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Are Social Media In Danger Of Becoming Irrelevant To Business?

Unless online business advocates and marketers begin to deliver profit to the corporate sector, the main reason for business participation online – social media are in danger of becoming irrelevant, a meaningless trend.

Why Irrelevant?

If social media marketers fail to prove the cash question, business will become cynical and take the view that social is unproductive.

  • Terms such as social capital, social authority and social ranking do not lead directly to monetization. Business is not interested in meaningless phrases, which are becoming  jaded and over used.
  • Business needs people to take action, by parting with their cash.

The internet provides a powerful link between business, prospects, customers and employees. A large international community are now using social media on a daily basis. The development of mobile technology means this is going to explode over the coming 2/3 years, as the 4.8 billion “dumb” mobile phones are replaced with “smart” phones.

The next step is to leverage all of these ingredience, to produce PROFIT.

Related: How To Build A Social Media Business Strategy That Delivers Traditional Business Returns

The Social Business Model;

We are witnessing a business model emerge that can leverage all online services and platforms, it is called Social Business and relates to all online activities, not just Social Media.

Social Media as a term, is in itself, far too limiting. It fails to acknowledge all the developments that are coming at us at a speed which will make our heads spin.

This is my own understanding of the emerging model. Taking all the components listed below and developing a strategy to leverage them, is the result that social business strategy is trying to achieve.

  • It is about authenticity, values and transparency.
  • It is about dynamic content and story telling.
  • It is about internal and external collaboration between people.
  • It is about harnessing all online technology/platforms and all mobile developments.

This is a formula which I have developed to help me better understand the business model:

People ( Prospects, Customers, Employees ) Online x Intrinsic Motivation = ( Advocates > Evangelists ) = Engaged Social Communities > Social Business

You will notice that in the formula there is no mention of technology, that is not a mistake on my part.

  • The strategy has to be developed taking into consideration the companies business model and goals.
  • The method of delivery of the strategy is not automatic, it has to be researched and the correct method of delivery optimised. This may lead to the use of online marketing or not.

Related: Does Your Company Take A Social Approach?

Intrinsically Motivated, to do what? Take action, that’s what.

Companies are beginning to embrace social business.

Coca-Cola and Burberry are among those leading the charge, helping to define the social business model. I have written about both companies recently.

Coca-Cola

Coca-Cola are now two years into their Event 2020 online marketing strategy to double their sales world wide.

  • That strategy in itself is defining the model but recently they have up-dated their method of measuring online success.
  • Coca-Cola are now measuring expressions not impressions.
  • They now believe that if their dynamic content leads to a member of their online community taking action, commenting, expressing an interest, that is a measurement of success.

Anyone can like your Facebook page or follow your Twitter account, even look at your website and never interact with you again. Coca-Cola are saying that it is not an effective online marketing result, as the person has not expressed an opinion either way about your product or organisation.

Burberry

Burberry recently took part in the London Fashion Week, where they ran a total immersion online fashion show.

  • They Live Streamed the catwalk show on Facebook allowing their 8 million friends share a link of the show.
  • They added 500,000 new likes. They had Twitter involved, they posted the new fashion range on Pinterest.
  • They loaded pictures of the fashion show on Instragram, the music from the show was available for download on iTunes.

This was an introduction to the future of online retailing.

Here the expression of interest was the purchase of the new collection, their online community has exclusive rights to purchase for a week, after registering for the Live Streamed fashion show, from Burberry’s own website.

The data and analytics provided by all the online activity surrounding the show will prove invaluable to Burberry’s marketing department. This in turn will allow them to move onto their next creative online “community centric” campaign.

Related: Starbucks: An Inspired Use Of Modern Technology

Conclusion

To avoid Social becoming irrelevant this is what it will take: Online marketers doing what is expected of them, developing strategies that allow their business clients make a profit from their engagement. A demonstrable result will be the key to keeping the corporate sector interested. Social Business Strategy is here to stay, as long as it produces profit for business clients.

Thanks to CIO.com for their white paper . I referenced some info in the opening 2 chapters of the report,  in the first 4 paragraphs in this post.

