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Social Media & Marketing: Online Networking & Advertising 1

Social Media & Marketing: Online Networking & Advertising

A thesis submitted in fulfillment of the requirements for the award Bachelor of Arts

(Communication) (Honours)


Weng Wah, Wong

School of Communication

Faculty of Arts

Charles Sturt University

February 2008
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Declaration of Authorship

I certify that the work presented here is, to the best of my knowledge and belief, original and

the result of my own investigations, except as acknowledged, and has not been submitted,

either in part or whole, for a degree at this or any other University.


Weng Wah, Wong

February 2008
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Whilst once the domain of the information seeker and the passive web surfer, the Internet has

evolved to become a truly social media environment; an interactive environment that now

sees a free-flow of information and conversation. In line with this evolution we have seen the

balance of power shift from the marketer to the consumer, from the communicator to the

receiver through social media platforms such as YouTube, MySpace and more recently,


Currently it is estimated that during an average adult’s day, a total of nine hours is spent

surfing the net. It is anticipated that this time commitment will increase significantly as social

networking becomes mainstream.

Since consumers are now able to control the ebb and flow of information, marketers and

advertisers are coming to recognize that, in order to succeed in the new digital world, they

need to re-think their strategies.

Social media is seen as an emerging communication environment for many, therefore little to

date has been written on it. Indeed it appears that many media practitioners, marketing

agencies and advertising agencies are continuing to apply traditional planning strategies in

this new environment.

In this thesis, my objective is to highlight the growing importance of online advertising,

especially social advertising in the social media environment. The thesis seeks to do this by
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addressing the principal research question “What strategies can be successfully employed by

advertising and marketing practitioners within the social networking platform?”

For this study, the principal form of data collection was participant observation in two

leading media agencies over a period of one month. This was followed by a series of informal

interviews to survey the digital environment and by mini case studies. The research was

successful in obtaining relevant and contemporary data detailing the Australia digital

environment supported by case studies of successful social media campaigns in Facebook,

MySpace and Bebo.

From the investigation the researcher has identified that word of mouth is the most powerful

form of advertising in Web 2.0, and to harness this form of advertising, advertisers need to

build trust and continuously engage the consumer via various online activities. By developing

a high level of engagement with the consumers through the use of interactive online

activities, consumers’ positive word of mouth may be generated, facilitating a successful

online marketing strategy.

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Arguably, my greatest academic accomplishment is the completion of this thesis. It has been

a real challenge for me in terms of getting the language right and balancing external factors

such as the recent loss of my father and the commitments of working fulltime and tertiary


Undertaking and now completing my Honours has built up my personal and professional

confidence and self esteem. I have learnt much on this journey, not only about my specific

area of research, but about myself. It has been a gratifying experience and I would like to take

this opportunity to thank a few important people who have helped and supported me along

the way:

First and foremost, I would like to show my deepest and sincerest gratitude to Dr John

Carroll who has been a very good mentor to me from the start of my course. He has provided

endless moral support, help and motivation to me in my hardest times. Without him, I would

not have been able to finish the course. I admire his willingness to go the extra mile with me.

The second person whom I want to express my deepest gratitude to is Rod McCulloch who

has been my supervisor for the last six months. He is a very important person in the

production of this thesis as he was the one that spend hours and days in correcting my

English and also feeding me constructive feedback to ensure this thesis meets the high

standard set by my university. I really appreciate his help and also his time to help me. When

I doubted my capabilities in completing this course, he believed in me.

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I would also like to thank Timothy Francis Gregory, James Foo and Don Still who have

helped with proofreading my work at various stages. Without their help, I would still be

struggling with words and endless grammatical errors. Lauren Magid continuously offered

assistance to me when I was away from the course and I am really touched by all the little

things she did to help me in regard to this thesis. My cousin, Henry Cheang has provided me

with endless resources to assist me in completing this thesis. There are no words to

adequately express my gratitude to him as he has been providing and helping me to cope with

living in a new country over the past twelve months. Both Ng Wen Chien and Viona Lai have

provided me with endless support and motivation during the hard times of my life. When I

did not even believe in myself that I could complete this thesis, they believed in me, which

means a lot to me.

Last but not least, I would like to thank my family who has been very supportive and

considerate over the past year, and also my church members who have been praying for me

everyday. Thank you so much!

Weng Wah, Wong

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Table of Contents

i) Declaration of Authorship 2

ii) Abstract 3

iii) Acknowledgements 5

1.0 Introduction 10

1.1 Motivation 10

1.2 Thesis Structure 12

1.3 Overview of Research Questions 13

2.0 Literature Review 14

2.1 Introduction 15

2.1.1 Media Landscape 16

2.1.2 Interactivity 21

2.1.3 Social Media 28

2.1.4 Word of Mouth Marketing 34

2.1.5 Social Networking 38

2.2 Conclusion 42

3.0 Research Approach 44

3.1 Problem Statement 44

3.1.1 Research Objective 44

3.1.2 Research Model 46

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3.1.3 Research Questions 47

3.1.4 Definitions 48

3.2 Research Method 50

3.2.1 Research Type 50

3.2.2 Research Strategy 51

3.2.3 Data Analysis 54

4.0 Analysis of data 57

4.1 Australia Advertising Industry 57

4.1.1 Media Landscape In Australia 57

4.1.2 The Internet 64

4.1.3 Media 2.0 68

4.1.4 Consumer 2.0 73

4.1.5 Conclusion 83

4.2 Social Media & Marketing 84

4.2.1 Social Media Marketing Framework 84

4.2.2 Social Networking 89 Social Advertising 89

4.2.3 Case Studies 101 Bebo 101 MySpace 109

Social Media & Marketing: Online Networking & Advertising 9 Facebook 112

5.0 Conclusions 120

5.1 Reflections on Methodology and Limitations 120

5.1.1 Answer to Research Questions 122

5.1.2 Further Implications of the Study 126

List of Figures & Tables 128

List of References 130

Appendix A – Journals 143

Apendix B – Email Transcripts 151

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Chapter 1: Introduction

I am pleased to submit this, my Thesis, for consideration for the award Bachelor of Arts

(Communication) (Honours) at Charles Sturt University. The research component of this

thesis was undertaken during the period of February 2007 to November 2007, with the area of

study being online advertising, specifically within the social media environment.

This first chapter examines the motivation for the study into online advertising and briefly

outlines the structure of the Thesis.

1.1 Motivation

The World Wide Web (www) was chosen as the platform for this research primarily due to

its impact as a communication medium and its exponential growth in terms of the number of

users navigating the network of websites globally. It has heightened the capabilities of

information exchange in an ever expanding media environment.

There have been two generations of the World Wide Web which are known as Web 1.0 and

Web 2.0. A layman’s way of defining Web 1.0 and Web 2.0 is that the Internet in Web 1.0 is

a one-way communication configuration tool, whereas Web 2.0 is a two-way communication


The structure of the Internet is characterized by both increasing media diversity and by the

expanding array of media platforms. Hence, the Internet has evolved into a range of media,

rather than a single medium. In this evolution, it integrates the capabilities of many existing
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media into a highly flexible and personalized communication tool. These properties of

flexibility and personalization of content have given birth to the notion of social media.

Social media is defined as the manifestation of the Internet and a social tool that allows

people-to-people communication online (Goldhammer, 2007, para. 6; Chartered Institute of

Public Relations, 2006, p. 2; Wikipedia, 2007, para. 1). As the name implies, social media

involves the building of communities or networks, encouraging participation and engagement

(CIPR, 2006, p. 2). Examples of social media applications are Wikipedia, MySpace,

Facebook and

In this social media environment, Internet users are brought closer to each other with social

software that foster closer relationships and encourage group participation and collaboration.

For example, instant messaging has allowed communication with one or many, with just a

few clicks. Another example is the Wikipedia platform which is an online encyclopedia that

allows group collaboration in producing content. The power of one may be limited but the

power of a network is limitless.

Social media is a relatively new communication environment; hence there is little written to

date in the literature. The purpose of this research study then is to investigate current

practices of the advertising industry and specifically online advertising in the social media

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Without doubt, the greatest encouragement I have received in the course of this research was

the fact that a segment of my work on the social media environment entitled “Evolution or

Revolution” in has gained significant global attention. In

just six months, my presentation received 17,677 visitations, with a majority requesting a

copy. Most of these requests have come from advertising agencies in the US and Europe and

indeed, this overwhelming response helped fuel my desire to produce a comprehensive

presentation of my research findings.

1.2 Thesis Structure

In this section, the researcher seeks to provide a brief summary of the structure of the


This Thesis begins with 1.0 Introduction, where the researcher provides the background to

the thesis and provides a short overview of the research questions.

In Chapter 2.0, readers will be introduced to what has been written in the literature regarding

the research topic. Chapter 3.0 discusses the researcher’s approach to the answering of the

research questions while Chapter 4.0 outlines the findings from the data collected. Chapter

4.1 provides an overview of the Australian advertising industry landscape. The main trends of

Internet usage by Australian audiences are also highlighted here. Chapter 4.2 introduces the

social media marketing model and incorporates mini case studies to exemplify what has been

discussed. In Chapter 5.0 the researcher concludes by specifically addressing the research

questions and also presenting recommendations.

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1.3 Research Questions

This section contains the questions that will be answered in this thesis. Based on the main

themes explored in the literature review, this thesis addresses the following question:

What strategies can be successfully employed by advertising and marketing practitioners

within the social networking platform?

To address this, the following three sub-questions were constructed:

§ What elements do current social marketing campaigns exhibit?

§ What elements make marketing with social networking unique and different from

other forms of online advertising?

§ What strategies can be devised to enable advertisers to maximize success on the social

networking platform?
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Chapter 2.0: Literature Review

This literature review both explores what has been written and identifies areas where little or

no investigation has been conducted thus far into social media. As this field of study is still

very new, there is a seeming lack of peer-reviewed sources. Hence, the necessary information

for this research was obtained largely from the Internet itself as it provides the latest source of

information in this field.

Prior to undertaking this literature review there appeared to be little, if any, literature on the

roles that advertising can play in the social networking media environment. This research

seeks to add to the limited body of knowledge in this area.

The research focuses primarily on Internet advertising, specifically on the social media aspect

as this has seen tremendous growth in very recent times. Not only has it attracted much media

attention, but considerable advertising spend as well. From the investigation, five main

themes repeatedly emerged: the media landscape, interactivity, social media, word of mouth

marketing and social networking. These five themes form the backbone of this literature


By the end of this review, new developments of the Internet in relation to social media, the

history and future of online advertising have been identified. It is also hoped that the review

will provide a more profound insight into the aspects of social media and how these are

affecting advertising.
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2.1 Introduction

The notion of social media, and specifically its relationship to the advertising industry is in its

infancy. There is still very little written in the literature relating to social media and its impact

in the advertising environment today. Hence, this research has largely utilised information

gleaned from the Internet itself which has been authenticated for credibility.

As described earlier, the literature review covers the following five main themes of media

landscape, interactivity, social media, word of mouth marketing and social networking.

Details of these are as follows:

1) Media Landscape- The roles of advertising and current trends.

2) Interactivity- The Web’s main feature is its ability to be hyper-interactive in terms of

use. Therefore, the literature review strives to develop an understanding of what has

been said about Web interactivity in relation to the user.

3) Social Media- Arguably the most debatable media topic which sums up the Internet

and its huge potential in various fields.

4) Word of mouth marketing- The success of good marketing and advertising often is

measured by the success of word of mouth. The more people a certain advertising

program reaches, the more awareness is generated.

5) Social Networking- A good understanding of the function and prominence of social

networking will allow marketers to take advantage of opportunities that currently

exist or may arise in the future.

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Although the literature presents these themes in a variety of contexts, this study will primarily

focus on their relevance in establishing an understanding of how advertising can be used on

this social media platform.

2.1.1 Media Landscape

Overview of the Media Scene

The total Internet advertising spend in the US in 2004 was larger than that of the whole

outdoor advertising industry, was about 80% of the size of the US magazine advertising

industry and was half the size of the radio advertising sector! Total US advertising spend on

the Internet as recorded by the Interactive Advertising Bureau (IAB) and

PricewaterhouseCoopers (PWC) in 2004 totaled 9.6 billion dollars (as cited in DoubleClick,

2005, p. 3).

Comparing 2004 with 2003, Internet advertising spend increased by 31.5% (IAB/PWC),

compared to 10% for broadcast television, 7.4% for the advertising industry in general

(Universal McCann) and 6.6% for the current dollar GDP of the US economy as a whole (as

cited in DoubleClick, 2005, p. 4).

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Figure 1.0: A Brief History of Online Advertising from 1994-2004.

Source: DoubleClick 2005

2004 continued the acceleration of online advertising spend in the US and for the first time in

four years, the industry outspent the previous highpoint of 2000, when the budget for Internet

advertising dropped by 25% as a direct consequence of the economic recession from 2000 to

2002 (DoubleClick, 2005, p. 4). This is shown in Figure 1.0.

Over the same period, the number of adult Americans using the Internet rose steadily, at an

average cumulative annual rate of 7% from 2000 to 2004 (DoubleClick, 2005, p. 4). The shift

toward Internet advertising was accompanied, at least in part, by a shift away from

advertising in other media (Hallerman, 2006, para. 1).

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While the advertising community went through a period of uncertainty about the viability of

the Internet as a serious medium, consumers had no such doubts and continued to embrace it

wholeheartedly. It was only natural, therefore, that advertisers eventually returned in full

force, recognizing the need to be where their audience is (Doubleclick, 2005, p. 4).

According to Citigroup Investment Research, newspapers have been the hardest hit, losing

$890 million annually in advertising revenue to the Internet from 2004 through 2007. As

shown in Figure 2.0, this was followed by broadcast TV, with losses to the Internet of $720

million per year. As the Internet made up an increasing share of the total media space,

Internet advertising spending has supported the year-over-year growth of the total media

spend (Hallerman, 2006, para. 1).

Figure 2.0: Change in Ad Spend by Consumer Medium

Source: eMarketer, 2007

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David Hallerman, IMedia Connection (2006) states:

“Internet advertising spending will continue to rise even as total media spending falls

for two key reasons: One, in tough times, marketers will increasingly look to more

measurable media to make sure their spending is as effective as possible (and that's

the Internet); and two, as consumer spending falls, consumers will increasingly use

the Internet for research and shopping to maximize their dollars, too. And therefore,

marketers will more likely give up advertising spending in traditional media than in

the Internet space.”

Mass Media goes niche

In 1965, advertisers could reach 80% of Americans aged 18-49 by running TV commercials

on only CBS, NBC and ABC (Auletta, 2005 as cited in DoubleClick, 2006). By 1994, the

“big four” broadcast networks being CBS, NBC, ABC and FOX commanded a 52% prime-

time audience share. By 2004, that share was down to 31% (Strengel, 2004, as cited in

DoubleClick, 2006).

Today, the average U.S. household has 90 TV channels. As Procter & Gamble’s Jim Stengel

stated at the 2004 AAAA Media Conference:

“We must accept the fact that there is no ‘mass’ in ‘mass media’ anymore, and

leverage more targeted approaches... And, we must better understand who we are

reaching as media plans become more fragmented. I give us a ‘D’ here because our
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mentalities have not changed. Our work processes have not changed enough. Our

measurement has not evolved.”

As media choices have proliferated for consumers, so too has the volume of advertising we

are exposed to every day. Estimates from various research companies of the number of

commercial messages the average American is exposed to each day range from hundreds to

more than 5,000, when you include not only advertisements on television, radio, magazines,

newspapers, movie theatres, Web sites and email messages but also omnipresent logos on

billboards, bus stops, stadiums, key rings, t-shirts, baseball caps and so on (Double Click,

2005, p. 14).

