The predictions of growing consumer power that predated the turn of the century were fueled by the rise of the Internet, then reignited by social media. This presentation explores the intersection of consumer behavior and social media by clearly defining consumer power and empowerment in an Internet and social media context and by presenting a theoretical framework of five distinct consumer power sources: demand-, information-, voice-, social-, and community-based power. Research questions are elaborated for each power source outlining the agenda for future research areas. The presentation has been prepared for the 42nd Annual Conference of the European Marketing Association Conference in Istanbul, June 2013.

1. EMAC, 42nd Annual Conference, June 7th 2013, 09:00-09:30
Lauren I. Labrecque, Loyola University Chicago, USA
Jonas vor dem Esche, Muenster University, Germany
Charla Mathwick, Portland State University, USA
Tom Novak, University of California at Riverside, USA
Charles F. Hofacker, Florida State University, USA
By The Power of Social Media… I Have the Power!
A Critical Review of Consumer Empowerment in the Social Media Era

2. The Prediction
• “Networked computers empower people around the world as never before
to […] gather together in groups based on […] social affiliations. Because many of
these affiliations are based upon consumption activities, including ecommerce,
these e-tribes are of substantial importance to marketing and business
strategists.” Kozinets 1999
• “Networked markets are beginning to self-organize faster than the
companies that have traditionally served them.” Locke, Searls, & Weinberger
2000
• “The digital interactive transformation in marketing […] is unfolding on a model of
consumer empowerment […].” Deighton & Kornfeld 2009
Kozinets, Robert V. (1999), “E-Tribalized Marketing?: The Strategic Implications of Virtual Communities of
Consumption,” European Management Journal, 17, 3, 252-264. | Levine, Rick, Christopher Locke, Doc Searls,
and David Weinberger (2000), The Cluetrain Manifesto: The End of Business as Usual. New York: Perseus
Books. | Deighton, John & Leora Kornfeld (2009): “Interactivity's Unanticipated Consequences for Marketers
and Marketing,” Journal of Interactive Marketing, 23, 1, 4-10. 2

3. The Battle
Consumers Marketers
DMA (2012): „Data Privacy: What the Consumer Really Thinks 2012,“ Direct Marketing Association, available at:
http://dma.org.uk/sites/default/files/tookit_files/data_privacy_-_what_the_consumer_really_thinks_2012.pdf 3
Google‘s data warehouse in Council Bluffs, Iowa
vs.
16%
31%
53%31% of UK consumers
have privacy concerns
DMA 2012

4. 4
By the power of social
media!
Do I have the power?

5. Outline
1. Definition of Consumer Power
2. Theoretical Framework
3. Moderators
5

6. What is Consumer Power in a Social Media Context?
February 23, 2012
6
“The asymmetric ability to control people or valued resources in
online social relations”
cf. Rucker, Dubois, & Galinsky 2011, Magee & Galinsky 2008, Handgraaf et al. 2008, Keltner,
Gruenfeld, & Anderson 2003

7. What is Consumer Power in a Social Media Context?
February 23, 2012
7
“The asymmetric ability to control people or valued
resources in online social relations”
cf. Rucker, Dubois, & Galinsky 2011, Magee & Galinsky 2008, Handgraaf et al. 2008, Keltner,
Gruenfeld, & Anderson 2003
“relative degree of
mutual dependences”
“hierarchy”

8. What is Consumer Power in a Social Media Context?
February 23, 2012
8
“The asymmetric ability to control people or valued resources
in online social relations”
cf. Rucker, Dubois, & Galinsky 2011, Magee & Galinsky 2008, Handgraaf et al. 2008, Keltner,
Gruenfeld, & Anderson 2003
“potential to act”
“status”

9. What is Consumer Power in a Social Media Context?
February 23, 2012
9
“The asymmetric ability to control people or valued
resources in online social relations”
cf. Rucker, Dubois, & Galinsky 2011, Magee & Galinsky 2008, Handgraaf et al. 2008, Keltner,
Gruenfeld, & Anderson 2003
“influence”
“reach &
persuasiveness”

10. What is Consumer Power in a Social Media Context?
February 23, 2012
10
“The asymmetric ability to control people or valued
resources in online social relations”
cf. Rucker, Dubois, & Galinsky 2011, Magee & Galinsky 2008, Handgraaf et al. 2008, Keltner,
Gruenfeld, & Anderson 2003
“right of disposal over
scarce online
resources”

11. Five Sources of Consumer Power
11
Time
ConsumerPower
1 – Demand-based Power
2 – Information-based Power
3 – Voice-based Power
4 – Social-based Power
5 – Community-based Power• All sources relevant today
• Power derivable from multiple sources
• Sources build upon each other
Individual
Sources
Network-based
Sources

12. 1 – Demand-based Power
Demand-based power resides in the aggregated impact of consumption and purchase
behaviors arising out of Internet and social media technologies.
Hirschman, Albert O. (1970), Exit, Voice, and Loyalty: Responses to Decline in Firms, Organizations, and States,
Cambridge, MA: Harvard University Press.
Anderson, Chris (2004), “The long tail,” Wired Magazine, 12, 10, 170–177. 12
Hirschmann‘s Exit-Voice-Loyalty-Theory
Loyalty
Voice
Exit
Anderson‘s Long Tail-Theory

13. 2 – Information-based Power
Changes in Consumer Awareness
Information-based power is grounded in the ease of access to product or service
information which reduces information asymmetry.
Changes in Product-Life-Cycles
13
ConsumerAwareness
Pre-Internet Post-Internet
>
InfofromMarketerX
OtherInfo

14. 3 – Voice-based Power
User-generated Content Electronic Word of Mouth
14
The central element of voice-based power lies in the ability to create and disseminate
relevant content to a wide audience, which is able to influence people’s opinion.
&

15. 4 – Social-based Power
Social-based power refers to actions designed to build personal reputation and influence
markets through the distribution, remix, and enhancement of digital content.
15
• Content Dissemination
Sharing and organizing content through
networks
• Content Completion
Comments on a blog post that
contribute to previous content, tagging
• Content Modifications
Repurposing of content such as a video
or image meme

16. 5 – Community-based Power
Community-based power resides in a social network’s ability to actively pool, mobilize,
and structure communal resources in a way that benefits the community and its individual
members.
16
Pure Online Communities
• Share-points
• Online brand communities
• P3 communities
• Communities of interests
• Etc.
Online-Offline Communities
• Car-sharing communities
• Communities using infos
from mobile devices
• 3D printing communities
• Etc.

17. Moderation
17
Consumer Activity
Consumer
Empowerment
through…
5 – Community-based Power
4 – Social-based Power
3 – Voice-based Power
2 – Information-based Power
1 – Demand-based Power
Infrastructure
Characteristics
1 – Technical Affordances
(Interaction Designs, Openness
of Infrastructure)
2 – Community Governance

18. Future Research Questions
• Demand –based Power
– What is the value of social media signifiers of demand (Likes, Shares, Tweets, …)
and how can we categorize these and new forms?
• Information-based Power
– Social media infos create a paradox of technology (Mick & Fournier 1998) leading
to simultanious consumer empowerment and disempowerment.
• Voice-based Power
– Which impact do different levels of media richness have on the development of
voice-based power?
• Social-based Power
– Does the need for authenticity in social media pressures consumers to relax
privacy for their digital persona beyond their personal comfort zone?
• Community-based Power
– Is there a model to predict which consumption areas are likely to become
digitalized or communitized next?
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19. June 7th, 2013
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