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The Social Media Marketing Honeymoon Is Over

Social media marketing has failed business. Pic by jcoterhals

Social media, social media marketing, and social networking have been the subject of much hype, buzz and marketing budget disruption for big and small business alike.

Most businesses entered into social media marketing as a defensive strategy because they were afraid of losing out to competitors who were quicker to adapt and leverage this new platform.

Buoyed up by a seemingly endless cavalcade of social marketing experts demonstrating how their own social marketing success was evidence of how social media marketing would work for each and every business, if only they invested cash, time and effort.

Businesses bought into social marketing wholesale. Huge marketing budgets were allocated for social marketing campaigns intended to catapult the marketing reach and social influence of that business into huge, untapped online markets.

Business and social media marketing today

Business has now invested several solid years in social marketing. It's been a wild ride. Stories abound of incredible marketing successes, dismal social media failures, and everything in between.

But what is the bottom line?

Social media's shocking ROI for Black Friday

According to research by Forrester:

"Social tactics are not meaningful sales drivers"

They arrived at this conclusion after analyzing the primary sales drivers for eCommerce and found that less than 1% was driven by social media.

But this was prior to Black Friday and Cyber Monday of 2012. Surely, several years of investment into social media marketing would have paid dividends on over the biggest online shopping frenzy of the year?

According to IBM Smarter Commerce, which tracks sales for 500 of the top retail sites, social media made up less than 1% of Black Friday sales.

FaceBook, LinkedIn and YouTube combined contributed a dismal 0.34% to Black Friday sales.

Twitter, contributed 0%.

But social media has value, right?

Many proponents of social media marketing will point out that social media has less tangible benefits. It's quite reasonable to assume that someone who sees your brand on FaceBook may not necessarily buy there and then, but may make a purchase further down the line.

Yes, of course, this is absolutely true. There's no debate about whether or not it's productive to have people talking about your company, brand or product on the social networks. Generating buzz, and building social influence do have value.

But let's go back to the bottom line. Consider what your business has invested into all things social in the last few years. In tangible benefits, social media marketing has contributed less than 1% of your revenue.

Working out social media's value

So, has this provided you with a positive ROI? If the answer is yes, then there is no further debate and you can continue happily with your social media marketing strategies and campaigns.

If the answer is no, then you need to consider the value of the intangible benefits of social media marketing.

Let's be generous. Let's assume that the intangible benefits of social media marketing offer an entire order of magnitude more revenue than the direct revenue. This would mean that social media brings in slightly under 10% of your online revenue.

Compare this to how much you have invested in social media. Do you like what you see?

Why business has gotten social media wrong

Social media marketing has been driven by businesses' fear of losing competitiveness. This is not the same as adopting a new marketing platform because it has proven itself time and again.

The one thing that social media has actually marketed very well is itself! This is because social media has a vested interest in social media.

But why doesn't it work for business?

  1. Buying "likes" was never a smart idea
  2. Likes don't have much intrinsic value
  3. Being great in social media doesn't trump good products and service
  4. Publishing great content requires the skills and expertise of a publisher
  5. People immediately assume there's bias in content that comes direct from a company (read How social influencers can grow your business online for a good way to get around this)

How to use social media marketing properly

Businesses' underlying error in judgement is this:

Business mistakenly views social media as the connection with customers. It's not. Social media is a tool to connect with customers.

In other words, that connection with customers that will make them ready to buy is not sufficiently met by social media. Social media is a great tool for reaching out to customers, but it's not the whole equation.

That's why so many businesses are able to obtain fine looking social media marketing metrics (i.e. plenty of likes, lots of "engagement"), but completely fail to convert it to revenue.

Here's what you do to fix the problem:

  1. Start treating social media like a tool that reaches out to customers
  2. Stop believing it can magically conjure sales, if only you get it right
  3. Realign your expectations to meet reality
  4. Create a strategy to build on the achievements of your social media marketing
  5. Be creative and innovative in how you look to further increase trust and engagement online

In other words, start looking at social media marketing as a link in the chain, instead of the whole chain itself.