Figure 3.0: Time Spent with Media Daily

Source: Future Exploration Network, 2006
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Broadband penetration and technology convergence have been identified as the major reasons

for the change in consumer lifestyle and media consumption habits. Research by the Future

Exploration Network (2006, p. 4) revealed that an average adult spends at least nine hours on

the Internet per day. This is shown in Figure 3.0. Thus, it becomes clear that as consumers

shift their attention to the online world, advertisers must be drawn to the online mediums to

reach and influence them.

As Bloom (2006) explains, over the past ten years audiences have been steadfastly and

dramatically deserting traditional media channels, not because of the availability of new

media, but rather because of the simple lack of quality and social value to be found in their

conventional media channels.

The fragmented world of traditional advertising and the growing maturity of digital media are

forcing brands, media owners and agencies to seek alternative ways of engaging consumers

(Bonello, 2006, para. 1). Traditional mediums of communication are no longer as effective,

with brands struggling to make their voices heard within the boundaries of the traditional

advertising environment, at a time when audiences are tuning out and becoming their own

producers (Bloom, 2006, para. 10).

2.1.2 Interactivity

Marketing communications on the Web provides benefits to both consumers and marketers.

Many of these benefits stem from the inherent interaction between the Web site and the

consumer (Roehm & Haugtvedt, 1999, p. 27).

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The Web is highly interactive and this has allowed people to control what information they

see, for how long, how many times, and in what order (Roehm & Haugtvedt, 1999, p. 28).

Since the inception of the Web, interactivity has been a term that many scholars and

practitioners have tried to define with regard to the functions and applications of the medium

as it relates to advertising and communications (Sohn & Leckenby, 2002). Interactivity in this

context, is one of the important elements in advertising studies as it has been used as a

measurement of advertising effectiveness of the Internet (Sohn & Leckenby, 2002). However,

the multidimensional nature of the interactivity construct has made it difficult to be properly

conceptualized as there are many definitions of interactivity that encompass various fields

(Sohn, Leckenby & Jee, 2003; Peters, 2006). These definitions are detailed in Table 4.0:

Multiple Definitions of Interactivity – Page 22, 23)

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Table 4.0: Multiple Definitions of Interactivity

Source: Johnson, G. J., Bruner II, G.C. & Kumar, A. (2006).

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Upon closer examination, these different definitions can be classified according to whether

they focus on user–machine interaction, user–user interaction or user–message interaction

(Liu & Shrum, 2002, p. 5). User–machine interaction was the focus of early definitions of

interactivity, where the emphasis was on human interaction with computers. To be

interactive, a computer system must be responsive to users' actions. However, although user–

machine interaction is an important aspect of interactivity, it alone is no longer adequate in

addressing the concept of interactivity taking into account the proliferation of more advanced

technology such as the Internet.

User–user interaction is most often discussed from an interpersonal communication

perspective. The more that communication in a computer-mediated environment resembles

interpersonal communication, the more interactive the communication is (Ha & James, 1998

as cited in Liu & Shrum, 2002). However, one problem with this perspective is that it ignores

the ability of a medium such as the Internet to break the boundaries of traditional

interpersonal communication. For example, traditional interpersonal communication requires

two people to be in the same place at the same time for communication to take place but in

the Internet, not only do people no longer need to be at the same place, they do not even need

to be communicating at the same time. In addition, with online translation services, people

also do not need to understand each other’s languages to be able to communicate.

Furthermore, research has shown that computer-mediated communication and face-to-face

communication are not functional alternatives (Flaherty, Pearce, & Rubin, 1998 as cited in

Liu & Shrum, 2002).

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From a user–message interaction perspective, interactivity is defined by Steuer (1992) as:

“the extent to which users can participate in modifying the form and content of a mediated

environment in real time”. Whereas people have little control over messages in the traditional

media, the Internet provides users with considerably more freedom in controlling the

messages they receive. It also allows users to customize messages according to their own


The view of interactivity as being a subjective experience of an individual user has been

defined as “the extent to which a person perceives he or she controls the interaction process,

his or her communicative counterpart (a person, a mass-mediated environment, or a

computer mediated environment) personalizes and responds to his or her communicative

behaviour” (Wu 2000, p. 41 as cited in Sohn, Leckenby & Jee, 2003).

Ha and James (1998) as cited in Dholokia, Zhao, Dholakia & Fortin (2000) studied the

interactivity of early business Web sites and proposed five dimensions of interactivity,

specifically: playfulness, choice, connectedness, information collection, and reciprocal

communication. Further research was undertaken by Dholokia, (2000), who modified

the model to reflect a total of six dimensions of interactivity: user control, responsiveness,

real time interactions, connectedness, personalization/ customization, and playfulness.

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2.1.3 Social Media

While social media as a construct has existed since the advent of the Internet, the recent

phenomenal growth of social networking sites has popularized the phrase. Young (2006)

claims that social media is a new medium in its own right. As such, he argues that successful

commercial exploitation of this new medium requires the development of new

business/advertising models (para. 3).

The Internet has become more socially-friendly, with the development of various social

software giving users a pleasant browsing experience. Web 2.0 is one prominent instance,

and is defined by Reilly (2005) as follows:

“Web 2.0 as a platform, spanning all connected devices; Web 2.0 applications are

those that make the most of the intrinsic advantages of that platform: delivering

software as a continually-updated service that gets better the more people use it,

consuming and remixing data from multiple sources, including individual users, while

providing their own data and services in a form that allows remixing by others,

creating network effects through an ‘architecture of participation’ and going beyond

the page metaphor of Web 1.0 to deliver rich user experiences”.

Social media is unique in the sense that it has transformed a passive audience into producers

and distributors of media (Young, 2006, para. 3). From a marketing perspective, social media

has allowed people themselves to become an integral part of the brand communication

strategies and processes (Young, 2006, para. 3). Hollis Thomases (2006) in his article entitled
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“Are Advertisers Brave Enough for Social Media?” stresses that the social media audience

comprises vocal and engaged people who desire a say and perceive that they may influence

or exhibit some control over what is shown to the community (para. 7). Social media

introduces new models of value creation and has brought an understanding to many that the

media platform has evolved from interactive to social media. This is shown in Figure 5.0.
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Whereas the media evolution began with broadcast media (e.g. CNN) where the relationship

with the audience is defined as one-to-many, it has evolved to become interactive as Internet

platforms such as allow readers to comment, rate, market via email and

occasionally discuss issues of interest in forums. As the online market grows and consumes

more of people’s time, the Internet looks set to become a more prominent medium for the

sharing of information and news. An excellent example is Wikipedia, where its relationship is

many-to-many and readers are the participants, reporters and even editors.

In short, this significant shift in Internet use from passive to active can be summed up

effectively in one word – “participation” (Connecting the dots, 2006, p. 7). The new culture

on the Web is about consumer creation. Conversation defines the heart of social media,

supporting the popular beliefs of Levine, Locke, Searls & Weinberger (1999) that markets are

conversations that consist of human beings, not demographic sectors. The Internet is enabling

and indeed, promoting conversations among individuals that were simply not possible in the

era of mass media.

According to Future Exploration Network (2006), a symbiotic relationship has emerged

between mainstream media (such as newspapers and broadcast media) and social media (such

as blogs, podcasts, online social networks). Both media models feed off each other, e.g. blogs

provide a vast public forum for discussion of content distributed by major media. An

example, is the leading blog search engine, Technorati which has enabled every online item

of The Washington Post, Newsweek and Associated Press newspapers to display the

complete blog discussion about that article hence turning an article into a conversation visible
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to all. At the same time it has become common for mainstream media to quote blogs and

bloggers, sometimes exclusively, and the conversations between bloggers often provide the

ideas for media stories. Together, mainstream and social media create a single media

landscape in which everyone participates.

The generation of participation has changed the rules of information filtering. In the past, it

was the journalist who created the content which was then filtered by editors. In the realms of

social media, user-generated content has created a vitally important trend which is that of

user-filtered content. The flexibility of the Internet has transformed and shifted the power

from the editor to the consumer.

Social media is the manifestation of the Internet and is a social tool that allows media sharing

with one another (Goldhammer, 2007, para. 6; Chartered Institute of Public Relations, 2006,

p. 2; Wikipedia, 2007, para. 1). This technology has allowed people to interact and share

ideas and content instantaneously. As the name implies, social media involves the building of

communities or networks, encouraging participation and engagement (CIPR, 2006, p. 2).

Prominent examples of social media applications are Wikipedia (encyclopedia), MySpace

(social networking), (social networking),YouTube (video sharing), Second Life

(virtual reality), Digg (news sharing), Flickr (photo sharing) and Miniclip (game sharing).

Indeed, the Internet itself is a giant, global social network which is created by and for

individuals (Goldhammer, 2007, para. 11).

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In summarizing social media, Mayfield, (2007, p. 5) concludes that social media has the

following characteristics:

1. Participation: Social media encourages contributions and feedback from everyone

who is interested. It blurs the line between the concept of media and audience.

2. Openness: Most social media services are open to feedback and participation. They

encourage voting, feedback, comments and sharing of information. There are rarely

any barriers to the access and utilisation of content - password-protected content is

frowned upon.

3. Conversation: Whereas traditional media is about "broadcast" content that is

transmitted or distributed to an audience, social media is more seen as conversational

and having a two-way interaction.

4. Community: Social media allows communities to form quickly and communicate

effectively about common interests - be that a love for photography, a political issue

or a favourite TV show.

5. Connectedness: Most kinds of social media thrive on their inherent connectedness,

via links and the combination of different kinds of media in one place.
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2.1.4 Word of Mouth Marketing

In this marketing-saturated world, many of us have become quite adept at ignoring the

"noise" of advertising. Indeed, the advances in modern technology are making it quite easy to

avoid advertising altogether. TiVo (which is a popular brand of digital video recorder in the

United States with built in time-shifting technology) has enabled consumers to skip over ads

they do not want to see. Consumers are listening to satellite radio or podcasts, and they are

gathering news and information according to their own schedule and in their chosen format

(Martin, 2007; Taylor, 2005).

Consumers are becoming more able and willing to ignore traditional advertising; they are

becoming even more influenced by what others consider objective "testimonials" from

friends, family, and even total strangers. Much of word of mouth advertising is driven by how

a company has made a person "feel" (Martin, 2007; Taylor, 2005).

Social media provides the technology and platform to spread the “word of mouth” message.

In social media, people share information via their networks of friends, a one-to-many

communication. In support of this statement, a report by MarketingSherpa based on a survey

of 790 viral marketers (as cited in Wyk, 2006) found social networking-related activities-

driven by sites such as MySpace and YouTube- have had the most explosive impact on the

growth of viral marketing in the past year. Digital channels have facilitated the leveraging of

online communities; the ease with which digital content can be shared now becoming

incredibly powerful. Digital channels amplify what word of mouth can accomplish in analog
Social Media & Marketing: Online Networking & Advertising 35

channels, and suddenly people are discussing the product in a public forum accessible to the

entire online population (Lockhorn, 2007).

Word of mouth amplification, according to Lockhorn (2007), is a double-edged sword. The

“uncontrolled distribution is powerful” and “terrifyingly unpredictable”. Word of mouth

campaigns can take off very quietly through niche communities and can be powerfully

persuasive, or conversely result in an astonishing backlash (Lockhorn, 2007).

Word of mouth is controlled by the consumer and it has been the consumer’s nature to care

more about what other consumers think than what a particular advertisement says (Ramsey &

Blackshaw, 2006, para. 1; Keller & Berry, 2006 para. 1). This form of marketing has been

viewed by many as an important complement to traditional media and an essential part of the

marketing mix (Womma, 2005, para. 1). For example, a 2004 Deutsche Bank study in the US

on the consumer packaged-goods sector found only 18% of TV advertising campaigns

generated a positive return on annual investment, whilst the Harvard Business Review

reported that for every dollar invested in traditional advertising for consumer packaged-

goods, the short-term return on investment was just 54 cents. One response to the saturation

has been to reduce media costs by using free (and influential) media—word of mouth

connections—to deliver marketing messages (Wyk, 2006).

Social Media & Marketing: Online Networking & Advertising 36

As cited in Wyk (2006), a 2004 UK survey by Mediaedgecia found 76% of people accredit

word of mouth as the main influence on their purchasing decisions, compared to only 15%

for traditional advertising. This supports the belief that consumers have a high distrust level

for advertising. This is not a new phenomenon. According to research as cited in Wyk (2006),

the level of trust in product recommendations from other consumers was high; from friends,

it was even higher at 65% when compared to “experts” at 27%. Consumer-to-consumer

contacts are, in this respect, undoubtedly powerful. When one consumer says something to

another, the message is likely to be immediate, personal, credible and relevant (Letelier,

Spinosa & Calder, 2003, p. 90).

Womma, (2006) defined word of mouth marketing as the opportunity:

“to give people a reason to talk about the products and make it easier for the conversation to

take place.”

Word of mouth marketing is certainly not new. It has been around since man first learnt to

communicate (Kiviat 2007; Wasserman 2005). However, the Internet has allowed campaigns

to be more measurable by using the latest online software and metrics. It has also increased

the power of those who spread the word, and because "computer-generated media" like blogs

and discussion forums amplify reach, companies are wooing such e-fluentials with freebies

that are given out prior to distribution to the masses. According to WOMMA (2006), there

are two key differences between word of mouth that result from day-to-day interaction with

customers, and in particular the kind that occurs as a result of a specific campaign to create or

encourage it. The first is organic word of mouth, which occurs naturally when people be-
Social Media & Marketing: Online Networking & Advertising 37

come advocates and share their support because they are satisfied or even delighted with the

product. The second form is amplified word of mouth which happens when marketers launch

campaigns designed to encourage or accelerate word of mouth in existing or new com-

munities. This is explained in Figure 6.0.

Figure 6.0: Organic Vs Amplified Word of Mouth

Source: WOMMA, 2005

Social Media & Marketing: Online Networking & Advertising 38

2.1.5 Social Networking

Within this literature review, social networking is considered to be one of the most important

elements in the social media construct since just as it is through a network of friends (offline)

that we are connected; then through the online network, people are communicating,

collaborating and sharing via peer-to-peer networks.

Word of mouth requires a network of people to transmit information to. Research has shown

that despite the more limited social presence of computer-mediated communication, online

relationships are often strong with frequent, supportive and companionable contact (Sproull

& Kiesler, 1991 as cited in Wellman, 1996). However, this statement is considered

somewhat outdated, as today the online environment has given much control and flexibility to

the user, allowing him or her to stay in contact in real time and on-the-go via the mobile

phone. A good example is Twitter, a social networking site where users can stay in touch

with their network of friends, anytime, anywhere while they are on-the-go.

Social network theory has long been studied by scholars as it is through understanding the

mapping which connects one person to another that one can evaluate the social capital of that

individual. Specifically, it allows the understanding of the resources accumulated through the

relationships among people to be studied and understood (Coleman 1988, as cited in Ellison,

Lampe & Steinfield, 2006).

Social Media & Marketing: Online Networking & Advertising 39

Social capital is an elastic term with a variety of definitions in multiple fields (Adler &

Kwon, 2002 as cited in Ellison, Lampe & Steinfield, 2006). Bourdieu and Wacquant (1992)

as cited in Ellison et al., (2006) define social capital as “the sum of the resources, actual or

virtual, that accrue to an individual or a group by virtue of possessing a durable network of

more or less institutionalized relationships of mutual acquaintance and recognition” (p. 14).

