If there’s one thing in my career I really enjoy, it’s marketing trends. Some are persistent and become best practice. Others devolve and are recognized as fads. Monetizing social media as a discussion certainly feels more like a trend topic that will turn into a best practice. But anyone who held a marketing position at the turn of the century remembers that monetizing the original Internet model was really, really difficult and was almost given up on.
So how can we better understand the current topic and how can we help push it toward fruition? Best to strip it down to the studs and start at the beginning.
I’ll be the first to admit that I’ve not done my own research on this. But I did find a really good study by Regus published this month that has some startling findings. Anyone who wants to read it can find it here .
Apparently, U.S. companies are really, really bad at turning social media into a profit tactic. Not only by their own metrics, but by global standards. U.S. companies ranked ninth among 15 ranked countries in terms of percentage of companies successfully using social media for business profit, well behind India, Mexico, Spain, the Netherlands and others. Which, in a way, is sort of embarrassing since we’re the ones talking about it the most and supposedly driving the phenomenon.
What’s important to note is that U.S. small businesses are far more adept at turning social media into new customers. Forty-four percent of small businesses made it work as opposed to 27 percent of large businesses. So lesson one is that large businesses need to market socially like small businesses. Why is this?
As it turns out, the University of Maryland’s business school looked into this. And the findings are interesting. Small businesses aren’t social-media mavens. They use standard outlets, such as Facebook and LinkedIn, more than anything. Twitter has not gained a strong foothold. Small business teaches us that focus is more important than expansiveness.
The real “ah ha!” comes in two parts. Small businesses are extremely enthusiastic, with 45 percent of respondents saying they firmly believe their social-media efforts will pay off in the near future. This is as opposed to a large brand that has to invest and analyze many different media types. Sort of an “in for a penny, in for a pound” mentality. So belief, even possibly blind belief, is a critical success element.
Additionally, small businesses are transforming social media into a primary lead-generation element, as opposed to larger businesses that likely already have well-established lead-gen mechanisms (call centers, online destinations, direct mail, etc.).
But do these factors necessarily explain it? Not really. It’s very important to understand that social media is likely just friendlier to small businesses, which are traditionally more oriented toward success and profitability through customer-service relationships. But therein lies the rub. You aren’t likely to find anyone who honestly thinks social media is a passing fad. And as it becomes more persistent and better understood, the pressure will only increase on large brands to convert it into a successful, profitable marketing tactic not unlike e-commerce, or dare I say it DRTV, replete with cost-analysis metrics and LTV statements, etc.
If there’s one giant lesson in all of this though, it’s that social media isn’t like other tactics, simply because the consumer or end user has just as much say in the conversation as the brand or seller. And given the propensity for like-minded individuals to come together online, the brand can actually play a disproportionately smaller part of the conversation — especially if things become negative. Turning social media into a profit center will require managers and directors to re-orient their approach and better understand how to sell through a conversation as opposed to through a traditional funnel.
