Who Killed Social Media Marketing?
Ask not for whom the bell tolls, the bell tolls for social media marketing.
I’m usually not one to whistle past the graveyard (seriously, I’m not!), but I have to admit that the trouncing which social media marketers are taking lately is delicious! For the past few years, anybody who has failed to drink the social media Kool-Aid has been mocked and insulted by triumphant social advocates.
Now it seems that the worm has turned. A recent flurry including an Ad Age column and an Ad Contrarian post expose supposed social media successes to have indeed been failures. Additionally, TechCrunch shows MySpace’s decline is actually accelerating. What happened? It’s time to do a post mortem.
The Hype Cycle
Probably the simplest explanation is that social media marketing fell prey to the Hype Cycle, which I described in an earlier post. The basic idea is summarized in this chart:
Social media certainly has had its “peak of inflated expectations.” For a while, you couldn’t turn your head without someone proudly proclaiming that “it’s all about the conversation!” Anybody who was the least bit skeptical was ignored, if not shouted down.
Now it is clearly sliding down into the “trough of disillusionment.” The negative press has begun, social media itself is consolidating into three major companies (Facebook, Twitter and LinkedIn) and marketers seem keen to get back to basics.
Social Media Specialists Lacked Marketing Expertise
Social media advocates were certain that they had discovered a new media paradigm. They would trash the old “interruption model of TV” and claim that the “old media era” was over. However, they missed the fact that even revolutionary new paradigms don’t obviate old needs.
Newton’s theories reined for centuries until Einstein came along and established a new paradigm. As a result not one bridge collapsed and not one building crumbled. While we enjoy new things like GPS systems and nuclear power that Einstein’s equations made possible, I would argue we still depend more on the engineering principles that Newton gave birth to.
The fact that very few, if any, of the new social media gurus had actually ever run a brand worked against them. They failed to understand traditional marketing tasks. In effect, what they were proposing was very much like expecting GPS navigation to put cars out of business (to torture the analogy a bit, but not much).
So let this be a lesson to all the aspiring paradigm-changing media gurus out there: If you set out to break the rules, first learn what they are!
Social Media Marketers Didn’t Know Much About Social Networks
Another thing that was often overlooked is that there is a substantive difference between social media and social networks. Unfortunately, social network theory is highly mathematical and difficult to learn. It’s much easier to tweet and make friends on Facebook.
Christakis and Fowler, two renowned scientists who have studied social networks show why excessive use of social media can blind you to market realities. Who you’re connected to will, to a great extent, affect how you think. If you’re getting most of your information from social media, your conversation is likely to revolve around how great social media is and overlook everything else.
Marketing, however, is a very real job. To be good at it, you need to understand the passions of people very unlike you and how they are influenced. So, to use social media effectively, it is important to learn some basic network principles.
Enthusiasm is no substitute for expertise.
ROI Nonsense
A few years ago, I pointed out that ROI for social media is a fruitless quest. My reasoning was simply that digital media as a whole, much less social media specifically, makes up a very small proportion of marketing activity. Therefore, it’s impossible to isolate it from traditional media, where the bulk of marketing budgets go.
I was, of course, shouted down, called a “hater” and treated to a barrage of non-sequitors. One woman, interestingly, insisted that results have nothing to do with how much you spend (a curious position for someone trying to make a case for ROI).
Nevertheless, many continued to make outrageous claims in defiance of clear facts, insist that traditional media was dead and generally make asses of themselves. Is it any wonder that there was a backlash brewing?
Social Media Marketing is Dead! Long Live Social Network Marketing!
So who killed social media marketing? Social media marketers, of course. And they failed for the worst reasons: hubris, avarice and stupidity.
This, of course, is not the last word. It’s perfectly reasonable to assume that social marketing will climb the “slope of enlightenment” and reach the “plateau of productivity” just as the hype cycle predicts. However, the emphasis is likely to be on social network marketing and not confined to social media.
Next Wednesday, I will outline four ways in which social networks can be harnessed for marketing: Customer Relationship Management, Big Seed Marketing, Social Listening, and utilizing the web’s new social infrastructure.
