2.

0 Introduction This chapter consists of a brief literature review which forms part of the study about social media. A brief definition of Social Media is presented followed by its marketing impact on Small and Medium Enterprises. A brief overview of the social media tools is also presented and some of the characteristics of Social Media Marketing mentioned. At the end of this chapter the challenges relating to social media marketing are elaborated. 2.1 What is Social Media? Social media are media for social interaction, using highly accessible and scalable communication techniques. Social media is the use of web-based and mobile technologies to turn communication into interactive dialogue. Andreas Kaplan and Michael Haenlein define social media as "a group of Internet-based applications that build on the ideological and technological foundations of Web 2.0, which allows the creation and exchange of usergenerated content." Businesses may also refer to social media as consumer-generated media (CGM). A common thread running through all definitions of social media is a blending of technology and social interaction for the co-creation of value. Social media is the use of technology to co-create, know, like and trust. In general, social media has become an accessible platform for everyone through the internet. Social Media is a word of mouth on steroids and is beginning to morph from a fun and easy way to stay socially connected with friends into a dynamic and interactive way of doing business and practising law. Undesirably, social media has been used as an online tool for drug marketers and recorded 25 per cent of spam email messages which are directed to advertisements medicines.

2.2 The impact of Social Media Marketing on SMEs Social Media Marketing is an innovative, result-driven and cost effective marketing technique used by SMEs to increase their brand exposure and positively influence their sales figures. The impact of Social Media Marketing can be easily understood through lines stated in Oliver Blanchards book on marketing, It does not matter whether you have a Billboard, a magazine ad, an online banner or a social media channel. Impressions are impressions. 6

As technology advances and effect the business environment, small business strategy has taken on a whole new meaning. In the past small business strategy was focused on the growth of local businesses and looking for clientele in a very small area of coverage. The introduction helped to increase the idea of small business strategy as businesses began to expand outside of their local limitations into a lot more regional spectrum and in some situations a nationwide growth. Further recognition of the web in reference to social media networks created an even new small business strategy that has assisted a business of any size compete with the larger firms and their million dollar advertising campaigns. This new potential small business strategy is primarily successful when a business creates small business plans focused on the utilization of social media. Social media marketing has a focus on finding consumers and making use of social networks that they often frequent so as to grow a personal relationship outside of the buyer-seller environment. For the client, the chance for social networking assist to keep contacts from all over the globe and remain apprised of any conditions or promotions happening with their regular business outlets. For the small business strategy, social media use assists a business stay in regular touch with their clientele and potential clientele in order to increase client awareness and boost brand recognition. As the on-line environment has a huge number of websites, it has become extremely hard to find success online. When a company incorporates social media into their small business plans they're taking benefit of a social network which captures the attention of consumers and makes them a part of their client's lives. When you utilize the marketing potential of Facebook into your small business plans you can become "friends" with your clients and send them regular updates so they're constantly reminded of your business. Making use of social networks such as twitter assists to keep a constant flow of information to clientele so that you could build brand recognition and customer attraction. However the regular updating and tweeting of these social networks and many more can prove overwhelming to the uniformed person. This is why it is essential when you're seeking to incorporate social media networking into your small business plans you use the knowledge and experience of an expert. With their experience you can create a social media network that will allow you to often update your clients without overwhelming them or yourself. Social media has greatly impacted the business environment 7

and the client business relationship. This shift in small business strategy represents the greatest opportunity to find business success quickly and establish market dominance. Source: Articlesbase by Andrew McCauley 19 July 2011 Today with all the business and business related activities interconnected globally, Social media is essential for getting the message out about a business, its products and services. It doesnt matter if a company is focused on marketing or public relations, or sales the social web requires that businesses spread as wide a net as possible. To flourish in this environment, businesses must integrate a comprehensive strategy for growing and retaining customers. This means putting a marketable brand in front of the target audience, wherever they may be. Social Media in business is for key stakeholders as social media can turn communication into an interactive dialogue and impact on business practices and processes. Some of the ideas of using social media to see greater success with small business are: Marketing: Participating in social media is a fast and easy way to market your small business to others in a place online where you are guaranteed loads of traffic and its free. Just participating in your favorite social media platform (commenting, voting, sharing information) will make you stand out as a helpful member of the community and make sure others remember you. Branding: Through the information you share in social media, you can show your expertise, building brand and authority within the community of your choice. While a business blog can certainly help you do the same, social media allows you to do so before a ready made niche audience and to build authority much faster within a larger established community while you build your own following on your own site.

