Part 2:  Why is Social Media Marketing critical to business success?
All the buzz about social media would be a “so what” if it weren’t for the incredible reach of social media. According to WebProNews March 18, 2008, social media has a mass communication reach similar to television. 

Let’s look at the statistics:

• The top 25 social media networks delivered over 155 million unique visitors in Feb. 2008 (70% came from MySpace, Facebook, and Classmates.com).  If add YouTube and Flckr you get another 60 million.  This leads to a grand total 215 unique viewers
• Monthly unique TV viewers in Feb. 2008 was approximately 200 million

In addition, depending on the social network, each unique visitor is looking at 1000’s of pages per month.  The analogy to TV is a relatively good one.  The social media audience is loyal, large and habit-oriented just like TV.  In fact, according to Media Post, November 25, 2008: 

• Demography of users closely mirrors the U.S. population, with over half the Internet users visiting social media sites
• Although 15-34-year-olds account for a significant portion of the visitors, social networking sites are now reaching more than half of 35- to-44-year-olds and more than a third of those ages 45-54

What does Social Media Marketing have to do with business success?

This is best answered by looking at looking at the research Cone/Opinion Research Corporation published in September 2008.  Their findings are delineated below:

• 93 percent of social media users believe a company should have a presence in social media
• 85 percent believe a company should not only be present but also interact with its consumers via social media
• 56 percent of users feel both a stronger connection with and better served by companies when they can interact with them in a social media environment

Couple the above findings with the power of “word of mouse” and you have the perfect storm, namely the convergence of marketing, advertising, and public relations.

This, of course, begs another question:  How can I harness the power of Social Media Marketing?  Stay tuned for Part 3 on May 5th, which addresses this question.

Part 1:  What is Social Media Marketing?

Most businesses back in the 1950’s relied heavily on “word of mouth”.  Of course, there were also several significant advertising mediums available, such as newspaper, radio, direct mail, and the new embryonic media called television.  However, “word of month” played a significant role and for some businesses was their life blood.

In today’s high-tech world, “word of mouth” still plays a significant role. 

Let’s look at some recent statistics:

• Recommendations from family and friends totally outweigh other consumer touch-points when it comes to influencing purchases (ZenithOptimedia, AdAge, April, 2008)
• 86.9% of respondents said they would trust a friend’s recommendation over a review by a critic, while 83.8% said they would trust user reviews over a critic. (Marketing Sherpa, July 2007)
• Consumers say that word of mouth is still the number one influencer in their apparel (34.3%) and electronics (44.4%) purchases (Retail Advertising and Marketing Association/BIGresearch Study, November 2008)
• According to a global Nielsen survey of 26,486 Internet users in 47 markets, consumer recommendations are the most credible form of advertising among 78% of the study’s respondents. (Nielsen, “Word-of-Mouth the Most Powerful Selling Tool”, October 2007)

Undeniably, on the Internet, “word of mouth” has become “word of mouse” and a critical element in influencing the decisions people make.  For example, comScore and the Kelsey Group reported that reviews generated by fellow consumers on Internet shopping sites had a greater influence than those generated by professionals (comScore/The Kelsey Group, October 2007). 

What does “word of mouth” have to do with Social Media Marketing? 

Actually, it has everything to do with Social Media Marketing.  Just consider the results of JupiterResearch.  Online social network users were three times more likely to trust their peers’ opinions over advertising when making purchase decisions. (“Social Networking Sites: Defining Advertising Opportunities in a Competitive Landscape,” JupiterResearch, March 2007).

What is Social Media Marketing? 

From my view point, Social Medial Marketing is a form of Internet marketing which seeks to achieve branding, marketing communication, and sales through:

• Participation in social media sites – such as Facebook, MySpace, Classmates.com, YouTube, Flickr, iBlogBusiness, iBizRadio, LinkedIn, and Digg
• Utilization of social media – such as blogs, micro-blogs (like Twitter), audio/video media & podcasts, and public bookmarks

Now, we are ready to address the key question:  Why is Social Media Marketing critical to business success?  Stay tuned for Part 2, which addresses this question.