The importance of Social Media!

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Obama making an announcement

Facebook attracts more traffic than any other website in the world. It positions itself as a service provider for you. But have you ever wondered, why it doesn’t charge you for its highly advanced community platform? Because, if you are not paying for it then you are not the customer. You are the owner or you are the ‘product’ being sold. Let’s find out what you really are in this statistically enriched article.

The online world is alive with activities from Facebook, Twitter, blogs and other forums, yet few Facebook marketingcompanies and general marketers ever ask why buyers use these forms. The first step in meeting customer needs is to understand what motivates people and why marketers should take the time to understand what is going on. Why do people tweet or join online discussions? Why do people post and who are these people?  How can answering questions such as those help marketers choose how to arrange user-generated content?

User Generated Content Pages

User generated content (UGC) which is also called consumer generated media (CG) includes comments in forums, status updates on social networking sites, blogs and contributions to wiki (Zuopong, 2011). 184 million users have started a blog, but it is not clear if all blogs are actively kept up, according to Universal McCann (Technorati website).

Neilsen Online claimed that by the end of 2008, social networking sites surpassed email in terms of worldwide reach. A massive 66.8 percent of internet users accessed social networking sites such as Myspace or Facebook (Neilsen online website). Exploring why people feel the need to post draws on deep psychological motivators.

A sign to these motivators is most UGC are people writing about themselves (
Frog and Tower
), for example The Pew Internet and American Life Project looked at bloggers from the USA in 2006 and found that 76 percent blog about ‘personal experiences and share them with others’ and 37 percent report the key topic of their blog was ‘my life and experiences’. Looking at the winners for the Bloggies award in 2009, the main theme remains ‘me’ (Pew website).
User generated content
Why are people so addicted to creating content online?

Why are people so addicted to writing about themselves online? The three universal themes seem to be motivation – identity, social and knowledge management.

Anybody using UCG is part of the most well informed media population yet and they also understand completely the concept of image management.

People put fingers to keyboards in cause of UGC because it ‘boosts their self esteem, makes them feel needed and important’ (Zuopong, 2011).  In a recent research carried out by Daugherty, Eastin and Bright, they called this the ‘ego-defensive’ driver of UGC (Maastricht University website). One of the latest UGC tools is an applet which displays the current track you are listening to through iTunes as your status update. This would seem very strange to those of the early internet, but not in today’s society. Many of us have got used to the idea that how we look,
dress
and what we correlate ourselves with is focused on how we want others to think
about us
.

It can be argued that UGC meets people’s need for temporal structuring along with incorporating past and present experiences. As this deep personal need is something humans have always had and UGC fit’s the task accordingly, this could explain the rapid uptake. The appeal of connectedness is a powerful motivator when it comes to community, seemingly ideal to make use of. In a study by McKinsey, it was found that contributing factors of UGC were ‘a desire for fame and feeling of identification within a community’ (Bughin, 2007).

Social maintenance has now become extremely easy, even if that means keeping in contact with hundreds of people thanks to UGC. The time and effort in reaching hundreds or maybe thousands of readers is slight compared to costs of traditional forms of publishing, bearing in mind the possible return of the connection-hungry poster or blogger. The insignificant cost of gaining another member of the audience is basically nothing.

The blogosphere is pretty unique when it comes to meeting the deep human needs and in doing so effortlessly, this seems to be why UGC has taken off rapidly. Thinking about this, which groups are more likely to blog and contribute to UGC? There has not been much research in this, but it is clear that there are no certain types or age groups who are more likely than others. This also applies to all income levels and some basic psychographic groups.

Anthony Baker of Nucleus Digital Strategy says that people who take part in UGC involve both shy and outgoing people.
He
mentions that while doing his degree in the early ‘90’s, his lecturer thought that the internet would isolate shy people by letting them escape from the need to socialise, but today, introverted people have not been more connected or social than they are now (nucleusdigitalstrategy website).

