Impact of Social Media on Businesses

Contents
INTRODUCTION ............................................................................................................................................. 3 What is Social Media??? ........................................................................................................................... 3 Evolution of Social Media ......................................................................................................................... 3 SCOPE OF PROJECT ....................................................................................................................................... 5 IMPACT OF SOCIAL MEDIA ............................................................................................................................ 5 Proliferation of corporate engagement in Social Media .......................................................................... 5 Business applications ................................................................................................................................ 6 Use of Twitter........................................................................................................................................ 6 SOCIAL MEDIA & CUSTOMER ENGAGEMENT ............................................................................................... 6 Example: STARBUCKS ................................................................................................................................ 7 SOCIAL MEDIA MARKETING .......................................................................................................................... 7 Why you need to consider social media marketing services? .................................................................. 8 LEARNINGS & CONCLUSION.......................................................................................................................... 9 Approach to Social Media (OASIS) ............................................................................................................ 9 Best Practices in Social Media................................................................................................................... 9 Graph 1 External use of twitter............................................................................................................ 11 Graph 2 Internal Use of Twitter ........................................................................................................... 11 Graph 3 Most common Sales uses of Social Media ............................................................................. 11 Graph 4 Shift in Future Uses for Sales.................................................................................................. 12 Graph 5 Common Marketing uses of social media .............................................................................. 12 Graph 6 Shift in Future uses for Marketing ......................................................................................... 12 Graph 7 Attitude of organization towards Social Media ..................................................................... 13 Graph 8 Challenges identified by the organizations ............................................................................ 13 Graph 9 Responsibility of Business Function for Social Media in an Organization .............................. 14 Graph 10 Ford gained big way from marketing on social media ......................................................... 14 Graph 11 Use of User Generated Content ........................................................................................... 15 Graph 12 Metrics used to measure value of Social Media activities on Business ............................... 15

INTRODUCTION
What is Social Media???
Social media technology involves the creation and dissemination of content through social networks using the Internet. The differences between traditional and social media are defined by the level of interaction and interactivity available to the consumer. Use of social media has created highly effective communication platforms where any user, virtually anywhere in the world, can freely create content and disseminate this information in real time to a global audience ranging in size from a handful to literally millionsin less time than it takes to read this document. There are many types of social media tools but the common link among all forms is that the content is supplied and managed by individual users who leverage the tools and platforms provided by social media sites.

Evolution of Social Media

Social media has become an integral part of modern society. There are general social networks with user bases larger than the population of most countries. There are niche sites for virtually every special interest out there. There are sites to share photos, videos, status updates, sites for meeting new people and sites to connect with old friends. Precursors to Social Media Usernets BBS (Bulletin Board System) Online Services CompuServ & Prodigy

First conceived in 1979 by Tom Truscott and Jim Ellis to let users post articles or posts to newsgroups Came online in late 70s and were the first type of sites that allowed the users to log on and interact with one another

like First real corporate attempts at accessing internet. CompuServe was the first company to incorporate a chat program into their service. AOL started as an online service too and made great strides at making the Internet more universally accessible in the U.S. IRC developed in 1988 and ICQ in mid-90s They allowed users to create profiles with photos and contact other users. However, these rarely used to allow keeping a friend list These were really descendents of the BBSs popular in the 70s and 80s, but usually came with a more user-friendly interface, making them easier for non-technical visitors to use. Launched in 1997, was the first modern social network. It allowed users to create profile and become friends with other users

IRC (Internet Relay Chat), IRQ Early Social Networks Dating Sites

Forums

Six Degrees

LiveJournal

Started in 1999, LiveJournal was built around constantly updated blogs. It encouraged users to follow one another, create groups and interact.

