Atomic Direct, LTD

My 4th of July post included links breaking out social media consumers. With this foundation, let me suggest the following:

Your effective social media audience is about 10% of your potential customers.

First, let me clear about “effective”. One of the problems looking at social media is that “everybody” has an account. But that doesn’t mean you can reach “everybody” through social. The only people who are reachable are those who rise above a certain level of activity and who pay attention to/pass along commercial messages.

So in these terms, “effective” means those people you can actually get in touch, motivate, or otherwise influence with through social media.

Secondly, the lessons taken from this numbers seem pretty solid. About half of the US has a social media account and about 20% of those are active enough to be reached commercially (posting, checking in). Hence, 10% seems a smart choice.

This number is postulated as a planning estimate – realistic, even slightly aggressive, without being curmudgeonly. It’s not intended as the be all and end all of counting social media impact. Even better, the lessons it tells us seem resilient. Double the number. Does it change the role social plays in your marketing? Not really.

But Aren’t There Hundreds of Millions of Facebook Accounts? Yup. There are. Many are duplicates and a great many are foreign. And of the remaining, are they active enough? To reach someone commercially they need to be active enough that your messages don’t scroll below the page break on the social media screen.

So new data finally helps us see through the outsized claims from the social media companies, the research manipulation by VC funded PR efforts, the gaga news coverage of Tweets (where you reach far fewer than 10%), and hip new ad agency claims to have bred a new type of man who populates this Brave New World.

Some might suggest the number will grow in the future. I’m not so sure. Because the way social media works a consumer has to sort through a tremendous information load. And that suggests that it may be limited to 10% for quite some time to come.

Isn’t This Bad News? No larger company can survive communicating to only 10% of their market. So if you can’t reach any more than 10% of your target through social media, then it cannot be the core of your marketing.

Taking it one step further, it’s my experience that many of your most valuable customers probably aren’t reachable on social media. I’m close to three “enthusiast based” social communities for very high end craftsman topics. Social media plays a strong role for companies marketing to all three. And specialty topics like these are predicted to attract experts.

The truth is, I’ve found that the best craftsman aren’t socially active. And, that many of the most socially active are NOT great craftsmen. (Showing how mere social activity doesn’t guarantee that someone has significant influence.)

But while SoMe isn’t going to take over the world, it isn’t all bad news.

The Good News: 10% Is Pretty Good. Think about radio. If you can find a radio show that reaches 6% of the audience, you’ve got a VERY large shows. What about TV shopping? QVC and HSN used to proudly talk about having around 8% of TVHH’s as viewer/shoppers. Traditional TV? Except for the absolute biggest of primetime shows, 6% of the population is a very nice number.

That comparison isn’t really fair. Hedging for viewing activity, “TV” in all forms reaches probably 70% of your potential audience even though a single network show is unlikely to get more than 2% or 3%. Hedging for listening activity, radio in all forms probably reaches 60% while a single show typically reaches less than 1% of a market.

Still, all-in-all a 10% potential (after a LOT of spending and hard work) is a pretty decent number. There is one qualitative difference that is important.

When you buy a TV show, you buy a direct connection with a known audience. But when you attempt to market through social media, you probably need to figure that each endeavor gets little audience pieces whose size is unknown until after the effort is complete. That means it’s difficult to set a goal and know what it will take to meet that goal. How much effort does it take to get 10% of your market to see your message with social?

C’mon, You’re Ignoring Lady Gaga. Someone might point to the hundreds of millions of Lady Gaga video views on Youtube. But big numbers aren’t the same as meaningful numbers.

First, those views are driven by huge traditional media coverage – Gaga is brilliant in her ability to drive “buzz” with outrageous actions.

And, of course, Youtube isn’t social media. Those views are driven by massive TV and Magazine coverage. So what is social media’s contribution here? I think it’s that social media raises her latest antics to the awareness of the traditional media.

This is, in fact, a very solid use of social media – showing that the buzz is high enough that it is picked up in the traditional media. And it makes sense that it’s effective with the 10% number.

Only A Starting Point I don’t think this is, in any way, the last word on social media. Rather, it’s a starting point. And I hope that there continues to be quite a bit of conversation in three areas:

- Can we get more accurate on this general number?
- How can we develop estimates for specialized markets?
- Assuming the number is below 25%, how should we use social as part of our mix?