Relationships in this context can differ in form and function. Other definitions nominate

social capital as a network that ties goodwill, mutual support, shared language, shared norms,

social trust and a sense of mutual obligation that people can derive value from. It is

understood to be the “glue” that holds together social aggregates such as networks of personal

relationships, communities, regions, or even whole nations, according to Ellison et al.,


One advantage of studying online communities is that it allows researchers to gather data

with considerably less effort than other forms of communities. The researcher’s ability to

learn more about the social network is simply a side-effect of users transmitting information

digitally (Ellison et al., 2006).

Social capital allows individuals to draw on resources from other members of the network

and leverage connections from multiple social contexts. These resources can take the form of

important information, employment opportunities, personal relationships, or the capacity to

organize groups (Paxton, 1999 as cited in Ellison et al., 2006).

Social Media & Marketing: Online Networking & Advertising 40

When a computer network connects people, it is a social network (Wellman, 1996).

According to Wellman (1996), just as a computer network is a set of machines connected by

a set of cables, a social network is a set of people connected by a set of socially meaningful

relationships. A social network resembles the architecture of the World Wide Web as each of

the networks shares a deep structural property (Hammond & Glenn, 2004, p. 15).

Computer networks provide the venue for social networks to happen and also facilitate the

building of more relationships amongst a wider range of people. The asynchronous nature of

the Internet and the distance-free cost structure of a computer network that transcends spatial

limits has enabled people to communicate easily and effectively over different time zones.

Thus, it has enabled more active contact and interaction in what would otherwise have been

latent relationships (Wellman, 1996, p. 191).

The advent of the Internet has allowed communities and work groups to be organized by

mutual interests rather than by shared neighbourhoods or worksites (Fischer, 1984; Wellman

& Leighton, 1979 as cited in Wellman 1996). It has also allowed a continuation of interaction

from an offline community to an online community such as Today’s

online social networking sites are structured to both facilitate meetings with new individuals

as well as maintain existing ties (Ellison, et al., 2006).

According to Ellison et al., (2006) citing Boyd (2004), research on (a social

networking site) found that a user may have a variety of motivations for using a social
Social Media & Marketing: Online Networking & Advertising 41

networking site. It can range from using the site to connect with old friends, meeting new

acquaintances, dating or furthering professional networks.

Information exchange is the primary motivation for social relations to happen (Monge, 1977;

McGee, 1990 as cited in Hammond & Glenn, 2004). Levine, Searls & Weinberger, (1999)

support this statement with their chapter in the Cluetrain Manifesto which highlights the fact

that people in the market are always finding ways to converse. The authors conclude that

conversations must and will happen because the market consists of conversations.

Social networking sites are online spaces that allow individuals to introduce themselves,

articulate their social networks, and establish or maintain connections with others (Ellison, et

al., 2006). These sites usually connect people with shared interests such as music or games.

MySpace, for instance, has millions of members connected to each other who create their

own content and share this with friends and groups in the spaces.

The surge in popularity that social networking sites currently enjoy was highlighted when

Rupert Murdoch acquired MySpace for $580 million in 2005 (FoxNews, 2006). The

feasibility of such sites has yet to be substantiated by many, but Ellison, et al. (2006) believe

that social networking sites are the best sources for personal consumer information. Such

personal information can then be used to explore the potential marketing and advertising

strategies that are relevant to these social networks. eMarketer, a research agency has forecast

that global advertising spend on social networks will leap from US$445 million in 2006 to

$1.1 billion in 2007 and $2.8 billion in 2010 (cited in Jones, 2007).
Social Media & Marketing: Online Networking & Advertising 42

2.2 Conclusion

Having reviewed the literature, it is evident that the social networking environment is

growing exponentially. As cited in Fodaghi, (2007), Nielsen//Netratings reported that

MySpace had an audience of 2.75 million in May 2007, or more than 13% of the Australian

population. Another social networking site, Facebook is gaining popularity too, having grown

in usage by 826% in the six months to May 2007. Indeed, an astounding 287,000 Australians

logged onto Facebook in May 2007, up from 56,000 in the previous January! (Alpha, 2007).

Social networking sites are easily the fastest-growing marketing communication medium

ever. As a result, many media companies are now spending significantly on research,

identifying and leveraging the unique potential of this online advertising medium for greater


The Web has so much to offer when compared to the traditional media of television and

radio. Today, an advertising spot on television is not only expensive but is also being

challenged by the new technology. Time shifting video recorders and the all-powerful remote

control allow annoyed audiences who find such commercials disruptive to mute the audio

source or even switch channels, thus eliminating completely whatever influence that

commercial would have had on them. Furthermore the Web is more cost-effective than a 15

second television commercial run nationwide.

Social Media & Marketing: Online Networking & Advertising 43

A 15-second spot or video clip on YouTube costs almost nothing if the content of the

advertising is relevant and engaging, for not only will the advertisement be seen by direct

users of the site, but it can also reach out to indirect users – individuals who have been e-

mailed the link of the YouTube page by direct users. If these indirect users find the clip

relevant and engaging, they could forward its link to even more people. This is the power of

word of mouth on a social network.

Advertising on the Internet has progressed to another dimension, one where it engages,

informs and fosters relationships. The potential of this medium is apparently limitless and it

is the prerogative of advertisers and marketers to maximise this potential with currently very

little governance or control. In light of this, my focus is in this area, the identification of the

myriad factors that make advertising work on the Internet, specifically on the social

networking platform.
Social Media & Marketing: Online Networking & Advertising 44

Chapter 3: Research Approach

In this chapter, the approach taken for the research is outlined. Specifically, the problem

statement is clearly enunciated, research models and methodologies are explained and the

analysis of data is discussed.

3.1 Problem Statement

3.1.1 Research Objective

As identified earlier, online advertising is relatively new, and although there has been an

increase in the advertising expenditure on the Internet, there are still relatively few who are

willing to advertise on social networking sites.

The type of advertising prevalent in the online environment is described as passive

advertising. It is effective in generating awareness but is a low engagement form of

advertising. This research focuses on social media marketing which I suggest is a form of

engagement marketing that helps a brand to amplify marketing messages. However this form

of marketing and advertising is yet to receive serious attention, as online advertising is still

relatively new to brand agencies.

Social Media & Marketing: Online Networking & Advertising 45

According to Sir Martin Sorrell, CEO of the WPP Group,

“The only reason why online advertising spend is only 2% of the media budget is

because brands fear to be investing in something they are unsure of. They are used to

doing what they are doing and it takes a lot to change this behaviour,” (Digital

Marketing Summit, 2007).

An interview with Tom Parish, a social media specialist identified the following perspectives:

“Advertising will change a lot. With marketing departments, they will change and

become more conversation departments. Traditional advertising will of course exist in

some form. But over time a two way approach to advertising - engagement -

relationship based marketing will play a greater part in the overall marketing

strategy” (Personal communication, April 23, 2007)

As identified earlier, social networking is the principal focus of this research study. The

researcher seeks to identify social networking as a potential platform upon which advertisers

can engage with the consumer and one on which they may build an effective campaign.

Therefore, the purpose of this research is to investigate a set of hypotheses that explain how

and to what extent social networking platforms can be used effectively for online advertising

and this will be done by analyzing the consumer involvement and advertising in the social

networking platform.
Social Media & Marketing: Online Networking & Advertising 46

3.1.2 Research Model

The research model is defined as a schematic representation of the research objective,

providing a clear-cut visual of the steps that have to be taken in order to reach the stated


The research model in Figure 7.0 can be explained as follows: an analysis of the literature on

advertising trends (detailing the latest trends, social networking theories and concepts),

leading to theoretical insights that explain how social networking works as an advertising

platform. The model provides necessary understanding of the field before proceeding to the

data collection stage. Two principal types of research are identified: primary research and

secondary research. The primary research methods chosen for data collection are participant

observation and interview. The secondary data collection encompasses background materials

and archival research. Final analysis of the data collected using these methods will be used to

address the main research question.

Figure 7.0: Research Framework

Social Media & Marketing: Online Networking & Advertising 47

3.1.3 Research Questions

This section identifies the questions and subsequent sub questions that will be answered in

this thesis. Based on the main themes identified in the literature review, this thesis addresses

the following question:

What strategies can be successfully employed by advertising and marketing practitioners

within the social networking platform?

To address this, the following three sub-questions were constructed:

§ What elements do current social marketing campaigns exhibit?

§ What elements make marketing with social networking unique and different from

other forms of online advertising?

§ What strategies can be devised to enable advertising companies to maximize their

success on the social networking platform?

Social Media & Marketing: Online Networking & Advertising 48

3.1.4 Definitions

The terminologies used throughout this thesis are defined as follows:

§ Social networking sites: Web sites designed for members to create and post content,

usually in the form of profile pages, primarily in order to communicate with each


§ Classic influentials. These online users are experts within a particular interest

category - such as electronics, entertainment or fashion, and are the first people

friends reach out to when making a decision about a purchase.

§ New influentials. These online users are avid users of social media and its

accompanying tools and are active broadcasters of information across large groups of

both friends and strangers.

§ Frequent networkers. These online users use social networking sites daily.

§ Ad impressions: An ad impression refers to the number of times a banner ad is

“served” to visitors through a website. Impressions are mere assumptions that visitors

have seen the ad - there is no way of confirming that the ad was fully downloaded

prior to the visitor leaving that page or if the visitor has actually seen the ad. This is

measured entirely on the ad-serving side.

Social Media & Marketing: Online Networking & Advertising 49

§ Unique Users: The number of different individuals who visit a site within a specific

time period. To identify unique users, Web sites rely on some form of user

registration or identification system or research studies using panels of people, such as

Nielsen Media Research (NMR) WebRatings. Also referred to as unique visitors.

Social Media & Marketing: Online Networking & Advertising 50

3.2 Research Method

3.2.1 Research Type

According to Verschuren and Doorewaard (2000) as cited in Kloos (2006), there are two

types of research study − theoretical-oriented studies and practical-oriented studies.

Theoretical studies are focused on developing or testing theories, while practical research is

focused on developing, testing and evaluating solutions for practical problems.

This research model collected utilized here is a practical-oriented study. Its ultimate objective

is to evaluate the feasibility of the social networking platform as an investment for marketing

and advertising practitioners.

In this study, I have taken an interpretive approach with the aim of determining how people

understand the social world and express themselves through language, sound, imagery,

personal style and social rituals.

I subscribe to the notion that concepts and theories emerge out of the data that directly relate

to a particular naturally-occurring situation (Daymon & Holloway, 2002). For example, I

need to be involved in the field as a participant observer in order for me to conceptualize the

reality before proceeding to interpret it.

A researcher who applies this method usually deploys qualitative methods of research

because it allows him/her to get close to the people they are studying and become involved

with them (Daymon & Holloway, 2002). This offers research flexibility, as there are no
Social Media & Marketing: Online Networking & Advertising 51

certainties. Researchers may therefore commit to exploring new avenues that emerge as

informants reveal their understanding and interest.

3.2.2 Research Strategy

Two types of research strategies exist, quantitative and qualitative. Each utilizes a range of

tools in their application.

Quantitative research is concerned with the collection and analysis of data in numeric form. It

tends to place an emphasis on relatively large-scale numerical data. On the other hand,

qualitative research is concerned with collecting and analyzing information in as many forms,

chiefly non-numeric, as possible. It tends to focus on exploring, in as much detail as possible,

a smaller number of instances which are deemed interesting or illuminating, and aims to

achieve “depth” rather than breadth (Blaxter, Hughes & Tight, 1992, p. 60).

Intense debate has taken place within the social sciences regarding the relative merits of

quantitative and qualitative strategies for research. However, it is generally agreed that each

method has its advantages and disadvantages. Nonetheless, it is possible for the researcher to

synthesize the advantages of both strategies to compensate for the weaknesses of each


In this study, a qualitative research strategy is applied. Specifically, participant observation,

an interview, and case study methodology has been utilized to meet the research objective.
Social Media & Marketing: Online Networking & Advertising 52

The first stage is the observational method. According to Daymon & Holloway, (2002)

“observation entails the systematic noting and recording of events, artifacts and behaviour of

informants as they occur in specific situations rather than as they are later remembered,

recounted and generalized by participants themselves” (p. 203). This method articulates the

distinction between the extent of participation and observation. According to Rugg & Petre

(2007), observation can be subdivided in one of two ways; either into 'direct observation' and

'indirect observation', or 'disclosed observation' and 'undisclosed observation'.

In this study, undisclosed observation is undertaken. The researcher requests the opportunity

to visit two leading media agencies (identified as “Alpha and “Beta” in this thesis) with the

intention of data collection. The researcher spends a total of four weeks in both agencies. The

objective here is to gain first-hand exposure to, and a comprehensive understanding of, the

nature of online media planning. After being in the “Alpha” agency, the researcher moves to

“Beta” agency and observes if the theme that was observed in the first can be replicated.

During the second observation period, the researcher seeks validation and insights from an

expert in the online community. The researcher has also taken the opportunity to attend

several conferences on Web 2.0.

The multiple observations have delivered significant results, as the researcher has managed to

gather a considerable amount of soft data (computer files) from both agencies, valuable

insights from an industry practitioner, and validation of information from conferences which

are all part of archival research. In order to utilize all these data, the researcher de-identified

information that may compromise confidentiality of the agencies and/or any individual. This
Social Media & Marketing: Online Networking & Advertising 53

is vital for the protection of the best interests of the parties involved, and to maintain the

researcher’s ethical standing.

The interview is the second research method where the researcher utilizes an informal style of

interview via email correspondence. This method is flexible as it allows the interviewer to

structure the question to understand the perspective of the interviewees, with no time limit.

An interview, defined as “a conversation with a purpose”, involves questioning or discussing

issues with people. The e-mail correspondence process for this research is unstructured and

the end result of the interview is an archive of the e-mail.

The main purpose for utilizing this method is to validate both for the data collected and the

respondents’ points of view. There are no set numbers of interviewees for this research.

However, whenever there is a conspicuous discrepancy in the data collected, the interviewing

method will be extended in order to close the gap. Interviewees are chosen on the basis of

their professional backgrounds to ensure the credibility of information.

The final research method utilized is that of the case study. A case study inquiry is usually

associated with an intensive investigation of a location, organization or campaign (Daymon

& Holloway, 2002). As explained by Daymon & Halloway (2002), the purpose of a case

study is to increase knowledge about real, contemporary communication events in a

particular context.
Social Media & Marketing: Online Networking & Advertising 54

In the social research context, the case study method is often accorded the central role in the

research, with the case being allowed to stand on its own (Daymon & Halloway, 2002).

However, this is not a one-size-fits-all definition of a case study. Indeed, in various fields, the

term 'case study' has different meanings and terms of usage.

In the field of advertising and marketing communications, case studies are often used to

illustrate or provide an example of something else (Daymon & Halloway, 2002). In

advertising agencies and public relations consultancies, case studies are usually a compilation

of best practice or award-winning campaigns used for promotional purposes (Daymon &

Halloway, 2002). However for this research, case studies refer to the best practices of Internet

marketing campaigns that have delivered commendable results. Several case studies will be

introduced to provide an understanding of how successful campaigns can work in the social

media environment.

3.2.3 Data Analysis

Analysis, as defined by Blaxter, Hughes & Tight (1996), is the search for explanation and

understanding, in the course of which concepts and theories are likely to be advanced,

considered and developed. In this research, content analysis is performed to analyse the data


Holsti, (1969) as cited in Content Analysis (2007), defines content analysis as “any technique

for making inferences by objectively and systematically identifying specified characteristics

of messages." Content analysis allows the researcher to include large amounts of textual
Social Media & Marketing: Online Networking & Advertising 55

information and systematically identify its properties, for example the frequencies of most-

used keywords, by detecting the more important structures of its communication content.

