You Know What’s “Uninspired,” Prof. Galloway? (UPDATED)
Galloway turned to fashion company Burberry to make his point. The British based clothing company has over 8.6 million “likes” on Facebook, while the internationally recognized women’s magazine Cosmopolitan has only 1.1 million.
“How did a trench coat company get so far out ahead of you there?” he asked. “It’s somewhat ironic that brands are ahead of media companies. Burberry has spent millions of dollars on Facebook before it was cool and by our estimates 13 to 15 million people over the next few years will raise their hands and say I want a direct relationship with your brand. Once they get there, somewhere between one third and two thirds of people that subscribe to Vogue will already have a relationship with Burberry. Will they spend more, less or the same to advertise? The response around Facebook is fairly uninspired in this industry.”
–Scott Galloway, New York University Professor, via Audience Development
No, actually, Professor, what’s uninspired, is using lazy apples to oranges comparisons to make a debatable point that’s meaningless without proper context. Comparing Burberry to Cosmopolitan and Vogue vis-à-vis Facebook completely misunderstands what each one is ultimately selling, and by extension, where social media fits in their overlapping but very distinct worlds.
Burberry is an aspirational brand that sells premium products to affluent consumers, and are only [barely, it seems] dependent on the economic winds of change, not the flightier and less predictable whims of advertisers. Being able to establish a direct connection with consumers is a relatively new opportunity for brand marketers like them, but it’s old school for magazine publishers as only the platforms have changed.
Cosmopolitan and Vogue sell the eyeballs of aspirational readers to mercurial advertisers like Burberry, offering them a curated context via heavily subsidized (and, sadly, commodified) print and online products, and the direct connections to and influence over readers that used to be their killer app is being distintermediated by a lower barrier to entry to digital publishing for alternative media and savvy marketers alike.
This is a chart I use at the day job to illustrate that point:
In the pre-digital days, influential media brands like Cosmopolitan and Vogue were one of the primary gateways for marketers to connect with consumers. They offered an attentive audience that would have been difficult for most marketers to gather without investing heavily in staff and infrastructure. Today, those media brands are no longer primary gateways, and marketers aren’t nearly as reliant on them to reach their desired audience as they used to be as they now have cost-effective tools at their disposal to engage directly with consumers.
Whereas magazines and marketers used to be partners, today they are often co-opetition at best, outright competitors at worst, as brands have become publishers, and increasingly, magazines are becoming retailers:
Vogue is working with Moda Operandi, a year-old site that provides an online version of a store’s trunk show, where customers can preorder runway looks. Style.com, which, like Vogue, is owned by Condé Nast, will start selling clothes in November. And Details editors will soon start selecting items to sell on Mr. Porter, the men’s version of Net-a-Porter, a site for designer luxury goods that showed just how well $995 Christian Louboutin pumps could sell online. The magazines typically get a small portion of sales, or a fee for the number of shoppers they send to the e-commerce sites.
The difference, of course, is that a magazine selling Burberry products isn’t a threat to Burberry, while the latter’s use of social media to engage directly with consumers is an overt disintermediation of their magazine partners, whether intentional or not.
Even then, however, it’s not a zero-sum game as a “Like” on Facebook does not equal a sale, and Burberry’s having ~8x as many as Cosmopolitan is the kind of meaningless anecdata that gets dropped at conferences with maximum disdain and zero context.
Cosmopolitan had a paid and verified circulation of 3,032,211 copies as of June 2011, and an average of 1,339,212 unique visitors to their website. Burberry’s website averages 292,862 unique visitors, and while I don’t know how many customers purchased their products, Prof. Galloway apparently doesn’t either since he didn’t think any of those numbers offered valuable context in which to frame his “Facebook is teh shiznit!” commentary.
And, of course, that’s not even mentioning the ongoing (and escalating) privacy concerns related to Facebook’s ever-changing platform, a much more pressing concern for publishers, nor the ephemeral nature of social networking platforms in general.
It is not and has never been about Facebook. Nor is it about Twitter, MySpace or AOL. It’s about people connecting to people and the barriers to making those connections dropping fast and hard, which is an opportunity and a challenge for publishers and marketers alike.
Don’t believe me? Ask Kenneth Cole and DKNY what they think about that.
UPDATED: 10/7/11 @ 2pm
A June 2011 study by ExactTarget, “Subscribers, Fans and Followers: The Meaning of Like,” offers some relevant and revealing context:
The ExactTarget study found that 58% of US Facebook users expect to gain access to exclusive content, events or sales after “liking” a company, while 58% also expect to receive discounts or promotions. Additionally 47% expect to see updates about the company, person or organization they “liked” in their newsfeed, which bodes well for brands as they work to have their content always show up for their followers.
Additionally, younger consumers, ExactTarget found, have fewer expectations and generally “like” brands as a form of expression, not to get certain perks.
It is presumably these “younger consumers” Galloway was referring to in this jaw-droppingly insipid quote:
RT @Mattbean1: Galloway at #MPAAMC: Social media is the equivalent of corporate skinny jeans…Get with the trend!
— Audience Development (@AudDevMag) October 4, 2011
* blink *
* blink *
* blink *
Social media has been pitched as a variety of things, but “Corporate skinny jeans” is perhaps the most ridiculous metaphor I’ve ever heard, though inadvertently apropos for the lazy angle Galloway is approaching it from. I’m glad I hadn’t seen that quote when I first wrote this post because the tone might have been a lot harsher.
C’mon, son!
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Great article. The only (minor) quibble I have is this – “… it’s not a zero-sum game as a “Like” on Facebook does not equal a sale, and Burberry’s having ~8x as many as Cosmopolitan is the kind of meaningless anecdata that gets dropped at conferences with maximum disdain and zero context.”
If a company is smart, and if they are retail, they can use tools to approximate a value here; whether or not they do is impossible to know just by viewing the likes.
To illustrate, if a company A has 10,000 likes, and converts 1,000 of those to a sale of $10.00, that’s potentially more valuable than a company B that has 1,000,000 likes that only converts 1,000 at a sale of $10.00. If company B has an army of social media people, but A has a social media person, that’s a different ROI. But then you start getting into the value of branding, and what ELSE you’re doing on these channels (ie, are you offering easy access to customer service, consumer problem solving, etc..).
This is my way of saying I agree more with your overall premise, because of that; with the caveat I could be wrong.
Oh, we’re totally on the same page there! Based on the article and the #MPAAMC tweets I read, though, it doesn’t appear Galloway was coming from that angle, which is a lot more sophisticated than his, “Hey, magazines, ur doin’ it rong!”
He notes Burberry “has spent millions of dollars on Facebook” and suggests magazines should be doing the same, as if the ROI is the same for a luxury brand and consumer magazines.
Seriously, send this to Kate Rados and a few other people who teach digital marketing classes; we can’t let the next generation learn the wrong lessons from educators like that.
Partly for selfish reasons, do you want to untrain some kid who gets their filled up with that kind of fluff?
I’m wearing my corporate jeggings.
You know I’m taking a screenshot of this and will reference it on 10/17, yes? 😉