Web 2.0. The New Showroom for Fashion Brands: How important is Social Media for the Fashion Industry?

Table of Contents

Index of Tables

Index of Figures

Abbreviations

1 Introduction
1.1 Background of the Dissertation Topic
1.2 Demarcation of the Topic
1.3 Research Purpose
1.4 Research Aim and Major Objectives
1.5 Structure of the Dissertation

2 Literature Review
2.1 Introduction
2.2 Web 2.0 and Social Media
2.3 Marketers and Customers
2.4 Social Media Monitoring

3 Methodology
3.1 Introduction
3.2 Research Design and Strategy
3.3 Data Collection
3.3.1 Secondary Data
3.3.2 Primary Data

4. The Fashion Industry and their Brand Engagement
4.1 Introduction
4.2 Definition Brand
4.3 Premium Priced Labels
4.4 Medium Priced Labels
4.5 Low Priced Labels
4.6 Conclusion

5. Research Findings and Discussion
5.1 Introduction
5.2 Online Observations
5.2.1 Facebook
5.2.2 Twitter
5.2.3 Youtube
5.3 User Questionnaire
5.4 Interviews
5.5 Discussion

6. Conclusion and Recommendations
6.1 Conclusion
6.2 Recommendations and Future Research

Bibliography

Index of Appendices
Appendix A: Results Online Observations
Appendix B: Results User Questionnaire
Appendix C: Interview Questionnaire
Appendix D: Formulas

Index of Tables

Table 1. Metrics for Social Media Applications

Table 2. Social Media Platform Variables

Table 3 Key Facts Fashion Brands

Index of Figures

Figure 1. Measuring Social Media's Impact

Figure 2. Clustered Overview of Web 2.0 Applications

Figure 2.1 Socialbakers Formulas

Figure 2.2 Wisemetrics Formulas

Figure 3.1 Observed Fashion Brands

Figure 3.2 Formulas Engagement Rate & Response Rate

Figure 3.3 Questionnaire Design

Figure 5.1 Fan Growth Rate Facebook

Figure 5.2 Average Post Rate Facebook

Figure 5.3 Facebook Posts including Multimedia

Figure 5.4 User Engagement Facebook

Figure 5.5 Facebook Brand Replies

Figure 5.6 Follower Growth Rate Twitter

Figure 5.7 Twitter Posts

Figure 5.8 User Engagement Twitter

Figure 5.9 Subscriber Growth Rate Youtube

Figure 5.10 Youtube Posts

Figure 5.11 User Engagement Youtube

Figure 5.12 Social Media Performance Matrix

Figure 5.13 Brands' Social Media Performances

Figure 5.14 Social Media Mix

Figure 5.15 Strategic Plan

Abbreviations

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1 Introduction

1.1 Background of the Dissertation Topic

Over the course of the past few years, the Internet has greatly changed in form. From a pure source of information, the Internet has developed into a new mass- communication medium which offers numerous possibilities for the user to create, form and influence content. The Internet has become an important component of everyday life for many people. The steadily rising number of users and technological progress has pushed the Internet to develop from its static form into today's interactive Web 2.0. This allows communication and the exchange of opinions through social media platforms such as chat rooms, news forums or blogs (Fisch and Gscheidle, 2008). These new forms of communication in the so-called "social networks" have strongly influenced the formation of public opinion. While before only established media such as TV, newspapers or magazines could reach the public, a communication network was created by the establishment of Web 2.0 which offers the user the possibility to find an audience both nationwide and internationally. Consequently everyone is able to transmit positive and negative opinions, interests and events, both consciously and unconsciously to a huge number of people (Busemann and Gscheidle, 2009).

It has become easier, especially for enterprises, with this new form of the Internet as a data carrier and "key to every household" to market their products and services directly to the consumer. Here it must be noted that not only the intended opinion of the enterprise, but also the views of every user can be responsible for the formation of public opinion about a brand or product (Absatzwirtschaft, 2010b). It is necessary to clarify who the leading initiator of public opinion is, who can be affected by it and which factors have a decisive influence on opinion creation. This "word-of-mouth marketing", according to Misner (1999, p. 26) is the most current marketing measure and is able, in association with social media, to diversify and authoritatively influence the purchasing decisions of the affected persons.

