Social Media

How word-of-mouth advertising on social media can influence a business

Fi Bendall /

Snapchat recently made some big design changes that left many of its users cold. In fact, many said they wouldn’t be using the app anymore. One of those people was Kylie Jenner, she of the Kardashian/Jenner clan of reality TV show royalty, who made her disapproval very public on Twitter.

One news report attributed at least some portion of influence to Jenner’s tweet to Snap’s dramatic fall in share price (Snap Inc. is Snapchat’s parent company). It was estimated the company lost US$1.3 billion ($1.66 billion) in share value! The truth is that Jenner’s tweet was a high profile example of the more generalised backlash from the design rather than the actual cause of the loss in value.

It’s an extreme example, but a potent reminder that you need to keep your biggest fans and ardent advocates in mind whenever your business is thinking of making major changes that could incur their wrath.

Celebrity influencers, like Jenner and her famous sisters, can of course be very powerful. They can make or break a brand with one comment in the media or a post to social media. However, as Kurt Wagner at Recode points out, Jenner’s take on the Snapchat redesign may align more with her business interests than her personal interests as a user of the app:

“Jenner doesn’t explicitly say in her tweet why she’s no longer opening the Snapchat app, though we assume it’s because she doesn’t like the redesign. But like the rest of the Kardashian clan, Jenner is a businesswoman who has used the app with tremendous success to help sell her line of beauty products. It’s entirely possible she says she doesn’t like opening the app because she’s seeing that fewer people are seeing her posts.”

But it’s not only celebrities who have the power to shape a brand’s destiny. Almost every good business will have a number of clients/customers that are loyal advocates, ready to vouch for the business and share their approval via word-of-mouth and other means. You need to identify these advocates and you need to know how to keep them happy.

With trust in traditional advertising continuing to be low, businesses have to look carefully at how they treat their customers, especially those who they can identify as brand advocates. This is why your social media strategy needs to include how you manage conversational and interactive elements.

As outlined in Nielsen’s 2015 Global Trust in Advertising report, the trust we place in the recommendations of those we know is far higher than any other source, with 83% of 30,000 people surveyed saying they completely or somewhat trust recommendations from family and friends.

“The power of digital ad formats cannot be underestimated, as they offer many advantages for achieving effective reach,” said Randall Beard, president of Nielsen Expanded Verticals.

“But few brands have mastered online word-of-mouth marketing techniques, the results of which can go viral very quickly.”

Beard goes on to point out that word-of-mouth can be a double edged sword: people spread both the good and the bad.

“Passionate brand advocates can be powerful allies to amplify your message, but you need to give them a reason to talk. Evolve the relationship from a one-way sales pitch to a two-way conversation. And be transparent and accountable. Online brand advocates can quickly become adversaries with the power to damage credibility and reputation if things go wrong.”

The explosion of social networks and consumer-generated media is significantly impacting advertising, as consumers’ reliance on word-of-mouth in the decision-making process – either from people they know or online consumers they don’t – has increased significantly. We can see Kylie Jenner’s Snapchat tweet as an example of digital word-of-mouth writ large.

Put simply, you need to identify and talk to your brand advocates. They are the people who often hold the fate of your business in their hands. Do well by them and they’ll do well by you.

NOW READ: What small businesses can learn from Facebook’s teen battle with Snapchat

Advertisement
Fi Bendall

Fi Bendall is chief executive of The Bendalls Group and a Westpac/AFR 2015 100 Women of Influence, who was described by CEO Magazine as 'The CEO's Secret Weapon'. An expert and pioneer in digital strategy, she has over 23 years’ experience in the digital and tech sectors.

We Recommend

FROM AROUND THE WEB

  • Duke Vukadinovic

    I think that when famous people are seen in advertisements, audiences are more prompted to do something according to his/her advice than when some company suggests it. Consumers tend to think whenever a company is involved there is some interest in the whole story and that they are somehow played into doing something which wasn’t their intention in the first place at all.