A great deal of people still reject UGC on political or philosophical grounds, stating reasons such as lack of editorial quality control, time consuming or privacy issues. Even devoted bloggers will admit that the amount of UGC material is astonishing, especially when it is combined with so much repetition and stupidity.

There are still opportunities in trying to convert cynical people to the UGC, although it is unlikely to be done so easily due to psychological barriers. If  research is correct, UGC plays a dual role in both enhancing and cementing people in the cultural level.

Collectivists have the upper hand. In research by Jonathan Sinton of the Research International, he observed Marketingmag.com.au and found that the more ‘collectivist’ a country is, they are more than likely to be a strong blogging nation.

Australia is far more individualist than socialist China, so it is of no surprise that blogging is excessively popular among Chinese users of the internet. It is reported by McCann that China has 42 million bloggers, which is more than the USA and western Europe put together (Bughin, 2007). This, inspite of china having a lower head count per internet penetration than other locations.

Issues remaining for marketers are how and if UGC will fit in with their business. Founder of Lcubed (online marketing and tools firm), Luke Farley says that numerous clients are nervous about connecting with UGC as many are still cautious of its ‘young and free’ nature.

In making an allowance of these facts, companies can decide if there is a good fit between client motives and the space they are in. Meaning if you are not able to help customers with one of the main drives for UGC (identity, knowledge or social management) then it is doubtful UGC will work for you. If none of the factors mentioned fit with your business model then you should consider if you are taking the right path. Consider carefully which motivator you are looking to use and whether you will use and existing platform or build a new one.

If you are steadfast in following a UGC path then you should consider a number of routes.

Case Study: Levi’s Jeans: Branding for the youth market – Jobber, 2007

Levi’s jeans were considered cool but the complacency in the marketing effort declined the sales of Levi’s and it lost quite a bit of its market share. It realised that the target segment of this
brand
is going to shrink in the coming years and it will have to entice the ones it has lost.

Levi’s, with an attempt to retain its cool again, made many few creative efforts. Viz. The Cinch store in London, the viral campaigns, launching new products and pavement marketing and email marketing to name few; However, the case doesn’t speak anything about UGC pages effort made by Levi’s.

What could have happened?

Levi’s was making a lot of effort in spreading the work. As the case suggests, it ran viral marketing campaigns. However, it left the mode of communicating the word to the consumers. If it would have provided a platform for the consumers to generate content, then it would have acted like a catalyst. Levi’s do have a facebook community but the community is only 4,181,630 members strong(
http://www.facebook.com/Levis?sk=info
). This is one of the things which Levi’s should not have missed on.

To cite an example, In 2003, Cadbury had discontinued its product called Wispa, due to a continued decline in its sales, something similar to what happened with Levi’s and for the same reasons. They later decided that the consumers want it back and when they decided to re-launch it. They only provided them with an online platform to interact with each other, which is a form of UGC pages. This was done through the Wispa website which provided the users to participate in an online forums and throuch communities on the social networking websites. The facebook page os Wispa is more than 1.6 million users strong (
http://www.facebook.com/wispa
).  The content generated by users initiated the movement and kept the momentum of the campaign to get Wispa back. It looked like it wasn’t the company who launched the product but it was the consumers who made the company launch Wispa. From the first week of Wispa’s permanent relaunch in 2008 it was the No. 1 selling chocolate bar in the UK, which is the same chocolate bar which was discontinued due to the faded sales figures (Faruhar et. al, 2010).

A movement like this is what Levi’s needed when its competitors were eating into its market share. Though Levi’s was focussing on relationship marketing and it did well, however the use of UCG would have helped Levi’s by leaving little to worry about maintaining cool, because the consumers themselves would have worked upon it, to spread the cool factor.

Case Study: Intel Inside out – Jobber, 2007

Intel was not performing well and was facing competiton with other upcoming
brands
. AMD was doing well in the server market and now it had started to attract the personal computer manufactures too. Companies like Dell, Google and HP started moving to AMD and Intel had to lose its market share. Intel now realised the importance of new R&D and new product development and product innovation and also it tried to explore new markets.

