Living Through a Revolution.

The Impact and Value of Social Media for Marketing and Business Development
Emily Hampton
This research examines the value and best practice of using social media for business development and marketing. It also explores how businesses are currently using social media. Student ID: 070155273
April 2010 Media, Communications and Cultural Studies School of Arts and Culture W o r d C o unt : 10 ,9 8 9 Dissertation Supervisor: Chris Falzon i|Pa ge

Livin Th h Rev V e o S ci Medi eve

i n: The I c and M e in nd B siness en

Purpos : A) o e amine the value and best practice of usin social media for business
development and marketin B) o ascertain current enterprise social media activities.

Approach/Methodolo y : he research was conducted by A) An e tensive literature review to
identify the benefits and best practices for usin social media. B) An online survey to gather the views, e periences and current practices of 360 businesses using social media.

indin s: he research found that social media is a valuable tool for business development and

marketing. Businesses found the biggest challenges to be measuring effectiveness and Return on Investment.

Research li itations: he research was designed to test only businesses using social media
rather than e amine why some businesses are not using it. he survey results mainly reflect small to medium sized businesses rather than large corporations.

Ori inality/value: he research added knowledge to the indicated information gap in academic
literature regarding social media activity for businesses.

Keywords: Social Media; Social Media Marketing; Business Development; Web 2.0











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I would like to e press my appreciation to Serge Gladkoff, President of Logrus International Cooperation and administrator of Localization Professionals group on Linkedin (5400+ members and largest in the language industry), for his advice in the final stages of my dissertation. hanks to Serge, this research has been used as one of the reference research materials for Localization World Berlin 2010 panel on using social media for the language industry. Special thanks go to John Whaling, a sales specialist from Melbourne, Australia, with strategic knowledge of Enterprise 2.0, Social Media, and business development. John contacted me on his own accord to give me advice on survey structure and analysis, and later made suggestions for my work. Justin Souter, a business consultant from Newcastle, and Declan Metcalfe, a brand practitioner with an in-depth knowledge of social media, must be thanked for their support, guidance and advice over the course of my dissertation. I would also like to acknowledge the help of Hazel Burton from the North East Entrepreneurs Forum, who kindly put a link to my survey in their weekly e-newsletter, and Luke Bean, the online marketer for Sony Pictures in Los Angeles, who re-tweeted my survey link to his large number of followers. I am e tremely grateful for all the respondents of my survey, who not only provided rich data, but also offered further support, advice and guidance.

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Abstract.................................................................................................... ...................i Acknowledgements............................................................................... ......................ii Contents.....................................................................................................................iii Figures and Tables..................................................................................................... .vi

Chapter 1: Introduction
1.1 Background.......................................................................................................... .1 1.2 Social Media Channels......................................................................................... .3 1.3 Value of Research............................................................................. ................... .3 1.4 Objectives............................................................................. ............................... .4

Chapter 2: Literature Review 
2 1 Brand Awareness 5

2 2 Positive Brand Association

2.2.3 ransparency and honesty................................ ............................... ...12 2.2.4 Providing innovate, creative and engaging content........................ ....12 2.2.5 Addressing and alleviating customer concerns.............................. .....13 2.2.6 Negotiating the message........................................................ .............14 2 3 Business Development 15

2.3.1 Monitoring and learning from conversations............................ .........15 2.3.2 Social Impact and Return on Investment (ROI).................................. .17 2.3.3 Internal Communication and Business to Business (B2B)...................19

2 4 Relevant Customer Reach

2.4.1 arget Marketing.................................. .............................. .................20

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2.1.1 Brand Exposure.................................................................................... .5 2.1.2 Viral...................................................................................................... .6 10

2.2.1 Relationship Marketing ...................................... ............................... .10 2.2.2 Adopting the human voice................................. ..................... ............11


Chapter 3: Methodolo y
3.1 Methodology 3.2 Distribution 3.3 Sample and Population 3.4 Advantages 3.5 Disadvantages 3.6 Limitations 3.7 Ethical Considerations . . . . ..22 ...23 ...24 ..24 . ..25 . . ..26 . ....27

Chapter 4: Data Collection and Analysis
4.1 Data Collection 4.2 Survey Response Rate 4.3 Data Analysis 4.3.1 My sample .. .28 .....28 ....29 ..29

4.4 Main Benefits........................................................... ..............................30 4.4.1 Brand Awareness 4.4.2 Positive Brand Association 4.4.3 Business Development 4.4.4 Marketing Spend.............. 4.4.5 Relevant Customer Reach .... 4.5 Main Concerns .... ................. .. 30 ..32 .35 ..36 .. ..38 ...38

4.5.1 Measurement and ROI.........................................................................38 4.5.2 Lack of Social Media Awareness........................... ............................... 39 4.5.3 Challenges with Social Media..................................... .......................... 40

Chapter 5: Conclusions
5.1 Conclusion........................................................................................................ ....41 5.2 Further Implications of the Study...................................................................... ..42 Bibliography............................................................................................................. ..44 iv | P a g e 

Appendix................................................................................................................. ..48
Appendix A: Social Media Channels: Facebook, Twitter, LinkedIn, YouTube, Blogs....................................................48 Appendix B: Survey....................................................................................................................................................51 . Appendix C: Social Media Sites mentioned.................................................................................................................56 Appendix D: Measurement tools...............................................................................................................................57 .

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Figures and Tables Figures
Figure 2.1: Viral Funnel................................................................................ .......................7 Figure 2.2: Influencers Pyramid................................. ......................................................... 9 Figure 2.3: Non-financial/ Financial Impact................................................... ...................18 Figure 4.1: Years spent using social media........................................ ............................... 29 Figure 4.2: Main Benefits..................................................................................................30 Figure 4.3: Social Media channels used....................................................... ..................... 31 Figure 4.4: ime spent using social media per week........................................ ................ 33 Figure 4.5: Response to Negative Comments.......................... .........................................35 Figure 4.6: Social Media Budget..................... ................................... ............................... 37 Figure 4.7: Future Social Media Spending................................................... .....................37 Figure 4.8: Social Media Measurement.............................................. .............................. 39 Figure 4.9: Challenges using Social Media................................................... ..................... 40

able 4.1: Awareness of Social Media ools....................... ................. ............................. 39

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Chapter 1 Introduction
1 1 BACKGROUND: The Social Media Environment
With the advent of the Internet, the communications climate has transformed. We are currently living through a key moment of change where the asynchronous, monological forms of traditional media and marketplace have been met by Internet penetration and online global networks. Prior to the web, marketing involved companies projecting a one-way message at a mass of consumers with the intention to sell more products. he web has dramatically changed those traditional rules of marketing. Initially, web culture endorsed traditional forms of push advertising, acting as an information superhighway . In 2004 however, Web 2.0 took hold, marking a revolutionary turning point for web culture, as the Internet became increasingly social. In the online environment, time and space have been compressed to such a great extent that we are able to communicate, share, and collaborate with one another with no physical or temporal boundaries. Online marketing has moved from publishing to participation, as the democratisation of information means that society has the power to publicly deconstruct marketing messages and co-create content.

he popularity of social media in the 21st century has been meteoric and has infiltrated people s

everyday lives. Visiting social sites is now the 4th most popular online activity with two-thirds of the global internet population visiting social networks (Burmaster & Covey, 2009). Now more than ever before, society is connected and empowered to participate and share its views. As a centre for both community and commerce in the virtual world (Hearn, 2008: 210), it is imperative that marketers leverage its power in order to create innovative brand experiences.


