I recently attended another conference in San Francisco. At the event, one of the many presenters made a rather poignant and relevant presentation titled “Why Small Business sucks at marketing”.

While the title may be arresting, the sentiment might be right given today’s changed marketing environment.

Reconsider conventional wisdom.

Let’s examine, for a moment, the impact of social media on small business. As the new networks and community platforms of social media have evolved, many experts have made compelling arguments that user-generated content would someday take a significant share away from the traditional media and message distribution pie.

The reasoning behind this view was that there is no production cost associated with social media and that people can create it for free.

The thinking prevailed that user-generated content could better meet the demand for fragmented online audiences that have smaller sizes and more specialized interests.

The promise of shiny, new objects.

The result of this evolution is that many businesses, small and large, have flocked to social media with the aspirational promise of building a community, making new connections and sharing the value that they offer in real time over the web. And while social network participation continues to grow at an astounding pace around the world, other forms of social interaction have now plateaued or are on the wane, according to research from Forrester.

In fact, Forrester found that the number of people who actively maintain a blog, write articles, or upload videos and music in the U.S. has actually dipped. 
This due, in part, to the unique traits required to be a “creator” of content. And at this moment, the number of people interested in or participating in these special behaviors has plateaued.

There’s no question that continual content creation is a significant challenge for just about anyone. But what this research begins to uncover is that many businesses may not be willing or able to meet this social media participation requirement. For there is no question that a significant new burden has been foisted on them. Continually thinking and acting like a publisher does not align with the skill sets and resources in most organizations.

What’s more, this new media has exchanged the traditional cost of targeting an audience with paid reach—think newspapers, radio, magazines, direct mail, yellow pages, etc.—for the resources and time required to create engaging content that prospects and customers will find valuable on their own.

How the data alters expectations.

Earlier predictions by pundits and gurus that user-generated content will someday replace professionally produced content—and advertising too—are now being exposed as perhaps an exaggerated vision.

It’s telling, for example, that the vast majority of blogs are abandoned after a few updates. 90% of Twitter users are “lurkers,” who just like to read what others post. And 15 of the top 20 most-watched videos on YouTube are professionally-produced while most of the user-generated content is much less memorable or simply dismissed.

The millions of blogs and sites on the web produce an impressive amount of content. But most of the posting and discussion still refers back to professionally produced content generated by specialists and edited for an audience. For example, recent research from Pew found that 80% of all links connect back to sites maintained by newspapers and broadcast networks.

So why is the number of online creators leveling off at a time when more and more are joining social networks? It’s impossible to know for sure, but there’s no question that the bar is set high, and continues to move up for small business owners who look to social media as a silver bullet for reducing their marketing costs and supporting a community of customers with content that is relevant and valuable.

The Forester study and others are beginning to expose the true costs for social media participants: Social is by no means free. And success in this new environment requires a huge investment of resources and time. Not just for a one-time event, but for the long term.

Continual participation and social media’s hidden costs.

The implications for business are clear: Either outsource this new marketing requirement or hire the resources and expertise to remain competitive.

Either decision will add significant management investment and new costs to the “free” platforms. For there is now a relentless and unmet appetite for not just mediocre, but high quality, engaging content that will differentiate a brand, influence customer interaction, further a relationship and ultimately lead to increased revenue.

So where are you in today’s marketing evolution?

Have you embraced your new role as a “continual content creator”? Do you and your team have the skill sets, infrastructure, and methods to meet the demands of this new marketing requirement?

Leave a comment and share how social media is impacting your business. Looking forward to hearing from you!

13 thoughts on “Social media: the hidden costs of success.

  1. Great post, Paul. As you so aptly point out, equating the cost of social media with its value will not be possible until businesses understand that making something “free” requires money, time and resources. Furthermore, just because it’s “free” doesn’t mean it has no value. For it to be effective, social media has to deliver something important, new or needed. If it doesn’t, and the numbers seem to show more and more people are coming to this realization, it’s just more noise. After all, social media is just another tool, and in order for it to be effective, one must know how to wield it to properly and to maximum effect. We’re all on the learning curve here, though, so it’s not surprising some of us are finding that curve a little too steep. But it’s not the medium’s fault. In other words, if you build a house and the house falls down, don’t blame the hammer.

  2. FP,

    Loved your comment: “We’re all on the learning curve here”. So true.
    We’ll just have to see how the numbers continue to unfold.
    And if all of this becomes an exercise in more noise generation, I think I may join the growing crowd of non-participants.

  3. I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you down the road!

  4. I am in the midst of an experiment. I have had a blog but am using it quite actively, doing weekly posts from a project I did in Nigeria photographing womens reproductive health programs, including girls education. I decided to do it for several reasons. First and foremost, it is the only way I can get the work out and present it to the wider world. The NGO’s will use an image or two but I had such rich material that I felt compelled to share it. Secondly, I feel it is the best marketing I can currently do and although many of the people I send notices of the blog posts do not open it, I t seems that there are a core number of possible clients that do. I am halfway through the 10 posts I plan on uploading so we will see how all this works out in the next 3-4 months. Marketing still requires more than just creating the material and sending out notices. I am starting to follow-up with emails or calls but I also know I could use a better mailing list. I am of the “older generation” so am still a bit clueless about using the social media to my advantage. It seems that there is a great deal of “noise” in the social media and from my past experience, one only has to find a few good clients. I still have a lot to learn on how all this new marketing really works.

  5. Hi Ben,

    Thanks for the supportive comments. And for the RSS subscription.
    Looking forward to sharing more soon.
    Stay tuned!


  6. Paul, It has been a pleasure reading this post after crossing paths via twitter.

    The same discussion happened around the open source boom, When Free is no longer free.

    Your post offers great commentary on the coming realization for small businesses in particular.

    I personally recognize that with a larger budget I could have a larger impact on my business via social media.


  7. Debra,

    Thanks for your thoughtful comments.
    In my view, Social media is still in the early innings. And I believe that the long term value and requirements for success are yet to be understood by many.
    We can only hope that all of the noise, spin and expectations around SM actually turn into meaningful value for those willing to experiment and invest in the potential it offers.

  8. As someone who has been writing a weekly business blog for two years now, I can attest to what hard work it is. Attracting eyeballs isn’t the name of the game anymore; keeping them is.

    Great piece, Paul.

  9. Paul,

    I think your spot on here. Professionals tend to be better at things simply because they do them a lot more than amateurs and take them much more seriously.

    If it isn’t work, you’re probably not doing it very well:-)

    – Greg

  10. Greg,
    Many thanks for your POV. You’ve written about this extensively and I think that there is an unmet need to provide both a ten thousand foot view of the changing marketing environment as well as analysis and implications of what it means in the real world. In my view, marketers are challenged like never before to deal with the new interconnectedness and rising complexity of what it takes to succeed.
    Thanks again for your thoughts.

  11. Hi Paul,
    Great article! Although I’m not sure that continuous content creation is a new requirement exactly. Publishing it appropriately, using social media, is the new part. Aggregating content is also an option for some.

  12. Thanks Judy for your comment.
    Thought you might find this post interesting from Jeff Bullas. It has a lot of relevance to the need for continual content creation and the value that it can deliver.

    The 3 New Pillars of Marketing=“Getting Found Online”.

  13. Hey,
    Nice Read. 
    Few companies are hell bent of having a social page and do all sort of stuff to make their presence felt…some even go spending huge sums so as to garner visibility but what I have seen is the missing connection…aptness. The brand in B2B are great example …connecting with masses they don’t cater to and collecting them by completely different communication channel…no correlation…What does your research say on this?

    Divesh Mehta

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