Social media's business impact is growing

By now it is clear how media impacts our daily lives. We constantly have any type of screen in front of us whether it’s at work, at home or in class. Over the past couple of years, media outlets have shifted their traditional form of business by integrating their services on the Internet.

Also, social media networks have found ways to profit from their popular sites with new features. Advertisers have jumped on the bandwagon as well by placing ads and commercials within popular sites like Pandora and YouTube. With all of these integrated forms of media and advertising it seems there are new business ventures within this realm. We immediately notice the radical changes Facebook makes to our profiles. Frustration rose when users thought Facebook was going to start charging us for our profiles. Yet, has anyone noticed the “promote” button next to page posts? For different exposure options, Facebook users can “promote” a page by appearing on news feeds of people who like the page. When it comes to music, it feels like about 50 percent of the time I am listening to commercials instead of ’90s throwbacks on my Pandora station. Professionals are even utilizing blogging and exposed journaling for business. Blogs have shifted from their original intent to a form of promoting products. Many people who are active bloggers write about their personal interests or a play-by-play of study abroad trips throughout Europe. Now, blogging brings a personal tone to the products by allowing customers to provide feedback and interaction with the company. A popular site that is relatively new is Pinterest. Pinterest allows users to collect different images onto customized “boards.” These images include instructions for a new recipe, crafts, clothing, funny quotes and more. Some images lead to websites where users can get more detailed information. Online shopping sites have been able to profit from this site because they are able to upload photos of their products on Pinterest. When a user “pins” their photo, they have the option of being guided straight to the site and make a purchase of the item in less than five minutes. It is an inexpensive alternative in advertising your products and a great business venture for companies who are strictly online-based. There is no doubt the importance of the Internet is at its all-time high because of its potential to bring in more business. This integrated media provides businesses with portals to get in touch with potential customers around the world. It will be interesting to see how changes in media will go in hand-in-hand

with new business ventures over the years.

What Impact Does Social Media Have on Corporate Commerce?

A study conducted by the Altimeter Group indicated that companies use social media to accomplish various business objectives, such as increasing annual sales growth. Small businesses recognize the benefit of social media as a communication platform that facilitates two-way communication between a company and its stakeholders. This supports company processes and objectives including customer relationship management, market research, customer base expansion and customer retention, product marketing, cost control initiatives, public relations, sales and recruiting.

Customer Relationship Management

Tom Funk writes in “Social Media Playbook for Business: Reaching Your Online Community with Twitter, Facebook, LinkedIn, and More" that the principle advantage of a social media program is the opportunity to strengthen the relationship between a company and its customers. Through real-time online connections with existing and potential customers, a company conveys information regarding its brand. In turn, the company might benefit from positive word-of-mouth that is exponentially broadcast across a social network. Funk states that the greater the frequency and degree of engagement, the stronger the relationships become and the greater the impact of the relationships on sales, customer satisfaction and product reputation.

Customer Retention

Funk writes that 67 percent of Twitter users who become followers of a brand are more likely to buy the brand's products. This sales result is due in part to a company's use of social media to convey brand values, create positive word of mouth and enforce the connection between the company and its customers. These enhance a company's efforts to build customer loyalty.

Expansion of Customer Base

According to Funk, companies reach new customers through the conveyance of the corporate message on a social media channel, the broadcast of positive customer feedback regarding the corporate message and its products to some of the 100 million Twitter users and 500 million Facebook users, and the conversion of the feedback to product purchases. The broadcast of such third-party endorsements complement such traditional marketing efforts such as print and broadcast advertisements.

Market Research

Stephen Rappaport writes in "Listen First: Turning Social Media Conversations into Business Advantage" that social media is a reliable means to explore the culture, views and lifestyles that influence consumer behavior. The social media arena is a means to profile a target audience to develop marketing and advertising strategies. Social media conversations also alert companies to issues that may negatively affect current market opportunities.

Product Marketing

A product can be directly marketed to the consumer using social media. Such marketing amplifies messages that are conveyed by other product promotions, including website advertisements and press releases.

Achievement of Competitive Advantage

Funk states that 80 percent of Fortune 100 companies are active in one or more social media channels, such as Twitter. The ability to listen to a competitor's message enables a company to develop business strategies and tactics that directly counter that competitor's initiatives. This helps your company to gain a competitive advantage. For example, data transmitted by McDonald's regarding future franchise locations is a key criterion used by Burger King in the selection of its franchise locations. This gives Burger King a cost advantage in terms of saving market research expenses.

Cost Control Initiatives

A reliance on relatively low-cost social media channels to market products to millions of consumers supports a company's efforts to control costs of essential functions, including sales, marketing and customer service. For example, a company can maximize its return on marketing dollars by relying on social media to reach some customers rather than higher cost television advertisements.

