Facebook's About Face

Here at the Ketel One Conference Center of The Ad Contrarian Global Headquarters, we've been talking lately about the remarkable success that Facebook has achieved.

Not only have we been talking about it, but we've been high-fiving ourselves and taking full credit for it.

Perhaps you remember Facebook in its initial incarnation. It was the social media upstart that was going to slay the traditional advertising dragon. Well, it seems that it has done just the opposite. It has become a juggernaut of traditional paid advertising.

Some of the baloney that Facebook first tried to sell us was:

• Consumers wanted to "join the conversation" about brands on line.

• Precision targeting and social media marketing were going to make mass marketing obsolete.

• Traditional paid advertising was a thing of the past.

But according to The New York Times...

"Facebook has changed its pitch and the products it offers advertisers so often that many marketing executives are wary."

Now Facebook is making money hand over fist, its stock value has soared, and they've done it by completely abandoning their initial principles and implementing the semi-brilliant marketing advice of a certain Luddite dinosaur blogger.

A couple of years ago a piece appeared in this space entitled Either Facebook Is Nuts Or I Am. The piece made a few points:

First, was that Facebook's "precision targeting" strategy was dumb.

"Why would a company that can reach a billion people...want to sell targeting? They should be selling anti-targeting. They should be selling reach. They are the only media property in the solar system that reaches a billion people (yet) they are trading on their ability to reach falafel lovers in Yonkers.

They're sitting on a gold mine, but they're throwing away the gold and selling the dirt."

Second was that they had to abandon the social media marketing fantasy and realize they were in the advertising sales business...

"...the Z-man has to get used to the idea that he's in the ad business... he has to get rid of all the Global Chief  Engagement Content Relationship Jargonators.

He has to get some ad sales people who know what the f/k they're selling, and then give them something worthwhile to sell. "

Third, they needed to forget about the little postage stamp ads they were peddling and develop some ad units that had impact.

"They need to offer big-time advertisers something of real value, not the crap they are currently selling."

Two recent reports, a very positive one in The New York Times and a very negative one in The Wall Street Journal, indicate that Facebook management have become assiduous readers of this blog.

First, they are soft-pedaling the precision targeting and emphasizing the mass reach. Reporting on a meeting that Facebook's sales staff had with a big client, The Times reporter says......

"At the meeting (Facebook's) ad strategists were saying they wanted (the client) to spend money to show ads to every American woman 45 and older on Facebook — as many as 32 million people."

Next, they have pretty much abandoned the social media bullshit...

"A few years ago, the company was telling brands to increase the number of people following their pages. Now it says fans are largely irrelevant." 

And finally, they have gotten rid of the no-impact crappy little side bar ads and replaced them with big fat ads right in the middle of your feed, and as The Journal said..." a changed format for Facebook's right-hand column ads. They're now larger..."

Unfortunately, old habits die hard. Even though Facebook is no longer kidding themselves about what business they're in, the nitwits in agencies and marketing departments still don't get it. According to a piece in Media Post, Facebook just signed a $100,000,000 advertising deal with marketing giant RB. Here's what a clueless RB jargonmeister had to say:

"This is not about advertising, but rather about collaboration to drive growth for RB brands and engagement on Facebook,"

Oh, good. For a minute there I thought this might be about advertising.


Thanks to Jim Dittmann and Prof. Byron Sharp for links regarding today's post.

The Two Faces Of Facebook

We’re almost 10 years into the era of social media and I think it's time we took a step back and had a fresh look.

The fact that social media is a huge cultural phenomenon is very interesting. But it is only relevant to marketers insofar as it affects our ability to influence consumer purchasing behavior or the building of brands.

It’s also time to be precise about what we mean when we say "social media." Our first chore is to separate "social media" from "social media marketing." As the great Mark Ritson points out, and as I have written, we are not sociologists, we are marketers .

We know that social media has been a huge worldwide phenomenon. But how about social media marketing? How effective has it been for the purpose of advancing product sales and building brands?

This is a critical distinction and has been at the root of tremendous misunderstanding and incalculable misuse of marketing dollars.

When the idea of social media first was introduced, it seemed impossible that it wouldn't have massive value in marketing. The logic went something like this: People are going to use social media to talk with each other. They are interested in brands. They will surely have conversations with and about brands. The web will allow them to share their enthusiasms with others who will, likewise, pass these conversations on and potentially create a huge amplification in which a few comments can morph into literally tens of thousands of impressions.

As Facebook CEO Mark Zuckerberg put it in 2007,

“The next 100 years are going to be different for advertisers starting today... For the last 100 years media has been pushed out to people, but now marketers are going to be a part of the conversation.”

Of course, the attraction to marketers was instantaneous and powerful -- who doesn't want to create tens of thousands of positive impressions without spending a cent on media?  In fact, many proclaimed the advent of social media to be the death knell of traditional advertising.

Understandably, marketers quickly adopted social media marketing as a fundamental component of their marketing activities.

