The world is changing; technology is ubiquitous and it is impacting society with each rapid change it undergoes itself. A few decades ago, television was the most exciting technological development, and it transformed society in an unprecedented manner. Today, we’re seeing a similar transformation via the Internet and the rise of social media. In fact, social media is poised to transform society in an even more fundamental manner.

It is easy to underestimate the true disruptive potential of social media, a moving target which is hard to pin down due to constant innovation. For example, as a consequence of the widespread adoption of social media, the distinction between the public and private spheres of life is quickly eroding. Whether one is a CEO, the president of a country, a member of the British royalty, or a commoner, everything about one is on social media: personal information, likes and dislikes, and other mundane activities. In fact, everything said or done is now a matter of public record, and nothing can remain hidden anymore. Besides the doom and gloom surrounding social media because of this lack of privacy, however, there is a bright side as well: social media has led to a drastic increase in transparency in society.

The focus of this paper is on the impact of social media on marketing media. Traditional media, consisting of print, radio and television, offer what can be called a shotgun approach: they represent one to many (passive communication ). Therefore, in order to achieve efficiency and effectiveness, segmentation, targeting and positioning strategies are utilized. Social media, on the other hand, are interactive in nature: they represent peer to peer relationships, or what is referred to as many to many (active communication). Additionally, since word of mouth (WOM) is so crucial in marketing, the paper will also discuss how traditional WOM influence will change dramatically in the world of social media.

Social media is a blur of “likes,” tweets, shares, posts and content (Bullas, 2014). Its use is not limited to youth. Rather, it is universal and embedded in every corner of the web. The numbers are staggering: 72 percent of the all Internet users are now active on social media (Bullas, 2014). Eighty-nine percent of people eighteen to twenty-nine years of age use social media. Eighty-two percent of people thirty to forty-nine years of age are active on social media. Sixty-five percent of those fifty to sixty-four years of age use social media, while, of those over sixty-five years of age, 49 percent are active users (Pew Research, 2014). It is clear that regardless of their age, people are now spending a lot of time on social media, constantly sharing and browsing information.

When it comes to geography, it is US citizens who top the list of time spent on social media with sixteen minutes per hour spent on the Internet. Australians follow them with fourteen minutes and Britons with thirteen minutes (Experian, 2013). The use of mobile technology to access social media is also increasing rapidly, with 71 percent of the users of social media using mobile devices to access it (Bullas, 2014) (Fig. 1.1).

Currently, Facebook is the “biggest kid” on the social media block, with 1.49 billion Facebook users (Statista, 2015) and more than 100,000 web pages are accessed with the Login with Facebook feature (Lafferty, 2014). Twenty-three percent of Facebook users login at least five times a day (Romeri, 2014). Facebook also has a lot of influence on the buying decisions of customers, as 47 percent of Americans say that Facebook is the number-one influencer of their purchasing habits (Romeri, 2014). Since Facebook has so much influence on people, it isn’t surprising that 94 percent of business-to-consumer (B2C) marketers and 82 percent of business-to-business (B2B) marketers today use Facebook for customer acquisition (Stelzner, 2014).

But Facebook isn’t the only large player in the social media space, as there are a number of other platforms that are quickly amassing users. For instance, Twitter, which took the social media world by storm with its 140-character limit, now has almost a billion registered users (Koetsier, 2013) and 316 million monthly active users (Twitter, 2015). As is the case with Facebook, where people spend their time, marketers are soon to follow, and 34 percent of marketers use Twitter to generate leads (Bullas, 2014).

Other popular social media platforms include WhatsApp, Instagram, Snapchat, Pinterest, LinkedIn, YouTube, Vine, Tumblr, and SlideShare. With their impressive user base, these platforms are also gaining more and more attention from marketers.

What follows is a discussion of the WOM phenomenon in both its traditional context and on social media. Specifically, the emergence of WOM, its impact on marketing, and other characteristics are considered in both contexts (Table 1.1).