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Last week, I was pointed in the direction of an article entitled: “Online Social Media Cheap Alternative In Face Of Recession”.

It describes how Forrester Research is advising marketers to “spend more on online social media as a cheap, efficient way to advertise during tougher economic times.”

Given the fact that it’s increasingly becoming clear that marketing on social networks is ineffective for the vast majority of marketers who have tried it, and is losing money for even the Googles of this world, Forrester Research’s 'research' seems to be quite contrarian to say the least.

The kool-aid sippers at Forrester provide three rationales for their recommendations.

  • Rationale 1

"Well-designed social applications are effective. Social programs leverage the voice of the customer to get messages carried further than ad impressions. If your message resonates with consumers, their word-of-mouth is a more effective medium than any of the traditional media."

The idea that brands are having consistent success leveraging social media to get their “messages carried further than ad impressions” is a myth in my opinion.

Word-of-mouth is not necessarily synonymous with social media. That is, just as with any other form of marketing, there is no guarantee that consumers are going to take your message and carry it on.

The message and the product, not the delivery mechanism, are the primary factors in determining whether an ad campaign goes 'viral'.

I discuss word-of-mouth in the context of social media marketing when discussing Rationales 2 and 3 below.

  • Rationale 2

"They’re cheap. Advertising campaigns often run into millions of dollars. But Facebook pages and blogs are two examples of social programs that you can start for next to nothing. Even more sophisticated programs like a full-blown customer community typically don’t cost more than $50,000 to $300,000 to get going."

Perhaps there’s a reason that social media marketing campaigns are cheap.

If they were delivering great results, you can be sure that the costs would reflect that. MySpace and Facebook aren’t charging rock-bottom rates because they’re altruistic.

As it stands now, the paltry results from social network ads provide a more likely explanation for the cheap costs - if these companies charged more, they wouldn’t be able to sell advertising.

I’d love for Forrester to explain how a Facebook page or blog is going to drive results for brands that do billions of dollars in revenues every year.

If you have a small business that did $20,000 in revenues last year and can find a way to leverage social media marketing to increase your revenues to $30,000 this year, that’s great.

But when talking about consumer brands that are doing billions in revenues annually, it’s naive to assume that attracting even 10,000 'fans' or 'influencers' is guaranteed to have any noticeable impact on the bottom line.

I also question the value of having a 'full-blown customer community'. Even though a major brand can drop $50,000 to $300,000 without hesitation, just what does the brand really receive?

Forrester seems to focus on cost while ignoring value. As anybody with half a brain knows, low cost does not always equal high value.

Is it not better to spend $2 million on a campaign that delivers results than to spend $200,000 on a campaign that doesn’t? Let’s take a global beauty brand’s 'community' on Facebook as an example. According to Wikipedia:

"Make-up Art Cosmetics, better known to most as MAC, is a brand of cosmetics sold internationally, that originally became famous through word-of-mouth endorsements by professional makeup artists, models and celebrities.

"The company has become synonymous with glamour due to its ever-growing presence in the fashion industry, continued use of celebrity endorsements and commitment to cruelty-free products and universal diversity."

The company now has a community on Facebook:

The MAC Cosmetics Facebook community is a good case study for social media marketing.

When looking at the screenshots above, it’s clear that the audience is far too small to be of significant benefit to such a brand and, most importantly, there is very little 'conversation' going on (32 wall posts, 1 discussion topic, etc.). The 'conversation' that is taking place doesn’t have a whole lot of substance (i.e. “my fav. cosmetic”).

In general, this is fairly representative of what I’ve seen with the communities and pages other brands operate.

This is not to say that MAC Cosmetics does not have a respected brand that its consumers are passionate about.

What I will say, however, is that it’s very difficult for brands to get consumers to engage around their brands online on a regular basis in meaningful ways, especially when the 'venue' is controlled by the brand.

After all, you may love MAC Cosmetics, but are you really going to spend hours every week talking about MAC Cosmetics, especially on Facebook?

