Page 234 - Introduction to Electronic Commerce and Social Commerce

218 7 Social Commerce: Foundations, Social Marketing, and Advertising

7.5 SOCIAL ADVERTISING: FROM VIRAL Young adults are especially good at viral marketing. If
ADVERTISING TO MICROBLOGGING members like a certain product or service, word-of-mouth
AND OTHER PROMOTIONS advertising will spread rapidly sometimes to millions of peo-
ple at a minimal cost to companies’ advertisers. For example,
The major current revenue source for many social commerce when YouTube first started up, the site conducted almost no
companies is advertising. The reason is that seeing the large traditional advertising in its first few months, but millions
number of members and visitors in the social networks, and joined because of WOM. For the “power of WOM,” see
the amount of time they spend there, has given advertisers bazaarvoice.com/research-and-insight/social-commerce-
the motivation and justification to pay a great deal for plac- statistics and Wilde (2013), for an example of using Insta-
ing ads and running promotions in those networks. Like gram to acquire customers, see Smith (2015).
other SC activities, advertising is done both in public and in
private company-owned social networks. Viral Blogging
Many advertisers are placing ads on Facebook, YouTube,
LinkedIn, Instagram, Pinterest, or Twitter. Although social Many retailers are capitalizing on WOM marketing by using
media campaigns may have a small impact on actual online bloggers. When viral marketing is done by bloggers, it is
retail sales, they may have huge benefits with regard to referred to as viral blogging. Viral blogging can be very
increasing brand awareness. Millions of companies have effective with the use of tools such as Twitter (e.g., do a
pages and a presence on all major social networks. Google search for “Dell Uses Twitter to Drive Sales”).
Note that paid bloggers may be biased in favor of those that
hire them. This could be a concern for the blogs’ readers.
Social Ads and Social Apps
Other Viral Marketing Methods
Most ads in social commerce are branded content paid for by
advertisers. These come in two major categories: social ads Viral marketing is done in most social networks through
and social apps. internal e-mail, text messages, and forwarding of videos, sto-
ries, and special offers. In addition, there are other innovative
1. Social ads. These display ads and banners are placed in ways to go viral.
social games and discussion boards in social networks.
2. Social apps. These applications support social interac-
tions and user contributions. These are more complex to Location-Based Advertisements and Social
implement than social ads. Networks

Facebook features hundreds of thousands of third-party Location-based advertising and marketing is a business
software applications on its site. One popular application model for m-commerce. The model is based on knowing
area is travel. For example, one specific application is where a customer is via the GPS in her or his cell phone.
“Where I’ve Been,” which includes a map of places where Once the vendor knows that a person is near a certain busi-
users have visited or hope to visit. You can plan trips, orga- ness, the vendor can send a text, e-mail, or even a telephone
nize group travel, and find and rate paid or free accommoda- call offering discounted products, coupons, or services.
tions (e.g., at Couchswap). This information can be sold to This targeted ad-based business model was not too success-
travel-oriented vendors, who in turn advertise their products ful in traditional e-commerce. Customers were not inter-
to Facebook members. Of special interest is Tripadvisor’s ested, and those with GPS shut it off due to privacy
“Cities I’ve Visited” with its interactive map. concerns.
The situation changed with the introduction of social net-
works. The nature of location-based marketing changed to
Viral (Word-of-Mouth) Marketing and Social being social, entertaining, and rewarding; advertisement came
Networking as an add on service. Location-based ads generated signifi-
cantly more interactions than non-targeted ads. The technol-
Viral marketing refers to electronic word-of-mouth (WOM) ogy is based on geolocation and geosocial networks.
method by which people tell others (frequently their friends)
about a product they like or dislike. Viral marketing and Geosocial Networking
advertising has several variations and it plays a major role in
e-commerce and social commerce. For more, see Logan Geosocial networking is social networking with location
(2014) and Turban et al. (2016). awareness capabilities. This enables social networks to connect