February 03, 2010

Who's Making Money From Social Media?

The hysteria over social media raises an interesting question.

Are agencies all drooling about it because it's good for their clients? Or good for them?

Another way to pose the question is this: Who's actually benefiting from the social media frenzy? Marketers or agencies?

Evidence of the efficacy of social media is pretty thin on the ground. As with all marketing crazes, there are a few anecdotal successes. We've all heard the legend of Zappos and the story of Dell.

But with every company in the universe racing headlong into the world of social media, you'd think there'd be more concrete evidence of its success.

Of course, nobody wants to publicize their failures. When I speak to many agency people off the record there's a lot of enthusiasm for having a new source of income -- but not much belief that it's actually doing very much for their clients' businesses.

We all remember not long ago when having a website was going to be a guarantee of fabulous business success and fame. Now, a website is mainly just a cost of doing business (like a Yellow Pages listing) and is not much of a change maker, except to online retailers.

It looks like social media is headed the same way.

Two things I read yesterday lead me to believe that social media may be a nice source of revenue for ad agencies, but not much of a boon to marketers. The first was a piece called Are Marketers Creating A Social Media Bubble*, by Nigel Hollis, Chief Global Analyst for Millward Brown.

Hollis says...
"All of this leads me to believe that social media is no way for a mass market brand to disrupt the status quo... unless you do it right...you risk undermining your brand rather than strengthening it."
Perhaps the most telling statement about social media was contained in the headline of an email I received yesterday touting an agency conference about emerging media...
"Emerging Media: 100% More Fun + 200% More Billable"
It's pretty clear that someone's making money from social media. But I'm not sure it's the people who are paying for it.

*Thanks to "tom-nonbeliever" for this.

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