The business world is seeing a rising impact of the use of social networking permeating the corporate world. Oftentimes, social media has been utilized as a source of data as well as a tool in disseminating information that greatly influences the choices and beliefs of people across the globe. It can be said that social media has become one of the primary marketing tools as well as in the creation of new business opportunities (Jurisova, n.d., 403).
However, the factor of being a large multinational or a start up is irrelevant when discussing the benefits of social media for their respective industries. Compared with the large audience that social media affords the companies, only a small percentage of all advert campaigns on television generate positive results, Newspaper promotion campaigns are being hurt owing to the down spiral of its sales, and radio ads are also facing a similar situation (Coleman, 2013, p.1).
In the years after Mark Zuckerberg launched one if not the most iconic social media sites, Facebook, social media has transformed itself from just a “dorm room” into one of the most used marketing tools in the boardrooms of America Inc. In 2012, it was estimated that more than seven out of 10 of all companies on the Fortune 500 list were engaged in Twitter, and eight out of 10 of senior corporate officials stated that one of the factors that led to the rise in the sales figures of their companies was the use of the company of social media sites.
It has been stated that social media platforms use by companies have largely been limited to marketing as well as community awareness programs and policies. However, a McKinsey report evidenced that a large portion of the approximately $1.3 trillion in approximated value from social technologies is based on enhanced communications and coordination within as well as across enterprises. Simply put, social media will soon assume the position as a productivity protocol in the office in much the same manner that electronic mail messages did in the early parts of the 1990s (Savitz, 2012, p. 1).
Engaging in social media can translate into significant results for American companies, particularly in “linking and connecting” with users. In the research of Adler (2014, p.1), Americans spend a good amount of time on social media, spending an average of 37 minutes day, more than any other activity done on the Internet.
One of the questions that must be posed in this study is whether there is an actual need in developing a social media platform for companies. In less than a half decade, social media has earned the distinction of being one of the most popular activities done on the worldwide web. The reason for the dramatic rise in the popularity of social media sites is due to the ability of these sites to filter the vast amounts of information on the web, or simply help the user to avoid what is termed as “information indigestion”.
However, at first mention, the objective seems to run counter to the goal of the Web, which is to offer countless bytes of data to the users. Also, social media in fact offers more data than the web itself. However, the conflict in the provision of information is resolved. In Chris Andersen’s The Long Tail, the Internet has the ability not only to provide vast amounts of information to the users, but be able to persuade the choices and options of the users as well (Qualman, 2012, 3).
However, as compared to the past years, what is the level that business owners have in technologies such as social media in terms of aiding them in their businesses? And in a similar light, to what degree do business owners believe that social media has helped them in their businesses (Qualman, 2012, 236). Businesses can utilize the growing number of social media sites in promoting as well as selling their products and services. Nevertheless, present day society’s commonly used marketing and communication platforms have lost their “stranglehold” in the market.
Even with brands that have the largest following in the social media networks have to endeavor harder in order to stay relevant in the market. In the belief of many companies, having a wide exposure in the market is not enough; there are other uses for social media that businesses can use for their benefit. Social media is an effective platform to raise funds; for example, though the Kickstarter campaign is not by itself considered as a social media platform, social media is an effective mechanism to be able to spread the campaign to the global Web community. “Netizens” will, at first glance, will want to give funds to a cause or even to a company advertising its services and products.
However, if the organization or company maintains a strong presence on the Internet for a sustained period of time, the audience can slowly “warm” to the idea of the group, associating the concept of the group as a successful and desired brand, then raising funds and generating interest in the group. In addition, the company or group can increase its sales volume by making a potent sales pitch directly in the feed of the company. For example, JetBlue uses a forceful pitch to “guide” the visitor to the company’s online registration sites.
This can be considered as a very risky activity; however, if the company believes in the strength and quality of their products of services, then the company can engage in social media marketing and be able to justify the costs related to its use. In this light, it can be said that all the company has to do is to generate the interest of the target market it wants to attract. By making the process a more enjoyable and simpler procedure, then the potential market believe in the value of going through the site and not give the impression that all the company is interested in is generating a sale from the visitor.
In addition, as social media is designed to be social, the work of spreading the interest in the product or service of the company can be done by the “followers” of the brand on the platform as well as generating interest from visitors to the site of the company. “Referrals” can be of enormous benefits for companies looking to widen their market reach as well as widening their market base.
Heggesteun (2013, p.1) avers that the “explosion” of technologies where social media platforms can be used is expected to explode in the coming years. In the report of BI intelligence, 2013 will signal a dramatic rise in the penetration rate of smartphone users, from 5 percent of the world’s population in 2009, to an estimated 22 percent of the global population. The rise in percentage points translates to more than 1 billion smartphones in a period of less than half a decade. Average wise, for every nine individuals on the planet, two people will have access to a smartphone. (See figure 1).
Nevertheless, there is growing recognition among the business community that more that more and more business leaders must engage in social media with their customers. In a 2013 poll among company leaders, more than eight out of ten chief executive officers believe it is important for them to interact with their clients via social media. However, there are CEOs that are hesitant, even to the point of resistance, to participate in these social media activities.
