Investment In Social Media - Research Paper Example

? Investment in Social Media The recent technological advancements have led to increase in internet usage and telecommunications networks that foster social commerce through social media. Ideally, social media has the capacity to facilitate the exchange of business information between different parties, enable business planning, and create new markets using the social media platforms. Facebook, Twitter (Ghali, 2011), My Space, and YouTube are some of the common social media platforms that significantly enhance business interactions, provide updated business information, and facilitate business operations. Notably, the social media merits include flexibility, visibility (Burg, 2013), human nature, and its ability to address customer needs. As such, business owners and online shoppers are finding it irresistible. However, even as more business owners continue to use social media for business, they face the challenge of measuring the time they should consume online and assessing the value of social media investment (Ghali, 2011). Specifically, business owners lack the knowledge of determining the Return on Investment (ROI) with respect to social media investment (Burg, 2013). This paper seeks to address ROI in perspective of social media and equally draw the relationship between social media, E-commerce and social commerce. Moreover, the paper will also discuss marketing through social media. It is quite clear that business owners encounter various challenges with respect to investing in social media. Among the social media challenges they face include lack of time, lack of knowledge on how to determine the return on investment, and absence of social media operational skills. Nevertheless, determining the social media ROI remains as the fundamental problem to most business owners (Kelly, 2012). In addressing this challenge, we should first define ROI. ROI is the most common profitability ratio that establishes the efficiency of an investment. In this context, ROI will measure the returns from a social media investment. However, it is factual that calculating ROI is difficult, may not be perfect, and depends on the applied returns and costs. Actually, there is no universal way of measuring the ROI of the social media commitments (Kelly, 2012). As such, some business owners tend to count how many Facebook fans and Twitter followers they have or how many retweets and likes they enjoy. However, this may not be an effective measure of ROI. We can measure ROI using metric tools that foster conversion measurement and optimized CPM, which enables Facebook ads to reach the target audience (Burg, 2013). This enables the investor to know who clicked through their ads thus enhancing future business planning. In addition, we can measure ROI by analyzing interactions by multiplying the number of received likes by the number of friends of those likes witnessed the action. This defines how far the advert went. Moreover, we can analyze traffic to determine the ROI in social media efforts (Harden & Heyman, 2011). Indeed, different social media understand the business owners need to evaluate their ROI in social media and thus there is a provision for built-in analytics tools for following engagement, likes, and shares (Burg, 2013). This helps the marketers to determine how often people find the marketer’s page through the social sites. For example, on Facebook, one can analyze the comment to like a ratio of posts while on Twitter, one can analyze the retweets to tweet ratio. Notably, the higher the ratios, the higher the ROI is. In addition, we can analyze the website analytics against pay per click or the average cost of those PPC campaigns per person in relation to the free social media placements (Burg, 2013). This derives a clear picture of the effectiveness of the social media investment. Another mode of measuring ROI is by determining the number of people that has a potential of interacting with the marketer while using the social media (Ghali, 2011). This enables the investor to deduce his market scope. More so, one can establish what people are saying about their business on social media to ascertain their ROI. The measure of sentiment is relevant in defining the attention that a certain brand is getting on social media. The attention on the social media directly relates to the ROI of the investor (Kelly, 2012). Notably, measuring sentiment with respect to prior performance is a sure way of determining ROI. We can actually establish this by calculating the total number of mentions, and attempt to determine if the mentions are positive, negative, or neutral (Ghali, 2011). Additionally, we can determine ROI by evaluating how one’s audience is engaging with your content and what they are saying about the brand (Ghali, 2011). Indeed, we can ascertain this by measuring the social media shares, which may include likes and retweets in relation to your product (Harden & Heyman, 2011). Notably, the measure on engagement helps the marketer to determine whether their product resonates with their target audience and thus their ROI. Another measure that determines one’s ROI is the measure on what the audience is saying about your brand, which you are not providing (Ghali, 2011). This helps the marketer to gauge the effectiveness of their social media commitments. Ideally, we can establish a direct relationship between the social media, e-commerce, and social commerce. Indeed, the growth in technology led to the introduction and use of internet connections that hosts social media, e-commerce, and social commerce. More so, telecommunication networks link e-commerce, social media, and social commerce. At the same time, we can establish that e-commerce, and social commerce is business strategies that depend on social media to derive competitive advantage and maximize profits through projected sales turnovers as well as promoting economic development. Furthermore, social media, e-commerce, and social commerce are modern ways of interaction that draw a clear distinction between traditional markets and modern markets. Most assuredly, e-commerce involves a two-way communication between the consumer and the suppliers using social sites to support business relations and operations between the business parties and thus social commerce. Indeed, both e-commerce and social commerce entails all aspects of trade including marketing, ordering, and supply that are available in the social media (Manzoor, 2010). Furthermore, e-commerce supports electronic provision of services that social media hosts. E-commerce uses the internet and social networking technologies availed by the social media to do business. Most importantly, social media, e-commerce, and social commerce rely on internet