Alex Carey suggested that the 20th Century was "characterized by three developments of great political importance: the growth of democracy, the growth of corporate power and the growth of corporate propaganda as a means of protecting the corporate power against democracy".
To me, the first decade of the 21st Century will be remembered for the historic election of President Obama, the public distrust of large corporations and their brands as a consequence of the financial crisis and ensuing recession, and the role of social media in giving a voice back to the people. Just as the printing press of 1440 enabled democracy in the West, so too has social media enhanced the democratic process today, given a voice back to the people and restored the balance of power between governments and/or corporations and the masses.
I want to focus the rest of this discussion on how social media can restore the balance of power between organizations and its customers, which then provides the potential to restore trust in brands and the organizations who own brands. I will do this by relating my discussion to the five principles of democracy:
1. Freedom of speech, debate and democracy: traditional mass communication channels involve one-way communication between the organization and its customers. Customers can become aggrieved that the organization has lost touch with customer needs and somehow doesn't value the importance of individual customers in keeping the organization afloat (remember: "customers are the reason you are in business"). With social media, consumers can communicate freely between themselves, seek recommendations from people they trust and/or people who position themselves as opinion leaders, and they can freely give opinions back to the organization.
2. Popular democracy: traditionally organizations have shaped and controlled their own messages, for example, messages about the brand and its value proposition. One characteristic of social media is that it is consumer generated. While many marketing managers fear losing control of the brand message, there are benefits with consumer generated media in that it provides rich insights for marketing managers, immediate feedback from the market on any aspect of its product, brand and marketing strategy, and quick identification of problems or misinformation. For consumers, one advantage is that they can mobilize and then put pressure on an organization to change a product, policy or part of the way in which the product is delivered to consumers.
3. Open accountable and diverse media: mass media should be open and transparent so that we can identify the source of news and individual, corporate or government agendas. In addition, mass media should be sufficiently diverse such that monopolies do not develop and dominate opinion. While on-going mergers and acquisitions can create an oligopoly structure within the communications industry, with social media the messages are many and not controlled by a few.
4. Economic democracy for the people: with this principle, power is decentralized and smaller communities can form. Social media has not changed the desire of consumers to join a club or community; it has simply made it easier for brand communities to form and consumers to engage.
5. Equality before the law: social media removes any hierarchy and allows consumers to be treated as equally important. What this means is that an organization does not know whether a consumer generated comment comes from say a small or large customer, or a recent or lapsed customer. Rather, the organization has to treat each customer comment as equally important.
What does all this mean for marketing managers? There is plenty of evidence to show just how social media can facilitate the democratic process: think back to the election of President Obama, or the recent election in Iran. These examples also provide rich evidence of the willingness of the masses (or in the context of this post, consumers), to be heard.
Yet, we know that many organizations struggle to know what to do with social media - for example, only 15% of Fortune 500 companies maintain a blog and most of these blogs are hosted within the organization's website. The low incidence of Fortune 500 blogs is likely to be a reflection of a generation gap (that is, the Chief Marketing Officers who make strategic marketing decisions being unfamiliar with terms such as Facebook, blogs, posts and Twitter) and an overwhelming fear of the consequences of losing control of the brand message. In addition, and at a time when organizations need to be more accountable for marketing expenditure and make more efficient decisions on how to allocate scarce marketing resources, social media poses substantive challenges because it is difficult to demonstrate a return on marketing investment for something so new, something for which we talk about "best known practice" not "best practice".
But, times have changed and like it or not, social media is here to stay. Social media is not as a replacement for traditional media but should be seen as a compliment, as part of an integrated marketing communications strategy. To me what is interesting is watching different organizations embrace social media, leaders who are willing to learn and experiment in order to shape best practice, and be brave enough to recognize that they can no longer completely control the brand message.
Jenny Darroch is on the faculty at the Drucker School of Management. She is an expert on marketing strategies that generate growth. See www.MarketingThroughTurbulentTimes.com