Enterprises are increasingly using Web 2.0's new instruments in their business communication. They use the Internet with the help of content-orientated platforms such as Facebook, Twitter and YouTube, or the mechanisms which these platforms provide, to persuade as many consumers as possible about their offered services and products. Analysis and observation are also of great importance for enterprises, primarily to gain helpful information about their own products or the company from the broadly formed opinion of the masses (Absatzwirtschaft, 2010a). Particularly in the area of the social networks, a potential in the form of online advertisement exists for enterprises to pursue effective brand communication. On these platforms, the type of communication plays an important role as in Web 2.0 and especially on social networks an advertising banner is not enough anymore to successfully pursue brand communications. Marketers must focus more on the interaction with the user and pursue advertisement in a more dialogical form (Absatzwirtschaft, 2010b).

The past years have offered many examples of companies who communicated the wrong way with their users using social media because of ignorance and incomprehension of the main purpose of social media applications. One of the latest examples comes from the luxury fashion label Louis Vuitton. After a user created a parody to criticise the brand's image, the only thing Louis Vuitton did was to threaten the user and to sue him for defamation (Owyang, 2012d). There was no real dialog with the user. As more and more people joined in the conversation against the brand, Louis Vuitton learned the hard way that social media was made for people, not for brands (Fournier and Avery 2011, p. 193).

However, the traditional British clothing brand Burberry has gained a competitive advantage by using the opportunities offered by Web 2.0. When users enter the Burberry website, they begin a journey. Users around the world can view 3D live broadcasts of runway shows and at the click of a mouse, directly order the viewed item. Due to the innovative use of Web 2.0 and its social media platforms, Burberry has grown in new markets such as China in addition to their traditional markets (Business Today, 2011).

But it is questionable whether Burberry's successful integration of social media really led to their increase in market share and brand awareness. Furthermore whether their strategy to gain a competitive advantage can really be seen as a long- term strategy. Moreover whether this successful integration can be transferred to other fashion brands in a lower-priced sector.

Hence, the overall question is whether social media is the new "vogue" and important for the fashion industry. If yes, and if it is profitable, should companies increase their investment in it as Burberry did to gain competitive advantages and to enter new emerging markets? Does social media enhance brand perception and brand awareness? If not, why do companies then invest in it?

1.2 Demarcation of the Topic

To analyse the importance of social media for fashion brands, it is necessary to start by clarifying the terms "Web 2.0" and "social networks" in a more detailed way. A big impact on their importance is also today's most discussed question: Who really owns the influence? Do marketers still have power over their products due to the fact that social media has empowered the customers? Hence this includes a closer look at the diffusion process of innovations and who the leading initiator of public opinion is (as mentioned earlier), who can be affected by it and which factors have a decisive influence on opinion creation. With this qualitative background knowledge the importance of social media for fashion brands can be better researched, and hence conclusions can be made about whether companies should increase their investment in social media in the future.

1.3 Research Purpose

The main purpose of this study is to estimate the importance of the social media use for the fashion industry. This is driven by a previous study and published article by Socialbakers (2012c) about the response rate of different kinds of industries on Facebook. The concluded study indicates that the engagement of the fashion industry with social media applications is rather low and less responsive compared to other industries (cf. Socialbakers, 2012a). However, the potential for a successful and efficient implementation of social media applications in the business strategy of fashion companies is rather high. Users want to talk about fashion by using the Web 2.0 and keeping up to date with the latest trends and products available on the market, as well as sharing their opinions online (Weber, 2012). Therefore this study was created to find explanations to what prevents fashion brands from improving their social media presence and from including it in their business strategy.

Additionally during the research process the purpose of this study changed in its form. The importance of social media was still the main objective to determine, but weaknesses in the measurement of companies' social media activity were also identified. Previous secondary literature has shown that companies struggle with analysing weather their social media activities are successful and efficient (cf. Marketingcharts, 2012). Hence it became important to develop an efficient strategy for businesses to overcome these weaknesses. Figure 1. illustrates the findings in a bar chart.

Figure 1. Measuring Social Media's Impact

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Source: Marketingcharts (2012)

1.4 Research Aim and Major Objectives

Due to Figure 1. in the previous section, the overall aim of this study is to address the following research question:

"How important is the use of social media for the fashion industry?"

The following nine objectives have been posited in order to address the research question:

(1) To clarify why the engagement of the fashion industry with social media is low.
(2) To find an efficient way to measure companies' social media performance.
(3) To evaluate if companies should increase their investment and include social media as a marketing strategy.
(4) To develop an effective social media performance strategic plan.
(5) To analyse if social media increases market share and brand awareness.
(6) To establish why one brand grows faster by getting more ''Fans'' than others.
(7) To evaluate the similarity between different brand's social media behaviour.
(8) To describe the differences or similarities in age and income of the users between the brands.
(9) To clarify who are opinion leaders and own the influence of opinion creation.

