TIM3221

INTERNET MARKETING

LEC 10:
Engaging Customers with Social Media
Learning Outcomes
■ After reading Lecture 10, you will be able
to:
– Define social media and compare it
with traditional websites.
– Discuss how marketers use social
media.
– Identify social media tools.
– Describe the role and important
measures of social media
performance.

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 Dell Starts Listening
Dell Computer has always been America’s darling with its high-quality equipment, direct distribution model, and great
customer service. Yet, in June 2005, Dell was brought to its knees by a single blogger—Jeff Jarvis of BuzzMachine.com: I just
got a new Dell laptop and paid a fortune for the four-year, in-home service. . . . The machine is a lemon and the service is a
lie . . . DELL SUCKS. DELL LIES. Put that in your Google and smoke it, Dell. This post brought a hailstorm of similar customer
service complaints that lasted for nearly two years, and this issue has come to be known as “Dell’s Hell.” What happened?
Wanting to pare costs, Dell followed a current trend and outsourced its technical customer service to a firm in India in the
early 2000s. Things looked great as costs dropped and market share increased to 28.8 percent the following year (2004),
according to the global market intelligence firm IDC. However, complaints about the customer service also increased: Better
Business Bureau complaints rose 23 percent and Dell’s customer satisfaction declined 6.3 percent, according to a University
of Michigan survey. A 2005 Google search for “dell customer service problems” returned nearly 3 million links. Clearly the
outsourcing strategy was not having the desired effect. Like many companies, Dell decided to sit tight for a year and wait for
the online complaint storm to pass. When it didn’t stop, Dell appointed a digital media manager to “deal” with the internet
chatter. Lionel Menchaca initiated several Dell blogs in multiple languages as mechanisms for handling customer complaints
and ideas and to have conversations with stakeholders about the problems and Dell’s actions to fix them. IdeaStorm.com is
a notable blog and social medium where users post ideas and vote on them, with the best percolating to the top. Dell
responds to the ideas, makes changes in the company, and reports on the progress. In the first three months, IdeaStorm
gathered 5,000 ideas, over 20,000 comments, and more than 350,000 idea endorsements. In early 2017, there are over
26,000 ideas, 100,000 comments, and over 740,000 ideas endorsed. These resulted in over 550 changes to the company
(see Beal and Strauss, 2008, for more on “Dell’s Hell”).

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 Dell Starts Listening
■ In 2005, Dell was brought to its knees by bloggers who
posted customer service complaints.
■ As Dell outsourced its technical customer service, customer
complaints also increased.
– A 2005 Google search for “Dell customer service
problems” returned nearly 3 million links.
■ Dell initiated several blogs in multiple languages to handle
customer complaints and to have conversations with
stakeholders about problems and actions to fix them.

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Social Media
■ Social media is a term used to describe media
based on conversation and interaction
between people online.
■ Social media focuses on bringing information,
photos, and video to an audience that wants
to learn and to be entertained.
– Content is generated as a conversation,
with all participants able to upload,
discuss, edit or rate.

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Types of Social Media

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Communication & Networking
■ Blogs (Web Logs)
■ Microblogs
■ Social networks
■ Social network aggregation

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Events
■ Local event sites allow residents to
post to a calendar.
■ Personal event sites allow individuals
to create events and invite people via
e-mail.
■ Group member event sites are for
public groups that others can join.

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 Events
■ Companies and organizations can hold seminars (usually called “webinars”),
workshops, and discussions online. Holding online events in which clients get to
“talk to” senior or prestigious people may be seen as one more valuable reason
for being a client of a particular organization..
■ Live streaming is a popular method to inIt also saves considerable time and cost
compared to holding or attending a physical seminar. Also, when business people
attend online webinars, they register, creating leads for personal sellingclude
viewers all around the globe as part of the event. Most of the major social media
platforms offer the capability to host and be a part of such events.
■ Meetup.com users form special interest groups by location and then arrange
offline meetings. Local residents can post to a calendar in Meetup.com that is
searchable by local area. Facebook and Evite.com allow individuals to create
events, such as a party, and invite a list of people via e-mail. The invitees can
respond with a “yes,” “no,” or “maybe,” and post a comment.

