Studies have found that social media significantly affects the manner in which people communicate with each other. Social media affects how users make decisions, socialize, learn, entertain themselves, and do their shopping. Research has led to the conclusion that social media has caused a shift in the influence of consumers at the expense of mass media such as television, radio, and newspapers. This democratization process has significantly reduced the effectiveness of mass marketing campaigns and has given the consumer more choice in selecting which messages to listen to and which messages to create.
On June 8, 2010, Performics (www.Performics.com) released a report, “S-Net (The Impact of Social Media),” based on a study that explored how social media permeates consumers’ lives and affects communication, shopping and other activities. According to Performics, the findings concluded that social networks continue to drive changes in consumer behavior online. Performics CEO Daina Middleton stated that “social networking has greatly contributed to the shift from strict consumerism to more lively, two-way participation between brands and everyday customers. It’s a groundswell of technology – enabled word of mouth, and many of the brands involved in these active discussions are effectively satisfying their fans.”
Rather than merely consume the messages, through social media the consumer is now becoming both consumer and creator of messages. For example, a consumer may decide to buy a book based on positive book reviews posted on Amazon.com. Upon reading the book, the same consumer may post his own positive review, further encouraging more consumers to purchase the book. This series of user-generated reviews is increasingly becoming more valuable than the most sophisticated marketing messages produced by professionals. The vast and exponentially growing knowledge base created by comments, product reviews, and other publicly shared information provides consumers with valued feedback that allows more informed decisions.
The shift from professionals to peers is forcing businesses to deal in a more honest and transparent manner or risk losing the business to a competitor that does. While social media presents challenges to businesses, it also provides opportunities to those that embrace the change and work within the new paradigm. The message that is penetrating the business community is that businesses that ignore social media do so at the risk of becoming irrelevant.