Face(book) It – Your Social Media Strategy isn’t Paying Off

According to eMarketer, last year, U.S. companies spent more than $3 billion on Facebook brand pages and social media advertisements and the return has been universally abysmal. GM went on record in May of this year in the Wall Street Journal saying that FB ads don’t pay off and that GM was ending all investment in FB advertising.

That said, The CMO completed a survey in February 2012 and found “…that marketers continue to increase spend on social media. In the next 5 years, marketers expect to spend 19.5% of their budgets on social media, almost three times more than the current level! Within a year, marketers expect to spend 10.8% of their budgets on social media.”

Unless the results change, however, marketers are going to lose interest in this “shiny new toy” and eventually drop or at least significantly reduce their investments in social media.

That would be a mistake.

The problem doesn’t lie with FB et al per se. The underlying problem, in my opinion, and what has recently been corroborated by research is that your social media strategy needs to include authentic customer engagement and not be viewed and used as yet another one-way digital advertising channel.

To help make this case, one of my portfolio investments, Get Satisfaction!, will hold an event on Thursday, July 26th to unveil recently completed research in this area.

Are You Capitalizing Upon Your Social Media-ness?

I had a great meeting with Bindu Reddy last week. Bindu is the CEO of MyLikes and the former head of product management for Google Apps. Her husband and co-founder of MyLikes, Arvind Sundararajan, is the former tech lead for AdSense.

The premise behind MyLikes is simple: we are more likely to trust the recommendations of our friends, colleagues and advisors more than we trust consumer ads and the opinions of people we don’t know (with the exception of Hollywood celebrities and sports stars because, of course, we all know they are completely believable, role models for our children and extremely well educated – sarcasm intended).