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Digital marketing and social media: Challenges and solutions

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 Digital marketing and social media:
Challenges and solutions
Ibrahim M. Elawadi
School of Management, University of Leicester

Abstract:
Recent years have witnessed a very fast adoption of new digital channels that allowed billions of
human beings to connect, share and collaborate like never before. These new channels defined
a new marketing environment full of challenges. And with Great Challenges Comes Great
Opportunities. In this research, I outline main definitions and characteristics of digital media.
Then identify challenges that includes the importance of customer insights, impact of social
media on branding, digital metrics and talent gap. And within each challenge, I highlight solutions
and opportunities that lies within the shifting digital landscape.

Introduction: United States (Snapchat, 2016). While

We live in a rapidly changing world where a
tsunami of data is being generated every
second. Platforms such as Facebook, Twitter,
Youtube and Snapchat provided the digital
infrastructure to allow billions of human
beings to connect, share and collaborate like
never before.
Worldwide, there are over 1.13 Billion active
users daily on Facebook, while 1.57 Billion
are active monthly (Facebook, 2016). To put
that number in perspective, this is 21% of the
7.4 Billion human beings on the planet
(Worldometers, 2016). A 100 million people
are active on Snapchat every day, while
Snapchat users watch over 10 billion videos
per day. And in any given day, Snapchat
reaches 41% of all 18 to 34 year-olds in the
Twitter has over 310 Million active users
(Twitter, 2016).
Beside social media, Mobile plays a vital role
in the digital era. Cisco expects 11.6 billion
mobile-connected devices by 2020,
expanding the mobile traffic 8-fold from
2015 to 2020. While expecting that 75% of
the world’s mobile data traffic will be video
by 2020 (Cisco, 2016).
That new era of digital and the infrastructure
that lies beneath it defines a new marketing
environment. And the massive expansion in
digital media positioned the internet as one
of the most important marketplaces. Online
consumer spending in the United States
surpassed $92.8 billion in the first quarter of
2016 (U.S. Department of Commerce, 2016),
and the growth rates of online demands for
information goods, such as books,
magazines, and software, are between 25%
and 50% (Albuquerque et al. 2012, cited in
Leeflang et al. 2014).
Social media and mobile will carry the future
of marketing, hence, the field of digital
advertising is expected to reach $537 Billion
by the end of this year (ZenithOptimedia,
2016). And since the internet became one of
the most important marketplaces, adapting
digital tools and technologies into existing
business models is a must. But before we
dive into this new marketing environment,
Its important to discuss the 3 elements that
defines the characteristics of the new digital
era: Web 2.0 , creative consumers and social
media.
Web 2.0 :
In the early days of World Wide Web, the
majority of companies used websites as an
advertising tool that reflects the corporate
brochure in what came to be termed
‘brochureware’ (Berthon et al., 2012: 261).
“World Wide Web was used to present
marketing messages through page views and
advertising to reach large numbers of people
in a short amount of time” (Berthon et,al.
1996, cited Tiago and Verissimo, 2014: 704).
The term Web 2.0 was first used in 2004 to
describe the participatory and collaborative
platform where content and applications are
no longer created and published by
individuals, but are continuously modified by
all users (Kaplan and Haenlein, 2010: 60-61).
The participatory and collaborative culture
of Web 2.0 caused three effects that Berthon
et al. (2012:262) summarizes in: (1) a shift in
locus of activity from the desktop to the
Web, (2) a shift in locus of value production
from the firm to the consumer, and (3) a shift
in the locus of power away from the firm to
the consumer.
Web 2.0 provided the infrastructure that
enabled creative consumers to exist, and
creative consumers took the lead and
became the dynamos of this new digital
world.
Creative Consumers:
The technical infrastructure of Web 2.0
offered a number of benefits to the
consumer, including richer information, a
broader selection of products and product
diversity. On top of that, consumers are no
longer receivers only in the marketing
process. Consumers are taking increasingly
active role in co-creating everything from
branding to product design. They use digital
media to research products and services,
engage the companies they buy from, as well
as other consumers who experienced the
products and services before.
Berthon et al. (2012: 263) defines creative
consumers as those "who produce much of
the value-added content in social media, and
it is their networks of friends and associates
that constitute the social” causing what
(Stephen, 2016) defines as ‘mega-phone
effect,’ which is the ability for regular
consumers to access large audiences
through digital/social media. And through
those networks, they create, share and
engage in informal discussions about
products and services, create reviews in text
or video and even become involved in the
modification of the products and services.
