Social Media and Technology Trends

Online Consumer Behavior

Web advertisers study online behavior and use the results to increase the effectiveness of their campaigns.

Learning Objectives

Explain the relationship between behavioral targeting and online consumer behavior, and how behavioral marketing influences online advertising

Key Takeaways

Key Points

  • The web has become the new ‘zero moment of truth‘, or ZMOT (Google, 2012) for consumers today. Marketers need to understand where their customers are going to research their products / services and what they are doing on the web to help form their purchase decision.
  • Site publishers can use the data generated from website pages and the searches made to create defined audience segments based on visitors that have similar profiles. Layering this data with other demographic & psychographic data helps marketers build out personas of their key customer segments.
  • Not all consumers behave the same online. Customers’ online behaviors will fall along a technology adoption curve; innovators will be excited by the latest upgrade or feature, while others will resist change. Further, there is a chasm between the early technology adopters & the mainstream market.
  • When visitors return to a specific site using the same web browser, profiles generated from data collection can be used to allow advertisers to position their online ads in front of those visitors who exhibit a greater level of interest and intent for the products and services being offered.
  • Many online users are concerned about privacy issues around doing this type of targeting. The behavioral targeting industry is trying to contain these concerns through education, advocacy, and product constraints to keep all information non-personally identifiable.

Key Terms

  • conversion rates: In internet marketing, conversion rate is the ratio of visitors who convert casual content views or website visits into desired actions based on subtle or direct requests from marketers, advertisers, and content creators.
  • Cookie: Also known as an HTTP cookie, web cookie, or browser cookie, it is usually a small piece of data sent from a website and stored in a user’s web browser while a user is browsing a website.
  • segments: Market segment — the smaller subgroups comprising a market

Online Consumer Behavior

Introduction

When consumers visit a web site, data is gathered about their online behavior. The site collects information about the visitor that includes the following:

  • Pages visited
  • Amount of time spent on each page
  • Links clicked
  • Searches performed
  • Components with which they interact

The sites collect the data, along with other factors, and create a profile that links to that visitor’s web browser.

Site publishers can then use this data to create defined audience segments based on visitors that have similar profiles. When visitors return to a specific site or a network of sites using the same web browser, those profiles can be used to allow advertisers to position their online ads in front of those visitors who exhibit a greater level of interest and intent for the products and services being offered.

On the theory that properly targeted ads will fetch more consumer interest, the publisher (or seller) can charge a premium for these ads over random advertising (or ads) based on the context of a site. Behavioral marketing can be used on its own or in conjunction with other forms of targeting based on factors like geography, demographics, or contextual web page content. It’s worth noting that many practitioners also refer to this process as audience targeting.

Behavioral Targeting

On the theory that properly targeted ads will fetch more consumer interest, the publisher (or seller) can charge a premium for these ads over random advertising (or ads) based on the context of a site. Behavioral marketing can be used on its own or in conjunction with other forms of targeting based on factors like geography, demographics, or contextual web page content. It’s worth noting that many practitioners also refer to this process as audience targeting.

Behavioral targeting refers to a range of technologies and techniques used by online website publishers and advertisers that allows them to increase the effectiveness of their campaigns by capturing data generated by website and landing page visitors.

Behavioral targeting techniques may also be applied to any online property on the premise that it either improves the visitor experience or it benefits the online property, typically through increased conversion rates or increased spending levels. Some of the early adopters of this technology/philosophy were among the following:

  • Publishing sites such as HotWired
  • Online advertising with leading online ad servers
  • Retail
  • Other e-commerce websites

What about My Privacy?

Internet Usage: This is a basic chart showing online usage. It displays the types of online activity and how long the person was on those types of websites.

Many online users and advocacy groups are concerned about privacy issues around doing this type of targeting. This is a controversy that the behavioral targeting industry is trying to contain through education, advocacy, and product constraints to keep all personal, identifiable information from end-users or to obtain permission.

The European Commission has also raised a number of concerns related to online data collection (of personal data), profiling, and behavioral targeting, and is looking to enforce existing regulations. While behavioral targeting is not new and many companies are using it, companies like Google tried to alleviate the worries about profiling users. They won’t create sensitive interest categories, like race or religion and it won’t cross-correlate the data with other information saved in Google accounts.

Mobile Consumer Behavior

Social media applications for mobile devices are an effective way to advertise to consumers because consumers spend so much time on their mobile devices.

