Why Social Media for Business and Marketing?

Current Business Scenario & Social Media:

“If You Aren't Online, You Don't Exist!”

The statement, by no means, is an overstatement. Arguably, it applies to almost every human being alive today. The world is flocking towards making their virtual presence felt among their peers and friends. It, though, still remains a choice for us individuals to be on social media platforms or not. But do the businesses of today have this choice?

Simply put – no, they don’t!

The markets have changed and the competition for the businesses has notched multiple levels up in the past decade. The businesses cannot afford not to be on the web today. If we delve deeper into the subject, we would understand the underlying reasons behind it. And so, let’s try to understand this ‘Why’ phenomenon – why is it so important for businesses around the world to be online today?

Let’s begin with trying to get the answers of two basic questions here – what is a business and how does it thrive in the market?

A business can be understood as an entity that offers its products and services to its customers. The customers, in return for their consumption for these products and services, payback to the business in the form of money – real or virtual. And so one important task for businesses here is to make sure they keep their customers close to their chests as when the customers stop buying, they stop paying and the businesses eventually die!

Now for the businesses to make sure the customers keep buying from them, there are few fundamental tasks a business has to perform continuously and one of the key tasks among others is to be seen! And to be seen, what better platform a business can leverage today when nearly half of the human race is on one of the social media platforms that we have today, if not on multiple!

Yes, gone are the days when advertisements could only be done via offline channels and media. The pamphlets and hoardings of the world have largely been replaced by the online visibility of these businesses on various social media platforms. Some of the prominent social platforms of today include the likes of Facebook, Twitter, Instagram, WhatsApp, and YouTube. No matter what you're doing or selling, if it's not online, you're making it more difficult for well over half of your potential market to interact with you. And so, it is more than vital for a business to be on these social media websites.

Web 1.0, Web 2.0, and the Evolution of Social Media:

According to a Wikipedia page, Web 1.0 is a retronym referring to the first stage of the World Wide Web's evolution, from roughly 1991 to 2004. According to Cormode and Krishnamurthy, "content creators were few in Web 1.0 with the vast majority of users simply acting as consumers of content." With Web 2.0, it became common for average web users to have social-networking profiles and personal blogs through either a low-cost web hosting service or through a dedicated host (like Blogger or LiveJournal). In general, the content was generated dynamically, allowing readers to comment directly on pages in a way that was not common previously. 

So where did the Social Media came from? - Social media is seen as an aspect of Web 2.0. Social media enables communication among the users to link to each other and extend this to linkages to the friends/colleagues of each other forming a complex web. And this complex web is what today’s businesses have their eyes on!

Now, let’s take a sneak peek into the world of Social Media. The below graphs show the evolution of MAUs (Monthly Active Users) on various Social Media websites. While few Social Media platforms became more popular than the others, each of these social media platforms witnessed an increase in their MAUs-

Source: Statista and TNW(2019)

Overall, 3.80 billion (49% of the world population) out of 7.75 billion people are active on Social Media today; making it the biggest marketplace in the world. The numbers below make it quite clear the size of the market on Social Media sites -

Source: Hootsuite

Have a look at this interesting data coming from a survey that reveals the buying pattern of different age groups and how the Social Media websites influence and facilitate their buying behaviors-

There are, therefore, a lot of potential points for a business that it can leverage by being on Social Media platforms.

Benefits to Businesses from Social Media:

“Data is the new Oil.”

Probably the most important advantage to a business from its presence on social media sites is the fact that it helps them understand their customers better – with a better understanding of their customers, they have better insights today and they use these crucial insights to make sound business decisions. This is important as now they can back their decision-making by data – the same data they collect from their users on these Social Media websites.

Moreover, today they can segment, target, and place (S.T.P) their product and services with far better efficiencies and confidence than what they could do via the conventional ways of doing business in the recent old times.

