Departments
Korean Consumer & Society
Growing Popularity of Social
Media and Business Strategy
LEE Dong-Hun
Social Media Becomes a Hit
“What’s happening?” or “What’s on your mind?”
are questions people frequently ask their close
friends during a conversation or a phone call.
However, in social media, they present a new opportunity for businesses. Increasingly, diverse social media have begun to emerge. Firstly, there
are blogs such as Facebook and YouTube, which
provide a space where Internet users can produce and share images, and Twitter, which leverages mobile devices. Such forms of media have
gained popularity, innovating communication
methods which were previously centered on the
mass media.
Simply put, social media is an “open media for
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interactive communication led by normal people.” Unlike the one-way production and transfer
of news, information, and entertainment from
main media outlets via the mass media, social
media allows anybody to become a producer of
such content, and deliver it through interactive
communication in the form of a pyramid, based
on relationships.
Showing explosive growth in just 4–5 years since
its birth, social media is establishing itself as the
media of choice all across the world. In Western
countries especially, a wide range of age groups,
from children to the middle-aged use social media.
According to Google’s Ad Planner, 15 percent of
those aged 17 or below, 9 percent of those aged 18
to 24, 18 percent of those aged 25 to 34, 25 percent
of those aged 35 to 44, 19 percent of those aged 45
to 54, and 14 percent of those aged 55 or older are
using one form of social media or another.
“adding friends” on Facebook, users are able to
find out what other people want to say and what
they are doing.
There are four reasons that can explain the wide
popularity of social media. First, social media
provides a “window” that satisfies users’ desire to
express themselves. It is a useful outlet for their
desire to standout and draw attention. Social network services such as personal blogs, Facebook,
and Twitter are appropriate tools to reveal oneself and be recognized. The popularity of the
show “Britain’s Got Talent” in the mass media
can be explained in the same manner.
Lastly, people can escape from their daily routines. Daily life is repetitive for most people,
which is why so many strive to bring change to
their lives. Such wishes are reflected through social media, where users use other people’s lives to
escape from their own.
Second, users can obtain the latest news on anything they want to know. Information based on a
“timeline” offered on Twitter has more meaning
to them because it is not from a newspaper or
from the Internet, but from someone they know.
News from those they are interested in is more
relevant than random news from the mass media. There is a fundamental trust that important
news will certainly be delivered; the news being a
recommendation or an opinion on a topic of interest from their friends, which is more valuable
than a stranger’s tip when making a purchase.
Third, users can see how the people they are interested in are doing, satisfying their desire to
“peep.” Using the RSS Feed on a blog, “riding
waves” (visiting personal blogs by clicking on the
names of those who have added a remark or
photo) on Cyworld, “following” on Twitter, and
|Table 1
Four Key Values of Social
Media for Businesses
Then, what has got the business world focusing
on social media? Social media in Korea has not
yet spread to the general public, and most of the
issues are limited to corporate, celebrity and news
bulletins. There is a problem of credibility in regards to social media, because the provider of
the information tends to release the content without verification, unlike in the mass media. Therefore, social media is not yet capable of replacing
traditional media. However, it still has value in
four aspects: time, audience, cost, and relations.
1
Time: Speed and Durability
In social media, information is distributed
rapidly (Speed) and has a long-lasting impact
(Durability) compared to that in the mass media.
Users can easily create content with short text
messages and post them on microblogs such as
Twitter (a post can include up to 140 characters)
Key Characteristics of Mass Media and Social Media
Media
Key Characteristics
Mass Media
(Media 1.0)
• News, information and entertainment were produced mostly by media outlet (monopolized by a few players)
• Content was transferred in public, one-way, and indirect channels to the public
Social Media
(Media 2.0)
• Anybody can produce content based on the spirit of Web 2.0 which is openness,
sharing and participation (competition takes place between multiple players)
• Interactive communication based on relationships and content is delivered in the form of a pyramid
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Growing Popularity of Social Media and Business Strategy
and me2DAY (up to 150 characters). Unlike the
mass media, bloggers and YouTube users can
disseminate content right away without having to
be concerned with meeting editorial deadlines or
broadcasting schedules.
Social media also offers faster distribution than
the mass media because it is done through the relationships of the users. According to a study1,
most social media users retransmit content they
have received within the hour. In Twitter, 35 percent of users redistribute content within 10 minutes and 55 percent of them within an hour.
In addition, the impact of content is continuous
once it has been released, another characteristic
which is different from the mass media. While
broadcast news is exposed once and then disappears, social media content is often saved as files
and uploaded again, even though the source content has been deleted. Also, parodies can be
made and uploaded, reminding the viewer of the
original content and its implications.