Traffic: Nowadays, social media should be used first and foremost to get a hold of some of the elusive traffic that can be difficult to capture at first simply by blogging. Sharing

content or even just a link to your blog via social media can make all the difference in the world in terms of the traffic you can begin attracting almost immediately.

SEO: Whether the social media platform you use passes search value directly to your Website or not as a result of participation, it is certain that the visitors you attract including those who may use social media to search for their own content (see below) certainly will. Sharing your content or simply links to your site will encourage first visits and then inbound links from the very niche you are targeting and will surely eventually have a positive effect on your Search Engine Optimization.

Crowd sourcing: We have done this ourselves by posting questions in order to gather responses from our community and you can do the same. Use social media to find out what your audience thinks or to ask them to participate. You will build better products and services with this input and build community interaction and interest in your business online.

Content: Social media is a two way street. In addition to letting you create and share content, social media enables you to find content in your industry as well. Search for topics to blog about or news to share with your own social media following giving credit to the originators of the material, of course.

Research: We mean both market research and data research here. Simply, social media allows you not only to address but to listen to your communities hearing what others are saying about your industry and perhaps even about your business or brand. At the same time, social media channels can be a great place to monitor the latest news in your industry often from a variety of perspectives.

Networking: Of course, social media allows you to be much more than a passive observer. One of the greatest aspects of social media is its social aspect. You can not only share content and give and receive feedback on that content and the content of others but also make connections, decide who to follow and who to make a part of your network and who you should ask to network with you. Social media allows you to make connections not just with those in your industry but with potential customers and those who might refer customers to you. 9

Community: Building community goes beyond traffic and visitors to your Website. It has to do with how engaged those visiting your Website are, whether they share your content with others, refer people in their network to your content, products and services and so on. Using social media can help you do much more than simply build traffic on your businesses main Website. Social media attracts engaged users interested in giving feedback, sharing comments and votes and, in general, participating. That engagement should transfer to your home site as well and build your community in the process.

Authority: Social media helps you gain authority for your content Website and brand by letting you share it more widely and more quickly than you might ordinarily be able to simply by up dating your blog regularly. Plus social media makes it easy for others to share your content with their networks gradually building your authority in your niche.

2.3 Conventional Media and Social Media People gain information, education, news, etc., by electronic media and print media. Social media are distinct from industrial or traditional media, such as newspapers, television, and film. They are relatively inexpensive and accessible to enable anyone (even private individuals) to publish or access information, compared to industrial media, which generally require significant resources to publish information.

One characteristic shared by both social media and industrial media is the capability to reach small or large audiences; for example, either a blog post or a television show may reach zero people or millions of people. Some of the properties that help describe the differences between social media and industrial media are: Reach - both industrial and social media technologies provide scale and are capable of reaching a global audience. Industrial media, however, typically use a centralized framework for organization, production, and dissemination, whereas social media are by their very nature more decentralized, less hierarchical, and distinguished by multiple points of production and utility. 10

