Report Claims Social Media Fails As Marketing Medium -- I Claim Bullshit

Last week MediaPost's own Joe Mandese (I know, he has a great name, but we are not the same person) wrote an article on new research released by Knowledge Networks. According to the study, social media, like Twitter and Facebook, are poor marketing mediums.

From Joe's column: "Among other things, the study finds that less than 5% of social media users regularly turn to these social networks for 'guidance on purchase decisions' in any of nine product and/or service categories, and that only 16% of social media users say they are more likely to buy from companies that advertise on social sites."

I really have a hard time with where to begin. Let's start with "less than 5%" of social media users "regularly" turning to social media for guidance on purchase decisions. I don't know about any of you, but I don't turn to TV for guidance on purchase decisions, I don't turn to radio for guidance on purchase decisions, and I certainly don't turn to outdoor billboards for guidance on purchases, yet all three can be effective marketing media. I turn to TV and radio to be entertained, and it's up to content publishers and marketers to work together to integrate marketing in a meaningful and impactful way.

This leads me to the second point that "only 16%" are more likely to buy from companies that advertise on social sites. Is it that social media is not convincing me to buy, or is it that I just don't need whiter teeth, a job that pays me to stay at home, or a new dating service? I mean, these are the things I see advertised most often on social sites, but I guess the social sites just aren't moving product. Marketers and agencies need to figure out how to tap into social media in order for it to be an effective medium, but first they at least have to be there in scale.

The column continues: "'Obviously, a lot of people are using social media, but they are not explicitly turning to it for marketing purposes, or for finding out what products to buy. It's really about connecting with friends, or connecting with other people,' says Dave Tice, vice president and group account director at Knowledge Networks, and the top analyst behind the report. 'What we're seeing is that word-of-mouth is still the No. 1 most influential source, followed by TV...'"

This point blows my mind. I thought that it had already been established that effective social media campaigns generate word-of-mouth. Online is about people connecting to each other, as mentioned above, and if brands can get people to talk to each other about their brands, they are in effect generating word-of-mouth. So how can word-of-mouth be the most influential source, while at the same time social media, one giant word-of-mouth engine, is ineffective?

I am a horribly biased source, so feel free to blast me in the comments section below or on Twitter @joemarchese.

Maybe I have it all wrong, but all this report tells me is that marketers have not figured out how to participate in social media effectively, not that social media isn't effective. In fact, since word-of-mouth is so important, doesn't social media have MORE potential than any other medium? If there was nothing but crappy TV ads being produced, would we say that television is a poor marketing medium?

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38 comments about "Report Claims Social Media Fails As Marketing Medium -- I Claim Bullshit".
  1. Marc Abrams from MLA Consult , May 26, 2009 at 4:34 p.m.

    It is very interesting how data can be tossed and turned to fit your point of view. When you deal with new mediums/medias there is always a learning curve on how to make it work for you. There is no doubt, in our me-too society, that Social Media will be around to stay and marketers will figure out what works and develop numerical equations that prove it. It probably won't fit the current mindset, but who knows!!!

  2. Susan Mclennan from Babble On Communications Inc. , May 26, 2009 at 4:38 p.m.

    I think you're absolutely right Joe. Social media really is another way of generating word of mouth - which is most effective. A great rebuttal!

  3. Keith Ritter from Keith Ritter Media , May 26, 2009 at 4:42 p.m.

    Joe - agree with you about this. I wrote a post last week on how misguided this kind of thinking is. In a nutshell, the study is mistaking the tools people use with the activities in which they engage. Check out the full post here: http://bit.ly/aUeHh. Keep up the good work!

