How Does Social Media Marketing Affect the Economic Success

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Introduction

The modern business world is characterized by the dominance of multiple giant corporations acting in different parts of the globe. They become more influential and acquire millions of customers in various regions. This globalization results in the increased revenues and creates the basis for further growth. However, it also introduces the higher sophistication of managing client relations as the company’s success directly depends on the ability to understand the target audience’s needs and focus on their fulfillment. The diversification of customers along with their growing demands for quality and content introduce a severe challenge for global corporations. They have to align the cooperation with individuals living in different areas and ensure their proposals are relevant and might attract the public interest. Under these conditions, technologies allowing brands to interact with their clients in various parts of the world acquire the top priority. Social marketing is one of the modern and effective strategies resting on the growing population of social networks and the spread of the Internet.

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The following paper focuses on proving the importance of this tool for the functioning and development of global corporations. Using Nike and Adidas and their use of social media as the background for the research, the following hypotheses are formulated:

  • The relevance of being present on social media for Adidas and Nike is increasing.
  • The customer relationship has developed differently since Adidas and Nike started using social media
  • Using social media has a big economic impact on Adidas and Nike
  • Adidas and Nike are more successful with social media than without

To prove the following hypotheses, the relevant literature linked to the theme is analyzed. These include annual reports of the brands, investigations, and credible sources. Social media plays a crucial role in the functioning of most modern successful organizations. The paper focuses on how this tool impacts the image and economic components of Adidas and Nike.

Social Media Marketing

Social media marketing (SMM) is an effective tool that allows companies to work with clients from different parts of the globe. It is defined as the use of social media and networks to market products and goods created or offered by a particular brand (King, 2020). By using this approach, companies acquire a chance to increase customers’ engagement, reach new ones, and spark the public interest vital for the promotion of an item (Tuten, 2021). Brands might also focus on cultivating a desired culture, mission, and vision shared with clients and explained to them to attain better devotion (McDonald, 2016). At the same time, SMM is viewed as a potent tool to increase sales by directly cooperating with potential clients, listening to their needs, and involving them in creating new offerings that might be attractive to them (Hanaysha, 2017). The given strategy is also a potent data collection tool as it helps to analyze traffic, requests, and preferences to see qualities or measures are appreciated by the target audience.

The power of SMM and its topicality are evidenced by the fact that most leading brands today increase their presence in social media and launch advertising or other public campaigns using various platforms as the basis. The most popular sites include Twitter, Facebook, Instagram, YouTube (Eze et al., 2021). They allow companies to promote their goods, interact with clients, and get the feedback needed to alter existing offerings (Tuten & Solomon, 2018). Statistics show that companies which use SMM actively are more successful compared to those which do not devote attention to this tool (Beig & Khan, 2018). Under these conditions, social media is often viewed as the future of business because of the multiple opportunities they offer companies (Mehmood, 2020). Adidas and Nike, as two giant international corporations, also focus their efforts on developing this sphere and widely using SMM to improve their positions and overcome fierce rivalry traditionally peculiar to the market.

Adidas

Adidas is one of the global most recognized brands known in all parts of the world. It is the largest manufacturer of sportswear in Europe and second globally (Adidas, 2021). In 2019, its net income reached 23,640 million and continued to grow, which evidences the success of the brand, its correct understanding of the market, existing demands, and clients’ needs. Adidas focuses on creating high-quality products combined with a unique and recognizable story (Adidas, 2021). In fact, the brand views its past and special place in the modern market as the key to attracting new clients (Adidas, 2021). It emphasizes that by buying products manufactured by Adidas, a client becomes a member of a privileged group of individuals who share the same qualities, culture, and the advantage of wearing outstanding sportswear or using apparel (Adidas, 2021). This idea is also cultivated by using SMM. The current Adidas strategy presupposes the continuous increase of its presence on the most popular and influential platforms to align the improved cooperation with clients and support their interests.

