The short answer to what social media is, according to Lon Safko (2012) it is the media we use to be social.

A social network, trusted network, virtual community, e-community, or online community is a group of people who interact through newsletters, blogs, comments, e-mail, and instant messages. The social network’s goal is to build trust in a given community. Every social network has different levels of interaction and participation among members. This can range from adding comments or tags to a blog or message board posts, to competing against other people in Virtual Gaming.
The ability to intermingle with like-minded individuals instantly from anywhere on the globe, has considerable benefits (Safko, 2012).

The benefits to use Social Media in business
Because it appeared quickly, social media has developed a reputation by some for being a passing marketing interest, and therefore, an unprofitable one.
The statistics, however, illustrate a different picture. According to Hubspot, 92% of marketers in 2014 claimed that social media marketing was important for their business, with 80% indicating their efforts increased traffic to their websites. And according to Social Media Examiner, 97% of marketers are currently participating in social media but 85% of participants aren’t sure what social media tools are the best to use (DeMers, 2011).

For businesses in any industry, the key to success is knowing your audience. Social media makes this possible, and easier to accomplish than ever. With tools like Facebook Insights in Hootsuite (a site which manages all your social media) you can learn the dominant languages spoken among your social media audience, as well as their age and gender. This knowledge can help you cater campaigns and product offers to your target audience, which will provide you a better return on investment (Cisnero, 2014).

(Taken from Hootsuite, 2015)

Social media for business gives you instant access to positive or negative feedback, which provides you with valuable insights on the customer perspective. For example, if you launch a new product and share it on social media, you’ll instantly learn what your customers think of it. Another way to gain customer perspective with social media is by learning how they use your product; brands often base new products or services on their customers’ original ideas.

Another benefit for any business to use social media is the fact that it increases the web traffic of your website. SEO is the best way to capture relevant traffic from search engines, but the requirements for success are always changing. It’s no longer enough to regularly update your blog, ensure optimized title tags and meta descriptions, and distribute links pointing back to your site. Google and other search engines may be calculating their rankings using social media presence as a significant factor, because of the fact that strong brands almost always use social media. As such, being active on social media could act as a “brand signal” to search engines that your brand is legitimate, credible, and trustworthy. That means, if you want to rank for a given set of keywords, having a strong social media presence could be almost mandatory.

Risks for businesses using Social Media

One inappropriate tweet or Facebook post can cause irreparable damage, but should this stop companies from integrating social media into their business?

Social media may cause a risk to a company’s reputation by creating negative publicity. Legal issues may perhaps arise if a company gives an inappropriate comment about another company on a social media platform for instance.
While social media allows a company to interact directly with customers in real time, it also gives those same customers a public platform to voice dissatisfaction.
However, Steve Nicholls, author of the best-selling book “Social Media in Business,” (techxb.com) believes that any form of progress comes with risk and the key is to identify them and overcome them.

Conclusion
As we all know, social media is ever changing, and what was cool yesterday might not be tomorrow (O´Hare, 2011).
The longer you wait, the more you have to lose. Social media marketing, when done right, can lead to more customers, more traffic, and more conversions.
The most important things online are to listen first, and when it’s appropriate to add something to the conversation, you slide it in, just like in the real world.

Sources

Chaney, P (2009). The Digital Handshake, Seven Proven Strategies to Grow your Business using Social Media. Hoboken, New Jersey: John Wiley & Sons. p185

Cisnero, K. (2014). Benefits of Social Media for Business Every Skeptic Should Know. Available: http://blog.hootsuite.com/social-media-for-business/. Last accessed 28th Jan 2016.

DeMers, J. (2014). The Top 10 Benefits Of Social Media Marketing. Available: http://www.forbes.com/sites/jaysondemers/2014/08/11/the-top-10-benefits-of-social-media-marketing/2/#20e587935232. Last accessed 28th Jan 2016

Hootsuite. (2014). Social media is an easy way to learn about your audience. Available: http://blog.hootsuite.com/social-media-for-business/. Last accessed 28th Jan 2016

O´Hare, C. (2011). Utilizing Social Media to Benefit your Company. Available: http://web.b.ebscohost.com.ezproxy.brighton.ac.uk/ehost/pdfviewer/pdfviewer?sid=9ba6ebbb-d440-4845-afa8-62b761d80dc1%40sessionmgr198&vid=1&hid=110. Last accessed 28th Jan 2016

Safko, L (2012). The Social Media Bible. 3rd ed. Hoboken, New Jersey: John Wiley & Sons.. P537-600

Techxb. (2014). Top five risks companies face when using social media. Available: http://techxb.com/top-five-risks-companies-face-when-using-social-media. Last accessed 28th Jan 2016