Social Media is new and exciting. No question. And it should be approached as a massive and growing opportunity. But social media has matured to the point in the lifecycle where it makes sense to ask some hard questions about assumptions we’re making. My favorite example is eMarketer, who in January 2011 proclaimed that spending would grow like this:
2009: $0.74 (all numbers in billions)
2010: $1.86
2011: $4.05
2012: $5.74
The data did not disclose which numbers were actuals, and which were estimates. But obviously 2011 and 2012 were estimates, and 2010 is questionable. Note the extraordinary growth predicted from 2010 to 2011. But the point is not to bash fishy market research estimates – it’s to figure out what’s real, and what’s not.
For example, many social media marketers have taken to the idea of “customer networks,” in which your company can create a virtual army of social fans who will promote your product to their friends via Facebook and other platforms. This may work for some products or some industries, but ultimately it will reach a law of diminishing returns: social media users who frequently recommend products to their friends will have diluted recommendation value amongst their networks, while those who do so infrequently are not likely to generate a huge return on marketing investment.
Whenever a new industry emerges, there is always a rush to find experts. But these experts have perverse incentives – they need to hype the industry that they are employed to work in, to find returns where there may be none. Simply put, let the buyer beware.
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