Thursday, April 3, 2014

What if Everything You Know About Social Media Marketing is Wrong?

What if everything you "know" about social media marketing is wrong? What would this mean to your upcoming and current social marketing programs? Better yet, what might it mean to your job?

If you are employed in social media marketing, it is time for a healthy dose of reality followed by some serious soul searching and career planning. Some of you are lucky enough to work in the rare companies that create advocates with great products, service and mission and thus are equipped to leverage social media for marketing gain; most work at companies that have inflated their opportunities in the medium and are floundering with their social media marketing and content strategies.

Here's the way a large number of social media professionals today go about justifying their programs, along with some recent data that may (and should) scare the hell out of you if you work in social media marketing:

  • Consumers welcome brands' social media marketing. Untrue: A recent study by Kentico found that 68% of US consumers “mostly” or “always” ignore brand posts on every social network. A recent study of US college students by Concentric found that "nearly half stated they didn't believe brands should be on social media or they didn't personally follow brands" and "nearly 70% report following three or fewer brand across all social media." A 2013 YouGov survey found that "most social media users feel negatively towards marketing strategies by companies on social media sites, with 35% saying that they often hide companies’ updates if they update too often." And a global research study commissioned by Pitney Bowes recently found that 83% of consumers have had a bad experience with social media marketing.
     
  • Forrester found consumers have substantially less trust in
    companies's social posts than they do of company websites.
  • Consumers find trustworthy the information shared by brands in social media. Untrue: In 2013, an Adobe study found that just 2% of US consumers felt that company social media pages were best for credibility, a figure almost 90% lower than the credibility of company websites or traditional advertising. Forrester's recent data demonstrates that just 15% of US consumers trust the social media posts of brands, half the rate at which consumers trust information on company websites. Likewise, Nielsen recently found that ads on social networks were among the least trusted form of advertising, significantly lower than trust in ads viewed in traditional media.
     
  • Consumers who follow brands are interested prospects, making social an acquisition channel for brands. Untrue: The 2013 Adobe study found that more than half of consumers indicate they like brands because they already purchase from them while just than one in six US consumers indicate they like brands on Facebook because they aspire to buy from those brands. A 2013 YouGov study of UK consumers found that "the followers / likers of companies are most likely to be current customers (33%) whose primary motivation is a desire to get something in return (34%)." Digital consultancy L2 studied nearly 250 prestige brands and found that over four years, less than 0.25% of new customers had been acquired through Facebook and less than .01% from Twitter; this compares to almost 10% for paid search and 7% for email marketing. Moreover, L2 found that "customers acquired via social channels register lower lifetime value than customers acquired via search."
      
  • Every fan and follower has value, because they reflect brand affinity and are a leading indicator of future success.  Untrue: There is no social media sacred cow more hallowed than this, yet this belief remains largely unstudied. I've tackled the issue twice. In 2012, I evaluated the 40 companies with the greatest Facebook fan counts that were both tracked by the American Customer Satisfaction Index (ACSI) and publicly traded. I found a modest negative correlation (-0.3) between Facebook fans and customer satisfaction and no correlation (-0.1) between Facebook fans and stock performance. I repeated a similar evaluation last month, studying the stock performance of the companies with the top 50 brand accounts on Twitter; I found the average performance of these companies was no better than the NASDAQ index and their median performance was significantly below the NASDAQ index.

    This data is supported by plenty of empirical evidence; for example, Lady Gaga's ARTPOP saw disappointing sales despite the fact she heavily promoted the release via her Twitter profile, the fourth most popular profile on the service. Blackberry has collapsed, despite being one of the most popular brands on Twitter with 4 million followers. Dippin' Dots declared bankruptcy mere days after collecting its 5 millionth Facebook fan. And Facebook likes were found to have little to no correlation to election results in the 2010 gubernatorial and House races. I continue to believe that fans earned authentically with the right brand purpose, products and services deliver value, but so many companies have "bought" meaningless fans with deals, discounts, sweepstakes and freebies that there is no correlation to be found between fans/followers and business outcomes.
      
