Evaluation of social media use and its effects

¶ … Social Media

Travel and tourism, a multibillion-dollar worldwide industry, with the UK being one of the premier tourist destinations, has constantly relied greatly on endorsement and advertising as platforms for the enormous number of destinations, spots, and vacation selections; hotels, resorts, areas, and countries; challenging for travel business, not to bring up the crowd of carriers, airlines, trains, cruise liners, buses, and other transport vehicles for travellers to those destinations. So imperative is the business that there are whole venues (together with smaller nations) whose financial systems are just about wholly reliant on tourism.

Travel PR in a Digital Age

Just like most other industries, the social media revolution has had a deep impact on the travel and tourism markets; both in terms of advertising (Kayak, LastMinute, Orbitz, Expedia, Travelocity, Priceline) and promotion (holiday websites, online travel media, blogs, chat rooms/forums, YouTube, travel-optimized search engines, social networks, mobile media sharing, e-mail blasts). Viral is the key word. The importance of social media on the advertising of travel is on the whole powerful and rising exponentially. In reality, word-of-mouth in the travel industry is prized as much as conventional advertising or yet editorial coverage.

Social media sites make certain that everybody can be an influencer with an autonomous voice, involved what is now termed as "citizen journalism." every person can send and receive suggestions and travel approvals inside a social media group that contributes to common interests and likes. As soon as social media methods and applications are applied to travel/tourism public relations drives, messages are spread to a bigger and more varied audience. With the help of digital media, customers are given the chance to take a great deal more dynamic approach to devising their upcoming travel decisions (Rusbridger, 2010).

Strong word-of-mouth decisions facilitates by social media underline the task of engaging in discussions with those online communities in addition to conventional media, for the reason that you want to be in the game of recreating critical word-of-mouth. Web 2.0 or social media data signifies that people are paying attention to people like me instead of the third-party authority people. Business and holiday travellers can directly hook up with tourism opportunities straightforwardly by driving into the wide spectrum of social networks on the Web. They can take part in personal conversations online that manipulate decisions (via Facebook, MySpace, Twitter). They can be driven by tourism messages or public relations campaigns additionally, and by advertising employing visually arresting still photographs or films (via YouTube, Flickr). Dedicated search engines such as Kayak and Bing Travel in addition enthusiastically identify competitive products and services from a vast universe of travel and tourism websites. Social networks or micro blogging sites like Twitter allows travellers to self-partition into compatible clusters, just like they do in real life (Davidson, 2009). By talking and appreciating the verbal communication of the online community, travel marketers and advertisers can recognize those areas of particular interest and demographic importance that share individual tourism inclinations, and grow their business practices consequently.

Literature Review

In the pre-social media era, the travel PR expert first and foremost focused on travel writers working for major newspapers, magazines, and wire companies, in addition to the television channels. In the present day, on the other hand, as dailies are vanishing across the UK, the online community has become very important. Travel editors and writers at dozens of daily newspapers in the UK have been discarded, to be reinstated by wire companies and syndicate reports. Several of these correspondents, whose hard work once appeared in the newspapers, are now working for their own web-based travel sites or have joined the blogging community.

Does this signify that conversing public relations promotions through the Internet is more successful than via long-established print publications? The correct response is that they are poles apart. Varied audiences evaluate and scrutinize communications methods in separate ways. Their viewpoints are dissimilar, and there may even be a generation-gap split in their inclinations as well. Whereas print periodicals offer the observations of objective, impartial journalists, a lot of the online communications channels are the views of classic consumers and people like you who are looking to learn more before they purchase their holiday (Seymour et al., 2011). A few travellers have a preference for editorial write-ups that are critiqued by powers that be in the industry; others have a preference the common man reporting of online bloggers and chatting websites. All offer diverse content on dissimilar terms. Readers of print publications furthermore transfer to the online sites of those exact same journals that may have the same, or additional, perspective content and editorial writers. No matter what their working platform, innumerable journalists carry on to write about and report on travel; and that shows that they want to be well-versed and knowledgeable about accessible tourism promotions (Davidson, 2009). One typical, respected method uses press adaptation visits and tours, where journalists are brought over to the destinations as guests to visit a locations or property; either independently or in groups. A rising section of big, well-regarded newspapers and journals have forbidden their writers from taking such free trips in order to protect editorial veracity, and this development continues. In the meantime, the ferocious rivalry among holiday locations asks for marketing and advertising methods that are more imaginative and specific than ever before. However, the augmentation of the Internet and the phasing out of the travel agent's power means clients have higher control over the travel range and booking procedure. Looking for travel packages on the Internet has grown considerably; producing a chance for much larger direct-to-client social media promotions and campaigns.

