
Is Social Media Worthless? - eliza1wright
https://www.lucidchart.com/blog/2013/04/10/is-social-media-worthless/
======
davidroberts
I think the Pepsi example really doesn't work for two reasons:

First, the decline in sales in the sugary soft drink industry is only remotely
connected to their social media advertising. It is a widely reported phenomena
that is usually attributed to a more health-conscious society and a widening
array of beverage choices.

Second, Pepsi's intention in offering contributions to non-profits based on
social media recommendations was probably seen as a way to boost corporate
image in a domain far beyond potential soda drinkers. It probably was meant to
influence investors, journalists, regulators, and people like Mayor Bloomberg
in New York who would portray soft drink vendors as an evil in our society.
When you are a big as Pepsi, directly influencing buyers is only part of your
advertising outreach.

Still, I agree with the article's overall conclusion. Social media advertising
is typically not a very efficient way to convert advertising dollars to
revenue. But it can be. With any advertising method, you have to devise a way
to measure the results of a campaign, whatever your goals are. Otherwise, you
are just throwing money in the air, hoping it lands somewhere useful.

~~~
PaulHoule
Pepsi is an interesting case for the ineffectiveness of advertising in
general.

I find it hard to believe that television or other advertising for a product
like Coke or Pepsi makes a big difference in sales. I'm already aware of the
products, I already have my opinions on them, and they aren't going to change
them.

If these companies stopped advertising tomorrow I don't think there would be
an immediate effect on consumer behavior.

For a while I was a heavy drinker of low carb Monster. One day I saw the can,
thought I'd try it, decided I liked it, and then I bought it frequently.

I hadn't seen a single ad (or promo) for Monster until years after I'd gotten
sick of it.

What would happen is that the channels they sell through would notice that
they weren't being so aggressive about marketing. The channels might think
they are less serious and then they wouldn't work so hard to promote those
products.

I know somebody who sells newspaper advertisements and when people ask the
question "For what a postage stamp sized ad costs in the paper for a year I
could rent a storefront or hire an employee so why do I need to spend money on
you?" he gives them the answer that people who are used to seeing your ad in
the newspaper might think you went out of business if the advertisements stop.

That's how sick the advertising business is in 2013.

~~~
mindcrime
_I find it hard to believe that television or other advertising for a product
like Coke or Pepsi makes a big difference in sales. I'm already aware of the
products, I already have my opinions on them, and they aren't going to change
them._

I feel the same way about beer. I _love_ beer commercials... they are usually
absolutely hilarious, and I often literally LOL at them. During football
season, when I'm hanging with my friends at the sports bar watching the
Dolphins play, I look forward to the commercials so we can have a group laugh
over the latest ads from Budweiser, Coors, Michelob, etc.

But... 2 minutes after a given ad airs, I could not tell you if it was an ad
for Coors, Michelob, Budweiser or "other". Well, ok, the Keystone ones do
stand out a bit in my mind. But in any case, NONE of them give me the
slightest inclination to drink their respective brand of beer. I already
regard all mainstream, mass-market American beers as being roughly equivalent
to stale horse piss, and all the funny commercials in the world aren't going
to change that.

My staple beer is Sam Adams, which I usually drink unless a given bar has a
microbrew I happen to like. And I was drinking Sam before I ever remember
seeing a commercial for it. How'd I find it? A bartender recommended it to me
once, I tried it, liked it, and that was it.

~~~
at-fates-hands
>>>>> How'd I find it? A bartender recommended it to me once, I tried it,
liked it, and that was it.

This is the angle social media attempts to replicate. Leveraging respect
levels between you and your social "circle". Sometimes it works with great
effectiveness, but a majority of the time, I believe this approach fails.

------
no_gravity
I know many stories like these. When I ask companies "Do you generate revenue
via social media? Facebook, Twitter, G+ or anything?" the answer is always no.
I would love to know about counterexamples if there are any.

~~~
thelegit
I get 100% of all my sales through Facebook... as a small business owner
social media is the lowest price entry point directly to your audience

~~~
eliza1wright
That's a great point. But Facebook is starting to stonewall business owners
with promoted posts, and the value of the channel seems to be dipping lower
and lower. So business owners work to build up these audiences, and then
they're charged a premium to get any eyeballs. At this point, a simple website
and a good SEO expert might be a better long-term investment.

