Does Social Media Marketing Really Work?

In these tough economic times, many companies are tightening budgets and making cuts, social media channels provide a cost-effective way for companies to promote their business and increase website traffic. Use of websites like Facebook and Twitter has exploded in recent years, among both consumers and companies: in 2012, more than 1.4 billion people used social media networks (www(dot)emarketer(dot)com, 03/12/12). This was a 19% increase from the previous year. Figures like this have encouraged companies to increase their online marketing spend. Yet is this leap in use achieving results? Or are companies wasting their money and potentially driving away consumers by entering websites primarily used for personal and social interactions?

Social media has undoubtedly revolutionized the way in which marketers and advertisers work; they provide a vital way of targeting certain demographics of consumers, building relationships, and networking. The billions of people who use social media networks are a prime target for online marketers and many companies have adjusted their budgets accordingly. As the online advertising spending statistics from www(dot)go-gulf(dot)com show, billions are being spent on social media ads. For example, in the U.S., 2.11 billion dollars were spent on social media adverts in 2012 alone (www(dot)go-gulf(dot)com). The same data showed that 89% of advertising agencies planned to use Facebook, 39% Twitter, 21% LinkedIn, 36% YouTube, and 18% Google Plus.

However, a recent study by Pitney Bowes Software highlighted the fact that some companies may be in danger of overcommitting to these channels:

“The survey found stark disparities in the concentration of consumers on certain social media networks, compared to the percentage of marketers on those channels.” (www(dot)emarketer(dot)com, Dec. 2012).

This survey discovered that there were discrepancies between the proportion of consumers on certain social media websites and to the proportion of marketers. On Twitter, for example, 57% of marketers reported using the website compared to 31% of Internet users. Regarding LinkedIn, 50% of marketers said they used the website compared to 19% of consumers. In contrast, statistics regarding YouTube showed that 53% of internet users said they used the site while just 41% of marketers said the same (www(dot)emarketer(dot)com, Dec. 2012). These figures demonstrate that whilst the potential of this type of online marketing is considerable, these websites must be used smartly and companies must match their use to the number of consumers also using the site.

Nevertheless, the power of the internet and of social media remains considerable for attracting new customers, for SEO purposes and for increasing website traffic – it is difficult to believe that companies would be investing billions of dollars in it it wasn’t providing results. Additionally, social media channels offer a unique way of connecting with overseas consumers. Of Facebook’s 400 million users, for example, 70% live outside of the United States.

To conclude, whilst social media is potentially a powerful marketing tool, overuse can be a waste of company resources. Additionally, it is worth expanding use beyond Facebook, LinkedIn and Twitter. Pinterest is certainly underused and, especially in the creative industries, it provides an effective way of communicating with consumers. The huge growth of consumers on these websites is exciting and its potential use for marketing is endless but it must be used smartly if it is going to provide return on investment.


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