Literature review methodology and applications

¶ … Social Media on the Advertising Competitiveness of Small Businesses

Marketing is a complex issue (Joshi, 2005; Christensen, 1997). Because of the complexities surrounding it, it is very important that every researcher into the issue carefully consider what area of marketing he or she wants to study, and focuses on that area. By doing so, marketing (both domestic and international) can be better addressed (Christensen, 1997). Long before social media ever appeared on the scene, companies were finding creative and innovative ways to market their goods and services to consumers (Joshi, 2005). The trust that is associated with traditional media has been increasingly successful in transferring over to viral marketing strategies online. Trust in traditional media (newspaper ads and articles, and TV), the authors report (using Menon's research), transfers to the Internet. In particular, trust in traditional advertising for health issues and mediations leads to trust in Internet drug searches (Soh, et al., 2007). As this trust is continuing to be transferred into a viral environment, use of social media in marketing campaigns becomes more crucial than ever.

Yet, this growing trend is still relatively unrecognized within the contemporary scholarly discourse. Contemporary researchers are struggling to keep up with the emerging trend. Thus, "researchers are scrambling to understand the phenomenon almost as quickly as the technology advances" (Williams & Merten, 2008, p. 254). In this environment, it is important for studies like this one to continue to flush out the benefits of social media marketing and how they can be utilized by contemporary organizations.

Benefits of Social Media Marketing

The research clearly shows a number of positive benefits that are associated with utilizing social media within marketing strategies. First and foremost, these strategies are incredibly cost effective. Presence on social media platforms is often free of charge, allowing organizations to set up fan pages on sites like Facebook, Twitter, and YouTube for just the cost of the labor to keep the site updated. Small businesses can utilize these free resources as a way to get started with little or no capital investments, and still be able to reach a very broad audience. Moreover, many social networking sites offer advertising space, where banners and ads are seen on homepages. Facebook ads are one example that is still extremely cost effective, averaging out to pennies per click.

Additionally, there is much m more engagement with the consumer, and all of his or her network. This means that the consumers are much more personally involved in the marketing messages that are being spread through their networks. Here, the research states that "social media allows social marketers to directly engage their consumers in the creative process. In this paradigm, customers become creators or co-creators with the agency or organization" (Thackeray et al. 2008 p 341). Overall, this keeps consumer investment high which will benefit SMEs by retaining a greater customer loyalty and increasing the facilitation of word of mouth marketing strategies through consumer generated content that does the marketing work for the organization.

Moreover, marketing through social media platforms presents much less invasive marketing techniques. The marketing message is often spread through consumer networks, thus from friends or friends of friends, rather than a consumer constantly being bombarded by annoying ads that are distracting and unappealing. When a company puts a "fan" page or a "follower" page up on Facebook, the advantage for a company is two-fold, Taylor et al. explains. One, although Facebook users cannot enroll unlimited numbers of friends on that site, the number of "fans" is "unlimited, allowing companies or brands to enlist thousands of fans" (Taylor et al., 2011, p 259). The second advantage is really a benefit for consumers because a user who becomes a "fan" of a company or of a brand may wish to follow it but he or she doesn't have to give their profile or email address to that company in the process. This keeps consumer anonymity, thus increasing the overall likelihood they may further investigate products and services without the worry of being constantly bombarded by sales calls and emails for the next year.

Another clear benefit of using social media as a platform for marketing is the greater scope of demographics that become reachable through such technologies. Essentially, social networking platforms do tend to break down some of the traditional socio-economic barriers that separated demographics in more traditional marketing strategies. The sheer popularity of social marketing is astounding. Over ten million people use social networking on a daily basis (Williams & Merten, 2008). This increases the overall ability for an organization to reach a much wider scope of demographics than traditional marketing practices. As more and more users go online, they are being stripped of the previous divides that separated them into groups in terms of other traditional forms of marketing. Modernization theory illustrates how social networking is helping remove previous boundaries between socioeconomic divides. This theory suggests that "In the context of social reproduction, modernization theory holds that as societies develop they become more open, socioeconomic achievements become less tied to social background and other ascribe characteristics," (Marks, 2009, p 918). People of all different backgrounds easily come into contact with each other online, where they would have never met in person. Thus, because "social background becomes less important and social attainment becomes more universalistic" marketing efforts can go much further online than in traditional forms (Marks 2009 p 918). Use of social media can expose an organization to a much wider selection of the marketplace, for a fraction of the cost.

