Go Social or Go Home! - Social Media Effectiveness and Why Startups Should Use It

Written by: Andreas Byberg



2.0 and the wide spread of e-commerce created a new world for marketers to market products and companies. In today’s fast-paced society and marketplace it is instrumental for a firm to be seen and build brand awareness and brand credibility. Social media is seen as a strategic marketing tool for firms’ today, much since online is where the modern consumer is located. Due to the different strategic advantages with social media, such as high potential reach, high interaction, enhanced credibility and cost-efficiency, it creates a great way for any firm to market itself and its product, not least for startups. This paper demonstrates why social media is a crucial advertising tool for startups to have in their marketing mix today, and why it could be the difference between success and failure for a new brand. It also gives a great example of a previous startup company that has built its brand almost entirely trough social media marketing; the Swedish watch brand Daniel Wellington.

Go Social!

Social media has created a new world for marketers to market products and companies.  If you want to advertise a company or its products today you should not go for the classical, and almost ancient, methods – you should go social. The development of Web 2.0 and the spread of e-commerce have also created a new type of consumers, with different purchase habits and decision-making processes (Pereira, Salgueiro & Mateus, 2014). Armelini & Villanueva (2011) states that unless you interact with consumers on social media’s like Facebook and Twitter, you do not even exist in the consumers’ minds today. Social media generates conversations that would not have existed otherwise or elsewhere (Singh & Sonnenburg, 2012), and in this highly connected society we live in today this is arguably the one way for a successful start as a new venture or startup company. Thus, if you do not go social right from the beginning, you might have problems succeeding – and this text will demonstrate why. But first we need to understand why social media is so effective as a marketing method. 

Social Media Effectiveness

The number of users on social media is constantly increasing for every day, all over the world (Armelini & Villanueva, 2011). Facebook, Twitter, Tumblr, Instagram, Vine, LinkedIn, Pinterest, YouTube – the list of different social medias today can go on forever it seems. Whether you want to stay in touch with friends, share pictures, share videos, do blogging or micro blogging, or even get a job and advertise yourself professionally, social media is where to do it. But what is in it for marketers and companies as a whole? There must be more to it than just a huge amount of users visiting and using the sites? 


Due to the extreme amount of active users, advertising on social media has a massive potential reach. Facebook, Twitter and Instagram have together over 2 billion active accounts (Statista, 2016). 2 billion! There is no other media in where one could reach that many people with an advertising campaign. Over 50% of the social networks users in Europe are connected to brands, and as many as 70% states that information regarding new products and brands was one of the reasons for joining Facebook (Pereira et al., 2014). Hence, firms’ have a great potential reach through social networks; just one post could reach millions of people through ‘likes’ and ‘shares’. 

Furthermore, everything goes faster online, and as is well known, advertising can create brand value by enhancing brand recognition, image and reputation (Armelini & Villanueva, 2011). To be able to do this fast and with a broad reach is seen as an advantage for all firms today. Additionally, Armelini & Villanueva (2011) further argue that the volume of a product-related conversation has direct effect on sales – either positive or negative, depending on the direction of the conversation. Thus, with the high potential reach of social medias, if people are interacting and talking positively about a firm’s campaigns and/or products, it could lead to increased sales. 


Compared to traditional advertising social media has the advantage of being immediate and interactive. It makes it easier to intervene, get customer insight, and you can always adjust a campaign or a message if it backfires or needs to be edited (Barwise & Meehan, 2010; Armelini & Villanueva, 2011). Consumers in today’s fast-paced marketplace want constant interaction, not least with companies in the service industry, and social media opts for a more personal advertising. Furthermore, by enabling communication and giving access to online content, social media builds engagement between firm’s and consumers, and it is argued that through social media consumers engage more with brands. Social networks are thus argued to be a great strategy in order to enhance customer relationships due to the ease of interactivity (Hollebeek, Glynn & Brodie, 2014; Pereira et al., 2014). The interaction between consumers and companies on social networks, and for a consumer to follow a firm’s updates, is also argued to enhance purchase intention (Beukeboom, Kerkhof & Vries, 2015). 


Word of mouth is argued to be the most powerful tool when it comes to influencing and persuade others. “Not even the best advertisement can match a personal recommendation in credibility” (Armelini & Villanueva, 2011, p. 32). Recommendations, ratings, and other consumer insights are further argued to be some of the most reliable sources of product and/or brand information, and through the interaction created on social networks between brands and consumers, all information consumers share with each other about a particular brand matters. If it is going in a positive direction, it could enhance a product’s/brand’s credibility much more at a faster pace than any traditional media (Armelini & Villanueva, 2011).


Social media marketing has a lower cost and is thus often more cost efficient compared to traditional marketing methods. Most social networks are free to use, and the cost of reach could be many times lower than traditional advertising methods (Armelini & Villanueva, 2011). However, to bear in mind, even though social media is argued to be more cost efficient, it does not mean that it is a free or cheap marketing alternative. Some alternatives and some content do cost, and a successful e-WOM (electronic word of mouth) strategy demands a company to be connected almost continuously. Customers wants to be able to interact with a company regarding all matters as quickly as possible, and on many social medias today you can even see the average response time for a company. Therefore it requires continuous commitment of time and staff, making it more expensive than one could think (Armelini & Villanueva, 2011).  

