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The declining value of social marketing

The declining value of social marketing Joseph Carrabis
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Social marketing's been around for a while now. Are you in? Or are you waiting? Have you been there, done that, and gotten the T-shirt? Are you battle weary and wish the whole social thing would go away? Or are you ecstatic with your results and evangelize social marketing whenever you can?


Those options sum up the sentiment of 1,700 U.S. and Canada based businesses that NextStage surveyed in 2013 regarding social marketing experience.


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Just to be clear, social marketing means creating a social presence and using that social presence to drive conversions. Conversions cover everything from loyalty to acquisition to retention to customer service metrics to satisfaction to truly strange recency calculations linking site to social to mobile to...


We made it easy for the companies we interviewed by asking, "Could campaign cost be repeatedly and accurately linked to campaign income?"


We started with 4,200 companies, and "cost to income" quickly whittled things down to just over 1,700. All interviewees were director level and above, all qualified themselves as knowledgeable social managers with two or more years' experience in social, with more years in marketing in general, and all answered under terms of strict anonymity.


Companies ranged from mom and pop shops to F100 companies. Tools involved ranged widely: Expion, Fanscape, Google Analytics, HootSuite, InsideView, Nielsen, Radian6, ReviewAnalyst, Salesforce, Shareablee, Spredfast, Sysomos, Viralheat, homegrown variants, manual calculations, and more. We learned about successes, failures, plans for 2014, and what each company would tell other companies about social before spending money on it.


So what did businesses think? And would they do it again?

6 percent of marketers said they're new to social media


First, we're not sure how someone in business in 2013 can be new to social media and claim two years' experience.


It's completely understandable that someone is new to a given platform -- but new to social media as a whole? That's a stretch these days. Part of people's newness claims did amount to an inability to keep up. A conversation with a healthcare giant ended with, "We're not sure the platform we need is out there yet."


That "which platform" question is a considerable challenge for 2014 and beyond. The proliferation of platforms equates to audience segmentation.


Does a company plan different campaigns for different platforms? An umbrella campaign designed to hit a percentage of each platform? Or does it target platforms with large audiences and ignore the rest?


It's hard to know what to do if you've had a great Facebook audience and presence and that audience is now going to Pinterest, which studies have indicated is the current user migration path. Facebook and Pinterest are different social creatures, and a Facebook campaign won't translate to a Pinterest effort easily.


Companies planning 2014 social campaigns offered that they're developing three-year strategies that need to show value in year one, which is not an easy task in an ever -- and rapidly -- changing world.


7.75 percent of social marketers are happy campers


One take-away we expected was the low satisfaction rate with existing social marketing campaigns. No single measurement/management tool dominated here, and only a few respondents named their tool without being asked.


All successful efforts came down to four basic things that vied for top spot. The top two spots were knowing and respecting the audience. Every director, VP, manager, etc., who claimed uncaveated success talked about knowing their audience and showing it respect.


Respect came in several forms. Shared interests, shared social causes, shared social beliefs, letting the audience have their say, and digital transparency that was seconded on non-digital channels (print, TV, billboards, etc.) were all rated highly.


Third is the old "location, location, location." One VP of social said, "Go where the audience is, don't pull them to where they ain't, don't push them where they don't want to go." For example, big successes were had by a leading food manufacturer and an information technology direct marketer, two companies with very specific markets with very specific likes and dislikes who show up in very specific locations at very specific times. Put that all together, and there's no surprise there's success.


Fourth, but not last, was deciding what to measure and then finding or making the tool that could accurately measure it. "My office is a revolving door of vendors, and they're all good products, but none of them are the right product for what we're doing. In the end, we hired a team to roll our own and we're happy with it," offered a Montreal based director of marketing.

10.5 percent are going to "do something else"


The "doing something else strategy" is the 2014 plan for 10.5 percent of the businesses interviewed. This means everything from revamping social marketing campaigns to completely rebuilding social teams to everything in-between. These people were unhappy with their results but not so unhappy as to abandon social marketing altogether -- just unhappy enough to consider alternative spends.


Did these people think their social spend was wasted? Definitely not. All of them considered their social campaigns learning experiences (although some did say that the education was expensive), and most offered a variation of, "It's not that we failed, it's that we didn't succeed as well as we would have liked."


"Would have liked" varied by industry and purpose. Many use social to listen in on what's going on "out there." Other uses are making themselves known -- hiring, product design, testing business decisions before making them final -- customer support, and moving a brand's presence to a different channel. One director of social strategies said, "There's no way to measure engagements on social sites, so we'll stay in the game, but we're pulling back our investment in it." A Boston-based CMO flatly stated, "Nothing does a good job of measuring social."


21 percent labeled themselves "dissatisfied with social marketing"


While not the largest group in our study, more than one-fifth of businesses currently using social marketing are not happy and are ready to replace social spend with more traditional buys. These people already went the "let's do something else" route, and things either got worse or stayed the same (and in both cases the return didn't justify the expense).


