Facebook Marketing and Growth A Case Of Netflix
FacebookMarketing and Growth: A Case Of Netflix
Thestudy sought to establish the impact of Facebook marketing inNetflix. the study employed the use of secondary data to analyze andinvestigate how Facebook has impacted the performance of Netflix overthe years. from the study it was established that Facebook has playedan integral role in enhancing the growth and financial performance ofNetflix. This was clearly seen from the current marketing modeladopted by Netflix. In addition, the company’s target marketrequires the use of real time communication channels and in this caseFacebook and other social media platforms. However, it was also foundthat there is a need for Netflix to improve its service deliverystructure by adopting new policies and regulations to change withconsumer preferences and needs. Further, privacy was pointed out asanother issue that needs to be addressed while using Facebook as amarketing tool.
CHAPTER ONE 4
Background Review 4
Research Problem 9
Aim of Study 12
Research Objectives 13
Research Method 13
Significance of Research 13
Limitations of the Study 14
Structure of the Research 15
CHAPTER TWO 16
Literature Review 16
Facebook’s Popularity 16
Facebook’s Functional Areas 18
Web Technology used in Social Media 19
Impact of Facebook as a Social Media Platform on Marketing 21
Criticism of Using Facebook as a Social Media Marketing Tool 26
CHAPTER THREE 28
Research Philosophy 28
Research Approach and Strategy 29
Research Method 29
Data Collection and Analysis 29
CHAPTER FOUR 32
Findings and Discussions 32
CHAPTER FIVE 37
Conclusion and Recommendations 37
Thechapter provides an overview of the use of social media andparticularly the use of Facebook in the modern society taking intoconsideration the case of Netflix. A brief overview of the numerousconcepts of social media marketing provides an ideal platform tobuild on the study and answer the research questions in a coherentmanner.
Theonset of technology in the marketing space has provided manyorganizations with a more reliable and cost effective marketingapproach. At the same time, businesses that have leveraged on the useof technological tools are better placed in the competitive market(Bronner, & de Hoog, 2014). Some of the key benefits drawn bythese companies in the marketing environment include access to alarger market base in real time, dissemination of information in realtime, reduced operating costs owing to the nature of the internet,customized marketing strategies, and unlimited marketing activitiesand other-related benefits (Ashley, & Tuten, 2014). Essentially,marketing is a fundamental tool that aids organizations to releasesignificant information on their operations, inform customers of newor existing products, illustrate to customers the use of newproducts, and tell customers of their offers or promotions. All thesemarketing strategies are meant to facilitate organizational growthand profitability in the long run.
Businessesneed to use their marketing platform to maintain awareness, however,in order to do so they need to understand the needs, preferences,and habits of their customers. In this case, businesses must bededicated and work hard towards building reliable models to collectdata that will enable understanding of customers. The use of biganalytics has been widely used as an essential strategy of buildingon decision making on issues pertaining to customers. For example, acompany like Netflix uses its data storage mediums to collect andanalyze data that spurs decision making (Borker, 2014). Data miningis one of the integral components in the recent society that has beenused by organizations to facilitate the development of reliable andquality products based on customer feedback or other existinginformation. There is a strong link between online marketing and dataanalytics (Felt, 2016). On one hand, data analytics helps in gettingthe right information to structure the right message or informationto reach out to the customers and on the other hand, online marketingprovides fundamental data analyzed by data analytics to facilitatethe development of customized message or marketing content reachingout to individual customers (Brooker, Barnett, & Cribbin, 2016).
Theadoption of smartphones and social media networks has changed the wayorganizations develop their content and consumers consumption of thesame content. In fact, there has been a strong relationship betweencontent development and consumption as opposed to the past periodswhere businesses had to rely on traditional media (Capon, &Hulbert, 2014). There is no surprise that with the advent of socialmedia, there has been a convergence between online and mobilemarketing. According to statistics developed by the Bank of America,it is estimated that more than 67 billion purchases will be made frommobile devices by the end of 2017 (Högberg, 2017). Moreover, therehas been a radical shift from traditional media to new media asorganizations try to build their brands in the market. The shift hastotally reshaped the marketing strategies adopted by companies likeNetflix.
Smartphonepenetration has already exceeded PCs and is significantly closing thegap established by TVs. Therefore, the internet is quickly becomingthe most preferred marketing channel in the world today. For example,in the U.S. it is estimated that about 36% of the mediums used in thecountry is the internet, TVs still rank slightly higher at 40% andthis is owing to the already established model where big broadcastingcorporations like CNN, Aljazeera, and BBC are trying to merge thetraditional models with the latest models in a bid to remaincompetitive (Tseng, Liu, & Wu, 2014). The main internet-basedmedium used in the U.S. is social media where Facebook ranks as themost competitive and widely used platform as compared to Twitter, andGoogle Plus which come second and third respectively. Facebook aloneis depicted to have more than 2 billion users and 68% access onmobiles (Kim, & Yoon, 2016). The introduction of the digital adon Facebook has made it possible for big corporations like Netflix tobuild a strong niche market (Gulbahar, & Yildirim, 2015).Typically, the success of companies like Netflix is leveraged on theprocess of taking advantage of the wide market space, using the righttools and building a strong image brand in the market.
Further,it is estimated that by 2018, the digital ad spending will increaseby about 20% and hit 38% of the total media spending by bigcorporations trying to outdo each other in the market space.Moreover, this will be much higher than TVs. In fact, the data showsthat mobile, social, and e-commerce marketing will shape the entiremarketing platform among businesses to the extent that any firmwithout a clear social media marketing strategy will struggle tomaintain market control and build or grow in the same way as others(Ahmed, 2015). It is on this premise that there is a rush to build astrong social media profile among corporations like Netflix. In thisretrospect, it is true to point out that some of the corporationshave been successful so far in building a strong social mediapresence as opposed to others and a good example is Netflix.
