Marketing - Through the invention of social media, where millions of people can connect to each other at the same time addressing masses, the word-of mouth (WOM) or more precisely the electronic word-of-mouth (eWOM) has become one of the most interesting

University Degree Business and Administrative studies

1. Introduction

1.1 The WOM

Through the invention of social media, where millions of people can connect to each other at the same time addressing masses, the word-of mouth (WOM) or more precisely the electronic word-of-mouth (eWOM) has become one of the most interesting fields for organizations and marketers. In 2007, Ed Keller, the president of the Word of Mouth Marketing Association, points out that the „word of mouth conversation is retaking the throne in the social order“ and „word-of-mouth (WOM) has now become the most important and effective communications channel“ (Keller, 2007, p. 448). Seeing the traditional view of WOM as too narrow Godes et al.(2005) refers to them as „social interactions“ (Godes et al., 2005, p. 416). The ímportance of the WOM cannot be neglected: Already in 2003 a McKinsey & Company study found that 67% of to consumer sold goods were on personal information sources (Taylor 2003). The eWOM, which definition differentiates to the WOM only through the electronic media, is a hybrid „from mixed technologies and media origins that enable instantaneous, real-time communication, and utilizes multi-media formats (audio and visual presentations) and numerous delivery platforms (Facebook, Youtube, and blogs, to name a few), with global reach capabilities“(Mangold & Faulds, 2009, p. 359). It is crucial and fundamental to understand the difference between WOM and eWOM, and its global capabilities are the challenges and opportunities for future marketing directions.

1.2. The eWOM

Face-to-Face conversations have always been a major factor for customers' buying decisions

(Richins & Root-Shaffer, 1988, cited in Henning-Thurau, 2004, p. 39), but nowadays the eWOM has made it even easier for customers to review products. Underlining the importance of this new marketing field researches illustrate the growing impact of word-of-mouth as the primary source for customer purchase decisions (Advertising Age, 2008). Moreover „user-generated content has [even] become a mass phenomenon, with Facebook, MySpace, YouTube, Wikipedia, and Twitter all being listed among the Top 15 websites, accounting for more than 11 percent of global internet traffic, as of April 2010“ (Henning-Thurau et al.2010; Alexa 2010). In retrospect to the rising internet participation analyzing unique characteristics and aftereffects of eWOM has become an interesting field for marketers. To clearly define eWOM Henning-Thurau et al.(2004) determines electronic word-of-mouth as „any positive or negative statement made by potential, actual, or former customers about a product or company, which is made available to a multitude of people and institutions via the Internet“ (Henning-Thurau et al., 2004, p. 39). My further investigations will concentrate on eWOM in social media especially in networking sites ( e.g. Facebook ), product review websites (e.g. ciao.com),retailers websites (e.g. amazon.com) and generally on eWOM in crowdsourcing systems, which will be seized on later.

1.3. Characteristics and impacts of social media

The last decade has seen a rapid growth of social media's popularity among internet users. According to Chaney (2009), 73% of Americans are online, and 35% of adults are using social networks (85% of 18-34 year-olds).In the case of joining social networks, reading blogs, or contributing reviews on shopping sites Kaplan & Haenlein state a growth from 56% in 2007 to 75% in 2008 of internet users using social media.. This growth, they claim, represents „a revolutionary new trend that should be interest to companies operating in online space – or any space for that matter“ (Kaplan & Haenlein, 2010, p. 59). Defining social media Mangold & Faulds (2009) take a consumer focused view of social media, equating the term with 'consumer-generated media' and providing the following definition, taken from Blackshaw & Nazarro (2004): social media are „a variety of new sources of online information that are created, initiated, circulated and used by consumers intent on educating each other about products, brands, services, personalities and issues“ (Blackshaw & Nazzaro, 2004, cited in Mangold & Faulds, 2009, p. 357). Interestingly this definition completely ignores the use of social media mainly for social purposes. Kaplan & Haehnlein sees social media as „a group of internet-based applications that build on the idealogical and technological foundations of Web 2.0, and that allow the creation and exchange of User Generated Content“ (Kaplan & Haehnlein, 2010, p. 61). This means the two terms are not the same, rather than social media is being used to produce user-generated content. Social media encompasses a huge selection of online word-of-mouth, as illustrated by Table 1. To show the importance of this new emergence for marketers Mangold & Faulds (2009) decribes the phenomenon of social media as „de facto modus operandi for consumers who are disseminating information on products and services“ (Mangold & Faulds, 2009, p. 359).

