Social networking sites such as Facebook, Instagram, Twitter, MySpace etc. have all influenced the buzz of word of mouth marketing. In 1999, Misner said that word-of mouth marketing is, "the world's most effective, yet least understood marketing strategy" (Trusov, Bucklin, & Pauwels, 2009, p. 3). Through the influence of opinion leaders, the increased online "buzz" of "word-of-mouth" marketing that a product, service or companies are experiencing is due to the rise in use of social media and smartphones. Businesses and marketers have noticed that, "a persons behaviour is influenced by many small groups" (Kotler, Burton, Deans, Brown, & Armstrong, 2013, p. 189). These small groups rotate around social networking accounts that are run by influential people (opinion leaders or "thought leaders") who have followers of groups. The types of groups (followers) are called: reference groups (people who know each other either face-to-face or have an indirect influence on a persons attitude or behaviour); membership groups (a person has a direct influence on a person's attitude or behaviour); and aspirational groups (groups which an individual wishes to belong to).
On April 24, 2012 many started to see that Google has started to penalize companies that are buying links for the purpose of passing off the rank. The Google Update was called Penguin. Since then, there have been several different Penguin/Panda updates rolled out by Google. SEM has, however, nothing to do with link buying and focuses on organic SEO and PPC management. As of October 20, 2014 Google has released three official revisions of their Penguin Update.
The code of ethics that is affiliated with traditional marketing can also be applied to social media. However, with social media being so personal and international, there is another list of complications and challenges that come along with being ethical online. With the invention of social media, the marketer no longer has to focus solely on the basic demographics and psychographics given from television and magazines, but now they can see what consumers like to hear from advertisers, how they engage online, and what their needs and wants are. The general concept of being ethical while marking on social network sites is to be honest with the intentions of the campaign, avoid false advertising, be aware of user privacy conditions (which means not using consumers' private information for gain), respect the dignity of persons in the shared online community, and claim responsibility for any mistakes or mishaps that are results of your marketing campaign. Most social network marketers use websites like Facebook and MySpace to try to drive traffic to another website. While it is ethical to use social networking websites to spread a message to people who are genuinely interested, many people game the system with auto-friend adding programs and spam messages and bulletins. Social networking websites are becoming wise to these practices, however, and are effectively weeding out and banning offenders.
In 2012 during Hurricane Sandy, Gap sent out a tweet to its followers telling them to stay safe but encouraged them to shop online and offered free shipping. The tweet was deemed insensitive, and Gap eventually took it down and apologized. Numerous additional online marketing mishap examples exist. Examples include a YouTube video of a Domino's Pizza employee violating health code standards, which went viral on the Internet and later resulted in felony charges against two employees. A Twitter hashtag posted by McDonald's in 2012 attracting attention due to numerous complaints and negative events customers experienced at the chain store; and a 2011 tweet posted by a Chrysler Group employee that no one in Detroit knows how to drive. When the Link REIT opened a Facebook page to recommend old-style restaurants, the page was flooded by furious comments criticizing the REIT for having forced a lot of restaurants and stores to shut down; it had to terminate its campaign early amid further deterioration of its corporate image.
In May 2014, Instagram had over 200 million users. The user engagement rate of Instagram was 15 times higher than of Facebook and 25 times higher than that of Twitter. According to Scott Galloway, the founder of L2 and a professor of marketing at New York University's Stern School of Business, latest studies estimate that 93% of prestige brands have an active presence on Instagram and include it in their marketing mix. When it comes to brands and businesses, Instagram's goal is to help companies to reach their respective audiences through captivating imagery in a rich, visual environment. Moreover, Instagram provides a platform where user and company can communicate publicly and directly, making itself an ideal platform for companies to connect with their current and potential customers.
This involves tracking the volume of visits, leads, and customers to a website from the individual social channel. Google Analytics is a free tool that shows the behavior and other information, such as demographics and device type used, of website visitors from social networks. This and other commercial offers can aid marketers in choosing the most effective social networks and social media marketing activities.
Marketers target influential people on social media who are recognised as being opinion leaders and opinion-formers to send messages to their target audiences and amplify the impact of their message. A social media post by an opinion leader can have a much greater impact (via the forwarding of the post or "liking" of the post) than a social media post by a regular user. Marketers have come to the understanding that "consumers are more prone to believe in other individuals" who they trust (Sepp, Liljander, & Gummerus, 2011). OL's and OF's can also send their own messages about products and services they choose (Fill, Hughes, & De Francesco, 2013, p. 216). The reason the opinion leader or formers have such a strong following base is because their opinion is valued or trusted (Clement, Proppe, & Rott, 2007). They can review products and services for their followings, which can be positive or negative towards the brand. OL's and OF's are people who have a social status and because of their personality, beliefs, values etc. have the potential to influence other people (Kotler, Burton, Deans, Brown, & Armstrong, 2013, p. 189). They usually have a large number of followers otherwise known as their reference, membership or aspirational group (Kotler, Burton, Deans, Brown, & Armstrong, 2013, p. 189. By having an OL or OF support a brands product by posting a photo, video or written recommendation on a blog, the following may be influenced and because they trust the OL/OF a high chance of the brand selling more products or creating a following base. Having an OL/OF helps spread word of mouth talk amongst reference groups and/or memberships groups e.g. family, friends, work-friends etc. (Kotler, Burton, Deans, Brown, & Armstrong, 2013, p. 189). The adjusted communication model shows the use of using opinion leaders and opinion formers. The sender/source gives the message to many, many OL's/OF's who pass the message on along with their personal opinion, the receiver (followers/groups) form their own opinion and send their personal message to their group (friends, family etc.) (Dahlen, Lange, & Smith, 2010, p. 39).
Social networking websites are based on building virtual communities that allow consumers to express their needs, wants and values, online. Social media marketing then connects these consumers and audiences to businesses that share the same needs, wants, and values. Through social networking sites, companies can keep in touch with individual followers. This personal interaction can instill a feeling of loyalty into followers and potential customers. Also, by choosing whom to follow on these sites, products can reach a very narrow target audience. Social networking sites also include much information about what products and services prospective clients might be interested in. Through the use of new semantic analysis technologies, marketers can detect buying signals, such as content shared by people and questions posted online. An understanding of buying signals can help sales people target relevant prospects and marketers run micro-targeted campaigns.
In 1998, two graduate students at Stanford University, Larry Page and Sergey Brin, developed "Backrub", a search engine that relied on a mathematical algorithm to rate the prominence of web pages. The number calculated by the algorithm, PageRank, is a function of the quantity and strength of inbound links. PageRank estimates the likelihood that a given page will be reached by a web user who randomly surfs the web, and follows links from one page to another. In effect, this means that some links are stronger than others, as a higher PageRank page is more likely to be reached by the random web surfer.