It was going to change business forever. It was going to make traditional advertising irrelevant. It was going to revolutionize marketing.
It was social media marketing. And it's been the biggest disappointment since the NFL hired referees.
While advocates for social media still cling to the wreckage of "the conversation" and continue to hound us with apocryphal tales of social media magic, dispassionate observers are starting to realize what a delusion the whole theory of social media marketing has been.
The idea that consumers were enthusiastic about having conversations about brands online, and they would activate their network of friends and followers to share their enthusiasms and create a socially transmitted tsunami of sales has proven to be deeply fanciful.
It turns out that the average consumer has a lot more on her mind than conducting online conversations about fabric softener. And the ones that do seem to have no ability to generate enthusiasm in others.
While people with a financial or ideological stake in social media continue to propagate the fantasy, those annoying, troublesome things called facts keep popping up to undermine their careless assertions.
The first crack in the wall came in 2011 when the largest, boldest experiment in social media marketing ever attempted -- the Pepsi Refresh Project -- was exposed as a nasty failure that seems to have cost the brand 5% of its market share, which it has never recovered.
Then in September of 2012, Forrester Research reported that...
"Social tactics are not meaningful sales drivers. While the hype around social networks as a driver of influence in eCommerce continues to capture the attention of online executives, the truth is that social continues to struggle and registers as a barely negligible source of sales..."A few months later, a story in The Wall Street Journal reported on a study IBM had done on the effect of social media on Black Friday sales. While sales were great, the social media contribution to sales were essentially nonexistent.
IBM reported...
Shoppers referred from Social Networks such as Facebook, Twitter, LinkedIn and YouTube generated .34 percent of all online sales on Black Friday, a decrease of more than 35 percent from 2011.The Journal commented...
"...there’s one notable under-performer in the online shopping frenzy: social media."But perhaps the most damning report on the negligible influence that social media marketing has on sales was issued a few days ago by McKinsey & Company.
This sentence from the report says it all:
“Email remains a more effective way to acquire customers than social media - nearly 40 times that of Facebook and Twitter combined."We're talking about email here, not the Super Bowl. Email 40 times more effective than Facebook and Twitter combined? Now that's frightening.
The social media fantasy is in a death spiral. Social media marketing is no longer taken seriously as a sales builder by anyone with a functioning cortex.
Social media marketing will continue to be strangely popular and sporadically effective in some small niche categories.
But when it comes to serious brands, in the vast majority of cases it is evolving into just another cost of doing business.
Don't miss Part 2 of "The Slow Painful Collapse Of The Social Media Fantasy" in which we discuss how the delusion of "brand loyalty" lead to the fantasy of "the conversation."
18 comments:
Another article built on last-click attribution. Welcome to the 90s.
Another comment that criticizes a post's facts without providing any facts of its own as counterpoints. And thank you. I miss the 90s.
I have my reservations, here. We all know the Refresh Project failed miserably, but I've never been certain that the blame could be placed solely at the feet of social media. The quality of the idea has to be questioned as well. Depending upon/banking on the unselfishness of a specific generation to make them choose your fizzy cola over another fizzy cola is actually highly questionable. Actually, no, it's just plain nonsense.
Idea quality is something social has always suffered from – I've never had a great social idea. I wonder if anyone has. I suppose we'll know when it happens. All of these statistics...no creative. I wonder if we're failing the medium? Just a thought. Could be rubbish.
You can't argue with the results of the IBM and McKinsey reports: social hasn't delivered particularly well for direct response commerce in the past. The Pepsi example is just an anecdote, not proof of a trend either way. But some new facts: social advertising is really starting to deliver results as the major social networks mature. For example, Facebook's Newsfeed ads are delivering unquestionably against both branding and direct-response goals, and doing so at scale with unprecedented targeting and measurements. Social is even delivering against branding and offline purchasing decision, as demonstrated by a growing body of experiments using third-party data like DataLogix (https://blog.twitter.com/2013/promoted-tweets-drive-offline-sales-for-cpg-brands). Social marketing is in its infancy, but the reach, targeting, measurement and innovation is making it unstoppable. Social profile data are making audiences of one addressable, and that capability is bleeding into all other digital media including website and video. It is real. Period. It's fun to be a contrarian, and contrarianism helps drive important debate -- and break down unjustified hype. But marketing and advertising people who pretend that social is not real will become irrelevant.
Sorry for replying to just one very specific thing in your comment.
But aren't Facebook's Newsfeed ads classic interruption model ads?
I don't peddle social as a sales rocket. It's a slow process, as all band building is, and it's a tough daily grind that very few companies can afford to opt out of (provided they care about long-term relationships with customers).