It is clear that the trend of social networking and media is only going to continue into the future. This is demonstrated by the mass exodus of young readers away from traditional print media (newspapers, magazines). Yes, the young reader doesn't go out on the front lawn and pick up the daily newspaper anymore; perhaps his or her father or grandfather still does, but the young reader goes online to pick and choose what information to review. And in choosing what information to tap into online, the typical online magazine has many of the same features as the print version of magazines, hence, the young Internet-savvy person finds the blogs more entertaining and useful because on social media sites there is all that addition entertainment and diversity to explore. This provides a key situation, where SMEs can tap into an emerging market trend before it becomes too cliche to work effectively at such low costs.

Social Media as a Viable Marketing Strategy for SMEs

One of the groups that have the most to benefit from cost effective social media marketing are SMEs. These organizations have much more restricted cash flow than their larger enterprise counterparts, and thus any cost effective measures can help them reinvest funding into other areas of the business. Yet, this cost effectiveness does not signify poor performance. According to the research, "there is an increased potential for social marketers to use the Internet for promotion" (Thackeray et al., 2008, p 339). Grainger (2010) points to the fact that the companies that are timid about dipping their toes into the social media stew are missing out, but those engaging in social media -- even though they may not know "why they are entering them" -- are learning how to market with this tool. There are many cases of SME firms successfully implementing these cost effective measures and seeing amazing returns. For example, it and it staffing companies have been using social networking as a way to reach out to potential businesses and potential employees looking to be placed in prestigious companies all over the United States. The research shows that in the case of these it companies, use of social networking within their marketing and networking strategies increases their ability to reach a wider section of the marketplace (Westlake, 2008)

Social Media and Large Enterprise Businesses

Still, SMEs are not the only organizations tapping into the social media trend. Many enterprise businesses are also rapidly jumping on the bandwagon. The research shows that advertisers shelled out about $1.2 billion in 2009 for ads on social media sites (and one can bet a lot more than that was spent in 2010), but researchers are saying it is going to be important for advertisers to understand the consumer / social media follower's "motivations for going online" (Taylor et al. 259). However, such excessive funding into advertising via social networking platforms can prove to actually hinder the success of the fundamental strategy. Too aggressive strategies on social networking platforms can bombard to consumer on a platform they expect to be for building relationships, not for selling products.

Reviews of the culture of the Internet have shown that advertising can be "intrusive and annoying" -- and especially for those Internet users who see pop-up ads on every page they visit are very negative towards advertising cluttering up MySpace, Facebook, and Twitter (Taylor et al., 259). If consumers and social media aficionados sense that their Facebook and YouTube, etc. are being flooded with "excessive commercialization" those users may abandon the sites and hence, not make purchases of the goods and services (Taylor et al., et al., 2011). Individuals most often use social media to create and strengthen relationships and increase communication within those relationships, rather than explicitly wanting to shop for products. Those individuals are using social media sites to: a) "construct a profile within a bounded system"; b) maintain "lists of other users with whom they share connections"; and c) view and "browse" those lists of connections with others they have interacted with online (Taylor et al., et al., 2011, 259). Many users of social media do not intend to use viral platforms to think about buying products, but end up doing so subliminally. Rather, most are using such platforms to create and maintain relationships; "typical social networking sites allow a user to build and maintain a network of friends for social or professional interaction" (Marks 2009 p 5). Jim Tobin's concept of "Cocktail Party" is the analogy for social media that attaches the cocktail party routine (mingling before talking; "keeping the conversational threat going"; sharing information that "doesn't benefit you"; and sharing what you know in the context of what is being discussed) to how people interact online in social media contexts. Chat a bit, meet another person, share information, add to someone's litany of abuse in prisons, and so forth (Grangier, 2010). In fact Taylor et al.'s (2011) investigations into the reasons people use and enjoy social media reveals that merely engaging in social-networking activities "may be perceived as a means to improve one's quality of life by purposefully distracting oneself from life's ongoing challenges" (262). In other words, aside from any value that a user derives from "actual content" or from actual communication interactions with others, the act of browsing freely through a universe of ideas that are found in social media sites -- for example, the multitude of videos and story-telling scenes on YouTube can be fascinating enough to spend hours searching through for favorite wildlife topics, or sports -- may offer "welcome distractions" and can "facilitate more positive attitudes towards" social media sites (Taylor, et al., 262). Social networking is only a viable marketing strategy when it correlates with the very reasons why users sign up in the first place. Here, "anecdotal evidence indicates that social-networking advertising (SNA) can be effective when users accept it" (Taylor et al., 2011). Bombarding users with ads like they are watching an infomercial will most likely turn them off to the product being advertised, and even the very site it is being advertised on.

