The 10 Business Growing Pains that Social Media is Going Through Right Now
On a recent April afternoon, at the suitably hip offices of AppNexus over 200 agency and marketing folks came together for the IAB Social Media Agency Day. Susan Borst, Director, Industry Initiatives, IAB opened the event titled "Social Media. What can Twitter, American Airlines and Jane Jetson teach Us About Social Media Planning For Real Time?" It provided a rare chance for marketers and technologists to commune about the practical challenges of successful social media for brands.
The agenda included an impressive set of panels covering Politics, Sports, HBA and Auto discussed by a mix of tech folks, brands folks and agency folks. Each panel had something unique to share with the group - about what success meant or how to execute great social concepts.
But in listening to all the panels, I also noticed many of the panelists expressed a "wait and see" attitude about social media; reflecting the reality that social media is still in its infancy. No doubt with maturation comes standardization but in the meantime, the session seemed to repeat certain key themes - growing pains as it were - about the business of social media. As I listened to panel after panel, these themes kept surfacing:
1) Operational practicality. There are many many social media platforms jewels. Some share content, others find content and yet others focus on shared social experiences. The problem is that the dizzying array of networks and platforms makes it hard to execute "rinse and repeat" campaigns. Nearly all the brand panelists lamented this issue in various ways.
2) Scalability. For social marketing, this translates to mean brands can reach quality audiences with higher levels of brand receptiveness because of the role trust plays in social media. Nice idea but today's architecture which detaches platforms from the network these platforms must operate on creates a Grand Canyon sized crater making it hard to reach these quality audiences predictably.
3) Measurement. A biggie that came up a lot. Everyone agrees that measurement is key but there isn't even consensus on what should be measured! While today this is a gap, everyone remained optimistic that many great companies are working on this. We'll have to wait and see how this shakes out.
4) Platform fragmentation. This drives a lot of other issues. As I mentioned above, the underlying architecture where platforms are detached from networks is a fundamental barrier to industry adoption. It's not uncommon to see posts like: "15 content syndication strategies that work" or "Top 20 video optimization platforms" And on and on and on. It's virtually impossible to stay abreast of all the companies, approaches and methodologies. Connecting the platform and network dots is often overwhelming.
5) Social integration with mainstream media. This makes so much sense and was expressed as a need but the industry hasn't really even tackled this opportunity yet. So far there's some experimentation going on between TV and social media but that's still pretty dicey.
6) Tech platforms built by technologists not marketing domain experts. This issue is a big part of the overall lack of business maturity and came up subtlety. A few panelists noted that for every new social media platform that they found and liked, they were disheartened to learn that they not really designed to be practical for agencies to monetize or brands to operationalize.
7) Talent to execute. Another big issue right now as there is a dearth of people with multi-format marketing strategic depth and tech chops to go along with it. It'll take some time to train the next generation of marketing leaders but in the meantime, you have a Venus/ Mars thing going on between the younger digital ninjas and traditional marketers.
8) Saturation. The jabberwocky of content sites, blogs, social content feeds is ever growing. Add onto that another layer of advertising that comes along for the ride and it all spells major clutter for consumers.
The result, we now know, has been catastrophic for advertisers. In five years, Click through Rates (CTR) has plummeted 5x. In 2008 CTR was ½ of 1% and by 2012, CTR fell to 1/10th of 1% (Source: DoubleClick). Worse, according to Nielson's, "Advertising On Social Media" study, 33% of consumers agree that ads on social networking sites are more annoying than other online ads. Sobering stats.
9) Terminology. The lack of consistent terminology around measurement, success, tool sets and even what "native" meant was a humorous but persistent reminder that the basic terms and definitions are far from settled.
10) Lack of a business model to support agencies. I saved this for last because it is probably most important. The simple reality is as money gets redistributed from high profit, high billing traditional media into high labor, low billing social media - the profit squeeze is on for agencies. There are no good options really - at least not yet. Alas, this is probably the toughest "pain" the industry has to wrestle with.
Taken in total, this is a pretty intimidating list of growing pains the industry has to get through. Truth be told, if the upside of social marketing wasn't so huge ... I wonder if it would be worth all this growing pain. Happily it is.
image: social media/shutterstock
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