Social Media Can Affect Business Growth
Carolyn A. Carlile
East Carolina University
There is a debate in the business world about whether social media marketing affects
Businesses around the world are wondering if marketing through Facebook,
Twitter, LinkedIn, or blog sites is beneficial to their business growth.
Some businesses reject the
use of social media in their marketing efforts because they do not see the value in
contend that they cannot measure their return on investment, nor can do they know if they are
reaching their target customer. Another point
that is debated is
whether it is helpful for
customers to be able to voice their opinion about a company
’s product or services in such a
With social media networks being relatively new outlets for the business world to
use, there are pros and cons to the use of social media networks for marketing and advertising.
One big benefit
to a busines
s is social
provide a vehicle for word of
mouth advertising. Dave Evans (2008), consultant and strategy director for GSD&M IdeaCity,
generates technology and communication strategies for clients like Microsoft, Hewlett Packard,
. He also wrote a book
Social Media Marketing: An Hour a Day
describes the power of word of mouth advertising. He points out that people trust each
other’s opinions more than that of a professiona
l advertisement. While being the most t
form of advertising,
word of mouth
is also the least expensive form of advertising there is.
When customers use a product then discuss it on the internet, other internet users interact about
it. Whether the results are good or bad, opinions about
oduct or service spread quickly and
reach a wider audience
without spending a large amount of advertising dollars. According to an
by Michael Stelzner (2010), 78%
of the marketers using socia
l media that were
said that thei
r social media marketing efforts increased their company’s exposure, and
helped them close additional business. Stelzner reports that there was a 12% increase in
additional business closed in 2010 compared to 2009.
He credits the increase in use of socia
media in marketing campaigns for the additional growth in sales volume.
According to an article
written by Chris Pickering (2010), an ecommerce blogger, social media marketing is highly
effective. He states that, according to a study by Marketing Sherp
a, there are many reasons that
social media marketing is effective. They found that social media marketing influences brand
reputation, and increases brand awareness. They also found that social media marketing
improves search engine rankings which incre
ases website traffic therefore generating leads and
increasing sales. They found that social media marketing improved internal communication as
well. Pickering contends that social media marketing is necessary for any business to grow in
In an article written by
professional journalist and Executive Editor
Rose Gordon (2011),
Gordon discusses how social media marketing directly
siness growth for Totsy, a business
which sells baby gear, cloth
nting a refer
friend program through social media networks
seen a 35% increase in organic growth
also states that other companies like 1
FLOWERS, Dotbox, and Celebrations.com, have increased t
heir bottom line by increasing
business through social media networks, and
not having to buy expensive media advertising.
looking to grow their customer base to increase business.
media networks allow
companies to reach customers that they would never have been able to
Dover, a managing partner at SocialTrust Advisory Group, and S
principle and strategist for MediaPlant, LLC,
point out one possible reason for this growth in
r 2011 article, “Co
Creating Your Brand with Young World Consumer Entrepreneurs,” that
the fastest way to obtain a new customer base is to market to the global economy. They claim
that an increase
in technology across the globe has opened up new opportunit
ies for companies
to reach customers they would not have been able to communicate with in the past.
that internet connectivity has grown by 1
000 percent across Latin America.
This is important
because some of the greatest economic upswing has
been in countries with the fastest growing
middle class, such as China
India, Brazil, and South Africa.
These emerging economies provide
the fastest way to increase business. The use of social media marketing efforts aimed at these
emerging economies has
allowed companies to
create brand awareness in countries with minimal
The use of social media networks also provides companies with an opportunity to
speak to the new global customer base, and find out what kinds of products and services they ar
looking for. For businesses, this takes the guess work out of what products will sell in the new
global market. The data collect
the companies risk by
allowing them to
they know will sell in these economies.
hors do warn that marketing to
a global economy using social media networks does have some risk associated with it.
biggest risk is
in marketing to countries with
g cultural values. Companies
research global value systems
and make sur
e they are speaking to specific consume
putting the global customer base under one blanket. Another risk
when a company
enters a global market is consumer communities can become
too large to benefit a product
proper word of mouth adv
ertising. When there are too many differing opinions
about a product
because of cultural divides and differences in expectations based on geographical
location, it can
lead to confusion over the features and benefits a product or service provid
Companies need to be very diligent in the research they do concerning local cultural beliefs
when entering into a new market. Certain cultures differ in what they find offensive, and what
they find acceptable in advertising.