Moreover, many large businesses have yet to enter into the social marketing arena, which is opening up greater opportunities for SMEs to use the platform successfully, without being pushed out by larger organizations with deeper pockets. Fortune 500 companies (as of 2010) were using social media, the author discovered that "less than 50% of the entire Fortune 500 had official Twitter and Facebook accounts for their companies" (Grainger, 70). Some sixty percent of respondents to the Qualtrics online survey explained that they had a way of measuring the effectiveness of their Facebook "fan page," their Twitter account, and their YouTube account. The bad news was that the survey only had a 10% response rate, which Grainger attributes to the fact that many Fortune 500 companies "have policies against employees participating in surveys or student-led projects" (p. 72). The research shows that social marketing is quickly becoming a major platform for much more than just communication, which SMEs can take advantage of to their benefit. Thus, "organizations and businesses are just beginning to recognize and utilize the power of Web 2.0 social media" (Thackeray et al., 2008, p 340). This opens up the environment for SMEs to compete in lieu of a dominance held by larger enterprise businesses. There is much less entry barriers, essentially because there are so few companies working with these new platforms.

Word of Mouth Marketing Strategies via Social Media Platforms

Too many ads can spoil an online experience, so companies must also consider how much advertising they are doing. A balance should be struck between giving customers too much time to forget a message, and allowing customers to see a message so much they start ignoring it or they get tired of it. Everyone has a commercial or other ad they just despise, and the key is for companies to avoid that reaction as much as possible from the largest number of individuals in their target market. By helping companies and individuals better understand the value of social media for marketing, and what changes marketing in that manner require, this study can provide benefit to a large segment of the population.

Word of mouth style advertising is a possible compromise between maintaining a good balance between advertising while still promoting the social relationships that are the very foundation of social networking platforms. Word of mouth marketing "facilitates and encourages people to pass along a marketing message or share information about a product" (Thackeray 2008 p 341). This style of marketing strategies prove much less invasive and thus potentially even more successful than the larger and more exaggerated strategies currently being employed by larger, enterprise businesses.

Social networking sites provide "easy-to-use tools for current users to invite others to join the network," which facilitates marketing strategies focusing on word of mouth (Marks, 2009, p 5). The consumer can praise the company on a Facebook post, which is then directly seen by all their friends. Spreading the word has seemed almost synonymous with online communities since their inception, and thus it can be a very successful trend for SMEs to tap into without breaking the budget (Marks, 2009). Such strategies that focus on word of mouth as a primary delivery are in tune with social marketing's low cost environment for marketing. Research shows that often times, the most effective word of mouth ad campaigns have been extremely cost effective, with price tags no where near traditional marketing strategies (Marks, 2009). Authors Colliander and Dahlen (2011) have engaged in a survey in the Journal of Advertising Research that helps point out how powerful blogs have become in the online experience. Theirs is a very well thought out comparison between the effectiveness of blogs as opposed to online magazines. Indeed, blogs and magazines "are in competition" and they are "similar enough to appeal to the same audiences and the same advertisers" (Colliander, 2011, p. 314). In their research the authors determined in this article that blogs have "superior publicity effectiveness" and that the blog readers' relationship with the blogger "is… similar to -- and as powerful as -- a word-of-mouth relationship" (314).