  • Social Media content increases purchase intent. Untrue: While some social media content can deliver sales (see the mention of @DellOutlet in yesterday's post), there is no evidence that the vast majority of brand content leads to any demonstrable increase in purchase behavior. The Kentico study found that 72% “never” or “hardly ever” purchase a product after hearing about it on a social network. A 2013 PwC study found that only 18% purchased a product as a result of information obtained through a social media site. This finding is similar to YouGov's finding that just 13% of all social media users have bought something as a result of reading something on social media sites.

    None of these self-reported data points are very encouraging, but the measured data on social driving purchases is even worse. IBM tracked purchases across 800 retail sites and reported that social media drove just 1% of last year's Black Friday online purchases. Meanwhile, Experian reports that social media sites, despite being the most popular sites on the Web, account for a mere 7.7% of all traffic to retail Websites (and Pinterest drives more traffic than either Facebook or Twitter).
       
  • The sad tale of organic reach on Facebook,
    as told by Social@Ogilvy
  • Earned media is a growing way to reach consumers. Untrue: Facebook remains by leaps and bounds the place where consumers do most of their socializing (capturing 57% of all social visits according to Experian and consuming more than twice as much time as any other social site per Nielsen), but earned media on Facebook is dying. Social@Ogilvy has found that brands have suffered a 50% decline in reach in the past six months, and Facebook is warning marketers to expect further declines. Ogilvy predicts "the end of organic reach" is coming. Perhaps other social platforms will furnish better reach, but with the marketers pushing large quantities of brand content at consumers with little interest in seeing marketing in their social feeds, the recipe for success does not look encouraging. 

The time has come to start preparing for a marketing reassessment of the value of social media and earned media. While it was acceptable to experiment and make assumptions five years ago when social media was young, it is no longer tolerable (nor is it wise to your career) to believe and repeat the same tired, unfounded and incorrect notions.

Why do so many marketers believe things about social media marketing that are not supported by the data? In part, it is because an entire social media marketing industry has blossomed in the last seven years, and it is far more lucrative for this army of agencies, consultants, authors and speakers to sell marketers on earned media and content strategies than to acknowledge the woeful data or track record. As Upton Sinclair once said, "It is difficult to get a man to understand something when his salary depends on his not understanding it."

Also, marketers tend to make the mistake of thinking their own behaviors and that of consumers are alike, but they are not. Exact Target's 2013 study "Marketers from Mars" found that marketers were 50% more likely than consumers to like a brand on Facebook, 400% more likely to follow brands on Twitter, 100% more likely to make a purchase as a result of seeing something on Facebook and 150% more likely to have completed a purchase as a result of a tweet. Marketers have done a better job of selling themselves on the value of social media marketing than they have of selling social media users on the value of their products and services.
Exact Target found that Marketers see substantially more
value in content than do Consumers. 

Not only are marketers' social behaviors vastly different than consumers', they also have much greater confidence in content than do consumers. In the same study, marketers and consumers were asked where their favorite companies should invest more of their marketing time and resources to improve customer loyalty. Marketers were almost 80% more likely to cite content about products and 280% more likely to see content about related topics as a driver of consumer preference.

So, is it time for marketers to dismantle their social teams and abandon their social strategies? I've suggested as much in the past (and I'm hardly alone in this), but I'd like to close this blog post on a (slightly) more positive note. Rather than treating the title of this post--"What if Everything You Know About Social Media Marketing is Wrong?"-- as if it is rhetorical, let's instead answer the question.

The secret to successful social media marketing--and to protecting your job--is not to bury your head in the sand, ignore the data and continue building strategies based on deeply flawed assumptions. Instead, toss out all the faulty suppositions and start from scratch.  The key to success is not to assume that social media is a marketing channel but to assume it isn't. Watch what happens if we take that same list of unsupported beliefs and turn them on their head:

  • Consumers DO NOT welcome brands' social media marketing:  My brand must approach customers and prospects with great respect for their time and intelligence. We should stop posting silly "like this if you're glad it's Friday" and "Happy National Bubble Week" posts and instead provide content and functions that are worthy of people's time and attention.
      
