For businesses large and small, capitalizing on social media is a bit of a no-brainer. Social networking is revolutionizing the way businesses learn about and interact with their consumers.

Social media tools like Facebook and Twitter have become crucial audience information.
The likes, dislikes, tastes and trends of a company's existing and potential consumer base are all there, ripe for analysis, targeting and retention. American consumers remain relatively energized about the interactivity of social networking. Almost 50 percent described themselves as enthusiastic about socializing via computer and mobile devices in a recent survey from the Pew Internet & American Life Project.

Despite the unprecedented access and reach provided by social media, there are some limitations and considerations that business leaders should take into account. Here, we'll spell out a few pros and cons of using social media for your business.


  • Building Brand LoyaltySocial networking allows businesses to connect with consumers in instant, nuanced ways that can strengthen a company's position as an authority, an expert or an advocate. Social networking is also a great way to get a feel for complaints, shortcomings and other issues that might be missed or glossed over in traditional surveys or interactions with clients. It's a simple and effective way to cultivate a degree of brand loyalty.
  • Grabbing dataMarketers are using information from personal networking pages on MySpace and Facebook to craft targeted ads uniquely tailored to a person's tastes. During the Easter holiday, Reese's Peanut Butter Eggs Facebook page has more than 165,000 fans. Cadbury Crème Eggs have more than 380,000 fans. Combined, that's more than a half-million people who to some degree identify with those brands. That's also a half-million people whose personal information can be mined for companies and marketers.
  • Measuring impactDon't let anyone tell you this stuff is immeasurable. Is there any way to predict whose friend of a Facebook friend will wind up becoming your biggest fan? No. But there's a host of metrics and analytics that companies can use - some extremely cheap or free - to get a handle on the effectiveness of a given social media campaign.
  • Online presenceGenerating quality content and garnering quality links are key ingredients in the ever-changing recipe for boosting a company's presence in the search engines. Utilizing social media is a huge part of the equation. Share photos of your product on Flickr. Post videos and tours on YouTube. Get some reciprocity going among your company's blog and those of industry commentators, opinion leaders and even detractors. Use the networking abilities of each site to tie them all together - your blog post to photos to the YouTube group. It can translate into widespread exposure.
  • The Power of PeopleAt the day's end, word of mouth still reigns supreme. People are simply more apt to purchase or be moved in that direction if they're spurred by the recommendation or insistence of someone they know - and even by those they don't. Posting videos, photographs and product descriptions invites consumers to evaluate and comment on a company's offerings. And if you're offering a quality product, those positive reviews can carry tremendous weight with prospective customers.


  • It eats time and resourcesSocial media campaigns involve a bit more than updating your Facebook status once a day or cranking out a blog post every week. Just shoveling thoughtless content into your blog or ignoring your Twitter feed will push consumers - and the search results - away. Companies have to allocate time and resources to social media campaigns, either in-house or via outsourcing. Like any sustained marketing effort, it's a commitment. It's also not always cheap. At larger companies, you're typically looking at a larger, vertical integration of marketing, public relations and communications strategies and campaigns.
  • The whims of the marketplaceThis one confounds corporate veterans to no end. Massaging the message is one thing, but controlling it in a social media environment is difficult once the public grabs hold. Bloggers can rip your product to shreds for giggles. A video mocking your corporate identity and ethos might wind up inextricably linked with your original YouTube piece. Beyond that, there's no guarantee that your blog post, your LinkedIn networking fodder or your laundry list of Tweets will get any attention. Creating quality content helps, but finding those key outlets and echo chambers - think aggregators like Digg and Reddit - is what can push you into the stratosphere. And the interests and dislikes of that realm can change as the wind blows. Building a social media base is paramount and time-consuming.
  • It's still earlyAs the American mainstream media can attest; figuring out the best advertising business model online is a constant struggle. No one has perfected it on Facebook or any of the other prominent social media outlets. The efficacy of paid ads in these locales is still a question mark, one that companies have to consider when examining their marketing budgets. Another wrinkle is that the return on investment can take significant time to develop, given the nature of relationship building.