Just as every now and then a relief pitcher hits a home run, inexorably a few brands did some things with social media that became big commercial successes. These successes became legendary and were offered up at every conference, in every magazine, and at every new business pitch as evidence of the remarkable power of social media.

As time went on, however, it became clear that the philosophical foundation of social media marketing was flawed. People were enthusiastic about engaging with their friends on social media by sharing personal experiences, political opinions, silly videos, photos of children, pets, and meals.  But they seemed to demonstrate little to no interest in talking with or about brands — except sometimes to gripe about mistreatment.

But we became really good at ignoring the evidence of our own eyes.

A look at any Facebook page or Twitter feed would have quickly convinced any dispassionate observer that people were not broadly sharing their enthusiasms for brands. In fact, people were overwhelmingly not voicing enthusiasms for brands at all. And on the rare occasions when they did, their comments did not get shared and go viral, but quickly trickled away.

Additionally, pages that brands built on Facebook and feeds they created on Twitter drew initial interest as novelties, but soon became moribund as consumers found them to be bland and self-serving. Today, about 7 in 10,000 of a major brand’s followers will engage with a Facebook post. The number for Twitter is about 3 in 10,000.

Becoming a publicly held company, and needing ways to make money for its shareholders, Facebook saw what was happening and quickly changed its tune.

To their credit, Facebook pulled one of the most amazing bait-and-switch jobs in the history of business. Notwithstanding Zuckerberg's earlier proclamations, they realized they were in the traditional advertising sales business. They dropped the fancy talk about “sharing” and “engagement” and quickly reverted to “reach” and “TRPs” — the decades-old language of traditional advertising.

Facebook's business is no longer about providing a forum for conversations about brands. It is now believed that about 1% of a brand's followers receive the brand's posts organically. As Forrester Research vice-president Nate Elliott has said...

“Any marketers who believe they’re having a conversation on Facebook are delusional” 

Remarkably, there are still marketers and agencies who believe — or, in the case of some agencies, pretend to believe — that spending ad dollars on Facebook is “social media.”

It is no such thing. It is traditional paid advertising. But, as always, the social media lobby is nothing if not cunning. Every time their spurious claims are exposed they redefine "social media" to fit the facts. So we now have "social ads" -- a complete contradiction in terms. The thing that was supposed to replace ads is now ads.

Social media is an amazing worldwide phenomenon. But social media marketing — and the promise of free lunch through conversations and sharing — has turned out to be a fantasy.

Facebook's remarkable success as a platform for traditional paid advertising is the face of the fantasy.

Part 2: The Slow Painful Collapse Of The Social Media Marketing Fantasy

Today's post is the 2nd part of "The Slow Painful Collapse Of The Social Media Marketing Fantasy" which began here on Monday.

It seems like only yesterday we couldn’t turn on the TV, open a magazine, or go to a website without someone exhorting us to “join the conversation.”

“The conversation” was the physical manifestation of the marketing industry’s fascination with social media. The idea was that people were highly interested in our brands and would be eager to chat and share their enthusiasms on line with other people.

The philosophical seeds of this conviction were planted in the mid-1990’s when it was postulated that the “interruption model” of advertising had run its course. 

The theory went something like this: consumers were no longer responsive to advertising messages like TV spots, radio spots, and magazine ads which interrupted their activities. Instead, marketing was transitioning into a period in which the “permission model” would dominate.

The “permission model” posited that in order to be effective, marketers had to stop bothering people with advertising, and instead gain their permission to market to them.

The way you got permission was to engage consumers with useful, interesting messages (currently known as “content”) that gave consumers value instead of sales pitches. If you did this, they would trust you, like you better, and permit you to market directly to them. In marketing terminology, they would “opt in” to your marketing programs.

Best of all, they would share their passion for your brand with their network of friends and followers who would, likewise, share with their network. A multiplier effect would be born.

There was only one problem with this wonderful proposition. It misinterpreted consumer behavior by substantially overestimating consumers’ fervor for brands, and concomitantly misjudging consumers’ inclination to share their presumed fervor.

Believers in this ideology assumed that a person's use of a product was a demonstration of enthusiasm for the brand. Sadly, in the vast majority of cases, it is merely an indication of habit, convenience, or mild satisfaction. It is not proof of devotion or enthusiasm.
 

Regardless of the time, energy and money we spend “differentiating” our brands, most people see very little difference between our brand and our closest competitors. While there are some brands that people do have great loyalty to, and some categories that people are truly interested in, these are the rare exceptions. In most cases people will change brands with very little bother if it turns out to be convenient or otherwise beneficial.

Most people will gladly switch from Skippy to Jif if they can save a buck or two. If the ballpark doesn’t serve Coke, most people will happily return to their seats with a Pepsi. 

The idea that social media would become a channel in which consumers would share their strong enthusiasms by having “conversations about brands” has turned out to be largely a delusion.

Most brands are finding that their social media programs are more time-consuming, more expensive, and less capable of driving sales growth than was promised. Consequently, they are abandoning the “permission model” and reverting to the “interruption model” in their online advertising.