Public Relations

Corporate news can be conveyed to an audience in real time using multiple social media channels such as Facebook, Twitter and LinkedIn. According to Funk, a legal or investor relations department relies on multiple social media channels to improve audience engagement, which is key to the success of efforts to control bad news that can "go viral" or be quickly disseminated to a large number of social media participants once the news emerges.

Sales

Funk states that sales can be increased by adding social media functions to corporate websites. For example, customer product ratings, "fan" and "email friend" options serve as ways to engage website users. This leads to user and company engagement that contribute to increased product sales.

Recruiting

In "Social Media for Business: 101 Ways to Grow Your Business Without Wasting Your Time," Susan Sweeney writes that the social media platform is a cost-effective way to directly reach potential employees in that four out of five online Americans participate in a form of social media each month. Such a program also is a means to determine if a recruiting program resonates with potential employees through the feedback the company acquires regarding such items as the positions advertised and the recruitment program itself.

The Positive & Negative Impact of Digital Media on Business

Modern media is no longer confined to a television or radio show, newspaper or advertisement. Instead, today's media -- from text to video and sound -- can be saved and shared electronically, using everything from desktop computers to small mobile devices. This electronic dissemination of media has had a powerful impact on the way people communicate for personal reasons, school and even business. However, digital media has not had only a positive impact on business.

Faster InformationThanks to digital media, companies can get their information out to the public faster than ever. Instead of printing inserts and waiting for the Sunday paper to announce their sales, companies now can let the world know about an exciting promotion through email, social networking, their websites and Internet ads. However, digital media can spread bad information about a business just as fast as it can spread good. A video or camera taken with a cell phone or a Facebook status update featuring a company secret or faux pas can go viral within minutes, leaving a business's reputation damaged when business before digital media would have been able to clear up the mess long before it went public.

Greater ReachDigital media means businesses can reach more customers than ever before. A simple promotion featuring a giveaway or a freebie can earn a business hundreds or thousands of Facebook fans and email and text message subscribers, meaning that the business can send a message to these consumers with just a touch of a button. However, digital media also means that those consumers can reach back. Through negative comments to your Facebook page and other social networking sites, like Twitter and your blog, customers can use digital media to take a complaint that would have otherwise been between the two of you world wide.

TechnologyUsing digital media means using new technology both to create and support the media. New technology can be an asset for your business. When you adopt smartphones and laptops in order to use digital media, you also can positively influence other areas of your business. For example, such mobile technology makes communication among employees much easier. However, new technology is expensive, and sometimes it does not have the positive effect its champions think it will have. For example, "Information Week" notes that a number of companies gave its employees home computers when the Internet first became popular hoping that those employees would be a positive influence for the company online. However, the program really ended up causing support and tax problems for the companies and employees.

OptionsThanks to digital media, businesses now have many more options that they can choose from when seeking to get word out about their businesses. Instead of choosing among a TV or radio commercial or a print advertisement, they can now create media that is a combination of audio, visual, text and interactive media. This mixed media can appeal to a larger audience with differentiated preferences. However, it is also more costly to keep up with the ever-changing technology and may require the creation of new strategists who can think and create digital.

Negative Effects of Social Media on Business

Only one in seven companies has a formal process in place for the use of social networking in their businesses, a survey by Cisco Systems Inc. revealed in 2010. The same survey also noted that only one in five companies has established a policy about the use of social media. This lack of formalized attention is unfortunate considering the varied risks and negative effects on business that are associated with social media.

Burden of the Marketing Shift

Business marketing now involves personal engagement with customers; campaigns that do not invite consumer interaction risk being unsuccessful. While social media-based marketing can be used effectively, businesses that are used to providing a one-sided sell must now learn how to develop a relationships with people buying their product. Instead of releasing statements about product lines, companies have to develop stories that promote the culture of the product instead of simply outlining its particular benefits.

Increased Customer Power

In the days before social media, negative company experiences might stay within an individual's circle of friends; now, stories of bad customer service and disappointing products can run quickly through social media networks. It has become more difficult for companies to contain its negative publicity. The upside is that as much as bad publicity spreads more quickly, good publicity spreads more quickly as well.

Tracking Negative or Misleading Statements

Social media is an enormous conversation everyone is invited to join; with all that talk, it's difficult for businesses to track statements about their brand that are negative or even defamatory. Companies have the added burden of tracking statements and responding when necessary; the response, however, might be of limited effect if the negative statement has already made the social media rounds.

Accidental Release of Confidential Information

Individuals with inside knowledge of the company might inadvertently blurt out confidential information, damaging the company's competitive advantage. Before social media, a letter sent to the wrong address or even an email that ended up in the wrong inbox could be retrieved and the information kept under wraps. In the world of social media, the sheer numbers mean that once confidential information is out, it's out.