Image: “Question marks and dollar bills/Shutterstock


Co-Founder at the Ahain Group. The first blogger to name the MDEC Model. A social business enthusiast and looking to learn something new every day. Which is not difficult to find online. Keen golfer and Munster Rugby supporter. http://www.ahaingroup.com

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Comments
  • I think you have this back to front, John. 

    For me, social media are here to stay, they are now too ingrained in the lives of people, the consumer. 

    The reality as I see it: If businesses don’t learn to use social media to properly engage, motivate and communicate with their customers, it is their business that is in danger of becoming irrelevant. We have to keep reminding ourselves, that it is business that is following the consumer, not the other way round. 

    Let’s not fool ourselves here, businesses are not the ones in control, really.  It’s now up to businesses to keep up. The smart businesses are embracing social and pushing the boundaries as you have mentioned above, but others are continuing to lose ground.

    Interesting post 🙂

  • While agree with some of what you are saying here Niall, my point is that if the social media marketers do not prove the cash question, business will lose interest. Social Media will continue to grow and exist. You mention that it is up to the companies, while I agree, it’s also up to the people who understand the medium to answer the cash question for the companies. Online marketing is now a huge industry, if the marketers fail, the companies will lose interest. The result, a lot of online marketers will be looking for work. The number of businesses happy with their online marketing return is still to low.

  • Interesting post.  The cash question comes up regularly with businesses and I think this is mainly due to a lack of understanding about what social media or social business is actually all about. Your social media activity should drive people to your website or offline store, which is where the sale should take place – after all, why would you spend your cash on a fantastic website only for the transaction to take place on a facebook page which you can never technically own?
    I suggest customers who are new to social media or not clear on the benefits think of it much as they traditionally might have approached branding.  In the past a local business may have sponsored a local team for example with little more than an ad at the side of a pitch or their logo on a jersey to show for their spend.  Now they have an interactive opportunity to engage with customers, get real feedback, keep their brand front of mind with regular updates and potentially connect with new customers who may have been out of reach for budgetary reasons in the past – and watch it drive traffic and activity on their website at the same time.  A much better return on marketing spend even if it’s not as quantifiable as other marketing efforts, even online options such as email or adwords?

    I agree with Niall that social media is here to stay as it’s where our customers are.  It will evolve and we will need to follow the customers if they move on to the next big thing.  The problem is however not so much about the return, rather a misunderstanding of what it should deliver – and that’s not necessarily about likes, followers or euro.

  • Interesting post.  The cash question comes up regularly with businesses and I think this is mainly due to a lack of understanding about what social media or social business is actually all about. Your social media activity should drive people to your website or offline store, which is where the sale should take place – after all, why would you spend your cash on a fantastic website only for the transaction to take place on a facebook page which you can never technically own?
    I suggest customers who are new to social media or not clear on the benefits think of it much as they traditionally might have approached branding.  In the past a local business may have sponsored a local team for example with little more than an ad at the side of a pitch or their logo on a jersey to show for their spend.  Now they have an interactive opportunity to engage with customers, get real feedback, keep their brand front of mind with regular updates and potentially connect with new customers who may have been out of reach for budgetary reasons in the past – and watch it drive traffic and activity on their website at the same time.  A much better return on marketing spend even if it’s not as quantifiable as other marketing efforts, even online options such as email or adwords?

    I agree with Niall that social media is here to stay as it’s where our customers are.  It will evolve and we will need to follow the customers if they move on to the next big thing.  The problem is however not so much about the return, rather a misunderstanding of what it should deliver – and that’s not necessarily about likes, followers or euro.

  • Thanks Debbie, I agree with you on the process but not the result of the process. If we continue to ask business to spend money on social marketing, they have to see a return for their investment. If this does not happen business will stop investing their marketing budgets.
     
    Coca-Cola and Burberry see the benefits and have experienced increased turnover/profits. Coca-Cola have increased their online marketing spend from 3% in 2007 to 20% in 2011, why? Because they have increased their turnover/profits, this is the only reason big business will invest their shareholders money in social.

    There is no sentiment in business, social is not a new business model it is “word of mouth marketing” transferred to online. So the question is, why would business spend money online if there is no return? The answer is they won’t long term. The result has to be about euros, not likes or followers.