Learning Objectives

Describe the four types of mobile social media applications and how they are used in social media marketing

Key Takeaways

Key Points

  • Consumers can receive text messages about sales and promotions at their favorite stores, restaurants, night clubs, etc. Typically, people can click on a link that will direct them to the website of interest.
  • There are four types of mobile social media applications, depending on whether the message is location sensitive and/or time sensitive.
  • The use of the Internet on a mobile phone has doubled in many countries since 2008.

Key Terms

  • SMS: A text message sent on a cell phone.
  • MMS: Multimedia Messaging Service – standard way to send messages that include multimedia content to and from mobile phones.

Mobile Consumer Behavior

Social media applications used on mobile devices are called mobile social media. In comparison to traditional social media accessed on computers, mobile social media display a higher location- and time-sensitivity. One can differentiate between four types of mobile social media applications, depending on whether the message takes account of the specific location of the user (location-sensitivity) and whether it is received and processed by the user instantaneously or with a time delay (time-sensitivity).

  1. Space-timers (location and time sensitive): Exchange of messages with relevance for one specific location at one specific point in time (e.g., Facebook Places; Foursquare)
  2. Space-locators (only location sensitive): Exchange of messages, with relevance for one specific location, which are tagged to a certain place and read later by others (e.g.,Yelp; Qype)
  3. Quick-timers (only time sensitive): Transfer of traditional social media applications to mobile devices to increase immediacy (e.g., posting Twitter messages or Facebook status updates)
  4. Slow-timers (neither location, nor time sensitive): Transfer of traditional social media applications to mobile devices (e.g., watching a YouTube video or reading a Wikipedia entry)

Since these social media applications can be used on mobile devices, they are a good target for social media marketing. For example, SMS marketing has become increasingly popular. Consumers can receive text messages about sales and promotions at their favorite stores, restaurants, night clubs, etc. Typically, people can click on a link that will direct them to the website. People are able to make purchases through the convenience of their phones.

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iPhones and Push Notifications: Push notifications were first introduced to smartphones, specifically the iPhone, as a new way to advertise to customers.

MMS mobile marketing can contain a timed slideshow of images, text, audio, and video. Nearly all new phones produced with a color screen are capable of sending and receiving standard MMS messages. Brands are able to both send and receive rich content through MMS A2P (application-to-person) mobile networks to mobile subscribers. In some networks, brands are also able to sponsor messages that are sent P2P (person-to-person). Good examples of mobile-originated MMS marketing campaigns are Motorola’s ongoing campaigns at House of Blues venues, where the brand allows the consumer to send their mobile photos to the LED board in real time, as well as post their images online.

Push notifications were first introduced by Apple with the advent of the iPhone in 2007. They were further popularized with the Android operating system, in which notifications are shown on the top of the screen. It has helped application owners communicate directly with their end users in a simple and effective way. Users can download apps and receive notifications about promotional activities. Clicking on the notification sends the consumer directly to the necessary website, to learn more and perhaps make a purchase.

Advertising on web pages specifically meant for access by mobile devices is also an option. The Mobile Marketing Association provides a set of guidelines and standards that provide the recommended format of ads, presentation, and metrics used in reporting. Google, Yahoo, and other major mobile content providers have sold advertising placement on their properties for years. Advertising networks focused on mobile properties and advertisers are also available.

Targeting Consumers Where They Spend Time

The World Wide Web has become a key commercial center, and thus, an increasingly important place where companies target potential customers.

Learning Objectives

Describe how the World Wide Web, social media, and mobile devices are transforming the way advertisers target consumers

Key Takeaways

Key Points

  • The Internet, or more specifically, the World Wide Web, has eliminated time and geographic constraints for both consumers and businesses looking to connect regardless of physical location.
  • Social media sites such as Facebook have proven to be lucrative channels for user insight and online buying behavior.
  • Brands must modify their marketing strategies to reach consumers accessing information from mobile devices, versus desktop or laptop computes.

Key Terms

  • World Wide Web: Collectively, all of the web pages on the Internet which hyperlink to each other and to other kinds of documents and media.
  • Market: One of the many varieties of systems, institutions, procedures, social relations and infrastructures whereby parties engage in exchange.

Target Consumers Where they Spend Time

Since an exchange involves two or more people, it is natural to think of the market in terms of people, individuals, or groups. Clearly, without the existence of people or businesses to buy and consume goods, services, and ideas, there would be little reason for marketing. Since people create markets, it is essential to target clusters of people and the locations they visit to better implement marketing strategies. The World Wide Web has become an important, albeit virtual, location where companies are spending more time and money to target and influence consumers.

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Shopping Mall: More and more consumers are shopping online, rather than traditional (and physical outlets) such as stores and shopping malls.

