How Important Should Social Media Be In Marketing Your New Business?

Image Credit: Sean MacEntee on Flickr

On March 20, 2015, Elon Musk, the visionary CEO of Tesla, put out this tweet:

“Major new Tesla product line — not a car — will be unveiled at our Hawthorne Design Studio on Thurs 8 pm, April 30”

Within 10 minutes of posting, Tesla shares jumped 4%, adding close to $US 1 billion to its market cap.

Examples such as this one make new entrepreneurs pencil social media at the top of their marketing to-do list for launching their new business.

And I don’t blame them.

If you are searching for advice on how to market your new business you will invariably come across a common recommendation: you have to “engage” your target audience on social media with compelling content that everybody will want to share.

Social media experts have long predicted the disappearance of traditional marketing communication channels, and the dominant role Facebook and Twitter will have in influencing consumer choices.

The rationale behind the prediction was that consumers hate advertising pushed through traditional mediums, such as TV, newspaper and magazines. The only way for brands to build reputation is by engaging in organic, spontaneous two-way conversation.

Judging by the Tesla example above, social media is a powerful tool for established brands with millions of followers.

But what about new businesses? Can social media help business owners reach potential customers more effectively, and ideally at a lesser cost?

People Socialize with People, Not Brands

The reality is that for most businesses social media play a minuscule role in finding new customers who will want to buy from you.

The word “social” refers to people, not businesses, and that’s how all social media platforms were initially designed.

Remember the first screen that appeared when you signed up for a new social media platform? It invariably presented you with a list of your friends and co-workers that you should add to your community.

There is only one problem with targeting your friends and family: they don’t want to buy from you, or “engage” with your brand. No matter how engaging your postings are, they want to know about you, and not what you have for sale.

Social Media is Unpredictable, and No Longer Free

Once the number of users becomes significant, social media platforms face the big challenge of monetizing this success. This is when they invariably turn to businesses for help.

Let’s take Facebook as an example.

In 2007 the most popular social media platform introduced Fan Pages and Facebook Ads, as a “revolutionary” opportunity for brands to move away from the traditional way of marketing to consumers and engage in conversations that will eventually translate into sales. Brands took notice and started investing time in building communities of fans, and delivering content to hopefully be shared with their friends.

But in 2012, brands were in for a big surprise.

Facebook announced that organic posts by brands were only reaching up to 16% of the fan base. In addition, the platform would further restrict organic reach of posts deemed to be too promotional.

The solution? In order for brands to become more visible, they would have to pay for it.

Needless to say these changes were met with frustration and even anger by business owners who spent years building an audience, just to discover that due to recent changes in algorithms and strategy by social media sites, they can no longer reach that target audience organically.

If you are curious to visit pages with impressive followings, you will notice the fans’ engagement is very low. According to Forester Research, only 0.07% of users interact with each post.

That is a ridiculously low number by any marketing metrics.

Those constant changes and updates makes it impossible for business owners to create any meaningful strategy around social media. And with organic reach nearing zero, the argument that maintaining a social media presence is free is no longer valid.

Social Media Revolution That Never Was

Social media will not revolutionize marketing as the expert predicted. Facebook, Twitter and Instagram are becoming alternative paid communication options, just like other forms of digital, print, outdoor and TV advertising.

So what should be the role of social media in the overall marketing communication for a new brand?

Once you build your community (through paid advertising), social media can successfully be used to augment the level of customer service your brand provides and to always improve your overall brand experience. Surrounded by the anonymity the internet provides, people are more comfortable expressing their true feelings about a brand and its actions.

This is not to deny the impact social media had on how brands communicate with their audience. I just want to set realistic expectations for new entrepreneurs, who are counting on social media to build their new brand: the days of building a brand through free organic reach are over.

Just like email, direct marketing and personal selling, social media requires knowledge, dedication, time, and money to effectively use.


  1. Hi Carrie,

    Thanks for your feedback. Are you generating new customers from advertising on social media?


  2. Carrie Stallard says:

    As the owner of a small online business with a limited advertising budget, social media is really the only affordable option.

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