services to operate. Indeed, even the definition of e-commerce derives the relationship between online services and online business. Most specifically, e-commerce refers to a business in the internet via a computer-mediated network and incorporates all forms of business in the social sites (Goel, 2007). Social media may include Facebook. Twitter, Amazon, Yahoo, and other that encourage social interactions for various purposes that may include business reasons. This establishes the relationship between e-commerce and social media. However, with the ever-increasing internet usage, social media reliance, and rise in e-commerce, e-commerce is gradually becoming social commerce. In fact, social commerce uses electronic commerce and relies on interactions on the social media to prevail. It is very clear from the social sites that e-commerce advertises its products on the social sites for marketing thus leading to the aspect of social commerce (Goel, 2007). More so, e-commerce uses online shopping tools and social site generated contents to do business thus leading to the assumption of social commerce. The social sites which define social media and apply in e-commerce to facilitate business communications and business operations include Facebook, Twitter among others. These social sites equally host social commerce and thus the relationship. At the same time, e-commerce advocates for social sharing through the social media thus promoting social commerce and economic development. Most significantly, social commerce uses social tools like videos, blogs, comments, profiles, and groups in the social sites as well as social sites-generated content to carry out business (Manzoor, 2010). As such, it is clear that e-commerce, social commerce, and social media relate to one another. It is quite true that social media has led to various contributions and changes in business marketing. With the social sites enjoying a huge number of subscribers amounting to more than 1.5 billion, business owners are aware that this offers a significant and effective platform for marketing their products (Zarrella, 2010). As such, many small, medium, and big companies rely on the social media to market their products. Social media marketing involves the use of social networking sites like Facebook and Twitter to display their products to the potential online shoppers. Notably, to establish a competitive advantage in the marketing environment, any company must include an internet marketing strategy in the modern world (Kabani, 2013). The social media marketing goals will aim at strengthening your brand, expanding the target market, increasing sales, and facilitating the purchasing process (Zarrella, 2010). Nevertheless, the social media marketing goals should correlate with the ROI to avoid losses. Generally, social media marketing refers to the process of raise the visibility and enhancing website traffic of business products in the social media sites. Indeed, social media marketing seeks to generate attraction of the company products and encourage online readers to buy the products and share the product’s information with their social networks. This plays a huge role in increasing the audience and customer base of the company’s brand. It also serves the purpose of relaying new product information to the online shoppers. Ideally, the success of social media marketing depends on the listening ability, specialization, and quality, availability of the business representatives to the audience, feedback, and customer satisfaction. At the same time, it is factual that word-of-mouth recommendations by customers in social networking sites propels social media marketing (Kabani, 2013). Notably, we can ascertain that social media has led to various changes in marketing including the 4Ps of marketing. Indeed, the social media requires the company to offer products that will deliver on their promises and work (Cohen, 2010). This is because by using social media, the shoppers have timely knowledge on the company’s new and current products on the advertisement board. Additionally, the social media requires companies to price their products on offer fairly, consistently, and competitively across distribution channels since social media accommodates price transparency (Cohen, 2010). Furthermore, social media mandates the companies to have a presence across a broad array of social media offerings to enable the customers access the product in various places. In addition, social media changed promotion by delegation the role of spreading the word about products’ performance and value to the consumers. As such, social media seeks to know the uniqueness of the product for the consumers and the public want to associate with it. Therefore, modern marketing takes place when consumers converse (Cohen, 2010). In conclusion, I find that social media has the capacity to facilitate the exchange of business information between different parties, enable business planning, and create new markets using the social media platforms like Facebook and Twitter. As such, many businesses are investing in social media. Nevertheless, we can only establish the effectiveness of investing in social media by measuring the return on investment (ROI) although it is challenging. However, various methods effectively measure ROI. We can also trace a direct relationship between the social media, e-commerce, and social commerce. Additionally, social media has many contributions and effects on marketing. Most specifically, social media changed the 4Ps of marketing. References Burg, N. (2013). How to Measure Your Social Media Return on Investment. Retrieved from: http://www.forbes.com/sites/capitalonespark/2013/04/25/how-to-measure-your-social-media-return-on-investment/ Cohen, H. (2010). How Social Media Has Changed Marketing’s 4Ps. Retrieved from: http://heidicohen.com/how-social-media-has-changed-marketing%E2%80%99s-4ps/ Ghali, P. (2011). Calculating Your Social Media Marketing Return on Investment. Retrieved from: http://www.icontact.com/static/pdf/Calculating_Social_Media_ROI.pdf Goel, R.(2007). E-Commerce. London: New Age International, 2007. Harden, L., & Heyman, B. (2011). Marketing by the Numbers: How to Measure and Improve the ROI of Any Campaign. New York: AMACOM Div. American Mgmt. Assn., 2011. Kabani, S. (2013). The Zen of Social Media Marketing: An Easier Way to Build Credibility, Generate Buzz, and Increase Revenue. London: BenBella Books, 2013. Kelly, N. (2012). How to Measure Social Media: A Step-By-Step Guide to Developing and Assessing Social Media ROI. London: Que Publishing, 2012. Manzoor, A. (2010). E-Commerce: An Introduction. London: Amir Manzoor, 2010. Zarrella, D. (2010).The Social Media Marketing Book. New York: O'Reilly Media, Inc., 2010. Read More