FACULTY OF ECONOMICS AND BUSINESS ADMINISTRATION, UNIVERSITY OF OULU WORKING PAPERS ____________________________________________________________ ________ No. 29 ____________________________________________________________ ________ Tuula Lehtimaki, Jari Salo, Heidi Hiltula, Mikko Lankinen HARNESSING WEB 2. 0 FOR BUSINESS TO BUSINESS MARKETING – LITERATURE REVIEW AND AN EMPIRICAL PERSPECTRIVE FROM FINLAND ____________________________________________________________ ________ OULU 2009
Tuula Lehtimaki Jari Salo Heidi Hiltula Mikko Lankinen Taloustieteiden tiedekunta Oulun yliopisto Faculty of Economics and Business Administration University of Oulu Osoite: PL 4600 Address: 90014 Oulu, Finland Puhelin: Phone: +358 50 4675154 Salo Telefax: +358 8 553 2906 e-mail: Tuula. [email protected] fi Jari. [email protected] fi ISBN 978-951-42-9119-7 ISSN 1459-8418 ISBN 978-951-42-9120-3 ELEKTRONINEN VERSIO Oulu University Press April 2009 Tuula Lehtimaki, M. Sc. (Bus. Adm. ), M. Sc. (Tech. Jari Salo, Dr. (Bus. Adm. ) Heidi Hiltula, M. Sc. (Bus. Adm. ) Mikko Lankinen, student University of Oulu, Faculty of Economics and Business Administration Harnessing web 2. 0 for business to business marketing Literature review and an empirical perspective from Finland Abstract The purpose of this report is to round up current literature and other published sources on harnessing web 2. 0 for business-to-business marketing and add an empirical perspective on the subject from Finland.
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Web 2. 0 means technologies that enable users to easily communicate, and organize, create and share content. By web 2. 0 tools, we mean blogs and podcasts, social networks, communities, content aggregators and virtual worlds. Based on the literature review we present pros and cons of every tool for marketing purposes. Among the examined Finnish industrial firms the utilization of web 2. 0 is still low, but blogs, wikis and video sharing raised some interest. Overall, web 2. provides firms with benefits still largely unexplored, and we believe that the importance of internet marketing will continue to grow. Key words: Web 2. 0, Internet, Business to business marketing, Industrial marketing ___________________________________________ Space does not permit the authors to name all the interviewees and the members of the DECCMAC project group who were of such help to them, but they would like to thank all involved. We also wish to convey our thanks to Tekes. Executive Summary Web 2. means technologies that enable users to communicate, create content and share it with each other via communities and social networks easier than before, and to have real life experiences in virtual worlds and to organize content on the internet with content aggregators. The number of web 2. 0 users has been growing so rapidly that it has become an important channel for marketers to reach their customers. As B2C companies have already managed to create successful web 2. 0 campaigns B2B marketers have also begun to investigate how to harness web 2. 0 in their marketing efforts.
In addition, B2B buyers are already using the internet as one of their main sources for information gathering. Hence, it is important to B2B marketers to be present in those channels where their customers are. Benefits and difficulties of using web 2. 0 tools based on the literature review are summarized below. Strengthening and expanding customer relationships, Brand building Lead generation Employee communications, Enhancing communication in partnerships Enhancing communication in R&D Demand generation Lack of support by top management Lack of metrics of measuring effectiveness of web 2. marketing Technical challenges if marketers do not know how to utilize different web 2. 0 tools Maintaining web 2. 0 tools demands commitment to continuous content generation and maintenance and it takes a lot of time and effort to maintain the chosen marketing strategy Web 2. 0 tools can be grouped into blogs and podcasts, social networks, communities, content aggregators and virtual worlds, which all have different pros and cons.
Tool Blogs and podcasts Social networks Communities Content aggregators Virtual worlds Use Informing of current events and new products Content sharing, creating and maintaining relationships Maintaining customer relationships, brand building Informing of new products Maintaining customer relationships, brand building Strengths Easy and cheap tool to maintain Easy to set up a profile, possible targeted advertising Intense two-way communication Easy to use Engaging customers effectively Weaknesses Requires time and constant updating How to persuade users to participate?
Requires lots of resources to maintain Content needs to be interesting enough to be tagged Requires lots of resources to maintain; inducing users to participate Only one-third or less of B2B marketers has used web 2. 0 tactics in their marketing mix. Based on the interviews made for this report, the utilization of web 2. 0 for marketing seems to be low among Finnish industrial firms too. Some firms had utilized video sharing sites, but more on ad hoc basis. Blogs, wikis, and video sharing were seen as the most interesting options for industrial firms.
An expert opinion was that perhaps the most suitable web 2. 0 tools for industrial marketing are online communities, where a firm can contribute to brand building, have direct interaction with customers and other stakeholders, gain valuable information and provide services. Communities were not, however, an appealing alternative for firm interviewees, because hosting a community requires more work than benefits and community? s targeting power was considered low. 5 Web 2. 0 Tools Blogs Podcasts Social networks Online communities
Usage among six examined firms One firm has a (unofficial) management level blog, one is preparing a video blog, one is planning an internal blog or a blog to existing customers. Three firms have none. One firm has its CEO’s letter in webcast format (but there is no commenting option) and has done pilots for online teaching. Five firms have none. Four firms have unofficial groups in Facebook for internal networking. One has more official Facebook group but does not know yet what to do with it. One firm has none. One firm has done some advertising in industrial communities and joined some communities and directories.
One has used communities to search information of other firms and customers. Three firms mention that customer extranets are the most important online communities for them. One firm mentions nothing. One firm had official and one had unofficial YouTube videos. Two firms plan to build a wiki and one has tried to contribute to existing ones. One firm has none. Not participated or utilized actively, even though one firm takes part in some professional forums. One firm builds a mash-up for their website and three firms offer RSS feeds. One firm is interested in social bookmarking.