Most companies that fell in this 21percent bucket were using social as a cross between general consumer promotion and targeted marketing, something all admitted after the fact was a major mistake. One CMO said, "We were serving two masters, and that never works. Worse, the two masters were usually at odds with each other."


Serving two masters also took the form of too many departments doing social without checking with each other. Some companies had sales, media, public affairs, marketing, R&D, and customer service all doing social campaigns and confusing audiences. Not good.


Another common problem in the 21 percent bucket was too many tools, no standardization, and not enough data to go around. As with the 7.75 percent who are happy with social outcomes, no tool dominated the dissatisfied segment. Social managers spent more time finding a tool that would give them the numbers they wanted and less time managing the company's social campaigns.

54.75 percent are stepping back and waiting


The largest group in the survey said they'd managed several campaigns, had the same level of success as they'd had with non-social campaigns, and hadn't made any clear decisions about next moves. One senior social manager said, "I'm a veteran of five social campaigns going back to 2005, and it's Wanamaker all over the place. Some things work, but nobody knows why or how, and you can't duplicate it from here to there. We've gone through tools and models and consultants, and anybody coming in the door who tells you they've got the answer should be shown the way out before they take a seat. We've lost money and I know lots of businesses that have lost money on hippos with spam in a can solutions."


One CMO told us, "The best social money we ever spent was a one-off. It brought back 289 percent  in less than three days, but the company that designed that campaign won't touch us now because that was a perfect social storm (they say) and won't happen again. Maybe they just know they can't repeat it and are playing it smart by not trying."


This 54.75 percent of social marketers are unlike the 10.5 percent "do something else" group mentioned above. This 54.75 percent have decided not to do anything else except wait. They've heard all the pitches they want to hear. Many classify themselves as social agnostics waiting to be converted.


"We learned to ask the negatives," a Denver based senior social strategist told us. "Tell us what didn't work, why, and with whom because nobody's having success after success after success doing social."


A Vancouver GM shared,


"I've been in three companies, all doing social. General marketing efforts worked but remember, general means to be sure of hitting the target, shoot first and, whatever you hit, call it the target. The more you segment and specialize the more it's a catch-as-catch-can. You can use all the tools you like, and you're going to customize them into the grave by the time you're done, and you can't tell the big dog you win some and you lose some, that doesn't go over well. Social's still big but so's neuro, big data, and cloud. I can name 10 to 15 trends through the years. Each has their moment in the sun, but nothing stays king of the hill for long, and nothing delivers big numbers repeatedly. So we're waiting for something that delivers reasonable numbers repeatedly that we can work with."

Companies in this group had successes, and like the CMO with the 289 percent return above, those successes came with lots of work, specifically social and behavioral knowledge of audiences that takes time and tends to be one-offs because social audiences change from day to day.


Summary


Better than half the businesses interviewed admitted the decision was still out on social marketing's value. They are prepared to sit it out in 2014 rather than continue to invest. Less than half the total businesses contacted are using social as part of a strategic plan (i.e., it's showing up in spreadsheets as expenses only).


2014 may or may not be a make-or-break year for social, but with more than 50 percent having a "let's wait" attitude, social marketing seems to be losing its pull.


Joseph Carrabis is the founder and chief research officer for NextStage Evolution.


On Twitter? Follow iMedia Connection at @iMediaTweet.


"Social media, social network concept" image via Shutterstock.

Joseph Carrabis is Founder and CRO of The NextStage Companies, NextStage Global and NextStage Analytics, companies that specialize in helping clients improve their marketing efforts and understand customer behavior. He's also applied neuroscience,...

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Comments

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Commenter: Jay George

2014, January 22

Re: tracking ROI... I see it from the perspective of a marketer, but many CEOs like concrete numbers. They're used to direct marketing. Sure, there are ways to measure social, but as it stands, we cannot provide reporting that is cut and dry in the way you could if presenting direct marketing metrics.

We can present great plans, we can explain long term value and using it as another piece of a marketing plan, but ultimately the mind of many CEOs work in a way that, understandably, appreciates black & white metrics. There are absolutely companies that understand the value of social, but it goes back to my point below: they understand that it's an additional marketing tool as opposed to a magic wand.

Commenter: Tim Hamby

2014, January 20

Excellent piece with some thoughtful comments, as well.

I can see it clearly from both sides- the desire of a CEO interested primarily (or exclusively?) in tracking / measuring simple ROI, like is so easy to do with typical direct-marketing media buys; and Social Media Advocates who respond that ROI is there for companies that understand social media and recognize it as an effective, but longer-term, less-direct proposition more closely associated with branding and public relations, both of which rely upon fuzzier metrics. Companies that inherently understand and value branding will likely have a much easier time committing resources to social. For those that do not, it is far more natural and logical for them to dedicate more of their resources to strategies that have proven capable of producing nearer-term revenue gains.