Social media is an umbrella term for a wide range of technologies such as social networking sites, blogs, micro-blogging sites, podcasts, wikis, and video and photo sharing sites. It has had significant implications for marketing as it has dramatically disrupted the power balance between companies and their consumers (Li & Bernoff, 2008), increasing productive consumer agency and causing a surge in online consumer activity. Ample evidence suggests that postmodern customers continue to eschew traditional forms of push advertising, as they grow increasingly cynical and less attentive (Scott, 2007: 7). In this increasingly consumer-orientated landscape, the traditional hierarchical structure between brand and consumer has been suppressed so that the people formerly known as the audience are now the media (Jaokar et al, 2009: 1). Distance between production and consumption has been compressed to the extent that online participants are becoming prosumers ( offler, 1980), producing user-generated content that is facilitating co-creation. Forrester researchers Li and Bernoff proclaim that there has been a groundswell (2008), whereby consumers are able to share knowledge and opinionated views on brands, publish their own content, andfilter and create their own media feeds. he traditional dialectic between business and personal has become increasingly obsolete, as the online sphere blurs our social and professional circles. With social media propelling the rise of the consumer, brand behaviour is changing. here is no place for direct marketing (Odden, 2009), and instead, marketers have to form reciprocal relationships with their customers and engage in dialogical communication. Consumers have more control over the timing, medium and format through which they consume media (Maymann, 2008: 47), shifting more authority to the users. Some companies are experiencing social media phobias, feeling highly anxious at this loss of control over their marketplace and worried about being overly exposed to public scrutiny (Gibson & Jagger, 2009: 35). However, marketing professionals cannot afford to ignore this new dynamic. Instead they need to react to it, embrace it, and leverage the power of the new tools that it provides. In this postmodern and somewhat turbulent environment, companies need to re-evaluate their business strategies by incorporating social media,


being creative, fast, and open to change (Christensen et al., 2008). hose that fail to do so will be at a disadvantage to their competitors. Forecasts envisage that this digital marketing trend is set to rise. Recent studies (SoDA, 2010; Alterian, 2010) show that investment in traditional media is expected to remain consistent or fall this year, whereas digital spending is predicted to increase. New research from Alterian (2010) that surveyed 1,068 marketing professionals, found that 66% of marketers plan to invest in social media over the next 12 months and 40% will shift more than one fifth of their traditional direct marketing budget toward digital, interactive or social channels. hese figures show that there is a healthy outlook for the digital marketing industry. Future generations of consumers will expect brands to be highly available online, and it is therefore imperative that companies are using social media as a component in their marketing and business development strategy.

1 2 Social Media Channels
here are currently a multitude of social media channels that can benefit businesses. Each one is

unique and can add value to the company in different ways; therefore it is recommended that businesses adopt a multi-channel communications strategy. Some channels may be more appropriate for the business goals of the organisation. his research is primarily focused on Facebook, Twitter, LinkedIn, YouTube, and blogs. For more information on these channels see Appendix A.

1 3 Value of research
As a cutting edge area of study, using social media for marketing and business development is highly relevant, yet academic research on the topic is still limited. With social media making a significant impact on businesses, and with forecasts predicting further influence, companies must consider using social media as an essential component of their communication strategy. he research conducted by the Society of Digital Agencies revealed that 45% of the marketers surveyed






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considered social media as top priority , and a further 42% cited it as very important (Lent, 2010: 13). However, although most businesses recognise its importance, many are still unaware of how to use it effectively and are still sceptical of using social media as a marketing tool. Regardless of whether or not companies are going to participate, conversations about the brand will be occurring.

he purpose of this research is to examine the following: The changes brought about by social media in the marketing communications environment The benefits of social media for businesses The best social media practises for businesses How companies are implementing social media for business development and marketing Company opinion and past experience in regard to using social media

This research will therefore contribute to the current assessment of the value of social media as a tool for business development and marketing strategy.



% %

he new marketing paradigm is current, under-researched, and unfamiliar for many, making it a

highly salient research topic.

1 4 Objectives

y y y y y

Chapter 2 Literature Review
Due to the contemporary nature of the research topic, literature regarding social media is relatively sparse, and many leading social media experts share their knowledge in the form of online blogs or online articles as opposed to hard print. Furthermore, as we are living through a period of rapid technological change, details in the literature become outdated quickly, although many of the underlying core concepts remain consistent. The literature identifies a plethora of benefits of using social media and advice for best practise. To enhance clarity, I have organised the theory into four main categories: 1) Brand Awareness 2) Positive Brand Association 3) Business Development 4) Relevant Customer Reach.

Online global networks have caused a compression of the world (Robertson, 1992: 8), enabling us to overcome the realities of physical space, time, and natural environments. This has dramatically increased the fluidity of our landscapes, enabling communication to move at high speeds across various kinds of previously impervious boundaries (Appadurai, 1990: 52). Such spaceless proximity (Lievrouw and Livingstone, 2006: 38) provides businesses with a significant opportunity to communicate brand messages quickly, over vast distances, and to a large audience.

2 1 1 Brand Exposure
Social media sites provide an excellent way to increase brand visibility in the online sphere. Although social media marketing is compatible with traditional marketing methods, creating an online brand 5|Page

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presence is fundamental as content can reach thousands of new eyeballs quickly without interfering with ... other marketing strategies (Weinberg, 2009: 6). Online message exposure is instantaneous and an opportunity for direct conversation that can educate customers about the product or service that the brand provides. Brand messages can make a lasting impact as the internet retains a level of permanency, and can be recalled in the future if the promoted product or service isn t relevant to the viewer at that particular time. To gain exposure, specialists (Evans, 2008: 164) recommend participating among multiple channels, as each social media tool is unique and therefore can add value to the brand in different ways. In addition, communicating on various channels will help to build a brand empire, increasing the brand s Search Engine Optimisation, thus increasing brand visibility online (Clay & Esparza, 2009: 435).

2 1 2 Viral
Mitch Joel, in his recent book Six Pixels of Separation (2009), emphasises the highly interconnected structure of online society, and provides sound advice for how this mediascape can help businesses to flourish. Due to the highly connected infrastructure of social networking sites, brand content can be shared from person to person rapidly. This viral marketing strategy encourages the growth of message exposure and influence, creating a snowball effect whereby the spread of the message gathers momentum. Malcolm Gladwell, in his highly influential book The Tipping Point, suggests that ideas and products and messages and behaviours spread like viruses do (2000: 7), consequently increasing social mention and therefore brand visibility. Trusov et al. (2009), in their research on the effect of word of mouth on social networking sites, found that word of mouth referrals are 20 to 30 times higher than that of marketing events and media publicity respectively. It is for this reason that marketers are shifting from a broadcast approach to a many-to-many model, as shown in Figure 2.1.


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Fi ure 2 1: Viral Funnel (Mendez, 2007)

We are currently living in a communications environment where there is a trust deficit (Brogan, 2009: 14) and consumers are feeling increasingly cynical and hostile about traditional push advertising and the dissemination of information (Meadows-Klue, 2007). Seth Godin, in his work on Permission Marketing (1999), concurs that prospective customers are resenting the intrusive nature of interruption marketing , and instead prefer to voluntarily endorse brands that have been recommended or reviewed by their friends, highlighting that our peers have a huge influence on our brand and product choices. Users both intentionally and unintentionally recommend brands to their peers. Intentionally, users can suggest that their friends become a fan of a brand, or alternatively post a link to branded content which enhances discoverability (Weinberg, 2009: 5). However, due to the open and voyeuristic nature of social networking sites, users can also influence their peers unintentionally. For example, when users publicly befriend or become a fan of a brand on Facebook, this as well as any other interactions, will be displayed on their personal profile s mini-feed or the main news feed. People within their social circle therefore, will see these interactions and be more inclined to pay attention to that brand themselves and regard it more highly. Furthermore, social adverts displayed 7|Page



alongside the newsfeed can incorporate friend s names that are already fans, acting as personal endorsements and thus stimulating this viral effect. This effect is otherwise known as fanvertising or community branding and makes the advert seem like an authentic and objective recommendation rather than direct advertising. As Mark Zuckerberg, a creator of Facebook states: Nothing influences people more than a recommendation from a trusted friend. A trusted friend referral is the Holy Grail of advertising (Zuckerberg, 2007 cited Maymann, 2008: 38). Such activity both extends the online presence of the brand and creates the opportunity to acquire a larger fan base. Viral spread can also occur from one social circle to another. This is particularly facilitated by groups or pages, which act as a hub for people with similar interests. Members of these groups are usually composed of weak ties (Granovetter, 1973), bound by a common interest and relatively heterogeneous in everything else, helping to bridge social capital. Individuals can also distribute content into another destination such as a blog, and even commenting, rating or reviewing online content such as a video on YouTube, can make it easier for others to discover later on. In order to spread a brand message, it is fundamental that marketers create a dialogue with the brand s most powerful influencers. Gladwell (2000) highlights the power of word of mouth marketing and identifies three personality types that pollinate ideas: Mavens, Connectors and Salesmen. His Law of Few Theory (2000) suggests that information specialists, known as Market Mavens , initiate word of mouth epidemics (2000: 67), sharing their expert knowledge with others. This information is diffused by connectors , highly sociable individuals with a large network of acquaintances. These individuals cultivate weak ties to facilitate the transfer of knowledge between the Market Maven and the rest of the public, escalating word of mouth. These two personality types, along with salesmen who charismatically persuade people to buy into a product, service or concept, endorse and advocate brands, tipping them to expo nential success. It is therefore of prime importance that marketers use these so-called influencers as vehicles to influence the masses.


