Social Media 1

povertywhyInternet and Web Development

Nov 18, 2013 (3 years and 6 months ago)

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Social Media
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Social Media










Social Media Can Affect Business Growth

Carolyn A. Carlile

East Carolina University





















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There is a debate in the business world about whether social media marketing affects
business growth.
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

it. They
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
public forum.

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

media networks
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,
and Wal
-
Mart
. He also wrote a book
called
Social Media Marketing: An Hour a Day

in which
he

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
rusted

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
the pr
oduct or service spread quickly and
reach a wider audience
without spending a large amount of advertising dollars. According to an
industry report
by Michael Stelzner (2010), 78%
of the marketers using socia
l media that were
surveyed,
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
l
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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
today’s technolo
gical world.
In an article written by
professional journalist and Executive Editor
of DMNews.com,
Rose Gordon (2011),
Gordon discusses how social media marketing directly
affected bu
siness growth for Totsy, a business

which sells baby gear, cloth
ing, and
prenatal care
products.

S
ince impleme
nting a refer
-
a
-
friend program through social media networks
, Totsy

has

seen a 35% increase in organic growth
.
Gordon
also states that other companies like 1
-
800
-
FLOWERS, Dotbox, and Celebrations.com, have increased t
heir bottom line by increasing
business through social media networks, and
by
not having to buy expensive media advertising.

Companies
are

always

looking to grow their customer base to increase business.

Social
media networks allow

companies to reach customers that they would never have been able to

reach

before.

Dover, a managing partner at SocialTrust Advisory Group, and S
a
lkowitz,
principle and strategist for MediaPlant, LLC,
point out one possible reason for this growth in
thei
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.

They state
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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
expense.

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
e
looking for. For businesses, this takes the guess work out of what products will sell in the new
global market. The data collect
ed

greatly minimize
s

the companies risk by
allowing them to
provide

product
s

they know will sell in these economies.
The aut
hors do warn that marketing to
a global economy using social media networks does have some risk associated with it.

The
biggest risk is
in marketing to countries with
differin
g cultural values. Companies

have t
o
research global value systems

and make sur
e they are speaking to specific consume
r groups,
without

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

with
proper word of mouth adv
ertising. When there are too many differing opinions

about a product
or service

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
es.

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
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dire
ctly with their customer base.
Stephanie Wonderlin (2011), Director of Social Media for
Digital

Street in Austin, Texas, and guest blogger for central
Illinois Fox news station,
points o
ut
that social media allows instant access to an
audience, and provides more staying power than
most traditional marketing campaigns.

Wonderlin
states that customer
s do not like to do
b
usiness with faceless companies
they know nothing about. Social media marketing allows
customers to know more ab
out a company,
its

philosophy, and how it

operate
s
. In addition,
customers can discover

new developments directly from th
e company

itself
,
rather than

through
a third
, likely

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
plea
se them, and they are more likely to recommend a company or product to a friend.

By being
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
marketing

programs in the health care industry.

They state it is the
fastest

and easiest way

to
increase product awareness
. They also discuss the benefits that social media marketing prov
ides
including viral marketing
and consumer
generated advertising. Communicating directly with the
consumer provid
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
ie (2011)
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observed in his article written in the Social Media Examiner, social listening is important to any
business
. He calls it “
listening data” and states that the practice
allows a co
mpany to get a sense
of how its
customer
s

perceive

its products or
services which
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
chal
lenges that companies will face in the near future.


Negative
advert
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
resources
that appear to b
e accurate
are factual. Anyone with

access to the internet
can start a
blog;

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
important to
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
y effect
ive when used the right way and
should
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
med
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
s
ocial me
dia sites. Godarzi warn
s if you do not have worthwhile content to share, post, or blog
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about, it is better not to place anything on the social media sites just to stay in front of the
customer.
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

thi
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
Xinu to
name a few. Peter Wylie

(2011), Social Media Examiner contributor discusses
the use of real
ti
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

modifica
tions” to a marketing
campaign. With the introduction of tracking software for tracking customer behavior,
businesses
can
know

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
growth
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.

By
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
if

a product or
service is going to be accepted by the public
. If

it is not, a company can quickly remedy a
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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
bus
iness through a whole new customer base.
While
there is some risk involved in s
8

ocial
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.
Pe
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
-
reaching

and effective
. Industries
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
out how
they are going to implement
and continue to participa
te in it. With minimal expense

and
time i
nvested, social media
marketing will help boost any

company’s bottom line. Social
media
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.







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References

Dover, M., Salkowitz, R., (2011, January/February). Co
-
creating your brand with young world
consumer entrepreneurs.
Ivy Business Journal.com
. Retrieved January 27, 2011, from
http://www.iveybusinessjournal.com/co
-
creating
-
your
-
brand
-
with
-
young
-
world
-
consumer
-
entrepreneurs

Evans, D. (2008)
Social media marketing: An hour a day
(pp. 19
-
29). Indianapolis, Indiana:
Wiley Publishing, Inc.

Godarzi, T. (2011, February 10). The problem with social media marketing.
The Blog Herald
.
Retrieved February 11, 2011
from
http://www.blogherald.com/201
1/02/10/the
-
problem
-
with
-
social
-
media
-
marketing/
.

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
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-
mark
eting
-
drives
-
sign
-
ups
-
at
-
private
-
sale
-
site
-
totsy
-
social
-
media
-
week/article/196166/
.

Jost, K., Hipolit, M. (2006, June 9).
Are blogs a passing fad or a lasting revolution?
Blog
explosion
,
16, 505
-
528. Retrieved January 22, 2011, from
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6060900&type=hitlist&num=3
.

Pickering, C. (2010, November 26)
. Does social media actually work?
Ezine articles.com.
Retrieved January 27, 2001 from
http://www.ezinearticles.com/?Does
-
social
-
media
-
marketing
-
actually
-
work?&id=5400593
.

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Stelzner, M. (2010, April). How marketers are using social media to grow their businesses.
2010 Social Media Marketing Industry Report
, 6
-
27. Retrieved February 02, 2011 from
http://socialmediaexaminer.com/social
-
media
-
marketing
-
industry
-
report
-
2010/
.

Thackeray, R., Neiger, B., Hanson, C., and McKenzie, J. (2008, October 9).
Enhancing
prom
otional strategies within social marketing programs: use of web 2.0 social media.
Health Promotion Practice
, 9, 338
-
343. Retrieved January 22, 2011, from
http://hpp.sagepub.com/content/
9/4/338.full.pdf+html
.

Wonderlin, S. (2011, February, 10). 5 Reasons to stand by your social media plans.
Social
Media Today.com.
Retrieved February 10, 2011, from
http://socailmediatoday.com/stephaniewonderlin1/269019/5
-
reasons
-
to
-
stand
-
by
-
you
r
-
social
-
media
-
plans
.

Wylie, P. (2011, January 27). 5 Ways to use social data to grow your business.
Social Media
Examiner.com
. Retrieved February 02, 2001, from
http://socialmediaexaminer.com/5
-
ways
-
to
-
use
-
social
-
data
-
to
-
grow
-
your
-
business
.