Advertising Through Social Media

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In today’s business world, social media is being discussed on a daily basis. This phenomenon has taken over the marketing and advertising industries and has changed the way they handle their efforts to attract customers. There is a big misunderstanding that social media are only popular networking sites such as Facebook and Twitter, but as defined by the Merriam-Webster dictionary, social media are “forms of electronic communication (as Web sites for social networking and micro blogging) through which users create online communities to share information, ideas, personal messages, and other content (as videos).” The rise of these online communities has given companies an opportunity to engage in conversations with their customers. This in turn has allowed them to better understand what people are looking for, and tailor both their products as well as their marketing efforts accordingly. One of the main advantages that social media has brought to businesses is the opportunity to advertise their products through this media. As a result, advertising through social media has proven to be more effective than that through traditional media outlets such as radio, television, magazines, newspapers etc. As stated by Stephen and Galak in their article The complimentary Roles of Traditional and Social Media in driving Marketing Performance, “Social media is a relatively new form of publicity, and yet the impact of more traditional forms of publicity on marketing outcomes has received disproportionately less attention…” (pg. #?). Although Social media is a relatively new way of advertising, companies are finding it to be more lucrative and successful in driving sales than any other media. In this paper I will examine (i) the financial impact that advertising through social media has on companies,(ii) the targeted demographics for this type of advertising and (iii) consumers’ response to this phenomenon, whether it is positive or negative.

Financial Impact of Advertising through Social Media

As previously mentioned, businesses are moving away from traditional sources of advertising to more innovative ways that have proven to be more effective. Using the apparel industry as an example, companies are experiencing increased traffic to their websites thanks to their social media ads. They are taking advantage of these sites to further relationships with their customers: “Apparel brands and retailers that have invested time and resources into crafting a progressive social media strategy have been able to use the medium to further customer loyalty, raise brand awareness, spread advertising messages, create online communities, communicate directly with customers, and in many cases, drive sales” (“Apparel Industry” 1). Apparel retailers are only one example of an industry that has taken advantage of the reach that social media has. Research conducted by Swedish economists Dahlen and Colliander, on the effectiveness of blogs versus online magazines proves that blogs “generated higher brand attitudes and purchase intentions” than magazines did (pg. #?). Their experiment was based on posting the same exact text on seven different blogs as well as seven different online magazines and testing their effectiveness in a scale of consumer response and purchases. The fact that blogs were proven more effective proves that even online traditional ads have lost their power. It is not a matter of posting an ad online, but rather building a sense of trust in costumers’ minds that will drive them to purchase form you. Customers today are faced with more options than ever before, that is why companies strive to maintain close relationships, to make it that much harder for customers to switch to another competitor. Social Media however is not only used to introduce a new product or advertise an existing one, it has also helped companies to regain their reputation after a scandal. After Toyota had to face their decline in sales because of the safety...
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