World of Warcraft/MMORPGs

Massively multiplayer online role playing games became popular social networks in their own right. Major Advances in Social Networking Friendster Founded in 2002, first modern general social network. It was in part new kind of dating site. Hi5 Established in 2003, another major social network. Profile privacy works a bit differently on Hi5, where a users network consists of not only their own contacts, but also second (friends of friends) and third (friends of friends of friends) degree contacts. LinkedIn Founded in 2003, first mainstream social network devoted to business. LinkedIn allowed users to post a profile (basically a resume) and to interact through private messaging. Founded in 2003, most popular social network in the world by 2006. MySpace differentiated itself from competitors by allowing users to completely customize the look of their profiles. Users could also post music from artists on MySpace and embed videos from other sites on their profiles. Started in 2004 as a Harvard-only social network and expanded quickly to everyone eventually. Facebook allow users to post photos, videos and otherwise customize their profile content, if not the design.

MySpace

Facebook

Niche Social Networks Ning

Ning is a platform for creating niche social networks. Networks are hosted by Ning but can take on their own personality and can even pay to have their own branding instead of the Ning brand. Launched in 2003, first photo sharing site. Photobucket allows users to share photos publically or in password-protected albums. They allow users 500MB of storage It became social network in its own right. Flickr has groups, photo pools, and allows users to create profiles, add friends, and organize images and video into photo sets/albums. Launched in 2005, first major video hosting and sharing site. Users can upload videos and share them through YouTube or by embedding them on other websites

Photobucket

Flickr

Youtube

Real Time Updates

Twitter

Founded in 2006, became a new norm in social media. There are Twitter clients for updating and managing followers; services that track Twitter trends; and services for posting photos and videos directly to Twitter. Eg: Ustream.tv, Justin.tv, Friend Feed (allows you to integrate most of your online activities at one place)

Lifestreaming and Lifecasting

SCOPE OF PROJECT
This report is capturing the impact social media has caused on the businesses its scale, challenges, perceptions of organizations and CMOs. It covers an approach being suggested for measuring the ROI from social media activities, its tracking and coming up with an integrated solution which links your business goals with results. Also perception of internet users (who re on social networking sites) have been taken in the form of survey to find out how much customers are able to separate relevant information from the clutter.

IMPACT OF SOCIAL MEDIA

The use of social media channels is mind-boggling. Publishing tools like TypePad and WordPress offer any company or customer the chance to write a blog, while microblogging on Twitter allows a rapid-fire stream of real-time commentary, complaints, and recommendations. Social networking sites like Facebook and LinkedIn bring together friends, fans, and detractors, while wikis and social news sites like Delicious and Digg quickly move links and ideas around the Web. Customers planning a vacation, a meal, or a haircut can turn to customer review sites like Trip Advisor and Yelp. Meanwhile, on multimedia sites like YouTube, companies can post promotional clips, while disgruntled consumers can capture scenes of poor service or damaged products on their iPhones and quickly upload the video.

Proliferation of corporate engagement in Social Media

Social media has shifted control of the corporate message away from the organization and towards consumers, stakeholders and running away or hiding is no longer safe. Enterprises have also discovered that they are able to monitor the market, their competition and their customers via social media outlets. This allows engaged enterprises to be on top of any changes that may be needed and to proactively make appropriate adjustments to strategies, products or services. A 2010 Burson-Marsteller study showed that, of the Fortune Global 100 companies, 65 percent have active Twitter accounts, 54 percent have Facebook fan pages, 50 percent have YouTube video channels and 33 percent have corporate blogs. Some of the observations of the study: - Companies are tweeting and posting aggressively - Companies are not just broadcasting information: there is a real dialogue going on

Marketing and PR are currently the leading business uses of social media; sales and collaborative work lag behind. However, the focus will be on Lead Generation as the top business function for the future. Larger organizations with over 1000 employees are twice as likely to use social media for internal communication

Business applications
It has been seen that organizations use Social Media mainly for Branding, Information Sharing, Public Relations, Understanding Customers and Lead Generation. Use of Twitter Twitter delivers the ability to communicate minimally but immediately. Use of Twitter for external communication is seen shifting from general communication to a more focused communication for connecting with organizations customer. The most commonly used external Twitter function is Sharing breaking news, followed by Extending a personal face to customers. Looking ahead, their top pick is Keeping in immediate touch with customers, followed by Extending a personal face to customers, then followed by Sharing breaking news. [Whitepaper Survey, socialmediatoday - See Appendices Graph 1] Internal use of twitter focuses on information sharing, knowledge & resources, as well as networking [Whitepaper Survey, socialmediatoday - See Appendices Graph 2] In B2B markets, Twitter is not an effective as a customer contact tool. According to a justreleased study from ES Research Group, The New Social Media: Do They Enable B2B Selling?, only 4% of sales respondents said that Twitter had ever directly helped them win a B2B sale.

