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New Gallup research questions social media's effectiveness as sales tools

"Social media fail to live up to early marketing hype," headlines the Wall Street Journal.
"Social media fail to live up to early marketing hype," headlines the Wall Street Journal.
Courtesy Bright Orange Advertising, by permission

If advertisers aren't questioning the sales value of their social media marketing, they have good reason to, says a June 23 Wall Street Journal report, citing brand-new Gallup research to be officially released June 30.

"Social media fail to live up to early marketing hype," the WSJ headlines. "Social media are not the powerful and persuasive marketing force many companies hoped they would be," the Gallup report concurs.

For the US companies that spent a combined $5.1 billion on social media advertising last year – a figure expected to almost triple by 2015 – that could mean expensive failures.

This is partly because of how consumers use social media and partly because of how marketers misuse them.

How consumers use social media

Between the Facebook users who post 4.75 billion content items , the Twitter users who send 400 million tweets, the Instagram users who Like 1.2 billion photos and the YouTube users who watch 4 billion videos every day, some 72% of US adults use these social media – most several times a day.

But the dirty little secret is, they don't use them for shopping.

According to Gallup's findings, 94 percent of consumers who use social media go there to connect with family and friends – and your brand is neither. "They are far less interested in learning about companies and/or their products," says Gallup, "which implies that many companies have social media strategies in place that may be largely misdirected."

How much less interested? Well, when Gallup asked more than 18,000 adults how much social media influenced their buying decisions, a significant majority – 62 percent – said not at all. Less than a third – 30 percent – said social media had some influence, while only 5 percent said social media influenced their buying decisions greatly. Even among Millennials, whom many marketers think are slavishly devoted to social media, almost half – 48 percent – said social media had no influence whatever on what they chose to buy.

"[S]ocial media initiatives may actually be the least effective method for influencing consumers’ buying," Gallup notes, because

consumers are much more likely to turn to friends, family members, and experts when seeking advice about companies, brands, products, or services. Company-sponsored Facebook pages and Twitter feeds have almost no persuasive power.

It gets worse.

Consumers interact with brands far more often in person than through social media. While 79 percent of bank customers visit the branch lobby, only 11 percent visit their banks' Facebook pages. (And only 5 percent go to their banks' Twitter feeds.) In retail, "56 percent of shoppers base their purchasing decisions on in-store displays," while only "7 percent base their decisions on social media content."

So much for the effectiveness of social media as sales tools.

How marketers misuse social media

Though many, many marketers use social media, most of them use them wrong, in many ways:

  1. The numbers game – "When many companies joined Facebook in the late 2000s, they used it as another brand website where they provided links, contact information and monitored consumer gripes. Then," says the WSJ, "they got caught up in the numbers game, trying to rack up raw masses of fans and followers, believing they were building a solid marketing channel. But that often wasn't the case." As Jan Rezab, CEO of Prague-based Socialbakers AS, explains, "Fans and follower counts are over. Now it's about what is social doing for you and real business objectives."
  2. Failing to analyze – "After years of chasing Facebook fans and Twitter followers," the Journal says, Ritz-Carlton hotels was one of "many companies [that] now stress quality over quantity. They are tracking mentions of their brand, then using the information to help the business." Specifically, they analyze social media conversations to see what guests do and don't like and to reach out to people who've never stayed at their hotels because of price resistance.
  3. Acting like you're the center of the universe – It's a costly mistake to think that consumers – even your social-media followers and fans – are sitting out there breathlessly awaiting your next pronouncement about what you want to sell them. Too many "brands assumed incorrectly that consumers would welcome them into their social lives. Then they delivered a hard sell that turned off many people," the WSJ writes. "[C]onsumers are highly adept at tuning out brand-related Facebook and Twitter content," says Gallup, and Facebook's new ranking of news feeds according to users' known interests will make them more adept than ever. So it's not the least bit surprising that brands reached only 6.5 percent of their own Facebook fans this March, down from only 16 percent in February, 2012, according to social-media analytics firm EdgeRank Checker.
  4. Targeting the wrong consumers – Gallup's research shows that social media "do not motivate prospective customers to consider trying a brand or recommending a brand to others. Therefore, if companies want to acquire new customers, their best bet is to engage their existing customers and inspire them to advocate on their behalf." Forrester Research reports that "marketers spend almost 89 percent of their interactive marketing budgets on mass acquisition." But they shouldn't, because, as Adobe points out in the case of retail marketers, repeat customers comprise only 8 percent of visitors but account for 40 percent of revenue, spend three to five times more per visit than first-time buyers and bring in five to nine times the revenue.
  5. Assuming social media are the only media – "[A]ny effort to engage customers must take place through both offline and online channels," says the Gallup report, noting that "customer engagement is influenced in large part
    by how well a company aligns all of its touchpoints. Social media do not exist in a vacuum, and consumers rarely
    interact with companies through these channels alone." Not only that, but social media may be the least trusted of all those they interact with. In a worldwide 2013 study, Nielsen Holdings HV found that consumers trusted television and radio commercials, print ads, billboards and even movie trailers more than social media advertising.

Given all that, any brand relying on social-media marketing – particularly to attract new customers – needs to step back, take a deep breath, and ask itself two questions: First, should we be doing social-media marketing at all? And if so, how can we do it right?

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