 Accessibility - the means of production for industrial media are typically government and/or privately owned; social media tools are generally available to the public at little or no cost. Usability - industrial media production typically requires specialized skills and training. Conversely, most social media production does not require specialized skills and training, or requires only modest reinterpretation of existing skills; in theory, anyone with access can operate the means of social media production. Immediacy - the time lag between communications produced by industrial media can be long (days, weeks, or even months) compared to social media (which can be capable of virtually instantaneous responses; only the participants determine any delay in response). However, as industrial media begin adopting aspects of production normally associated with social media tools, this feature may not prove distinctive over time.
Permanence - industrial media, once created, cannot be altered (once a magazine article

is printed and distributed changes cannot be made to that same article) whereas social media can be altered almost instantaneously by comments or editing. Community media constitute an interesting hybrid of industrial and social media. Though community-owned, some community radios, TV and newspapers are run by professionals and some by amateurs. They use both social and industrial media frameworks. In his 2006 book, The Wealth of Networks: How Social Production Transforms Markets and F r e e d o m , Yochai Benkler analyzed many of these distinctions and their implications in terms of both economics and political liberty. However, Benkler, like many academics, uses the neologism network economy or "network information economy" to describe the underlying economic, social, and technological characteristics of what has come to be known as "social media". Andrew Keen criticizes social media in his book Th e C u l t o f t h e A m a t e u r , writing, "Out of this anarchy, it suddenly became clear that what was governing the infinite monkeys now in putting away on the Internet was the law of digital Darwinism, the survival of the loudest and most opinionated. Under these rules, the only way to intellectually prevail is by infinite filibustering."Tim Berners-Lee contends that the danger of social networking sites is that most are silos and do not 11

allow users to port data from one site to another. He also cautions against social networks that grow too big and become a monopoly as this tends to limit innovation. There are various statistics that account for social media usage and effectiveness for individuals world wide. Some of the most recent statistics are as follows: Social networking now accounts for 22% of all time spent online in the US.A total of 234 million people age 13 and older in the U.S. used mobile devices in December 2009.Twitter processed more than one billion tweets in December 2009 and averages almost 40 million tweets per day. Over 25% of U.S. internet page views occurred at one of the top social networking sites in December 2009, up from 13.8% a year before. Australia has some of the highest social media usage statistics in the world. In terms of Facebook use Australia ranks highest with almost 9 hours per month from over 9 million users. The number of social media users age 65 and older grew 100 percent throughout 2010, so that one in four people in that age group are now part of a social networking site. 2.1.1 Classification of Social Media Sites Social Media can be broken down into five main categories of social media sites namely the Social News sites like Digg, Reddit and Yahoo Buzz. Secondly, the Social Bookmarking Sites such as Delicious and Stumble Upon followed by the Social Networking mostly used by the internet users such as Facebook, MySpace and LinkedIn. Moreover, Social Sharing such as YouTube, Twitter, Flickr, Urban Spoon as well as Social Tagging sites like Yelp which falls under same category. Lastly, Social Knowledge such as Wikipedia and Yahoo Answers.
2.1.2 Users on Social Media Sites

Dryer (2010) reported that there were around 200 million blogs worldwide, more than 450 million people on the social networking site namely Facebook, 27 million tweets for every 24 hours and 1.2 million viewers on YouTube daily. Whereas Brassel (2010) argued that entrepreneurs must distinguish between their targeted audiences before appealing on different platforms. He also added that entrepreneurs must be able to choose the appropriate tool before launching on social media networks. Whereas Spio (2010) said that internet users are growing showing 90% aged 18-29 as compared to 67% from the age group of 30-49 about video sharing. Through a survey carried out by online competitive intelligence service it can be noted that social media growth continues to skyrocket with 2.5 billion visitors in September 2009 for Twitter (600%), Facebook (210%) and LinkedIn (85%). On the other side, Technorati stands at 12

133 million and within a single 24-hour period 900,000 blog posts are being created. Conversely, YouTube served more than 75 billion video streams to around 375 million unique visitors and online photo sharing site Flickr host more than 3.6 billion user images. Finally, online bookmarking service had more than 5 million users and more than 150 million unique bookmarked URLs. 2.1.3 Area influencing social media

Social Media Increases risk of ID Theft LinkedIn, Google+, Twitter and Facebook users were found to have the highest incidence of fraud, although Javelin emphasized there is no proof of direct causation. It had been summarised that 68% of users shared birthday information among 45% sharing the month, date, year as well with public social media profiles. 18% shared their phone number and 63% shared their high school whereby many companies used personal information to verify identity. Javelin (2011) also found that smartphone owners also experience a higher incidence of fraud with 7% experiencing ID fraud, about one-third higher than the general public. And social media users who check in with GPS-enabled devices reported fraud rates that were about twice the average.

