“By giving people the power to share, we’re making the world more transparent.” – Mark Zuckerberg
Introduction to social networking sites
Social networking sites provide venues for interaction online. Some popular social networking sites include Facebook, Instagram, LinkedIn, Reddit, Snapchat, TikTok, and Twitter.
The U.S. social networking site industry has grown at an annualized rate of 36% from 2013 to 2018 [1]. Most of social networking sites’ revenue comes from advertising. Why do companies like advertising on social media? Because social networking sites allow firms to access a wide audience (over two billion active users on Facebook alone) and segment that audience based on demographics (location, age, gender, etc.) [1].
Reasons to utilize social media
Whether your company uses paid advertising on social media or simply uses organic marketing (creating a page and interacting with the community cost-free), social networking sites provide many benefits to companies. Social media helps get the company name out to a variety of potential customers and business partners. Utilizing organic marketing on social media can help your firm establish a strong relationship with your client base and grow trust in your firm.
Myth buster
Since social networking sites were initially accepted by the younger, more tech-savvy generations, many people believe that teens and individuals in their 20s make up the vast majority of the social media market. However, that is not true. People aged 13-29 only make up 34.3% of active users, which is less than 30-49-year-old active users at 40.4% [1]. Also, possibly more surprising, people aged 50 and older make up 25.3% of the market, which makes the old saying “don’t share anything you would not want your grandmother to see” even more relevant today [1].
Where to begin
Growing a following on social media is difficult, so our recommendation is to begin with the biggest players to reach the largest potential market.
Out of all the social networking sites in the United States, three companies own 84.9% of the market share: Facebook, Inc., LinkedIn Corp., and Twitter Inc [1]. Facebook, Inc. owns Facebook and Instagram and makes up 70.1% of the market share. Facebook and Instagram allow many avenues for communication including microblogging, photo sharing, video sharing, live video streaming, and even location statuses. Facebook and Instagram are two great social networking sites to start with because of the enormous market and ability to communicate in multiple ways. LinkedIn Corp. (owned by Microsoft Corp.) is the second largest social networking site player in the U.S., making up 10% of the market. LinkedIn focuses on professional networking and therefore attracts less of the teenage market and more individuals in their twenties and older. Despite the lower market share and fewer communication features, LinkedIn is a great site for targeting professionals of older generations. Twitter Inc. (Twitter) sits at third place on the list with 4.8% of the market share [1]. Twitter focuses mainly on microblogging and is used often by television programs and even in politics to source audience questions and concerns. Some businesses use Twitter to test ideas with their audience. Twitter can be a great resource for companies to actively interact with and source ideas from their customers.
To recap, social networking sites provide a wide audience for businesses to reach and segment. For that reason, we recommend implementing social media in your firm’s marketing strategy. To do this, you might start with a few of the major social media platforms – Facebook, Instagram, LinkedIn, and Twitter – to build up your social presence.
[1] Hoffman, E. (2018). Expanding networks: Enormous growth will continue as sites find ways to monetize. IBISWorld Industry Report OD4574 Social Networking Sites in the US, 1-33. Retrieved from https://clients1.ibisworld.com/reports/us/industry/default.aspx?entid=4574