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Collaboration
■ Tagging involves attaching keywords to video, photos, or text to
help users find content.
■ Wikis allow users to create, edit, and link content
collaboratively. This is closely related to crowdsourcing and
user-generated content. Examples include Wikipedia
(encyclopedia), Wikihow (how-to-do site) and Wikispaces
(education). For example, Demand Media Inc.’s eHow has
over 2 million articles and videos created by consumers and
professionals covering 30 categories and every topic from
house and garden tips to business ideas. All content is
created by site users and screened by site editors for quality
and value (see ehow.com).

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Collaboration
■ Wikis are important because a consultant can edit definitions
and add material to a site like Wikipedia or Wikihow and
become known as an expert. When added to other tactics like
reviewing products and books or answering Yahoo! questions
in his field of expertise, the consultant is building a thought
leadership niche: type in his or her name and it comes up in
lots of different places showing his or her expert area. Some
companies, people, and brands are important enough to be
allowed their own Wikipedia entries and marketers take
advantage of this.

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 Collaboration
■ Social bookmarking allows users to share, organize, search, and
manage web resources. These sites allow users to share their favorite
websites and comments on them online. Pinterest provides a free Web
browser plug-in so that users can simply click on a button to bookmark
a website. Pinterest asks users to place the bookmark on a board,
which is used to categorize the bookmark. Social bookmarking is
powerful because users can click through to other users who have
bookmarked the same articles to see what else they are reading on
the same topic. It is a great resource for individual or collaborative
research, and one we’ve used to indicate assigned class reading lists.
It is even better for marketers wanting to create a buzz about a white
paper, blog post, or other online article, and that is why a Pinterest
bookmark icon appears near such articles.

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Collaboration
■ Social News are sites where users submit links to online
stories and readers vote or comment. These are sites
where users submit links to online news stories and
readers vote or comment on which are the best ones.
Examples include Digg and Reddit.

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Digg.com

Another form of earned media

occurs when users submit a
link to an online news story and
it appears on digg.com. On this
site, additional readers can
“Digg” the story, and the more
who do so, the higher on the
page the story appears (this is
similar to a Facebook “like”).

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How Businesses Use Social
Media
■ 25% of the top 100 online retailers
do not have a Facebook page, but
91% say that will start one within a
year.
■ Only 22% of Fortune 500 companies
have an active blog, but 70% of small
businesses maintain blogs.

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SOCIAL MEDIA & ADOPTION BY SMALL
BUSINESSES

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Social Media Strategies

■ Exhibit 13.7 displays social media goals

from strategies to tactics.

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The hierarchy of effects model is important because it helps marketers
understand where consumers stand in relation to the purchase cycle
so the company can select appropriate communication objectives
and strategies that will move consumers closer to purchase and loyalty.
Bear in mind that some traditional IMC tools are more appropriate for
building awareness and brand attitudes (advertising, public relations),
and others are more suited for encouraging transactional behavior
(direct marketing, sales promotions, personal selling). Nevertheless, all
can be used at each level. Obviously, businesses want to be sure they
find the right social media tactics to achieve their objectives and ROI
requirements in this uncharted territory. The best place to start is with
the company’s objectives. Exhibit 12.1 displays a continuum of social
media goals, from broad business strategies to specific brand tactics.
We’ve indicated in which level of the hierarchy of effects each goal falls.
The social media are especially well suited at raising brand awareness
and creating a buzz, but they can also result in sales when customers
read about the brand and either purchase at the website or offline. Note
that many other IMC tools can achieve these goals and that an
integrated marketing communication effort will be the most effective
over time.
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Social Media & E-Mail
■ Marketers use a variety of e-mail
strategies:
– Follow us links in e-mail messages.
– Sign up forms for Facebook-type
pages.
– Links to e-mail messages on social
media pages.
– Options to share e-mail with others.

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■ Reputation is a belief in the mind of the beholder. Abraham Lincoln is
attributed to saying that “Character is like a tree and reputation like a
shadow.
■ The shadow is what we think of it and the tree is the real thing.” Thus,
an entity’s reputation is based on what other people think of it, not what
it thinks of itself.
■ With earned media, there is plenty of opportunity for other people to
shape the reputations of a company, its brands, and its employees.
Brands and companies have lost a great deal of control over their
images and reputations and must now monitor, engage and participate
in social media conversations or pay the consequences.

