With over 80% of consumers reporting that social media—especially influencer content—significantly impacts buying decisions, marketers across industries are driving the evolution of social media marketing (SMM) from a stand-alone tool to a multipronged source of marketing intelligence on an increasingly important—and growing—audience.
Within 18 years, from 2004 to 2022, the dramatic growth of interactive digital channels took social media to levels that challenge even the reach of television and radio.
By Q1 of 2022, there were 4.6 billion social media users globally—over 58% of the world’s population—an increase of over 10% in one year alone.
As the use of social media trends upward, marketers are perfecting strategies to capture the significant competitive advantage that engagement with this key audience can deliver even more rapidly and effectively than traditional marketing.
What Is Social Media Marketing (SMM)?
Social media marketing (SMM) (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, social media marketing (SMM) has purpose-built data analytics that allow marketers to track the success of their efforts and identify even more ways to engage.
Why Is Social Media Marketing So Powerful?
The power of social media marketing (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 ways that were previously impossible, 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 Twitter).
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 (SMM) campaigns.
Customer Data: A well-designed social media marketing (SMM) 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 Works
As platforms like Facebook, Twitter, and Instagram took off, social media transformed not only the way we connect with one another but also the way businesses are able to 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 social media marketing (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:
- 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 both 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, gets them to purchase products, and then makes them want to 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—which makes the creation of shareable content one of the most important ways that social media marketing drives growth.
Earned Media: Social media marketing (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 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 social media marketing (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 social media marketing (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 very important metric is focused on the business: response rate/time (how often and how fast the business responds to customer messages).
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
Tailored social media marketing (SMM) campaigns that instantly reach a range of target audiences are clearly advantageous to any business.
But—like any social media content—SMM campaigns can leave a company open to attack. For example, a viral video claiming that a product causes illness or injury must be addressed immediately—whether the claim is true or false. Even if a company can set the record straight, false viral content can make consumers less likely to purchase in the future.
Top Digital Marketing Terms and Definitions You Should Know
Digital marketing is an all-encompassing term for any type of online marketing that occurs through a digital device which is an internet-connected tool. Knowing the terms associated with the work helps to understand the actual process and progress in work by marketers.
Digital Marketing terms and definitions can be categorized under various specific domains—SEO or search engine optimization, social media marketing, email marketing, video, paid advertising, influencer marketing, digital PR, and others. On the other hand, there are the general, technical, and operations-related terms that are relevant across the divisions.
Here is a list of the top most critical digital marketing terms and what they mean.
- A/B Testing
Also known as split testing – the process of testing two versions of digital content with a target audience, the preference is learned by measuring by conversion rate – used in testing e-newsletters, email subject lines, social ads, calls-to-action, and landing page copy to know which version has the greater chance of giving the desired action such as subscribing for a paid membership.
- Affiliate Marketing
A strategy that rewards ‘affiliates,’ i.e., people or organizations outside the business for bringing new customers or visitors; done through a promotion like ads or content on the affiliate’s website for a commission based on the number of customers generated – used on personal or lifestyle sites for product recommendations.
- Brand Positioning
Building a brand identity and connecting to it as different from competitors through tone, voice, and visual design of ads, promotion, logo, representation in social media, etc. – creates market differentiation, builds reputation, drives sales, and focuses your brand marketing message.
- Content Strategy
Planning and implementation of digital content to make it work towards a uniform end; includes creating and distributing content for digital marketing campaigns such as blog posts, articles, social media posts, videos, podcasts, e-books, guides, webinars, etc.; includes testing to gauge content performance – content is the base on which all marketing techniques are built. This digital marketing term is a fundamental component of content marketing campaigns as well.
- Conversion Rate
The percentage of users who completed the desired action; calculated by dividing the overall size of the audience with the total number of ‘convert’ users; for instance, those who clicked on an ad – conversion rate percentage is used as a metric upon which marketers try to improve further growth. Digital marketing strategies are almost always data-driven, and this digital marketing term is one of the most common parameters measured to determine the performance of any campaign.
- CPA or Cost per Acquisition
A pricing model that charges only when leads, sales, or conversions are generated; it is a financial metric that measures the costs of acquiring one paying customer – it helps marketers to know how much a company can afford to pay for leads and drive new customer growth.
- CPC or Cost per Click
A pricing model that measures the cost for each click on an ad; designed to drive traffic to a website – a critical digital marketing metric showing how much a business pays for someone to click on their ad.
- CPM or Cost per Thousand
A pricing model that measures the cost of an online ad per 1000 impressions, the impression being whenever the ad is displayed on a web page – ideal for creating brand awareness and delivering a direct message on high-traffic websites.
- CRM or Customer Relationship Management
A set of applications that marketing firms use to manage customer data, analyze customer interactions, and receive relevant data in real-time – CRM is used to update and improve customer relationship strategies, to personalize and target marketing services.
- CTA or Call-to-Action
Referring to a piece of content, such as a text, banner, form, button, or image on a web page (or email) prompting visitors to perform a specific action; includes instructions or directives to either read more content, join, subscribe, sign up or buy – CTAs guide visitors in their buying journey, impacts conversion rates.
- CTR or Click Through Rate
The percentage of users who click on links placed in emails, ads, websites, etc.; measures the users actively engaging with linked content on a site with the formula: CTR = (click-throughs/impressions) x 100 – this metric helps to understand customers and finetune target audience.
- CRO or Conversion Rate Optimization
The process of optimizing a website to increase the percentage of visitors performing the desired CTA; a marketing system to raise the percentage of visitors converting into paying customers – CRO methods create a better user experience, generate quality leads, and shorten time to close deals.
- Email Filtering
A technique that organizes emails based on a word or phrase in an effort to keep the user’s inbox free of spam – used to steer clear of spam filters and avoid blacklisting; allows targeted reach.
- Engagement Rate
Metrics to track the involvement of the target market with a brand’s content; understood as the number of likes, comments, and shares or interactions with videos, updates, blogs, etc. – important in social media marketing to measure success through brand visibility, affinity, and credibility. This digital marketing term is one of the strongest measures of social media campaign success, especially when the focus is to build a strong subscriber or follower base for your social profile.
- The Funnel
The sales funnel displays the buying process from a lead to a customer.
ToFu or Top of the Funnel
The first stage of the buying process where visitors are still looking for information – this stage requires building trust through quality content to motivate visitors into the next stage.
MoFu or Middle of the Funnel
The middle stage where buyers have identified their problem and need but continue research – here leads are transferred from marketing to sales.
Bofu or Bottom of the Funnel
The last stage where the buyer is getting ready to buy after identifying several vendors – a consultative approach to help a customer to come to a decision will seal the deal.
- GTM or Go-to-Market strategy
Plan specifying how to present a product’s unique value proposition to achieve a competitive advantage in reaching customers – provides a roadmap for launching a product to achieve product-market fit.
- KPI or Key Performance Indicators
A metric or quantitative benchmark to track progress toward marketing goals; KPIs should be SMART or Specific, Measurable, Achievable, Relevant, and Time-Bound – used in measuring performance and course correction.
- Keyword Stuffing
The practice of using too many keywords in the content to improve visibility on search engines; a harmful tactic attracting penalization by search engines – sifts bad marketing firms from the good ones who focus on keyword research to optimize web advertising and website search engine placement to match high traffic keywords.
