Introduction
Abstract
Without question,
we currently stand on the advent of a new type of marketing. It works off of
the permission based marketing that was coined in 1999 by Seth Godin. (Godin
1999) However, the technology that
has come into usage today is at a minimum, remarkable. This is said with a
caveat however, and that caveat will be that the first large company (i.e.
Oracle, Microsoft, Google, and Yahoo!) and others who have a heavy interest in
data mining will eventually take a good hard look at taking over the industry
from its current state of the wild, Wild West, to that of a well-organized
machine.
This research
intends on analyzing several facets of a business new to social media
marketing. First, utilizing Google analytics, we will examine the traffic,
“likes”, “followers” unique visitors to the web site or web store that we
design, Facebook, Twitter, LinkeIn, Pinterest, Foursquare, MySpace as well as
other smaller social media platforms. We will then analyze the actual amount of
foot traffic that comes into the physical store, the amount of new referrals to
the store and the amount of increased revenue that can be immediately connected
to the campaign.
This paper will then research
permission marketing email campaigns through companies such as Constant Contact
with coupons, events and rewards similar to what Groupon advertises. The
research will cover in-depth the results of the permission based marketing
campaign.
By adding an online scheduling
application to a Facebook page, a business can accept reservations for
appointments, at a certain time and with a certain service provider within the
business. They then can only reserve that time by placing a major credit card
into the site, secured by PayPal. The amount of appointments that are then kept
will be compared to the amount of appointments not kept prior to this campaign.
There will be a
total of over 100 different analytical observations of various aspects of the
success, or failure of the social media marketing campaign. Currently, actual
viewers of TV conducted by companies such as the Neilson Rating utilize an
extremely cross section of the population to make a decision for the executives
at the media companies as to who pays attention to what. Companies such as
Google Analytical, Hootsuite, Onlywire and several others can analyze exact
measurements of page views, unique visitors, time spent on various pages,
postings, tweets, re-tweets, etc. This information will be used in the future
to predict the viewer’s options as it is live, real and exact as it is
configured by an algorithmic formula that does not take into consideration
socio-economical information and other characteristics that can alter the
scores. In fact, the analytics can determine not only gender, but ethnicity (if
disclosed), age bracket, sexual orientation, education level, income level,
etc. The list goes on. No such metrics exist now in media in its current stage.
This paper will
take a look at the pieces as they exist now, and as a whole as they will
eventually become in the next 5 – 15 years.
Scope
Currently, there seems to be a
platform for every type of small business advertising campaign that exists. The
problem is, they are extremely small, often do not interact with each other and
can be cumbersome in advertising to a consumer as their public relations
department (if exists) and their marketing departments are under-skilled and
usually have multiple hats to wear within the company. That leaves the consumer
or the ad agency to decipher what is right and what is the wrong solution for
them. Of course, each company brags that they are the most cutting edge and
have the best product.
An example of this
is an online scheduling calendar for hair, nail, tanning salons and other
companies that can take appointments. Having this solution offers the business
owner many reasons. For a cost of $100 - $150 per month, they can put their
entire staff on the schedule, which staff member can perform which services,
when the services are available, when the service provider is available, how
much the service costs and much more. With the calendar, the consumer sees a
blank calendar (those appointments that are still open) and can book
accordingly their service. They then register with a credit card (run through
PayPal) and it holds their appointment. When they show up, they can choose to
pay in cash and the hold is released, however if they do not show up the missed
appointment is charged. I have seen shops whereas they report that more than
90% of the appointments made are kept. They will also receive an email and an
SMS message reminding them of the appointment, as will the shop owner and the
service provider. In addition, should they wish to maintain a standing
appointment, they can do so at this point. For $150 per month, the lack of a
receptionist taking phone orders is a mere drop in the bucket to the increased
revenue, but equally important the talk of the town that the shop owner
receives.
This
is one of dozens of innovative concepts that are being sold, that interacts and
can be placed on a blog, website, and Facebook or Twitter page with no
programming skills whatsoever. In the interest of time, this paper will not
discuss all of the available components that currently exist nor those that are
in development.
