Although social media accessed via desktop computers offer a variety of opportunities for companies in a wide range of business sectors, mobile social media, which users can access when they are "on the go" via tablet computers or smartphones, benefit companies because of the location- and time-sensitive awareness of their users.
Mobile social media tools can be used for marketing research, communication, sales promotions/discounts, informal employee learning/organizational development, relationship development/loyalty programs,[1] and e-commerce.
Studies indicate that the primary benefits of access to the internet for small businesses are the direct and indirect network effects, lower search costs and price dispersions.
In particular, small businesses allow for more consumer benefits which can result in more egalitarian distributions of income, creation of more jobs and an expanded middle class.
Direct network effects, on the other hand, are related to the size of the user base and thus favor large companies.
For example, authors Haucap and Heimeshoff studies on internet-based dominant services demonstrate that in the case of telecommunication networks like Skype, Facebook and LinkedIn, the utility that consumers derive depend on the presence of other users.
According to the authors, Jeon and Nasr discussion, 57 percent of newspaper readers now turn to digital sources for their news information.
[15] Although this study states that the presence of the internet has negatively impacted the newspaper industry, it also demonstrates how small businesses have undermined large news monopolies.
These show that lower search costs support a more competitive structure because it is easier to find unique and rare products through the increase of firms presence on the internet.
The New York Times writes an article about a grocery retailer, "Holiday Market", that is labeled as a small business in Detroit.
Social media tracking also enables companies to respond quickly to online posts that criticize their product or service.
In the US, for example, if a customer criticizes a major hotel chain's cleanliness or service standards on a social media website, a company representative will usually quickly be alerted to this critical post, so that the company representative can go online and express concern for the sub-par service and offer the complaining person a coupon or discount on their next purchase, plus a promise to forward their concerns to the hotel manager so that the problem will not be repeated.
These are private communities that engage people around a more narrow theme, as in around a particular brand, vocation or hobby, rather than social media containers such as Google+, Facebook, and Twitter.
[23] In a 2011 article,[22] Jan H. Kietzmann, Kristopher Hermkens, Ian P. McCarthy and Bruno S. Silvestre describe the honeycomb relationship as "present[ing] a framework that defines social media by using seven functional building blocks: identity, conversations, sharing, presence, relationships, reputation, and groups".
According to Inc. Technology's Brent Leary, "This loss of trust, and the accompanying turn towards experts and authorities, seems to be coinciding with the rise of social media and networks.
As a result of the changes in consumer communication habits, due to the rise in the use of social media platforms, traditional research methods have become less effective.
Long established methods such as telephone and email conversations, used by businesses have begun to decline in terms of quality and ability to reach customers when attempting to gain opinions and insights.
However social media offers a new accessible method which has limited costs when attempting to communicate and gage the opinions of a target market.