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Brand perception
Management
■ Online chatter can make or break a
reputation within hours.
– JetBlue in 2007.
– Nestle in 2010.

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■ Greenpeace UK, the activist not-for-profit organization working for a green
and peaceful world, posted a video on YouTube to build awareness of a
perceived problem. Nestlé, the maker of Kit Kat candy bar, was
purchasing palm oil extracted from forests in Indonesia, thus ruining the
Indonesian rainforests, which pushed the orangutans towards extinction.
The video, entitled “Have a Break?” showed an office worker taking a
break by eating a Kit Kat bar. When he bit into it, blood gushed from the
chocolate bar.
■ The video received 476,328 views by 2011; however, the damage really
escalated on Nestlé’s Facebook page. Immediately after the March 17,
2010 video post, viewers began complaining about the palm oil
harvesting with comments on the company’s Facebook page. Some of the
protesters created a graphic imitation of the Kit Kat candy bar package,
replacing the brand name with the word “Killer” in the same font or
stamping the package with bloody orangutan footprints. They made this
image their profile picture on Facebook so every post on the Nestlé page
included this image.
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■ Nestlé responded by saying that they would delete any
comments that contained the altered image. This
inappropriate response created a blogstorm and many more
posts, and shifted the conversation away from the core issue
of deforestation and animal slaughter to Nestlé’s ineptitude in
social media. Nestlé debated with commenters, defending its
decision to censor profile pictures and then started deleting
comments as well. It got very nasty. Eventually, the Nestlé
executive running the Facebook page posted an apology and
said they would stop deleting comments.

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What really is amazing is the speed at which this happened:
■ March 17, 2010: Greenpeace video posted on YouTube.
■ March 18: 190 Facebook complaints and 1,000’s of Tweets in response.
■ March 19 at 2:26 AM: Nestlé responds on Facebook with the plan to
delete the “Killer” bar logo profile pictures and comments.
■ March 19 at 1:29 PM: Nestlé apologizes on Facebook and stops deleting
the posts. Several companies analyzed the social media conversations
after this incident. One found that social media conversations including
both terms “Nestlé” and “Facebook” jumped by 40 percent on March 19,
2010, and that 16 percent of this conversation was negative, 66 percent
neutral, and 16 percent positive (see blog.biz360.com).

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Social Networks
■ Starbucks has the largest corporate
Facebook page, with over 7 million
fans.
■ JC Penney launched a widget targeted
at teens on its Facebook page called
“Stuck on You” in 2008.
■ Facebook is not just for teens.
Strongest growth is coming from ages
35-49 and 50-64.

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SOCIAL NETWORK MARKET SHARE
(EXCLUDING TWITTER)

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Blog
■ There are more than 24,000 blogs started
each 24 hours.
■ It can be helpful to have multiple blog
authors to keep posts frequent.
– CEOs
– Consultants and thought leaders
■ Companies can blog without starting their
own by following bloggers in one’s industry
and adding comments.

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■ Trust is a key component of word-of-mouth communication resulting
from customer engagement.
■ Edelman, a leading US public relations firm, found in 2012 that 65
percent of its over 5,000 respondents in 23 countries trust “persons
like themselves” for credible information about a company.
■ This is in contrast to the only 38 percent who trust the company CEO
(see trust.edelman.com for more information).

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■ “A person like yourself” is someone who shares similar interests or
friends—either in person or in a social network. For example, when
planning trips or on the road, travelers visit the largest travel
site, TripAdvisor.com, to check out the 50 million reviews and opinions of
hotels and sites in 30 countries, which are written by other travelers as
they are planning trips. Thus, when people post opinions about products,
over half of the readers are likely to believe what they say, and this will
influence their purchase decisions.

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 Blog
■ Stormhoek Vineyards initiated successful viral marketing on social
networks (stormhoek.com). The company first offered a free bottle of
wine to bloggers. Within six months, about 100 of these bloggers
posted voluntary comments about the winery on their own blogs. Most
had positive comments, which were read by their readers and by other
bloggers. The Stormhoek example raises an interesting question: Can
bloggers be bought? The criticism is that bloggers are not required to
disclose that they are being paid (or receive gifts) for their
endorsements. Companies can pay bloggers directly to endorse
products, or do so via an intermediary, such as PayPerPost.

