X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Is Facebook the new company website? - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Apr 11, 2011

    Is Facebook the new company website?

    Last week, our entire nation united in favour of Mr. Anna Hazare. He received support from millions of Indians. What is more important is that this time around, the youth of the country too were actively involved. The news channels covering Anna Hazare’s campaign got more eye balls than the immensely popular IPL cricket competition. The reason for the huge participation from the youth lies in innumerous tweets/ Facebook status updates. It was also supported by the online invitations to attend the candle light vigils.

    Could you have imagined such enormous support especially from the younger generation in the absence of social networking? Well, such is the power of social media. And now the Indian companies too have awakened to this fact.

    So what exactly is social media? A social media website may refer to any website that doesn’t just give information, but interacts while giving you that information. These include blogging sites like Twitter, Blogger, social networking sites like Hi5, Facebook, Orkut, Linkedin and also sites where you can share photos and videos like Flickr and YouTube.

    Companies all over the world are utilizing social media for gaining visibility and maintaining their brand value. Starbucks, the international coffee chain has stated that it boosted its UK sales of Christmas drinks by 15% last year as a result of inviting its Facebook fans to choose seasonal flavors. In India too, social media is slowly but surely making a place in the advertising budgets of corporate. From media companies to airlines to telecom companies, everybody is hopping on to this bandwagon.

    HUL was the first company which adopted social media in 2005 to promote their Sunsilk shampoo. The company created an online community "Sunsilk Gang of Girls" who could relate to this brand. More recently, PepsiCo India arranged live chats on Facebook with Ranbir Kapoor when it launched an online game.

    Opportunities

    Companies have to keep pace with changing consumer needs and preferences. These days we are spending more time interacting on these social networking websites. Thus, it would make sense for the companies to advertise and publicize where the target customer is. Also, social media is much cheaper than other mediums. The best part is that the companies do not have to invest much to maintain their facebook profiles and twitter accounts.

    India has more than 500 million mobile users. More and more people are accessing internet through mobiles. This along with the existing internet user base of 81 million provides a huge scope for growth in this segment.

    Social media help in building brand images and encouraging brand loyalty. The companies can target a larger audience and also the specific audience that they need for their product segments. We may read reviews and analyses but would still prefer to go for the products that have been recommended by our peers. Networking websites facilitate this word of mouth publicity.

    Facebook is the new company website and much more than that. The networking websites provide numerous ways of engaging the customers. Customers can post their feedbacks on the walls, participate in online surveys, play interactive games and suggest new ideas.

    Challenges

    Although social media provides a direct medium of interacting with customers, what matters is how companies use it to maximum advantage. Merely having a fan list would not suffice. They will need innovative ideas to engage the customers. Otherwise they would lose interest and move on to a ‘page’ that is more interesting.

    Another problem is that it is very difficult to calculate the return on investment made in such activities. We cannot even define the value of a facebook fan or the increase in sales as a result of "likes" on a company’s profile.

    In India, we have the right to freely express ourselves. The customers will freely write their opinions about brands and products on company pages. At times these derogatory comments may cause more harm than expected to brand image.

    Conclusion

    From traditional platform of print media (newspapers and magazines) we moved to electronic media (movies, radio, out of home advertising and television). When internet gained immense popularity, online advertising became the preferred medium of advertising. Nowadays, we are spending a substantial time on facebook, orkut and twitter. In fact, 50% of Indian web traffic is now social. Thus, social websites are the place to be for companies especially those with brands that target the youth. Whether they reap benefits out of this new trend will be evident in times to come. But, they certainly cannot afford to ignore it.

     

     

    Equitymaster requests your view! Post a comment on "Is Facebook the new company website?". Click here!

      
     

    More Views on News

    Zee Ent: GST Short term Negative but Long term Positive (Quarterly Results Update - Detailed)

    Aug 14, 2017

    The management believes that GST will aid the advertising spends in the long-run.

    S Chand and Company Ltd. (IPO)

    Apr 26, 2017

    Should you subscribe to the IPO of S Chand and Company Limited?

    GTPL Hathway Ltd. (IPO)

    Jun 21, 2017

    Should one subscribe to the IPO of GTPL Hathway Ltd?

    Zee Ent: Advertising drives revenues (Quarterly Results Update - Detailed)

    Aug 1, 2016

    Zee Entertainment has announced its results for the first quarter of the financial year 2016-17 (1QFY17). The company has reported 18.5% YoY growth in sales and a 13.7% YoY growth in profit after tax.

    Zee Ent: Taxes, lower other income mar bottomline (Quarterly Results Update - Detailed)

    Feb 3, 2016

    Zee Entertainment has announced the third quarter results of financial year 2015-2016 (3QFY16). While the topline grew by 17% YoY, bottomline fell 11% YoY during the quarter.

    More Views on News

    Most Popular

    This Small Cap Can Drive Chinese Players Out of India (and Make a Fortune in the Process)(The 5 Minute Wrapup)

    Aug 17, 2017

    A small-cap Indian company with high-return potential and blue-chip-like stability is set to supplant the Chinese players in this niche segment.

    The Most Important Innovation in Finance Since Gold Coins(Vivek Kaul's Diary)

    Aug 10, 2017

    Bill connects the dots...between money and growth, real money and real resources, gold and cryptocurrencies...and between gold, cryptocurrencies, and time.

    It's the Best Time to Buy IT Stocks(Daily Profit Hunter)

    Aug 16, 2017

    The IT Sector could be in an uptrend till February 2019. Are you prepared to ride the trend?

    Bitcoin Continues Stellar Rise(Chart Of The Day)

    Aug 10, 2017

    Bitcoin hits an all-time high, is there more upside left?

    5 Steps To Become Financially Independent(Outside View)

    Aug 16, 2017

    Ensure your financial Independence, and pledge to start the journey towards financial freedom today!

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    S&P BSE TECK


    Aug 23, 2017 (Close)

    COMPARE COMPANY

    MARKET STATS