Separating Social Media Hype From Reality

Dear Dr. pROfIt: I’ve been in direct marketing since 1985. I think I’ve seen just about everything during my career. But something seems different in the past two years. There’s so much hype about social media and mobile. We're actively measuring what works and what doesn’t. Is it my imagination, or are newer channels simply not generating incremental sales?

Dr. pROfIt: So much of what we read is specific to one brand during one campaign at one point in time. Go back to the mid-90s, when e-commerce burst onto the scene. It was self-evident that e-commerce was going to change the world. You simply looked at the sales generated by the channel and knew that you had to be in the e-commerce game or else quickly fall behind your competition.

I remember being at Eddie Bauer in the late 90s. It went from seven e-commerce orders a day in 1996 to $100 million in annual e-commerce demand in 2000. That, folks, illustrates how self-evident it was that you had to be in the e-commerce game!

Now let's take a look at social media in 2010. We continually hear about brands that have a half-million or million Facebook fans. Well, that’s wonderful. That’s validation that social media provides a channel for consumers to interact with a brand.

It isn’t, however, validation that social media creates orders.

That’s the big difference between social media and e-commerce. Undoubtedly, social media is creating orders for brands with a specific customer demographic. If you're a catalog marketer with a 60-year-old male customer base, it’s unlikely that social media will generate any incremental orders. If you're an e-commerce brand with a 30-year-old female customer base, it's likely that social media is responsible for a significant percentage of your orders.

Mobile is likely to be a transformative channel — maybe not at the level that e-commerce is, but it's going to be transformative.