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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


Twitter has over 310 Million active users
We live in a rapidly changing world where a (Twitter, 2016).
tsunami of data is being generated every
second. Platforms such as Facebook, Twitter, Beside social media, Mobile plays a vital role
Youtube and Snapchat provided the digital in the digital era. Cisco expects 11.6 billion
infrastructure to allow billions of human mobile-connected devices by 2020,
beings to connect, share and collaborate like expanding the mobile traffic 8-fold from
never before. 2015 to 2020. While expecting that 75% of
the world’s mobile data traffic will be video
Worldwide, there are over 1.13 Billion active by 2020 (Cisco, 2016).
users daily on Facebook, while 1.57 Billion
are active monthly (Facebook, 2016). To put That new era of digital and the infrastructure
that number in perspective, this is 21% of the that lies beneath it defines a new marketing
7.4 Billion human beings on the planet environment. And the massive expansion in
(Worldometers, 2016). A 100 million people digital media positioned the internet as one
are active on Snapchat every day, while of the most important marketplaces. Online
Snapchat users watch over 10 billion videos consumer spending in the United States
per day. And in any given day, Snapchat surpassed $92.8 billion in the first quarter of
reaches 41% of all 18 to 34 year-olds in the 2016 (U.S. Department of Commerce, 2016),
and the growth rates of online demands for locus of activity from the desktop to the
information goods, such as books, Web, (2) a shift in locus of value production
magazines, and software, are between 25% from the firm to the consumer, and (3) a shift
and 50% (Albuquerque et al. 2012, cited in in the locus of power away from the firm to
Leeflang et al. 2014). the consumer.
Social media and mobile will carry the future Web 2.0 provided the infrastructure that
of marketing, hence, the field of digital enabled creative consumers to exist, and
advertising is expected to reach $537 Billion creative consumers took the lead and
by the end of this year (ZenithOptimedia, became the dynamos of this new digital
2016). And since the internet became one of world.
the most important marketplaces, adapting
digital tools and technologies into existing Creative Consumers:
business models is a must. But before we The technical infrastructure of Web 2.0
dive into this new marketing environment, offered a number of benefits to the
Its important to discuss the 3 elements that consumer, including richer information, a
defines the characteristics of the new digital broader selection of products and product
era: Web 2.0 , creative consumers and social diversity. On top of that, consumers are no
media. longer receivers only in the marketing
process. Consumers are taking increasingly
Web 2.0 :
active role in co-creating everything from
In the early days of World Wide Web, the branding to product design. They use digital
majority of companies used websites as an media to research products and services,
advertising tool that reflects the corporate engage the companies they buy from, as well
brochure in what came to be termed as other consumers who experienced the
‘brochureware’ (Berthon et al., 2012: 261). products and services before.
“World Wide Web was used to present
Berthon et al. (2012: 263) defines creative
marketing messages through page views and
consumers as those "who produce much of
advertising to reach large numbers of people
the value-added content in social media, and
in a short amount of time” (Berthon et,al.
it is their networks of friends and associates
1996, cited Tiago and Verissimo, 2014: 704).
that constitute the social” causing what
The term Web 2.0 was first used in 2004 to (Stephen, 2016) defines as ‘mega-phone
describe the participatory and collaborative effect,’ which is the ability for regular
platform where content and applications are consumers to access large audiences
no longer created and published by through digital/social media. And through
individuals, but are continuously modified by those networks, they create, share and
all users (Kaplan and Haenlein, 2010: 60-61). engage in informal discussions about
products and services, create reviews in text
The participatory and collaborative culture
or video and even become involved in the
of Web 2.0 caused three effects that Berthon
modification of the products and services.
et al. (2012:262) summarizes in: (1) a shift in

