Social Media Marketing (SMM): What It Is, How It Works, Pros and Cons

Social media marketing (sometimes called digital marketing or e-marketing) is the use of social media platforms to grow a company’s brand, generate sales, and drive website traffic. In addition to allowing businesses to communicate with existing consumers and reach out to new ones, SMM includes purpose-built data analytics that enable marketers to track the performance of their efforts and identify new ways to engage.

Between 2004 (when Myspace became the first social media site to attract one million subscribers) and 2022, the tremendous rise of interactive digital channels propelled social media to heights that rivalled television and radio.
Our World in Data. “The Rise of Social Media.”
At the start of 2023, there were 4.76 billion social media users worldwide, accounting for more than 59% of the total population.

KEY TAKEAWAYS

• Social media marketing makes use of social media and social networks such as Facebook, X (previously Twitter), and Instagram to promote products and services, engage existing customers, and reach out to new ones.
• The power of social media marketing stems from the platform’s unrivalled ability to connect, communicate, and collect client data.
• Social media marketing has altered how organizations can influence customer behavior, from promoting engaging content to gathering personal data that helps messaging resonate with users.
• Because social media is so widely used nowadays, businesses must employ effective marketing methods on these platforms.
• Social media marketing is sometimes less expensive and provides greater exposure, but it takes constant management and may result in unwanted bad comments.

Why Is Social Media Marketing (SMM) So Powerful?

SMM’s power stems from social media’s unrivalled ability to connect, interact, and collect client data.

Connection
Not only does social media allow businesses to connect with customers in previously unthinkable ways, but it also provides an incredible number of routes for connecting with target audiences—from content platforms (like YouTube) to social networks (like Facebook) to microblogging services (like X).

Interaction
Social media interactions are dynamic, allowing businesses to take advantage of free advertising chances via eWOM (electronic word-of-mouth) recommendations between current and potential clients. This can happen through direct conversation or passive liking. The fact that these interactions take place on social networks renders them observable, in addition to being a valuable motivator of consumer decisions due to the positive contagion impact from eWOM. Businesses can, for instance, calculate their social equity, which is another word for the ROI from their social media marketing initiatives.

Customer Data
A well-crafted social media marketing strategy provides a valuable asset to enhance marketing results: customer data. Instead of feeling daunted by the 3Vs of big data (volume, variety, and velocity), SMM tools can extract customer data and transform it into actionable market analysis, or even leverage the data to crowdsource new strategies.

Understanding the Functionality of Social Media Marketing (SMM)

With the rise of platforms such as Facebook, X, and Instagram, social media has revolutionized our connections and the way businesses can impact consumer behavior. This includes promoting engaging content and utilizing data to tailor messages to users based on their location, demographics, and interests.

Social Media Marketing Action Plan
A highly focused SMM strategy will significantly enhance its effectiveness. According to Hootsuite, a prominent software provider in the social media management industry, here is a suggested action plan for creating an SMM campaign with an execution framework and performance metrics:

• Ensure that social media marketing goals are in line with specific business objectives
• Understand your target customer’s demographics and interests.
• Analyse your competitors’ successes and failures to gain a competitive edge.
• Assess your current social media marketing performance (achievements and setbacks)
• Develop a schedule for social media content distribution
• Develop top-notch content Monitor results and adapt social media strategy accordingly

Customer Relationship Management (CRM)

Social media marketing offers unique advantages over traditional marketing, such as the ability to facilitate targeted customer relationship management through two types of interactions: customer-to-customer and firm-to-customer. Put simply, traditional marketing focuses on capturing purchase activity to track customer value, while SMM can track customer value through purchases and product referrals.

Shareable Content

Businesses can leverage the increased connectivity of social media to develop captivating content that immediately captures customers’ attention. This encourages customers to buy items and spread the word. Word-of-mouth advertising can reach an audience that is typically hard to access and comes with the endorsement of someone the recipient trusts, making shareable content crucial for driving growth in social media marketing.

Earned Media

Social media marketing is the most effective method for businesses to leverage customer-generated product reviews and recommendations, a form of earned media.

Viral Marketing

One effective social media strategy involves leveraging the audience to create and spread messages, such as viral marketing, which aims to quickly disseminate product information through word-of-mouth. When a marketing message spreads to a wider audience than intended, it is deemed viral, offering a cost-effective method to boost sales.

Customer Segmentation

With customer segmentation being more precise on social media marketing (SMM) compared to traditional marketing channels, companies can effectively concentrate their marketing resources on their specific target audiences.

Tracking Metrics

As per Sprout Social, the key social media metrics to monitor revolve around customer interaction: engagement (likes, comments, shares, clicks); impressions (frequency of post appearance); reach/virality (unique views on SMM posts); share of voice (brand’s online presence); referrals (website traffic sources); and conversions (online purchases). Another important metric that businesses should focus on is the response rate/time, which measures how frequently and quickly a business responds to customer messages.

When a company needs to decide which metrics to monitor from the vast amount of data social media produces, the key is to connect each business objective with a suitable metric. To achieve a 15% increase in conversions from your SMM campaign within three months, it’s essential to utilise a social media analytics tool to track the campaign’s performance against your goal.

Advantages and Disadvantages of Social Media Marketing (SMM)

Advantages

Social media marketing has brought a new range of advantages. Social media platforms offer a potent avenue for connecting with a broad audience, enhancing brand visibility and recognition.

Interacting with customers on social media platforms can strengthen connections and cultivate customer loyalty. It is frequently a more cost-effective choice compared to traditional advertising approaches, which can be particularly attractive to smaller or newly established businesses.

Social media marketing offers numerous advantages. By sharing links to your website or blog on social media, you can boost traffic and improve conversion rates. Furthermore, social media offers a means to collect customer feedback promptly, enabling immediate interaction and straightforward communication.

Social media marketing offers the advantage of being both wide-reaching and focused. Utilizing social media can assist companies in expanding their reach and boosting engagement through shares, likes, comments, and other types of interaction. This holds particularly true as numerous customers share content with friends and family who may not be customers. However, social media platforms provide a variety of targeting options, allowing companies to identify specific demographics, interests, and behaviors to deliver personalized content to those audiences.

Disadvantages

Despite the numerous advantages, social media marketing also comes with its share of drawbacks and complexities. Establishing a robust social media presence requires dedication and ongoing content creation to keep followers engaged.

To excel in social media marketing, one must possess a thorough grasp of different platforms, be skilled at crafting compelling content, interpreting data, and using data to inform decisions. Every platform has its own unique requirements that need to be understood. Moreover, social media platforms frequently update their algorithms and policies, posing challenges in forecasting and sustaining success.

While social media facilitates customer communication, it also allows customers to express their complaints and grievances in a public forum. There is a possibility that this could lead to the creation of a public forum, potentially harming a company’s reputation if not managed correctly.

Finally, quantifying the return on social media marketing may pose a challenge. Assessing the impact and return on investment of social media marketing can be quite complex due to the need to monitor various metrics, interpret intricate data, and speculate on consumer behaviour.

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