1.4. What is my work about?

„The advent of the Internet has extended consumers' options for gathering unbiased product information from other consumers and provides the opportunity for consumers to offer their own consumption-related advice by engaging in electronic word-of-mouth (eWOM). Given the distinct characteristics of Internet communication (e.g., directed to multiple individuals, available to other consumers for an indefinite period of time, and anonymus), eWOM deserves the serious attention of marketing researchers and managers. However, only limited research on consumers' eWOM communication has been published to date“ (Henning-Thurau et al., 2004). Now, seven years later, a lot of new researches, studies, field test, and investigations have been published to make the new phenomena of eWOM in social media more tangible. Therefore this study tries to identify upcoming challenges, problems and opportunities for organizations to cope with the new phenomenon of online mass communication.

2. The new marketing directions

2.1. The early studies

This is a preview of the whole essay

2. The new marketing directions

2.1. The early studies

Until 2004 only little research had been done on the new aspects, opportunities and aftereffects for organizations and marketers through the invention of online social media communities. Phelps et al. (2004) made the first attempt to understand the uniqueness of networks by examining customer responses and motivations to pass along email. Obviously this study did not concentrate on communities, however they do have similarites to viral marketing strategies nowadays. Concerning viral marketing Kaplan & Haenlein (2011) define it as electronic word-of- mouth in some kind of marketing message form related to a company, brand, or product transmitted often through the use of social media applications. The outcomes of this research are interesting, because „only by understanding these motivations and behaviors can advertisers hope to tap effectively into this rich vein of communication and advocacy“ (Phelps et al., 2004, p. 333). The motivations to pass along email were mainly the desire to share the included information with others, but also altruistic and superstitious. Interestingly receiving pass along emails can end up in negative feelings,but sending has positive motivations. Another crucial point is that pass-along emails did also stimulate face-to-face and telephone conversations. The highest viral potential have had messages containing naked pictures, jokes, crime warnings and games. In this research the major amount of emails have been text messages (almost 50% jokes). Phelps et al. (2004) did not investigate any viral marketing strategies (Phelps et al., 2004, p. 333-342). Chevalier and Mayzlin (2006) focused on the effect of word of moth on sales concerning online book reviews on Amazon.com and Barnesandnoble.com. This has been the first literature „documenting that community content plays any role in consumer decision making“ (Chevalier and Mayzlin, 2006, p. 345). Their major goal was to find out whether positive or negative book reviews have an impact on book sales over time and their results are almost as ex ante suspected. Chevalier and Mayzlin's results are as follows: First, an increase in the average star rating on Amazon.com over time results in higher relative sales of the book on Amazon.com over time. Second, they identify that one-star reviews have a greater effect than five-star reviews on the same site. Finally, concluding all results „evidence suggests that customer [electronic] word of mouth affects consumer purchasing behavior at two Internet retail sites“ (Chevalier & Mayzlin, 2006, p. 354).

2.2 Dove's campaign to communicate with the masses

Starting in 2005 Unilever's Dove made a unique marketing campaign and is a representative how to include customers in their new market positioning. The idea was to introduce „a global brand unit for each Masterband, entrusted with the responsibility for creating its global vision and charged with inspiring cooperation from all geographic markets“ to „winnow its more than 1,600 brands down to 400“ (Deighton, 2007, p. 2). Several consultations with experts and market researches summed up to “The Campaign For Real Beauty“, whereby the outcome of the survey with 3000 women in 10 countries showing that only 2% of respondents worldwide chose to describe themselves as beauty, might have been a crucial reason, for this decision (Deighton, 2007, p. 3). The first campaign, the so-called Tick-Box campaign, showed ordinary people on billboards in supermodel contexts. Viewers were asked to call and decide whether a woman was “outstanding“ or