Netflixhas illustrated continued growth for the past 15 years. The companyfocusses on innovation and keeping things simple as depicted by itsCEO. The focus of the company is to access the largest market aspossible in a bid to maintain a strong presence in the market.Currently, Netflix has about 85 million subscribers across thecountry according to data collected in 2015. The growth of thecompany is majorly fueled by its marketing strategy and contentdissemination approaches (Hopkins, 2013). Netflix operates under thepremise of a subscription model and there is no chance that it isgoing to shift anytime soon. Through this model, the company hasopened operations in about 130 countries across the world. The launchof its operations in 2016 in Africa was a major boost to itsoperations owing to the growth of the region. In addition, this isone of the regions exhibiting a massive penetration of smartphonesand internet technologies, and the entertainment industry in thispart of the world largely remained unexploited (Capon, & Hulbert,2014). The strategy to open up operations in such Africa also makesthe company take advantage of social media marketing tools. Countrieslike Kenya and Nigeria combined have about 10 million social mediasubscribers with a prospect of the number going up. Therefore,leveraging on social media marketing is an integral approach toenhancing operations in the African market (Ehrenberg, 2013), andthis is the same strategy adopted in Europe which is so far thelargest market for Netflix.
Aclear analysis of Netflix`s audience shows why it is important tomake use of social media marketing and particularly the use ofFacebook. Currently, the company has about 79% of millennials as itsmajor subscribers, followed by 38% Gen X, and 38% of baby boomers.Any successful company in the modern market is one which is able toknow the concentration of its customers and adopt the right marketingtools to reach out to the customers (Hong, & Chiu, 2014). Forexample, in the case of Netflix, going for traditional media will notbe an ideal approach of reaching out to the millennials. This marketgroup is known to focus on the use of social media and theirmarketing behaviors are dictated by group activities and they willradically change in line with demand and environmental factors(Hopkins, 2013). Social media marketing is, in fact, the only viablesolution to reach out to the millennials. The advantage of socialmedia marketing is that it is flexible, reliable, and cost-effectivein the long run. Thus, should customer needs change, marketing willbe changed immediately at the least cost possible and this will notbe possible if traditional media is used in the marketing process.
Netflixhas multiple social media profiles and Facebook alone has a fan baseof about 25 million and Instagram and Twitter have about 2.1 millionfans each. The focus on Facebook is closely linked to the number offollowers and subscribers using Facebook. At the same time, thecompany is looking out for an ideal platform without compromisingother social media sites (Keillor, 2013). Facebook has risen as oneof the major marketing tools in the recent past, and this isattributed to the inclusion of new marketing tools and features thathave easily transformed the use of social media marketing (Hammick, &Ju, 2016). At the same time, Facebook contains a much larger accessrates and this is based on its original model where they nevercharged for subscription or marketing although at the moment they docharge for the service.
Tothis day, the use of Netflix`s SVoD service is accessible in almost70 countries across the world, and in a larger number of them, thereare several media accounts created. The use of these social mediaaccounts has spread significantly and opened up avenues for thecompany to maximize its profits and thwart competition in the market.The use of Facebook, Twitter, Instagram, and Tumblr is fundamentalfor the growth of the company and continues to affect the overallstrategy adopted by management.
Backin 2012, Netflix CEO commenced an interesting conversation onFacebook that was not only strategic for the success of the companybut also illustrated the power of social media market. In his post,he cited the milestones the company had taken in building itsFacebook profile which had reached an estimated viewership of 1billion hours for the first time in history. In less than hours, thepost was shared by bloggers and immediately found its way into themainstream media. The impact of the post was far-reaching as thecompany`s stock rose from $70.45 to $81.72 within a short period oftime (Sharma, 2014). The accidental transparency caught the eyes ofSEC which immediately launched investigations but would drop thecharges later. However, the lesson that can be drawn from thescenario is that Facebook and in general social media plays afundamental role in the success of Netflix in the current market.
Typically,the growth of Netflix has been in part due to proper marketingstrategies and strategic management plans. In the modern day,internet based services are very competitive and profitable at thesame time. The high-profit margins and lack of legal restrictions onentering the market have brought about more entrants into the market(Gasovic, 2014). For example, the entry of Hulu and Amazon Prime hasmade a huge impact on the performance and market size of Netflix.Currently, the major competitor of Netflix is Amazon that seems touse the same business model as Netflix (Kalliny, Ghanem, &Kalliny, 2016). However, the difference in their market strategies iswhat separates them. Netflix focusses on the use of social mediaplatform and particularly Facebook more as opposed to Amazon. Infact, this can be depicted as one of the main reasons why Netflixstill retains the largest customer base and more especially themillennials.
Theuse of the internet is growing each passing day. Companies likeNetflix and Amazon are working hard to ensure that they retain astrong online presence owing to their service delivery mechanisms. Asopposed to companies like Samsung or GE, Netflix and Amazon requirethe internet at all times since they offer online-based services(Noreen, & Han, 2015). Particularly, Netflix operates under thepremise of a subscription based model. Netflix is one of the leadingentertainment companies offering online based data content havingshifted from the shipping of physical DVDs and other entertainmentmaterials.
Theuse of the internet may seem to offer numerous advantages and optionsto companies like Netflix, but it is much challenging for operationsas compared to the physical and traditional operating models. It isimportant to remember that the services cannot be tested physicallybecause they lack tangibility. At the same time, sometimes, there maybe a radical shift in one direction and if a company is not preparedto cushion itself from probable losses, then success may not beattained as failure will be inevitable in the long run (Sharma,2014). Therefore, online marketing requires proper checks andbalances for organizations to thrive.
Currently,Netflix has about 25 million followers on Facebook alone and thenumber is likely to go up each passing day. One of the primaryreasons for a large number of subscribers is that Netflix`s target isthe millennials aged between 18 and 24. This market segment iscomposed of technology enthusiasts and more particularly frequentusers of social media. In fact, it is approximated that young peopleaged between 18-24 years of age spend about 30%-40% of their time onsocial media as compared to the baby boomers and Gen X who areinclined more towards the use of traditional media and othertechnological platforms like e-mails.
Somecritics argue that the success of Netflix is largely based on itssubscription model and not the use of social media. They go furtherto point out that there are some companies that have continuouslyused social media but not become successful in the long run. However,some researchers argue that there is a strong connection betweenorganizational success and its marketing strategies (Keillor, &Wilkinson, 2015). Essentially, a good market plan is an opening foran organization to access a wide range of options and exploitresources to fulfill the needs of the customers. Moreover, it is aguide meant to steer an organization to a right direction (Noreen, &Han, 2015). Therefore, while on one side it can be argued that properusage of Facebook has catalyzed the growth of Netflix on the otherside, it can be argued that the organizational model is responsiblefor the proper market positioning and growth of the company.
