Social media is a tough nut to crack. Its benefit is hard to measure but it’s become a focal point in sales and marketing efforts. Market research says it plays a minor role relative to traditional media and word of mouth, but an entire industry has been built around the need to use it efficiently and effectively.
The Leadership Music Digital Summit in Nashville, focused solely on social media, helped explain these apparent contradictions. Indeed, social media is both difficult to quantify and impossible to ignore. The running theme of the panels was that social media is simply one of many aspects to a successful career, project or campaign. The panel moderated on monetizing social media often reminded the audience that email lists and iTunes are still two of the most impactful pieces of any digital strategy.
If anybody had inflated expectations of social media, NPD’s Russ Crupnick brought them back to earth. Crupnick gave a short and sobering presentation that showed social media’s modest – if that – role in music discovery and purchase decisions.
To exhibit how social media is “a little bit hyped,” Crupnick showed a slide that shows that traditional AM/FM radio accounts for most music discovery of 40% of the most-engaged music fans. Word of mouth, TV shows, awards shows and video sites all came in around 10%. At the bottom of the list was social media at around 1%.
Social media ranks lowest in factors that would encourage people to buy more digital downloads. Another of Crupnick’s slides showed that Twitter recommendation ranked low on a list of reason a product or service was purchased. The top reasons for purchase were the influence of advertisements, concert sponsorships, free download and video product placement. You have to keep all vehicles in perspective because consumers are keeping them in perspective, he warned.
However, none of Crupnick’s examples gauge social media’s impact on artist affinity, for example. If social media is having such a small impact on discovery and sales, it stands to reason an artist would not be much worse off by ditching Facebook and Twitter. But social media has become a mandatory tool for nearly all artists, management companies and labels to engage with fans.
The problem with social media is its fuzziness. CEOs and CFO’s like concrete numbers, not fuzzy guesses. Nobody knows the exact value of a tweet or Facebook post unless ecommerce is built into the message. Most of the power of social media comes in indirect ways, just like good customer service indirectly benefits a restaurant or retail store in ways that aren’t easily measured. Even though you can’t easily measure social media’s impact, you probably don’t want to live without it.
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