Such amounts of textual information, categorized according to a certain theoretical

framework, will ultimately provide a meaningful summary of the content under scrutiny.

Content analysis is part of an element in media evaluation or analysis. Data from content

analysis will usually be combined with media data, for example; circulation, levels of

readership, number of viewers or listeners and frequency of publication (Content Analysis,


The data that has been gathered by the researcher can be categorized into primary and

secondary data. The primary data consists of a four week journal and an interview transcript

(where both are reproduced in the Appendix A and B) whereas the secondary data consists of

data from the studied agencies, online resources from the Internet, magazines ranging from

AdNews and B&T (advertising industry publication), Digital Media (Asia Pacific

Advertising Magazine), BRW (Australian Business Review Weekly), videos, podcasts and

lastly observational journals of attended conferences.

The researcher sourced a significant volume of secondary data from the literature, trade

journals and case studies. The researcher then followed a five step process that involved:

reviewing all the files, shortlisting the files, transcribing the files, highlighting the main

points and categorizing them. Finally, by revisiting the text I was able to further highlight the
Social Media & Marketing: Online Networking & Advertising 56

main points of the article. Utilizing this method, I am able to see all the resources by category

and by content.

After all the files have been processed and categorized, the researcher begins to list all the

files in a spreadsheet, thus enabling the tracking of resources. Ultimately, this process is used

to categorize the agencies’s data under separate Alpha and Beta listings for the convenience

of referencing.
Social Media & Marketing: Online Networking & Advertising 57

Chapter 4: Analysis of Data

This section provides an insight into online advertising in Australia and seeks to inform

readers about the important concepts and themes that have emerged from within the industry.

The media landscape in Section 4.1.1 addresses advertising expenditure in the industry and

aims to provide a concise and precise understanding in the Australia advertising environment.

Section 4.1.2 – aims to build an understanding of the evolving media industry and

consumer’s activity on the Internet. Chapter 4.2 is dedicated to introducing the main key

concepts of social media and marketing. Section 4.2.1 introduces the social media marketing

framework, Section 4.2.2 - introduces social advertising concept and lastly Section 4.2.3

describes mini case studies of social advertising campaigns.

4.1 Australian Advertising Industry

4.1.1 Media Landscape in Australia

Over the twelve month period to 30 June 2007, online advertising expenditure in Australia

totalled $1,199.5 million; an increase of 54.2% (or $421.5 million) over the twelve months

ended 30 June 2006 (PricewaterhouseCoopers, 2007). Paid search remains the primary driver

of growth in expenditure on the Internet, overtaking display advertising. This trend,

according to market analysts, will continue to remain the largest growth driver over the next

five years. The large increase in search advertising is due to new clients experimenting with

search and advertisers competing for keyword placement. This in turn is driving up prices.

Search and directories advertising accounted for 44% of the total expenditure over the last 12

months (PricewaterhouseCoopers, 2007). This is shown in Figure 8.0 and Figure 8.1.
Social Media & Marketing: Online Networking & Advertising 58

Figure 8.0: Online Advertising Expenditure – Total Spend by Category by Period.

Source: PricewaterhouseCoopers – IAB Online Advertising Expenditure Report – June 2007

page, 7.

Figure 8.1: Online Advertising Expenditure 12 months ended 30 June 2007 Category Share.

Source: PricewaterhouseCoopers – IAB Online Advertising Expenditure Report – June 2007

page, 7.

Search marketing is developing at a rapid pace as advertising and marketing specialists

realize how important it is to have their brands or companies at the top of the search results

(Wyk, 2007). Considering the growth of consumer information and search activity before

purchase, investment in search marketing can no longer be ignored. A recent survey by

Social Media & Marketing: Online Networking & Advertising 59

Accenture (2007) revealed that 69% of the respondents researched product features online,

68% compared prices online before physically shopping in store, and 58% said they used the

Internet to locate items online before going to a store to purchase (Maskalyuk, 2007). Also

another survey by Cherrypicks reveals that 70% of today’s youth often research products

before purchasing (Cooper, 2007). In the US, research by Edelman (2007) reveals that in

2003 “the person like yourself or your peer” was only trusted by 22%, while in the most

recent (2007) study, 68% of respondents said they trusted a peer. This is a significant

attitudinal change that indicates trust is an importance determinant of credibility. Experience

shows us that people are more inclined to believe word of mouth over traditional forms of

advertising and communications. Over 80% of consumers trust recommendations from other

consumers and 60% of consumers trust another consumer’s online postings (Alpha, 2007).

Jupiter (2007) reveals that friends are the greatest influence over online users when making a

large purchase, influencing 20% of online users in the past year. This then underscores the

importance of brand presence on the Web and the maintenance of a good reputation conveyed

through web communication.

Richard Kimber said in a 2007 Business Review Weekly interview:

“Even if people do not buy online, a huge amount of the purchase cycle involves

research that people do ahead of buying. Retailers have started to incorporate online

as part of the broader campaigns, so rather than being run out of the e-commerce

department or the IT department, it becomes more of mainstream marketing activity

as part of an integrated campaign”(as cited in Fodaghi, 2007, p. 32).

Social Media & Marketing: Online Networking & Advertising 60

In general, advertising expenditure in Australia clearly indicates that the Internet has taken a

share of spend from both television and newspapers (Ceasa, 2006 as cited in Alpha, 2007), as

shown in Table 8.2. The growth rate disparity between Internet advertising and total media

spending indicates that the majority of Internet dollars come from other media, more so than

new spending entering the market (Hallerman, 2006).

Figure 8.2: Share of Advertising Expenditure as cited in Alpha, 2007

In 2006, the Internet accounted for 8% of the total share of advertising while consumers were

spending 16% of their time on the Internet. This data suggest that the Internet advertising

spends will continue to increase in the future in line with time spent online. It is believed that

it will be some time before advertising spends match total online media consumption.

However those who realize the power of the Internet have already begun leveraging and

maximize their presence on the Web.

Social Media & Marketing: Online Networking & Advertising 61

Time spent with Media

A research study titled “Family Affairs” undertaken by Yahoo & OMD (2006) revealed that

the youth (18 years and above) are spending at least nine hours a day consuming media and

concluded that youth are increasingly spending more time on the Internet compared to other


Yahoo & OMD (2006) also revealed that globally, the Internet is the most consumed

medium, with an average of 3.6 hours spent online, followed by television at 2.5 hours, radio

at 1.3 hours, newspapers at 0.7 hours and lastly magazines at 0.6 hours. Internet consumption

is expected to increase yet again when mobile providers begin to incorporate high speed

surfing on mobile telephones. At the moment, 56.6% of the youth in Australia are already

engaging with the Internet daily (Yahoo & OMD, 2006) Therefore is little doubt that the

Internet is establishing itself as the most important platform to target the youth market.

The Internet in Australia

Today, almost every company has a dot com address which is commonly referred to as a

website. In the last few years, it has been of growing importance amongst businesses to have

their own websites and hence the Web has become a key part of today’s marketing strategies.

Marketers view websites as a competitive advantage for their businesses because with the

Web the need for a physical presence may be diminished or even removed completely.

Additionally, a web presence overcomes geographic boundaries, providing a company with a

global presence.
Social Media & Marketing: Online Networking & Advertising 62

As businesses look to stay one step ahead, consumers are also seen to be shifting and

changing the way they look for information, moving from the traditional library to the

Internet. Hence, embracing the Internet as a business, marketing and advertising tool is no

longer optional if one wants to remain competitive in today’s and tomorrow’s marketplace.

The Australia/Oceania region has the second highest Internet penetration globally with 55.2%

of the total penetration (Miniwatts Marketing Group, 2007). Furthermore, its accumulated

usage growth over the last five years amounts to 149.9%. On average, this means,

Australia/Oceania delivers 30% year-to-year growth in hours spent on the medium. Asia still

remains the highest (See Figure 8.3) and the strongest region with a 302.0% growth rate for

the last seven years (2000-2007).



(Millions of users)

250 232



100 89

50 33
19 19

Asia Europe North Latin Africa Middle Australia/
America America East Oceania

Figure 8.3: Internet Users

Souce: Miniwatts Marketing Group (2007)

Social Media & Marketing: Online Networking & Advertising 63

The online industry

The online advertising industry varies in size from country to country and in Australia is still

in its relative infancy. From the researcher’s observation of the two surveyed media agencies

there appears to be a great similarity in terms of employee’s age in the online team and also

the sizes of the team. The digital planners in both agencies were aged between 22 years and

25 that is, Generation Y-ers (people who were born between 1985 and 1995). At the

beginning of the year, both agencies had less than six people in their interactive departments.

Within a few months, both agencies had expanded their teams significantly. They then had 10

to 12 employees working in the online planning and buying department, clearly indicating the

impact that this medium is having within the media industry.

The Internet offers many opportunities for marketing and advertising because the platform is

flexible, easy to use and inexpensive. At the 2007 Australia Digital Summit conference, one

of the key note speakers argued strongly that Internet advertising will continue to boom,

especially with the year-to-year price increase of television advertising and other above-the-

line advertising. Hence, marketing and advertising specialists will increasingly look to

engage their target audience via the Web. It is not only less expensive to advertise on the

Web but it provides essential accountability for the money spent in the medium. As the focus

on return on investment (ROI) metrics of measurement continues to improve, there will be

more advertisers investing in this platform. In the meantime, marketing and advertising needs

to review the traditional ways they are doing things. Agencies need to be reminded that

increasingly consumers are in control. Consumers have more power and more information
Social Media & Marketing: Online Networking & Advertising 64

than ever before and brands that really want to make a difference have to go beyond the

expectations set by others (Martyn, 2007).

4.1.2. The Internet

The exponential growth and global expansion of the Internet has led many to believe that the

Internet is ushering in a new era − the information age − and a new social form − the

information society. The evolution of the information society is a result of the transformation

that has taken place over a relatively short period of time. To facilitate a better understanding,

Figure 8.4 clearly illustrates the growth in global communications flow. Over just the last 160

or so years, mankind has traversed the industrial age, modern media age and lastly the

information age. At present, we are moving from the information age into the conceptual age.

Figure 8.4: Growth in Global Information Flow

Sources: Alpha, 2007

Social Media & Marketing: Online Networking & Advertising 65

In order to recognize the importance of the key themes highlighted in this research, it is

important that we review the evolution of media, highlighting key areas that facilitate an

understanding of the importance of engaging the consumer in this new information age.

Advertising has existed in one form or another from the time that humans began to interact.

The most basic form of advertising is today known as word of mouth. It is arguably the most

effective and the longest existing form of advertising. Mass media as we now know it did not

really exist until Johann Guttenberg invented the printing machine in 1440. As a result of his

printing machine, the newspaper was able to deliver information on a large scale. Hence the

term “mass media”. This marked the first media revolution. The second media revolution was

driven by television and print and was also widely known as the age of interruption. That is

the age where technology connects people to people, enabling interruption (Friedman, 2006).

Additionally, it facilitated an increase in advertising messages being exposed to people.

The third revolution is being driven by the Internet. An example of this is the emergence of

Napster. Napster began as a free audio and video download tool, with a goal of making it a

real business in partnership with record labels. In the beginning, it was very small and

unknown, however within less than six months, Napster went from being an unknown

technology to the biggest threat the music industry had ever seen.
Social Media & Marketing: Online Networking & Advertising 66

According to Dodge (2005), the goal of Napster was to be the source of an online distribution

channel for the record labels, much like iTunes.

“Napster had over 50 millions users many of whom were willing to pay $5 per month

or $1 per download for digital music. That translates to about $250M a month or $3B

per year. Even if Napster kept just 10% of the revenue that would be $300M per year

against expenses of less than $10M. At the stock market multiples of the day that

would have been a $15B IPO”. (Dodge, 2005)

With the evolution of the Napster phenomenon and the growth of MP3 technology, file

sharing became popular. People were overwhelmed and thrilled by the power of sharing. The

impact of this technology was the emergence of a new breed of consumers known as

“prosumers”, which will be discussed later in the chapter.

The Digital Ecosystem


Communication Content Co-Creation

“Death” of traditional media
Transition to mainstream

Advertising Web1.0 Web2.0

Uni-Directional Bi-Directional Multi-Directional
Small Worlds

1900 - 1990 1991 - 2001 2002 - Today

Figure 8.5: The Digital Eco System

Source: Beta, 2007 (Viral & Word of mouth marketing)

Social Media & Marketing: Online Networking & Advertising 67

Furthermore, the recent history of media may be characterized in three stages as shown in

Figure 8.5. The first stage was all about communication, where advertising was uni-

directional and passive. The second stage relates back to the beginnings of the Internet where

it was referred to as Web 1.0. Communication in Web 1.0 was bi-directional where the web

was mainly read. The third stage refers to Web 2.0, where the Web is used for both reading

and writing (co-creation). Here the Web is multi-directional. As a result of this, the world has

become a smaller place.

The notion of Web 1.0 and Web 2.0 relates to the transformation of the Internet. They

highlight the changes, the modernization, and the upgrade of the Web. While Web 1.0 was

only mostly read, Web 2.0 enhances communication, creates engagement, ensures

transparency and builds trust. With such attributes it follows that it is complementary to

traditional communication advertising (Bradley, 2007). Table 8.6 highlights the

corresponding power shift from service provider to consumer.

Web 1.0 --> Web 2.0

DoubleClick --> Google AdSense
Ofoto --> Flickr
Akamai --> BitTorrent --> Napster
Britannica Online --> Wikipedia
personal websites --> blogging
evite --> and
domain name --> search engine
page views --> cost per click
screen scraping --> web services
publishing --> participation
content --> wikis
directories --> tagging
stickiness --> syndication

Table 8.6: Differences between Web 1.0 and Web 2.0

Source: Reilly, 2005

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Whilst Web 1.0 illustrated the simplicity of the Web and how communication was still very

much passive, in Web 2.0 the Web is more social friendly and encourages active

participation. For example, in Web 1.0 information publishing has always been one way.

Web 2.0 shows us that information publishing can be much simpler and faster when one

harnesses collective power by encouraging participation.

4.1.3 Media 2.0

Web 2.0 exemplifies the improvement and advancement of technology, allowing the user to

be in control. The ‘2.0’ phenomenon also applies to mass media. Media 2.0 highlights the

intimacy of the media with the audience (Beta, 2007).

Media 1.0 Media 2.0

Channel 10 Foxtel

Channel 9 TIVO

Channel 7 PS3


Table 8.7: Media 1.0 and Media 2.0

Source: Kennedy (2007)

In consumer media terms, in Australia, Media 1.0 corresponds to free to air television

channels such as Channel 10, 9, 7 and the ABC while Media 2.0 corresponds to Foxtel, Tivo,

PS3 and XBOX360. The drift from Media 1.0 to Media 2.0 highlights the shift of control

from media-centric to consumer-centric.

Social Media & Marketing: Online Networking & Advertising 69

In the Media 1.0 environment, audiences may choose from a limited range of channels and

programs and there are excellent opportunities for marketers to advertise to consumers.

However, Media 2.0 changes the media landscape and the balance of power by putting the

consumer in control. For example, TIVO is a time-shifting technology that allows consumers

to skip advertisements and also fast forward to the programs they would like to watch.

Gaming devices such as Playstation 3 or Xbox 360 have allowed content to be portable and

viewed on these personal devices at any time and any where.

