Taylor Bell
Mrs. Straub
Economics
3 November, 2014
The Effects of Social Media
For quite some time now, social media has been making its way throughout the world, enhancing communication between individuals. From Facebook to Twitter to public blogs, this type of technology is becoming more and more popular, especially from an economic standpoint. Businesses are doing everything in their power to be a part of the latest social networking sites, as well as have the latest technology, in hopes of promoting and improving their business. All major company owners have realized how wrapped up our society is in social networking, so what better way to draw in customers, than communicate with them virtually?
Most of us high schoolers are all part of the common social networking sites, like Twitter, Facebook, Instagram, and many more. We use them to communicate with our peers, as well as update everyone with where we were last weekend, or what you’re going to have for dinner tonight. Some see these sites as useless and stupid, but business owners see them as an opportunity. Companies are able to produce advertisements, as well as accounts on these sites, so that they can better update the public with things involving their business. With social media being as popular as has been recently, the demand for companies to be apart of this social lifestyle is at an all time high.
Not only is this a fast and easy way for businesses to communicate with potential customers, but it’s also free! According to Jennifer Schiff, who wrote an article about ways that social media is affecting the enterprise, companies are saving “tens of thousands of dollars a year on traditional print, television or radio advertising- or even online banner ads”(Schiff), all because they have chosen to advertise on social media. This is allowing companies to put this extra money elsewhere, and evidently increase the quality of their products. And with this increase in quality, more customers are willing to make purchases, because they are getting what they’re paying for, evidently increasing the revenue and income of these companies.
This is where social media begins to affect the economy as a whole, because of how much control it really has all across the world, and in the United States especially. If you look at the map below, more than 50% of the countries population have at least one account on any of these social media sites.
Businesses are then going to use this to their advantage, by taking that large chunk of the population, and informing them of anything and everything the company wants consumers to know. With this positive effect of social media on businesses, the nations GDP per capita is also increasing. Research was conducted by Richard Florida on the top 50 cities in the United States that use social media the most, and then those cities GDP’s were compared to see the correlation between the two.
This graph ultimately shows a positive trend, with the cities with the highest amount of social media use, having the highest GDP per capita. This all comes together, because the more aware consumers are about businesses and their opportunities, the more profit these businesses will make. Ultimately increasing the GDP of the nation, which then increases the GDP per capita as well.
Clearly social media affects more than what meets the eye, because it is overall helping the health of our economy. With constant advertising and communication with consumers, social media has done nothing but benefit businesses, and increase income. It’s crazy how just a few sites like Twitter or Facebook can have such an influential effect on the incomes of businesses, and the overall position of our economy. So if you aren’t apart of social media, I highly suggest you sign up, and do your country a favor of staying connected with one of the economies biggest money makers.
Works Cited
Florida, Richard. "Is Social Media Driving the Economy?" The Atlantic. Atlantic Media Company, 27 Oct. 2010. Web. 3 Nov. 2014.
Mullaney, Tim. "Social Media Is Reinventing How Business Is Done."USATODAY.COM. A Gannett Company, 16 May 2012. Web. 3 Nov. 2014.
Schiff, Jennifer. "6 Ways Social Media Affected the Enterprise in 2012." CIO. CXO Media Inc., 13 Dec. 2012. Web. 3 Nov. 2014.
"Promoted Tweets: Is Your Business Ready?" Entrepreneur. Entrepreneur Media, Inc., 28 Apr. 2010. Web. 3 Nov. 2014.
Weingartner, Brian. "The United States of Social Media." Azavea Atlas. 22 Jan. 2014. Web. 3 Nov. 2014.
Taylor,
ReplyDeleteI think that you chose a very interesting, important, and current topic. I new that social media was changing advertising, but it is also changing sales. I know that blogs aren't exactly popular for our generation, but I think that young adults use them often. I know from watching shark tank that if a blog with a large following mentions a company, they see a huge increase in sales. I think its very interesting how social media can effect our GDP. I wonder if social media is impacting other nations GDP.
Now that you mentioned it I have been seeing a lot more business post on social media. I mostly see companies promoting their in store items on Twitter. If you think about it posting sales on social media could help sales, then again it couldn't impact the sales at all. It all depends if the store having the sale is in the same area as you are.
ReplyDeleteWow Taylor, this post is great! It really doesn't surprise me that Social Networks have such a major role in our economy, but many of the ideas you brought together in this piece were new and interesting to learn about. It's fascinating to see how GDP per Capita relates with Social Networks. To be honest, I don't believe there's a single person in the US with access to the internet or a smartphone, that doesn't have at least one social network.
ReplyDeleteI agree that social media does help with helping businesses out, whether it's larger company such as Nike, or a smaller company that is trying to improve business. It helps out the economy in a way that businesses itself need help with between deals, and getting the word out of what they have as a store. Commercials and ads cost businesses money, but the option of using social media helps increase the revenue of a company, and help provide for a better economy. The opportunity that is open for businesses, is a benefit for a company to make a bigger profit, and get the public's attention to what is going on.
