Social media has taken over the lives of most online users across different age groups. Social networking sites began to book profits, earned valuations worth billions of dollars and began to make serious, long-term expansion plans. It looks like social media is here to stay. This would be the right time to understand what this means for businesses not just in promoting products, services and offers in the short term but also in terms of market research and innovation in the long haul.
However, before analysing the role that social networking sites will potentially play in promoting businesses, we must probably touch upon the fact that social media is constantly evolving. Some sites make it harder to analyse groups and their activities or are built from a pure networking perspective, like LinkedIn. If we were to refer to social networking sites that offer businesses great opportunities for engagement, they would be sites like Facebook and MySpace where people from an almost inexhaustible number of backgrounds and cultures meet and interact. They throw open different demographics, age groups, personality types, various target groups for businesses to choose from, whether it’s to get opinions or launch a new product at a fraction of the cost. These are also forums for businesses to connect to consumers and build loyalty.
How are short tem revenue and long term innovation affected by social media trends? How can businesses continue to tap into the vast consumer pool existing among social media networks? To boost their bottom line and also enhance the relevancy of their business, products and services?
The double-tier advantage
Social networking sites, like the examples mentioned above, including microblogging phenomenon like Twitter offer a double-tiered advantage. On the first, most basic level is revenue. Businesses can do a vast number of things on social networking sites to boost revenue, they could have a celebrity with huge numbers of followers on a site like Twitter tweet about their products, for instance. They could also advertise a new product in the advertising space provided by these sites or develop customised applications where possible on sites like Facebook. However, the more important and exciting opportunity for businesses on social networking sites is the possibility of engagement. To hear what the customer really wants, to understand their deepest desires and everyday cravings, is an unprecedented opportunity offered by social networking sites. They also work like highly cost-effective market research groups, where a simple ‘status update’ can elicit hundreds of responses.
At this point, as we move on to talking about social media, it becomes important to clarify certain aspects of it. Firstly, social media spurs conversation. Conversation is very different from content, which is usually static and is consumed but does not lead to interaction. Secondly, social media rings in the attention age, where information is at our finger tips but attention is at premium. Given these aspects one can include a whole gamut of online conversations, be it photo and video sharing like Flickr and Youtube or participation in forums, sharing music, using VoIP (Voice over Internet Protocol ) and more.
Immense data pool
A particularly crucial aspect of social media is the vast amounts of user data it helps create. From billions of photos, videos, tweets and posts, there is a never-seen-before quantity of information accumulated in social media networks. Experts see unlimited potential of such tremendous data gathering. Some believe that ‘search’ time for any kind of information will be brought down drastically, considering that so much information is now put together and being made available for internet users. Other experts say that algorithms, which are the backbone of many online media, are now easier to come up with and test due to large volumes of data.
Various communities have emerged with the coming together of social networking and social media. In the near future, social shopping communities could evolve resulting in social commerce. Research shows that businesses must access these networks to benefit from them, so that they can understand them better and offer customised services. This is also important to catch any negative publicity right away, as businesses in these structures will be relying heavily on word-of-mouth marketing and consumer-to-consumer spending patterns. Social media is demonstrating in various ways how it shapes opinions, carries opinions, aids businesses and more. A simple example is how social networking site Facebook has helped financial planners follow leads and get customers. It is said that over 50% of them do so on Facebook. Yet another example is blogging. Everybody from junior execs to CEOs are on blogs these days, airing their points of view and giving people a peek into the minds of business leaders and also inspiring more impressionable users.
Evolution of social tools for business
Indeed social media and social networking sites have done a great deal for businesses over the last two years. With the use of simple technology, it has gathered millions of followers, helping business gain crucial insights into the minds of its customers, promote its brand and more, at a negligible cost compared to traditional market research and brand building efforts. However, businesses must remember, that great advantages come with greater risks. Indeed, social media has raised a number of questions about the safety of the individual. Online users are vulnerable to stalking by marketers, phishing by scammers and identity threats. It could adversely affect businesses if people lose faith in engaging with them online. Some surveys and researchers are showing that social media is having serious offline ramifications, especially on the safety of women or teenagers, who might not be discerning about engagements on these forums. Stricter controls while safeguarding their interests may create a more controlled environment, making it harder for businesses to engage with particular demographics.
Lastly, with the diversification and growth of social media, sites and users are more ‘scattered’ than before. This may increase with time. Besides, social media and sites are constantly in ‘beta’ stage, evolving ever so often. It is now time for businesses to take a more streamlined approach to engaging or generating revenue on social media, through serious strategic planning and implementation efforts. Thus the days of social media bringing about a radical change in the world of business may be in the past. We will probably soon usher in an era of well-thought out marketing initiatives in the sphere of social media.