The economic principle I am exploring is how people generally respond to incentives in predictable ways. My research question to help me study this economic principle is: How do social media companies design apps to incentivize people to use them longer? What effect does this have on individuals, society, and business?
The article published in Lyfe Marketing titled “The Importance of Social Media in Business,” demonstrates this economic principle because it shows all the ways social media has influenced how businesses are run.
Social media marketing can be quite cost effective. Social media is now an integral tool in business strategy, as the number of social media using adults has risen from 7% in 2005 to 69% ten years later.
Social media allows businesses to make their connections with customers more personalized -- creating a more loyal fan base. When advertising was strictly billboards and television, it was difficult to know who your audience was going to be, and social media has minimized that issue because the different media apps/sites each have different audiences. Businesses now have employees that spend the day responding to customers who have questions, concerns, or complaints via social media. For example, customers may complain over a gross meal they ate at Taco Bell via Twitter, and Taco Bell will tweet back, apologizing and offering free meals in the future. This is crucial because complaints over the web can lead to more people being less interested in that particular business, and reaching out to a customer personally and promptly makes brands less superficial and increases customer satisfaction.
Many businesses create hashtags, and when a customer buys the product, the brand suggests they take a photo with it and post it with the hashtag. If a hashtag is “trending” many other users will see it and now the audience has widened.
Finally, with people’s continuous use of social media, and its growing popularity, advertising via social media, including paid campaigning, has proven to be extremely effective and a crucial part in keeping businesses afloat in this competitive environment.
In my next blog post I will research: The genuine enjoyment of social media vs engagement mechanisms.
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