Twitter is making me nervous.
Facebook, Instagram, Pinterest and LinkedIn, too – they’re all helping businesses get exposure they couldn’t otherwise afford. A retweet here, a pin there and “likes” popping up everywhere. The way we use social networks amounts to a great big freebie for businesses, especially our local ones.
And that’s making me nervous. Not for Twitter, mind you. I’m getting nervous for the businesses getting something for nothing.
Social networks are shaping up to be the 21st century’s version of the 20th century invention of television. In both cases, businesses pay to advertise their products. In both cases, you are the target of these ads. And in both cases, you’re expected to buy into this arrangement as long as the real content – the television show or the news feed – continues to entertain and engage.
But there’s a big difference between television and social media. Television networks don’t run ads for free; social networks effectively do – if you choose to follow, friend or like the business.
Television advertisements are unidirectional; social networks are interactional, allowing users to engage with the businesses they like. Television advertisers pay thousands to increase their chance of reaching the intended customer; once a business has its friends and followers, it has a captive audience – for free.
Think about it: Where advertising on social networks is similar to advertising on television, it’s as annoying as its 20th century counterpart. Where social network marketing differs from television advertising, it’s as engaging as all of the other friends and fun that users follow.
In short, we find ourselves in one of the most unusual subsidy systems imaginable: Some businesses pay Facebook and Twitter (and others) for advertising space; these payments keep social networks like Facebook and Twitter running, and these social networks are used by other businesses for no charge at all. In effect, the paying advertiser is bankrolling the marketing of a nonpaying advertiser, all while paid advertisements are generally ignored by you.
Does anyone think this can last?
There already are signs that it can’t and won’t. Since last spring, social networks such as Facebook have begun making it a little more difficult to get the word out for free. Businesses and nonprofits aren’t showing up on users’ news feeds on a consistent basis. In some cases, Facebook officials say only about 15 percent of a given company’s posts are making it to a friend’s or follower’s page.
The solution? Pay up or find another playground. For a single post to reach all of your fans, you’ll pay something in the neighborhood of $200. As a business, imagine how many posts are sent out. Even if it’s only one per day, you’re now looking at roughly $73,000 a year. A church, nonprofit or food truck is going to burn through an advertising budget – if it even has one – in a matter of weeks.
Nonpaying advertisers are gradually going to be as profitable as paying ones – if not more. And for those pinning their hopes on Pinterest or Twitter, which are still free, remember that Facebook is the oldest player in town right now. As these feisty startups begin to mature, they’re going to be looking for new revenue streams, too. Who better to ask to chip in than the organizations getting a free ride?
If you own a business or direct a nonprofit that’s been enjoying the ride, it’s time to start looking ahead to the end of the road. It might be here sooner than you suspect.
John Taylor is an associate professor at Drury University and a faculty adviser of the school’s Enactus team. He can be reached at jtaylor3@drury.edu.[[In-content Ad]]