ReplyDeleteSocial media is something that has definitely taken over, it's become a daily part of many people's lives. Yet, I've never thought about it in an economic standpoint before. It truly is a great tool to get the word of your company out there, however my question is how do the companies go about getting these accounts known? I often see tweets on my news feed that are promoted by a certain company that I'm not even following. I'd be curious to see how much it costs to get those tweets out there in comparison to other advertisement techniques.
ReplyDeleteThis a pretty interesting topic. I thought it was cool that companies could save so much money just by using social media for advertisement. I see this sort of thing on my news feeds as well. Most of the time however, I seem them because they were promoted. I wonder if this cost money to do. Another thought I had was what is the best way to make a tweet or a post that we have the largest effect on the consumers.
ReplyDeleteIt's great to see an article highlighting the positive impacts of social media rather than the constant negative news we hear about these social engines. The fact the businesses are able to reach you whenever, and wherever you are is truly amazing and must have a huge impact in sales by letting people know when things are on sale. Social media is a booming industry and I love that it is creating an environment that can help other industries like a commercial sector. Overall great article!
ReplyDeleteYou said that advertising over social media was free, but is this always the case? Every now and then on Twitter and various other social media outlets there are posts that are sponsored. In these cases, I assume that the company does in fact have to pay Twitter a sum of money, probably an extremely high amount, in order to show up on people’s feeds. My question is if this is even worth it. I can’t remember a single time when I’ve seen one of these promoted posts and subsequently bought their product because of their advertising efforts. Perhaps I am just not remembering any instances or am apart of a minority, but sometimes I think the commercial effects of social media are overestimated.
ReplyDeleteWith the abundance of people who are involved in one or more social media sites, advertising does get around quickly, which easily profits the company. Also, games on Facebook like Farmville and whatnot can gain profits this way as well because of how they have costs within the games, which therefore increases profit even more. Although the companies try really hard with their advertising, a lot of times the ads don't even get noticed -- just scrolled right past. This may be helping the economy, but it also may be simply a waste of time.
ReplyDeleteSocial media for sure will be a major impact on our lives. It'll be an even greater impact on us when technology advances in the future. Like Alex said, social media is a great thing for business to use to help promote and or advertise something new that the company has come out with. I think that social media has a positive impact on our future other than cyber bullying, but that's really the only major issue for social media. I think it's a great way for someone or some company to make money and promote things that will help them gain more money. Who knows maybe facebook or twitter will be like how Myspace is now..will there be another social media site to take over the world just like Facebook has?
ReplyDeleteClearly a majority of teenagers and young adults have social media accounts on things such as twitter and facebook, but what about advertising to the older population? Is there a way that business connect to the older population through these sites or is it entirely for the youth. Also, the business has to get sponsored so people know about their business being online but I'm assuming the benefits greatly outweigh the cost. It's actually really interesting that social media has that much of an effect on consumers buying behavior, I always see advertisements, but usually don't take a second look, so it amazes me that this has such an impact, when the teenagers don't usually look at advertisements it's more of a negative externality that comes with the use of social media and the internet. This was really interesting to read about how positive the correlation is between the amount of social media advertising and sales.
ReplyDeleteThe posts on social media are not always free for I have seen a Mcdonald ad on Instagram and it has a picture of there product on the page. These sponsored ads are usually used by big companies that can afford them. The social media tools that are free are the ones you have to "like" but the ones that randomly show up on your feed are the paid ones.This technique will make a bridge between the successful companies from the struggling ones for the ones that can afford to pay will prosper more in their advertising.
ReplyDeleteI think your topic is a great choice especially for people out age who are so involved in social media. I do also agree that social media is great for sales because it allows people to get information about products at the tips of their fingers. With being able to order products online as well, businesses cannot go wrong with creating a social media account to advertise their business.
ReplyDeleteWith the insane amount of social media users, it’s definitely a great idea for businesses to advertise so these users can see their advertisements. Although the advertisements may be annoying to these users, both the social media site and the advertisers can make money off of the investments, and in the end the advertisements won’t cause people to delete their social media accounts. It would be interesting to see how much more successful companies were after they started utilizing this social media tool.
ReplyDeleteThe information is awesome with beautiful presentation. Thanks for sharing the post with us.
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Interesting and informative stuff. I find that everyone thinks they're up to speed with the new social media platforms, but in reality things change so much and so quickly that it's hard to keep current. The angle on the financial savings for business in using social media for advertising is surprisingly often overlooked, I find. Good stuff.
ReplyDeleteSteven @ Cambridge Local Marketing
Social media has exploded with advertisements. It is now the best place for a brand to advertise their product, with the average person using social media more than once a day. These types of adverts are used solely online to attract certain market segments. They are able to take advantage of a users demographic information and target appropriately.
ReplyDeleteEdwin @ Clicks In Motion
This is an interesting look at a different side of social media than everyone is used to. I personally have had great experiences with Facebook sites for local small businesses in my area. They allow much more interaction between businesses and consumers and provide accurate locations, hours, and can allow for a dialog directly with the business. It is surprising to see hard evidence of such great success from social media.
ReplyDeleteCharles Campbell @ EVM Digital
Thank you for sharing! This article is very informative and helpful. I hope other articles will be as good as this article.
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