November 01, 2012, 8:00 AM — This has been a difficult year for social media. Google+ has been declared a ghost town. Twitter's data center glitches have raised questions about the stability of its infrastructure. General Motors pulled its display advertisements from Facebook because marketers there were not convinced they worked. And, of course, Facebook's long anticipated IPO underwhelmed investors.
Perhaps the most devastating news this year for social media advocates, though, came from Forrester. The research firm studied two weeks of online purchasing transactions and concluded that a mere one percent of them could be directly tracked back to a social network. Given that the primary business proposition for virtually every large social network is to connect buyers to sellers, such news should give advertisers pause about where to put their money.
However, what we don't know from the study is how many of the companies involved in the 77,000 transactions reviewed apply analytics to their social media marketing programs. Are they simply throwing up display ads and hoping for the best? Or, are they engaged in serious analytics of the relevant unstructured data from a social media site? I'd be very surprised, shocked even, if the companies not getting results are using analytics.
I'd be shocked not just because I'm an advocate for applying analytics to unstructured social media data. I'd be shocked because I know of too many examples of companies that are getting amazing profit-generating results from mining the information from social media. For example, marketing communications companies rigorously analyze comments left on social media sites to identify influencers or detect dissatisfaction among customers and then use the insights to reduce churn.
Further, there are other studies that show social media influences up to 74% of buying activity or that up to 90% of buyers review user comments about a product before making a purchase. So, I would be cautious about abandoning social media if I were a serious marketing professional.
By serious, I mean someone who is data-driven and understands that for the overwhelming amount of chaff found on social media sites, there are precious grains of wheat to be mined and exploited. However, if you're a marketer who is simply following a fad or using your "gut" to determine where to spend promotional dollars, I would advise you quit using social media. In fact, I'd advise you to leave the marketing profession because in the 21st century those who just jump on bandwagons or listen to their stomach will be in for long and hungry rides.
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