Now that the kids are being put to bed, it’s time to get serious.
– Greg
Thanks for the post. Those of us that lived through the “go-go” days of the web know this phenomenon well. Social Media/Social Networking tools are transformative, no doubt. These capabilities are welcome addition to our toolboxes too. But as the saying goes, there is a learning curve here, as we experiment and uncover best practice we can use to meet our business goals. In other words, core marketing principles and strategic problem solving still apply. Two other things… It seems to me that Social Media per se involves constant attention, constant interaction in business to be effective. I am a marketing professor and there are wonderful opportunities for digital native students to apply their skills that I think will continue. And of course, having access to these tools at low or no cost is a marketer’s dream. This gives us untold freedom to engage, test and apply like never before, if we have the courage (and time!!!) to do so.
Good points Randy. Thanks.
Next Wednesday I’ll be posting some great areas of opportunity for social networking tools.
– Greg
I personally never liked the term social media.. But I am a big picture guy first and then once we have a plan like to get deep in the details of execution..
Social is always inherent in business it is just that the conversation had changed and the tools and tech have shifted the power to the customer and with it companies abilities to brainwash or market the way they wanted to. ( yea- I am a big Cluetrain Manifesto fan- read it 11 years ago.) I am old enough to remember a closing technique like this- You want that in red or blue? Times have changed…
But you have to move with the times- In my area of social we use to call it Knowledge Management- then it changed to Business intelligence, then Collaboration/Networked Enterprise, ERP, ERP2.0, CRM- now SCRM, and just in the last 3 months the father of the term e-business, IBM rolls out Social Business… ( My first mention of the term was in late 09.)
Your use of Gartner’s Hype cycle is dead on… the interesting part is looking at the companies that lead thru the entire cycle and was still at the front when it hits that 30% marketshare- they normally have evolved their ecosystem and may be in new industries with new products and are working on things back in the beginnings of the cycle again. IBM has reinvented itself over it 100 yrs many times and they are doing it again.
Social Network Marketing – is that a part of the marketing channel in a Social Business?
Look forward to your next posts…
Steven,
Thank you so much for such a thoughtful comment.
I wrote about social network marketing here. I don’t think it’s social business, which is a much broader issue. It’s simply using social network theory and associated technologies to improve marketing performance.
That’s still fairly narrow, but extends far beyond simple social media.
– Greg
Greg,
Your situational analysis of social marketing sliding into the “trough of disillusionment” is timely and has significant implications for monitizing the companies in this sector. All of the IPO talk and financing activity around these companies reminds me of when private equity firms like Blackstone and Fortress Investments went public and they were the “hot” business model of the moment.
Warren Buffet publicly questioned the valuation of companies such as Facebook and Twitter http://www.bloomberg.com/news/2011-03-25/most-networking-site-companies-will-be-overpriced-buffett-says.html ahead of their public offerings. Also of note is the recent drop in the private market for Twitter’s shares http://bit.ly/dEOdaP
Signs of a social media bubble abound, but its confirmation is only possible looking in the rear view mirror. But like private equity in the late 1990’s, the public offering of the social media behemoths may be a leading indicator that their valuation has topped out. Now lets march onward to the”plateau of productivity.”
Steve,
Thanks for your comment.
I saw that article about Buffet, but I think it was misunderstood. He didn’t actually say they are overvalued, he said that they are hard to value and probably would get bid up in the future.
As far as I can tell, Facebook is probably a good buy at $50 billion. I was skeptical at first, but once I started running the numbers, I was amazed at how solid they looked. I wrote about it here.
With that said, I agree with him (and you) that things will probably get blown up out of proportion. It already has on the marketing side.
– Greg
G:
Nice job on this post.
Great post Greg.
I think what has actually happened is that traditional media has absorbed most of the good elements of social media: in TV CNN has iReports, Radio is now Internet radio, Outdoor has QR codes (many years now in Japan), Magazines are now on iPad’s/Tablets.