Supportingly to the main research question ''How important is the use of social media for the fashion industry?'' and to accomplish the research objectives efficiently, six research questions were defined to avoid errors during the research process and to keep the focus on the purpose of the study.

(1) How is success in terms of social media defined and how can it be measured?
(2) Is it profitable to invest in social media and should it be included in the company's long term marketing strategy to gain a competitive advantage?
(3) How can the use of social media be successfully implemented in the long term strategy of a company?
(4) What would a general guideline for a successful implementation into a company's business strategy look like?
(5) Does social media enhance brand perception and brand awareness?
(6) How do fashion brands use social media and what is their main purpose of using it?

These questions as well as the aims and objectives of this study will be analysed and evaluated in the discussion section of chapter 5 after outlining the results of the research process.

1.5 Structure of the Dissertation

This dissertation consists of six parts, including the introductory chapter. The following chapter provides a critical review of the existing literature in the field of social media and begins by giving basic definitions relevant to the topic. Furthermore the chapter looks at who owns the influence in opinion creation on social media platforms and the power struggles between marketers and users. Finally the third section discusses different methods to measure social media activity.

Chapter three describes the methodological approach; covering issues such as research design, data collection, sample selection and data analysis methods. Possible limitations concerning the research approach are also mentioned.

In chapter four, the twelve observed fashion brands are described and categorised in three different price genres. The chapter begins with a short definition of the term ''Brand'' and explains this in context to brand awareness and brand engagement. Subsequently, the study's findings will be outlined and discussed in chapter five. Within the discussion section, a new social media measurement method will be presented together with a strategic guideline for the successful implementation of social media into a company's business activities. The sixth and final chapter comprises the conclusions regarding the study's purpose and recommendations for future studies.

2 Literature Review

2.1 Introduction

The literature herein serves as a basis for the research questions that will be considered in this study. This chapter refers to the previous academic work about Web 2.0 and social media. The chapter is divided in three sections. Section one provides a review of the theoretical background of Web 2.0 and social media. This part analyses the different aspects of this new form of Internet based on a paper by Tim O'Reilly (2005), who stamped the term "Web 2.0" in 2004 for the first time. The importance lies in understanding what the term "Web 2.0" defines, how it changed the way of communication and how it is structured. This is necessary to analyse the importance and use of social media in the fashion industry, because the focus for the research is on special social media applications. Section two refers to the question of who owns the influence in the communication process and discusses (with detailed examples from previous works) the main issues brands are challenged with in using social media. This leads to a discussion about whether companies should increase their investment in the new technology. The last section of this chapter discusses the importance of the measurement of social media engagement as well as the methods used by different authors. An exact definition of the term ''Brand'' will be given in chapter 4, together with an explanation of brand awareness and brand engagement.

2.2 Web 2.0 and Social Media

Web 2.0 forms the basis for the diffusion of information through social media platforms. The technology of Web 2.0 permitted the rise of social media applications such as YouTube, Facebook or Twitter. Due to the development of this new form of the Internet, new ways of communication were created, which influence (besides the traditional media) today's opinion formation (Stanoevska- Slabeva, 2008).

Tim O'Reilly (2005) coined the term "Web 2.0" for the first time in 2004 at the "Web 2.0 Conference", and he has been, since that time, the name giver for this new development of the Internet (O'Reilly, 2005). O'Reilly and Dale Dougherty, the vice president of the O'Reilly publishing company, recognised during a brainstorming session that the Internet had not broken down during the bursting of the dotcom bubble in 2000, but had become more and more meaningful. After the conference, during which the central subjects were Web 2.0 and the changes linked with it on the Internet, O'Reilly published the article "What is Web 2.0?" the following year. With this article, he defines, above all, the concept of the new Web and characterises it in a more detailed way. He describes different aspects which decisively declares the Internet to be in this new form and especially explains the basis for the diffusion of information in the net (O'Reilly, 2005).

