Strategic Social Media Marketing

Strategic Opportunities of Social Media Marketing for Organizations

Social media offers many opportunities for both consumers and organizations. On one hand, in using social media, consumers have developed new ways to interact with brands, to voice their opinions about particular brand experiences, and have also helped them in searching, evaluating, choosing and buying goods and services. On the other hand, organizations have the opportunity to invest in their social media presence and develop more targeted campaigns, communicate with consumers, use the medium to drive direct sales, gain insights into how customers perceive and appreciate a brand, as well as lifetime value targets, such as customer acquisition and retention.

Social Media Marketing and its Advertising Potential

Social media marketing is highly correlated with advertising and its potential for driving business and conducting promotional activities to reach and communicated with targeted customers.

Facebook achieved in $27.6 billion in total revenue in 2016, with $8.62 billion in the final quarter. Moreover, as reported by Facebook itself, it had an overall daily active users of 66%, of its total of 1.8 billion users. That means that approximately 1.18 billion people are actively engaging in social media activities on Facebook, providing marketing opportunities for global and local brands that can target this large audience based on various demographics and interests. In June 2017, this highly popular social media platform reached a new milestone as now more than 2 billion people from all around the world use Facebook.

Twitter is another social media platform used by organizations for advertising, generating $2.5 billion in ad revenue in 2016. Snapchat, a newly public social media company based on a photo-sharing app, reported in its first three-month period of 2017 a revenue generated by ads of $149 million.

Based on the strategic importance of social media in advertising, a number of studies have examined this subject related to promotion on social platforms. In his study, Duffett explored the behavioral attitudes of South African Millennials towards Facebook advertising, extending the study to answer research questions related to the efficiency and effectiveness of social media practices in relation to intention-to-purchase and purchase perceptions.

In a similar study, Carrillat et al. raised attention to hedonism and proposed it should be included in social media advertising to create positive and pleasurable brand experiences in online mediums. Mir (2012) also proposed that SMM and online advertising on these platforms, can lead to favorable attitudes of existing and potential customers.

Conversely, other studies showed advertising on social media does not exhibit positive and favorable behavior for consumers, presenting divergent behavioral attitudinal responses. For instance, Bannister et al. examined US students' attitudes for advertisement, and their study found negative attitudes as most students ignored the ads, without generating any purchasing decisions.

In a another study, Chandra et al. discovered that students used Facebook advertisements to compare prices, however they tended to experience negative cognitive and affective attitudes for brands appearing in the ads. Moreover, Kodjamanis and Angelopoulos in their UK empirical primary research found that more than half of the respondents did not consider that Facebook advertisements had an impact on their buying intentions or behaviors, and one third of the respondents felt that they had a low effect on them.

Impact of E-Word-of-Mouth on Social Media Marketing

On social media platforms, existing customers are able to talk about their brand experience, influencing other potential customers. Meanwhile, companies can listen in on these public comments and recalibrate their social media marketing strategies accordingly.

As a result, electronic word of mouth has a higher impact on social media marketing because it can reach more people in online settings and influence their future decisions or perceptions related to various brands, relative to traditional interactions between people.

Using the premises of a secondary study for examining research trends related to social media marketing, Alalwan et al. found that social media platforms lead to a more intense and extensive impact of WOM compared to traditional marketing tools. Moreover, Hudson et al. demonstrate the value and relevancy of brand relationship quality for social media marketing and help identify how this concept is related to other behavioral results, such as electronic word of mouth.

On the other side, Barreto based her eye-tracking experiment to study advertising effectiveness based on empirical data and to examine banner blindness and found that Facebook advertisements registered lower consideration for buying, compared to eWOM from friends on this social media platform. Based on this finding, marketers should focus on stimulating interactivity and eWOM by adopting a proactive endorsement of sharing (as promoted posts or ad campaigns on social media) content created by consumers (also known as user-generated content). Various types of content and marketing communications that are created, developed and shared on social media by consumers and customers of a brand or organization can then be re-purposed and transformed in advertising campaigns.

Social Media Marketing and Customer Relationship Management (CRM)

Social media can serve as a productive and useful tool for organizations or brands in developing, sustaining, and maintaining emotional and social relationships with consumers, to establish a solid and lengthy connection with them. Coulter and Roggeveen assert that global companies use social media to contribute in increasing customer experience and customer relationship management. By creating, posting and sharing various types of content on social media platforms, consumers are more likely to engage with brands in online settings, thus, cultivating their level of interactivity and involvement in a more profound relationship with an organization.

Consumers have become proactively involved in the co-creation of their experiences with firms. Various authors have emphasized the emergence of a "social customer" or "creative consumer" who is actively implicated in creating and propagating value-adding content on social media platforms. This new role of the consumers, facilitated by technological developments, requires the reconsideration of customer relationship management from both academics, and marketing practitioners.

Multiple studies have recognized the increasing role of social media in CRM and a new term arose, namely 'Social CRM'. Social CRM does not replace traditional CRM, instead it is presented as an extension of the well-known marketing tool to incorporate social functions, processes and capabilities that include business-to-consumer (B2C) and consumer-to-consumer (C2C) interactions. For social CRM, Trainor et al. propose the following definition: "a firm's competency in generating, integrating, and responding to information obtained from customer interactions that are facilitated by social media technologies".