Social media

Godes & Mayzlin, (2004) contend that many internal communicators still resist using social media networks such as Facebook for collaborative projects, because of a lack of a demonstrable business case. He identifies four possible 'gateways' which practitioners can consider: staff directories, user group forums, video library and project wikis. Davidson, (2009) suggests that employee profiles and resumes uploaded on Facebook, for example, may be used by colleagues setting up a virtual team, identifying who to interview in another location, or looking for a mentor. User group forums, on the other hand, allow companies to listen and receive customer and client feedback immediately. The difference with customer hotlines is that user group forum members can 'defend' the company from unjustified complaints from other members. Video libraries are compilations of all corporate videos, stored on the company server. Wright predicts that internal communicators might end up running their own company web TV channels (Seymour et al., 2011). Wikis are ideal for collaborative projects because team members can contribute and edit work via the web. Curran, (2011) however, thinks that the biggest challenge is encouraging staff to use them.

Establishing connections with clients, customers or consumers to promote positive word of mouth in the vast, invisible networks that exist between all of us can seem a complicated business. But it doesn't have to be. Just as with any marketing campaign, it begins with product or brand differentiation. You then research the word of mouth that's already taking place. Next, decide if you need to use a tactical approach (such as a campaign that uses contagious communication), or a more strategic plan that will manage the relationship with the most influential buyers in your market. Better yet, go holistic and integrate both.

Either way, remember to set objectives so your efforts are measurable, and make sure you have the right people with the right skills to implement your connected marketing strategy. And that's it. Of course, there is a little more to it in reality (Trusov, et. al, 2009).

Methodology

In January 2011, Informative conducted a study designed to answer these questions. One thousand people who had flown on a named group of UK domestic airlines - EasyJet, British Airways, RyanAir, BMI, Flybe, Manx2 and Hebridean Air Services - during the previous year were surveyed on their flying habits and their recommendation activities. Data was collected on their elite flying status, standard demographics, online check-in and boarding pass experience, and recommendation behaviour. Respondents were first asked whether negative or positive comments have a bigger impact on their purchase decisions.

Which of these would have the greater impact on your decision to fly or not to fly with an airline?

* a positive comment from a friend or acquaintance on Facebook or Twitter about their flying experience with that airline

* a negative comment for a friend or acquaintance on Facebook or Twitter about their flying experience with that airline

People were roughly split on their perception of the impact on their flying choices of positive and negative comments.

54% reported that positive comments on Facebook or Twitter by an acquaintance had a greater impact on their decision to fly with a particular airline, and 46% believed that negative comments had greater impact. In general, the social media marketing community tends to focus on the value of positive buzz as a potential driver of customer acquisition and brand promotion. This focus on the positive benefits of consumer word of mouth behaviour is a natural tendency. I certainly like to think that positive comments have a greater impact on my decisions than negative comments. In fact, the respondents to the survey reported that the two factors that had the biggest impact on their airline choices were comparison-shopping on the Internet (38%) and personal recommendations from an acquaintance on Facebook or Twitter (42%). but, although personal recommendations have a clear impact on choices, the question is whether positive comments have a greater impact than negative comments. This distinction has not yet been made with regard to word of mouth marketing effects. The U.S. national election in 2004 was viewed by many as the most negative in recent memory (Johnson, 2011). Why would hard-nosed politicians with limited budgets invest so much in negative advertising if positive comments had greater impact on behaviour? Although we like to believe positive comments have a greater impact on our decisions than negative comments, there are reasons to believe that within certain industries or contexts negative comments have a more pronounced effect on our behaviour. Survey respondents were asked about their recommendation activities for the seven airlines in the UK, in order to measure the number of positive and negative comments for each airline during the previous year.

