EFFECT OF TWITTER BAN ON FOREIGN INVESTORS IN NIGERIA
CHAPTER TWO
LITERATURE REVIEW
2.0 INTRODUCTION
Our focus in this chapter is to critically examine relevant literature that would assist in explaining the research problem and furthermore recognize the efforts of scholars who had previously contributed immensely to similar research. The chapter intends to deepen the understanding of the study and close the perceived gaps.
2.1 CONCEPTUAL FRAMEWORK
SOCIAL MEDIA
Social media are computer-mediated technologies that facilitate the creation and sharing of information, ideas, career interests and other forms of expression via virtual communities and networksUsers typically access social media services via web-based technologies on desktop computers, and laptops, or download services that offer social media functionality to their mobile devices (e.g., smartphones and tablet computers). When engaging with these services, users can create highly interactive platforms through which individuals, communities and organizations can share, cocreate, discuss, and modify user-generated content or pre-made content posted online. They introduce substantial and pervasive changes to communication between businesses, organizations, communities and individuals. Social media changes the way individuals and large organizations communicate. These changes are the focus of the emerging field of technoself studies. Social media differ from paper-based media (e.g., magazines and newspapers) or traditional electronic media such as TV broadcasting in many ways, including quality, reach, frequency, interactivity, usability, immediacy, and permanence. Social media operate in a dialogic transmission system (many sources to many receivers). This is in contrast to traditional media which operates under a monologic transmission model (one source to many receivers), such as a paper newspaper which is delivered to many subscribers or a radio station which broadcasts the same programs to an entire city. Some of the most popular social media websites are Baidu Tieba, Facebook (and its associated Facebook Messenger), Gab, Google+, Instagram, LinkedIn, Pinterest, Reddit, Snapchat, Tumblr, Twitter, Viber, VK, WeChat, Weibo, What sApp, Wikia, and YouTube.
EVOLUTION OF SOCIAL MEDIA
Social media have evolved through Web 2.0, a term coined to describe a new wave of Internet innovation that enables users to publish and exchange content online Kaplan and Haenlein (cited in Eun 2011:6). Social media encompass a wide range of electronic forums, including blogs, microblogs (e.g., Twitter), social networking sites (e.g., Facebook), creative work-sharing sites (e.g., YouTube), business networking sites (e.g., LinkedIn), collaborative websites (e.g., Wikipedia), and virtual worlds (e.g., Second Life). Among these social media, social networks and microblogs are the most popular, accounting for 22.7% of all time spent online in the United States ACNielsen (cited in Eun 2011: 6). According to Dominick (2009:283) Web 2.0 is the idea of a second generation Internet that is highly participatory, allowing users to improve it as they use it. Social media contents are primarily written and published by their users and not owners or employees of the site. For instance, most adverts, videos and pictures on Facebook and Twitter are uploaded by visitors of the sites.
Jenkins et. al (cited in Stagno: 2) observe that Web 2.0 has been growing tremendously as it facilitates the production and dissemination of information, allows for the involvements in participatory culture to share individual expressions or creations and bring people with similar interests and goals to connect with each other on blogs, social networking sites and others. Few years ago, websites were quite static and passive. There was no much interaction going on as they were mostly corporate websites. The only way an individual could participate online was to send an email or form to the owners or web master of the website and hope that they would get back to him. This type of arrangement was called Web 1.0, referred to as “first generation Web where users generally consumed content. The audience went to web pages and looked at content provided by the website owner” Dominick (2009:283). But today, users have become producers which mean that they simultaneously consume and produce information (Bruns, cited in Stagno 2010:1). Igbinidu (2011:26) explains that the first exploitation of the potential of the social media especially to spread a candidates message, gain support and get the public engaged was through the 2008 presidential campaign by the then Senator Barack Obama who eventually became American president. The Obama campaign reached five million people on 15 different social media platforms. As at November 2008, Obama had approximately 2.3 million Facebook supporters; 115,000 Twitter followers and 50 million viewers of his YouTube videos. Facebook is a social network for connecting people with those around them,friends, family, coworkers, or simply others with similar interests. Facebook was created by Mark Zuckerberg in 2004 alongside his roommates and fellow computer science classmates Eduardo Saverin, Austin Maskovitz and Chris Hughes at Harvard University in the U.S (Locke cited in Nnaane 2011:15). Initially, Facebook membership was restricted to Harvard students but later extended to other colleges in Boston and Stanford University all in the U.S. “Since 2006, Facebook has expanded beyond Harvard to other 24 schools, corporations, businesses and any user across the world” (Dunay & Krueger 2010:27). Zuckerberg, cited in (Nweze, 2009) explains that advertising on Facebook is an opportunity for companies to reach their exact audience and connect real customers to their business. Facebook allow users to connect and share information in a variety of ways. Facebook allow users to post photos, videos and customize their profile content. Facebook has