An important element to a
ny business is to get consumer feedback about the products and
services they provide. Social media networks provide an avenue for businesses to communicate
ctly with their customer base.
Stephanie Wonderlin (2011), Director of Social Media for
Street in Austin, Texas, and guest blogger for central
Illinois Fox news station,
that social media allows instant access to an
audience, and provides more staying power than
most traditional marketing campaigns.
states that customer
s do not like to do
usiness with faceless companies
they know nothing about. Social media marketing allows
customers to know more ab
out a company,
philosophy, and how it
. In addition,
customers can discover
new developments directly from th
paid party. Social media also allows companies to handle customer service issues
in a timely manner. Through customer blogs, companies become quickly aware of an issue with
a product or service. Comp
anies can in turn act quickly to resolve issues with a product or
service. Wonderlin points out that no company is perfect, and consumers appreciate the
opportunity to be heard. In return, customers are likely to provide a company a second chance to
se them, and they are more likely to recommend a company or product to a friend.
transparent through social medi
a marketing, companies can
save their bottom line by reworking
products or services that are less than satisfactory to their customer
before they have too much
capital invested in it.
In another article, authors Thackeray, Neiger, Hanson, and McKenzie
(2008), all university professors, acknowledge the increasing importance of social media
programs in the health care industry.
They state it is the
and easiest way
increase product awareness
. They also discuss the benefits that social media marketing prov
including viral marketing
generated advertising. Communicating directly with the
es the health care industry with insight into what the customer is looking for in a
product or service. This allows the industry to change or implement new practices, and change
product assortment according to an ever
changing customer base. As Peter Wyl
observed in his article written in the Social Media Examiner, social listening is important to any
. He calls it “
listening data” and states that the practice
allows a co
mpany to get a sense
of how its
its products or
in turn makes the company more
relevant to what its customers
are trying to achieve.
With social media marketing on the rise, it is important to point out some of the
lenges that companies will face in the near future.
ising is always a concern,
especially with blogs
and social media networks being
open to anyone with a computer to
express their opinion of a company or its products. According to an article written by Kenneth
Jost (2006), adjunct professor at University
Georgetown Law Center, and Melissa Hipolit
(2006), associate editor at CQ Researcher, the sources of information on these sites are not
always credible. They warn that with the continued growth of the blogging community, not all
that appear to b
are factual. Anyone with
access to the internet
can start a
therefore a reader should check the credibility of the source before believing in or citing the
content of the blog. Jost a
nd Hipolit do believe that blog
based discussions are
business growth potential if the discussion is from a credible source.
Tanner Godzari (2011), a
social media marketer, discusses some additional problems surrounding social media marketing.
Godzari contends that s
ocial media marketing is onl
ive when used the right way and
be used as a source to find
and share meaningful content, not just list promotions about
products, or promote a company’s services. The author
expresses concern that
the increase in
demand for social media mar
keting packages has adversely affected the usefulness of social
ia as a marketing tool. Godzari
points out that because of the growing popularity, social
media marketers are using a “cookie cutter” approach to how they market business through
dia sites. Godarzi warn
s if you do not have worthwhile content to share, post, or blog
about, it is better not to place anything on the social media sites just to stay in front of the
Given the increase in social media marketing, customers are
receiving an increase in
information about products and services. Customers will opt out, unlike a Facebook fan page,
and not follow tweets if the information they are receiving is not perceived as valuable. If a
company decides to launch a social media c
ampaign, the content has to be meaningful to the
target audience or they risk losing customers because of it.