Have you made a very negative comment to a friend or acquaintance on Facebook or Twitter about your experience flying with an airline in the previous year? (Yes/No)

* (if Yes) Tell us which UK airlines you made a negative comment on Facebook or Twitter about to a friend or acquaintance and to how many people you spoke

* Have you made a very positive comment to a friend or acquaintance on Facebook or Twitter about your experience flying with an airline in the previous year? (Yes/No)

* (if Yes) Tell us which airlines you made a positive comment about on Facebook or Twitter to a friend or acquaintance and to how many people you spoke

Discussion & Interpretation

The first thing that was observed was that easyJet and Ryanair were the only airlines in the study that were profitable in Q3/2010 and they were the airlines with the lowest negative comments among respondents who considered them their primary carrier. easyJet and Ryanair were also the airlines with the highest percentage of positive comments. The single exception is BMI, that squeaked by British Airways, with 93% positive comments. The second observation is that the airline industry is in dramatic upheaval and undergoing structural transformation from low-cost carriers such as easyJet and Ryanair. The result is that all the traditional network airlines are losing money at historic levels.

Negative word of mouth on social media and networks predicts poor profit

The really interesting finding here is that the percentage of negative comments on Facebook, YouTube, Digg or Twitter is highly predictive of operational profit, while positive comments are not very predictive at all. While many people might have anticipated that negative comments are as predictive as positive comments, few people would expect negative comments alone to be predictive of operating profit. The correlation of negative comments is even higher against the five-quarter average of operational profits than it is with operational profits in Q3/2009 (Doganis, 2010).

This makes sense because the five-quarter average contains data over a longer period of time and smoothes out any volatility that might impact a single quarter. The strong negative correlation between operating profit and negative comments suggests that as the percentage of an airline's customers who are making negative comments about them increases the airline's operating profits decrease (Daily Post, 2011, September 5). Conversely, as the percentage of an airline's customers who are making negative comments on social media sites about them decreases the airline's profits increase. This correlation illustrates a very interesting dynamic that appears to be at work in this particular industry.

If we view the word of mouth communication on social media sites among UK airline customers as a media channel then we are saying the greater the frequency and reach of the negative comments about an airline on that channel the greater the negative impact on an airline's profits (Daily Post, 2011).

This is literally what is happening in this industry with traditional media channels, advertisers specify in advance the frequency and reach of their advertisements and then pay accordingly With the word of mouth channel there is good news and bad news. The good news is that you do not have to pay to use the channel for advertising. The first piece of bad news is that you cannot specify the content, frequency, or reach of the advertising. The second piece of bad news (at least for the airlines studied in the current market) is that negative word of mouth advertising is much more predictive of profits than positive word of mouth advertising (Lawton, 2011).

Financials

At this point we can answer two of our original questions:

* Does a positive or a negative statement on social media sites have equal financial impact or is one more beneficial and the other more harmful?

* Can the economic value of customer recommendations be quantified?

Not only are negative comments more predictive of operating profits than positive comments but their impact can be quantified. Negative comments on social media sites have more financial impact than positive comments within the airline industry. Every 1% reduction in negative comments co-varies with £4,050,464 of operating profit; every 1% increase in positive comments co-varies with £1,709,300 of operating profit (Daily Post, 2011). The term 'co varies' has been used because there is not yet a proven causal relationship between negative comments and operational profits. However, the percentage of negative comments definitely mirrors operational profits for the airlines within this study to summarize; it appears for this industry at this time more financially beneficial to reduce negative consumer comments about a brand than it is to increase positive consumer comments about a brand (Wangenheim & Bayon, 2007).