added a number of features over the past few years, including instant messaging/chat and apps (and their developer platform).Users communicate with one another through different methods, for instance, private messaging as well as writing on another user’s wall. Wall posts are visible to that user’s friends, but usually not to the general public. Users can also change their privacy settings to allow different users to see different parts of their profile, based on any existing relationships (the basic privacy settings are “only friends”, “friends of friends”, and “everyone”). Users can post notes that are visible to all of their friends. Users can also comment on or, more recently, “like” the posts of their friends, and conversations often occur within the comment sections among multiple people (Dunay & Krueger2010:27). Facebook pages are online location for businesses, organisations, public figures, entertainers, professionals of all types and individuals with the intention of marketing themselves to the Facebook community. Facebook Pages provide a powerful set of online tools for engaging with customers (or, as they are called in Facebook, fans). Every day, 3.5 million people become fans of a Facebook Page. According to eMetric’s February 2009 Facebook Usage Metrics Worldwide Study, although popular consumer brands enjoy large installed fan bases, smaller brands, business-to-business (B2B) companies, consultants, and personalities can also build a loyal following by using Facebook Page (Dunay & Krueger2010:27). He notes further that if Facebook were a country, it would be the sixth most populated nation in the world. This is because the site has grown to be perhaps the most popular all over the world with a user base of over 660 million (Amaefule 2011:20). The number of users continues to grow steadily. 25 Tyler (2010: para 3) explains that there are currently 1.7 billion Internet users worldwide, almost 57% of them have joined a social network, 66% of all Internet users visit social networks, Facebook is used more than 80 million hours daily and that close to 15million photos, wall posts, links, news, notes etc. are shared on Facebook every day. According to Idaresit (cited in Ofose, 2010) about 39.6 percent of all Internet traffic from Africa is from Nigeria and 29.8 percent of the population access the Internet. As at 2009, there were 30 million Nigerians on Facebook. Of this figure, 67% were males while 33% were females. These figures have changed since then. Lagos alone now has about two million subscribers to Facebook (Ogunbayo, 2011: 44). Supporting the above, Solaja and Odiaka (2010:32) state that “such a large population naturally offers a good basis for the adoption of the platforms for marketing purposes”. Facebook offers targeted communication initiative to select customers groups for product development as well as service enhancement and also be able to engage their customers and non-customers on platforms they are comfortable with while recovery real-time feedback on what they have to say about their brand, products and services (Wmworia (2010, February 11). In Nigeria, President Goodluck Jonathan boasts of the highest fan base with 97,000 Nigerian Facebook users. Both local and international brands would consider placing an ad on the presidents Facebook fan page as traffic to the site is unbelievably high Adebija (cited in Ofose 2010:4). Twitter was launched in 2006 and founded by Dorsey Jack, Biz Stone and Evan Williams as a free micro blogging social network that enables users to post short messages known as tweets that could be viewed by other subscribers, more commonly referred to as followers. Tweets of not more than 140 characters can be sent from and received by almost any kind of electronic equipment, including desktop computers, laptops, Black Berrys, iphones, and other mobile devices (Farhi 2009). According to D’Monte (cited in Nnaane 2011) Twitter has gained popularity worldwide and is estimated to have 200 million users, generating 65 million tweets a day and handling over 800,000 search queries a day. Message brevity, in contrast with lengthy e-mail marketing messages, has been hailed as an asset of microblogs; which 26 enables consumers to browse a large amount of updates efficiently (Zhao and Rosson, 2009). Aided by increases in smart phone sales and the continued rollout of Internet and mobile network infrastructure, Twitter is poised for even more growth (Wauters, 2010). Users broadcast messages to the masses, without visiting a particular person's profile to do so. By following other users, people automatically receive messages on their own Twitter home pages tweeted by those whom they are following. Even though some Twitter accounts are kept private, and some users require that they offer approval to people who wish to follow them, messages exchanged on this microblog are public by default, thus everyone can read and comment on a Twitter message (Kaplan and Haenlein, 2010). Chiang (2011) explains that visitors increased by 1,382, to 7 million in February 2009, up from 475,000 in February 2008, “making it the fastest growing social media site for that month” (McGiboney, 2009)
Twitter is an American microblogging and social networking service on which users post and interact with messages known as "tweets". Registered users can post, like, and retweet tweets, but unregistered users can only read them. Users access Twitter through its website interface or its mobile-device application software ("app"), though the service could also be accessed via SMS before April 2020.The service is provided by Twitter, Inc., a corporation based in San Francisco, California, and has more than 25 offices around the world. Tweets were originally restricted to 140 characters, but the limit was doubled to 280 for non-CJK languages in November 2017.Audio and video tweets remain limited to 140 seconds for most accounts (D'Monte, Leslie 2009).
