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.
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