You can see this most clearly on Facebook. Facebook calls itself a social medium, but its advertising model is good old-fashioned paid advertising plastered all over the page. Compare the number of paid ads you see on your Facebook page with the number of "conversations about brands." 

YouTube calls itself a social medium but it sticks pre-roll (mostly recycled TV spots) everywhere it can. 

The reason is clear: marketers are finding that they can get more value out of these websites by treating them as avenues for advertising, not conversations.
 
And, just a reminder, Facebook, YouTube, Twitter, etc., don't make money from us having conversations about yogurt. They make money the old-fashioned way -- they sell ad space.

Social media are quickly evolving into just another channel for delivering traditional interruptive advertising.

It is also not surprising that the social media lobby has learned another lesson from traditional paid advertising. When you point out to them that they're not very good at generating sales, they default to the universal excuse for failed advertising -- it's not about sales, it's about branding. Whatever the hell that means. 

Social media is not going to die or go away. It will continue to grow. But the fantasy of consumers having conversations about brands and sharing their passion for brands -- and the claim that this will replace or surpass traditional paid advertising -- is simply collapsing as the evidence rolls in.

The “conversation” was a nice idea. It would be lovely if consumers were as eager to share their enthusiasm for our brands as we are. Sadly, they have other things on their minds.

It turns out that “the conversation” has been mostly a monologue.

Facebook's Awesome Bait-And-Switch

I guess you have to admire the shamelessness of their duplicity.

And I guess you have to marvel at the stupidity and naivete of an industry that not only allows such bullshit to exist, but doesn't even seem to care.

The subject is social media marketing, and the perpetrator is Facebook.

Let's go back a few years. Social media marketing was going to disrupt the traditional paid advertising industry big time (by the way, if I ever hear you utter the word disrupt I'm coming with a shovel to disrupt your face.)

You see, you and I were going to "join the conversation."

We'd be going on line and having conversations about brands. And these conversations would be read and shared by our network of friends and followers. And this would create a multiplier effect that would make folly of traditional paid advertising.

According to an article at Entrepreneur.com, Facebook's Global Brand Experience Manager once believed that companies need to… replace random display ads. Those… ads will fall by the wayside, like so many other obsolete processes and technologies.

Well, by now it's pretty clear that the whole thing was an infantile fantasy. Or as McKinsey & Company put it a few weeks ago...

"E-mail remains a significantly more effective way to acquire customers than social media—nearly 40 times that of Facebook and Twitter combined."

Now it seems that even Facebook, the former poster child for social media marketing, is joining the rats in abandoning the social media marketing ship.

Now that Facebook is a real company and has to make real money and is finding that real advertising is its real business, they are singing a new tune.

Last week, Time magazine reported that Facebook’s Pages platform reaches only 6% of a brand’s followers, and is headed down to 1 to 2%.

When questioned about this by Time, here’s what a Facebook spokesperson had to say...

“… if businesses want to make sure that people see their content, the best strategy is, and always has been, paid advertising.”

Boy, am I confused.

Can Facebook Make Old Cool?

Say what you want about Facebook, they have proven to be amazing salespeople.

• When they started out they convinced gullible marketers that advertising was dying and that social media, in the form of conversations, was the future. Mark Zuckerberg said... “For the last 100 years media has been pushed out to people, but now marketers are going to be a part of the conversation.                                                                                                                                                                       That is, until he discovered he could make billions pushing out advertising to people all over his platform and then Facebook quickly morphed into another channel for delivering traditional paid advertising. Doing a complete 180, a Facebook spokesperson had this to say “… if businesses want to make sure that people see their content, the best strategy is, and always has been, paid advertising.” Oh.

• For several years they sold imbeciles in the marketing industry the fairytale that "likes" were worth something. 

• When every discount dentist was advertising on Facebook, they convinced marketers that the key to advertising success was getting clicks through "precision targeting." But when big advertisers balked, they changed their tune and decided advertising was all about that tired old thing, reach and frequency.

The point is, if there's anyone who knows how to blind the marketing industry with horseshit, it's Facebook. But now, they may actually be in a position to do the marketing world some good despite the industry's unwillingness to help itself.

According to Bloomberg, Facebook will lose over 3% of its teen audience next year  -- the first year in its history it has lost any part of any audience. A few more years of this and Facebook may be forced to do the unthinkable -- start selling its clients on the value of an older target.

People over 50 are the most valuable consumer group in the history of marketing. But the television and radio industries, who have plenty of over-50's, have been totally incompetent at explaining to advertisers the incredible amount of money they are losing by ignoring this group.

The one and only media entity with the brains and skill to sell advertisers on the value of advertising to a mature target may very well be Facebook.

If so, it would be the second time Facebook stole billions of dollars in ad revenue from the asleep-at-the-wheel broadcast industry.

2014's Most Popular Post

Continuing our blessed vacation from blogging, today is the last post of 2014. It was the most popular post (by viewership) of the past year. It was a two part post entitled "The Slow Painful Collapse Of The Social Media Fantasy."

