Social Media is Dead, Long Live Social Media

At some point the most promising internet trends and technologies get big enough that they go mainstream. They move beyond mysterious concepts -- with cryptic names that only hardcore online marketers understand -- into something that the average Newsweek reader can explain to your parents. Or your CMO. Think of the Dotcom 1.0 days of AOL chatrooms, personal homepages, search engines, online auctions, and instant messaging. Or the current days of viral videos, text messages, podcasts, Second Life, and MySpace.

This is when the most promising internet trends hit what I call the Debate Stage. Are they the next evolution of the internet or just another fad? Are they really a new trend, or just an upgraded version of how we have been using the internet since Compuserv bulletin boards back in the late 80s? And, probably the most debated, are they worth spending marketing dollars on?

Social Networking has finally reached that stage. Last year saw a gold rush of marketing dollars into MySpace. This year will see a gold rush of marketing dollars into Facebook and its resulting symbiotic remora (widgets, beacons, and a whole slew of new mystery terms). All while a quietly growing tide of niche social sites swell up into a tsunami to surprise everyone.

So now we reach that point where every marketing article about social networking is proclaiming that it will save the world. Or that it died 15 minutes ago and no one noticed.

For instance, headlines from the last week:

Study: Marketers won't drop social media if economy tanks
The continued uncertainty in the U.S. economy will likely result in marketers trimming traditional advertising budgets while continuing to ramp up advertising in social media, blogs and Web communities, according to a study by Forrester Research.

The Social-network Backlash
Although advertising on social networks is projected by eMarketer to jump 75% this year, the segment faces key challenges, according to this article: The growth rate for users has slowed considerably, social networkers are spending less time on average on the sites and some are jumping ship altogether; meanwhile, the social nets' clickthrough rates are among the lowest in the Net segment.

Social Sites Don't Deliver Big Ad Gains
There are signs that some of the biggest new places where consumers are flocking on the Web -- social networking and video-sharing sites -- are yielding advertising revenue slower than some Internet companies had hoped. The latest warning that the hottest Web properties are proving difficult to make money from came from Internet giant Google Inc. While announcing disappointing fourth-quarter earnings Thursday, Google executives said the company was having a harder time than it expected generating ad revenue on social-networking sites.

Agencies Need to Reboot
Forrester Research believes today's ad agencies are not well-structured to take on tomorrow's marketing challenges, needing to move from making messages to establishing community connections. In a new report, the research firm paints a grim view of the current state of advertising, which it believes is in "a world of hurt" because consumers are tuning out the messages the industry is predicated on producing. Instead, it believes shops need to be organized around communities, not disciplines. What it is calling "the connected agency" would not only know certain communities but also be active members of these groups. Pushing messages would give way to encouraging voluntary engagement, and ongoing conversations would replace time-based campaigns.

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So what is the reality? The big social networks (Myspace, Facebook, and probably Bebo next) are becoming the new mass reach online media buy. The type of media dollars that supported AOL, Yahoo and MSN during Dotcom 1.0. But the difference is that users are not spending their time reading entertainment articles on AOL, or watching broadband videos on Yahoo, or lurking in MSN chatrooms. Activities that keep them on the same page for a period of time so that the surrounding advertising can get noticed.

They are zooming through tons of personal pages during their MySpace sessions, barely noticing the hundreds of banners hiding in the visual clutter. Or playing with the widgets and embedded content on their own Facebook page, providing little exposure for advertisers. Yes, consumers spend over 30 minutes on their fave social site, but their behavior is very different than when they are visiting the rest of the internet.

The results include terrible banner clickthrough rates (trust me, the industry average 0.15% CTR is already terrible and social network CTRs are even worse). I haven't seen a Dynamic Logic study on social network advertising brand effectiveness, but I bet it also ranks at the bottom of the industry benchmarks. And it won't take long before marketers figure out that the "cost per friend" of those Upload Your Video and Win sweepstakes ain't making the expected ROI.

The latest media sleight of hand will be advertising in widgets. Because it lets us say "widget" and "established reach" in the same sentence. At least until we realize that the CTRs are just as lousy and marketers start asking how we know their ads aren't being served to the same 10 "friends" over and over again.

Which is going to force marketers to think about social networking beyond a paid media channel. Which is painful, since we actually have to think about it. And different types of agencies are going to have a distinct POV. Ask advertising, PR, media, internet-pure play agencies how their clients should use social networks and you will get very distinct views. Which doesn't meant they are wrong. Just that you can't pigeon-hole social media into one type of execution. But at the same time, defining the right mix of social media strategies into an integrated program, in an environment that changes monthly, is going to be tough.

Marketers have developed the integrated marketing brief, specifically to address some of these challenges when working across multiple agencies on a single initiative. It helps provide all agencies the same direction, despite their focus on very different tactics. And ensures that the marketer (i.e. client) has a vested interest in the outcome.

I would love to see marketers take the same approach to social media. They need to take ownership of their social media strategy. Sounds like rocket science, but it isn't. Spend some money on research, understand how your consumers interact with social media, and compare that with your overall marketing strategies. Then develop a social media input brief, send it to your agencies, and see what happens. And please don't expect that buying some "widget banner video pre-rolls" means you can check it it off your list of online tactics.