If nothing else, I’ll play the Hobgoblin of the Little Mind and stay consistent: Social Media Marketing is bad persuasion not because it is inSincere (it is!) but because there’s no money in it. Consider this market maven’s take on Groupon.
Sure, it has 83 million subscribers. But just 15.8 million of them have ever bought anything at all. Really. That’s fewer than one in five . . . But look at the conversion ratios. In 2009, the company sold 69 Groupon deals per 100 subscribers. In 2010 it was just 60 deals. In the first quarter of 2011: just 34 . . . even though the company sold $645 million worth of deals, at a 42% gross margin, it nonetheless ended up losing $146 million at the bottom line.
As a standard persuasion play in something like the Cascade, sure, you can use social media for Exposure/Reception, but that’s old news in your Father’s Oldsmobile. The hype on relational marketing through social media is a New New Thing. Yet, when you look carefully at the business model, the numbers don’t add up.
Now, if I’m a VC running with that Cool Table, you bet I’m playing every trick I can pull to get a hot IPO out and make my killing the real old fashioned way: with Persuasion. The world makes new ones every day, including many suckers who fancy themselves as persuasion mavens, when they are only FauxItAlls. Marc Andreessen will eat you for lunch (pass the prawns, baby).
I also agree with Mr. Andreessen’s assertion that there is no bubble in technology right now. His first argument is the best: There can’t be a bubble because by definition a bubble occurs when no one thinks there is a bubble. And, he also knows the relatively low P/E ratios for great tech stocks like Google, Microsoft, or Cisco. So, technology stocks and hopefuls like Groupon or Facebook aren’t a financial bubble.
But they are a Persuasion Bubble. Lots of people believe that Social Media Marketing is a New New Thing of unprecedented impact when it is just another channel and one that seems to produce seriously weak effects where it really counts: the TACT. The fun paradox here is that a few people are using persuasion to sell Persuasion to other people who think they’ll buy that Persuasion for their persuasion on yet some other people.
It’s not exactly selling sand to a Saudi or ice to an Aleut, but selling persuasion to persuaders is pretty close.
More Sand!!! (Click to enlarge for even More Sand!!!)
P.S. I use this post frequently as part of my persuasion metaphor, More Sand. Let me elaborate.
Persuasion is usually about the Other Guys and Changing Them. A casual read of the Persuasion Blog reveals that this is harder to accomplish than most people realize, especially if you actually Count the Change with your head rather than your heart. And, an even more difficult Change is the Change you attempt when you try to Sell the Sell. Those persuaders who seeks to persuade Other Guys who call Themselves persuaders aim at a peak persuasion experience.
A great illustration of selling the sell comes from a little known Peter Sellers movie, After The Fox. Sellers plays a character who is both deluded and persuasive, so it’s hard to know whether he is sincere or persuasive since we see both. As part of an elaborate scheme Sellers fakes making a movie that takes place in the desert. During one particularly parched scene, Sellers as director recalls yet another director who faced the same problem and solved it with: More sand!
He shouts, “More sand!” as the crew takes up the cry and we hear “More sand” echoing across a shot of nothing but the desert and . . . sand, sand, sand everywhere you look. More sand?
Yet Sellers sells the sand to people standing hip deep in sand.
Which returns us to the high wire act of persuading persuaders. If you can do that, then you are selling sand to Sauds and can probably sell ice to Aleuts. But most importantly you can persuade the persuader.