I accidentally said something on Twitter today that I think has caused some confusion. I wrote, “While you could technically acquire customers via social media, the acquisition cost is astronomically high…” When I wrote that, I was thinking of the following scenario:”

Imagine that you work within a reasonably new company that builds a consumer good. You believe that this consumer good fills a legitimate need, so you know that your next task is to get out there and let potential customers know that it exists. So, what do you do? Do you start buying traditional advertisements? What about PR – should you blanket the world with press releases? Or what about that newfangled social media? Should you start up a Twitter account/Facebook page/etc and try to build a following through social channels?

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I want you to imagine yourself in the following situation:

You released a web application six weeks ago. You subscribe to leading theories of startup success, meaning that you released quickly and iterate even faster. Over the six weeks your application has been live, you have pushed out 18 major updates. You introduced the application on Hacker News two weeks ago and got a wonderful response with an upsurge in traffic, but most importantly, you are discovering that many of those users keep coming back. Moreover, when you analyze your analytics, you discover two things – your mentions on social channels are constantly increasing, and your traffic from social channels is increasing just as quickly.

An enviable position, don’t you think? You have attracted users who keep coming back and your application is already generating buzz after only six weeks of operations. However, you are starting to get emails from customers wondering if you are ever going to release a mobile app. What do you do?

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On Saturday night, I was sitting at home chilling out on Hacker News, when I came across a particularly interesting article. Titled “Why social marketing doesn’t work“, this article (by Tim Harford who is an author/columnist for the Financial Times), looks at social marketing with a very critical eye.

Social media marketing does not work and I am very happy that Harford came out and said this on his blog. Sites like Twitter are awash with ‘social media gurus’ who dish out questionable advice laced in SMS speak. Marketing types are falling over themselves to secure social media presences, major brands are spending huge amounts of money, and nobody is being terribly successful. So, why do brands keep putting money into social marketing?

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