Impact of Social Media on Businesses

Evaluate the extent to which social media has transformed business, using both academic literature and practical examples from your wider experience.

Social media is a phenomenon that has played a vital role in transforming businesses and academics from Minot State University state “the fastest way to grow a business entity is through social media and networking” (Edosomwan et al. 2011). Social media utilises mobile and web-based technology to create interactive platforms that allow individuals to connect with each other within seconds to “create, discuss and modify user-generated content” (Kietzmann et al. 2011). There are many interpretations of the understanding and application of social media, however, for the purpose of this essay a dictionary definition will be outlined to provide a holistic understanding of social media. Social media are “websites and applications that enable users to create and share content or to participate in social networking” (Oxford dictionary, 2018). Various forms of social media exist and are used for many different purposes, most commonly for social networking, professional networking, marketing and media sharing (Miller et al. 2016). Platforms such as Facebook allow friends and family to connect with each other and share content while other platforms such as LinkedIn are built for professional networking.  In this essay I will discuss the importance, impact and challenges of social media on business, drawing upon the success of Kylie Jenner’s business, Kylie Cosmetics, to capture the extent to which social media has and continues to transform business, by highlighting her marketing strategy that underpins the audience, products and relationships with customers. Social media is paramount to the success of businesses. It has become the primary method for marketing as it has and continues to transform the way businesses and people communicate with each other (Evans and McKee, 2010). As the world is moving digital, interest in social media has spiked in recent years with more than 3 billion users worldwide more people joining every single day. Businesses have taken advantage of this “fast, inexpensive and effective way to reach almost half the world’s population” (Rendler-Kaplan, 2018). Bandyopadhyay (2016) explains the impact of social media is essential to the success of a business. He states the primary goals of marketing using social media is to increase market share, retain existing customers and building a new customer base, creating a brand image and improving customer loyalty. He believes the goals can be achieved through creating awareness of products and brands, managing reputation and strengthening relationships with customers through engagement and feedback. Kambhampati (2014) states Instagram is a relatively new form of social media which allows users to share updates by taking photos. In recent years Instagram has grown rapidly in the number of users and uploads since its launch in 2010; it has managed to attract upwards of 150 million active users and 16 billion photos shared as of 2013. Advertising on social media platforms such as Instagram and Facebook are highly effective as it allows businesses to reach a larger, tailored audience and track progress of adverts. Businesses using Instagram to advertise have the choice of marketing to various groups of consumers such as custom audiences, lookalike audiences and automated targeting with access to statistics on how many people see and interact with their adverts (Instagram, 2018). Custom audiences enable businesses to advertise to existing customers based on their contact details. Lookalike audiences enable businesses to find new customers who are like their existing customers based on commonalities. Automated targeting enables businesses to quickly create an audience based on a variety of indicators such as locations, interests and demographics using cookies. Cookies are tiny snippets of data stored on mobiles or computers that hold information on users and their behaviours when they visit websites. Cookies containing information on location, demographics, emails, phone numbers, interests and behaviours to deliver adverts based on the type of audience the business is targeting. Instagram use cookies to deliver advertising relevant to the interest of users not only on Instagram but also when they visit other websites (Instagram, 2018). This is an effective method of advertising for businesses as it gives them exposure to a large audience by enabling their adverts to reach the timelines of users on various platforms who otherwise might not have been exposed to the content. As advertising using social media also produces tangible results based on user interactions, businesses can enhance their marketing strategies and adapt to changes faster. Social media has revolutionised marketing, it has opened a new door for businesses by enabling them to engage effectively with customers and ultimately develop relationships. Bandyopadhyay (2016) states marketing using social media businesses can strengthen relationships with customers and help businesses adapt to changes in the market through engaging with consumers. The interactive platforms allow users to make comments on and like content which they enjoy. Kylie Jenner, CEO of Kylie Cosmetics utilises social media to enhance her relationship with customers. As of 2018 Kylie Cosmetics has 18.4 million followers on Instagram and posts content regularly. Jenner does not spend any time or attention on negative comments, rather she utilises the time to strengthen her relationship with her community. Jenner regularly spends time on social media going through feedback, responding to fans’ comments and promoting fan content across her social media platforms, giving them exposure (Talbot, 2018). As a result, Jenner is able to improve her products and continuously strengthen the relationship with her community through connecting and relating to them, her community do not just view her as another big corporation and so she has been able to gain their loyalty. Social media has been essential in the success of Kylie Jenner, the 27^th richest woman in America at the age of 21 (Robehmed, 2018). She utilises social media effectively and has managed to leverage her 250 million followers to build a $900 million fortune. According to