Purpose and Goals
The small to
medium business runs this country. The medium to large corporations are well
capitalized and therefore deal primarily with enterprise solutions. The
question will become, will it be smarter to take the risk of selling a very
large enterprise solution vs. that of selling hundreds of thousands of
affordable smaller scaled solutions.
In
reverse, large business runs small business. I remember in the early 1980’s
when the largest IBM plant in the world located in Poughkeepsie, NY decided to
outsource, downsize and cut its workforce by up to 40%. This didn’t just affect
the IBM worker however. Homes were placed for sale in droves, dramatically
creating a glut of supply on the market and causing property values to plummet.
With a dropped property value comes a dropped tax assessment and therefore
government and school districts were forced to cut back. The Ford and GM
dealerships across the street went from selling 100 new cars per month, to less
than 10. Without selling cars, the dealer had no need for many of their
employees. Those employees who stayed home no longer patronized the local hot
dog wagon, and he in turn had to close his shop.
The
relationship of large and small business is staggering. In the case of social
media, it is as easier, softer way to disseminate information at a dramatically
reduced cost. Not only is it cheaper, it is incredibly faster. A bomb blowing
up in Beirut may take CNN up to 2 hours to get it on air, while a normal person
with a smartphone can post it on YouTube within seconds. From their blogs are
created and the world is now instantly connected to the bomb blowing up in
Beirut.
Businesses
will run cheaper because of social media; they will have a quicker and cheaper
access to supply chain demand, getting their products quicker and with less
effort. Those times of having to go to a specialty store for your business
needs are now left to the Internet. The cost of that online store is cheaper,
they have fewer employees, no rent or utilities and now only have to worry about
fulfillment. If they can’t handle it, as was the case of Toys R Us in the
Christmas holiday season of the early 90’s, they found out that being a good
toy retailer did not make them a good toy online retailer. That is why to this
day, Toys R Us has their entire fulfillment outsourced to Amazon, who
specializes in this type of thing. If not for the immediate decision to move to
Amazon, Toys R Us was effectively done online. Sure, they took a huge black eye
as their fulfillment was able to get their products delivered by late January
for the previous December holiday, but they recovered quickly with the help of
Amazon. This philosophy was discussed in depth by Harridge-March (Harridge-March 2008) who discussed in detail
relationship marketing as well as direct marketing.
Supporting Forces: As bandwidth becomes cheaper and faster,
so does the tools and applications that run upon them. Chain supply demand will
become a totally automated process and human intervention will be totally
removed from this element, further reducing costs.
Educational: The American public is still not versed in
their knowledge of social media marketing compared to what they will be in 15
years from now on. And only those with extra time and a bit of the savviest players
will take advantage of it. “Effective social media measurement should
start by turning the traditional ROI approach on its head. That is, instead of
emphasizing their own marketing investments and calculating the returns in
terms of customer response, managers should begin by considering consumer motivations
to use social media and then measure the social media investments customers
make as they engage with the marketers brands.” (Hoffman and Fodor 2010)
Technological: Social Media in its current state would be
the equivalent of me to buy a car from Ford; I would have to buy the seats from
their manufacturer, the engine from theirs, the transmission from them and so
on. That would be a preposterous idea because I can walk into a Ford dealer and
they did that already for me. The future of this industry is walking into a
dealer and being able to turn a key and start the engine.
Economical: To obtain the proper solutions, multiple vendors
would be involved and therefore a higher cost. Under the proposed solution, we
have a one stop shop as opposed to the a la carte shop that exists. This is why
the data miners will take over this industry in 15 years and make social media
marketing a household name. Everyone will expect that they can do their food
shopping, their auto shopping, turn on their home alarm remotely (already
exists) as well as perform every other task that requires face to face
confrontations and/ or a drive in a car to perform meaningless but necessary
tasks.