  4. Darin Ingalls from Blue Hue Interactive , May 26, 2009 at 4:42 p.m.

    I think your right on Joe. As you are most of the time. The problem I see most marketers having with Social Media is really understanding what it is and how to utilize it. Its very similar to the issue with online video. People are far to worried about creating spots and banners. They are missing the fact that they have the complete freedom to create content that inspires and engages and get to hung up on selling ad space and pre/post or what ever roll. Just make the darn content... Using the social networks to beat people up with ads is the only solution the unimaginative can come up with. They could be creating much more engaging and integrated marketing approaches that uses the social tools as they should be. Social networks easily share information and allow for social comments. Unless your a marketer who is developing content or applications for the Social networks what are you really doing for a client? It really is more like a self service model for a client to participate in branding. Brands could be doing much more to participate and drive traffic back to retailers or their own site. Social sites may not be the first place people go to engage a brand, but its where a brand can engage a potential customer.

  5. Alex Czajkowski from eGaming 2.0 Ltd , May 26, 2009 at 4:43 p.m.

    Joe, for once I agree with you; although I'l pass at the contextual plug to meet you at OMMA....

    And @Marc, "mediums/medias"? What are you, 12? Get your latin sorted, mate. Try to add value next time. and REMOVE the !!! key from your pc.. you'll thank me for it.

  6. Monica Bower from TERiX Computer Service , May 26, 2009 at 4:55 p.m.

    Joe, you are so dead-on, you should have your own cinco de mayo float.

    First off I'd essentially KILL to get a 16% response rate on my advertisements. a 5% response is a thousand points better than most direct mail advertising and would be the single most successful tv campaign in the history of TV.

    Secondly word of mouth IS social media, PERIOD. It isn't driven by WOM, it IS WOM. The only difference is it tends to be a written rather than a spoken word, but trust me, me telling you on facebook that I love Sexy Socks is the same as me telling you in an email that I love Sexy Socks. People need to get over the wow whizbang gee golly effect of the internet already and see it as a delivery device and not content in and of itself.

  7. Jose Ramos from McCann Worldgroup , May 26, 2009 at 4:59 p.m.

    Amen, Joe. These reckless evaluations of social media as an effective medium drive me nuts. Clearly no one has dialed the right combination on using it effectively which should be expected given SM's current state of evolution and the fact that so many folks use it without a great deal of discipline. "If you build it, they will come" does not work here. Just means those of us in the advertising world have our work cut out for us.

  8. Tom O'brien from MotiveQuest LLC , May 26, 2009 at 5:02 p.m.

    Wait just a minute Joe - you mean to tell me that people are using Twitter and Facebook for trivial nonsense like keeping up with their friends and entertainment?

    They aren't using them primarily to make purchase decisions? What is wrong with people.

    Until they learn to use SM for purchase decisions only (like they do TV and Internet) we are going to stop all SM marketing efforts.

    <sarcasm off>

    TO'B

  9. Donald Bartholomew from Fleishman-Hillard , May 26, 2009 at 5:10 p.m.

    Agree with the thrust of your piece, Joe. On this point:

    'What we're seeing is that word-of-mouth is still the No. 1 most influential source, followed by TV...'"

    The studies I have seen do suggest the most trusted influencers today are our friends and colleagues. (Traditional media sources are not trusted highly.) So I would distinguish between WOM from trusted sources and the WOM generated by people you don't know or have a relationship with. I obviously not seen the study Mr. Tice refers to because TV is typically further down the list of influence.

    While Twitter and Facebook both have some challenges as marketing platforms, clearly social media must be part of the equation. Traditional + social media marketing is greater than traditional or social media marketing.

  10. Tory Lynne from Magnetic , May 26, 2009 at 5:20 p.m.

    Great article, Joe.

    "Do you turn to social networks for 'guidance on purchase decisions'"? Really? Who thought that one up?

    It's simply another case of someone asking the wrong question.

  11. Colleen Wright from Search Engine Academy Northwest , May 26, 2009 at 5:28 p.m.

    I love how you point out how people don't watch TV to make purchasing decisions...I wonder what the results would be for social media if they conducted the research in a manner similar to research studies for TV ~OR~ if they did a study on TV exactly the way they performed the research in this study. THAT would be interesting to see.