There’s no value in doing so. Therefore, the idea that social media marketing campaigns are going to turn consumers into online brand zombies is ridiculous.

Ideally, your brand plays a role in a consumer’s life, but thinking that your brand is the consumer’s life is just plain stupid.

I think far too many people involved with marketing (in all realms) forget this. Yes, consumers may love your products, but at the end of the day, toothpaste is toothpaste.

You just can’t form deep personal relationships with consumers around many, if not most, products.

As noted on Wikipedia, MAC Cosmetics grew into a successful business primarily because of word-of-mouth endorsements from celebrities and industry professionals.

This took place long before social media existed and it highlights a point I recently made:

"The truth is that great brands don’t need to pay social media marketing “experts” to cultivate legions of consumers who recommend their products to their friends and family.

"Word-of-mouth existed well before the internet; social media marketing “experts” who try to represent that they have some sort of formula for creating it certainly didn’t invent it.

"A great product, a great value proposition and a great story (with the means to get it out) are what brands truly need to cultivate word-of-mouth buzz. A social media marketing “expert” can’t create these out of thin air; bullshit artists are only required when a brand lacking those things is looking for some hot air."

A stealthy social media marketing campaign on MySpace or a community on Facebook isn’t going to get influencers talking about MAC Cosmetics. Great products and a business model that invests people in the MAC Cosmetics business will.

  • Rationale 3

"They motivate consumers in the middle of the funnel. Social applications like discussion forums are better than advertising at helping people in the consideration phase when they’re on the fence about purchasing. In a recession, improving consideration will be more cost-effective than blasting awareness messages at resistant consumers."

Again, the 'discussion forums' that are run by the brands themselves look a lot like the Facebook 'discussion forum' for MAC Cosmetics - empty.

I will not argue that consumers don’t increasingly use the internet to research products and services before making a purchasing decision.

They obviously do. The problem is that, pragmatically, there’s little room for brand involvement in the discussions Forrester is referring to.

If a brand offers a quality product, some consumers will naturally sing its praises (and often recommend it to their friends). If a brand offers a product that consumers aren’t satisfied with, it can expect negative comments.

In other words, the best way a brand can promote and influence the 'conversation' is at the product-level - successfully introduce the market to a great product and there’s a good chance that the product itself will help cultivate consumer passion.

It’s nearly impossible to engage in a 'conversation' that subtly persuades consumers to love a product they aren’t satisfied with and there’s no 'relationship' to be cultivated with consumers if your product truly isn’t compatible with their needs and desires.

This underlies the admittedly crude analogy I made about what marketing really boils down to:

  • I make a product that I think is great.
  • I identify targets who I think need or want this product.
  • I approach those targets and, using a variety of techniques, attempt to demonstrate to them that my product is great and should be purchased.
  • If I can’t convince those targets that my product is great after reasonable attempts, I should move on to other targets. If I can’t convince enough targets that my product is great, I need to re-evaluate the viability and/or appeal of my product.
  • If I can convince those targets that my product is great and they become buyers, I do my best to ensure that those buyers continue to buy my product. Depending on the product, this can be done in a number of ways which are outside of the scope of this post. In some cases, however, it may be difficult to build a “relationship” with my buyers (i.e. if I sell toilet paper it’s unlikely that consumers are going to become evangelists for my product even if they really do like how soft my tushy tissue is).

At the end of the day, it really isn’t much more complicated than this. Those who try to make it more complicated are either asking for a hernia or a lot of money.

Conclusion

As I read Forrester Research’s article, I couldn’t help but think that the firm is basically forced to offer recommendations that just don’t make sense.

After all, Forrester Research is one of the research firms that has hyped social media the most.

Example 1 - its $279 2006 'Social Computing' report went so far as to state that:

to thrive in an era of Social Computing, companies must abandon top-down management and communication tactics, weave communities into their products and services, use employees and partners as marketers, and become part of a living fabric of brand loyalists”.