“outsized.“ Interestingly as “outsized“ first raced ahead, the campaign, through the eWOM and WOM, found massive public interest and already showed Dove's idea of a customer-integrated marketing strategy. The second series of ads showed six “average“ women in white underwear, Kathy O'Brien, Dove's marketing director said they wanted the ads to “provoke discussion and debate about real beauty“(Deighton, 2007, p.4). Next step was first a movie, but then turned into an ad, however no product was mentioned. One small girl is shown she “hates her freckles“, and an young Asian who “wishes she were blonde.“ It ran in 2006 broadcast of the Superbowl. Stage four of the Real Beauty campaign involved a movie named “Evolution“. In October 2006 it was posted on YouTube, and within three months, it had been viewed three million times. The movie never ran on television, except in the context of news. This movie went viral through the social communities and, thus the marketing strategy encompassed two worlds the “real“ and the “electronic“ world. Finally in late 2006 the last step was announced. The contest “Real Ads by Real Women“, where consumers created their own ads for a new product, and winning commercials would air in the commercial break on the annual Academy Awards in February 2007. This final chapter perfectly integrates consumers in their marketing concept to use them as a marketing vehicle. But was it successful? Philippe Harousseau, Unilever's former Marketing Director for the Dove Skin and Masterband, knew that their campaign is effective as Dove's firming girls were shown 16 minutes on the Today Show. Moreover through the ad “Hates her freckles“ aired during the Superbowl, news programs echoed the message, Oprah Winfrey dedicated a show to self-esteem, with the ad as a centerpiece. Jay Leno ran a parody and Wal-Mart created their version of the ad featuring its employees (Deighton, 2007, p. 1-6). This concept as a perfect example for viral marketing strategies, therefore I will sum up this campaign shortly: First, the Tick-Box campaign, which involved consumers through telephone calls and online votes. Second, the ad broadcasted during the Superbowl, to endorse the already huge public discussion. Third the movie “Evolution“, which only aired on Youtube and went viral through the social networks, and the final contest to create an own ad for Dove Cream Oil Body Wash, which clearly shows the idea of a consumer-integrated marketing strategy, combining online (create an ad ) and offline (billboards) advertising. In 2005 1.5 million+ visits to the CFRB.com (Campaign for Real Beauty) site were generated and 1.7 million voted on the CFRB site across Europe, resulting in 65% net recognition for print and outdoor.(average 15-24%) (, 2007).

2.3. Viral marketing : From pass along email to social media networks

Unilever's marketing campaign, which started in 2005 for their Masterband Dove can be seen as a representative for many following marketing strategies of other organizations using crowdsourcing platforms. Examples for crowdsourcing platforms are Facebook, Wikipedia, Youtube, Flickr or World of Warcraft, just to name a few. Doan et al.(2011) defines „that a system is a CS system if it enlists a crowd of humans to help solve a problem defined by the system owners“, but in this survey they consider the systems (applications) and not the crowdsourcing platforms themselves (Doan et al., 2011, p. 87). Unilever's idea to use crowdsourcing platforms for their marketing concept was at that time unique, but followers did not wait long. In the following passage I will describe some other interesting campaigns. First PepsiCo's Mountain Dew, a social media marketing strategy titled “DEWmocracy.“ DEWmocracy 1, the most recent project has been DEWmocracy 2, relied on a story based online game and let participants collaborate and collect points through various worlds, with the final objective to create all facets of a new Dew drink. According to this strategy Mountain Dew's marketing manager said „Some of the trends that we were trying to tap into specifically with this program were consumer need for self-expression, collaboration, social networking, and obviously, consumers in control“ (Creativity, 2008). The consumers developed the new soda drink Mountain Dew Voltage which since its launch in July 2007 has sold more than 11 million cases, and moreover has driven growth across the Mountain Dew portfolio (PR Newswire [New York], 2009).

Altogether Unilever's and Pepsico's marketing campaigns were successful, whereby both companies did not use social media networks, such as Facebook itself. Burger King changed that in 2008. In December 2008 Burger King released an application on Facebook where users were encouraged to delete 10 people from their friends list in order to earn a free Whopper sandwich coupon. More than 82,000 users downloaded it, resulting in 233,906 sacrificed friends and more than 20,000 Whopper coupons, whereby after 10 days Facebook disabled the application. The viral element was that every 'defriended' person got a notification 'toss your friend before they toss you' and that they had just been sacrificed for a 10% share of a Whopper.This campaign generated about 35 million media impressions (Kaplan & Haenlein, 2011). Until now, I have only shown positive outcomes of new marketing campaigns using eWOM, viral marketing ideas and crowdsourcing systems, but obviously there are also some negative representatives. First, the musician Dave Carroll experienced a negative incident with United Airlines breaking his guitar at Chicago's O'Hare airport. After nine months of frustration without compensation, he posted the song “United Breaks Guitars“ on Youtube with now more than 10 million clicks and nearly 28,000 comments, which obviously has had a negative result on United Airlines' reputation (Harvey, 2009). He used the eWOM through a crowdsourcing system. Second, Gap unveiled a new logo for its brand Tropicana in 2010. After realizing a cartoon wherein the old iconic Tropicana logo got eliminated, a movement went throughout the internet communities commenting on the new logo as “ugly“ and “resembling a store brand.“ After six weeks with sales going down by 20%, Tropicana North America announced the company was going back to the old design (Lipman et al., 2010). Gap tried to use the internet, especially crowdsourcing systems, to successfully implement the new logo, but failed. Finally, Boeing got a lot of criticism after opening a pseudo-blog named Randy's Journal from Boeing's Vice President Randy Beseler to the public. However, major blog characteristics were missing. Bloggers were not able to comment on blog-entries and furthermore there were neither trackbacks nor RSS feeds. Beseler comments on the criticsm „I didn't realize that the blogosphere had such a rule. Sorry, that's just not what we're about. Sure, we're going to post some of your comments. Even critical ones. But it's not a free-for-all“ (Holtz, 2005). This example in particular also shows the risk that companies, and private persons are facing through social media. Especially being depicted in a negative context can have severe aftereffects on sales and reputation.

