“Create fans, not customers,” describes the goal of social media marketing.
Every company has a personality that consumers can identify and describe. For that reason, marketing is not so much about getting people to make purchases as it is about getting people to like and trust you.

New media marketing comes in many varieties: online banner advertising, viral marketing, social networking, interactive Websites, blogs, podcasts … the list goes on. But no matter the tactic, the purpose is the same–turning potential customers into enthusiastic fans.

The use of social media websites for marketing is growing fast. Social media marketing is a method of promoting your brand (be it yourself, a product, a service, or company) by strategically making your presence known across various social media networks (such as Facebook, Twitter, LinkedIn, Digg, Reddit, StumbleUpon, Myspace, etc.) This may seem overly elementary but “Making yourself known” is the kicker because each category of social media has a different, sometimes intricate method for effective promotion.

Social media marketing can also mean extending the reach of a brand through viral videos or by joining the conversation. To that end, companies need to understand peoples’ motivations for having a conversation and then contextually engage with that audience. Making marketing programs conversational and contextualized to niche audiences that naturally gravitate around a specific theme or shared passion is the essence of social media marketing, and perhaps the future of marketing itself

With the rise of social media, the speed and reach of word of mouth with respect to consumer products and services is increasing by orders of magnitude. At the same time, a growing number of companies are deploying technology solutions to harness the power of word of mouth to raise brand awareness, drive marketing improvement and, ultimately, increase shareholder value.

Companies are enamored with the possibilities of social media marketing as the foundation for consumer-driven referrals and brand advocacy.

An April 2008 Cogent Research survey found that US investors are highly engaged in social media, and their investment decisions are influenced accordingly. The study found that 25% of US online adults are engaged in social media specifically related to personal finance and investing. Furthermore, almost two-thirds of high-net worth investors – defined as those with $100,000 or more in investable assets claimed online peer-generated content about personal investing and finance has influence on their financial purchasing behaviors and decisions. “Today’s companies can no longer sit on the sidelines when it comes to social media,” Christy White, chief of operations at Cogent Research, told Business Wire. “Purchasing decisions are being influenced by what investors are seeing on blogs, message boards and videos, and financial services companies will increasingly feel the impact on their bottom lines. The question firms should be asking is not ‘if,’ but ‘how quickly’ they can engage in social media”.