Duncan Watts a network theory specialist, challenges aspects of viral marketing theory. He claims that the best influencers are not necessarily those with the biggest networks, but are those who have a specific topic of interest. He believes that it s a function of passion, not position (Watts, 2008 cited Maymann, 2008: 77) that makes the best influencers.


ctive Engagers ctive Listeners Passive Listeners
Figure 2.2 Influencers P ramid

Rather than a separate entity, online life is an extension of offline activities, thus making the binaries of public and private increasingly obsolete. The way in which our lived experience and mediated experience are inseparable and interlaced (Thompson, 1995: 230-231), is fundamental for marketers, as the permeable boundaries enable online brand promotion to filter to offline word of mouth and consumer activity, as well as offline marketing to instigate online discussions It is for this . reason that social media marketing is so compatible with traditional marketing, as they can mutually benefit one another. Ultimately, social media is a catalyst that can be woven into other brand activity.






onversation Starters. Highly social and professional. Many connections. Influential. Connectors. Will distribute content. Observers. Open to new ideas. Likely to be influenced

Ignorers. Usually sceptical and cautious. Unlikely to participate

With increased exposure, it is vital that brands emit a positive public image and manage a healthy reputation. Having explored the viral impact of social media, it is crucial that brands generate positive word of mouth and boost popularity. Brands are able to construct their identity as they wish it to be seen by their online voyeurs, taking time to carefully construct their identity statements and promote a socially desirable image, otherwise known as egocasting (Rosen, 2004 cited Hearn, 2008: 210). Such control over impression management provides an overwhelming opportunity for brands to have control of their selfmaintenance and promote an idealistic brand image.

2 2 1 Relationship Marketin
5 5

Communication online gives users greater control over who they wish to interact with. Rather than being bound to one community, people are becoming online nomads, manoeuvring through multiple, specialised partial communities, giving limited commitment to each (Haythornthwaite & Wellman, 2002: 38). Some companies fear that customer connections made online are fragile, ephemeral relations, and don t necessarily signify brand loyalty. Participants are able to remove themselves from fan pages and groups with just a click, making virtual communities incredibly unstable and potentially temporary. On the other hand, reduced distance between producers and consumers in the online world means that brands have an exceptional opportunity to increase intimacy and improve customer relations. By building strong relationships, brands can strengthen customer loyalty and multiply brand advocates. In contrast to the top-down approach of traditional marketing, hierarchy has been suppressed so that producers and consumers are engaged in a cooperative relationship. Marketers therefor need e to switch focus from short-term profits to relationship marketing, fostering dialogue and building a rapport with their consumers. Brands need to utilise social media sites as a platform to insinuate 10 | P a g e



themselves into the lives of the consumers, acting and being treated as though they are citizens (Hearn, 2008: 214) in order to establish long-term relationships with current and potential consumers (Weber, 2007). Practising effective Customer Relationship Management (CRM) by remaining committed to customer relationships and building trust and rapport can help brands to cultivate long-term advocates. By actively initiating and participating in conversation, the community manager of the brand can engage members and build loyalty by fostering genuine relationships (Weinberg, 2009: 64). Furthermore, by having their own profile, brands can be treated as citizens and are able to ingratiate themselves into the lives of the consumers. With consumers finding their friend s content, such as photos, videos, and messages, more interesting than that of professionals (Fine, 2006), marketers are embedding their brands into user content and talking to them in their online vernacular (Hempel, 2005). Such integration erodes previous hierarchy and helps marketers to advertise their brand by their activity and status updates which become visible in the news feeds. Such relationships build over time and are therefore difficult for competitors to infringe on (Godin, 1999). Offering rewards or incentives to support the brand such as discounts and coupons are effective ways to capture the attention of the audience, increase customer satisfaction, and generate loyalty (King, 2010).

2 2 2 Adoptin the human voice
The Cluetrain Manifesto (1999), a set of 95 theses, was written to advise businesses on how to respond to the Internet as a new marketing environment. The manifesto s initial emphasis is on the fact that markets are conversations (1999), and that the Internet facilitates discussion and high levels of interactivity. In order to infuse themselves into the lives of consumers, brands need to reject the homogenised voice of business such as uninviting mission statements and contrived brochures, and instead adopt the human voice. Shel Israel, co-author of Naked Conversations, agrees with this approach, claiming that All too often, professional marketers lose their credibility by 11 | P a g e


7 7

hyperbole, hubris and amplification (Shel Israel, 2004 cited Maymann, 2008: 91). Social media is organic, and therefore companies need to belong to the community discourse in order to survive. Brands need to break down corporate barriers, engage in natural, genuine conversations, and share the concerns of their communities. The more a brand speaks to communities in the audience s vernacular and possesses human qualities, the better it engages consumers in the social media space, and the stronger the emotional ties it creates (Maymann, 2008: 41). Blogs provide a good way to achieve this, as they can act as the sounds of independent voices (Scott, 2007: 54), authentic, and a way to decrease scepticism.

2 2 3 Transparency and honesty
Chris Brogan, an influential author and blogger, states in his recent book Trust Agents (2009) that the general public s level of mistrust is at an all time high (Brogan & Smith, 2009: 9). It is for this reason that social media experts (Wright, 2005; Brogan and Smith, 2009; Joel, 2007) assert that brands need to be open and transparent, building [a] community based on trust (Joel, 2007) in order to prosper. By being committed, exceedingly visible, and willing to participate in social spaces honestly, brands can develop sincere relationships with their customers. Joel emphasises that as trust and rapport builds over time, it is imperative that brands connect with the online market now in order to build these relationships and thus have an advantage over competitors. Similarly, consistent time commitment will reinforce the brand s devotion to the community and therefore build and maintain trust (Weinberg, 2009: 17). Brogan believes that companies should employ a Trust Agent in order to humanize the communication, build fluid relationships (2009: 21) and be straight talking, diligent and upfront about their objectives.

2 2 4 Providin innovate, creative and en aging content
Brands need to cultivate creative cultures, producing content that is provocative, engaging and original. Seth Godin, a bestselling marketing author, centres his book Purple Cow (2003) on how brands can t afford to be ordinary. Instead, he insists that they must be remarkable , keeping 12 | P a g e



9 9 @ @

content dynamic, fresh, and relevant in order to sustain interest in the consumer and encourage others to distribute it among their friends and network. The quality of the content will thereby determine its viral capability. In the shift from old marketing to new marketing, engagement is replacing interruption. As a result, we are living in a full-fledged attention economy (Goldhaber, 1997 cited Maymann, 2008: 50), whereby content needs to have distinct value that will capture concentration that is becoming scarce. Gladwell refers to content that is memorable and able to sustain attention as The Stickiness Factor (Gladwell, 2008). In order to encourage commentary, brands need to create compelling, differentiated content that is open and interpretative in nature so to have room for additions and alterations at any point (Maymann, 2008: 38). Content that is interesting, funny, and worth commenting on or sending to a friend, can enhance the personality of the brand and resonate with consumers. In social media, you are what you share (Leadbeater, 2008: 1), thus innovative and creative content with distinct value will enhance the brand identity. Simply having a statistical profile or having an egocentric display of products and services (Scott, 2007: 37) is not enough. Brands must come to have faces and personalities to be more appealing and intimate with their consumers. Hall and Rosenberg, in their contemporary book Get Connected (2009), advise that companies share content that is sometimes personal, sometimes industry related, and sometimes focused on news or current events (2009: 40-41). Whilst personal content can be humourous, reflect personality, find common ground, and create the illusion of intimacy, industry-related content can provide useful knowledge, and can be passed on to others thus increasing the customer base. Posting updates about current news can be equally provocative and create a sense of cohesion.

