Why have Social Media stocks crashed?

posted in: Economy, Innovation, Social 0

What is happenning with Social Media Stocks???

20150505 Social stocks

It looks like a heart attack – 20%+ drops across the board. What is happenning?

Well it is pretty simple, sales forecasts have not been delivered in the core area of advertising.

People advertise to build brand awareness and make higher margin sales, if this is not happening – they stop advertising, so what is going on?

Well the whole point of Social is that customers have their own media channel, so in theory they tell everyone how wonderful your products are, and that is more credible that the brand owner singing his own praises.

The reality is that people tell other people how wonderful they are, and if you get it right they will enhance their own status by association with the aspirational brand values of your brand.

There are two problems with this. Firstly it is an increasingly tenuos link to sales or changing behaviour. Secondly the Aspirational elements of your brand are better reinforced by traditional media than social media.

Consider which is more effective a Full page Spread in Vogue, or someone tweeting about what they did, and possibly mentioning your brand?

The Social Media boys need to be careful about which stats work in terms of sales. You can only be the new kids on the block whilst you are new. Tech can change how you engage, but it may not change why you engage as effectively.

 

Discuss

 

 

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