Monday, June 8, 2015

The Wonderful Wizard of Instagram: Marketing Opportunity Or More Of The Same?

A few years ago, blogs and industry pubs were full of hopeful predictions of how Facebook and Twitter would usher in a new age of cost-free or low-cost marketing. Brands would "authentically" earn attention, and friends would see each other's likes and retweets, creating viral success for brands.

Fast forward to today, and marketers are struggling to figure out the value of their Facebook pages as engagement drops, and some are opting out of Facebook altogether, Meanwhile, the interaction rate with brand tweets stands at 0.07%, which is less than the current click rates for banner ads.

So, what have we learned from the brand marketing experiences on Facebook and Twitter?

Have marketers realized that in social channels controlled by consumers, brand messaging is so much less welcome than content from friends and family that it is impossible for most companies to earn attention, acquire new customers or generate marketing ROI?

Have we realized that, just like on the Web (where Adblocker is the most popular Chrome download) and on TV (where almost half of millennials now timeshift to improve convenience and skip ads), consumers in social media will ignore or actively reject most brand messaging?

Or maybe we have concluded that while it is possible to get consumers to click a "like" button in exchange for a discount, this cannot create a new brand relationship if over 90% of consumers do not agree it is fair for companies to collect information about them without their knowledge in exchange for a discount.

Is that what we have learned?

It does not seem so. The lesson marketers seem to have gleaned from the past few years is that something is wrong with Facebook and Twitter--they are boring and black-and-white--so let's instead shift our attention to the Technicolor world of Instagram! In the last couple of months, my email box and feeds have been full of hype for Instagram, and the justifications are exactly the same as they were for Facebook and Twitter back in 2010.

For example, "Why Your Business Needs an Instagram Account in 2015" contains no business justification whatsoever. The reason your business "needs" Instagram, the author argues, is because "Instagram is exploding," you can "get creative" and "show people what you do behind the scenes, not just what you're selling." Does any of this sound familiar to you? Remember in 2010 when Facebook was "exploding," brands could use it to "get creative" and the key to success was to "be human"?

In "A Three Step Guide to Winning at Instagram," the author never once suggests how to convert pretty pictures and likes into business wins (particularly on a social network that does not permit links within posts). Instead, it offers the same tired advice brands got about pictures on Facebook and Twitter: Image quality is everything; Consistency is key; Photography is aspirational. If those tips did not work in Facebook and Twitter, what would lead us to believe it will be any different on Instagram?

One analyst firm promoted its Instagram 2015 report by noting the social network offers "100 percent organic reach," unlike Facebook, "which inserted a paywall between brands and their communities." First, Instagram handles followers in the same way as Twitter, offering no filter or algorithm for the people following the brand, so there is no reason to think brands will not suffer the same fate on Instagram as on Twitter. Second, as we have learned on Twitter, there is no such thing as "100 percent organic reach"--the vast majority of posts on Twitter and Instagram are not seen by followers because they are ephemeral, disappearing rapidly in feeds that are not monitored 24/7. And lastly, what do we expect will happen as brand presence grows on Instagram, consumers become increasingly tired of brand content and Instagram improves and expands its pay offerings? Put simply, Instagram 2017 will look a lot like Twitter 2015--decreasing organic engagement, increasing costs for paid media and disappointed brands.

Will some brands succeed on Instagram? Sure, just as some have succeeded in Facebook or Twitter, but this has been the exception and not the rule, as there is little evidence brands are delivering marketing success on a widespread basis. Despite billions of dollars spent on content strategies, social media management platforms and engagement-building campaigns, the percentage of online sales attributable to social media in 2015 stands at a mere 1%, one point less than it was last year and more than 90% less than acquisition from email, CPC or affiliate sources.

Some will argue, as they did on last night's Beancast, that this sort of click-attribution is a poor measure of social value, and I would agree--if brands were earning significant levels of engagement. But in a world where Facebook Organic Zero is approaching and Twitter engagement is less than banner ads', what reason do we have to believe there are broad and unmeasured benefits in a channel where so few people see and engage with brands? (Case in point: As I type this, the past week's posts for McDonald's, which has 57 million fans on Facebook, each have earned fewer than 500 likes and 35 shares--one of the largest brands on Facebook is engaging 25% fewer people with each post than walk into a single of the company's 35,000 restaurant locations in an average day.)

As I have argued in the past, there is undoubtedly value in social for a select few brands in the right verticals or that have built the right customer relationships through actions, products and services, but too many brands are struggling to make themselves appealing and engaging on social networks when they have failed to do so in the real world. Distrusted brands with weak customer relationships that try to be interesting on Instagram will be like Oz frantically pulling levers to create distracting visual effects while demanding, "Pay no attention to that man behind the curtain!"
Pay no attention to that brand, er,
I mean man behind the curtain!