Unauthorized Employees Speaking on Company's Behalf

It's difficult for companies to monitor employee social media activity and prevent them from speaking on company matters without authorization. In the era of engagement, companies might strive for employees to have the ability to assert their personalities online; however, this freedom comes with the risk that even a well-meaning social media post about a company's perceived objectives and direction can damage the company's reputation or challenge the company's assertions to investors.

Goals for Social Media for Business

Many businesses have turned to social media as an effective new way of promoting themselves among a broad demographic. Because people in just about every age group participate in social media, companies have recognized it as a more personal way to connect with likely customers. While the business uses of social media are potentially tremendous, it doesn't pay to set up social media accounts without thought for expectations or return on investment. Any business participating in social media should have some specific goals.

Brand Awareness

Social media helps to increase brand awareness for a business -- a core goal for using this type of marketing tool. Companies can use social media as an effective way to communicate profiles that explain who the company is and what it offers. The goal of using social media for this purpose is to reinforce other methods of advertising and marketing in order to solidify the public's awareness of the company as a brand.

Community Goodwill

Many companies use social media with a goal of building goodwill in the community. The company may add other company profiles to its page or link to other businesses in order to form social media networks. The company can then use such networks to publicize community events and help build involvement in them. In this way, the company builds its image as a true community partner that actively participates in meeting the community's needs.

Customer Incentives

A company might also use incentives at its social media site with the goal of both rewarding those customers that "follow" it and encouraging more customers to join in. Special deals and promotions at a company's social media sites can attract new followers. The company also can capture information in this manner. The business might use other media to drive traffic to its social media site with the goal of increasing both awareness and return traffic through the coupons and special offers.

Potential Leads

A final key goal of social media for business purposes can be to generate potential client leads. Depending on the industry, a business might gain greater visibility through its social media sites than through other, more traditional means, such as print advertising, event marketing or cold calls. This has the potential to allow the business to turn these online interactions into genuine business relationships.

The Importance of Integrating Social Media and Small Business

Small businesses have a lot to gain by integrating social media websites into their general Web presence. Not only do social media sites like Facebook and Twitter serve as general hangouts, but they also provide opportunities to spread your message as a business, to connect with your target audience better and to get to know your fellow small business owners more personally. Because social media has no hours of business, you can interact and connect at anytime from anywhere with an Internet connection.

Connecting With Consumers

Combining your business with various social networking sites gives you the ability to connect with your consumers directly. It's about more than being able to communicate news and updates directly to your fan base in an instant; if there's an issue, you'll be able to fix problems personally and as quickly as possible. It also gives your consumers a way to talk to each other. By being connected to your consumers and clients, you'll have a better understanding of what they like and don't like about your business -- giving you the opportunity to make informed changes to your products and services faster than ever.

Affiliation

When you begin networking on social websites, you'll start encountering other business owners and people in your niche. This gives you the opportunity to discuss current issues in your market, as well as affiliate with similar businesses. You can share ad space, promote each other on your social websites and swap leads for work and ideas for further expanding your reach with the market.

Referrals

Expanding your business via social media isn't only about self-promotion, but about creating word of mouth on a digital scale. When you have one satisfied customer who talks about your product or services, it generates interest that can lead to more business. While this isn't the kind of return you're likely to see when you first integrate social media into your business, over time -- as your reach and your clientele grows -- your social influence is likely to help.

Inexpensive Advertising

While social media cannot replace traditional advertising in your marketing plan, using social media websites to market your products and website helps expand your reach without increasing your cost. The most popular social networking sites offer free accounts, and do not require any expertise outside of good written communication skills.

Expanded Reach

A small business can only reach so far, especially if, as the owner, you're the only employee. When you've got to do everything, trying to expand your business can fall by the wayside. The beauty of social networking is that it's built to be shared. When you post something to your blog and share it on Twitter, it goes to every single follower. Of the followers who see that, a couple of them might share it with their followers. When that message is scattered across several different networking websites -- such as Twitter, Facebook and LinkedIn -- it has the potential to reach consumers who would have otherwise never heard of your business.

Role of Social Media Marketing for Business Development in PakistanEveryone knows how Facebook came into existence when bunch of college students created a website to publish their pictures on it and later on it became the internet phenomenon. The way social media marketing is being adopted Facebook will become one of the most important marketing channels in the world. Facebook is on track to generate more the $2 billion in ad revenues in 2010, far surpassing the earlier estimates of around $1 billion, and will likely double this figure in 2011, as more marketers are shifting budgets from TV, Radio, and print to the social realm. Proctor and Gamble Pakistan was the first

one to decide that it would transfer the majority of daytime TV advertising budget to social Media platforms like Facebook, Twitter, YouTube and LinkedIn.