Not utilized. Content communities Forums Content aggregators Virtual worlds Interviewees understood the benefits of web 2. 0, but could not directly relate them to their business, which was one of the major obstacles for web 2. 0 utilization. Firms were afraid of the uncontrollability of online discussions, negative word-of mouth and losing confidential information. Because of the huge number of web 2. 0 users and its benefits, using web 2. 0 for marketing is however expected to increase. The report presents the main obstacles for web 2. implementation, how to cope with them, and challenges related to fundamental characteristics of web 2. 0. Many interviewees thought web 2. 0 inapplicable for industrial marketing as a rule although that is not so. There seems to be a need to get to know web 2. 0 as a channel better and then find suitable ways to utilize its potential benefits. Web 2. 0 as an environment, its benefits, possibilities and effects are unknown Technical difficulties Setting rules and guidelines is difficult Get to know web 2. 0 as a channel, explore Set clear purpose and targets for utilization of web 2. Link web 2. 0 to the “whole picture” of marketing Offer real value that helps users to do their job better Difficulty of developing interesting content Web 2. 0 applications are focused on infotechnical matters, and not on creating real value, flow, good usability, or emotional experiences Uncontrollability Prepare a worst case scenario and how to handle it If utilizing web 2. 0 accept its nature! Challenges How to proceed 6 PART 1 – LITERATURE REVIEW UTILIZATION OF WEB 2. 0 TOOS FOR INDUSTRIAL MARKETING 7 1 Introduction to the literature review Web 2. means technologies that enable users to communicate, create and organize content and share it with each other via communities, social networks, and virtual worlds. Web 2. 0 services are becoming popular among customers and this has brought several challenges for marketers. Today customers are highly reliant on information they receive from their peers due to web 2. 0 and peer-to-peer communication online. Hence, the focus of marketing communication is no longer on one-to-many but manyto-many communication where customers communicate with each other and marketers do not have that good control over the message.
In addition, media fragmentation and customers’ selective attention for marketing messages and communication bring marketers the problem of how to reach their customers through online channels. However, web 2. 0 tools have brought companies new ways to reach their target audience and build their brand image. Weber (2007, 22) notes that a marketer’s role has changed from a broadcaster pushing out messages to an aggregator who pulls together content, collaborates with its customers and participates in communities. Using social media and web 2. tools is becoming more and more popular among consumers in Finland. In spring 2008 35 % of Finns used the internet for instant messaging, 38 % for reading blogs and 30 % wrote to discussion forums and newsgroups (Tilastokeskus 2008). Similarly, B2B buyers have begun to use web 2. 0 tools and they are shifting to use digital media faster than B2B marketers are adopting it (Davis Kho 2008b). While the amount of people using social media increases continuously and businesses have become interested in how to harness different web 2. tools for marketing activities it is evident that web 2. 0 will have significant effects on business environments. Since the new generation using web 2. 0 everyday will use it also in working life in one way or another, presumably web 2. 0 is here to stay. Web 2. 0 is a relatively new concept and marketers are interested in its potential. To date most web 2. 0 technologies have been introduced within B2C markets. However, B2B marketers are increasingly recognizing the new marketing channels web 2. 0 generates and businesses aim to incorporate web 2. in their marketing mixes. This paper examines the main concepts and conformities around web 2. 0, introduces basic web 2. 0 technologies and suggests, by using real life examples, how these technologies 8 could be used in B2B marketing. In addition, challenges and drawbacks relating to web 2. 0 are addressed. 1. 1 Internet and B2B-marketing The internet has changed communication radically in industrial marketing. As the internet has become an important source of information among third-party location information (e. g. onvention and visitors bureau resources), and personal and colleagues’ experiences, it has also become an important channel for communicating with customers and developing relationships because of the possibility of two-way interaction on the internet. Typically, internet marketing devices like e-marketing platforms are less expensive compared to other marketing platforms and via web channels it is often possible to reach customers that would be out of reach of physical distribution channels. Due to this Sheth and Sharma (2005) state that reducing costs and enhancing reach are primary advantages of e-marketing.
However, B2B companies spend more on their online marketing budgets than B2C companies. The reason for this is a less specialized approach of B2B companies when planning e-marketing activities in comparison with B2C companies. Hence more holistic online marketing planning and prioritization methods are needed. (Bach Jensen 2006. ) E-marketing has changed the focus of marketing from a “supplier perspective” to a “customer perspective” since through the web, companies can better address the individual needs of their customers and build customers? oyalty. Due to customer data collection possibilities companies can also segment customers to financially and strategically viable groups, which allows better targeting. The value of customer input to products, i. e. co-creation in the web environment, is also emphasized. Moreover, companies allowing co-creation have an advantage when compared to firms that do not. (Sheth and Sharma 2005. ) E-marketing has brought many advantages for companies but still there remain obstacles to its effective use.
Samiee (2008) highlights that while the use of the internet no longer offers a competitive advantage, not having any presence on the internet whatsoever increasingly leads to a competitive disadvantage. Typical challenges that B2B companies using e-marketing face are security issues and business conducting norms. As confidentiality of personal communications is extremely important in business marketing the potential loss of proprietary data over the internet remains a critical issue. Also conducting business via personal face-to-face communication is the 9 norm in the B2B environment.
These issues may slow down the deployment of the internet in B2B activities. 1. 2 How to be found on the internet B2B buyers use only a few primary sources for information gathering and decision making. Due to this, B2B marketers have to understand while planning their promotions which information sources and channels are considered useful by their buyers. Enquiro Research found in its ? Business to Business 2007? survey that 65% of 1000 B2B buyers start their research process with a general search engine and after that move on to B2B vertical search engines such as Business. om and company websites when progressing to the negotiation and decision-making stages (Davis Kho 2008b). Hence, it is crucial for a company to appear high in the search results. This can be achieved using web 2. 0 tactics. By blogging, sharing videos and other content, social bookmarking and networking a company can get links to search engines. These above-mentioned tactics can be classified under organic Search Engine Optimization (SEO), as good search rankings are achieved without paying for them. The best known organization that offers paid SEO is perhaps Google.
Yet, other services also exist such as Overture. (Bach Jensen 2006. ) Google is currently the world? s leading search engine. In July 2006, Google Sites represented the number one European online property, attracting 156. 3 million visitors (ComScore 2008). Due to Google? s vast reach potential, search engine optimization is an integral part of most businesses involved in web 2. 0 since by using web 2. 0 tools a company can increase its visibility in its customers? information gathering. Google offers different kinds of services for targeted advertising based on visitors? interests.
These services are Google AdWords, Google AdSence and Google Maps. AdWords, i. e. sponsored links, are text-based ads that appear together with Google? s search results. In addition, AdWords appear on advertising spaces of thousands of publishers belonging to Google? s content network. These ads are shown whenever a user searches information with keywords picked by the advertiser so it offers companies an effective way to advertise their products for interested users. AdSense is targeted for website owners and other content creators since they can sell advertising space on their own websites.
