By Cara Whitehouse, Head of UK & Europe at Reload Digital, a leading UK Search Engine Optimisation, Search Engine Marketing and Online Strategy company. www.reloaddigital.co.uk
It is, of course, far too late to suggest that social media is going to be ‘the next big thing’. Social media is very big and very much ‘the thing’ already. But without doubt, the ante has been upped of late, and even the men in suits are taking note.
Investment bank JPMorgan recently announced the launch of a new fund to invest in online and digital media companies. According to reports, it plans to raise up to $750 million through the initiative.
This follows investment giant Goldman Sachs recently valuing Facebook at $50 billion, while ‘deal of the day’ site Groupon managed to raise $950 million in the financial markets. And with a rumoured billion dollar buyout for Twitter and a forthcoming flotation by business networking site LinkedIn, it seems social media is genuinely becoming big business.
But in a tough economic climate, where marketing departments are under more pressure than ever to deliver a return on investment for their online activities, can the money men’s hype around social media’s ‘value’ really translate into measurable marketing returns? Or should brands stick with tried and trusted search marketing solutions, such as search engine optimisation and pay-per-click advertising?
Xhead: Social consciousness
There’s no denying that social media is a rich source of potential. Facebook now has more than 650 million global users (equivalent to the third most populous country on the planet) and last year, it surpassed Google as the most visited site in the US, according to Experian Hitwise. But many brands have the attitude that they ‘need to be on’ the likes of Facebook and Twitter — without really understanding how (or even if) they can do it in an effective way.
In reality, the jury is very much still out as to how social media users allow brands to interact in what is essentially their ‘private’ space. As a general rule, it is only the companies that have made significant outlays (and have had the resources to create social media-specific content) that have seen significant returns.
Another fly in the social ointment is that, more often than not, these ‘returns’ are somewhat intangible and difficult to measure — which might make them tough to defend around a boardroom table. Interaction, numbers of followers and ‘likes’ may indicate what ‘positive sentiment’ has been generated by a brand. But they don’t necessarily send people to that brand’s website to make transactions.
Xhead: Search solutions
By contrast, this is precisely what the search engines have been designed to do. Based on the age-old ‘problem-solution’ format, they handle billions of searches every day, sending qualified leads direct to a company’s online door.
Despite the inexorable rise of social media, evidence confirms that the vast majority of a brand’s online traffic is still driven there by the search engines. According to data recently released by JPMorgan, the amount of traffic referred by Google to sites such as Amazon and eBay is almost three times as high as traffic coming through Facebook.
So in terms of the numbers, then, as opposed to the hype, there’s no doubt that search is the sounder investment. And, on the whole, a much less complicated one, too. Search engine optimisation isn’t without its pitfalls — it has to be done strategically using ‘white hat’ techniques. But its goals are simple to define: get onto the first page of Google, ideally in the number one spot. And these goals are very easy to monitor and measure.
The rewards are tangible too, in terms of increased traffic (and, provided the site converts well, increased sales). Specific stats vary, depending whose research you read, but there is no doubt that the vast majority of online consumers don’t bother to look beyond the first page of results returned — meaning brands in these top spots dominate the market for that search term. And the site at the top of Google can get two or more times as many clicks as the site at number two (with click through rates dropping in line with ranks).
Even the advertising delivered via platforms such as the Google AdWords Search Network is readily accepted as a relevant result of the consumer’s request for information. This is in contrast to traditional advertising which, even in highly contextual and targeted spaces such as Facebook, is ultimately still served up as an interruption to the user experience.
Xhead: Beyond the ‘froth’
Social media has, without a doubt, changed the way people interact with their friends and keep abreast of trends. But to what extent it has changed the way people shop for products or services is still open to question. And for the time being, marketers would be wise to listen to the numbers, not the hype. Particularly if they’re not blessed with the creativity or budgets to produce the sort of viral campaigns that are needed to genuinely make an impact in the social media world.
WPP chief, Sir Martin Sorrell, recently commented that Facebook’s $60 billion valuation was somewhat “frothy” — and perhaps this aptly sums up the caution with which companies should treat the social media world. The opportunities for brands to create positive stories and experiences through sites like Facebook are huge. But as yet, they still can’t match the tangible cash rewards that come from being found at the top of a Google search. So although experts are predicting that 2011 will be ‘the year of social media’, businesses would do well to remember that tried and trusted digital marketing methods, such as search engine optimisation and pay-per-click advertising, are still more likely to deliver to the bottom line.