Twitter was created by Jack Dorsey, Noah Glass, Biz Stone, and Evan Williams in March 2006 and launched in July of that year. By 2012, more than 100 million users posted 340 million tweets a day,and the service handled an average of 1.6 billion search queries per day.In 2013, it was one of the ten most-visited websites and has been described as "the SMS of the Internet". As of Q1 2019, Twitter had more than 330 million monthly active users.Twitter is a some-to-many microblogging service, given that the vast majority of tweets are written by a small minority of users( twitter search team 2011).
In April 2014, Twitter underwent a redesign that made the site resemble Facebook somewhat. On June 4, 2014, Twitter announced that it would acquire Namo Media, a technology firm specializing in "native advertising" for mobile devices. On June 19, 2014, Twitter announced that it had reached an undisclosed deal to buy SnappyTV, a service that helps edit and share video from television broadcasts.The company was helping broadcasters and rights holders to share video content both organically across social and via Twitter's Amplify program.In July 2014, Twitter announced that it intended to buy a young company called CardSpring for an undisclosed sum. CardSpring enabled retailers to offer online shoppers coupons that they could automatically sync to their credit cards in order to receive discounts when they shopped in physical stores. On July 31, 2014, Twitter announced that it had acquired a small password-security startup called Mitro. On October 29, 2014, Twitter announced a new partnership with IBM. The partnership was intended to help businesses use Twitter data to understand their customers, businesses and other trends.
On February 11, 2015, Twitter announced that it had acquired Niche, an advertising network for social media stars, founded by Rob Fishman and Darren Lachtman. The acquisition price was reportedly $50 million. On March 13, 2015, Twitter announced its acquisition of Periscope, an app that allows live streaming of video. In April 2015, the Twitter.com desktop homepage changed.
FOREIGN INVESTMENT
Foreign investment refers to the investment in domestic companies and assets of another country by a foreign investor. Foreign investment refers to investments made by the residents of a country in the financial assets and production processes of another country. The effect of foreign investment, however, varies from country to country. It can affect the factor productivity of the recipient country and can also affect the balance of payments. Foreign investment provides a channel through which countries can gain access to foreign capital. It can come in two forms: FDI and foreign institutional investment (FII). Foreign direct investment involves in direct production activities and is also of a medium- to long-term nature. But foreign institutional investment is a short-term investment, mostly in the financial markets. FII, given its short-term nature, can have bidirectional causation with the returns of other domestic financial markets such as money markets, stock markets, and foreign exchange markets. Hence, understanding the determinants of FII is very important for any emerging economy as FII exerts a larger impact on the domestic financial markets in the short run and a real impact in the long run. India, being a capital scarce country, has taken many measures to attract foreign investment since the beginning of reforms in 1991.
Foreign Direct Investment (FDI) plays a very important role in the development of the nation. In such cases, foreign direct investment plays an important role in bridging the gap between the available resources or funds and the required resources or funds. It plays a vital role in the long-term development of a country not only the source of capital but also for enhancing the competitiveness of the domestic economy through the transfer of technology ,strengthening infrastructure, raising productivity and generating new employment opportunities.
DETERMINANTS OF FDI
There are various factors that influence the FDI inflows into a country. The investors consider and evaluate various aspects of a country before investing in it. The relative importance of these determinants of FDI varies not only between countries but also between different types of FDI. Traditionally, the determinants of FDI include the following:
- Size of the Market:
The developing countries possess substantial markets where the consumers demand for certain goods far exceed the available supplies. This demand potential is a big draw for many foreign enterprises. In many cases, the establishment of a low cost marketing operation represents the first step by a multinational company into the market of the country. This establishes a presence in the market and provides important insights into the ways of doing business and possible opportunities in the country.
