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Here's Why Social Media Marketing Is Big Business
Posted on July 29th 2014
Marketing technology bandwagons are a great thing, especially when businesses can get in front of them. From the first companies in the 90’s Dot-Com boom to the first campaign on Pinterest, there’s a huge value in going into uncharted marketing territories with a vision. That vision, extended to all marketing mediums, presents a real opportunity for the winners of tomorrow. Today, these “uncharted” territories tend to fall into three categories: social, local and mobile.
Once just a playground for teens and college kids, social media has evolved into a pillar of communication in life for nearly every one of us. It’s no surprise that social media marketing quickly followed suit, ingraining itself into the business models of both the platforms (Faceboo, Twitter ect.) and the advertisers (anyone looking to have their message heard). At the core of this dynamic is content (including organic, native and paid) and investments are booming, as shown below.
The reason social media investments are booming comes down to three core driver: Ecommerce, Customer Lifetime Value and the Zero Moment of Truth (ZMOT). Simply put, social media marketing allows companies to build an owned following and have the ability to reach out to customers without interrupting them like a radio commercial would. This reality is why social media cannot be matched by mediums like PPC, SEO or content marketing alone.
Social media now even allows companies to sell products beyond their websites and on Facebook or Twitter, a revolution for ecommerce and a great reduction in friction for conversions and sales. Social is growing into a powerful tool, and in the right hands, it produces both short and long term value for businesses.
In a world where businesses are judged by the quarter, it can become easy to neglect long-term revenue drivers like customer lifetime value and the zero moment of truth. Resultantly, companies typically tend to focus more on proven “must-have” methods such as SEO and content optimization, leaving social as a side-project. Although short-term revenue drivers like social ecommerce are still in an infantile stage, social media currently plays a huge role in the early stages of the customer lifecycle and ZMOT, or word of mouth marketing as it pertains to digital media.
To consider the value of social, we need only see how company praises and criticisms can spread like wildfire on networks like Facebook, Twitter and Reddit, and the resultant booms and busts that tend to follow because of the bandwagon effect. When a customer is happy or unhappy with a product or company, they don’t just tell their friends anymore- they tell the world and people respond.
Resultantly, opinions are then aggregated and shared online and reviews are combined and sorted for potential new customers in an Amazon-like style. Due to social factors, the tides of customer and industry blessings can change in an instant, necessitating flawless conversion marketing, value delivery, conflict resolution and amplification of positive experiences on the business end. Whether a customer is in discovery to post-purchase, social can now play an important role in the entire buying cycle. For businesses, certain tools like social suites and remarketing platforms, can help to move customers along this cycle, boosting satisfaction and the bottom line of social ROI.
The chart below illustrates the percentage of total web generated traffic by popular channels (including SEO, social and direct), where you’ll noticed inbound mediums received a disproportionate percentage of marketing investments given the traffic generated. For social, considering:
1. the amount of web traffic it drives
2. the ability to quickly communication with customers
3. the ability to disseminate information
4. the ability to resolve disputes
5. the ability to drive sales
Social starts to been seen as the core marketing pillar that it is.
Yet, as any marketing professor will tell you, we must always be mindful of the need for a strong marketing mix. As overreliance on any one channel can become a competitive weakness, diversification into other marketing mediums such as SEO, PPC advertising and site and content optimization becomes critical. Because the digital landscape is ever changing, companies with the foresight to experiment translating messaging across new customer-connected mediums will own their territory online and grow over time.
Tying it all back to the bottom line, though multichannel attribution and powerful (and even free!) tools like Universal Analytics, we can then backtrack sales and the return on investment to specific marketing channels to repeat what works and change what doesn’t. Over time, this will prove true what many companies are coming to know- Social media marketing isn’t just child’s play- It’s big business!
Share in the comments section down below how your organization is using social media and the results you’ve seen over time.
Originally posted at the MITX Innovation Blog.
Image via Flickr