SOCIAL MEDIA MANAGEMENT IN THE FINNISH B2B MARKETSProfessor Jari SaloAalto University, School of Economics(Formerly known as Helsinki School of Economics HSE, Dept. of Marketing & Management)Co-authors: Tuula Lehtimäki, University of OuluHenri Simula, Aalto University

Jari.salo@aalto.fi

Agenda

• Introduction to social media

• Categorization of social media

• Methodology

• Six mini case studies & industry expert viewpoints

• Results and discussion

Influene of IT business marketing

• From the 1960s onwards, the computerization of business activities has been an area that has been widely studied (Kaufman 1966)

• IT impacts on business marketing has been identified as important study area (Reid and Plank, 2000; Sheth, 2007)

• Literature review on how IT influence business relationships (Salo 2005)

• New emerging trend in these studies is the focus on new internet technologies and how do those contribute to create value & capture

Purpose of the research

• This study aims to identify how companies operating in business markets perceive and use possibilities of the current social media (or web 2.0 or User generated content)

• Social media / User generate content, web, 2.0:

• Defined as “use of internet enabled applications (blogs, communities, social network sites, virtual worlds) and technologies (backbone enabling internet) that enable users to communicate, create and organize content and share it with each other

Landscape of social media

Sense of community

Web 2.0 tools

User generated

content

Network effects

Collective intelligence

Many-to-many communication

Lehtimäki et al. 2009

Social media - Value for industrial companies

Three social media types:

• Company owned media

• Company earned media

• Company bought media

Table 1: Categorization of social media tools and some practical illustrations

CATEGORY SUB-GROUP USAGE B2B EXAMPLES

1. BLOGS AND PODCASTS

Traditional blogs, vlogs, podcasts, videocasts

Informing of current events and novelties

Boeing VP of Marketing frequently updates blog. It started in 2005 and has millions of visitors. Finnair´s (Finnish National Airline) provides information for business passengers. Finnair`s CEO also writes articles in it

2. SOCIAL NETWORKS Social networks Content sharing, maintaining relationships, networking

LinkedIn is used mainly for business networking. Many B2B firms have established their online social media presence with Facebok and MySpace accounts

3. COMMUNITIES Online communities

Member-initiated Members' mutual interests and reciprocal interaction

Many open source software ideas such as Linux have been created by member communities. Linux is one of the most used B2B server software. More consumer markets focused examples deal with communities formed around hobbies, games, profession e.g. Aukea.net for photography

Organization-sponsored Business transactions, brand building, interaction among organization and customers, co creation of products

Salesforce.com provides a community to discuss about the services but also about other issues such as open jobs

Third-party established Enable communication and transactions between buyers and sellers

Alibaba and B2BExchange are used by firms to find suppliers and resellers. Zentra is trading platform for wholesalers.Go4worldbusiness.com is B2B portal for exporters and importers

News and updates !

Sharing & Connected Customer

Brand valueKM= Interaction & knowledge creation and sharingSales

Table 1: Categorization of social media tools and some practical illustrations (continued)

CATEGORY SUB-GROUP USAGE B2B EXAMPLES

3. COMMUNITIES Content communities

Content sharing sites, wikis

Content sharing Wikis, Youtube, Flickr, Picasa, Pikeo, dotPhoto, GoogleVideo, Wikipedia can be used by B2B forms for content sharing e.g. for viral marketing purpose. Providing up-to-date information about the company and its offering is also one option

Forums/bulletin boards Discussion of mutual interests

Typically these forums are interlinked to those third-party established online communities. Tradekey and Allactiontrade are examples of B2B discussions boards and forums

4. CONTENT AGGREGATORS

RSS, widgets, bookmarks, tagging services etc.

Categorizing and customizing of web content

Delicious, Yahoo! Widgets can be used by B2B firms to provide relevant information for their customers and third parties

5. VIRTUAL WORLDS Virtual worlds Substitute for the real world

Firms have launched, developed and sold their products in different virtual worlds such as Second Life and Kaneva. Northrop Gumman corporation has prototyped products and conducted simulations in Secondlifegrid. IBM and Intel have conducted conferences and meetings and saved travel costs. Service providers such as Vio and TMP worldwide, offers B2B networking, recruitment and management services online

Sharing & ConnectedCustomer

Information, news,Brand valueEducation NPD ideas

Methodology

• Part of four year research project • Companies studied approximately over two years

each • Inteviews with managers of six companies and four

industry experts• Six case studies

Interviewees Marketing experience Work related social media experience

1. Manager, marketing communications 5 years A bit

2. Manager, product marketing 10 years A bit

3. VP, web communications 5 years Some

4. Officer, external communications 5 years A bit

5. Strategist, a marketing agency 10 years Under 5 years

6. Analyst, consulting company 10 year Under 5 years

7. Manager, marketing 10 years A bit

8. Researcher 10 years About 5 years

9. Manager, consulting company 1 year About 3 years

10. Three managers 1 year Under 3 years

Results:Table 3. Utilization of social media marketing tools in examined firms and their current Web 2.0 strategy

