Management seems confused about why they need to deal with social media. Most of those with responsibility for profit performance are missing the point when it comes to new media and ignoring the history of past media revolutions. Consumer markets are going through a transition phase regarding their media preferences.
Right now, ROI isn’t necessarily about new revenue and new sales. It’s more likely to be measured as the market share a company doesn’t lose.
All other things held constant, the rise of online and social media hasn’t created new markets or consumers (with the exception of those buying and selling stuff needed to engage in social media). Social media is a new communication preference for existing customers in existing markets to engage, assess and choose the brands with whom they will transact business in future.
Future being the key word.
One facebook account may take over 4 hours a week from the available time of a mother of 2 children. That’s 4 hours a week less one mother has to spend in other communication channels in future. Less time in stores, magazines, newspapers, TV and radio. The same goes for the mobile platform and the sms/mms channel. Time is a finite resource.
So, not only are we moving into new online and social media, we are moving out of pre-existing communication channels.
Spare us all the engagement and authenticity romanticism. Spare us all the finger wagging and pious recrimination over brands being unable to demonstrate concrete ROI from social media. It’s all either pseudo ethical or pseudo academic drivel.
The reason brands must market and engage in online and social media is that the customers they already serve are shifting their preferences as to how they will engage with all brands in future. If a brand’s existing customers arrive in online and social media and find the brand they have been dealing with is absent, alternative brands with comparable offerings will take future market share. End of story. That’s why every media revolution is an opportunity for new brand start ups in mature consumer goods and services markets.
This always starts off sounding like a distant cry until marketing programs through traditional communication channels start showing reduced ROI. By then, the damage is already being done.
It must have sounded like a distant cry in the early 1950’s when TV appeared on the horizon with few channels, limited broadcasting schedules, little content and small audiences. I still remember watching the ‘test pattern’ as a kid while waiting for the screen to come to life in the early 1960’s. By 1979 there were 300 million TV set in operation. By 2001 there were an estimated 1.75 billion TV sets worldwide. The most notable observation we can make here is that the move into online and social media is much faster than was the revolution into TV.
TV broadcasting licenses and advertising must have seemed expensive and unsupportable investments for some time in comparison to radio, newsprint and cinema. But look at how market share changed hands after the transition phase to TV got going, and look at the monumental consumer brands that were forged from advertising in the early years of television. The curse is on the laggard.
That’s the catch with social media ROI. During this transition phase between traditional, web 1.0 and web 2.0 communication channels, ROI in social media isn’t necessarily measured in new sales revenues. It’s significantly measured in avoiding the loss of existing market share as existing customers shift their communication preferences to new media.
For new brands, it’s an opportunity to take share from established brands lagging behind in the transition.
If you decide to stay largely out of online and social media until clear evidence of ROI is on the table, you are making a mistake. You’ll pay for it with lost market share.
The next phase of this revolution will be the competitive phase where the fight for market share will be between those who have entered social and online media. Then we will see a more relevant and conventional assessment of ROI from within new media channels.
Until then, as the song says, “don’t count your money while you’re sitting at the table”…especially when other players are moving to new tables.