Three Customer Experience Lessons From Social Media Performance in 2015

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In 2011, back when social media hype was at its greatest, I wrote about the "slow-motion social media valuation bubble burst." Since then, year after year, social business and social marketing companies that are publicly held (and thus report their business results) have consistently struggled for stable, profitable performance. For marketing leaders striving to leverage social to improve their firms' customer experience, the performance of social companies contains lessons about the future of social media and the present of marketing.

In 2014, just three of the 11 social companies I tracked had a P/E ratio (Price/Earnings ratio), because only three had positive net earnings in the trailing twelve months--Facebook, HomeAway and Yelp. A year later, it is much the same story. In 2015, just four of the twelve publicly-traded companies in the social media and social marketing category had positive net income from continuing operations over the past four quarters--Facebook, Angie's List, Yelp, and HomeAway. This says something important about the value these firms are delivering for both consumers and marketers. (Please see my list of corporations included in this list at the end of this post.)

Marketing leaders can learn three things from the financial performance and business models of these companies:

• Facebook is diversifying and so should marketers 
• The sharing economy will change the customer experience landscape, but a long road lies ahead 
• Social media marketing will continue to be a struggle in 2016 

To read more, please visit my Gartner blog for Marketing Leaders.