If Social Media Were A Stock, How Much Would You Invest?

by Ilana Rabinowitz |
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A couple of weeks ago I attended a conference for e-commerce executives. There were two keynotes that blew me away.  For opposite reasons.

The first was by Ray Kurzweil, the inventor and futurist, who spoke about the exponential growth of technology, science and medicine. Showing several graphs indicating year-over-year growth in the triple digits, he demonstrated how the world does not only seem to be changing faster than we remember in these areas — it is. As a result, a few years in the future, technology will change in ways that are beyond (most of) our imaginations. The trajectory of social media is even steeper than most of the changes that Kurzweil demonstration.

The other keynote was by the CEO of a multi-billion dollar multi-channel retailer who said he’s not investing in social media because he doesn’t want to lose focus on e-commerce and the bottom line. He said, “Until you can show me the value of a Facebook like, I’m not investing.” His comments were tweeted and echoed by people throughout the conference.

Not only was this conglomerate not investing, but a lot of the business people in the audience were (figuratively) hitting the like button on his sentiment.

Maybe it’s because we’re in the midst of this social media bubble world, but I was stunned.

In 1999, most businesses questioned the value of having a website. That’s hard to imagine today. Anyone who could plot a straight line on a graph could have seen where the trend on the internet was going. There’s a steeper trend in the use of social media.

No matter what anyone tells you, you will not know the value of a Facebook like or a blog visitor before you get started. And then, not right away. It generally takes a year or two to build your presence into something worthwhile. But being a year behind in 2011 is like being 10 years behind in 2005.  At the rate of change in social media, time is awasting.

At Lion Brand, the company where I work, we set up a Facebook page in 2009. We never paid or gave anyone a financial incentive to like us. Today we have over 200,000 engaged likes. The blog that we started in 2008 allows us to tell longer stories with video and images. That, along with our YouTube Channel with nearly 3 million views, a podcast and other industry related social media activities are all part of the media that we use (judiciously and in the context of helpful content) to reach people.

Today, two to three years after starting our social media program and making it a central part of our marketing efforts, we can publish to a large, targeted community—the people who have asked to hear from us–whenever we want. Our blog, Facebook page and YouTube channel appear in search listings that our website could never have made. We are a small family-owned business. We sell yarn (the kind you use to hand knit a scarf) and without social media we could never afford to communicate with millions of people on a regular basis. But that required a serious commitment.

Last year at meeting of a marketers that included the largest consumer product companies in the world, I mentioned that we had one person devoted almost exclusively to Facebook and Twitter. I told the incredulous group that “yes, she spends most of her day talking to people on Facebook and Twitter.”  They clearly thought that was ridiculous. One of the CMOs said to me, “we just couldn’t afford that.” Now for this particular company, the amount of money we had invested in social media was a rounding error in one of their agency’s invoices. So by “not being able to afford” it they meant “not believing in it enough to invest in it.”

If you read this blog, you probably believe in the importance of using social media but how truly committed are you? How far out on a limb (at this late date) are you willing to go? If you can’t convince your client or your  CFO or CEO that social media is where more of their marketing needs to happen, remind them of this:

1.      You will be left behind, and may not survive.

Social is the way everyone will be making buying decisions in a couple of years. The decision not to make social media a serious initiative is akin to a decision not to invest in a website a few years ago.

2.      No one is taking your calls

Customers will contact you if they are interested in what you have to offer. They will make their decisions based on how you present yourself on social media and how you are seen in the eyes of others.

3.      Your investment is going to double two years from now.

Will you buy? How much are you willing to invest?

The comments are yours.

 

Related:

Growth of Social Media (YouTube video)

How To Be Profitable Without Focusing On The ROI (Marketing Without A Net)

 

 

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About the Author

Ilana Rabinowitz

Ilana Rabinowitz is the vice-president for marketing for Lion Brand Yarn and blogs about social media at Marketing Without A Net. Rabinowitz approaches marketing with an uncompromising focus on the customer and a grounding in psychology and neuroscience to understand what motivates people to make buying decisions.  She believes that businesses need to develop their own media as a means of creating a branded experience for customers.  She has spoken at digital marketing conferences including Web 2.0, Blogher Business and Internet Retailer. She is the author of a book about psychology, a book about mindfulness and co-author of a book about the culture of knitting. Follow her on Twitter at @ilana221.