- Political Stability:
In many countries, the institutions of government are still evolving and there are unsettled political questions. Companies will generally be unwilling to contribute large amounts of capital into an environment where some of the basics political questions have not yet been resolved.
- Macro-Economic Environment:
Instability in the level of prices and exchange rate enhance the level of uncertainty, making business planning difficult. This increases the perceived risk of making investments and therefore adversely affects the inflow of FDI
- Legal and Regulatory Framework:
The transition to a market economy entails the establishment of a legal and regulatory framework that is compatible with private sector activities and the operation of foreign owned companies. The relevant areas in this field include protection of property rights, ability to repatriate profits, and a free market for currency exchange. It is important that these rules and their administrative procedures are transparent and easily comprehensive.
- Access to Basic Inputs:
Many developing countries have large reserves of skilled and semi-skilled workers that are available for employment at wages significantly lower than in developed countries. This provides an opportunity for foreign firms to make investments in these countries to cater to the export market. Availability of natural resources such as oil and gas, minerals and forestry products also determine the extent of FDI.
EFFECT OF TWITTER BAN ON FOREIGN INVESTORS IN NIGERIA
On 4th June 2021, the Nigerian government officially put an indefinite ban on Twitter (BBC 2021) restricting it from operating in Nigeria after the social media platform deleted tweets made by the Nigerian President Muhammadu Buhari warning the south eastern people of Nigeria, predominantly Igbo people, of a potential repeat of the 1967 Biafran Civil War due the ongoing insurgency in Southeastern Nigeria. The Nigerian government claimed that the deletion of the President's tweets factored into their decision but it was ultimately based on "a litany of problems with the social media platform in Nigeria, where misinformation and fake news spread through it have had real world violent consequences". This ban was done without considerations of over 39 million Twitter users in Nigeria including business owners and foreign investors who uses the platform to promote their businesses.
In an online publication by BusinesInsider (18th June) Zainab Onuh-Yahaya posits that For young Nigerians, Twitter is not just a platform for organizing or calling out bad governance and stifling policies. Twitter has revolutionized business in Nigeria—from customer service to job creation facilitating the ease of doing business—a campaign promise of the Buhari administration itself. Many small business owners in Nigeria operate on Twitter, either through targeted ads or organic engagement. In a country which ranks second in global unemployment, with an estimated 13 million young unemployed people, methods such as these are literal means of sustenance and livelihood. “The Twitter ban is certainly taking a toll on e-commerce, and is making things even harder for many young Nigerians who have leveraged technology for their economic empowerment in significant ways.” says Fareeda Abdulkareem, a McHenry Fellow at Georgetown University. She said that the ban reflects a clear trend of the government making attempts to heavily regulate sectors that are central to the country’s digital economy. Tech, she says, is now responsible for contributing to more than 10 percent of the country’s GDP.
The Twitter ban sends a clear message that this is not a safe country for foreign investments. It worsens Nigeria’s reputation as an increasingly volatile political environment, which Nigeria is proving to be. Investors will simply choose Nigeria’s neighbor Ghana, as Twitter has done, or South Africa’s relatively stable economy. “Foreign investors always pay critical attention to the policy leanings of governments prior to making an investment,” says Chidi Odoemenam a Nigerian corporate lawyer at The Converstaion (2021) publication,, “These policies drive macroeconomics variables such as inflation, exchange rate, political stability, fiscal deficit, unemployment, etc., and these variables ultimately affect the general performance of an economy and the ability of businesses to thrive.”
Many small and medium enterprises in Nigeria use social media, including Twitter, for marketing, pitching, attracting investors and reaching customers. An example of these are start-up technology firms like Cowrywise, a savings and investment company, and Piggyvest, an online savings platform. Not too long ago, Cowrywise announced it was raising US$3 million in investment funding. One of the participating investors, Sahil Lavingia, tweeted that his investment conversation started via a Twitter direct message or “DM”. Lavingia is the founder of Gumroad, a San Francisco based online platform that facilitates the sale of products by creators directly to consumers. Lavingia invested in the Nigerian company and posted on Twitter: “Excited to invest in another African startup! The power of Twitter”.
Nigeria has tried to diversify its economy away from dependence on oil in recent years, and tech should be a key part of that. The country is projected to become Africa’s largest tech hub—and yet the Nigerian government continues to place restrictive policies that discourage growth and threaten what would otherwise be a successful transformation.