The central aspects of his report form, in particular, the representation of the Web as a platform, and the inclusion linked with it, of the collective intelligence of the users. Hence, there are three kinds of Web 2.0 platforms, which are also mentioned in the work of Högg et al. (2008), titled "Overview of Business Models for Web 2.0 Communities". As it can be seen below in Figure 2 (Högg et al., 2008), some of the platform's applications are community-based services; the others are target- oriented services. One type of Web 2.0 platform focuses on the creation of net communities. This type of platform offers users the possibility to collect and add other individuals as friends to their account (Facebook), exchange knowledge (Wikipedia) or view music and films (YouTube). Therefore, all users pursue one common aim. Another kind of platform implements community-based services as well as target-oriented services. There, applications and tools help the user to create his or her own blogs or wikis. An example of such a service with which Wikis can be created is Wetpaint. An online cooperation which implies common work on content is an example of the third kind of Web 2.0 platform. This contains strictly goal-oriented applications. Thus, several users have the possibility to work together on content on the Internet, for example, by doing online brainstorming (Högg et al., 2008, p. 49 following). In relation to the research question of how important social media for the fashion industry is, brands will be analysed with applications with community-based services such as Facebook, Twitter and YouTube. These services offer, for companies, the best opportunity to merchandise their brands and products.

Figure 2. Clustered Overview of Web 2.0 Applications

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Source: Högg et al. (2008)

2.3 Marketers and Customers

The fact that Louis Vuitton got "brand-jacked" by using social media applications shows that with social media, it is not just the marketers who have the power to create a brand image. The technology of Web 2.0 empowered marketers and made it easier to reach the customers, but it has also empowered the consumers (Fournier and Avery, 2011, p. 193).

Fournier and Avery (2011) discuss this topic in their paper "The Uninvited Brand" in more depth. They analyse how web-based power struggles between marketers and consumer. Additionally they explore the emergent cultural landscape of open- source branding and explain marketing strategies in the context of social media. The first notable point they make in this context is that it is important for companies in the time of Web 2.0 and social media to listen to the users. Active listening can not

only prevent a negative company image but can also strengthen the company's brands and expedite them as well (Fournier and Avery, 2011, p. 197). Furthermore, marketers need to communicate with those who like their brand. It is not enough to put words in their mouth. Rather, it is more about creating things that consumers want to talk about and to submit to them the passion of the brand fitted to their needs. People love to talk, and they love using social media because they want to be heard and to gain a sense of their importance in the world (Bueno, 2007, p. 535). By creating consumer-driven programmes through which consumers can publish and share their ideas and work together with the company to build next-generation products, some companies have found a good way to communicate and include the users in their online brand activities. Hence, ceding power to the broad mass of users serves to get some power back while creating a feeling for the users that they are important to the company.

But in the end, Fournier and Avery (2011, p. 197) argue that the company still knows what is good for its brand and what is not and, in particular, what is best for the company itself. Therefore, marketers should not fully transfer the control to the customer and be slaves of influence. They risk losing the brand and a lot of money. In this case, it is also notable that the main users of social media platforms are under 25 and hence not always a brand's main target group (Riegner, 2007, p. 438). The main customers for a brand like Louis Vuitton, for example, might differ in age and online behaviour to H&M customers; due to Louis Vuitton's higher product prices. The brand's customers might exist more in the background and might have a different opinion compared to those who actively communicate on social platforms and influence each other in opinion creation. This is one of the objectives that will be researched and is necessary for defining the importance of social media. The target user group might differ between several priced labels.

The biggest influences on the diffusion process have those individuals who are experts in the respective, subject complex. These "opinion leaders" are used by the majority of individuals as sources of information in opinion formation. Katz and Lazarsfeld (1955, p. 3) define them as "the individuals who were likely to influence other persons in their immediate environment". Opinion leaders are characterised, above all, by their extensive knowledge in one field and are therefore used by other individuals as a source of information. Opinion leaders have a more intense relation to the mass media in comparison to other individuals and are deeply anchored in their subject area (Corey, 1971, p. 48). However, individuals with many connections in the form of acquaintances or friendships with other members on the network called "social hubs" have an influence as well. For companies and their marketing, the identification of such individuals is important as they show a big number of connections in the form of acquaintances or friendships on the network. Opinion leaders and social hubs influence the masses with their extensive knowledge and their highly persuasive abilities and play an important role in the introduction of innovations. If the marketing identifies these individuals, it can include them in their marketing strategies to reach the masses (Dressler and Telle, 2009, p. 167). Referring to the fashion industry, people like to engage with fashion brands and share online what they are wearing. This is first and foremost a representation of themselves and brands are often chosen to express their personality to others by using social media applications (Thenextweb.com, 2012). The fashion industry realised the major impact these people have on the success of the particular brands they engage with; due to their well developed and linked online social networks. For the 2012 Fashion Week in Paris, some famous designers like Karl Lagerfeld, invited fashion bloggers to attend at their fashion shows and were seated in the front rows (Laurent, 2012).

