Social media marketing As an Investment

In the brief history, Social Media, as called New Media, has traditionally already been viewed as a place to meet new friends, reconnect with old friends plus interact in an online social environment. In short, social networks were “a cool place to hang out” but kept little applicability beyond that. There is no shortage of funding in Silicon Valley for firms launching brand new media platforms. With the emergence of sites like MySpace, Facebook and Twitter, there is no question that there is worth in the vast amounts of information on people that these platforms have been able to collect; however , there has been no clear monetization strategy beyond bringing in advertising income. Arguments have been risen as to the correct value of these firms; some might state that their valuations are overpriced and artificial, while other declare that the value of their databases alone are usually enough to justify multi-billion buck price tags.

The New Value of Social Media and The Social Media Firm
More recently social media provides spawned a new value proposition, which is the business applicability of the vast user-bases these social networks have created. Irrespective of which side of the valuation fence you sit on, it can be said that social media holds vast utility for companies looking for a new way to reach out to customers and engage in two-way communications. It has never been done before from the traditional marketing, advertising or advertising perspective, and has given rise to a new business model: The Social Media Firm. This brings forth the discussion of whether or not The Social Media Firm is an excellent investment. Is The Social Media Firm a fad that will die out in the coming years, or is this a long-term, sustainable industry that will one-day drive obsolescence to the traditional ways of advertising, public relations and marketing?

Given the state of the current economy, Investment capital and angel funding sources have already been keeping their portfolio dollars near to their chest, reserving investment only to businesses with a decent operating history, solid revenue streams and unlimited growth potential. Does the Social Media Company fall into this category? My answer is yes. The bottom line is: social media is not really going anywhere. Social media has become a basic piece of the lives of younger generations, and the fastest growing adopters of recent media are people over the age of 30. Since the recognition of the business potential that social networks holds, large Lot of money 500 firms are devoting a good portion of their marketing budgets in order to social networks and new media promotions.
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For instance, Pepsi has devoted $20 Million of their marketing budget for the social media program called Pepsi renew, and many large firms are beginning to follow suit. Needless to say, the earning potential for The New Media Firm is significant.

Is it sustainable?
As mentioned earlier, new media is not going anywhere. In most cases it has become a standard part of the Web experience similar to email. The sites that are considered the gorillas in social media marketing may churn; however , there will always be something new to which these Internet-based communities will migrate. For example , the social networking migration to-date has gone from Bebo to Facebook to Twitter, and the next major shift and/or addition to this massive online social sphere is likely just around the corner. The long-term durability of The Social Media Firm is largely based upon these companies’ ability to identify plus pre-empt the next big shift, and also to develop effective methods of leveraging both old and new platforms with regard to driving revenue, profitability, sales volume and identity to their clients.

Exactly why Outsource to The Social Media Firm?
A single question that may arise is: exactly why would large companies hire the social media agency when they have the monetary resources to do it in-house? The answer for this is the simple fact that it is cheaper to outsource a new media campaign to some firm that has a skilled team currently in place that is intimately familiar with navigating the complex world of new press. In the same manner that large companies employ advertising agencies to design traditional mass media campaigns, this approach can and will be used for new media. By hiring The brand new Media Firm companies can eliminate both the administrative burden that comes with hiring a multitude of new employees, as well as the learning curve that will inevitably be present when trying to integrate those employees into their corporate culture. It is more cost effective, both in monetary and administrative respects, in order to outsource these campaigns to professional teams that are fully adept with leveraging the potential of modern media, navigating the codes of conduct of such online communities and staying ahead of the curve when it comes to identifying the exploiting the latest new media trends.

Closing Comments

In summary, I do believe that investment within the Social Media Firm holds great potential for many funds; however , it is imperative that when vetting these agencies, Enterprise Capitalists and Angels need to ensure the company contains the correct personnel plus management team to fully exploit this particular budding industry. The ditch contains large amount of one-man shops and so-called social media experts that are no more than sufferers of the recession who happen to be adept at Facebook or Twitter. It is imperative the architects of new media campaigns are aware of the intricate details of new mass media, and the vast array of assets which exist online to for a business to take full advantage of the social media planet. Utilization of the lesser known social media stores such as Digg, BrightKite, hi5, Xanga and countless others could be the difference between a full-scale robust strategy that shows real results, plus an ineffective and unorganized try at new media that waste materials marketing dollars.

Due to the infancy of this industry, there are few companies out there that truly know how to unlock the cost of new media for business. The particular one’s that do will quickly rise to the top, and when sufficient due diligence is done, these companies are ripe for investment. A strategic infusion of capital is likely the enhance needed to take these companies from an eco friendly cash-flow business to the next industry giant with A-list clientele.

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