2.1.4

Social Media v/s Traditional Media

According to a report conducted by Universal McCann on the impact of media which reveals that social media is "becoming a more important part of global media consumption for internet users than some traditional media channels". Even there exist cultural differences among different nations; the use of social media is growing worldwide. It can be concluded from the report that 57% of internet users are members of social network and significant increase in number internet users watching video clips online since June 2007. There is also a rapid growth in the consumption of RSS which jumped from 15% to 39%. Furthermore, the report also stated that among the top markets for blogging were China with 70%, Philippines 66% and Mexico with 23% who wrote a blog. Nevertheless Philippines was leading with 83% among the market for social networking followed by Hungary and Poland with 76% for both.

Marketing in Small and Medium Size Businesses 13

Finding new customers is the major challenge for Small business owners. Small businesses typically find themselves strapped for time but in order to create a continual stream of new business, they must work on marketing their business every day. Common marketing techniques for small business include networking, word of mouth, customer referrals, yellow pages directories, television, radio, outdoor (roadside billboards), print, email marketing, and internet. Electronic media like TV can be quite expensive and is normally intended to create awareness of a product or service. Many small business owners find internet marketing more affordable. Google Ad Words and Yahoo! Search Marketing are two popular options of getting small business products or services in front of motivated Web searchers. Successful online small business marketers are also adept at utilizing the most relevant keywords in their site content. Advertising on niche sites can also be effective, but with the long tail of the internet, it can be time intensive to advertise on enough sites to garner an effective reach. Creating a business Web site has become increasingly affordable with many do-it-yourself programs now available for beginners. A Web site can provide significant marketing exposure for small businesses when marketed through the Internet and other channels. Some popular services are WordPress, Joomla and Squarespace. Social media has proven to be very useful in gaining additional exposure for many small businesses. Many small business owners use Facebook and Twitter as a way to reach out to their loyal customers to give them news about specials of the day or special coupons and generate repeat business. The relational nature of social media, along with its immediacy and 24-hour presence lend intimacy to the relationship small businesses can have with their customers, while making it more efficient for them to communicate with greater numbers. Facebook ads are also a very cost-effective way for small businesses to reach a targeted audience with a very specific message. In addition to the social networking sites, blogs have become a highly effective way for small businesses to position themselves as experts on issues that are important to their customers. This can be done with a proprietary blog and/or by using a back link strategy wherein the marketer comments on other blogs and leaves a link to the small business' own Web site. A solid public relations strategy that utilizes speaking engagements, press releases, feature stories, events and sponsorships can also be a very cost-effective way to build a loyal following for a small business.
2.2 Characteristics of Social Media Marketing

Nowadays, marketing approaches are related to social media and this lead to the 4 Cs of marketing. Tons of relevant, education-based, and perhaps user generated content that is 14

filtered, aggregated, and delivered in a context that makes it useful for people who are starving to make connections with people, products, and brands they can build a community around. From the following definition the equation below can be deduced: Content + Context + Connection + Community = Social Media Marketing Social media marketing can be used as a channel for promoting a product for a company or SMEs whereby users can edit, generate and share valuable online information. Awareness (2008) stated that social media marketing includes features like to create a strong relation between brand and customers for a better communicate known as multidirectional dialogs. Secondly, it specified that social media marketing is participatory whereby users must participate so that it becomes realised. Finally, all communications and discussions on social media marketing are done online and the main objective is to make users talk also called as user generated. Social media is best understood as a group of new kinds of online media, which share most or all of the following characteristics: Participation Social media encourages contributions and feedback from everyone who is interested. It blurs the line between media and audience. Openness Most social media services are open to feedback and participation. They encourage voting, comments and the sharing of information. There are rarely any barriers to accessing and making use of content password-protected content is frowned on. Conversation Whereas traditional media is about broadcast (content transmitted or distributed to an audience) social media is better seen as a two-way conversation. Community Social media allows communities to form quickly and communicate effectively. Communities share common interests, such as a love of photography, a political issue or a favorite TV show. 15

Connectedness Most kinds of social media thrive on their connectedness, making use of links to other sites, resources and people.