2 2 5 Addressing and alleviating customer concerns
The transparent nature of social media means that brands are able to observe the sentiment of their customers. Although positive comments about the brand in such an open arena can be incredibly beneficial for the brand reputation, companies fear that negative word of mouth could do 13 | P a g e


fundamental damage. Negative statements, known as flak, can be spread quickly and over a large distance by destructive participants, ultimately damaging its reputation. To combat this, brands must take advantage of being able to monitor customer attitudes, be responsive to customer concerns, and engage in conversation with their detractors (Defren, 2008; Wright, 2005). This proactive approach to crisis management can turn negative experiences into very positive ones (Weinberg, 2009: 27), consequently increasing customer retention and brand loyalty. In agreement, Todd Defren (2008), a globally recognised Social Media and Public Relations innovator, suggests in his blog PR-Squared , that in order to enhance customer retention, companies must be responsive to feedback even if it is negative, to demonstrate approachability and be part of the conversation rather than simply observing it. By acknowledging the public voice, the consumer feels valued, empowered and therefore is more likely to be a brand loyalist. Alleviating customers concerns online may solve other people s problems simultaneously. Such public customer service would be mutually beneficial to both the company and the customers, saving time, resources, and effort. Everyone has the capacity to use media to express oppositional messages (Harrison & Barthel, 2009: 165), but by having direct access to negative feedback, brands are able to learn from the sentiment, which can facilitate clear, informed decision-making.

2 2 6 Negotiating the message
Increasingly, your brand is what your customers say it is (Li & Bernoff, 2008: 77). Companies are no longer in control of the perception of their brand (Eikelmann, 2007), as consumers are now also active producers of symbolic meaning, and can independently create and reshape its original meaning. Brands need to react to this democratization of leadership (Li, 2009) by being agile, endorsing customer feedback, and being perceptive to their customer s needs and desires. They need to be 14 | P a g e


self-reflexive, revising and negotiating their projected identity and brand meaningand modifying their behaviour to meet public expectations. Although many companies are anxious about losing control over the interpretation of their brand, exploiting social media will help the business to understand their consumer and therefore grant them more control.

2 3 BUSINESS DEVELOPMENT 2 3 1 Monitoring and learning from conversations
Rupert Murdoch, Chairman of Newscorp stated that Media companies don t control the conversation anymore (2007). Instead, social media has given a voice to the masses and power so that everyone can be a content creator (Weinberg, 2009: 16) and therefore able to influence the brand. Users are benefitting from an increased sense of agency as they are able to manage their own media activity and are able to share, select, filter, and generate their own content. This is the primary focus of Li and Bernoff in their stimulating book Groundswell (2008), who assert that the masses are gaining influence over companies who cannot control their message anymore. Li, in her spin off work Leading through the Groundswell (2009), re-iterates this by stating that people are using online tools to connect, take charge of their own experience, and get what they need information, ideas, products and bargaining power with each other." However, leading social media experts maintain that brands should embrace the fluid structure, encourage the exchange of new, free ideas and harness collective intelligence. As James Suroweicki argues in his book The Wisdom of Crowds (2004), it is the power of the masses rather than the elite that can provide intelligent decision-making, judgement, innovative thinking and forecasting. This kind of thought leadership can manifest creativity, transcend obvious, linear thinking, and offer innovative and compelling ideas to help propel the business forward. Brands now have a prime opportunity to use social media platforms as a think tank whereby consumers can be idea

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facilitators, creating, advancing and sharing ideas that will influence the future direction of the business. Due to the ubiquitous nature of the Internet, power has become dispersed so that an individual s knowledge and expertise grants them high status (Matthews, 2007). From a Marxist perspective, this kind of co-creation also indicates the exploitation of customers even if the co-productive activities are voluntary, and at times, enjoyed (Zwick, 2008: 180). Social media sites offer companies a contact with the fast-moving world of knowledge in general (Terranova, 2000, cited Zwick et al., 2008: 172), helping them to understand their audience, listen to opinions, needs and sentiment, and obtain direct and constructive feedback. Companies need to become sophisticated observers (Christensen, 2008: 13) by monitoring conversations to learn what their customers are talking about, what they are saying about their brand, and their competitors. Learning from these conversations can make a big impact on the future direction of the business and can capture new prospects. In such an open arena, brands can exploit the voyeuristic nature to monitor competitor activity. By observing the behaviours and practices of other brands, marketers are able to learn, incorporate and exercise these techniques themselves, or conversely differentiate from the competitor activity. However David Roth, the Director of Search Marketing at Yahoo, says how this transparency is a double-edged sword , as competitors will simultaneously be able to observe the brand s practises (2009). This monitoring ability is also highly beneficial from a Public Relations perspective, as brand ambassadors can closely monitor public attitudes. This is extremely valuable for crisis management, as any minor complaints can be dealt with quickly before they escalate. Although listening to customers is significant, it is essential that companies also participate in the conversation, acting as a catalyst and instigating quality conversations. As Chris Heuer stated, participation is marketing (2007), thus by commenting and contributing, brands can add value to

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the customer experience and simultaneously benefit from further feedback and audience insight. This view is shared by many leading practitioners. Li (2009) believes that brands need to engage with the groundswell and drive peer to peer movements, and Joel (2009) shares the view that brands can t afford to be silent anymore; to be in control, brands must participate. Companies need to ensure that the content they share is not too narcissistic, but rather is engaging and interactive, displaying personality and encouraging intimacy. Such interaction between company and consumer will build trust, loyalty and brand advocates.

2 3 2 Social Impact and Return on Investment
One of the biggest challenges of social media marketing is measuring your ROI (Weinberg, 2009: 17). The return on investment of social media marketing has been under-researched, and its ambiguity has left many companies sceptical about the real effectiveness of using social media as a marketing strategy (Gibson & Jagger, 2009: 35). Olivier Blanchard, a macroeconomist and author of the blog BrandBuilder, which focuses on the role of social media, asserts that ROI is solely the financial impact; Not estimates, not potential, not yet-to-happen transactions (2010). It is necessary therefore to make a clear distinction between financial impact (ROI), and non-financial impact (social return). With regard to both of these categories, it is critical that to measure the impact of social media marketing accurately, the company starts with a baseline. This baseline marks where the company started before utilising social media and therefore provides a starting point from which to measure. Secondly, the company should be clear about their business objectives, and what they are choosing to measure. When measuring financial return, businesses can measure how many sales they were making before social media, and then measure this against how many sales they were making once social media

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had been implemented. Nevertheless, this will never be a precise, causal relationship, as other factors such as other marketing strategies may also impact the sales made. However, the majority of social media buzzwords are people-centric rather than about sales, and are more focused on relationship building, trust, rapport, commitment and engagement. Business owners question whether the social impact correlates with the financial impact and are unsure how to measure it. Blanchard (2010) in his ROI model, suggests that there is a relationship between the non-financial and financial impact, as people have to be influenced socially before they commit to a sale.

Figure 2 3 Non-financial/Financial Impact

The relationship though, is not directly proportionate. Blanchard states that despite the number of people influenced socially, The body attached to those pair of eyeballs becomes one of three things: A browser, an influencer, or a transacting customer (Blanchard, 2010). Jason Falls, a social media expert, suggests that the problem with trying to determine ROI for social media, is you are trying to put numeric quantities around human interactions and conversations, which are not quantifiable (Falls, 2008 cited Weinberg, 2009: 8). Here, Fall contradicts Blanchard s claim that ROI is solely finance related, thus highlighting the ambiguity of the term. Furthermore, Falls statement it not absolute. Although factors such as engagement and influence are difficult to determine, there are several tools that the platforms provide in order to measure social impact. Companies can easily measure the number of fans (Facebook), followers (Twitter), connections (LinkedIn), and views (YouTube), as these are displayed by the platform itself. External websites such as Twitter Grader or Twinfluence can measure the profiles authority based on the

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number of people following, the number of followers, and the reach of those followers. However, these sorts of frequency counts do not necessarily account for engagement, attention or sentiment. Social media platforms such as Facebook recognise that it is not exclusively about the number of eyeballs reached, and are therefore trying to measure engagement more effectively, providing insights into interaction, quality of posts and interactions per post. These types of factors can be quantified to a certain extent by the number of posts, comments, discussions, uploaded photos and videos by active participants.

2 3 3 Internal Communication and Business to Business
Social media also facilitates business development beyond the brand to consumer relationship. They provide an online platform through which internal employees can managetheir relations (Gillin, 2008), exchanging ideas and knowledge, sharing best practises, co-ordinating activities and building bonds. Blogs in particular provide an effective tool to personalise the workplace in a meaningful way (Azua, 2010: 57). Management can update colleagues on a regular basis and personalise their leadership in order to educate and retain their employees. Blogs can therefore help to handle company stress by lowering communication barriers, bridging geographically dispersed employees, and building relationships (Azua, 2010: 57-58). Presentation and document sharing sites such as Slideshare or Scribd are also extremely valuable tools to publish and share professional information with internal colleagues and external associates. Furthermore, these sites provide a unique opportunity to network with like-minded business professionals, to form partnerships with new clients, find new business prospects and make new sales. LinkedIn in particular is suited to this business to business networking, and has become favorite tool for recruiters (Vick & Walsh, 2006: 3), facilitating the search for highly skilled and qualified job candidates.