Example 2 - its $250 Strategy For Facebook, A Ready-Made Marketing Platform teleconference. It is not unreasonable to say that Forrester Research’s credibility in claiming to be a provider of "pragmatic and forward-thinking advice" is on the line.

So it’s taking the Bush Administration approach - even though the quantitative data shows that social media marketing isn’t delivering the hoped-for results and big proponents (such as Google) are admitting that it hasn’t panned out quite as expected, Forrester Research will continue to tout fanciful claims and hope that people continue to believe them simply because they keep hearing them.

Fortunately, not all brands are drinking the kool aid. My internet company recently signed a deal with a $500m/year consumer brand and as part of this deal, we’re implementing several online marketing initiatives for them.

Several of the proposals on the table included social media campaigns similar in nature to what some of their competition has implemented. The response? The brand is not interested in standard 'user-generated content' initiatives (the word 'cheesy' was used several times).

Not only does the brand’s marketing team feel that these no longer offer anything unique and compelling, but the team feels that consumers are very smart and aren’t going to be easily lured into engaging with the brand in a meaningful way unless something of real value is offered.

Obviously, this is only one company, but I think it does highlight the fact that some brands recognise that they have specific objectives and that these aren’t going to be achieved using standard fare social media marketing campaigns.

Instead of being convinced that they need to change their objectives (or forget about the notion of ROI altogether), they’re focusing on coming up with initiatives that do have a real chance to achieve their objectives.

You may not be as sceptical of the information that comes out of research firms like Forrester as I am, so I will make a recommendation of my own: instead of spending $279 on a Forrester Research report about social media marketing, take $279 and advertise your product or service on Facebook.

Good luck!

Drama 2.0

Published 11 February, 2008 by Drama 2.0

237 more posts from this author

Comments (15)

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mike ashworth

With regard to your list of what marketing boils down to. I would have thought it prudent to identify a problem or need that people have and then create a product that fixes that problem or satisfies that need.

As for the Forrester and social Media reports, you're right overpriced and overhyped. Instead people would be far better buying a selection of books published by the likes of Seth godin, David Meerman Scott and Joseph Jaffe. These will give them all the insights they need into the way Marketing works now.

Mike Ashworth
Business Coaching and Consultancy
Brighton and Hove, Sussex, UK

almost 9 years ago

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Richard Telofski

Dead on.

It's not the promotion that creates a great brand. It's the product/service and how well that product or service fulfills the customer's need.

Richard Telofski
The Kahuna Content Company, Inc.
Princeton, New Jersey USA

almost 9 years ago

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Gab Goldenberg

Great article. Forrester and similar companies are in an impossible position of trying to report the news when it's already no longer news. Also, as you pointed out, their credibility isn't all that great.

One criticism though: "The message and the product, not the delivery mechanism," are the important points, according to you. I'd say that the message and the product AND the delivery are important. Consider why people bait Digg. They need its mass-geek-market delivery to get the word out to the linkerati. It's about the distribution.

almost 9 years ago

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David Lockett

I operate a modest website promoting tourism services in one of the remotest parts of the world.

I conduct no online or offline paid marketing or social networking activities and develop my website's contents on a part-time basis, and I certainly do not employ the services of Forrester Research to advise how the site should be promoted.

The website receives about 1000 unique visitors per day and the numbers continue to grow. Google provide most of the site's exposure and the local tourism operators who's services are promoted at the website obtain enquiries and bookings from clients who are located around the world.

Ain't the web great?

almost 9 years ago

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Ted Shelton

It seems like you are confusing, early on in this analysis, advertising on social network sites with Forrester's actual recommendation about getting involved in talking with customers and prospects.

almost 9 years ago

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Drama 2.0

Ted: there's no confusion. Obviously social media goes beyond social networking, but the problem is that social networks have widely been hailed as one of the ideal social media platforms for the type of advertising discussed here and Forrester specifically mentions Facebook, MySpace and Bebo.

The truth is that good brands have always been engaged in "talking with customers and prospects." This concept didn't just come about with the advent of social media.

