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Ian Hughes
This month's online edition
Have your say on the latest issues affecting our industry and the world of business. DMI columnist and ‘Master Debater’ Ian Hughes welcomes your comments on his latest rant.
Today’s topic – ‘Network Schmetwork’!
Those of you who attended the USA DMA’s annual fun-fest in California this autumn will have noticed two words blaring out from a number of stands: ‘Social Networks’.
They are the two words that are the current juicy topic in the marketing world. Everyone wants to get in on social networking or believes they have an angle.
And they are all deranged.
The simple truth is this. There are only three ways to make money out of social networks. First, you can run one. Facebook is worth billions; Twitter seems to be through the stratosphere. But God knows why.
The second way is to write an application like Farmville or My Mafia Family. You can then charge people to use it.
The third way is to charge money to monitor the Chatter-sphere on Facebook, Twitter and Blogs about a company. Because, while you can’t make money on these sites, you can lose reputation and customers really, really, really easily and you need to watch it like a hawk.
And that’s it.
I haven’t come across a single, long-term marketing proposition that works on any social networking site.
And the reason for this is very, very, very simple. There is a very fine line between Social Norms and Market Norms. You might go out and tell people I have written a great blog and they might come and read it and comment on it. They might even subscribe to DMI as a result.
But if they subsequently found out that I paid you to tell all your friends how good my blog is, they might look at you rather differently, especially if I paid you $1.00 or something smaller to rat out their name and details to me.
Bottom line – when a consumer crosses a line between Social Norms and Market Norms, it is almost impossible to get back across that line.
So, be really careful before you dump a ton of money into social networking: the only friend you might make is the salesperson at the supplier.
If anyone has a good example of where Market Norms and Social Norms have crossed and it has worked, long term (not just a one week fad), let me know!
2 responses so far ↓
1 jamieriddell // Nov 27, 2009 at 12:27 pm
Ian’s comments about making money are valid but I would temper that with making [vast] amounts of money. Indeed a company like Zynga, makers of Farmville and other horribly addictive games, is set to turn over $100m next year and we all know the huge valuations of Facebook and have no doubt bought the book and will watch the movie next year…
It does seem like 2010 will be the year of Social Network marketing which is very concerning, not least because social networks have been around for many years and have reached maturity [in terms of audience size] well over 12 months ago.
Regrettably with Digital Marketing there is a tendency for the less enlightened brands/clients to focus on the ‘next big thing’ which will be social networks [in their eyes.]
Social Networks can work well for companies and brands and can generate very strong revenue when harnessed in the correct way. Example include Dell, generating millions in revenue from pay attention and engaging their customers on Twitter (http://blogs.zdnet.com/BTL/?p=19696) to brands like Canterbury of New Zealand that have successfully driven engagement and business through their Facebook channel which has had one of the highest engagement scores of any brand on FB in Europe [Disclaimer: This was work I set up with my former agency, CheezeDMG http://www.cheezedmg.com/latest-news/index.php?id=163
Putting your brand into social networking can lead to success if you are prepared to understand and interact with the audience. However, social networks should remain only part of a mature marketing mix that includes search [paid and natural], display, email, CRM and mobile.
Social may be the next big thing from brands and marketeers but the smarter people will be playing with and understanding apps..…
2 Marty Shaw // Dec 1, 2009 at 5:52 pm
My personal view on social media marketing? As noted in The Cluetrain Manifesto…
“Historically, the authors state, the marketplace was a location where people gathered and talked to each other, they would discuss available products, price, reputation and in doing so connect with others. The authors then assert that the internet is providing a means for anyone connected to the internet to re-enter such a virtual marketplace and once again achieve such a level of communication between people. This, prior to the internet, had not been available in the age of mass media.”
I believe both businesses and consumers can and will, if approached with measured strategy, benefit from this SMM medium that is still in its infancy. It is important to be “part of the conversation” and SMM can be that conversation. The jury, indeed, is still out on how/if this will provide measurable benefit to most businesses who undertake SMM initiatives.
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