Why Social Media Is Important to Business

Last week, we mainly discussed what social media is. This blog, I would like to enter the business world and focus on the topic why social media is important to business.

Why social media is important to business? There is a TV program on CNN every night through Monday to Friday, called Quest Means Business. I think this name is a perfect explanation to tell you what social media means to business. As we known, for any kind of business, customer is always the king. For those for-profit businesses, customer is where you profit comes from. For those non-profit businesses such as NGOs, customer is who you want to help or deliver your service. So how can companies reach out and attract their potential customers? Yes, they need a platform, which is easy to draw people’s attention. This is the main reason why social media has been such a great and significant power on business, which no companies can ignore. Now, let’s look at some real statistical data about some popular social media which would help us to better understand how important is social media to business.

Graph 1: The growing number of Monthly
Active User, released by Facebook

Facebook, one of the most

Graph 2: The growing revenue of Facebook
 from 2010 to 2012, released by Facebook

well-known social media in the world, now has more than 1 million users and this number is still growing rapidly. On January 30 this year, Facebook executives threw out a lot of numbers during the company's earnings call, showing the network's steady growth in users and how much money those users bring to Facebook. 

Facebook announced that the 
social network was reached at 1.06 billion monthly active users. In addition to a 25 percent increase in monthly users from last year and a 28 percent rise in daily users, Facebook saw 57 percent growth in mobile monthly users. 


Here are some of the figures  released on January 30, 2013:

• 1.06 billion monthly active users (MAU) as of December 31, 2012

• 618 million daily active users (DAU) for December 2012

• 680 million mobile MAUs as of December 31

• $1.58 billion in revenue for the last quarter

• $5.32 in average revenue per user in 2012

Yao Chen's Weibo Home Page,
extracted from Weibo

Now, I would like to give you some example of social media in my home country, China. QQ, the Chinese MSN, had 784 million active user accounts with approximately 100 million users online at a time by 10 September 2012. Weibo, the Chinese Tweeter, has already become the biggest information exchange platform for those well-known people in China, such as politicians, artists, celebrities, business figures. Yao Chen, a famous Chinese actress, has more than 4,4430,000 followers, which means what she writes or shares on Weibo, nearly 4.5 million people are available to see it. More importantly, most of them are loyal fans who give her more credibility than give to some traditional media. Now, I think you may have a broad idea about how important is the social media for business because of its enormous number of users and unlimited business opportunities. But how are companies using social media for doing business marketing? What kind of marketing strategy they should take? I will focus on this topic in next blog.  

Reference: "Facebook by the numbers: 1.06 billion monthly active users", by Donna Tam, CNET