P. 1
A cost benefit analysis of Social Media Marketing

A cost benefit analysis of Social Media Marketing

|Views: 2,938|Likes:
Published by Dave Scanlon
A cost benefit analysis of Social Media Marketing (SMM) from the perspective of the Irish
SME is presented. SMM is the process by which a company can enable and engage in
meaningful bi-directional conversations with its customers within an online environment.
High profile examples of SMM include Zappos.com's use of the Twitter micro-blogging
service, Dell's Ideastorm customer forum, and Blendtec's "Will It Blend?" video series on
YouTube.
A review of the literature establishes SMM's position in the continuing evolution of
marketing practices. Further drawing from the literature, the benefits of SMM to a
company's performance are identified, namely: an improvement in customer acquisition
and retention performance; and an improvement in a company's Research and
Development or New Product/Service Development processes.
An online survey of those companies using SMM is detailed, and its findings presented
and discussed. The primary purpose of the survey was to determine the level and nature of
resources being committed by Irish SMEs to SMM, as well as to establish what business
benefits are being realised.
Results indicate that SMEs consider SMM to be more effective than traditional marketing
methods with regard to customer acquisition and retention, and that a significant majority
of respondents are likely to continue to include SMM in their marketing plans in the future.
SMM is also reported as making a positive contribution towards companies' Research and
Development or New Product/Service Development processes. The study concludes by
noting the suitability of SMM for the particular approach to marketing inherent within
SMEs, while emphasising the importance of developing and maintaining a comprehensive
business strategy to guide its use.
A cost benefit analysis of Social Media Marketing (SMM) from the perspective of the Irish
SME is presented. SMM is the process by which a company can enable and engage in
meaningful bi-directional conversations with its customers within an online environment.
High profile examples of SMM include Zappos.com's use of the Twitter micro-blogging
service, Dell's Ideastorm customer forum, and Blendtec's "Will It Blend?" video series on
YouTube.
A review of the literature establishes SMM's position in the continuing evolution of
marketing practices. Further drawing from the literature, the benefits of SMM to a
company's performance are identified, namely: an improvement in customer acquisition
and retention performance; and an improvement in a company's Research and
Development or New Product/Service Development processes.
An online survey of those companies using SMM is detailed, and its findings presented
and discussed. The primary purpose of the survey was to determine the level and nature of
resources being committed by Irish SMEs to SMM, as well as to establish what business
benefits are being realised.
Results indicate that SMEs consider SMM to be more effective than traditional marketing
methods with regard to customer acquisition and retention, and that a significant majority
of respondents are likely to continue to include SMM in their marketing plans in the future.
SMM is also reported as making a positive contribution towards companies' Research and
Development or New Product/Service Development processes. The study concludes by
noting the suitability of SMM for the particular approach to marketing inherent within
SMEs, while emphasising the importance of developing and maintaining a comprehensive
business strategy to guide its use.

More info:

Published by: Dave Scanlon on Aug 20, 2010
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less

06/13/2013

pdf

text

original

The second benefit of SMM lies in increased exposure for a company, and customer
acquisition (these two items are closely related, and are therefore dealt with together here).
SMM can occur wherever conversations take place online: conversations about a product,
a brand, an organisation; and the conversations can take the form of blogs, forums, video
sites, wikis, etc., or a combination of these. Increased company exposure and customer
acquisition are enabled by SMM in two ways: SMM encourages meaningful engagements
in real-time at a time and place of the customer's choosing, which generates a positive
response from the customer; and the fact that it is online by nature means that SMM lends
itself to word-of-mouth (WOM) marketing: the message itself and the environment in
which it is created (e.g. blog comments, discussion forums) are designed for sharing and
redistribution. This is closely tied to Iocabucci's concepts of "Interactions Among Groups"
and "Networked Networks" (1998). In a study examining the effectiveness of WOM in

13

social networks, Smith, et al., (2007) found that influential individuals within an online
network will redistribute messages which they consider to be "unique and trusted" (Smith,
et al., 2007, p. 395). Smith, et al. further recommend that marketers wishing to achieve a
'viral' distribution of their message should identify those websites where influential
individuals (dubbed 'mavens') are found, and engage them in meaningful dialogue to elicit
their trust. Similarly, Allsop, et al., (2007) recommend targeting the points of a network
where an engagement will be most effective, stating:

"[...] marketers should work to understand who has the greatest impact on the
spread of WOM in their particular category and figure out ways to give them a
positive experience with the brand, so they will be more likely to pass that along."

(Allsop, et al., 2007, p. 402).

The authors further reinforce the positive results that engaging meaningfully with
consumers via SMM can have for a company, stating:

"[...] emotional appeal (trust, good feelings, and respect) consistently has the
strongest influence on corporate reputation [...]"
(Allsop, et al., 2007, p. 406).

A final point on WOM marketing is worth noting, especially given the focus of this
research on the Irish SME: the Nielsen Company (2007) report that 84% of Irish
consumers trust WOM recommendations (i.e. recommendations from other consumers)
when they are researching a purchase. Clearly then, engaging in SMM and facilitating and
enabling these WOM recommendations in an online environment should be of great
interest to the Irish SME.

A survey by WhitePaperSource of those companies who engaged in SMM found that: 81%
had seen a growth in exposure for their business; 61% indicated an increase in site traffic,
subscriptions, or opt-in mailing list; 56% said that it had led to the development of new
business partnerships; 52% had seen an improvement in their search engine results
ranking; and 48% reported the generation of qualified business leads (WhitePaperSource,

14

2009). In an article published by Aberdeen Research (2009a), the findings show that of
those companies who excel at SMM (e.g. companies with senior management backing for
SMM, or companies with processes in place to continuously adapt SMM based on their
interactions) 95% improved their rate of customer acquisition, and 95% also improved
their "brand advocacy" amongst their customers (Aberdeen Research, 2009a, p. 4).

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->