Social Media Strategy

3 Ways to Survive the Coming Social Bust

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Jay Baer Blog Post

Today, the social media industry is crowded and swollen like a grilled sausage, right before the heat splits the casing.

The bust is coming. In both social media software and social media services, the herd is about to be thinned. It’s inexorable, as this is a process undergone by all maturing industries. The winners will prosper, and the losers will fade away, remembered only by their one-hit-wonder viral videos and nifty SXSW T-shirt giveaways.

Compared to the last boom/bust technology cycle that culminated with the dot com crash of 2000, the social-era combatants are in an even more precarious position. Back then, the engine of the expansion was e-commerce, which at least generated revenue (although clearly not at ROI sufficient to save,, and legions of other online ghosts). Last time, success and failure was driven as much by expense control as revenue generation, and the huge influx of public market financing through IPOs allowed start-up companies to essentially trade dollars back and forth in a giant shell game.

This time, the actual business opportunity is more narrow. Social media is part of the marketing and customer satisfaction success path for companies, but it’s not the whole story. Even becoming a “social business” as I wrote about with Amber Naslund in The NOW Revolution, helps companies achieve operational efficiencies and newfound innovations more so than direct, linear revenue or profit. And now with a few exceptions, we don’t have IPO money to burn. Other than the burst of buyouts of the first tier social media management software firms by Oracle, Salesforce and Google, the players in this game largely have to stand on their own feet and balance sheets, augmented with modest A-round venture financing.

This is not just a software battle. If you, like me, are providing social media or social business services in any form or fashion, the shakeout is on the way. There are three, critically important steps you can take to help ensure your survival. You’ve got 18-24 months to figure out how you’re going to have a chair when the music stops.

1. Go Narrow, Not Broad

There’s not a kernel of differentiation in the positioning of just about any social media software or services company. None. I wrote a post about this many months ago, and included a survey asking people to pick the correct tagline for many popular software providers. Best score was 25%. The delightfully wry “jargonated” website skews the ridiculous and vague positioning of social media agencies and the like, which invariably have no differentiation or real-world meaning.

Tell me the difference between Spredfast, Sprinklr, Sprout Social, Argyle Social and Hootsuite? Me or my team have demoed or used all of them, so I know that differences actually exist, but almost all social media software companies (I’m not just picking on these five) want to provide an all-in-one solution, hoping that it increases their market opportunity. This is misguided. Nobody wants a tool that indeed does everything, but does many of those things generically or just adequately. I want the tool that’s tuned precisely for my circumstances. Figure out what you can be the best at, go long on that facet, and then ruthlessly market that advantage.

This issue is perhaps even more acute on the services side, where every agency of every size and type is fighting for a piece of the growing social media budget. Tell me the difference between a PR firm, ad agency, digital agency, or social media agency if they are all providing the exact same services within the realm of social? It’s perfectly okay to offer a broad range of social services (and I advise agencies to embrace at least these 23 services). But from a marketing perspective, you must focus on much smaller number of things you do as well or better than anyone else. That’s why at Convince & Convert we’re redoubling our efforts around Youtility audits and our Social Pros on-call strategic counsel services, two pieces we provide that most do not.

2. Go Touchy-Feely

In markets where competitors are minimally differentiated in terms of their actual offerings, the customer experience becomes an even more important factor in obtaining and retaining business. I know it’s all the rage to hire as many smart, technical people as possible to build wonderful software or hack together custom APIs for your agency clients, but this emphasis on hard skills versus soft skills needs to be turned on its head.

The most important people on your team are the account managers, sales people, client satisfaction managers and anyone else that interacts with confused and stressed customers, whose career paths are now linked to the success of your software or services like a double helix. We’re in a race to replace actual human interaction with digital analogs (Download the “hug your kids” app). All this technology-enablement may be efficient, but it’s psychically disastrous.

Once you’ve pruned your messaging tree and figured out what you stand for, figure out how to acquire, train and empower the very best customer relationship people, and do not let them leave. At Convince & Convert, if we don’t receive at least one note per week from a customer praising us for being fast and responsive (our calling card) something is amiss. I received a hand-written thank you note the other day. Made a big impact. Dave Kerpen of Likeable Media sends out several per day, just because. Smart.

However, Dave’s company is misnamed. Being likeable isn’t the goal, because indeed you can like software, and you can like your agency. But like doesn’t win. LOVE wins, and nobody loves software and nobody loves companies. They love individual people that work for software companies or agencies. Do your customers LOVE your people?

3. Go Translate

The future of marketing isn’t big data, it’s big understanding. (Tweet this)

We’ve spent much time and energy talking about measurement of social media, but we’ve almost wholly neglected to acknowledge that numbers without context are useless. The good news is that most social media software companies and providers of social media services have gotten better about reporting over the past year. There’s less reliance today upon public, aggregated metrics like fans, and followers and impressions. But in their place, too many companies are panning for numerical gold and tracking two dozen metrics from all across the social sphere, hoping to find nuggets of insight. This doesn’t result in clear data that’s understandable and actionable, it results in Excel bloat.

