Introduction
The rise of social media (SM) has changed the way people engage with each other and with businesses. An increasing number of people create accounts on various platforms such as Facebook, Twitter, Instagram, and others every day. For example, in the last decade, the user base of Twitter, one of the most popular microblogging websites and applications, grew from 30 to 330 million individuals (Number of monthly active Twitter users 2019). Thus, it is clear why businesses would want to adapt to a communication channel for their profit. The question of whether consumer decisions have changed due to the influence of SM arises as a result. This essay aims to examine the role of SM in purchasing decisions, investigating such phenomena as electronic word of mouth (eWOM), social influencer culture, targeted advertising, and algorithms. The main framework introduced in the analysis is the Veblenian socio-psychological model, and the essay argues that SM users’ consumer behaviors are strongly influenced by shared information, trust, and other users’ perceived authority.
Social Media
To understand the role of SM in consumer behaviors, one has to see which functions do such platforms perform in people’s everyday lives. Sohail and Al-Jabri (2017) state the SM has opened up new channels for communication among people, permitting users to talk in groups, exchange instant messages, share various media types, and access content uploaded from different parts of the world. The evolution of the internet and SM, therefore, resulted in a new environment that had its specific channels of connecting people in real-time.
However, SM is unique from other media and communication channels because it is a combination of the private and public approaches to interaction. It provides knowledge to the public in video and text format similar to television, newspapers, and magazines (Lucius & Hanson 2016). In this case, SM presents a collection of one-sided information that can be further discussed by other users. At the same time, it helps to share people’s own thoughts and allows for direct and private communication between users, providing feedback directly to authors and receiving answers from them. Such a level of flexibility, in addition to social media’s increased outreach, is what separates social media platforms from other ways of information sharing.
Social Influences on Consumer Behaviour
Among the numerous approaches to consumer behavior, the Veblenian socio-psychological model places emphasis on social factors and people’s reliance on particular community characteristics. According to Veblen’s theory of the leisure class, consumption choices rely on individuals’ social class, income, culture, and friends, persons with influence, and family members (Miller 2018). Therefore, a person does not utilize their own opinions when purchasing a product. Instead, they are guided by a combination of factors helping them to assume a particular place in the hierarchy and present a status that corresponds with their environment or makes a statement.
The examination of SM as a force of influence on consumer behavior, thus, can be approached from the perspective that communication and information sharing, both private and public, is a factor that determines people’s purchasing decisions. It is theorized that consumption objects have been used as a symbol that could help individuals to associate themselves with particular groups (So et al., 2018). Moreover, So et al. (2018) argue that commodities serve not only their primary purpose but also the role of differentiators. This view of consumption allows one to address the changing attitude toward communication on SM platforms, especially if it explicitly involves marketing messages.
Electronic Word of Mouth
The idea of word of mouth (WOM) is not new – people have been sharing their opinions with each other since the beginning of time. The factor of discussing products and services has been substantial in influencing the purchasing decisions of people (Chu & Kim 2011). However, the previous range of WOM was limited by geography and available communication channels. For instance, family members, friends, and neighbors could advise one another to buy a certain brand or choose a model based on their own experience. Nonetheless, such conversations were hugely reliant on the situation and knowledge that one’s circle of connections possessed.
In contrast, the concept of electronic WOM (eWOM) does not have physical restrictions and extends its reach to all areas that have access to the internet. In this case, a person can collect information from any individual that shares it on a public platform, most often using one of SM sites (Schivinski & Dabrowski 2016). SM users can post a short or a long review of a product and, depending on their connections online, disseminate this information to thousands of people (Cantallops & Salvi 2014). The discoverability of this knowledge relies not only on friends and relatives that the author of a text may have but on the contents of the review, namely its data and metadata.
As a result, every SM user can find information about the products that they want to purchase and see the opinion of the public. While the level of trust differs from one person to another, the overall picture formed by community reviews affects purchasing choices, making some brands more recognizable and others less favorable (Doh & Hwang 2009). The power of eWOM is stronger than its real-life equivalent because it overflows with information and removes the boundaries of one’s location and connections.
Influencer Culture
A special niche in SM communities is devoted to influences – people who have a large following and are considered to be experts or media representatives of individual lifestyles. Social influencers have accounts that many people visit or subscribe to; as an outcome, a significant number of readers prompts brands to establish relations with these users to promote their products. Influencers’ rise in a segment of any SM creates a hierarchy of trust that is both similar to and different from using celebrities in offline advertising. It exploits the ideas of aspiration present in traditional marketing while also maintaining a level of personal connection that SM provides (Susarla, Oh & Tan 2012). Influencers, in contrast to celebrities, can engage with readers, providing and receiving feedback and continuing the conversation, thus eliminating the wall between advertising and endorsement and contributing to eWOM.