What social media has done is try to present itself as the most effective platform for brands to engage in conversation with consumers for marketing purposes yet for all the hype, social media marketers seem ill-equipped to demonstrate an ability to consistently drive tangible ROI. In my opinion, the concept of the "conversation" as presented by most social media marketing "experts" is pure BS.

http://www.drama20show.com/2008/02/01/the-social-media-debates-round-1/
http://www.drama20show.com/2008/02/04/the-social-media-debates-round-3/

almost 9 years ago

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bella

Consumer FANS of MAC products, not the MAC brand itself, created the Facebook group....

You'll see a number of MAC fan sites, created by fans, all over the Internet - give it a google! (Yes, consumers really can chat about MAC products every week!)

; )

almost 9 years ago

Drama 2.0

Drama 2.0, Chief Connoisseur at The Drama 2.0 Show

Bella: the screenshots were taken from the official MAC Cosmetics Facebook page located at http://www.facebook.com/pages/MAC-Cosmetics/16126780553.

Even if you couldn't tell from the URL structure that this was an official page, you'd be able to tell from the content and copy being used.

Certainly, MAC fans didn't write the following copy:

"In keeping with the company’s vibrant embrace of contemporary culture and art, M·A·C worked with the French graffiti artist, Fafi, to create a spring colour collection around three exclusive Fafinette characters. As icons of our Spring ’08 collection, Monoko, Eriko and Ermine embody the Fafinette’s signature qualities of sexy, liberated girls: playful, coquette-ish, chick-a-boom rebels in knee-highs, who dress like girls, bat their eyes like divas, and love nothing better than putting on the style.

To complement their outrageous hip, the collection is filled with bold, empowering hues: girly shades of pearly pinks and tangerine reds, shimmering iridescent powder, deeply hued brown, blue and green eye shadows, and a range of accessories that bring these icons to the fore.

According to James Gager, Senior Vice President/Creative Director, “M·A·C leans to the unconventional and iconic. As makeup artists, we’re drawn to artists who also push the limits of colour, content and style. With a devout following in the subculture world of street art and anime comics, Fafinettes are notorious for inspiring bold, colourful self-expression…everything that embodies M·A·C’s take on artistry."

So let me ask you, Bella: who do you work for? Clearly, you have some vested interest in MAC Cosmetics otherwise you would not have dropped by to make a claim that is patently false.

The irony is that MAC Cosmetics is a respected brand. I never disputed that. I simply pointed out that the Facebook page really doesn't appear to be doing much for the company. Right now it's simply serving as an echo chamber for a small number of people who are already MAC fans and there really aren't a whole lot of echos.

If you are associated with MAC Cosmetics or an agency working for them, which is my sneaking suspicion, you really do a disservice to a good company by trying to claim that an official Facebook page is an unofficial page created by fans. I, like most consumers, are a little too smart for that.

I thought social media marketers were supposed to respect the intelligence of consumers more than their traditional counterparts? Guess not.

almost 9 years ago

Alan Charlesworth

Alan Charlesworth, lecturer / researcher at University of Sunderland

In the main I agree with the crux of your argument. I would add:

Re advertising on social media sites - don't the visitors of these sites go there to escape the real world and all of the advertising they face in it? They just ain't receptive to ads in 'my' space.

Re a company/brand/product presence on social media - it works for a very [and I mean, very] few. For the vast [vast] majority of organizations such a presence is a waste of time. Indeed, some of the best proponents of SM practice it on their own web sites [eg online communities such as lego].

Also, because we include it within SM, consumer generated content is important to the marketer. You do not have to participate in SM [ie develop your own presence], but 'lurking' and adding the occasional [overt] comment can be beneficial. The problem with that is that even using 'reputation management' software the practice is time consuming, and few organizations will commit to resourcing it.

almost 9 years ago

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Steven Herron

I thought I was the only one thinking, "The king has on no clothes!" I have been very skeptical of the Web 2.0 hype and have even predicted a Dot Com Bust Part Two in regards to all of the sites trying to cash in on the wave. I applaud you coming out in "mainstream media" to call it what it is.