  • Consumers DO NOT find trustworthy the information shared by brands in social media.  We cannot take it as a matter of fact that anything our brand shares will be found credible. Instead of investing so much in content that our brand broadcasts in social media, we should strive to give our customers a greater voice--after all, people believe each other, not brands.
      
  • Consumers who follow brands ARE NOT interested prospects, and social is a WEAK acquisition channel for brands.  My fans and followers are not prospects but are, for the most part, existing customers. Our strategies should not focus on filling the top of the funnel but on loyalty, repurchase and advocacy.
      
  • Every fan and follower DOES NOT have value, and merely having fans IS NOT a leading indicator of future success.  Our brand should not try to collect the largest fan or follower base but should target a smaller set of the right people. Rather than attract people interested in contests and sweepstakes, we should strive to engage with customers interested in our company, its mission and its products and services. A smaller fan base of more valuable consumers trumps a large fan base of disinterested people who hide, ignore or do not see our posts.
      
  • Social Media content DOES NOT increase purchase intent. A funny viral video or clever Vine may accumulate lots of likes, but if it does not drive meaningful consideration or increased purchase intent, then it is worthless marketing. We must stop settling for content that we think keeps our brands "top of mind" and instead work harder to change minds! Even more vital is that we must reconsider our metrics--social media is a relationship medium, not a direct marketing channel. Unless we care to measure results in long-term metrics such as consideration, NPS, preference and the like, we have poor alignment between our marketing investments and objectives.
      
  • Earned media IS NOT a growing way to reach consumers. In the early days of the social era, we all had high hopes for earned media, but just as consumers avoid and ignore ads in other media, so too are they escaping the reach of organic marketing content in social media. Social media marketing requires an investment in paid media, and that means we have to get much better at knowing what content and interactions deliver value (and are worth putting money behind) and what do not. 
Assume this is the attitude of your social
audience, and you may just succeed.
(photo credit: Alicakes* via photopin cc)
Tossing out all the baseless assumptions makes the job of social media marketing much more difficult, but it also forces us to build stronger, better strategies from the ground up. Too many social media marketers have fallen into ruts, and this has resulted in brands vomiting a useless flow of jokey, unmemorable, indistinct and unpersuasive posts and tweets. We have to stop posting content for content's sake and start developing strategies designed to succeed. 

The investment in social media marketing has risen over the course of years, and so have the expectations. Either we change how we approach social media strategy, or CMOs will soon change the people responsible for those strategies. 

If you assume social media is a marketing channel full of interested consumers hungry for our content and ready to purchase, then any strategy makes sense (and will almost certainly fail.) This is the path to career pain.

Social media is not a marketing channel. If you can build social strategies that are designed to triumph despite that fact, then you are on your way to securing your career in social media marketing.

But take heed: The goal of this difficult process should not merely be to determine what your brand's marketing strategies ought to be in social media but if it should even be trying. By starting with clearheaded and factual knowledge about the difficulties, the investments required and the long-term metrics that are best aligned to social media strategies, it may lead you to determine social media is best left to others in the organization.

Whatever your decision, just make sure it is one supported in facts and not naive myths and false promises. Your brand's future and your career depends on it. 

29 comments:

stephen said...

Augies, this post makes very important points and should be a wake up call. The decline of organic reach on Facebook is also related to FB changing its business model to favor paid advertising as the preferred way for brands to get reach. For some time now FB has been tweaking EdgeRank to reduce organic reach in order to get brands to purchase advertising.

Alex Roe said...

This is one of the most down to earth blogs on social media I've read. Everyone is in a social media frenzy but few are actually looking at the ROI.

Anyone being pitched by of one of those social media gurus out there should ask the 'guru' one simple question: How much of an increase in sales can I expect?

If a straight answer is provided, then the guru may well be worth hiring. Otherwise, social media campaign cash should be invested in more tried and trusted methods of marketing - such as, and as you mention, newsletters.