2
Platforms for Engagement: The world of media is changing rapidly over
the past years. The massive growth in
Social media is defined as “a group of number of connected consumers, along with
internet-based applications that build on the the expansion of mobile penetration led to
ideological and technical foundations of shift from traditional to digital media. That
Web 2.0, and that allow the creation and shift had a massive impact on global media
exchange of user generated content” advertising.
(Kaplan & Haenlein, 2010, p. 61). These
applications enable instantaneous, real-time Television is still the world’s dominant
communication, with global reach advertising medium, attracting 38.8% of
capabilities. global advertising expenditure in 2014, while
internet advertising attracts 25.5%
Social media is the product of Web 2.0, (ZenithOptimedia, 2015), but internet
hence, it played a vital role in transforming expenditure grows much faster. In 2017,
the internet from a platform for information internet advertising will account for 34.0% of
to a platform for influence. And while global adspend in 2017, slightly behind
Traditional Media relies on reach as One- television’s 35.9%. And the market share gap
Way Communication (one to many), social between the two media will narrow from
media relies on engagement through two- 13.3 percentage points in 2014 to 1.9 in
ways communication channels (many to 2017. At this rate of growth, internet
many), turning the old days of page views in advertising will overtake television in 2018,
Web 1.0 into "billions of people creating and social media will be the fastest-growing
trillions of connections through social media sub-category at 28.4% a year to 2017.
each day" (Hansen et al.,2011, p. 3 cited in
Richard et al., 2011: 267). Hence, social Moreover, cheap smartphones have come
media came to be termed as user-generated on to the market over the past few years.
content (UGC) or consumer-generated Hence, mobile advertising became the
media (CGM). driving force behind the growth of the entire
advertising market. And (ZenithOptimedia,
In his book The New Influencers, Gillin (2007) 2015) predicts that mobile internet
points out that ‘‘Conventional marketing advertising will overtake newspaper
wisdom has long held that a dissatisfied advertising next year. In fact, studies show
customer tells ten people. But that is out of that mobile is driving a second Internet
date. In the new age of social media, he or revolution, that is even more profound than
she has the tools to tell 10 million’’ (Gillin the first one (Husson et al. 2013, cited in
2007, cited in Mangold and Faulds, 2009: Leeflang et al. 2014: 3).
359).
The shifting media landscape reflects in a
shift in communications paradigms. In the
Shifting Landscape: 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 to increase the promotion of firms,
digital era, information originates in the expanding internal and external
market place (Mangold and Faulds, 2009). relationships, knowing consumers’
Hence, marketing managers should consumption habits and preferences.
recognize and the importance of discussions
And since marketing executives are
occurring out of their control.
confronted with rapidly changing markets
Out of Control: which are beyond their control, (Leeflang, et
al., 2014) identified 4 important challenges
By its nature, social media plays two based on their survey for 777 marketing
important promotional roles in the executives from the US, Europe, and Asia.
marketplace. First, it allows companies to
communicate with their audience, and These challenges are: (1) The ability to
second, it allows audience to communicate generate and leverage deep customer
to one another. insights, (2) Managing brand health and
reputation in a marketing environment
Second role of social media reflects highly where social media plays an important role,
magnified form of word-of-mouth (3) Assessing the effectiveness of digital
communication, but the uniqueness lies in marketing, (4) The increasing talent gap in
the scale and magnitude. Now creative analytical capabilities within firms.
consumers have the ability to communicate
with hundreds, thousands or even millions In the next section, I continue with a critical
of other consumers. As a consequence, more discussion for those challenges:
consumers are led by other consumers than 1. Customer insights:
by advertising and consumers became in
control. The ability to track consumer behavior
across online platforms led to a large and
That has brought a challenge because complex data sets, forming what termed to
companies cannot directly control be big data. Hence, “the most important
consumer-to-consumer conversations, but challenge in a digital marketing world is the
they do have the ability to shape the ability to generate and leverage deep
discussion and have influence over it in customer insights” (Leeflang, et al., 2014: 5).
consistency with the organization`s mission The challenge requires implementing an
and performance goals. efficient tracking to capture, store, share,
transfer, analyze, and visualize data.

Marketing challenges: Implementing a proper tracking system will


allow marketers and decision makers to
A survey conducted by Tiago and Verissimo follow consumers during their customer
(2014:705) shows that managers identifies journey. And companies that track and
benefits of online marketing in improving analyze data are said to outperform
information gathering and feedback, competitors (Davenport 2006, cited in
potential to increase knowledge, potential Leeflang et al. 2014: 3).
4
However, overreliance on data and hard Additionally, the social media impact reflects
facts decision making, might lead to also in a dynamic and interconnected
reduction in creativity and out-of-the-box international environment, were "local
thinking. Hence, it is important to define the events rarely remain local and global events
allowed degree of innovativeness, as well as are likely to be (re)interpreted locally"
using big data to leverage utilizing several (Berthon et al. 2012: 261). Hence, managing
data sources in an innovative fashion. For e-reputation became a complex challenge
example, Dutch railways used their own data for marketing executives charged with
combined with data by TomTom navigation formulating and implementing marketing
systems to inform customers on their strategies internationally.
expected travel time by train and by car. This
Moreover, the brand health challenge
helps customers to make more informed
magnifies the importance of customer
decisions on their choice of travel mode
insights, where a proper monitoring for
(Leeflang, et al., 2014, p. 6).
brand mentions and sentiments must be
2. Social media & brand health: implemented.
Traditionally, companies use fully controlled 3. Metrics:
mass advertising to build and sustain brand
Measuring the Return of Investment (ROI) of
reputation. A successful marketing
online marketing is one of the biggest
campaign requires sufficient reach and
challenges in digital marketing. (Leeflang, et
attention. In the digital landscape, social
al., 2014) shows that it is difficult for
media offer a great opportunity to reach
marketing executives to understand online
large audience easily and at a relatively low
metrics and turn it into actionable insights,
cost. But as mentioned before, that comes at
especially when it come to the financial
a price of a weaker control over brand
impacts.
reputation online or what termed to be e-
reputation. The risks of lack of control Moreover, most firms use online and offline
increases proportionally with the size and media to promote online and offline stores.
strength of the brand. Hence, many efforts are taken to compare
the effectiveness of digital channels with
Consumers can easily become value
traditional channels, creating a universal
destroyers instead of value creators for
metric that allows for direct comparison of
brands. And since creative consumers like to
financial outcomes between traditional and
network with other consumers with similar
online media. (Srinivasan et al. 2010, cited in
interests, marketers can leverage that by
Leeflang et al. 2014: 8).
campaigns that either create the
communities or participate in existing A key challenge to measure the actual ROI in
communities. Taken as a whole, companies digital is to identify Key Performance
are struggling to build successful Indicators (KPIs). For example, companies
engagement strategies that can make real and organizations tends to use the last-click
and measurable impact. method, where sale is attributed to the last

5
medium used. That ignores the customer and leverage deep customer insights, and
journey and the fact that costumer have manage brand health and reputation in
been exposed to many factors before taking social media. And since most involve
the final click, which leads to an inaccurate challenges involve data, a great
and deceiving metrics. opportunities rise from implementing an
efficient tracking to capture, store, share,
4. Talent gap:
transfer, analyze, and visualize data.
The rapid expansion in digital media is
creating a digital talent gap. (Manyika, et al.,
2011, p. 11) estimate that 440,000–490,000
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