April 02, 2010 Features & Images » Feature Story

The Myth of Social Networks 

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On September 14, 2009 Tourism Whistler hosted a guest speaker, tourism consultant Anna Pollock at an All Member meeting. Pollock was bullish on the importance of social media for tourism, insisting it was vital to have a presence on social media sites like Facebook and Twitter but concluded her remarks by commenting that, "It's impossible to keep up with it all".

That's why companies have devoted entire teams of marketing staff to the task of managing social media, but it begs the question, "does it really work?" There is a stunning lack of evidence to support the business case for having a social media presence. Despite the incredible membership numbers boasted by the industry, there's no proof that it actually brings in the bucks.

 

Show me the Money

After four hours of internet searching, only two companies could provide examples of making money via social media - Dell and H&R Block. According to The Social Media Bible: Tactics, Tools and Strategies for Business Success by Lon Safko and David Brake, H&R Block saw a 171 per cent increase in online ad awareness and an overall increase in brand awareness of 52 per cent.

By using applications such as Facebook, MySpace, Twitter and YouTube to introduce customers to Truman Greene - a clean cut 20-something singing character who serenaded prospects with the brand's key messages - the aforementioned metrics would suggest that some money was made. Dell on the other hand has actual cash stats. Dell claims that it raked in over $3 million U.S. over two years from its Twitter followers (it boasts 600,000) who clicked through Dells posts to purchase products.

The volume of social media users is staggering; Facebook is the master of all with more than 400 million active users. The world's most popular networks, as measured by total monthly web visits include the previous number one MySpace (110 million), Twitter (60 million) and Linked In at 35 million. According to Facebook's own website, more than 60 million status updates are posted each day, more than three billion photos are uploaded to the site each month and more than five billion pieces of content (web links, news stories, blog posts, notes, photo albums, etc.) shared each week.

With so much hype about social media and the amazing numbers it generates it almost seems like a giant conspiracy that there are so few success stories of businesses actually profiting from it. It is true that Facebook's valuation is stratospheric and that since 2007 the company's revenue has doubled year over year to the point where it's currently on pace to reach the magical $1 billion figure by the end of 2010.

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