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Social Media Marketing (SMM): What It Is, How It Works, Pros and Cons

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What Is Social Media Marketing (SMM)?

Social media marketing (also known as digital marketing and e-marketing) is the use of social media—the platforms on which users build social networks and share information—to build a company's brand, increase sales, and drive website traffic. In addition to providing companies with a way to engage with existing customers and reach new ones, SMM has purpose-built data analytics that allows marketers to track the success of their efforts and identify even more ways to engage.

Within 18 years, from 2004 (when MySpace became the first social media site to reach one million users) to 2022, the dramatic growth of interactive digital channels took social media to levels that challenge even the reach of television and radio.

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 At the start of 2023, there were 4.76 billion social media users globally—over 59% of the world's population.

Key Takeaways

Social media marketing uses social media and social networks—like Facebook, X (formerly Twitter), and Instagram—to market products and services, engage with existing customers, and reach new ones.

The power of social media marketing comes from the unparalleled capacity of social media in three core marketing areas: connection, interaction, and customer data.

Social media marketing has transformed the way businesses can influence consumer behavior—from promoting content that drives engagement to extracting personal data that makes messaging resonate with users.

Because social media today is so ubiquitous, marketing techniques using these platforms are extremely important for businesses.

Social media marketing is often more cost-effective with great exposure, though it requires ongoing maintenance and might have unintended negative feedback consequences.

Why Is Social Media Marketing (SMM) So Powerful?

The power of SMM is driven by the unparalleled capacity of social media in three core marketing areas: connection, interaction, and customer data.

Connection

Not only does social media enable businesses to connect with customers in previously impossible ways, but there is also an extraordinary range of avenues to connect with target audiences—from content platforms (like YouTube) and social sites (like Facebook) to microblogging services (like X).

Interaction

The dynamic nature of the interaction on social media—whether direct communication or passive liking—enables businesses to leverage free advertising opportunities from eWOM (electronic word-of-mouth) recommendations between existing and potential customers. Not only is the positive contagion effect from eWOM a valuable driver of consumer decisions, but the fact that these interactions happen on the social network makes them measurable. For example, businesses can measure their social equity—a term for the return on investment (ROI) from their social media marketing campaigns.

Customer Data

A well-designed social media marketing plan delivers another invaluable resource to boost marketing outcomes: customer data. Rather than being overwhelmed by the 3Vs of big data (volume, variety, and velocity), SMM tools have the capacity not only to extract customer data but also to turn this gold into actionable market analysis—or even to use the data to crowdsource new strategies.

How Social Media Marketing (SMM) Works

As platforms like Facebook, X, and Instagram took off, social media transformed how we connect and how businesses can influence consumer behavior—from promoting content that drives engagement to extracting geographic, demographic, and personal information that makes messaging resonate with users.

SMM Action Plan

The more targeted your SMM strategy is, the more effective it will be. Hootsuite, a leading software provider in the social media management space, recommends the following action plan to build an SMM campaign that has an execution framework as well as performance metrics:

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Align SMM goals to clear business objectives

Learn your target customer (age, location, income, job title, industry, interests)

Conduct a competitive analysis of your competition (successes and failures)

Audit your current SMM (successes and failures)

Create a calendar for SMM content delivery

Create best-in-class content

Track performance and adjust SMM strategy as needed

Customer Relationship Management (CRM)

Compared to traditional marketing, social media marketing has several distinct advantages, including the fact that SMM has two kinds of interaction that enable targeted customer relationship management (CRM) tools: both customer-to-customer and firm-to-customer. In other words, while traditional marketing tracks customer value primarily by capturing purchase activity, SMM can track customer value directly (through purchases) and indirectly (through product referrals).

Shareable Content

Businesses can also convert the amplified interconnectedness of SMM into the creation of sticky content, the marketing term for attractive content that engages customers at first glance. This gets them to purchase products and share the content. This kind of word-of-mouth advertising not only reaches an otherwise inaccessible audience but also carries the implicit endorsement of someone the recipient knows and trusts—making the creation of shareable content one of the most important ways social media marketing drives growth.

Earned Media

SMM is also the most efficient way for a business to reap the benefits of another kind of earned media (a term for brand exposure from any method other than paid advertising): customer-created product reviews and recommendations.

Viral Marketing

Another SMM strategy that relies on the audience to generate the message is viral marketing, a sales technique that attempts to trigger the rapid spread of word-of-mouth product information. Once a marketing message is being shared with the general public far beyond the original target audience, it is considered viral—a very simple and inexpensive way to promote sales.

