If the market has no memory what is the value of purchasing social influence?
The New York Times published a short piece last month on the value of the influence of the Twilebrities. It was a discussion on how more followers may or may not mean more influence.
In the end I was left wondering if measuring social influence by the number of Fans, Followers, Tweets or Likes was nothing more than a parlour game.
In many ways it takes us back to the late 1990′s when everyone was enthusiastically touting eBusiness only to discover in retrospect that the only “e” in Business that really counts is expenditure.
After all the only metrics that counts at the end of the day are revenues – expenditure = profit.
So the real question we should be asking ourselves is Does social media influence translate into sales? and, if so, what is the cost of “buying” that social influence? Only then can we establish an ROI that will tell us if all this excitement about So.Me translates into shareholder value.
“In the tests we’ve seen, we generally haven’t seen much of a lift in performance,”
- Social Media’s Tiny Impact On Businesses - Fast Company
Kyle Lacy asked the question earlier this month does negative social media and PR actual hurt brands? and proceeded to analysis the impact on Nestle’s sales revenue in the aftermath of Greenpeace’s revelations about the company’s use of Palm Oil.
You’ll be surprised to discover that despite all the “Webrage” and the “Twitterstorm” sales of the company’s chocolate and pet food products rose 6.1%. Now compare that result with what happened to Pepsi when it banked on being social. Despite all the good will generated by the Refresh Campaign sales fell 9.8 percent in the first nine months after the campaign launch and the Soft Drink Giant has now dropped to number 3 in the Cola Wars.
The same goes for Dell and it much publicised Twitter So.Me campaign of 2009. Dell’s revenues flatlined in 2009 and fell 13% in 2010.
Business Insider also published a chart demonstrating how Facebook has relatively little influence over what people buy online.
Yet, two years worth of data that Forrester has collected with Shop.org shows that social networks fail to drive meaningful revenue for eBusiness retail pros, have a questionable ROI and are generally ineffective as customer acquisition tools. – Media Post
And although AdWeek published a chart illustrating how fan pages can improve brand loyalty they also published a chart illustrating just how ineffective banner advertising was on Social Media (0.08%).
Arnie Gullov-Singh provides some key insights into the challenge’s Facebook and the other So.Me platforms face with his post Is Social Media too Engaging for Its Own Good?. The simple fact is it would appear the audience is to busy “being me” to worry about “involving you”.
At the moment So.Me is generating a lot of economic activity. Both on the supply side (i.e. The fans who generate the content) and the Customer side (i.e The advertisers who buy access to the influencers and time with the fans).
The risk of course is all this talk of manufacturing So.Me influence is in reality an illusion. An illusion in the sense that what happens online on these So.Me platforms doesn’t translate into the “real world”. Maybe not even across to the other online and mobile platforms.
Perhaps in all this enthusiasm to get social we are missing one simple point in the equation.
Maybe social doesn’t equate into being commercial? Maybe social is where we go to get away from the pressures of commerce?
Perhaps social exchanges and commercial exchanges are mutually exclusive activities… masks we present to the world if you like.
If so, what does that mean for the future of Facebook and the other So.Me “wunderforms”?