Thus, due to some of the aforementioned reasons, there are arguments stating that social networks have made traditional advertising medias obsolete. However, it should be stated that many researches argue that one should not only focus on social media and use it as a direct substitute for traditional media, but rather see the two strategies as complementary and try to cover them both in the marketing mix (Armelini & Villanueva, 2011). 

What is in it for Startups?

According to Coleman & Heriot (2014) 46% of all entrepreneurs use social media as a means of communicating and connecting with existing and potential customers, and 88% of marketers reportedly argue that marketing on social media have generated exposure or some kind of benefit for the firm. Why is it so popular among new firms to use social media? Or rather, should the question be; why does only 46% of all entrepreneurs use social media, should not the number be higher? 

As a startup company you want to make people aware about that you exist – aware about your brand. You want to create brand awareness, as soon and much as possible. This is the first goal for any new brand, and a powerful way to increase brand awareness and brand likeability is to reach out to opinion leaders. Their power has increased tremendously since the growth of social networks, but so has the ability for firms to reach out to them and many more through social conversations, and thus increase brand awareness (Kapferer, 2012). Furthermore, in order to stand out in the competitive marketplace we live in today, you want to increase trial and sales right from the beginning. In order to do so you have to increase consumer attitudes towards your brand as well as increase their intention to purchase your products, which social media can contribute to (Barwise & Meehan, 2010).  

Additionally, as mentioned in the introduction, this is where the modern consumer is located – online! It is now up to firms to decide whether they want to get serious about social media; communication about brands online does happen, and companies should participate in it (Kietzmann, Hermkens, McCarthy & Silvestre, 2011) Pereira et al., (2014) adds to this that it is important to know that the decision cycle is shorter for the online consumer than for the traditional ‘offline’ consumer. Social media is therefore perfect as interaction point between a firm and the online consumer since “social media enable a shorter distance between consumers and brands, creating the notion that there is always someone who listens and can fix a problem” (Davis, Piven & Breazeale, 2014, p. 474). The online consumer also demands more personalised experiences today, which social media creates. Consumers wants to continue the offline conversations online, and brands become real and close in social media, so consumers expect them to be there (David et al., 2014). Thus, if a startup company in the b2c industry is not present and available on social media’s today there is a great risk that a) your brand will not be noticed b) consumers prefer other brands that are. 

Hence, overall as a startup company you want to build and enhance your brand presence, and social media could boost all of the abovementioned factors. Social media, which is where modern consumers interact with companies, builds awareness, encourage engagement and also makes it possible to measure performance (Barwise & Meehan, 2010). The last aspect is important for any firm, in order to see that the allocated time and resources really gives results and is worthwhile, and that is possible with the help of online analytical tools.

Startups + Social Media = The Perfect Match

With all the potential reach, interactivity, credibility and cost-advantages that social media marketing offers it is the perfect marketing method for a startup. As mentioned, a startup needs to a) build brand awareness, i.e. reach out to people, b) communicate with potential consumers, i.e. be interactive, c) build up trust among new and potential consumers, i.e. enhance credibility, and d) do it all in a cost efficient since a startup often have limited resources. Thus social media provides most of what a new startup needs in terms of marketing and communication aspects. 

A successful example of a startup that built a recognised brand through social media is Daniel Wellington, the Swedish watch brand. Daniel Wellington started to sell its watches online, and online is also where the company has advertised. The owner, Filip Tysander, has from the start in 2009 refused to pay for traditional advertising, and focus has therefore been mostly on social media marketing – a media other watch brands traditionally have avoided. In line with what is written above, Daniel Wellington has cooperated with a lot of influencers worldwide; influencers such as celebrities and bloggers with many followers. By giving away free samples as well as paying them smaller amounts, these influencing people have advertised for Daniel Wellington (Pulvirent, 2015). Along with its own great work and interaction on social media, this has given the company a great reach. Daniel Wellington has for example 1.8 million followers on Instagram and over 380 000 likes on Facebook (Daniel Wellington, 2016a; Daniel Wellington, 2016b). Daniel Wellington has consequently manage to create a great brand awareness and brand likeability. By being promoted by influencers also gives a lot of credibility to the brand, and it is a cost efficient alternative compared to traditional advertising. Thus, Daniel Wellington has covered all the advantages with social media marketing mentioned, and has proved what impact it can have for a firm since it today, 6 years later, is a $200 million worth business (Pulvirent, 2015). 

Hence, to conclude, startups should really use social media as an effective marketing method in order to successfully markets its brand and products. It provides them with a marketplace in which consumers are actively involved today as well as a cost efficient way to reach out to millions of people. If managed successfully and by having a great interaction with existing and potential consumers, social media could provide credibility to a brand, which is seen to be crucial for a startup. Therefore, if you have a startup or if you are thinking about starting something, one great recommendation; go social or go home! 










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