April 22, 2015

One Chart Demolishes Social Media Fantasy

If you're still a believer in the fantasy of social media marketing on Facebook, this chart may change your mind. It comes from Jay Baer at Convince&Convert.

While it is far from definitive, it offers us a microcosm of what is going on in social media marketing. And it suggests that the whole "conversational" theory of marketing is a cruel joke.

What the chart shows is that over a 5 month period, from October 2014 to February 2015, as Facebook's organic reach dropped dramatically, its share price increased dramatically.

I'll explain what this indicates in a second, but first let's clearly state the caveats:

1. Five months is a short period for drawing big conclusions.
2. Share price is a better indicator of market sentiment than it is of business success.

Having said that, if the chart is accurate, it strongly suggests that Facebook's success as a marketing tool is totally related to paid advertising and not at all related to "conversations about brands."

The first thing we need to understand is the meaning of "organic reach." It is the number of people who were served a post free. As you can see, according to Baer, in that 5 month period the average number of a brand's followers who were shown one of the brand's posts on Facebook dropped by half, from 12% to 6%.

Also according to Baer, that number is now often 1%. He goes on to say...
"...Facebook encouraged businesses to build and reach audiences for “free” on their platform (until that free ride ended)... Facebook has still been able to pull off the greatest Gillette scam ever (you give away the razor, and then sell the blades)."
Social media promised us "conversations" among our followers, and now only 1% of our followers are even seeing our Facebook posts.

During the same time period Facebook's share price rose almost 40%. Why? Because while clueless marketers still believe in the fantasy of Facebook social "engagement," Facebook has gone all-in on good, old-fashioned paid advertising.

By cutting organic reach to almost zero, they are not even pretending to be a social media marketing entity.

Is their conversion from a social medium to a paid advertising medium a good thing for marketers? Not according to the London School of Marketing which released a white paper this week that called marketing on Facebook "a lost cause."

According a piece on the Global Marketing Alliance website...
"...experts claim Facebook advertising is no longer a cost-effective option for marketers who are seeking to build new audiences or attract new customers...Facebook advertising has changed. For some, it has shifted from being every marketer’s dream to, quite frankly, a lost cause. "
Social media marketing is useful for ultra-high-interest products (movies, bands, celebrities) and some small brands in small categories.

For the rest of us -- as we have been saying here for years -- the idea that consumers are in love with our brands and want to have conversations or social interactions about our brands online is an infantile delusion.

The billion or so people engaged in social media want to engage with each other. Not ads, not brands, not you, not me.

Thanks to Plannersphere20 and Alistair MacLenan.

My new book -- "Marketers Are From Mars, Consumers Are From New Jersey" -- will be available at Amazon within a few weeks. Here's some promo hype.

April 20, 2015

How Marketers Lie To Themselves

Anyone who has spent time in advertising knows that there are very few things in this world as unreliable as the numbers we throw around.

Our industry is so poorly trained in mathematics and statistics, we can be fooled by the most elementary of statistical manipulations and misrepresentations.

But our denseness about numbers is often as much about self-delusion as it is about ignorance. Often, we want to believe the lies we tell ourselves.

I remember not long ago -- during The Great QR Code Scare Of 2012 --  I was finding the following statistic being bandied about: "60% of people say they use QR codes."

This statistic was obviously total bullshit, and yet serious people seemed to be taking it seriously. Anyone who spent any time in the real world could see that no one was using QR codes. Yet this stat kept popping up to justify the implementation of this dimwit technology.

It was pretty clear to me what was going on. Someone did a survey: "Have you ever used a QR code?" 60% of some sample said yes. This lead to enormous misrepresentation and misunderstanding.

Here's how it happens. Let's say you ask people the following question: Have you ever eaten a snail? And 60% of the people say they have. Then you create a sentence -- "60% of Americans say they eat snails."

Even though the incidence of eating a snail may be once in a lifetime, the sentence in question appears to make the eating of snails a regular occurrence.

The same with the QR code. If 60% of consumers used a QR code once, the actual incidence of using a QR code while shopping might be one in a hundred thousand.

But by structuring the sentence to say, "60% of people say they use a QR code" instead of "the incidence of QR code use among shoppers is one in a hundred thousand" a truth is technically being told, but reality is being radically misrepresented.

While we in the marketing business often use slippery words and sentence structures to put a happier face on our communication to consumers, we don't realize how frequently this trick is used on us.

When an entire industry wants to believe, there is no better time to be skeptical.


April 16, 2015

Corruption And Fraud Starting To Hurt

A couple of weeks ago we posted a two-part piece that asked Will Advertising Corruption Scandal Explode?

The nub of the potential scandal is that the gullible clowns in big marketing corporations are being screwed blind by the sharpies in the global agency holding companies who are...
1. Buying online media at one price and selling it to them at another.

2. Taking kickbacks...oops, I mean "volume-based incentives"...from media vendors.

3. Buying media that is in the agency's best interests, not the client's.
My point of view was that clueless advertisers have been getting so badly date-raped by every variety of con man, digi-hustler, techno-crook, and cyber-scammer for so long that they probably wouldn't even notice a few billion gone missing to agency scoundrels.

However, it could be that I'm wrong. In the last few days a couple of influential ad industry analysts have been downgrading the big agency holding companies based on the belief that their somnambulant clients might finally be regaining consciousness and realizing what's been going on.

Brian Wieser, an influential analyst at Pivotal Research Group, had this to say...
“The volume and specificity of allegations by aggrieved media owners, former agency executives and marketers are difficult to ignore. Rightly or wrongly, there is a growing perception among marketers that agencies have been misleading, transferring value associated with media volumes without clients’ full understanding or support.”
He went on to say...
“As...more specific allegations come to light, a drumbeat of negativity will build around the sector over the course of this year....Given this risk, we’d recommend that investors move to the sidelines or exit the sector altogether while it all plays out.”
So who knows, maybe these creeps will finally get what's coming to them.

I know how hard and how diligently most people in the agency business
work on behalf of their clients. I've seen the blood and I've felt the suffering.

The online media industry is rotten to the core and a terrible discredit to our business.

And as we have documented here over the past few years, the agency component of online media fraud and corruption is only a small part of this sleazy circus.