Opportunities and Barriers of Social Media Marketing

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European Business School
International University Schloss Reichartshausen

Seminar Paper
Seminar Subject
Fall Term 2010

Opportunities and Barriers of Social Media Marketing – A Critical Evaluation against the Background of Social Network Theory

Table of Contents
List of abbreviationsi
List of figures and tablesii
1.Introduction1
1.1 Problem Definition and Objective1
1.2 Course of Investigation1
2. Theoretical Foundations2
2.1 Social Network Theory2
2.1.1 The Strength of Weak Ties2
2.2 Web 2.03
2.2.1 Historical Review of the Internet3
2.2.2 Definition Social Media Marketing4
3. Why Social Media Marketing is Important5
3.1 Changed Internet User’s Behavior5
3.2 Reference to Social Network Theory5
3.3 The Decline of Traditional Marketing6
3.4 Increased Significance of Recommendations6
3.5 Usind Social Media Proactively7
4. Critical Evaluation of Social Media Marketing7
4.1 The Fear of Engaging in Social Media7
4.2 Prerequisites for Successful Social Media Marketing8
4.2.1 Develop a Strategy8
4.2.2 Take Engagement Seriously and Monitor Activities9
4.2.3 Be Honest and Transparent9
4.2.4 Social Media Marketing is an Ongoing Process10
4.3 Opportunities of Social Media Marketing10
4.3.1 Increased Traffic and Visibility in Search Engine Results10 4.3.2 Favourably Improved Knowledge About Customer Needs11
4.4 Barriers of Social Media Marketing12
4.4.1 SMM is a not Quantifiable Long Term Engagement12
5. Conclusion13
6. Reference List14
7. Appendix18

List of abbreveations
SMM [Social Media Marketing]

List of figures and tables
Illustration 1 (from http://www.gruenderszene.de/marketing/social-media-marketing-2-kunden-image-und-abverkaufe-beeinflussen)11

1 Introduction
2.1 Problem Definition and Objective
The development of the Internet, particularly the ground-breaking evolvement of WEB 2.0, has completely changed the media landscape and subsequently the way people communicate. Nowadays, people can show their sympathy by pressing the “like-button” on someone else’s post on facebook, write an article on getsatisfaction.com to express their anger about a firm’s low quality service or let videos simply speak for themselves after uploading them on Youtube. As Cyert (1992) claims, being adapted to its environment in the best possible way in order to maximize net revenue has always been among every firm’s main goals. So how should firms react in order to benefit from that trend? The primary goal of this paper is therefore to point out the relevant changes in Internet users’ behavior due to recently evolved communication forms in social media. I will then put a particular emphasis on its impact on firms’ prospective marketing strategies by critically evaluating the opportunities and barriers this development entails. Furthermore, the comprehension of that enormously significant effect shall be increased by taking into account the findings of Social Network Theory. 2.2 Course of the Investigation

This paper is based on grounded desktop-research. Several academic works presenting the Social Network Theory will be discussed. In doing so, I will dedicate a special focus towards the features of the so-called strength of weak ties. Furthermore, I will present various events that were key triggers in the development of the Internet throughout the course of the last decade, ultimately resulting in the Web 2.0, the Internet as we know it today, as well as its impacts on interpersonal communication with regards to Social Network Theory. The knowledge derived from the previously described section will be used to illustrate the importance of investing in Social Media Marketing. In doing so, however, it is crucial to follow the prerequisits I will expose throughout this investigation in order to execute the campaign in a successful manner. Finally, I will controversially discuss the opportunities and barriers that Social Media Marketing entails in order to answer the question whether...
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