What are the Advantages and Disadvantages of Social Media for Companies?

Word Count: 1,091

Introduction

Social media platforms poses both benefits and disadvantages to brands. Bilgin (2018) shows that there are multiple benefits that brands can draw from using social media platforms. The authors found that brands can build vibrant brand communities, grow brand recognition, audience engagement, high conversation rates and reduced marketing budgets. Even so, Tayeb (2021) found that brands suffer unintended sentiments on their social media content. Other negative impacts include and grey areas in measuring actual impact, creating bad customers and unintended sentiments, negative word of mouth, and reduced brand value.

Advantages 

Social media help companies to create vibrant brand communities. Morales, Sosa-Fey and Farias (2017) show that brands can build vibrant communities if they are selling to tech savvy young generations that actively use multiple social media platforms every day. The authors established that social media brand communities have huge following and allow users to network with peers, seek product information, and address concerns. For example, a top brand such as Nike has 36.9k followers on Facebook (Nike, 2022). When considering that the 36.9k following is distributed across the globe, it is arguable that the Nike brand is popular. In turn, a large brand community converts to large audience reach.

Social media boosts brand recognition. Evidence from Horn et al. (2015) shows that vibrant brand communities boost brand actions such as recognition (awareness) when more social media users interact with brand content. The authors show that social media interactions help marketers to grow brand awareness through electronic word of mouth. As Bilgin (2018) shows, brand recognition occurs when a brand continuously engages its target audience using catchy and informative brand content. Using the example of Nike’s Facebook post above, it is arguable that the brand directly reached out to at least 65k who liked the post as well as many more when considering the 5k shares.

Social media boosts audience engagement. Figure 1 below shows a sample post made by Nik on its Facebook fan page. The figure shows that the post had 12k comments, 5k shares, and 65k likes as of July 29, 2022 (Nike, 2022). When considering that the post was made on January 28, 2018, it is arguable that Nike achieved immense engagement levels among its global audience. DeMers (2014) affirms this position by showing that audience engagement occurs when the target audience likes, shares, or comments on a social media post. While one may expect that the Nike post captured by Figure 1 above should have attracted huge audience engagement, attracting 12k comments is a huge milestone.

Social media platforms boost brand conversion rates. While it is not easy to tell whether conversion occurs solely because of a single digital channel, enhanced audience awareness and engagement boosts conversion rates. Evidence from Di Fatta, Patton and Viglia (2018) recent work shows that conversion rate is the number of visitors to a digital platform such as websites or social media that completes a desired goal such as product purchase or subscription to a newsletter. When considering that the main goal of social media marketing is to influence audience behaviour (Horn et al., 2015), it is arguable that every post on a social media platform offers an opportunity for brand to convert customers into buyers.

Social media also helps brands to cut their marketing costs. DeMers (2014) reports the findings of a recent student by Hubspot showing that social media cuts marketing budgets greatly compared to other channels. The study established that brands could generate huge traffic volume and conversion rates by only dedicating six hours a week to build content and engage their target audience. When considering that the immense audience reach among popular social media platforms such as Facebook, Instagram, and YouTube (Bilgin, 2018), it is arguable brands can reach out to a large portion of their target audience by only dedicating small budgets.

Disadvantages

Social media can build “bad” customers. Evidence from Dynel (2020) shows that social media users tend to hide behind the computer screens to make disparaging comments on brands’ fan pages. The author suggests that users are likely to make disparaging comments since social media anonymity drives away guilt and accountability. For example, a look at the Nike post captured by Figure 2 below shows extremely negative comments from followers. The figure shows that a user called Victoria Thomas complained about Nike’s website using negative words such as “awful”, “hell”, and “Y’all losing” (Nike, 2022). It is likely that the user may not use the same harsh words in a physical store. Unfortunately, bad customers spread negative word of mouth among their peers.

Poorly executed social media campaigns can reduce brand value. Tayeb (2021) shows that brands suffered immense brand image mishap by engaging in a poorly executed social media campaign to increase female chefs in its outlets. The author shows use the example Burger King’s recent post on Tweeter on the International Women Day showing that “women belong in the kitchen.” While considering that the tweet was part of a thread that appealed to more women to take up available chef positions, it is arguable that social media audiences can form opinions based on a slight mistake.

Grey areas in measuring social media impact. While some social media metrics such as number of followers or number of likes on a post, evidence from Chaffey and Smith (2022) shows that it is not easy to quantify other aspects such as the actual impact on sales revenue form social media campaign. The authors show that some social media metrics have so many grey areas, making it hard to quantify their impact son brands. For example, while a large social following is equated to high brand recognition and engagement (DeMers, 2014), it is not easy to quantify the impact of such following in monetary terms. The challenge is more compounded among brands with multiple digital platforms including blogs, email, websites, and mobile apps.

Conclusion

The essay has demonstrated that social media is beneficial to brands. Brands can build vibrant brand communities, grow brand recognition, and audience engagement. Besides, social media boosts conversation rates and reduces marketing budgets. Even so, social media content can lead to unintended sentiments from target audiences which can in turn create bad customers who spread negative word of mouth among their peers. Ultimately, negative sentiments on social media can reduce brand value. The situation is compounded by the reality that some social media metrics are hard to relate to social media.

References

Bilgin, Y. (2018). The effect of social media marketing activities on brand awareness, brand image and brand loyalty. Business & Management Studies: An International Journal, 6(1), 128-148.

Chaffey, D. & Smith, P.R. (2022). Digital marketing excellence: Planning, optimizing, and integrating online marketing. London: Taylor & Francis.

DeMers, J. (2014). The top 10 benefits of social media marketing [Online]. Available At: http://onforb.es/1vyccu4/ (Accessed on July 29, 2022).

Di Fatta, D., Patton, D., & Viglia, G. (2018). The determinants of conversion rates in SME e-commerce websites. Journal of Retailing and Consumer Services, 41, 161-168.

Dynel, M. (2020). On being roasted, toasted, and burned:(Meta) pragmatics of Wendy’s Twitter humour. Journal of Pragmatics, 166, 1-14.

Horn, I. S., Taros, T., Dirkes, S., Hüer, L., Rose, M., Tietmeyer, R., & Constantinides, E. (2015). Business reputation and social media: A primer on threats and responses. Journal of Direct, Data and Digital Marketing Practice, 16(3), 193-208.

Morales, K., Sosa-Fey, J., & Farias, J. (2017). Social media: are the benefits worth the risks for business? International Journal of Business & Public Administration, 14(1), 87 – 97.

Nike Inc. (2022). Nike – just do it [Online]. Available At: https://www.facebook.com/nike/ (Accessed on July 29, 2022).

Tayeb, Z. (2021). Five big-brand campaigns that flopped, from Burger King to Pepsi [Online]. Available At:  https://www.businessinsider.com/burger-king-tweet-iwd-caused-stir-company-campaign-fails-2021-3?r=US&IR=T/ (Accessed on July 29, 2022).