Is Social Media a Waste of Resources?

An interesting article caught my eye on the Wall Street Journal this morning, thanks to a posting from a friend: it seems many businesses are starting to asking themselves what they are getting out of social media, and whether they ought to continue to invest in that aspect of their online presence.

In a fascinating Gallup survey, a whopping 62% of respondents indicated that social media had no influence at all over their purchasing decisions. Only 5% of respondents indicated that social media had a significant influence on their purchasing decisions.  Not surprisingly, 94% of respondents indicated that the primary reason they used social media was to keep in touch with family and friends.

In response to figures like these – which a reasonable person could have predicted – it seems more businesses are considering dialing back their online investment, particularly when it comes to social media.  If a re-tweet on Twitter or an up-vote on Reddit is not, in most cases, going to result in greater sales, then the amount of spending going into a business’ presence on such sites will decrease.  As the Gallup report concludes, these venues “are not the powerful and persuasive marketing force many companies hoped they would be.”

The present situation reminds me somewhat of the first tech bubble in the late ’90′s. Back then, the term “internet millionaire” was coined to reflect the fact that, in the Wild West-atmosphere of those heady days, people were able to strike it rich by persuading investors that their online product was worth millions in potential revenue. Businesses felt the pressure to get in on the online game, because everyone else seemed to be doing it.

At the time it always seemed to be a bit of an Emperor’s New Clothes situation. Companies were spending exorbitant sums on what was often little more than hype.  When the bubble burst, millions of people lost their jobs, their savings, and so on.  If you were looking for employment back around 1999-2000, you will remember what a terrible time that was for many workers, particularly those in industries with ties to the nascent online industries.

Although time and technology have marched on, the underlying question remains the same, only this time with regard to a company’s social media presence: how is digital media going to make my business more profitable?  In order to properly consider that question, however, let me suggest that we need to weed out a few types of online experiences to examine the issue at hand.  There are profits to be made through digital media, but for many businesses it seems to me that the trick is to understand what you can and cannot achieve with your online presence.

First let’s put to one side the use of social media by those having no profit motive:  your Tumblr account about funny pictures of cats, for example.  Let’s also discard sales portals for the purchase of goods and services: companies like Amazon or Ebay, craftsmen who sell their work online, virtual travel agents, etc. These businesses use all kinds of digital media, including social media, to present the consumer with images and information on the types of products they offer for sale. Although far faster and more comprehensive than any printed catalog, when you get down to brass tacks the business model here is really not that much different from something like the old Sears Wish Book.

What we’re left with, in terms of the opportunity to make a profit, seems to be advertising, as indeed it always has been. What many companies didn’t understand 15 years ago, and which they don’t seem to have learned about social media until now, is that sites which do not engage in direct sales should be viewed primarily as public relations vehicles, not profit-generators, unless you happen to control the sale of advertisements on that site.  If you are a producer of a good or service, you want to have a consumer view your product in a positive way.  A component of your marketing strategy online should be to make your presence attractive on social media, but this is simply a variant of creating a beautiful showroom, running clever ads in magazines or on television, and so on.

There is also a question to my mind as to whether many of these companies have been more focused on building altars, rather than storefronts.  Sadly, more people today spend their Sundays worshiping professional athletes rather than God, and the profits to be made from areas such as merchandising and advertising the exploits of these athletic entertainers are enormous.  Yet whether they are cars, phones, or entertainers, the businesses that have to sell these products have done a great job of bringing together fans of their products through social media, but apparently without significant monetizing of those social connections.

Thus, while thousands may click “Like” on the Ritz-Carlton corporation page on Facebook, how many of these people are actually staying at Ritz-Carlton hotels on a regular basis? While the Gucci account on Twitter has over 1 million followers, how many of those followers can even afford to buy a pair of the company’s iconic Italian horsebit loafers?  It’s all very well to be popular in social media, with thousands of hits on your YouTube video.  Yet from a profitability standpoint, if that popularity is not generating sales, then are you wise to continue the same level of investment in it?

If the WSJ piece is to be believed then, more companies are waking up to the fact that having a presence in social media is worth some level of investment, but only up to a point.  Just as 15 years ago, companies needed to create websites in order to be part of the conversation and remain current, so too they needed to hop on the social media bandwagon when that began to roll along several years ago.  Their expectations in doing so don’t seem to have been matched, in many cases, with the anticipated level of return.

Until the next big thing comes along, however (virtual reality, anyone?), one doubts that business is going to be leaving social media altogether any time soon – even if it may choose not to spend as much on it in the future as it does in the present.

