If Social Media Were A Stock, Would You Invest?
If Social Media Were A Stock, How Much Would You Invest?
If Social Media Were A Stock, How Much Would You Invest?

A couple of weeks ago I attended a conference for e-commerce executives. There were two keynotes that blew me away.  For opposite reasons.

The first was by Ray Kurzweil, the inventor and futurist, who spoke about the exponential growth of technology, science and medicine. Showing several graphs indicating year-over-year growth in the triple digits, he demonstrated how the world does not only seem to be changing faster than we remember in these areas — it is. As a result, a few years in the future, technology will change in ways that are beyond (most of) our imaginations. The trajectory of social media is even steeper than most of the changes that Kurzweil demonstration.

The other keynote was by the CEO of a multi-billion dollar multi-channel retailer who said he’s not investing in social media because he doesn’t want to lose focus on e-commerce and the bottom line. He said, “Until you can show me the value of a Facebook like, I’m not investing.” His comments were tweeted and echoed by people throughout the conference.

Not only was this conglomerate not investing, but a lot of the business people in the audience were (figuratively) hitting the like button on his sentiment.

Maybe it’s because we’re in the midst of this social media bubble world, but I was stunned.

In 1999, most businesses questioned the value of having a website. That’s hard to imagine today. Anyone who could plot a straight line on a graph could have seen where the trend on the internet was going. There’s a steeper trend in the use of social media.

No matter what anyone tells you, you will not know the value of a Facebook like or a blog visitor before you get started. And then, not right away. It generally takes a year or two to build your presence into something worthwhile. But being a year behind in 2011 is like being 10 years behind in 2005.  At the rate of change in social media, time is awasting.

At Lion Brand, the company where I work, we set up a Facebook page in 2009. We never paid or gave anyone a financial incentive to like us. Today we have over 200,000 engaged likes. The blog that we started in 2008 allows us to tell longer stories with video and images. That, along with our YouTube Channel with nearly 3 million views, a podcast and other industry related social media activities are all part of the media that we use (judiciously and in the context of helpful content) to reach people.

Today, two to three years after starting our social media program and making it a central part of our marketing efforts, we can publish to a large, targeted community—the people who have asked to hear from us–whenever we want. Our blog, Facebook page and YouTube channel appear in search listings that our website could never have made. We are a small family-owned business. We sell yarn (the kind you use to hand knit a scarf) and without social media we could never afford to communicate with millions of people on a regular basis. But that required a serious commitment.

Last year at meeting of a marketers that included the largest consumer product companies in the world, I mentioned that we had one person devoted almost exclusively to Facebook and Twitter. I told the incredulous group that “yes, she spends most of her day talking to people on Facebook and Twitter.”  They clearly thought that was ridiculous. One of the CMOs said to me, “we just couldn’t afford that.” Now for this particular company, the amount of money we had invested in social media was a rounding error in one of their agency’s invoices. So by “not being able to afford” it they meant “not believing in it enough to invest in it.”

If you read this blog, you probably believe in the importance of using social media but how truly committed are you? How far out on a limb (at this late date) are you willing to go? If you can’t convince your client or your  CFO or CEO that social media is where more of their marketing needs to happen, remind them of this:

1.      You will be left behind, and may not survive.

Social is the way everyone will be making buying decisions in a couple of years. The decision not to make social media a serious initiative is akin to a decision not to invest in a website a few years ago.

2.      No one is taking your calls

Customers will contact you if they are interested in what you have to offer. They will make their decisions based on how you present yourself on social media and how you are seen in the eyes of others.

3.      Your investment is going to double two years from now.

Will you buy? How much are you willing to invest?

The comments are yours.



Growth of Social Media (YouTube video)

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About the Author

Ilana Rabinowitz
Ilana Rabinowitz is the vice-president for marketing for Lion Brand Yarn and blogs about social media at Marketing Without A Net. Rabinowitz approaches marketing with an uncompromising focus on the customer and a grounding in psychology and neuroscience to understand what motivates people to make buying decisions.  She believes that businesses need to develop their own media as a means of creating a branded experience for customers.  She has spoken at digital marketing conferences including Web 2.0, Blogher Business and Internet Retailer. She is the author of a book about psychology, a book about mindfulness and co-author of a book about the culture of knitting. Follow her on Twitter at @ilana221.
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  • Michael, yes, it is time and money but there are two things that you need to do that precede both.  First, you should consider what you hope to get out of your activities, but more important–know how to engage.  It’s not about broadcasting your stuff. It’s about giving people information that will help them and sharing it in an intriguing and interesting way. Then they will share it with others.

    For example, if you write on your blog about communicating without words, do a little research and offer some fascinating images and a story.  Then share that link with an intriguing and little known fact from that blog on Twitter, rather than saying, “read our blog post about communicating without words.” 

    Take seminars (Jason Falls offers several), read appropriate blogs and books and/or hire a consultant but doing social media right will save a lot of time and money. 

  • Michael Bugle

    For a business I work with (http://www.expresslanguagesolutions.com), we didn’t invest any money into my social media effort, just time. Unfortunately, this wasn’t very successful and my social media effort failed quite miserably!

    Obviously we didn’t spend enough time or money on it. Next time we will try to spend a lot more time on it and maybe invest in something like Facebook Ad’s which seem to work well for some companies. Especially worrying to read however that if we don’t invest then we could well be left behind, something that I think would be a massive negative to our business!

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  •  had this same talk with a prospective client a couple days ago. He expressed surprise at the advancements Social Media has made yet is hesitant to invest in it because he still compares Social Media to his kids using Facebook and Myspace. It took a lot of exmaples, graphs, and points to finally get him to jump on board and he finally did. While I must admit he will be one of the tentative clients that will need that gentle touch to make them secure I believe it  will be well worth it. Great Post. Thanks for the info

    • Thank you for commenting, Al. You did your prospective client a service. In addition to everything else a consultant needs to do, he or she needs to be a good educator as well.

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  • I think one of the tough things for businesses to realize (especially smb’s) is that social media is an investment into the future with little results in the beginning. Most of the small business owners that I deal with everyday are worried about making payroll and rent each month, and it is tough for them to even think about laying down more money or time for social media or to hire a consultant. As consultants, it isn’t only our job to advise on social media, but we have a duty to change the mindset of business owners about what marketing really is. It’s an investment, not an expense.

    • Nick, I think there are two issues for small businesses.  The first is the one you mention.  Social media is not a sales tool. There is not a direct line from a tweet to a dollar.  It’s an investment in a relationship and as you say, that takes time.  The other issue is that for so many businesses, they can’t make sense of what it even is. I agree with you that at this point in the history of social media, part of a consultant’s job is to change the mindset of business owners.  Even those who do get marketing, don’t get social media because they’ve seen it only in the context of personal use, if at all.

      It’s probably hard not to seem self-serving for a consultant to push social media on a client. That’s why consultants who offer overall marketing services are in a better position than those who offer only social media to strongly encourage clients that this is an area of marketing that needs to have more of their investment.

  • Most of the small companies are still blissfully ignorant of social media influence on customer choice of products/services. This should help them know that you can no longer ignore FB, Twitter or Youtube while planing their marketing strategy.

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  • Hmmm… I’ve never thought about it!

  • Thanks for sharing such helpful information. I think this is really a very nice post. Thanks for the great content!

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