The entire notion of the 2.0 phenomenon highlights the importance of the power shift

amongst consumers and brands. Consumers are moving from a passive audience status to an

active audience status, from consumer 1.0 to consumer 2.0. In essence, consumers are

becoming smarter and are maximizing the inherent advantages of the Web to their own

advantage. The Web is their playground, without stringent and tight law enforcement being

implemented. It is apparent that consumers 2.0 are now in control. The inefficient markets are

becoming effacing markets, for example eBay, and all of this as results of unprecedented

global innovation (Stanley, 2005).

“Magazines aren’t magazines any more, they are brand,” said Nick Cutler, Sales

Director of magazine publishing house Derwent Howard.

When the Web changes and shifts, the media changes as well. The print industry is going

through drastic changes now as consumers increasingly embrace digital media (Mescal,

2007). For example, Derwent Howard consumers began moving away from offline
Social Media & Marketing: Online Networking & Advertising 70

magazines to the Web for game information. Derwent Howard quickly recognized this trend

and launched a website to cater to this online reader activity (Cutler, 2007).

Besides print, television programs are becoming interactive, rather than simply passive

programs. A good example is American Idol, which is an annual American televised talent

competition. The success of this American Idol on television is predicated on the concept of

the TV audience voting for who they want to win, rather than the winner being solely decided

by the judges. This participation and engagement model has proven successful with TV

ratings skyrocketing and look-alike programs appearing in other countries (Nielsen Media

Research, 2007). This is an example of how traditional media is becoming interactive and

more social friendly in order to engage with the consumer 2.0.

Another example of media 2.0 “consumer versus corporation” power is a case that has drawn

much attention and impacted on Dell’s market in the US. It began with latent dissatisfaction

with Dell’s customer service and perceived arrogant attitude and led into a major disaster for

the company. The controversy centred on Jeff Jarvis, a journalist turned blogger who was

best known for pushing newspapers to engage in “news as conversation”. Jeff had been

writing on his BuzzMachine blog about his problems with a Dell notebook. He used a phrase

common to those who have found themselves trapped in a Dell tech support maze: Dell Hell.

His posts elicited literally hundreds of comments on his blog, many from other customers

who believed Dell did not listen to their problems.

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Figure 8.8: NASDAQ - Dell’s Crisis

Source: Dodge (2005)

According to Dodge (2005), Dell’s stock prices immediately dropped after Jeff Jarvis’s

postings on his blog. Figure 8.8 is a screenshot of Google Finance and highlights the crisis

impacting Dell’s shares. Dell had enjoyed a bull run since 2002 but suffered a year-long dip

following Jarvis’s posts on 21st June 2005.

The voicing of public opinion has seen significant change with the Internet democratizing

communications. Individuals are now empowered to not only voice their dissatisfaction, but

to group together to amplify the impact of their protests. Such is the power of Media 2.0.

The notion of Web 2.0 and Media 2.0 as the key drivers of a consumer revolution on the Web

is exemplified by the cover of Time, highlighting the person of the year as “YOU” (see

Figure 8.9). This is indeed true. Consumers are now number one and in control of the

Information Age.
Social Media & Marketing: Online Networking & Advertising 72

Figure 8.9: Time – Person of the Year Cover

Source: Grossman (2006)

“But that's what makes all this interesting. Web 2.0 is a massive social experiment,

and like any experiment worth trying, it could fail. There's no road map for how an

organism that's not a bacterium lives and works together on this planet in numbers in

excess of 6 billion. But 2006 gave us some ideas. This is an opportunity to build a new

kind of international understanding, not politician to politician, great man to great

man, but citizen to citizen, person to person. It's a chance for people to look at a

computer screen and really, genuinely wonder who's out there looking back at them.

Go on. Tell us you're not just a little bit curious.” (Grossman, 2006)
Social Media & Marketing: Online Networking & Advertising 73

The Internet is not just about information sharing. It is about connecting people to

information, to ideas and to each other. It not only encourages human engagement with the

medium, but importantly it allows consumers to enjoy deep experiences within a community,

allowing people to be able to connect seamlessly with their chosen communities. It is all

about an experience that is customized to user needs and its success is reflected in the

following quotations from Alpha (2007):

“ 36% of Australian Internet users make regular use of participatory media (RSS,

blogging, social networking, podcasting), and a further 4% feel they are likely to

begin undertaking these activities during 2007” (Nielsen Australian Internet &

Technology Report 2006-2007 as cited in Alpha, 2007)

“17% of 14-24 year old internet users use the internet for making social contacts,

compared with 9% in 2005”(Roy Morgan single source Australia : Oct 2005 - Sep

2006, Oct 2004 - Sep 2005 as cited in Alpha, 2007).

4.1.4 Consumers 2.0

Modern technology has enabled consumers to have more control of the media. This has

caused the communication landscape to change, with both a proliferation of media vehicles

and a fragmentation of audience groups (Alpha, 2007). Whilst technology has been widely

adopted by all age groups, it is the younger consumers who harness it in all aspects of their

lives - the generation Y-ers (people who were born between 1985 and 1995) (Forrester,

2006). This is the media generation, the generation known as “consumer 2.0”.
Social Media & Marketing: Online Networking & Advertising 74

While it is difficult to categorically define consumer 2.0, I would define this group as people

who use the Web for multiple uses and spend more than one hour daily on the Internet

consuming and creating media. “Prosumer” is a widely accepted term used to categorize

consumer 2.0.

Prosumer is a portmanteau formed by connecting both the word producer and professional

with the word consumer. The term has different meanings in different contexts. In this study

it means a consumer with professional tools. The Internet gave birth to the prosumer. This is

possible because the Internet offers limitless content, ranging from do-it-yourself (DIY)

guides to DIY movies which are available for free. As consumers become both equipped and

more empowered by the Internet, it becomes increasingly difficult to reach them as they have

the tools to select and see what they want to see, and to screen out irrelevant content.

Media multitasking is a common behaviour among consumer 2.0. Media multitasking means

consuming two or more types of media at the same time. For example, an individual may

open a multiple browser and read or listen to an online radio station while chatting via an

online messenger.

In North America, 80% of all online adults listen to the radio, read a newspaper or magazine

or use the Internet while watching TV (Forrester, 2005 as cited in Alpha, 2007). As can be

seen from Table 9.0, the most popular combinations of media multitasking are reading

newspapers while watching TV, and reading a magazine while watching TV. Over a two year

period, online consumers who use the Internet while watching TV grew from 35% to 39%,
Social Media & Marketing: Online Networking & Advertising 75

and those using the Internet while listening to the radio grew from 31% to 40%. However the

research showed that the Internet wins the attention battle when multitasked since only 11%

of the consumers who went online while watching TV said they paid more attention to their

TV (Forrester, 2005 as cited in Alpha, 2007).

Table 9.0: Consumer Technographics

Source: Forrester (2005) as cited in Alpha (2007)

Technology is the key that drives the shift of media habits amongst consumers globally. This

shift is inevitable as broadband penetration increases and the acceleration of the e-economy

drives people to adopt this new model. As a result, two types of consumer have emerged over

time; with Consumer 1.0 refering to digital immigrants and Consumer 2.0 refering to digital

natives (Carroll, 2007). As Carroll explains “ if you still print out your e-mails and then read

them, you definitely are a digital immigrant. If you are an immigrant, you speak with an

accent because it is not your native language”

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However, whether one is a digital immigrant or digital native only serves to define the user’s

capabilities towards harnessing the power of Web 2.0. It is crucial to understand the distinct

difference between consumer 1.0 and consumer 2.0, because 2.0 is the market that marketers

and advertisers are going to target. The failure to identify this will results in dollar wastage

online. Consumers 2.0 is the new target audience!

To further elaborate on consumer 2.0, the following section defines threee key characteristics

that the current consumer 2.0 demands of the Internet media. They are a) Real Time

Dialogue, b) On Demand Expectation and c) Personal Experiences.

a) Real time Dialogue

Procter & Gamble Chief Executing Officer, A.G. Lafley, in an ANA launch speech to

marketers and advertisers implied that in order to be succesful in marketing to online

consumers, marketers need to allow the consumers to be in control (cited in Alpha, 2007).

In an online environment, brands are not the only ones in control of the message. Consumers

have grown to learn to take control of the message as well. Indeed, consumers have emerged

as the co-creator of the message.

Success in an online environment is not just about placing the message in the right place and

at the right time; it is about delivering a message that is relevant and turns the message into a

viral component. As there are quite literally millions of brands competing for the consumer’s

attention, an online marketing communication strategy must include a word of mouth

Social Media & Marketing: Online Networking & Advertising 77

replication system to be successful. This is a system where a message is passed on via either a

business-to-consumer or consumer-to-consumer network.

When a brand controls the message often the message is governed by the authority, but when

a message is created by the consumer it generates “talkability” from many points of view. It

is this word of mouth system that serves to amplify awareness and deliver the products to the

consumer via a trustworthy network of friends, as exemplified in Table 9.1.

Table 9.1 : Shifts of Control

Source: Alpha, 2007

b) On demand

As technology progresses, the speed at which we do things changes as well. From dial-up

connection to high speed broadband connection, from Web 1.0 to Web 2.0, the ongoing

development of the Internet is not solely driven by government but also by consumers. A

good example is It is an open source software portal which encourages both

group collaboration and individual participation in projects. When an individual participates

in this, he or she is not only gaining self fulfillment but is also improving the current

environment by helping to building new applications and systems on the Internet.

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On-demand is the fundamental change in how consumers experience the media and they now

have unprecedented control over the content they consume. The “long tail phenomenon” is

the primary reason for this. In the past, a consumer was subjected to what marketers decided

to deliver to them. Now, we are finding that brands are slowly losing control online while

consumers are taking control with consumer generated content in blogs, forums and other

online venues. This means that the Internet has open up access to the long tail of contents.

Consumers are no longer restricted to popular on-demand content or products, but to a wide

range of niches (Alpha, 2007). This is also a reflection of the abundant resources available on

the Internet and the scarcity of demand. Now, consumers have the liberty to choose! (“Long

tail” will be discussed further on the next section).

The Internet has also allowed consumers to enjoy seamless portability across platforms and

devices, not only in terms of the content but also in experience (Alpha, 2007). For example,

consumers now have the ability to time shift through the usage of portable MP3 players that

not only allow audio content to be stored in a portable format but also allow individuals to

consume this content at any time. They are also implementing advertising blocking

technology on browsers and using content management systems via the Internet such as, a platform that allows aggregation of contents. This technology utilizes the

functions of “really simply syndication” (RSS) feeders and acts as an RSS integrator on this

platform. Netvibes not only aggregates contents but also turns the platform into a personal

homepage where individuals select and choose what they want to see on their screen. All of

the above shows that consumers are increasingly in control of what content they do or do not

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As software developers begin to improvise the current file format of Internet data, consumers

are beginning to benefit from content being broken down into small chunks of information

and its associated portability across a multitude of devices. From video-on-demand and

DVRs to podcasts and video on mobile devices like laptops, mobile phones, MP3 players and

PDAs, the technology includes personal start pages, RSS (an XML-based format for content

distribution), desktop widgets, browser widgets, social filters, badges and skins.

As the previous discussion highlights, on-demand is a form of consumer 2.0 behaviour where

messages are transformed from a passive audience to an active audience. Consumers are in

control of what they see and interact with across a multitude of channels. In order for brands

to engage with the consumer, brands must deliver value to the consumer, as Table 9.2 shows.


Consumer accepts all brand messages Consumer decides which brands to let in
Their time My time
One channel at a time Multi-channel coordination
Access to ‘hits’ Access to ‘niches’

Table 9.2: Passive Consumption – Active Management

Source: Alpha, 2007

Long Tail

Media fragmentation is but the tip of the iceberg compared to the plethora of content (media-

generated, consumer-generated and brand-generated) that is growing daily on digital

platforms such as the Internet, mobile phones, PDAs and MP3s. As a result of this media

fragmentation, the concept of “long tail” has developed. The term was coined by Chris

Anderson, the Editor in Chief of Wired magazine.

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In the offline environment, the demand and supply curve is used to determine the demand and

supply of products or services. This is crucial to understand when managing a business.

However, it is different in the online world which exhibits the long tail economy. Basically,

the long tail model represents the abundant demands and supplies on the Internet. In the

online environment, the best selling products are not just the popular products but the

aggregation of small niche products. As a result of the Internet’s low cost of distribution and

ability to search out niches online, businesses like Netflix, iTunes and Amazon take

advantage of the long tail by offering millions of product selections that their offline

counterparts could never afford to offer. Furthermore, the communities that form around

these businesses add to the utility of finding niche ‘content’ via their recommendations and

ratings. For example as shown in Figure 9.3, the top online sites account for only 39% of

minutes on the web and the ‘long tail’ of sites account for the remaining 61% (Alpha, 2007).

Top sites account for only 39% of minutes on the web.
Sum of Total Minutes 2Q06 (MM)

120,000 The ‘long tail’ of sites account for the remaining 61%

Yahoo – 13%
80,000 Time Warner– 12% (mostly AOL)
Microsoft – 8% (mostly MSN)
MySpace – 3%
eBay – 2%
Google – 1%


Top 100 Properties

Source: comScore Media Metrix (second 3 months 2006 sum) US only

Figure 9.3: Long Tail of Sites

Source: Alpha, 2007

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As a result of the abundant supply and demand for products, content and services on the

Internet, marketers are able to deliver and meet the needs of each individual differently.

Instead of being dependant of what brands can offer to consumers at the local market level,

consumers are beginning to turn to the Internet as their primary source of information. The

shift of control and power from brands to consumers has contributed to this change where we

now see consumers interacting with each other to have their needs and wants fulfilled through

web communities.

c) Personal

Personalization is of utmost importance to consumers 2.0. As consumers are exposed to more

and more choices and product information on the Internet, they have grown to be smarter as

well and harder to engage with. There are no one-size-fits-all solutions when marketing to

consumers, especially online. To engage with online consumers, marketers and advertiser

must realize that brands have to deliver a personalized experience to the consumer and that

the old model of advertising interruption simply is not going to work any longer.

In order for a campaign to work effectively, brands need to speak to, as well as to listen to the

consumer, and build an affinity with him/her. Brands need to understand that they now need

to be invited in to the hearts and minds of their consumers.

The only way for brands to succeed in this environment is to bring value via what I refer to as

“engagement branding". This is the process by which a company engages with its customers

across channels and over time to gain their attention and create relevant, valuable and
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motivating experiences - everything that traditional advertising and push marketing cannot

do. Such active branding puts people first.

Brand owners now must acknowledge that consumers are the leading stakeholder in brand

stewardship. Advertising and marketing practitioners should be building structured dialogue

and conversation with their consumers with the aim of creating genuinely engaging dialogue

and content that has intrinsic and relevant value for the consumer, as Table 9.4 illustrates.

Implications of Personal
Push Pull
Passive Experiential
Selling Servicing
Sponsor of content Brand as content

Table 9.4: Implications of Personal

Source: Alpha, 2007

Being personal implies that the old advertising interruption model is no longer effective in

capturing the individual’s attention, because consumers have changed. Hence a different

strategy is required. Brands have to be experiential rather than passive, servicing an

individual’s needs, rather than just selling. Before-sales and after-sales relationships are

critical, and rather than brands sponsoring content, content must be a brand as well.
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4.1.5 Conclusion

We have learnt that consumers have changed and so to has the media environment. The new

media environment requires a different strategy. Today, the imperative is to turn the old

advertising model of interruption into integration, from passive to active and indeed, to

interactive. From prediction to intention. From brand as publisher to consumer as publisher.

