Principals of Facebook
Principles of Facebook: Social networking service (SNS) is one of the main products that were derived from Information Communication Technologies (ICT) revolution. Facebook is a classified under SNS. Figure 1 shows the timeline of launch dates of major SNSs on the internet. Although Facebook is not new, it is strategically differentiated from its competitor through its platform and functions. Essentially, SNS is defined as an online service that allows individuals to construct a profile and build up their own network within their bounded system by linking up with users they share connections with. They are then able to view the lists of connections and the networks of other party’s network within their bounded system, therefore expanding their network possibilities. (Boyd & Ellison 2008) Critically, the principles of SNS are building and replicating the traditional social network, social relation and interconnectedness that human share with each other onto online platforms that amplify the potential of expanding networks.
Functions of Facebook: Facebook envisioned itself as a vast, public and multifaceted social network that function as a ‘social utility that helps people communicate more efficiently with their friends, family and co-worker’ and ‘facilitates the sharing of information through the social graph, mapping of real-world social connections’. (Facebook 2011) Facebook function much like an online social media portal (or hub) that allows users to share information, content and knowledge. Its platform provides immense number of uses to fulfil the objectives of different types of users. Statistics shows that there are over 900 million objects that people interact with (pages, groups, events and community pages) which are embedded in the functions of Facebook. (Facebook 2011) All applications are potential for creating and delivering messages that will assist marketing effort. In a nutshell, the critical applications are: Real-time updates of news feeds, wall post, groups, events, discussion, notes, pictures, videos, sharing of links to hypertext (Threatt 2009) which are vital for marketing efforts.
Facebook creates a medium that allows users to expand social network and fulfil communications objectives. As research shown, users are controlling the effects of their own networks. It is not a traditional method of company controlling the users; but it is the inverse relationship. (Cited from Holzner by Threatt 2009) Therefore users are required to input information, knowledge, content sharing etc to make Facebook work.
Alignment with Marketing
The core principle and the functions of Facebook discussed earlier will be used to align Facebook with marketing theories to provide critical insights to the effectiveness of Facebook as a marketing tool. The sequence is as follows: Marketing techniques/uses will be described, followed by augmenting it with marketing theories. The marketing techniques described are word-of-mouse (WOM), segmentation & brand community, ‘pull’ marketing, IMC and targeted advertising placement. The marketing theories that underpin each technique are Consumer Decision Making model (CDM), Defined Goals for Measured Advertising Results model (DAGMAR), Service Dominant Logic (SDL) and Hierarchy-of-Effects respectively.
The first marketing technique in Facebook is WOM marketing. The theories used will be CDM and DAGMAR. The Word-of-Mouse (WOM) illustrates how ‘word of mouth’ is translated onto the web with high speed information transmission with just a click of a mouse. (Threatt 2009) The use of viral marketing is the main strength of social networks as user is connected to each other to increase trustworthiness. (Gill-Or 2010) Viral growth occurs when a message is spread exponentially which has direct impact for a brand/company. Outbound Viral marketing can be tracked as well in Facebook by algorithm. Researches deduced that presence of many users influences the memory of people to social-related information (Gill-Or 2010) and third-person effect theory, which suggest that individuals tend to expect SNS to have a greater effect on others than on themselves, helps to conduct viral marketing in Facebook (Zhang & Daghtery 2009) where users generate/share content to create more effects in terms of viral marketing.
