The Pros and Cons of Social Networking from the Corporate Point of View.
There is little doubt of the phenomenal success social networking sites are witnessing as the digital age continues to grow and grow. However, what impact does this have on companies and brands that are becoming entwined in the movement, through their own choice or through their target markets’ lead? This article entry outlines some of the key pros and cons that companies face in relation to social networking.
Lets start optimistically and look at the advantages that beckon:
An all time favourite marketing tool has to be Word Of Mouth (WOM). It is the most powerful marketing initiative that a company could ever hope for. To have consumers talking about your brand, comparing notes, and actually unconsciously building brand awareness for your company!
Therefore in this instance social networking sites that allow consumers to discuss your brand to people all over the world, has to be a good thing! Getting the word out about your brand is one of the hardest things to do effectively, and if your customers are willing to discuss your brand, then this is a clear advantage over your competitors.
Consumers like to feel that they have the upper hand in any commercial relationship. Social Networking sites allow consumers to talk freely with others about their consumer experiences. They therefore feel less inhibited and are more likely to be honest about their feeling towards particular brands.
An added advantage that WOM brings to any marketing strategy is that it increases brand equity and trust. Consumers are more likely to believe another consumer when they comment that the product/ service is excellent, than if the company itself purports these claims. So if people are talking favourably about your company online, it’s a great boost to your equity status!
Social Networking sites work 24/7 so are available to consumers at a time when it is convenient to them. A lot of advertising messages are ignored or discarded because people are not in the right frame of mind to listen. This problem is resolved through social networking sites as people are more receptive to messages and more willing to digest information.
Relationship Marketing has become a huge buzz word in the industry. More and more companies are trying to build closer alliances with their target market and enter into ‘commercial friendships’. Social networking sites allow this transition, as interaction and the breakdown of barriers are possible.
Now, for all those pessimists out there, here are the cons!
We have heard about WOM and how good words can increase brand equity. But what about the other side of the coin? What if a group of consumers do not agree with your company or have had a bad experience. With a bit of fire in their bellies they can really damage your reputation.
As the consumer gains power in the relationship, the company looses power. This can be disastrous for a company, as they are unable to control the marketing of their own product, and have to be more cunning to continue to hold authority.
Lastly, with more interaction taking place online through various mediums, it becomes very hard for a company to monitor their target markets’ perception of the brand, and identify all comments that are floating around the internet. In essence they loose a big part of their corporate power.
So what do you think of the relationship between the impending domination of social networking sites and corporate organisations. Is it a good marketing tool, or is it something that should be avoided at all costs?
May 14th, 2008 at 5:11 pm
I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you….
August 22nd, 2008 at 7:56 pm
I think on positive note it is good for company to have relationship between with social networking sites. the target market is there and I can say that the market is very promising through social networking sites. Yes there’s maybe some issue but hey, it’s business, so ride the waves…
August 23rd, 2008 at 11:54 am
yep, get business where ever you can these days and be grateful, google is more difficult than ever and their adwords are so expensive, many business people are telling me they are lucky to break even on their google adwords and use it to get exporsure for their site. It would be nice to have a few more ways of getting business on the internet. Off line promotion, pushing buyers directly to sites, will become important in the future I suspect for all sites, not just the big ones. Becoming less google dependent is the dream
August 26th, 2008 at 8:00 pm
This is one I never thought of, I didn’t realise you could use social networks to promote your business, how does it work? I thought it was only for personal use.
August 27th, 2008 at 8:15 pm
Social marketing can work well as you have a targeted audience of online users - for example, certain adverts can be placed on Facebook that may be of interest to a person and take account of their interests. I think Social marketing is also a modern form of “word of mouth” as if your friends are buying a product, then you are also likely to do so.
August 30th, 2008 at 12:28 pm
I am not in favor of social networking for corporate purposes as the message is difficult if not impossible to control or manage. Also social networking may not be a serious enough platform and may sound frivolous.
September 2nd, 2008 at 5:40 pm
Social networking sites play a very important role in the development of a company it tells about the status of the products manufactured by different companies so that there is a sense of competitiveness among the companies. Social networking sites also help the consumer to be honest and give honest opinions
September 4th, 2008 at 10:55 pm
I have never tried to use networking sites for promoting.But by reading the article and the comments above,i think I have changed my mind and will try it soon.
September 7th, 2008 at 5:01 pm
Social networking has grown rapidly and now it has become a very important tool for promoting the company as more and more people are getting into social networking it is now playing very vital role in building up company brand
September 8th, 2008 at 7:00 pm
I also have same opinion with Pebbles about this. With social networking, people could know who you are. They could interact personally with you more close. At the same time, we could build online relationships and trust within each others. Actually, we shouldn’t depends on it 100% but use it as one of your marketing tools. As andrew said, it has grown rapidly nowadays. If you’re using the right strategies with social networking, you’ll get huge benefits from there.
September 23rd, 2008 at 1:39 am
As I said before, social networking may not be the correct media and once the information is put up on say Facebook, a company practically lose control over the material. To effectively use social networking websites, a company must have a team and structure set up to control the message and monitor the online activities.
September 23rd, 2008 at 1:08 pm
If you have an online business it is important to have as much visible prescence on the Internet, and social networking sites are an excellent way of increasing your exposure.
If you sell or advertise online you must make an effort to become part of the global Internet community, and with any form of self advertising this can take time and effort, but ultimatly will allow new people to come into contact with your business.
September 23rd, 2008 at 2:02 pm
It seems to me that mainstream companies are only now starting to realize the usefulness of social networking and how it can benefit their businesses. Innovations on Facebook are one example that a company can create something unique, and draw attention to themselves and gain visitors that want to use their FB app.
September 24th, 2008 at 8:18 am
at this point of time i should agree with the fact that social networking has grown rapidly and now it has become a very important tool for promoting the company as more and more people are getting into social networking it is now playing very vital role in building up company brand. it is a part and parcel of life now.
September 24th, 2008 at 8:28 am
Social networking is a big business today and a very good medium to promote any company. It is very important for brand building because of its quick reach to many audience in very short span of time.
November 6th, 2008 at 4:52 pm
Word of Mouth (WOM) on online world can be done on social network.
Promoting on social bookmarking site is really popular nowadays.
The popularity of social bookmarking site should be investigated too. It’s because a social bookmarking site which is popular on US, not always popular on Asia.
November 7th, 2008 at 1:48 pm
ya social bookmarks are effective true and as you said they are not equally popular all over the world, some are popular in Asia and some are in US so it is necessary to know who you want to attract.
November 17th, 2008 at 6:06 pm
I think a moderated social networking page about a company on it’s own is a good idea. But I think it should be a policy to keep the employees pages totally unassociated with it. And you should be careful about what comments you allow on the page, checking each and only allowing a few a few on, just like you would reviews on a regular site.
November 22nd, 2008 at 2:30 am
Cool Blog…Your topic was very interesting! I don’t really agree with everything mentioned but your views are on point and we are all going to have our own opinions on things. …