Lookingat the two factors, business model, and Facebook marketing, it isclear that there is a strong connection that cannot be disputed(Keillor, 2013). The adopted business model requires a strong onlinepresence and this explains why Netflix has tried to establish astrong presence on social media, besides, customers want continuousupdates and in real time. The only place that real-timecommunications can be fostered is on the social media platform(Sundstrom, 2012). Typically, Netflix`s strategy is to ensure that ithas a well-developed communication link between management and thecustomers. The use of real-time data particularly is significant tothe growth of the company amidst stiff competition from otherincumbents like Hulu.
Theemergence of Hulu and Amazon Prime increased competition in themarket space, consequently, Netflix lost some market share and sincethe entry of these competitors, Netflix has been working hard tomaintain a strong presence in the market. Both Hulu and Amazon Primehave a strong marketing channel inclined towards the use of theinternet, and just like Netflix, they also rely on the word of mouthto ensure that they build their presence successfully. In a bid tore-establish its presence in the market, Netflix has launched massivecampaigns on social media sites and especially Facebook in a bid toappease and interact with the customers more closely (Helme-Guizon,Caldara, & Raïes, 2013). Some of the common campaigns held byNetflix on social media include grammaster, Instagram adventure,living with spoilers, real life gifs, and student ambassadors. Allthese promotions have been directly or indirectly associated with theuse of Facebook.
Aim of Study
Thegrowth of Netflix has been phenomenal in a society characterized bythe use of social media marketing tools. At the same time, the targetmarket adopted by Netflix dictates that the company makes use of anideal marketing framework and in this case social media. At the sametime, for the past ten years, the company has registered immensechanges in its marketing strategies in a bid to align itself with thechanging market space. Therefore, in this premise, the study focusseson the investigation and analyses of the impact of social mediamarketing on the business growth of Netflix. The primary social mediaunder consideration is Facebook which so far is the most preferred byNetflix and its customers.
OnFacebook alone, Netflix has more than 25 million followers andsubscribers and the numbers are still rising as the company bracesfor its continued growth in the market, and this is against about 2.1million held by each of the other social media platforms likeTwitter. Further, the study aims to establish the link betweenNetflix`s target market and the use of Facebook as an ideal marketingtool for the company. Besides, the target market, there are otherfactors that Netflix may consider which include cost, reliability,timeliness, and competition (Walker, 2014). Therefore, the studyseeks to investigate whether such factors are essential for thesuccess of the company in the use of Facebook as the ideal andreliable marketing tool.
Further,the study aims at studying the financial performance of the companyand establishes its link to the adopted marketing strategies. Inessence, business growth can be measured in terms of financialperformance or customer base growth. The combination of the twodenotes success of Netflix and they are better parameters to assessthe impact of social media marketing and particularly the use ofFacebook.
Theprimary research objective is to investigate the impact of Facebookmarketing on the business growth of Netflix. Secondary objectivesinclude:
To analyze the usage of Facebook among Netflix`s customers
To investigate the extent of using other social media platforms for marketing purposes in Netflix
To assess the specific strategies used by Netflix to build on its online marketing campaigns
To explain why Netflix is one of the most successful social media marketers
Acase study approach is used in the study and a secondary researchmethod used in this study is exploratory research method. Focusing onexploratory research methods is a fundamental approach of taking intoconsideration the large amount of secondary data sources (Quinlan,2015). The focus on secondary research method is essential in savingon time and costs of the study. At the same time, it is the mostideal approach in this context where there are enormous amount ofstudies conducted on the topic under consideration. Moreover, thereis no need to undertake the same study that other researchers havealready conducted and using the same variables (Shaughnessy,Zechmeister, & Zechmeister, 2015). However, it is significant tocompare and analyze the already established findings on the impact ofFacebook marketing on organizational performance taking intoconsideration the case of Netflix.
Thesignificance of the study is two-fold, significance to the primarystakeholders and to the secondary stakeholders. The primarystakeholders include the customers, management, employees,shareholders, and the board of management. Secondary stakeholders tothe company include the government, media, scholars, competitors, andthe general public. To the primary stakeholders, the research willprovide phenomenal information that will drive decision making. Basedon the findings of the research management and employees will knowwhich areas to focus on in a bid to further catapult the growth ofthe company. For example, should they find that Facebook is anessential tool for business growth in Netflix management will put inplace strategies and mechanisms to enhance the use of Facebook inmarketing campaigns. However, in the event that Facebook is seen asan impediment, then management will opt for an alternative marketingapproach. At the same time, employees will assess the performance ofthe company over a period of time and try to change or improve theirmarketing strategies in a bid to meet the needs of the company basedon the findings and conclusions from the research.
Thestudy will add to the existing studies on the significance of socialmedia marketing. The special aspect of this study is that it focusseson a specific organization, Netflix. Essentially, this will provide afoundation for future studies on the use of Facebook as a marketingtool in the modern study. Students are also important stakeholderswho can either fall under the category of the general public oracademicians. For students, the study will add to the vast amounts ofdata existing in journals and libraries on the impact of modernmarketing strategies. The government plays a fundamental role indecision making by building on infrastructure, therefore, the studywill provide significant data that will show which areas aresensitive for the government to improve or introduce additionalpolicies to enhance operations in companies like Netflix.
Limitations of theStudy
Thestudy will be based in the U.S. and this means that the findings maynot necessarily show the perception of other customers and employeesin various parts of the world with Netflix operations. Therefore,future studies need to include other regions in the study in order toensure that the findings match the perceptions of other stakeholdersacross the world. Further, the study is only conducted for a shortperiod of time which means that it may not capture changing trendseffectively for a longer period. In this retrospect, there is a needfor future studies to conduct studies based on a longer period oftime to capture any changing trends in the market. The study utilizesonly secondary sources and does not involve primary data collectionmethods this means that the study may exhibit different levels ofbiasness. Therefore, future studies should focus on analyzing primarydata sources.
