Social Media Marketing: Challenges and Opportunities in the Web 2.0 Marketplace

The present stage in the evolution of the Internet, commonly called Web 2.0, has revolutionized the way people communicate, interact, and share information and has radically changed the way customers search for and buy products. The increasing adoption of Web 2.0 applications and technologies has led to an explosion of customer-generated content and has opened new opportunities for networking and collaboration among customers. Web 2.0 applications have brought about a new media category, the Social Media, increasingly growing in importance at the cost of traditional media. The Social Media have changed the power structures in the marketplace; evidence points to a major power-migration that is taking place and to the emergence of a new breed of powerful and sophisticated customers, difficult to influence, persuade, and retain. The chapter outlines the nature, effects, and present status of the Social Media, underscoring their role as agents of customer-empowerment. It explains their aptitude and possible roles as part of the corporate marketing strategy and identifies different ways of engaging them as marketing tools. The chapter proposes two possible Social Media marketing strategies. One is a passive approach focusing on utilizing the Social Media domain as source of customer voice and market intelligence. The second is an active approach, engaging the Social Media as direct marketing and PR channels, as channels of customer influence, as tools of personalizing products, and last, but not least, developing them as platforms of co-operation and customer-generated innovation. Finally, the chapter identifies future research directions for this new element of the marketing landscape