There are a number of successful case studies where word of mouth marketing strategies have worked in synergy with social media networks. For example, there is the successful case of Georgetown Cupcake, a small baking company. According to the research, "After being open for approximately two weeks, the business was selling 800 cupcakes a day at $2.75 each, during which time the owners did no advertising" (Thackeray et al. 2008 p 341). Most new customers had found out about the company through word of mouth online, by reading rave reviews on blogs and review sites. Thus, consumer opinions were more positive, since they were gathering trustworthy opinions from friends and family members via social networking platforms, rather than being bombarded by messages they were not sure the could trust.

The academic literature that is addressing social media can be defined as rare at its best. During those past previous years, researchers have started to take a more -?

than-?

passing look at how corporations are able to apply social media to advertising exertions, why they are coming into these digital spaces, and eventually what the consequences of this shift into the online arena.

A lot of what are obtainable emphases chiefly on how numerous features of social and online media have been able to work. On the other hand, after a more in depth review of the material and the presence of business blogs, the literature look as if to have five separate study subjects of scholarship that exist in mention to business practice of social media and how it is evaluated.

Social media

In that past few years, the Social media has certainly stepped up its game and has unquestionably becoming more and more popular and as a result of this acceptance, other customary Media have also being going through some major declines which are occurring in both business and popularity. Palmer and Lewis (2009) made the point that the main stream media channels in the past have faced numerous obstacles in recent times that have led to some form of closure with TV facing down turn in their levels of profits.

Palmer and Lewis are associating the presentation of these customary channels to the increase of social media in advertising and brand supervision. Accordingly of a hard economic environment, businesses have constricted their budgets particularly promoting budgets which have moved to online channels. As mentioned by Forrester research study (2011) by Ernst.J, David M. And Cooperstein, Dernoga M, established that businesses (brands) are progressively everchanging their publicity significances to bring into line better with today's consumers. Today's consumers are the ones that are extremely tech savvy and social media enthusiasts. As a result it is the production of the social media network facilities in brand management and selling that bring us to the responsiveness of social media networks. First, the examiner will define social media and then outline those systems that are driving the discussion.

Word of Mouth (WOM) Marketing

The directive to "go social" is essentially what has made a lot more traditional marketers start feeling endangered and painful. On the other hand, a lot of the premises that goes behind social media advertising is discovered in basic word of what people say (WOM) methods. For years, corporations have been employing WOM ideologies to market their products, brands and services. WOM is considered to be one of the "most significant networks of communication in the market" for the reason that it is frequently seen as more "trustworthy than marketer-?introduced communications" (Allsop, Bassett, & Hoskins 2007, p. 398). The effect of WOM as a marketing instrument has only intensified with the arrival of such information to networks as cell phones, PDAs, the Internet, instant messaging, and blogs.

Research specifies that it is the abstemiously associated mainstream, not the much lesser amount of extremely related minority, who holds the uppermost likely of effect when it comes down to things like the electronic WOM (Smith, Coyle, Lightfoot, & Scott, 2007). As a consequence, marketers are learning how to intrude wide-ranging discussions with a plethora of starting and end situations, circumnavigating a network of linguistics with no start or finish. Furthermore as Barnes (2008) specified, influencers (i.e., bloggers) are chiefly inspired by a longing to assisting others (Smith et al., 2007).

Tobin (2008) manages to take the conversation to an even additional base level by associating social media advertising, not to WOM marketing, but to discussions at a place like business parties. He transcribes, "The ones [social media marketing campaigns] that have been working online were the same exact ones that would have functioned at a business party. Every one of them that have not been doing well online were the same ones that would not have done well at a business party" (p. 2).

He then continues on to define ten cocktail party instructions that relate to social media marketing. These type of rules are the ones that include mingling and listening before talking, allowing the conversational thread by going logically, sharing information that does not benefit you, and sharing what you know, but in context (Tobin, 2008). These rules give credence to the notion that social media marketing is less alien than many marketing and communication specialists may think.

