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It’s Time to Pay Up: The Death of Organic Acquisition

by: Dave Walters (@_DaveWalters)
27 March 2014

In the words of an all-time soul great, “People get ready, there’s a train a-comin’.” Yes, Curtis Mayfield’s epic soul/gospel hit could have been a call-to-arms for lots of audiences — including digital marketers in 2014.

So, you ask: Why digital marketers in 2014? Well, remember the good old days when marketers could “game” the system to drive thousands of Facebook likes or purposely engineer beautifully optimized Google SERPs? Whether you were building a social audience on Facebook, Twitter (or almost any other social site) or driving mad traffic to your site with search-optimized landing pages, there was great hay to be made in riding the coattails of other people’s audiences (#DownWithOPA?).

A small number of very technically oriented, move-at-warp-speed marketing types could singlehandedly build an audience around almost any topic — and one that would predictably convert into sales, brand advocacy or whatever other business objective you could lay out. Sometimes these were called “growth hackers,” but most of us just understood it was making the best of a juicy set of loopholes across the Web.

Well, guess what? That gravy train is most of the way over. Unfettered access to the audiences you’ve “borrowed” from these sources is all-but-dead. This week I was asked by a big tech blog to comment on Nate Elliott’s Forrester post, “Facebook is Still Failing Marketers.” In stepping back to think about this more deeply, it occurred to me the road signs have been whizzing by for a while. Consider these lessons:

Google search icon1) Google

Google’s Panda update in late February 2011 had a massive traffic impact on several big content-oriented sites of the day. Take Jason Calacanis’ Mahalo, for example. Founded in 2007, it was building solid steam as a human layer of curation on top of key Google search terms and topics. It had grown its content business with a Q&A feature and was humming along until the bottom fell out following the Panda update.

Lesson: When you depend on Google for traffic and the algorithm takes you from Page One to Page 101, you pivot or die.

Facebook icon2) Facebook

Beginning in 2010, the slow-roll of what Facebook used to call EdgeRank has been gradually reducing the actual number of Facebook fans who see your content. Under the guise of making your News Feed stream ultra-relevant, this algorithm culls the content down to a fraction of the actual people and brands you’ve liked, friended, clicked or followed.

As Forrester cites, the percentage of organic reach now stands at about 6 percent according to recent Ogilvy data. And that’s just since October 2013! The story’s even worse for brands with more than 500,000 likes, who find their reach just above 2 percent.

Lesson: All that like-gating we were so proud of five years ago is now worth nothing. And you should assume it’s Facebook’s intent to drive your organic reach to 0 percent.

Twitter icon3) Twitter

For a slightly less Draconian example, let’s look at Twitter. Given Twitter’s role as a pure-play social network, I expect them to continue to roll-out easy-to-use ad products like Lead Generation Cards, but doubt they’ll bring any serious audience-limiting tactics to town. That doesn’t mean an insignificant percentage of any user’s followers aren’t bots, inactive, fake profiles or spammers, however.

There’s a developing conversation around actual “reach” on Twitter that will be interesting to see come full circle. For example, StatusPeople shows my fake followers at only 1 percent, but since 33 percent are inactive, we can reasonably assume my maximum potential audience starts at just 66 percent of my 1,150 followers (although this Atlantic piece allayed my ego for a couple seconds).

Lesson: If you’re already “famous” IRL, building a meaningful Twitter audience is radically easier, but bots are bots and true reach is probably lower than we think.

Pinterest and Instagram4) Pinterest and Instagram

The next battleground is likely around two more fast-growing social properties: Pinterest and Instagram. While each are rolling out aggressive, new advertising products, TIME reports the average cost of entry is expected to be radically higher at Pinterest than it was for Twitter’s first forays — $1 million to $2 million deals on a $30 to $40 CPM on today’s Pinterest, versus $80,000 for some of the first promoted tweets in 2010.

This directly reflects the increased likelihood of purchase from Pinterest users versus other social networks. And with TIME also reporting a new Omnicom adverting deal with Instagram being in the $40 million to $50 million range, it’s clear the new battle for big brand dollars is about to be waged in the social sphere.

Lesson: To reach those most likely to purchase your product, you’re going to have to either spend big bucks or wait on these sites to roll out self-service advertising products that will enable small- to mid-sized targeted ad buys.

How to Stay Ahead of the Curve

So what’s the driver behind all these dynamics? And how do marketers need to change their approach in 2014? The answers are very simple: It’s all about monetizing these social networks, and marketers need to be prepared to pay to play. Investors up and down the value chain (from seeds through VCs to Wall Street) are increasingly demanding monetization strategies, and the social sites are getting very smart about ways to drive revenue (check this latest wrinkle from anonymous social site Whisper).

The good news is you can still do some very targeted marketing for a couple thousand bucks a month. And you can certainly test different offers and messages with very small audiences to understand what drives maximum conversion — both within a specific campaign, and over the long haul of customer lifetime value when you retain good lead source data.

The bad news is you’re going to need to spend real, budgeted money. Gone are the days of getting someone smart on your tech staff to hack up some audience for you. Over time, today’s social media manager is going to end up doing a lot more paid campaign work as the everyday means-to-an-ROI-end, with the more genius social interactions (think Arby’s and Pharrell) being the Hail Mary, brand-building moments of Zen.

So get to work, and move those budget line items around before the end of Q1. Get your test campaigns lined up, and start your learnings NOW. Otherwise, you could find yourself living a worst-case scenario in which you have a brand that’s driven by the holiday season, and you roll into September thinking everything’s like it was in 2013.

Related Blogs:

1) “Social Couponing Comes to the Marketing Platform

2) “6 Pinterest Holiday Marketing Tips

3) “On Facebook’s 10th Birthday, 10 Tips for Using Social in Your Digital Marketing Strategy

 

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