Burt blog

Some thoughts on advertising in social media from our CEO Gustav von Sydow:

Just finished reading a GigaOM article on the value of social ads (or lack thereof). Typical quotes being:

The point is that Facebook is a social medium, not an advertising one, like search or display. It certainly is one of the most powerful, if not the most powerful branding medium. It is, however, a word of mouth or PR medium. You interrupt social conversations with commercial messages at your peril.

and

Can Facebook and/or Twitter manage to prove that social advertising isn’t an oxymoron, but a crucial new way of getting your message to potential customers? Billions of dollars in market value are riding on that question.

So. It seems our industry is finally converging around the idea that social media in it’s current form is sort of like e-mail, telephone, word-of-mouth, “buzz” and PR, but more structured, shapeshifted into one experience and put on steroids. At least in the context of marketing, and especially the outbound variety. Identification, payment, customer service, consumer research etc. is obviously a whole other deal.

Sure, if you’re Facebook and control 30% of the world’s online experience, you can always make money off selling those eyeballs. Naturally, the lack of efficiency is totally offset by how cheap it is to create inventory. But that’s not the point here. The point is that pundits are trying to make the case that social media (due to data and viral mechanics) is a potentially more lucrative touchpoint than say, “regular” content. 

(“lucrative” being the key word here, which is not the same as “valuable”)

There are four main challenges with any word-of-mouth and PR activity, and therefore also “social”:

1. Predictability

The entire concept is based on the credibility that comes from others making an independent decision to pay your message forward. As such, it’s extremely difficult to predict both the impact, not to mention the timing of any impact. And if your business (like most companies) relies on people buying goods within a certain timeframe, this is probably a deal breaker for making “social” your core marketing investment.

Compare this to search (arguably the only truly successful online advertising format) where hundreds of thousands of business’ would go under without the predictable impact they receive from investments in search marketing.  

2. Target audience

This is something rarely discussed. So your youtube clip (or new bogus charity project or whatever) went viral. 20 million people consumers “engaged”. But who where they? Can they recall that you were the advertiser? Could they afford to buy your product? Where they even in market for it? And did you even have distribution in their geography?

Again, compare that to search, where people qualify by actively searching for the product or your brand. You have pretty much 100% affinity.

3. Scale

Last, but not least, there’s the issue of scale, which manifests itself in two ways:

First of all, the value of word-of-mouth is inverse to the number ofdifferent recommendations (paid or non-paid doesn’t matter) you receive. If everyone I know tells me to buy (or “like”, or whatever “action”) product X, it might be likely that I will too. But if I start to get mixed signals, that is if my friends recommend different products within the same category, well that’s just going to confusing. So multiple brands within one social media experience will be very hard to pull off.

Second, the value of word-of-mouth is inverse to the number of recommendations I get in total. If I only get recommended to buy one product this week, well that will be really powerful. But if I were to get showered with recommendations left and right I would stop listening to any of them, regardless of their quality.

4. It’s not natural

This I find the most interesting. Go to your Facebook stream. How much of your experience is a product recommendation? The behavior that people would, immediately upon buying something awesome, go out and shout their happiness from the rooftops just isn’t there. Sure, we may join fan pages or groups or follow a brand or whatever, but that’s “permission marketing” and doesn’t cost a dime for anyone. At least not yet. 

It seems like most successful social “plays” in the last couple of years have been built around behaviors that already existed. People were already talking about where they were (Foursquare), uploading images as they were happening (Instagram), asking questions about stuff (Quora) and showing off the inspiring things they find online (Pinterest).

Of all these companies, it seems like Pinterest is the closest to social product and brand endorsement nirvana. I could totally see how their experience can integrate advertising in a much more natural way than Facebook ever could, but still, much of the value lies in the honesty of the platform, and if it’s word-of-mouth they’re going for, they will still have to adress predictability, audience and scale.

/Gustav 

originally posted at: 

http://gustavvonsydow.com/post/18665648110/four-issues-on-advertising-in-social-media

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