Moreover CRM has become CRM +Social CRM with this week’s launch of Microsoft Dynamics CRM, while Salesforce.com has just purchased Radian6.
But you’re correct in saying that the best thing to happen to date is that the Zealot Social Media Folks have to turn down the volume and back down a bit.
Cheers!
Blair
Thinking of the digital revolution as ‘tools’ will miss the forest for the trees the same way thinking of social media vs. social meaning has.
Social network theory may be complicated but applying network thinking isn’t. I would also suggest that you think in terms of ecosystems (and i don’t actually mean using the term ecosystem to express a pile of stuff which seems to be the way most pple are using it – what i mean i shared here on slideshare
http://www.slideshare.net/leighhimel/greenman-marketing ). One’s philosophical approach to network marketing is as important if not more than the math 🙂
This is a good read and I look forward to reading your next installment.
It’s not about the technology, it’s about the culture. Marketers don’t understand this and as a result, try to control the message and carpet bomb consumers with one-size-fits-all ‘spray and pray’ mass marketing campaigns across social media platforms in the way they did with mass media.
There are multiple reasons for why marketers are doing this – inertia, tradition, fear – are a few reasons. Most important is fear and the fact that they see themselves as losing control as the concept of marketing in its traditional form may have seen its best days.
Today, in a social media world, it is the consumer and not the organisation that defines the brand.
Thanks TAC!
– Greg
Thanks, Blair.
It’s going to be interesting to see what happens with QR codes. To be honest, I just can’t believe that those ugly things will still be around in a decade.
– Greg
Good luck with it Leigh. It’s always good to have a philosophy!
Thanks for your comment.
– Greg
nice post. enjoyed reading. Do agree it’s an and-story, like it’s most of the time were we think about “or”. The only thing I miss here is to see the opportunities of social media in a broader perspective. But then again, those that claim the social media marketing specialist title often have that narrow perspective. Looking forward to the network theory!
I always favor the “Genius of the ‘And'” over the “Tyranny of the ‘Or'”
(apologies to Jim Collins)
– Greg
Great post, Greg, thanks for sharing! I fully agree with you on the hype cycle, and on the importance of understanding the marketing rules before aiming to surpass “old” approaches.
However, I couldn’t disagree more with your statement that “ROI for social media is a fruitless quest” because “digital media as a whole, much less social media specifically, makes up a very small proportion of marketing activity. Therefore, it’s impossible to isolate it from traditional media, where the bulk of marketing budgets go.”
The key to isolating effects is not their size, but their independent variation over time. Yes, if digital and social media spending are close to 100% correlated with traditional media, you can not calculate its ROI. That is why companies like P&G designed clever field experiments to vary these independently. The key finding is that well-executed digital media, and social media in particular, does have a higher ROI than well-executed traditional media. However, it fails to be a substantial business driver (to your point), either because
(1) not enough is spent on it (so firms should spend more)
(2) it can only reach so many people (so it complements offline and should be combined for optimal impact + ROI)
(3) diminishing returns have yet to set in
Figuring out which of these three explanations hold for a given situation is key to my research, and I am now gathering data for large offline firms (eg selling toilet paper or cars) that spend close to 20% of their marketing budget online.
In sum, I believe more, and not less, effort is needed to quantify the ROI of social media, which will then help us identify best practices and move towards Enlightenment and Productivity.
Cheers
Koen,
There is a lot of truth to what you say and I should clarify my thoughts:
What I was mainly arguing against was suppliers (i.e. social media marketers, digital markets, etc.) seeking to supply ROI metrics without the access, experience and ability to evaluate other channels in their proper context.
It is possible (albeit extremely difficult) to evaluate the effect of any one component (even social media) by marketers internally or even by an external agency if they have full access to internal data. Econometrics firms are contracted to do exactly that for short term analysis and programs like ZenithOptimedia’s Touchpoints have had some success with evaluating longer term effects.
So, you’re right. There is some potential value in ROI for social media. However, in practice, most of the proposals I saw put forth were an absolute joke.