The present era of social media metrics reminds me of late 90s web analytics, when you could download a Webtrends report that included 60 pages of stats and most people would print them out and waive them around like a talisman, as if having access to the percentage of 640 x 480 browsers in Lichtenstein was a data point worth knowing.

Stop creating reports, and start creating understanding. (Tweet this)

Take the time – using your much loved customer relations team – to work with customers to provide context and insight for analytics. Numbers can and should tell a story, and the winners in the coming shakeout will be the companies that can spin a tale with data.




Facebook Comments


  1. says

    Great post. I would ad #4: Get creative. Invest in creativity and creative thinkers (yes, this is a self-serving comment, but true nonetheless). Social media is all about the mechanisms and way too little about the messaging. In that realm, it is a me-too world. We need more conceptual thinkers who can connect, human-to-human, in constantly fresh new ways. Also, when you offer creativity, it is self-evident differentiation; you either have the work to show, or you don’t.

  2. says

    Good advice. Interpreting the data for my clients is one of the biggest differentiators I have. The report is basically the only tangible deliverable each month, and mine tell a story. This prevents me from becoming a commodity.

  3. jessicamalnik says

    Great advice! I would take this a step further and say don’t be afraid to “wow” your clients. It’s amazing just how beneficial it may be when you go the extra mile and surprise and delight a client.

  4. says

    I’m actually surprised that you’re predicting a “bust”. I would have said the same thing on web site development, email, and other technologies. I thought by now we’d have visual APIs to just drag and drop our tools and developers would have gone the way of COBOL. I thought email would be so problematic and saturated with SPAM that we’d be relying on it less – especially with social media available.

    But the demand has continued growing… even through saturation and mass adoption. I still think there’s a ton of potential in the type of tools, the platform technologies and adoption. It’s easier and easier to develop better tools and bring amazing ideas to fruition via the web.

    While social media may not be “hot”, I’m bearish on any “bust” and predict it will go the way of the website, or the email… which are still growing in demand and sophistication. We haven’t even really tapped video yet, either. I think we’ve got a ways to go! That said, your advice is gold for any company to ensure they’re leveraging social properly.

    • says

      Yes… I agree Douglass – I’ve read about the demise of email for years – had a tech. owner tell me last week that it was dying, again. It’s still one of the strongest forms of marketing for small business, and I couldn’t go a day without it.

      I also remember being told that website developers would be out of work as we’d all be ‘making our own’ soon. I think Social is maturing, and a lot of the pretenders who have NO business acumen will end up being unemployed as companies begin to grasp that it’s a powerful tactic and not an impossible science that they need a wizard to make sense of – maybe that’s what Jay’s getting at.???

  5. says

    I agree in large part with what @douglaskarr:disqus says below about the comparisons to website, mobile and the demand for social. We haven’t even tapped video yet, and the demand I think will continually grow at many factors of +1. With that being said, I think this post is spot on Jay. I think all of the clamoring for big data and social data without the context of what it means and why is throwing money out of the plane. Building off of that, social is ‘too big’ to be mass executed. So I absolutely love your Go Narrow Not Broad call-out. I’ll piggyback off of Doug one more time in saying your advice is gold for any company to ensure they’re leveraging social properly.

  6. says

    Jay: While I’m not sure bust is the right word, there is no doubt the social media market will start to consolidate, which reflects its maturation and evolution. I completely agree with the three “buckets” that you’ve identified. In fact, I’ve applied these approaches to my business providing startups with marketing services.


  7. says

    Unlike the dotcom era, we have the luxury of hindsight this time. The likes of Instagram aside, the majority of startups in this era face greater scrutiny for revenue. MBAs with powerpoint decks are not getting funded like they were then.

    The acquisition frenzy and the scrutiny of those businesses being shuttered feel similar but at least we don’t have sites dedicated to tracking the demise of high flyers. E-commerce was the buzz then and we now take it as a given in our everyday lives. Social media won’t die or go away. It will simply cease to be discussed distinctly separate and with such hype.

    Companies blew a great deal of money and were bloodied after their many mistakes in the dotcom era. Maybe those memories are behind the pressure for social media ROI. Many do not wish to be left bloodied again.

    I don’t think we will hear a bubble burst but perhaps we will hear a sigh of relief and comfort as wisdom and rational thinking settles in, social becomes embedded within companies like email and an online presence, and we await the next big thing that will occupy the hype machine and be speculated about as the next thing to go bust.

    • says

      Agreed on the embeddding of social, for certain. I wrote a couple weeks ago that social for business will become like air (omni-present) rather than like water (you have to seek it out). When that happens, the consolidation in software and services companies will really pick us steam, and the wheat and chaff will separate quickly.