Figure 7 This bar graph displays many of the most serious perceived obstacles that are blocking the way of firms accepting social media as a marketing device Not surprisingly, not knowing enough about social media tools (a.k.a. "where to begin") and not knowing how to measure social media as a marketing tool are the two top barriers for many professionals according to this 2009 Marketing Industry Trends report for not utilizing social media as a marketing

Return on Investment

ROI is what is considered to be a remarkably difficult topic that endures to be discussed regarding the traditional media circles. Writers are just starting to scratch the surface of how to thoroughly evaluate ROI for social media advertising operations.

In fact, a recent investigation that was done by the conference board discovered that old-fashioned ROI calculation is still in its first stages of expansion (Crosby, 2009). Just about one-?

third of the advertising companies measured assuredly have not made any efforts to measure ROI and then having another third one in order to have just been working on increasing an ROI model that would be for less than a couple of years. The researcher then goes on to mention the point that it is "that the marketing ROI seriously needs to be start taking seriously" (p. 2).

One writer's viewpoint for Advertising Age created the point that is was time to "start getting serious" regarding monetizing the social media before the media started growing too large for ad agencies and advertising companies to mechanism (Schafer, 2008, p. 7). However, social media are in the primary phases of ROI discussions, the digital, non-?social world appears to be making some sort of progress.

In 2009, Google was unrestricted a study reporting the properties of an online exhibition promotion for Unilever's Dove deodorant. Google has been discovering that the promotion that has resulted in a $650,000 deals life for the merchandise and a "12-? -?

point growths in ratings for what have been favored" (Neff, 2008, p. 2). Additionally, Yahoo!, in a combined study with MediaVest, discovered that ads in the search had produced an ordinary of 150% upsurge in unassisted product consciousness.

Such numbers at times are causing some to ponder, "is the Internet more active than media that is traditional?" (Yoon & Kim, 2001, p. 53) a 2001 study displayed that the Internet publicity was observed by consumers as the "the best average in terms of media favorite but padded that is behind TV in publicity efficiency" (p. 58). As a result, the Internet is fast developing as an prominent media selection for a lot of people, nonetheless is also not fairly as operative as other methods of more traditional advertising.

With that being said, Kellogg has lately made the announcement that it had some tactics to cut its saleable filming economical up to 40% for the reason that it was getting such a high ROI from its numerical exertions (York, 2008). Moreover, this instance appears to designate that businesses do have ways of calculating social media.

It seems as though the digital, non-?social media is certainly starting to get more and more academic consideration, despite the fact social media is just starting to come into the conversation. At this time, the wholesale of the social media ROI discussion appears to be online. Of course there has been a certain log in particular that has assumed particular consideration to this matter called "Mashable.com." Mashable is considered to be "the world's biggest blog which happens to be focused wholly on Social Media news and the Web 2.0" (Cashmore, 2009). The site obtains somewhere which is more than 12.5 million scheduled page interpretations and has arisen as one of the most commanding blogs that are on "all matters social media."

Resource Distribution

A lot of different studies actually display how the companies have to read just their reserve source in regards to the media selection in today's progressively digital situation.

Studies make the suggestion that beat publicity (i.e., Marketing in some certain weeks of the year and then not in others) is preferable to continuous advertising (evenly distributing a media budget over the course of a year) for the reason that it evades over-?

soaking the market with advertising communications. On the other hand, it is challenging to produce the "pulse" in pulse publicity in the occurrence of social media, a technology that endorses a frequent conversation that dampers most pulse struggles (Niak, Mantrala, & Sawyer, 1998).

And yet social media are able to function in contradiction of the forces of pulse publicity, it does bid dealers the single chance to more exactly target customer segments inside a market (Iyer, Soberman, & Villas-?

Boas, 2005). Sellers now have the extravagance of directing market segments that are very exactly; on the other hand, the query of how to amount those detailed comments, conversations, Tweets, and posts that are just starting to turn into a vital issue.

