The
potential for marketers to exploit the emerging trend of online
social networking groups
‘The
potential
for marketers to exploit the emerging trend of online social networking
groups’
This
paper aims to analyse the recent trend of online social network
services and
its implications from a marketing perspective. A limited amount of
research has
been done on the subject of social networking as a whole, but its
potential for
marketers apart from viral marketing has not been explored. The amount
of
literature available on the subject is thus also limited and restricted
largely
to newspaper articles and papers by blogging evangelists. This paper
includes a
survey conducted among cosmopolitan elite which represent the typical
audience
which has potential to be targeted through social networking services
and
analyses their trends and behaviours. Our findings are highlighted on
the basis
of the use of these services on counts for market research, advertising
and
promotion and propagation marketing. The limitations and implications
of the
findings are chronicled with an Indian marketer’s perspective based on
the
trend and internet usage patterns of the internet user base.
In
the recently emerged trend of online
social networks, an initial set of founders sends out messages inviting
members
of their own personal networks to join the site. New members repeat the
process, growing the total number of members. [1]
The type of network we are studying comes under the category of ‘Social
networking services (SNS)’, which are oriented towards social
communities
and/or dating, and where users typically fill in personal information,
add
contacts, share information, and join communities of their interest.
Our
objective is to analyse this trend
of online SNS and its potential for marketers in the following
activities –
a)
Segmentation, Targeting and Positioning
b)
Product Promotion by identifying and targeting influencers and
trendsetters
c)
Media Planning
d)
Consumer Research
Definitions
Social
Networks - A
social network is a map of the relationships between individuals,
indicating
ways in which they are connected through various social familiarities
ranging
from casual acquaintance to close familial bonds. The analysis of
social networks
(called network theory) has emerged as a key technique in
modern
sociology, anthropology and organizational studies, as well as a
popular topic
of speculation and study.
Internet
social networks - Through
the 1990s, there was a recurring piece of pop-anthropology verging on
an urban
myth, referred to as 'six degrees of separation'. Developed on this
theme,
online social networks became popular in 2003 with the popularity of
such
websites as Friendster, Tribe.net and LinkedIn. There
are over 300
social networking sites (see Appendix 5) Search engine Google
launched Orkut
on 22 January 2004. Kibop, a Spanish- and Portuguese-language
social
network, also debuted in 2004.
In
these communities, an initial set of
founders sends out messages inviting members of their own personal
networks to
join the site. New members repeat the process, growing the total number
of
members in the network. Sites then offer features such as automatic
address
book updates, viewable profiles, the ability to form new links through
"introduction services," and other forms of online social
connections. Further evolution of this idea is the Semantic Social
Network,
which interconnects both people and weblogs, such as StumbleUpon
and Funchain.
Christopher
Allen has classified these into two primary
categories in his papers, as -
BOS
are already
maintained with the purpose of individuals who desire to grow their
business
contacts as an extension of real world networking. SNS however, should
be of
primary interest to marketers as it provides immense scope in a number
of
areas.
Objectives
of
the Review
Our
purpose is to analyse this
trend of online social networking systems (SNS) and its potential for
marketers
in the following areas –
a)
Segmentation, Targeting and Positioning
b)
Product Promotion by identifying and targeting influencers and
trendsetters
c)
Media Planning
d)
Consumer Research for Customer Relationship Management
Works under Review
Seminal
Works on Segmentation and Target Marketing
The
term "segmentation"
appears to have been originally introduced by Smith (1956). He referred
to a
single-product marketer, who could either aim to secure a "share of
a
broad and generalized market" (product differentiation) or aim for
"depth of market position in the segments that are effectively
defined
and penetrated" (segmentation).
The
idea of segmentation caught the
imagination of marketers and was soon incorporated in the orthodox
canon. In
1967, Kotler described three kinds of marketing strategy:
undifferentiated,
differentiated, and concentrated. Briefly stated, the principles of
target
marketing are to identify the major market segments, target one or more
of
these, and tailor the marketing effort towards each particular segment.
