Social Media Generates Hype; Fails to Deliver Marketing Punch
A new study argues that social media has reached its tipping point, with 83% of the online population now using it in some form - and more than half doing so on a regular basis, reports MarketingVOX.
Despite its popularity, socnet platforms - including Facebook, Twitter and the like - have failed to demonstrate prowess as marketing tools, and possibly never will, according to Knowledge Networks, which released the report, titled “How People Use Social Media.”
The latter is based on a survey of 418 social media users, responding to the question “How often do you refer to social media Web sites or features as a resource for information, reviews, or recommendations when in the market for [category]?”
Ultimately, Knowledge Networks parked the value of social media advertising as “somewhere in the long tail” of other marketing offerings - well below word-of-mouth (WOM) recommendations and TV advertising.
Categorically, social media is most likely to influence the consumption of media-related products or services, particularly books, movies, TV shows and music.
Overall, however, less than 5% of social media users regularly visit such networks for “guidance on purchase decisions.” And only 16% say they are more likely to buy from the following product or service categories after seeing ads on social sites:
“Obviously, a lot of people are using social media, but they are not explicitly turning to it for marketing purposes, or for finding out what products to buy. It’s really about connecting with friends, or connecting with other people,” stated SVP-Group Account Director Dave Tice.
“What we’re seeing is that word-of-mouth is still the #1 most influential source, followed by TV,” Tice said. “The influence of social media isn’t at the bottom of the list, but it is somewhere in the long tail of marketing - about the same as print ads, or online [display] ads.”
According to Tice, only about 1% of the population ever used Twitter - and most of them are members of the media, shining a less favorable light on data from previous, less explicit studies: the Pew Internet & American Life Project found 11% of US online adults said they used Twitter or a similar microblogging service to share or view updates; but 51% of Americans don’t use services from brand names Twitter, MySpace or Facebook, according to a Harris Poll.
“[Twitter is] more of a media industry thing right now,” Tice said, comparing Twitter to services that rode significant waves of hype early on, such as TiVo, a service once thought destined to destroy TV advertising.
In reality, Tice said, few people subscribed to the service overall; and digital video recording services are now de facto offerings by cable firms that sell set-top devices. Eventually, the ad industry and the evolving TV medium found a way to coexist, as demonstrated by a 2005 liaison between TiVo and DirecTV to sell ads.
“Whereas TiVo dominated the conversation around television, we’ve seen Twitter dominate conversations around marketing. What is also similar is that both are examples of ‘flyover blindness’: while popular topics among the urban digerati, neither - TiVo then or Twitter now - are significant in terms of usage among the general population across the country,” the report reads.
Despite the naysaying, Tice admits Twitter influences the media’s discourse in a major way - which may influence consumer perceptions about the service in general.
“While social media is still a minor part of the media and personal mix that consumers use to make decisions, Twitter and its progeny can certainly greatly influence the way the press covers a product or media property - what gets buzz and what doesn’t,” concluded Knowledge Networks.
“Our advice to marketers is, in a tweet-size bite of 140 characters: Twitter is less a way to directly reach customers, and more a way to reach passionate voices who may influence perceptions of your brand,” the company stated.
Ultimately, Knowledge Networks parked the value of social media advertising as “somewhere in the long tail” of other marketing offerings well below word-of-mouth (WOM) recommendations and TV advertising.
A previous study by Nielsen found social networks and web video radically alter online behavior - which naturally affects the way advertisers must cater to users over time.
May 21st, 2009 at 2:22 pm
Social media can (and has been) utilized as a word of mouth tool for some time. I don’t see how these two can be considered mutually exclusive.
May 21st, 2009 at 2:53 pm
Thank you for doing this piece of research and publishing the findings. It had seemed rather intuitive that while the use of social media may run into millions, that it still does not infiltrate the larger expanse of American consumers. Mass brands especially cannot expect to significantly shift focus to emerging media. Qualitatively too the discussion on these sites is rarely ever about brands and more focused on their own social issues and “states of mind.” I am fairly confident that the Twitterysteria will gradually die down as well.
Brands should definitely manage their online and social media profiles because negative publicity can do a lot of damage and very quickly. But serious brand building, differentiation, and sales requires employing the wider spectrum of media options from mass/established to niche/emerging. Finding the optimum balance is always a challenge and should be figured out on a case by case basis. Another aspect is that social media typically caters to the ADD-torch wielding batch of consumers which disallows any brand to relay what it is about, why consumers should care, and provide the necessary stimuli to build an ongoing relationship. It certainly satisfies me to know that TVs are still alive and relaying!
May 21st, 2009 at 4:03 pm
I disagree with the consensus you’ve provided, albeit in great detail. It’s a fact, social media is here to say, with more and more businesses latching onto new affordable ways to market their business. My strategy is to pioneer the way for small towns to latch on to providers in their local communities, if this happens it we’ll have an upswell, and with twitters impending launch of their new business tools, allowing small businesses to formally use twitter as a marketing tool in exchange for a small decided fee. With this advent, we’ll see an upswing towards the end of 2009, mark my words!
May 22nd, 2009 at 11:15 am
Marketing is a broad term that hasn’t been addressed entirely in this article. A key part of marketing is knowing your market. Social media is a great way to monitor what is being said about your industry, company, brand, product. It provides the ‘marketer’ with the opportunity to communicate with their customer/prospect like no other medium. The growth stats of social media speak for themselves, its obviously here to stay. The key here for the savvy marketer is to utilize social media with a ‘new’ mindset and to not compare it to traditional marketing. Times are changing, consumers are changing and so must our approach to marketing.
May 22nd, 2009 at 12:52 pm
Hi Racheal - I could not specifically tell if you were disagreeing with my comment or the broader article. Not for a moment am I suggesting that social media is irrelevant or going the way of VCRs. My point simply was that all eggs in the social media basket may not be the optimal route for a brand. I’d also agree with you that the usage will grow - as marketers understand its use, innovate, have success stories, etc - and with no small part being played by experts like you. The fact remains however that it will grow exponentially also because it currently represents a smaller sliver of the media budget pie.
May 22nd, 2009 at 1:32 pm
I am not be surprised at the results of this survey and it matches my anecdotal experience with small businesses. We are in the “hype phase” of social media adoption where visions of the potential for social technology far outweigh the resulting profits. It will be interesting to watch the results of this study in another year as the early adopters begin to combine the potential of this technology with new business visions. Over time as business visions meet technical opportunity, great results will follow.
May 27th, 2009 at 11:54 am
I coined the term “BUZZ GAP” — the inability to cross the chasm from increasing brand awareness, inquisitiveness and self replicating viral processes, to achieve product or service consideration and other marketing objectives such as response, demand generation and sales. Research Pundit, Erik, Rachael, Stacie and Susan - I would love to hear your comments about “Buzz Gap” (e.g. - Do you have any “Buzz Gap” stories or experiences you can share)… http://buzzgap.wordpress.com/about/
September 23rd, 2009 at 8:20 pm
The article makes the reader assume that SMM is all about the commercial, consumer social networks- it clearly is not. Social Media is everything from Blogs to custom brand/ services communities which are proven in many ROI based metrics. New practices such as Social Telephone platforms and creating new customer value chains are good examples of social media marketing in action.
Facebook ads and pages are clearly not even on the radar in these contexts.