2.2.1 Social Media Marketing Facts 53% of Twitter users recommend companies and products in their tweets. 74% of B2B companies aggressively using Facebook in social media marketing. 57% of companies have acquired customers through LinkedIn. 75% of small businesses in the U.S. engage in social media marketing. $3.1 billion will be spent on social media marketing in 2014. B2B spending on social media marketing will rise 67% over the next 3 years. 20% of all website visitors to company sites come from social media. 2 out 3 people that follow a brand on Twitter will purchase from that brand. 66% of marketers saw a rise in search engine rankings due to social media marketing.

2.2.2 Future Entrepreneurs

All small business owners should consider the hierarchy as shown in Figure below to make sure that their business succeeds in the future before launching directly into the socialmarketing tactics. Each level will be discussed as follows:

[Source: Social Media for Small Business, Version II] The foundation of the pyramid is blogging which is a doorway to all other social marketing whereby internet users can read, comment and blog. Followed with the use of RSS technology 16

which is a helpful tool for republish as well as create new content. RSS also helps with the aggregate and filter the content around the subject. Thirdly there is the social search which an important element for small business owners to participate and manage reputation of their enterprise. Fourthly, the social bookmarking can act as an open way for new channels to generate extra search traffic. The next level in the hierarchy is the Social Networks such as Facebook or MySpace which can help as a business tool. Finally, on the top of the hierarchy, micro which contributed to the success of business whereby this has become an essential of the social media mix. A related example of such platforms can be Twitter, Thwirl, plurk and FriendFeed since they allow users to connect, engage and doing quick search. 2.2.3 New Social Media Tools Rule In 2007, the comparison between Fortune and Inc. 500 companies which were blogging compared are 8% and 19% respectively. Following this trend of the upcoming next three, in 2010, the figures reveal that half and 23% were blogging for Inc. and Fortune of the 500 companies correspondingly. This new record illustrates clear the reduction of blogging among the Inc. 500 companies. From these statistics given above, it can be deduced that the incorporation of new platforms and tools including Facebook, LinkedIn, Twitter, YouTube, texting, downloadable mobile apps and Foursquare while noting the reduction in the use of blogging, message boards, video blogging, podcasting and MySpace. The Table below shows figure from a survey about the social media tools adopted by the Inc. companies. Social Media Tools Used by the Inc. 500 (% of Respondents) Social Media 2009 (%) 2010 (%) 2011 (%) Facebook 61 71 74 LinkedIn 73 Twitter 52 59 64 YouTube 45 Blog 45 50 37 Online Video 36 33 24 Text 15 Mobile Apps 14 Podcast 12 16 6 MySpace 6 1 [Source: UofMass, Dartmouth Center for Marketing Research, January 2012] Despite the elimination of some effective tools, many respondents argued that they were satisfied with Twitter (86%) and Facebook (82%). There had been a slight change in social networking category towards specific platforms like Twitter, Facebook, MySpace, LinkedIn, and Foursquare. The reduction in the use of wikis can be explained due to a shift from 17

collaboration tool rather than communication or engagement tool. From the recent 2011 survey, it had been observed that YouTube, corporate texting and LinkedIn were among the new adapted as well as the use of discount sites like Groupon and downloadable mobile apps has significantly increased. Successful Social Media Tools Used by the Inc.500 (% of Respondents) Percentage (%) of Respondents 2009 2010 2011 91 93 96 88 86 92 91 87 93 90 90 88 87 82 81 86 84 54 85 82 89 71 80 75 68 36 0

Media Tool Message/bulletin boards Blogging Mobile Apps Online Video LinkedIn Discount sites YouTube Twitter Texting Facebook Podcasting Foursquare MySpace

