Impact of social media marketing on businesses

Umme Sutarwala

August 21, 20237 min read

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Have you ever wondered how a simple hashtag can turn an ordinary person into an overnight sensation on Instagram? Well, we all have been there! But a viral rags-to-riches story aside, what's even more fascinating is how businesses harness the power of social media. 

If you've ever imagined how your favorite companies effortlessly conquer the social media game, making us double-tap and, more importantly, converting those likes into profits, you're not alone.  

It’s no surprise that social media has revolutionized business operations, consumer interactions and product or service promotions in this digital age. Pretty much everyone is on it! Platforms like Facebook, X, formerly Twitter, Instagram, LinkedIn and others in the social media space have transformed into crucial tools for branding and marketing.  

To engage with their target audience, build brand awareness, enhance website traffic and increase sales, businesses are now employing social media marketing (SMM) because you just can’t do without it given the times.  

So, in this article, we’ll be exploring the secrets behind their social media triumphs and how they were able to turn digital engagement into real-world success. Now, let’s jump right into it with a basic question. 

Table of Contents

What is social media marketing? 

Social media marketing is when a brand or an individual uses social media websites and platforms to advertise a business or a product. It entails producing and publishing content on social media platforms to accomplish marketing and branding objectives. What’s more, SMM isn’t simply about promoting products. It’s also about having a two-way conversation with your audience for greater engagement. 

In 2023, social media usage is projected to skyrocket, with an estimated 4.9 billion users worldwide, reaching an all-time high. Experts predict that by 2027, this figure will surge even further to 5.85 billion users. 

It's also important to know that these numbers include people who use multiple social media platforms. This means that, on average, users are active on 6–7 different platforms each month. This highlights that businesses need a well-rounded social media marketing strategy to reach and engage their audience effectively. 

Impactful components of social media marketing 

Content creation and curation 

The cornerstone of social media marketing is content. Businesses produce and curate interesting, educational and relevant information for their target market, which will help them stay ahead of the curve. It comes in various formats, including text, pictures, videos, infographics, etc. And the reach of the brand's message is only amplified by people when they share high-quality content with their networks to keep more people gripped. 

Read More: How to create a content plan? 

Audience segmentation and targeting  

Being able to segment and target particular groups is one of the key benefits of social media marketing. Businesses may contact customers based on their demographics, interests, activity and geography, thanks to the sophisticated targeting tools offered by platforms like Facebook and Instagram. Social media marketing’s impact is maximized by precisely directing the content to the right audiences.  

Social media advertising 

Through social media marketing, businesses can spread the word about their content to a larger audience, instead of it just reaching their followers. These paid, or inorganic, advertisements combine with organic content in consumers' feeds without being noticed. When adequately created and targeted, social media advertising efficiently improves conversions, generates leads and drives traffic. 

Community management and engagement 

A brand's online community must be built to use social media marketing successfully. Community moderators actively interact with followers, respond to messages and comments and encourage a sense of community among the audience. And when there are positive customer experiences, they only foster brand loyalty and transform consumers into brand advocates. 

Also Read: How to build an online customer community in 2023 (+benefits)  

Influencer marketing 

In an ever-evolving digital landscape, influencer marketing platforms have become indispensable for businesses that are looking to expand their reach and drive meaningful engagement. These platforms serve as innovative digital ecosystems, acting as the dynamic bridge that connects brands and influencers in the vast realm of social media.  

Popular brands like Dunkin and ZARA are now harnessing the power of influencer marketing strategies to thrive in the competitive online space so they can connect with consumers on a deeper level.  

How can social media marketing impact your business?  

The positive impact of social media marketing on businesses 

  1. Enhanced brand awareness: Social media platforms allow your brand to connect with a wide audience. Businesses get the opportunity to contact a whole range of prospective customers, even those outside their immediate geographic region, thanks to the billions of active users across several platforms. And when your marketing efforts become viral via engaging and shareable content, they can dramatically raise your brand's visibility and recognition. 

  2. Improved customer engagement: When you interact with customers through posts, comments and conversations consistently, it fosters loyalty and trust, and it builds a strong emotional connection between your business and its audience. This not only boosts customer satisfaction but also encourages customers to become brand advocates who spread positive word-of-mouth and attract new potential clients. Responding promptly to their inquiries shows genuine respect and interest in their opinions, which further strengthens the bond and makes customers feel valued and heard. 

  3. Targeted advertising: Social media platforms include sophisticated targeting capabilities that let companies create advertisements that are relevant to specific demographics and interests. This way, your marketing efforts will reach the right audience because of the precise targeting. 