The content of the site is indexed and ads are screened to the page in accordance with the content and the interests of the page visitors. Both these services help a company to advertise to users who are looking for information concerning products and services 10 offered by the company. When a user searches information via Google Maps about a certain company, a map appears on the screen showing contacts of the company in question. (Google 2008a; Google 2008b; Google 2008c. ) Google also offers a service for measuring the effectiveness of using their services.
Google Analytics is a free browser based tool for analyzing ad campaign results and website traffic. It offers over 80 different reports. Due to Google? s analyzing tool it is relatively easy for companies to measure an ad campaigns efficiency and return on investment (ROI). (Google 2008a. ) Google? s services are widely used by marketers and it has become one of the leading companies in the web 2. 0 environment. While companies can help to increase their position in search engine results by using web 2. 0 tools they can also better target their advertising with these new services by Google. . 3 Enhancing word-of-mouth (WOM) and viral marketing with web 2. 0 tools The Edelman trust barometer (Edelman 2006) illustrates the current power of word-ofmouth (WOM) communication. Today people no longer trust established institutions and figures of authority, but instead trust their peers as the best sources of information about companies. Companies need to move away from sole reliance on top-down messages toward fostering peer-to-peer dialogue among consumers and employees and hence activate a company’s most credible advocates.
According to this research, trust is the key objective for global companies since it creates the base for the company’s operation. A company’s trustworthiness can be enhanced by being transparent and engaging multiple stakeholders into a conversation via different communication channels. Web 2. 0 tools bring new opportunities for this interaction. Since communication between users constitutes the core of social media, companies can carry out effective viral marketing activities using web 2. 0 tools. Viral marketing is marketer-originated WOM communication over the internet.
The reference mechanism in viral marketing is similar to traditional WOM but its special characteristics are the speed and the extent of spreading messages. The main goal is to get users to spread a marketer? s message to their friends by using their own networks and to get as large an audience as possible for the message. Viral marketing messages usually consist of text and pictures so that they can catch the attention of consumers with visual appearance. Along with YouTube, viral videos have also become very popular. Users do not spread the marketer? message onwards if they do not get any benefit, or if the content of the 11 message is not interesting enough. Viral marketing is considered an effective form of marketing, since its effectiveness is based on the same idea as in traditional WOM trust in the sender of the message. (Helm 2000; Turban, King, Lee, Warkentin and Chung 2002, 188; Lindgreen and Vanhamme 2005. ) On the other hand, De Bruyn and Lilien (2008) found in their research that in viral marketing campaigns, close relationships between the sender and the receiver of the message can capture recipients? ttention and create awareness, but they do not influence the later stages of the decision-making process, i. e. the interest and final decision stages. This means that WOM communication might not be as effective as it is often considered to be. While viral marketing can increase attention on the product, it doesn? t have a straightforward effect on sales. However, it seems that networks of friends (instead of networks of professionals and colleagues) are better suited for viral marketing campaigns, since referral mechanisms require close relationships.
Interestingly this research discovered also that electronic referrals from demographically dissimilar ties had more influence at each stage of decision making than referrals from demographically similar ties. This might be explained by demographic dissimilarity serving as a surrogate measure of perceived authority, social status and information-bridging potential. This kind of behavior can be explained by the presumed expertise of the message sender. While there are contrary opinions about the total effects of viral marketing, there are still many examples of successful viral campaigns that have managed to catch the public attention.
These include the ???Will It Blend? -campaign on YouTube by Blendtec (see Content communities) and the Aquafina campaign in MySpace (see Social networks). In Finland, YouTube has been used for viral marketing successfully with music artists like Tea Hiilloste and Lissut (whose music videos were huge hits on YouTube) and with the tv-show Ketonen & Myllyrinne. Hence, web 2. 0 tools are an opportune channel for viral marketing since people tend to spread interesting content via them. 12 2 2. 1 Web 2. 0 and social media Definition of web 2. 0 and social media Although there is no specific definition for the term web 2. , it can be described in many ways. The term was originally coined in 2005 by O’Reilly (2005), and one can say that web 2. 0 is a set of technologies as well as a new way of thinking that enables new imaginative operations and business models. Social media is a term that refers to services based on a sense of community, information generation and sharing (Hintikka 2008) and it also includes web 2. 0 technologies (Kangas, Toivonen and Back 2007) and tools (see Figure 1). However, Constantinides and Fountain (2008) view web 2. 0 as an umbrella term of web applications, including social media.
In this paper, social media is considered the new information channel on the internet and web 2. 0 tools are applications for using this channel. Thus, key words of social media are a sense of community, user generated content, and web 2. 0 tools, which then result in network effects, many-to-many communication and collective intelligence. Figure 1. The formation of social media/web 2. 0. At the core of web 2. 0 is collective intelligence and wisdom of crowds where users (private people, organizations) have the key role. User-generated content is the basis of the success of web 2. (Constantinides and Fountain 2008; Frampton 2008) since actions of users have a significant impact on the value of the service/application (Kangas et al. 2007). However, it is argued that some content generated by users like 13 anonymous amateur videos and music remixes posted to YouTube and other sharedcontent sites violate intellectual property rights and thus harm professional artists and the entertainment industry in general (Constantinides and Fountain 2008). Hence, copyright problems are one of the biggest issues when discussing the future of social media and the central role of user-generated content in it.
Web 2. 0 tools benefit from network effects; the more people attend different communities and social networks and generate content into them, the more people are tempted to join them. Thus, network effects and peer usage are important motives for customer lock-in and loyalty. (Constantinides and Fountain 2008. ) Businesses can utilize this by introducing their own communities and profiles/groups in social networks. This is discussed in chapter three. 2. 2 Web 2. 0 tools Adapting a classification by Constantinides and Fountain (2008) we divide web 2. 0 tools into five main categories (see Table 1). ) Blogs and podcasts. Blogs are public diaries in the internet and vlogs are blogs in video format. Blogs are combined with podcasts or videocasts, i. e. digital audio or video that can be streamed or downloaded to portable devices. 2) Social networks are applications allowing users to build personal profiles through which it is possible to communicate and exchange content and network with other users, and maintain existing relationships with friends. 3) Communities can be divided into online communities, content communities and discussion forums / bulletin boards.
