Thanks to social media networking, almost the whole world is just a tweet away. The social media sector has burgeoned into a fast-growing field, with fierce competition and exponentially increasing revenues. While actively using social media can be a simple task, understanding its impact on the economy is a different matter altogether.
In a recent survey undertaken by market research firm TNS and social media giant, LinkedIn, it was found that a staggering 81% of North America’s small and medium businesses (SMBs) used social media to drive their growth; an additional 9% intended to use social media in the near future. There are approximately 1.3 million SMBs in North America, and together they annually generate revenues of $5.5 trillion.
Going by the results published in the study, we can safely assume that social media networking has become pivotal to a majority of the North American SMB community. As opposed to traditional forms of marketing, social media networking offer considerable scope for promotion to small-sized businesses. Apart from being low-priced, social media marketing also helps organizations in creating an interactive community—where problems can be quickly recognized and resolved.
As with any other sector in the tech industry, the social media sector has been carefully examined by investors. When Facebook had its IPO in 2012, it was considered one of the world’s largest. However, the social media sector displayed a below-par performance in 2014. Except for three companies, almost all of the prominent social media firms failed to gain in value last year. Moreover, these 3 social media stocks turned out to be some of the top stocks of 2014—Facebook was up 42.6%, LinkedIn and Bazaarvoice gained 10.6% and 3.5% respectively.
Everyone is aware of the Facebook growth story since the IPO days when the company did not have a good mobile strategy. Today Facebook has over a billion active users on mobile. After peaking at $80.78 on December 26, 2014, Facebook stock is valued at $75.74, as of 13th Feb, 2015. In 2014, this social media company went on an acquisition spree, creating new sources of revenue. Facebook’s improved advertising system helps SMBs to a large degree—business owners can easily target small communities of 5,000 to 10,000 people with ads priced as low as $10. They can also schedule company posts and install customer-oriented apps on their profile pages.
Likewise, LinkedIn has been at the forefront of SMB marketing, the world over. Priced at $269 a share (as of Feb 13th, 2015), LinkedIn stock has never been more expensive. The lifeline of any organization is its talent pool, and small-sized startups require highly talented workers to fully grow. In order to facilitate such a need, LinkedIn offers recruitment services for SMBs. And, by providing a number of other business-oriented services, LinkedIn helps organizations increase their online visibility.
Well-thought-out social media strategies enable companies to enjoy the many benefits that social media networking has to offer. Over the years, a number of small businesses have used social media to effectively leverage their growth; some of them include JarvieDigital Photography, Coconut Bliss, JamaicansMusic, and EasyLunchboxes. Whether on Facebook or on Twitter, these companies have successfully interacted with their customers online, engaging them with podcasts, videos, and contests.
Undoubtedly, the fate of SMBs seems to be tied with that of the social media sector. When you look at it in one way, oddly enough, investing in the social media sector does help local businesses to some degree. A local pizzeria with a considerable following on Twitter would definitely be affected if the social media giant were to go bust overnight. The same holds true for small digital marketing agencies that rely heavily on incomes generated from the social media campaigns they create.
In the time we live in, it is essential for small-sized business owners to recognize the advantages offered by social media networking. You can also choose to invest in some worthy social media stocks and make a killing. Just be careful about where you put your investments.
Have you invested in a social media stock before? Did it pay off? Comment below.