Consumer Decision making (CDM) model is 5 steps consumers take when deciding to buy a product. The 5 steps are: Problem recognition, information search, Evaluation of Alternatives, purchase, post purchase shown in Figure 2. Facebook is not only changing what we buy, but also changing the psychology of how we buy through the CDM. (Montoya 2011) It can be seen from a research on travelling package that when it comes to ‘search for information’ stage, 49% used website and 36% relied on consumer generated site like Facebook where users share content. Both websites and consumer-generated content are equally important in that stage. (Bronner & De Hoog 2008) Users then evaluate the alternatives on hand and move to ‘purchase’ stage. This is proven by a research that indicated WOM referrals have strong impact on new customer acquisition, with long term elasticity of sign up in the ‘purchase’ stage (Trusov et, al 2009) They will then have post-purchase evaluation, where Facebook again plays a role when users generate content about the product/services on the Facebook platform. Marketers should monitor the information on social network due to the viral effect. (Litvin et al 2008)
DAGMAR model was proposed by Russel H. Colley in 1961. It is a model that offered a sequence of steps which consumers take when looking at information or advertisement provided by marketers. They are: Awareness, Comprehension, Conviction, Action (ACCA). DAGMAR is a descendant of AIDA model and works like the Hierarchy of Effects model. The social media can be an avenue to progress the users up the steps to act. Users can be in different steps of the DAGMAR model. Therefore Facebook is an all-encompassing platform where marketers can accelerate learning, or assist users to move through the steps to take action through viral marketing in Facebook.
The second use of Facebook as a marketing tool is brand community and segmentation. Brand communities attracts new user to an organization, reinforce loyalty and helps marketer better understand consumers and potential uses of the product through dyadic interactions. (Threatt 2009) It allows for targeted communications which users can choose to engage with on their own term. In a way, Facebook allows for a ‘pull marketing’ approach than a ‘push’ marketing approach, which assist in user segmentation. (Montoya 2011) Consumers can choose the information they need. Demographic information can be collected by social networks, and it segments users with homogenous characteristics together, to allow marketers to target their adverts to a particular audience. (Quirke 2011) Facebook provide ‘an intricate web of audiences to filter through before delivering effective messages’. (Threatt 2009) As Kotler suggested, the 5 critical factors for segmentation are: Measurable, Relevant, Accessible, Distinguishable and Feasible. Facebook, as a ‘pull’ marketing model, is readily accessible and feasible. Marketers can then provide relevant and distinguishable message to the precise segments. Facebook, like any internet tool, has a lot of data and is measurable.
Service Dominant Logic (SDL), as proposed by Vargo and Lusch (2004), is a relatively new marketing theory where the emphasis is on the role of consumers changing from mere receivers of goods/service to a co-creator of value (Marandi et. al 2010) In this aspect, SNS provides a good platform for value co-creation. SDL emphasise on operant resources from the users as part of value creation. Users are embedded in the whole process of creating value in goods/services. Facebook are known as value constellations (Vargo & Lusch 2006). When users are segmented based on homogeneous needs through ‘pull’ marketing, they are ready to communicate with marketers. They have, in a sense, become a new source of competence for the organization. (Marandi et. al 2010)
The third use of Facebook as a marketing tool is targeted online advertising. Facebook made Microsoft its exclusive partner to serve banner advertising. (Facebook 2011) They also serve up advertisements on the sidebars, using the personal data of a profile page to target the type of advertisement to be served, which is similar to Google advertising.
Hierarchy of Effects model as proposed by Lavidge and Steiner (1961) works like DAGMAR model where consumer moves through a series of step from product awareness to actual purchase. This model can act as a conceptual tool to predict consumer behaviour (Chan et, al 2004) Facebook is perhaps a greater online advertising tools than Google Adwords because of the fact that the targeted advertisement towards Facebook users are more personal, rather than just simply a keywords that a person may randomly need for a short period of time. A research shows that when an individual’s product involvement increases, the level of attention to the banner advertisement also rises. (Chan et, al 2004)
Conclusion
Facebook brought immense opportunities for organizations in terms of marketing. As described in the alignment with marketing, Facebook affects how users make decisions about buying products (CDM), how they follow the sequence of steps when looking at information or advertisement provided by marketers (DAGMAR), How markets can segment the users and even group them into communities (Segmentation) to come together to co-create value for both organizations and users (SDL) and make users a competence for an organization in the process. Marketers can also use targeted advertising using the information provided by users and algorithms to target advertisements towards users (IMC & Hierarchy-of-effects model). This paper is just the tip of the iceberg as many theories and applications that has been discussed can be further elaborated to factor in other marketing theories. I strongly recommend organizations to use Facebook.
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