Regulated social media marketing is a mechanism by which consumers feel encouraged to share messages regarding businesses with their social network friends. These messages, when used by the friends of consumers durintransactions, must be traceable to the respective originating consumers. The business can then reward consumers who chose to share their messages because it helped create additional business transactions. The companies can also want to pay the friends that transacted and encourage them also to share the business’s messages  

Advantages. Businesses have adopted social media as an essential channel and are investing money to mine data from these channels. Because the voluntary data in social media channels are typically unstructured, there is much intelligence that needs to go in the data mining process to get a dependable percentage of true positives and true negatives from the analysis. This idea circumvents the problem of unstructured data mining and thereby ending up in false positives and false negatives, which leads to negative ROI for any business. The approach helps companies recognize enthusiastic customers, thus helping them retain customers over a more extended period. It also helps businesses get new customers through their existing customers, thereby reducing costs in customer acquisition.  

Disadvantages. One risk associated with this approach is that customers may feel that they are being usedThere is also the fear of being ostracized from their circle of friends if they are viewed as “spam agents” for businesses. They may fear loss of privacy as well. Besidescompanies may fear losing customers aa result of these customer perceptions. While customers may feel apprehensive, ultimately, it is up to them to choose whether or not to share the messages. If the messages are not shared, businesses do not gain the benefits of acquiring friends of customers but may earn loyalty from this customer based on their promotional messages. The difference would be that the promotional messages went through a social media channel and probably at much lesser cost than traditional physical fliers. This would still be a cosadvantage to the business.  

Because it is the personal choice of the customers to share or not, they are more likely to be viewed as trusted sources of information than spam agents. Human nature would provide the controlling gates for the governance of this relationship, and it is inherent to all social channels irrespective of the type and frequency of messages that individuals want to share. Businesses should be careful not to reveal the customer’s sensitive and private information. Any violation of these fundamental governing principles can backfire, which is the same risk that businesses make when they accept credit cards for transactions. Creating promotional messages that have the potential to reveal what the customer purchased would not be an excellent way to implement promotions. Businesses should be aware of such situations and rely on fundamentally sound business ethics and sound marketing principles while implementing social media marketing solutions.  




Several business benefits can be proposed in terms of the impact at the business level and the customer level. At the business level, we can measure the increase in brand awareness, sales, profit, ROI, and the number of positive and negative WOM conversations. At the customer level, we can measure the influence effect and thinfluence value.  

For businesses that want to do focused on social media marketing, the selective option like HokeyPokey is recommended. Though this kind of initiative is more costly, the initial selection and message creation process can help the initiative focus on specific metrics that the business wants to measure based on feedback from the field. While this approach can get focused feedback, it lacks the flexibility to regulate the messaging and also may not be that flexible in providing traceability of transactions.  

Regulated social media marketing is recommended for businesses that need flexible social media marketing that offers traceability of transactions against the message while providing control to customers for managing their privacy and how they share the marketing message. Although it would come at a higher cost than a “broadcast type approach, it offers tangible benefits. From an ROI perspective, regulated social media marketing is the most recommended approach as it can provide a higher return at a comparable cost to selective WOM marketing.