Part 1

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.

Part 2

It seems like only yesterday we couldn’t turn on the TV, open a magazine, or go to a website without someone exhorting us to “join the conversation.”

“The conversation” was the physical manifestation of the marketing industry’s fascination with social media. The idea was that people were highly interested in our brands and would be eager to chat and share their enthusiasms on line with other people.

The philosophical seeds of this conviction were planted in the mid-1990’s when it was postulated that the “interruption model” of advertising had run its course. 

The theory went something like this: consumers were no longer responsive to advertising messages like TV spots, radio spots, and magazine ads which interrupted their activities. Instead, marketing was transitioning into a period in which the “permission model” would dominate.

The “permission model” posited that in order to be effective, marketers had to stop bothering people with advertising, and instead gain their permission to market to them.

The way you got permission was to engage consumers with useful, interesting messages (currently known as “content”) that gave consumers value instead of sales pitches. If you did this, they would trust you, like you better, and permit you to market directly to them. In marketing terminology, they would “opt in” to your marketing programs.

Best of all, they would share their passion for your brand with their network of friends and followers who would, likewise, share with their network. A multiplier effect would be born.

There was only one problem with this wonderful proposition. It misinterpreted consumer behavior by substantially overestimating consumers’ fervor for brands, and concomitantly misjudging consumers’ inclination to share their presumed fervor.

Believers in this ideology assumed that a person's use of a product was a demonstration of enthusiasm for the brand. Sadly, in the vast majority of cases, it is merely an indication of habit, convenience, or mild satisfaction. It is not proof of devotion or enthusiasm.
 

Regardless of the time, energy and money we spend “differentiating” our brands, most people see very little difference between our brand and our closest competitors. While there are some brands that people do have great loyalty to, and some categories that people are truly interested in, these are the rare exceptions. In most cases people will change brands with very little bother if it turns out to be convenient or otherwise beneficial.

Most people will gladly switch from Skippy to Jif if they can save a buck or two. If the ballpark doesn’t serve Coke, most people will happily return to their seats with a Pepsi. 

The idea that social media would become a channel in which consumers would share their strong enthusiasms by having “conversations about brands” has turned out to be largely a delusion.

Most brands are finding that their social media programs are more time-consuming, more expensive, and less capable of driving sales growth than was promised. Consequently, they are abandoning the “permission model” and reverting to the “interruption model” in their online advertising.

You can see this most clearly on Facebook. Facebook calls itself a social medium, but its advertising model is good old-fashioned paid advertising plastered all over the page. Compare the number of paid ads you see on your Facebook page with the number of "conversations about brands." 

YouTube calls itself a social medium but it sticks pre-roll (mostly recycled TV spots) everywhere it can. 

The reason is clear: marketers are finding that they can get more value out of these websites by treating them as avenues for advertising, not conversations.
 
And, just a reminder, Facebook, YouTube, Twitter, etc., don't make money from us having conversations about yogurt. They make money the old-fashioned way -- they sell ad space.

Social media are quickly evolving into just another channel for delivering traditional interruptive advertising.

It is also not surprising that the social media lobby has learned another lesson from traditional paid advertising. When you point out to them that they're not very good at generating sales, they default to the universal excuse for failed advertising -- it's not about sales, it's about branding. Whatever the hell that means. 

Social media is not going to die or go away. It will continue to grow. But the fantasy of consumers having conversations about brands and sharing their passion for brands -- and the claim that this will replace or surpass traditional paid advertising -- is simply collapsing as the evidence rolls in.

The “conversation” was a nice idea. It would be lovely if consumers were as eager to share their enthusiasm for our brands as we are. Sadly, they have other things on their minds.

It turns out that “the conversation” has been mostly a monologue.

End Of Year Reruns

It's the time of year when lazy-ass bums don't feel like working. So, as is customary, I am filling the blog for the rest of the year with stuff from 2014 that I liked. Here's a 2-part series on social media we did in January:

The Slow Painful Collapse Of The Social Media Marketing Fantasy

PART 1

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.

PART 2

It seems like only yesterday we couldn’t turn on the TV, open a magazine, or go to a website without someone exhorting us to “join the conversation.”

“The conversation” was the physical manifestation of the marketing industry’s fascination with social media. The idea was that people were highly interested in our brands and would be eager to chat and share their enthusiasms on line with other people.

The philosophical seeds of this conviction were planted in the mid-1990’s when it was postulated that the “interruption model” of advertising had run its course. 

The theory went something like this: consumers were no longer responsive to advertising messages like TV spots, radio spots, and magazine ads which interrupted their activities. Instead, marketing was transitioning into a period in which the “permission model” would dominate.

The “permission model” posited that in order to be effective, marketers had to stop bothering people with advertising, and instead gain their permission to market to them.