I'll be recommending your blog to a senior manager in a major multinational I know - I suspect he'll find it extremely interesting.

Regards from Italy,

Alex

RobertKCole said...

Excellent points, as always, Augie.

My take: Very little brand-related social media involves high quality / high value executions that create value for both the consumer and the brand.

Your article speaks directly to the point that organizations must define goals based on business objectives, establish metrics to measure performance against those goals, have an iterative process to do more of what works & stop what doesn't - from the customer's perspective, not solely the brand's.

Social media is not one-size-fits-all, and for some (many? most?) it does not make any sense, or at least lacks a compelling return on investment.

That said, social media is a fundamentally different channel than traditional broadcast channels since it has the potential to be highly interactive.

My feeling is that most organizations use social media to broadcast messages, not engage interactively with consumers - a process that rarely scales
efficiently.

I see social media marketers making the same mistakes as the nearly universally loathed outbound telemarketers or direct response postal mail marketers - groups that generally did such a poor job trying to exploit interactive communications platforms (telephone and postal mail) with broadcast messages.

While there is still a massive amount of spam email, some email marketers have discovered ways to effectively engage consumers and create value in the process.

Here's to hoping some enlightened souls do the same with social media and avoid following down the path of the bad telemarketers and junk mailers that alienated so many consumers from even engaging with those channels.

Terry Golesworthy said...

I think the wake up call is a positive thing. Brands need to turn the model upside down as the points you made support. Marketers see life as a funnel in which you seek to convert a small percentage. Social is about reaching a small percentage that believe in your products. The goal should be to make them happy enough to occasionally recommend the company by any means including social media. In this, you may broaden the message outwards. The issue is that most companies are happier spending on gaining new customers than satisfying existing customers.

It has never made sense for brands to be "social". People don't want a social relationship with a brand. This does not means you should not be on social platforms but for consumers to more easily reach you and not for you to reach consumers.

Tom Snyder said...

I have nothing more to add than to say this should be required reading for everyone even thinking about using Social Media to market their brand. Arguably the best I've read in awhile. Are you SURE you can't come to Milwaukee in June? ;)

Michael D. Yoder said...

Thank you for this incredibly insightful post, Augie. And, thank you for being the voice of reason for those trying to make social media something that it was never intended to be. I couldn't agree more that "social media is a relationship medium, not a direct marketing channel."

Hal Thomas said...

Well said, Augie. Well said.

John Steger said...

Good to see that you are still leading the way Augie.

Augie Ray said...

I figured this post would get some reaction, and I'm pleased to see the carefully considered challenges (and praise) here and on Twitter.

Stephen, I am not completely convinced we can toss Facebook under the bus for the death of organic reach. I know it's popular to accuse Facebook of bait and switch, but I think some of that is CYAing from agencies who made promises they cannot deliver. At the end of the day, no one signs on to Facebook to see what brands are doing, and as more brands pumped more content, it was inevitable that brands were going to have to compete for attention in the old-fashioned way--paid media. Nonetheless, your point is well-taken--one cannot look at how Facebook is evolving and not reconsider the value of organic marketing content on that platform (or, for that matter, other social platforms.)

Alex, I agree we need to ask tougher questions of our gurus, agencies and consultants. I will say that I have some concern about only measuring social in terms of sales. On the one hand, hard ROI is a good thing, of course. On the other hand, focusing ONLY on conversions and sales can result in short-term gains but long-term brand damage. I fear brands will turn their social feeds into streams of discounts, which can increase sales in the short run but also leaves the brand damaged by constant price discounting. I'd prefer to see marketers focus on the value of long-term relationships and then measure in those long-term metrics (but, let's face it, most marketers really only want sales and acquisitions.)

Robert, great and thoughtful comment. Your spam analogy is a good one--brands took email (a powerful tool) and rather than use it to furnish high-value content that built relationships instead treated email as a way of pushing more offers and discounts at consumers. Email was never measured in terms of how it lifted purchase intent or consideration but only in terms of how many clicks and conversions it could produce. As a result, no one pays any attention to their marketing emails nowadays (and we are on the same path in social at the current time.)