~~~
thelegit
I've literally stopped my SEO efforts.. most are just price checking anyways,
looking for 'the lowest price' (web design services)... I tend to find
building a relationship and educating my potential clients better than trying
to get a sale from SEO window shoppers, I can do that best with social
media... I've started driving people from my website to my social media
profiles, and I'm doing the same with my clients

~~~
fotbr
Really? I find few things more annoying than going to a business's or
organization's website and finding it has no details about them, their
products, their services, or anything else useful -- all because some genius
has decided that facebook/twitter/google+/etc is a better platform for that
information than their website.

Want to know the result? My money goes elsewhere.

------
NathanKP
I would agree. I don't use social media to see information about brands. I
want to see my friend's activity, not advertisements. That's why I deleted my
Facebook account and just use Path and Instagram, which so far don't have a
big focus on promoting brands like Facebook and Twitter do.

Social networks are for connecting with friends, and I'm not friends with
LucidChart or Coca-Cola, or any other brand for that matter. Some brands I
respect because of the value they offer, but I would never consider them to be
my friends. Hence it grates on me when companies try to use social media to
connect with me as if they are my friends instead of just providers of quality
goods and services, which is what I really want from them.

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ebbv
I won't speak to what's right for anyone else's company but I will talk about
where I work;

We engage in social media because our business is a service business. Our
customers are paying us every month to continue to serve them. It's therefore
important to stay in communication with them and stay engaged with them.

We don't see social media as a major traffic source, let alone sales source,
but it is useful for engaging our current customers and communicating with
them.

We do also use it as an opportunity to spread the word about ourselves and
have more presence but we don't expect, and don't see it as a major source of
traffic or sales. That's ok because the purpose of those pages is not to be a
sales source.

I think if the point of this article is; don't sink tons of money into social
media expecting an immediate boost in sales, I'd say that's a solid point.

But if the point of this article is abandon all social media ye who enter
here, that's probably silly. It's not that hard to keep up a Facebook page,
Twitter account and even Google+ page.

~~~
bhanks
Yeah I think the point is that if you are using it as a sales channel then you
should measure it closely because it probably isn't doing as well as you
think. Social media is just an extension of customer support in its most
effective use case. You can see Lucidchart responds to customer questions via
twitter for example.

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peteforde
It's odd that "most people have no idea who we are, have no reason to care and
therefore aren't seeing our social media updates" didn't make it on the
authors' list of considerations.

Then comparing to Coke is just goofy. Without even discussing the merits of
what Coke's SM strategy looked like, there's no useful comparison between a
tiny web company and a century-old international beverage conglomerate.

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onemorepassword
I have no idea about the actual value of social media, but this evidence is
clearly stacking the deck:

* Search engines: how does your product become highly ranked and easily findable?

* Partner websites: ditto, how do people find those?

* Friend: how do those friends communicate about stuff like Lucidchart in 2013? This one is not even funny anymore...

* Co-worker: ditto. A lot off our conversations not directly about the work at hand happen either during lunch via social media. "Have you seen this cool app?"

* Other: seriously?

* etc..

I could go on, but social media clearly plays a major role in transferring
this information. It's impossible to calculate to what extend these other
channels would dry up if you would take social media out of the equation.

