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Is Social Media Worthless?

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Re: Is Social Media Worthless?

#53
post #32

I know many stories like these. When I ask companies "Do you generate revenue via social media? Facebook, Twitter, G+ or anything?" the answer is always no. I would love to know about counterexamples if there are any.

Local business - yes, if their customers make regular purchases Fashion brands - yes, if it's a brand name that people are excited about sharing, and again regular purchases helps - people want to keep checking back for what's new It's tough; I work with a lot of different retailers, everyone wants to believe that social media is going to be good for them, but it depends on both their business and their customers. I…

What are some reasons it does/doesn't work for SMBs?

Re: Is Social Media Worthless?

#54

I think the Pepsi example really doesn't work for two reasons: First, the decline in sales in the sugary soft drink industry is only remotely connected to their social media advertising. It is a widely reported phenomena that is usually attributed to a more health-conscious society and a widening array of beverage choices. Second, Pepsi's intention in offering contributions to non-profits based on social media recomm…

Pepsi is an interesting case for the ineffectiveness of advertising in general. I find it hard to believe that television or other advertising for a product like Coke or Pepsi makes a big difference in sales. I'm already aware of the products, I already have my opinions on them, and they aren't going to change them. If these companies stopped advertising tomorrow I don't think there would be an immediate effect on co…

I find it hard to believe that television or other advertising for a product like Coke or Pepsi makes a big difference in sales. I'm already aware of the products, I already have my opinions on them, and they aren't going to change them.

I feel the same way about beer. I love beer commercials... they are usually absolutely hilarious, and I often literally LOL at them. During football season, when I'm hanging with my friends at the sports bar watching the Dolphins play, I look forward to the commercials so we can have a group laugh over the latest ads from Budweiser, Coors, Michelob, etc.

But... 2 minutes after a given ad airs, I could not tell you if it was an ad for Coors, Michelob, Budweiser or "other". Well, ok, the Keystone ones do stand out a bit in my mind. But in any case, NONE of them give me the slightest inclination to drink their respective brand of beer. I already regard all mainstream, mass-market American beers as being roughly equivalent to stale horse piss, and all the funny commercials in the world aren't going to change that.

My staple beer is Sam Adams, which I usually drink unless a given bar has a microbrew I happen to like. And I was drinking Sam before I ever remember seeing a commercial for it. How'd I find it? A bartender recommended it to me once, I tried it, liked it, and that was it.

Re: Is Social Media Worthless?

#55

I know many stories like these. When I ask companies "Do you generate revenue via social media? Facebook, Twitter, G+ or anything?" the answer is always no. I would love to know about counterexamples if there are any.

Direct response ads have turned out to be very successful for brands on Facebook. Once they have reached a healthy fan base size they sell actual products to their fans in their newsfeed. Example: Domino's offering a special only available to their Facebook fans. With Facebook's pixel tracking you can back out the exact ROI for every dollar spent promoting that offer to fan's & friends of fan's.

Re: Is Social Media Worthless?

#56

I think the Pepsi example really doesn't work for two reasons: First, the decline in sales in the sugary soft drink industry is only remotely connected to their social media advertising. It is a widely reported phenomena that is usually attributed to a more health-conscious society and a widening array of beverage choices. Second, Pepsi's intention in offering contributions to non-profits based on social media recomm…

Pepsi is an interesting case for the ineffectiveness of advertising in general. I find it hard to believe that television or other advertising for a product like Coke or Pepsi makes a big difference in sales. I'm already aware of the products, I already have my opinions on them, and they aren't going to change them. If these companies stopped advertising tomorrow I don't think there would be an immediate effect on co…

An interesting anecdote...when I was in middle school, an account exec for McDonald's came to speak to our class. He told us that in our local market, McDonald's Corp wasn't convinced that the TV and radio ads were having a significant effect on buying behavior. So for one day, they pulled the ads in that market. They found that sales absolutely plummeted in that day, so they scrambled to reinstate their regular ads and all was well. Of course this is anecdotal evidence, but it made a big impact on my middle-school mind :) Everyone thinks they're not affected by advertising.