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Social media provides contact with a high number of people, helping organisations to increase their customer reach and fanbase. It extends brand visibility beyond the organic world, and in doing so, reaches new channels of customers and demographics that don t respond to traditional media. As explored previously, the excellent viral potential means that knowledge of a brand can spread rapidly and widely, influencing a large number of people and gaining advocates.

2 4 1 Target Marketing
However, it is not all about numbers, but rather it is about the quality of these numbers. Contacts must be relevant and engaged to ensure that the marketing is effective. Rheingold, in his seminal text The Virtual Community (1993), argued that the Internet gave birth to a new community, bringing people together online around shared values and interests (Rhiengold, 1993, cited Castells, 2000: 386). Social media encourages communities of like-minded people and unifies people with similar interests (Brogan, 2007), thus facilitating target marketing and the ability to reach niche buyers directly. An effective way to make quality connections on sites such as Facebook and LinkedIn is by joining groups that are specific to the interest or industry, and then generating conversation and participating in discussions (Levine & Young, 2010: 278). This enables brands to address consumers communally, and members are able to liaise with one another, diffusing reciprocity, and thus revitalising the public sphere. On Twitter, businesses can build a virtual network of relevant contacts by following people who share the company interests, who in turn will follow them. The codified structures of social networking profiles encourage users to reveal their intimate details and define themselves by their consumption tastes. Alice Marwick (2005) supports this by suggesting that the self-presentation available on social networking sites is tied to capitalist interests. The profile structure drives users to define themselves by their consumer tastes and their popular culture preferences, which helps marketers to capture data, filter their audience, and target their 20 | P a g e



marketing. Pertinent, tailored messages are therefore directed at relevant contacts, thus reducing the bounce rate whereby visitors exit without engagement. This relevancy will in turn increase the likelihood of users subscribing to the brand s content, generating traffic to the website, and ensuring that time is not wasted on marketing to uninterested parties.

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Chapter 3 Methodology
3 1 Methodology
The literature review has identified the potential benefits of using social media as part of the business and marketing strategy and the best practises by which to maximise those benefits. The research now takes a deductive approach by testing how the theory correlates with how companies are currently engaging with social media. For this research, a survey distributed in electronic format proved to be a robust method of collecting and tabulating data regarding the opinions, behaviours and experiences of co mpanies using social media. The survey was constructed using Kwik Surveys, a tool designed specifically to produce professional online surveys quickly and easily and then analyse feedback. The survey followed a logical, structured topic guide, drawing incisive questions from the four categories identified in the Literature Review: Brand Awareness; Positive Brand Association; Business Development; and Relevant Customer Reach. These topical questions followed several general, introductory questions, and preceded some concluding questions. Questions examined the perceived benefits of social media for businesses, their current social media practices, social media budget, and belief in the value and effectiveness of social media. A questionnaire is like a conversation which typically evolves in accordance with societal norms (Schwartz, 1996, cited Dillman, 2000: 86), which is why my survey opened with some simple, yet salient introductory questions, and postponed more intrusive questions related to market spending and financial return. My results were then used to examine the correlation between social media theory, and practical use.

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The survey encompassed 25 quantitative and qualitative questions in order to generate a combination of hard statistical data, and soft interpretative data. Access to empirical evidence helped me to identify an external reality, and was more focused on factual information of how brands are using social media. This positivist stance requested closed, multiple choice questions that were mutually exclusive in order to produce tangible results. These encompassed nominal, ordinal, and interval questions. Vague, ordinal quantifiers such as very satisfied were limited intentionally as these are too broad, ambiguous, and open to subjective interpretation. These closed questions however, limited and perhaps distorted responses to a fixed schedule, preventing respondents answering in their own way (Gill & Johnson, 1991: 88). Qualitative questions on the other hand, were used to search for meaning, and ascertained the views, opinions and experiences of brands using social media. These open questions invited a variety of responses and permitted flexibility, although their answers, as well as answers to any other please specify categories, were post-coded and quantified later. The lack of structure however, meant that the information was not readily codable and computable (Gill & Johnson, 1991: 89). A printed sample of the final survey is published at Appendix B.

3 2 Distribution
My survey was distributed on several social media platforms; Facebook, Twitter, LinkedIn and my blog. I used Facebook and LinkedIn by joining many relevant groups and pages related to social media, marketing, and business, and added the survey link to the wall and discussion pages. My main method of distribution however was on Twitter, where a publicly visible message with a link to the survey was sent to hundreds of companies. These messages were visible to their contacts and were able to be forwarded (re-tweeted) to their newsfeed. was used to create a blog: Building A Digital Footprint , which provides an account of the research progress, social media advice, and a link to the survey. Using multiple communication platforms meant that each one was supplementing the others, as each site provided a link to another. 23 | P a g e


3 3 Sample and Population
Placing the survey among social media platforms automatically targeted the population of interest, producing a sample likely to find the survey relevant to them (Gilbert, 2008: 309) and as a result, helping to obtain a representative sample. The viral nature of the Internet facilitates network or snowball sampling, as respondents can pass it on to others. Although network sampling can limit representation and therefore generalisation, the research benefited from the survey being dispersed among networks of companies and those with a specific interest in social media. By placing the survey link in different groups, it covered companies from a large range of industries to improve generalisation and extrapolation. Evidence suggests that email survey participation requests gain higher actual response rates than Web-posted surveys (Hewson et al., 2003: 82). However, due to the significant number of users who are likely to be exposed to the survey on social media platforms, large samples can be acquired despite a low response rate (Hewson et al., 2003: 82). 360 respondents proved to be a statistically robust and commendable number to work with and allowed me to work with the data to a high degree of confidence.

3 4 Advantages
Online surveys were a suitable methodology for the purpose of the research. Unlike regular research, they can transcend geographical and temporal barriers and can therefore gather a lot o f information quickly, from a large and diverse sample covering a vast geographical area. This granted the opportunity to gain a more representative sample and improve the external validity. In contrast to a postal survey, the production of hard copies of materials, distribution and data collection was not required (Hewson et al., 2003: 43). Online surveys facilitate a faster response rate, and responses are received in an electronic format, which makes them easier to sort and analyse. As a result, online questionnaires have greater time and cost efficiency. 24 | P a g e


A major advantage is that once the survey was released online it could be passed on virally, thus gathering a larger sample. As the survey was distributed on social media platforms, it automatically targeted the population of interest, thus ensuring that the respondents were relevant. Such relevancy encouraged people to complete it, thereby increasing the response rate. Participants were able to respond from the comfort of their own homes and at a time that suited them, which was another factor to enhance the survey s appeal and helped to improve the response rate (Hewson et al., 2003: 44). Unlike interviews, surveys avoid interviewer subversion (De Vaus, 2002: 130), as they minimise the chance of the researcher influencing the response to the survey (Dillman, 2000). The interviewer can not reveal their own opinion, give their own interpretation, or prompt a specific response. The absence of leading questions in the survey helped to avoid the contamina tion of results, and therefore increased the validity of the research.

3 5 Disadvantages
Some researchers (Czaji & Blair, 2005; Dillman, 2000) warn that the response rate for Internet surveys is relatively low. However, they still obtain a higher response rate than postal surveys or interviews because of the convenience that participants gain from Internet use (Dillman, 2000). People can easily ignore questionnaires (Dillman, 2000), therefore it is better if they are sent to current contacts or referred by a friend. The online environment facilitates this type of viral pass-on, and by placing a link to the survey in relevant groups, many users were likely to complete it voluntarily. Some may give up if they find the questionnaire difficult, therefore all of the questions in this survey were clear, relevant, and didn t contain esoteric terminology. By starting with easier, multiple choice questions, respondents were more likely to engage and co-operate.

