If you've been following discussion related to Facebook (even remotely), you probably know that the company went through a controversial and largely unsuccessful IPO filing this year. Mark Zuckerberg had been trying to avoid taking the company through an IPO, but once the number of investors passed 500, he had to.
When it was announced that Facebook would file for an IPO, it was expected to be the largest ever, with more than a hundred billion at stake. While the sale did prove to be popular, what it didn't turn out to be was the massive success that had been expected. Over-evaluation, computer problems at NASDAQ and a general pattern amongst investors made the IPO much less successful than it could have been. In fact, some experts regard the Facebook IPO as a failure.
Facebook's failed IPO started a storm of arguments against social media marketing and ROI capabilities. Social media does work -- just not the way traditional media does.
Marketers, especially those who focus on Social Media, are probably not concerned about the valuation of shares or the computer problems at NASDAQ. What they're more interested in is the third item: a general pattern of investors that undervalues companies like Facebook based on its marketing and monetizing capabilities.
Aftermath of The IPO: Marketing Awareness
Right after the IPO, numerous commentaries sprang up: experts used the failed IPO to argue that social marketing is still in its infancy, and claimed it is not possible to generate any decent ROI through social media ads. The case of General Motors, which pulled its ad campaign from Facebook, is a valid case in point.
But, while it's true that Facebook hasn't got a good marketing strategy for running ad campaigns (yet), and it offers a poor monetization model (both web and mobile), it is not true that social media marketing generates less ROI. In fact, the truth is quite the opposite.
Understanding Social Media: Lessons from the Failed IPO
Understanding the ecosystem of social media involves far more than, say, how social media marketing tips work. If you can nail the way a particular social ecosystem like Twitter works, you can easily hook, engage, and pull an audience to generate a substantial ROI.
#1. Ads Aren't the Way To Go
If there's one thing you can learn from both the IPO and the way General Motors jerked its million-dollar campaign on Facebook, it's this: ads aren't the way forward.
Social media ads -- like the ones Facebook used (and to a certain extent, continues to use) -- are like banners. People get used to them and then they stop noticing them. It's called "banner blindness."
Twitter (and more recently Facebook) has come up with the idea of Promoted Posts, which are more or less similar to carefully placed advertisements. The success of these "promoted" posts depends on the content they carry and the value the content offers to the reader. Still, considering the cost and the overall ROI of these promotions, I'd say ads aren't going to be much use in a social ecosystem.
Social media doesn't work that way.
#2. It's All About Engagement/Interaction
Social media is all about engaging the users. Interaction is key. Naturally, if the content you share engages your readers, you win their following and their subsequent interest.
Social media campaigns should be about creating engagement and interaction. Take this as an example: 1Password 4, recently released for iOS mobile platform, made sure some of its customer support team tracked (and participated in) all discussions that happened around the web regarding 1Password. This included social media pages, popular websites where the app was reviewed, etc.
This is the kind of engagement that gets you traffic, a following, and potential customers. This is precisely how social media works: it's interaction rather than advertisement. And this is why General Motors came back with its own campaign through its Facebook fan page, instead of going the old ad-way.
#3. Tracking & Analytics: Must-haves
As with everything you do online, the ROI of your marketing efforts can only be gauged through effective tracking. However, analytics is often associated either with organic search traffic coming through Google or via links from elsewhere on the web. Those involved in core marketing are fond of analytics only to track the clicks coming in through various ads.
Tracking social media requires a lot more than that.
- What if you get lots of likes but not enough click-throughs?
- What if you generate a lot of comments/discussions but not enough conversions?
- What if one of your posts gets shared a thousand times and catapults your traffic?
Social media tracking is not just about the inbound traffic through social posts. It's also about how your audience interacts; it's about realizing what the users want, what the users expect, and what users would love to grab -- all through effective tracking of likes, shares, comments, retweets, mentions, and of course, the resulting click-throughs.
#4. Going Mobile
One of the biggest reasons for the lack of interest in large-scale investments in Facebook's IPO was this: Facebook didn't have a good mobile strategy. This continues to be true. Facebook doesn't have a great way to monetize its mobile app, despite having millions of users sign in through mobile every single day.
The importance of having a mobile strategy has been emphasized countless times. If you don't have a mobile strategy, then just like Facebook, you're going to miss out on a large source of traffic. By mobile strategy, I mean:
- a responsive website that looks usable and friendly on a mobile
- geo-specific targeting that helps you climb the search engine ladder faster
- mobile-specific content to enable easy interaction, content discovery, and bookmarking
- an understanding of what a mobile user is really looking for
Social media marketing doesn't work the way traditional marketing does. It's social. It's all about engagement. Content decides how you create that engagement. And engagement results in good ROI.