In January 2020, for instance, the Lagos state government announced a sudden ban on okada (motorcycle taxis) and tricycles. Bike-hailing services within the city were victims, although start-ups like Gokada and ORide had raised funding in millions of dollars from international investors who had bought into the idea that Lagos was a rapidly growing investment hub. “International investors are looking closely at Nigeria because it is a very attractive investment hub,” says Kunle, a tech enthusiast who asked to use a pseudonym due to his company’s press policies, citing Nigeria’s fintech company Flutterwave, which recently secured $170 million from international investors after a Series C round and is currently valued at over $1 billion, “But these investors are also looking at government policies.”Kunle says that one of the bigger impacts of the Twitter ban could be difficulty in accessing funding for Nigerian tech start-ups. “The Twitter ban demonstrates two things: That the rule of law is very weak in Nigeria; and that no business is safe as you are one government policy away from your business being denigrated. We’ve seen it happen with cryptocurrency.”
“The ban sends a message of regulatory uncertainty and executive rascality to investors; two factors that discourage investors from making investment decisions. With Nigerians and Nigerian businesses still recovering from the effects of the COVID-19 pandemic on the economy, this ban will further stifle the operation of many businesses that rely heavily on digital media for information exchange, marketing, customer service, and remote work,” Odoemenam says.
“The ban on Twitter affects customers as much as it affects vendors and companies,” says Vera, a customer service representative in a Nigerian bank who also asked to use a pseudonym. “In keeping with the COVID restrictions, customers have to wait for a longer period of time before accessing in-bank services. But for lots of social media users, tweeting at a bank does the trick. With this option being cut off, customers would have to tailor their complaints through other channels, and this means that those channels are going to get swamped, leading to a longer wait time.”
With its ban on Twitter, Nigeria joins China, Iran, and North Korea. China can afford to shut out foreign services thanks to the scale of its own domestic internet. North Korea is an economic disaster zone, and Iran is deeply unstable. Wanting to get on that list, as a mid-sized developing economy, is a disastrous move.
“Nigeria’s ban on Twitter fails to appreciate its current economic situation,” says Odoemenam. “With the state of its economy, Nigeria should be prioritizing policies that would drive economic recovery and not on internet firewalls to stifle free speech. We are a third-world economy battling with high levels of insecurity, youth unemployment, a dwindling economy, and political instability. Our realities are completely different from a country like China.”
2.2 THEORETICAL FRAMEWORK
The Uses and Gratification Theory
The Uses and Gratification Theory was propounded in 1974 by Elihu Katz, Jay Blumler and Michael Gurevitch. “The theory was developed to explain why audiences do not passively wait for media messages to arrive, but actively and deliberately seek out forms of content that provide them with information that they need, like and use” ( Kur, 2003:34). Folarin (2005: 65) observes that the theory perceives the recipient of media messages as actively influencing the effect process, he selectively chooses, attends to, perceives and retains the media messages on the basis of his needs and beliefs. This implies that “members of the public will actively select and use specific forms of media content to fulfill their needs and to provide gratifications of their interests and motives Defleur & Dennis (1994:559). The uses and gratifications perspective takes the view of the media consumer. It examines how people use the media and the gratification they seek and receive from their media behaviours. Uses and gratifications researchers assume that audience members are aware of and can articulate their reasons for consuming various media content (Wimmer and Dominick 2003: 403). Consequently, when applied to this study, social media allow for participation as they give the advertisers and customers the opportunity to interact with each other on a one-on-one basis. The implication is that business organisations or entrepreneurs who use social media are active as they willingly create their Facebook page or Twitter account. The business organisation chooses social media as a means to fulfill their wants and goals over other sources. Basically, the business organisation/entrepreneur sign up an account on Facebook or Twitter for a particular purpose. That is, the need to connect with customers to promote a product/service. For other users, it could be the need to connect interpersonally with friends or the need to patronise a product/ service advertised on those social platforms or just to know an organisation they are interested in the better. The assumption is that those who decide to patronise adverts on Facebook and Twitter may be doing so because of the gratification they hope to derive from those messages. While those who do not patronize the messages, may not have seen any gratification in the messages. Debatin, Lovejoy & Horn (2009:87) explain that social media users are found to expose higher risk-taking attitudes than individuals who are not members of an online network. It can therefore be assumed that the expected gratification motivates the users to provide and frequently update very specific personal data that most of them would immediately refuse to reveal in other contexts.
