Social media have rapidly gained share and attention among all kinds of consumers and companies, often at the expense of traditional media. Companies have started to redefine key aspects of their marketing mix. With advertising and online word of mouth competing for shrinking marketing budgets, many companies regard having an active presence in social media as a viable alternative to traditional advertising.
In their recent IESE Insight article, professors Julián Villanueva and Guillermo Armelini argue that this would be a mistake, as the two strategies are complementary rather than substitutive. A comparison of advertising and word of mouth shows that social media obey very different rules from traditional advertising.
Social media can start conversations or build brand recognition, but the results are much more difficult to predict or measure. With that in mind, the authors recommend how to define a social media plan, citing examples of companies that got it right – and offering cautionary tales of those that got it wrong.
Guillermo Armelini is a professor at ESE, the business school of the University of the Andes. Julián Villanueva is head of the Marketing Department at IESE.
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