For social to be leveraged most effectively, I believe it needs to be looked at, not as direct marketing driver, but in a supporting role, both for building brand awareness, perception and reputation; and as a potentially powerful accelerator for traditional marketing campaigns. The former role is longer-term value proposition. The latter is where CEOs could look to close the loop with respect to realizing significant ROI and recapturing / justifying their longer-term investments. In any event, I do believe that social media does require active integration with marketing to be successful (planned together). A disconnect there dramatically decreases the odds that any investments in social will be leveraged fully or properly, decreasing the overall chances for success, and effectively wasting those resources that were allocated to social in the first place.

Commenter: jerome pineau

2014, January 19

There's no way to measure engagements on social sites..." - not sure what he meant by that but clearly this is not the case. There's plenty of ways to measure engagement on most social networks earned or owned.

"Nothing does a good job of measuring social." - some vendors do a great job of it but you have to know what you're measuring first and why - you can't blame the tools for lack of clear ROI strategy.

Commenter: Jay George

2014, January 19

Great article and very relevant for the online marketing world. With that said, the biggest issue with social media marketing has been, at least in my experience, clients who have a lack of understanding surrounding social media and content marketing.

With all the talk of 'going viral' and obscure reality stars who have millions of Twitter followers, no matter how much coaching you attempt, there are a high number of people who genuinely don't understand social media and why they, too, haven't achieved internet stardom.

I am of the belief that one of the biggest issues facing social media marketing is not only a the lack of understanding, but also the fact that businesses that try to use it like a traditional advertising method. Obviously, the hard sell doesn't work well on social. To go one step further, I believe there are many instance where the real problem lies with businesses/inexperienced social marketers treating it as a business platform, when in reality, it wasn't designed as such. We are joining a community, not the other way around. The only surprising thing would be if it didn't fail.

Social is a great tool, but it is just that —a tool. My hope would be that as business continues to evolve with social, a better understanding of the platforms and the process will increase. I don't see social going away, but rather we'll be able to refine how it's used.

Commenter: JM Bonthous

2014, January 16

Great article, and very relevant topic.

However... this story begs to consider an underlying question---while social marketing needs to be re-evaluated, is social marketing the "baby" or the "bathwater"?
By that, I mean--what is the mindset underlying most social marketing initiatives, and what is the quality in design and execution of these initiatives?

Some examples---In 2013, we've had a CEO ask us to remove all social sharing buttons from their web site because "a client told us that these buttons don't look good". Amazing but not that uncommon.
Another client, with no prior experience with or presence on YouTube, spent $75K creating within one week, with no clear understanding of audience, purpose and concept,. a video grossly out of sync with YouTube audiences. When the video flopped miserably, the Chairman called us a Friday at 10PM summoning us to "mobilize the teen market during the week end". I could go on and on. This lack of understanding of social marketing is more the norm than the exception in small to mid-size have social marketing embraced across functional silos.
There has been for too long a quasi mystical belief around social marketing that with the proper amount of luck, it could help a company strike it big. Social marketing has often been seen as a substitute for innovation and for marketing savvy. A bit like buying a marketing lottery ticket. More often than not, we see companies approaching social marketing as a way to avoid being customer-centric, hoping that by some miracle, they will unleash some virality. Any social marketing initiative undertaken within this mindset is bound to fail.

My sense is that behind what you have observed, what we witness is the decline of the hype and misguided beliefs around social marketing. Social marketing is getting more difficult by the day. The low-hanging fruit has now been picked. Success in social marketing now requires skills, experience and most of all knowledge and understanding of the customer, and a dedication to building authentic, long-term relationships with your audience. This maturing of social marketing could signify the dawn of a new age where we see less stories about hype or success-by-anecdote-- and more substance in how companies make social marketing work for them and for customers.

Commenter: Steve Poppe

2014, January 15

Social media performs best when following a brand strategy. Most social programs are sales driven or engagement driven, divorced from key brand value builders. Brands with an organizing principle for product, experience and messaging (aka a brand plan) are best prepared to be social and earn returns.

Commenter: Nick Stamoulis

2014, January 15

Interesting statistics! I think the success of social depends on what you want to get out of it. Some companies use social strictly as a customer service tool and don't expect to sell anything. Others want to use it as a lead generation platform. I think you could have success in one way with social and less than stellar results in another.

Commenter: Brant Emery

2014, January 15

Ah jeez, sorry Joseph, not John. :-(

Commenter: Brant Emery

2014, January 15

So John are you saving this research for your book ;-) - or will there be a fuller research whitepaper / publication coming out too? All seems very pragmatic, and thus probably the realistic picture of social marketing at this stage. I believe many companies will be shifting some budget to lead generation this year and know-it-works brand programs: more cross channel, more experiential, less pure digital.