Social media marketing has long been criticized by small and medium-sized businesses (SMBs) for its inability to deliver a quantifiable return on investment. And as IBM’s Black Friday 2012 report pointed out, hardly anyone purchased anything on Black Friday via a social media referral:
Shoppers referred from social networks such as Facebook, Twitter, LinkedIn, and YouTube generated 0.34% of online sales on Black Friday, a decrease of more than 35% from 2011.
On Twitter, the transaction conversion rate was 0%. The result is perhaps surprising to some but makes sense when compared with the standard 0.2% clickthrough rates on banner ads, offering little chance for conversion after the click. When consumers equate and relegate tweets and Facebook posts as proxies for banner ads, this reinforces the perception that social media won’t ever drive transactions.
The IBM report simply confirms the well-known fact that commercial intentions and sales pitches are frowned upon within social media spheres. It’s instructive for SMBs to consider the precepts of traditional Madison Avenue advertising to understand where social marketing is now taking a place within major brands’ positioning strategies.
Before the Internet, advertising generally delivered marketing messages with two distinct objectives: branding and a “call to action.”
Branding messages do three things: 1) create awareness, 2) try to convince consumers that a product or service is a solution to their problem, and 3) create a feeling of familiarity and relationship with the consumer, commonly known as “brand affinity.” That’s why most SMB TV commercials show the owner, staff, and premises onscreen or are narrated by the owner. Twenty years ago, advertising provided the same kind of social edge that good social media reviews do today. A typical broadcast media pitch to an advertiser would suggest that commercial messaging was subliminally greeted by consumers as if it was a referral from friends. (My first job was selling radio time, and frankly this pitch was well-enough accepted to justify repetitive spot buys.)
Advertising was — and still is — widely sold on impressions based on Nielsen ratings and circulation numbers, not quantifiable performance metrics. Like social media marketing, brand advertising’s ROI is qualitatively assessed by the uptick of business that occurs after a campaign run.
Fast-forward to today and low-budget SMB commercials designed to foster brand affinity now seem contrived and dated. Viewed through social media glasses, they even seem suspicious: Will this business fob off the cost of its ad campaign onto its customers? A series of Yelp reviews provides a far more authentic view of a business. By facilitating the commentary around brands, social media is replacing advertising in positioning and defining brands, but it doesn’t sell the goods in a direct way.
“Call to action” messages focus on selling. SMBs advertise sales events, reward loyal customers, email marketing and offer coupons to draw traffic. SMBs value these promotional campaigns more because sales are quantifiable, and their methods are easy to understand by owners who simply want customers walking through the door. Groupon took off because it institutionalized the “call to action” online and scaled the coupon offering for eager SMBs — until they realized that the sugar high of trackable sales didn’t necessarily translate into profitable campaigns.
SMBs need to understand that although the marketing game has completely shifted, the traditional advertising rules of branding and “call to action” still apply. The challenge is to adapt to the new marketing platforms. Instead of commercials, develop a content marketing strategy that reinforces the brand message without being pushy. Get customers and allies to define their brands for and with them via social media, and supplement call to action media buys with online loyalty and deals programs that drive immediate business.
SMBs may become frustrated when they can’t see tangible results from social media, but they should realize that most of their potential customers are absorbing and reacting to social media conversations and are understanding brands through these interactions. Brand marketing, not the 0% conversion rates, is social media’s key strength.
Patrick Kitano is a founding principal of Brand into Media, a strategy group for social brand management solutions, and administrator of the Breaking News Network, a national hyperlocal network devoted to community service. He is reachable via Twitter (@pkitano) and email (email@example.com).