The latter business leaders are still engaged in “traditional” marketing, meeting with their clients on a face to face basis and still making contacts within the local community; the younger, more “tech savvy” CEO’s are monitoring “virtual” connections via such sites as LinkedIn and calculating the risks and costs of their respective campaigns on other sites such as Twitter.
Nevertheless, it cannot be said that one method has a significantly higher success rate than the other. It must be noted that both methods affords benefits to the users. This factor must drive marketing as well as senior management business professionals to forge a balance with their online “presence” as well as their “real life” marketing activities.
Though there is a need to optimize both methods in earning better revenue streams for their companies, businesses must acknowledge that there is an increasing migration of consumers to online sources for information regarding services and products. With this in mind, again calling for the need to maintain a strong real world marketing presence, companies must strive for an equally strong, if not a stronger, online presence (Hendricks, 2014, 1).
It must be noted that some of the more profitable companies are those that began as small-scale “startups” who have come to recognize the power of social media in generating sales and revenues for the company, and have used this tool to gain a critical advantage in the business market. Rather than spending a large amount of money for an advertising campaign, these companies will go online to generate interest in the product or service, increasing the possibility that visitors will “like” the post and “share” the information to friends, both in real life and online. Once the services or the products of the company generates enough “likes”, customers will likely look for the store, wanting to learn more of the product and service, and ultimately generating sales for the company.
Here, the cost benefits of social media are evidenced in that companies can use social media to spread awareness of the products or services without having to spend millions of dollars in advertising costs. Should the company opt to operate the site on its own, the costs to the company are minimal and limited to the costs and the time of the person updating the content of the site. However, the results of social-media based advertising compared to a high powered advertising activity are still in favor of the latter.
The results, also, in social media based advertising is slower than that of a “traditional” and expensive advertising campaign, as the needed “buzz” for the awareness of the service and the product may take a longer time to realize, utilizing analytical tools and crunching the numbers in order to verify if the campaign on the social media option is indeed paying off for the company (Hendricks, 2014, 1).
As well as maintaining contact with existing costumers, social media can also be used to generate new customer bases for the company. For the latter, social media can allow companies to connect with their existing clients, or those that already use or avail of the services and products of the company. Businesses that link with their online “friends” can convince them to post the company’s advertising materials or relay to other online “friends” regarding the business, the services or the products that the company offers, any promotional items and programs and finally the location of the business or its branches.
Businesses can also combine online and real life marketing by putting small pieces of paper detailing the services and products of the store in shopping bags when customers purchase items or avail of the services of the store, suggesting to them to link with the online site of the store on the network of choice of the customer. Once linked in, customers can get updates on any promos that the company may be launching, new products, or even just express satisfaction through the customer feedback section, where visitors can also go to view the products and services of the company.
Social media sites allows companies to freely promote any company activities, whether these are companywide or branch specific, for their customers and followers to avail of. At times, companies will limit the availability of certain store promos to followers and subscribers of the company social media page. In addition, having a social media presence will allow the customers to get in touch with the company faster, as the company can reply in real time to the concerns being raised by customers.
Lastly, companies can save substantial amounts of financial resources in advertising costs. It does not cost any money to create a social media presence, or if the company should allot a small amount, the company can purchase a small advert on the social pages to increase the presence of the company on the Internet aside from the social media pages dedicated to the company (Freeman, 2014, 1).
Though companies strive to satisfy the ever changing and rising needs of the customers, both existing and potential, customers also have a responsibility in ensuring that a social media campaign works. As companies continue to redefine their identity in the technology driven market, CEOs must recognize the value and worth of the feedback that customers give for companies to improve on the cited issues and concerns raised by the online community (Hendricks, 2014, 1).
Social media has provided companies a significant window to access large amounts of data on the behaviors as well as inclinations of customers, or the “Big Data”. However, understanding the data and turning the data into tangible action policies has been difficult for the business community. Large business companies, inclusive of Gatorade, Dell as well as the Super Bowl, and nonprofit organizations such as the International Red Cross, have established so-called “command centers” focused for real-time costs analysis and regulation. Staffed by dedicated employees, the centers track the movements and activities on the company site, everything from tweets and likes and feedback from the customers (Savitz, 2012, 1).
In concluding, the research shows that customers are slowly moving towards social media as a primary purchasing and shopping tool. This factor must motivate businesses to try and establish themselves in social media to avoid being left out of the growing trend of companies going on the Web to generate interest in their products and services as is the policy and practice of smaller companies looking to offset the logistical advantages of larger, more established and financially equipped companies.
Though traditional advertisement or even company statements can help potential customers in narrowing down choices for products and services, recommendations from friends, online or otherwise, is seen as a greater motivator for the customer to avail of a product or service, going by the positive opinion of the friends. Though there are a number of opportunities that businesses stand to gain from establishing a presence in social media, there are threats that must be addressed and resolved in order to maximize the opportunities and reduce the threats.
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Figure 1:List of number of users using various social media platforms: