But Can You Make Money With It?

December 4, 2012
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A recent Social Media Today blog post by J.C. Kendall, CEO of TekPersona, gave me a serious case of déjà vu.  He calls it, “Facebook: Waste of Time for Most Advertisers.”

Kendall points out that there’s increasing evidence that Facebook as a money-making tool is looking like a bust.  He quotes IBM reports that underscore the notion that making money on Facebook is a fool’s game.  I won’t bore you with the numbers, but data from both Black Friday and Cyber Monday show that a very small percentage of sales was directly attributable to social media.

What’s the problem?  Is it that social media is still new, and companies aren’t proficient as maximizing its commerce-generating potential?

No, instead, Kendall refers to “Commercial Intent,” stating that it’s a variable that is essentially non-existent on social media platforms.  Bottom line: people don’t go to Facebook or Twitter with the idea of wanting to buy something.  They generally show up at these sites to hang out, show off their holiday photos, brag about their kids, and to chitty-chat.

So, what’s the problem with making money from Facebook, and why does it appear to be such a challenge?  Here’s the money quote from Kendall’s blog:

“The true value of social media is that it provides a very effective forum for both corporate (business) and personal branding. ”

And that is something that seems inherently true when you look at brand pages throughout Facebook.  The very best ones are connecting with fans, giving them a voice, and allowing them to enjoy and talk about the products and services.  And that has nothing to do with whipping out a credit card.

Interestingly, Kendall points out that while Facebook really doesn’t move the money needle, Google+ has tremendous potential.  Why?  Because it is tied to an amazing search engine – and that’s where we go to learn about TVs, mattresses, and restaurants.

So, why the case of déjà vu?

Because Lori Lewis has been saying the same thing for a long time – to our clients, in Merge (the column she pens for All Access), and in memos, blog posts, and articles.

The best of these was authored almost one year ago in February 2012, and it is linked here.  “About Face(book)” nailed some of the key points to remember about the limitations of Mark Zuckerberg’s “kid,” but also how it can be used most effectively.

Lori’s money quote?

“Facebook could be the most effective gateway to the digital space you own – but only when you have earned the permission to be part of your audience’s daily lives (which is their “live feeds”) by building on your station’s social value and trust.

To continue to use Facebook as a blatant promotional/sales device erodes your station’s social value because that behavior interferes with people’s experiences on Facebook and jeopardizes what could be that priceless asset.”

We would love to hear your feedback on this one, because it has great importance in the way that broadcasters utilize the human and financial resources they have.

Money making or brand building?

I think we’re moving toward the truth.

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13 Responses to But Can You Make Money With It?

  1. Bill Wood on December 4, 2012 at 9:04 AM

    The People have spoken – again ! Facebook started by the people and for the people. Facebook for our chain of stations is used to “point” to our website where they can see the ads that we’re selling. You can make a social media outlet it’s not. When Facebook began the thought was not to sell anything. Tough to change a Tigers stripes.

    • Lori Lewis on December 4, 2012 at 9:21 AM

      Thank you for your thoughts, Bill. Right on!

  2. Andrew Curran, DMR/Interactive on December 4, 2012 at 9:41 AM

    Yes indeed. The ability for your brand to foster a community on Facebook and other social platforms that connects your station with the lives of the audience is truly a powerful opportunity that goes far beyond selling a post like it is a 30 second spot.

    • Fred Jacobs
      Fred Jacobs on December 4, 2012 at 10:21 AM

      Dead on, Andrew. Thanks for the feedback and taking the time.

  3. dave presher on December 4, 2012 at 9:54 AM

    Facebook is a real revenue generator in multiple business worlds, it is done through indirect routes of Inbound Marketing. The goal on first glance is to entertain, educate, build a deeper connection with the audience. This connection while not directly on the page of Facebook enables Broadcasters Revenue in a dramatic fashion. The software has only been available for 6 months. 2 Major Broadcasters are launching programs. You also are able to measure the ROI on how FB develops clients through deep analytics. Inbound Marketing is a big growth opportunity with over 30 other Media companies engaging in new tactics. It’s inexpensive, has a high ROI and delivers passive and direct revenue. It’s a new way of doing business. The early adopters will make a bundle and there are no tricks, it’s not expensive and it integrates Social Media. Content yes I agree, with SAAS solutions and tactics available for an industry struggling to grow I think you aren’t aware of the new trends our are viewing from a Radio perspective rather than the digital perspective. This improves engagement, fans have more loyalty and the Stations generate a large new revenue source-Dave Presher

    • Lori Lewis on December 4, 2012 at 10:30 AM

      Always appreciate your insight, Dave. What we’re specifically talking about here is radio selling “status updates.” Thank you for your time!

  4. Charlie Profit on December 4, 2012 at 11:26 AM

    Radio CAN make money with social media; fairly easily at that, provided you have a good sales team. I sell a product that does such a thing for radio. You cannot sell ON Facebook or Twitter without using their ad platforms, however when you understand “how to use social media to make money” it is a game changer. I also have an article published in Radio Ink from September 2009 that is still relevant today that explains the basics. As this is the conundrum for most radio owners, I’m happy to explain to you how.

    • Fred Jacobs
      Fred Jacobs on December 4, 2012 at 1:24 PM

      Charlie, I would love to hear more detail from you. To our way of thinking, many in radio dove into Facebook like they do with everything else – not understanding its purpose or the motivation behind why consumers signed up in the first place. The changing rules of Facebook, combined with opporutnities to monetize assets radio owns – databases, websites, and the on-air product – make profiteering challenging. Thanks for commenting on this post, and Eric Rhoads’ comments.

      • Charlie Profit on December 4, 2012 at 2:10 PM

        Hi Fred, I’ll send you an email. Thanks!

    • Lori Lewis on December 4, 2012 at 1:26 PM

      Thanks for your time and comment, Charlie.

  5. Keith Hastings on December 4, 2012 at 1:57 PM

    Never before has such a malleable tool been available to radio. When it comes to Facebook, I think about it in audience terms, a la “What’s in it for me?” Another way to look at the Facebook/Radio connection is to think of it as the most high tech, intense, and wonderful request line we could have ever hoped for.

    From our brand, our audience seeks engagement and entertainment. It’s a mistake to “pander-handle” at this particular intersection.

    • Fred Jacobs
      Fred Jacobs on December 4, 2012 at 2:05 PM

      Always nice to hear from a great programmer in the middle of these dialogues. Facebook presents a unique opportunity to connect with the audience in ways we never could before. As Lori reminds, listening to them is an important start, as is understanding why they signed up in the first place. Thanks for chiming in, Keith.

  6. Lori Lewis on December 4, 2012 at 4:06 PM

    “Pander-handle,” ha! I like that. Great to hear from you, Keith!

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