Structure of theResearch
Theresearch is segmented into five chapters and each of the chapter hasa unique aspect in relation to the research topic. Chapter 1 coversthe introduction and it gives a snapshot of the entire research. Inthis chapter a brief overview of the research is given from a generalperspective. Essentially, the introduction opens an avenue forfurther discussions in the rest of the chapters. Chapter 2 is theliterature review and it analyses the wide range of researchesavailable on the premise of the primary research topic. The chapteroffers an integral approach of setting the pace for further argumentsand the research foundation. Chapter 3 denotes the methodologysection and it is essentially about the research approach that willbe used in the study. This is an essential segment of the research inclarifying what specific research technique proved suitable for thisstudy. Chapter 4 is the findings and analysis section. In thissection, the data is collected and analyzed taking into considerationthe research topic. The final section is chapter 5 and it is theconclusion and recommendation section and it is in this section ofthe research where final remarks are given in relation to the studytopic. Precisely, this is where the final answers to the studyquestions are given.
Thischapter provides a deeper analysis of the main aspects of Facebook asa marketing tool and how Netflix and other companies have leveragedon the platform to enhance their competitive advantage in the market.The chapter connotes a critical analysis of the wide range ofresearches on the use of Facebook and other social media platforms asessential marketing tools and their impact in the modern society.
Thegrowing popularity of social media has compelled marketers to rethinktheir marketing approach. As opposed to the traditional media, socialmedia is dynamic and ever evolving calling for constant change intact in the use of the tools in the marketing process. For example, adecade ago companies were not able to effectively point out withcertainty that Facebook was a marketing environment this is becauseat the time Facebook was more of a socialization platform wherepeople mingled (Chan, 2013). However, this has drastically changed ascompanies like Netflix have resorted to the use of Facebook toincrease their popularity in the market. Social media is primarilybased on the use of the internet and other cellular basedapplications like Facebook, Twitter and YouTube. The popularity ofsocial media platforms like Facebook is anchored on the portability,flexibility and easy accessibility of internet based devices in themodern society (Hennig-Thurau, 2014). Today, it is very easy toaccess a smartphone compatible with a wide range of applications at arelatively cheaper price as opposed to a decade ago (Charan, &Bansal, 2016). Therefore, it is on the premise of the continueddevelopment of technology that companies like Netflix are taking alead in the utilization of these technologies to enhance theirperformance in the market.
Socialmedia has evolved over time and particularly the use of Facebook inthe market. Facebook’s user base has extensively increased over thepast decade (Howard, Mangold, & Johnston, 2014). During the1930s, newspapers and magazines were the main mode of marketing apartfrom referrals. In this era, traditional media houses controlledadvertising and charged exorbitantly for the services (Mercea, 2014).Typically media publicity and advertising were for big corporationswhich could afford the high prices set to purchase media spaceminutes. Small businesses or start-up would grapple with hugeadvertising costs and most of them would opt to forgo mediapromotions and advertisements and rely on the word of mouth to passtheir messages to the public (Coelho, Nobre, & Becker, 2014).However, this has drastically changed in the modern society where theuse of such social media platforms as Facebook has become dominant.
1950’swas known as the TV commercial age and during these period marketersinclined towards electronic media advertisements. In 1960’s, theconcept of Corporate Social Responsibility (CSR) came into being andduring 1970’s computers were born. Between 1960 and 1970, there wasextensive use of direct marketing, media research, and the use ofelectronic media in carrying out promotional activities (Mariani, DiFelice, & Mura, 2016). As compared to 1950’s, 1970’s was seenas a major transformational period for both large and smallbusinesses in the market (Charan, & Bansal, 2016). Essentially,easy to use, cheap, flexible, and reliable technological tools wereinitiated in this period and all businesses found an essentialplatform to foster their competitive advantage (Byoung, 2014).
Facebookmay have begun as a social engagement site, however, the platform hasslowly transformed into a commercial site. In essence, Facebook hasbecome a marketer’s tool and this is pegged on the continuedincrease in the number of users (Hutton, 2012). The early pioneers ofsocial media include User net, Bulletin Board System, Online Service,CompuServe, AOL, Genie, Internet Relay Chat and ICQ. The early socialnetworking sites include Myspace, LinkedIn, Facebook, and Kontain.Basically, in the modern society it is almost impossible to separatefrom social networking sites and commercial social media platformslike ICQ (Coelho et al., 2014). For example, Facebook combines theaspects of commercialization and those of social networking.
Today,Facebook is used in three main functional areas of marketing and theyinclude advertisement, research and public relation. Advertisementhas been the major focus of many companies when it comes to the useof Facebook (Komodromos, 2017). For example, Netflix launchednumerous ads on Facebook meant to spur the use of its services. It iscommon to see Netflix use Facebook to showcase their next movies tobe uploaded and sensitizing the public on the features of the movies(Choi, 2015). Lately, there has been a focus on the movie termedNarcos which tells the story of Pablo Escobar. Such previews offerusers with the anticipation to want to watch the movie and by sodoing they will either sign-up or make update their Netflix accountsto watch the movie (Crofton, & Parker, 2012). Other good examplesof the use of Facebook for advertisement purposes are the cases ofBurger King’s Facebook humor and that of Dunken Donut’sFacebook/Twitter news. In these cases, focus is on increasingawareness and building on the brand’s image in the market.
Facebookhas also proved significant in conducting market research and Netflixis one of the major companies that has benefitted from suchresearches (Lee, 2012). Netflix has devised a research modelcorrelated towards collecting data from the customers and building ontheir service delivery channels to enhance operations in the market.Other important research models are those used by Starbuck termed as“My Starbuck Ideas” & ‘Ideas in Action’ and Kellogg’snew product research. In all the cases of research using Facebook theaim is to gather enough evidence to support future strategies orimprovement of the current operationalization strategies.
Facebookis a significant public relation’s platform (Ebeid, 2012). This hasbeen illustrated by many companies including Netflix. As illustratedearly, Reed Hasting continuously makes the use of Facebook todisclose important organizational issues to the public. For example,in 2012 he made use of Facebook to announce the company’sincreasing profitability. His message sparked immediate mediaattention and in less than 30 minutes, there were numerous responseson the message to the extent that the company’s stock priceincreased almost immediately (Houlihan, & Creamer, 2014).According to Piñeiro-Chousa, Vizcaíno-González and Pérez-Pico(2016), the use of social media impacts the stock market directly andthis explains why Netflix’s stock rose after the CEO’s post onFacebook and Twitter.