  12. Aaron Burcell from SmartyCard , May 26, 2009 at 5:59 p.m.

    Anyone that puts "I call bullshit" in the title of their column has my attention. Thanks for calling this stuff out and picking it apart, Joe. These bullshit reports get boiled down into snippets and show up in the most inconvenient places... like BOD meetings. Thanks for calling bullshit so that I can just point to your article and not use such language at work.

  13. John Fredette from Alcatel-Lucent , May 26, 2009 at 5:59 p.m.

    Gee a lot of people seem to be drinking the same kool aid on this issue. I listen to Sirius XM and find terrestrial radio impossibly annoying. I watch cable on my DVR and skip the ads. I avoid billboard strewn roads as much as possible. I read the NYT and my local paper online and skip the few ads that cross my path. I do go to the Internet to find information to make purchasing decisions. In fact I joined Angie's list today. Targeted and manageable advertising is what I want and I do not think I am alone. I do think that the social media can be used for marketing purposes but it is not going to look like traditional media. Finding our my high school chum uses Crest is only going to be useful and not an annoyance if I am checking out toothpaste brands. Sooner rather than later the traditional media advertising of the 20th century is going to look even more antiquated and passe than it does today. I don't think the survey was wrong to ask the questions it asked. I think people are being narrow sighted to dismiss it so handily.

  14. Ted Rubin from The Rubin Organization / Return on Relationship , May 26, 2009 at 6:01 p.m.

    Joe... you are so right on the money! I had this discussion with my CEO and his "advisors" right after the article was published. Thanks for the back-up!

  15. Merri lee Barton from BartonMedia , May 26, 2009 at 6:15 p.m.

    The real magic is when marketing is used within the context of social media. Like the quizzes that circulate on Facebook. A "What Kind of Flower Are You" quiz sponsored by 1-800-Flowers before Mother's Day, would be relevant and fun. We not only get to learn more about friends, but there's a connection with the sponsor. Get creative, folks!

  16. Matthew Yorke from International Data Group , May 26, 2009 at 6:26 p.m.

    Joe a great piece..it's all about how you ask the questions and then publish the data. They are missing the point, soon it won't be about social media sites but rather about social web experiences personalized and that we choose to share with our friends /followers etc. Advertising can become very meaningful within that environment.

  17. Joe Marchese , May 26, 2009 at 6:31 p.m.

    @john really good points about avoiding the ads on TV and radio (sorry, but you lose me at saying you drive a different route to avoid billboards). But none of that means they have not been incredibly mediums for marketing through the years, and they will adapt once marketers can become more relevant.

    Just cause advertising on social media won't look like broadcast, doesn't mean marketers won't be there, it just means they are the ones that are going to have to figure it out.

  18. Jim Harmon , May 26, 2009 at 6:31 p.m.

    The Knowledge Networks conclusion is laughable!

  19. Joe Marchese , May 26, 2009 at 6:34 p.m.

    @alex I really am glad that after well over 100 columns posted I finally got one you agree with! I will try to do better next 100 ;-)

  20. Esmee Williams from Allrecipes , May 26, 2009 at 7:01 p.m.

    Joe -- love your article. Consumers are most receptive to brands within environments where they feel comfortable, strong ownership, authenticity and a strong sense of belonging. Large social environments such as Facebook and Twitter meet these criteria. For the sake of this dialogue, it's important to think beyond just these two destinations when discussing social media -- sites such as flickr, traveladvisor, allrecipes.com, and yelp.com all provide outstanding environments for brands to reach and engage with their target audiences -- such as the photo, travel, food enthusiasts.

  21. John Mallen from JMC Marketing Communications , May 26, 2009 at 7:17 p.m.

    Another voice of agreement! Social media IS word-of-mouth. I like what Donald Bartholomew (www.acumentics.com) says. The sum of traditional and social media is greater than either alone.

