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Social Media: Is It Really Better than Traditional Marketing?

Different WayOn several occasions I’ve had clients tell me, “I need to be on Facebook” or “I need to start tweeting.” I ask, “Why?” They often respond with a befuddled, “What do you mean, why?”

Because my client’s friends or colleagues are already using Facebook, Twitter, etc. and are enthusiastic about social media’s touted marketing powers, I can appreciate why clients are so anxious to join them. To help clients understand the “why” before they catch the social media-marketing wave, I review statistics (like those below) to help them decide what would be most profitable for their business.

Social media may not be right for every business; for some, it may be a core strategy (strategic imperative) while for others it’s an enhancement to the core strategy.

Let’s look at those social media stats:

From 4/23/12 S-1 filing with the SEC
901 million active subscribers
526 million subscribers using Facebook daily
From 7/30/12 TechCrunch article
500 million accounts
170 million active users
From LinkedIn Press Center (as of 3/31/12)
161 million professionals
From 6/27/12 TechCrunch article
250 million total users
150 million monthly users
75 million daily users
From 6/28/12 Compete article
20 million users

I readily acknowledge that social media can be used to positively impact business. I also question the fervor with which social media is pursued as the ‘silver bullet’ or ‘holy grail’ of marketing to achieve business growth. Especially when it involves the abandonment of profitable – but ‘unsexy’ – traditional marketing strategies.

I know, I know! You must think I’m the only marketing guy in the world not head over heels in love with social media. Wanna know why? I’ll let the numbers do the talking.

We’ll use Facebook as our example since it’s currently the largest of the social networks:

  • 56% of Facebook pages have less than 256 fans []
  • 3.5% - 16% - the number of fans reached by the average post by a brand page. These reach statistics come from two reliable sources: 1) Facebook, as reported by TechCrunch from the Facebook Marketing Conference in New York earlier this year, puts the number at 16%, and 2) a recent PageLever study of 400 million Facebook fans states 3.5% - 7.49% of a brand’s Facebook fans actually see the average post.
  • 0.25% - 0.9% of a brand’s Facebook fans interact with the average post (e.g., any content directly related to the brand)

Maybe you’re saying, “Thanks for the stats, but what does it all mean?”

For the purpose of this example, we’ll assume that the PageLever study underestimates the reach and Facebook overestimates the reach, so we’ll take the average of the two numbers: 9.75%.

We will also take the average of the range of Facebook fan interaction with the average post: 0.575%.

Fans of Your Facebook Page 256 500 1,000 2,500 5,000 10,000
# of Fans That See Your Post 24.96 48.75 97.50 243.75 487.50 975.00
# of Fans That Interact With Your Post 1.47 2.88 5.75 14.38 28.75 57.50

Now let’s compare the interaction #s to the average response rates for direct mail and email sent to existing customers:

  • 5.2% - the average clickthrough rate of email sent to existing customers as reported by Epsilon and the Direct Marketing Association's Email Experience Council
  • 3.4% - the average response rate to direct mail sent to existing customers as reported by the DMA’s 2012 Response Rate Trends Report
# of Subscribers In Your Contact Database 256 500 1,000 2,500 5,000 10,000
# That Respond To Email 13.31 26.00 52.00 130.00 260.00 520.00
# That Respond To Direct Mail 8.70 17.00 34.00 85.00 170.00 340.00

As you can see, there is a significant difference between the response rates of the Facebook fans that respond to a post vs. subscribers in your contact database that respond to email or direct mail. The number of subscribers who respond to an email is nine times higher than the fans that interact with a Facebook post. And the number of subscribers who respond to direct mail is six times higher.

So, what do these numbers tell us?

Social media might be right for your business if you use it to accentuate the marketing strategies you already use. To be clear, it’s not that I think social media can’t work; I just think it’s important that the business employs the right marketing strategies to achieve their goals. The measurement of success that should be used is not how many fans or followers you have, but what the Return On Investment (ROI) is relative to other tactics within your marketing. And it would be prudent to investigate if other investments made with that same time and money could be more profitable.

Many questions need to be answered before you dive headlong into the sea of social marketing. Next week, I’ll give a detailed list of key points to consider before you invest time, effort and expense into your social marketing campaign. In the meantime, check out my article "How to Improve Marketing Effectiveness".

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