June 6, 2012 1

Will Social Media Marketing remain sustainable?

By in Digital Marketing Strategy, Social Media for Business
Facebook One Month Average

Facebook Stock Plumets!

 

And what a month it has been for Facebook…

The social media giant with delusions of grandeur a la Google and Apple took a tumble, well more than just a tumble in the stock market. Facebook Inc. has shed off just north of 32% of its original share price of $38 to close at new low of just over $25. This recent airing of dirty linen did not start with the stock prices of Facebook though. The world largest social media network lost advertising revenue from the world’s fourth largest advertiser, General Motors. In a statement from GM, it emerged that they feel paid advertising, which is how Facebook make their money, is not an effective marketing tool. They however conceded that their ‘free’ Facebook pages still provided a great resource for direct marketing and that they wished to continue using free features.

If Facebook’s current woes are anything to go by, is there a future for social media marketing?

As much as the medium’s conversational marketing remains effective, social media has been unable to crack the hard nut known as paid advertising in a way that makes it effective for brands such as GM. This can be alluded to a myriad of external factors, key of which is the lack of an eco-system for social networks to live in. With the exception of Google Plus, social networks tend to remain as stand-alone facets of our digital lives, completely separated from our work and productivity suites. This limits the reach of social media platforms and inherently the reach of paid advertising. Facebook seem to be trying to counter this by planning for a Facebook smart phone and a buyout of Opera. All this is in a fickle attempt to gain the ecosystem the social media giant needs to survive and avoid becoming just another app on other platforms.

Other high fliers such as Pinterest and Twitter are also stuck in more or less the same rut; where it is viable to maintain ‘free’ conversational marketing on the platforms but not paid advertising. This begs the inevitable question; is social media sustainable?

Let me know what you think.

 

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One Response to “Will Social Media Marketing remain sustainable?”

  1. AdamBritten says:

    I think it is, but that platforms have to find a new way to earn revenue other than traditional advertising. (Example, Pinterest earns “some” revenue by automatically switching some product links to an Amazon affiliate account owned by their team. Since a lot of product pictures are shared on Pinterest, they could stand to make a decent amount there.)
     
    By the way, welcome to Livefyre! If you ever have any questions or feedback, please feel free to give me a shout.

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