Social networking: business implications

This is the next of a series of columns on how the law can impact your life. Each month we will focus on various aspects of the law relating to personal injuries, those that happen both on-the-job and otherwise, including mishaps which occur in driving vehicles, using products and receiving medical care. The column will also respond to legal questions relating to personal injury that are sent to us.

Healy Scanlon Law Firm is comprised of eight trial attorneys, two of whom are from Ireland. We are located downtown at 111 West Washington Street, Suite 1425, Chicago, Illinois 60602 (312-226-4236). . The firm concentrates in the representation of injured victims of all types of accidents.

Readers are encouraged to call or write with questions concerning personal injury law.

Social Networking:
Business Implications

Over the last two months, we have discussed social media and how it may impact your life. In September, we explored privacy concerns relating to social media. Last month, we examined the potential impact of social networking on litigation. This month, we discuss the interaction between social networking and business.

More and more, businesses are using information technology and social media to gather information regarding their customers and to advertise their products to new demographics. This allows businesses to more efficiently promote and market their products and reach new audiences.

Most companies today use social networking in some fashion. According to a report by the McKinsey Global Institute, 70% of companies are using social technology in some way. Indeed, most well-known brands and large companies have registered accounts on blogging or micro-blogging websites for the purpose of releasing updated information about the company or its products, and to otherwise attract the attention of internet users. However, very few companies are anywhere near achieving the full potential benefit. More than 1.5 billion shoppers around the world have an account with one social networking site or another. Almost one in five online hours is spent on social networks, increasingly via smart phones and other handheld devices. The opportunities companies now have to reach theses users are nearly limitless.

Search Engine Optimization and Facebook’s EdgeRank System

Most companies also engage in “search engine optimization,” or “SEO,” which is the process of attempting to make a website easier to find when using a search engine, like Google. SEO generally considers how search engines work, what people search for, and the terms or keywords typed into the search engines. Making a website more “visible” means that site is more likely to appear when a search is completed for certain terms in a search engine. Optimizing a website may involve editing its content or coding to increase its relevance to certain specific keywords. Companies can also pay for better search engine placement when certain terms are searched. That way, the company will appear earlier in search results. Using these tools, business owners can track where users are coming from, identify the actions they took on the site (i.e. making purchases), and calculate the value of that activity.

Similarly, Facebook uses an algorithm called EdgeRank to determine which people see which posts or advertisements. EdgeRank uses a number of factors, including how often one’s “friends” log in to Facebook and what settings they choose on their news feeds. The purpose of Edgerank is to highlight only the most engaging posts from brand pages. One of the key factors in that optimization is engagement: the amount of clicks, likes, comments, and shares generated by a piece of content. Simply put, the more activity a certain post generates, the more likely that post is to be pushed to other users.

Having a social media presence will also likely increase the company’s ability to be located on the internet. Therefore, companies use social media hand in hand with search engine optimization of their own website to make the company more visible overall.

The business of Social Media

With its increased usefulness in the business setting, social media has become a big business in and of itself. According to estimates from media advisor, BIA/Kelsey, U.S. Social media advertising revenues exceeded $4.6 billion in 2012. Recent projections indicate that U.S. Social Media ad revenues could reach $9.2 billion by 2016. Spending on display advertising will increase from $3 billion in 2012 to $5.4 billion in 2016.

The social media boom has also led to increased opportunities for training programs. Each year, there are conferences for businesses looking to elevate its social media presence. For example, the SMX Social Media Marketing Conference in Las Vegas assembles each year and is designed for Internet marketing professionals interested in enhancing their social media marketing skills. Attendees focus on how to use Google+, Facebook, Twitter, Pinterest, and other resources to drive traffic, enhance advertising campaign performance, and improve customer service.

Facebooks “Promoted Post” feature and backlash

The growth in social media as a business tool stems in part from the increased abilities of social networking to accommodate advertisers needs and desires to reach the right consumers. For example, this summer, Facebook introduced a feature called, “Promoted Posts,” which allows businesses with 400 or more Facebook “likes” to pay a fee so that more fans of that business can see that business’ posts in their News Feeds. Many businesses that refuse to pay for the extra exposure provided by the Promoted Post feature are now having difficulty getting their message to their customers via Facebook.

Because of Facebook’s new “pay for exposure” program, some business owners have moved more aggressively to other forms of social media including LinkedIn, Tumblr, Twitter, Pinterest, and even the newly revamped MySpace.

While it is uncertain whether any one of these social media providers will move to the forefront, what is certain, however, is that this is an area that will continue to grow and expand. New issues will undoubtedly arise as new technologies are devised and applied to social networking sites. The use of social media in business is not a fad that will soon fade. Social media is likely to be used in the business setting for years to come.


Social networking has had a significant effect on modern life. It has produced many benefits, but has impacted basic concepts of privacy, sometimes in unexpected ways. If you are involved in social networking, try to fully understand its benefits, but always be aware of its potential downsides.

By: Martin Healy, Jr.

Patrick C. Anderson