Why Social Media won’t make you rich… yet

Why you won't get rich from Social Media... yet

Why you won't get rich from Social Media... yetEveryone always bleats on about Social Media marketing as ‘the next BIG thing’…

Online ‘gurus’ would have us believe there is untold wealth and success to be made if you can just tap into the Social Media phenomenon.

The problem is, the Internet is filling up with more and more Social Media tools for every conceivable purpose.

Social Media isn’t just Facebook, Google + and YouTube anymore, it’s a great big tapestry of tools, networks and platforms. There are Apps, curation sites, Ad networks and literally hundreds of weird and wonderful tools.

Take a look at this slightly terrifying new infographic from Luma Partners to see just what kind of a minefield it has become:

Why Social Media won't make you rich... yet
Click on the image for the large version

This is actually just a smallish sample – there are actually a great deal missing from this list.

There have been a whole spate of Internet Marketing products popping up recently promising easy profits from bits of automated software that post content on your behalf on various different social networks… and supposedly drip feeds affiliate income directly into your bank account.

Virtually everything I’ve looked at so far is complete and utter over-hyped nonsense. Most simply don’t work, while others can do severe damage to your online reputation by getting you blacklisted by big players such as Google and Facebook. The truth is, the world of Social Media is simply too vast, complex and ever changing for a piece of hastily cobbled together piece software to work.

Now of course there is some money to be made here but you can’t get there by pushing a magic button as many so-called experts would have you believe.

But what about the BIG ones, the Facebook’s of this world – surely there’s a way to profit from the big players? Well frankly if Facebook can’t effectively monetise their own business, the chances of us doing it are much less.

Let’s look at Facebook in a little more detail because it shows just how much of a shaky territory this is right now. They recently floated for $100 billion dollars on the stock market. A lot of people asked “$100 billion for what exactly?”. Needless to say the shares tumbled by more than 18% in the first week.

Some commentators blamed technical glitches in the Stockmarket on the first day of trading, but I would hazard a guess that it might have something to do with the fact that like most Social Media platforms, Facebook doesn’t actually have a proven business model.

They’ve got more than 900 million users and yet generate relatively little profit from ad revenue each year. Why? Because hardly anyone clicks on the ads. You don’t go on a Social Networking site to connect with friends and at the same time watch car adverts or buy kitchenware. EDIT: It seems like I’m not the only one who feels this way. According to a recent Reuters/Ipsos poll:

“Four out of five Facebook Inc users have never bought a product or service as a result of advertising or comments on the social network site.”

You can have all the users in the world but it’s not worth a penny if they’re not clicking or buying.

The scary thing is… Facebook is the BIGGEST network. If they haven’t figured out how to make big money from this, who does?

The return of the Dot Com Bubble anyone?

One day there will be a smarter way to profit from Social Media but right now it should not be seen as a silver bullet. It’s a shiny new accessory which should sit alongside your core business. Social media can be a great tool for raising awareness about your business, keeping in touch with customers and even researching your competition – but it’s not a standalone money making opportunity.

Be extremely on your guard when looking at these kinds of Social Media marketing products. If in doubt drop me a line and I’ll do my best to grab a copy and give you the lowdown.

I’m desperate to be proved wrong on this, so if you’ve had success and made money using a Social Media marketing programme or want to add to the debate please do leave a comment below.

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4 responses to “Why Social Media won’t make you rich… yet”

  1. WOW – how refreshingly frank and honest!
    Great to read an article that can cut through the noise and bring some rational thinking to the whole social media monetized area.Like you, I am also fascinated to see how the Face Book float goes.

  2. Hi Alison

    I think you’re absolutely correct when you write ‘Social media can be a great tool for raising awareness about your business, keeping in touch with customers and even researching your competition’ and its on this basis as a social media consultant that I try to encourage businesses to get involved.

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