SOCIAL MEDIA & CUSTOMER ENGAGEMENT

Customer engagement is the engagement of customers with one another, with a company or a brand. The concept and practice of online Customer Engagement enables organisations to respond to the fundamental changes in customer behaviour that the internet has brought about, as well as to the increasing ineffectiveness of the traditional 'interrupt and repeat', broadcast model of advertising. While social media strategy lives in the "acquisition" category for many brands, these results speak to social media as an engagement strategy that keeps a brand top of mind and help brands fight through the communications clutter. Either way, it is clear that the social media phenomenon is something that brands can't afford to ignore because the potential for low-cost growth is very high.

Example: STARBUCKS
A very good example is of Starbucks, and how it used social media to build a meaningful customer engagement. Starbucks' ability to engage community and foster customer loyalty is nearly unmatched. Starbucks' marketing efforts focus less on traditional marketing and more on giving texture to the brand in fun, engaging formats:

Fully engage the community Last year Starbucks took advantage of April Fool's Day by announcing that it had cracked the code for delivering fresh, hot brewed coffee through the internet tubes and a USB plug-and-pour device. At Starbucks, social media is not a separate and distinct entity. Various departments collaborate online and offline to develop and implement plans designed to fully engage the community. Starbucks believes you need to focus where customers start so people know where to find you on various social media venues. As a result, all of the company's vanity URLs contain the brand name "Starbucks" (Facebook.com/starbucks, Twitter.com/starbucks, www.YouTube.com/starbucks, and so on).

Remain true to your brand Rule No. 1 in social media is to be genuine and transparent, so this precept is not breaking any new ground. What is crucial here specifically for Starbucks is that they remain true to the brand--they started with a coffeehouse culture, so the social media team is expected to be coffeehouse-like when engaging through social media.

Detect trends and opportunities early To see what's going on with your brand in real time, plug in to Twitter, says Starbucks' digital media team, where things tend to go viral fastest. Real-time monitoring increases your response time to what people are saying about your brand, negative or positive. In addition, it provides early notice of any opportunities that arise--any given second, any given day. Headline findings from the the 4th annual Online Customer Engagement Report published by Econsultancy and cScape show how the presence of companies on social networks has almost doubled from 23% to 44% since last year, and how the use of Twitter to boost customer engagement has gone up five-fold from 7% to 35%

SOCIAL MEDIA MARKETING

Conventional marketing wisdom long held that a dissatisfied customer tells ten people. Butin the new age of social media, he or she has the tools to tell ten million. 7

Social media is all about networking and networking in a way that espouses trust among parties and communities involved. Any website which allows user to share their content, opinions, views and encourages interaction and community building can be classified as a social media. Some popular social media sites are: Facebook, YouTube, Twitter, Digg, MySpace, StumbleUpon, Del.icio.us, Scribd, Flickr etc. Trust and goodwill are the basis of social networking, and by marketing in the realm of social media you need to adhere to these fundamental notions. It is probably the only marketing platform that encourages fool proof communication and accountability among sellers as well as consumers. Global companies have recognized Social Media Marketing as a potential marketing platform, utilized them with innovations to power their advertising campaign with social media marketing.

Why you need to consider social media marketing services?

