Social media marketing is what most CMOs have at the top of their list for spending increases this year and next. Indeed, social media holds the promise of wild viral effects, socially infused search results, and virtually infinite possibilities for targeting. But as many marketers dive into using social media, some are learning lessons the hard way; some lessons are costly and others may cause irreversible and permanent damage. Read Full Article
Facebook – Perpetuating the Myth of Reach and Frequency
Doing social media shouldn’t mean sticking ads on Facebook. Unfortunately, most of the early adopters ended up doing just that. They are still asking for “reach and frequency” – how many people did wepotentially show our ads to – because of their TV advertising mindset. And Facebook is more than happy to take their money, by throwing off several hundred billion impressions per month by displaying up to nine ads per page and charging on a cost per thousand (CPM) basis (see: The Facebook Ad Scam). But as budgets shift from TV advertising to digital and social, the metrics of success must also be updated.
After several quarters of experimenting, advertisers are left scratching their heads and wondering about return on investment (ROI) and business impact. Some big advertisers are realizing that the banner ads simply don’t work – General Motors, for example, publicly stated that it is cutting its $10 million of Facebook ad spend and the associated $30 million of agency, content, and creative costs. The “soft metric” called “branding” is just not good enough anymore, especially in light of click-through rates being a “rounding error to zero.” Awareness alone is no longer enough to get modern consumers to take action.
Fortunately, there are better ways of “doing” social media marketing that are not only more valuable but also longer lasting. Users are on Facebook to socialize. Most people don’t “friend” Lipitor or boring brands on Facebook; they friend their friends. Their conversations aren’t media that can be bought or sold. In fact, this kind of media doesn’t exist ahead of time like television airtime per a schedule of TV shows. People’s conversations happen when they happen. And most advertisers don’t have a right to speak to them, yet. It’s like a thief breaking into your house at dinnertime and shouting at you to buy their products; or getting so-called influencers to do the shouting for them. Instead, advertisers need to earn the right to speak and be in the conversation with knowledgeable consumers. This takes time and persistent work – like providing something of value, insights, something sharable, etc. Truly understanding your community of fans takes time; but once the relationship is built up it can yield continuous payoff; and these conversations are free.
Groupon – A Quick Fix Leads to a Lifetime of Regret
The exact opposite of persistence and patience is a quick fix called Groupon. Thousands of local businesses rushed headlong into doing Groupons to drive traffic to their restaurants, retail stores, etc., with the promise of repeat business to make up for the “loss leader.” As it turns out, actual experience has shown that those repeat visits and purchases never materialized – why would they, when the user just got your product or services for 80 percent off. Some businesses didn’t even live to tell about their horror stories – remember the little cupcake store that had to make 20,000 cupcakes at a tremendous loss to fulfill the Groupon campaign. Not many would live to tell their story after something like that.
Instead, how about a free solution? If every restaurant would politely ask their patrons after their meal to write them a Yelp review – good or bad – they would start to accumulate reviews that would be useful in helping the next potential customer make their purchase decision. Modern users are so savvy they will look at the number of reviews, the recency of the review, and whether anyone else thought it was valuable. Or how about having patrons “check in” on Foursquare with pictures of the food they are enjoying (of course, all of this depends on the food and service being solid or stellar). While these approaches won’t drive the hordes of people beating down your door (after all, it isn’t as sexy as 80 percent off), they will yield the long-lasting benefit of real advocacy by fellow restaurant-goers, not the advertiser.