SMM Strategy

Adidas’ social media marketing strategy implies several significant factors that make it more successful and contribute to preserving the high level of public awareness. First, the brand has official accounts on all most relevant social media platforms and actively manages them (Naik, 2020). It means that clients can comment, discuss, and respond to posts made by the brand, making them more involved in Adidas’ work and remain informed about the recent products and changes offered by the company (“About strategy,” n.d.). Second, the company focuses on creating hype and vigorous discussion among the users and clients (Astound Commerce, n.d.). For instance, the recruitment of a well-known celebrity Kanye West who previously worked for a direct competitor resulted in a significant increase in sales caused by debates over this incident (Long, 2021). Moreover, Adidas engages in collaboration with famous brands to support the high level of interest in the brand and ensure partners’ loyal clients might also be engaged in buying products. Finally, by using social media, Adidas provides clients with an opportunity to feel a part of the story and take an active role in forming a new brand’s image (Nike, 2020). The success of this SMM strategy is evidenced by the constantly growing number of followers and the number of posts.

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In such a way, it is possible to state that the relevance of being present on social media for Adidas is increasing. The brand uses this tool as a powerful method to remain in touch with clients and evaluate their needs. The recent statistics that the brand is successful in SMM as it has about 39 million followers on Facebook (see Figure 1).

Adidas’ Facebook statistics
Figure 1. Adidas’ Facebook statistics (“A deep dive into the social mediahabits and performance of Adidas,” n.d.)

At the same time, it continues to gain new ones with a speed of about 0.12% per month, which proves the need to continue focusing on the same aspects in the future (Adidas, 2021). Furthermore, analysis of Adidas’ Twitter profile shows that it is a place for discussions and debates as numerous clients or devoted customers share their visions and impressions about the products (Adidas, 2021). Under these conditions, the brand manages to attain its goals by employing social media and these platforms. It justifies launching new projects in this sphere.

Relations with Clients

One of the ways to support relations with clients, preserve the brand’s image, and attain its improvement is the discussion of issues that are interesting for the majority and provide a chance to debate. For this reason, Adidas launches multiple social projects supported by their social media accounts and aimed at resolving problems that are relevant at the moment. For instance, in January 2020, Adidas outlined its concerns about plastic waste and its impact on the state of the environment (Sa, 2017). For this reason, the brand launched a new social media campaign, End Plastic Waste (Stanciu, 2021). It was supported by numerous posts on Twitter, Instagram, Facebook and discussion by celebrities and other brands (Adidas, 2021). Following this statement, Adidas also doubled the number of items made of recycled plastic caught in the ocean (Adidas, 2021). It resulted in the growing awareness and enlargement of its targeted audience along with the client base. Statistics of using social media show that hashtag #endplasticwaste became one of the top 10 hashtags used by Adidas and 9th by average engagement (Adidas, 2021). It means that the brand managed to spark public interest in its activity and become more popular.

The wise and effective SMM strategy contributes to significant changes in the methods employed to cooperate with clients and build customer relationships. For instance, one of the relevant approaches is by standing for social causes and protecting the rights of vulnerable groups (Adidas, 2021). The effect of such strategies becomes more significant because of the use of social media platforms which are essential and influential nowadays. Thus, Adidas is one of the most active supports of the social movement Black Lives Matter, focused on building a new, more tolerant society (Gilliland, 2017). This approach allows the brand to develop its relations with customers not from the position of a seller which wants to earn money but from the role of a partner caring about loyal clients and trying to promote positive change globally (Adidas, 2021). This change in attitude and communication patterns became possible due to social media as it provided the brand with an opportunity to analyze the existing moods, respond to them, and remain in touch with clients, which is critically important for all modern corporations.

Communication with female customers is another area that altered significantly due to the use of social media marketing by Adidas. This segment became one of the major areas of the brand’s activities with numerous advertising strategies and tools. Currently, the firm has official pages on all its media channels dedicated to women and their needs (Adidas, 2021). This source of data helps to improve the overall apparel fit for females by considering their needs and things they would like to change in all presented goods. The inclusion of women in debates and their empowerment is one of the key changes in developing customer relationships attained due to the effective SMM strategy. The campaign She Breaks Barriers asked women to share challenges they face and tell their stories by using social media (Adidas, 2021). It helped to make the brand more customer-focused and ensure clients support it. At the same time, more attention devoted to women and their needs resulted in the significant diversification of products offered to clients and their increased participation (Adidas, 2021). For this reason, being engaged with SMM, Adidas alters the way it works with clients