It's pretty much the same argument as it used to be about advertising in the
pre-clickthrough era: it could not possible be measured in direct revenue.
Doesn't make it worthless.

~~~
eliza1wright
Just to touch on one of your points, we've actually found that most people who
talk about us on social media are those using or looking for free accounts.
There are certainly exceptions to the rule, but the overwhelming majority are
people who don't want to pay a cent for the product. We still love those
people, but they don't pay the bills. And like I mentioned in the blog post, a
pretty significant sample of users confirmed that most who discover us through
social media are on free accounts.

Like I wrote, we won't be abandoning our social media efforts anytime soon.
But we _are_ taking another look at how much time & effort we invest in those
channels.

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bradleyjoyce
Posting my comment on the site here:

Of course social media results will suck if you’re doing it wrong.

Most people have no idea how to optimize their social marketing efforts; that
timing can drastically effect the ROI of a tweet; that topics and geographies
should be optimized differently.

Here’s an example:
[https://www.dropbox.com/s/5clvhpib0drqv8s/social_infographic...](https://www.dropbox.com/s/5clvhpib0drqv8s/social_infographic.png)

\---

In addition, we just built <http://www.rewardrkt.com> to integrate our API
with the <http://rewardstyle.com> API.

According to rewardStyle, approximately 80% of their publishers are earning
revenue directly from social media. Some publishers, generating $20-30k per
month in revenue, see 60%+ of their revenue from social channels.

------
will_brown
The problem is looking at this case study in a vacum, ie. Pepsi spend millions
on a social marketing campaign and it did not produce the expected ROI - so
what? That is no more determinative of social media than say a company that
runs a TV commercial that does not produce the expected ROI - in a vacuum no
one would say that TV advertising is worthless.

We all know there are successful social marketing campaigns - so why shift the
blame on social media and not those responsible for the failed Pepsi campaign?

Social media for businesses is not simply about marketing but offering people
a way to directly interact with their favorite brands - which really has never
been available until social media. For example, and in my opinion one of the
most successful companies at using social media is the UFC, who first uses
social media to interact with fans of the brand (they have bonuses for
fighters who use twitter), second as a form of customer service (when people
tweet their PPV went out, UFC responds in real-time sending service people out
to fix the PPV); and lastly marketing/promotion is an after thought (don't
miss tonight's fights #UFC) - probably not a whole lot of measurable ROI but
no arguing it is immeasurably increasing brand loyalty.

------
orangethirty
I do know that direct social media marketing works like a charm. It has saved
me a lot of time and generated good results ever since I started doing it. You
can generate sales from it without much hassle. No need to purchase a lot of
ads, either.

A lot of these huge companies market very differently than startups (those
that do market) and small businesses. They focus more on branding. So, any
result they get does not translate to you.

------
antninja
I discover almost all new music via Twitter, be it by following other
musicians who share who they like or magazines like Pitchfork who publish
critics.

Both musicians and magazines are businesses selling something.

Just today I discovered Microsoft's Infer.Net for probabilistic computations.
It's not a commercial product but it's a product nonetheless, and it's a tweet
that made me read their documentation.

Social media is definitely not inefficient, if done properly.

------
notactuallyme
The article is written very much against social media sales people, who are
basically just like sales people in any other field. The truth is that an
awful lot of companies have hopped on the social wagon and push for it
themselves, without needing to be sold on it.

Social media is just a small part of my company, we offer it as a service but
only to companies who specifically request it, and then we ask that they
provide expected KPIs up front which we can hit, and that KPIs should be
related to the platform (e.g. likes, reach on Facebook), not related to sales
- this way it is up to them to decide whether the spend is worth it or not,
all we do is ensure that we deliver what they want from us. We've never pushed
anyone to increase spend on social media (from a company point of view, we'd
far rather they spend marketing budget with us away from social media...)

Despite this, despite the fact that we don't push it at all, our biggest
social account spends $500k/year on Facebook with us, purely on community
building. So sure, maybe some companies are being sold on it by salesmen, but
plenty are making their own choices here.

------
pjbrunet
I came to the opposite conclusion last night and wrote about it here:

<http://tomakefast.com/seo-vs-social-bots-vs-people-2617/>

Essentially, SEO can really work against you if Google doesn't see your
business the way you see your business. Google rarely gives anyone special
treatment and once the algorithm makes up its mind, it's very slow to adapt
unless you do something drastic (what I did last night) like take down entire
domains that aren't getting the queries you want.

Part of my comment on the blog:

You'll change your tune when Google changes its algorithm.

You have one big point of failure on the left side of your chart. And let's be
real, I bet Google is 98 percent of your "search engine" traffic. That you
have no control over. Risky! Even worse if "partner website" is on the Google
gravy train too.

Take it from me, someone who received millions of clicks from Google. Now I'm
lucky to get 100 queries/day from them.

Some kind of social media presence is a hygiene factor. Also it's a given your
SEO is working due to positive social signals.

------
princess3000
Well, flowchart software isn't especially sexy, and unlike clothes or music or
a game or something along those lines you're probably not going to be
intrigued by the prospect of flowchart software unless you're actively looking
to make a flowchart.

Pepsi's also a bad example, it's a 100-year-old behemoth of a company and it
would be difficult to point to any single thing as responsible for a loss in
revenue, especially a social media campaign. Pepsi also isn't especially sexy
from a social media perspective, if you check their twitter it's a lot of
"Hey, anyone drinking a Pepsi right now?" which to me at least isn't
particularly compelling.

Social media can be extremely effective, local businesses especially can get a
lot from not a ton of investment. Bars and restaurants can post specials,
parties, pictures from past events, do ticket giveaways, etc. In SF at least a
lot of nightlife promotion and engagement happens on Facebook, and you only
really need a person or two per venue or production house to make that happen
effectively.

------
drewying
Direct benefits from Social Media are very low, yes. But this article ignores
the fact that a lot of modern SEO relies very heavily on Social Media. So even
though direct links from Social Media are worthless, the effect it will have
you more likely making it on page one of a Google Search result makes all the
difference.