Atthe same time, Netflix has been known to use Facebook to launch newproducts and access the customers in real time. Other companies thathave made use of Facebook as public relations platform include Dellthrough its image turnaround campaign, Syfy through its bloggerrelation campaign, and Ford through its putting out PR fire campaign.In all these cases, the aim is to build on brand image and capturethe attention of the customers in the market (Dhaoui, 2014).Typically, building a strong positive image in the public is a goodcompetitive advantage in itself as more customers tend to associatewith well-known brands in the market.
Web Technology usedin Social Media
Theuse of social media platforms like Facebook is anchored in the use ofdifferent web technologies that include web 1.0, web 2.0, and web3.0. Each of these technologies has a unique element that makes itsuperior than the other (Campos, & Soares, 2014). A descriptionof some of the main elements or each of the web technologies commonlyused in social media is illustrated below:
Thisis commonly connoted as the first stage in the World Wide Web (WWW)and it was entirely made up of static webpages connected byhyperlinks (Wampler, 2014). The use of web 1.0 was replaced since itdid not provide interactive content. At the same time, the use of web1.0 was mainly characterized by proprietary applications (Fankhauser,Wang, Gerlicher, Grecos, & Wang, 2016). Although web 1.0 wasreplaced by web 2.0, there is no distinct stage where fulldetermination can made as this is a change that happed gradually overa period of time as the internet grew more interactive. Despite itsnon-interactive nature, by 1995 there were about 45 million usersattached to web 1.0 (Haglund, & Herron, 2012). This is certainlya large number of users in a time when the use of the internet hadnot grown exponentially.
Thecontinued growth of the internet brought about the need to have aninteractive platform where users generated their content and it is onthis premise that the use of web 2.0 was coined. Web 2.0 is thesecond stage of web development and in it is characterized by the useof dynamic webpages as opposed to the use of static webpages(Helme-Guizon, Caldara, & Raïes, 2013). The focus is on givingthe users to dictate the use of webpages and not based on theoriginal proprietary nature established by web 1.0. By 2015, therewere over 2 billion global users attached to the use of web 2.0concept (Mohebbi, 2012). The number is continuously increasing asinternet connection is enhanced across the world.
Thefocus of web 3.0 is on portability and personalization on the use ofthe web. There is also a focus on meaning of data, intelligentsearches and behaviors as opposed to earlier frameworks (Srinivasan,& Sangwan, 2017). Today, organizations are trying to establishweb based solutions that return tailored searches based on userbehavior and interests (Helme-Guizon et al., 2013). In fact, the riseof computer intelligence and data analytics concepts has made iteasier for web 3.0 to penetrate the market and become one of the mostpreferred web-based frameworks.
Impact of Facebook asa Social Media Platform on Marketing
Marketersare always interested in the use of the most suitable tools to grabthe attention of consumers in the market. As more people embrace theuse of social media as one of the essential communication media,marketers are concerned on how to leverage on the use of social mediato enhance their marketing strategies (Rahman, 2017). The continuedadoption of smart technologies and portable digital devices hasopened an avenue for marketers to reach a larger customer base thanbefore (Ramsaran-Fowdar, 2013). Essentially, social media guarantees24/7 capacity and accessibility through a wide range of mediums likeFacebook and Twitter. Moreover, new technologies enhance chances ofmessaging being seen by a larger group of consumers as opposed to thetraditional media. Therefore, it is obvious that social media luresmarketers (Helme-Guizon et al., 2013). Similarly, traditional mediahas been overshadowed not only by the increasing usage of newtechnologies, but also by the increasing difficulty to createoutstanding campaigns owing to competitive markets.
Themain challenge associated with modern marketing approaches is theconstant change in consumer mindset and preferences (Robards, &Lincoln, 2016). Basically, the internet has created high leveldynamism. As more people get connected to the internet, the higherthe chances are that they will likely shift from the consumption ofone product to another (Colucci, & Scarpi, 2013). It is thischanging nature of consumer behavior that companies like Netflix aregrappling with and taking advantage of at the same time (Roehl,2015). Generally, social media has led to a culture of activeengagement, real-time access to information and other consumergroups, and constant communication between organizations andconsumers or between consumers themselves (Hutton, 2012). In fact,this is something that the traditional media could not have achievedin the first place.
Figure1: Top Brands on Facebook: the statistics was done bysocialbakers.com in 2016 and it is based on the fan-page of each ofthe companies on Facebook
Figure1 above shows the leading brands on Facebook in terms of the fan-baseof each brand. According to socialbakers.com, the dominance of thesebrands is linked to the number of follows on social media and theability of the marketing department to emancipate the use of socialmedia in building continued growth. A good example of success onsocial media is illustrated by the case of Coca-Cola and Netflix.Although Netflix has not attained the same fan base as Coca-Cola, ituses pretty the same strategies to enhance its performance. Just likeCoca-Cola, Netflix is targeting the young consumers and it is doingthis by constantly coming up with ads matching the taste of themillennials (Komodromos, 2017). Looking at the brands on the top 10list, it is clear that they all leverage on the behaviors of themillennials in the market. For example, millennials tend to associatewith technological activities and spend a large proportion of theirtime online (Taecharungroj, 2017). By understanding this, thesecompanies have developed numerous ads, come forth with new socialmedia campaigns, and enhanced real time communication with theircustomers through social media all aligned towards building theircustomer base.
Besidesinitial engagement expectations of consumers, social media is linkedto sustained attention kept over considerably a long period of timeas opposed to only a few moments (Volam, 2014). The impact of socialmedia can be clearly seen in modern day television advertisementswhich have resorted to plead to their consumers to sign-up on theirwebsites. For example, consumers accessing articles on New York Timesor the Guardian are often prompted to sign-up using their mails toget future notifications on similar articles or news sources(Wattanacharoensil, & Schuckert, 2015). Essentially, traditionalmedia like CNN and BBC are trying to compete with the modern socialmedia platforms through web-based solutions. At the same time,traditional media houses are combining the use of social mediamarketing and traditional marketing in a bid to improve theirpresence in the market (Lauer, 2013). In this retrospect, there areno single major media companies without a Facebook, Twitter, orInstagram account. The rush towards aligning to modern daycommunication channels has illustrated the impact of social media inthe society (Redondo, 2012).