From fixed place to any place and to active involvement in the “conversation”.
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Chapter 4.2: Social Media & Marketing

4.2.1 Social Media Marketing Framework

The definition of marketing has evolved and changed significantly in recent years and today

marketing is considered to be based on delivering continual value to the customer. Tailor

(2000) suggests that “marketing is not about providing products or services, it is essentially

about providing changing benefits to the changing needs and demands of the customer”.

After all, as consumers are the end user of the products or services, it is very important to

provide consumers with satisfaction.

The marketing and advertising focus is primarily on consumer needs and wants and on

improving or creating a value-added service to these consumers. Research should inform

marketing and advertising strategy, for from research, consumer insights will invariably be


Whilst it may appear to be stating the obvious, marketing communication begins and ends

with people. According to Li (2007), we need to recognize four important elements when it

comes to online marketing and advertising. The first one is people. We need to identify and

understand who the consumers are that we are targeting. Secondly, we need to identify the

campaign objectives, for from these the strategy will be developed. Thirdly, we must

determine what methods we will employ to achieve the objectives. Finally, technology is the

platform for online, therefore it is important to understand how our target audience interacts

with technology. In short, we must identify insights! Insights allow marketers to understand
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their consumer’s behaviour and also identify opportunities to deliver brand engagement with

their consumer.

In order to provide a better understanding of integrated marketing communication, I would

like to introduce a strategic framework that is built on delivering effective strategies that

focus on brand engagement with consumers. From this, we will be able to understand how

marketing communication strategies are developed.

Understand & discover Create & refine Execute & evaluate

Business Explore

Brand Engagement Engagement

Think Platform Plan Non-digital Research
Feel Do

Figure 10.0: Strategic Planning Model

Source: Alpha, 2007

As shown in Figure 10.0, there are three phases involved in campaign planning. These are :-

a) Understand and Discover,

b) Create and Refine, and

c) Execute and Evaluate.

Social Media & Marketing: Online Networking & Advertising 86

Understand and Discover

In this first phase there are four main points to consider: business, brand, consumer and

communications. There is a need to understand the background of the business, because this

will allow marketers to relate better to the entire project. The brand is the personality of the

product, therefore it is important to ensure future strategies are aligned with the overall brand

image. Failure to do so may confuse consumers and affect sales. Advertisers seek to deliver

product and services advertising messages to consumers. Therefore, we need to have a

thorough understanding of the consumer to determine which communication approach should

be utilized to communicate effectively with them.

Create and Refine

The second process involves strategy creation and refinement and builds upon the insights

that were identified in the first stage. Developing strategies that are based on consumer

insights aids marketers in the development of comprehensive engagement strategies linking

the brand and consumer.

Execute and Evaluate

The last stage is strategy execution and evaluation. In this stage, marketers segregate

strategies into digital, non-digital, and content. This allows the marketer to see and evaluate

each strategy for integration. Once all the strategies are integrated, they are executed and

measured to ensure that the campaign achieves the set objectives.

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Previously, we identified that consumers are in control and they have the ability to filter out

or block advertising. The only way for brands to build a relationship with the consumer is to

converse at their level and add value.

Social Media

Social media as a term has a number of applications. In the context of Internet marketing,

social media refers to a collective group of web properties that are primarily driven by the

user. For example, blogs, discussion boards, vlogs, video sharing sites and dating sites.

There are two aspects to social media. The first is known as search engine optimization

(SEO). This refers to on-page tactics that a webmaster can produce to improve their website.

Such optimization includes adding links to services such as Digg, Reddit and so

that their pages can be easily “saved and submitted” to and for these services.

Social media optimization (SMO), on the other hand, is the off-page characteristic of social

media. This includes writing content that is remarkable, unique and news-worthy. Marketing

this content can be achieved by opening the content 'popular' on the services mentioned or

even creating a video that is likely to be viral on the likes of YouTube and other video sites.

Social media is about being social, so this off-page activity can include involvement in other

similar blogs, forums and niche communities. In short, social media optimization (SMO) is

the process of widely distributing content across multiple social media networks.
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To developed a better understanding of how social media marketing is executed, Figure 10.1

shows a concise framework by Armano (2007) titled “Conversation Architecture” where

marketing moves beyond the idea of one-way messaging. Traditionally, marketing has been

about the message. Now marketing is increasingly becoming more about experiences. These

experiences are enhanced by building engagement through facilitating conversation and

promoting community. As today’s consumers are becoming more active participants and

seeking relationships, brands need to leverage the opportunity to build a relationship with

their consumer. A relationship that leads to loyalty, affinity-building, and lastly, to a sense of

emotional attachment to the community.

Figure 10.1 : Conversation Architecture

Source: Armano, 2007

Social Media & Marketing: Online Networking & Advertising 89

4.2.2 Social Networking Social Advertising

Facebook, (2007) defines social advertising as the following:

“Social actions are powerful because they act as trusted referrals and reinforce the

fact that people influence people,” said Zuckerberg. “It’s no longer just about

messages that are broadcasted by companies, but increasingly about information that

is shared between friends. So we set out to use these social actions to build a new kind

of advertising system.”

Social advertising reflects advertisement formats that engage with the social context of the

user viewing the advertisement. Traditionally, advertisements are targeted based on the

individual search or the individual page. For example, if a user views a web page about

baking, they may see advertisements for baking trays and recipes that fall within the category.

Or, if users view a web page containing brownie recipes, they may see advertisements about

recipes or something else relevant to the page contents (Google, 2007).

Generally, social networking sites include any Web site that allows users to create a personal

profile and interact with other. In social advertising the advertisement is targeted based on

what it knows about the individual user's social network. Advertisements can be targeted

specifically towards the target audience user’s profile. For instance, Nike would like to target
Social Media & Marketing: Online Networking & Advertising 90

18-22 males living in New South Wales. MySpace (a popular social networking site) will

then only display Nike advertisements targeting this geographic audience only. Advertising

on social networks is both one-to-one and one-to-many. For example, a single user receives a

targeted message and then passes it on to an influencer who spreads the message to their

network. Examples of how social networks have been influential include the Bourne

Ultimatum theatre movie release campaign which was created by the “Alpha” agency and

which leveraged social networking tools in MySpace to generate awareness and interest

through video content and promotional tactics.

Social advertising is the first form of advertising to systematically leverage historically

"offline" dynamics such as peer-pressure, friend recommendations, and other forms of social

influence. At the present time it can only function if the user’s details are registered with the

system. Currently social advertising is happening on social networking sites such as

Facebook, MySpace and others and its strength lies in the power of such sites. In these social

networking spaces, brands can converse with consumers, turning them into friends rather than

just customers. For example, Facebook reveals its unique solution advertisements endorses

and encourages members to subscribe to a brand which is called “Fan-Sumers” (an evolution

of the consumer). As consumers share their affinities, brands can advertise using trusted

social relationships (Owhyang, 2007).

Social Media & Marketing: Online Networking & Advertising 91

Social networking

A social network is a technical and hierarchical infrastructure that enables people across the

world to establish communities of interest where they can exchange ideas, content, tools and

information in order to enhance the experience of being a part of a community. All social

networks exhibit different unique selling points thus attracting different users. Marketers

therefore cannot adopt a “one profile fits all” mentality. Advertisers must use features that

capitalize on each site’s unique properties otherwise engagement will be limited and

expensive creative executions will fail (Riley, Card, Zia & Inia, 2007).

Social networking is an activity where people network with each other to stay in touch. This

process usually begins when a person starts to tell others about themselves through their

profile on the online platform. This platform provides an efficient environment for users to

share their interest with each other by browsing each other’s profiles and befriending each

other. However this form of communication is an asynchronous communication, meaning

there is a built-in delay between sending messages and receiving responses, or between

posting information to a friend’s profile and waiting for them to read it (eMarketer, 2007 as

cited in Alpha, 2007). According to comScore Media Metrix, as cited in Riley et al. (2007)

more than 60 million US Internet users visit

The growth of social networking sites is based on the fundamental convenience and

simplicity of how social networking enables human-to-human contact. People want to be

connected with their family and friends. They want to be able to share their life’s highlights
Social Media & Marketing: Online Networking & Advertising 92

with them as easily as possible and these platforms provide a way to be in touch and not lose

touch. Now people do not need to worry about losing their phonebook, or even about moving

from one place to another place because now everyone can be in contact with anyone as long

as there is an Internet connection. According to the Future Foundation, Social Networks,

2006 as cited in Microsoft, 2007:

“The growth of the networked society, the increases in individualism, and the shift

away from “automatic” deference to society’s institutions means that personal

sources of advice and influence are more important than ever”.

What is this implying to advertisers? According to Marc Bressel, Regional Sales Director of


“Advertisers need to harness the power of social recommendation by identifying

advocates of brands online and making them the first to receive deep and relevant

content to encourage them to socially recommend a brand to a friend. By creating

performance-related incentives for social recommendation, advertisers have an

opportunity to engage with large scale consumer audiences and monetize social

networks” (As cited in Microsoft, 2007).

Social networking facts

According to eMarketer (2007) as cited in Alpha (2007) worldwide online social network

advertising spending will increase from US$1,235 million in 2007 to US$3,630 million by

2011 as shown in Table 10.2.

Social Media & Marketing: Online Networking & Advertising 93

Table 10.2: Worldwide Online Social Network Advertising Spending

Source: eMarketer, 2007 as cited in Alpha, 2007

The forecast in advertising spending truly reflects the potentiality of this medium as a future

marketing tool on the Web. To fully explore this growth, data has been obtained from

international social networking sites including MySpace and Facebook and such data can also

detail the Australian market.

In the US market, 69% of online users aged 18 to 24 years have used social networking sites

in the past year compared with 23% of those aged 45 to 54. According to comScore Media

Metrix (as cited in Riley, Card Zia & Ina, 2007), the average users of social networking sites

are aged 25 to 34 years old as shown in Figure 10.3.

Social Media & Marketing: Online Networking & Advertising 94

Figure 10.3: Frequent Visitor to Social Networks

Source: Riley et al., 2007

In July 2007, children and teens made up 19.4% of Internet users (Nielsen//NetRatings as

cited in Alpha, 2007). Research by eMarketer (2007) as cited in Alpha (2007) and reproduced

in Figure 10.4 reveals that 26% of them utilize social networking each day and 22% visit

several times a day. This implies that teens in general enjoy being in their own spaces and

communicating with friends on this platform (eMarketer, 2007). eMarketer as cited in Alpha

(2007) reveals that in a week, at least 45% of teens spend at least one to four hours online as

shown in Figure 10.5.

Social Media & Marketing: Online Networking & Advertising 95

Figure 10.4: Frequency of Social Networking Web Site

Source: eMarketer, 2007 as cited in Alpha, 2007

Figure 10.5: Time Spent per Week on Social Networking Sites

Source: eMarketer, 2007 as cited in Alpha, 2007

According to Microsoft (2007), the popular misconception is that people only use social

networking sites for dating and meeting possible partners. This is indeed not true. Besides

using social networking sites to facilitate existing relationships and to keep in touch with

friends, they are also using it to deepen relationships with like-minded people.
Social Media & Marketing: Online Networking & Advertising 96

Motivations involved in social networking

According to Microsoft (2007), there are three motivations involved when it comes to social

networking. As shown in Figure 10.6, these are the need to self-express, to be part of

communities and to extend one’s network.

The inner motivations of one to self-express are visibly reflected by how people are utilizing

the Internet to share their life highlights. Blogging is one of the self expression tools that

enable people to share their life highlights through writing, pictures and videos being posted

on their blog. The amazing aspect of this is that it enables people to respond to the author and

also allow their life highlights to be shared publicly or privately.

The sense of belonging and friendship is also one of the motivations that draw people to

network. Most often than not, people are utilizing community sites to extend the network of

friends and to meet new people online. In short, social networking sites represent a

fundamental shift in the way people interact with each other and with other media (Fox

Interactive, 2007).
Social Media & Marketing: Online Networking & Advertising 97

Figure 10.6: Social Networking Motivations

Source: Microsoft, 2007

The power of recommendation

As mentioned in Section 2.1.1 - Media Landscape, trust is an important factor. This is the

reason why social networking has become popular because people trust the people of their

network. According to Forrester (2006) (as cited in Microsoft (2007),

“80% of consumers trust advice from friends online – that is three times as much trust

than in ads via traditional media. This implies that social networkers have a strong

influence within a community - particularly those driving social recommendation of

advertising/brands” (Microsoft, 2007).

Social Media & Marketing: Online Networking & Advertising 98

Riley et al. (2007) addresses this by stating,

“Simply advertising on social network is not enough to influence users. Advertisers

must augment general awareness campaigns by harnessing the influence friends have

over users’ purchase decisions”.

The ‘new influentials’ are the people who are likely to spread viral advertising messages and

engage with social marketing (Jupiter, 2007). By targeting new influentials, advertisers have

a higher success rate in spreading viral messages or attracting consumer-created content.

Jupiter (2007) also reveals that the new influentials are relatively likely to visit social sites

compared to all online users. Targeting these new influentials rather than frequent networkers

is worthwhile as more advertisers inundate social networks with invitations to engage with

advertising in the form of consumer-created commercials and contests.

“Friending” is the next advertising.

In the real world, consumers are more likely to be attracted by retail events such as sales and

would be inclined to walk into the shop and browse. It is the same in the virtual world.

According to Fox Interactive 2007, individuals are more likely to befriend a brand just to find

out more about the brand’s marketing activity, see Figure 10.7
Social Media & Marketing: Online Networking & Advertising 99

Figure 10.7: Why did you make a company or a brand your friend on your favourite SN site?

Source: Fox Interactive, 2007

There is a meaningful connection between brands and individuals in the social network

environment. As Fox Interactive (2007) suggests:

“Having Puma as a friend is pretty cool. You get some online sales or whatever since

they’re kind of expensive. You can see what kind of shoes they have.” Claire, 18,


“I don’t want companies to advertise to me. I want them to be my friend.” Rob, 27,

Los Angeles
Social Media & Marketing: Online Networking & Advertising 100

Social networking in Australia

A study by Hitwise in 2007 revealed a 114% increase over a period of three months (28 July

to 13 October 2007) in Australians visiting a social networking website. MySpace continues

to lead with Facebook gaining market share. According to Hitwise (2007), as at the week

ending 13 October 2007, 33.9% of Australians visited Australian based social networking

sites and chat websites, while 66.1% went to international websites. Hitwise (2007) found

that Australian Internet users spent an average of 20 minutes and 8 seconds on these websites,

which is on average approximately 9 minutes longer than the time spent on other websites.

The top fifteen social networking and chat websites visited by Australians for the week

ending 13 October, 2007 were led by MySpace, Facebook, YouTube and Bebo, while

Australian visits to Facebook has increased by 293% over the three month period (Hitwise,


By analysing the incoming and outgoing of users after entering and leaving a site, the study

also revealed that there was a cross duplication of users. From the research, 9.19% of

Facebook's traffic came from MySpace and 5.76% of Facebook's traffic went directly to

MySpace (Hitwise, 2007).

In the US, 7% of teens aged 13-17 are using more than one social network at least weekly

(Riley et al., 2007).

Social Media & Marketing: Online Networking & Advertising 101

As one colleague recently observed:

“The bad thing about social networking sites is that they are here today and gone tomorrow,

new sites will be up by improving the current model and the next thing you know, users are

migrating, how do advertisers address this platform?”

4.2.3 Case Studies

Three main social networking sites that have been popular in the last six months are

introduced as mini case studies that demonstrate the power of social networking. The case

studies represent a collection of presentations made by media proprietors during the

researcher’s observation period. The data is useful in that it allows those who are not in the

media industry to develop a basic understanding of social media’s potential as an advertising

and marketing medium.