Talbot (2018) Jenner’s social media strategy is the key to her success; she makes sure to understand her audience, promote her products, strengthen relationships with her customers,  keep customers interested, partner with other influencers, use her content to educate followers on her products. Miller and Stafford (2003) highlight the importance of the audience for businesses and they suggest consumers are individuals who purchase goods for personal use, and so are vital for businesses. They play a significant role in the economic system and without consumers the economic system would not exist because they are the ones who demand goods; without consumers there would be no economic system (ibid). Social media has been vital for businesses to reach different audiences. For example, Kylie Jenner appeals largely to the interests of millennials who are similar in age to her and have similar passions. Market Research suggests the demographic that Jenner appeals to most use Instagram as their primary platform to discover brands and products, YouTube for shopping recommendations and Snapchat to document their shopping experiences (Sehl, 2018). It is evident that Jenner is knowledgeable and has a successful social media strategy, she focuses most of her content distribution across the platforms that her target audience access regularly. She has successfully maximised her audience reach using various social media platforms; as of 2018 Kylie Jenner has 120 million Instagram followers, 3.3 million subscribers on YouTube and confirmed in February 2016 that she has more than 10 million Snapchat followers. According to Bernoff (2008) social media has made marketing extremely cost-effective. He states social media platforms such as Facebook, Instagram, Snapchat and Twitter offer virtually free advertising and may even attract more sophisticated audiences. Furthermore, content posted will likely be viewed by millions of people around the world and is available almost instantly. Social media creates awareness of products, increases brand awareness, people access social media daily. Furthermore, social media helps businesses promote their products. Kylie Jenner has managed to create an audience and posts content regarding her new collections, on Instagram she posts a product shot for every three or four posts regarding her personal life (Talbot, 2018). This aids the expansion of Jenner’s business as followers who are unaware of her business or follow her for a different purpose are also exposed to her business-related posts. In addition, social media has enabled businesses to engage effectively with customers reads comments and feedback to produce better, tailored content for her community and posts it alongside her personal content for millions of people to see. Jenner uses her platforms to educate her followers on her products and often takes to social media to show how her products can be used to create distinct looks (Talbot, 2018). Jenner creates regular video tutorials that her community can use to recreate her looks or create a similar look. As of 2018 Kylie Jenner’s YouTube channel has 3.3 million subscribers which suggests she has been successful in capturing the attention of her audience. Collaborations when done appropriately can add value to businesses and be effective in helping them grow. Collaborations enable brands and influencers to enter new markets with confidence and increase brand awareness more efficiently (Bellissimo-Magrin, 2017). In 2018 Jenner began collaborating with Adidas and have both managed to benefit significantly from this (Eytan, 2018). The collaborations have been successful for both Jenner and Adidas, it has helped expand their businesses by gaining customers and growing their fanbases as Adidas have access to Jenner’s 250 million social media followers and Jenner has been able to confidently enter a new market. Jenner’s Instagram followers spiked from 100 million followers in January 2018 to 120 million followers in November 2018 (www.trackalytics.com). These partnerships have given both businesses clout, enabled them to attract new customers and reap the maximum benefits of social media. Each of the collaborations provide credibility and exposure as influencers and brands use and promote each other’s products to their millions of followers and customers. It is evident that social media has been pivotal to the success of business. Social media has given businesses the opportunity to grow and gain more customers faster than ever before. Kylie Jenner, CEO of Kylie Cosmetics, founded the company in 2015 and has since gone on to become the 27^th richest woman in America and is on track to becoming the youngest billionaire ever (Robehmed, 2018). However, businesses cannot just blindly take towards social media; according to Barker (Barker et al. 2016) businesses must have a strategy and plan in place and invest a lot of time in to maintaining its presence on social media in order to benefit. Furthermore, according to Beese (2016) another challenge of social media is time management. They explain that social media is constant and requires consistent wort on content development and optimisation, audience growth and engagement. Moreover, measuring progress of marketing using social is trickier than traditional online marketing as it is difficult to measure the value of your post being shared in comparison to clicks on advert. Finally, responding to all customer queries has proven to be difficult whilst social media is supposed to be a two-way communication channel, however, it is frequently used as a promotional mechanism. According to Beese (2016) marketers often use social networks to broadcast, however, 90% of customers use social media as a means of communicating directly with businesses and brands. This truly evidences just how essential social media has been in the success of business and an organisation’s marketing strategy. Companies are increasingly joining social media platforms and using them regularly to stay connected with customers and stakeholders. It is evident that social media has transformed businesses to a great extent. They are platforms where consumers instantly have access to products, promotions, brands and new releases. Despite limitations and challenges that businesses encounter, social media has proved to be one of the most powerful marketing platforms.

