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Can businesses make money from Twitter and Facebook?
It was quite odd to see the headline, “Can Twitter Make Money?” on the front cover of April 2010’s Technology Review.
Despite its massive popularity and potential as a source of real-time news, Twitter doesn’t really have a formal business model yet and no-one is quite sure how (or if) it’s going to make any money. (Apart from the $160 million stumped up by venture capitalists!) One revenue stream they are considering is advertising. In fact, as I write, it has been announced that Twitter will be launching promoted tweets.
There’s no doubt that many business-to-consumer companies have been very successful in making use of Twitter, Facebook, MySpace etc., collectively called Social Media or Social Networking. It can be a great way of building brand loyalty by getting friends and followers who like a certain chocolate bar, beer or musician to spread the word. It is a form of “viral” marketing and the frivolous, leisure-time nature of Social Media suits these types of business.
Being invited by a friend to join a Facebook group or follow someone on Twitter has an inherent ‘recommendation’ element to it, but has no real cost to the organization being recommended, the person making the recommendation, or the person accepting the invitation. Social media allows people to prompt others to join up to a group and support a business at any time, with just a few clicks. And all someone has to do to accept that recommendation is click on a link.
It’s not just big brands making the most of this communication channel either. One of our customers, Cornish Traditional Cottages, is doing extremely well making the most of social networking.
It is also important to point out that a lot of these brands are actually just as interested in limiting any negative publicity that could get out of hand. I was recently sent a request to join a group boycotting Shell and BP.
But how can Social Media benefit business-to-business organizations?
Every business knows how powerful recommendations are and surely this one area where there is potential for Social Media in the business-to-business arena. But the dynamics are very different and how social media can be used for these organizations is much less clear.
For one thing, what people choose to buy for their business can have a significant positive or negative impact and they are more likely to make considered buying decisions. The buying process has moved from being frivolous to being serious.
That said, one significant business-to-business growth area has been consultants telling companies that they are missing out on the Social Media phenomenon. Fear of loss is a powerful incentive! Seminar anyone?
If you consider social networking as a form of marketing communication, like any other advertising, PR or marketing, it can be a powerful and very inexpensive way to get your name in front of potential business customers. Or can it? Are you getting in front of the right type of people? Are they business people and will they be in a business frame-of-mind when they see it? Facebook is not the obvious choice when you want to buy a new server or accounting software. Even if they do see you and consider what you offer, will they take you seriously if they see you being promoted on Facebook? Or tweeting amongst all the inane chatter? Possibly not.
It is after all Social Networking, not business networking, and there is an associated sense of quality linked with it. Marmite’s recent “Spread the Word” spoof election campaign is pure genius and ideally suited to Social Media. On the other hand, Alfred Dunhill, the long-established, high-end gentleman’s outfitters seems oddly out of place on Facebook and it feels like they’re weakening their exclusive brand. One way they appear to be using Facebook is to get feedback on certain “looks”, but I don’t think it works.
In short, do you really want your business to be associated with Facebook and Twitter?
That was a question we asked ourselves at Benchmark and knowing what some of some of the content is like on Facebook and Twitter we weren’t sure we did? (One US study of 2,000 Tweets found that 62.2% were “pointless babble”.) Is everyone talking but no-one is really saying anything? Does the business really want to be a part of that?
The other question was whether Benchmark would actually benefit from being on Facebook or Twitter? Could it help the business in some way we hadn’t thought of? We weren’t sure it could but there was that itching feeling that we were missing out on something even though we weren’t quite sure what. As I said, fear of loss, or missing out, is a powerful motivator.
It is very important to mention at this point that search engines and especially Google LOVE blogs and social media. The right content can make dramatic differences to your search results and this was one of the main reasons for thinking about using it.
So we kept doing research and trying to think creatively about social media as a communication channel and ways we could use it that didn’t weaken our brand but got us “out there”. It had to be done the right way and we weren’t sure what that was.
Finally, we realized how both Facebook and Twitter could be used to help us and our customers. It certainly isn’t in any traditional sense of straightforward advertising or sales, and any return will be almost impossible to measure, but a lot of marketing, branding and customer service is like that. We’re starting out on the Social Media journey and time will tell.
Let’s start with Twitter. We are continually developing our accounting, CRM, payroll and sustainability software, usually based on user feedback. When new versions go out, there is a list of the changes made, referencing the name of the company where they had input. Customers also want to know what new features, programs and modules we are working on. We use our emailed newsletters to do this.
We decided that Twitter would be an ideal way to let people know about these changes and upgrades and with the right content, we could get better search results for our products, particularly the sustainability software which is a very new market and has huge potential given the importance of sustainability to business now.
As far as Facebook is concerned, our approach was very different. A couple of years ago, we set up an exhibition of vintage computing and gaming to celebrate 30 years in business. It was very popular but only lasted two-months. Since then we haven’t had the time or a suitable venue to set up another exhibition, although we have done some talks at local schools to ‘Gifted and Talented’ groups, which the pupils loved! So we thought a virtual museum would be ideal (there are already plenty on the Web) and where better than Facebook to set up a community? Our experience was that people love seeing old computers and computer games and reminiscing about them.
The benefits to the business? Well again, links to our Web site should improve our site’s page ranking and by the museum Facebook page generating interest, Benchmark should increase its profile by being associated with it, without weakening our brand, as the museum is a form of business philanthropy. Effectively we are sponsoring the museum, a well-established form of marketing.
Admittedly, some of these benefits seem woolly at best, but we’re getting started. After all, if Twitter isn’t even sure how they’re going to make money, we can give ourselves a bit of slack.