Online communities can be formed around members’ mutual interests or a certain brand / organization. Content communities refer to websites in which particular types of content (e. g. video or photos) are organized and shared. As wikis are software enabling multiple people to edit websites and are they are often used for content sharing (Tapscott and Williams, 2008, 18), wikis can be placed in the category of content communities. Forums/bulletin boards are sites for exchanging ideas and information typically revolving around special interests. They are also one form of communities because of the sense of community among members.
Due to this, it is reasonable to position them as a subcategory of communities. 14 4) Content aggregators refer to applications that enable users to customize the web content they wish to access. These are RSS feeds (Real Simple Syndication or Rich Site Summary), widgets, bookmarks and tagging services. 5) Virtual worlds are internet sites where users communicate and interact via avatars and it is this that distinguishes virtual worlds from other social media. They are considered to be substitutes for the real world and businesses have also entered into virtual worlds. Table 1. Categorization of web 2. 0 tools. CATEGORY 1.
BLOGS AND PODCASTS 2. SOCIAL NETWORKS COMMUNITIES TOOL Traditional blogs, vlogs, podcasts, videocasts Social networks FOCUS Informing of current events and novelties Content sharing, maintaining relationships, networking Members’ mutual interests and reciprocal interaction Business transactions, brand building, interaction among organization and customers, co-creation of products Enable communication and transactions between buyers and sellers Content sharing EXAMPLES Blogs by Dell, podcasts from interviews MySpace, Facebook, IRC-Gallery, LinkedIn, ITToolbox Communities formed around similar interests e. g. Aukea. et (photography) Communities by Mozilla, Fiscars, Dell and Salesforce. com 3. Online communities Member-initiated Organizationsponsored Third-party established Content communities Content sharing sites, wikis Forums/bulletin boards 4. CONTENT AGGREGATORS VIRTUAL WORLDS RSS, widgets, bookmarks, tagging services etc. Virtual worlds eBay Discussion of mutual interests Categorizing and customization of web content Substitute for the real world YouTube, Flickr, Picasa, Pikeo, dotPhoto, GoogleVideo, Wikipedia B2Bexchanges, Alibaba, Zentrada, Go4worldbusiness Delicious, Yahoo! Widgets Second Life, World of Warcraft, Kaneva, Universe, Habbo . 15 3 Marketing in social media Companies’ websites have traditionally been the place for interactive marketing communications. Marketing communication activities linked to manufacturers’ websites include advertising, sales promotion, public relations and direct marketing. Tools for two-way communication on websites include feedback mechanisms such as direct email links, signups, surveys and questionnaires. (Perry and Bodkin 2002. ) Web 2. 0 tools however bring new ways for interactive marketing communications as they help to deepen the conversation between customer and seller. The terms social media marketing (SMM) and marketing 2. refer to marketing actions using web 2. 0 tools in order to leverage conversation online, to increase product awareness and brand equity, and to reach new customers. As web 2. 0 tools make possible deeper interaction between marketers and customers it is easier for marketers to get feedback on their actions and know their customers better. Web 2. 0 channels can also be seen as ? engines? that energize and add power to the marketing messages and spread them in a viral fashion. Web 2. 0 can be seen to have changed power structures and shifted market power from marketers to consumers.
Hence, marketing in social media needs to be both honest and transparent since deceptive means are usually exposed. Despite the hype around web 2. 0, there is still skepticism. Users can generate harmful content in social media about the marketer and hence damage reputation. For example Comcast Cable Communications Inc. reputation as a good customer server was jeopardized when one of their technicians fell asleep on a customer? s couch and the frustrated customer posted a hit video about it to YouTube (Bernoff and Li 2008). Customers can also discuss the marketer in a negative way in communities and social networks.
Hence, marketers cannot control their brand image in web 2. 0 because of the active role of the customers but they can try to affect it by participation. By actively listening and participating in online conversations, a marketer can improve the conversation about the brand and at the same time learn what the customers actually want and care about. B2B marketers are beginning to introduce web 2. 0 tactics to their marketing efforts, since buyers, partners, distributors, resellers and other third-party entities along the value chain are becoming more involved in social media. However, Laura Ramos from 6 Forrester Research (InSight24 2008) reminds us that B2B buyers are more conservative and therefore industry specific magazines, trade shows, and websites are also very important sources of information. In addition, WOM communication with peers greatly affects their business decisions and B2B buyers tend to be groups rather than individuals. That is why B2B marketers have not adopted web 2. 0 tools as widely as B2C marketers have. An interest in web 2. 0 marketing exists but the activity level is still low. Only one-third or less of B2B marketers uses blogs, podcasts, videos or other web 2. tactics in their marketing mix (eMarketer 2008a; Ferrante 2007). In addition, only 29% of B2B marketers sponsored an online discussion or community site and 18% advertised in virtual worlds (eMarketer 2008a). Due to the ease of use and inexpensive nature of web 2. 0 marketing, companies have introduced web 2. 0 tools for their marketing mix without a strict plan or goals for these efforts. Although signing up for most web 2. 0 applications is free, keeping up with them requires time and resources (Frampton 2008). Moran (2008) highlights the possibility of experimenting with web 2. 0 tools. If the web 2. strategy is not working, it is fast and simple to fix it. By experimenting, a marketer learns quickly which the most appropriate tools for his marketing efforts are. However, in order to gain the possible benefits, marketers need to do more than experiment. They should create a web 2. 0 marketing plan with specified goals which should blend seamlessly into the whole marketing mix and to other online marketing tactics (InSight 24 2008; Davis Kho 2008b). When planning to introduce web 2. 0 tools to marketing efforts it is critical to learn about web 2. 0 and to know which tools are appropriate for the company.
There are many problems facing companies implementing web 2. 0 tools for marketing. According to McKinsey Quarterly (2007) and Avanade (2008) problems with web 2. 0 marketing include: Lack of support by top management Lack of metrics to measure the effectiveness of web 2. 0 marketing Technical challenges: marketers do not know how to utilize web 2. 0 tools Maintaining web 2. 0 tools demands commitment to continuous content generation and maintenance and it takes a lot of time and effort to maintain the chosen marketing strategy Bernoff (2008) emphasizes the importance of success metrics to ensure business goals are accomplished.
