Alison Ong Yan
Lin (alison.ong.2013@socsc.smu.edu.sg),
1st Year Student, School of Social Science, Singapore Management
University (SMU)
1.
Executive Summary
This paper will examine the reason for the
author’s choice of topic, the history of marketing and advertising hence showing
why viral marketing and social media today is more superior to traditional
marketing means. This paper will also explain the different types of viral
marketing and its technology namely, Behavioral Targeting, creating a strong
social media presence as well as social share buttons. Lastly, the various
advantages and disadvantages of viral marketing will also be discussed in this
paper hence analyzing whether viral marketing has a positive or negative impact
on businesses today.
2.
Reason for Choice of Topic
The concept of advertising - defined as a
paid announcement, as of goods for sale, in newspapers, magazines, on radio or
television, etc, have been used since invention of Johannes Gutenberg’s Metal Movable Type in mid
15th century (Padmanbhan, T. T. 2011) as it was revolutionary in the
printing industry to be able to mass produce brochures and pamphlets.
The evolution of print media from flyers to
advertisement on billboards and eventually on television and radio has long
been effective companies to make use of in getting their products known.
However, this usage of traditional media has been dwindling and this calls for
a need for a new form of media to step up and perform the tasks of traditional
media, in an improved manner. According to Oggolder (2012), new media was
intended to be combination of technology together with old media so as to allow
for the revival of traditional media.
With the turn of the century and the
improvement of the World Wide Web from Web 1.0 to today’s Web 3.0 made possible
through progress of Information and Communications Technology (ICT), businesses
are now able to leverage on new media, and in particular social media, as an
alternative method of marketing and advertising for the company.
As ICT progress rapidly and social media
takes up a significantly higher proportion of our time than before (Mielach D., 2013) it is no
wonder an increasing number of businesses are turning their attention to viral
marketing. It is therefore important that people are aware of this concept. This
paper will therefore attempt to explain the evolution of social media as a form
of marketing and advertisement, the reasons for the rise of social media as a
marketing tool as well as future considerations that have to be factored in
when employing viral marketing in the social, political and economic contexts.
3.
Introduction
The use of the Internet to transmit
information and opinions about a good or service interactively is also known as
viral marketing. Web 2.0 now includes a more interactive platform for users of
the Internet to communicate more with each other and also an environment where
content on the internet were produced by users themselves. Even before Web 2.0,
Hotmail was the pioneer of viral marketing where advertisements were attached
to emails, enabling its content to be seen by the numerous consumers who make
use of Hotmail as their email server (Wilson, R.F., 2012 May 10). Today, large multinational companies from
various industries such as Nike and Volkswagen all make use of viral marketing
due to the trust that consumers can rely on since it appears to be more
personal as compared to traditional media (Adweek, 2012).
Today, it is an irrefutable fact that social
media is a revolutionary innovation. Research has shown how Americans are now
clocking up to twenty-three hours per week on emails, texting and social media
(Mielach D., 2013). The growing trend of social media which, includes Facebook and
Twitter, gives viral marketing an edge over other types of marketing due to the
large number of potential clients it is able to reach out to.
This paper will hence explain the different
viral marketing available for businesses to leverage on and how ICT has made
them possible.
4.
Historical Perspective – Evolution of Marketing and Advertisements
The art of printing
started in the mid 15th century with the invention of Gutenburg’s
metal movable type. Prior to his invention in Europe, reproduction of print
materials was done by hand. This meant that the duplications were rare and
since supply of it was little, it was costly to own it and were only possessed
by the wealthy, educational institutions and monasteries. These copies of print
materials were also not identical to each other as there was a certain element
of human error that was bound to happen when copying from the original source.
This was not ideal especially when these materials were religious texts (Historyguide.org. 2014). Gutenburg’s invention of the first metallic movable type therefore
helped improved this situation. The movable type included the concept of
individual seals representing the different alphabets that can be arranged to
form the words on a page. Multiple copies could then be reproduced at a more
efficient rate with the reduction of errors occurring to almost none. This gave
birth to the idea of print advertisements of flyers and brochures (Historyguide.org. 2014).
Through the 1870s, print advertisements
started gaining popularity as businesses saw the effectiveness it had to boost
sales. The first print advertisement in America was by Smith Brother’s Cough
Candy (drops) on a New York paper named Poughkeepsie in 1852. This was followed
by advertisements in magazines, billboards as well as posters. Trade cards,
which were name cards for businesses, also saw a heightening of population as
it was seen as a collectable and an alternative way to advertising in the 1880s
(Library.duke.edu., 2014).
The 20th century saw a new wave
of advertisement that was auditory. This includes advertising through means of
radio, television and telephone in 1922, 1941 and 1947 respectively (Eridon, C
2012). Since these household devices became more common, businesses therefore
are able to reach out to an even greater mass of people who had access to
radio, television and telephone. This was also especially important for an
older generation who was illiterate and was not able to benefit from print
advertisements.
Alas in the 1980s where IBM and Apple put
the first personal computer on the market (Eridon, C 2012). The combination of
print media and the PC was an even better way for advertising as it lowered the
cost for businesses significantly. It was also able to reach approximately
46.4% of American households, which made it attractive for businesses (Eridon,
C 2012).