2.4. What changed?

Seeing that Unilever's and PepsiCo's marketing strategies both have been very successful, it seems that consumer-integrated marketing could be a source to gain more interest and create self-identification to products and services, especially through the involvement of consumers to create new products, as Mountain Dew and Dorito have done. Therefore without having brand stores where customer interaction takes place the internet is the easiest way to communicate with customers. Of course, organizations can attract consumers through tv advertising, but it seems like maximum involvement of consumers could result in maximum profits. Letting customers develop new products (e.g. Mountain Dew's Voltage) or let consumers make and decide about new tv ads ( e.g. Dorito's campaign „You make it, we play it“), whereby the winners got £20,000 and reportedly the ad did only cost £6.50 (Sweney, 2008). This shows clearly that these new marketing concepts can also save costs. Nonetheless the internet does not allow any mistakes, shown through the examples of United Airlines, Gap's Tropicana or Boeing's fake blog. The old fashioned one way marketing strategy seems to be outdated and organizations should concentrate how to get involved into customer-to-customer interaction. But where do customers interact? In the recent years social media platforms have gained enormous public interest and social network sites have already outpaced email as the most popular online activity (Nielsen Online 2009). Therefore reaching customers and new consumers through the internet should be a major component in the new marketing mix. This idea was already mentioned by Mangold & Faulds (2009) who are arguing in their article that „social media is a hybrid element of the promotion mix because in a traditional sense it enables companies to talk to their customers, while in a nontraditional sense it enables customers to talk directly to one another“ (Mangold & Faulds, 2009, p. 357)

3. Conclusions and implications for future research

Considering the interactions between crowdsourcing systems, eWOM and viral marketing concepts and its recently discovered importance for the future, further research has to be done. The coming out of MySpace (2003) and Facebook (2004) changed the way people communicate and especially by using viral marketing strategies many companies were attracting attention. Obviously these strategies can result in positive and negative outcomes, because „even the most successful buzz cannot heal a bad product, inappropriate price, or insufficient distribution“ (Kaplan & Haenlein, 2011, p. 260). Moreover „in the era of social media, marketing managers' control over the content, timing, and frequency of information is being severly eroded.“ (Mangold & Faulds, 2009, p. 360). Customer-generated media, also known as social media (Mangold & Faulds, 2009), and customer-integrated marketing by using viral marketing strategies (e.g. The Diet Coke and Mentos experiment, Kaplan & Haenlein (2011)) seems to become the most interesting advertising field, also because even with a low-budget millions of people can be addressed (e.g. the movie “Paranormal Activity“ in the U.S.). According to the subject of my study, I will now highlight important areas for future research. First research has to be done how companies can gain usable information on consumer activities generated in such communities. Generating, measuring and understanding these online interactions are crucial to market products, but also for customer relationship. „At this point, it is also unclear how existing brand relationships are affected by new media services“ (Henning-Thurau et al., 2010, p. 317). Second, the difference between all facets of eWOM has to be clarified, especially the differentiation between pcWOM and mWOM (mobile word-of-mouth) and their unique capabilities (Okazaki, 2009). In India, already, phones outnumber Pcs by 10 to 1 and in Thailand, for example, 13% owns a computer, while 82% have access to a mobile phone (Kaplan & Haenlein, 2009). For marketers the mWOM seems to be a remarkable sector, because of the ability to communicate with a mass amount of people in real-time. Finally, the cultural differences are important and cannot be neglected. The advantage being able to address millions in seconds also has negative aftereffects, such as being confronted with negative publicity due to unique cultural mannerism, for example. Mikhailitchenko et al. (2006) findings indicate a difference in managerial styles and interorganizational relationship strategies in SMEs (small and medium-sized enterprises), but more research has to be done on multinational companies and therefore multinational strategies.

In the times of globalization and social media expansion cross-cultural marketing strategies gain more and more importance and „should be of particular relevance for customer relationship management“ (Henning-Thurau, 2010, p. 312).

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