Moreover, I also think that ROI generally has been overemphasized. All too often if favors what you can measure over what you can’t. Metrics, ROI or otherwise, should always be taken with a grain of salt.
– Greg
Actually they have been used in Japan for almost a decade and some of them have taken an art form. Check this out: http://www.facebook.com/Design.QR.code?sk=wall&filter=2
Blair
Yeah, but still…
Marcus,
Sorry for the late reply. For some reason your comment got caught in my spam folder.
Good points, nonetheless. I’ll try not to disappoint in my post on Wednesday.
– Greg
Hello Greg,
I think you have hit a discussion that is timely! The most important point is that putting all your eggs in one basket is never a good strategy. Most of my success in social has been from an integrated approach from a solid business and marketing background, and, as you point out, through social network theory. Many evangelizing social do not understand the intricacies involved and the power of nuance and hidden influence. See this short interview with Valdis Krebs: http://bit.ly/aI8bNA.
Social has empowered the ability of an idea to move more quickly. Also, the degrees of separation have been reduced and one has the potential to connect with others anywhere in the world in ways never before possible. This is a layer that must be integrated with an entire strategy. The power is in delivering the information (content) people want, when they want it (now in realtime), where they are looking for it (all channels), and in an integrated manner.
I think where some social evangelists have gone wrong is that the power they have built is among themselves. The true potential of social is moving outside your circle and capitalizing on weak ties.
What is needed, I think, is an understanding of the 21st century skills that are now necessary– the polymaths who combine art and science to understand how social fits in the big picture. As much as people and organizations say they want to be innovative, they really are not. Innovators are learners, not experts. http://www.screenr.com/w4F.
I look forward to following the discussion.
Thank you,
Angela Dunn
@blogbrevity
Angela,
Happy to see another Valdis Krebs fan!
I couldn’t agree more on all your points. We need more integration, more “T-shaped people” and above all to seek out a more diverse set of views.
The “nobody gets it!” crowd just doesn’t get it.
Delicious irony.
Thanks
Greg
Related post and links that I think you will appreciate:
Web 2.0 Swan Song:
http://socialcapitalvalueadd.com/2008/06/18/web-20-swan-song/
First of all, I don’t think we are past the frothy phase – Salesforce.com just paid a multiple something between 15x and 25x for Radian6 in a $326 MM acquisition.
Second, I agree that we are past the “early adopters” phase. We (MotiveQuest LLC) work with the world’s largest brands using social media as the raw material for understanding people’s passions and motivations both within and beyond categories, around brands, issues, etc.
Some of our very largest clients have really solid, experienced marketing people in charge of how they are using the social channels in alignment with their entire marketing message – and none of these people are gurus – they are doing the hard, but valuable work of using social channels to move their brands forward.
We are using research to better understand what people want thru each channel, and around each brand.
This is measurable and we can see how their efforts impact brand advocacy which is linked directly to sales and share.
This is the model of the future for social networks – which are a really lousy place to market AT people, but used well, a great place to engage with them (on their own terms).
I could go on . . .
Tom O’Brien
MotiveQuest LLC
@TomOB
Thannks for your input, Tom. Good luck.
– Greg
Greg,
Thanks for the thoughtful commentary. Always refreshing to read what you have to say in the sea of hype out there that passes for content. I think the link to Christakis and Fowler is particularly interesting and your point that understanding Social Networking is hard science was just spot on. I am about ready to scream when I read people talking about marketable trends based on their “tribes.” Get outside for a change and see what’s going on in the world. Anyway, I’m looking forward to Wednesday’s posting.
Take Care.
Gerry,
Thanks. Always nice to hear kind words!
btw. I posted that a few weeks ago. Next Wednesday is actually now last Wednesday. Here’s the post: https://digitaltonto.com/2011/4-ways-to-use-social-networks-for-marketing/
– Greg
Hi Greg
Thanks for a great post. It was kinda weird to read this yesterday, on the same day my own post on the topic went live:
http://econsultancy.com/uk/blog/7457-are-we-in-a-social-media-bubble
In my piece, I look at how the mindset of social media experts and their clients is similar to the way subprime exploded up to 2007. But I think your ‘hype cycle’ concept is stronger, and gets to the heart of the issue in a way that an analogy can’t. I’d be interested in your thoughts.