Size: Facebook has over 250 million users globally. On an average, 70-100 tweets happen by the second. An average user on Facebook has 120 friends. This is the kind of enormity Social networking sites espouse and with this comes the license to communicate powerfully. But when such large numbers are involved, there is a danger of something going wrong and when it does, it happens in a big way. You may be a regular user of networking sites, but when you involve business with it, an expert should be hired to do what is best for your business. Transparency: no cheat code involved. No black hat techniques allowed. Everything that happens in the social networking landscape is fool proof. You cannot fake authenticity in an attempt to get more people involved. Members can choose to associate with you or opt out. Opinions made on social networking platforms are taken seriously and the more authoritative you get, more seriously you are taken. When you win, you win in a big way. Reach: It is possible to make your mark globally and do it quickly using social networking sites. Boost website traffic: social media is probably the fastest and easiest means of redirecting traffic to your website. By simply placing your website URL in your profile, you can have all your profile visitors check out your website and a percentage of traffic is sure to get converted in course of time. This is the virtual way version of word-of mouth. Branding: Buying a candy may have been impulsive all your life, but if it is discussed on a social networking site, you are likely to get brand conscious even a candy. Social media is a smart way to build brands. Social media platforms are known to be one of the most powerful and fast means of branding. Some of the big brands like Coke, Ford, Dell, IBM, Burger King are some of the well known brands have powerfully used social media platforms to endorse themselves.

LEARNINGS & CONCLUSION

Companies cannot afford to ignore social media now. Connecting with your consumers is the need of the day. With so much competition any company, not present on social networking sites is losing out. Initially though the returns of social media were considered difficult to measure, now there are ways to measure ROIs of social media presence for a company. The returns are huge compared to the investment.Companies have to realize that its all about the consumers and not just about them anymore. The more the customer feels that the company cares about them and considers their opinion valuable too. Social media is more than just a marketing channel because it offers marketers a direct, unmediated connection with their customer, and this relationship can be leveraged for insights relevant to new product development and market research. This is particularly important to FMCG marketers, because social media offers them direct access to their products end users for the first time. This engagement can provide a better understanding both of the customer as well as what they want from the brand. With social media, the company can ask for new ideas, what else consumers want new in the products etc. Its about how the consumers feel about your brand and not just what they know about it. This is how social media is different from the traditional media of marketing by the companies. Traditionally, it was all about telling people about them. Its about being involved as a part of the consumers daily lives. Only then will the customers feel connected to the brand. Dove with its social media campaign about realizing the real beauty for women definitely improved brand image and increased sales. Thus, it is important that every company has a social media strategy.

Approach to Social Media (OASIS)

Objectives- Determine what the organization wants to achieve through social media. Audience- Profile your audience Strategy- Pick a path that fits to the organization goals Implementation- Select the channel and the technologies needed in social media (Facebook applications, Twitter) Sustainment- Nurture, Measure, Adjust. Have a strong visual identity, link back to the companys website and build relationship with consumers.

Best Practices in Social Media

Dedicate Time- Dedicate time to invest in Social Media and spend time interacting to consumers to make them feel connected. It does reap huge benefits

 Conquer Fears-Many business owners believe that social media gives people a chance to criticize their business. But avoiding social media doesnt mean that their opinions will never see the light of day. The brand is at the mercy of those who take to social media to share their experiences, so its better to take an active role to contributes to the stature and perception of the brand. Listen, research and contribute-Social networking is far more effective when you realize that creating profiles and updating social networks arent arbitrary. Theres an art and science to all of this, and the process begins with listening and research. Take active participation when consumers suggest changes, or want to know more about the company etc. Establish an attractive and expansive presence- Social media gives the ability to showcase your products and services to attract customers and spark conversation is arguably greater on social networking sites than your own website. It is important to be attractive to target audience. Use engagement as new customer service and marketing- Customers, prospects, and influencers are already engaging with others to contribute, learn, and discover. They are forming and sharing opinions and making decisions based on the information they find online. The companies should use engagement as a fast, free, and powerful way to reach and serve customers.

