The Importance of Social Media in Branding Today

The Importance of Social Media in Branding Today

Posted by: Rahul Vyas | Posted on: May 13th, 2014

There’s a continuing debate about whether social media is useful for businesses or not, or about the actual worth of social media to businesses. There are a great many businesses that have social media profiles, but do not use social media channels actively. There are also a great number of businesses, which actually play the role of passive listeners, trying to understand brand perception from social media reactions. But by and large, it seems, brands that are actively using social media in a manner aligned with their businesses are getting ahead, because social media has value, and is a part of our reality – which cannot be ignored.

How important are social media users to social media platforms – let’s start with some facts

The online world is constantly in flux as is the world of social media. Even at the time of writing this article, Facebook has purchased WhatsApp for a whopping sum of $16 billion.

Given that WhatsApp is nothing more than an instant messaging service with a current user base of 450 million, it gives you an idea of the value of a share of the social media market, or even that of a share of being able to influence access to social media.

Now Facebook is not making whimsical purchases. Earlier this year, it bought Instagram, which is an actual photo sharing platform for $1 billion – at the time Instagram had a user base of 30 million. While WhatsApp’s user base falls a little short of 16 times of that of Instagram, WhatsApp was able to fetch a price of $16 billion, because Facebook estimates WhatsApp’s user base would quickly surpass 1 billion.

And there is at least one thing that every pundit in the world would have to agree upon – Facebook’s experts and analysts know more about the real worth of social media than most on this planet. If that’s the kind of investment Facebook is making on purchasing influence on user access to social media, despite having its own instant messaging service Facebook Messenger, then social media has real value.

How important is social media marketing to businesses – from some recent reports

As we said before the online world is constantly in flux and to understand a situation the most recent reports are the best – and here we look into two reports released as recent as February, 2014. One report, named “Priming the Economic Engine” is from social media giant LinkedIn and it sheds light on social media usage by small and medium businesses. The other report, named the Holmes Report, and conducted by BackBay Communications, a financial services PR firm, and PitchBook, an independent research company, makes a study of branding by private equity firms.

The Holmes Report studied 290 private equity general partners, limited partners, fund of funds, placement agents, investment bankers, lawyers, consultants, intermediaries and other professionals serving the private equity industry and found that regular social media activity by private equity firms has increased by a big margin. While in 2011 the use of social media by PE firms was limited to 7 percent, by 2013, that use has risen to 12 percent. The study found that one-in-three private equity firms are actively using social media to enhance their brands with the most popular channels being Twitter, Facebook, LinkedIn, YouTube and company blogs.

The LinkedIn study found that a whopping 81% of SMBs are currently using social media for brand marketing, which means over 1 million SMBs, only in North America, are using social media for reaching their target audiences. That statistics implies that right now, in North America, social media has an impact on $4.5 trillion potential revenue.

LinkedIn researchers surveyed close to a 1000 SMBs in North America for their social media usage. And 94% of respondents said they use social media primarily for marketing – specifically to maintain a company presence and identity. Other reasons for SMBs using social media involved all elements of brand marketing including delivering content and new information, brand reinforcement, advertising to promote awareness, generate new leads and generate word-of-mouth marketing.

And in case of SMBs on the track of growth, the verdict of 91% was that social media helped them to increase brand awareness, while 82% admitted that social media helped them get new leads.

One of the most important findings of the Linked In study was that SMBs admitted social media interaction helped them reshape their branding strategy and marketing strategies by being able to learn customer reactions, get answers to questions, find industry experts, and source talent.

To conclude, this article was mainly about driving home the importance of social media, but to be really understand the role of social media, the different channels, and the attitude that would bring branding success by using social media – you have to understand that ‘social media’ is neither monolithic nor homogeneous, and that your branding would fail unless you use social media inputs to adapt your strategies and search out the soul of your brand.

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