It’s pretty simple, actually: The people we are trying to attract see no value, we are not able to show the return to our companies and our bosses are not willing to invest more, and so the vicious cycle continues. No, I am not predicting a doomsday scenario; I am merely looking forward to some sanity settling in as we get into 2012. Don’t get me wrong, I still fundamentally believe in the significant disruption that social media will cause to business. However, to paraphrase Mark Benioff, I believe we are about to enter a long and cold Enterprise Winter. Could the lackluster initial public offerings of Jive and Zynga this month be a sign of what to expect next year?
Every day for the past two years, I have been seeing one study after another, some declaring that social media is going to change the world — which, to some extent, it has — while some declaring the bubble is about to burst. What has changed in the last couple of months, however, is the number of studies that predict the latter, combined with the lack of any news that the next big thing in social media is just around the corner. Some of the facts:
- Growth is slowing down: The New York Times reported that growth in Facebook visits was a “mere” 10% in the 12 months ending in October, down from 56% a year earlier. Meanwhile, Facebook is preparing for an IPO early next year. As George Colony, CEO of Forrester Research, said at the LeWeb conference, “Social is running out of hours. Social is also running out of people.”
- Companies are not able to generate value (aka return on investment): I wrote about the holy grail of social media ROI more than a year ago, and eMarketer published a flurry of research this month. Some of the mind-numbing statistics are that only 8% of marketers could attribute ROI for all of their investments in social media, while 60% still count fans, followers, and “likes.” This translates to 2 in 5 marketers having little confidence in their ability to measure social media campaigns, according to a Chief Marketer study.
- Corporate investments are decreasing: According to a University of Massachusetts Dartmouth study, “social media use among America’s largest companies is losing steam.” Their study, which focused on the Fortune 500, found no growth in corporate blogs, while the use of Facebook and Twitter grew only 2%. This certainly is consistent with discussions with my peers in the industry.
So what does this mean for us?
- If you are an enterprise social media technology provider, my advice is to focus on the user experience by helping customers reduce the noise, and prove the value of social media. I fully expect a major shake-out in this space next year, and I think the companies that will survive will somehow exhibit these two characteristics.
- If you are an enterprise leveraging social media to connect with customers, my advice is to focus and execute well, while moving beyond counting fans, followers, and “likes.” There are ways to do that, but it’s not as easy as starting a Twitter or Facebook account and hoping they will come.
I suspect that many of you will not agree with my thoughts, and I hope to create some dialogue with this post. As always, I look forward to your thoughts and comments.
This post was originally published on SmartBlog on Social Media.
Image credit: qthomasbower
The value of social media declines deeply as the ‘noise’ and ‘interference’ on social channels rise. If we continue to put value (i.e., spend our time and money) on them, are we throwing good money after bad, or exhibiting some sort of irrational optimism? Seems to me it is no different than random methods of meeting people IRL. Eventually, those who have a common interest form organizations or start enterprises that attract those they want to socialize with. In the social world, tweet chats seem to provide that venue. Ted, are you aware of any research on them, or perhaps on LinkedIn groups (which, imho, are not as social)?
Janice thank you, no I have not seen any published research on tweetchats although we have recently started to experiment with them recently and are seeing interesting traction. You should also definitely check out Google hangouts as well. Both have a real-time component, which of LinkedIn does not (yet) have.
Hi Ted,
i agree with your assessment as to the state of the social media affairs, especially when looked at from behind the corporate veil. i had exeprienced it firsthand when tasked with similar objective – intranet at the time. the politics were simply stifling and the existing structures have resisted the temptations of the day very well. resisted so well that i don’t even want to mention any names or post this on SDN.
now this is how commoners like me are looking at it. we are not CXO’s or the audience whose attention your are most interested in, but some of us will get there and we will remember what has gotten us there. so, here’s the big promise of which i’m sure you are aware of.
there is a saying in advertising that half of the money spent on it is wasted but we don’t really know which half. social media seems to follow a similar path, it’s quickly becoming an alternative channel to television and traditional press.
but can we really go back? can we ignore it’s out there? just because we don’t know how to measure those eyeballs doesn’t mean they are not focused on today’s cacophony of messages. it’s also about credibility and hierarchies. they both seem low at the time, but are on the increase.
both the younger generation and also older one are launching their careers based on the whimsical moods and trends of the day. somehow, social media through its realtime delivery hits different brain cells that those that are active when we read a book or watch a movie or listen to a newscast. it adds interaction even if it’s largely an illusion of real human interaction.
i don’t have a powerful brand behind me nor funds to broadcast my message but we both share interest in SAP and that’s why we have engaged, would this be possible without social media if had never met?
good luck at the social media week!
Greg,
Thanks, you raise a couple of very interesting points, and want to try and dissect them:
Audience: While you are correct that today’s participants are the ‘common folk’ like you and me, therein lies the challenge. We all dream of the time when CxOs will freely engage with us in social channels. Although I believe we are starting to see that in some areas, we tend to underestimate the importance of the trust we need to build, and the fact that these people are severely time-constrained (hence the value of content and value you are delivering to them is paramount).
Impact: This is an interesting one, as the way I have heard the comment you raise is that CMOs will claim that only 20% (not 50%!) of their budget delivers any value, they just don’t know which 20%. While the easy way out is to point out those inefficiencies in the existing channels, I think that’s too easy, and we all need to focus on demonstrating the value to our companies (which as you very well know takes time and perseverance) .
Thank you again for your thoughtful comments.