Social Media Marketing - A Reality Check

Before I go into the issues that concern me about marketing in a social media context, let's take a look at what the ‘hip hip hooray' is all about. Social media has been around for ages. Forums and user groups are a form of social networking, so is online gaming communities and online dating and that's not new, so why the sudden fuss?

Websites such as Facebook and MySpace have made social networking more accessible to the masses and was correctly positioned at a time when the tipping point was destined to happen; when the herd decided to follow the pioneers. In the past, social networking was considered the domain of geeks and left-of-centre individuals. For most people social networking was scary and inaccessible; it is no longer. What has taken our breaths away should not be the concept of social networking but the awesome rates of adoption and propagation of social networks.

Gauging by mainstream reporting, you would be forgiven for thinking that there were only two players in the social media space, MySpace and Facebook. Granted they are the biggest players but there are hundreds, if not thousands of sites that can rightfully claim a social media badge.

While the statistics available on individual site members are murkier than a Media24 circulation audit, it seems that Facebook has around 39-million users with their largest network being London, with a small gathering of people over the million mark (Alexa, Aug 2007) while Peter Levinsohn, president of Fox Interactive Media who owns MySpace, seems to think that they have 110-million active accounts. Even if you halve those numbers, it still is a huge number of eyeballs in one place. That aside, some pundits believe that if you put a price tag on Facebook you would realise US$10-billion in a sale. Again, I am not saying that won't happen, you just need to look at the lunacy of online acquisitions around the turn of the century to know that anything is possible. I just don't believe that the price is justified.

Firstly, Facebook was the right platform at the right time; period. Facebook is certainly not a technological marvel. It is a solid platform that is easy to use and easy to distribute. My argument is that Facebook (and others) will not be able to sustain, never mind grow, member numbers in a year's time.

Here is why. As easy as it was for millions of people to pour into social network sites, it is as easy to depart. There is no technology currently available that will lock in an individual. For a huge number of people, the novelty of nudging 227 people, whom you really wouldn't have a nanosecond for in real life, will wear thin. My real friends and family will tell you that I am doing a pretty shoddy job of maintaining our relationship, never mind being a good friend to 332 online friends. If I want to communicate with far flung friends I will Skype or mail them.

MySpace say they have 200-million profiles of which only 110-million are active accounts. If you decode the word ‘inactive' you will more than likely see that inactive tends to mean that people have moved onto the next best thing or have simply got bored with the concept of being mates with the entire world. It is not going to be long before Facebook members start realising that it is not the coolest place to be. The mavens will move to the next coolest social network and the masses will follow.

If we take a closer look at why people in general enjoy social networking, we need to understand the compulsion behind that desire to belong. The Social Comparison Theory (Festinger, 1954) describes an individual's need to look externally to assess and judge their own opinions and abilities and gauge how they compare to the group.

With social networks, this behaviour is amplified by the vast access a person has to other people to compare themselves to. This would all be fine for the health of massive social media networks but the theory also indicates that the greater the difference in opinion of members, the less people start applying these subconscious comparisons. When a social network includes every walk of life under one roof, that sense of belonging begins to feel meaningless. This is the reason why a great deal of the original Facebook members, American varsity students, are leaving in their droves. Facebook is overrun by ‘outsiders' and their little digital commune of educated and privileged sensibilities have been violated by the great unwashed.

The collective effervescence of the big social networks will fizzle out as the networks fragment into smaller networks. The bulk of social networkers are late adopters and they have been corralled into large enclosures simply because that's where everyone else has gone. Once the mavens decide to move on, logic dictates that they will look for tighter communities: communities that reflect their social standing or interests. Exclusive enclaves for the like-minded. A community of like-minded people is far more dynamic than a broad based community connected by a flimsy non-social platform. These networks are termed vertical social networks where the glue becomes the common interest such as business, arts, music, sports and pastimes. So there goes the theory that advertisers will be able to reach the masses in one or two big ponds. No amount of smart technology, clever connective widgets or lock-in strategies are going to stop people from seeking out niches that are meaningful, relevant and rewarding in their lives. Fragmentation is the social media giant's greatest nemesis.

What does this mean for advertisers and marketers? Far too many marketers think that because you now have millions of people communicating with each other under one roof, that advertising to these people will be easier and yield better results. This is ludicrous. With rare exception, the truth is that most advertisers using these platforms to advertise are not doing anything clever; they are still broadcasting - big fat peals of shotgun rounds echoing through the dark. This is an archaic run of network mentality and reach in this environment does not necessarily equate to success and there is little control over inappropriate clicks and wasted impressions.

