Monetizing social media – “This is not an age for magazines”

Social media surely is all the rage, but, at the risk of beating the proverbial dead horse, everyone wants to know how to make money from it and whether it’s worth the internal investment.

In a panel discussion during the Social Media and Mobile Commerce day at eTail, industry experts weighed in on how to do just that. The consensus was that we are in an age where user-generated content can sell product and customer advocacy through social networks can make or break an organization. The consensus also was the social media is so important, it is trumping the importance of some traditional media channels. In fact, Tom Phillips, President, CEO, Media6Degrees went so far as to say:

“This is not an age for magazines. It’s not even an age for magazines on the web. It’s an age for social media.”

The other panelists joining Phillips were:

Stacey Santo, VP of Marketing, Rue La La

Josh Greene, Director of Internet Marketing, 1-800-Pack-Rat

Tom McFadyen, CEO, McFadyen Solutions

The panelists talked about the evolution of social media and how big brands can approach the medium to better understand customers.

“For e-commerce, social media is especially important because people are talking and sharing,” said Santo. “Social media gives a lens to always be understanding your customers and to meet them in an unconventional way.”

“Our growth has been led by friends telling friends,” she added.

One social media offering that was recommended was Facebook’s pay-per-click targeting as well as programs where you can have your die hard fans donate their status to your brand a few ties a month (meaning you’ll be able to update it on their behalf) which is something small companies should try. Phillips noted that it is important for brands to harness the power of their existing customer base. “Your existing customers are the key to finding your best customers,” he said. Another suggestion was to reach out to obsessed fans to see if there is something nice you can do for them. The more loyal you can make them to your brand, the more they will promote you, and at what cost to you? Next to nothing.

Questions arose about where this social media should come from. If you’re going to make money off of it, how will you do so when you’re spending X amount on it? While some say that it’s worth it to pay for the outsourcing of certain tasks, for instance, finding followers on Twitter, increasing your fans on Facebook, etc., brands with a strong social media presence said it was because their social media is authentic, coming from in-house sources who understand the product they are communicating about. Greene said that where your social media comes from will depend on the size of your company. He also suggested some resources like Elance, where freelancers can be hired to help your effort.

Santo, on the other hand, is a firm believer in keeping things in house and dedicating appropriate time and resources to it because ultimately that will make you money as it is more focused and concentrated an effort.

“You have to look at it as your whole marketing approach,” said Santo. “If you want to go into social media and think its relevant to your constituency, you have to figure out what the pieces are that will add value and then how you source them. I don’t believe in being half pregnant. If you’re going to be in it, be in it. I believe it’s all about authenticity – and as it evolves it will become more about that. We’re not in every social media channel, but we are in the ones our customers want us to be in and for those, we staff it and make sure someone is there everyday providing that authenticity. You need to think your strategy through three to five years.