Since it is also hard to measure the results and effectiveness of 17 web 2. 0 marketing, B2B marketers should measure the interaction level and engagement of the customers. The use of tools such as blogs, communities, social networking sites and viral videos requires dialogue and extended relationships with customers. If blog entries appear high in search results, marketers can target some of their search engine marketing budgets at blog funding. Similarly, the amount of visitors contributing content (videos, photos, documents, wiki entries) to a marketer site tells about the interactivity level and engagement of the customers.
While attitudes towards using web 2. 0 tools for marketing are cautious among B2B marketers there are already some successful results from using them. Research conducted in the spring of 2008 by Coleman Parkes Research and Avanade reveals that early adopters of social media marketing reported improved customer relationships and increased sales as well as achieving better corporate reputation. Companies using social media technologies also reported improved feedback and greater customer satisfaction as well as reductions in resolution times for support issues.
Using social media marketing was also seen to create a perception of the company as forward-looking and to improve its market reputation. (Avanade 2008. ) According to research by the IT consultancy firm Avanade and Coleman Parkes (Tieke 2008), for which Finnish managers were interviewed, nearly all of the interviewees feel that they understand the benefits of social media for business, whereas over a half of respondents do not believe that the top management understands the benefits of social media in customer relationship management. This can explain the low adoption rate of web 2. 0 in marketing.
However, only 25 % of the interviewees believed they were at risk of losing customers to companies using social media more effectively, when world-wide, 38 % believed this. Thus, in that sense Finnish managers do not yet generally see social media as an important competitive advantage or a must. But on the other hand, the interviewees estimated social media to increase the sales more than interviewees in other countries (56 % of the Finnish respondents, 40 % world widely) and that using social media gives a forerunner image to a company (83 % in Finland, 75 % in the other countries).
In addition, it is estimated that using social media improves customer feedback (78 % and 78 %) and customer satisfaction (72 % and 66 %). However, there were only 30 people interviewed in Finland while globally there were over 500 interviewees. According to Petri Ketola, the Country Manager of 18 Avanade Finland, in the light of these research results it is difficult for any industry to ignore the benefits of using social media. When examining the communication and interaction related benefits provided by utilizing web 2. in B2B marketing, we conclude, that it can be utilized for: 1) Strengthening and expanding customer relationships, 2) Brand building (with blogs, RSS feeds, podcasts, video on demand, wikis, mobile, viral video, social networks and virtual worlds (Madden 2008)), 3) Lead generation, (some authors suggest that this should be the only use, e. g. Keulenaer 2007), 4) Employee communications, 5) Enhancing communication in partnerships, 6) Enhancing communication in R&D (Weber 2007, 23-24, 32), 7) Demand generation (especially by using email marketing, online ads, SEO and webinars) (eMarketer 2008a).
So the main benefits are related to getting customers’ interest and attention, but apart from simple products or services, sales processes are not likely to come online widely in B2B markets (Keulenaer 2007). 3. 1 Implementing web 2. 0 When implementing web 2. 0 the first thing is to know the environment and its possibilities, which are several. Companies can harness web 2. 0 for marketing efforts by banner advertising in popular communities or blogs or communicating desired messages to new online opinion leaders, i. e. bloggers, podcasters etc.
Companies can also utilize the discussion of their products that happens in social media for their marketing efforts. For example Coca Cola discovered a range of amateur videos posted on YouTube that featured experiences of customers dropping Mentos mints into Diet Coke bottles. The company made use of this free publicity by launching a ? Coca Cola Challenge? campaign that encouraged people to post videos that showcased creative uses of everyday household items. Finally, companies can engage in web 2. 0 by introducing their own content for social media, establishing communities, or otherwise using web 2. tools for their marketing communications. (Constantinides and Fountain 2008. ) Table 2 below summarizes other issues involved in planning web 2. 0 marketing. 19 Table 2. Main issues when planning marketing with web 2. 0 tools. Know the environment Creativity and content The main thing is to know which kinds of tools are appropriate for the company and how to use them properly. In social media it is all about content and creativity. Only content interesting enough lures users in to participate and share the content forward in a viral way. Since web 2. tools require constant updating and new content, devoted personnel are required. New content needs to be generated continuously in order to keep customers interested. Measuring the interaction level and visitor amounts is quite simple with web 2. 0 tools. There should be specified goals set up in order to measure benefits reached with web 2. 0 tools. Through interaction with customers a company can get useful feedback to enhance its operations and to maintain customer relationships. Committed personnel and support of the management Continuous content generation Measurement Specified goals Listening and discussion
Creativity is at the core of a successful social media campaign as well as having personnel committed to maintaining social media tools. Marketers should provide content on their website that customers can use, bookmark or share online. This is one way to increase viral marketing efforts since website content that is easily spreadable is easier for the visitors to pass on, and this may include interesting stories spread by emailing, linking, blogging or social bookmarking that page. (Moran 2008, 91. ) In addition, it is important to have fresh content available continuously.
Weber (2007, 38) argues that in social media marketing the best websites combine professional and user-generated content. A company can pay or develop professional content for its sites and users can then comment and share their views about the subject. Companies are also urged to create content such as whitepapers or podcasts and encourage interested people to register by supplying their contact information. However, the problem with this approach is that content behind registration does not appear in search engine results, which might diminish corporate visibility.
Visibility in search engines can be increased by actively sharing content with other sites too. (Optaros 2007. ) An alternative approach for companies to harness web 2. 0 is by providing customers with personalized products. First-movers in this strategy are companies such as Kleenex (mykleenextissue. com), photostamps. com that allows consumers to create stamps from their own photos, Heinz (myheinz. com) that invites customers to create personalized labels for ketchup bottles and M (mymms. com) allowing customers to select favorite candy colors and have personalized messages printed on them.
Pepsi and Nike 20 also offer similar sorts of personalized products for their customers. Online communities and virtual worlds enable users and members to become product developers. Lego was one of the first companies to harness customers as product developers in their community. Many companies start to explore social media and communities by establishing their own internal communities to improve their knowledge management. If the community proves to be successful, it can be implemented for marketing efforts too.