Customer Segmentation

Because customer segmentation is much more refined on SMM than on traditional marketing channels, companies can ensure they focus their marketing resources on their exact target audiences.

Tracking Metrics

According to Sprout Social, the most important SMM metrics to track are focused on the customer: engagement (likes, comments, shares, clicks); impressions (how many times a post shows up); reach/virality (how many unique views an SMM post has); share of voice (how far a brand reaches in the online sphere); referrals (how a user lands on a site); and conversions (when a user makes a purchase on a site). However, another critical metric is focused on the business: response rate/time (how often and how fast the business responds to customer messages).

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Sprout Social. "The Most Important Social Media Metrics to Track."

When a business is trying to determine which metrics to track in the sea of data that social media generates, the rule is always to align each business goal to a relevant metric. If your business goal is to grow conversions from an SMM campaign by 15% within three months, then use a social media analytics tool that measures the effectiveness of your campaign against that specific target.

Advantages and Disadvantages of Social Media Marketing (SMM)

Advantages

The introduction of social media marketing has introduced a new suite of benefits. Social media platforms provide a powerful channel for reaching and engaging with a large audience, which can help increase brand awareness and recognition.

Engaging with customers through social media channels can help build stronger relationships and foster customer loyalty. It's often a less expensive option than traditional advertising methods, making it more appealing for smaller or start-up businesses.

The nature of social media marketing also has plenty of benefits. Sharing links to your website or blog on social media can help drive more traffic to your website and increase the likelihood of conversions. In addition, social media provides a way to gather feedback from customers in real time, allowing for instant interaction and simplicity in communication.

Social media marketing also has the benefit of being broad but also targeted. Social media can help businesses reach a wider audience and increase engagement through shares, likes, comments, and other forms of interaction. This is especially true considering many customers forward content to friends and family who might be non-customers. On the other hand, social media platforms offer a range of targeting options, meaning companies can pinpoint specific demographics, interests, and behaviors and deliver personalized content to those audiences.

Disadvantages

Though riddled with benefits, there are some downsides and complications to social media marketing. Building a strong social media presence takes time and effort, and business owners must often consistently engage and create content.

Effective social media marketing requires a deep understanding of the various platforms and the ability to create engaging content, analyze data, and make data-driven decisions. Each platform is often specialized and requires its own understanding. In addition, social media platforms are constantly changing their algorithms and policies which can make it difficult to predict and maintain success.

Though social media makes it easy to communicate with customers, it also provides a platform for customers to voice their complaints and grievances publicly. This may have the unintended consequence of creating a public forum, which can damage a company's reputation if not handled properly.

Last, it may be difficult to clearly quantify the return on social media marketing. Measuring the effectiveness and ROI of social media marketing can be challenging as it often involves tracking multiple metrics, analyzing complex data sets, and making assumptions about why consumers may have acted in various ways.

Pros

May help companies enhance brand recognition easily

Offers companies more cost-effective solutions with great exposure

May be leveraged to increase website traffic and real-time feedback

May be leveraged for targeted or specific engagements

Cons

May be time-consuming to set up and maintain

May be unpredictable, as different platforms may change algoriths

May result in negative feedback displayed in a very public fashion

May be difficult to fully understand the true ROI

What Is Sticky Content in Social Media Marketing?

Sticky content is the marketing term for attractive content that engages customers at first glance and then influences them to purchase products and share the content.

What Is Viral Marketing in Social Media Marketing?

Viral marketing is an SMM strategy that attempts to trigger the rapid spread of word-of-mouth product information—a very simple and inexpensive way to promote sales.

What Is Earned Media in Social Media Marketing?

Earned media is a marketing term for brand exposure from any method other than paid advertising, e.g., customer-created content ranging from product reviews and recommendations to shares, reposts, and mentions.

What Are Some Examples of Social Media Marketing Strategies?

Social media marketing has grown to include several techniques and strategies to engage users and market products and services. These include audience-targeted advertising, interactive chatbots, creating personalized experiences for customers online, social media influencers, and building an online audience.

The Bottom Line

Social media marketing (SMM) uses social media platforms to interact with customers to build brands, increase sales, and drive website traffic. As social media usage grows around the world, both via computer and mobile devices, the ability to drive sales from certain user populations is a growing business rife with competition for views and clicks.