The official video clip of Korean singer Psy performing Gangnam Style has been viewed on YouTube 2,070,893,622 times. That’s over two billion and seventy million hits. The population of China is ‘only’ one billion three hundred and sixty-six million. The video went ‘viral’, which means people used social media to recommend it to others. The astonishing number of views grew through electronic word-of-mouth via social media.

Compare that with traditional media. The largest television audience in America is for the Super Bowl, which is viewed by about 108,400,000 people. It costs advertisers $4m to buy a 30-second commercial to reach that audience. The cost per viewer on social media: zero.

Online discussion

So what is social media? Why should businesses embrace it? And, importantly, how can companies use social media effectively?

Wikipedia defines social media as: “The various activities that integrate technology, social interaction and the construction of words, pictures, videos and audio.” Put simply, social media is people having conversations online. Those conversations are powered by platforms such as Facebook, Twitter, YouTube, WordPress, Slideshare, Flickr, LinkedIn, Digg, Second Life and many more.

Why should you care? Because people are talking about your company and you need to join in that conversation.

The first step is to determine the marketing and business needs of your organisation. You may need to improve customer service, promote a product or service, manage and respond to a crisis, or advocate an issue or cause.

Objectives that help you select the most appropriate social media platforms may be expressed personally by individuals in various areas of your organisation. Examples could be:

Upper management

“I am a leader. I know a lot and I want to share.” The appropriate social media would likely be a blog, Twitter or a podcast.

Marketing

“I need a place to share content so we can build traffic.” The solution may be Digg, Reddit, StumbleUpon, YouTube, Flickr or Vimeo.

Public relations

“I want to know what the public is saying about us and respond.” These platforms are good for listening: Technocrati, Amazon, Serph, Ice Rocket and review forums. The following are good for responding: Digg, Reddit, Twitter and YouTube.

Sales and human resources

“I want to network to create new business and find awesome employees.” Platforms such as LinkedIn, Facebook, MySpace, Friendster and Orkut would be appropriate.

The next step is to segment your market and select the sections you wish to target. Identify within those segments the types of individual you wish to engage in online conversation. For each of those types, create a representative ‘persona’. This is the most critical element of your social media plan. When building a persona, document as much detail as possible. For example, age range, key responsibilities, major concerns, key stressors, key purchase drivers, the places they are most likely to find information, their preferred contact medium, the days and times they are most likely to consume content and the role they play in the purchasing process for their family or organisation. Once completed, you will be in a position to choose your language carefully and start conducting ‘personal’ one-on-one conversations with each persona.

Target persona

To illustrate how important persona creation is, just imagine having a phone call with your grandmother. You have a picture of her in mind when talking with her. What tone of voice do you use? What grandmother-appropriate topics do you choose? What language do you use? Now imagine a phone call with your work associate. How different is your tone, your language and the choice of topics? Your detailed knowledge of each persona will also help determine the platforms you select.

[Online content] needs to attract your target persona to click on the link that takes them to your website

This is where marketers need to learn how to not sell (temporarily). The content you post to social media has one objective: it needs to attract your target persona to click on the link that takes them to your website. You then use your website to manage the visitor experience so that they develop a relationship of trust with your company. The secret to successfully developing that relationship is to provide relevant information at each stage of the buying process. Research shows us there are six stages in the consumer buying cycle: awareness; consideration; intent; purchase; loyalty; and advocacy.

By providing worthwhile information of value at each stage of the buying process, such as a white paper or e-book, to our prospective customer, we draw on a well-known behavioural psychology known as the rule of reciprocity. Have you ever felt obliged to do something for someone because they first did something for you? That’s the rule of reciprocity at work. Also known as the norm of reciprocity, it is a type of social norm that can have a powerful influence on our behaviour. We tend to feel obliged to return favours after people do favours for us.

Wade Halvorson is professor of digital marketing at the Australian SP Jain School of Global Business