3.1. Introduction
In this chapter, we address the nature and specificities of social media, and the impact it had on marketing theory and practice. We start by defining the construct and looking into its development in the past decade, followed by an examination of social media types, strategies and an overview of relevant social media research.
With the appearance of the web in the mid-1990s, marketing had to reinvent itself in terms of both vision and practice. The term “digital revolution” became frequently used to refer to the rapid changes in technology and, that have had, as a consequence, a deep impact on marketing theory and practice (Hoffman and Novak, 1996; Shankar and Malthouse, 2009; Varadarajan and Yadav, 2002, 2009). In other words, marketing had to transform from the more “traditional” unidirectional, broadcasting-based marketing to an approach based on interactivity, personalization, real-time and collaboration with a community of users (see Kozinets et al., 2010). The paradigm shift is even more evident if we observe the changing role of the Internet in marketing strategies, that have experienced major changes over the years (Varadarajan and Yadav, 2009). What first started as an attempt to use the Internet for the purposes of revenue generation, disintermediation and communication of web site content, later became a matter of achieving value chain efficiencies through cost reductions and building and enhancing customer and channel relationships (Barwise and Farley, 2005; Sultan and Rohm, 2004).
Several authors have identified drivers of changes in marketing strategies, that we group into four main areas: (1) company-driven factors (e.g. IT resources and skills, product characteristics, increased customer focus, cost reduction), (2) customer-driven factors (e.g. customer empowerment), (3) technology-driven factors (e.g. web 2.0 technologies, diffusion of mobile, smart phones and tablets, location-based services) and (4) industry-driven factors (e.g. channel characteristics, market thinness) (see Barwise and Farley, 2005; Deighton and Kornfeld, 2009; Labrecque et al., 2013; Varadarajan and Yadav,
2009). It is important to note that, among these drivers, social media and web 2.0 technologies can be seen as dominant drivers, since they are at the core of the technology-driven factors, and also have an impact on the other three groups of factors.
This clearly shows that the widespread use of the internet has significantly changed not only the consumers’ methods of accessing content, but has also influenced the way companies and brands approach the consumers and interact with them. Moreover, Hennig-Thurau et al. (2013) argue that social media has had such a profound impact not just on marketing, but business as a whole, that marketing scholars have yet to explore and understand. A good comparison between the “old” and “new” marketing is depicted by a bowling vs. pinball metaphor presented by Hennig-Thurau et al. (2010), in which
“old” marketing is like bowling where the company uses traditional instruments (represented by the bowling ball) to influence their consumers. Once released, the bowling ball will travel in a single direction to reach the target. The “new” marketing in a social media environment however, resembles a somewhat chaotic game of pinball where the balls bounce back in different directions based of consumer interactions and feedback (Hennig-Thurau et al., 2010). In this environment, there is less control and a lot more uncertainty. In the bowling metaphor, the marketer’s task was to release the ball and evaluate the result. With the pinball metaphor, the marketer not just releases the ball;
he also uses the flippers to keep the game going as long as possible, and carefully observes what is going on as the ball bounces around. This example clearly shows that social media marketing is a complex game that requires a different approach. As Malthouse and Hofacker (2010) conclude – “as the interactive media is still in its
“adolescence”, its role will continue to increase in communicating with customers, distributing products and services, inspiring new products, managing customer relationships and creating new marketing strategies” (p. 183).
The chapter is organized as follows. First we provide an overview of social media - definition, origin and scholarship. Here we focus on explaining the similarities and differences between social media and related constructs such as Web 2.0 and UGC. Next
we address in more detail the impact social media has had on marketing by presenting the new interactive marketing paradigms. Finally, we turn our attention to an examination of social media strategies companies use to develop and maintain relationships with customers.
3.2. Definition and origin
3.2.1. Web 2.0, user-generated content and social media – a definition
Even though the term Web 2.0 has been frequently used by marketing practitioners and academics alike when referring to its different forms (e.g. blogs, forums, social networks etc.) or effects, finding a definition of what constitutes Web 2.0 becomes a daunting task.
The Web 2.0 has often been described as “facilitating dialogue and participation” and is often discussed in the context of various forms and platforms (Campbell et al., 2011;
Deighton and Kornfeld, 2009; Hamilton and Hewer, 2010). Some authors, however, argue that Web 2.0 refers to the more technical aspects, while social media refers to the more social aspects of various applications (Constantinides and Fountain, 2008).
Moreover, Kaplan and Haenlein (2010) and Berthon et al. (2012) argue in favor of differentiating the concepts of Web 2.0, user-generated content (UGC) (sometimes also referred to as consumer-generated content and consumer creativity) and social media.. In this context, Berthon et al. (2012) provide a useful framework for understanding the similarities, differences and interdependencies of Web 2.0, user-generated content and social media (see Figure 2) that we use as a basis for further discussion.
Figure 2: Web 2.0, UGC and Social media
Source: Adapted from Berthon et al. (2012)
The term social media has frequently been related to the terms web 2.0 and user-generated content (UGC). In fact, in the past few years there has been a lot of debate around the definition, scope, and impact of web 2.0, social media and user-generated content on marketing (Berthon et al., 2012; Constantinides and Fountain, 2008; Deighton and Kornfeld, 2009). While the terms social media and web 2.0 have often been used as synonyms, the term user-generated content is used in the context of consumer behavior, more specifically, it reflects how consumers use the technologies and platforms available as content creators. However, certain inconsistencies and discussion surrounding the phenomenon persist (see for example Kaplan and Haenlein, 2010), so before offering a definition of social media, we will first define and explore the concepts of Web 2.0 and user-generated content (UGC).
The term Web 2.0 first appeared in 2004, and was developed by practitioners Dale Dougherty and Tim O’Reilly of O’Reilly Media Inc. (O’Reilly, 2007), and immediately caused controversy and discussion. One of the main concerns was that it was merely a new “buzz word” and had no true meaning or relevant impact (Constantinides and Fountain, 2008). Still, both academics and practitioners began using the term in theory and practice. While Web 1.0 was based mainly on content publishing via corporate and