The Opportunities and Challenges of Social Networking

The Opportunities and Challenges of Social Networking

According to the Nielsen report, The Asian Mobile Consumer Decoded, ownership of smartphones in the Asia-Pacific region is increasing. With Singapore as one of the countries with the highest smartphone penetration in Asia-Pacific, this presents organisations with huge opportunities to engage consumers by leveraging on social networks. As consumer use of these smartphone devices will continue to evolve and expand, it is paramount for companies to move forward with the times and develop sophisticated marketing tools and strategies to accommodate to these changing consumer behaviours.

With the advent of social networking, the internet has transformed into a tool for connecting people and has led to an evolution in human interaction (A. Weaver & B. Morrisson, 2008). In recent years, top social media networks such as Facebook, Twitter, Instagram, YouTube and Tumblr have generated the most number of users and has served as hubs for user-generated content such as blog postings, photos and videos, online statuses, article submissions and social interactions. With up to 19.6 hours a month on one social media platform alone, it comes as no surprise that 46.2% of Singaporeans would research on social media for product reviews before making a decision to purchase a product. But why social media? Compared to past years, the world has seen an amazing increase in internet speed and has become easily accessible to anyone, making it convenient to access information about almost anything at all. The basic trend associated with the development of these new media is that it highlights the democratization of the production and dissemination of news on organisations. Consumers enjoy having more than one source to receive information from and the many social networking platforms the internet has to offer comes as an advantage to anyone who has questions about a product, an organisation or even an individual person.

In the past, when we think about media platforms that companies often engage to reach out to their consumers, we think about traditional PR 1.0 tools such as newspapers, radio broadcasts, television and magazines. However, the media landscape has changed. Consumers these days would no longer take a trip to their nearby newspaper stands to buy a newspaper but would prefer to sit at the comfort of their homes and read the headlines off the internet. In recent years, revenues for newspapers has declined dramatically, with 45,000 million dollars of revenue in 2005 down to 20,000 million dollars in 2012 (The Newspaper Industry Overall, 2013). Print advertising is also now just 41% of what it was in 2006 while mobile advertising revenue is growing rapidly. Rather than using the classic communication channels companies often use in the past, they are now seen moving towards web 2.0 tools like online social media platforms, blogs, emails, forums, online newsrooms, or any user-generated content platforms for advertising and customer engagements to meet these modern trend expectations and consumer behaviours. Social networking sites are now seen to be developing features that accommodate and cater to companies who wish to use them.

With the rise of social media in recent years, these new opportunities will pose advantages and disadvantages for both the organisation and the consumer when using them as strategies for external communications. Nowadays, brands often engage in social networking tools such as Facebook, Twitter and Instagram to promote their products or services, as well as announcements or promotions the company might be having. These new media tools also help to promote and support their corporate identity.

Adopting these social networking strategies come with it many advantages for the company. Firstly, there is increased awareness of the organisation. With 3.22 million Facebook users in Singapore and billions of users all over the world, the company will have a large pool of audience to target and promote their Facebook profile to. Creating a Facebook corporate profile is free and the interface is user-friendly. Companies are free to update their statuses, upload photos of their products or services, post announcements and product launches, as well as use the platform to interact and answer customer enquiries. McDonald’s is an example of a brand that engages Facebook to reach out to its customers. With 335,548 likes on Facebook, McDonald’s Singapore’s Facebook profile is a platform for its consumers to visit should they need to get information about their food and services. McDonald’s also updates its page about new product launches such as the recent prosperity burger, food advertisements, promotions and announcements. Many of its consumers have also taken to their Facebook page to feedback on their food and services with compliments as well as complaints. Through their frequent and effective use of this social network, McDonald’s is able to increase their brand awareness and also enable their customers to be updated with their services.

