Social media still slippery to grasp
As 2009 wanes, marketing and advertising agencies are ending the year much as they began it ”“ all atwitter over emerging social media technologies, but none the wiser on how to make money from them.
In using the phrase “snake oil” to describe social media”™s impact on businesses, Ben Kunz does so only in the kindest connotation of the term, if a kind connotation could be attached to it. As director of strategic planning for the Danbury-based media buying firm Mediassociates, Kunz says the topic of social media marketing is aired frequently by his company”™s customers, even if not all of them know what they are getting into.
“It”™s like adopting a child,” Kunz said. “Once you”™re in, you”™ve got to be really in and committed to it.”
By all accounts, Corporate America wants in. In a survey of nearly 150 of the companies included in the Inc. 500 list of fast-growing businesses, University of Massachusetts Dartmouth researchers said that an incredible 91 percent of respondents said they were using at least one social media technology as a marketing tool, up from 77 percent a year before; and between 82 percent and 92 percent of respondents said social networking tools had been successful for the businesses, depending on the technology used.
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Social networking tools like Facebook and LinkedIn were familiar to 75 percent of respondents, followed by blogs (67 percent) and Twitter (52 percent), which the survey carved out separately from Facebook, LinkedIn and Myspace, among others.
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“It is interesting to note that 1 in 4 Inc. 500 companies consider Twitter an appropriate vehicle for (business-to-business) communications,” UMass researchers Nora Ganim Barnes and Eric Mattson wrote. “This could signal an important change in the popular conception of Twitter and how it is being used.”
Appropriate is one thing, and profit is another. While a merchant had a realistic shot at real revenue by selling dog food over the Internet in 1998, Kunz notes, getting people to talk up dog food on Twitter today is less likely.
In short, influencing “buzz” is harder than soliciting a sales transaction via a Web site, not to mention being harder to measure.
“You tend to get a very low cost per response, but you get very low volume (of responses),” Kunz said.
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Low-cost marketing is still an appeal ”“ many companies decreased their media buying in 2008 heading into the recession, according to a new survey published by Advertising Age magazine, with General Electric Co. among the few to register a significant increase in ad spending in part due to promotions for the summer Olympics that year in Beijing covered by its NBC Universal subsidiary.
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Worldwide, Fairfield-based GE spent more than $1.5 billion in advertising and marketing in 2008, ranking it 22nd among the top 100 corporations for global ad spending, and 20th in that peer group for the biggest year-over-year increase in U.S. ad spending at 18.4 percent.
Procter & Gamble Co., which owns Bethel-based Duracell, led all companies in global and U.S. ad spending, though its U.S. spend fell 6 percent.
Kunz said the biggest change his company saw among media buyers this year was a focus on measuring results from various campaigns ”“ for instance tracking systems that calculate the cost to generate an incoming phone call or website visit from each ad component.
“The biggest change we”™re seeing in our clients is more focus on hard results and less on general branding,” Kunz said. “It”™s important, because there is always waste in any ad campaign. The best advance planning in the world can”™t predict exactly what will happen; direct response measurement can ”¦ Advertising has always been based on a rather artificial currency called ”˜impressions.”™ That currency is now being devalued and the only solution is to measure your way out of it.”