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What effect does social media have on consumers?

Brandon Fung

24 March 2021

Introduction

We have only really seen the true power of social media in recent years. Starting as pure entertainment, social media has evolved into a marketing powerhouse that often influences how the viewer or reader perceives something. From a media scholar's perspective, we have learned how social media has infiltrated every aspect of our lives and it inspired me to further research just how social media aims to persuade the consumer to spend money on some product or service. This research project's main goal is to explore the effects of social media on consumers of all ages, and how it influences what we purchase.

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Advertisements on Social Media

Not too long ago, there was no such thing as online shopping. If you wanted to buy something, you had to physically go to the store and purchase it. Consumer behavior used to be much more organic and genuine than it is today. What I mean by this is that back then, you would have to conduct your own research to see if you really needed to buy something. This research came in the form of news magazines, television ads, and simple word of mouth. There was a whole process when buying a product: you repeatedly see an advertisement, you convince yourself that you need it, you go to the store and buy it. Nowadays, you are bombarded with advertisements on social media, most of which are targeted to you based on your online activity, drastically increasing the odds that you spend more money. Some advertisements even end up on your favorite celebrity's social media page and you do not even know if the product is what you want or not. The process for buying a product today is: you see an advertisement you like and you click the buy button on your screen. Although it may seem like a minor change, eliminating going to the store has made it dangerously easy for you to buy something that you may or may not truly want or need.

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Consumer Analysis

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Social networks are often said to play a dual role in consumers' online shopping behaviors. There is a positive relationship between time on social media and consumers' purchasing behaviors. As the consumer spends more time on social media, they are "frequently exposed to information about products and consumption-related activities, ranging from product ads by brands to friends’ conversations and opinions about recent shopping experiences" (Zhang, Trusov, Stephen, Jamal 24). This in turn often leads to the consumer buying more items because they are exposed to so much more information about products. On the flip side, there is also a negative dynamic between time on social media and consumers' purchasing behaviors. A person is more likely to buy something if they're browsing some e-commerce site like Amazon or eBay than doing anything else on the Internet. In the same way, when consumers spend more time on social media, "(s)he may spend commensurately less time doing other online activities such as online shopping" (Zhang, Trusov, Stephen, Jamal 25). An empirical study to explore said relationship between time on social media and consumers' purchasing behaviors used a data set that features a panel of 10,192 people whose online activities were tracked during the full year of 2007, tracking individual online purchase records, full web-browsing history, and demographic information. After modeling various relationships and comparing various calculated statistics, the study offered strong evidence of the correlation between social network usage and online sales as well as compelling data that suggests that social network engagement is related to people's propensity, or natural behavior, to shop.

​Taking advantage of social media influencers, known as influencer marketing, are becoming more common in both the academia and business sector. Partnerships with social media influencers likewise are becoming increasingly important in brands' marketing strategies. Consumers view social media influencers "as more accessible and credible than mainstream celebrities, and thus, a message an SMI [(social media influencer)] communicates is considered more authentic and trustworthy than a similar message a celebrity communicates" (Willemsen, Neijens, Bronner, & De Ridder, [99]). In communicating with social media influencers, brands also can communicate easily with large audiences of target consumers. There are also statistics to reinforce the value of using social media influencers to spread a message or product. "Influencer Marketing Hub ([47]) reported that businesses are receiving $5.20 on average for each $1 spent on influencer marketing, and 92% of marketers judge influencer marketing to be effective" (Ki, Kim 1). A study was conducted to answer the question: do consumers' desire to "mimic" social media influencers play the role in affecting their purchase decisions? From the study, it was discovered that "the mechanism by which SMIs [(social media influencers)] influence target consumers occurs in four principal stages: (a) an SMI's [(social media influencer's)] influence attempts; (b) target consumers' attitudinal response to the influence exercised, which, in turn, affects (c) the targets' desire to comply, and ultimately, (d) their favorable behavioral outcomes" (Ki, Kim 6). In other words, if the consumer has a positive response to the social media influencer's media, then they are more likely to trust the consumer and buy whatever is advertised.