Terry, Tom, Michael, Hal and John, thanks for the support. It comes as no surprise that I'd find myself on the same page with folks like you !

Christopher Brock said...

Augie Ray go bold or go home! Since you are hinting that I and many others social marketers examine our career path, I thought to add a few important issues to consider with your article before you send us all into an existential and career crisis. In person and online surveys like those referred to in the article chart consumer opinions, which are often riddled with attribution errors and actor-observer bias. A Nielsen's report down playing the importance of Social is near useless considering their relationship with the search giant Google and correct me if I am wrong, but I am pretty sure that Pitney Bowes still thinks the Postal industry is a good long term play. Though I agree with many of your premises and most of your wrap up, the fact of the matter is social, specifically Facebook is one of the most accurate data resources in existence for companies to generate business opportunities today, it just so happens that most marketers are not well versed in sustainable growth practices, performance ad targeting, and social graph hacking for ROI. Next drink is on me and bravo for stirring the pot.

Christopher Brock said...

Augie Ray go bold or go home! Since you are hinting that I and many others social marketers examine our career path, I thought to add a few important issues to consider with your article before you send us all into an existential and career crisis. In person and online surveys like those referred to in the article chart consumer opinions, which are often riddled with attribution errors and actor-observer bias. A Nielsen's report down playing the importance of Social is near useless considering their relationship with the search giant Google and correct me if I am wrong, but I am pretty sure that Pitney Bowes still thinks the Postal industry is a good long term play. Though I agree with many of your premises and most of your wrap up, the fact of the matter is social, specifically Facebook is one of the most accurate data resources in existence for companies to generate business opportunities today, it just so happens that most marketers are not well versed in sustainable growth practices, performance ad targeting, and social graph hacking for ROI. Next drink is on me and bravo for stirring the pot.

Davina K. Brewer said...

"The key to success is not to assume that social media is a marketing channel but to assume it isn't." IMO That's long been one of the most critical flaws in all business communications Augie, that channel conduit metaphor. It's that assumption that if you send it down the pipeline: "they" - whatever audience you're targeting - will receive it; they will pay attention to it; they will understand it; they will come and do whatever action (buy, vote, like) you need them to do. Flipping those assumptions around, taking a new look - that's the smart way to move forward as the social landscape continues to evolve, transform, as the way we do business does. FWIW.

Matt said...

Christopher Brock, Nielsen shut down their social media practice a year ago. Of course they have a vested interest in tapping surveys over social insights

Ken Hittel said...
This comment has been removed by the author.
Ken Hittel said...

Bunk, Augie. Correlating SM performance one-to-one w/ stock price is, as Freud said of mental illness, over-determined by multitude of moving factors, of which SM is one tiny factor.
Bravo for pointing out how to do SM right, or better, but i don't think that changes the issue. SM won't return ROI But it "works" when it's a well-integrated part of a large & well-conceived overall digital portfolio: well-designed Web sites, strategically-successful PPC, mobility that works, a smart DNS strategy, and much else.
So, I think while much research you have gathered here is to the point in itself, it's to the wrong point. It's irrelevant to the real point of achieving digital ROI.

Augie Ray said...

Christopher, I agree with you that we must be aware of the source of data (and that was EXACTLY the point of my last blog post). That being said, most of the positive studies on social are done by agencies and vendors that have a stake in the game, and most of the negative studies I cited are from far more trustworthy sources with more objective intent.

Marketers have been too quick to buy into any case study or study by a company eager to sell social media services while turning a deaf ear to the growing body of evidence that has shown disappointing outcomes, struggling social media programs, poor sales, lower organic reach and annoyed consumers.

I stand by my contention based on my considerable experience and the data. Social is an important thing happening TO companies, but it is a weak channel FOR companies' social media marketing communications.

Augie Ray said...

Davina,

Thanks for the comments!