~~~
dmgrow
Have there been any studies definitively showing a link between social media
links and increase in search rankings? I've been doing SEO for a number of
years and I'm always a little skeptical of what is proclaimed as the latest
trend.

I agree it would certainly make sense for Google to do it (and I imagine they
are, and giving favor to G+), but I haven't seen any compelling evidence
myself.

~~~
bhanks
ditto. There are huge problems in filtering authority with such a massive
source of real-time information that is so easily gamed. The barrier to
tweeting a link is magnitudes easier than putting up a new webpage. I would
argue that the only real value they are getting currently is rel="author"
information with plans for giving value to other signals later. I really think
the SEO hype about social media is an extension of the hype the article talks
about.

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dpolaske
I agree with the author in that many businesses don't see much RIO on their
social media marketing efforts. However, I would tend to think that is more of
a reflection of a poor social media strategy as opposed to social media being
worthless. Additionally, the article mentioned a brand ran a huge social media
campaign and accumulated massive increases in likes, but this did not
translate to an increase in sales. Social media is about scaling
relationships, not about accumulating likes. The brand may have increased
their likes but may not have done an effective job of building meaningful
relationships with their customers.

------
JacobJans
Here's the truth: Lucid Chart hasn't figured out how to do social media
properly. Now they're making excuses.

The fact is, many business are making a lot of money with their social media
efforts.

My little company has tripled revenues since implementing an effective social
media strategy. Nearly all of that increase is directly trackable back to the
social media marketing we are doing.

Social media marketing can be hard. It requires different strategies than most
people are implementing. But that doesn't mean it's worthless, it means that
some strategies are worthless, while others are very, very, valuable.

------
klochner
It depends on the product - few people seeing lucidchart in their facebook
feed have any use for it (or at least don't recognize said use). Lucidchart is
a product where you only need it under fairly special circumstances (small
niche).

The case for Pepsi is completely different - anyone can drink it, and just
about everyone already knows about it, so social media is largely brand
marketing.

I'd like to see comparative analysis of different social media campaigns
broken down by what the existing ad spend is intended for, and also broken
down by the main pre-campaign marketing channels.

------
colemorrison
Social media loses a ton of its value when we abstract away the usage/meaning
of it in order to view/use it only as a tool. Once we start plotting it into a
plethora of graphs, charts, and marketing plans, OFTEN egocentrism and
depersonalization happen.

We begin talking about users as "users" (a metric) instead of users (people).
Likewise the same happens to a variety of the other attributes (i.e.
interactions, etc). ROI this, reward plans, etc.

The best social media plans are the ones that don't lose the core component to
any real marketing:

Empathy.

------
zwieback
Right now social media is probably not generating real revenue for the vast
majority of companies. But the decision makers in those companies are probably
like me: in their 40s, distaste for social media even if they are generally
tech savvy.

Let the current 20-somethings become decision makers and my kids become
consumers and it'll be a whole different story. And I'll be cursing from my
rocking chair in the retirement home, maybe I'll even be sending incendiary
tweets at that point.

------
taopao
Social media and SEO are fields employing many thousands of people. They will
do or say anything they can to defend their existence regardless of their
efficacy.

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dreamdu5t
Oh you mean your product has something to do with your distribution? You don't
say!

I thought I could just spam people's Facebook walls and get rich. What gives?

------
iamleppert
The Pepsi example is a brain-dead application of social media. Of course it
didn't matter when people are deciding on healthier beverage choices and the
market is increasingly saturated. Not to mention Pepsi hasn't iterated on
their product in years, and people simply are getting bored.

No social media campaign in the world can save a shrinking business.

------
mindcrime
Obligatory: <http://en.wikipedia.org/wiki/Betteridge%27s_law_of_headlines>

That said, I think the real answer is "it's complicated". I'm pretty some
businesses benefit from Social Media, but I expect there are a lot of
variables that affect how much value they derive from it.

It also depends on how, exactly, you define "social media". It's become a bit
of a catch-all term these days, and to the extent that it's been very
generalized, I'd argue that the answer to the posed question is even more
"No".

Anyway, FWIW, one more anecdote for you... so far the vast majority of the
traffic to our blog and our website is traffic from links submitted here at
HN, on Reddit, through Tweets, posted on G+, Facebook and LinkedIn, etc. We
spend essentially nothing (other than a little bit of my time) on this, but I
believe it is increasing our exposure and brand awareness. Social Media
activity also seems to contribute to generating backlinks, which improve our
positioning with the search engines.

We're still "pre revenue" so it doesn't make sense to talk about the ROI of
our social media efforts yet, but my impression is that it's a valuable part
of our effort to get the word out, without spending a pile of money.

 _shrug_

------
codeoclock
Obviously it depends on the business. If you're trying to market work tools,
people generally don't (or don't like to) discover them socially (apart from
JS frameworks). However, if you're trying to market an album, movie, or media,
it does quite well.

------
SumoLogic
It really depends on who your target market is.. but I can see the pros of
this article.