[Source: UofMass, Dartmouth Center for Marketing Research, January 2012]

2.3 Facebook in Figures for US market The US market, on 13 March 2010, Facebook.com with a percentage of 7.07 was leading the number 1 ranked website over google.com with 7.03%. Facebook is meant to be the most search term and Facebook-related terms account for 14% of the top search clicks. Facebook.com users are highly loyal to the website; 96% of visitors to Facebook.com were returning visitors in January 2012. In January 2012, statistic shows that 9% of all online visitors were on Facebook and spending on average time 20 minutes for occurring of 1 in every 5 page views. Study on the gender group reveals that 57% female remained online while compared to 43% of male online population. Visit share by Age (12 weeks ending 28/01/2012) Age Group Website Visitors 18-24 25-34 35-33 45-54 55+ Online Population 16% 21% 20% 19% 24% 18

Facebook Twitter LinkedIn Google +

18 30 13 29

23 21 19 20 22 19 17 12 13 17 25 32 19 20 17 16 Source: Hitwise, February 2012.

Visit share by Income (12 weeks ending 28/01/2012) Income Range($ X000; Ending in.999) Website Visitors <$30M 30-59 60-99 100-149 >150 Online Population 22% 31% 26% 14% 8% Facebook 23 32 26 12 6 Twitter 24 29 27 12 9 LinkedIn 15 24 27 19 14 Google + 22 30 28 12 7 Source: Hitwise, February 2012.

Moreover, the income group also was recorded as shown from the table above. The figures showed that Facebook had obtained 499,949,430 visitors against YouTubes 223,732,591 visits and Twitters 15,166,795 visits online. Internationally, Facebook.com ranks in the top two websites in every market except China, where Sina Weibo, Baidu Zhidao and Renren are the dominant social networks. Facebook.coms largest footprint is in Canada, capturing almost 12% of all visits in that market. It also recently surpassed Orkut, placing it behind only Google Brazil in market share. Facebook changed to Timeline feature on 29 February 2012 with brand pages on the social network which will allow visual oriented format to highlight entire history as well as show more current updates. With this new implemented feature by Facebook businesses will be able to contact fans directly as well as include ability to pin important posts to top of Timeline for a week and exchange private messages with users. Timeline for brands offers the potential for marketers to better showcase products and services and connect with fans. In January, Facebook released more than 60 new apps for Timeline. The idea is that the new offerings will inspire users to visit company pages and interact with and share their content even more. Overall, this is a positive move by Facebook, and a good opportunity for brands to show off their roots -- something that might actually be of interest to fans, said Grant.

2.4 Too much advertising is Digital suicide

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According to the Digital Advertising Attitudes Report (DAAR) from Upstream and YouGov illustrates that 20% of American and 27% of British consumers online would stop using a product or service, such as the social networking site, if they are subjected to too much advertising. 66% of the American and British (Brits) online consumers had already claimed that they feel subjected to excessive digital advertising and promotions. The DAAR in 2012, says that 20% of US consumers would stop using a companys products or services entirely as a result of receiving too many advertising messages whereas only 28% would be less likely to respond positively to that company in the future. Furthermore, 14% of US 18-24 year old would complain about that company to their friend on Twitter or Facebook. Responses to Digital Advertising Overload (% of Respondents; February 2012) % of Respondents Response US UK Would unsubscribe from a brands promotions if they were too frequent 66% 66% Would respond negatively to future messages from that brand 28 37 Would stop using brands product and service 20 27 Would protest on social media sites 11 10 Source: Upstream/YouGov, February 2012 69% are happy to receive marketing and advertising on mobile, PC, tablet or MP3 player. However, to make US iser respond positively to marketing, advertising must be tailored to customers personal interests (26%), contextually relevant to what they are doing (21%) and specific to their location (19%). Generally, 55% of US consumers do not wish to be targeted more than once a month. 33% of 18-24 year olds are most amenable to being targeted as frequently as once a week or more.

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