Economic Factors

The economic success of using media is another critical factor proving the fundamental character of this tool for Adidas today. The numbers evidence that regardless of severe challenges that emerged because of the pandemics and influencing the whole retail sphere, the brand managed to remain successful and even attract new clients (Adidas, 2021). SMM and effective strategies are the factors that are linked to this success and are considered central to the company’s successful performance. For instance, following the brand’s annual report, the number of clients engaged by social media comprises about 40% of clients (Adidas, 2021). For this reason, the company proclaims its readiness to continue using the same strategy and devoting more funds to increase its online presence (Adidas, 2021). Projects such as Ready for Sport became vital for overcoming the crisis caused by COVID-19 and supported people via various social channels (Adidas, 2021). They became a serious step towards increasing social media presence, using SMM for advertising products, and improving relations with clients in different spheres. In such a way, the financial aspect of Adidas is nowadays influenced by its activity in this sphere and contributes to the growing level of attention to this aspect.

The big economic impact of using social media is also proven by the solid growth of e-commerce sales. SMM is one of the central factors promoting the evolution of this sector, and Adidas reports that about $4 billion were generated due to this channel in 2020 (Adidas, 2020). It became especially important regarding COVID-19 restrictions and the retail sphere crisis (Loh, 2021). The brand focused on digital acceleration and the replacement of available inventory to e-commerce to create more powerful platforms that can be used by clients (Herzogenaurach, 2021). This success became possible due to the solid social media presence and aligned contacts with clients who visited Adidas’ sites to look for updates or new options. The brand plans to support the digital transformation by devoting €1 billion to these incentives, which will result in a doubling of e-commerce sales up to €8 billion (Adidas, 2020). In such a way, there is a significant economic impact caused by SMM on the brand.

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The rise of e-commerce is not the only benefit generated due to the focus of SMM. Adidas reports that in 2020 it acquired €19,884 million net sales, which is 14% lower than in 2019 (Adidas, 2021). The decrease in revenue is explained by external factors, such as the pandemic affecting all important markets. However, regardless of this negative change, Adidas managed to recover and returned to growth in the fourth quarter of the year, with stable showings today (Adidas, 2021). The brand preserved its links to consumers, which became able mainly due to the expansion of digital capabilities. The pandemic accelerated the focus on social media presence and making clients central actors influencing the company’s development vector (Ong, 2021). For this reason, promotional activities and advertising also became more effective due to the use of SMM to reach customers and remain in touch with them.

In such a way, it is possible to conclude that by using social media to market its products, Adidas acquires multiple benefits. The brand became more successful due to the employment of these measures as they allowed the company to interact with clients more effectively and collect information about their requirements and current needs. Additionally, SMM introduces new ways of promoting sales by advertising new offerings, reaching new audiences, and boosting e-commerce as the innovational way to overcome restrictions and the crisis caused by the pandemic. The company’s reports show that it plans to continue increasing its social media presence as it recognizes the competitive advantage it might provide it. The data proves the hypotheses formulated above, as Adidas becomes more recognizable and successful, while the target audience’s interest levels remain high.

Nike

Nike is another iconic brand known all over the world and working in the same sphere. It is a giant multinational corporation designing, developing, manufacturing, and distributing footwear, apparel, equipment, and services (Nike, 2020). It is the world’s biggest supplier of athletic shoes and special equipment (Nike, 2020). The brand reports that it managed to earn $37.4 billion in 2020, although the pandemic introduced multiple barriers which had to be overcome (Nike, 2020). Nike emphasizes the high quality of all produced goods and services and their contribution to developing a healthy lifestyle (Nike, 2020). Nike cultivates the idea of a unique lifestyle that becomes available to all clients who support the brand and their belonging to this club (Nike, 2020). This part of the strategy, along with the powerful advertising campaigns and support of numerous celebrities or sports teams, results in the exceptional Nike’s reputation and its growing popularity (Nike, 2020). This factor is employed in Nike’s social media marketing strategy.