The way you got permission was to engage consumers with useful, interesting messages (currently known as “content”) that gave consumers value instead of sales pitches. If you did this, they would trust you, like you better, and permit you to market directly to them. In marketing terminology, they would “opt in” to your marketing programs.

Best of all, they would share their passion for your brand with their network of friends and followers who would, likewise, share with their network. A multiplier effect would be born.

There was only one problem with this wonderful proposition. It misinterpreted consumer behavior by substantially overestimating consumers’ fervor for brands, and concomitantly misjudging consumers’ inclination to share their presumed fervor.

Believers in this ideology assumed that a person's use of a product was a demonstration of enthusiasm for the brand. Sadly, in the vast majority of cases, it is merely an indication of habit, convenience, or mild satisfaction. It is not proof of devotion or enthusiasm.
 

Regardless of the time, energy and money we spend “differentiating” our brands, most people see very little difference between our brand and our closest competitors. While there are some brands that people do have great loyalty to, and some categories that people are truly interested in, these are the rare exceptions. In most cases people will change brands with very little bother if it turns out to be convenient or otherwise beneficial.

Most people will gladly switch from Skippy to Jif if they can save a buck or two. If the ballpark doesn’t serve Coke, most people will happily return to their seats with a Pepsi. 

The idea that social media would become a channel in which consumers would share their strong enthusiasms by having “conversations about brands” has turned out to be largely a delusion.

Most brands are finding that their social media programs are more time-consuming, more expensive, and less capable of driving sales growth than was promised. Consequently, they are abandoning the “permission model” and reverting to the “interruption model” in their online advertising.

You can see this most clearly on Facebook. Facebook calls itself a social medium, but its advertising model is good old-fashioned paid advertising plastered all over the page. Compare the number of paid ads you see on your Facebook page with the number of "conversations about brands." 

YouTube calls itself a social medium but it sticks pre-roll (mostly recycled TV spots) everywhere it can. 

The reason is clear: marketers are finding that they can get more value out of these websites by treating them as avenues for advertising, not conversations.
 
And, just a reminder, Facebook, YouTube, Twitter, etc., don't make money from us having conversations about yogurt. They make money the old-fashioned way -- they sell ad space.

Social media are quickly evolving into just another channel for delivering traditional interruptive advertising.

It is also not surprising that the social media lobby has learned another lesson from traditional paid advertising. When you point out to them that they're not very good at generating sales, they default to the universal excuse for failed advertising -- it's not about sales, it's about branding. Whatever the hell that means. 

Social media is not going to die or go away. It will continue to grow. But the fantasy of consumers having conversations about brands and sharing their passion for brands -- and the claim that this will replace or surpass traditional paid advertising -- is simply collapsing as the evidence rolls in.

The “conversation” was a nice idea. It would be lovely if consumers were as eager to share their enthusiasm for our brands as we are. Sadly, they have other things on their minds.

It turns out that “the conversation” has been mostly a monologue.

Twitter Giving Up On Social Media Marketing?

Here at The Ketel One Executive Center of The Ad Contrarian Global Headquarters, we've been saying for some time that:

a) The delusion of social media marketing is rapidly evaporating

b) Social media sites are morphing into channels for carrying traditional paid advertising as fast as they possibly can

There are three reasons for this

1) Consumers have shown approximately zero interest in having "conversations about brands"

2) Consumers have shown approximately zero interest in having "conversations about brands"

3) Did I mention that consumers have shown approximately zero interest in having "conversations about brands?"

If you need proof of this, click on over to your Facebook page and see if you can find a conversation about a brand. What you'll find is a festival of paid advertising.

While the dim bulbs in the marketing industry spent 5 years exhorting us to "join the conversation" actual human beings were thinking "what fucking conversation?"

So the lovely fantasy of consumers carrying our marketing water for us by going online to extol the virtues of our mittens, mayonnaise, and motor oil has gone all sour.

Facebook saw the light and stopped pretending to be a vehicle for social media marketing. They became a born-again old-school paid advertising channel. As one Facebook executive put it to Time magazine...

“…if businesses want to make sure that people see their content the best strategy is, and always has been, paid advertising.”

If I may take the liberty of translating the above sentence, here's what the Facebook guy was trying to say:

"We can't make a nickel off this social media bullshit, but we can have a nice juicy steak dinner selling some good ol' fashioned paid ads."

Of course Facebook's rival, Twitter, is drooling.

Having seen what Facebook's stock price did once Facebook stopped living in new-age never-never-land and started seriously selling real ads, Twitter wants a slice.

But first they have to figure out how to convince people -- especially marketers and investors -- that they are not what they said they were.

The problem is that marketers and investors love the idea of social media but hate the reality of it. They want to see real money from real ad sales. Not hot air about "conversations."

And so Twitter is now on a mission to convince the world that they are not really a social network.

According to The Wall Street Journal last week...

"Executives hope to shift the perception of Twitter from a social network to a broadcast platform"

A broadcast platform? But hold it. Isn't broadcast dead?

The only question now is how long it will take the cement-heads in agencies and marketing departments -- who are still gorging on empty calories at the social media buffet -- to figure out what the hell is going on.