    • says

      I think you’re right about social being embedded. I wrote last week that social will become like air rather than like water. But when that happens, only the best software and services companies survive, just like email.

  8. says

    There will be a bust, but not for the reasons in this article. The dotcom bubble didn’t fail over ecommerce; that wasn’t the driver of the bubble. The dotcom bubble was based on banner ads and CPMs. In the beginning, CPMs were $20. If you got a million monthly users, that’s $20K/mo and you could start a company on that. (I know this: I ran the website at; we grew to 16m monthly users.)

    So everyone got into the game: build a site, get attention, get traffic, and sell investors on the promise of future traffic. That of course led to massive fraud: fake clicks, fake data, etc. But who cared? Dotcom valuation went to an astonishing $5 trillion dollars. Everyone was in the fraud: Wall Street bankers, VCs, the marketing industry, magazine publishers, WSJ, crooked investors, etc.

    That was of course unsustainable. There was too much advertising. CPMs fell to $0.10 and $0.05. By then, companies had grown to 500 staff. The CPM revenue could not support that staff. The bubble popped.

    The same has been happening in the social bubble. AJenkins below says “MBAs with Powerpoints won’t get funded.” Ha. That has been happening in Silicon Valley for the last several years. Just read Techcrunch. Implausible business plans are getting $7m and $10m.

    It’s fraud all over again. Promise the investors there will be mountains of gold in ad revenue. Use all kinds of fraud to inflate the numbers (number of members, monthly traffic, clicks, etc.) Early investors put up $1m. Use the money for massive PR (business magazines will publish nonsense as long as you pay them). The second round of investors show up and buy the stock from the first round. 1st round tripled their money and disappear. 2nd round repeats the process and sells the crap, er, highly anticipated stock to 3rd round. FB snookered $70b from investors. For example, a key investor put $5m into FB and made $65m in the IPO. FB has no, not one, scrap of evidence to show its advertising works. Twitter plans to IPO for $11b. Zynga was a morass of fraud. These companies will crash. I expect Microsoft or Google will buy Twitter for $3m. FB will be sold for $25m.

    Some 5,000 companies were set up in SV in the dotcom bubble. About 2,000 crashed. Most deserved to crash. However, in the panic, many good companies also crashed (investors fled, etc.) Around 100,000 workers lost everything: jobs, house, apartment, wife, car, etc. A few major investors were investigated, but bribes, er, political donations adjusted the political trials. Many of the same scoundrels are part of the social bubble.

    • says

      Oh man. Fantastic! I ran online for for 6 months or so. We hated you guys. I completely agree with your CSI work on the bust and some of the stuff around Zynga et al is a bit sketchy. Not sure I see Facebook, with the largest audience ever assembled online falling down like that, but I’ve been wrong before.

  9. says

    Great post Jay. I don’t think social media bust is the right set of words though. Perhaps consolidation,pruning, compressing, etc. I also think business need to focus on building out their community, and as you mentioned, in a a very narrow band, and service them to death.

  10. David says

    Your comment “want to provide an all-in-one solution, hoping that it increases their market opportunity” has been a problem with software makers since the PC was invented. First there was “specialized” software for word processing, spreadsheets, database then the big idea that all should be integrated into one package (Word Perfect corp.). It didn’t work well then and as you point out it won’t work now in the social software / services space. Good point, all should take note and learn from history.

  11. Kathryn Ballett says

    I think maturing is a great way to look at it. I love the integration of traditional with social. It is making it all so much more effective and fun for the end-user. The Superbowl ads were great examples of this.

    • says

      Yes. While I think the ga-ga about Oreo et al was a bit overdone by the marketing talking heads, we probably reached a watershed this year with the social marketing “layer” being viewed as valuable even as $4 million TV spots are rolling alongside.

  12. says

    Fantastic read Jay. The pool is certainly over crowded and something has to give. These are certainly great PFD’s but my $1million question is – what does the future of social look like?

  13. says

    Jay, you really hit the nail on the head with what uberVU (the company whose community I manage) is aiming for in your last couple of paragraphs. While we have capabilities for analytics/reporting, what’s exciting to me about our product is the Signals feature, which offers social media managers not only notifications about the important things that are happening in social, but also suggests actions to take to optimize time spent executing a social strategy.

    If you’re ever interested in checking out the product, we’d love your feedback! You can reach me at elisabeth at ubervu dot com. Thanks!

    • says

      Haven’t seen it in a while, and we’d love to demo. Totally agree on notifications. A big missing feature in a lot of software. So much of it seems to assume that social media managers will stay logged in all day. Foolish. This is why email will never go away, it’s power as a notification engine for social actions is its killer app.

      • says

        Awesome! Shoot me an email at the address above and we can find a time to demo for you. Looking forward to our discussion!