2.3 EMPIRICAL FRAMEWORK
According to Return on Investment Research 2011, social networking accounts for one of every six minutes spent online. There are 750 million active Facebook users across the globe and 31% of Facebook users are on the site multiple times every day. Edison Research revealed that 24% of consumers consult their Facebook friends before making a purchase. More than one in three consumers say they are likely to purchase from a company they follow on Facebook and Twitter (eMarketer). 53% of Facebook users would recommend a brand or company's product to friends (Facebook Success Summit 2011). In a result of their seventh annual survey on social media marketing adoption released by integrated marketing services provider- Alterian on Jan 21, 2010, the survey revealed that, 66 percent of respondents will be investing in social media marketing in 2010. Of those, 40 percent said they would be shifting more than a fifth of their traditional direct marketing budget towards funding their Social media activities. The survey also revealed that more than 36 percent of respondents are investing in social media monitoring and analysis tools. Nearly half of respondents (42 percent), however, said they do not currently incorporate clickstream and web analytics data into their customer and e-mail database. The research also revealed that over half of respondents (51 percent) are placing a ‘fair’ or ‘significant’ amount of effort on moving from a campaign-centric direct marketing model towards multichannel customer engagement. In fact, only 7 percent make no effort at all. The survey covered 1068 marketing professionals worldwide, 98% North America and Europe and 2% Asia Pacific and other region (Wauters, 2010: 3). In a study by Anderson Analytics and Marketing Executives Networking Group titled “Marketing Trends 2010” the report revealed some interesting insights in the minds of marketing executives. When marketing executives were asked to choose the most important trends and buzzwords to pay attention to in 2010, getting a good return on marketing efforts was number one with 58% saying it was the most important trend to keep an eye on. But what is even more interesting is that social media made the top 10 list with 42% choosing it as one of the top trends to watch. In addition, 72% said they work for companies that are planning social media initiatives in 2010 (Porterfield 2010, March 29). This survey corroborates the findings by eMarketer which revealed that 92% of marketers use Facebook and 75% of marketers plan to increase their use in 2011 (2011 Social Media Marketing Industry Report). A study jointly conducted and released by Nielsen and Facebook took a good look at Facebook and the value of ads campaigns. The study titled, “Advertising Effectiveness: Understanding the Value of a Social Media Impression,” analysed data from over 800,000 Facebook users and more than 125 Facebook ad campaigns across 70 different brands. This study used 3 criteria to determine the value of ad campaigns on Facebook; Brand Awareness, Purchase Intent and Ad Recall and also determined how paid media, “earned” and peer-to-peer advocacy contribute to ad campaigns. Nielsen defined “Earned Media” as advertising that is shared among friends and beyond. Nielsen looked at 14 Facebook ad campaigns that used “Become a Fan” as the engagement point, or call to action, and then determined the effectiveness in 3 ways: Lift from a standard Homepage Ad, Lift from Homepage Ads with Social Context and Lift from Organic Ads. The study showed some great insights regarding how peer-to-peer advocacy and recommendations affect social media ad campaigns. The findings revealed that people who viewed ads with social contexts had higher response rates than people who viewed the same ads without social context. Ad recall grew from 10% to 16%, awareness doubled from 4% to 8%, purchase intent jumped from 2% to 8%. The result proved that social media users had a direct impact on other users when it comes to ads, and that social media are fast and effective way to advertise products or services (Brooke 2010: 11). In another study, “The State of Small Business Report,” sponsored by Network Solutions, LLC and the University of Maryland’s Robert H. Smith School of Business, the study results showed that social media usage by small business owners increased from 12% to 24% in just the last year, and almost 1 out of 5 actively uses social media as part of their marketing strategy. Here is a breakdown of what the small businesses reported as the main uses of social media marketing. 75% have a company page on a social networking site. 69% post status updates or articles of interest on social media sites, 57% build a network through a site such as LinkedIn, 54% monitor feedback about the business, 39% maintain a blog, 26% tweet about areas of expertise and 16% use Twitter as a service channel. According to the study, different industries are adopting social media marketing at different rates, and while many industries have started using social media marketing in their efforts to reach more customers, many still have not positioned it as their top priority. The work also measured small businesses expectations of social media. While 58% feel that social media “met expectations,” 12% feel it has “exceeded expectations,” while 25% feel social media have “fallen short of expectations”. Some of the reasons given by respondents for social media’s shortfalls were that, 50% of the respondents feel that social media have used up more time than expected. 