Basically,platforms like Facebook are not only communication and engagementmediums, but they are also significant business environments(Yildirim, 2015). On most occasions, the consumers make use ofFacebook, Twitter, or Instagram for fun and to them it does not makeany difference whether they are joining unbranded or branded game.However, the more creative and successful a brand is the higher itsprospect to build loyalty and repeat visits. In this premise, brandsshould strive to have in a mechanism built towards having a strongsocial media presence by adopting creative strategies and programs toretain users and initiate continued visits to fan pages (Rosenthal,Buka, Marshall, Carey, & Clark, 2016).
Therehave been a wide range of campaigns driven taking advantage oftechnological tools by companies like Netflix. The tools have helpedorganizations to successfully track their messages. The concept ofpersonalized services and customized products or services is built onthe basis of getting reliable data and using the data to makecritical decisions to enhance consumer experience and satisfaction(Saiprasad, 2016). Modern day social media analytics has provided afoundation for continued integrated marketing communication. Facebookhas a wide range of analytic algorithms embedded in its framework toassist advertisers analyze their presence on the platform and buildon their campaigning strategies (Moghavvemi, & SalarzadehJanatabadi, 2017). In fact, there is no social media platform withoutan analytic algorithm. For example, Facebook makes use of EdgeRankto determine which posts should appear on user feeds. The use of suchalgorithms makes it easier for organizations to rank their posts onFacebook and build on their content development to ensure that theyenhance their presence (Stangierska, & Górska-Warsewicz, 2016).Generally, social media campaigns are developed with a motive ofbuilding brand capacity and presence on the social media circle.
Communicationhas gradually evolved from one-to-many to one-to-one toone-to-community. Marketers are also continuously evolving andtargeting communities. The targeted communities are not defined byoccupation or industry rather they are defined by interests andpreferences. Social media is a powerful tool when it comes totargeting communities on the premise of their needs and preferencessince it is much easier to get social media groups characterized byindividuals with similar needs or wants. Companies like JetBlue andDell have continuously used Twitter and Facebook to advertise theirdeals to the consumers (Raghupathi, & Fogel, 2013). Recently,Volkswagen ran an Application Program Interface (API) based onLinkedIn’s viewer pages. Through the approach, women professionalscould seek ads on Beetle, male professionals interested in sportscars would see ads on polo while senior executives could see ads onJetta all the viewing took place in real-time and simultaneously(Mäntymäki, & Islam, 2016). This enhanced the company’srecommendation and in just 30 days the company was able to garnerapproximately 2700 product recommendations. The example of Volkswagenillustrates the power of social media in the modern society.
OldSpice’s YouTube campaign termed “The Man Your Man Could SmellLike” is one of the most successful YouTube campaigns that makeviral hits and this makes it one of the greatest brand campaigns onsocial media (Kern, & Gil-Egui, 2016). Through the campaign, thecompany was able to suddenly transform the image of its brand thathad previously been dubbed as old-fashioned and out of place in themodern market. Since the adoption of the campaign strategy, the brandcurrently has spin off games, featuring videos, Facebook page, andlinks to its retail ages (Raghupathi, & Fogel, 2013). The sitehas managed and continuous to attract thousands of consumers whowould want to join and play along with the brilliant marketing game.
In2015, Netflix managed to keep its political drama House of Cardsentertaining despite the fact that no new release had been made formonths. Through the show, Netflix managed to engage its customersthrough tweets, Facebook posts, still images, short clips, and plaintext quotes that fostered the interaction between the customers andthe company. Essentially, the company leveraged on the power ofsocial media to ensure that customers continuously commented and posttheir views and opinions on the drama without necessarily a newrelease in the market (Charan, & Bansal, 2016). Basically,competitive advantage in many organizations is built on enhancingcustomer loyalty by offering services or products that match thespecific needs of individual customers.
Criticism of UsingFacebook as a Social Media Marketing Tool
Thecontinued growth of the use of Facebook and other social mediaplatforms has brought about a wide range of concerns regarding thetechnology (Auter, & Fine, 2016). The use of social media can beeither enhance the development of brands in the market or impairperformance of organizations. However, it depends how the platform isused. For example, if comments or posts are made in haste, it canlead to marketing disasters and damage reputations of organizations(Volam, 2014). A real example of the impact of social media marketingis illustrated in the latest trend where major corporations likeNetflix and Walmart have pulled down their ads from YouTube’s spaceciting poor alignment of videos to their ads (Bitter, &Grabner-Kräuter, 2016). Major corporations are always sensitiveabout their brands and will take drastic measures to protect theirimage in the market (Rahman, 2017). Google boycott is a driveinitiated to compel Google to restructure its marketing policies andstrategies towards building a protective culture for brands. Pooralignment of content is always catastrophic to organizations (deVries, & Kühne, 2015). In fact, this explains why mostorganizations would resort to contract the services of qualifiedsocial media marketers or consultants to ascertain high quality.
Theissue of privacy has long lingered in the modern internet space.Privacy is a major concern when it comes to the use of social mediaplatforms (Daraei, 2015). Facebook alone has reported numerous casesof stalking, privacy breaches, and improper use of personal data bymarketers. The privacy issues tend to make most people shy off fromthe use of Facebook and other social media platforms. This isparticularly true among the older users who are more sensitive toprivacy issues. In spite of potential drawbacks of Facebook, itspopularity is still growing and has by far exceeded that oftraditional media (Schivinski, & Dabrowski, 2015). In fact, if TVcommercials gone viral can be compared to those on Facebook, TVcommercials can cost millions, are poorly targeted, and do not enablereliable data capture and analysis whereas advertisements on Facebookare almost free and are flexible (Eckler, Kalyango, & Paasch,2016). At the same time, if wrong message is sent it can have apsychological impact on the users as seen in the many cases ofdepression across the world.
Thechapter provides an analysis of the research methods used in thestudy. The chapter is segmented into four key areas that includeresearch philosophy, research approach and strategy, research method,and data collection and analysis.
Themost essential perspective of this study is the constructionismontological approach. This is to mean that focus is placed on thesocial actors who are constantly in position to enhance the factorsof socialization and integration in the society (Ahmed, 2016).Therefore, social media is seen as an essential ingredient inbuilding on the development of brands in the market. It is also seenas a key instrument in the society in bringing people together andbuilding on relationships. Basically, social media and particularlyFacebook is a reality that changes due to a construction andre-construction process (Morse, & Kimball, 2012). Hence, in a bidto understand the impact of social media, it is prudent to analyzethe different subjective elements motivating the use of social media,in this regard, an interpretivist position is regarded.