According to a research by Association of National Advertisers and B2Bonline. com the most effective Web 2. 0 tools perceived by B2B marketers are viral videos (23% of respondents), podcasts (21%) and blogs (17%). Only 10% of respondents perceived social networks as effective marketing tools and 8% rated Second Life to be an effective marketing tool. On the contrary, B2C marketers consider viral videos and social networks to be the most effective web 2. 0 tactics (32% and 36% of respondents) and only 13% see podcasts and 6% see blogs as effective. eMarketer 2008a. ) In order to reach their customers B2B marketers should find out what social media tools customers are using and become part of that conversation, wherever it is taking place. This can be considered a guiding rule when planning web 2. 0 marketing activities. “It’s really who your audience is,” says Kira Purdue, executive vice president of Trevelino/Keller Communications Group in Charleston. “If you’re a really niche B2B business, Facebook is probably not for you. But maybe you should create a network on Ning. ” (Frampton 2008).
Davis Kho (2008a) argues that corporate strategy and cultural standpoint should be taken into consideration when choosing social media applications and technologies. Although marketers need to have an open mind about new marketing channels, Davis (2006) emphasizes that web 2. 0 tools should be selected in accordance with target groups. This view is supported by marketing practitioners too. It is important to understand and profile buyers? digital footprints online, where they look for information. Moreover, it is important to understand how buyers use the searched information in the physical world of their sales organization.
This study next discusses this challenging issue of choosing the right web 2. 0 tools. 3. 2 Blogs and podcasts Blogs are one of the first forms of web 2. 0 and they include many of the core ideas of web 2. 0: collective producing and sharing of content as well as new policies on the internet (Hintikka 2007). Currently blogging is one the most common forms of web 2. 0. 21 The Pew Internet and American Life Project estimates that 11 % of adults living in the US read a blog on a daily basis, and 33 % say they have read a blog (Frampton 2008).
Blogs are an example of collective intelligence since they are usually strongly linked with each other. Blogging has also expanded in the form of video blogging (vlogs). In the blogosphere information flows extremely fast and widely, due to the interrelated nature of blogs. Due to this blogs often appear at the top of search engine results. Blog readers often actively comment on blogs, which makes the form a social medium. (Hintikka 2007, 27-28. ) For companies blogging offers a new way of informal communication and bring out the company? s humanity.
When a blog is successfully implemented in use it can help to strengthen customer relationships (due to both the informal nature and interactive capabilities of blogs), build the brand, generate leads, improve customer service (keeping customers informed through the blog among other channels as well), enhance the reputation of the company (by displaying expertise), and improve search engine rankings. Companies can also get reputation by commenting on blogs that are popular and relevant to the business. In this way, companies can participate in the blogosphere and promote their thoughts in the field.
There can be several blogs for different target groups and authors can be executives, experts or the whole work community. Many of the popular company blogs are written by top executives since they act as the face of the company. Successful blog authors have been for example Sun Microsystem? s CEO, Jonathan Schwartz; CEO of Apple Computers, Steve Jobs and the McDonalds Vice President, Bob Langert. Other enthusiastic employees can also write the company blog, the main thing is that the content is useful for the readers so that they subscribe to the blog and want to engage in a conversation with the marketer.
It is advisable for bloggers to concentrate on creating dialogue with readers and to discuss subjects that readers are interested in, as a blog is not an advertisement. By blogging, a company can demonstrate its expertise, the collected knowledge and converse with customers. It is fundamental that everything written in blogs is truthful and honest. For example, Wal-Mart faced a scandal when it was revealed that a blog praising Wal-Mart was actually written by two of its employees although it was supposed to be written by unrelated authors (Weber 2007, 15-16).
In addition, blog postings need to be regular in order to be effective channels of interaction with readers. A good example of well-worked blogging is provided by Dell who 22 managed to change its reputation from being a bad customer service provider to being a customer-oriented company that contributes to true conversation with its customers by becoming a part of the blogosphere. Dell has a group of bloggers writing about product launches, promotions and answering questions from customers to enhance the dialogue with its customers and to improve its products and services.
The success of blogs can be measured by the number of subscribers and their comments. However, the number of subscribers does not tell the whole truth, since not all subscribers see every blog post. The success of the blog also depends on how much it has been referred to. When starting a company blog, there are several rules that need to be considered for creating a corporate blogging policy. Blogs should be evaluated before posting and there should be common rules for what kinds of goals are expected to reach with blogging.
There is also the question of responsibility; is the blog personal or does it speak for the company? Who are the authors and what are their positions in the company? Blog authors have also a responsibility for not revealing any confidential information and securing that content is proper and does not insult anyone. However, blogging is challenging and there are many obstacles to succeeding with it. According to a report by Forrester Research (Tietoviikko 2008) most of the blogs concentrated on business customers do not reach their goals.
Blogs do not inspire readers to comment and take part in the conversation and they also have problems gathering sufficient audience. The reason for this is the content of blogs. Most blogs concentrate on repeating the same messages as the companies? other communication without presenting any new ideas. Consequently, the blogs rarely get any comments but some B2B bloggers have mentioned that they get feedback by email and phone from their readers since they do not want to give it publicly. The amount of new business blogs has also decreased. One further problem with blogging is the difficulty in getting publicity.
According to Jon Miller from Marketo (Miller 2007), who is author of the Modern B2B Marketing blog, one has to write about popular and trendy topics to get links instead of writing of everyday tactics in B2B marketing. Podcasts are audio files that can be streamed or downloaded over the internet. They usually include interviews, commercials or other informative content. Thus, they can be considered audio newsletters. Moran (2008, 46-47) and Weber (2007, 23) discuss the opportunities of using podcasts in marketing communication. Podcasts are preferred to 3 radio air time because of their immediacy, low cost and flexible time duration. Videocasts are essentially similar to podcasts except that they include video. Podcasts can be used to inform customers about new products and current events in the industry. A marketer can for example do a podcast interview with some interesting personality concerning a topic close to the company or include customers to discuss their opinions about some current topics or products. The podcast can then be published on a company website where the message is in everyone? s reach. For example Sun Microsystems ontinuously offers podcasts on their page about the latest news from Sun and interviews with Sun engineers and executives. In one podcast, Sun CEO and an expert on sustainable development discussed “how the internet and technology can enable communities and environmental solutions”. (Weber 2007, 181. ) The success with company podcasts can be measured by download counts but it does not tell if it was actually listened to after downloading so measurement of its effectiveness is difficult. Blogs and podcasts seem to be attractive web 2. 0 tools for B2B marketers, as by using these companies can provide useful information for their customers.