Additionally, according to a study by Matthew Lee (2006), the most common reason for users to join community groups and start sharing opinions about brands is for their own satisfaction and because they feel that it is their responsibility to tell others about their experiences. Those can be positive as well as negative. Fournier and Avery (2011) discovered that the two most-feared means of influence and communication in the social web for a brand, and especially for marketers, are criticism and parody. Due to the new technologies, such as blogging, ranking or rating, consumers are able to share easily and quickly their dissatisfaction and complaints. As already mentioned in the case of Louis Vuitton, brands can find themselves quickly at the centre of a storm of critics with whom they must deal (Fournier and Avery, 2011, p. 200).

Brian Gilbert (2009, p. 5), vice president of integrated marketing at Hacker Group, states that criticism is the hardest part of jumping into new media but dealing with a critic well will very often earn the company a fan for life. This means that criticism is not just a danger for a brand; marketers can also use online critics to gain approval from them. Social media platforms can be used as a free marketing research tool that can save costs. Firms can gain from innovative branding opportunities (Hollenbeck, 2006, p. 484).

Schultz (2008, p. 11) expounds in his article "Actions, Not Promises—The Future Ain't Going to Be Like the Past!" that branding has to change from the tradition of non reliable promises, which marketers make, to actual in-market performance and repeatable brand experiences. He refers, especially in relation to brand experience, to his personal experience with websites, customer service and influential personalities such as blogger or broadcaster. Marketing should be a combination of pushing out traditional branding messages and responding effectively to the questions and concerns customers are raising, as mentioned earlier in this paper. But in the end, even the worst parody campaign can have some positive effects for the brand. When, for example, a parody video is seen more often than the original video, and is more talked about, the brand will stay in people's minds. Similarly, a celebrity such as Madonna gains from negative campaigns as well, because her name as a brand remains in people's minds. Marketers can also use parody to promote their products in a funny way by jumping on the bandwagon and creating their own parody advertisements and videos for the brand. At least they can learn from it and gain a free advantage.

The findings of previous works mentioned in this section are used to observe and analyse how fashion brands interact with customers by using social media applications. Therefore, these criteria build the basis of the whole research process. Observing the interactivity of different brands in Facebook, Twitter and YouTube helps determine the success of using social media and, finally, the importance of social media for the fashion industry.

2.4 Social Media Monitoring

Only a small amount of research has been done to measure the abovementioned theoretical criteria, the effectiveness of social media marketing and hence the importance of social media for companies. Most of this research states that it is difficult to measure the effectiveness of social media.

Hoffman and Fodor (2010) mention in their paper "Can You Measure the ROI of Your Social Media Marketing?" that the main reason for this difficulty lies the way marketers have measured their marketing efficiency in the past by focusing on direct sales, direct cost reductions or increases in market share from campaigns. Moreover, the authors advise to focus more on key motivation factors that a social media customer has as the online content is more user-generated rather than marketer-generated. Those factors, which are called the 4 C's, are:

Connection

Creation

Consumption

Control

In today's modern world of Web 2.0 customers are fully in control of their online experiences and want to connect online with other users to create, share and consume online content. Hence, to measure the importance of social media, it is advisable to analyse the active "investments" customers will make as they engage with the company's brands at the specific social media application, such as blog comments, registration or active participation (Hoffman and Fodor, 2010). Hoffmann and Fodor (2010) point out, that social media enhances the formation of brand awareness and brand engagement, due to an increase of word of mouth. This is how the 4 C's contribute to measure social media activity.

The paper refers to the findings of Fournier and Avery (2011) and establishes a way of measuring success for marketers using social media applications to create brand awareness or brand engagement. Nevertheless, examples of data gathering are missing as well; the second part of the paper describes paths to develop an effective social media strategy rather than continuing answering the title question of whether social media activity is measurable. Above all Hoffman and Fodor's paper provides a good basis to answer the research question about the importance of social media. Table 1. gives a short overview of the various social metrics for social media which will be helpful for the local research.

