Statistical Methods in Customer Relationship Management

9.2 Social Media

Social media typically cover all interactive media outlets in which consumers can comment on or contribute to the medium's content. As the Internet becomes one of the most important distribution channels, and a major source of customer information and empowerment, social media, also referred to as Web 2.0, are increasingly influencing how customers interact with each other and how businesses use social medial tools to manager customer relationships. Internet users are turning to one another as trusted sources for their purchase decision making. In riding this social media wave, marketers have significantly increased their marketing budgets on social media channels. For instance, Internet advertising spending in the USA increased by 23.1% in the first half of 2011, to $14.9 billion, from $12.1 billion for the same period in 2010, according to Interactive Advertising Bureau. Some of the popular social media channels that marketers are increasingly adopting include blogs, social networks, content communities, and social coupons:

Blogs are online journals, and are often a virtual storehouse of information. A corporate blog is a powerful tool for firms to create consumer involvement with their marketing activities and to keep customers informed about the company and its product offerings [2]. A recent addition to the world of blogs is micro-blogging. Micro-blogging sites such as Twitter are also popular social media channels that can reach out to millions of users. ...