2
Audience: Plurality and Diversity
Social media transfers content to a more diverse range of people compared to the mass media. It creates a “small-world” network2 where
content is easily distributed to a large number of
people, as the network is formed through voluntary connection and requires fewer steps for
sharing information. As for Twitter, content
tweeted to an average of four people can end up
reaching any user in the world3. Content is transmitted to a broader public when they are introduced to another form of media. For example,
blog content is linked onto Twitter, which is then
reported through mass media.
Moreover, social media transcends both national-
ity and class. Word of mouth can only go so far,
but social media can deliver a message to anybody in the world. Former CEO of Sun Microsystems, Jonathan Schwartz, continued to communicate with the public through social media
and even tweeted his last goodbye, a case in point
that the world is entering a new era of World of
Mouth (global) from Word of Mouth (local).
3
Cost: Feasibility and Effectiveness
Costs can be reduced with social media as
the distribution phase necessary in mass media,
is eliminated. Most social media outlets are accessed free of charge. For banner ads, 1,000 clicks
cost a mere $20 (YouTube, in 2007). A company
can create content without using a celebrity or an
advertising agency.
In addition, the development of target groups
and issue-by-issue advertising and promotion are
possible at a lower cost. YouTube offers free statistical data on time of access, access regions, age
and gender, which provides an understanding of
various lifestyles, demographics, and consumption patterns. By leveraging this, companies can
send out content, targeting homogeneous user
networks. The Italian luxury fashion brand, Dolce and Gabbana, invited famous bloggers to attend its show and post their opinions on its blog
and Twitter page in real-time. This attracted feedback from tens of thousands of fashionists
across the world, resulting in the company enjoying a promotional effect at a much lower cost.
4
Relations: Friendliness and
Credibility
In contrast to the traditional method of one-way
communication, relationships in social media are
established based on adding each other as friends
and through interactions. Therefore, heart-to-
1 Kwak,
H. et al.(2010) “What is Twitter, a Social Network or a News Media?” The 19th International World Wide Web Conference.
2 (Newman,
M. (2003). “The structure and function of complex networks.” SIAM Review, (45), 167-256.)
3 Kwak,
H. et al.(2010). “What is Twitter, a Social Network or a News Media?” The 19th International World Wide Web Conference.
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LEE Dong-Hun
Now, social media is
broadly used by 79
percent of the Fortune
100 Best Companies.
heart, sincere communication and trust-building
are possible. By openly sharing daily events, companies are able to show the unique traits and
friendly image of their brands. Also, by encouraging customer participation in various events
on hot issues and in innovative campaigns, they
can make their brands more recognizable. Levi’s
was able to become closer to its customers by
launching the “iSpyLevi’s” campaign in Australia. Levi’s offered clues as to the current location
of its agents wearing Levi’s jeans on Twitter, and
gave the jeans to those who found the agents.4
This campaign was highly successful, and was
seen in Australia as an event that only the stylish
Levi’s could devise.
Furthermore, interactive communication can
eliminate misunderstandings which can occur during unilateral communication, and build corporate
trust. Interaction also nurtures support groups
while improving corporate reputation. When a
company has trustworthy supporters, it prevents a
small problem from transpiring into a crisis.
Use of Social Media for
Marketing
Advanced companies use social media in diverse
sectors, mostly for marketing, and then for research and development, knowledge management, and communication among employees.
Now, social media is broadly used by 79 percent
of the Fortune 100 Best Companies. One of the
largest public relation agencies in the world, Burson-Marsteller, surveyed the world’s top 100 companies from November 2009 to February 2010
and found that 68 percent used YouTube, and
uploaded 10 postings a month; 54 percent used
Facebook and uploaded 3.8 postings a week;
Twitter users uploaded 25 to 30 postings a week.
The study also found that 65 percent of the 100
largest international companies had active accounts on Twitter, 54 percent had a Facebook fan
page, 50 percent had a YouTube channel, and 33
percent had corporate blogs. CNBC, a US news
channel, even announced the top 10 companies
on Twitter (April 12, 2010). Dell came first, followed by Whole Foods Market, Zappos, JetBlue,
Comcast, New York Times, Southwest Airlines,
Starbucks, Kodak and Home Depot.
An increasing number of companies in Korea
are also employing social media for business, following the popularity of Twitter among the public. For example, KT transformed its image
through social media. Among Korea’s top businessmen, Lee Chan-Jin, Park Yong-Man, and
Chung Yong-Jin were cited to be the top three
power Twitterians.