Secondly, social networking allows companies the ability to identify new product or service opportunities. This is possible as social media platforms can encourage customers to suggest and vote on new product or service ideas. With the increase of smartphone ownership and the accessibility of the internet, organisations have taken the advantage of the convenience of social media platforms to engage their customers in their business delivery. An organisation that best demonstrates this would be 987fm, a popular radio station in Singapore that frequently uses Facebook to encourage their listeners to submit song requests and dedications on their Facebook page. In the past, 987fm wholly relied on phone calls and text messages from their listeners to receive their song requests. Often times, a listener would have to depend on luck to successfully get through their hotline or have their dedication text messages read. However, with the prominent popularity of Facebook in recent years, listeners can now take to 987fm’s Facebook page to submit song requests and dedications conveniently, during their own time, without the need to wait by the phone, and without having to pay for the SMS and call charges. Therefore, the rise of social media networks has definitely presented the radio station and its consumers with efficient service opportunities.

Another advantage that social networking has presented companies is the ability to better analyse and understand their customer demographics as well as gain insights about the company’s target markets. Social media platforms such as Twitter, Facebook, LinkedIn, blogs, YouTube, etc. allow their users, in their own discretion, to display their personal information such as their names, age, race, where they live, and even where they work or study at. When an individual user starts to follow or like a certain organisation’s social media profile, it gives the company an advantage to gain an insight and overview of their customer demographics. Once the organisation has gained a better understanding of their target customers, they may attempt to customise their business delivery and strategies and develop targeted marketing activities to accommodate and suit their target audiences. This will therefore help to improve the firm’s business and thus increase their competitive advantage in the market.

Social media networking has also given companies the ability to monitor conversations about the organisation and understand their customers’ perceptions of their brand. Many social media platforms like Twitter, Instagram and Facebook have a feature called “hashtags” and “mentions” which allow users to tag a company or an individual in a post which would be relevant to them. Facebook also has a feature that shows the number of people “talking” about their brand on their page. When a consumer talks about a product or a service online, they may “hashtag” the company’s brand name in their post or may directly post a comment on the company’s page. Sometimes these posts could be featured in the company’s profile page or even on a public featured page of the social media platform that is visible to a large number of users. This allows organisations to identify positive and negative comments about their brand and take steps to rectify and eliminate bottlenecks in their business delivery to decrease the number of bad comments. This way, it also helps the organisation to improve their customer service and support and increase the number of positive comments and thus improve their reputation.

These social media platforms often have an “About Me” column where these organisations are allowed to display their corporate story and feature their company website. With the large number of people on social media platforms like Facebook and Twitter, it gives companies the advantage to reach out and promote their company website to a large number of potential customers. Anticipating an increase in traffic to their company website is a benefit for many companies, especially for online shopping websites as increased traffic will definitely help boost their sales.

Another advantage that social networks present for companies is improved information sharing and speedier access to external knowledge for their stakeholders. PR 2.0 tools like online newsrooms have the potential advantage of improving media relations. In order to connect different platforms and media content, corporate communications professionals in organisations have developed online newsrooms as an affiliated part of a company’s website. These online newsrooms are a one-stop page for media relations that comprises company reports, speeches, press releases, as well as dynamic content such as videos, news feeds, widgets, podcasts and searchable archives of content. These online newsrooms help to provide media journalists with complete information when they need it and it also helps drive traffic to the company’s website. This helps improve relationships with external stakeholders. An example of a company that has developed a comprehensive online newsroom is the Body Shop.

Lastly, by adopting social media networking into their marketing strategies, companies are able to reduce their overall marketing costs. Many, if not all of the top social media networking platforms are free to use and free to create corporate company profiles. This is no wonder why many top organisations take to social media to advertise and promote a new product launch instead of employing traditional television or radio advertising which are expensive. Because of its low costs, companies like Samsung, Apple, McDonald’s and KFC are more often seen to be using Twitter, Facebook and their company websites to feature a new product instead of advertising on television, like they so often did in the past.. This is definitely a benefit for firms as they get to save on expenses and use the funds on areas of their business that needs more funding.