Status Firm A Firm B Firm C Firm D Firm E Firm F

Web 2.0 status

Novice with caution, no own Web 2.0 efforts

Novice exploring on an ad hoc basis, minor Web 2.0 efforts

Exploring and monitoring with a plan, no own Web 2.0 efforts

Exploring and learning with caution, minor Web 2.0 efforts

Interested novice, minor Web 2.0 efforts

Experimenting and learning with caution and a plan, minor Web 2.0 efforts

Web 2.0 strategy

Customer communication

Sharing content, cooperation

Customer acquisition, brand building, serving stakeholders

Increase interaction internally and with customers, brand building

Sharing experiences and knowledge, brand building, internal communication

Corporative communication internally and with existing and potential customers, cooperation

Has utilized

(communities for information searching)

Video sharing, cooperative learning tools

(monitoring and advertising in communities and forums, monitoring wikis)

Content aggregators, wikis (communities for advertising)

Content aggregators (communities for advertising)

Blogs, video sharing

Is currently preparing

Vblog Content sharing, cooperative tools

Plans to utilize

Cooperative tools, blogging, content sharing linked to firm website

Own wikipedia Blog within an extranet

YouTube, blog and user generated content to firm website

Is interested in

RSS feeds, communities, cooperative tools, content sharing

Forums, communities, YouTube

YouTube, contributing to communities

Wikipedia, blogs. For internal use: bookmarking, communities, forums

Utilizes internally

Facebook Facebook, cooperative tools, content sharing, blog, webcasts

Facebook Facebook Facebook Facebook, blogs

Table 4. Marketing actions in social media

Tool Purpose of use

Blogs Brand building. Blogs can bring out the professionalism or other characteristics. More personal communication tool and therefore might be more convincing in customers’ eyes. Customer communication, mainly for existing customers. Creating awareness about the firm and its products. Creating WOM with high effectiveness by engaging opinion leaders to firm’s blogs and so have perhaps more attention among targeted group.

Social networks

Creating WOM with high effectiveness. To show the network and know how one has, working as a reference. Enhancing internal networking and communication. Enhancing extranet based social networks.

Online communities

Creating direct contacts with potential customers already interested in the firm or its products. Networking. Tool for enhancing customer relationships through increased interaction and additional services. Being present in communities in order to be remembered by customers. Collecting customer feedback and responding to it. Creating WOM with high effectiveness. Creating awareness about the firm and its products. Targeted marketing. It is easy to find people with similar interests. Brand building. Knowledge creation and sharing.

Content communities

Creating interest, enhancing recognizability of the firm and WOM. Strengthening relationships between the firm and the members of a community. Offering additional services to existing customers. Content sharing for training purposes. Brand building and product promotion. Could be integrated to firm’s website and then be used for more targeted marketing. Sharing already existing materials with a larger audience. To get traffic to firm’s websites. Increasing firms SE results. For recruiting purposes. Brand building. To enhance knowledge sharing and creating.

Content aggregators

Targeted marketing e.g. with RSS feeds. Sharing own findings and experiences e.g. by social bookmarking.

Results: Challenges with social media marketing initiation

• Social media benefits, opportunities and effects are unknown to many industrial companies

• The most relevant information received from customers is feedback, and customers’ needs, wants and wishes, and they feel that they have no reason to increase other kinds of bidirectional communication

• Setting rules and guidelines is difficult, but necessary, for example concerning blogging, what is the policy to monitoring discussions and reacting to them, and how to deal with openness and requirement for IPR protection

• The difficulty of developing interesting content that offers real value for its users is perhaps one of the most challenging issues for industrial firms

• Creating flow, good usability, or emotional experiences is undervalued

• Technical difficulties in realizing Web 2.0 applications

Results: Challenges with social media

• The difficulty in controlling discussions on the internet results in fear of negative WOM, or the spread of false information, which can quickly have strong negative effects on a firm.

• Fear of losing confidential information due to an increased amount of open, interactive communication.

• Firms are more transparent to the public so they need to act in a more responsible manner, reflecting the true values of the brand in every move they make.

• Many social media tools require continuous updating and monitoring, hence, resources from both the moderator and from the participant.

• The measurability of social media marketing results is considered a weakness and therefore it is difficult to get budget approval for Web 2.0 developments.

• Web 2.0 applications do not reach industrial customers, because most of them are aimed at consumers.

Social media management

How to proceedChallenges

Get to know web 2.0 as a channel, explore

Set clear purpose and targets for utilization of web 2.0

Link web 2.0 to the “whole picture” of marketing

Offer real value that helps users to do their job better

Prepare a worst case scenario and how to handle it

If utilizing web 2.0 accept its nature!

Web 2.0 as an environment, its benefits, possibilities and effects are unknown

Setting rules and guidelines is difficult

Difficulty of developing interesting content

Technical difficulties

Web 2.0 applications are focused on info-technical matters, and not on creating real value, flow, good usability, or emotional experiences

Uncontrollability

What next: Social media - Value for industrial companies

Action points in social media:

• Internal usage: pre-launch/marketing, informing and educating employees, project related knowledge sharing

• Extranet – shared social media • Direct sales• Indirect sales (SEM, Optimization and advertising)• Brand equity/value• Innovation / NPD/NSD• Establishing and maintaining customer relationships• Education

Thank You !Comments

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