Jim Scheinman is the founder of Bebo, a site that was launched in July 2005. Soon after its

launch, the site appeared at the top of the Google Zeitgeist list in 2006 (Dower, 2007), see

Figure 10.8. The site was also reported to be the overall top ranking website in Ireland,

edging out Google and Yahoo (Dower, 2007).

Social Media & Marketing: Online Networking & Advertising 102

Figure 10.8: Google Zeitgeist

Source: Bebo Presentation

By mid 2007, Bebo had about 2.5 million registered users with up to 450 million page views

per month (Scheiman, 2007 as cited in Dower, 2007). Over the six month period, September

2006 to March 2007, site traffic grew by 49%. The average time individuals spent at Bebo is

28.58 minutes compared with 26.26 minutes for MySpace (Hitwise, 2007 as cited in Dower,


In general, social networking sites are competing with each other for traffic, and as a result of

the competitiveness of these sites many users are duplicated users.

One of the major reasons for duplicate social networking websites is that not all individuals

choose to join the same website. So, if there is a better, more user-friendly website out there

that most of a user's friends decide to join, a user might decide to try it out and once they find

it easier to use, they may even be convinced to use the site as their permanent source of social

Social Media & Marketing: Online Networking & Advertising 103

In every social networking site, there will be common criteria which apply and best describe

the attributes of a social networking site. For Bebo they are:

1) User profile pages containing personalized components such as photos, blogs, video

content and a range of other multimedia “add-ons”.

2) Users have the flexibility to borrow content for their own profile pages from other

parts of the site, such as profile skins from Bebo Skins, videos from Bebo TV and


It is the simplicity and ease of the Bebo site that has attracted the 13 to 19 year old teen

market (Scheinman (2007) cited in Dower (2007).

Hence, the success of a social networking site is not based on functionality alone but also the

ease of use and of course, how it interacts with the user in building engagement between the

platform and that user.

Bebo is unique when compared to MySpace, in that it is better organized and less cluttered.

In an advertising context, the Bebo advertising model is different in that it applies a social

advertising context to interruptive marketing – conversation rather than interruption. At

Bebo, users have the option of what type of advertising they would like to have appear on

their profile page. In this way advertising is not only attractive to marketers but also to the

site user. Individual users will be receiving relevant advertising messages, and because they
Social Media & Marketing: Online Networking & Advertising 104

are actually choosing what type of advertising they would like to see, advertising that is

shown on the profile page creates a higher attention rate.

There are various advertising models used on social networking sites. The conventional

model is display advertising. That is, ordinary placements in a site such as banners,

leaderboards, islands and others. Another form of advertising that is frequently mentioned in

this study is engagement marketing. In the context of social networking, this can be achieved

by creating a profile page within the social networking group that draws attention and offers

page views through display advertising. Once traffic is redirected towards the site, the user

will then be engaged with the site through branded content that was designed for a specific

brand. To illustrate this, the following is a case study from Ireland for advertising the Disney

“Cars” movie on Bebo. It is an excellent illustration of this scenario.

Bebo - Disney “Cars”

Although the Disney “Cars” movie campaign was launched specifically for the target

audience in Ireland, it also received significant attention from users from other parts of the

world. Such is the “internationalization” of the medium.

Disney approached Bebo with the intention of building a community that enabled

participation among Bebo-ers. The objective was to build campaign awareness through viral

communication on the social networking site, as Disney recognized the need to move their

consumer from passive recipients of the film messages to active and engaged consumers

(Disney Promotions Executive, as cited in Bebo presentation).

Social Media & Marketing: Online Networking & Advertising 105

Bebo approached this campaign by creating a “Cars” sponsored profile that had a movie

trailer, a blog to keep the fans up-to-date with related news, trivia, a competition, quizzes and

polls as well as behind the scenes insights and photos of all the movie characters along with

their profiles. With this sponsored profile, the brand not only engaged its audience but also

interacted with it. Such a successful conversion of an audience leads to the passing on of the

message or adoption of a branded property to its profile page.

Figure 10.9 exemplifies the impact of a branded profile page. The interaction process in the

“Cars” profile page could have begun by having a consumer visit the “Cars” brand

community. While the consumer is at the page, he or she may come across a download for

“Cars” wallpaper or a skin for an individual’s profile page. The consumer might then pass on

the wallpaper to a friend whom they believe would be interested in it or they might even load

it to their own page. From here, other consumers might see “Cars” personal pages and decide

to use them for themselves or pass them along. Those consumers viewing the “Cars”

wallpaper or receiving the pass along may be influenced by this consumer-to-consumer

Social Media & Marketing: Online Networking & Advertising 106

Figure 10.9: User Interaction on Social Networking Site

Source: Fox Interactive, 2007

To facilitate this pass-along effect, Bebo created a built-in internal multimedia enabled mail

system (see Figure 11.0) which was designed to enhance the user’s ability to share content

amongst friends and also allow them to transport creative assets from the “Cars” profile page,

thus creating a viral movement through the site.

For this “Cars” campaign, a contest was staged in conjunction with the launch. The contest

utilized the whiteboard that is in the profile page and users were asked to draw their favorite

“Cars” character. This activity not only allowed users to interact with the site, but also to be

creative and to express themselves. The fact that the winner of the whiteboard competition

would receive a rare autographed book about the movie would also have encouraged many
Social Media & Marketing: Online Networking & Advertising 107

users to enter the contest. Each element of the profile was afforded maximum exposure

throughout the site, with multiple touch points on the homepage and TV sections and within

the contest’s area and sponsored thumbnails.


The overall results of the campaign were as follows: -

Video Views : 45,000 people

Sponsored Profile Views : 90,000 views

Video Homepages : 5,000 views

Skin Homepages : 2,700 downloaded

Friends : 2,200 friends

Profile Comments : 1,000 comments

Source: Bebo’s Presentation & The campaign is estimated to

have had a modest budget of $40,000. It was deemed to be measurable, effective and value

for money.
Social Media & Marketing: Online Networking & Advertising 108

Figure 11.0: User Interface

Source: Bebo, 2007

Social Media & Marketing: Online Networking & Advertising 109 MySpace

MySpace was founded in August 2003. The acceleration of awareness of MySpace was

facilitated through its acquisition by News Corp for US$580 million (Hitwise, 2006). This is

a strong indication of the value placed on these web properties by web publishers, marketers

and advertisers.

MySpace claims to be the world’s largest social networking site with 200 millions users

worldwide, 4 million users in Australia, 3,043,000 unique browsers in Australia and at least

1.13 billion page impressions (MySpace Internal Figures, 2007, Nielsen Net Ratings August,

2007 as cited in MySpace presentation).








Unique Audience [000] Blogger Facebook bebo

Figure 12.0: MySpace Australian Unique Audience 2007

Source: MySpace, 2007 as cited in Alpha, 2007

Social Media & Marketing: Online Networking & Advertising 110

According to Alpha (2007), and reproduced in Figure 12.0, it is the leading site with the

largest audience, compared to Blogger, Facebook and Bebo. MySpace (2007) also claims to

have the highest total page views of all the social networking sites.

MySpace’s audience splits are as follows:

§ 57% of all 14-17 year olds

§ 51% of all 18-24 year olds

§ 20% of all 25-39 year olds

Source: Nielsen Net Ratings NetView, July 2007 as cited in Alpha, 2007

From the research it is apparent that sponsored profile pages deliver results. Therefore, rather

than presenting another sponsored profile page case study, here I will discuss how MySpace

as a brand leads its members from online to offline. In this mini case study, one will see how

social networking can be used to engage users from an online to offline model.

MySpace Secret Shows

Early in 2007, MySpace launched its MySpace Secret Shows in Australia. MySpace Secret

Shows is a channel within MySpace where members of MySpace are informed of the latest

happenings in the entertainment industry, and specifically the music industry. Occasionally

MySpace organizes Secret Show gatherings with very little prior notice, creating a desire for

music fans to visit this site and to subscribe to its update for the latest happenings. The Secret
Social Media & Marketing: Online Networking & Advertising 111

Show usually features music artists, including both local and international bands and

MySpace users who join this viewer group gain exclusive invites to these gatherings.

The first Secret Show was in Brisbane and it attracted a crowd of more than 400 people.

People began queuing up from 5 a.m. with chairs, stools and even mattresses! Due to limited

space, 150 latecomers had to be turned away. “Pretty much the best gig I’ve been to. Very

relaxed and intimate. I loved it”, commented one show visitor. According to MySpace

(2007), its user base grows at least 7% every time there is a Secret Show gathering.

What does this means to marketers and advertisers? It means that if a brand such as MySpace

can shift its engagement from online to offline, other brands can do the same on this platform,

or indeed on any other social networking platform. Since it is the biggest social networking

site in the world and has the most consumer touch points, including video, music, gaming and

etc. it is obviously very attractive for marketers and advertisers.

The Secret Show case study shows that engaging consumers both online and offline is

equally important because they actually allow the brand to be more personal and relevant to

the consumer. Hence, it is now becoming more common to see a brand utilize offline to drive

traffic to the online page, and from the online page, encourage them to participate in the

brand’s offline activities. These are all important strategies of a truly integrated campaign.
Social Media & Marketing: Online Networking & Advertising 112 Facebook

Facebook was founded by Mark Zuckerberg, and was launched in February, 2004. In

Australia, there are at least 380,000 active users monthly, 70% recorded having geographic

location as their primary network, 26% have college as their primary network and 4% have

high school as their primary network.

Figure 12.1: Australia Active Users August 2006 – August 2007

Source: Facebook, 2007 Presentation as cited in Alpha, 2007

In Australia, 56% of Facebook users are female, 4% are under 18 years old, 49% are between

18 and 24, 35% are 25 to 34, and 12% are over 35 years old. In Australia last year there were

about 514 million page views monthly with at least 1,334 average page views per user

(Source Facebook, 2007 as cited in Alpha, 2007). In the US, Facebook was the number one

site in 2007 among both male and female 18 to 24 year olds (eMarketer, 2007 as cited in

Facebook, 2007).
Social Media & Marketing: Online Networking & Advertising 113

As mentioned earlier, different social networking sites have different styles and functionality.

In Facebook, it is the efficiency of locating friends and the interactivity of mini applications.

From the researcher’s experience, to build at least 70% of your friends in a social site could

take 3 to 5 months, depending on the intensity of site use and how readily friends adopted the

site. In Facebook, it takes less than 2 months with the same sort of intensity applied, to have

50% of the network completed. However, the researcher still frequents the first social

networking site that he joined because that is the network which has the most friends. In

terms of length of stay in a site, the researcher finds he spends a shorter time in his old social

site when compared to a newly joined site. This goes some way to explaining the reasons for

a cross duplicating audience.

Since Facebook primarily engages with users through mini applications, the researcher will

discuss a Red Bull application that has been successful in Facebook in terms of creating word

of mouth. In general, mini applications usually take off quite well because every time a user

installs an application to his or her Facebook, the application prompts the user to invite their

friends to install the application. Hence, this actually speeds up the adoption of the

application. The amazing thing about these applications is that it is on the network and it is

interactive. People who adopt this mini application can not only play with their friends but

also get to challenge each other. As for the brand, this actually creates a viral effect when

people start to talk about it offline and ask their friend to participate in it as well so that they

get to play together.

Social Media & Marketing: Online Networking & Advertising 114

There are currently 652,769,589 installs across 10,713 apps on Facebook. “Facebook has

approximately 56 million Unique Active Users in the past 30 days and a valuation of $16.8

billion” (Adonomics, 2007, December 8).

Facebook launched its platform to application builders on the 29th May 2007. Within four

months, 5,000 applications were created. Compete (2007) reveals Facebook activity grew

32% from May to August, 2007, with more than a third of the growth coming from the new

applications, as shown in Figure 12.2.

Figure 12.2: Facebook Applications

Source: Compete, 2007 as cited in Johnston, 2007

Social Media & Marketing: Online Networking & Advertising 115

Red Bull – Roshambull

Red Bull ‘Roshambull’ is an application that was created for Red Bull. As shown in Figure

12.3, it is an online version of the classic rock, paper, and scissors game. Although it seems to

be strange to be playing this game online, it is a perfect match for the Facebook community

(Johnston, 2007). This application allows users to add Roshambull to their Facebook profiles

and then to invite friends to battle. This game is not the usual kid’s game, in that it leverages

Facebook technology to actually create a scouting sheet that can be used to help players

decide what to throw, as shown in Figure 12.4. Before one makes the next throw, they can

also check their friend’s stats and see what they have been throwing in the past. This concept

not only makes the game harder but also highly engaging, as the individual is constantly

trying to out-strategize their opponent.

Social Media & Marketing: Online Networking & Advertising 116

Figure 12.3: Red Bull Roshambull Profile Page

Source: Facebook, 2007

Social Media & Marketing: Online Networking & Advertising 117

Figure 12.4: Red Bull Roshambull

Source: Facebook, 2007

Social Media & Marketing: Online Networking & Advertising 118

The “Roshambull” application reinforces the fact that social networking is a consumer-to-

consumer construct. If an advertiser wants to utilize this platform, they must first fully

understand the platform. Gusteav, as cited in Alpha, 2007 says:

“The biggest flaw I have with companies looking to generate positive WOM online is that

they begin with the notion that they are going to “take advantage” of social networks or

blogs. You can’t – What you can do is participate in social networks and blogs. To do that

you have to have 100 per cent confidence in what you’re saying about your brand. If you’re

overstating claims you’ll be seen through very quickly”.

Advertisers looking to engage their consumer on a social networking platform must integrate

different and popular styles of communication on each individual site. MySpace is large and

therefore represents the widest array of communication styles. It is content creation-centred,

particularly video and music. Bebo and Facebook each foster a communication centred on

socializing more, rather than on content creation. Bebo attracts the youngest crowd and

Facebook specializes in college students.

In each case, the heavy users of any social networking site spend a tremendous amount of

time and effort in creating an environment that they feel familiar with and one that is

trustworthy and safe for them and their friends. In order for someone (i.e.

advertisers/marketers) to be included in this social activity, they must respect that they are on

the outside and are asking to be invited inside (Jupiter, 2007).

Social Media & Marketing: Online Networking & Advertising 119

In summary, social networking sites are highly flexible and engaging. However to effectively

leverage these mediums for marketing and advertising purposes, one must understand how

the consumer is behaving in this space before planning the strategy.

Social Media & Marketing: Online Networking & Advertising 120

Chapter 5: Conclusion

5.1 Reflections on methodology and limitations

Having undertaken this project over the last eight months or so, one recognizes that the area

of social networking and marketing viability is huge, growing exponentially and also

constantly evolving.

The principal research method used was participant observation. The research observation

process went very well as the ultimate objective of the observation was mainly to create an

opportunity where the observer can gain access to past presentations of the company. Overall,

the internship was considered a success though there was some access limits applied to

ongoing company projects.

As a result of the one month internship in the media company, the researcher with permission

retrieved vast amounts of past presentations from the company. Most of the presentations

retrieved were training presentations, conference presentations and media owners’

recommendations to the media company. This retrieval was considered to be fruitful because

the review of the presentations opened up access to information regarding social media and

the marketing environment. Undertaking the role as an observer has helped the researcher to

conceptualize contemporary digital concepts and by utilizing the practical-oriented model,

the researcher is able to explain the process of digital marketing from a first person

Social Media & Marketing: Online Networking & Advertising 121

Up to the present time, online is the fastest growing advertising medium. It is recognized and

acknowledged that online is arguably the future of advertising and the study here aims to

providing substantial reference to support this statement. In addition, the research highlights

the fact that the growth of online as a viable medium for advertising has given birth to the

social networking platforms where is also widely known as social media as a whole.