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Open questions are more suited when the respondents can reply verbally, as many people experience difficulty putting their ideas in writing (De Vaus, 2002: 129). Furthermore, there is no interviewer to probe a clearer response from an inadequate answer, asking for clarification, explanation or further detail. It is for this reason that the majority of the questions required quantitative answers. Although there are benefits to an absent researcher, this also poses difficulties. The researcher has no control over the conditions under which the survey is completed, and is unable to judge the sincerity of the response (Hewson et al., 2003: 44).There is also no guarantee that the identity of the participant is genuine, and it is easier for participants to deceive the researcher, which may lead to inaccurate information. However, sending the survey link to relevant contacts and ensuring that the questions were only relevant to companies using social media attempted to omit these fraudulent responses and increase accuracy. Due to the public and viral nature of the online sphere, it would be impossible to calculate the response rate of the social media distribution, as it would be hard to assess how many people have seen the Internet survey and how non-response might be patterned (Gilbert, 2008: 309).

3 6 Limitations
Although targeting companies via social media would guarantee a relevant sample of people using the medium, this also endured a limitation. By excluding people that don t use social media, it eliminated views of why people have chosen not to adopt the new paradigm. The chances are that if they are engaging in social media, they have had a positive experience using it. As a result, the research would encounter a sample bias and would lack responses where companies believe it is not valuable. However, the research was concerned primarily with how to exploit social media as a business and marketing tool, and how companies are currently engaging with it.

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Obviously, the research was limited to the companies that chose to fill in the questionnaire, which limits its validity. However, this is unavoidable with any research, and the high number of surveys completed increased the level of generalisation and external validity.

3 7 Ethical Considerations
In all aspects of research, it is essential that ethical concerns are considered. In the online environment, the distinction between public and private domains is ambiguous. This has ethical implications, as what people choose to disclose online could arguably still be private information and not consented to for research use. However, my research ensured ethical integrity as the respondents answers to the surveys were not publicly visible and remained anonymous, thus maintaining confidentiality. To certify that consent was given by the participants, all respondents were informed that the survey was being used for research purposes, and it was clarified that participation was entirely voluntary. Participants were able to withdraw from the study at any time, and therefore by submitting their responses their consent was given. Furthermore, as the researcher, I was ethically responsible for debriefing the participants after they had completed the study. This consisted of a message of gratitude and my contact email address.

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Chapter 4 Data Collection and Analysis
The success of the distribution process demonstrated the power of networking and the viral capabilities of social media. On Twitter, many people were forwarding (re-tweeting) the survey voluntarily to make it visible to all of their contacts, thus accelerating viral pass-on. I intentionally targeted including key influencers such as Herbert Kim, the CEO of the Thinking Digital Conference and Codeworks, and Luke Bean, the online marketer for Sony Pictures in Los Angeles. The latter contact in particular helped to gain more responses from overseas, increasing the diversity of the sample and the external validity of the research. The North East Entrepreneurs Forum also placed the survey link in their e-newsletter to increase exposure, viral spread, and credibility. Making a strong social media footprint by participating on several social media channels generated a considerable snow-ball effect, demonstrating how businesses can network and build online relationships rapidly. Once a very active member of the Twitter community, users would follow me, regardless of whether or not I was following them, request to connect with me on Facebook and LinkedIn, and comment on my blog posts. The methodology in itself therefore highlights the high viral capabilities and the benefits of increased exposure online. The survey was open for three weeks, and in that time received 360 responses , providing a robust and reliable sample for valuable data collection.

4 2 Response rate
360 completed surveys provided a substantial amount of responses to increase the generalisation of the research and highlight the power of social media. However as anticipated, the exact response rate is unknown, as it was impossible to measure precisely how many people saw the survey.

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Despite this, the link received 886 clicks, indicating that 41 of the people that clicked on the survey chose to complete it.

4.3 DATA ANALYSIS 4.3.1 M Sample
The respondents spanned a huge variety of industries, although 35 were communications based: Marketing, Advertising, Media, PR, and Publishing. On reflection, this category should have been broken down, although an exhaustive list of nominal category choices would have be undesirable. en Information Services (16 ) and Accountancy and Business Services (13 ) were also highly represented. The large majority of the companies in the sample were SMEs (84 ) (holding under 250 employees), and 220 companies (61 ) comprising less than 10 employees, thus classing them as micro-firms. This revealed that the results of this research mainly reflect how small companies are using social media. According to the study, 238 companies (66 ) have been using social media for two years or less, highlighting that adopting social media for business is a recent phenomenon.

10 21 6
15 101 Less than a year

1-2 years 3-4 years
5-6 years 7-9 years 13

10 years or more

Figure 4.1 Years spent using social media

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4 4 Main Benefits
The research shows that companies using social media have achieved clear, definable benefits. Respondents to the survey prioritise the benefits as shown below in Figure 4.2.

Figure 4 2 Main Benefits

4 4 1 Brand Awareness
Increased brand exposure was noted as the main benefit of using social media. The three most popular social media platforms proved to be Twitter (26%), Linkedin (21%), and Facebook (20%), although these results may have been influenced by uneven distribution of the survey among the sites. Twitter was mentioned specifically elsewhere in the survey, and was commended for its immediate and significant exposure benefits, with one respondent claiming that after engaging in just three conversations their followers have shot up! Although numbers of followers doesn t necessarily signify brand loyalty, it does prove an increase in brand exposure. In accordance with Mitch Joel s analogy of a virus, companies are noticing that these online networks have strong viral capabilities for their brand message, with one respondent asserting that social networking has put word of mouth on steroids.

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a a


It was evident that companies are using multiple platforms to increase their online brand visibility. Results showed that many companies are using blogs (14 ), YouTube (11 ), Fli k (5 ) and Slide ha e (3 ). Forty companies mentioned alternative social media platforms that they use for their brand. These included community sites such as Spa e and S u ble Upon, social news

websites, social bookmarking websites, video sharing sites, micro-blogging sites, applications and blogging platforms (see Appendix C).

Figure 4.3 Social Media Channels used

Evidently, there are a plethora of social media channels which each have their own unique purposes, with some more suited to certain businesses than others. As one respondent noted: It s ea l in the curve for social media and therefore hard to kno which platforms will sta and which will fade awa That s part of the fun!

Social media tools are not stable, as popularity of certain sites will rise and fall over time. Although some may find this refreshing and exciting, others see it as a burden: It change eve continue to - so etimes it s ha d to keep up! da and

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d f e r



q p



ih wt







f g

However, the general consensus from the survey responses expressed that: The medium or platform may change but social media will stay.

4 4 2 Positive Brand Association
The survey results showed that companies are making good use of social media to create a positive brand image and reputation. One respondent in particular noted: I believe we have created a younger, fresher image for our organisation by using Social Networking, whilst another stated that engaging in regular conversation has helped to establish a strong brand personality . Building relationships with customers was recognised as a significant benefit to using social media, with 42% saying that it has changed the way their business communicates with its customers. Tom Nixon, a social media agency co-founder, noted that using social media as a marketing tool should not be used just as promotion or an advertising alternative, but rather it should be used to: Bring an organisation and its stakeholders (customers, suppliers, partners, employees) much closer together and engaged in the process of running the organisation (Tom Nixon, social media agency founder)

Although this is in line with the reviewed social media literature, some companies are finding difficulty knowing the appropriate balance between social content and brand promotion.Overall, companies prefer to adopt a professional, yet informal and personal tone of voice, conveying enthusiasm and using humour. An independent cinema commented how it has helped to convey the personality of their brand:

The majority of companies in the sample (59%) spend less than 5 hours on social media platforms per week, although 24 companies (8%) reported dedicating over 20 hours a week to social media. 32 | P a g e

x x

It builds the brand in the exact way we want: it's personal, friendly, light hearted and passionate, just like the people we talk to.

The majority of companies are therefore using social media for just under the recommendedtime commitment, an hour a day (Evans, 2008).



Less than an hour a week 1-5 hours a week 6-10 hours a week


Over 0 hours a week

Furthermore, 65 of companies have someone responsible for social media, and 22 have someone whose sole responsibility is managing social media. This suggests that social media is creating new roles and functions within organisations. One respondent noted: Any company looking to generate online noise should invest a lot of time in social media, even if it means bringing someone on board who knows how to effectively use social media The rewards will become clear very quickly. However, in an alternative question, 71 respondents believed that social media takes up too much time. In answer to an open, qualitative question, one person suggested that time dedicated to social media can be wasted: I think the one down side to it is you can lose track of time, spend too much time seeing what others are doing but you feel like you're working on your business when really you're not.