Why negative word of mouth is linked to poor profitability

It's time to poke holes in this analysis in order to test these conclusions. We have not yet presented a theory about the causal processes that could explain the correlation of negative comments and operating profit. The competitive story was what Clayton Christensen terms the disruptive transformation of an industry by low-cost entrants (Trusov, et. al, 2009). In Christensen's model of disruptive innovation:

* Incumbent players compete with one another by creating high-margin services for demanding customers.

* Low-cost entrants enter the competitive picture, meeting the needs of the under-served, less demanding segment of the market.

* Low-cost entrants develop product and business models that meet the requirements of less demanding customers at a price that the incumbents cannot match, and still operate profitably.

In this competitive environment:

1. It makes sense that the incumbent airlines would generate more negative comments than their low-cost competitors who have less demanding customers.

2. It also makes sense that the low-cost entrants' ability to operate profitably at a much lower price point would generate higher positive comments from their less demanding customers.

This model of disruptive innovation gives a plausible account for why there might be a negative correlation between negative consumer comments and operating profits among the airlines we studied. But how does this information help marketers in the airline industry do their job? How does understanding the dynamics of word of mouth marketing help marketers build a successful airline, or a successful marketing campaign for that matter? If we take seriously the notion that word of mouth on social media sites is a media channel with frequency, reach and content that has a direct relationship to profitability then airline marketers have several approaches open to them (Arnold, 2010).

Marketing implications

You can't manage what you don't measure. The first thing an airline marketer should consider is to track and measure the word of mouth content about their airline: (1) track the number of negative comments its customers are making to their acquaintances about the brand; (2) identify the concerns being expressed by its consumers; and (3) wherever possible, address these concerns to decrease the negative word of mouth (Lawton, 2011). Decreasing negative comments is literally like money in the bank for an airline. Addressing the causes of negative comments might mean changing in some way their product or service offering.

But it may be that their customers are misinformed about or unaware of some aspect of the airline's business. In this case some kind of informational marketing campaign utilizing traditional media could help decrease the negative word of mouth. Another approach is to consider countering negative word of mouth by allocating marketing budget to target the major sources of word of mouth marketing effects. Not all consumers are equally effective in the communication of their attitudes throughout the network. Marketing segmentation approaches have tended to segment consumers by different demographic or product use attributes, but have generally ignored the impact people have on others' purchase decisions. But if you look at recommendation behaviour and other psychological and social attributes, some consumers have much greater impact on word of mouth activity than others (Lawton, 2011).

Borrowing terms from the traditional media channels you could say some people have greater frequency and reach than others. Further, some consumers have greater impact on the purchase decisions of those around them than the general population. Marketers are developing segmentation profiles to identify people with various roles in the transmission of messages through the social network (Arnold, 2010).

For example, I have developed a segmentation profile for influencers that have proven successful in identifying people who have greater frequency, reach and impact on purchase decisions than the general population. The profile measures people along two variables that are highly predictive of recommendation behaviour and impact. It utilizes the Affective Communication Test (ACT) developed by Howard Friedman at the University of California and a variable I created to measure the relative size and geographical distribution of a person's social network (Wangenheim & Bayon, 2007). A great number of people have been profiled over the past two years, and we can conclude that influencers have several attributes of interest to marketers.

First, they are very active recommenders. In many industries and concerning many different product categories, they have been shown to exhibit recommendation frequencies from two to six times greater than the general population. They also have been shown to know on average four to five times the number of people as the general population. A Pareto analysis on influencers shows that 20% of the population account for about 68% of all the social acquaintances of the population studied (Trusov, et. al, 2009). It turns out that the distribution of social acquaintances does not follow a normal distribution but a power law distribution. This same kind of phenomenon has been identified in links to websites on the Internet and other places susceptible to network effects. In power law distributions (unlike normal distributions) there can be extreme deviations from the norm.