In the previous chapter, the authors briefly looked at different aspects of branding and how they should be implemented within companies. Recently, the world of marketing has seen a revolutionary shift, as traditional media—which until now were dominating the world of marketing—are becoming less effective, and instead, social media is gaining more power. In this chapter, the authors compare the impacts of traditional and social media on brand equity and also look at how different measures such as customer lifetime value, customer influencer value, and customer knowledge value are being affected by social media platforms. Social media are examined more closely to see how they are composed and what building blocks they use. This helps managers to better integrate social media in their marketing strategies in order to gain the most bang for their buck.
TopIntroduction
The world of media has experienced a fundamental shift in recent years (Mangold & Faulds, 2009). Traditional media is being replaced by new forms of media, especially social media and networks. The success of the brands is now dependent on their social media strategy, as consumers now use social media platforms to gain knowledge about brands and products. Companies are aware of this transformation, as they are putting aside more sign can’t portions of their budget for these strategies.
Social media could be considered as mass media as they are being accessed by different groups and demographics. For example, some studies show that 75 percent of users who have access to the internet in United States also use social media (Miller, 2009). The viral nature of social media contents makes their reach far wider than that of traditional media such as TV (Keller, 2009). The sudden growth of social media marketing has made some people to question the power of marketing managers in the branding process in today’s world (Berthon et al., 2007).
Social media platforms are becoming the go to choose for consumers who are looking to generate and share their ideas with the world. These platforms include websites, blogs and social media apps. This phenomenon is often called the social media revolution, as it can affect the sales, marketing and other activities of a company. Many managers are avoiding these new platforms because they don’t fully comprehend how they can utilize them in their own plans.
In order to help companies better connect with social media, in this chapter we model social media with seven functional building blocks: identity, conversations, sharing, presence, relationships, reputation, and groups (Kietzmann et al., 2011). As we will explain later, each of these blocks bring something unique to the table as to the way managers should utilize them.
The interaction between firms and their customers has been completely overhauled by social media platforms that try to create value in this process (Adjei, Noble, & Noble, 2012; Gensler et al., 2013; Hennig-Thurau et al., 2010; Labrecque, 2014; Rishika et al., 2013; Rohm, Kaltcheva, & Milne, 2013).
Using social media platforms in the branding activities can improve the interpretation and communication response of the brand, its attachment, the attitude of consumers toward the brand and its products and services, brand loyalty, participation and profitability (Van den Bulte & Wuyts, 2007; Gensler et al., 2013; Colliander & Dahlén, 2011; Wang, Yu, & Wei, 2012; Labrecque, 2014; Rishika et al., 2013).
Two reasons can be cited for the importance of social media in today’s world. The first reason is that teenagers’ and young consumers’ media habits have changed, as they are less inclined towards traditional marketing channels such as TV and printed ads, and more likely to be affected by digital marketing channels (Singh, 2013). The second reason could be described as the role of other people and human networks in a person’s decision to purchase and adopt a brand, which is of great importance in the digital age (Chen, Fay, & Wang, 2011; Chen, Wang, & Xie, 2011; King, Racheria, & Bush, 2014).