Theresearch is conducted on the premise of an interpretivistepistemological approach. The approach depicts that a social world isprone to numerous changes and it is difficult to fully adapt to thechanges (Neuman, 2014). At the same time, the social world cannot befully described owing to its complexity. In this retrospect, there isa need to adopt a different logic in studying the social world andthis is anchored in the need to reflect on the characteristics ofhumans in relation to the natural order. Therefore, there is a needto include a subjective meaning of social action in the study in abid to provide the necessary insights into the impact of social mediamarketing on organizational performance (Quinlan, 2015). Generally,understanding the human behaviors and how they impact organizationalperformance is fundamental in the study.
Research Approach andStrategy
Theapproach used in the study is an exploratory study which isinstituted to take into consideration numerous literatures availableon the impact of social media on marketing. The approach can berecommended in situations where there is limited time as is the casein this study since it is quicker to complete (Salkind, 2012). Inorder to gain a deeper understanding of the study topic, a case studyresearch design is used and in this case one case study isappropriate. The use of real life example provides an in depthanalysis into the significance of social media marketing in themodern market space (Shannon-Baker, 2015). The adopted strategy isnot only time and cost saving, but also provides a framework toanalyze and compare real life situations that revolve around the useof social media and particularly Facebook in marketing activities.
Theprimary research method is aligned towards the use of secondary datasources (Breakwell, Smith, & Wright, 2012). The strategy isdriven by the need to analyze numerous studies on the topic andprovide a fundamental conclusion on the role of Facebook as amarketing tool. In this regard, the use of qualitative researchmethod and more specifically the use of exploratory method provedsignificant in the study (Shaughnessy, Zechmeister, &Zechmeister, 2015). The research approach was the most appropriateapproach since it provided an avenue of analyzing human behaviors onsocial media platforms.
Data Collection andAnalysis Data collection.
Primarydata would have been essential in this study however, this was notpossible owing to strict company laws and regulations and theinability to access the respondents (McNeill, & Chapman, 2012).Therefore, the objectives and aims were adapted so as to make use ofsecondary data sources. Important information sources includedcommercial directories, official statistics from reliable sources,previous researches conducted on the topic, trade press, andother-related sources that could offer critical data about Netflixand the use of social media marketing (Shaughnessy et al., 2015). Theadvantage of using secondary data is that huge amounts of data can beaccessed within a short time frame and at the least possible cost. Atthe same time, the use of secondary sources offers an additionalapproach of analyzing the data from a different perspective.
Ina bid to analyze the data, content analysis was suggested as the bestapproach. The method is fundamental when examining dynamic elementslike human behavior and organizational values or performance(Waldman, Wang, & Fenters, 2016). Moreover, content analysis ishighly reliable and transparent when using secondary sources of data.The impact of social media marketing has been a major topic in recentdays. This is particularly true when it comes to the use of Facebookmarketing strategies in the market. The need for organizations toimprove their marketing processes based on the use of social mediahas attracted a wide range of researchers in the topic and this hasalso immensely added to the existing literatures on the topic.Therefore, for the purpose of this study, there are multiplesecondary sources that will be used throughout the study to come to aconclusion on the impact of Facebook marketing taking intoconsideration the case of Netflix.
Boththe primary and secondary researches require the correlation to theethics framework. In this study, the primary ethical considerationwas addressed in the use of secondary sources. All the data collectedfrom these published researches was properly acknowledged and thereferences given at the end of the research (Neuman, 2014). Theapproach is an essential step towards aligning to the ethicalframework.
Inthis section, the major research approach adopted in the study isanalyzed and the main steps that were taken into consideration toensure a successful completion of the study. The need to adopt asecondary study process was instigated by the wide range of availabledata in the field and the need to take advantage of already existinginformation instead of duplicating content. Further, the need to saveon time was an essential step towards the completion of the currentstudy. Finally, the ethical framework was adhered to throughout thestudy and this was through the use of references and acknowledgementof other people’s works.
CHAPTER FOURFindings andDiscussions
Accordingto a report published by Deloitte, Facebook connects over 1.35billion people around the world, and this is a huge market space forcompanies like Netflix that have derived their business models fromthe use of the internet. The report goes on to depict that there hasbeen about 14% increase in the number of people using Facebook in thelast year alone and this is likely to go up as more people access theinternet (Deloitte, 2015). In the U.S. alone it is estimated thatabout 20% of the time is spent on Facebook and this is the largestaudience in the market as far as target audience for Netflix isconcerned. The figure below shows an analysis conducted by Deloittethat illustrated the usage of Facebook in the world.
Figure2: Facebook usage across the world: the analysis was conducted byDeloitte in 2014 and since then there has been a significant increase
Thegrowth of Netflix and just like other companies leveraging onFacebook has been castigated by the use of Facebook pages andtargeted advertising that have aided the company to enhance its salesboth in the local and international market. In fact, throughFacebook, the company has been able to reduce trade barriers in itsmarketing strategies (Ting, & de Run, 2015). Over the last fiveyears alone, Facebook marketing has accounted for approximately 50%of the sales gained by the company. Facebook is one of the majorsocial media platforms in the society and it has given corporationsan ability to reach over 1.35 billion people at the same time.Therefore, there is real time communication to over one billionpeople. Netflix has increasingly used Facebook’s marketing toolsgrow, this is through pages and ads that have effectively acquiredand retained customers and increased product or service awareness.
Thereare three major effects that create economic impact from marketing onFacebook and they include pages, targeted ads, and referrals (Scott,2012). It is on the premise of these effects that major corporationslike Netflix has tried to improve their performance in the market.Pages provide companies with an approach of establishing theirpresence online (Funk, 2013). Therefore companies on Facebook can bediscovered easily by users who are interested with the providedservices or products. Targeted advertising is based on the needs andspecifications of the customers. In this way marketers can deliverthe content that suits the characteristics of the customers in realtime and this is a viable approach of enhancing customer base(Wigglesworth, 2014). The use of Facebook is majorly driven by theability to reach to a large customer base at the least cost. The useof Facebook’s self-service, auction-based ad tools create campaignsat a scale. The feature offers minimal barriers to advertising asopposed to the traditional media and therefore organizations takeadvantage of the feature to promote their products and services.