How you take your engagement with potential customers that have been reached via social media marketing is up to you. It depends on the type of business you are, the type of products and services you offer, and a whole host of other things.

If you can't think of ways to do it, pay someone who can. The great thing about this type of problem, being directly tied to revenue, is that you can offer an expert an incentivized pay structure, so that you only fork out the big bucks if the strategies they put in place generate big bucks.

What are your thoughts on this analysis of social media marketing? If you disagree, why? How do you explain the dismal failure of social media to drive sales? If you do agree, what are you going to do to improve conversions and drive sales online?

Join The Conversation

  • Aug 2 Posted 3 years ago territorioclasi...

    Social media is a wonderfull TOOL to get contact with costumers, but as you mention, it is a tool, and it is properly used as one for after sale support for example.

  • Mar 28 Posted 4 years ago VictorSaigon

    Hello Peter, nice post, however I don't agree with the way that your way you expose your ideas. At the end you recognize the value of Social Media but just after letting it totally down.

    I answer to your article in post based on how groupon developed an awesome use of social media by integrating it in a well-planned med-term marketing strategy. 

    hope you like it the post and that it does not offend you ;)



  • Dec 11 Posted 4 years ago protinteract

    Thanks for the feedback, i've posted your social media marketing idea on our on our suggestion box:

  • Dec 10 Posted 4 years ago gtaube

    I absolutely agree that the expectaions of what social marketing can do are totally wrong.  We represent many VC funded early stage companies and frequently we are being asked to use only social networking and no other marketing vehicle to reach customers because it is preceived as less costly.  In each case where we have done this the results have been disappointing.  Social networking is an excellent tool but not the only tool.  It is truly, "a link in the chain, not the chain."

    I would also add that the reverse is also true.  Companies that dont invest in social networking to enhance their visibility in the market will find themselves behind their competition.  Like with most things, a good balance is called for.

  • Tara Isaacs's picture
    Dec 7 Posted 4 years ago Tara Isaacs

    Well said Diane!

  • Dec 7 Posted 4 years ago Lake Oswego Con...

    Your article makes a valid point - likes and follows do not equal cash. The example that we like to use in our Marketing Your Art workshops is that walls don't sell paintings, people do. Social media can play an undeniable role in the awareness and interest phase of marketing communications. I believe that it plays a lesser, but argueably still relevant role in the belief phase. Where it tends to struggle is in the desire and definitely the action phases.

    But unless the sources for your Black Friday study were able to measure where each and every sale came from (and I am not talking about where the cash transaction took place); unless they knew exactly who and what influenced the person who made that purchase, then who is to say that person x did not walk into store y because their friend said something positive about the store on a social media site? Unless every participant company in that study had the means in place to know exactly who or what influenced every buyer to make each and every purchase (virtual or physical) and actually buy something, the data to support your attention-getting headline is flawed.

    The honeymoon always ends. The more relevant questions are: Are both parties committed to the relationship? To making it work no matter what? To finding the best ways to work together? To helping each other grow?

    Social media is a place to engage with your customers. Engage means you have to talk to them, and listen to them. You have to find out what they want and how your company can give that to them. You have to let them know that you've figured that out and you have what they are looking for. You have to let them know that you care, that you are interested in them, that you hear them and understand what they want and need. And then you have to deliver. It's not a mystery. It's just good business.

  • Qnary's picture
    Dec 5 Posted 4 years ago Qnary

    As we start the new year and you roll out new social media strategies, start thinking of social media as a tool to market your company or self instead of as the only way to market yourself.  Your social media strategy should fit in seemlessly with the rest of your marketing tactics.

  • Lee Frederiksen's picture
    Dec 5 Posted 4 years ago Lee Frederiksen

    I think you are making the right points here. I'm comming from a bit different perspective, whick is based on marketing professional services to a b2b audience. There are really no direct sales, only leads or opportunities.In this contect our research shows that social media has two specific rolls. First is to share content within a content marketing model. The second is to develop specific relationships through repeated interaction. In the overall ranking of effectiveness most social media fall in about the mid range. SEO, blogging and analyitics are high and banner ads are at the bottom.

