Is the Social Network Really just a Social Utility?

What a difference an IPO makes.

Tuesday brought news that 80% of Facebook users have never made a purchase because of an ad or comment on the site. This is just the latest bit of news to tarnish the once-golden site of our time. As part of the IPO process we learned about the anemic revenues generated per user. The same poll that showed lack of buying indicated users were spending less time on the site. And we’d already seen that males were spending their online time elsewhere.

Can it all just be sour grapes?

Well, maybe. But I think what’s really going on is something that’s been seen before, namely the maturing of a channel or technology. Human beings crave novelty. I’d argue a major premise of marketing is feeding the quest for novelty. Disagree if you will, but if you think about it that’s a tidy explanation for the power of ‘NEW’ and an explanation for hula hoops, mood rings and  pet rocks among other head-scratching, short-lived crazes.

Adoption of Select Technologies 1970-2003

Click to enlarge

The chart above shows adoption of major technologies since the telephone. It needs to be updated to include social media–which may not even be its own technology– and tablets, but it will serve for now. There are 2 things I’d call to your attention. The first is that technologies don’t disappear.

The second observation is that on the time dimension the period of adoption is compressed as time moves closer to the present. So while it took 60+ years for phones to be in the majority of homes, color TV was faster and cell phones faster still. I’d bet that a similar curve for use of Facebook is even more compressed on the time axis.

For the math buffs, these are basically all sigmoid curves that are asymptotic on the high side. Technically, an asymptote never touches either the zero bound or infinity. All technologies, though, start at zero usage. And none ever reaches 100% penetration. So allow me the latitude. What’s important is that sigmoid curves have an inflection point, they flip, just like the letter ‘S’, and the slope diminishes until it approaches zero.  Think of early adopters being at the left hand side of the curve and your grandma at the right hand side and you see how this applies to technology.

I think Facebook has hit its inflection point.

What does this mean for a marketer, rather than a Facebook user? I’d suggest that widely disseminated technologies become utilities. And I mean that in the gas company, electric company, phone or cable company sense. No one loves a utility, they just use it and expect it to work. In short, they take it for granted. If Facebook has reached such a point does it serve a purpose as a marketing channel?

Perhaps in some instances it does. Because I’m trained as a direct marketer and have some additional analytical training I’m skeptical of Facebook’s value in driving business activity. A Facebook user is engaged with their friends and games (and themselves). They are not engaged with the advertiser’s brand–especially if the brand appears either a) in the ad ghetto on the right hand side or b) as part of a feed as though they were my friend. Marketers themselves love novelty so, for example, it struck no one at Columbia Records as odd that someone might find a post from Miles Davis–dead 2o years last September–peculiar or off-putting.

A marketer’s job, last I looked, is to create profitable customers. We ought to  use every channel available. We also should be appropriately skeptical and subject claims to analysis. Every market is slightly different. What works for me might not work for you and vice versa.  But we can both look at our efforts and results and make informed decisions about what works without hyping the flavor of the moment. What direct marketers know is that our efforts work best when they tap into deep-seated human behaviors. A love of novelty is just one of those behaviors.


Here’s the great Lily Tomlin tapping into everyone’s love of that favorite utility, the phone company:


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