The findings showed that companies are sharing a wide variety of content on social media platforms, from photos, videos, events and blogs to advice, special offers, reviews, and case studies. Content appears to be a mixture of business and personal interest as companies share documents,

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Figure 4.4 Time spent on social media per










11-15 hours a week 16- 0 hours a week

presentations, recent work and job vacancies as well as opinions, music, games and authentic experiences. One respondent emphasised the importance of personal content stating: I try to talk about normal things and not overload people with posts about new products etc

Companies are also building relationships with their consumers by offering incentives to support their brand. 24% of businesses said they have used incentives and rewards such as discounts, tickets, cameras, ipods, Blackberrys, and game consoles. Many incentives were also specific to that particular business such as a free month s subscription to their program, free website design, and upgrades and trials of new services. One respondent said: If the marketing is informative and creates value, people may pay attention to it. But it's a battleground out there; fight for people's attention.

This view is in line with Godin, author of Purple Cow (2003), who stresses the importance of creative and dynamic content. One company in particular raised their concerns of finding such creative content ideas. 48% of companies have never received negative comments about their brand online although it , could be argued that they are not looking hard enough. For those that have received negative comments, 62% respond to the complaints, 29% of which only sometimes. Only 3 companies delete the negative comments, and 4% leave the comment open to public viewing and don t respond to them. This shows that the majority of companies are abiding by social media literature and responding to concerns to improve customer relationship management, therefore boosting trust and reputation.

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Figure 4.5 Response to Negative Comments

24 of respondents expressed their concern about the open nature of social media, making it an easy outlet for damaging content and consequently harming the company image:

However, the majority had the attitude that being aware of negative feedback is also constructive as it is better for improving the business rather than never knowing that this opinion exists. They also held the view that social media enables [them] to track and respond to criticism, providing the opportunity to turn a detractor into a neutral at least by addressing the issue promptly.

4.4.3 Business Development
According to the survey, companies are using social media to develop their businesses with both external customers and clients, and internal employees. As shown previously in Figure 4.2, respondents revealed that they consider the second main benefit of using social media to be acquiring new customers (17 ), and they are capitalising on the open and voyeuristic nature of the

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People prefer to shout about things before they know all the facts and tend to offer opinions on people or businesses without having any personal experience with said people or businesses. This leads to slanderous comments that are in the public domain when the person making those comments has never actually interacted with said person or business

internet by monitoring what their competitors are doing (86%) and monitoring what others are saying about their brand (81%). An independent cinema stated their fondness of social media: I can't stress enough how important it is to me/the company I work for. It's fantastic to keep in touch with customers, to see what they're saying, what they want to see at the cinema, what they don't Companies also seem to be very open to customer suggestions, and willing to change their products/ services accordingly. 49% of the companies surveyed said that they had already done so, and a further 10% would consider doing so if the suggestions were put forward. One company remarked:

So far I have not, only because we are a brand new company; however, this is something I would definitely consider doing because referrals/word of mouth advertising is very powerful and if one or two clients felt strongly about one of our services, it would definitely impact the decision others would make about using the same service.

In terms of internal business development, 16% of the companies have hired someone using social media, and a further 15% have used it as a search tool for potential employees. Interestingly, 56% haven t used it as a hiring tool but would consider doing so, indicating that social media has great potential to become an increasingly utilised recruiting tool.

One respondent emphasised the importance of internal collaboration, business growth, and building strong customer relationships by not only using public social networks, but also private social networking applications. They stated that:

These are the powerful new tools that are changing organization charts, communication within organizations and even the relationships among companies, suppliers and customers.

4 4 4 Marketing Spend
Respondents identified the third main benefit of social media to be its low cost (14%). Some mentioned this as a particular advantage due to the current economic climate, and others compared 36 | P a g e

ˆ ˆ

its cost to traditional advertising whilst still reaching a high audience. 48 of the companies surveyed said that they don t have a social media budget, and those that do have a relatively low one; with 44 of those with a budget only spending 1-5 . However, 25 with a social media budget said that it is over 20 , demonstrating that companies are either investing a fair amount or very little, with little middle ground.


58 21

1 9

10 9

Figure 4.6 Social Media Budget

In regards to future spending, 48 said they would increase their social media spending in 2010 and 27 of which said this would be a significant increase. These figures may even be set to rise, as 19

said they were unsure. Only one company said they would decrease their spending, and this would be significantly. One respondent expressed their concern of this trend, who found it disconcer ting that their company is cutting back in vital areas to expand [their] social network programs.

Figure 4.7 Future Social Media Spending

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Over 20


16 - 20


11 - 15


6 - 10

‘ ‘

1 -5













4 4 5 Relevant Customer Reach
Although the survey questions didn t draw specifically on target marketing, a few respondents commented that social media is a great way of reaching a targeted audience . This in turn helps to boost clients, sales and reputation. Whilst one respondent stated that they have gained work through Twitter without meeting someone , another said that: Social media gives us access to tools to connect to these customers, and gives them tools to evangelise about our company, our brand and our values .

Increasing the relevancy of the company s online connections will help businesses to tailor [their] content very effectively and increase responses to the company s efforts as they have agreed to become engaged with you in the first place .

4 5 Main Concerns
However some businesses engaging in social media have experienced some pitfalls or shortcomings.

4 5 1 Measurement and ROI
As raised in the social media literature, the two main concerns of social media appear to be measurement and ROI. As one respondent claimed:

The research revealed that most companies measure the effectiveness of their social media efforts by: The number of followers/ fans (22%); Visits to the website (21%); and Social mentions (17%).

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“ “ ” ” ”

Measuring the damn thing is the single most important issue

y y y

However, as Figure 4.7 shows, a significant majority of users are not measuring these factors.

Measured ot Measured

Figure 4.8 Social Media Measurement

4.5.2 Lack of Social Media Measurement Awareness
In addition, 132 companies said they were aware of tools to measure social media efforts, although only 76 companies (21 of the sample population) were able to name the tools, as depicted in the chart below. This means a staggering 79 , or 284 of 360 respondents could not name a tool that would measure ROI. For a list of tools mentioned see Appendix D.
Table 4.1 Awareness of Social Media Tools

Respondent population Aware Aware of tools Aware of tool names 132 76

360 Unaware/Unsure 168 284

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– —




followers/fans visits to site
social mentions


4.5.3 Challenges with Social Media
When asked What are your challenge(s) with using social media? respondents replied with:

Figure 4.9 Challenges using Social Media

These results show that although many companies (24 ) claim not to have experienced any challenges with social media, a significant 11 of companies surveyed don t know how to measure its effectiveness. When asked What would you like to know about social media? 10 respondents mentioned that they wanted to know how to measure ROI, and a further 15 respondents mentioned that they want to know more about measurement. However, although measuring quantifiable results was a concern, respondents were giving very positive feedback about the social returns of social media. Serge Gladkoff, group administrator for a LinkedIn group comprised of 5,400 members said:

The idea is simple and very effective Do good for people without immediate return, and they will get back to you with contacts, information, and opportunities. Serve people and it pays

out With a staggering 22 of companies expressing that they don t know enough ab social media, my research will provide businesses with a valuable insight into the best social media practices.

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d f



Chapter 5 Conclusion
5 1 Conclusion
This study examined the impact of social media and its value as a marketing and business development tool. In doing so, it explored the best practises, and how companies are currently implementing social media, as well as their views and opinions towards the recent phenomenon. The survey results revealed that the majority of businesses engaging with social media are complying with the advice from social media literature (Scott, 2007; Li & Bernoff, 2008; Holzner, 2009; Postman, 2009; Weinberg, 2009). With an extensive literature review and a survey of 360 companies, this research found thatdespite being a recent phenomenon, those who have adopted a social media strategy have recognised tangible benefits, providing a compelling reason for others to also adopt social media for marketing and business development purposes. Irrelevant of the size or industry of the company, having an online presence is fundamental to increase awareness of the brand and build relevant customer relationships at little to no cost. Companies should have a brand presence on multiple channels to increase their visibility and SEO. Social media has without a doubt put the social back into business. By being a vocal activist and joining conversations, companies are increasing their brand exposure, positive reputation and building relationships with a large, relevant consumer base. Businesses are stimulating word of mouth by sharing emotionally engaging, creative and dynamic content, adopting an authentic human voice to reflect personality and building rapport rather than being seen as distant, inhumane corporations. Most companies are being responsive to both positive and negative feedback, offering