~~~
thelegit
agreed... this article ignores the fact that lots of people simply don't like
pepsi, Diet Coke sells more than pepsi

If you're in third place... you have to make it a choice until you're first

------
AznHisoka
Social media has turned into a channel for maintaining relationships with your
existing customers, rather than growing your customer base.

A campaign that generates a million likes probably got most of those likes
from existing customers.

------
PavlovsCat
Are personal moments worthless? To marketers, yes. _Let's keep it that way._

------
Axsuul
I bet if Email Marketing was one of the options, it'd be really up there.

------
keammo1
Worth noting in this whole discussion: Apple does not have a Facebook or
Twitter page

EDIT - I stand corrected: <https://twitter.com/Apple>

~~~
hboon
They have several, fairly active Twitter accounts
<https://twitter.com/AppStore> and <https://twitter.com/AppStorejp>.

PS: I don't think @apple belongs to them

------
andys627
Lucid Charts is a tool for website owners and developers. People are going to
find them in a completely different manner than someone would find a local
restaurant.

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mathattack
This is why social media types say don't measure ROI, which is strange because
online ROI is much easier to measure than traditional media advertising.

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level09
I would really like to believe this article, and take out all our social
sharing buttons, boxes, iframes, api layers and throw them in the trash :)

------
AliAdams
It feels like the author is disregarding non-first order effects. Direct
Facebook ads/links are not all that constitute social media.

------
Aardwolf
Maybe it's because creators of charts are power users, who use the real
internet, rather than the sheeples who use social media.

------
fabrika
Social media won't bring a whole lot new customers but it is a great tool to
build a brand or to provide support.

------
hawkharris
*are social media worthless. Are, not is.

~~~
corin_
"Social media" is considered to be a noun to define that type of
site/community/service/etc. and can therefore be used in singular. The title
is worded as "Is <concept> ..." rather than "are all the things that make up
<concept>...".

~~~
hawkharris
No. That's grammatically incorrect. The word media is plural regardless of
whether or not you're using it to describe a general concept. Consider another
example. You wouldn't write "Is People Useless."

~~~
corin_
Think of it as a shortened version of "is [the] social media [category of
services/products]".

------
peterwwillis
In other headlines today:

Are cars bad?

Is meat good for us?

Will the world end tomorrow?

Are you a racist?

What's in my pocket?

------
kaonashi
(for advertising purposes)

