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It’s not exactly a revelation that Social Media is the hot trend for online advertising. Twitter, Facebook and LinkedIn, among others, are everywhere in the news and media from politics to sports to celebrities and entertainment. Facebook postings and “tweets” drive major news stories and have made and broken careers.
Any medium which is so omnipresently ubiquitous has to be bait for marketing mavens. There are dozens of articles advising how to best use this free medium to spread brand awareness, advertise special deals for online users, new product roll-outs, company news and basic product placement.
Even the venerable NYT is getting in the act: Using Social Media to Test Your Idea Before You Try To Sell It by disastrous IPO roll-out and plummeting share price aren’t the only indicators Social Media may be more of a fad than a legitimate and effective way to sell products.
Sir Martin Sorrell unconvinced that Facebook is a good advertising medium
A different profile … Sir Martin Sorrell thinks Facebook is one of the best branding mechanisms in the world but is unconvinced by its advertising potential. Photograph: Brendan McDermid/Reuters
Sir Martin Sorrell has dealt Mark Zuckerberg’s plan to turn Facebook into an advertising juggernaut a blow by saying that he is unconvinced the social network is a good advertising medium for clients.
The head of the world’s largest marketing group said that WPP – which spends about $65bn globally annually on behalf if its advertising clients, roughly 30% of all the money spent annually through ad agencies worldwide – believed that Facebook provided branding opportunities, but not much more.
“I told them this and I don’t think they liked it,” said Sorrell, speaking to MediaGuardian at the Cannes International Festival of Creativity. “I believe Facebook is the best or one of the best branding mechanisms in the world but I don’t think it is necessarily an advertising medium.”
Sorrell added that WPP as a whole spent about $200m last year on Facebook, accounting for about 5% of the social network’s estimated total revenues of about $3.7bn.
He said that this year WPP would increase this to about $400m, again accounting for roughly 5% of Facebook’s total revenue. Sorrell added that WPP will increase its spend on Google in 2012 from $1.6bn to about $2bn – again roughly 5% of the internet search giant’s total revenues.
“[Facebook] will be very successful no doubt, it is the third largest country on the planet [counting its 900m users], and has a good shot at being the largest, but it does have issues to deal with,” he said. “Monetisation, mobile, the IPO pressure cooker. The eyes of the world are on you. We have to look at Facebook in the long term. This is a marathon not a sprint.”
According to the digital business analysts comScore, potentially more than 40% of Facebook usage comes from mobile, but the social network is so far struggling to convert this into significant revenues.
“The $400m on Facebook might look big but it is pretty small change, entry level spending for WPP,” said a senior WPP executive, commenting on the group’s strategy. “Facebook is not brilliant for response [to advertiser campaigns] so far and there is the growing issue of the amount of usage over mobile which they can’t monetise.”
Facebook is starting to see signs of a slowing in its growth. In the first quarter of 2012 global revenues were about $872m, up an impressive 37% year-on-year, however well down on the staggering 87% year-on-year uplift seen in the same period of 2011.
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Others share his sentiment:
The social media thing such as Twitter, Facebook, Google, and others have done nothing for me. Personally, I think it is all just another money trap. I have spent thousands of dollars on marketing such as SEO, adwords, etc with little or no results. Everyone has got their hand out but no one has the ability or the experience much less the interest to help someone. Everyone is wrapped up in their own little world tweeting and facebooking. I have better luck with face-to-face meetings and referrals from people that know me. I would much rather spend the time and money with a face-to-face meeting than anything else.
Other major companies are bailing on Facebook and other social media:
Sorrell’s comments follow the recent statement by General Motors, one of the world’s biggest advertisers, which decided to pull its $10m annual Facebook spend after deciding its ads were not delivering.
GM was the first major advertiser to question the wisdom of advertising on Facebook.
Concerns over Facebook’s business plan caused the one-time internet darling’s stock market debut last month to go awry, with most analysts calling it a failure after it closed a fraction above the launch price of $38.
Since then the stock has dropped to the mid-20s dollar range before building in recent days to $31, although a number of analysts believe Facebook’s true value lies closer to $20.
Some commentators are more blunt in their assessment: Social Media Sucks for Businesses
Targeting the Wrong People
When you walk down a grocery isle or wait at the check-out line, is it common for a stranger to spark a conversation with you? Not necessarily. Why? Perhaps, they just don’t know who you are. But if you go to scuba diving store, looking for scuba gear, most likely it would be quite easy to spark a conversation. Why? People in the scuba diving store have a common interest. My point is why look for a broad audience when you can only provide a niche interest. It’s super easy to ask a broad audience to follow you on Twitter or “Like” your Facebook page, but many will give you a deaf ear when you talk. On the other hand, if you focus on engaging with a relevant niche, not only will they be happy to join you on social media but they will start to inquire about your services.Solely Promote Instead of Engaging
We receive tons of emails, Twitter DM’s and Facebook updates from businesses that solely promote or advertise their services to us. All we do is delete them all. Now, if we are familiar with a company, than perhaps we can refer them to our network or even inquire more about their services in the near future. Just to inform you, there’s an 80/20 rule you must abide by in social media. As I mentioned hundreds of times, social media is about sharing and engaging. 80% of the time you should be offering value to your audience. Value may consist of creating or sharing content that provides a solution to your audience’s problems. 20% of the time you can promote your services. Give, and give alot before you can receive.Outdated Website Can Hurt
If someone finds you on social media, and you have an outdated website, your visitors will be skeptical in doing business with you. Based on Pew Research Institute, 58% of Americans research products online and 78% of Internet users have at least occasionally done online research for a product. So, most likely someone is researching you and if your website have outdated content, you can lose your credibility in seconds. We have follow links from social media and have seen website copyright dated for 2010, or outdated web technology, or the recent blog post from a year ago. Your prospect wants to know what you are doing now, not last year. Keeping updated website content is one of the keys to a successful social media presence.Fail to Learn About Your Competition
One of the many questions we ask when consulting with our clients is, “Do you know what your completions are doing online?” 99% of the time they are clueless. In order for any business to survive in this economy they must have a competitive edge. Having a strong social media presence can lead to a competitive edge in your industry. Earlier this year, Social Media Examiner, published a blog post on “How to Gain Competitive Insight With Social Media”. Using social media to research your competitors can be quite useful when developing a clearer social media marketing strategy. Everything you need to know about your competitors is public. We would suggest that you compile a list of your competitors and research them on Facebook, Twitter and Google. Research their comments in their communities, number of links, quality of followers and how they engage and promote their business on social media. Why reinvent the wheel?