The Devolution Of Social Media Marketing

Every time I try to explain to someone who is not in the ad business (and some people who are) why social media marketing has been a disappointment, I get the same response:

"But how can you say that? Facebook has over a billion users... Twitter is the medium people have used to overthrow governments... Pinterest is this and Instagram has that...and...my daughter is constantly using social media and... and...and..."

What people don't seem to understand is that social media and social media marketing are two very different things.

Social media has been a huge worldwide success. Social media marketing has not.

Social media is to social media marketing as news is to public relations.

News is generated by news media. The objective of PR is to influence that news. Social media is chit chat generated by individuals. The objective of social media marketing is to influence the chit chat.

Just as PR is rarely successful at manipulating the reporting of the news, social media marketing is rarely successful at manipulating chit chat.

Sure, sometimes Burger King's PR department gets a story placed somewhere and they have a big PR hit. And sometimes Wendy's social media effort pays off with a social media success. But both are rare and massively unreliable.

Do PR and social media pay out in the long run? If done well, I guess so. But no one with a functioning brain believes anymore that they can rely on either to carry their marketing water for them.

Regardless of what PR experts tell you, you cannot control the news. Regardless of what social media experts tell you, you cannot control chit chat. Just as people can smell PR disguised as news, they can also smell social media marketing disguised as chit chat.

As social media marketing has been exposed for not being the magic it was purported to be, its influence -- even in the world of social media -- has waned.

The early zealots of social media marketing claimed that it was going to replace traditional paid advertising. "Talking down to consumers" (the code words zealots use to describe advertising) was going to be replaced by consumers having "conversations about brands." This wonderful little fantasy soon became unmasked for the nonsense it was.

One of the confusing elements of this topic is a distinction that many don't understand. Just as social media and social media marketing are different things, social media marketing and social media channels are often confused.

Our most successful social media channel -- Facebook -- can barely be considered a vehicle for social media marketing anymore. It has mutated into a channel for delivering traditional banner advertising. Facebook's revenue model is basically no different from any other website -- they are selling ad space. They are not in the "conversation" business. They are in the advertising space sales business.

My informal estimate is that over 1/3 of a Facebook page is covered with display ads of some sort, either outside your feed or inside it.

Social media marketing is devolving into not much more than traditional advertising on social media channels. The delusion that consumers crave conversations with marketers and engagement with brands is quickly evaporating.

Content Is The New Magic

Recently I praised Fast Company for publishing a very good piece about the dream world  marketers are living in in which they think Facebook members give a shit about their brands.

Well, it didn't take long for Fast Company to revert to form. Last week they published a self-promotion piece disguised as an article called Why You Should Buy Facebook (And Sell GM). It was written by a "content" hound and it explains to us dinosaurs, with great forbearance, why "content" shared on Facebook is the new online marketing magic.

According to his guy, like everything else in the long line of online marketing miracle cures, content -- especially that which is shared on Facebook -- will soon be replacing traditional advertising.

As usual, the argument is not a discussion of facts, it's the oft-told battle between the tired old forces of reaction and the heroic new crusaders of virtue.

Conveniently, the author neglects to inform us that the identical claims have been made for previous online wonders including podcasts, blogs, banners, widgets, user generated content, Twitter, apps, YouTube... and it has all proven to be seriously delusional.

So fire up your cliche meter, here we go.

"There's a battle brewing between the old-world thinking of Madison Avenue and Wall Street and the mindset of the Facebook generation...Facebook is about replacing traditional ads with shared content; it's about new ways of sharing with friends and strangers, not old, failing ways of shilling for products...

This guy needs a jargon make-over. If he's going to be channeling the magnificently wonderful "Facebook generation" he really ought to stop quoting 5-year old social media powerpoints.

Also, we idiots are...

"...famous for opposing any threat to (our) power and (our) ancient ways of operating"

Yeah, all this power is really going to my head. And does anyone know where I can get my abacus re-beaded?

You see, we are suffering from...

"...a complete failure to understand where Facebook's real economic value lies... (we) should be dreaming that a friend or a stranger shares an online link to a piece of content authored by their brands."

I think the operative word here is "dreaming."

He also inadvertently neglects to include the two most important facts about advertising and marketing on Facebook:

• Click through rates are a staggering 5 in 10,000
• Engagement rates with "shared content" are below 1/2 of 1%

Finally, this guy loses any and all credibility by quoting extensively from the appalling, misleading, and completely unscientific piece of garbage from Nielsen called Global Online Consumers and Multi-Screen Media: Today and Tomorrow that we took apart here last week.

Apparently unconcerned that Facebook makes about 85% of its money on paid advertising -- not shared content -- the author concludes...

"It doesn't take a genius to figure out how Mark Zuckerberg and his shareholders will make money on this exploding phenomenon."

This confirms something I've suspected for a long time. I'm no genius.

Online Advertising Is Corrupt At Its Core

Let's forget for a minute about the growing Google scandal.

