Breaking News on Social Media – New Study

In past posts, I’ve tried to make the case that social media is a communication channel and that you need a sound strategic reason to consider adding it to your mix. When I was a Brand Manager I lived through the introduction of the Internet and websites. The early phase was marked with great optimism and everybody jumped on-board with the philosophy that they couldn’t afford not to participate. However, when the dust settled and the investment was subjected to rigorous financial evaluation the conclusion was that investing in a destination website was not a right choice for every brand.

A quick review of history would have saved many companies a lot of money. Radio was believed to be a “must use” communication channel when it was introduced in 1922 (Remick’s Music Store). But it turned out not to be right for every brand that used it. Then television was introduced in 1941 (Bulova Watch). It was also thought to be a “must use” channel. And? You guessed it, investing in advertising on television did not deliver a positive ROI for every brand.

Each experience reinforced that the basics of branding always apply. You always need to have a sound strategic reason for adding a media channel to your mix to have a right to believe a payout is possible.

Study Finding – 90% of Social Media Efforts Fail to Deliver an ROI

I recently read a pre-publication summary of this landmark study. It is the first study of its kind I have reviewed.

The summary provides a list of 7 key reasons for failure. They all center around the lack of proper strategic planning and having unrealistic expectations.

The study does not say social media won’t work nor does it say you should not invest in a social media effort for your community. The study does suggest you need to approach this new channel with the same objectivity and rigor you apply to investing in other communication channels.

“Plan to win and Prepare to win before you expect to win.” Zig Ziglar

While the study was not conducted in the field of economic development, I believe the learning is applicable and should be taken into account as you manage your community marketing investment.

I have no doubt you will continue to hear in webinars, lectures and seminars about the power of social media as a tool in place branding. My best counsel is to listen objectively and seek to understand the methodology used for asserting that a given program was successful. In many cases you will discover that the conclusion is based primarily on judgment (e.g. number of likes or tweets) versus a financial assessment of return on investment.

There are no shortcuts, no magic solution, and no guarantee of success. You need to invest the time to understand social media and have a sound strategic reason for including it in your overall communication plan. If you do the planning and the preparation, then your program has a shot at being part of the successful 10%. If you do not, then the odds of being in the 90% go up dramatically.

By the way, don’t be surprised to see the dialogue shift to apps and tablets as the next hot “must use” trend in communication. I can already see it coming.

For more insight into the use of social media, review some of my earlier blog posts on the subject.


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10 Comments so far

  1. Emery Graham

    July 20, 2011

    I think the study and your conclusions are right on target, i.e., Social Media is a new communication channel, no more. Its’ use must adapted to the advertising and marketing mix of effective and efficient production techniques. There is a raging debate in the Social Marketing, Development Communications, Social Media communities about what is what. Social Marketing and Development Communications are strategy generating disciplines which view social media as another communications channel.

  2. Fred D. Burkhardt

    July 21, 2011

    Social media is just one more tool that can be used for marketing, awareness, et al. It is a tactical tool and has wide applications for building awareness and communicating a message. The channel is still relatively new and its ability to monitorize and generate a return on investment spotty.

  3. Seanna Roysden

    July 21, 2011

    This article presents an interesting point of view. I think that it is important to note that social media is effective in certain avenues, not all. Therefore, depending on your end goal, social media can be useful or can be a waste of resources. We use social media as a communication tool (as intended), specifically as a way to communicate to local residents what is happening in their town, raise awareness, and create excitement. For this purpose, social media is very effective. Once social media is used outside this scope, I feel that the usefulness becomes rather shaky.

  4. Sean Upton-McLaughlin

    July 22, 2011

    Interesting article. Of the 7 points listed, the ones that resonated most with me were

    (1) Failure to understand the channel, and

    (4) Using an intern as the voice of your brand on social media

    I still remember Warren Buffet always said he would never invest in an industry he didn’t understand. Why invest money in an advertising channel you don’t understand either?

    I have also seen multiple “managers” or promoters for companies and brands on Linked In whom were not yet out of college. It doesn’t always leave a favorable impression of the company or the brand.

  5. Mpumi Motsabi

    July 22, 2011

    Most evaluations of the success of Social Media have been based on visits and tweets; I admit I used to think this was suffcient. I agree that although this gives a good indication of interaction with your brand that may have been achieved, it is not an accurate measure of ROI. Ultimately there must be clear and noticeable returns (ultimately must translate in sales).

  6. Sandra McLeod Humphrey

    July 22, 2011

    An interesting article with plenty of food for thought!

  7. Ed Burghard

    July 26, 2011

    You may find value in this blog post on social media. I wholeheartedly agree with Laura –

  8. Dawn Jensen

    August 9, 2011

    Unfortunately or not, having a social media strategy is a necessary part of building your brand – whether or not the ROI is worth it..its not just a part of doing business.

  9. Melissa Wildstein

    August 11, 2011

    Social media isn’t some ‘if you build it, they will come’. Instead of Retweets, you could very well be hearing crickets! You have to look at your customer and say where is your customer spending the majority of their time – then participate in those areas to help add value to the conversation that’s already ongoing.
    We’ve recently launched a new online community and ‘toolhouse’ for entrepreneurs called ‘PRENEUR ( We have been trying to figure out the best social medium for us; spending a ton of time on Twitter, some time on Facebook and a little time on LinkedIn and some of the other social networks. Here’s what OUR experience has been like.
    Twitter is great for us to engage people, media, etc… in our cause – leveling the playing field for entrepreneurs and helping them succeed. It does drive some traffic to our site and it drives some referrals to our members and they pick up some business. No one has joined our membership though because of a Tweet
    Facebook on the other hand seems to be working better for us as a channel because while we have fewer followers, they’re more engaged and want to not just be part of the broad entrepreneurial conversation, but they want to know specifically what we and our members are doing. We have had people actually join our organization through Facebook
    LinkedIn hasn’t driven any member sign-ups, but it has given us a way to promote our member’s services and they have gotten referrals through what we’ve posted on LinkedIn.
    So I would say, look at your audience and where they’re spending the majority of their time, tailor your conversations accordingly and monitor what you’re doing and what types of results you’re seeing so that you can make sure that you’re spending your time in the most effective manner. If you do that, you’ll be in the 10% that does see an ROI.

  10. Steve Coupe

    September 9, 2011

    Great article. Like any communication channel, social media has its place and needs to be part of an overall communications strategy. Bad TV, radio and print messages can be damaging to any brand and social media is no different. The difference is the interactive and viral part of social media that amplifies the message, making good messages better and bad messages worse.

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