Social media is an extremely hot buzzword in the business world today. However, it is not just a buzzword. According to Andreas Kaplan and Michael Haenlein, social media is "a group of Internet-based applications that build on the ideological and technological foundations of Web 2.0, and that allow the creation and exchange of user-generated content." (Kaplan, 2010, p. 53) As this paper will demonstrate, social media has had a tremendous impact on the business world particularly in the areas of marketing and public relations. Marketing

Social media is revolutionary is that it relies on consumer-to-consumer communications, whereas most marketing operations rely on business-to-consumer communications. (Mangold, 2009, p. 358) Consumer-to-consumer communications are much more natural and comfortable for the average person than listening to a sales pitch or an infomercial. With social media, consumers can learn about a company's product in an informal, interactive, and pressure-free environment.

Another key element that distinguishes social media is consumer-generated content. One example of this is the restaurant review website Yelp.com, where consumers submit ratings and reviews of restaurants that they have eaten at. All of the content, even the listing for the restaurant itself, is created by consumers, not by the employees at Yelp.com or by the restaurant-owners. This allows restaurants without aggressive marketing operations...

Qualman defines "socialnomics" as "…the value created and shared via social media and its efficient influence on outcomes (economic, political, relational, etc.)." In practical terms, this means that, in the future, "we will no longer search for products and services, rather they will find us via social media." (Qualman, 2010, p. xxi)
Social Media, however, may not be completely revolutionary. Many individuals with a background in traditional marketing will recognize many of the tactics employed in social media marketing. Essentially, much of social media marketing is word-of-mouth marketing. The difference now is that word-of-mouth can be expressed and heard anytime and almost anywhere. Many business owners agree that word-of-mouth is, by far, the most effective form of marketing in terms of cost and time, certainly far more than so than advertisements and solicitations.

Social media allows people to exchange information with incredible speed and ease. More importantly, it is targeted information. Social media allows people to receive information which they would actually find interesting, unlike, for example, junk mail advertisements. Social media enables this sort of targeted information because it is organic and bottom-up, unlike traditional…