Social Media As an Investment

In its short history, Social Media, also called New Media, has been considered a place to meet new friends, reconnect with old friends as well as interact in an online social environment. In a nutshell, social networking sites were “a fantastic place to hang out” but held very little applicability beyond that. There has been no lack of financial backing in Silicon Valley for firms launching newer media platforms. With the growth of websites like MySpace, Twitter and Facebook, there is no question that there is value in the huge quantities of info on people that these platforms have been able to collect. However, there continues to be no clear monetization program beyond bringing in advertising revenue. Arguments have been risen as to the true worth of these firms; quite a few would point out that their valuations are inflated and synthetic, while many others claim that the importance of their databases alone is sufficient to justify multi-billion dollar price tags.

The New Value of Social Media and The Social Media Firm 
More lately social media has spawned a brand new value proposition, which happens to be the online business applicability of the huge user bases these social networks have produced. No matter which side of the valuation fence you sit on, it could be said that social networking holds great energy for companies searching for a brand new method to reach out to clients and participate in two way communications. It has never been accomplished before from a conventional marketing, public relations viewpoint or advertising, and has given rise to a brand new business model: The Social Media Firm. This brings forth the argument of whether or not The Social Media Firm is a great investment.
Because of the state of the present economy, Venture Capital and angel funding sources have been keeping their portfolio dollars close to their chest, reserving investment just to companies with a good working history, strong revenue streams and unrestricted growth potential. Social media has turned into a staple of the lives of younger generations, and probably the fastest growing adopters of new media are actually folks over the age of thirty. Since the recognition of the company potential that social networks hold, big Fortune 500 firms are actually devoting a good part of their advertising budgets to social networking sites and new media campaigns.Can it be sustainable?

For the most part, it has become a regular part of the web experience akin to email. The sites which are actually regarded as the gorillas in social networking might churn. However, there will always be something totally new to which these Internet-based communities will migrate. The long-term sustainability of The Social Media Firm is mostly centred on these companies’ potential in order to identify and pre-empt the subsequent big shift and in order to create successful ways of leveraging the new and old platforms for the benefit of driving revenue, profitability, sales volume and identity to the clients.Why Outsource to The Social Media Firm?

One question which might arise is actually: why would big organizations employ a social media agency when they have the monetary information to do it in-house? The answer to this is the simple fact that it is cheaper to outsource a new media plan to a firm which has a competent team already in place that is intimately acquainted with navigating the complicated world of new media. In the exact same fashion that big businesses hire advertising agencies to design conventional media campaigns, this particular strategy can and will be considered for new media. By hiring The new Media Firm companies are able to eliminate the administrative burden that comes with hiring a wide range of new employees, and the learning curve which will inevitably be existing when attempting to incorporate those employees into their corporate culture. It is much more cost-effective, in each administrative and monetary respects, to contract out these campaigns to pro teams that are completely adept at leveraging the possibility of contemporary media, navigating the codes of conduct of the internet communities and staying in front of the curve with regards to identifying and exploiting the latest new media trends.Closing Remarks

To sum up, The Social Media Firm holds great potential for numerous funds. However, it is imperative that when vetting these agencies, Venture Capitalists & Angels have to make sure that the company has the appropriate personnel and management staff to completely exploit this budding business. The ditch is actually full of one-man shops and so-called social media professionals that are no more than victims of the recession who happen to be skilled at Twitter or Facebook. It is important that the architects of new media campaigns are familiar with the complex details of new media, and the wide array of assets which exist online for a small business to take full advantage of the social networking community. Utilization of the lesser known social media outlets may be the big difference between a full-scale robust campaign that shows real results and an unorganized and ineffective attempt at new media which wastes advertising dollars.