One challenge in undertaking the research has been the relatively tight time frame – that is

eight months – that was available. Another challenge to the presentation of my thesis was

language. As I am an international student, I have found the lack of translating my thoughts

into English to be very challenging I feel that now I am not only a more competent

researcher, I am a more confident scholar.

Social Media & Marketing: Online Networking & Advertising 122

5.1.1 Answer to Research Questions

The intention of this research was to identify for advertising and marketing agencies the

growing importance of the social networking platform in the online industry. In doing so the

researcher has identified three sub questions which have assisted in addressing the main

research question concerning strategies that may be successfully employed by advertising and

marketing practitioners within the social networking environment.

Now let us revisit the sub questions and answer it in brief. The three sub questions were:-

§ What elements do current social marketing campaign exhibit?

A social marketing campaign exhibits five types of characteristics which are

participation, openness, conversation, community and connectedness which is

mentioned earlier on page 30 in the discussion of social media characteristics.

§ What elements make marketing with social networking unique and different from

other forms of online advertising?

The flexibility, the precision targeting and the viral element that is in built in a social

networking site are the main reasons that make marketing with social networking

unique and different. It allows brands to target specifically to their target audience

while no other forms of online advertising can provide such accuracy. Harnessing on

the social power of recommendations, the consumer no longer hears only from the

brand but hears the brand message through friends which increases the credibility

and trust of consumer and the brand. Section 4.2.2 details the answer to this question.
Social Media & Marketing: Online Networking & Advertising 123

§ What strategies can be devised to enable advertisers to maximize their success on the

social networking platform?

An integrated campaign, offline and online will be the most strategic strategies that

will maximize their success on the social networking platforms because it reaches the

consumer through all touch points and driving traffic to the web through offline

activities and online activities. In order for the web strategies to work, advertisers

need to understand their consumer and learn how to interact and engage with the

consumers without being intrusive. Successfully executing this will allow the brand

message to be passed along (that is, by word of mouth). Successful executions of some

social networking strategies are exemplified in Section 4.2.3. For more information,

also please refer to Section 4.2.1.

From the research it is clear that social networking marketing is very different from

traditional marketing. Simply moving offline strategies to an online environment is not a

viable solution. This explains why in the past decade, digital marketing has focused on

moving the old advertising model into the new landscape of the Internet.

In fact, online and offline advertising are two different fields. One cannot use the old model

of advertising in the new landscape. Online is a medium on its own, with multiple channels

which we refer to as websites. Every website is unique and the amazing aspect of the Internet

is that most of the content is free. You do not have to pay to read a newspaper online but you

do so offline. Offline advertising is about target audience rating points (TARPS) while online

is about impressions. Offline advertising does not have the capabilities to disseminate
Social Media & Marketing: Online Networking & Advertising 124

advertising messages directly to the specific target audience, but online this is possible with

behavioural targeting and strategies.

This study has shown that there are significant differences between offline (traditional

communication) strategies and those employed online. Many advertising agencies,

recognizing this, have developed not only online strategies but specialist online agencies to

implement them. However, whilst the two strategies are different, it is apparent from this

research that they may be integrated to deliver an IMC (Integrated Marketing

Communication) solution. See Figure 10.0.

Even in the online environment there are distinct differences between Web 1.0 and Web 2.0.

Web 1.0 advertising is focused on passive advertising. Advertisers buy placements (banners)

and media planners traffic this banners. At the end of the campaign, success or otherwise is

measured by the cost of clicks generated and impressions delivered.

In Web 2.0 advertising, online advertising is supported by search engine optimization, social

media marketing optimization and lastly, specific targeting through behavioral targeting. Web

2.0 advertising is more than just return on investment. Rather, it is about return on influence.

How can brands be part of the consumer’s daily conversation? The answer is by listening to

and interacting with them. It is about adding the personal touch. While traditional search

advertisers like Google and Yahoo match by keyword, social networking sites such as

MySpace and Facebook utilize something far more powerful - people and their relationships.

So now let us considered the main research question.

Social Media & Marketing: Online Networking & Advertising 125

What strategies can be successfully employed by advertising and marketing practitioners

within the social networking platform?

Online is an area where advertisers and marketers can enjoy tremendous flexibility.

Depending on the negotiations with the publisher (the site provider), there are little or no

restrictions on activity. The great thing about online is that the campaign is not limited to one

country but is able to reach the world.

Offline and online integration is no longer an option to advertisers. It is essential for, as we

have seen, consumer attention has shifted. To address this we have to understand our

consumer; where they are, what are they doing online and how we as advertisers can reach

them without being seen to intrude into their privacy. The impact of an integrated campaign

is not only its power but its effectiveness in ensuring the brand remains top of the mind by

reaching the consumers at all available touch points.

A really important benefit for any client undertaking an online marketing communication

campaign should be the accountability of online; something that offline struggles to provide.

Other really important benefits are interactivity which translates into engagement, flexibility

that is not restricted by statutory controls, and the nature of viral marketing in amplifying the

Social Media & Marketing: Online Networking & Advertising 126

So what is so attractive about social networking to advertisers and marketers? Firstly, it

reaches a targeted audience and secondly the fact that it does reach the targeted audience

provides accountability. The brand message is communicated virally on the network rather

than the traditional advertiser-to-consumer model, thus leveraging the power of consumer-to-

consumer which is arguably the most powerful method of advertising.

It is therefore very clear that the key success of a social media marketing program lies in

building a relationship with the consumer. Advertisers and marketers need to create an

interactive campaign that builds a relationship through engagement. Again as we have seen,

today’s consumer wants a relationship not just another type of product targeted at them. To

succeed, marketers and advertisers need to be consumer-centric and start listening before

talking, engaging and building friendship, instead of just marketing. This is what social media

marketing is all about!

5.1.2 Further Implications of the Study

As we have seen from this research, the power is already shifting in a dramatically inevitable

way from the marketer to the consumer. As social networking sites prove themselves to be a

powerful marketing and advertising platform, the traditional webmaster will disappear as

sites such as MySpace allow businesses and consumers to take charge of the creation of

content and the effective targeting of message recipients.

The implications for marketers are enormous. Beyond the paradigm shift, marketers need to

understand and address the unique challenges of operating in the social media environment.
Social Media & Marketing: Online Networking & Advertising 127

What is very clear from my research is the fact that the area of social media marketing is

evolving and changing very rapidly. Ideally further research is needed to record the new

trends which will continue to merge.

Social Media & Marketing: Online Networking & Advertising 128

List of Figures & Tables

Figure 1.0: A Brief History of Online Advertising from 1994-2004. p. 17

Figure 2.0: Change in Ad Spend by Consumer Medium p. 18

Figure 3.0: Time Spent with Media Daily p. 20

Table 4.0: Multiple Definitions of Interactivity p. 23

Figure 5.0: Social Media Introduces New Models of Value Creation. p. 30

Figure 6.0: Organic Vs Amplified Word of Mouth p. 37

Figure 7.0: Research Framework p. 46

Figure 8.0: Online Advertising Expenditure – Total Spend by Category by Period. P. 58

Figure 8.1: Online Advertising Expenditure 12 months ended 30 June 2007 Category Share. P. 58

Figure 8.2: Share of Advertising Expenditure p. 60

Figure 8.3: Internet Users p. 62

Figure 8.4: Growth in Global Information Flow p. 64

Figure 8.5: The Digital Eco System p. 66

Table 8.6: Differences between Web 1.0 and Web 2.0 p. 67

Table 8.7: Media 1.0 and Media 2.0 p. 68

Figure 8.8: NASDAQ - Dell’s Crisis p. 71

Figure 8.9: Time – Person of the Year Cover p. 72

Table 9.0: Consumer Technographics p. 75

Table 9.1: Shifts of Control p. 77

Table 9.2: Passive Consumption – Active Management p. 79

Figure 9.3: Long Tail of Sites p. 80

Table 9.4: Implications of Personal p. 82

Social Media & Marketing: Online Networking & Advertising 129

Figure 10.0: Strategic Planning Model p. 85

Figure 10.1: Conversation Architecture p. 88

Table 10.2: Worldwide Online Social Network Advertising Spending p. 93

Figure 10.3: Frequent Visitor to Social Networks p. 94

Figure 10.4: Frequency of Social Networking Web Site p. 95

Figure 10.5: Time Spent per Week on Social Networking Sites p. 95

Figure 10.6: Social Networking Motivations p. 97

Figure 10.7: Why did you make a company or a brand your friend on your favourite SN site?


Figure 10.8: Google Zeitgeist p. 102

Figure 10.9: User Interaction on Social Networking Site p. 106

Figure 11.0: User Interface p. 108

Figure 12.0: MySpace Australian Unique Audience 2007 p. 119

Figure 12.1: Australia Active Users August 2006 – August 2007 p. 112

Figure 12.2: Facebook Applications p. 114

Figure 12.3: Red Bull Roshambull Profile Page p. 116

Figure 12.4: Red Bull Roshambull p. 117

Social Media & Marketing: Online Networking & Advertising 130

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APPENDIX A – Journals
Social Media & Marketing: Online Networking & Advertising 144


3/7/2007 - Tuesday : First day

1) Digital Landscape Summary 2007.ppt

2) Terminology & Agency Workflow : Beyond Workflow : Powerpoint Slides : Online
3) Screengrabs


1) The work induction was all summarized in a powerpoint. Throughout the powerpoint,
I have learnt about the key terms being used when it comes to a media placement and
furthermore, it gives me a thorough understanding of what this online media agency

2) As soon as I have gone through the powerpoint, work was allocated to me just to
reinforce what I’ve learnt from the powerpoint and put it into work. I was given a task
which involved me surfing into websites which have the brand advertisement on it,
and then do a “screen grabs= screen capture” over the ad. The process varies and
could take almost the entire day, as advertisements on the website rotate hence I have
to keep on refreshing and waiting until the client’s advertisement turn up. I have no
idea why they do the ‘screengrabs’, one reason that was explained was that, it was to
ensure the campaign is running and active on the website.
Social Media & Marketing: Online Networking & Advertising 145

4/7/2007- Wednesday: Second Day


1) Continuation of screengrabs and hands-on the software use which are AdRelevance
by AcNielsen and DoubleClick which is adserving tools used by Beyond.
2) Post measurement analysis was taught to me
3) Was involved with the presentation of the Bourne Ultimatum proposal to the client.


I was assigned to do screengrabs as this is a necessary procedure which every digital planners
have to to to ensure all brands advertising is running and active. Besides that, I was taught by
my colleagues on how to use the campaign measurement software (AdRelevance).


Comparing campaigns in the sectors of your choice by different criteria, including the sites
where advertising is placed, the creative used, the campaign frequency, and the number of
impressions achieved

> Estimating how much competitors are spending on their online campaigns, and how
many ad impressions they are receiving

> Understanding the average ad spend in a sector to ensure that your clients are
making the maximum impact for their budget

> Assessing which sectors and advertisers are the most active
Social Media & Marketing: Online Networking & Advertising 146

Double Click

DART for Advertisers (DFA), a hosted, enterprise-class advertising management and

serving solution which helps marketers reach their online goals efficiently and effectively.

5/7/2007- Thursday: Third Day

1) Screengrabs
2) Post Analysis Report
3) Bourne Ultimatum Proposal
4) Submission of Codings on the Flash File for tracking

6/7/2007- Friday: Fourth Day

- Was out for lunch with media owner, no relevant insights were collected.

9/7/2007- Monday

1) Screengrabs
2) Post Analysis Report
Social Media & Marketing: Online Networking & Advertising 147


10/9/2002 – Day 1

1) Induction Manual
2) Team Introduction

- Introduction to Nielsen Ad Relevance: Campaign Review & Tracking
- Competitors Analysis on the creative execution frame by frame followed by top 5 sites
being advertised and results of the campaign. The analysis was further narrowed down by the
type of insurance.

4) Introduction to digital planning powerpoint was passed to me for me to understand more

about the online industry is. Refer to powerpoint.

11/9/2007 - Day 2

1) For me entire day I only fill up numbers from a paper to the powerpoint, the
powerpoint was a review of the campaign performance which has impressions, click
through rate, and number of clicks.
2) Gathering Cost per impressions from media owner.

12/9/2007 - Day 3
1) Reporting : CTR, CPM
2) EyeBlaster: AdServer : Upload rich media content
a. It will track
b. 1 week after launch > Report
c. 1 day after live> Check if it is live
d. 1 week after campaign- Post Campaign Analysis
e. Importance of this is optimization
Social Media & Marketing: Online Networking & Advertising 148

Optimization is about tracking the campaign chances of reaching the campaign objectives and
if it doesn’t, finding the best way to fix it. Most of the time it involves changing the creatives
to another, or switching the advertising placement, recommendation is from the publishers.

3) Client’s meeting- Conventional media planning

i. Escalating cost without reference to clients, pushes client into a corner.
ii. Media expertise is thoroughly on just ad bookings and placement.

4) Media Owner Meeting: DoubleClick regarding new software.

13/9/2007- Day 4
1) Competitive Analysis for tourism authority
a. Involving the use of AdRelevance to track campaigns that have run in the past
8 months, extracting creatives, tracking the post-campaign results and do a
competitive analysis.

2) MySpace Product Mock up: Was asked to design for the MySpace platform.

14/9/2007- Day 5
1) Mock up for NEW Pitch
2) PITCH Mock up for the survey website
3) One digital merger- Understand that there is a bigger boundary of the online planning
department and the role of media planners in the media agency is just the one of the
roles, other roles that are being exposed through observation, are production and
search. However, there is still a lot to be covered.
4) Tourism Authority - Netview, Netintelligence.
Social Media & Marketing: Online Networking & Advertising 149

17/9/2007 – Day 6
1) Completed the powerpoint mock up for the Pitch.
2) Gather information for Tourism Authority, break down by site composition, audience
3) Gathering data to convince the Tourism Authority client to invest in social media

18/9/2007- Day 7
1) Tourism Authority Data Entry
a. Travel Australia Macro Analysis
i. Looking into traffic performance: Average pages per visit & Minutes
per visit, Channel Visitation, Page views, Inward & Outward Traffic
towards Sponsorship
2) Sensis Mobile Media Presentation
3) Tourism Authority Sites Seeking via

19/9/2007- Day 8
1) Finished data entry.
2) Spent most of the time doing design for other teams which was a negative and
unproductive day for data collection as I am not exposed to the media planning side as
much as I wanted to be.

20/9/2007- Day 9
1) Data entry

21/9/2007- Day 10
1) Research into finding how rich media is better in terms of accountability towards planning.
2) Finding potential sites for advertising
Social Media & Marketing: Online Networking & Advertising 150

24/9/2007- Day 11
1) Reporting- Using Eyeblaster to retrieve reports
2) Using Nielsen: NetRatings to find out Ad Spends.

25/9/2007 – Day 12
1) Reporting

26 September 2007- Day 13

- Reporting
- One colleague made a quite good comment on my thesis, he went about saying that the life
span of social network sites are short as everyday there will always be a new creation,
improving on the current old model of the sites and sooner or later it will either be bought
over or users would migrate. He also commented that a Gen Y user may eventually have
several memberships in social sites and thus is hard to say is feasible when this is just merely
a trend.

27/9/2007- Day 14
- Roy Morgan
- Competitive Analysis for NEW Pitch
- In the meeting, everyone talks about their project performance and during this; the
boss makes a comment and said that everything that is on MSN always works. One
reason for him to say so is because there was quite a high click through rate in one of
the brands.

28/9/2007- Day 15
- Media presentation from MySpace.
Social Media & Marketing: Online Networking & Advertising 151

APPENDIX B – E-MAIL Transcripts