    For the time being we all still have a lot to learn, as today's Wall Street Journal reports in the story "Twitter Trips on Its rapid Growth: http://online.wsj.com/article/SB124329188281552341.html#mod=testMod

  22. Arthur Greenwald from Greenwald Media , May 27, 2009 at 2:29 a.m.

    I think you're both right. Social media certainly CAN have impact and therefore value -- but it's so new that it's a very long way from being reliably predictable and measurable. In fact, it can be damaging and counter-productive. The smart approach is to use social media to support and extend traditional advertising and keep watching and exploiting the new methods as they mature.

  23. Steve Meyer from SMART MARKETING/DISC&DAT , May 27, 2009 at 4:21 a.m.

    The New York Observer recently ran an article titled 'Twitter Sucks! The Backlash Begins'.

    A lot of what's in the article has already been reported elsewhere, but you can check it out here: http://tinyurl.com/d8z5gp

    A Google search of 'Twitter sucks' returns (as of this moment) 19 million plus results.

    We now know many celebrities are using Twitter to announce news to those who "follow" them, and that "news" is usually not from the actual person, but supplied by paid PR & Marketing people. Lasr week for example Mariah Carey revealed the name of her new album on her Twitter account: "Bcuz I Love U, I want u to be the first to know the title of my new album Memoirs of an Imperfect Angel Its very personal & dedicated to u," Carey (allegedly) wrote.

    Be sure to read the news story 'Social Media Fails To Manifest As Marketing Medium, Report Likens Twitter To TiVo: More Hype Than Reality'

    From that article: "It's more of a media industry thing right now," notes Tice. "Very few people between New York, Los Angeles and San Francisco are using it." In fact, Knowledge Networks goes so far as to compare Twitter to the hype surrounding digital video recording device TiVo a decade ago."

  24. David Woodrow from Skyword Inc. , May 27, 2009 at 10:22 a.m.

    Joe, I couldn't agree with you more. In particular, your statement, "In fact, since word-of-mouth is so important, doesn't social media have MORE potential than any other medium?" From a personal standpoint, I always look online for member reviews before making a major purchase decision and I never stay in a hotel unless I've seen what others have written about it on TripAdvisor. I consider all of this to part of the world of social media. When I want to ask my friends' opinions I leverage the broad connections I have on sites like Gather, Facebook and LinkedIn to do it.

    From a professional standpoint, we've built a business at Gather around people engaging with brands online. You need only look at one of these conversations to see the power that social media has for brands: http://tr.im/myqT

    Data can be interpreted in a number of ways. Just because "less than 5% of social media users regularly turn to these social networks for 'guidance on purchase decisions'" doesn't mean they don't receive guidance and aren't influenced while they're there. Plus, the universe of social media sites is vast, and each offers a different value prop to advertisers. Lumping them all together doesn't do justice for those that have truly done a good job of integrated brands into their conversations.

  25. Sam Levin from Sam Levin Consulting , May 27, 2009 at 11:15 a.m.

    Right on Joe! WOM is becoming more powerful than ever before. You are on the money with respect to TV vs. the web when making purchasing decisions. Keep up the great work. cheers, sam

  26. Lee Morrow from Media Buying Academy , May 27, 2009 at 11:27 a.m.

    No matter what you have to say, profanity is unprofessional.

  27. Greg March from Wieden Kennedy , May 27, 2009 at 11:56 a.m.

    I couldn't say whether ultimately Social Media works or doesn't work. I think you need more context to answer that question.

    Most marketer's ultimate goal is sell more stuff at better margins. But there are different, smaller objectives that get you there and they are different for every business. I.E. generate word of mouth, be present at point of decision, communicate your benefits, connect to an emotion, raise awareness etc.. These are different for every business and savvy marketers carve new paths with different smaller objectives that can get to the big one.

    Since many of us work in silo's, we focus on one of these smaller objectives. Things either work or they don't.

