Research question

What kind of influence does social media like Twitter have on the economy?

Social media: the new hybrid element of the promotion mix

W. Glynn Mangold & David J. Faulds, Social media: The new hybrid element of the promotion mix, 2009, Volume 52, Pages 357-365.
In "Social media: the new hybrid element of the promotion mix", authors Mangold and Faulds argue that social media is a hybrid element of the promotion mix because it gives companies the ability to communicate directly with the customers and customers can use social media to communicate with each other . They can use social media to immediately share their thoughts about a certain company or can use it as a source of information. It is seen by consumers as a more trustworthy source of information than the traditional elements of the promotion mix.  That’s why, Mangold and Faulds believe, marketing managers should incorporate social media into their Integrated Marketing Communication (IMC) strategies and promotional efforts.

Furthermore, companies cannot directly control consumer-to-consumer messages. They however do have the ability to influence the conversations. They can use tools to engage customers, such as: blogs to provide feedback, setting up a contest, by making use of online voting, etc. They can also provide exclusive content. For example they can allow online participants to listen to new songs before they are released to the general public. Besides that, the authors think products and services should be designed with talking-points in mind, to stimulate word-of-mouth and social-media-based conversations. It’s important to design products/services that are fun, easy to use and which engage the emotion of costumer. Companies can use social media as a way to track their image and even to influence it.

Mangold’s and Faulds’ vision is clear: companies should incorporate social media into their marketing strategies.

Mark Cazander

Think before you tweet: social media best practices for undergraduate business schools

Donna I.M. Spraggon, Think before you tweet: social media best practices for undergraduate business schools, 2011

The writer of this article is Donna I.M. Spraggon. She took a look into our social media and came to the conclusion that we can improve the way we work with the social media.

In the introduction she explains that online social media are new for businesses and that this medium is used as a communication tool of undergraduate students. Research has shown that social media were apllied much faster by universities and colleges than by the fortune 500 companies.

The article explains how businesses should use social media to boost their sales. Professor Spraggon gives a list with best and worst practices of these media. An example of worst practices is ‘being misleading in any way’ and an example of best practices is ‘ determine an audience and try to appeal to them by using multiple social media tools’.  

She studied 20 business schools between 20^th June and 7^th October and concluded that none of them is using Facebook with a certain consistency. 19 of these 20 schools don’t even participate on Facebook, so students, professors, Alumni and researchers have no place to meet each other on Facebook. Given this information professor Spraggon suggests a system which she developed to help institutions work with Facebook.

Nino de Moor

Twitter mood predicts the stock market

Johan Bollen, Huina Mao and Xiaojun Zeng, Twitter mood predicts the stock market, 2011

This article is written by Johan Bollen, Huina Mao and Xiaojun Zeng. These three scientists investigated if it should be possible that a whole nation experiences the same mood at the same time. They also wanted to know how this reflects on the stock market.

 They have searched social media for six words:  calm, alert, sure, vital, kind and happy. When this information was gathered the scientists have reflected the peaks and dales of the gathered words to the peaks and dales of the stock market. For example, when many people say one or more of these six words, they have concluded that in around 80% of the times the stock value increased, and when people didn’t use these words on social media the stock value decreased or plummeted. But they still underline the fact that it is not possible to predict the stock market, but we can say that there’s a relation between the sentiment displayed on social media and the stock value.

Statistic research proves that the word calm has a significant causal relationship with the stock market, and that it occurs with lags from 2 to 6 days. This means that the market can be predicted by the word calm, but the exact moment of an increase or decrease remains uncertain.

Nino de Moor

Influence and passivity in social media

Daniel M Romero, Wojciech Galuba, Sitaram Asur & Bernardo A. Huberman, 2010. Influence and Passivity in Social Media, page 113-121.

In ‘Influence and passivity in social media, the authors analyze the influence of people on the social media network Twitter. They want to know how and why twitter users get attention and why they influence other users. They work with the concept of passivity in a social network, which separates their method to measure influence from previous ones.  Passive users are those who follow many people, but rarely retweet. These users receive information from other users, but choose to ignore it. The authors assume that the influence of a user depends on the quantity and the quality of the audience she tweets.

They also want to know more about if it is possible to identify users who are very good at spreading their ideas, knowledge, or opinions to others. To quantify the influence of all the users in the network and the size of the influenced audience (the influence and passivity score), they make use of the Influence-Passivity algorithm. One important function of this algorithm is for example ranking users by their relative influence: the number of people she influences as well as their passivity. Furthermore how popular the people she influences are, is from importance in measuring her influence. To measure passivity they look at how much someone rejects other tweets compared to everyone else.

The conclusion is that the correlation between popularity and influence is weaker than might be expected. The research shows that the individuals have to actively participate in forwarding the information, as opposed to passively read it and not act on it.

Mark Cazander

Social media marketing web X.0 of opportunities

Social Media Marketing Web X.0 of Opportunities

The author tells us about the future of social media marketing. At this time, the marketers aren't been able to transform the increasingly popular social media such as Facebook and Twitter into a sustainable commercial model. Many are struggling to turn their popularity into financial success. On the other hand, some believe social media may not have the staying power. And yet in the top 10 most frequently visited web site there are several social media sites.

Viral marketing: interaction and participation

The author summarize different kind of marketing methods, with the focus on viral marketing and integrated marketing communication principles. Because of the interactive nature of social media, combined with consumers' participation, viral marketing has the most commercial potential. The consumers are participants in both creation and spreading of content.  This means not merely focusing on spreading the word, but actively participate in promoting products.

The viral marketing effort should fit the brand personality so consumer become part of the success of a product. The main finding of this research paper is that companies should learn to cede control to their customers. Both positive and negative word of mouth advertising are opportunities for corporations to start conversations with their customers.

Baruh, L. 2010. Social Media Marketing Web X.0 of Opportunities. Handbook of Research on Social Interaction Technologies and Collaboration Software: Concepts and Trends, 4, 33-43

MATTHIEU COVEMAEKER

predicting the future with social media

Predicting the Future With Social Media

In this research article, the two authors demonstrate how social media content - in particular Twitter - can be used to predict real-world outcomes such as forecasting box-office revenues. Because of the enormity and high variance of the information created by its users, it presents an opportunity for harnessing that data. As a result, it can be used when designing marketing and advertising campaigns. That content, strangely enough, remains largely untapped.

Viral marketing: twitter.com

Twitter, an online microblogging service, isn’t only very popular among private users, but it has also attracted the attention of corporations for viral marketing. An increasing number of news organizations also use Twitter due to its enormous reach.

Real-world outcomes

The authors focused on forecasting box-office revenues for two main reasons. The real-world outcomes can be easily observed and there is a considerable interest among social media users in movies. The method the two researchers use is a simple linear regression model that count the rate at which tweets are created. This method can be extended to other products of consumer interest ranging from the rating of products to election outcomes. Social media can be extremely powerful and an accurate indicator of future outcomes.

Sitaram A. & Huberman B. 2010. Predicting the Future With Social Media. International Conference on Web Intelligence and Intelligent Agent Technology, 1, 492-499

MATTHIEU COVEMAEKER