Social media marketing involves the use of social networks, consumer's online brand-related activities (COBRA) and electronic word of mouth (eWOM) to successfully advertise online. Social networks such as Facebook and Twitter provide advertisers with information about the likes and dislikes of their consumers. This technique is crucial, as it provides the businesses with a "target audience". With social networks, information relevant to the user's likes is available to businesses; who then advertise accordingly. Activities such as uploading a picture of your "new Converse sneakers to Facebook" is an example of a COBRA. Electronic recommendations and appraisals are a convenient manner to have a product promoted via "consumer-to-consumer interactions. An example of eWOM would be an online hotel review; the hotel company can have two possible outcomes based on their service. A good service would result in a positive review which gets the hotel free advertising via social media. However, a poor service will result in a negative consumer review which can potentially harm the company's reputation.
Social media can be used not only as public relations and direct marketing tools but also as communication channels targeting very specific audiences with social media influencers and social media personalities and as effective customer engagement tools. Technologies predating social media, such as broadcast TV and newspapers can also provide advertisers with a fairly targeted audience, given that an ad placed during a sports game broadcast or in the sports section of a newspaper is likely to be read by sports fans. However, social media websites can target niche markets even more precisely. Using digital tools such as Google Adsense, advertisers can target their ads to very specific demographics, such as people who are interested in social entrepreneurship, political activism associated with a particular political party, or video gaming. Google Adsense does this by looking for keywords in social media user's online posts and comments. It would be hard for a TV station or paper-based newspaper to provide ads that are this targeted (though not impossible, as can be seen with "special issue" sections on niche issues, which newspapers can use to sell targeted ads).
Affiliate Marketing: Affiliate marketing is one of the oldest forms of marketing, and the internet has brought new life to this old stand-by. With affiliate marketing, you promote other people’s products, and you get a commission every time you make a sale or introduce a lead. Many well-known companies like Amazon have affiliate programs that pay out millions of dollars per month to websites that sell their products.