1995 to the turn of the century was known as
the era of ‘search marketing’ where various search engines such as Yahoo! and
Ask.com were born (Eridon, C 2012). Google also came up with the concept of
Page Analysis where it determines how websites should be ranked when searched (Eridon,
C 2012). This is an important aspect of marketing that is still used today as
businesses fight to appear as the top few rankings on Google search pages. Businesses
would also then be able to purchase advertising spaces on these search
websites, a process known as ‘behavioral targeting’, launched in 2005, which
will be explained later.
As the new millennium approached and the
‘dot com’ bubble burst, social media began taking waves as MySpace, LinkedIn,
Facebook and Twitter was launched. Time spent online increase rapidly and in
2011, the time spent watching television was only 13.6 hours compared to the
time spent online at 13.7 hours a week (Eridon, C 2012). In 2012,
advertisements on social media sites would be able to reach 75.6% of the total
U.S population (Eridon, C 2012). The numbers would begin to increase owners of
smart phone and access to the Internet would surge. These factors all lead to
the growing appeal of advertising on social media as it seemed to be the fastest
and easiest way to reach out to consumers. This is especially so when
statistics show that 3.3% increase in online shoppers from 2011 to 2012, making
advertising on social media the new wave of marketing and advertising for
businesses (Eridon, C 2012).
5.
Current Situation
This section will focus on the current types
of viral marketing.
5.1 Behavioral Targeting
Behavioral Targeting is a type of Internet
advertising that makes use of a user’s cookie information to track his online
behavior. Before beginning to explain
how Behavioral Targeting works, one must first understand the concept of
cookie. Lou Montulli inveneted the concept of cookie for the purpose of
e-commerce websites (Tsuei, C.
2010). Today, online shoppers are able to
select an item they wish to purchase and place it in a shopping cart because
cookies enable for websites to retain information without disappearing when one
visits another site. As such, when a person visits a website, it will assign
the browser an ID containing numerical digits that is called a cookie. This
will hence allow the website to be able to track the person’s online behaviour
which may include the products viewed and information provided by the shopper,
enabling individual websites to remember ‘you’.
Behavioural Targeting comes in with the concept of third-party cookies
between different websites. Advertisers who have advertisement banners on the
initially website one visits will also be able to have access to their online
behaviours through third-party cookies (Tsuei, C. 2010). Hence, when visiting a second website with the same advertising
banner, it will be able to identify the first website one visits and places
similar advertisements and relevant information on the second website so that
shoppers are more enticed to purchase the item from the advertisements.
Behavioural Targeting hence makes use of cookies to trace a person’s
online behaviour so that advertisements can be more effective in reaching its
target audience (Dâniasâ, C. I., Tomitâ V., Stuparu D.,
& Stanciu M. 2010). Businesses know realise the power of Behavioural Targeting in
promoting their items and have thus increased their spending in this aspect. It
is projected that in 2014, a company would spend $2.60 billion solely on
Behavioural Targeting marketing methods, up from $925 million in 2009 (Miller, R. K., & Washington, K. 2013).. However, many have raised their
concerns for ethical uses of cookie tracking for Behavioural Targeting as they
deem this to be unfit (Tsuei, C.
2010). These
consequences would be further discussed later.
5.2 Business’ Online Persona
It is as important for businesses today to
be offline, as in a brick and mortar store, and online. This extends beyond having
a company website that provides consumers with information about the company
itself. More often than not, consumers are also looking for companies with a
strong social media presence. This is so that businesses are able to
communicate and build a strong patron-clientele relationship. This is done
simply by creating various social media profiles on Facebook and Twitter. With
social media, companies are able to not only able to create brand awareness but
also effectively communicating brand values and unique selling points that
differentiate it from competitor brands. Companies are also not restricted to
expensive marketing costs. Social media also allows companies to use various
forms of media such as through video, images and interesting links that are relevant
to the business to build a rapport with clients.
Besides being accessible online for
consumers, businesses are now also looking towards providing deals exclusively
on social media sites so that consumers are able to get these information first
hand. An example would be Scoot Singapore where flight deals are posted on
Scoot Singapore’s Facebook page, which is only available to consumers who
‘like’ the page. This not only benefits consumers as they stand to enjoy lower
costs when travelling but it also encourages consumers to be involved in the
online persona that businesses try to build. On top of that, consumers are also
able to get in touch with the businesses directly through social media such as
leaving a comment on posts on Facebook or replying to tweets. Hence with social
media, businesses are therefore able to maintain a good relationship with
clients and hence build their social media presence.
5.3 Social Share buttons
As with traditional marketing techniques,
many businesses still rely on the word of mouth as a form of advertising. With
the rapid increase of time spent online and on social media sites, businesses
are hence bringing the concept of spreading the company’s products through word
of mouth online. This is done so through the social share buttons. A common
example is the Facebook ‘Share’ button where users can post content from
someone else onto their own timeline and share the information with their own
friends. Regular websites do include social share buttons as well. This is so
that users are able to share information on social media sites. A simple
example would be to share a Business Times article with friends on Facebook and
Twitter by making use of these share buttons.