Microblogging (e.g., Twitter)

Table 1. Metrics for Social Media Applications

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Source: Hoffman and Fodor (2010)

Previous quantitative research about the social media strategies of fashion labels, like Hoffmann and Fodor's (2010) or Uitz's (2012) refer to the tools listed in the table to analyse how the labels interact via the top three social media applications: Facebook, Twitter and YouTube (see Baltner, 2011). Data is collected by counting, for example, the numbers of fans (Facebook), the number of tweets about the brand (Twitter) and the number of views of a video (YouTube).

Furthermore, the researchers compare the different labels in relation to these facts and evaluate a social media strategy for each of the labels. It is a good example of how data will be collected and analysed during the research process of this study. To answer the research question, this model of measuring the impact of social media is helpful and the research process will be based on it. However, it is not necessary to find or formulate one or more social media strategies for the labels to answer the question of importance.

The previously performed research seems to be, in some ways, a bit superficial and not developed enough. The evaluation is not as extended as it could be. For example, other key terms about social media interactivity, such as a brand's blog or social bookmarking, could be included. Dowling and Weeks (2011), for example, define three different kinds of analysis in their paper "Media analysis: What Is It Worth?". They describe the roles of:

1. Salience and sentiment analysis;
2. Theme and contradiction analysis; and
3. Problem and solution analysis.

Each of those three types provides a different media profile for an organisation, and all three types should be part of the organisation's research. All three together profile the image of an organisation in the media. The salience and sentiment analysis is described as the measurement of the stories and language used by the customer published, in this case, at social media platforms to describe the brand or the organisation. Theme and contradiction analysis is about clustering the given comments on the social media platforms in different themes. Finally, problem and solution analysis is used to understand a particular problem to save costs or protect revenues. Using different case studies, the authors explain the three kinds of analyses, and the value of the media analysis is listed at the end of the paper for each case study. The findings in this paper support, with a few points, the way the research for the importance of social media should be structured. For example, the authors mention that key opinion leaders should be identified at the beginning. It must be noted that the research Dowling and Weeks performed, and hence their different analyses, measure only the image of a brand or company at the social media platforms or other media. However, this can be helpful to explain the impact of social media to define the question of who owns the influence in the social web—marketers or customers.

Additionally, based on the tools Hoffma n and Fodor (2012) refer to for the measurement of social media activity, the analytic social media company, called Socialbakers (2012c), developed two formulas to calculate a company's online average engagement rate and response rate. This helps to determine a company's social media activity in a more analytical, quantitative way in relation to brand awareness and brand engagement. Whereas, the measurement method of Hoffmann and Fodor (2012) is mainly based on qualitative (non-numerical) objectives (Uitz, 2012). Furthermore, by using these formulas a company is able to compare the engagement rate and response rate of different brands they own and hence making conclusions about successful social media strategies. Social media manager can measure the brands' performances and decide what it is really worth acting upon and which type of posts are more effective ones in terms of engaging more users (Socialbakers, 2012c). Figure 2.1 shows the two formulas developed by Socialbakers (2012c).

Figure 2.1 Socialbakers Formulas

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Source: Socialbakers (2012c)

But there are limitations coming up with these two formulas. Wisemetrics (2012) analyzes in their online article ''Why The Current Facebook Engagement Rate Calculation Is Inaccurate'' the engagement rate formula, set up by Socialbakers (2012c) and explains the weaknesses of using this formula, what it describes and how to interpret the values. At the end the author comes up with an alternative formula, which is described as more ''significant and useful''. Due to the fact that the engagement rate measures, how well fans and followers interact with the shared content, the author mainly criticize that exactly this is not fulfilled by the formula (Wisemetrics, 2012). Five issues are determined in the publication by Wisemetrics (2012) which question the reliability of the formula.