The Rise of Social Media

The Internet, or more specifically, the World Wide Web, has eliminated time and geographic constraints for both consumers and businesses looking to connect regardless of physical location. Social media sites have further aggregated user content around similar topics, tasks and people, creating online communities that have proven to be lucrative targets for online advertising. As of December 2012, Facebook boasts over 1 billion active users, with over half accessing the social network via a mobile device. Personal information ranging from birthdays and profession, to family photos and multi-user gaming yield insightful intelligence for marketers looking to improve promotion to niche and hard-to-reach markets.

Targeting Digital Natives and Other Technology Users

Besides the rapid adoption of Internet technologies among consumers and businesses, the world is now seeing a generation of people born after the emergence of the commercial web come into adulthood. Often dubbed, “digital natives,” these individuals have only known a world with the Internet, and are just as or more comfortable interacting with brands in online rather than offline environments. More importantly, they understand the value of digital technology and use it to seek out opportunities, whether to initiate friendships, judge a brand or make a purchase.

Consumers are also increasingly accessing information from mobile devices, versus desktop or laptop computers. Busy and hectic schedules are prompting people to view and access brand messaging on the go from their Smartphones, tablets and gaming consoles. The growing legion of mobile users, as well as the increasing sophistication of online purchasers and their preference for relevant, digital content, will continue to push marketers to produce targeted, messaging for the web.

Making Appropriate Changes to Product, Placement, Promotion, and Pricing

Marketing teams must adjust their marketing mix strategies accordingly to adapt and succeed in a rapidly changing media environment.

Learning Objectives

Explain how the World Wide Web has changed the way brands target consumers and position their brand in the marketplace

Key Takeaways

Key Points

  • Although the way new products and services are marketed have changed, the primary aim of business in bringing economic and social values have not.
  • Marketing organizations must be ready to alter product features and ingredients based on consumer and media praise, or backlash.
  • Brands must ensure that their e-commerce websites work in concert with offline distribution channels such as fulfillment centers and warehouses.
  • Pricing–the primary means by which customer judge the attractiveness of a product or service–can also be affected by social media technologies, which offer wider access to customers via online channels.
  • Placement refers to providing the product at a place which is convenient for consumers to access. Marketing management must have a clear understanding of the types of distributors, of the trends influencing those distributors, and of how those distributors are perceived by customers.

Key Terms

  • World Wide Web: Collectively, all of the web pages on the Internet which hyperlink to each other and to other kinds of documents and media.
  • accountability: The state of being accountable; liability to be called on to render an account; accountableness; responsible for; answerable for.
  • social media: Interactive forms of media that allow users to interact with and publish to each other, generally by means of the Internet.

Making Appropriate Changes to Product, Placement, Promotion, and Pricing

Since its emergence during the 1990s, the World Wide Web has fundamentally changed the way businesses market to end users and consumers. Today, the marketing mix –product, placement, promotion and pricing–must take into account both online and offline buyers; traditional media, and digital media. Social media technologies such as social networking sites, as well as digital platforms including SmartPhones and computer tablets, have changed the way users access and consumer information. Marketing teams must adjust their marketing mix strategies accordingly to adapt and succeed in a rapidly changing media environment.

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Conversations in Social Media: Consumers intentionally and unintentionally use social media to purchase, evaluate and ultimately influence a brand’s marketing mix.

The Marketing Mix in the Digital Age

The Internet has changed the way business is done in the current world. Consequently, the variables of marketing segmentation, targeting and positioning are addressed differently. Although the way new products and services are marketed have changed, the primary aim of business in bringing economic and social values have not. Indeed, all businesses seek to implement a marketing mix that increases revenues and profit, expands brand awareness, and builds customer bases. Nevertheless, marketers must take into account the following shifts, which will inevitably effect their product, promotional and pricing strategies:

  • The shift from media advertising to multiple forms of communication.
  • The shift from mass media to more specialized (niche) media, which are centered on specific target audiences.
  • The shift from a manufacturer-dominated market to a retailer -dominated, consumer-controlled market.
  • The shift from general-focus advertising and marketing to data-based marketing.
  • The shift from low agency accountability to greater agency accountability, particularly in advertising.
  • The shift from traditional compensation to performance-based compensation (increased sales or benefits to the company).
  • The shift from limited Internet access to 24/7 Internet availability and access to goods and services.

Each element of the marketing mix must coordinate with other elements in the marketing program to ensure maximum reach and impact.

