The Power of Social Media and Its Impact on the Current Business Environment

The number of internet users has increased over the last decade due to the development of new technologies, internet availability and improved connectivity. Various online communications platforms have been invented and are widely used for both personal and business purposes world wide and social networking is the latest communication platform helping people connect to each other across different places. Its introduction has changed the way groups of people are connecting and communicating in business via online communities and professional networks. In business, many multi-national companies are currently moving beyond traditional media channels and using social network sites as a medium to reach their targets consumers instead. There is no argument that social networking is the key player driving new media communications in the digital era and its benefits and functions are impacting business considerably. There are hundreds of social networking platforms that have been introduced to the market but currently there are only two major sites recognised as the world's most powerful platforms attracting millions of users to participate. Firstly there is Facebook, a social network service that allows users to create their own profile, status, interest and preferences and also share information with friends and contacts. According to Trimpe (2011), reported that Facebook's active user base is 519 million which equates approximately to 1 in 13 of every person on earth. In the Facebook world millions of pieces of content, links and event invitations are shared every 20 minutes indicating the enormous power of Facebook as a social media tool. Secondly there is Twitter, a social network platform that allows users to generate and share messages, or â€Å"Tweets†, up to a maximum of 140 characters. According to Chiang (2011), claimed that there are nearly 200 million Twitter's users worldwide. The most common use is to promote business information about products and services or sometimes to educate industry on a business products or services. Due to the fact that these two social networking services possess millions of people's profiles, demographics and personal interests, thousands of multinational companies have turned their focus on new social media strategy to reach their target online. The term ‘social media’ has become the most recent area focused on by marketers, advertisers and public relations professionals in various business sectors and many experts have studied and tried to understand the benefits and functions of the term social media. According to Turner (2011), the Chief Content Officer of the 60 Second marketer reported that social media is about creating and having conversations among networks in online forums, blogs, and social networking sites. The key fundamental function is to use them as a medium for contacting, sharing and promoting data and contents. But when it comes to business, the main objective of operating social media is far beyond that. In business, social media is currently claimed to be the best tool in helping a company gain larger numbers of their target consumers just by providing a digital experience related to their products and services. Social media is also playing an important role in driving consumers brand engagement. According to Schmitt (2009), studied about digital brand experience and the result indicated that consumers who have a chance to engage with a brand in social networking sites can evolve from passive reactors to support the brand almost instantaneously. Creating a brand presence in social media can create not only opportunities for a company to gain more customers but also help marketers to understand more deeply what their potential target customers think towards their products and services thanks, for example, to Facebook that first invented the â€Å"Like† application that allows users to express their interest towards other websites, links or even competitors brands and share across networks. Thanks considerably to the advantages of social media, and its large numbers of potential target consumers, it is no surprise that many global companies have selected social networking as a key medium to start launching their campaign. According to Parsons (2011), reported that recently, Kellogg’s, the cereal manufacturer, launched a new range of Krave cereal and used Facebook as a medium to communicate and offer free sample packs to around 80,000 consumers on their Facebook fan page. The brand also developed video content to engage their 16-24 year old target age group to create interaction in Facebook. Additional examples show that Dell also gained a major success generating $3 million in sales after it launched its online outlet through Twitter and Starbucks has achieved the top ranking of Facebook brand pages, with nearly 4 million friends, by just offering fans coupons for free pastries and ice cream. Additionally, Whole Foods has topped Twitter with 1. million followers by broadcasting weekly specials and shopping tips (Schmitt 2009, p. 26). Companies in the FMCG industry are not the only sector that is involved in social media. Currently Honda, the Japanese automotive manufacture, is implementing their new marketing initiative from budget-led to customer-led by moving beyond traditional advertising and using social media as a tool to understand, manage and encourage open communication and conversation among their customers (Fisher 2011). In this point, the decision to buy a durable good like a car is a lengthy process, so to ensure that their brand will be in front of mind of consumers, Honda then focuses through a combination of data analytics using, and social influence methodologies, to engage and change consumer perception and increase brand awareness at the same time. In other words the role of social media, in this case, is to help maximise the goodwill and favourable mentions of company and brands. Moreover, not only can a platform of social networking provide a benefit to communicate with customers but it also enhances the capability of internal communications amongst staff as it has benefits of real-time discussion, response and speed to spread out information or opinions internally and reduce the time spent in meetings and it is enormously useful for companies with teams/staff members who working in different locations or time zones. For instance, according to Willson (2011) reported that AT&T, a US telecommunications company, launched a new tool aimed at providing their staff the opportunity to have discussions, brainstorm and refine ideas through its own internal social media platform. Employees have opportunities to be involved by voting their opinion on the company's ideas and strategies. As a result of this implementation, and in just 6 months, there are more than 200 topics that have been discussed with great outcomes and many fresh ideas generated without wasting time in meetings. Undoubtedly, social media platforms help a company communicate to both customers and staff faster and easier, however, the easy access of shared data can be a risk to a company’s confidential products and information. Many companies to date have suffered from the secret leaking of their products before its launch to market and it is not only bloggers or online journalists who cannot keep the information secret but also staff who are caught, sometimes by mistake, sharing confidential information. As recent examples, Coggan (2011), reported that Renault has suspended three senior executives allegedly for passing on blueprints for electric cars, Facebook’s corporate privacy settings went wrong when some of the social network’s finances were published and a strategy document from AOL came to light revealing that the internet and media firm’s journalists were expected to write five to ten articles a day. As a result of this type of leak information many companies, especially in the USA, do not allow employees to use their own computers or use memory sticks for certain online services. Accordingly Robert Half Technology also found in 2009 that more than half of chief information officers in America blocked the use of networking sites such as Facebook at work to prevent leaking of information. In the digital era, today's business is borderless with mobile devices, smartphone and computers helping the world connect with the internet. Social networking is a new communications platform that enhances this borderless world providing users with an ability to contact one another and spread information. Many companies use these social networks as a key strategic media to reach their target consumers or adapt its platforms for internal communications purposes to enhance the productivity of its members. However, with its easy access and ability to disperse information rapidly, social networking is becoming a big challenge for todays businesses on how to control data leaking and to protect information assets whilst, at the same time, sharing data without affecting the company's competitiveness. Ultimately, the challenge of gaining benefit from social media is to operate it in a balanced way and in the same way a company has always managed its confidential information. A company must know what it wants to achieve from spreading information about its products and services and also what information it needs to protect . A businesses staff who are involved in the management, operation and control of these platforms should be trained to know how to add accurate data in an online social context and be able to understand what information is acceptable to share.