Social Media Marketing

The term social media marketing (SMM) refers to the use of social media and social networks to market a company’s products and services. Social media marketing provides companies with a way to engage with existing customers and reach new ones while allowing them to promote their desired culture, mission, or tone. Social media marketing has purpose-built data analytics tools that allow marketers to track the success of their efforts.

KEY TAKEAWAYS

• Social media marketing uses social media and social networks to market a company’s products and services.
• It allows companies to engage with existing customers and reach new ones as they promote their culture, mission, or tone.
• Sites like Facebook, Twitter, and Instagram are commonly used to execute social media marketing.

How Social Media Marketing (SMM) Works

Social media has changed the way we function as a society, including the way we connect with one another. As platforms like Facebook, Twitter, and Instagram took off, businesses also took notice. They began to use these sites to further their interests through social media marketing. That's because these sites are able to change consumer behavior.

Social media websites allow marketers to employ a broad range of tactics and strategies to promote content and have people engage with it. Many social networks allow users to provide detailed geographical, demographic, and personal information, which enables marketers to tailor their messages to what is most likely to resonate with users.

According to Buffer, there are five key pillars of social media marketing:

Strategy: This step involves determining goals, the social media channels to be used, and the type of content that will be shared.

Planning and Publishing: Businesses should draft plans of what their content will look like (i.e. will there be videos? Photos? How much script?) and decide when it will be put out on the platform.

Listening and Engagement: Monitoring what users, customers, and others are saying about the posts, brands, and any other business assets. This may require the adoption of a social media engagement tool.

Analytics and Reporting: Part of being on social media is knowing how far posts are going, so reports of engagement and reach are very important

Advertising: Purchasing ads on social media is a great way to promote and further develop a brand. 

Special Considerations

A major strategy used in social media marketing is to develop messages and content that individual users will share with their family, friends, and coworkers. This strategy relies on word-of-mouth and provides several benefits. First, it increases the message’s reach to networks and users that a social media manager may not have been able to access otherwise. Second, shared content carries an implicit endorsement when sent by someone who the recipient knows and trusts.

Social media strategy involves the creation of content that is sticky. This means that it gets a user’s attention and increases the possibility that they will conduct a desired action, such as buying a product or sharing the content with others in their own network.

Marketers create viral content that's designed to spread quickly between users.3 Social media marketing should also encourage customers to create and share their own content, such as product reviews or comments. This is referred to in the marketing industry as earned media.

Advantages and Disadvantages of Social Media Marketing (SMM)

Social media marketing campaigns have the advantage of appealing to a broad audience at once. For example, a campaign may appeal to current and prospective customers, employees, bloggers, the media, the general public, and other stakeholders, such as third-party reviewers or trade groups.

But these campaigns can also create obstacles that companies may not have had to deal with otherwise. For example, a viral video claiming that a company’s product causes consumers to become ill must be addressed by the company, regardless of whether the claim is true or false. Even if a company can set the message straight, consumers may be less likely to purchase from the company in the future.

Compete Risk-Free with $100,000 in Virtual Cash

Put your trading skills to the test with our FREE Stock Simulator. Compete with thousands of Investopedia traders and trade your way to the top! Submit trades in a virtual environment before you start risking your own money. Practice trading strategies so that when you're ready to enter the real market, you've had the practice you need. Try our Stock Simulator today 

Related Terms

Social Media Optimization (SMO)

Social media optimization (SMO) is the use of social media networks to manage and grow an organization’s message and online presence. more

Viral Marketing

Viral marketing seeks to spread information about a product or service from person to person by word of mouth or sharing via the Internet or email. more

Social Media Definition

Social media sites and apps help people share ideas and build communities. See how social media can help you grow your business and gain customers. more

Understanding social Networking

Social networking is the use of Internet-based social media programs to make connections with friends, family, colleagues, or customers. more

What Is an Advertorial?

An advertorial is magazine, newspaper, or website content that looks and reads like that publication’s content but is actually a paid advertisement. more

Understanding the Network Effect

The network effect is a phenomenon where a good or service becomes more valuable when more people use it. Read how the network effect helps companies grow. more

How Do Internet Companies Profit With Free Services?

It may seem contradictory that companies that operate internet businesses are able to make substantial profits each year despite offering their services for free. Companies that operate in internet services have grown in number consistently over the years as more consumers are utilizing the internet to purchase products and services, connect with family and friends, search for employment, or gain access to information and news on virtually any topic.

The majority of content provided through these internet companies is offered to users at little to no cost, and consumers have grown accustomed to accessing information found on the internet for free.

The truth is companies such as Google, Facebook, Yahoo, Twitter, and many others have various ways in which they can generate revenue while continuing to offer their unique internet services at no cost to consumers. The primary way these companies make money on the internet revolves around creating revenue through selling advertising.

What Is TikTok?

With over 2.5 billion installs, TikTok is a very valuable app.

TikTok is a popular social media app that allows users to create, watch, and share 15-second videos shot on cell phones. With its personalized feeds of quirky short videos set to music and sound effects, the app is notable for its addictive quality and high levels of engagement. Amateur and professional creators alike can add effects like filters, background music, and stickers to their videos, and can collaborate on content and create split-screen duet videos even if they're in different locations.

Why Facebook Is Banned in China & How to Access It

China’s “Great Firewall” is a disruptor in the social media sector

Facebook (FB) has more than 2.8 billion monthly active users worldwide, with primarily no footprint in China.1 That’s because Facebook is banned in China, along with many other global social media providers.2 The Chinese government controls Internet content and restricts, deletes, or bans content it deems is not in the interest of the state. This has grown to become a long list of companies.

Twitter vs. Facebook vs. Instagram: What's the Difference?

Social media helps billions of people worldwide stay connected. Facebook (FB), Twitter (TWTR), and Instagram (which is owned by Facebook) are among the most successful social media brands. The three sites appeal to different demographics. Facebook has broad appeal across ages. Instagram users tend to be younger, and Twitter is favored by affluent college graduates.

How Facebook Makes Money

Facebook generates most of its revenue from selling advertising space

Facebook Inc. (FB) primarily makes money by selling advertising space on its various social media platforms. Those platforms include websites and mobile applications that allow users the ability to connect and communicate with family and friends. The company's sites and apps include social networking site Facebook, photo- and video-sharing app Instagram, and messaging apps Messenger and WhatsApp. Facebook also provides an ecosystem that allows users to connect through its Oculus virtual reality products.