We
may thus take the efficacy of STP
marketing as a given, both due to the nature and agreeability of the
leading
personalities on the subject of marketing and due to the established
use in
brand building by the marketing departments and advertising agencies of
almost
all established brands worth their salt worldwide.
Works
on the Problems of Segmentation in the Current
Information Age
Despite
the well-documented benefits
which segmentation offers, businesses continue to encounter
implementation
difficulties. Marketeers are always concerned about the cause of these
problems
and how they might be overcome. These concerns are addressed in the
form of
three questions: Is segmentation a good tool? If segmentation is such a
good tool,
why does it sometimes fail? What can be done to reduce the chance of
failure?
Dibb
S. in his paper on ‘Marketing
Intelligence & Planning’ concludes by suggesting that if marketers
are to overcome
their segmentation implementation difficulties, they need practical
guidance in
all stages in the segmentation process. There is currently a gulf
between the
priorities of academics and practitioners carrying out segmentation.
In
‘Internet market segmentation - an
exploratory study of critical success factors’ by Tom M.Y. Lin; Pin
Luarn;
Peter K.Y. Lo (published in Marketing Intelligence & Planning,
1
June 2004) they agree that market segmentation is a topic that has
already
produced significant results in conventional marketing research but
appears to
be still novel in the field of Internet marketing. Prior studies on
segmentation on the internet have been on data mining such as ‘Mining
the web
for business intelligence’ (published in The Journal of Database
Marketing
& Customer Strategy Management) where they advocate that
“Information
online provides good opportunities for marketers to understand and to
acquire
potential customers through the internet. The essence of web mining is
to
convert unorganised text information into customer intelligence stored
in a
database.”
Works
on Social Networking Services
Being
a fairly recent phenomenon, there
are almost no books or research articles published on social networking
services, and the potential for marketers is an entirely unexplored
area. Thus,
when looking into this uncharted territory, one is forced to either
look upon
preceding works on related theories and adapt their analysis to our
needs, or
to rely on popular literature such as newspapers and magazines and the
internet. This is, of course, subject to the limitation that the
information
they provide will be of very limited use. However, they are helpful as
providers
of information about recent trends, discoveries or changes and while
care is
taken to ensure relevancy and authenticity of the material, it must be
understood that such resources are of a largely subjective nature.
Roger
Clark in ‘Very
Black Little Black Books’ says, “The new dimension that
social
networking services bring is that they entice users to disclose
personal data
about their friends, business contacts or acquaintances.” The author
sees this
as a disturbing feature, requiring careful analysis. Our purpose,
however, is
not to analyse the implication on privacy and social aspects of the
phenomenon
but to assess its potential from a marketing perspective. This wealth
of
personal data makes for a plethora of knowledge databases which can be
exploited
for the effective profiling of target audiences and consumers (current
and
potential) on the basis of their demographics, psychographics and
behavioural
trends.
Metcalf's
Law which states that the
value of network increases as the square of the number of users is
fundamentally applicable for computer networks but may be extended to
social
networks as well. Metcalf's law implicitly suggests that adoption
should
be extroverted, because each individual added to a network (in this
case, of
individuals in the social network service) creates enormous incremental
power
to the network as a whole. From a marketing point of view, this can be
understood in terms of the use of social networks to further
word-of-mouth
advertising and product promotion.
Conclusions
and Potential for Marketers
Segmentation
The
problem of effective segmentation
and identifying individuals of the target segment is essentially solved
as SNS
users fill in detailed profiles including demographic variables such as
age,
location, occupation, education, gender, religion, ethnicity, marital
status.
Other characteristics for effective segmentation including attributes
like
sexual orientation, political view, fashion, tastes and preferences
etc. are
also part of standard profiles.
The
typical user also fills in
information such as their passions, activities, sports, ‘hangouts’ etc.
which
make for ideal psychographic segmentation.