2
Platforms for Engagement:
Social media is defined as “a group of
internet-based applications that build on the
ideological and technical foundations of
Web 2.0, and that allow the creation and
exchange of user generated content”
(Kaplan & Haenlein, 2010, p. 61). These
applications enable instantaneous, real-time
communication, with global reach
capabilities.
Social media is the product of Web 2.0,
hence, it played a vital role in transforming
the internet from a platform for information
to a platform for influence. And while
Traditional Media relies on reach as One-
Way Communication (one to many), social
media relies on engagement through two-
ways communication channels (many to
many), turning the old days of page views in
Web 1.0 into "billions of people creating
trillions of connections through social media
each day" (Hansen et al.,2011, p. 3 cited in
Richard et al., 2011: 267). Hence, social
media came to be termed as user-generated
content (UGC) or consumer-generated
media (CGM).
In his book The New Influencers, Gillin (2007)
points out that ‘‘Conventional marketing
wisdom has long held that a dissatisfied
customer tells ten people. But that is out of
date. In the new age of social media, he or
she has the tools to tell 10 million’’ (Gillin
2007, cited in Mangold and Faulds, 2009:
359).
Shifting Landscape:
The world of media is changing rapidly over
the past years. The massive growth in
number of connected consumers, along with
the expansion of mobile penetration led to
shift from traditional to digital media. That
shift had a massive impact on global media
advertising.
Television is still the world’s dominant
advertising medium, attracting 38.8% of
global advertising expenditure in 2014, while
internet advertising attracts 25.5%
(ZenithOptimedia, 2015), but internet
expenditure grows much faster. In 2017,
internet advertising will account for 34.0% of
global adspend in 2017, slightly behind
television’s 35.9%. And the market share gap
between the two media will narrow from
13.3 percentage points in 2014 to 1.9 in
2017. At this rate of growth, internet
advertising will overtake television in 2018,
and social media will be the fastest-growing
sub-category at 28.4% a year to 2017.
Moreover, cheap smartphones have come
on to the market over the past few years.
Hence, mobile advertising became the
driving force behind the growth of the entire
advertising market. And (ZenithOptimedia,
2015) predicts that mobile internet
advertising will overtake newspaper
advertising next year. In fact, studies show
that mobile is driving a second Internet
revolution, that is even more profound than
the first one (Husson et al. 2013, cited in
Leeflang et al. 2014: 3).
The shifting media landscape reflects in a
shift in communications paradigms. In the
traditional communications paradigm, the
organizations have a high degree of control
over the content, frequency, timing and
3
other elements of marketing. While in the
digital era, information originates in the
market place (Mangold and Faulds, 2009).
Hence, marketing managers should
recognize and the importance of discussions
occurring out of their control.
Out of Control:
By its nature, social media plays two
important promotional roles in the
marketplace. First, it allows companies to
communicate with their audience, and
second, it allows audience to communicate
to one another.
Second role of social media reflects highly
magnified form of word-of-mouth
communication, but the uniqueness lies in
the scale and magnitude. Now creative
consumers have the ability to communicate
with hundreds, thousands or even millions
of other consumers. As a consequence, more
consumers are led by other consumers than
by advertising and consumers became in
control.
That has brought a challenge because
companies cannot directly control
consumer-to-consumer conversations, but
they do have the ability to shape the
discussion and have influence over it in
consistency with the organization`s mission
and performance goals.
Marketing challenges:
A survey conducted by Tiago and Verissimo
(2014:705) shows that managers identifies
benefits of online marketing in improving
information gathering and feedback,
potential to increase knowledge, potential
to increase the promotion of firms,
expanding internal and external
relationships, knowing consumers’
consumption habits and preferences.
And since marketing executives are
confronted with rapidly changing markets
which are beyond their control, (Leeflang, et
al., 2014) identified 4 important challenges
based on their survey for 777 marketing
executives from the US, Europe, and Asia.
These challenges are: (1) The ability to
generate and leverage deep customer
insights, (2) Managing brand health and
reputation in a marketing environment
where social media plays an important role,
(3) Assessing the effectiveness of digital
marketing, (4) The increasing talent gap in
analytical capabilities within firms.
In the next section, I continue with a critical
discussion for those challenges:
1. Customer insights:
The ability to track consumer behavior
across online platforms led to a large and
complex data sets, forming what termed to
be big data. Hence, “the most important
challenge in a digital marketing world is the
ability to generate and leverage deep
customer insights” (Leeflang, et al., 2014: 5).