Why UGC: Intel had to face this problem because AMD realised what technology will be preferred by the consumers and it developed that technology before Intel did. Intel might have been in a better position if they would have developed faster and less heat-generating processors like AMD did.

UGC pages would have served this purpose. If Intel would have stayed up to date with the changes happening in the communication types then, then it might have realised that consumers have started using internet at a fast pace. Internet had a great market penetration speed. Users started participating in all kind of activities on the internet. Facebook was launched in 2004 and within 3 years, it was the biggest social group, where its members only communicated and Facebook served no other purpose (
http://www.facebook.com/facebook?sk=info
).

With this, Intel could have stayed updated with the market behavious and what the computer users, atleast the early adapters and the influencers, expects. It could have then used its resources to design the products accordingly.

By now, it was evident that the new era of more tech-savvy consumers appreciate innovation and they are less hesitant to change. If Intel doesn’t address the need then some-one else will, which AMD did.

Intel was spending a lot of money on marketing, but what it really missed out, again,was to tailor its campaign and more importantly, the products, as per its consumers needs. The UGC would have developed a first hand report for Intel to address the above mentioned issues

To support the assumption made, the best example will be Codechef, an initiative by Direct-I, an Indian software giant . Codechef allows the programmers from all over the world to develop software code and upload it on the website
www.codechef.com
. This webside develops UGC pages with different codes generating the same outcome, which is asked to address by the parent company Direct-i. The other programmers rates the codes and even write recommendations. There is a cash incentive offered to the programmers to motivate and encourage the participation (codechef website).

This helps the company to have the best code and also to find out what language of programming is more like by the programmers and what are the ways to better the code, which is the core business of Direct-i. The company here learn from the users generated content and this is implemented in the development of its forthcoming softwares. This adaped method is more likely to satisfy the consumers, because somewhere in the development, they have been involved too.

Intel has clearly shown the traits of transactional marketing in this case as it was busy developing products as per what it thought was needed for the consumers, without relating with the needs of the existing consumers, and hence the clients.

Conculsion:

It can be concluded that UCG pages are not only an inexpensive way of reaching and getting involved with customers, but also an efficient way of marketing as it makes the customers spread the word to its peer group by writing content, themselves.

It is expected to relate better with other consumers, as they are the words of the consumers, by the consumers, for the consumers.

References

Bughin, J., 2007
http://www.cs.ucl.ac.uk/staff/d.quercia/others/ugc.pdf
– 4th May 2011

Codechef website:
http://www.codechef.com/aboutus
– 4th May 2011

Farquhar,R., Barrie, R. and Goodwin, T. (2010). Wispa – For the love of

Wispa: a social media-driven success story. Institute of Practitioners in

Advertising: Gold, The Broadbent Prize for Best Dedication to Effectiveness, IPA Effectiveness Awards 2010. 1 (1).

http://www.pewinternet.org/Reports/2006/Home-Broadband-Adoption-2006.aspx
– 4th May 2011

Jobber, D (2007). Principle and practice of marketing . 5th ed. London: McGraw-Hill.

Maastricht University website
http://arno.unimaas.nl/show.cgi?fid=17592
– 4th May 2011

Neilsen online website:
http://www.nielsen-online.com/resources.jsp?section=pr_netv
– 4th May 2011

nucleusdigitalstrategy  website:
http://www.nucleusdigitalstrategy.com/news/the-psychology-of-user-generated-content/
– 4th May 2011

Technorati website:
http://technorati.com/blogging/article/state-of-the-blogosphere-introduction/
, accessed on 4th May 2011

Zuopeng, Z. (2011). Customer knowledge management and the strategies of social software. Business Process Management Journal. 17 (1), 82-106.

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I'm an eCommerce Project Director at an agency in London and a consultant for a number of eCommerce start-ups. I founded Think etc 9 years ago which now lets me share my research and experience with all the interesting brands, people, places and projects that I have been privileged to work with. My work on crowdsourcing was published by Oxford as part of a journal article and I have been obsessing over eCommerce and Magento over the past several years.

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