There is also the argument that it’s not social media which sucks, it’s the business trying to use it: Social Media Sucks
Social Media Sucks For Businesses And Here’s Why
By Adam Helweh For years it’s been “business as usual” and then suddenly everyone is bouncing around words like “social”, “engage”, “community” and all kinds of other blather. Social media sucks and here’s a few reasons why.Top 10 Reasons Why Your Social Media Sucks
By Rachel Parker So, we’ve wrapped up our latest blog post series, Top 10 Reasons Why Your Social Media Sucks. In case you missed any episodes, here’s a rundown for you.6 Reasons Social Media Sucks, But You Need to Use It Anyway
By Tom Pick Here are six reasons why social media skeptics have a point, and six reasons businesses must and will continue to embrace social media marketing anyway.Why “Social Media” Sucks for Prospecting
By Mark Hunter It’s time we kill social media, especially if you’re using social media as a sales tool or prospecting technique. Forget it. It’s not working for one very reason — you’re using the term “social media.”Social Media: Why You Suck at Social
By Todd Wilms The first word in “social media” is “social;” If you aren’t social, no matter how much work we do together, your efforts will be for naught.
Here’s a rebuttal against the social media haters disguised as dissent: Social Media Sucks For Businesses and Here’s Why :
et’s just get straight to the point… social media sucks. Plain and simple. For years it’s been “business as usual” and then suddenly everyone is bouncing around words like “social”, “engage”, “community” and all kinds of other blather. Some of the biggest companies in the world such as Ford, Starbucks, Dell, American Express and many others have fallen for the trap. I’m here to warn you before you do anything stupid. Social media sucks and here’s a few reasons why …
Social media shifts the limelight from brands to the customers. It was fine when brands were the stars. They spoke and customers listened. Now customers are the ones who speak and expect to be heard. Social networks like Twitter and Facebook allow them to easily share their opinions. Ecommerce sites even encourage the most vocal folks to leave customer reviews directly next to each product. Of course it’s all bad when you allow a negative review to slip by.
Social media forces companies to learn new tools. Never mind that it’s easier than ever to measure customer sentiment, track sales conversions, identify qualified sales leads and decrease customer service costs. The phone email and fax are the only toolset you need. In fact, the growth of smart phone owners last year increased by 10% to a total of 46% of American adults making it even easier to cold call folks wherever they may be, right? Besides, what could any respectable sales person do with social media besides tweet about their lunch and play Farmville? (hint)
Social media has changed the direction of marketing and sales from outbound to inbound. Companies are becoming more like publishers and distributers of content. An average of 60% of B2B respondents to a recent content marketing survey say they intend to increase their content marketing budgets over the next 12 months.
Social media provides lots of ways for customers to get information. Why can’t customers simply trust corporate web sites or call their helpful sales reps? Instead they actively share buying experiences and solicit opinions from friends and followers. Remember the increase in smartphone ownership I mentioned previously? Well it looks like some folks are using their smartphone for a bit more than just phone calls and Angry Birds.
Social media forces companies to be more human. No more do layers of automated customer support systems, grinning celebrity endorsements, slick promotional campaigns and PR spin guard me from facing my customer at the end of the day. They know that behind every business is a group of human beings just like them. They expect a reasonable touch of empathy in their interaction with a brand. Traditional marketing only takes you so far without that empathy. Even great companies have felt the sting of forgetting this key ingredient. Communications, customer service, sales, product development and marketing are all places where empathy should exist. Brands need to be walking in a pair of their customer’s shoes at all times if they hope to keep pace with the today’s connected customer.
Well there you have it. A handful of reasons why social media sucks for businesses. As you might have noticed by now I’m being facetious, but there are still plenty of business owners and C-level folks who think of social media as a flash in the pan or all fun and games. The bottom line is that it’s a reality. Applying social media to business takes effort, time, commitment and empathy. To those that continue to dismiss social media before doing their due diligence, social media is going to continue to suck.
This is meant to be satirical, but it makes some good points.
This isn’t meant as a blanket condemnation of Social Media. You can find an opposing view to just about anything on the ‘net, but some of these naysayers are big players ($400 million ad campaign isn’t chicken feed) and it’s always wise do question whether or not the common wisdom about any advertising trope is valid.
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