    For those that are trying to tie it all together, I think its not about what works and what doesn't. Its about the pro's, con's, unique values that will fertilize an idea that's hopefully connected to everything else.

  28. Doug Schumacher from Basement , May 27, 2009 at 12:52 p.m.

    http://www.avc.com/a_vc/2009/04/the-power-of-passed-links.html

  29. Kent Kirschner from MobileBits , May 27, 2009 at 1:25 p.m.

    "Do you turn to social media for Guidance on purchasing decisions"........hmm....trip advisor....yelp.....best buy's user ratings...edmunds car user reviews....and on and on and on.....in fact, it's the only place I turn if I don't have a real live person sitting nearby that can help me with the decision.

  30. Bob Rose from Seiter & Miller , May 27, 2009 at 1:50 p.m.

    You’re right to say that marketers have not figured out how to participate in social media effectively. As is often true of new media, the hype is way ahead of the utility.
    .

  31. Michael Senno from New York University , May 27, 2009 at 2:29 p.m.

    Good column Joe, while I think some of the uses and power of social media is still overrated in many of these columns when you look at the current mainstream application - it's certainly a lot more powerful than the other columnists proclaim.

    Just look at every major city and how people pick restaurants - Yelp, City Search, Whrrl - do you see many people relying on the New York Times food review anymore? They need to open their eyes a bit more.

  32. Craig Braasch from vml , May 27, 2009 at 4:48 p.m.

    Joe, as well as a few others below, I completely agree there is much more to learn regarding effective use of social media. That will evolve for years. As will usage. Some marketers and agencies get it, some will eventually and some won't. I still see billboards with way too much copy and TV spots leaving me with no recall of what they were selling, but there's years of experience/research/books/awards/educators to guide. Social media is and will always be powerful, there is no question about that. The question is measurement. People still seem to be happy with GRPs and impressions, yet digital must deliver against higher standards (becasuse it can). Engagement with a brand vs. "the potential to be exposed." Hmmmmm.....

  33. Jay Deragon from Social Media Directions , May 27, 2009 at 5:18 p.m.

    Without applying the complex formula’s of IRR, NPV and CLTV lets try and use simple math to define the value of social media activities to a business enterprise. Here is my simple example:

    You are a fairly savvy social net worker and have acquired some impressive statistics. You have connected with 500 “friends” on Facebook, 500 associates on LinkedIn, 500 posts on your own blog and have 1,000 followers on Twitter. Let’s say you spend 10 hours a week (two hours a day five days a week) managing your social media activities and elevating your Web presence. That equates to 40 Hours a month or 520 hours a year.

    Let’s also say your time – or the time of someone you hire – cost $50 an hour, which would mean, you invested $26,000 a year in social media related activities. In this example you would have to make a sale worth at least $26,000 (IRR) within the year to break even, that is using simple math. So out of roughly 1,000 or more connections you’d have to attract, connect and convert some of them in order to make a sale. Do you think your conversations are valuable enough to attract relations that may represent a sale?

    The other alternative is to spend $26,000 a year on marketing materials, print advertisements, web promotions and direct mail campaigns. $26,000 won’t get you much reach using those methods and your marketing activities would be considered anti-social.

    Consider this: By leveraging social media correctly you’ll reach even more people and create a deeper connection. And with a carefully thought out “conversational currency” strategy then your practically guaranteed that your social media activities will generate an attraction. A “conversational currency” strategy that takes into account where your current and potential customers are and is designed to reach them in such a way as to build an affinity adds value. And it’s easier than you think – much easier than calculating sophisticated accounting formulas.

    By simply doing the right things and doing them right will soon translate even the smallest (or largest) circle of friends into a healthy audience, an audience that can be grown beyond what you can imagine. Having a thriving audience is crucial to your success. Some in your audience will immediately identify with your offering and buy today (NPV), others will hopefully buy tomorrow (Future Value). But some are going to buy again and again and again (CLTV).