Only viral videos are considered more effective (eMarketer 2008a). Table 3. Summary of benefits and drawbacks of blogs and podcasts. Giving the company more human and informal image about Conversation with customers Displaying company’s expertise in the industry Difficult to measure the benefits Continuous content generation is needed What kind of content is relevant for the customers? 3. 3 Social networks Boyd and Ellison (2008) define social network sites (SNS) as web-based services that allow individuals to construct a public or semi-public profile within a bounded system.
Individuals can also articulate a list of other users with whom they share a connection, and view and traverse their list of connections and those made by others within the system. Salmenkivi and Nyman (2007, 106-110) note that with these profiles users give desired impressions of themselves to others and the opportunity to view other users’ profiles strengthens the trust between users. Boyd and Ellison (2008) make remark that networking with strangers is not the primary practice on many of the SNSs. Instead, users most often communicate with people who are already a part of their extended social network.
This is the case with for instance Facebook. Conversely, MySpace and LinkedIn are also used for making new friends and connections with people never met offline. (Shuen 2008, 92. ) 24 Social networks have become popular among users. According to the Pew Internet and American Life Project, an initiative of the Pew Charitable Trusts, 13 % of adults use an online social networking site daily and 29 % of adults say they have used a networking site (Frampton 2008). Still globally social networks are not yet that common while 58 % of adults in 17 countries do not know what social networking is.
However, 26 % of 13000 respondents belong to social networking sites. (eMarketer 2008c. ) Most SNSs provide commenting and messaging features, although they are not universal. Some have also other features such as photo-sharing, video-sharing, blogging, instant messaging or support for mobile use (Boyd and Ellison 2008). These kinds of services provide users with tools for data recording and communality (Hintikka 2007, 28). Social network sites can be classified into various subtypes depending on the purpose. Passion centric SNSs (e. g. Dogster) help strangers connect based on shared interests.
MySpace, Facebook, LinkedIn and the Finnish IRC-Gallery are examples of social networks that focus on building and maintaining relationships. Websites that originally focused on media sharing (e. g. Last FM, Flickr, YouTube) later begn to implement SNS features (see Figure 2). 1997 1998 1999 2000 2001 2002 Six Degrees. com 2004 LiveJournal AsiaAvenue BlackPlanet LunarStorm (SNS relaunch) MiGente (SixDegrees closes) CyWorld Ryze Fotolog Friendster Skyblog Orkut, Dogster Flickr Piczo Mixi Facebook (Harvard only) Multiply aSmallWorld Dodgeb all Care2 (SNS relaunch) Catster Hyves Yahoo! 60 YouTube Xanga (SNS relaunch) Cyworld (China) Bebo (SNS relaunch) Facebook (high school networks) Ning AsianAvenue BlackPlanet (relaunch) QQ (relaunch) Facebook (corporate networks) Windows Live Spaces Cyworld (U. S. ) Twitter MyChurch Facebook (everyone) 2005 2003 Couchsurfing LinkedIn MySpace Tribe. net Open BC/Xing LastFM Hi5 2006 Figure 2. Timeline of SNS and community site launches (based on Boyd & Ellison 2008). 25 The amount of SNSs launched has been growing especially since 2003. After 2006 numerous new social networks have emerged but they haven? reached the levels of success enjoyed by the most popular SNSs, MySpace and Facebook, and so they are not mentioned in the list. There are new SNSs also in Finland like Jaiku, Dopplr and Xiha in addition to IRC-Gallery. 3. 3. 1 MySpace and Facebook MySpace was launched in 2003 and started as an open networking environment for bands and their fans. Both private people and companies can create MySpace profiles. The service is particularly popular among the youth, who use it for virtually engaging with people of shared interests.
MySpace is still strongly music centered but it aims to widen its focus to other areas too such as the fashion and motion picture industries. Advertisers on MySpace try to enhance product value by giving consumers an opportunity to tag products as friends. By the end of 2007, there were over 100 million profiles at MySpace. (Salmenkivi and Nyman 2007, 114, 118???120; MySpace 2008. ) Examples of firms in MySpace ? Aquafina: The company launched a contest in which users had a chance to win a trip to Sundance Film Festival by making the winning Beastie Boys video. Dunhill Staffing Systems: Having video clips of staff members introducing themselves in MySpace. The purpose of this is to bring employees closer to clients. The company has also considered adding job postings and events to its profile. This enables a company to introduce itself to its customers in a new way when compared to a traditional company website. Facebook is a networking service enabling users to create a profile and network with each other. It has already about 120 million registered users (Siltala 2008) and in 2007 there were over 50 000 networks or groups consisting of students, company mployees or circles of friends (Salmenkivi and Nyman 2007, 121). Detailed information about users and the ability to create one? s own groups in Facebook have attracted companies to join too. Reaching out to customers through Facebook allows the company to catch customers? attention in a new way. This is perceived as an important tactic in the age of information overload, when even sorting through personal e-mail can be a chore. (Frampton 2008. ) “Frankly, I think people are more attentive to Facebook than to their own e-mail at this point. A big (e-mail) blast, they might just skip over. (Siegel in Frampton 2008) 26 A successful campaign in a social network site integrates the advertisement and brand into the community experience while enabling users to participate and create content to the campaign. Examples of firms in Facebook ? B’zar clothing boutique: Facebook pages for their store allows them to send new merchandise updates and other information directly to almost 750 customers. ? Fiery Ron’s Home Team BBQ: A Facebook page keeps the restaurant’s over 550 Facebook fans up-to-date on specials and events through a group page ?
Andiamo started a campaign in Facebook (see Figure 3) in spring of 2008 by introducing its own application which anyone could join. At the moment, the application has 344 monthly users but there are only a few posts on the wall and the bulletin board so the application’s interactivity level is low. Andiamo in Facebook: (http://www. facebook. com/apps/application. php? id=8040211415). Figure 3. Andiamo group in Facebook. 27 Different groups in Facebook and MySpace can be considered to be online communities too since in them members can interact with each other, post comments on the group? wall and bulletin board and also post their own photos and videos to the group profile. As is the situation in online communities concentrated on a specific mutual interest of members, members have to be engaged in the subject in order for them to participate in groups regularly. When considering communities of products and services, enthusiasm for participating in a community arises from brand loyalty. The discussion of using communities for marketing also applies to marketing in social networks.
