In several social media channels I participate in, one item continues to surface again and again: “How do you ensure business benefit from social media?” Underlying that question is a basic issue: How do you ensure some kind of financial return?
Although some social media folks genuinely understand the need for measurable business results, especially in difficult economic times, others insist that you must pay for something that is unproven and may never produce any real results. They seem offended at the idea of insisting on financial results.
Most of today’s social media efforts are like “exploring” the great unknown without any clear map of where you are going or plan on how to get there – it is more like aimless wandering
Many people call themselves “social media experts” but in reality have no idea how to apply their skills to business. They may be experts in individual interactions (such as building large personal followings), but they struggle with using social media channels for applicable business results. Add to all of this the instability shown in the news, such as Forbes talking about GM pulling out of their advertising with Facebook (see The Real Reason GM Left Facebook), and you can see there is a real problem.
Resolving the Social Media Dilemma About Business Return on Investment (Social Media ROI)
Social Media Fads and the Risk to the Enterprise are real when the business fails to consider profit (which companies need to survive) or business activities. Too often, people believe that companies should just blindly rely on social media, spend money on it, hire expensive social media consultants, and not consider the expenditure of their limited capital resources.
To finally achieve financial business benefit, we must identify the “root cause” of why financial business benefit is so elusive. So far, I haven’t even heard anyone articulate why leveraging business social media that leads to a financial return is so difficult. Certainly, some social media “rock stars” out there defy the conventional wisdom. However, current social media marketing methods are often colder than cold calls themselves.
The Social Media Marketing Problem – Targeted Markets
The business problem for social media is that it is individual. After all, it is “social.”
In other words, social media lacks target market economies of scale. Sure, you can develop volume, but is it the right volume? Is it the right target? Are you using the right channel? Do you even know who you are trying to reach, or how you are going about reaching them? Do you know what they want? Do you know how to use that medium to reach them?
More recently, Harvard Business Review explored Three Myths about What Customers Want, which directly addressed the issue that most customers do not want to engage with your brand. Further, if they perceive your social media posts as sales activity, they will avoid you even further.
The biggest platforms — for example, Twitter (X), Facebook, and LinkedIn — are limited in how you can segment, stratify, or gain market intelligence for marketing efforts. The idea of one-off, individual, personal connections has no economy of scale. When I refer to “economies of scale” in this sense, I am not referring to raw numbers. Rather, I am referring to economies of scale within your target market or potential customer base. No private enterprise that wants to stay in business can afford to go after every possible customer. This is why they target certain segments and markets.
Consider the difference between social media and more established Internet channels. When someone makes a search on Google, their results are highly targeted. If their search is related to a product or service and they click on your ad, you can bet they are reasonably far along in their purchase consideration. They might still be researching, but because they found your blog post or company website, you can drive a targeted effort to convince them to make a purchase decision. After all, the search engine provides an initial filtering mechanism over enough users to provide a reasonably targeted “economy of scale.”
This is not the case with social media. Many of today’s social media efforts are like “exploring” the great unknown without any clear map of where you are going or plan on how to get there. Now, social media is like yesterday’s cold call telemarketing, but without any target list to start with. Even modern algorithms are not specific enough to know why an individual may be interested in a certain area. For instance, many who are engaging in the targeted content are business people searching for success– just like you.
Current social media marketing methods are colder than cold calls because they cannot provide a truly productive focus. Where more traditional advertising mediums have built-in filtering mechanisms before they require human effort, social media is just the opposite. The marketer becomes the filtering mechanism, even before a virtual “cold call” can be effectively made.
In many ways, this is worse than the California Gold Rush in 1849. People went West dreaming of Gold Rush riches just by digging up the ground around areas where gold had been found. Similarly, today’s social media explosion is like digging for gold in the middle of the ocean. You float around for a while and try to dive to the bottom. Only if you reach the ground can you start digging for gold– never mind gold may not even be where you are looking. Even if you find gold, you may not be able to stay submerged long enough to collect it.
This is the current state of social media. You go deeper and deeper into the water of “social connections” until you finally hit the unstable ground of “enough” connections. Then, you start digging with your marketing effort, hoping to discover the “golden” sale. If you chose the wrong social media outlet, or if you failed to accumulate the right “target” group, all of your energy, investment, and effort may be completely wasted. You may be popular, but popularity doesn’t pay the bills. This doesn’t mean a few unusual situations won’t lead to “gold,” but it does mean that for the time being, social media business success is rarely scalable and adaptable. Social media by its very nature is individual, which makes business scalability difficult.
Social Media Market (Unrealized) Potential
Today’s social media is much like China and India in times past. They had gigantic populations consisting of over one billion people each, but they lacked marketable consumers. It wasn’t until huge economic, social, and cultural changes took place over nearly a generation (or more) that Indian and Chinese markets slowly opened.
The Social Media Marketing Problem – Social Media Landscape
We looked at the social media effort required for each social media channel. Now comes the rest of the ugly reality: the social media landscape itself. The landscape is such a fragmented mess– how do you even know where to spend your time, effort, and energy? At some point in the not-too-distant future, social media will likely experience additional consolidation and other changes. You may be spending tremendous efforts, finances, and energy on channels that in a year or two become irrelevant.
Conclusion on Making Social Media Business Focused
The social media problem for business has two key parts. First of all, the current efforts to properly employ social media are generally more labor intensive than telemarketing efforts. Secondly, the fragmented “channels” available cause instability. Social media efforts beyond the individual are so diluted, fragmented, and obscured that it will be some time before meaningful methods for business benefit emerge. Figure out how to develop target markets meaningful to business and then how to deal with the fragmentation, and these will serve as powerful marketing channels. Whoever can figure these problems out, and then make them scalable and reproducible, will have an effective business.