And THIS discussion will be much more productive for marketers than the hype we’ve endured for the past few years.

Copyright 2011 – Doug Garnett – All Rights Reserved

My 4th of July post included links breaking out social media consumers. With this foundation, let me suggest the following:

Your effective social media audience is about 10% of your potential customers.

First, let me clear about “effective”. One of the problems looking at social media is that “everybody” has an account. But that doesn’t mean you can reach “everybody” through social. The only people who are reachable are those who rise above a certain level of activity and who pay attention to/pass along commercial messages.

So in these terms, “effective” means those people you can actually get in touch, motivate, or otherwise influence with through social media.

Secondly, the lessons taken from this numbers seem pretty solid. About half of the US has a social media account and about 20% of those are active enough to be reached commercially (posting, checking in). Hence, 10% seems a smart choice.

This number is postulated as a planning estimate – realistic, even slightly aggressive, without being curmudgeonly. It’s not intended as the be all and end all of counting social media impact. Even better, the lessons it tells us seem resilient. Double the number. Does it change the role social plays in your marketing? Not really.

But Aren’t There Hundreds of Millions of Facebook Accounts? Yup. There are. Many are duplicates and a great many are foreign. And of the remaining, are they active enough? To reach someone commercially they need to be active enough that your messages don’t scroll below the page break on the social media screen.

So new data finally helps us see through the outsized claims from the social media companies, the research manipulation by VC funded PR efforts, the gaga news coverage of Tweets (where you reach far fewer than 10%), and hip new ad agency claims to have bred a new type of man who populates this Brave New World.

Some might suggest the number will grow in the future. I’m not so sure. Because the way social media works a consumer has to sort through a tremendous information load. And that suggests that it may be limited to 10% for quite some time to come.

Isn’t This Bad News? No larger company can survive communicating to only 10% of their market. So if you can’t reach any more than 10% of your target through social media, then it cannot be the core of your marketing.

Taking it one step further, it’s my experience that many of your most valuable customers probably aren’t reachable on social media. I’m close to three “enthusiast based” social communities for very high end craftsman topics. Social media plays a strong role for companies marketing to all three. And specialty topics like these are predicted to attract experts.

The truth is, I’ve found that the best craftsman aren’t socially active. And, that many of the most socially active are NOT great craftsmen. (Showing how mere social activity doesn’t guarantee that someone has significant influence.)

But while SoMe isn’t going to take over the world, it isn’t all bad news.

The Good News: 10% Is Pretty Good. Think about radio. If you can find a radio show that reaches 6% of the audience, you’ve got a VERY large shows. What about TV shopping? QVC and HSN used to proudly talk about having around 8% of TVHH’s as viewer/shoppers. Traditional TV? Except for the absolute biggest of primetime shows, 6% of the population is a very nice number.

That comparison isn’t really fair. Hedging for viewing activity, “TV” in all forms reaches probably 70% of your potential audience even though a single network show is unlikely to get more than 2% or 3%. Hedging for listening activity, radio in all forms probably reaches 60% while a single show typically reaches less than 1% of a market.

Still, all-in-all a 10% potential (after a LOT of spending and hard work) is a pretty decent number. There is one qualitative difference that is important.

When you buy a TV show, you buy a direct connection with a known audience. But when you attempt to market through social media, you probably need to figure that each endeavor gets little audience pieces whose size is unknown until after the effort is complete. That means it’s difficult to set a goal and know what it will take to meet that goal. How much effort does it take to get 10% of your market to see your message with social?

C’mon, You’re Ignoring Lady Gaga. Someone might point to the hundreds of millions of Lady Gaga video views on Youtube. But big numbers aren’t the same as meaningful numbers.

First, those views are driven by huge traditional media coverage – Gaga is brilliant in her ability to drive “buzz” with outrageous actions.

And, of course, Youtube isn’t social media. Those views are driven by massive TV and Magazine coverage. So what is social media’s contribution here? I think it’s that social media raises her latest antics to the awareness of the traditional media.

This is, in fact, a very solid use of social media – showing that the buzz is high enough that it is picked up in the traditional media. And it makes sense that it’s effective with the 10% number.

