How long will “Social Media Marketing” stay effective?

Social Media Marketing will remain effective as long as people/members on social media don’t lose their social engagement appetite on social networking sites (like Facebook), professional networking sites (like LinkedIn) and/or social sharing websites (like YouTube, Twitter, Pinterest, Instagram, Digg, Reddit etc.).

The sheer idea of people losing interest in such websites will cause advertisers to look for different territories to find target audiences, thereby influencing the development of the social media industry itself and its advertisement-based models, when investment money stops pouring in as it used to the last 15+ years. 

My own depiction of the dependency-relationship Social Media and Marketing have, is as follows:

1. Social Media Companies need Investors
2. Investors need Return on their Investment (ROI)
3. Investor’s ROI needs Social Media Success
4. Social Media Success for Investors needs Advertisement Money
5. Advertisement Money needs High Marketing ROI Guarantees
6. High Marketing ROI Guarantees need High On-site Engagement Statistics
7. High On-site Engagement Stats need Big Members Bases & Advertisement Model Development
8. Big Members Bases Growing & Advertisement Model Development need Investment to Achieve Fast Development & Exposure
9. Investment to Achieve Fast Development & Exposure need the Marketing industry to promote Social Media massively
10. The Marketing Industry builds a natural “livelihood alliance” with Social Media, and the circle is round again.

This basically means that as long as member-bases, overall engagement rates and on-site browsing rates do not show alarming decline or become threatened by a new more popular entrant or a next-better-thing, like Skype or Whatsapp (social media Apps), typical social media websites will continue to thrive at exponential and hard to keep rates.

And if such “threats” appear to be eminent, the affluent giants (like Facebook & Twitter) will “annex” them through acquisition, exactly like Facebook did with it’s $19 billion acquisition of Whatsapp.

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Birth of an alliance

Marketing through social media arose from the basic foundation which marketing has always thrived on, which is reaching target audiences with tailored marketing messages to achieve maximum exposure and high guarantee of marketing ROI (whether sales related or brand awareness related).

Social Media created the ultimate “reality version” of what was viewed as a “fairy tale world” to the mighty marketing industry, where (potential) customer are no longer fragmented & difficult to reach or to define, but rather gathered, connected & organized happily & voluntarily, in one place (like Facebook, a specific Facebook group or a country-category) to receive the marketing initiatives of businesses and organizations, while members (again, voluntarily) share & contribute their own “user-generated content“, either providing insights for research analysts, facilitating profile-targeting advertising techniques OR spreading the word among their virtual social network members (who are often members of real-life social networks too).

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Viral Magic

The very nature of social media, allows for a strange effect never before experienced in the world of marketing, which is the so-called viral-spread of information, or Viral Marketing. 

Viral Marketing means that if every five people who liked (not by smiling at it but by clicking on it) your Facebook updates or Twitter tweet shared this with all of their Facebook friends” or “Twitter followers”, and their friends did the same in a continuous domino-effect of sharing, the number of people who would read your text or click on the link initially posted by you 10 minutes ago, may suddenly be in thousands, in a “split of a second” (or at the click of a mouse).

And all of this is still done happily and voluntarily by the social media crowd. Plus, there is little to no annoyance any more from unwanted SPAM emails jamming your e-mail box or advertisement flyers and folders stuffed in your real home-mail box! How so happily and voluntarily?

Well,

• Happily, because membership is mostly free & it allows for convenient social interaction with dear ones or new others.
• Voluntarily, because registration, content posting and content sharing are facilitated & encouraged by design AND protection of privacy is left to the control of the members themselves (to an acceptable but controversial extent), through the indispensable “privacy settings” option.

Both the marketing industry & the social media players will make sure such a massive marketing platform (better to say an ever expanding marketing universe) will not lose its shine that soon!

It’s a strong & hard to break alliance!

What is more important “acquisition” or “retention”?

None of the two yet, as the definitive answer depends mainly on the phase of business life cycle the company finds itself in and as a derivative thereof, the customer life cycle. In any event, it is a rule of thumb, that you should not be a business that loses clients “carelessly”. 

Determining whether “acquisition” or “retention” is better at any given phase, depends on many factors that need to be calculated carefully, like:

1. The phase of business life cycle the company is in. A start-up will have a different strategy than a mature business geared towards more acquisition.
2. Is it B2C or B2B?
3. Are you selling products or services?
4. Service or product life time: once per month or once per 5 years?
5. Market competition: how fiercely do you have to fight for customers?
6. Necessity of acquisition; do you actually have to acquire customers intensively or do they choose you willingly?
7. Necessity of retention; Do you have to retain customers or do they come back every time “voluntarily”?
8. The type of product or service you’re selling in terms of high-loyalty products, luxury products, basic products, FMCG etc.
9. Market micro-economics: like purchase-power & competition.
10. Business sector: a B2C translation agency for only certified translations of official papers (diploma’s and ID’s) may choose to concentrate on acquisition and word-of-mouth marketing, since repeat purchase is unchangeably low for this specific service.

Most experts would put retention higher on the importance-list than acquisition, taking all pro’s and con’s into consideration, for reasons related to the researched fact that the cost of acquisition is 2,5 times the cost of client retention in relation to ROI. Although this percentage fluctuates regularly, sometimes claiming that retention’s ROI is 3 times that of acquisition, it has always had a non-variable & consistent advantage in favour of retention.

It basically means that it costs much more to attract new customers (without necessarily converting them into buyers) than to actually invest in current customers who already performed a first purchase. Furthermore, your existent client base is the livelihood of your business at less cost, while acquisition is like taking a wild guess in terms of expected ROI, but a certain loss in terms expenditure.

Others would argue that no retention is possible without acquisition preceding it, in the first place. How could you retain a “client” that you haven’t acquired yet? That client is non-existent and you should acquire him/her first.

It’s your say based on a more detailed and subjective approach, that leaved little space to philosophy and more to factual data and market research findings.

Is it “suicide” to simultaneously rebrand and reposition a brand that has a superior “brand-equity”?

I will ask the following non-rhetorical question first: what is the need for re-branding in the first place if the “brand equity” is immense?

Vital information may be missing here that can be collected via the following sub-questions:

1. Are we dealing with a new product by the brand OR new customers OR new markets?
2. Your brand equity is immense and superior, but is it “negative” or positive” for your new positioning?
3. Is it needed for the repositioning to a new customer segment that is willing to pay for “cheaper” more generic products than “branded ones”?

 

I believe the core of your question lies in the word “simultaneously”. And I think that in doing both simultaneously, the risk is higher and indeed closer to a suicide (if it fails). Why? That is too much change at once! Besides, to which one will you attribute a possible failure and how much time, effort and cost will such inquiry entail before you can reverse damage?

You may want to re-position first, benefiting form the superior brand name you have and the value derived thereof and see the result. Second, if you want to offer a different price-category, you may want to re-brand and see the effects of such action, better to pilot it and research it thoroughly first.

 

In many cases, considering an “endorsed identity” is much safer, one that derives trustworthiness, value, quality and recognition from the mother brand but offers “almost-the-same-for-less”. One that you can “easily” (=with minimal damage incurred) withdraw from without “self-killing” your mother brand.