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incentives, and assigning consistent time commitment to build a positive brand reputation and encourage customer retention. Businesses are currently monitoring customer feedback and their competitor s actions, and are using these insights to build the brand. By valuing their customer s opinions and ideas, companies can gain further understanding of the needs and sentiment of their audience, and let them influence business decision-making and the future direction of the brand. The research also showed that businesses are using social media to strengthen the internal structure of the company, improving internal communication, recruiting, and updating and sharing information between employees. Although companies are using social media as a searching tool for hiring employees, few businesses have actually employed someone using the medium. However, the majority of businesses are willing to do so, and this may be an increasing trend in the future. Respondents were also enthusiastic for the future of social media, seeming convinced that it is here to stay, and that so far we have only witnessed the tip of the iceberg. The research exposed that a direct impact on sales and ROI remains unclear, however the companies surveyed expressed that harnessing social media has had a positive effect on their company. Companies should plan social media strategies for continuous engagement and shouldbe clear about their objectives, which they can measure using social media measurement tools,

5 2 Further Implications of the Study
The results from the study revealed that businesses are using social media appropriately and there are strong links between social media literature and current use. However, businesses identified that their main challenges were measuring the effectiveness of their social media efforts, and the Return on Investment. The literature review has identified four main benefits of businesses using social media: brand exposure, positive brand association, business development, and relevant customer

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reach. Although the research explored ROI (section 2.3.2), the survey revealed that companies are questioning the value of social media investment and its direct influence on revenue generation. Further study should therefore investigate how these social benefits correspond to revenue and sales. As social media evolves, it is imperative that researchers monitor the advancements and continue to study how this new online environment is impacting marketing and business development.

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Gill, J. & Johnson, P. (1991). Research Methods for Managers. London: Paul Chapman Publishing. Gillin, P. (2008). Secrets of Social Media Marketing: How to se Online Conversations and Customer Communities to Turbo-charge Your Business. California: Quill Driver Books. Gladwell, M. (2002). The Tipping Point: How Little Things Can Make a Big Difference. New York: Little Brown and Company. Godin, S. (1999). Permission Marketing. London: Pocket Books. Godin, S. (2003). Purple Cow. New York: Penguin Group. Goldhaber, M. H. (1997). The Attention Economy and the Net. First Monday. Granovetter, M.S. (1973). The Strength of Weak Ties. American Journal of Sociology. 78 (6), 1360. Hall, S. & Rosenberg, C. (2009). Get Connected: The Social Networking Toolkit for Business. Canada: Entrepreneur Press. Harrison, T. M., & Barthel, B. (2009). Wielding New Media in Web 2.0: exploring the history of engagement with the collaborative construction of media products. New Media & Society, 11 (1&2), 155-178. Haythornthwaite, C., & Wellman, B. (2002). The Internet in Everyday Life. Oxford: Blackwell Publishing. Hearn, A. (2008). Meat, Mask, Burden: Probing the Contours of the Branded Self . Journal of Consumer Culture, 8, 197. Hempel, J. (2005). The MySpace Generation. Business Week 3963: 86. Heuer, C. (2007). Participation is Marketing. Weblog, accessed 11 Feb 2010, Available at: Hewson et al., (2003). Internet Research Methods: A practical guide for the social and behavioural Sciences. London: Sage. Holzner, S. (2009). Facebook Marketing: Leverage Social Media to Grow Your Business. Indianapolis: Que. Jaokar et al. (2009). Social Media Marketing: How Data Analytics Helps to Monetize the ser Base in Telecoms, Social Networks, Media and Advertising in a Converged Ecosystem. London: Futuretext. Joel, M. (2007). Trust Economies: The New Marketing ROI, Six Pixels of Separation, 17 March, Available at: Accessed: 15 February 2010. Joel, M. (2009). Six Pixels of Separation. New York: Grand Central Publishing. King, M. (2010). Facebook freebies can build a strong customer base, weblog post, 30 March. Available at: 45 | P a g e



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Facebook Facebook is a locus for social interaction, designed to facilitate connections between people as well as businesses. First established in 2004, Facebook has expanded rapidly and currently boasts over 400 million users (Facebook, April 2010). It has a desirable demographic predominantly educated 18 to 25 year olds with disposable income (Holzner, 2009: 7), and its open, transparent nature allows users to observe their friend s activity minute by minute. According to company figures, 50% of active users log in everyday, which proves that the medium is engaging its audience, and therefore provides a fertile ground for marketing. Currently, 1.5 million local businesses have active pages on Facebook, and all Facebook pages have produced more than 5.3 billion fans (Facebook, April 2010). These statistics demonstrate that Facebook marketing is not just for big corporate brands, but is also being embraced by smaller, local companies. Furthermore, it reveals that consumers are reacting to this new marketing approach, and are willing to publicly support brands. Twitter

Established in 2006, Twitter is a micro-blogging site where users share what s happening in a limited 140 characters. The site currently encompasses 18 million users mainly between the ages of 25-54 years old, and is saturated with businesspeople and marketers. By growing a network of likeminded people, users are able to listen to knowledgeable conversations and stay informed about market trends, product launches, and new research. Ultimately, people are able to narrow [their] cyber-eavesdropping to those conversations that are relevant to [their] field, skills, interests or organisation (Azua, 2010: 104) in order to tap into business prospects, influencers and customers (Weinberg, 2009: 125). 48 | P a g e

The tool facilitates the sharing of branded content, related news articles and blogs in order to promote services and products to a target audience whilst simultaneously encouraging viral pass-on (retweets) and immediate feedback. LinkedIn LinkedIn is a professional social networking site, which enables the user to collaborate with experienced businesspeople. In contrast to Facebook, profiles bear resemblance to CVs and encourage the user to display their professional identities. The profile structure compels the user to provide personal work history, specialisms and recommendations from others. The site currently holds 60 million users (LinkedIn, April 2010) who can provide powerful business intelligence (Azua, 2010: 106), facilitating idea generation, thought leadership, and business opportunities. The value of such professional networking enables the user to find potential clients, service providers, subject experts, and colleagues (Weinberg, 2009: 163). YouTube

YouTube is a video distribution platform that enables user-generated content to be uploaded and shared with the world. Founded in 2005, the site now holds over 100 million users and is the world s leading video community on the Internet (YouTube, 2010). For brands, YouTube can be used as a vehicle for engaging their target audience, acting as a centralised location to share videos related to the brand (Azua, 2010: 109). Videos can be spread virally and uploaded onto the company website, onto other social networking sites such as Facebook, Twitter and LinkedIn, or embedded into personal blogs. According to the latest YouTube statistics, 52% of 18-34 year olds share content with their friends and colleagues (YouTube, April 2010), indicating its viral potential. YouTube has a large and diverse user base, with the prominent age range being between 18 and 55

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years old (YouTube, 2010), demonstrating that it has great marketing potential to reach a large array of audiences. Blogs Blogs provide a platform to share ideas, knowledge, and experiences, both within a business and across the wider community. As a creative outlet (Scott, 2007: 45), they can incorporate text, pictures, videos, and audio, and can be customised aesthetically to add personality. Blogs are often seen as more of a push rather than a pull social media tool. In other words, blogs facilitate the dissemination of information, acting as a hub for creating strong institutional memory. Tapping into the blogosphere therefore provides a great opportunity for businesses to market their products and establish themselves as authorities in their field (Weinberg, 2009: 87), whilst maintaining a human voice. However, they also encourage dialogue, feedback, and commentary, thus acting as a trustbuilding mechanism between the business and their consumers or clients.

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Appendix B


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Appendix C
Social Networking/ Community Sites

Social Media Sites Mentioned

Video sharing sites

Photo sharing sites

Music sharing sites

File sharing sites

Microblogging sites

Social News sites

Social bookmarking websites



Blogging Platforms

Facebook LinkedIn MySpace Squidoo Stumble Upon Bebo Hyves Ning Eventbrite Xing

YouTube Vimeo


Slideshare Scribd

Twitter Yammer Ping

Digg Reddit Propeller



Plaxo Business Scene

Posterous Tumblr Wordpress Blogspot

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Appendix D Measurement tools

TweetBeep TwitterGrader TweetDeck Twinfluence Mr Tweet CoTweet True Twit Validation

Google Analytics Radian6 Trackur Hubspot Hootsuite SocialOomph

Social Radar Meltwater Buzz BrandWatch Buzzmetrics Technorati Sysomos Omniture Social Radar

Facebook Insights Pulsepoint Techrigy Questus Cision

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Assignment Declaration
I declare that this assignment is my own work and that I have correctly acknowledged the work of others. This assignment is in accordance with University and School guidance on good academic conduct (and how to avoid plagiarism and other assessment irregularities) .


Emily Hampton



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