The economic value of social media

Most users of social media — such as Facebook and Twitter — probably look at them as ways to have fun and communicate with friends and family, but is there a serious side to these technologies, says N.C. State University economist Mike Walden. They are becoming a big part of the business world.

“In fact a recent survey found that between 80 and 90 percent of businesses now say they use social media technologies to promote themselves or to reach customers. So, we got a big wave here, I think, coming in the future in terms of advertising, doing transactions, using social media and customers: 1.5 billion — billion with a B — people in the world now are on social media. And business analysts say that because social media can be used to improve worker productivity, to improve the outreach of businesses to customers by as much as 20 to 25 percent; that in time, social media could generate over $1 trillion of value to businesses.

“So, this is certainly something that’s much more than fun and games.”