When speaking to groups or even individual companies I tell them to prioritize their tasks based on available resources in terms of both human and monetary. Most companies have not mastered some of the most basic functions like SEO or usability analysis, and should not entertain a Social Media effort.

A lot of time can be wasted on the social media without generating real and tangible results. Unless you are Coca-Cola or another large brand, most companies do not have the resources to play (pun intended) in this environment.

almost 9 years ago

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TGR

I think the purpose of the MAC Facebook page has been misinterpreted. It is obviously less of a branding exercise than as a medium through which current MAC fans and those interested in MAC can engage with its new collection, Fafi.

The fact that there are already hundreds of organic blogs, Facebook and My Space pages as well as how-to videos on You Tube created by MAC fans attests to the fact that the brand is already very much established within the various online social networks. And yes they are talking. Talking about topics from, where to buy the latest shade of MAC lipstick to how to create the perfect look using MAC products.
Is a branding strategy which is completely reliant on social networks to create word of mouth without a quality product/service to back it up flawed? I would say yes, but it would be wrong to assume that is what all companies intend to use social networks for.

almost 9 years ago

Drama 2.0

Drama 2.0, Chief Connoisseur at The Drama 2.0 Show

TRG: your comment highlights the point I'm trying to make. MAC Cosmetics has built a respected brand that its customers are passionate about. It doesn't need to pay $50,000 - $300,000 for a Facebook page.

When you look at the lack of real "conversation" on the company's official Facebook page compared to the amount of genuine customer-generated "conversation" that is taking place without the company artificially creating it, one needs to ask: why is the Facebook page needed? Where is the ROI?

This is an especially relevant question given that there is apparently already a lot of *authentic* (and therefore *free*) word-of-mouth buzz.

almost 9 years ago

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Nancy Arter

Great post! Totally thought provoking and well written. You arguments are right on -- and love the humor! We featured you on our weekly Great Links posting for our readers, too. Hope you get some good traffic from this!

almost 9 years ago

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Emma Bishop

You fail to recognise the hundreds of message forums that have active and dedicated communities talking in depth about products - social networking is just that - designed for socialising.

Spektra.net has a busy forum populated by hundreds of addictive MAC cosmetics fans - you can't say that THIS isn't how W-O-M marketing works?

over 8 years ago

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Maggi Deroian

You make some great points, particularly in Comment #6 - "The truth is that good brands have always been engaged in "talking with customers and prospects." This concept didn't just come about with the advent of social media."

I thinks it's important to consider that social media can be extremely effective - look at what Zappos has done through Twitter. But then look at WaMu's Twitter experience - it completely bombed. Marketers need to be extremely careful when and how they implement social media campaigns. First, they need to make sure it's compatible with the brand's personality - Zappos is an online retailer with a young demographic, so online marketing makes sense. But that strategy doesn't work/isn't necessary for everyone. Look at Nikon - their Picturetown campaign was one of the most successful campaigns last year, from a WOM and a sales perspective. It incorporated the concepts of authenticity, community, and consumer involvement, but not through social media; it was done primarily through traditional methods (print, television ads).

Second, campaigns need to be thorough - it's not enough to set up a Facebook page, you have to establish a particular value for the page (it needs to be useful or entertaining). For MAC, a more successful campaign might have included instructional videos for applying the latest collections, or exclusive special events or promotions for members of their Facebook group.

Third, it needs to be personal - that's the point of social media, to connect people. So if a MAC artist wanted to use Twitter or Facebook to connect with customers, maybe offer free products to people or engage real conversations (not just make-up related, but about relevant lifestyle topics), it might build a community around the brand that way. This is a particular place where your point about volume comes in - is a small community worth the money? Over time, i think it could be. For a brand like MAC, where one lipstick is only $10-15, it's important to have loyal customers who will come back again and again.

over 8 years ago

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