Overthe last decade, Netflix has registered a continued growth in termsof revenue and customer base. To a larger extent, the growth has beendue to two factors that include increased marketing activities andchange in management strategies. Strategic management is an integralpart of any organization, however, it is not an all-inclusiveapproach and this means that it must be completed by other strategieslike marketing campaigns. Therefore, Netflix has leveraged on the useof the internet to expand its services across the globe.Particularly, the use of Facebook has made it possible for thecompany to target the millennials who are the major consumers ofentertainment products and services across the world.
Figure3: Netflix revenues since 2002 to 2016: the company has registered acontinued increase in its profitability and growth margins
Essentially,Facebook has not only made it easier for Netflix to market itsproducts, but it has also created an additional layer for thecompany’s services. Netflix has properly integrated Facebook on itsservice delivery model in such a way that customers can also accessNetflix website through Facebook or log into the systems viaFacebook. The integration of the two platforms makes it easier forcustomers to access the movie streaming sites even without knowingthe company’s URL ("Social marketing in the 21st century",2013). At the same time, it is a good approach of redirecting trafficto the company’s sites. Most often, first time customers can becomerepeat customers if they find that the services offered are reliableand effective, and most importantly align to their needs andinterests. Businesses like Netflix have benefitted immensely from theuse of Facebook and this is especially the case when customers sharelinks and posts on Facebook. For example, Netflix continuously poststhe series Narcos on Pablo Escobar, the links to the video are alwaysshared across the platforms as friends like and post on the series.Through such behaviors, the market base of the company has grownsignificantly.
Theintegration of advertising into mobile based application givesmarketers the power and ability to connect with people regardless ofthe devices being used (Raman, & Lateh, 2015). In fact, thepenetration of mobile based devices and applications has hastened thepace of Facebook advertising in the market. People are no longerrestricted to the use of larger electronic devices like laptops anddesktops to be able to access digital content (Treadaway, 2012). Inessence, with a small digital device like a smartphone, a person isable to access social media and also stream videos from major onlineplatforms like Netflix.
Theimplications of marketing on Facebook in Netflix have been seen inlower marketing costs, personalized services, directed advertising,large number of referrals, and easy to communicate platform betweenthe customers and the company. On the other hand, there are someoccasions that Facebook users may be weary of advertisements andprivacy violation issues (Rae, & Lonborg, 2015). These are someof the cases that major corporations like Netflix need to considerwhile undertaking marketing campaigns through Facebook. However, thegood thing about using Facebook in Netflix is that the company’sbusiness model easily correlates with the use of social media. At thesame time, it is much easier to market online based services throughthe use of social media as compared to marketing other physicalproducts like food (Carter & Levy, 2012). At the same time,Netflix has a specific target market which is mainly involved in theuse of social media and this is a major bonus to the company when itcomes to the use of social media to drive its marketing activities inthe modern society.
Astudy conducted by Ertell depicts that loyal customers always want tobe connected with business through the use of Facebook or othersocial media platforms, however, what dictates loyalty is howbusinesses interact with these customers (Matthews, 2013). Ifbusinesses take the initiative to continuously communicate andaddress the feedback of the customers, chances are that suchbusinesses will have a higher loyalty base. The researcher goes on todepict that about 49% of the customers who join social media pages oforganizations do so with an intention of finding out special offersor promotions, and about 45% would want to get more information onproducts and services. Therefore, to thrive in such a market,organizations need to provide compelling and relevant information ontheir services and products to appeal to these consumers (Mas-Tur,Tur-Porcar, & Llorca, 2016). In fact, the growing presence ofNetflix on social media illustrates a case of an organization thatunderstands the needs of its customers and working towards fulfillingthese needs through various promotion campaigns and adoption of newmovies, series, and TV shows that match with the needs of thecustomers in the market.
CHAPTER FIVEConclusion andRecommendations
Fromthe study, it is imperative to note that the success of Netflix isanchored in its ability to effectively make use of Facebook to driveits marketing agendas. To a large extent, Netflix is one of thelargest movie streaming sites with a high presence on social media.Over the past years, the company has continuously restructured itsmarketing strategies and services to meet the needs of the primarytarget market, the millennials (Haydon, 2013). For example, thecompany altered the prices of its online streamlining services from$7.99 to $9.99 with an intention of providing high quality servicesthat match the preferences of the millennials in the market (Stewart,2015). As opposed to the past decade, the company now primarilyfocusses on the young people who are the major users of the internetand this largely explains why the company has grown in terms ofcustomer base and profitability margins.
Theuse of the social media and particularly Facebook has provided aviable platform to reach over 1.35 billion users across the world.Since Facebook has become a new marketing tool, Netflix has been ableto align its policies to the use of the social platform (Vander Veer,2014). There are a wide range of benefits that Netflix has been ableto draw from the use of social media and they include but not limitedto lower marketing costs, larger customer base, real timecommunication and interaction, personalized services and marketing,targeted advertising and other-related benefits attached to the useof social media platform (Ray, 2013). However, the main benefits arethose of reduced marketing costs and access to a larger customerbase. Netflix’s revenues illustrate the impact of using socialmedia to access the customers. In fact, as illustrated since 2002 tothe present, there is a direct relationship between the growth ofsocial media and the profitability margins of Netflix. Since 2002,Netflix has intensified its online marketing strategies and thisexplains why it has been able to grow its presence in the market.
Theuse of Facebook and other social media platforms not only encouragethe dissemination of real time information between the company andthe customers but also between customers’ networks (Porterfield,Khare & Vahl, 2012). It is very common to see friends groupsshare information on particular products or services and theirsentiments on the use of such products. In this retrospect,organizations like Netflix need to ensure that they furtherrestructure their policies to fit the constantly changing demands andthe use of social media in marketing. Further, Facebook should beembraced as part of the promotional mix (Kitchen & Mirza, 2013).Organizations need to embrace undertake such processes as creatingcommunities of people sharing similar interests, engage customers onsocial media using additional tools like blogs, appeal to thecustomers by combining different promotional techniques, alwaysdisseminate and share information, and give customer a notion ofexclusivity in relation to the use of specific products and services.Finally, it is important for Netflix and other organizations toresolve the issue of privacy and confidentiality in the sharing ofcontent through social media platforms as this will improveconfidence and reliability in the marketing process.
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