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 Microblogs
■ Tumblr.com offers free micro content blogs.
■ Twitter members send text messages up to 140
characters.
■ Many executives use Twitter to talk about the company
and gain feedback and ideas from followers.
■ Every company wants to create content that goes viral, but few accomplish
this feat. The content has to be entertaining or mysterious, match popular
culture, and gain user attention. In a sea of online content and information
overload, sometimes even the best content does not go viral.

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 Microblogs
■ Viral marketing can be very successful with entertaining videos
(especially on YouTube) that are spread via e-mail and by microbloggers
(e.g., Twitter). Following are some successful viral campaigns:
■ Mr. Clean’s Cleaner of Your Dreams campaign launched during the
2017 Super Bowl. Leading up to the game, Mr. Clean released teaser
trailers on its Facebook and Twitter pages. When the advertisement
launched during the Super Bowl, it earned 11,700 mentions across
social media in just one minute and currently boasts more than 17
million views on YouTube (“The 5 Best . . .” 2017).
■ To celebrate Cinco de May 2017, Taco Bell , Taco Bell released a
Snapchat filter that made users’ heads look like tacos. The lens was a
huge success, with more than 224 million views in one day (Johnson,
2016).

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Other Social Media for
Business Use
■ Videos
■ Wikis
■ Social book-marking sites
■ Online forums (bulletin boards)
■ Online gaming

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 Support
Forums/Communities
■ Companies create spaces for consumers, prospects, and business
customers to discuss topics of interest, provide new product ideas or
seek company support with technical or product issues (among other
goals). The discussion itself is earned media, so here we present a few
principles for building a successful online community on a company
website or other online property. It is not as simple as making a
Facebook page and hoping folks will drop by—after all, marketers are
competing with billions of other pages, groups, or events for viewer
attention. As with most e-business strategies, research and planning
precede success. Larry Weber (2007) suggests a seven-step program
that works to this day:

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 Community Building principles
1. Observe. Visit social media hangouts for users on the topics of interest
in the industry of the company that wants to start a social media
community.
2. Recruit. Find internet users who want to talk about the industry and
recruit them for joining the new social media property.
3. Evaluate platforms. Decide whether the format should be a blog, pure
online community, or social network.
4. Engage. Plan ways to get the community members to talk and upload
content.
5. Measure. Identify metrics that will measure the success of the effort.
For example, number of comments posted or number of members.
6. Promote. Plan ways to advertise or build a buzz in the social media and
with search engines so the new community will attract users.
7. Improve. Use the metrics to continuously improve the community.

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 Online Games
■ Games can be played on special consoles (like Xbox and Playstation),
mobile devices, laptops, Smart TVs, and virtually any other device. The
mobile gaming landscape has exploded in popularity. Facebook users
reportedly play up to 50 minutes per day on the platform (Meeker,
2016).
■ Advergames combine online advertising and gaming, featuring a
company’s product. They are used to draw site traffic and build brands
in both business-to-business (B2B) and business-to-customer (B2C)
markets and are growing in popularity online. For instance, consumers
can test drive a Toyota online or play any number of exciting games at
the Nickelodeon website. Advergames are unabashedly commercial by
nature, but if they are fun and exciting, players will enjoy them and tell
their friends. The advergame is an important tactic that acknowledges
the consumer’s increasing power by engaging users with entertaining
product-related content.

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Performance Metrics
■ Three areas of social media performance
metrics:
– Earned media publicity
– Company owned social media
– Paid media

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Earned Media Metrics

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General Social Media Metrics
■ Actions taken by users.
■ Conversations in blogs and
elsewhere.
■ Social media dashboard.

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Social Media Dashboard

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Social Media Dashboard

It gives a 360º view of social media channels and allows daily,

weekly, or monthly comparisons for up to a year. It shows whether
the trend is positive or negative, builds a word cloud of key word
mentions in conversations, and metrics allow marketers to keep
track of the effects.
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