With a few exceptions, the first wave of social media firms to trade on the public markets has delivered a disastrous performance that conjures memories of the dot-com bust of 2000. On Thursday, the 800-pound gorilla of the group, Facebook Inc, reported tepid results that shaved some $10 billion off the company’s market cap. The stock has gone straight down since its botched May initial public offering and now trades over a third below its $38 IPO price. Does this mean the end of social media marketing ? In short, no.
For investors today instant gratification takes too long. If they bought facebook at $34 they want it to go to $44 right away so they can cash in but social media can be effective for brands as part of a strategic integrated brand strategy.
So what should marketers take away from all the noise around the social media bubble exploding ?
1ne: There is no correlation between what users want in social media and what investors want.
2wo: Despite all the talk about “the death of facebook” they have almost a billion users.
3hree: Think like a consumer and ask “why?” when thinking about a social media strategy.
4our: Consumers still expect your brand to be on social media if they have a question or problem.
5ive: Social media is still a great channel to launch new products and raise awareness if you know what you’re doing.
6ix: The model of “build it, attract users and then figure out how to make money” is not sustainable. I look for social media properties to start hiring experienced business people who can build a business that makes money (remember that facebook is making a LOT of money).
7even: What a lot of social media sites are offering brands is not marketing, it’s advertising. Huge difference.
8ight: Fragmentation of social media will continue as new sites come online.
9ine: Wall Street and investors will continue to put pressure on social media platforms to innovate forcing them to either get better or change personnel.
10en: Do what is best for consumers and try not to get influenced by the noise.
As I have said many times before there are not a lot of brands that people want to get to know. In fact consumers say that relationships are for friends and family not companies. If you are currently using social media marketing than experiment with it and, more importantly, learn from it and act on insights and please don’t spend countless hours trying to connect it to ROI. After all do you spend time with every print and TV ad connecting them to ROI ?