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Adding Social Media to the Marketing Mix

Adding Social Media to the Marketing Mix

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Adding Social Media to the Marketing Mix
by GUILLERMO ARMELINI and JULIÁN VILLANUEVA

I don't remember where I found this document, I reuploaded this to share with friends who are interested in E-Marketing as well as Social media
Adding Social Media to the Marketing Mix
by GUILLERMO ARMELINI and JULIÁN VILLANUEVA

I don't remember where I found this document, I reuploaded this to share with friends who are interested in E-Marketing as well as Social media

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Published by: Trần Thị Minh Trang on Sep 23, 2011
Copyright:Attribution Non-commercial

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U
ntil recently, when you wanted topublicize your company or its prod-ucts, you would launch an advertis-ing campaign in traditional media,engage in some corporate communicationsand PR, and run promotions and point-of-saleactivities. Savvy marketers would add onlineadvertising and might even try to monitor theironline positioning and Web traffic throughsearch engine marketing (SEM) and search en-gine optimization (SEO).Now, with the emergence of social net- works, such actions seem almost quaint.These days, you don’t even exist in consum-ers’ minds unless you chat with them on Twit-ter, have followers in Facebook or publish a blog. Using Gross Rating Points (GRPs) tomeasure your advertising impact is so lastcentury; what matters today are how many “likes” you’re getting. Advertising agenciesare touting creative new apps, which they say  will help you keep customers.Some say we are witnessing a revolutionthat will change the way we do marketing;that social network marketing has made tra-ditional advertising obsolete. But before weget too carried away by the hype, we need toexamine the evidence.
by GUILLERMO ARMELINI and JULIÁN VILLANUEVA
 Adding Social Mediato the Marketing Mix
THE POWER OF WORD OF MOUTH
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IssuE 9sECOND QuARTER 2011
 
 Adding Social Media to the Marketing Mix
Th R o All Thng socal
In a very short time, social media have cap-tured market share and attention among allkinds of consumers and companies. Accordingto ComScore, 84 percent of European Internetusers belong to at least one social network, andthe number of visitors to social networkingsites is growing by the month, reports Nielsen.To give an idea of just how quickly, in April 2010social media were being used by 24 percent morepeople than in April 2009, while hours spent peruser was up 66 percent.Because social networking requires time andactive engagement, it competes directly withtraditional media for share of consumption andattention. Part of the time people used to spendon traditional media is now being spent on so-cial media. Given this change in consumptionhabits and the fact that social media are moreinteractive, there is a danger that messages sentusing traditional advertising will fall at.Take the Oscars: The 2011 Academy Awardscounted four million fewer viewers than theprevious year, especially among 18 to 49 yearolds, whose audience share dropped 12 percent.Meanwhile, hundreds of thousands of Twitterusers broadcast their impressions of the cer-emony live. Quite simply, many viewers pre-ferred to interact through social media, sharingtheir thoughts, opinions, criticisms and sugges-tions. They wanted dialogue, not a monologuedelivered from the stage.
socal ma av raly
 gained hare and attentionamong all kind o conmerand companie, oten at theexpene o traditional media.Recognizing thi, companiehave tarted to redefne keyapect o their marketing mix.With advertiing and onlineword o moth competing orhrinking marketing bdget,many companie regard havingan active preence in ocialmedia a a viable alternative totraditional advertiing.Yet the athor believe thiwold be a mitake, a the twotrategie are complementaryrather than btittive. Acomparion o advertiing andword o moth how that o-cial media obey very dierentrle rom traditional adver-tiing. social media can tartconveration or bild brandrecognition, bt the relt aremch more difclt to predictor meare. With that in mind,the athor recommend howto defne a ocial media plan,citing example o companiethat got it right – and oeringcationary tale o thoe thatgot it wrong.
 
executive
 
summary
Rdfnng th Mx
Research has highlighted the fact that a productor service being talked about has a direct impacton sales. Movies are one of the best illustrationsof how word of mouth, or WOM, aects sales,given the key role that personal recommenda-tions play in getting potential spectators to ac-tually go to the theater. Even the Oscars are es-sentially a sort of movie industry WOM. Simply  being nominated for an Oscar – never mind ac-tually winning it – generates more audience andmore revenue. This signaling eect is now beingreinforced and amplied by social networks.Based on movie releases, we carried out astudy to measure the impact – and interrelation-ships – of three key variables on movie success:advertising investment, publicity (i.e., mediapresence without prior payment) and theconversations generated among potentialand actual spectators.One of our conclusions was that WOMabout a movie in social networks always has apositive impact on box-office revenue. Evenmore surprisingly, the impact turns out to beindependent of advertising investment.Given this reality, many companies havestarted to redefine key aspects of their mar-keting mix to include social media, adjust-ing their budgets accordingly. According toBurson-Marsteller, 79 percent of the top 100Fortune 500 companies already use Twit-ter, Facebook, YouTube or corporate blogsto communicate with their customers. Two-thirds have at least one account on Twitter, which is the platform most used by compa-nies. And 54 percent have a Facebook page.The digital marketing and media researchgroup, eMarketer, estimates that global ad- vertising investment on social networks willtop $6 billion in 2011 – representing almost9 percent of all Internet marketing – risingto almost $10 billion in 2012. In the UnitedStates, social media spending now accountsfor close to 11 percent of the online market-ing budget and is expected to represent evenmore in 2012.
An Altrnatv to Advrtng?
Maintaining an active social media presenceis commonly considered an alternative to tra-ditional advertising as a means of achieving brand awareness. In our view, this is a mis-take. Facebook, Twitter and other microblogs
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 Adding Social Media to the Marketing Mix
 
table 1
Wor of MouVru Avr
SOCIAL NETWORKS SERVE A DIFFERENT YETCOMPLEMENTARY FUNCTION IN RELATION TOCONVENTIONAL ADVERTISING.
WORd OF MOUthAdVeRtisingReACh CRediBiLitYCOntROLinteRACtiVitYintRUsiVenessCOstBRAndsALespROdUCts & seRViCesCOnteXt
n
Limited (thogh that i changing withe-WOM)
n
High
n
stimlated, bt not controlled
n
e-WOM i highly interactive andimmediate
n
Volntary and conenal
n
Low, thogh ome hidden cot
n
Poitive WOM enhance brand vale,bt no garantee that comment will beavorable
n
Negative WOM can do erio damage
n
Change attitde that may gideconmer behavior
n
Proven correlation between converationand ale
n
“Pll eect” tend to lat longer
n
Not very el with low-rik prodct orprodct that are eay to ae
n
Fndamental role in conmption oervice
n
Freqency and intenity eem greater inmore collective, hierarchical ocietie
n
High/Ma market
n
Limited
n
Fll control over meage, medimand reqency
n
Le cope or reaction or beqentadjtment
n
Meage may be annoying, in content orreqency
n
High, among the mot expenive
n
Deciive role in awarene andrecognition
n
Increae vale
n
shape attitde toward the prodct andtimlate interet in trying it
n
Low elaticity o ale in the hort rn, btimpact on frm vale and conmer priceenitivity in the long rn
n
Dration o “pll eect” i dipted
n
With tangible prodct, inorm o theirexitence and qality
n
With ervice, play a more peraiverole in term o providing inormation
n
Work in all cltre, thogh each i morereceptive to certain trategie
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IssuE 9sECOND QuARTER 2011

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