19% believe social media have lost them money while 17% feel that social media have allowed people to criticise their business (Porterfield 2010: 15). Another study by Invoke Solutions reveals that active social networkers find benefits of social media use beyond just staying connected with friends and family. Active social networkers say an important driver of social media use is sharing and gathering information and learning about new products. 63% of the respondents said that sharing information with network is very or somewhat important, 59% explained that gathering information from network is very or somewhat important, while 58% said that to learn about new products is very or somewhat important. Given that active social media users are looking for information about products and brands online, how well do they think companies are leveraging social media to these ends? The study revealed a room for improvement, with 46% saying that companies are not doing well using social media to listen to customers.46% said companies are not doing well using social media to deliver better customer service.50% said companies are not doing well using social media to learn about unmet customer needs. In a 2010 survey by Marketing Profs and Junta42 that asked marketers which social networks they are currently using: 55% said they are using Twitter, 54% said they are using Facebook and 51% said they are using LinkedIn. The study found that social media marketing is dominated by the “big three” networks: Facebook, Twitter, and LinkedIn. Being that the network that will be most effective for a brand depends on the audience and the strength of the brand’s efforts on each site, Facebook has been the most effective site for B2C (Business to Consumers) marketers according to HubSpot’s State of Inbound Marketing 2011 Report, which notes that: 67% of B2C marketers reported acquiring at least one customer from Facebook, compared with 41% of B2B (Business to Business) marketers. According to the report, one way to assess which social networks your customers and prospects favour is to check your web analytics data and survey their social media fans and followers to ask whether they also subscribe to their company newsletter or email promos. For instance, according to a Marketing Sherpa Case Study, when the baking accessory company, Wilton surveyed its email and social media audiences, it discovered that about half of its Facebook fans and Twitter followers were also subscribers to the company’s email Newsletter. Wilton followed up its audience surveys with a campaign to convert Facebook fans who had not yet opted-in to the company’s email newsletter. The marketing team created a Facebook wall post that encouraged fans to join the email list, and as a result, saw a 225% increase in newsletter subscriptions (The Definitive Guide to Integrating Social Media and Email Marketing:5) According to Exact Target survey, the key to making social sharing buttons work is providing “sharable” content. But people have different reasons for following brands on each social network, which affects the type of content they will deem most sharable. Here is a breakdown of major reasons people cite for subscribing to and following brands through different channels and what that means for an advertiser’s content strategy. Facebook users said that they become fans of a brand to receive discounts and promotions and also to show support for the company, to stay informed about the company’s activities to get updates on future products for fun or entertainment. active Twitter users say the reasons why they follow brands include: - To obtain new, authentic perspectives on companies and to find out what they really stand for - To receive insider information about upcoming products and services. - To get to know the personalities behind a company. - To see how a company responds when its brand is publicly criticized. Although 43.5% said that special offers and deals are the top reason why they follow brand in a recent Get Satisfaction/Column Five study. (The Definitive Guide to Integrating Social Media and Email Marketing:14). Facebook updates, tweets, and other social media posts can be used to build awareness for an upcoming event, special promotion or product launch. For example, Wilton used email and social media to promote the launch of its annual “yearbook” of cake decorating ideas. The team posted weekly Facebook updates about the upcoming book release and responded to customer questions about the product on their Facebook page. At the same time, they used Twitter to tease the book’s content, including a “guess the cover image” contest. Finally, they launched the product with an email campaign. The results: a 65% increase in year-over-year book sales. (The Definitive Guide to Integrating Social Media and Email Marketing: 16). In another study, Triumvirate, an environmental services company attributes $1.2 million in revenue to search engine optimization, blogs, and social media. Triumvirate had been doing Google Ad words but was spending too much money, not knowing how to optimize their complex campaigns. They launched a network of internal blogs to match their diverse service offerings and attract relevant search traffic to each business unit. Added calls to action on their blog pages, including a phone number and free resource download behind a lead form. Used Twitter and Facebook to share industry news and drive more visitors back to their content, leveraged interns and employees outside of marketing to participate in social media. The company has seen some great results from integrating content creation and social media into their marketing mix. According to Mark Campanale, marketing manager and new media trainer at Triumvirate, consistency is key - dedicate the time to social media and the rewards will make the investment worth it (The Definitive Guide to Integrating Social Media and Email Marketing: 17).