EMARKETER: LESS THAN HALF OF MARKETER'S LIKE FACEBOOK, THE GENERAL CONCENSUS: SOCIAL MEDIA SUCKS

Judging by all the press coverage, Facebook represents the advertising Holy Grail -- but most marketers still have no idea if it's any good for, like, advertising. At least that's according to eMarketer, which recently published the results of a survey of chief marketing officers about their use of social media. Overall less than half of the 175 execs surveyed by Bazaarvoice and The CMO Club on eMarketer's behalf even knew what kind of ROI Facebook was delivering -- and of these, the majority rated it just "average."

Specifically, the eMarketer survey found following:

• 15.4% of the respondents believed Facebook was delivering "significant ROI." 
• 20.6% said ROI was "average" compared to other social media sites. 
• 8.6% said Facebook was failing to deliver ROI. 
• 20.6% weren't using Facebook. 
• 34.9% said they didn't know one way or another.

These results may sound pretty mediocre, because they are... but Facebook was actually the leader in social media ROI in the eMarketer survey.  

Marketing execs surveyed said this about Twitter:  

• 11.4% said Twitter produced "significant ROI." 
• 12% said it was "average." 
• 13.1% said it failed to deliver ROI.  
• 40% said they had no idea what Twitter's ROI was. 
• 23.4% don't use it. 

For LinkedIn,

• 10.9% said LinkedIn produced "significant ROI."  
• 10.3% said it was "average." 
• 18.3% said it delivered "no RO.I." 
• 36% said they "don't know" what LinkedIn's ROI was. 

For industry blogs and online forums,

• 8.6% reported "significant ROI." 
• 23.4% reported "average" ROI. 
• 7.4% reported "no ROI." 
• 37.7% "don't know" what the ROI is.

All this paints a pretty dismal picture of the social media marketplace -- not so much because social media isn't working well, but because most marketers simply have no idea whether it's working at all.  

The same survey sought to determine which metrics are most popular for ROI, and the answer is "all of them": the responses were all over the map, and many of the most popular ones were also clearly insufficient.

Thus the top metric was site traffic, endorsed by 68% of CMO respondents, followed by number of fans/followers, with 62.9%, and number of positive customer mentions, also at 62.9%; while these may be a good start, I think most would agree they are no more than that -- a start. There were some moves to more concrete measures, but not many: the single big change in the top ranks was increasing popularity for "conversion," which jumped from 32.6% of respondents in 2010 to 65.7% in 2011. Meanwhile revenue, which strikes me as a self-evident winner for ROI, increased from 29.1% of respondents to 49.7% of respondents over the last year.

COMMENTARY:   This is great example of social media over-promising, and under-delivering. However, social media is still very early in its stage of development and still evolving as a media channel.  Facebook did not begin to offer advertising until about two and a half years ago.  Twitter launched its Promoted advertising offerings in August 2010, and on a very limited beta-test basis. LinkedIn just recently started to offer advertising, and is trying to find a formula that works.  

In a previous blog post dated February 2, 2011, WebTrends conducted a survey and discovered that Facebook's CPMs are too high and CTRs are abyssmal (one-half of regular display ads).  In another blog post dated February 1, 2011, digital agency Razorfish conducted a survey reported that social networks like Facebook and Twitter do not make users feel valued.

These findings are nothing new.  In an All Facebook article dated November 17, 2007 titled "Is Facebook Advertising Effective", was very critical of Facebook's high CPMs and low CTRs.  It does not appear that much has changed in three years.  This makes you wonder why advertiser's flock to Facebook.  The argument I keep hearing is, "where else can you reach an audience of 600 million users".   I don't think the size of the audience has much to do with it.   I believe that advertiser's understand numbers, and they see that traditional media is far more effective in generating revenues and increasing brand awareness, and that's where they are spending their marketing budget.

In another article dated January 23, 2011, I pointed out Facebook's abysmal revenue per user, which is 1/8th of Google's, a much more effective advertising platform.   Many medua experts, including myself, believe that Facebook is a very poor advertising platform, and the same holds true for Twitter and LinkedIn.   In short, users use social networks to connect with other people, not brands, and this disconnect is reflected in its poor showing.

Courtesy of an article dated February 8, 2011 appearing in MediaPost Publications The Social Graf   

 

Comments

[Tommy]

Christopher, Thank you for your response. Social media is not a brand builder. Research shows traditional media is better for creating brand awareness. Social media should be used as part of an overall integrated marketing strategy. Social media is a great way to develop deeper relationships and strengthen the bond with your fans. Its real value is in reinforcing, informing, educating and entertaining fans and tracking what they say about you in order to improve your products and services. That's where social media can shine.

[Christopher Hinn]

I totally agree with you that it is not the number of audience a social media has but what is important is its advertising flatform. Some social media are not really the best choice to generate revenues and to increase brand awareness and that is what the advertisers are looking for.