    The potential value added by using social media right is significant for both today and tomorrow. It all depends on how you measure the IRR, NPV and CLTV of relationships. Do you want a wider reach, a deeper connection and a greater return? Create better relationships and do the math. Get it?

    What say you?

  34. Alex Morrison from AgencyNet Interactive , May 27, 2009 at 5:25 p.m.

    Thanks Joe. Completely agree with your POV, and at the risk of repeating myself, I think I'll repost my initial comment to the report you're criticizing--

    "Thanks for an interesting read. I think it's refreshing to hear a more cynical voice when it comes to Twitter, given all the recent hype and buzz around it.

    That said, I take issue with the fundamental premise of the research conducted in this study. To say that less than 5% of social media users regularly turn to these social networks for "guidance on purchase decisions" is to miss the fundamental point of how people use social networks. People simply don't use Twitter like they use ConsumerReports.com. They're not necessarily actively seeking out opinions via Twitter (though some are), but a much greater number of users are passively absorbing brand-related conversations in an incredibly ambient stream of opinions and conversations that makes up Twitter. For this reason, I don't view these statistics as particularly meaningful.

    Regardless of whether the early adopters of Twitter have been media-savvy users from major metro areas, the reality is that Twitter is far more interesting than a tech innovation, because at it's core Twitter just enables human interaction (as old as time) in a new format. Whether Twitter lasts forever is secondary to the fact that people will always communicate using the tools they have at their disposal, and right now Twitter happens to be one of them. No, it's not a good place for advertising. But it's a great place for peer to peer conversation-- even if one of those peers happens to be a brand.

    The social space in general is a place to build relationships, and as long as brands and research firms continue to approach Twitter as another marketing platform to disseminate a message and set the wrong targets and goals, we'll continue to miss those targets."

    Alex http://www.twitter.com/alexgmorrison

  35. John Grono from GAP Research , May 27, 2009 at 6:40 p.m.

    Marketers want and need to 'control' their communication - they want to "push the corporate line". Social media by definition is not able to be controlled - it is "the voice of the people". It is the latest and greatest conduit for WOM - WOM that has existed for time immemorial. It is also obviously the most efficient WOM conduit ever invented.

    However, human nature will intervene once users realise that "their" medium - social media - has been infilitrated either covertly or openly by brand communications. Trust abused is trust lost. In order to not destroy that trust brands should listen, watch and learn. Hopefully, they will also be able to invite users into a conversation with their brands. Pushing that envelope is ill advised. Remember, just because you can, doesn't mean you should.

  36. Buff Bowen , May 27, 2009 at 6:45 p.m.

    Social networks reach huge numbers of people however their growth and existence is predicated on an ability to socially connect people in unique and entertaining ways. I have to believe successful applications such as the imaginative flower quiz campaigns described by Merri Lee Barton (above) will also have to maintain very social and fun attributes or they run the risk of altering and probably destroying the underlying purpose and interest of social networks.

    I think Darren Ingall's view that too little time is spent on "creating much more engaging and integrated marketing approaches" that have a chance of reaching a buyer when and where they are ready to purchase is grossly overlooked.

  37. Radiah Givens from Freelance-Social Media Consultant , July 21, 2009 at 1:56 p.m.

    Hey Joe,

    Awesome article:) I only have one thing to say: He needs to fire the research team, PRONTO! OR ELSE He won't have a business........

  38. Mary beth Brendza from UFPB / GoLocal247.com , July 21, 2009 at 2:50 p.m.

    I totally agree with your assessment. Word of mouth is the most valuable source, and I've watched time and again my friends (and myself) ask for and get great consumer feedback on social sites. As a matter of fact, a friend just bought a car thanks to Twitter connections. And now he keeps telling us about it, so we know exactly where he bought it (@davidkamerer!). That's the best PR that little local car dealer can't afford to miss.