I'm not sure what the definition is of "classic interruption model ads." They are paid media units, as are Google search text ads. They are different than conventional television or print add in that there is a very high level of targeting to create an experience that is both relevant for the consumer and profitable for the advertiser. Granted, it's imperfect, but it's early and social ads are evolving, as demonstrated by the incredible rate of updates and innovations from all the major social networks. In fact, that speed of progress is very difficult for most advertisers to keep up with.
Know thy brand! Moreover, it really depends on the client's immediate and/or long term needs and budget. Social media can work, but shouldn't be the only play. Safe to say that most brands will not see benefits across the board. And yes, we can all name brands that had tremendous success with social media campaigns with very small budgets. Conversely, we can name check brands that had enormous budgets that could be deemed utter failures. I wonder if the youth culture today cares less about brand loyalty than in yesteryears. (Are there too many brands vying for their currency?) Certainly social media and time-shifted content is more at play for them. But I believe there is so much transparency and digital noise in our digital world that they "don't believe the hype" and don't want to "talk/listen" to brands about the hype. Give them good value at a great price and they will find you. And they probably got the tip from a friend via social media!
There are countless examples of social driving sales. American Apparel released one last week.
Random thoughts...
- Big brands keep screwing this up. Small brands can definitely have success in social (I am a huge social hater, and I still can't deny it). But it's because they're delivering a much more concise message. If the super tiny company that makes my favorite guitar amps is talking to their audience of 300 or so facebook fans, they can provide information/resources/whatever that is super specific to that audience. People response well in a lot of cases. Shares happen, awareness grows, sales result.
In the case of Pepsi, their audience is "any human with a mouth" and their super generic social messages are the painful result. They could probably have more success with something that speaks to a small segment of their crowd, but then they'd have to deal with everyone else feeling excluded. Maybe having sub-pages for different interests is the way to go (IE - Mt Dew could have a fan page for gamers)
- The stuff Maxkalehoff is saying about newsfeed ads is a lot of misdirection. Facebook shows great results with newsfeed ads for two reasons.
1) They are dominated by retargeting messages. So you see an ad for a site you just visited on ANY placement (facebook, blogs, whatever) and the results are going to be higher. That's how regtargeting has ALWAYS worked and performed.
2) People don't realize they're clicking on ads, so "engagement" numbers are artificially inflated. Facebook knows this, worries about this (Hello FTC penalty) and that's why they regularly conduct surveys to try and determine if users are aware of ads.
- If we continue the trend of "hot startup has an awesome idea for some web-based thing" and the only way to make money off it is "let's show some text/banner ads!" - then we're gonna hit another dot com bubble real quick.
TV works because the content creators get supported via advertising AND subscriptions. The cable companies charge you for delivery, and a sizable chunk of that money goes to the networks. And we've stripped down to what most people consider a reasonable amount of advertising that is sold at a premium price.
On the web, we're 100% dependent on advertising, so it's skewed from the start. And rather than continuing to try and find an ad medium that people both tolerate and respond to, we stick with billions of banner ads that everyone hates. So we intentionally destroy our possible returns.
People seemed to have good ideas with various video ads, or sponsored content - but they ruin it by posting endless display ads in addition. Narrow it down to the stuff that works, GET RID OF THE REST, then you can create demand.
Nothing is countless. Except hyperbole.
I agree with just about everything written here. However, it should be noted that there are a few social media outlets that I think we can all agree drive real sales - namely Yelp and Trip Advisor. Also, for particular industries like Tech LinkedIn can drive significant 'conversions' in the form of job interviews and the like. I'm not sure I agree that Yelp, LinkedIn, and Trip Advisor serve "small niche categories" as the author notes in the article.
Facebook Newsfeed ads provide what? An experience? They experience not being noticed perhaps.
Almost 30 years ago I worked in a regional bank headquarters in marketing. We were called into a department-wide meeting and told there would now be a computer on every desk in the bank and the offices, within months, would be paperless - no more rooms and rooms of files, no more faxing, endless copying, et al. What we ended up with was computers AND pretty much the same endless paper files. Not to say computers and the internet have not altered the way business is done and the efficiencies of commerce today. Even that is a gross understatement. Entire job categories have been created... and eliminated or transformed. But the often idealistic promise of this technology has always far outpaced the performance in many ways. The dazzle of the technology does not always match the use and function and is often developed for the sake of the dazzle.
In the end social media is perceived by the end used as SOCIAL. I don't want to be solicited or solicit others on the same outlets that I share pictures of my family. I do not feel the need nor necessity to 'friend' businesses. And I apparently am not alone.
Yelp & Trip Advisor? Are you serious?
Matt: Don't confuse social media with social media marketing. Two different things. While these are popular social media sites there is very little marketers can do to influence what is written about them except cross their fingers or play dirty trick games.
Facebook ads are "relevant"? Seriously? I never cease to be astonished by how much FB knows about me and how ill-targeted its ads are.
YES! Thank you mjh, words right out of my mouth
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