However, while social networking proves to be a powerful marketing strategy, it is not entirely risk-free. Employing social networking as an external communications tool has its barriers and challenges for companies that adopt them. The following paragraphs will explain how these platforms serve as a disadvantage to firms.

Social media is free for anyone to use, anyone can create a Facebook, Twitter or YouTube account. Therefore, any followers of a company’s corporate profile are free to post and comment on their page. Because of the freedom of speech present in these platforms, companies are exposed to negative comments which lead to negative publicity. What I can advice companies to do should the situation arise is to develop a quick response to these negative comments. Because of the high speed of which social newsfeeds deliver, the negative comment might still leave an impression on the perceptions of other customers about the brand. However, by responding quickly to the comment, damage to the company reputation could be minimised.

Another disadvantage that social networking holds for organisations is the risk of hackers attacking their company profile or website page. An attacker can take over a company’s page and share false information that can quickly go viral. Even large, respected businesses have fallen victim to hackers. This can be seen from the recent Singapore cyber-attacks in 2013 where an activist hacker group, the Anonymous, hacked 19 Singapore government websites, the Straits Times website and the Ang Mo Kio town council website. A member of the hacking group even attacked a blog linked to the Straits Times website claiming that a journalist had published misleading posts about them. Therefore, I advice companies to take major security precautions when creating passwords and sharing password information with its employees.

Using social media as a marketing tool also exposes the company to legal risks associated with false advertising or the potential leaking of confidential information to the networks. In many countries, there are social media policies that prohibit disparaging or inappropriate posts. In the US, they are considered unlawful under the NLRA (National Labour Relations Act). However in 2011, a court in Australia fined a company for comments about its products on its Facebook page, which was ruled to be misleading. It turned out that the comments were posted by outside parties and not by staff of the company. Even so, the company didn’t remove or refute them and was charged guilty of misleading consumers. Therefore it is adviced that organisations allocate the task of monitoring social media profiles to a person suited and capable for the job.

Another potential downside to social media is that companies might not have the time, nor staff to regulate and monitor their social media profiles. Many small organisations do not use social media as a marketing tool as is can be rather time consuming. Monitoring a corporate page effectively would require a minimum of 6-8 hours a week. This timing would include posting updates frequently, updating the company profile and responding to customers comments and inquiries. This takes up a lot of time and if an organisation does not uphold an active profile, leaving large time gaps in between posts and not replying to customers, consumers would feel frustrated, which would not speak well of a company’s image. Therefore, I would recommend companies who adopt social media as a marketing technique to monitor their networks at least once a day.

Social media also has the risk of ruining a company’s reputation if they inadvertently publish posts that might offend consumers or other companies. News travels quickly since the evolution of the internet, especially on social media networks that showcases a newly published post at the top of every user’s timeline. Even though there is an option to quickly delete an offensive post, it does not disappear as quickly on other users’ newsfeeds. These posts could quickly be circulated and discussed around the internet, causing social media backlash and thus potentially tarnish an organisation’s image. An example of a company that was a victim of social media backlash due to inadvertent posts on Twitter is Tesco. In January last year, Tesco was found guilty of selling horsemeat in their beef burgers. However, they had scheduled an automatic tweet two days before the scandal broke, which stated, “It’s sleepy time so we’re off to hit the hay!” When the tweet got published during the scandal, consumers took to twitter to criticise Tesco of making light of the situation and condemned the pun for its bad timing and taste. It is my opinion that companies should have more than one person in charge of their social media profiles so that they can proof-read and double check posts before publishing them.

Companies will also find that adopting PR 2.0 tools could have the potential of annoying customers with their frequent social media posts, advertisements and e-newsletters. With the rise of new media, companies have started to use tools such as social media and emails to reach out to their customers. This is often because of its convenience and companies will find that adopting these strategies are cheaper than printing out traditional newsletters and flyers. A lot of consumers might find it annoying to see many advertisements appear on a webpage as it might destruct their use of the website. Frequent posts appearing on a social media platform as well as frequent emails will often find themselves getting removed from a timeline or sent to the trash bin. Companies should be adviced to have an option for a consumer to be unsubscribed from their mailing lists.

