Should startups use social media in their marketing strategy? Will that really help them increase revenues and promote brand awareness?
At first glance the answers to these questions seem pretty obvious. Social media has a lot of innate characteristics that make it seemingly suitable for startup marketing.
For one, the unprecedented amount of personal information that users share around social networking sites make them a great avenue for targeted advertising, provided proper care is given to user privacy.
General Motors made headlines when it stopped advertising on Facebook. The company said advertising on the social networking site had “no value.” However, recent news confirm that General Motors is considering going back to Facebook advertising, and in fact the person who initiated removing GM Facebook ads was axed.
Indeed, having a presence in social media promotes brand awareness. But having “Likes” on your Facebook business page does not directly translate to more revenue for your company. The same is true for Twitter, Yelp, Foursquare and other popular social media sites giving avenues for businesses to promote their products.
Social Media’s Effect on Advertising
It’s difficult to measure Return on Investment as a result of social media advertising endeavors. Alteryx, however, provides a way to “capture core social media activity and marry it with what actually happens in a business.” According to Paul Ross, vice president of Alteryx, the tool allows businesses to measure if a “customer who likes your company on Facebook is more likely to purchase your products.”
In Foursquare, the data shows that 1,000 check-ins result in a 1 to 2 percent influence on a firm’s sales. Facebook influence, however, depends on many factors. As an example, users that “Like” your business page are also likely to purchase items that are of high value to them.
Ross said that you are more prepared to create decisions strategically if you have lots of “big data.” On the other hand, startups need to know the meaning of the data they obtain. According to George Mathew, chief operating officer and president of Alteryx, businesspersons should understand and know “the data that surrounds their business and are smart about what they need to get done.”
Traditional Marketing Plus Social Media with Metrics is the Key
Ross said that “data adds deeper context to [a company’s] social media engagement.” More information plus a merging of traditional marketing and social media is the tendency right now.
Furthermore, Ross said that startup moguls should not rely too much on social media analytics, and should improve their business performance as well. Also, entrepreneurs should connect their virtual sphere and actual clients.
Right now, many businesses emphasize location-based actions. Ross said that startup entrepreneurs should also find out if there is a difference between how their customers from various locations act.
It all boils down to having more business intellect to have a greater chance of becoming a successful entrepreneur.