You're right--marketers have a tendency to see a new channel and immediately assume consumers are hungry to see brand content within it. Brands rushed into Second Life, and a few did well but most had rarely-visited "islands"; brands all rushed into QR codes a couple years back and were shocked to learn consumers weren't walking around with their phones out dying to scan codes beside magazine ads and in-store ad displays; and even at the birth of the Internet, most companies treated their first sites only has marketing opportunities (while today, successful sites are places to conduct business.)

It seems marketers never learn. But just as we saw with the Internet, I think other parts of the company are on their way to exploiting social for other sorts of benefits. Eventually, of course, some marketing will be part of a brand's social strategies, but I continue to believe that the way marketers today own and run social profiles is the wrong governance and structure for corporate social media.

Augie Ray said...

Ken,

You're going to need to work harder than that to validate that my post is bunk. I furnished several dozen data points from something like 18 different studies, and all you have to combat that is "Bunk"? You picked out a single point in my blog--about correlation between social media and stock performance--to criticize, but you seemed to have missed the larger part of my argument (and the data presented.)

Besides, I didn't say that social wasn't an important part of companies' digital or business portfolio. You know me, and you are aware I think social is an important change happening to companies and a vital part of business strategy. What I said, in essence, is that social is a lousy marketing strategy. I agree with you that social integrated into digital and business strategies provides value, but the way companies are treating their social profiles, marketing content and fans/followers today is simply mistaken and failing.

I'm happy to admit where I'm wrong, but if you want to prove me wrong, it will take some objective, third-party data that contradicts the many data points I cite. Case studies do not count (since there certainly are some rare companies making social marketing work); you need to cite reliable data that demonstrates consumers see social content with significant reach, they respond to social content in ways that are measurable and scaleable and that the sorts of results marketers value can be reliable produced and reproduced by brands via social media marketing. I'm laying down the gauntlet to you to do the same amount of research I did to find objective, trustworthy studies and research that demonstrates my post is, as you say, "bunk."

Mark Salke said...
This comment has been removed by the author.
Mark Salke said...

Augie,

Thanks for a thoughtful and well-researched post. I think you've reported great news! That is, as recommended in your conclusions, that if 'social media marketers' wish to keep their jobs, they better start earning their keep. And there are ways to do that which are based on established marketing concepts. There is nothing new under the sun, and if social media marketers had long ago established social as a complementary aspect of traditional marketing, they might not have found themselves in such a bind where they must back-track to justify their existence. All marketing is founded upon trust. Talk about earned media... Marketers, remember this glaring point - it's not about you.

Ken Hittel said...
This comment has been removed by the author.
Ken Hittel said...

Happy to continue the discussion, Augie. Perhaps I was a bit too succinct or oblique in my comments. The "Bunk" comment really referred to two things: (1) Your research purporting to show a one-to-one causal connection between social media practices and stock price performance. This is a non-sequitur at best and, frankly, nonsensical at worst. To repeat, there almost never is and probably will never be a one-to-one causal connection between one teeny-tiny part of a companies' activities and its performance in the stock market. (Try hedge fund activities, maybe.)

As to why I did not dispute any of the other items in your list of marketers' false beliefs about social media that, was obviously (for me at least) a pretty clear indication that I did NOT disagree with any of your positions there. (In fact I think these falsities have been debunked so many times and by so many people that I find it very difficult to believe that any sufficient number of SM marketers still believe them, if only from grim experience. That said, kudos to you for citing reputable and semi-objective research falsifying these falsities.)

(OTOH, I do not believe that your voluminous citations from IBM and Adobe -- all of whom are in the very lucrative position of supplying both products and consulting to marketers to fix their SM missteps and bring them to Jesus! -- are any less avariciously vexatious than the Case Study approach adopted by agencies. It's difficult for me to believe that the IBMs and Adobes, grappling for ever more SM business are really all that morereliable than the obviously cooked-up (or exaggerated) Case Studies.)

Nor do I believe that the positive and more likely successful tactics you outlined are false or at least logically refutable. (And thanks for outlining these better practices, as opposed to the thousands of articles published daily on "Your 5 Biggest Social Media Mistakes" or "Why You're Doing Everything Wrong on Social Media," which then offer only vague hints of what you could be doing or how real intelligence just might really work for you.

