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. The different types of viral marketing the author
will be talking about in this paper includes 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.
Introduction
The concept of advertising - defined as a
paid announcement, as of goods for sale, in newspapers, magazines, on radio or
television, etc (dictionary.com, 2014), have been used since invention of Johannes Gutenberg’s Metal Movable Type in
mid 15th century (Padmanbhan., 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 but 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.
The improvements of the World Wide Web from
Web 1.0 to today’s Web 3.0 was made possible through the 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. The use of the Internet to
transmit information and opinions about a good or service interactively is 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., 2012). 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., 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. 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.
3.
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 also costly to own because of its’
limited supply. Therefore, only the wealthy, educational institutions and
monasteries possessed the duplicates that were handwritten. 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., 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., 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.,
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.
As the new millennium approached and with the
‘dot com’ bubble burst, social media platforms, such as MySpace, LinkedIn,
Facebook and Twitter, that began taking waves when they were 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.,
2012). In 2012, advertisements on social media sites would be able to reach
75.6% of the total U.S population (Eridon., 2012). The numbers would definitely
continue to soar especially since ownership 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., 2012).
4.
Current Situation
This section will focus on the current types
of viral marketing.
4.1 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., 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.,
2010). Hence, when
visiting a second website with the same advertising banner, it will be able to
identify the first website where one had visited 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, Tomitâ, Stuparu, &
Stanciu,. 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., & Washington., 2013). However, many have raised their concerns for ethical
uses of cookie tracking for Behavioural Targeting as they deem this to be unfit
(Tsuei, 2010). These consequences would be
further discussed later.
4.2 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.
4.3 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.
5.
Future Considerations
This section will focus on the advantages
and disadvantages of viral marketing that should be taken note of when
progressing with times.
5.1 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 advertisements 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 & Domingos, n.d). With social share button, content can then be made viral by 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, 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,
Schöler, & 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.
5.2 Disadvantages of viral marketing
However as mentioned previously, many are
questioning if tracking third party cookies by advertising sites is an ethical
move (Golemon, & Babin, 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,
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 is important and definitely
effective in increasing profits. 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, Gammoh, Zhang, & Mallin, 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.
5.3 Evolution of viral marketing
As technology develops and becomes more
advance, viral marketing would also continue to progress. The future of social
media may therefore rely heavily on the up and coming web 3.0. Web 3.0, also
known as sematic web, is to enable ways to allow machines such as our laptops
and hand held devices to be able to process information on its own (Goswami., 2011).
Human interpretation is still required currently under web 2.0. A simple
example on how web 3.0 differs from web 2.0 is the need to manually search for
a company, such as Comgate or vPost, that provides services allowing it to take
the role of the ‘middle man’ for online commerce sites that do not offer
international shipping. Thereafter, shoppers will proceed on to shopping online
by choosing an item of choice, confirming the purchase by inputting personal
particulars and payment methods before the process is complete. This may be
quite time consuming, as one has to go through several procedures before the
shopping experience is finished. With web 3.0, the hassle is eliminated as a
simple sentence or two would get the job done. Web 3.0 will be able to do all
that web 2.0 is able to simply by typing ‘I want to purchase a dress suitable
for an interview from ASOS and have it delivered in 5 days. My budget is
US$50”.
Looking into the future, the author therefore
feels that viral marketing will take on a different approach with the advent of
web 3.0 in several ways. Firstly, viral marketing will become more interactive.
The author proposes one example of a more interactive viral marketing method
that involves having e-commerce websites providing feedback for users shopping.
Having the information of the user such as his preferred style of clothing and
sizing, an interactive feedback system embedded into the website is a good
viral marketing strategy as it gives shoppers a second opinion on whether he
should make the purchase. This would definitely help boost sales for businesses
as consumers get to shop with someone who already knows him inside out using
the technology from viral targeting.
However, a consideration for the evolution
of viral marketing to note is how it may be considered pervasive in our lives.
As we progress technologically, it is very soon that we will have even our
everyday items such as newspapers or our clothing to have computer chips in them
so that they are all interconnected to each other. In that time, viral
marketing will then be omnipresent in our everyday lives. While it is a new
platform for companies to advertise, the author feels that one thing to note is
how consumers may find it suffocating, as they are never able to escape from
consumerism.
6.
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.
7.
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