The below infographics are just a few examples to show how the data from the Social Media platforms can give the businesses of today numerous insights -

·      Gender and Age profile of users on Instagram and Facebook -

Source: socialbakers

·      Instagram posts per day vs Industry-wise engagement rate -

    Source: Rival IQ

• Facebook posts per day vs Industry-wise engagement rate-

Source: Rival IQ

· Businesses can also pick the Social Media of their choice based on their respective popularities -

Source: Hootsuite

·      Businesses can also see interesting data as per their needs. For example, the below data will help a business in case it wants to target a specific region based on average time spent region-wise -

Source: Statista

·      Can you believe the below chart? A business can decide when to advertise its product in a week and at what time in a day – so much power in the hands of the businesses today!

Best time to post on Instagram -

Source: Sprout Social   

Best time to post on Facebook –

Source: Sprout Social

Apart from Gaining Marketplace Insights, below are some other useful factors that impact the businesses-

•  Increased Brand Awareness – Implementing a social media strategy will greatly increase your brand recognition since you will be engaging with a broad audience of consumers. 
• More Inbound Traffic – Every social media profile you add to your marketing mix is a gateway to your website, and every piece of content you post is another opportunity to acquire a new customer. 
•  Improved Search Engine Rankings – Being able to rank in the top positions for your keywords will revolutionize your traffic and continue to generate positive results for your business. 
•  Higher Conversion Rates – With increased visibility, your business gains more opportunities for conversion. Every blog post, image, video, or comment may lead viewers to your company's website and increase traffic. Social media marketing allows your business to give a positive impression through a humanization factor. 
• Better Customer Satisfaction – Social media is a networking and communication platform. Creating a voice for your company through these platforms is important in humanizing your company. Customers appreciate knowing that when they post comments on your pages, they will receive a personalized response rather than an automated message. Being able to acknowledge each comment shows that you are attentive to your visitors' needs and aim to provide the best experience. 
• Improved Brand Loyalty – Studies show that the segment of customers that engages with a company’s social media posts is 62% more loyal to brands that directly engage with them on social media. Source: https://www.inc.com/geoff-smith/millennials-becoming-more-loyal-in-era-of-consumer-choice.html 
• More Brand Authority – Having customers mention your business on social media will advertise your business, and show new visitors your value and brand authority. Once you obtain a few satisfied customers who are vocal about their positive purchase experience, you can let the advertising be done for you by actual customers who enjoyed your product or service. 
• Cost-Effective – Social media marketing is possibly the most cost-efficient part of an advertising strategy. Signing up and creating a profile is free for almost all social networking platforms, and any paid promotions you decide to invest in are a relatively low cost compared to other marketing tactics. Being cost-effective is such an advantage because you can see a greater return on investment and retain a bigger budget for other marketing and business expenses.

A Caveat of Social Media the Businesses cannot afford to ignore:

The gap between the businesses of today and the customers are increasingly narrowing down as the customers now have better control and more say in the business with their voices being heard and seen. This understanding is very important for the businesses as this renders more power in the hands of their customers and this balance of forces, if not managed well, can make a dent in their business for no good reason – even when all of your business metrics are well-sorted and in place theoretically!

A recent example would be of TikTok. ByteDance’s  TikTok app, which has gained hundreds of millions of users in India with its short-form videos, is facing criticism in its biggest overseas market after disturbing videos surfaced on the platform.

Phrases such as BanTikTok, DeleteTikTok, and BlockTikTok have trended on Twitter in India in the past three weeks after numerous users expressed disgust over some videos that were circulating on Chinese giant ByteDance’s jewel app.

The backlash has resulted in millions of Indians giving the app a one-star rating on its Google  Play Store listing and posting poor reviews that are critical of the app. The app’s overall rating globally has tanked from 4.5 as of earlier this month to as low as 1.2 — until Google intervened.

Conclusion:

Historically speaking, the advent of the Social Media platforms of today has changed the entire world of business practices and how they engage with their customers. This in return has given them a source of invaluable insights and more power to the customers. This new great power to the customers, though, should be managed well by the businesses failing to which can cost them dearly and they can be out of the market sooner than they might realize - a decline in the Brand Equity is only seldom restored!