But here, below, is where my second reference to "Bunk" was meant to land. You certainly seem to be at least IMPLYING that if companies were to follow your suggested list of better practices that SM will work for them and, work in a very specific way, namely, landing the Holy Grail of ROI. That at least is how I read your better practices section. However, I think it's very unlikely that more than a minuscule number of companies could ever achieve positive ROI no matter how damn good their SM practices are, if looked at as a singuler marketing program. I will repeat that successful SM can be judged only by how well integrated it is with a company's myriad of digital properties and practices. This, to me, is largely a question of how those myriad digital properties and practices are ORGANIZED and, as you seem to agree in your reply, very few companies are in fact organized in such a way to enable a CONCERTED digital strategy and effectively integrate their digital activities. I hope this explains better my "Bunk" comment and your perhaps accelerated aversion to it.

Juan Sánchez said...

Finally someone honest :-)

Really interesting points indeed.

Augie Ray said...

Ken, Thanks for the clarification. I'm pleased we agree more than we disagree, but I have to say there are times I think you enjoy being a gadfly. Your conclusion, that I seem to IMPLY a correlation between social activities and ROI is the exact opposite point I was making (in more than one place.) My blog post contends that ROI is the wrong metric, and in several places I imply that unless marketers are willing to accept long-term metrics, that have a misalignment between their objectives and their strategies. I appreciate your comment, but I am puzzled why you would feel I am implying the specific opposite of what I stated. I think you enjoy sparking debate and disagreeing, which I happen to enjoy, but in this case I think you may have misfired.

As for if I am merely restating things that have been said, you are correct, I am. But I could say the same thing about your posts, as well. More to the point, the number of retweets of this post (here and on Social Media Today) seems to indicate a lot of people think this needs to be said and shared. We should both keep up making the same point again and again until more marketers get the message!

Juan, Thanks for the comment.

Mark, I love that you said "there is nothing new under the sun." I say the same thing--a lot. In the end, the message of this post is not that social media marketing cannot work but that it does not work in any way different than other marketing in the past. Marketers expected something different from the social era, but it's the same old WOM as ever. Do right by the customer, offer great products and services, provide a great experience and you are more than halfway to marketing success. But, try to out-market the competition with catchier advertising and snappier taglines, and you're halfway to failure!

Ken Hittel said...

Augie, one man’s dissenter (on two main points) is another’s gadfly, I guess. I’m happy to accept the label, however, in the face of some 20 people eager to jump on your bandwagon only to repeat your arguments and challenge nothing substantially. (And isn’t “What if Everything You Know About Social media Marketing is Wrong?” as "gadfly" a title as any you’ve seen elsewhere? Well, I guess not when everyone else just wants to more or less blindly agree…)
So, as gadfly I pointed out that “Correlating SM performance one-to-one w/stock price is, as Freud said of mental illness,over-determined by a multitude of moving factors, of which SM is one tiny factor.” So far you have neither conceded the error nor defended it. It’s known in sociological studies and statistics as “Erroneous Linkage.” I’ll remind you, however, that you once explicitly disowned this exact error:

“No correlation (-0.1) between Facebook fans and stock performance: The data did not reveal any correlation between the size of a brand's fan count and its 12-month stock performance. Among these top fan pages you will find brands like Walmart, Hershey and eBay, with share prices up more than 25% in the past twelve months, but you will also find companies with stocks that have dropped more than 35%, such as Research in Motion, Nokia, Facebook and Best Buy. On average, the companies in this list saw share prices increase just 2.9% in the past 12 months, lagging the major market indices (such as NASDAQ and the DJIA), which are up 6.6% to 6.9%. There is no evidence that investors care about large Facebook fan bases or that having large numbers of fans enhances business results in a way that investors notice or value: No Correlation Between Facebook Fans and Stock Market Performance [Social Media Study]
http://www.experiencetheblog.com/2012/07/no-correlation-between-facebook-fans.html

So why keep looking for one-to-one correlation between SM-favorites and stock market performance? I’ve twice now — thrice if you count this latest exchange — pointed out this “erroneous linkage” and you’ve yet to either refuse to defend it or admit the fallacy. There are lots of Facts and Conclusion that are “true,” but not when they are led to by faulty reasoning. So let me throw down the gauntlet on this one: Show me why it is reasonable to assume that one tiny part of a company's multifarious activities can strictly and on a one-to-one basis correlate with that company's stock market performance.