Users seeing a marketing post by an influencer may not see it as an advertisement but as a personal and sincere recommendation. While the data about influencers’ role in purchasing decisions differ from one study to another, thee individuals have a definite impact on some communities that use SM (Thoumrungroje 2014). This behavior is in line with the socio-psychological model, which poses that societal pressure, class aspirations, or the need to conform affect one’s consumer choices.
Friends and Family
As anyone can create posts on SM, the opinion of one’s friends and family members is also included in the notion of eWOM. Here, the use of suggestions is close to real-life WOM – people listen to those whose views and experiences they trust (Erkan & Evans 2016). According to Doh and Hwang (2009), one is more likely to purchase a product that was recommended by their friends than the one without any endorsement. SM encourages sharing and simplifies group discussions by removing not only space- but also time-based differences.
For instance, one can compare a conversation about a product online and offline. In real life, two or more friends may discuss an item that one of them endorses due to their personal experience. This event happens in a limited time frame, while the friends see or hear each other depending on the type of communication. Furthermore, the number of experiences and reviews is limited to physically present interlocutors (Thoumrungroje 2014). In contrast, an online discussion of a product is not limited to a location or time – people can add comments at different points in time, inviting their respective friends or family members into the conversation if they have an opinion to share (Hajli 2014). Here, the amount of information is significant, while the level of trust remains the same, enriching one’s consumer behavior and promoting stronger, more refined opinions about brands.
Businesses
Another participant that is more present in SM-based rather than real-life conversations is the brand itself. The outreach of SM to people and their active engagement in discussions of products and services was noticed by companies that decided to participate in the communication directly. Today, brand marketing SM accounts talk to people, respond to complaints in real-time, reach out with messages through public and private channels and even use SM’s principle of familiarity to market goods (Kumar et al. 2016). The presence of a store on a platform can determine its success (Kumar et al., 2016). Using the socio-psychological model, one may argue that this marketing approach is useful because it allows brands to create or infiltrate a culture or subculture that determines consumer choices.
As an example, one may examine the success of luxury brands in establishing their presence and promoting a lifestyle to customers. Godey et al. (2016) investigate the customer-brand relationship of such companies as Burberry, Gucci, Dior, and others and find that their marketing on SM is reliant on creating a particular image of prosperity and uniqueness. SM accounts do not only share advertisements and answer comments, but they also foster an exclusive environment that encourages the readers to maintain brand loyalty and spread information using eWOM. The authors show that brands use entertainment, trendiness, interaction, eWOM, and customization as the foundations for SM campaigns and customer interaction (Godey et al., 2016). The discussed above nature of SM allows for such a variety of activities to take place on one platform. One can see that the increase in feedback and brands’ use of familiarity creates strong ties between marketing and consumer behavior.
Advertising and Algorithms
SM platforms are corporate entities; thus, many of them integrate advertising into the structure of their website or application. The unique feature of such adverts, however, is that they are often based on the content that the particulate user searches for, engages with, or posts (Knoll 2016). This idea is called targeted advertising, and it is much more detailed than marketing on television and publishing. On SM, the possibility for a user to see an advertisement for something related to one’s interests or recent discussions is high. The socio-psychological theory is not as apparent in this case. Nevertheless, adverts maintain or create a particular culture, making targeted advertising more effective than traditional ads because their presentation consistent with the overall message. Consumer behavior is guided by advertisements and endorsements – if one sees only products that appeal to their interests, the potential for completing purchases increases (Booth & Matic 2011). Companies can also use targeted advertising by collaborating with influencers and other brands that exist in the same cultural sphere.
Another feature of SM that maintains a particular environment is the use of algorithms. Facebook and Twitter filter the content that users see when using SM – some friends’ posts are always at the top of the page, while other people’s messages may not even appear. This is explained by the SM platforms’ estimation of friend-to-friend networks and page ranking (Trattner & Kappe 2013). These algorithms embedded in SM determine the information that is seen by people. Thus, one may argue that such selective presentation has an effect on consumer choices as well – people listen to the opinions that they understand and perceive as socially acceptable.
Conclusion
Looking at the different concepts introduced with the rise of social media, one can conclude that the current consumer behavior is significantly affected by such factors as trust, culture and subculture, social class, and income. The findings of the discussed research support the socio-psychological model of purchasing choices, showing that internet users are often affected by the opinions of the communities in which they reside. On SM, the organization of these communities, however, is not limited by geography or time constraints. People connect regardless of their location, and communities develop based on their interests and social status. Thus, the importance of socio-psychological factors becomes increasingly prevalent in consumer decisions.
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