As anyone who was once a member of an electronic bulletin board knows, social networks have been around for decades. Twenty years ago, only a handful of businesses had the forsight or the technical knowledge to consider utilizing something like a BBS for marketing purposes. But today, social media technology is much more accessible and easier to use; and the minute the first luminary claimed social networks could be monetized, the world was off and running. In short order, executives and marketing people were frantically chasing the millions (if not billions!) of dollars that would inevitably be awarded to companies who could harness the power of social media.
What happened after was both predictable and expected. Companies large and small began hiring Internet marketing consultants, and adding social networking-related line items to expense budgets. Quarterly management meetings were dominated by social networking-related strategy conversations, and revenue projections were assigned to things like company blogs, FaceBook communities and Twitter accounts—projections which were turned into marketing goals. For the first time since the invention of the corporate website, executives were excited because their destinies were finally clear: figure out a way to monetize social media!
Fast-forward to today, and the first round of reality checks are beginning to set in for some firms. As companies continue to rack up massive amounts of time and money blogging and Tweeting and managing online communities, financially-savvy Executives are noticing something: bottom line revenues are not improving. The question “Where is our social networking income?” is finally being asked, and the answer—as painful as it might be—is now clear.
The social networking revenue they were chasing never actually existed.
You see, something interesting is happening right before our eyes. Business-related social networking is slowly being exposed for what it was originally meant to be: a communication channel. A channel designed to distribute information, increase corporate visibility, and build a community around a company and its products. A channel that can be used alongside—not in place of—things like SEM, SEO, PPC, e-commerce, direct email, telemarketing, outside sales, speaking events and trade shows.
So what is my point? That social networking is not a tool designed to generate sales, but a tool companies can use to shorten the sales cycle. Are there a few exceptions to this? Of course. Part-time bloggers who make 50 bucks per month driving people from social networking sites to affiliate ads (OK, you got me . . . and feel free to click on a Google ad or buy something from Amazon while you’re here) are obviously proof that once in awhile, social networking can generate a few pennies. But executives and marketers at REAL companies—firms with things like employees and health insurance and stock certificates—need to understand the difference between e-commerce and branding. And social networking is much, much closer to the latter.
Questions? Comments? Complaints? Feel free to reply to this post. Or alternatively, I’ll take any sort of social bookmark you wish to give—a Digg, a Stumble or a Retweet would be very much appreciated.
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Author: Eric_Rudolf (68 Articles)
Eric Rudolf is Director of Marketing for one of the fastest-growing professional development and training companies in the world. Eric's work has been republished and Retweeted by The Rainmaker Report, The Social Media Guide, WhyPR, Elite Tech Jobs, Microsoft Small Business, and others. If every job paid the same, Eric would restore old houses or shoot pool for a living.
December 8th, 2009 at 9:52 pm
Like almost anything other relatively new technology, there are people that will say “make loads of money from Twitter and Facebook” just to sell copies of their eBook.
The fact is that no communication tool on the web will inherently make money for you — these tools instead give good, responsible marketers a way to deliver an effective message. Social networks are no different.
March 22nd, 2010 at 5:09 pm
It’s about someone had the guts to tell it like it really is. You are definitely right; you can generate some revenue, but the reality is, social media is more of branding and visibility. Thanks
Twitter: abkingRemodel
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See you on twitter, have great day
March 22nd, 2010 at 9:21 pm
Social comments and analytics for this post…
This post was mentioned on Twitter by TSCB: [ Just Posted ] The Myth of Social Networking and Revenue Generation … http://tinyurl.com/l9shlj … Feel free to Retweet or Republish….
March 25th, 2010 at 5:38 pm
Glad I could be of help! In all seriousness, since this article was first written and posted, I believe most executives are beginning to believe it might be true. Maybe some day, someone will come up with a legitimate way to suck money out of their Facebook followers . . . but I haven’t seen it yet. As marketers, we need to start re-positioning the way we pitch social networking to our bosses: “It can lower our costs, grow our contact lists, and help us distribute information. Oh, and we might make a few sales once in awhile, too.”
Thanks for commenting!