    Here is a link to the research if you are interested (no registration required)http://www.hingemarketing.com/library/article/online_marketing_research_study


  • 40deuce's picture
    Dec 3 Posted 4 years ago 40deuce

    Great article! 

    It's so true that social is only one part of what should be a much broader strategy on how to market and get sales. Social is great way to interact with your customers/audience/community, but it's not a great place to try and sell them stuff.

    I wasn't surprised at all to hear those reports about Black Friday sales having no real value through Twitter. Who buys stuff through Twitter anyways? Twitter (or other social networks for that matter) are great places to drum up ineterst and stay front-of-mind with your audience. There's great value in the strategy to do so. But to expect large amounts of people to click a link and make a purchase right from Twitter is pie in teh sky dreaming for most companies right now.

    I truely believe that there is great power to the relationship that can be formed between brands and consumers through social media, but I'm not going to tweet that and expect you to buy it from me right now.



    Sheldon, community manager for Sysomos & Marketwire

  • IncomeTrue's picture
    Dec 3 Posted 4 years ago IncomeTrue

    Am I reading into this incorrectly? According to Forrester Research and comScore, what I understood is the qualitive value of "likes" can actually be measured in terms of dollars and that "likes" do have intrinsic value:

    “The Facebook Factor” via Forrester and the “Power of a Like 2” the sequel to comScore’s “Power of a Like” released last year:


  • Dec 3 Posted 4 years ago NateH

    I think the IBM research was taken slightly out of context. The report showed that social media made up less than 1% of DIRECT sales. Meaning, tweets linked directly to a product saying "BUY THIS!" didn't do so hot, no surprise there.


    Social media was an useful tool for more broadly based brand awareness, like a "Come in friday for 20% off" kind of tweet. The latest episode of The BeanCast covered this topic in a lot more depth, definitely worth a listen if you're interested in this stuff: http://beancast.evanbooth.com/shows/0229_The_BeanCast_Marketing_Podcast_Location_Is_A_Mindset.mp3

  • Dec 3 Posted 4 years ago Anashwara Radha...

    Great Article

  • Dec 2 Posted 4 years ago Volker

    Nothing new, really. But I can't help feeling that many engaged in providing social media workshops and services don't seem to be able to get the messaeg across: Social Media is one of many tools to engage with your customers/clients, but it's not the holy grail. Also, besides doing it right, those who wish to use these tools need to change their mindset. You don't find the customers/clients - they find you. I think that is the trickiest part, to get away from the traditional single direction (vendor to customer/client) marketing approach.  

  • DawserHadidi's picture
    Dec 2 Posted 4 years ago DawserHadidi

    Thanks for the article, when I read an article the other day which anounced that Twitter generated zero sales on Black Friday and that was surprising to all! I actually thought it's not at all! I think markerters expectations are overrated when it comes to social media, the secret word is "engaging" and the maximum benefit is increase of loyalty, awarness and interest, that all may lead eventually to sales. The role of social media is to support other marketing channels to build stronger relationships with customer. 

    I think it's unfair to judge Twitter based on the "black friday" event, it pissed me off when I saw the "#Fail" on the tweets addressing this matter!  

    Still ROI can't directly be linked to social media efforts!


  • reallyjeannie's picture
    Dec 2 Posted 4 years ago reallyjeannie

    Great article!

    I love social media because it's fun, liberating, and provides a lot of informatio and opportunities to network.  Many books and courses or programs came about since the creation of Twitter and Facebook and like many other people I have purchased one or two of these, and believed that I can do Social Media Marketing or Social Media Management - until I worked for a day with Holly Maust, owner of Interactive Swim.  She has years of Marketing experience and it was then that I realized that I may have the interest in social media / digital marketing, but there's so much I don't know.  I don't even know, what I don't know.