The challenge requires implementing an
efficient tracking to capture, store, share,
transfer, analyze, and visualize data.
Implementing a proper tracking system will
allow marketers and decision makers to
follow consumers during their customer
journey. And companies that track and
analyze data are said to outperform
competitors (Davenport 2006, cited in
Leeflang et al. 2014: 3).
4
However, overreliance on data and hard
facts decision making, might lead to
reduction in creativity and out-of-the-box
thinking. Hence, it is important to define the
allowed degree of innovativeness, as well as
using big data to leverage utilizing several
data sources in an innovative fashion. For
example, Dutch railways used their own data
combined with data by TomTom navigation
systems to inform customers on their
expected travel time by train and by car. This
helps customers to make more informed
decisions on their choice of travel mode
(Leeflang, et al., 2014, p. 6).
2. Social media & brand health:
Traditionally, companies use fully controlled
mass advertising to build and sustain brand
reputation. A successful marketing
campaign requires sufficient reach and
attention. In the digital landscape, social
media offer a great opportunity to reach
large audience easily and at a relatively low
cost. But as mentioned before, that comes at
a price of a weaker control over brand
reputation online or what termed to be e-
reputation. The risks of lack of control
increases proportionally with the size and
strength of the brand.
Consumers can easily become value
destroyers instead of value creators for
brands. And since creative consumers like to
network with other consumers with similar
interests, marketers can leverage that by
campaigns that either create the
communities or participate in existing
communities. Taken as a whole, companies
are struggling to build successful
engagement strategies that can make real
and measurable impact.
Additionally, the social media impact reflects
also in a dynamic and interconnected
international environment, were "local
events rarely remain local and global events
are likely to be (re)interpreted locally"
(Berthon et al. 2012: 261). Hence, managing
e-reputation became a complex challenge
for marketing executives charged with
formulating and implementing marketing
strategies internationally.
Moreover, the brand health challenge
magnifies the importance of customer
insights, where a proper monitoring for
brand mentions and sentiments must be
implemented.
3. Metrics:
Measuring the Return of Investment (ROI) of
online marketing is one of the biggest
challenges in digital marketing. (Leeflang, et
al., 2014) shows that it is difficult for
marketing executives to understand online
metrics and turn it into actionable insights,
especially when it come to the financial
impacts.
Moreover, most firms use online and offline
media to promote online and offline stores.
Hence, many efforts are taken to compare
the effectiveness of digital channels with
traditional channels, creating a universal
metric that allows for direct comparison of
financial outcomes between traditional and
online media. (Srinivasan et al. 2010, cited in
Leeflang et al. 2014: 8).
A key challenge to measure the actual ROI in
digital is to identify Key Performance
Indicators (KPIs). For example, companies
and organizations tends to use the last-click
method, where sale is attributed to the last
5
medium used. That ignores the customer
journey and the fact that costumer have
been exposed to many factors before taking
the final click, which leads to an inaccurate
and deceiving metrics.
4. Talent gap:
The rapid expansion in digital media is
creating a digital talent gap. (Manyika, et al.,
2011, p. 11) estimate that 440,000–490,000
of analytically trained people will be needed
in the USA in 2018 to analyze customer data,
create digital advertisements, develop Web
sites, and perform statistical analyses,
however, the supply is only 300,000 of these
talents. Hence there is a 50–60% gap relative
to the 2018 supply.
Hiring more skilled talents became a must
for organizations to manage their digital
marketing effectively, while other
organizations prefer outsourcing to media
agencies. However, both solutions provide
some disadvantages. Hiring in-house skills
can be a challenge because most talents
have excellent analytical skills, but lack a
strong knowledge and understanding in
marketing, which might result some
problems between marketing and analytics.
On the other hand, fully outsourcing also can
be a challenge because Analytics became a
strategic asset for companies.
Conclusion:
Social media and mobile will carry the future
of consumer marketing, and the rapid
changes in media landscape and the very
fast adoption of new digital channels has
brought both opportunities and challenges
for marketers. Marketing executives should
invest in analytical capabilities to generate
and leverage deep customer insights, and
manage brand health and reputation in
social media. And since most involve
challenges involve data, a great
opportunities rise from implementing an
efficient tracking to capture, store, share,
transfer, analyze, and visualize data.
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