Re: Is Social Media Worthless?

#57
Right now social media is probably not generating real revenue for the vast majority of companies. But the decision makers in those companies are probably like me: in their 40s, distaste for social media even if they are generally tech savvy.

Let the current 20-somethings become decision makers and my kids become consumers and it'll be a whole different story. And I'll be cursing from my rocking chair in the retirement home, maybe I'll even be sending incendiary tweets at that point.

Re: Is Social Media Worthless?

#58

I think the Pepsi example really doesn't work for two reasons: First, the decline in sales in the sugary soft drink industry is only remotely connected to their social media advertising. It is a widely reported phenomena that is usually attributed to a more health-conscious society and a widening array of beverage choices. Second, Pepsi's intention in offering contributions to non-profits based on social media recomm…

The answer is actually pretty simple: Pepsi failed at social because Pepsi didn't think socially. It was trying to create new, artificial human behavioral patterns instead of tapping into natural, existing human behavior.

Big companies and brands often lose sight of what social media is really about: namely, sharing things with friends. Grouping with people based on shared affinity for certain topics, things, events, etc. People are there for the friends first; all other considerations -- including content consumption -- are secondary.

It's incredibly hard to convince people to hang out on a soft drink's social page. What's the benefit? Where is the natural, social use case? If I want a Pepsi, I'll go buy one. When I don't, why the heck would I spend time reading about Pepsi, or talking with friends about Pepsi? Who actually does that? I submit that anyone who does is highly abnormal. Maybe even crazy. Regardless, they're the kind of person whose social feed I'll ignore.

As for the Pepsi Refresh campaign, they put the cart before the horse. People care about the cause first and the money second. If I want to raise money to fight breast cancer, for instance, I'll start with the people who care about breast cancer, building out from that passionate early adopter base. I don't just wave a giant paycheck around in front of a highly heterogeneous set of people, asking them to tell me where to spend it. It's a statistically irrational approach to marketing. But more important, there's no heart or soul in that. There's no grassroots need inherent to that. People don't want to vote on a cause. People have causes. Pepsi should have started with a specific cause, and then made waves by offering to match (or even triple) a crowdsourced fundraising campaign.

An example: for all its flaws, that infamous "Kony 2012" video went uberviral. The video didn't start by asking the question, "Hey, who's the most despicable African warlord we should try to depose? Vote here!" It started by informing people about a specific evildoer, educating them about him, and then asking them to do something about it.

Pepsi could have generated a lot more authentic goodwill by offering to match or exceed an existing campaign, hashtagging into it. They could have spared themselves the millions of dollars creating a page for their campaign, branding it, and acquiring fans for it.

Re: Is Social Media Worthless?

#59
I agree with the author in that many businesses don't see much RIO on their social media marketing efforts. However, I would tend to think that is more of a reflection of a poor social media strategy as opposed to social media being worthless. Additionally, the article mentioned a brand ran a huge social media campaign and accumulated massive increases in likes, but this did not translate to an increase in sales. Social media is about scaling relationships, not about accumulating likes. The brand may have increased their likes but may not have done an effective job of building meaningful relationships with their customers.

Re: Is Social Media Worthless?

#60

I think the Pepsi example really doesn't work for two reasons: First, the decline in sales in the sugary soft drink industry is only remotely connected to their social media advertising. It is a widely reported phenomena that is usually attributed to a more health-conscious society and a widening array of beverage choices. Second, Pepsi's intention in offering contributions to non-profits based on social media recomm…

Thought the exact same thing when the article didn't give the overall market growth number for the same time frame. It also didn't give the growth rate of the generic store brand cola products, which could have easily been replacing brand-name colas for budget-conscious buyers.
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