  4. Cost-effectiveness: Social media marketing is typically more affordable when compared to conventional advertising techniques. Even small enterprises may compete on social media since they can reach a large audience for a relatively small amount of money. If you’re curious about this, you should learn more about social media ROI

  5. Opportunity for viral marketing: A well-executed social media campaign can spread like wildfire online, reaching millions of consumers and propelling a brand to unprecedented popularity. To create viral content, make it relatable, shareable and, most of all, emotionally gripping for your audience. 

  6. Competitive advantage: A robust social media presence in today's fierce business environment can give companies a significant advantage. Brands that embrace social media marketing by creating appealing content that puts their products in the spotlight do, by all means, stand out from their competitors. This differentiation allows them to tap into a broader audience and stay one step ahead in the market. 

 Also Read: What is competitive benchmarking and how do I get started? 

The negative impact of social media marketing on businesses 

  1. Risk of negative feedback: Customers can and will express their ideas on social media, whether it’s positive or negative. Because, freedom of speech, right? And while receiving favorable feedback might be helpful, failing to appropriately respond to negative comments or reviews can harm your brand's reputation in no time. 

  2. Time-consuming: A lot of time and effort are needed to manage social media marketing efforts effectively. Maintaining audience engagement, responding to messages and producing high-quality content can take time, especially so for small firms with little funding. 

  3. Misalignment with the target audience: With an ill-defined strategy, firms could end up publishing content that doesn’t appeal to their audiences, which can certainly hurt engagement. It’s a hard truth, but if you want to know more about the best practices of publishing, you should understand the 6 common social media publishing challenges (and how to overcome them). 

  4. Data privacy concerns: Users may be concerned about privacy if their data is collected for targeted advertising objectives. Businesses must follow applicable laws and be transparent about their data-gathering procedures. 

Also Read: Social Media Security: How to Stay Safe on Social Media? 

Examples of how social media marketing impacts businesses

Wendy's and its X, formerly Twitter roasts

A Wendy's outlet with outdoor seating for customers.


Popular fast-food restaurant Wendy's is well-known for its creative and humorous X, formerly Twitter posts. Wendy's has attracted much attention on social media by interacting with consumers through humorous roasts and witty comebacks.

The company's unusual strategy distinguishes it from competitors and encourages a sense of community and excitement among its supporters. This approach has resulted in increased brand recognition, viral events and a committed internet audience.

User-generated content at Airbnb 

A person getting more details about the Airbnb app on an app store on their tablet.


Airbnb has effectively used UGC to produce captivating social media campaigns. It has created a sprawling community of visitors and hosts on Instagram by encouraging people to share their travel experiences and tag their company in their posts.

And by doing this, the company has prompted pleased customers from all walks of life to showcase genuine, real-life photos of their picturesque getaways. This way, they’ve developed greater credibility and confidence in their brand, encouraging others to use Airbnb to discover new places. So, it goes without saying that this user-generated content strategy has excelled in boosting brand loyalty and boosting bookings.

Nike's social activism  

Various illustrations of Nike ads on social media.


A great example of social media marketing with a purpose is Nike's "Dream Crazy" campaign, which stars former NFL player Colin Kaepernick. Nike provoked heated debates on social media by taking a stand on a controversial social topic. And though the ad received positive and negative feedback, it significantly increased brand mentions, interactions and online purchases. The strength of matching marketing tactics with a brand's ideals is clearly shown by Nike's readiness to support a cause that appeals to its target population.

Read more: 8 best practices to ace your social media marketing 

Wrapping things up

Social media marketing has transformed how businesses interact with customers and develop their brands. When pulled off right, it can provide significant benefits, including greater customer engagement, brand awareness and cost-effective advertising. However, companies must also be aware of the possible drawbacks, such as unfavorable reviews and concerns about data privacy. But remember that you can always get a better idea of how to go about your social media marketing strategy and learn how to leverage the power of relationships by looking at successful companies like Wendy's, Airbnb and Nike.

Social media marketing provides an unprecedented opportunity to communicate with consumers, connect with a worldwide audience and build a loyal audience. Beyond brand recognition and reach, social media marketing significantly influences customer relationships, revenues and overall business performance. So, businesses must use the power of social media marketing and modify their plans to stay ahead in a continually shifting market if they want to stay relevant in the digital age.

To have the edge over the competition in this chaotic digital environment, making the most of a social media management tool, can definitely help your company in efficiently managing its social media marketing efforts and increasing its impact.

With its comprehensive toolkit, Sprinklr Social, a comprehensive social media management platform, assists companies in streamlining their social media strategy, interacting with their audience and producing significant outcomes. So, give it a shot and harness the power of social media marketing to the fullest.

Frequently Asked Questions

Small companies may compete on an equal footing with bigger competitors by using social media marketing to communicate with potential consumers, reach a wider audience and create brand recognition.

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