    I think this is what is happening with many people jumping into social media marketing.  You can't just jump in.  People, like start-up entrepreneurs, and even medium sized companies need to be reminded that social media is only a tool and a part that supports the over-all marketing strategy of an entity.  As for the big companies is it right to assume that they should know what they are doing?

    And I will answer my own question - the answer is no.  Although I would like to say is that they should know how to spot the right people to hire for their social media efforts.

  • LCMPros's picture
    Dec 1 Posted 4 years ago LCMPros

    Very well said Diane - couldn't agree more. Social Media Marketing is simply a means to an end to get more business. One of many cogs in the wheel. Businesses need to understand that and use it as a 'Public Relations' tool to build and maintain relationships and trust, not as a platform to try to sell from. If expectations are properly set then everybody wins, especially potential customers.   - LCMPros

  • Dec 1 Posted 4 years ago billc

    Hallelujah! Yikes, the level of hype was substantial and yet like many new concepts, it seems the only winners are self-proclaimed "experts" getting paid to share their "wisdom" (also self-proclaimed).

    This is not to suggest that social media is a bad thing and I am sure there are examples of positive results out there, but it's not a "silver bullet" solution to all marketing challenges. Perhaps this will catch some marketers in time, before they over-commit to this tactic at the expense of others!


  • Dec 1 Posted 4 years ago Diane Castro


    Very fascinating article. Thanks for bringing this to light in a super hyped up social media marketing world.  I appreciate your realism.

    I worked in public relations for over 20 years and to me, social media marketing is a public relations tool. In public relations the end goal is to sell, but it is never a direct channel. In public relations the goal is to increase awareness, credibility and to educate your customers about your products or services. Social media marketing does the same thing. In my social media marketing business I always educate my clients about this -- I tell them that they most likely will not get direct sales,but social media marketing adds to their "marketing mix". I also tell them they should continue with all the other marketing and sales activities that they are doing, and that social media is like the icing on the cake. 

    Again, thanks for such an enlightening article -- a topic that no one is really talking about. 


    Diane Castro

  • CarlyFranklin's picture
    Nov 30 Posted 4 years ago CarlyFranklin

    I agree that social media has been significantly overhyped and that "experts" have been crawling out of the woodwork. Let's be realistic: no one is an expert five minutes after something comes into existence. As your article states, social media is not the end-all, be-all, magic elixir of marketing that will solve all a business' problems, if only they join the conversation. There's obviously a lot more to successful marketing than just participating or everyone with a crappy web site would be struggling to keep up with the flood of customers streaming through their doors.

    Like any advertising or marketing effort, social media takes thoughtful planning and consistent execution. And, the bottom line is that it may just not be a great fit for every type of company.

    I think it's important to note that social media works better for some types of businesses than for others, as well. Things that naturally draw people's interest more - sports, clothes, shoes, food - seem to have an easier time building audiences and engagement than drier subject matter - accounting, as an example. 

    Based on my experience, products may also have an easier time getting people interested than a service-based business depending, of course, on what the service is.

    Like any promotional tool, social media should be one part of a well-rounded, consistently-branded effort to promote a business. Otherwise, it's likely to be little more than a lot of hot air.

  • RobiRiot's picture
    Nov 30 Posted 4 years ago RobiRiot

    David, some amazing points here. I especially agree with your point that too much value is places on "Likes" and "Follows", which alone have no monetary worth until you can measure their results when it comes to profit. Even recently, the social media scientist (Dan Zarella) released a rather useless equation that calculated the value of your like.

    Indeed, even some of the most popular social media campaigns have falsely been interpreted in favor of true ROI. For example, offering free goods or major discounts are not proof that social media drives people into the stores, but more proof that free goods and major discounts drive people into stores.

    I'm curious to know your predictions- do you think this fear on the part of companies to outcompete their competitors will pay off as a whole with positive ROI in say the next 5-10 years?

    Great work!


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