The signs are not difficult to read, and the future is not hard to see. We are a decade or more into the social era, and we know how it works. Instagram is sufficiently similar to Facebook and Twitter that expecting a different outcome is, as the saying goes, the definition of insanity.

Social media is a powerful platform for consumers. It can also be powerful for brands that unleash Word of Mouth and earn true advocacy with their products and services. But we now have too many years of social media experience to think that attractive pictures on Instagram will deliver marketing results outside of select niches. Heck, even some in the fashion industry, which recently honored Instagram's founder with an award, are beginning to question the impact of Instagram (and if hot models and stylish clothes snapped by the world's most experienced photographers may not deliver business results for style brands, what do you think your social team will accomplish?)

You want your brand to succeed in Instagram? Put down the camera and give your customers experiences they will want to capture and share. Or you can try to make your brand fascinating and creative in Instagram, but just remember--even the great and powerful Oz was smart enough to know he would eventually be discovered and keep an escape balloon at the ready.


Mike Wise said...

You beat me to it, Augie. All true.

Brands typically don't look at things from the customer POV. Most of the time the people that rise to the top or the org chart are the people that really "know the business", not the people that really know the customer.

I think of insurance companies. Their primary value prop: Pay us a little bit over time regardless of your current situation and then when something unexpected happens and you're in a jam because you don't have your own reserve, we promise to cover the difference or stand in the gap, etc. So what the bottomline? Premiums and Claim Payments, right? Need validation of this? A look at almost any insurance company's Facebook page reveals a stunningly high percentage of the RPO comments and comments on the shares are people upset over claim denials.

And yet, do insurance brands share content about how many claims they paid last month? Nope. Do they share stories about claimants who's bacon they saved? Rarely. Instead, they share content about the danger lightning strikes this time of year. Why? Because it's what PR and Compliance have authorized - safe, easy, and feels like we're being a good citizen. Does it do anything to drive interest in coverage? No.

And then at the annual or semi-annual or quarterly Come-to-Jesus meeting, the marketers all get 40 lashes and possibly fired for lack of ROI.

Social/Digital, call it what you want. It's really an enterprise thing. What technology is doing to business is the same thing it's done to politics and government. It's opening the Kimono. There's no where for flawed business execution to hide now. UGC exposes cultural problems and impacts HR & Recruiting, exposes service issues and prevents sales, and the list goes on and on. On the flip side, Social is enabling the spread of new solutions like Uber, AirBnB, etc. via, as you correctly say, Word of Mouth.

Word of Mouth is the key. Always has been, always will be. As you yourself can attest to from your hugely successful days at USAA, technology simply amplifies the core corporate and human dynamics, right?

Augie Ray said...

Great comments, Mike! Thanks so much.

I like your comments about insurance companies and what they post. I recently had an interview at an insurance company for a social position. I said that in a channel where emotive storytelling is so powerful, I didn't understand why insurance brands DON'T focus on insurance success stories. ("My husband died and it was tough, but thanks to PruMetNY Life, I was able to stay in the home and even retire early" or "My dad died when I was only 16, and I miss him every day, but he loved me and my brother enough to leave behind enough so that we could both go to college. I think about my dad and PruMetNY Life every day and how much they positively impacted my life.")

The response was that this was too "negative"--all that focus on death and loss--and I was astounded. This is, after all, what life insurance is all about. They wanted to focus on how insurance gave people confidence--which they deemed to be more "positive"--and I pointed out that people who have never experienced the product benefits cannot tell others who haven't experience the product benefits anything new.

In any event, as you point out, there are opportunities to post pertinent brand-building content but--and its a big but--with declining organic reach, insurance brands cannot kid themselves about their chances to get through to users' news feeds and to gain substantial organic reach. Knowing this, insurance companies would be well advised to think about modest ways to develop content rather than blowing the budget. A dollar spent on paid media will reach an audience but a dollar spent on organic media simply won't go as far.

In the end, you are correct. All these social/digital/mobile tools are about providing better services and products to people, not about spamming them in new ways. COmpanies that create great experiences earn great WOM and succeed in social media. Companies that don't provide great experiences cannot "game" themselves to success with content--at least not consistently.

Thanks for the great dialog, Mike!

Daniel Hekman said...

I completely agree with you Augie, that on generic social media real engagement is not possible. It's inevitable that organic reach on Instagram will drop drastically in the very near future.

Here in The Netherlands I work for a startup that is offering businesses their own branded social network. Just as Nate Elliot from Forrestor has commented, I believe that businesses that choose to engage with their customers via social media, should do so on their own social media platform and capitalize on all the benefits that brings. I believe that the most important factor is creating a level playing field for organic interaction between consumers instead of managing it as a conversion funnel - a misconception about the workings of social media I see often.

A large percentage of the conversations I have with business from different markets and on c-level and below, I see that many are in a way still ‘stuck’ in the ‘old’ paradigm of engaging via generic social media instead of using it as a road sign.

Thank you for a great article!