Social Media Marketing Doesn’t Matter

In 2003, in the midst of the dot-com bust, Nicholas Carr wrote a now infamous piece in Harvard Business Review entitled IT Doesn’t Matter. Although the controversial title certainly grabbed readers’ attention, the underlying point of the article was more nuanced.

Carr argued that IT infrastructure was becoming too ubiquitous to be the source of competitive advantage for companies. The rising digital tide raised all ships, and companies could not gain competitive advantage simply by investing more in the company’s IT infrastructure. Certainly companies could continue to use their IT infrastructure in innovative ways, developing novel business processes that would create competitive advantage. These advantages would be the result of how these companies used IT to transform their business, however, not a direct result of the IT itself.

A decade later, it’s clear that Carr was right. Today, a company’s IT infrastructure is so far from being the source of competitive advantage that many companies are moving their IT infrastructure to the “cloud,” allowing third parties like Amazon and Google to provide the essential IT infrastructure. Many universities use Google to mange their email, calendar, and file-storage services, rather than invest in and maintain their own IT infrastructure to handle them.

Even IT startups like Dropbox and AirBnB, each valued at around $10 billion, do not own and manage the IT infrastructure upon which they are built. When companies do choose to manage their own IT infrastructure, they usually do so to control proprietary data, not because they think they can manage the infrastructure better than others. Digital processes and innovation still matter, but the IT itself does not.

I argue that we have reached the same point with social media marketing. In terms of competitive advantage, social media marketing simply doesn’t matter. Having a presence on Facebook and Twitter is no longer sufficient to provide any source of competitive advantage for companies — not when all of their competitors have a presence on Facebook on Twitter, too.

Monitoring social media chatter and sentiment won’t provide any competitive advantage on its own, because all your competitors are monitoring the same content as you and can derive the same insights. Customers today expect to be able to engage companies over Twitter and other social media channels. Companies can certainly deliver better or worse customer service over these channels, just like they can over the phone or in person, but these challenges become questions of backend operations, not marketing. Social media marketing has become table stakes for competitive business in today’s world, not a source of competitive advantage.

The fact that social media marketing doesn’t matter is supported by the data from our 2014 survey of social business. Our data showed that using social media in other aspects of business — innovation, transparency into organizational communication, management and recruiting, and integrated into business operations — were all meaningful differentiators for company’s social business maturity and social business outcomes. Whether or not companies engaged in social media for marketing, however, had little meaningful impact on these outcomes.

It is certainly possible that companies can continue to use social media channels to do innovative things that transform their business processes and the customer relationship using social media. Just as Carr noted in 2003, however, it is the innovative business process transformations that becomes the source of competitive advantage, not the platforms or channels themselves.

The data from our most recent survey supports this point. A key predictor of social business maturity and outcomes was whether or not senior leadership saw social business as an opportunity to fundamentally transform the way the company does business. Effective social business is about using these tools to change the way the company does business, not simply using social media as another channel for business as usual.

Companies can also differentiate themselves by how they use the data generated by social media platforms — another point supported by our survey data. While monitoring social data may not provide competitive advantage in and of itself, the insights generated from effectively analyzing this data can inform one’s competitive decision making. For example, Mondelez International measures the additional amplification of traditional ad buys provided by social media platforms, factoring this data into their decision making. T-mobile developed a new marketing strategy that broke from traditional contracts after analyzing data on social media platforms that indicated this point was where the customers of its major competitors were most dissatisfied.

Again, it was not the fact that these companies monitored social media data that created the competitive advantage; it was that they analyzed this data effectively and used the insights it provided to affect their marketing strategy.

In short, simply using social media for marketing no longer delivers companies any meaningful competitive advantage on its own. The competitive landscape of social business today centers on how to use these social media tools to transform the way you do business and leverage the data provided by these platforms to do social business better.

The stakes for competing with social business have gone up — will your company call, fold… or raise?

For more insights on the current state of social business, be sure to check out our 2014 report on social business, coming in July.