6.
Future Considerations
This section will focus on the advantages
and disadvantages of viral marketing that should be taken note of when
progressing with times.
6.1 Advantages of viral marketing
Firstly, consumers are able to have easy
access to companies with viral marketing. Forgetting the website which has the
dress a netizen is looking for would not be possible as companies are able to
place similar advertismenets that may catch the attention of the netizen
looking for a dress through third party cookies. Similarly with companies’
social media sites and social share buttons, consumers are able to connect with
businesses as long as there is access to the Internet.
Secondly and
more specifically to share buttons, the value of share buttons is its ability
to spread content that is beyond a business’ direct network, therefore enabling
businesses to reach out to consumers that have an indirect connection to the
company itself. This compliments the online persona that business’ portrays. As
much as a company may have a Facebook and Twitter Page, it is limited to the
people who ‘like’ the page or are ‘followers’ (Richardson, M. & Domingos, P., n.d). With social share button, content can then be made viral with the
concept of sharing information through social media, reaching out to potential
consumers.
The economic benefit of using viral marketing
is that it is relatively less costly yet more effective than traditional
advertising. This is due to the fact that viral marketing mostly makes use of
consumers to carry out the marketing efforts (Schulze, C., Schöler L., &
Skiera. B., 2014). This is more applicable for social share buttons and business’
social media sites. The effectiveness of viral marketing can also be said to be
higher than traditional types of marketing since promotional efforts come from
someone whom one personally knows and it is more likely that people trust
recommendations from friends rather than the company itself (Schulze, C.,
Schöler L., & Skiera. B., 2014).
As such, viral marketing is now seen as more
attractive than traditional marketing due to the fast gaining usage of the
Internet and its pervasiveness in modern day.
6.2 Disadvantages of viral marketing
However as mentioned previously, many are
questioning if tracking third party cookies by advertising sites is an ethical
move (Golemon, D. L., & Babin L. A., 2011). Some are concerned about the
privacy that Behavioral Targeting intrudes into since specific types of cookies
such as flash cookies are difficult to be removed. Netizens do not feel
comfortable with such extrapolating and data collection methods of themselves
such as health and finance personal information, which they are not aware of.
This is especially so in today’s context on the extent of data collected and
the way these data are being used or abused. Lou Montulli himself cautioned
about the problems that might surface with the usage of cookies, which is to
keep cookie information secure and prevent sharing of this data between websites
that are unrelated (Tsuei, C.
2010).. Therefore to cope with such a problem, the author feels that one
should think twice before entering any personal information on the Internet
that he does not want to share. On the other hand, more laws can be implemented
to regulate the extent to which consumers are subjected to extrapolation of
data by advertising firms so that on one hand the advantage of Behavioral
Targeting can still be made use by
companies and on the other hand, the privacy of consumers is protected.
Last but not least, the undisputable fact is
that a company’s online presence on social media sites are important and
definitely effective in helping profits increase. This can be seen in survey
reports where results have shown that 67% of a company’s Twitter followers
respectively do actually purchase its products. Similarly, 60% of a company’s
Facebook fans would also recommend the company to a friend (Swift, R. 2013).
However, setting up these social media profiles for businesses are fuss free
and relatively easy, resulting in low barriers to entry and high similarity
between each businesses. Consumers therefore may question the quality of
relationship businesses have with consumers (Pentina I., Gammoh B. S., Zhang,
L., & Mallin, M. 2013). The assumption is that with social media, the
element of human touch when building this relationship is lost, hence resulting
in a relationship that is of poor quality. A study have been conducted to measure how
social media sites affect brand relationship quality through various yardsticks
that would contribute to a sustainable relationship between the two, such as
identity expression, interdependence, commitment intimacy and partner quality (Pentina
I., Gammoh B. S., Zhang, L., & Mallin, M. 2013). These factors would then
affect the consumers’ repurchasing decisions, reluctance to switch to
competitive brands and willingness to share information with others. The
results of the study that instead of social media sites contributing to poor
relationship between consumers and businesses, social media sites actually
improve relationships. This is due to the fact that with social media, a
community of like-minded people can share their experiences with the product
and hence form stronger bonds between consumers themselves and ultimately
improving the client-business relationship with the brand.
This hence suggests that social media sites
actually do have a generally more positive than negative overall impact on
businesses.
7.
Conclusion
In conclusion, this paper has examined the
progress of advertisements and marketing methods since the invention of
Gutenburg’s metal movable type until today where with the help of ICT, viral
marketing is made possible. Viral marketing and social media can be considered
to be a revolutionary innovation, putting previous marketing methods redundant
as we progress towards an e-world. Although some concerns have been raised with
regard to the use of viral marketing, it is an undeniable fact that viral
marketing will be the new wave of advertising and marketing. While it is
important to address issues pertaining to the disadvantages that consumers
today are concerned about viral marketing, the author believes that it is also
important to always be open to new concepts and ideas instead of totally
ostracizing them.
8.
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