It can be said that the difference between social networks and online communities is that SNSs are organized around people and communities around interests. 3. 3. 2 LinkedIn and ITtoolbox In the B2B environment, LinkedIn and ITtoolbox are the most important social networking sites. LinkedIn is a social networking site for business where professionals can connect each other easily. It has over 30 million members (LinkedIn 2008) and the user-base is growing steadily. Members’ existing networks and business information are available for other members.
Therefore business networking and making new connections is easy and safe since a user can get recommendations from other members. LinkedIn is often used for creating new business contacts or career opportunities. Another famous professional networking site is ITtoolbox, a vertical industry network for 1. 3 million information technology professionals. 3. 4 Benefits and drawbacks of social networks Social networking services can provide SEO and reputation management benefits for the company and at best, these sites can help to make valuable new business connections.
According to a report by eMarketer social networks are increasing their position among B2B marketers, while in 2008 nearly $40 million will be spent on social network advertising in the US (eMarketer 2008d). Because so many businesspeople are joining these networks to make professional connections, it also attracts B2B marketers to join and make these connections. Researchers expect the B2B social marketing trend to grow to $210 million by 2012 (eMarketer 2008d). Morrison (2006) reminds us that the LinkedIn and ITtoolbox types of professional networks focused on professional topics are generally more structured than other kinds 8 of social networks (e. g. MySpace and Facebook) and may have a higher degree of moderation. This allows them to remain professionally productive which can result in a safe and predictable advertising environment for a B2B marketer. In professional networks, the conversation may often relate to the products that B2B marketers are offering and hence are effective spaces for advertising. In ITtoolbox, for example, it is possible to match white papers to the conversations users are having with its own proprietary contextual matching system.
Shuen (2008, 100) also highlights that social networks for business are effective WOM channels. While a company can get recommendations and find new business partners via social networks as well as spread the word about new products, bad news about the company also spreads widely. Many academics view banner advertising as inefficient marketing (Chatterjee, Hoffmann and Novak 2003; Briggs and Hollis 1997). Users of MySpace and Facebook spend on average three and a half hours per month on navigating between different profiles. A lot of time is spent checking friends? pages and updating one? own profile and therefore users do not have time to click banner ads. On the other hand, as ads featured in networking services can be tailored relevantly to different target groups, users? urge to click ads might increase. (Hamilton 2007. ) The success of groups on social networking sites can be measured by counting fans and members of the groups and estimating the value of the extended engagement or exposure they generate. Members? comments and postings as well as user-generated content are the basis for evaluating the success. Table 4. Summary of benefits and drawbacks of social networks.
Networking possibilities, getting new business connections Targeted banner advertising for different groups Easy way to create an own ? community? (group) in there and hence leverage conversation with customers Bad news spread fast Difficult to generate interesting content to lure users to the group or spread the word about the group. 3. 5 Communities 3. 5. 1 Online communities According to Kannan, Chang and Whinston (2007) online communities have existed for a relatively long time since they originate with researchers discussing and cooperating online while working for projects.
Many online services also offered local bulletin 29 boards for groups interested in specific technology issues so they could share content and discuss using the bulletin boards. The World Wide Web brought many real life communities online where members could more easily stay in touch with each other and communities could expand without geographical limits. There were also emerging communities operating only online, and as e-commerce began to grow, business oriented communities started emerging too. Online communities consist of individuals with congruent social needs.
Personal relationships confirm the feeling of engagement that is a base for the certain level of loyalty to the community. Members? contributions to the community consists of the information content they produce i. e. comments, feedback, attitudes and beliefs as well as informative needs. (Kannan et al. 2007. ) Users also generate other sorts of content to communities like photos, music and videos. Communication in online communities happens via instant messaging, blogging, voting and newsletters. In addition, messages can be sent to private mailboxes, discussion boards and e-mail (Turban, King, Lee, Warkentin and Chung 2002).
Forums and message boards can also be seen as types of community since they are the places for the conversation among customers where they send threads about different topics and also about products and services. WOM communication has a significant position in online community interaction. It is consumer-intensive marketing communication where the sender of the message is independent of the marketer. For other users, a sender is thus considered to be a more reliable and more credible source of information than a marketer. (Brown, Broderick and Lee 2007. According to Hagel and Armstrong (1997) and Kozinets (1999) a community has an influence over its members? opinions, purchase decisions and consumption of products and services. Ratings and reviews about products and services in the community can create positive WOM, as customers? recommendations often influence others which in turn can lead to sales increases. Algesheimer and Dholakmia (2006 via Weber 2007, 112) researched eBay? s customers and found out that customers participating in eBay? s online communities bid and buy more than non-participators and also pay higher final prices.
According to the research, eBay earned several million dollars in profit because customers were more active in the communities and hence trading more. Online communities can be divided into member-initiated, organization sponsored or brand centered and third-party established communities (Table 5). 30 Table 5. Classification of online communities (Porter 2004; Kannan et al. 2007). Type of community Memberinitiated communities Focus Mutual interests of members (like hobbies), maintaining relationships Brand building, business transactions, maintaining customer relationships Examples Aukea. et, KonsoliFIN BBS Why consumers participate Bonding with each other, information and content sharing, emphasizing one’s own individuality Product information, information and content sharing, emphasizing one’s identity with community membership, participating in product development Safe environment for business transactions Why companies participate Opportunity for targeted advertising Organizationsponsored communities/ Brand communities Community by Dell and Salesforce, Mozilla community Third-party established communities Business transactions; marketplaces maintained by intermediaries eBay
Reaching one’s target audience, getting feedback from members about products and services, product development with customers, increasing loyalty of their customers Opportunity for targeted advertising Companies join online communities since they can approach their target audience through them. Companies can either solely settle on banner advertising in different online communities or then establish their own communities. Online communities bring together users with similar interests and hence it is easy for marketers to target their marketing messages at different interest groups instead of according to demographic factors.
Targeting for group is more cost-effective than one-to-one targeting (Weber 2007, 37). But people most often want to have control over what sort of media content they are exposed to. Therefore, consumers may perceive even well targeted marketing campaigns as annoying. (Salmenkivi and Nyman 2007, 105). Consumers? reason for joining a community is usually the content delivered by the community and hence the quality of this content is the key issue. If the administrators of the community provide the content, they are responsible for the quality.
However, if the content