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Examples

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I'm sure that we all know who Charli D'Amelio is, but if not, here is a quick summary: she is the biggest personality on TikTok, boasting more than 110 million followers on the platform as well as just over 9 million subscribers on YouTube. Simply put, she may very well be the most famous social media influencer that there is today. With all of Charli's TikToks receiving well over 20 million views, it's a no-brainer why brands are in love with her. One of the brands to reach out to Charli was Dunkin Donuts. In a collaboration with the creator, Dunkin' launched "The Charli", which is D'Amelio's personal Dunkin order: a Dunkin' Cold Brew with three pumps of caramel. D'Amelio then collaborated again with Dunkin, this time coming out with "The Charli, Cold Foam", a remix of Charli's go-to order, this time with Sweet Cold Foam and cinnamon sugar on top. On the day after Charli's drinking debuted,  Dunkin' set a record for daily users on its app, seeing a 57% increase in app downloads. Not only was her drink a huge success for Dunkin, but the donut turned coffee empire saw a 20% sales boost for all cold brews the first day as well as a 45% surge the next day. 

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Tyler Blevins, more popularly known as "Ninja", is quite frankly, the largest and most profitable gamer to exist. He began his career as a professional Halo player, but once the popular game "Fortnite" came out, that is when his career really got started. Being one of the best players in the most popular game at the time, Blevins was able to garner upwards of 50 thousand viewers constantly on his live streams on Twitch. It even led to him playing a game with professional rappers Drake and Travis Scott, as well as NFL player JuJu Smith-Schuster, setting the record for the most concurrent viewers on the platform, attracting more than 600 thousand viewers to watch the spectacle. With his new gained fame and popularity, Tyler "Ninja" Blevins secured a partnership with the shoe and apparel company Adidas. In doing so, he was able to create his own signature shoe like famous NBA players, in addition to hoodies, pants, and his signature "Ninja" headband. His shoe was an instant success, with supply selling out within the first 40 minutes that it was released.  

Conclusions

The studies and real-life examples that I've explored throughout this blog clearly show the power of social media and motivations for brands to revise their marketing strategies to involve content creators. One study investigated the relationship between time on social media and consumers' purchasing behaviors. This led to two polar dynamics: people who spend more time on social media are exposed to more advertisements increasing their chances to buy something and people who spend more time on social media spend less time on online e-commerce sites decreasing their chances to buy something. In the end, it was revealed that there is strong evidence of a correlation between social network usage and online sales and that there is compelling data to suggest that social network engagement is related to consumers' purchasing behaviors. Another study focused more on social media influencers and explored the relationship between social media influencers and their audience's spending behavior. The study concluded that social media influencers affect their audience's purchase decisions in a 4 stage cycle. Finally, with the likes of Charli D'Amelio and Tyler "Ninja" Blevins, their huge success on their respective platforms has also translated to the success of brands that choose to affiliate with them. One important thing that they have in common is their audience; They are a bunch of young, impressionable teenagers. Brands are able to take advantage of their wide-reach and persuadable audience to boost their own sales and profits. In the end, it is clear that social media is infiltrating our lives, financially, and we must be smart when deciding who or what influences our spending habits.

Bibliography

Dunkin. “Top This: Cold Brew with Sweet Cold Foam Is Coming to Dunkin'.” Dunkin', 16 Feb. 2021, news.dunkindonuts.com/news/dunkin-sweet-cold-foam-         cold-brew#:~:text=The%20Charli%20Cold%20Foam%20offers,and%20cinnamon%20sugar%20on%20top.

Ki, Chung-Wha 'Chloe', Kim, Youn-Kyung. "The mechanism by which social media influencers persuade consumers: The role of consumers' desire to mimic."         Psychology and Marketing, October 2019, http://web.b.ebscohost.com/ehost/detail/detail?vid=4&sid=c4e576f7-21cd-4db3-8b58                                                     bfe6b8980a3f%40sessionmgr102&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=ufh&AN=138414411

Lawver, Bryan. “Ninja's First Adidas Drop Sold Out in Under An Hour.” ScreenRant, 31 Dec. 2019, screenrant.com/ninja-adidas-drop-time-in-sold-out-adult-           size/.

Pesqueda, Neena. “Calculating Charli D'Amelio's Massive Sales Lift for Dunkin' - StatSocial Influencer Attribution Use Case.” StatSocial, 13 Nov. 2020,                 www.statsocial.com/insights/charli-damelio-dunkin-influencer-attribution/.

Zhang, Yuchi, Trusov, Michael, Stephen, Andrew T, Jamal, Zainab. "Online Shopping and Social Media: Friends or Foes?" Journal of Marketing, November             2017, http://web.a.ebscohost.com/ehost/detail/detail?vid=6&sid=154b3443-fc04-44af-9a90-ebfb556f5dfc%40sdc-v-                                                                       sessmgr01&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=ufh&AN=126087332

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