Impact of Social Media

Collective interchange keeps progressing and becoming more and more advanced. And it is through the new media that our way of thinking, our way of dealing with things and most importantly our ways of communication have altered. In fact, nowadays we talk about the emergence of the Social Media and its impact on our daily life. However, before discussing its effect and influence, by definition, the Social Media is a collection of online channels and technologies that allows, massively, participants to communicate and collaborate, expressing their opinions, insights, experiences and perspectives; Bradley provided us with a more detailed definition in his blog. The Social Media technologies such as wikis, blogs and social networking can include images, videos, text, audio, podcasts and other means of communication. In other words, it’s sort of an online conversational format between the authors and the readers. For additional information about measuring the influence of Social Media, please refer to these slides, an eBook summary about this topic.

To begin with, Social Media and the Web 2.0 are very powerful. They are being introduced to the business world and are playing a major role in helping the businesses and strengthening them. They are not only changing the structures and basics of our nowadays industries, they are influencing and pushing the businesses and the marketers to evolve and to keep track of the speed of this progression, or else they would become “the victims of media survival of the fittest”. Breakenridge and Solis add that these communication and marketing industries are “going through some of the most incredible and dramatic transformations in decades”. However, some companies hesitate about participating in this social media, don’t believe in it and tactlessly underestimate it. These companies will remain unchanged when it comes to the evolution. As for the others, they are experimenting with it, engaging in discussions with customers which strengthens their customer as well as brand relationships and leads them to higher customer value and competitive advantages.

Additionally, this new media has a big influence on decisions concerning the buying and selling processes. Safko and Brake state in their book that the Social Media did not only change the way individuals communicate; it also altered the way companies market and sell. Actually, this two-way communication that occurs between the consumers and the suppliers fortifies a mutual trust and loyalty. Consequently, consumers would be motivated in buying more and being more secure and confident about their purchases. From the sellers’ point of view, the authors claim that we, sellers, should have a “digital presence” that assures the customers that whenever they want us, we are there.

Furthermore, in order to prove this huge impact of Social Media on societies, a study was made concerning the travel agencies. Xiang investigates how much social media appears in search engines when searching for travels online in nine U.S tourist destinations names. The analysis of this study reveals that search engines connect directly the users to social media sites. In fact, this is a confirmation of the rising power of the Social Media in this domain. More generally, when customers want to purchase a certain product or service, they first look it up on the search engines and try to access as much as possible feedbacks provided by previous customers. These previous experiences are very convincing and considerable. When the feedback showed negativity and dissatisfaction, the consumers would move away from this specific procurement and search for a substitute. On the other hand, if the criticism and the opinions showed satisfaction or even delight and a high customer value, they would consider this product / service and would be more enthusiastic and secure about it. As well, they require answers to their questions and a lot of information about their purchase which can be given to them either directly from the sellers the previous consumers.

Researching the impact of Social Media on Business and Decision Making, Jeff Bullas got to twelve outcomes concerning the managers and CEOs. He argues that social networks are being used by professionals for business and corporate purposes, and that each professional uses several ones, indicating that Facebook, LinkedIn and Twitter aren’t any ordinary networks anymore, but professional ones. He also adds that decision making processes are affected now by Social Media where these networks are an “essential decision-support tool”. These changes that are taking place highly affect the organizations. They now understand that they need to gather as much information as possible from these social networks to understand customers’ needs, to communicate and collaborate with them in order to obtain a higher customer value and to make the right decision processes. In fact, due to the Web 2.0, organizations understand more the current and future needs of their customers, thus they would know what to do in order to exceed their expectations and to provide them with delight. And of course, all this leads to a higher revenue for the business and to more cost-efficient processes. Bullas states the following: “Laggards who do not understand the value of social networking and its appeal to the emotional side of customer relationship management will lose competitiveness and, ultimately, market share. Perhaps most importantly, they will lose the ability to connect and learn from their customers”.

Moreover, to explain more the impact of Social Media on businesses, we need to compare the businesses that are using these new tools efficiently to those who aren’t at all, focusing on the income and profit generated in the long run. Blanchard begins his article with assuring us that if the Social Media is not being well applied by the business and is being used for the only purpose of marketing campaigns, we would not see any difference between the two categories. In fact, for those companies, after each good campaign we would see a jump in. But shortly after, things would go back to the way they were before the campaign, and the business growth in the long run would be relatively flat ( it wouldn’t exceed 10% of annual growth). This first image would clarify what is said. On the other hands, when companies are using social media more holistically, they would end up with a large business growth that would keep rising, and here is the second image that shows it and makes you understand and see the difference. These companies are not only using Social Media to attract new customers, they are also working on retaining their previous customers and engaging them in an “active” participation that would make them more loyal and that would fortify the CRM and thus increases “the buy rate”. This created social communication would retain and stabilize the growth of the company instead of having it ended shortly after each campaign.

Through social marketing, companies attract consumers and supervise the word of mouth spread through these sites. “Statistics show that 78% of consumers trust the recommendations of people that they know. Only 14% trust advertisers. These numbers show just how important proper social media marketing is to the advertising industry”. As well, Burson-Marsteller’s global research team studied the top 100 companies in the Fortune Global 500 Index use one or more of the most powerful social media platforms (Twitter, Facebook, YouTube and other corporate blogs). These large companies are interacting with their customers and 40% of them are actually replying to Tweets!

The last aspect I would like to mention about the social media is how it enhances business success. We all know that many tools of this media are for free, and this no cost has the potential of creating very high revenue for the business. As well, the social media “lowers the cost” of marketing and product design, of customer service, restocking payments and growing sales through all customer reviews and ratings and finally it lowers the costs of advertising and PR.

To sum up, the Social Media is a new way or strategy implemented in our nowadays growing businesses. It’s a cost effective strategy where companies can interact with their consumers and that brings traffic to the businesses. This traffic integrated in the social networks allows companies to spread their industries and to inform a much higher number of customers about their products and services. And more importantly it builds loyalty and long term relationships between the buyers and the sellers. The Social Media has changed the marketing business process and the structure of all business, increasing the rate of company’s growth and connecting people all over the globe. As for those who decide to ignore this major and dramatic change, they will pay a pig price and become the victims of evolution.

Finally, I would like to say that I found some very interesting, exciting and even surprising videos about the effect of Social Media. The first two are about the “Social Media Revolution”, one is done in 2009 and the other in 2010. The second two videos are more of educational; the first explains it visually with some funny cartoons and effects, the second one is made by a founder of an important Social Media web and is giving us an important report about the social media marketing in 2011.

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