Another pitfall to social media
marketing is the difficulty in tracking a company’s return on investment (ROI) when it comes to
its efforts in
s area of marketing. When s
ocial media marketing first emerged, there was not
any good way to track the ROI of a business’s s
ocial media marketing efforts. Now there are
many ways to quantitatively track ROI. There are Google analytics, Feedburner, and
name a few. Peter Wylie
(2011), Social Media Examiner contributor discusses
the use of real
me tracking data like Hootsuite which
allows a company to
“view consumer data at a granular
level, identify positive or negative trends, and make instant
tions” to a marketing
campaign. With the introduction of tracking software for tracking customer behavior,
whether social media marketing efforts are benefiting the company, and they can
better assess product assortment and services provided by the company.
All of the experts cited in this article agree that social media marketing is necessary to the
of any business. When social media first came in to practice it was difficult to track
whether it was working or not. As technology has evolved, we can directly measure website
traffic, search engine optimization (SEO) ranking, and sales generated throug
h a website.
using social media, the days of questioning whether a product has been well received by the
public is long gone. Social media affords a company
the ability to quickly know
a product or
service is going to be accepted by the public
it is not, a company can quickly remedy a
consumer problem or concern before much time and money is wasted on a failing product. This
can boost a company’s bottom line where before there would have been additional losses. The
experts agree that social m
edia marketing is the fastest, easiest and most inexpensive way to
grow a global customer base. The use of social media allows companies an opportunity to
increase brand awareness in countries never thought possible.
In return, companies can increase
iness through a whole new customer base.
there is some risk involved in s
media marketing, the benefits far outweigh the risks. If done right, social media will keep you in
front of your target audience generating the best form of advertisin
g, word of mouth advertising.
ople trust each other, not paid
for advertisements. Social media provides the opportunity to
generate discussion about a pr
oduct or service that is far
around the globe are launching soc
ial media marketing campaigns as a way to grow business.
Social media marketing is here to
stay, according to the experts, and c
ompanies need to figure
they are going to implement
and continue to participa
te in it. With minimal expense
nvested, social media
marketing will help boost any
company’s bottom line. Social
marketing is a cost saver
and a volume generator.
Large and small companies are seeing the
benefit of being able to create customers in areas of the world they would
have never thought of
in the past.
Because companies are seeing the benefit in social media marketing, demand for
knowledgeable social media marketers is on the rise. There are now
certifications being offered
from colleges and u
niversities around the cou
ntry specifically in social media marketing.
Dover, M., Salkowitz, R., (2011, January/February). Co
creating your brand with young world
Ivy Business Journal.com
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Evans, D. (2008)
Social media marketing: An hour a day
29). Indianapolis, Indiana:
Wiley Publishing, Inc.
Godarzi, T. (2011, February 10). The problem with social media marketing.
The Blog Herald
Retrieved February 11, 2011
Gordon, R. (2011, February 11). Social marketing drives sign
ups at private
sale site Totsy:
social media week.
Direct Marketing News.
Retrieved February 12, 2011, from
Jost, K., Hipolit, M. (2006, June 9).
Are blogs a passing fad or a lasting revolution?
528. Retrieved January 22, 2011, from
Pickering, C. (2010, November 26)
. Does social media actually work?
Retrieved January 27, 2001 from
Stelzner, M. (2010, April). How marketers are using social media to grow their businesses.
2010 Social Media Marketing Industry Report
27. Retrieved February 02, 2011 from
Thackeray, R., Neiger, B., Hanson, C., and McKenzie, J. (2008, October 9).
otional strategies within social marketing programs: use of web 2.0 social media.
Health Promotion Practice
, 9, 338
343. Retrieved January 22, 2011, from
Wonderlin, S. (2011, February, 10). 5 Reasons to stand by your social media plans.
Retrieved February 10, 2011, from
Wylie, P. (2011, January 27). 5 Ways to use social data to grow your business.
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