Let's forget the kickback scandal unearthed by the ANA.

Instead, let's go back to first principles and focus on the nature of online advertising, and why - at its core - it has become a corrupt and dangerous thing.

It all started with a big fantasy. The fantasy was this -- people would want to interact with online advertising.

We were told that online advertising would be far more effective than traditional advertising because it would be interactive. This fantasy lived for a few years until reliable data arrived and it became clear that consumers had virtually no interest in interacting with online advertising. In fact, click rates (the only possible way to interact with online advertising) were so low, platforms like Facebook refused to divulge them.

There are two ways online publishers make money - traffic and clicks. In light of the indifference consumers were demonstrating toward display advertising, publishers needed to find a way to generate traffic and/or clicks to attract advertisers and make money.

A crisis was averted when they hit on a solution: Disguise advertising as something else.

When you see a TV commercial, a billboard or a magazine ad, there is no question what it is. It is an attempt to sell you something. These ads may be annoying, stupid, or tiresome but there is no doubt about the nature of what they are or what their motives are. They are ads and they want to sell you something.

Online advertising is different. It has become devious, non-transparent, and unscrupulous. It is intentionally confusing and its motives are often unclear. It does everything possible to hide its real intent.

Yahoo is in the top 5 websites in the U.S. by visitor count. Here is a a screen grab from this morning's (as I write this) front page news feed.

Let's ignore for a second the unspeakable crap that Yahoo considers front page news. One of the leading stories on this front page is not a news story at all. It is an ad disguised as a news story (it's the Stephen Hawking "story.")

Yahoo also deceives us about the security of our personal information. According to Yahoo...

“...we have a deep understanding of the threats facing our users and continuously strive to stay ahead of these threats to keep our users and our platforms secure...”

But according to The New York Times, in 2014 Yahoo's chief of security recommended some changes that would make their platform a lot more secure by employing "end-to-end" encryption.

This initiative was thwarted by the person who runs their email and messaging services because "...it would have hurt Yahoo’s ability to index and search message data..." That means simply this -- they wouldn't be able to read our email and target us with advertising accordingly.

The result? Last year Yahoo announced that half a billion accounts had been hacked.

Google earns its money by misdirection. When you search for "Gloves" as I did here, you get an ad disguised as a search result.

Unless you happen to notice the word "sponsored" in the upper right corner, and happen to know that by "sponsored" Google actually means "this is an ad" you would believe you're getting a search result.

Google has made a minimal effort to identify ads (as is required by regulation) including a little yellow "ad" badge on most paid ads. However, the overall look and feel of the ads is so similar to search results that half the people can't distinguish between a paid ad and a legitimate search result. There is only one possible explanation for this - Google is intentionally blurring the lines.

This is not the only way Google strives to deceive. According to The Wall Street Journal, the Federal Trade Commission has reported "... Google Inc. manipulated search results to favor its own services over rivals’, even when they weren’t most relevant for users...the FTC’s bureau of competition found evidence that Google boosted its own services for shopping, travel and local businesses by altering its ranking criteria and “scraping” content from other sites. It also deliberately demoted rivals."

The Wall Street Journal also recently reported that "ads for products sold by Google and its sister companies appeared in the most prominent spot in 91% of 25,000 recent searches related to such items."

The Journal says, "The results show how Google uses its dominant search engine to boost other parts of its business and give it an edge over competitors....After the Journal shared the analysis with Google on Dec. 15, many of the ads disappeared... Google declined to comment on the disparity." I bet they did.

Facebook uses the names of its users to create phony testimonial ads which falsely imply that your friends and family are endorsing the brands in question. This practice amounts to hijacking user identities and disguising them as product endorsements. The ad below appeared in my Facebook feed today.

I have contacted both Nathan Krinsky and Susan Tillem, the people referenced in the ad, and have confirmed that neither of them knew they were being used in this way.

When Mr. Krinsky was questioned about this his response was, "how did they get my name?" He said he had no awareness of their using his name, he did not give permission nor did he "like" the advertiser.

Actually, he did give permission but didn't know it. The permission for them to engage in this deceptive practice is buried deep in the agreement he signed when he opened a Facebook account.

There is only one explanation for this -- Facebook is intentionally exploiting a legal loophole to deceive us into thinking our friends are endorsing products which they are not endorsing.

Many of the ads in my current Facebook feed are identified as "suggested posts." I wonder what language it is in which "suggested post" means "ad?" As usual, they are doing their best to confuse what is an ad and what is not.

Social Media is a gross abuser of reasonable advertising standards. The most dangerous outcome of this has been the perversion of the news industry.

First is fake news. The ability of fake news to make money for its creators is enabled by adtech (the automated buying and selling of advertising space.)  In very simple terms, a fake news story runs on a social media platform, attracts traffic and clicks, which signals programmatic (automated) systems to buy advertising on the site. Below is an egregious example of a "successful" fake news story.