The Marketing Mix in Social Media

User-generated content, one of the key features of social media websites, provides a direct communication channel between buyers and sellers. Products and services are meant to satisfy customer wants and needs. Comments, ‘Likes’, and other feedback mechanisms make it even easier for satisfied or disgruntled customers to voice their opinion to not only brands, but also to current and prospective customers.

Product

Marketing organizations must be ready to alter product features and ingredients as dictated by changes in consumer perception, as well as competitive and economic environments. However, product changes can be prompted by social media activity from stakeholders outside a brand’s consumer base. Greenpeace launched an attack on Nestlés use of palm oil in their products and its impact on the climate and natural ecosystems. When Nestlé attempted to respond to the criticism via Facebook, the public backlash was severe. As a result of the viral publicity, Nestlé subsequently increased auditing efforts in its supply chain, and promised to cancel contracts with any firm found to be chopping down rainforests to produce the palm oil used in its products.

Placement

Placement or distribution moves products from the producer to the consumer. With the Internet and social media websites, consumers now have access to more channels than ever to research, purchase and evaluate products. Both small and major brands offer e-commerce websites that allow web users to browse products and share their ‘wish lists’ or purchases with friends across social media websites. Amazon.com, the world’s largest online retailer, allows third-party merchants to advertise their goods on the company’s e-commerce site. This not only allows smaller retailers to take advantage of Amazon.com’s massive audience, but also utilize the Amazon.com fulfillment centers strategically placed near airports.

Pricing

Pricing–the primary means by which customer judge the attractiveness of a product or service–can also be affected due to wider access to customers via online channels. Amazon.com is primarily a retail site with a sales revenue model and generates revenue by taking a small percentage of the sale price of each item that is sold through its website. Amazon also allows companies to advertise their products by paying a fee to be listed as featured products.

Promotion

Promotion is probably the marketing mix element most impacted by social media. In essence, social media acts as a promotional element or communication channel used to reach customers. Promotional activities include advertising (by using different media), sales promotion (sales and trades promotion), and personal selling activities. It also includes sponsorship marketing, direct marketing, database marketing and public relations. Social networking sites can act as secondary or tertiary corporate sites that integrate and link these promotional elements back to the brand’s messaging. Content published by social media users can also feed into various communication channels (e.g. crowdsourcing ideas for a television commercial) and used to further expand a brand’s reach and presence.

Understanding Apps in a Marketing Context

Marketing campaigns can be enhanced through the use of mobile apps, designed to run exclusively on smartphones and tablets.

Learning Objectives

Describe how mobile applications are used to increase customer purchases and brand awareness

Key Takeaways

Key Points

  • Allowing your marketing campaign to appear on third party apps is a useful technique. Using existing apps (shown here with target audiences is a good way to get a message out, especially if the target audiences are the same.
  • A company can create its own app to promote their own marketing campaigns. Certain features make apps more favorable, such as GPS and mobile coupons. Providing convenience and making the app as user-friendly as possible is the best way to attract consumers.
  • Viral marketing refers to a marketing technique that uses pre-existing social networks and other technologies to produce increases in brand awareness. Using apps is a great media to create viral awareness for brands.

Key Terms

  • Mobile application: a software application designed to run on smartphones, tablet computers and other mobile devices. They are available through application distribution platforms, which are typically operated by the owner of the mobile operating system.

Mobile Apps

A mobile application (or mobile app) is a software application designed to run smartphones, tablet computers, and other mobile devices. They are available through application distribution platforms, which are typically operated by the owner of the mobile operating system, such as the Apple App Store, Google Play, Windows Phone Store and BlackBerry App World. Some apps are free, while others have a minimal price. Usually, they are downloaded from the platform to a target device, such as an iPhone, BlackBerry, Android phone, or Windows Phone. Sometimes they can be downloaded to less mobile computers, such as laptops or desktops.

Mobile apps were originally offered for general productivity and information retrieval, including email, calendar, contacts, stock market, and weather information. However, public demand and the availability of developer tools drove rapid expansion into other categories, such as mobile games, factory automation, GPS and location-based services, banking, order-tracking, and ticket purchases. The explosion in number and variety of apps made discovery a challenge, which in turn led to the creation of a wide range of review, recommendation, and curation sources. These include blogs, magazines, and dedicated online app-discovery services. The popularity of mobile applications has continued to rise, as their usage has become increasingly prevalent across mobile phone users. A May 2012 comScore study reported that during the previous quarter, more mobile subscribers used apps than browsed the web on their devices: 51.1% vs. 49.8% respectively.