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Graph 1 External use of twitter

keeping top management in touch with the organizing meetings offering products for safe getting back from customers Keeping in immediate touch with customers Extending a personal face to customers Sharing breaking news 5.80% 15.30% 20% 48.60% 55.10% 63.70% 71.90%

Graph 2 Internal Use of Twitter

coordinating emergency responses coordinating events or meetings keeping a team in immediate contact asking for instant expertise keeping up on professional developments leveraging the experience of others sharing knowledge & experience Professional networking Sharing Information 9.80% 19.10% 30.20% 32.00% 34.40% 34.40% 46.00% 51.20% 56.80%

Graph 3 Most common Sales uses of Social Media

sponsoring closed groups for select customers selling products Understanding the clients company organization sales prospecting by targeting "self-identified" new Information gathering in preparation for sales calls Sales prospecting by social networking Better understanding of client attitudes Maintaining social contact with clients 9.70% 19.30% 36.60% 38.70% 40.80% 47.70% 50.60% 67.60%

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Graph 4 Shift in Future Uses for Sales

sponsoring closed groups for select customers selling products Understanding the clients company organization sales prospecting by targeting "self-identified" Information gathering in preparation for sales calls Sales prospecting by social networking Better understanding of client attitudes Maintaining social contact with clients 11.60% 17.80% 7.70% 18.00% 5.60% 21.00% 8.20% 10.10%

Graph 5 Common Marketing uses of social media

use online focus groups sponsor interactive content online advertise on social networks start a user group for customers research new products provide ways to interact with the company Monitor Trends among customers Organic Messages 18.60% 19.20% 26.70% 30.10% 34.10% 51.50% 53.10% 56.00%

Graph 6 Shift in Future uses for Marketing

use online focus groups sponsor interactive content online advertise on social networks start a user group for customers research new products provide ways to interact with the company Monitor Trends among customers Organic Messages 13.00% 19.10% 6.90% 20.80% 7.50% 10.60% 10.60% 11.40%

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Graph 7 Attitude of organization towards Social Media

Social media is an important component of overall marketing It will not be taken seriously until its impact is measurable Interest in utilizing social media is growing rapidly A significant learning curve to overcome before utilizing social Use of social media for business purposes is a passing fad Social media tools are not very relevant for our business Difficult to see value of social media for business purposes Social media has been designated as a high priority Social media is integral to our overall company goals and strategy Use of social media is a tactical rather than strategic decision Use of social media will grow significantly over the next few years

11% 21% 29% 32% 42% 45% 46% 50% 57% 61% 69%

Graph 8 Challenges identified by the organizations

Getting people across the organization to see the value of social media Improving your ability to fully utilize social media within the organization Linking social media activities to an impact on company financials and/or ROI Measuring the effectiveness of social media activities Finding qualified staff who can work on social media activities Capturing/analyzing online conversations about your brand products/services Responding to findings from social media (i.e., quickly resolving/addressing Systemizing sharing of social media insights so they are quickly addressed by Leveraging social media insights across your organization Integrating social media analytics into your broader company analytics Educating your staff on how to use social media Understanding the potential of social media to make a difference in your

13% 14% 15% 15% 16% 19% 22% 25% 28% 31% 40% 41%

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Graph 9 Responsibility of Business Function for Social Media in an Organization

Finance Other External Agency Operations R&D Customer Service CRM MR/Customer insights IT Sales Web Team Public Relations communications Marketing

2% 6% 8% 9% 9% 12% 14% 15% 16% 17% 30% 35% 43% 69%

Graph 10 Ford gained big way from marketing on social media

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Graph 11 Use of User Generated Content

Twitter comments Product suggestions/ideas Forums Customer Feedback Polling Ratings & Reviews Presales Q&A 38% 32% 30% 50% 44% 60% 8% 10% 55% 72% 75% 80% 78% 70% *2011 plans 2010

Graph 12 Metrics used to measure value of Social Media activities on Business

number of mentions Number posts Number of page views Revenues number of contributors Number of fans/members Number of positive customer Conversion Site Traffic 0% 20% 40% 40% 41% 42% 50% 50% 61% 62% 64% 60% 60% 80% * 2011 2010 2009

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