It’s not just Facebook that is having an impact on social media marketing in Pakistan; Twitter, Blogs, Forums and YouTube is having a profound impact on how consumers interact, find products, get deals, shop and get information. For marketers, Social Media platform is not just a channel, but it’s an important part of their marketing plan. Social Media Marketing impacts all of a brand’s marketing campaigns, with free viral “sharing” beginning to surpass paid marketing channels like search engine marketing, display, and print advertising at diving large audiences to campaign pages and brand websites.

In 2010 when Social Media platform Facebook was banned in Pakistan, many small businesses are affected by it. According to social media marketing pioneer Shahjahan Chaudhary, there are at least 500 companies in Pakistan with a Facebook presence. “Smaller local companies have the most to lose from the ban,” he says. “Brands like H Karim Buksh, Hassan Shehryar Yasin, Ego, Bling, Hina Khan, Gunsmoke and Daman rely on the site for advertising.” While he was unable to quantify the loss that Pakistani businesses would face during the days without Facebook he estimated it could cross into millions. “If you inform 45,000 fans about an Rs1, 000 product and 4,000 of them buy it that means Rs40, 000 in profits.

The fashion chain labels like, Zahir Rahimtoola, shared that without their fan page, customers will not be informed about at least three upcoming events. “The cost for placing an ad on Facebook is too small or unimportant”, was according to Afzal Hussain, regional director business for Pirana. While a standard ad in most Pakistani websites can cost Rs10, 000 to Rs35, 000, an ad on Facebook costs 3 to 10 cents.

When it comes to Social Media Marketing, there are literally hundreds of services available to develop you brand name online – Twitter, YouTube, Google Plus, blogs, forums are just few names to be mentioned here. In fact, any social media platform that allows conversational interaction is the highest ranked venue for the rapidly growing fields in Social Media. With millions of users and billions of monthly page views, no business, large or small can ignore social media anymore in Pakistan.

Implementation of ideas like Group buying, daily deals, online discount, online stores, bakeries taking orders on fan pages, etc all together are a clear impression of business development on Social Media in Pakistan.

Are you engaging in Social Media or still trying to figure out what it’s all about?

You’re not alone. Most companies know of Facebook and Twitter but don’t know how they can use Social Media to grow their business.

A recent study by the Direct Marketing Association’s (DMA) Social Media Council, which surveyed 40% of the Fortune 100, revealed the following interesting stats:

Nearly 60 percent of respondents believe social media can have a high impact on brand awareness.

Close to 40 percent of respondents have a social media pilot underway at this time. Greater than 70% of those surveyed currently use external social networks for collaboration. External social networks are believed to have the most potential value to respondents’

respective organizations, above all other top emerging technologies. More than 45 percent believe social media can greatly impact capturing customer insights

and feedback.

Seven Uses of Social Media

While the opportunities are unlimited, here are 7 ways your company can get involved in Social Media to impact your business. Click on Learn More to get more about each topic.

1. Business Development & Revenue Generation Post a special offer to followers on Twitter and watch sales grow. The opportunities to leverage Twitter and other Social Media sites to drive revenue are endless.

2. Customer Service & Customer Insight Actively monitor social networks for mentions, complaints and suggestions; then react swiftly and directly. Energized, enabled customers become powerful evangelists!

3. Brand Communication & Brand Awareness Leveraging social media platforms, companies can drive brand awareness and manage brand communication (PR 2.0).

4. Market Research Social Media provides immediate access to a follower base (and through them their followers) to gauge consumer perspective. Social Media sites can be used to mine for data, research or even solicit user-generated-ideas.

5. Competitive Research A wealth of information and data are available on Twitter, LinkedIn, Plaxo and other Social Media sites. In addition, take the customer service example above and simply turn your monitoring toward tweets concerning your competition.

6. HR / Candidate Search & Research Using Social Media to find candidates increases the “Word-of-mouth” factor while giving you immediate access to their references through the candidate’s own social network.

7. Internal Corporate Collaboration & Innovation Now commonly referred to as Enterprise 2.0, social networking frameworks provide companies with long-sought methods to foster better internal communication, collaboration & innovation – while reducing time and cost.

conclusion

However, I contend that in the next few years, these technology based social media platforms will make it more difficult for marketers to target consumers due to fragmentation. This fragmentation will be aided by the increase in technological devices such as iPhones and iPads. This is because the use of such

devices cuts across the traditional age, gender and income group segments. This is also likely to reduce the effects of mass marketing techniques and brand loyalty.

In conclusion, even though social media platforms will continue to create opportunities, it remains to be seen if these myriad of opportunities can be converted into significant revenue growth by companies.