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Smartphone Apps: Apps on smartphones such as this one can be used as marketing tools.

Apps and Viral Marketing

Viral marketing is possible through the creation of apps. Viral marketing refers to a marketing technique that uses pre-existing social networks and other technologies to produce increases in brand awareness or to achieve other marketing objectives (such as product sales) through self-replicating viral processes, analogous to the spread of viruses or computer viruses. It can be delivered by word of mouth or enhanced by the network effects of the Internet and mobile networks. Viral marketing may take the form of video clips, interactive Flash games, ebooks, brandable software, images, text messages, email messages, or web pages.

When a celebrity Tweets about the latest and hottest nightclub (which can be viewed by all the followers on an app), many people will see this and re-tweet to their own followers. This creates a viral message. It’s a powerful marketing tool that requires very little effort. All it takes is one person to set the chain and the “virus” is able to spread. This can be replicated for many other products and services. Viral marketing is also possible through marketing on third party apps. Using existing apps with target audiences is a good way to get a message out, especially if the target audiences are the same. Alternatively, a company can create its own app to promote their own marketing campaigns. Certain features make apps more favorable, such as GPS and mobile coupons.

Trends in Social Media

Real-time and location-based web are key trends for marketers to understand as they try to develop image, create awareness, and increase sales.

Learning Objectives

Give examples of social media companies use for real-time and location-based web marketing

Key Takeaways

Key Points

  • Twitter set the trend for real-time services, wherein users can broadcast to the world what they are doing, or what is on their minds within a 140-character limit. Facebook followed suit with their “Live Feed” where users’ activities are streamed as soon as it happens.
  • Foursquare gained popularity as it allowed for users to “check-in” to places that they are frequenting at the moment. Gowalla uses the GPS in phones to create a location-based user experience. Clixtr, though in the real-time space, is also a location-based social networking site.
  • Companies such as Monster.com have been steadily developing a more “socialized” feel to their career center sites to harness some of the power of social networking sites.

Key Terms

  • real-time web: A set of technologies and practices that enable users to receive information as soon as it is published by its authors, rather than requiring that they or their software check a source periodically for updates.

As the increase in popularity of social networking is on a constant rise, new uses for the technology are constantly being devised. At the forefront of emerging trends in social networking sites is the concept of real-time web and location-based web. Real-time allows users to contribute content, which is then broadcast as it is being uploaded, a concept much akin to live radio and television broadcasts.

Twitter set the trend for real-time services, wherein users can broadcast to the world what they are doing, or what is on their minds within a 140-character limit. Facebook soon followed suit with its “Live Feed” where users’ activities are streamed as soon as it happens. While Twitter focuses on words, Instagram, another real-time service, focuses on photo sharing wherein users can update their streams with photos while at an event or after. Facebook, however, remains the largest photo sharing site. In April 2012, the image -based social media network Pinterest had become the third largest social network in the United States.

Foursquare gained popularity as it allowed for users to “check-in” to places that they are frequenting at the moment. Gowalla is another such service that functions in much the same way that Foursquare does, leveraging the GPS in phones to create a location-based user experience. Clixtr, another photo-sharing service based in the real-time space, is also a location-based social networking site, since events created by users are automatically geotagged, and users can view events occurring nearby through the Clixtr iPhone app. Recently, Yelp announced its entrance into the location-based social networking space through check-ins with their mobile app; whether this becomes detrimental to Foursquare or Gowalla is yet to be seen, as it is still considered a new space in the Internet technology industry.

Companies have begun to merge business technologies and solutions, such as cloud computing, with social networking concepts. Instead of connecting individuals based on social interest, companies are developing interactive communities that connect individuals based on shared business needs or experiences. Many provide specialized networking tools and applications that can be accessed via their websites, such as LinkedIn. Others companies, such as Monster.com, have been steadily developing a more “socialized” feel to their career center sites to harness some of the power of social networking sites.

One popular use for this new technology is social networking between businesses. Companies have found that social networking sites such as Facebook and Twitter are great ways to build their brand image. According to Jody Nimetz, author of Marketing Jive, there are five major uses for businesses and social media: create brand awareness, manage their online reputation, recruit employees, learn about new technologies and competitors, and generate leads for potential prospects. These companies are able to drive traffic to their own online sites while encouraging their consumers and clients to have discussions on how to improve or change products or services. These social networking trends create fun ways for consumers and companies to interact with mutually beneficial outcomes. Consumers get better products and companies get the information they need to attract more consumers.

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Follow Me on Twitter: “Follow Me” is now used by many brands to attract traffic to their Twitter pages.