The other day I got an email from someone who wanted to introduce me to their new social media network.
And not just me, but YOU — through me.
They suggested I check it out, and then write about it here.
I ignored the message.
Then, I got a second message. The “just checking on you because you didn’t reply to my last message” one…
To which I did reply, because I didn’t want to spend a bunch of time deleting future emails.
I basically said that I don’t have a ton of interest in social media… And “new social media” is a total turnoff for me. And so I wouldn’t be writing about this particular platform.
The person write back and thanked me for my honesty.
I can go back to early 2010, and I was having private conversations about the “social media bubble” aka “dot com 2.0.”
(I was definitely early to that call, and have avoided what could have been some very profitable investments as a result… Oh well…)
Now I’m talking about this purely from investment and company valuation terms. We’ll get to marketing in a minute.
In the first dot com bubble (circa 1999), the secret to raising millions of dollars in funding (private or public) and sending your fledgling company to sky-high valuations was simply throwing “.com” in your name.
And in the last few years, the same thing has happened with “social media.”
It always cracks me up when, from time-to-time, one of these guys (or gals) makes it through onto Shark Tank.
They start pitching the sharks… And their whole idea is “social media for XYZ.”
That’s their whole thing. I’m going to build a social media platform for nurses. I’m going to build a social media platform for copywriters. I’m going to build a social media platform for ambidextrious slide guitar players.
And they think just because it’s social media, they’re going to make a killing. (Hint: Facebook is already the social media platform for that. As-is Twitter. As-is LinkedIn. As-is… You need a better unique selling proposition.)
The sharks are too sharky for that — but not all investors are — and certainly not all business people.
There’s confusion between building a social media platform and building a business.
(Just like there was a big confusion in 1999 between building a website and building a business.)
Facebook’s IPO (and current 71.8 price-to-earnings valuation) shows just how overblown this can get with the major players.
Facebook is probably going to stick around. Primarily because they’ve figured out revenue generation through advertising. And yet, most folks thought MySpace was going to stick around — and look what happened there…
But today investors are valuing Facebook stock at what’s basically 72-years worth of today’s earnings. Meaning, if they were given ALL the profit their shares of stock entitled them to, every year, it would take 72 years to earn back their original investment. Even if Facebook manages to grow quickly, this seems like a ludicrous valuation. (It’s generally thought that public stocks are “fairly” valued at a price-to-earnings ratio of 15.)
This isn’t an investment letter, but I make this point because marketers are committing this same grave sin.
While investors are willing to pay ludicrous sums of money to get in on Facebook’s stock, marketers are willing to spend ludicrous sums of time and energy to try to make Facebook (and other social media platforms) work.
And so, particularly in the mainstream, you see businesses being measured by how many Facebook likes they get, how many fans are following them, and so on.
On Twitter, it’s followers. On YouTube, subscribers. On LinkedIn, connections.
The assumption is that more is better.
And perhaps there’s a case to be made in the brute force approach.
However, I’d like to suggest an alternative approach to social media. This is a strategy that I see top direct marketers applying over and over again, with great success.
And they’re not just using it to stroke their egos with the number of likes they get. Rather, they’re using it to drive real business results (customers, revenue).
First, we have to go all the way back to THE FORMULA for internet marketing profits.
I’ve written about this before. With a hat tip to Ken McCarthy, who was the first to beat this drum.
Here it is…
Traffic + Conversion = Profits
(As I write this, Ryan Deiss’s Traffic and Conversion Summit is going on in San Diego — hmm, wonder where he got that name from? I digress…)
Get qualified traffic to your website. Get consistent conversions (at good economics). And you’ll have profits.
There’s a lot of crap you can focus on in internet marketing.
But you’ll never go wrong by focusing on these two things.
This points to social media’s big role for direct marketers…
Social media has the advantage, alongside search engines, as getting the most traffic on the internet.
7 of the top 10 most-trafficked websites are either search or social media.
In the US, 11 of the top 25 websites are social media.
Last month, nearly 1.4 billion users were active on Facebook. 72% of adults online visit at least once a month. 890 million people check it daily — and spend an average of 21 minutes there.
That’s a lot of attention.
YouTube has a billion users. 4 billion videos are viewed every day.
Again, a ton of attention.
The other top social media platforms are similarly mind-boggling.
But, as we’ve learned, attention does not equal a business. Attention does not equal profits.
Traffic plus conversion does. And in order to make that happen…
The key goal for direct marketers in all social media is to get people OFF social media…
As you start to establish a presence on social media, you don’t want to be getting attention (or likes, or follows, or…) for attention’s sake…
Your goal is eyeballs.
And specifically, eyeballs that will turn into clicks to your website.
And clicks to your website that will engage with you on a deeper level. First, an opt-in. Then, a first purchase. Then more purchases.
And it doesn’t matter if you’re selling soap, information products, or whatver…
Social media is a great first-touch traffic source…
But as quick as you get that traffic, you need to be making it convert — OFF social media — into someone that has a deeper engagement with you and your business than clicking a “Like” button.
You want to get them involved in an ongoing conversation via your email list.
You want to be establishing a relationship with them to predispose them to doing business with you.
You want the ability to make offers they can respond to.
And again, this should all happen OFF social media.
Get this right, and you’ve figured out how to use social media as a business tool.
But a quick warning before I sign off…
This will tend to make you jaded against social media evangelists proclaiming the latest and greatest new social media platform.
You’ll take a “wait and see” attitude and wait until you’re able to identify a subset of users that represent a targeted traffic source for your business. And then you are likely to do minimal “socializing” on social media. You won’t care much about likes, either. Instead, you’ll simply dangle carrots to get this targeted traffic to come to you.
Do this, and you’ll find it’s THE major social media breakthrough for business.
Yours for bigger breakthroughs,
Editor, Breakthrough Marketing Secrets