SMM Strategy

Nike successfully uses SMM to create a better brand image and cultivate client’s devotion. Its strategy has several core elements contributing to final success. First, the company employs social media platforms, such as Twitter, Facebook, and Instagram, to create the idea of a lifestyle and a sense of community among all loyal clients and individuals from various parts of the globe (Nike, 2020). The company establishes a two-way interaction channel allowing clients and the brand to communicate and share their visions (Nike, 2020). Nike focuses on optimizing the process and dominating social media to empower the sense of community and emphasize the role of clients in the work of the company (Barsky, 2021). Nike’s slogan Just Do It is nowadays one of the most recognizable elements of sportswear and pop culture, which is also used in SMM and the brand’s strategies. At the moment, the brand has about 318 social media profiles making Nike one of the most followed companies in the world (Nike, 2020). This diversification is also attained by making special sites and accounts for various products and services, which is more convenient for clients and makes them engage in the company’s work (Barsky, 2021). This strategy contributes to a serious competitive advantage and Nike’s enhanced capability to struggle with rivals.

The success of Nike’s social media campaign and efforts is evidenced by the statistics. For instance, Nike Football has around 44 million fans, which makes it one of the most popular profiles on Facebook (Nike, 2020). As for Instagram, Nike has about 92 million followers who leave their comments and take part in discussions of new products, already existing ones and offer their views on particular options (Nike, 2020). The brand’s primary Facebook page has about 33 million followers, with an over 2-million increase annually (Ravi, 2018). It helps the brand to remain informed about the recent changes in the market and target the audience’s views. At the same time, Nike shifts its priority towards using ads instead of the public content on Facebook or similar social media (Nike, 2020). It preconditions the alteration in clients’ behavior and their increased levels of interest towards the content offered by the corporation. Video campaigns on YouTube are also a vital part of SMM strategy and help to attract the public attention to the issues touched upon by Nike. This approach contributes to the growing online presence of the brand and empowerment of its positions.

Relations with Customers

Analyzing patterns used by Nike regarding SMM, it is possible to state that it significantly impacted the way the brand interacts with clients and their relations in general. First, to ensure clients are engaged, Nike launched several public campaigns to attract attention to social issues and helping some vulnerable groups of people. For instance, Breaking2 inspired millions of social media users’ and contributed to vigorous debates about Nike and its projects (Nike, 2020). Additionally, Nike launched another famous program, Equality, with Serena Williams and LeBron James focusing on current issues with tolerance, racial discrimination, and opportunities for all people (Cole, 2018). These incentives were supported by different social media platforms available for Nike, which contributed to the increased awareness of potential clients and their readiness to participate in future projects of this sort (Nike, 2020). In such a way, by employing this strategy, the brand attained the goal of increasing its social media presence and making the brand a source of news sparking interest and making others speak about it. This SMM strategy also contributes to improved discussion between Nike and their clients due to the availability of multiple platforms to perform the task.

In such a way, the factors mentioned above demonstrate the radical change in how Nike treats clients and builds relations with them. Using social media, the company allows all individuals to feel their importance for the future rise of the company and its empowerment (Nike, 2020). At the moment, Nike uses Twitter to address customers’ issues and queries (Nike, 2020). On average, it provided an answer in 10 hours, which can be viewed as a short period regarding the number of clients leaving their comments and waiting for a response (Nike, 2020). Additionally, there is a separate Twitter account used to improve customer service and provide support to clients (Fioravanti, 2020). These measures result in growing customer satisfaction and their readiness to continue using the brand’s services in the future. Nike emphasizes that it is ready to support the high speed of its digitalization with the focus on using social media to improve customer relations and guarantee them an increased level of comfort. Under these conditions, the shift towards using SMM can be viewed as a critical factor influencing ties with the target audience and Nike’s enhanced ability to investigate their needs.

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Nike also focuses on working with clients by using YouTube channels, which allows the brand to be more effective in reaching a particular audience. Thus, the brand’s official account has 1,66 million subscribers who regularly view new short videos and have a chance to discuss the content (Grano, 2020). This idea contributes to the further popularization of the brand as numerous celebrities are invited to speak about products, services, or the company itself (Lee et al., 2020). The investigation shows that YouTube helps Nike to attract more attention to new offerings, which, in its turn, is vital for advertising and promotion activities (Nike, n.d.). Instead of investing in other ads, Nike focuses on creating content that might be more interesting for their target audience. Additionally, the involvement of influencers who also have their audience ensures better discussion and data collection, which is critical for strategic planning and further brand rise.