Product
Promotion by Identifying and
Targeting Influencers and Trendsetters
The
idea of product promotion through
SNS is based on the fundamental premise of not relying on celebrities,
editors
or über-hipsters, but rather looks for Peer Influencers, an
important yet
elusive group. This is because of the high degree of vulnerability as
well as
the expense involved in celebrity endorsements and PR campaigns when
compared
with this approach. Influencers have been chronicled to typically
motivate 70%
of their friends to adopt a product, brand or idea.
Peer
Influencers are not trendsetters
necessarily, but they're the first within their circle to identify
trends,
products, brands and ideas and introduce them to their larger group of
friends.
They exist within different cultures and subcultures and typically
influence
more than one group since they have a broad range of interests and
social
circles.
According
to a RoperASW/Washingtonpost.com
report, 82% of those people in the
John
Lawlor - business blogging
evangelist has affirmed that “SNS groupers and bloggers are, by their
nature, trendsetters and influencers. Businesses that depend on a
flow of
timely and critical information to and from their customers and
prospects need
to explore how (this) can benefit their businesses.” Propagation
Marketing is
used to integrate something new, more quickly, more widely and less
expensively. This sort of marketing is based on the criteria of
behavioural
segmentation and especially on the degree of acceptance of change. So,
consumers identified as being very keen on new products can be
activated to, in
turn, stimulate other more reticent prospects.
Media
Planning
Most
SNS services have categories of
information which include general, interests, professional and personal
information and contact information. Interests cover books, magazines
and
newspapers read; favourite TV shows, movies, music; cuisines. Given the
target
segment, media planners can thus find the ideal channels to use to
communicate
to the consumers, in lieu of or in addition to advertising through the
SNS
community itself. This second possibility has looked at almost since
the
inception of SNS on the internet, such as in The San Fransisco
Chronicle
(Monday, November 29, 2004) “Potentially, (Google/Orkut) could display
subject-related advertising next to the columns, as it already does
with its
e-mail”, a revenue-generating model which Google has refrained from
till now,
in spite of other noted SNS sites utilising the same post the
publication of
these articles.
Consumer
Research
Many
of the Social Networking Services
encourage the formation of communities which individuals can join based
on
their preferences and activities. A surprisingly large number of these
communities are formed around brands themselves. For instance, Orkut
has 9
communities for Coca-Cola lovers, including one for Diet Coke, and two
regional
communities (Brazilian Coke Lovers and Coke Drinkers in
Sampling
Method Used
Stratified
Sampling: The
population has been divided into two segments – users and non-users of
social
networking services. These two sub-populations are non-overlapping and
may be
assumed to be relatively homogenous within themselves, and taken since
the type
of information required and the analysis of the common questions is to
be done
on a separate basis.
Judgement
Sampling: The
units from the population are purposively selected. We have used
judgement
sampling in the second strata of the surveyed population, i.e. users of
SNS.
This is to get a more accurate representation of the strata since the
number of
surveyed individuals is relatively small.
Sample Size
The
sample consisted of 117 non-users of
SNS and 72 users of SNS who were chosen such that apart from their
membership
of an SNS, they belonged to a relatively homogenous group such that any
significant divergence in their consumption or behavioural could be
attributed
to causes related to their use of SNS.
Questionnaire
Design and Hypothesis of
Findings
We
have designed two sets of
questionnaires directed each at users and non-users of social
networking
services. The objectives of the questions can thus be outlines as
follows –
For
Non-users of Social
Networking Services
For
Users of Social Networking
Services
This
would
enable us to roughly divide the members among active and no-active
members
based on their interest and activity levels. Based on this data, we
hope to
predict whether these services are simply a passing trend or fad (if a
majority
of the users simply join up but are not very active on the networks).
This
would also
help us divide the users on the basis of the level of activity.
Significant
differences in traits such as the degree of adoption of new products
between
active and non-active users may thus be attributed to these factors.
Thus, we
may arrive at a core target of active users for marketers to direct
their
efforts.
Conclusions,
Data Analysis and Findings
Segmentation,
Targeting and