Lastly, companies with social media profiles will often find that they will easily attract existing and loyal customers who are already currently using their brands. Much more effort will be required to attract new customers to follow or like their social media pages. Of course, having existing patrons as followers is excellent to rouse them into making repeated purchases. However, it is difficult to persuade new customers to follow a company’s page and more often than not, this will require the organisation to employ various other marketing techniques in order to gain stronger brand awareness. In order to reach out to new customers, organisations can be adviced to attempt to cultivate word-of-mouth behavior for current patrons to influence new customers to try their services and products, or encourage the use of “hashtags” through contests and promotions in order to gain awareness of their brand.

With all these opportunities and challenges that social media presents for companies, it is also vital to know what social media channel best suits the organisation’s purpose and style. This is because social media platforms like Facebook, Twitter, Instagram and YouTube have different formats of which the published posts are delivered. To see which social media platform best suits the company, they may apply Berlo’s SMCR Model of Communication and its channel compatibility checks. The model highlights the Sender’s aims and objectives, its Message attributes, Channel attributes and the Receiver’s characteristic. This helps organisations establish whether their chosen social media channel meets the company’s message aims, is creatively enhanced and is compatible with the receivers – their target audience. However, it is my opinion that the model lacks in distinguishing whether the channel is able to meet the company’s ability to adopt it. Companies might not have the sufficient funds, time, and skills to operate a certain channel of communication, therefore, it is important for companies to analyse whether they are capable of employing a certain communication channel before adopting it.

In conclusion, it is also my opinion that the advantages of employing social media as a marketing strategy outweighs its disadvantages. After all, moving towards new media and away from traditional media helps companies to save on precious resources like paper and energy and therefore helps organisations to be more environmentally conscious. This is in turn will definitely improve a company’s reputation and brand awareness, thus giving them a higher competitive advantage in the market.
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References
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References: Assessing The Benefits of Social Networks for Organisations. 2013. JRC Technical Reports, pp. 10-12. BBC News. 2013.  'Anonymous ' hack Singapore newspaper. [online] Availableat:http://www.bbc.co.uk/news/technology-24768053 [Accessed: 4 Feb 2014]. Bullas, J. 2011. 12 Major Business Benefits Of The Social Media Revolution - Jeffbullas 's Blog. [online] Available at: http://www.jeffbullas.com/2011/02/14/12-major-benefits-of-the-social-media-revolution/[Accessed: 3 Feb 2014]. Chrisnorton.biz. 2011. The Seven Deadly Disadvantages of Social Media. [online] Available at:http://chrisnorton.biz/social-media/the-seven-deadly-disadvantages-of-social-media/ [Accessed: 4 Feb 2014]. Mitchell, A., Jurkowitz, M. and Guskin, E. 2013. The Newspaper Industry Overall. [online] Available at:http://www.journalism.org/2013/08/07/the-newspaper-industry-overall/ [Accessed: 1 Feb 2014]. Nielsen.com. 2013. The Asian Mobile Consumer Decoded. [online] Available at:http://www.nielsen.com/us/en/newswire/2013/the-asian-mobile-consumer-decoded0.html [Accessed: 1 Feb 2014]. Stateofthemedia.org. 2013. Newspapers: Stabilizing, but Still Threatened | State of the Media. [online] Available at: http://stateofthemedia.org/2013/newspapers-stabilizing-but-still-threatened/ [Accessed: 1 Feb 2014]. Tan, J. and Tan, J. 2013. Police investigating Ang Mo Kio Town Council website hacking. [online] Available at: http://sg.news.yahoo.com/ang-mo-kio-town-council-website-hacked-102124881.html[Accessed: 4 Feb 2014]. Yahoo News Singapore. 2013. 19 Singapore government websites taken down simultaneously for “planned maintenance”. [online] Available at: http://sg.news.yahoo.com/16-singapore-government-websites-taken-085939732.html [Accessed: 4 Feb 2014].