Economic Factors

Nike also managed to avoid severe problems in 2020, although the situation was critical. Following its official report, the company earned $37,403 million, compared to $39,117 in 2019 (Nike, 2020). It results from severe restrictions and the necessity to look for new ways of interacting with clients. However, Nike’s official report also states that its social media activities remained high, and the brand managed to avoid losing clients (Hoffmann et al., 2020). It is explained by the company’s attempts to create content appreciated by loyal clients and offer them new ways to acquire services and products they need (Nike, 2020). Nike also emphasized the need to minimize risks, which improved its image and guaranteed economic stability and further development. It is expected that regardless of the negative tendency, the corporation will restore its pre-pandemic revenue levels, and SMM is one of the key factors assisting in accomplishing the task.

Nike’s plans presuppose the continuation of this segment’s development. The brand states that it plans to increase the speed of transformation to ensure Nike functions within the marketplace of the future (Nike, 2020). It presupposes reaching 50% of digital penetration and the following increase in social media presence (Nike, 2020). At the same time, the current level of revenue from social media commerce and marketing will double due to the investment and focus on developing these practices (Standaert, 2021). Under these conditions, Nike’s intention to continue SMM and current strategies prove their strong influence on the economy of the brand (Thomas, 2020). The necessity to remain connected to clients increased the relevance of social media, and today, it is viewed as the primary tool for overcoming the crisis and returning to previous levels.

However, SMM influences not only sales but other spheres of the brand’s activity. Following its report, one can see that Nike became more popular in regions that were previously characterized by a low level of interest in its products (HH, 2021). It means that physical sales in distant areas are boosted due to the effective social media marketing and focus on using triggers vital for customers (Granic, n.d.). Additionally, it results in popularizing sports, which is another important effect of projects launched by Nike. As a result, new athletes might use apparel and sportswear manufactured by Nike, which explains the economic success of the brand and its wise strategy.

In such a way, the existing evidence proves that Nike acquires multiple benefits due to the focus on social media presence and marketing. It alters the way it cooperates with customers and remains in touch with them, which is especially important during the pandemic. Additionally, the focus on digitalization results in the emergence of new ways to distribute goods and guarantee all clients are satisfied with the quality of provided services (Uhlirova, 2020). At the same time, Nike manages to enter a new digitalized reality with new opportunities to spark the public interest and involve celebrities in promoting their products and services. Under these conditions, the existing data prove all hypotheses formulated above and guarantee that Nike will remain successful in the future and continue its dominance in the world.

Conclusion

Altogether, social media marketing is the potent tool used by modern companies who focus on digitalizing their activities and becoming closer to clients. It allows corporations, such as Nike and Adidas, to collect data about their clients, preferences, feedback, and the demands for new items. The research shows that the relevance of being present on social media for Adidas and Nike is increasing. At the moment, a significant part of marketing activities is performed by using platforms such as Twitter, Instagram, and Facebook. Both brands increase their presence in different social media as it allows them to create recognizable images and raise the popularity of their goods. For instance, by employing SMM techniques and involving celebrities in promotional campaigns, Adidas creates hype around its products, triggers their discussion, and attracts new clients. Nike also has a strong strategy supported by its recognized slogan “Just Do It!”. Actively participating in online discussions, the corporation holds loyal customers, find new ones, and improve its services.

The investigation also outlines a significant economic impact caused by using social media. Adidas and Nike enjoy the growth in their sales because of the enhanced relationships with clients, better consideration of their needs, and feedback. Due to the strong social media presence, both corporations avoided losing their clients during the pandemic, which allowed them to continue generating revenue. This fact evidences the power of SMM and strategies employed by Nike and Adidas to attract and retain clients.

In such a way, the information acquired from the analysis shows that Adidas and Nike are more successful with social media and strategies based on its extensive use. Reliance on SMM approaches empowers brands by allowing them to enter new markets, spread the unique culture associated with their products, and support the high level of interest. The research also shows that these methods help to generate a competitive advantage and remain leaders in the market, which is critical for further growth. For this reason, both companies have potent strategies for empowering their social media presence and ensuring they remain in touch with clients. SMM also helps to preserve economic stability in difficult times and remain leaders in the spheres. For this reason, firms invest in developing this aspect of their work and are ready to continue moving in this direction.

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BusinessEssay. "How Does Social Media Marketing Affect the Economic Success." September 15, 2022. https://business-essay.com/how-does-social-media-marketing-affect-the-economic-success/.