Monday, November 23, 2009

Misunderstood Social Media

Over the last months I have read quite a few white papers from agencies that postulate the rise of Social Media Marketing and the decline of TV advertising. Two of these white papers were “Fluent” from Razorfish and Insights that Incite” from DDB. I have a lot of respect for both agencies, especially for Razorfish’s annual publication about the state of Digital Marketing. I was not surprised that both white papers make an argument that Social Media is becoming more important because consumers value and trust recommendations by “Friends and Family” more and more while the trust and belief in TV advertising is on decline.

Both papers present proprietary research that supposedly supports this point of view. Unfortunately none of the published data points validate this hypothesis in any kind of form. Razorfish “Fluent” does not show any single relevant data point or any strong more holistic research evidence that support the hypothesis that Social Media Marketing is becoming more important at the expense of TV advertising (it shows other interesting data points though). DDB’s white paper inserts a chart about channel preference that clearly does not support the outlined point view (Page 4). The chart from Nielsen’s Global Online Consumer survey compares channel importance from 2007 to 2009. The chart merely reflects that TV remains the 5th most important influence source whereas recommendations by friends and family remain the most important. The author did not explain that the overall increased baseline of channel importance across all of them except for print has increased roughly the same percentage points since 2007.

I don’t assume that it is a malicious misleading representation of research data but a blind spot behavior by believing so strongly in a particular point of view that any data seem to confirm your own hypothesis. More importantly I believe that both arguments miss a critical element in the discussion of the importance of Social Media and related Marketing activities. The “channel” recommendations by friends and family were always one or the most important influencer in purchase or usage decisions. There might be slight increase in importance over the last decade but the true disruptive factor is that nowadays marketer can observe in real time these recommendations by friends and family. Before, marketers did not know what occurred in this channel (except by asking consumers), now one can not just observe but also try to intersect or stimulate a certain behavior in these previously private moments of making a recommendation. The key disruptive factor is that previously CLOSED networks of friends and family are becoming nowadays OPEN networks with all its benefits (for marketers) and drawbacks (privacy concerns). This is the real change, not the sudden importance of recommendations by friends and family.

I always applaud meaningful proprietary research within the agency community, but if it does not clearly support your own hypothesis than it might be wiser to rethink the original hypothesis and formulate a new data driven one. Both paper’s argument that Social Media Marketing is becoming more and more important is correct, but both white papers have misread the reason for its increased power.

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