Ken Hittel said...

Had to break this into two parts: too many words.

Since I was wrong in stating that you were implying that good, better SM practices can lead to ROI, I apologize. I misjudged based on this paragraph and its concluding word, "succeed":

“Social media marketing requires an investment in paid media, and that means we have to get much better at knowing what content and interactions deliver value (and are worth putting money behind) and what do not. Assume this is the attitude of your social audience, and you may just succeed.”

Since ROI, however, is what virtually ever SM manager is seemingly focused on, willingly or not, I (erroneously) took that as implying ROI. Since that was not your intent, again, Mea Culpa, my apology.

As for my second point — “Successful SM can be judged only by how well integrated it is with a company's myriad of digital properties and practices. This, to me, is largely a question of how those myriad properties and practices are ORGANIZED and, as you seem to agree in your reply, very few companies are in fact organized to enable a CONCERTED digital strategy and effectively integrate their digital activities.” — Now, since you say that this is “merely repeating things that have been said,” I must object. I don’t know of anyone openly saying this or actively working towards it. I can only say I’d be happy to be wrong about that, but I see no evidence of corporate America CEOs, CMOs, etc. saying “let’s put together the Web site guys, Social Media guys, PPC and other Lead gen guys, direct sales guys, and whatever it is those DNS strategy guys do, together under centralized leadership? Make them integrate their activities, kill their silos, and make them together responsible for some demonstrable business results, like making money and profits for us…

Do I like to spark debate? Damn right I do — as I know you do, too, although it seems lately you're much happier w/ overwhelming agreement than what even I would concede is, in the context of your whole post, some nitpicking about a few points. My fundamental training has been in philosophy, where “argument” is not a dirty word, as it largely is in corporate America, but is rather seen as the key to eventually arriving at truth. So, yeah, it bothers me when a lot of reasonable arguments can be made to seem unassailable by a chorus of huzzahs! Twitter-favorite companies’ market performance “was no better than the NASDAQ index and their median performance was significantly below the NASDAQ index.” I don’t doubt those facts, just their relevance (or rather note their irrelevance), because the procedure to arrive at them relied on erroneous linkage.

And, oh, yeah, another point you elided, why are studies by IBM, Adobe, Kentico, PwC — all of which are in the business of helping marketers get their SM efforts “right” with proprietary products and services — inherently more reliable than agency Case Studies? Do you really believe there's less venality in the former than the latter?

jaypalter said...

Very thoughtful and thought-provoking post, Augie.

To me, your most succinct statement is "Social media is not a marketing channel."

I say this to my clients every day. If you see social as merely a marketing channel, I think you leave most of its value on the table.

Social media is social. It's about relationships, it's about trust, it's about leadership. It's about building networks of value and word of mouth communication.

Every business creates a community and is supported by a community. Social technology is a medium through which a community communicates, shares and engages – in other words, social tech gives existence to these communities!

I tend to agree that the correlation between any one micro-tactic and a macro measure such as profitability, stock price, etc. is misleading – whether the correlation is positive or negative.

And, I've always been uncomfortable with the hijacking of social media for marketing purposes.

If anything, my takeaway from this post is the importance of understanding how social is changing interpersonal communications and communities and how these changes can be leveraged in any given business context.

Cliff Figallo said...

Nice work, Augie. Few people like a company that uses social connections to market itself. You know that in your gut and you've demonstrated the metrics to reinforce that.

Augie Ray said...

Cliff,

"Few people like a company that uses social connections to market itself" and yet so many marketers still seem to operate from the assumption that consumers love and are waiting for more of their content! :)