One of the details for this trouble is the "lag effect" that happens as a result of numerical advertising (Berkowitz, Allaway, & D'Souza, 2001). The lag consequence happens when a marketing effort that has an outcome on a company or brand but then again not until it goes way into the future. Researchers are starting to familiarize with old publicity models to comprise this often-?

annoying lag effect which means that more-?

precise ROI events may have to be adopted. As soon as one can comprehend the definite properties of a movement (even if it is months way down the road), and then a person can start to more accurately evaluate its outcomes.

Figure 3 Heavy social media uses statistics

Over the last couple of years, varied kind of social media interacting services have appeared and presently there are countless social media channels that attach individuals to each other. The most general social network places that are extensively used are; Flickr, YouTube, Face book, Twitter, and LinkedIn. In actual fact, twitter Facebook and YouTube are the most shared channels businesses use in their online marketing for creating brand consciousness or just appealing with the consumers.

Though LinkedIn is also extensively utilized by organizations, it mostly aims to create association on a specialized viewpoint and gradually turning into a B2B channel associated to other three networking sites that were talked about above. On the other hand for the purpose of this study, just five most prevalent social networking facilities are the ones that will be viewed.

Facebook

Facebook came into the picture in 2004 and have over 900 million people that are active members of which 450 million operators log on to Facebook through mobile devices. An average Facebook user is estimated to have at least 130 friends and is connected to 80 community pages, groups and events. There are more than 70 languages available on the site. Its main use is to establish and maintain relationships in work related situations, in political affiliations or just among friends and families (http://www.facebook.com/press/info.php?statistics).

Facebook has turned out to be the most powerful marketing tool used by companies to date. In April 2011, the corporation put into action a new service for dealers and attentive innovative organizations which is a procedure of online platform (Portal) that permits dealers and creative design agencies to construct brand promotions that are on Facebook. Facebook is currently is a huge competitor of Google in online promotion and this fresh service has made it conceivable for businesses for instance Financial Times and ABC News to make dynamic commercial visuals or announcement.

Twitter

Twitter was constructed in March 2006 by Jack Dorsey and then put into action that exact same year in the month of July. Nothing like Facebook where a person is able to get friends to share dissimilar things, with twitter one has to get attached to the newest material on what they discover to be interesting. An individual would have to discover the public stream that really interests them and follow in what they are communicating about. Each tweet is somewhere around 145 characters long. A person is still able to follow the tweets in spite of whether or not if they do not do any tweeting at all, and also there is not really any kind of limit as to the amount of tweets that a person can send inside one particular day. (http://twitter.com/about,2011)

Figure 4 Social Media Statistics for Twitter and how it is used by companies for promotion

Those in the Twitter businesses are now starting to share their material or news much more faster to a bigger audience that happens to be online succeeding the company, and from a tactical point-of-view, this has been able to assist organizations that are in the process of utilizing Twitter to market their brands and also be able to collect business wisdom by means of the feedback in order to be able to bring up their market intelligence so that they can precisely target consumers with pertinent services and merchandises or improve relationships in business. Twitter has assisted in lifting certain brands, enhancing the customer relationship by means of marketing and also brought in improvement that involved direct sales by reaching out straight to the interested audience on the stage (http://twitter.com/about, 2012).

YouTube

In February 2005, broke into the headlines with the power of creating as a video sharing website on which users are able to upload, share and opinion videos as an instructive and stimulating to others across the world. The corporation utilizes Adobe Flash Video and HTML5 knowledge to show a wide variability of user-produced video gratified. YouTube performs as a platform for allocating contents by makers and publicists also. Over 4 billion videos every day are viewed and there are in excess of 400 million observations each day on mobile tools (2011). It is assessed that beyond 850 million individuals look at YouTube almost every day and just about every month in order to share watch contents. (youtube.com, 2011) Just as many peoples have made the point that a picture is supposed to be worth a thousand words, pictures usually do have an influence in generating an image in the person's mind. This way of thinking really provided YouTube a competitive advantage in online marketing; on the whole more industries are now exhausting YouTube for their marketing advertising movements. Numerous businesses with unresolved video movements have had their advances in this form of brand promotion, particularly when the videos have been going viral. A lot of these viral achievements can be accredited to know-how and originality of the brand salesperson to interest the audience therefore making the public wanting to relate the videos to friends and family.