October 15, 2010- http://www.gather.com/viewArticle.action?articleId=281474978605059
Oh goody, as the New York Times reported on October 10th, Twitter has finally come up with a plan to make money. Only, it’s the old new plan, which is to say it’s the same plan as everyone else.
As Twitter’s Evan Williams stepped down, to make room for Dick Costolo who previously headed Twitter’s advertising program as the new CEO, the tech industry remarked on how the shuffle represented Twitter’s increased new commitment to monetization.
As the New York Times reported, “Twitter’s startling growth — it has exploded to 160 million users, from three million, in the last two years — is reminiscent of Google and Facebook in their early days. Those Web sites are now must-buys for advertisers online, and the ad industry is watching Twitter closely to see if it continues to follow that path.”
But there still seems to be no real innovation in the advertising models of hi-tech companies from whom the world expects a great deal of innovation. Why are hi-tech social media and social news aggregation companies having such a hard time innovating with their monetization strategies?
At this point, each new social media platform that comes along seems to jump into the online advertising market that Google forged largely on its own. Now that Google did the heavy lifting on education and we all speak and understand the language of “click-thru rates,” “impressions,” and “search engine optimization,” newcomers like Twitter don’t have to pay or do very much in order to enter this monetization space. Coincidentally, it would seem that they aren’t doing very much at all to evolve it.
As a result, the whole online ad framework is falling flat, and after a few years of evangelizing for social media advertising and the use of new media platforms like Twitter and Hulu, are advertisers really making more money and seeing the benefits of these new media? It’s becoming an embarrassingly redundant question- “yes, we know we are creating funny and entertaining media for our consumers to enjoy, but is it actually increasing sales?”
Interestingly, at this year’s gathering of the Association of National Advertisers, as the New York Times reported, a survey at the beginning of the opening session found that “marketers may still need some schooling on the dos and don’ts of social media. Asked to describe how its use has affected sales, 13 percent replied that they did not use social media at all. (Eleven percent said sales had increased a lot, 34 percent said sales increased ‘some’ and 42 percent said they had seen no change.)”
It would seem that media analysts are continuing to approach social media and search as a given element of any marketing strategy without any hard evidence as to why every company needs to integrate social media into their market strategies. Instead, without the numbers to make the case, analysts and marketeers still discuss the virtues of earned media versus paid media, the value of eyeballs and impressions, and earned equity.
One of this year’s smashing social media success stories has a particular ability to make marketers foam at the mouth. 2010’s Proctor & Gamble “smell like a man” campaign for Old Spice helped increase the brand’s followers on Twitter by 2,700%, to where they “now total almost 120,000.”
Marc Pritchard, global marketing and chief branding officer at Proctor and Gamble had his moment in the sun for what was, undoubtedly, the most high-profile and successful example of how modern brands can use social media to promote their brands. But in the coverage of Pritchard’s talks, there is little to no mention of how the campaign is actually impacting the company’s bottom line. Instead, there is this: “The currency the campaign has earned in social media has pushed it into the popular culture. Mr. Pritchard showed the audience a spoof that was recently introduced by Sesame Workshop in which Grover suggests that his young viewers ‘smell like a monster on Sesame Street.’”
But an internet meme does not a year over year increase in sales make. There is no mention of how an increase in followers on Twitter converts itself into a percentage increase in sales. It’s like an equation is missing, or somehow we have all misunderstood how to connect the dots. At the conference Joseph V. Tripodi, chief marketing and commercial officer for Coca Cola was interviewed, and his only contribution to this dilemma was to discuss how social media can sometimes save a company money on promotions through viral videos, “It cost less than $100,000 to produce the video, he added, demonstrating that “you don’t need huge amounts of money to engage with consumers.” However, savings on a marketing budget also do not a sales increase make.
Refreshingly, one of the conference’s keynote speakers, Mark Baynes, vice president and global chief marketing officer at the Kellogg Company, did acknowledge the missing link in the social media to profits equation by proclaiming, “In God we trust; the rest of you bring data.”