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Talking Turkey on Twitter’s Birthday

It’s Twitter’s 8th birthday, and for those among my readers who still don’t use it or see its relevance, today’s headlines may give you a taste of just what all the fuss is about.  Turkey’s Prime Minister Recep Tayyip Erdogan, who is in the midst of fighting both a re-election battle and corruption allegations, announced yesterday that Twitter would be banned in his country.  In a move which has brought both domestic and international condemnation, Erdogan obtained judicial authority to block the millions of Twitter users in Turkey from the social media network, describing it as a “menace to society”.

In becoming one of only a handful of countries to attempt to, using Erdogan’s word, “eradicate” Twitter, Turkey has joined a rather unsavory club.  Both the People’s Republic of China and North Korea have been blocking the social media platform for years, and have used tweets by individuals as the basis for imprisonment of those criticizing their regimes.  While tech-savvy users in these countries have found ways to get around the blocks put in place by their respective governments, for the average account holder no doubt the prospect of being prosecuted (or worse) for speaking their mind online has had a chilling effect on their level of Twitter participation.

For those of us who live under less autocratic governments, as part of marking their birthday Twitter released an application which allows you to type in a Twitter user name and see what that account’s very first tweet was.  It’s been great fun sharing first tweets with my Tweeps, i.e. the Twitter users whom I follow and interact with regularly. Here’s my first tweet, showing what a snot I was – was? – at the time I signed up for an account:

Tweet

Although I love using Twitter, I’ll admit there are many things about it that are problematic.  There is a tendency to gang up on those whom one does not agree with, and repeatedly knock them down, rather than just delivering one solid blow to an ignorant tweet and then moving on.  There is smut/foul language galore, although one quickly learns whom not to follow if this becomes a problem.  And there are “troll” accounts, which seem to exist solely for the purpose of trying to attack others.

I expect that these negative aspects of the service are what keep some people from using it. Yet when used well, Twitter can be a tremendous resource for good, particularly because of the succinctness of tweets, at 140 characters or less.  I have seen, first-hand, what is possible via Twitter which no other social media application, including Facebook, is capable of, at least with anything near the same amount of speed, penetration, or effectiveness.

I’ve seen Twitter provide many people with both material and emotional support during those hard moments in life, such as losing a loved one or a job, suffering from an illness, or just plain loneliness.  I’ve also seen Twitter offer practical help on little issues, like trying to find a decent hotel in another city, or figuring out how to fix a software issue.  Twitter is always knitting human relationships more closely together, by bringing those with shared interests but little or no chance of physical proximity into contact, whether it is a group of Tweeps watching and commenting on a sporting event together from all over the country, or discovering you’re not the only survivor from the Planet Krypton.

Eventually, I expect that Turkish people will find a way to express themselves on Twitter again.  Human beings are far more interested in being able to freely communicate their thoughts to one another, than they are in upholding the ideology of a single person or political regime.  Whatever its faults, Twitter has done a great deal of good for a great many people, and so I raise a coffee cup to it this morning and say: Happy Birthday, Twitter.

Thanks to the American Principles Project!

I want to thank everyone at the American Principles Project for the opportunity to live-tweet for them last night at their annual Red, White, and Blue Gala here in the Nation’s Capital.  I thoroughly enjoyed the evening, running into old friends and meeting new ones, and was impressed by the organization and flow of the evening.  Everything was very well planned-out, from the media table and press arrangements that APP staffers ran, to the excellent food and beverages at the Mayflower Hotel, to the beautifully designed signage and programs by Ampersand.  And those in attendance got to hear engaging, challenging speeches from Senator Rand Paul, talk-show host Michael Reagan, and APP’s Chairman Sean Fieler and President Frank Cannon, among others, who each gave us some ideas for the future to think seriously about.

From a practical standpoint, I was glad to see that APP’s Twitter account picked up a couple of dozen new followers as I tweeted throughout the evening.  Live-tweeting from an event can work to your advantage, if you want to attract attention to what you are working on.  I learned when I live-tweeted the Media Research Center Gala here in DC a couple of months ago, and also from tweeting at the Catholic New Media Conference in Boston, that there is a snowball effect when you get several people interested in following your event on Twitter, whether they themselves are attending or not.  If you can get them and others re-tweeting and discussing what you are talking about at your function, particularly if the hashtag “sticks”, then as more people enter into the conversation, the possibility of adding additional followers becomes more likely.

In any case, my thanks again to APP, both for the opportunity to help them get their message out to their followers old and new, and for putting together a terrific evening!

Last night's cocktail hour at the American Principles Project Gala

Last night’s cocktail hour at the American Principles Project Gala