Monday, September 20, 2010

Why Social Media is not in the C Suite of Big Brands

Last week I helped you as a marketer figure out the reality in terms of how many people are active on Twitter and Facebook, vs the number the networks want you to believe.

Today it's time for a different angle. I have stated that Social Media is an Interpersonal Communications Technology Revolution connecting people all over the world. And yes it has empowered the people to mobilize, thus making listening skills important to ensure your Brand keeps it's image up. But why so little caring and spending from CMO's and thus acceptance by CFO/CEO's when it comes to marketing/selling?

If you are in the C-Suite of a Fortune 1000 company you make a lot of money. Your money is enhanced by the stock price. The stock price is moved by sales. Big sales. Not small sales. You are going to focus on the big bang for your buck. Not whether Nancy in Iowa is a loyal Brand Ambassador.

So I am going to use Facebook which is viewed as the largest scalable network. Some Brands have upwards of 10mil fans. But I already proved that possibly up to 60% of users on Facebook are Ghosts. They either just browse or they do not exist. Now some case studies with my estimates of their actual customer base world wide. Engagement is the average number of people who either click Like or Comment on a Fan Page Post from the Brand:

Nabisco Cookies:
Customers: 600mil +
Fans:527,000= 0.08% of their Customers
Engagement:100-500= 0.02% to 0.09% of their Fans
Twitter Followers: 0 could not find a Nabisco or Oreo's account.

Not making money for the CEO

Customers: 26mil per day! I estimate 1 bil customers
Fans: 3mil = 0.3% of their customers
Engagement:500-1500= 0.016% to 0.05% Engagement
Twitter Followers: 46,000

Not making money for the CEO

Customers: 400mil
Fans: 13mil = 0.325% of their customers
Engagement: 100-400 wall posts by Fans (Starbucks does not post to its wall)
Twitter Followers: 1mil- Starbucks does get a ton of mentions on Twitter due to FourSquare etc, but I posit that this is not adding to sales very much. Twitter is not drawing people into Starbucks, people are Tweeting they are there, or that they want Starbucks. This has nothing to do with what Starbucks is doing on Twitter. In fact the Official Starbucks Twitter Account averages only 1-10 Tweets per day.

Not making any money for the CEO.

I am not saying this will never change. What I am saying that until it does change the CEO doesn't give a flying f*ck about Social. In fact Vice Presidents might not either other than thinking its a cute new accessory for their image. And a caveat, the engagement numbers are actually better if 60% of Fans are Ghosts, but the percentage of world wide customers are much worse if this is true, or if I severely underestimate world wide customers.

My next post will be using Starbucks and McDonalds as a case study in what they can do to improve their Social Media impact and results.

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