Big
business is already realizing this. I would love to watch my favorite key note
speaker give a lecture on my favorite topic – albeit in the privacy of my own
home. WHY do I need to fly somewhere and spend the money on food, airline,
hotel and take the time and aggravation to travel when the entire 90 minute
presentation can be done while I sit in my favorite recliner, in my pajamas
eating a bowl of popcorn?
Societal: Society has just begun to accept social media as a
toy with only some seeing its benefits of a business model. This will change as
education of the subject and business schools teach the different marketing
techniques that just didn’t exist even 5 years ago.
The
Florida Virtual High School currently has over 100,000 students enrolled. It is
state mandated that any student have the option of going to a virtual school or
a brick and mortar school. (Marley 2012)If they should choose the
virtual school, they still can play in the band, on the football team; go to
dances, all of the social aspects of going to school. Therefore, when it
becomes time for higher education, which is going to be ahead of the STEM curve
globally when they opt into virtual higher education?
Global: What happens in the U.S. will without doubt happen
globally, it is just a matter of time. There will be a push and shove of whose
stock prices outperform others, but this will be done so in a manner that will
only give benefit to the consumer. Think of the student in Ethiopia who has no
access to higher education, but AT&T, Verizon and European wireless
carriers are building 4G towers as fast as they can. Is it possible that one
day that we will sit in a virtual classroom with a student in Ethiopia, in
Argentina and in Utah? There is little doubt that the onset of all social media
will be global and shared as Internet bandwidth becomes cheaper and in many
countries, offered as a free service of the government (which is should be).
Challenging Forces (risk)
Economical: The concept of social media marketing may never
gain ground due to its relatively high cost now, therefore being unattractive
to the bigger data mining companies.
However,
the economic risk will without question be undertaken as our giant corporate
partners have many R&D dollars to spare.
Societal: Society may reject the concept of doing business a
new way and want to do business the way their grandfathers did it years ago.
Although this is possible, I am also going to reject this potential as the 16
year olds of today will be the 30 something’s of tomorrow, and THEY will
dictate how business is run.
Methodology (approach)
How will we approach it? – On a
long learning curve that will prove to be equally exciting as it is harrowing.
I believe that many of us will jump in head first and learn to swim while we
are in the water for the first time. From our mistakes, we will create our
futures and perfect the industry.
Model – I will use my current model that I have already in
place in my licensed corporation. I will grow it, adding new concepts daily,
making changes on the fly and staying ahead of the curve.
Analytical Plan – I will utilize the free Google Analytical
tools to show several different cross sections of how their business is or is
not improving. Unlike how TV ratings are derived, the demographics of social
media use will be deep, greatly varied and more accurate.
Anticipated Results – that for the next 5 years, the first
people in the pool will be the leaders. After that, the Google’s of the world
will snap up our experience and expertise and have we run this on an enterprise
level. The larger companies will dominate all of social media, but at a very affordable
cost and with good value.
Conclusion – The conclusion is simple. Social (Emerging)
Media is here to stay; at least that’s what it states on the Colorado Technical
University advertisement for emerging media. It will stretch into every facet
of our lives as we know it, changing industries along the way and rendering
others useless. We will have new methods of doing business on a small and large
scale and we will find that in 20 years ago, that what we now use spreadsheets
for and programs such as QuickBooks, we wonder how we did all of those
calculations on hand written ledgers. I even remember in the beginning of my
Doctoral Journal, one of the professors was in her late 60’s and she said that
it took her 7 years to get her PhD. I look at the tools that I have now such as
ProQuest and wonder how it didn’t take her 17 years to complete.
References
Godin,
S. (1999). Permission marketing: Turning strangers into friends and friends
into customers, Simon and Schuster.
Harridge-March,
S. (2008). "Direct marketing and relationships." Journal of
Research in Interactive Marketing 2(4):
192-198.
Hoffman,
D. L. and M. Fodor (2010). "Can You Measure the ROI of Your Social Media
Marketing?" MIT Sloan Management Review 52(1): 41-49.
Marley,
B. (2012). "The Investigation of Virtual School Communications." TechTrends
56(4): 26-33.