I’ve subscribed to your blog and I’m looking forward to reading more.
Thanks, Tom! I’ll take a look at your post. It’ll be interesting to see.
– Greg
Greg, this is a very interesting and insightful read. Thank you for sharing.
Thanks Rob!
– Greg
Nice Post. Whilst it is probably unfashionable to say so I still think this is why the larger comms companies will eventually dominate this space (much like they have eventually in digital display) as they are at least grounded in the basics of comms planning and are able to have a perspective across multiple media not just a SM silo. they may be slow to the party but they usually get there just when the bottom of the trough has been reached.
Paul,
I think you’re probably right. It makes a whole lot more sense for social to be integrated into stuff that has larger scale. I gave some ideas how that is likely to happen here: https://digitaltonto.com/2011/4-ways-to-use-social-networks-for-marketing/
btw. I’m a big fan of Newcast!
– Greg
Thanks Greg. Sitting here in newcast it is fascinating how ‘non-traditional’ is developing certainly not as an alternative to mainstream but simply giving opportunities for amplification or just a better way of expressing what a brand is trying to communicate. One client recently ran a media owner integrated content piece but the key benefit was not just the exposure but that as a direct result of the activity they got more shelf space in Tesco and thus we can calculate a proper ROI from it.
Obviously O2 Orgy of Fun was one of our creations so thanks for the plug!
btw. What do you think of the in-house departments springing up at media owners like this one:
http://adage.com/article/mediaworks/conde-nast-ideactive-unit-aims-advertising-budgets/227694/
I asked your friend Mark about it once and he was dismissive. He felt that an agency’s independence is an overwhelming advantage.
I see his point, but also think that media owners’ assets, such as specific content expertise, databases (especially in the case of Meredith in the US), pricing (they can usually package effectively), etc. as well as their general antipathy toward agencies make them a clear competitor.
Any thoughts?
– Greg
I think a lot depends on whether they are channelled towards clients direct or are set up for better collaboration with agencies on the clients behalf. If the latter then I think they can be a good thing as the insights they can bring about their brand & consumer are hugely valuable.
If the former then I feel it is is very rare that direct media owner collaboration of this type works successfully. Whilst again I have a vested interest in this, I agree with Mark that we as agencies add a huge amount of independence & expertise especially around the minutiae of contracts, value judgement and the shear volume of work it takes to pull these things together, which for the majority of clients (certainly this side of the pond) the time this takes up would be a serious drain on most clients resources
Thx.
Most likely businesses should properly do social media marketing for them not to mislead the way of their social business. Thanks for this helpful information. I’m not really good with this one but I am eager to learn through reading posts just like this one.
I’m glad it was helpful Anne.
– Greg
Despite the amount of hype, social media marketing is still in its relative infancy and the real experts are discovering that the name of the game is testing to see what works and what doesn’t. There are hundreds of self-proclaimed social media “experts” that claim to be able to make any site go viral when really all they are doing is outsourcing their marketing to a lot of these Facebook fans type of sites. The real tools in the professional modern advertising toolboxes are analytics, measurement, analysis, and lots of hard work. Likely the next step involves not just being able to get traffic and raw numbers, but figuring out how to get people to buy directly as a result of Facebook. Then it will just be game over for any competition from Twitter/Google in my opinion. Yes, people go onto Facebook currently for socializing, but its such a part of peoples’ lives that this is going to continue to evolve going forward.
Do you still feel that social media marketing is dead?
Darryl,
In the terms it was being promoted at the time I wrote the post, yes. Social media has not played the role that advocates were trumpeting, it certainly has not killed mass media and the vast majority of social networks have failed (very few traditional media outlets actually have).
However, I also wrote:
That has happened and social media has become an important tactic in the overall mix. Not nearly as important as TV, but something every brand needs to do.
– Greg