At first, the author states, that the formula does not include all interactions. It only measures likes, comments and shares and misses out the video, links and photo clicks made by fans on Facebook, Twitter or Youtube. This does not include a missing of the actual number of users who viewed these media posts (Naidu, 2012). Within the fashion industry these kinds of posts are important to measure as a lot of created content are based on media links and include photos or videos (Wisemetrics, 2012). This leads to the second issue the author is clarifying. The formula is based on the number of fans only; instead of measuring the number of actual users reached. The most shared content is not only seen by fans and followers, moreover by their friends. Lately, it is more important to include the number of users reached instead of the number of fans as statistically 84% of a company's Facebook fans, for example, do not view the created content (Wisemetrics, 2012). Hence a page with less overall interactions but with more shares and with a wider friends network may outperform another page with way more fans or more interactions, when it comes to number of users reached (Wisemetrics, 2012). The third issue concerns the fact that the formula derives a ratio of the total number of likes, comments and shares made by fans and non-fans, from the total number of fans which creates a bias suggesting a bigger engagement rate. All likes, comments and shares made by non-fans would need to be excluded (Naidu, 2012). The fourth point cannot be seen as a significant statement against the use of the formula as the author just mentions that with more posts the engagement rate can be increased. This is a clear fact which should not to be criticized as an issue. Companies need to increase their engagement rate by posting more. The more they post the more fans will like their pages and share the content. The last issue includes that the formula only measures interactions but not the actual proportion of fans who interact on the social media platforms. Therefore, the fact that one fan can make several likes or comments per day is not considered in the formula.

By the new formula the author makes clear, that the above mentioned issues will be suspended. Additionally, the credibility and accuracy are higher than the formula developed by Socialbakers (2012c). The general formula Wisemetrics (2012) suggests to conduct divides the number of engaged users by the number of users reached, multiplied by 100. In case a company is interested in calculating an engagement rate benchmark between several pages, the author advises to divide the number of engaged users by the number of made posts, this needs to be divided by the number of users reached and multiplied by 100. Figure 2.2 shows the developed formulas by Wisemetrics (2012).

Figure 2.2 Wisemetrics Formulas

illustration not visible in this excerpt

Source: Wisemetrics (2012)

However, neither Wisemetrics (2012) nor Socialbakers (2012c) divine in their publications what the calculated value predicates and how to interpret these. Expected are results in percentage between 0 and 1 for Socialbakers' formulas and results above 1 for Wisemetrics' formulas. Hence it is unclear, if a higher calculated value close to 1 is more desirable or a lower value, which is closer to 0. Both do not consider any limitations of their research in their publications. Therefore, the researcher included all formulas in this study's research process to test these formulas for credibility, to make decisions which formula is the most useful to measure social media activity, to analyse the collected data and hence to compare the different brands' performances on the several social media platforms.

The previous section discussed the review of relevant literature and findings in regards to the importance of social media for the fashion industry. It has shown that there are many ways of using Web 2.0 and that the new technology has permitted the rise of social networking where the research will be addressed. One way to answer the research question will be to determine who owns the influence, because there are power struggles between marketers and customers. Furthermore, examples of previous researches were given to analyse their effectiveness to get impressions of how a company's social media activity can be measured. As already mentioned at the beginning of this chapter, an exact definition of the term ''Brand'' will be given in chapter 4, together with an explanation of brand awareness and brand engagement.

3 Methodology

3.1 Introduction

This chapter provides information about the methodological approach of the study, the research design, including the research strategy and the empirical techniques. Furthermore, to ensure that the gathered data was credible and valid, the research process is described as well as the methods of data collection, data analysis and the design of questionnaires and interviews. Limitations according to this study are described at the end of this chapter.

The main purpose of this study is to estimate the importance of social media use for the fashion industry. For the investigation of this study's purpose and hence for the fulfilment of the associated objectives, listed in chapter 1, an analytical research approach was developed including an online observation of 12 international fashion labels, user questionnaires and interviews with marketers.

Based on previous literature, it is helpful to clarify the used terminology and to distinguish between the terms ''research methodology'' and ''research methods'' first. Jankowicz (2005) describes for example the term ''methodology'' as the analysis of, and rationale for, the particular method or methods used in a given study, and in that type of study in general. Saunders et al (2009) defines ''research methods'' as the techniques and the procedures used to analyse data, whereas, ''research methodology'' is the theory of how research should be undertaken.

3.2 Research Design and Strategy

The nature of this study refers to a multiphase research design which involves multiple phases of data collection and analysis. This allows a greater diversity of views to be reflected in the study and helps to explain relationships between the variables. Furthermore, multiphase research helps to prove the credibility of the study to establish a generalisability at the end (Saunders et al., 2012). This research consists of three multiple phases and starts with a quantitative research approach, which is based on numerical data from a structured observation process. This phase is followed by another quantitative approach in form of questionnaires and then by a phase of qualitative data collection. The qualitative research part is set up as a non-numerical approach and consists of interviews. Therefore, the study's prioritisation is based on a quantitative research approach. Qualitative data is mainly used to explain particular findings further and to support the findings of the quantitative research.

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