Has Social Media become Critical to Brands?

Some say that a company can’t survive if it ignores social media. Statistically, the involvement of many companies in social Media has been steadily trending upward, and according to a study of Social Media Engagement of the Top 100 Brands, “companies that are both deeply and widely engaged in social media surpass their peers in terms of both revenue and profit performance by a significant difference.” So, does that mean that engaging in social media is critical to brands? The short answer is yes, but there are always exceptions.

As with any business decision, opting to engage in social media has its pros and cons. However, the benefits of participating in social media far outweigh any reasons to ignore it. On the downside, social media can be very labor intensive for a business. Once a company chooses to participate, there’s no turning back. If that company doesn’t have enough resources to actively maintain communications via social media, it could run into issues. Too many unanswered complaints or stale and boring content can push customer's away instead of pulling them in. However, the financial impact of ignoring Social Media all-together could prove to be much more detrimental than increasing a marketing budget to include it.

Today’s marketspace is very competitive. There are countless brands battling for market share, and new competitors are popping up daily. Social Media helps build the awareness that can either maintain a brand, or assist in establishing one. Furthermore, engaging in social media gives customers the perception that a company is stable and “with the times” in terms of technological advancement. In addition, the ability to incorporate dynamic content allows a brand to position itself in a way that systematically embeds the value proposition within the minds of its consumers. Social Media also ensures a high-level of dialogue between a company and the market; which is highly relevant for providing excellent customer service, communicating promotions, developing ideas for product improvements or extensions and as a worst case scenario: managing public relations crises. Lastly, and maybe most importantly, the endless array of social media analytics tools available can provide businesses with invaluable market information that can facilitate offline marketing efforts.

In short, Social Media is becoming increasingly more critical for businesses of all types. Yet, the relevance of social media for a brand varies significantly by industry. Manufacturers, like Caterpillar, Luxury brands, like Dolce & Gabana, Cartier, Rolex, or Financial Institutions like CapitalOne, would likely not see too much detriment to sales if they opted to keep their distance from social media. However, it probably wouldn’t hurt them to participate either.