A second corruption of journalism is the ascendancy of clickbait. Since online publishers only make money from clicks and traffic, the use of clickbait tactics to attract traffic has become more economically rewarding than good journalism.

In the current model, good journalism can actually have a negative economic effect. The valuable people you attract through good journalism are tracked and re-targeted to at a lower cost site. Or your story is hijacked, aggregated and republished somewhere else. You'll never believe what happens next!

Third is the development and acceptance of "native advertising" as a legitimate form of journalistic activity. Despite its euphemistically lovely name, native advertising is nothing but advertising disguised as news.

Legitimate news organizations, desperate to make money at all costs, have been seduced into  producing and running thinly disguised advertising pieces masquerading as news. The rot has gotten so deep that some once-reputable news organizations have actually set up studios for the creation of this crap, and are going so far as to oversee its wide dissemination on social media channels on behalf of its clients.

It's hard to overestimate the damage that online advertising has had on the credibility of our news media. The fact that we have a populace that no longer knows what to believe from a media industry they once trusted, is not an accident.

Advertising and marketing people are generally good, hard-working people with worthwhile motives. We want to help our clients and we don't want to damage people or society. But we have been sleepwalking on a slippery slope of deviousness and deceit that has been advanced by a tech culture which has embraced - let's not kid ourselves - an ethos of malleable ethics.

There is decay, corruption and deceit now sitting at the heart of online advertising.

Research Company Crashes Into Planet Earth

Here at the Ketel One Conference Center on the campus of The Ad Contrarian Worldwide Headquarters, there's nothing we like better than a good chuckle at the comic antics of the  research industry.

These buffoons are wrong so often that we've asked our stock broker if he can find a way for us to short their press releases.

Now Forrester Research, the geniuses who ten years ago declared "the end of mass marketing" (but apparently forgot to tell Apple and Amazon and Walmart and Nike and Toyota and... you get the idea) have discovered something that everyone with just a little grey left in their matter have known for years -- social media marketing is a cruel joke.

According to an article in The Wall Street Journal on Monday, "Brands Are Wasting Money on Facebook and Twitter, Forrester Says." Well, who'd-a-fuckin'-thunk-it?

You see, Forrester recently discovered that Facebook and Twitter have fuck-all to do with social media marketing (I admit it, I've been spending too much time in the U.K.) As we have been writing here since about forever, Facebook and Twitter have become the toxic breeding grounds for the seemingly unlimited propagation of display ads.

According to a Vice President and Senior Analyst at Forreester... 

Facebook “will become nothing but a repository for display ads”

Well I'll be darned. It seems like over a year and a half ago I wrote in these pages that..

(Facebook) has mutated into a channel for delivering traditional banner advertising.

And then back in January...

Facebook calls itself a social medium, but its advertising model is good old-fashioned paid advertising plastered all over the page. 

Now that an internationally expensive research company has stumbled upon the truth, I guess maybe the truth is double extra true.

The really remarkable thing about this report from Forrester is that they had to write it at all.

The fact that so many demented people in the marketing and advertising industry are still living in a dream world of "conversations" on Facebook and Twitter -- a dream world that was DOA years ago -- is a sad and disheartening commentary on how far our industry has wandered from reality, and how thoroughly it has been hijacked by an ever-expanding species of jabbering baboons.


Thanks to Atomic Tango for the link to this story.

Television 2.0

Six years ago, in a piece entitled The Web: TV With Its Hat On Backwards, I wrote...

I'm starting to get the feeling that the web's killer app is television.

Then in January of this year in a post called Cloning Television In 2014, I wrote,

I am expecting online advertising to look even more like television advertising this year...video spots will be the 'new' rage.

Well, as usual, The Ad Contrarian is the only ad bozo you can trust. 

The entire digital industry is now rushing headlong into becoming the TV industry.

Yahoo announced this month that they were making a major investment in TV production...oops...I mean "content development." 

They are producing two 30-minute, 8-episode comedy series. They are joining Amazon, Hulu, Microsoft and just about every other web dog you can think of in chasing the tv truck down the street.

Not surprisingly, advertisers are liking the idea of the web evolving into television and are slowly moving money into online video.  

Of course, creating something is a lot easier than creating something good -- a very expensive lesson that Yahoo is about to learn. Or as one TV executive put it...

“It is the pure arrogance of the newly rich and the newly powerful to think content is easy”

But I digress... the big picture here is this: 

The utopian hypotheses behind the web as an advertising medium are spinning madly down the old toilet.

First victim is the "social" theory of web marketing. This has been discredited by Facebook's transmutation into a faux-social media marketing entity that is actually just a traditional advertising machine. Your Facebook page now has more paid advertising on it than a Nascar driver's ass.

Second, as the web morphs into TV 2.0, the idea that the web would be the vehicle by which the traditional "interruption model" of advertising would be replaced by the "permission model" is being exposed as more highfalutin' digi-babble.

While the advertising industry's clueless zombies continue their embarrassing shilling for zillionaire web fat cats, the fat cats know exactly where their bread is buttered.