How Social Media Can Be Used
for Marketing
Social media can be used for marketing in four
ways. First, as a direct sales channel: Companies
4 http://www.youtube.com/watch?v=oisTwUZCg_Q
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Growing Popularity of Social Media and Business Strategy
can harness the main characteristic of social media, relationship building, to increase sales. For
example, Dell sells its surplus computers at an affordable price through Dell Outlet, pursuing mutual benefits for both the company and consumers. Dell created the first account for direct sales
on Twitter, @DellOutlet, in July 2007. Since then,
the company tweets information on major discounts of recycled computers, inventory clearance, and coupon campaigns.
Social media distributes
information much faster
than traditional word-ofmouth.
Second, as a tool for customer contact and services, to replace the call center: Traditionally, call
centers have interacted with customers, answering questions on products and about repair.
However, customers are not always able to receive a direct answer via call centers or the company website. Based on its fast speed, social media provides an improved version of the call
center, offering instant response.
Third, as an amplifier of word-of-mouth: Social
media distributes information much faster than
traditional word-of-mouth. A study by Forrester
Research in 2010 found that social network users
tend to ask others’ opinions more than ordinary
Internet users. Among them, 30 percent said they
follow others’ recommendations when buying a
product while 50 percent shared their opinion on
products or services that caught their interest to
their friends. They shared their feelings mostly
on restaurants (69 percent), followed by movies
(57 percent), technologies (56 percent), television
programs (55 percent), home appliances (54 percent), travel (51 percent), music (43 percent), and
cars (39 percent). In an attempt to create a social
shopping experience, Levi’s employed Facebook’s
Social Plugin through which customers are able
to see their friends’ preferred items5. eBay is attracting acquaintances and friends of its existing
customers using social network data6. The idea is
based on the assumption that friends share similar tastes. eBay plans to get information on existing customers who have already bought certain
items on its site and gather their conversations
with their friends on social media in order to appeal to them.
Lastly, as a space for social commerce. Groupon
of the US and Ticketmonster of Korea offer discount coupons valid in local areas. They select
new services in diverse fields which include those
of famous restaurants, theaters and travel agencies and promote certain products at a discounted rate of around 50 percent for 24 hours in its
“Today’s Deal” category. Customers can enjoy
the service at half the price while the companies
5 http://www.youtube.com/watch?v=23KLU2hnB0s
6 http://www.youtube.com/watch?v=zAvPqPvPVMU&feature=search
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LEE Dong-Hun
benefit from exclusive promotions on the website. Groupon is reported to have recorded annual sales of $350 million in just one year after establishment.
about themselves, even if they previously had a
good impression. Developing a unique tone and
manner will also be a good tactic, as companies
need a special and witty way of communicating
to effectively deliver their message.
For Successful Social
Marketing
Lastly, they need to implement a cross media
strategy. Social media is not an alternative but a
supplement to mass media. Therefore, companies should take an integrated approach. To
smooth out the communication process, portfolios should be formed in line with business traits,
audiences, and individual media characteristics,
and be coordinated with communications materials. Intel has taken a multi-faceted approach to
blogs, Twitter (20,000 followers), Facebook
(125,000 friends), and YouTube to maximize the
effects of communications. A variety of expert
knowledge, the daily lives of the employees, and
major company issues are shared with customers
in diverse forms. In this manner, Intel has successfully maintained close communication with
its customers even though it is a B2B company.
Thus far, this paper has covered the characteristics of social media and how it can be harnessed
in the business world. Just as the world witnessed
the emergence of the Internet, now it is experiencing a growth in “socialnomics7.” Therefore,
companies should consider how to harness social
media with the following three points in mind:
First, they should not regard social media as a
simple marketing channel. Companies can best
benefit from relationship building when they use
social media. Therefore, they need to emphasize
the positive issues while suppressing the negative
in the course of building rapport, by respecting
the voluntarism of social media users. They
should provide interesting issues to encourage users to create and spread relevant content voluntarily, playing the role of stimulant in communication. Pepsi succeeded in projecting its image as
caring, humane company by running the “Pepsi
Refresh” Project to make the world a better
place. The project was designed to reward good
ideas on improving issues related to culture, education, food, health, and community.
Translation: YI Chiwon
Keywords
social media, YouTube, Facebook, Twitter,
bussiness strategy, social marketing, customer
relations
Second, companies need to be careful of their
tone and manner in delivering content. The three
basic keywords are “fun”, “sincerity”, and “quick
response.” They must also avoid self-praising.
People are not impressed by and are disappointed with companies or individuals who boast
7 Qualman,
Erik (2009), Socialnomics: How Social Media
Transforms the Way We Live and Do Business
JohnWiley&Sons
LEE Dong-Hun is research fellow at SERI. He was a visiting
scholar at Columbia University. His areas of expertise include
marketing strategy and consumer trends. He holds a PhD in
Business Administration from Sogang University.
Contact: [email protected].
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