REFERENCES

• Bandyopadhyay, S., 2016. How a Cost-Effective Social Media Plan Can Make a Difference for Small Businesses. Journal of the Indiana Academy of the Social Sciences, 19(1), pp.1-11.
• Beese, J. (2016). 10 Social Media Challenges Your Business Must Overcome. [online] Sprout Social. Available at: https://sproutsocial.com/insights/social-media-challenges/ [Accessed 2 Dec. 2018].
• Bellissimo-Magrin, M. (2017). The Power of Strategic Brand Collaboration. [online] Dynamic Business. Available at: https://www.dynamicbusiness.com.au/small-business-resources/sales-and-marketing/the-power-of-strategic-brand-collaboration.html [Accessed 2 Dec. 2018].
• Edosomwan, S., Prakasan, S.K., Kouame, D., Watson, J. and Seymour, T., 2011. The history of social media and its impact on business. Journal of Applied Management and entrepreneurship, 16(3), pp.79-91.
• eNotes (2018). Explain why the role of a consumer is important in an economic system. | eNotes. [online] eNotes. Available at: https://www.enotes.com/homework-help/explain-why-role-consumer-important-an-economic-171457 [Accessed 2 Dec. 2018].
• Eytan, D. (2018). Kylie Jenner Joins Adidas As Latest Brand Ambassador. [online] Forbes. Available at: https://www.forbes.com/sites/declaneytan/2018/08/29/kylie-jenner-joins-adidas-as-latest-brand-ambassador/ [Accessed 2 Dec. 2018].
• Evans, D. and McKee, J. (2010). Social media marketing: The Next Generation of Business Engagement. Hoboken, N.J.: Wiley Pub. Inc.
• Hu, Y, Manikonda, L & Kambhampati, S 2014, What we instagram: A first analysis of instagram photo content and user types. in Proceedings of the 8th International Conference on Weblogs and Social Media, ICWSM 2014. The AAAI Press, pp. 595-598, 8th International Conference on Weblogs and Social Media, ICWSM 2014, Ann Arbor, United States, 6/1/14.
• Instagram (2018). About Cookies | Instagram Help Centre. [online] Help.instagram.com. Available at: https://help.instagram.com/1896641480634370 [Accessed 2 Dec. 2018].
• Kietzmann, J., Hermkens, K., McCarthy, I. and Silvestre, B. (2011). Social media? Get serious! Understanding the functional building blocks of social media. Business Horizons, 54(3), pp.241-251.
• Kirtiş, A. and Karahan, F. (2011). To Be or Not to Be in Social Media Arena as the Most Cost-Efficient Marketing Strategy after the Global Recession. Procedia - Social and Behavioral Sciences, 24, pp.260-268.
• Miller, D., Costa, E., Haynes, N., McDonald, T., Nicolescu, R., Sinanan, J., Spyer, J., Venkatraman, S. and Wang, X. (2016). How the world changed social media.
• Miller, R. and Stafford, A. (2003). Economic issues for consumers. Belmont, CA: Thomson/Wadsworth.
• Oxford Dicitionary (2018). Social Media. In: Oxford dictionary. [online] Available at: https://en.oxforddictionaries.com/definition/social_media [Accessed 2 Dec. 2018].
• Rendler-Kaplan, L. (2018). 10 Benefits of Social Media for All Businesses. [online] Social Media Today. Available at: https://www.socialmediatoday.com/news/10-benefits-of-social-media-for-all-businesses/528236/ [Accessed 2 Dec. 2018].
• Robehmed, N. (2018). How 20-Year-Old Kylie Jenner Built A $900 Million Fortune In Less Than 3 Years. [online] Forbes. Available at: https://www.forbes.com/sites/forbesdigitalcovers/2018/07/11/how-20-year-old-kylie-jenner-built-a-900-million-fortune-in-less-than-3-years/#274d4096aa62 [Accessed 2 Dec. 2018].
• Sehl, K. (2018). Everything Social Marketers Need to Know About Generation Z. [Blog] Everything Social Marketers Need to Know About Generation Z. Available at: https://blog.hootsuite.com/generation-z-statistics-social-marketers/ [Accessed 2 Dec. 2018].
• Talbot, K. (2018). 5 Social Media Lessons To Learn From Kylie Jenner. [online] Forbes. Available at: https://www.forbes.com/sites/katetalbot/2018/07/24/5-social-media-lessons-to-learn-from-kylie-jenner/#7bafd27f1677 [Accessed 2 Dec. 2018].
• Trackalytics (2018). Kyliejenner | Instagram Statistics / Analytics | Trackalytics. [online] Trackalytics.com. Available at: https://www.trackalytics.com/instagram/profile/kyliejenner/ [Accessed 2 Dec. 2018].