The (Limited) Potential of Social Media

Some interesting numbers about the potential of social media (SM) have surfaced recently. It seems that, surprise, SM just doesn’t have the potential that a lot of “social media gurus” would have you believe. As eMarketer recently reported, a number of surveys and studies in 2010 have pegged SM as much better suited for branding and retention than for outright sales/acquisition:

Source: eMarketer

  • In a 2010 survey of US marketers, the Direct Marketing Association (DMA) found that “brand awareness was the most popular objective of social media efforts, followed by customer growth and loyalty.”
  • A July study by eROI “similarly showed brand awareness was the top goal of US marketers using social media.”
  • And search marketers surveyed by MarketingSherpa in April also “cited increasing brand awareness and improving brand reputation as the two objectives for which social media marketing was most effective.”

And as far as “money talking and bullsh*t walking”, when the DMA study dug a little deeper, it found that SM budgets over the years have become more focused on branding and retention, and less focused on actual acquisition:

While marketers started out in 2008 spending similar amounts on branding, customer loyalty and customer acquisition, by 2009 customer acquisition budgets had failed to grow as quickly as the others. Customer acquisition budgets more than doubled twice between 2008 and 2010, but they still lagged behind the even more dramatic growth of spending in other areas.

We can’t really say that any of this comes as a surprise. For starters, one the main reasons a social media campaign fails is because it tries to drive sales over engagement. And when it does comes to driving sales, SM is much better suited for a supporting role, such as through customer retention. There is also the tendency for marketing teams to rely on the “warm and fuzzy” numbers of social media rather than on real metrics like return on ad spend.

So where does this leave a marketer who need to acquire new customers online? Well, pretty much where they were before hoards of “social media gurus” crept up all over Twitter.

Back to Marketing Roots

For starters, there’s SEO. Although “Americans spend 906 million hours a month inside of social networks” compared to to only “138 million hours a month searching” (Ad Age Article), there’s a difference in mindset between the two sets of users.

Specifically, the social media user is much more passive. They’re just interacting with their personal network when you reach them.

The searcher, on the other, hand is actively engaged. That is, they’re looking for something they haven’t found , and that makes them a much more likely prospect as a paying customer.

Same thing goes with PPC. Through paid search, marketers can similarly target “actively engaged” users, but they can also yield results more quickly, and more easily track the ROI of each dollar spent.

Finally, there’s affiliate marketing. The best of part of affiliate marketing is that it’s focused strictly on acquisition.

Granted, it takes a bit more set-up in terms of choosing the right software and implementing the tracking. But beyond the initial set-up costs, the channel is virtually risk-free because it’s performance-based — i.e. you pay only for results.

The Catch 22 of Social Media

Credit: Hugh MacLeod

You see, the catch with any new channel is that it’s new. It hasn’t existed long enough for anyone to be an expert, and no one is sure what it’s good for.

For a lot of people, that kind of uncertainty represents an opportunity: they can say anything they want about some sexy, new space that everyone wants a piece of and no one understand.

But if social media really is about making connections and building relationships, then it’s little surprise that it would be seriously limited for driving sales. After all, the relationship would have to come before the sale, and then there’d be no guarantee that a sale would ever be closed, and there’s just no room for that kind of uncertainty in a sales environment.

About CT Moore

A former Staff Editor here at, CT Moore is a recovering agency hack with over a decade experience leveraging search, social media, and content marketing to help brands meet their business goals online. He currently provides digital strategy consulting to start-ups, SMBs, enterprise level companies through his consultancy Socialed Inc.. CT is also an accomplished blogger and speaker who educates groups and companies on how they can better leverage different online channels.

4 Responses to The (Limited) Potential of Social Media

  1. Wes says:

    I think social media is still in the experimental phase and is still widely misunderstood by businesses. No one really knows how big of an audience a campaign will reach, or how well the message will stick – it's a lot more complex than throwing a billboard up over a highway.

    • CT Moore says:

      I agree, but I do think user mind-set is a big factor. When I'm searching, I'm actively looking for something. When I'm on Facebook, I'm just hanging out, and if you hit me with a CTA, it's a lot closer to the billboard spray and pray approach than, say, a PPC ad.

  2. marianne filion says:

    i'm not at all surporised by any of this. when i'm on a social networking site, it's because i want to socialize, not because i want to buy. so while i might be open to engaging in a brand conversation for conversation's sake, i'd be downright turned off by a brand trying to make their next sale off of me.

  3. Jay says:

    Totally agree Twitter, and Facebook are way overrated people are just interested in socializing for the most part not looking to buy when they are visiting these sites. Your better off doing PPC or SEO for buying traffic as well as other Internet marketing techniques.