  • Christina Giliberti

    Hi John,

    What have you started?! hehe

    I believe that social media is just getting started and that businesses are starting to migrate across, or profiting from it already.

    Saying that, there are a number of businesses who hate the platforms and feel that they are wasting time on them – these people fail to see the benefit. Others enjoy social media, but fail due to ill-considered updates and zero planning. Both groups need metrics to show them the effects of social media and structured strategy planning to gain any kind of return.

    I love the examples of Burberry and Coca Cola – brands leading the way and sharing innovative techniques. However, to a business, this could be translated in two ways: –

    1) They are well-known and respected brands already with deep pockets and buckets of staff to support these activities – not Joe Bloggs, one man band with barely time to sneeze

    2) Wow, inspirational. What can I learn from these ideas to increase awareness, be more innovative, be more strategic…etc, with my own business?

    Unfortunately, 1) is the common response.

    Understand people and you can understand social media. You can learn to yield the technology, and wrap it around a customer-driven idea. Evereything can be measured for ROI and really should be to record a value. There are plenty of monitoring tools and techniques out there, if companies would only investigate.

  • Thanks for the comment Christina.

  • davidquaid

    Hi John

  • Thanks David, there is a lot to agree with in your comment. The use of big brands as examples is relevant to show social business has a working model, which the brands have successfully leveraged. Most Irish/UK companies in the 50min+ need this pointed out as most are unaware.

    The big companies have a huge advantage over “us” I completely agree, but most management in the 50+ age bracket do not “know” that social presents a new source of market/turnover/profit. This is the context in which I use the examples.

    John

  • davidquaid

    Coming back to the <€10million turnover mark – this is where I'm most interested – as the larger companies have automatic Social Media inertia (for those with huge visibility).

    Mercedes do really well I think – but what individual dealerships do varies from the unbelievable on one end to unbelievable on the other (referring to Niall's share on FB recently. Evocative.) 

    One thing that challenge unknown brands – how do you really start social engagement 1. with people who don't know you and 2. almost certainly haven't hired your company. If you can do that – you can take on any SM project 🙂

  • I would again agree with you, that worries me:) As I stated somewhere recently, this is still very much a work in progress. That is why I feel that if online does not answer the cash question consistently, business will lose interest.

  • davidquaid

    Well, there may be. Especially for information workers. If you use Social Media to differentiate (rather than try to broadcast a brand) and give value – you can pick up a lot of business referrals via twitter and LinkedIn – especially if you back it up with a good blog and great content on Slideshare/Youtube.

    We’ve had some amazing referrals on twitter and LinkedIn. 2 years ago we signed with a US Company that turns over €300 million a year globablly. Via a social media LI group :)Also, being highly visible frequently, is also good for ranking in search (which still drives the bulk of web traffic – something that only gets further underlined as our Analytics account swells – our average client has 100k visits in Ireland a month)Here’s an example (sorry for using ourselves, I’m being lazy):We rank for SEO, SEO Limerick, SEO Dublin etc but – indirectly we also rank for “Bad SEO” via Slideshare and Youtube. Why would we want to? Well we don’t – that’s why its not our site that ranks. But its actually a great search – companies that are heavily engaged in internet marketing and have had a bad experience are really happy to find someone who has the experience to recognise the problem, reverse it and improve the business.

  • I would understand the importance of the blog, content, YouTube but I would not have thought of Slideshare. My knowledge is growing everyday. Thanks for the tip on the Bad SEO and keeping it away from your website.

  • It’s on our development roadmap. We’re looking at a visitorM hosted check-in system as well as integrating with third party services like Foursquare

  • Thanks Sarah, it can make the job very frustrating for developers and users, hopefully Apple might change it eventually. Most developers have links on the info page for users,it would be useful if Apple told users to contact the developer directly. Hopefullyin the next blog I can give away some of the “magic circle” app developer secrets:)

  • Thank you Warren,means a lot coming from such a great blogger. We are trying to get the communication & education out there, watch this space for a book announcement:)

  • John Twohig

    Fab to see teenagers developing a product like this from the kenel of an idea to a real product. I hope the product achieves great sales and we get to see them on our shops shelves. Great find Aoife.

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