Only A Starting Point I don’t think this is, in any way, the last word on social media. Rather, it’s a starting point. And I hope that there continues to be quite a bit of conversation in three areas:

- Can we get more accurate on this general number?
- How can we develop estimates for specialized markets?
- Assuming the number is below 25%, how should we use social as part of our mix?

And THIS discussion will be much more productive for marketers than the hype we’ve endured for the past few years.

Copyright 2011 – Doug Garnett – All Rights Reserved

Since the late 1990′s we’ve been promised an amazing jump in advertising effectiveness from targeting only possible online. Initially, it was the claim to “know who the individuals are”. Today, it’s become “we track them and know everything about them”.

Truth is, online targeting hasn’t delivered, but the idea remains prominent. Part of the reason was summarized today in an excellent post by Byron Sharp discussing a recent HBR “advertorial” for McKinsey. (Link here.) Sharp criticized them, in part, because “there is an in-built assumption that hitting someone at the moment when they are thinking about the brand/category is the only advertising that works.”

Seems like such a smart idea. Except, let’s add reality. Any salesman knows that if we wait for the “best point” to ask for the order, we won’t sell much. At the same time if we always ask for the order at the worst time, we will never make money. In a way, traditional media planning walks this middle line focusing a reasonable amount, but casting a wide enough net to get the surprise purchasers.

The Digerati Code. But the Digerati ignore this reality and wholly embrace the assumption, leading to the following hypothesis:

Given a specific product or brand…

1. We CAN use digital tracking to determine points in time when consumers are most receptive to receiving ads about that product or brand.
2. Once we detect when they are most receptive, we CAN present ads that hit them at that most receptive time.
3. When ads are presented in this way their effectiveness is dramatically higher than using traditional methods.

If any of these three are wrong, we’ll never locate the Holy Graal of digital marketing.

What Does Experience Show? There has been no general increase in marketing dollar effectiveness as a result of digital efforts. And digital response rates (CTR’s) are pathetic while online CPM’s remain a fraction of what traditional media is able to demand.

There seem to be two realities:

There are times when online targeting pays out exceptionally – usually for highly targeted direct response campaigns. My guess is that constant low cost testing helps them figure out, of the target criteria available, which ones are connected to response. But brand campaigns don’t have this luxury.

So broader brand efforts haven’t seen a dramatic increase in ad dollar effectiveness. In fact, many campaigns curtail their online spending because there are simply too few places to spend money that achieve acceptable results. (For example, Pepsi and Best Buy have both recently redirected media funds away from digital and back to traditional. Apple has always succeeded with heavy traditional spending and minimal digital spending.)

Is Targeting Fundamentally Flawed? My sense today is that there’s a big problem matching market to online variables in a way that generates impact. Because online variable must be limited.

Assume Criteria List A tells us what makes a good target consumer. Unfortunately, if you have defined your audience well, nobody’s tracking what’s important in your list.

Because, in truth, Criteria List B is what is actually tracked.

But hoping to cross this gap, some digerati take “B” and expand it to Criteria List C using database correlation.

SO, this leads to three questions:
1. Can we effectively reach our audience “A” when we only have “B”? Not really.
2. How accurate are the projections in “C”? Probably not very accurate.
3. So can we reach “A” when we add the projections “C”? Probably not.

So, it turns out that online buying is pretty much just like buying TV with Nielsen rating data – just with some additional criteria. But “more” criteria doesn’t mean “the important” criteria. What we’d really like to know is predisposition to absorb some of what we say and have that cause action in the future.

There’s nothing wrong with this situation – TV has succeeded for years with Nielsen’s. But what happened to the consumer targeting nirvana we were promised?

Watch Out for VC Hype. VC’s know this theory is a clever way to try to increase value for their ventures. Also, this theory is one of the few really unique things the digerati can claim.

Even worse, ad agencies are suckers for this theory – probably due to a common agency disease I’ll call “Nielsen frustration”. (This is the tendency to blame weaknesses in Nielsen audience measurements for the fact your ads didn’t work. “If only the RIGHT consumers had seen our rats dumpster diving for sandwiches people would have bought the sandwiches in droves…”.)

That’s all nice. But online behavioral targeting hasn’t shown huge results in practice. Even worse, the theory has hung around for a decade without dramatically changing results. How much longer should we wait?

Until proof arrives, it seems best to conclude that online targeting is nice, but no magic pill.

Copyright 2011 – Doug Garnett – All Rights Reserved