The challenges that face advertisers are often far greater in a social media environment than a content driven network. People in social networks are possessive of their space and resent the intrusion and interruption of advertising, while with content driven websites they understand the tenuous relationship between advertising revenue and quality content.

Another huge problem is viewers successfully filtering out adverts. As a lot of social media sites are rigidly template based, people know where the adverts are and after frequent use they become highly proficient in filtering out commercial messages. Eye-tracking software such as Eyetools, highlights the severity of this problem.

While profiled adserving is not a new concept or technology, a number of social media sites are in a race to try to fine-tune the technology to serve profiled and relevant adverts using the rich data provided by members. From recent testing results, MySpace claims that targeted adverts, beyond simple geo-targeting (targeting individuals based on the country they live) increase click rates by as much as 70% in sectors such as motor and music.

Hyper-targeting is another buzz word flipped around. This is the ability to target individuals using a mixture of demographic and behavioural information. It works something like this; an individual lives in Pretoria and they belong to an online rugby group - serve advert for Blue Bulls Supporters Club or Squadron Rum. MySpace believes that if they get it right, they will increase ad revenues by 40%

Contextual advertising in a social media context has some huge advocates and a large number of advertisers have recorded pretty impressive results. Adsense, the Google child prodigy is streets ahead of the competitors, Yahoo Publisher Network and Clicksor in the contextual advertising game.

Once again, there are questions about the efficacy of contextual advertising in an environment such as MySpace and Facebook. Blogs that publish specific or specialist content obviously are far more effective in serving relevant adverts. The downside of contextual advertising is that it is not great for branding or building awareness.

J.M. Coetzee, in his latest novel ‘Diary of a Bad Year', observes, "Nothing worth knowing cannot be uncovered in a matter of seconds, and without much effort; private life is, to all intents and purposes, a thing of the past." Privacy issues are going to factor hugely in the monetization of social media sites. Personal information and profiles are fundamental to being able to serve a profiled advert to an individual. There are already dark rumblings at the US Trade Commission, concerning legislation and the use of personal data. A number of sites are attempting to educate members about how and why they will use the personal data and the ‘benefits' this will have on the members site experience.

A compelling argument social media sites offer their members is, "if you are going to see adverts, why not see adverts that are relevant to you?" Most people are intelligent enough to know that advertising fuels the survival of the site and are therefore, prepared to compromise, by varying degrees, the amount of data that they share.

An extremely brave, but I believe ultimately sensible privacy model, is letting individuals decide what levels of privacy are acceptable to them. This is a stunning opportunity to build levels of trust with the community. I'll give you an example; Flip is a beta social network site, aimed at the young and hip. They allow their members to choose the type of advertising that they receive when they login to Flip. An interesting side debate is; should Flip, part of the behemoth Conde Nast Group, be allowed to share data and profiles with other titles in their stable? It certainly would be the logical thing to do. MySpace are discussing giving members the choice of opting in or out for certain advertising. It will be interesting to see from their test groups what type of profiles are left in the opt-in group and how prospective advertisers view this flexible gesture.

One of the things that surprises me is how few advertisers and marketers have embraced the essence of what makes social networking so unique compared to almost every other media form; the ability to create conversations between individuals. Most marketers do not understand the environment or culture they want to market to and think that forcing themselves on individuals demanding to be heard, is how they are going to win market share. No wonder they feel like lepers at a swingers' party.

The brands that understand the dynamics of this culture are the ones that will win the hearts and minds of the networkers.

In a sense I have painted a bleak picture of the state of social media compared to most of the upbeat articles you might have read recently. I am not negative towards social media, in fact I am optimistic, albeit cautiously. I believe there is huge opportunity for advertising and marketing in aspects of social media. I am particularly excited about the potential of smaller more manageable vertical communities where brands interact with members in a relevant and contextual manner. No one has even scratched the potential of marketing within the online gaming community. This is not a community that pops in to check messages for a few minutes a day. It is people spending hours and hours online, collectively saving the world or trying to re-live their lives. Now that's what I call a captive audience.

The future for marketers in social media should be in a place where marketers are engaging with consumers and asking for their opinions. A place where the advertiser's message is authentic and the brand is welcomed. Where marketers immerse themselves in the community and use their observations to drive their campaigns and communication. These people will certainly find the gold in social media.

en Tomlinson is from ENVENT, which has developed Ensight, a user-friendly integrated suite of web and e-marketing tools, combining the elements of publishing, profiling, personalisation and communication, for all online customer-facing initiatives. For more information visit http://www.ensight.co.za/newsletter