Social Media Bubble
I think we may be looking at a probable social media bubble.
(My background and bias: I wrote one of the first books on social media (for beginners), have worked in social media marketing, and teach social media marketing. I’ve worked at or with agencies, at non-profits, as well as small, medium and Fortune 500, Fortune 50 corporations. Over time time I began to question social media in direct inverse proportion to my understanding of how ROI works, and my skepticism increased as companies evolved their advertising platforms, most notably Facebook.)
This post was triggered by a discussion today where someone sought input on a series of slides they intended to present at a conference, and instead of accepting the statistics at face value (which I am the first to admit I have done in the past), I decided to do some digging. In each case, my skepticism was confirmed.
I will excerpt things very briefly here, but I’m glad to share the context and more data. I think the fundamental conditions for a bubble include overinflated hype, with a detachment from fiscal sustainability, as well as a kind of incestuous citation from conflict of interest sources. I think all these conditions are present, and that some large brands can effectively use conventional social media; I also think that more sophisticated use of some advanced Facebook ad products can result in ROI. But for many others, it is starting to look like a significant issue.
STRIKE ONE (indicative hype quotes)
“Social Centered Selling reports that 72.6% of sales people using social media outperformed”
> conflict of interest – http://scs-connect.com/
“Social media marketing budgets will double”
> doesn’t mean it is effective.
“15,100,000” consumers go to social media channels before making purchase decisions”
> doesn’t really say anything about the % or demographics, or what influence social had
“74% of consumers rely on social networks to guide purchase decisions”
> based on 2011 study (out of date)
> conflict of interest from original source:
“According to a study by the digital marketing agency ODM Group, 74% of consumers rely on social networks to guide purchase decisions.”
> it doesn’t specific which social networks or what kind kinds of purchase decisions. this is probably B2C peer referral, but it’s also a social media company so probably a bit suspect, conflict of interest in terms of spin.
STRIKE TWO – WSJ/GALLUP
One of the items that came up in my research was a Wall Street Journal article, that cites a Gallup poll, saying that a majority of respondents in a Gallup survey said that social media had no influence at all on purchasing decisions.
“Fans and follower counts are over. Now it’s about what is social doing for you and real business objectives,” says Jan Rezab, chief executive of Socialbakers AS
STRIKE THREE – FACEBOOK/HUBSPOT
Facebook quietly made several changes to their newsfeed this month and a respected industry source released an internal article on a paid membership site under the title “Facebook makes reaching your audience even harder”.
The article got my attention, but what got my attention even more was a link to Facebook’s page recommending “best practices” for engaging on social media, which gave me a funny feeling like I was on the Titanic. Facebook recommends people post more frequently as part of “best practices”, but they do not address the fact of diminishing returns.
If you look for data on Google on how often to post, you see a Hubspot article on benchmarks (http://is.gd/zZYcey) but the article doesn’t show how effective strategies are, just what people are doing.
If you actually look at the Hubspot data in the report behind the article, the #1 takeaway shows the opposite of what Facebook is urging people to do. Hubspot is a respected industry source, and the data is pretty deep.
Outside of large-scale brands and custom audience targeting, it makes me wonder if Facebook may be not be a good investment for most businesses.