        Agree that notification emails, while they can be overwhelming at times, are SO, so helpful for someone who doesn’t have time to “hang out” in one platform or place all day.

  14. says

    I agree that the herd is being thinned. All these social media secrets that people are touting don’t work anymore. People are receding from it or using it less and less. People have commented on how little I post on Facebook anymore, personal or business page. At first I was confused, like I’m always on Facebook, then I realized I was spending all my time in private groups… where I have relationships and communities built.

    Also that is the most horrifying picture I’ve ever seen.

  15. says

    Jay, I’m jumping into the commentary from a slightly different perspective. We all know that social media as a technology has gone through a golden age where marketing is concerned, and it has become increasingly common to see social as an integral part of any comprehensive marketing effort. So much so that many wonder why we now talk about social media as a distinctive technology silo. When the social lens began to turn inward, and social collaboration became a part of the social business moniker, a couple of things happened. First, those who condemned the value of social efforts due to less than obvious ROI went deaf, dumb, and blind when it became an internal, enterprise (and enterprise vendor) effort. Second, the low hanging fruit of focusing social on process exceptions, which requires much maligned human effort, still avoids the stigma of value, and added benefit. Sure, we can show that social collaboration can help solve internal problems, but unless there are existing metrics in place, how does the Fortune 100 justify the effort? This isn’t to say that the evidence doesn’t exist, as folks like Dion Hinchcliffe and others have pulled together some compelling evidence.
    SAP recently showcased what a big part of the future will look like, with the use of cloud based, in memory processes. What will this mean for marketers, who can now get huge amounts of information in near real time (how about processes that are at least 3,000 times faster than what we have all experienced). The implications are profound.
    So, you wonder where I am going with this? We will see social media vendors go through acquisitions, extinctions, and the like. Those that provide only the baseline functionalities will be especially at risk of external forces. But the rub is that we’ll also see continued morphing of social as it becomes more fully intertwined with marketing, HR, customer support, product management, product marketing, etc. And we’ll all be contending with the changes that the large enterprise vendors will be pushing out as they continue to fine tune all things internal. Like it or not, change is afoot. Finally, imagine when real time becomes available to the masses, not just the SAP world. Marketing is in for quite a ride.

    • says

      Great stuff Marty. I’m not sure real-time for the masses will be the key, but rather predictive computing that’s using analysis of all prior actions to determine what you can and should do next. Lots of amazing stuff on the way in that category, a la “hey, you should check out this Greek restaurant three blocks away, you’ll love it”

  16. says

    Loved the article Jay! We’re a small SM management company in the UK, comprising just 2 people at present. Our backgrounds are in journalism and advertising (creative side) and graphic design respectively. We find more and more, that good quality editorial combined with clever, witty or thought-provoking creative is proving to be far more successful than the ‘shout loudest and/or longest approach’, particularly when combined with the right platform for a particular brand (Vine has stirred our juices enormously). So many SM companies here in the UK seem to be adopting the same positioning/branding taglines and promises of social media success as their competitors, or people they hold in high esteem within social media. What’s tragic is this is being done without understanding what that particular brand or individual truly stands for, or how they’ve achieved their success, and worse still failing to live up to what their brand outwardly promotes itself as being. This just seems ludicrous to us and when we created Growcial we thought long and hard about what we DIDN’T want to be rather than what we did. At first glance this may seem a backward step, but it’s an old way of rationalising a great concept in advertising. If you can tear down an idea due to its failings, your usually left with the idea (in this scenario the ‘brand ethos’) that can stand on its own two feet and survive. Neither one of us at Growcial is a programmer, or a an analysis expert,, but we know we’re very strong creatively, so have chosen this as our particular USP* (*use of the ‘U’ is tentative) with social media being our canvas. ‘Thinning of the herd’, natural selection, whatever we define it as, it strikes us that social media has now gone through its adolescent ‘shouty’ stage where it was about high numbers of fans and followers and is marrying with a more incisive, creative and targeted approach. Apps such as Vine will perhaps put social media back into the hands of ad agencies and creative writers as well as designers who know better how to connect with audiences than the average SM manager and what ‘brand’ really means. From both an audience and client perspective this can only be a positive. “Just because we can, doesn’t necessarily mean we should…”

    • says

      I love that metaphor of the adolescent “shouty stage.” Well done. As for Vine, I’m not a huge believer in its transformative power – per my video post today. But we’ll see.

  17. says

    Social Media as a stand alone will be replaced by Social Business with the convergence of social, mobile, cloud and big data. And Social business has to be integrated to the internal and external work flow increasingly and become seamless for context and perspective. So Social business will become a way of business and stop being just tools. I think this will be the “Go Translate” part to happen in the future.

    • says

      I disagree there. I’m a big proponent of social business. Hell, I co-wrote one of the first books about it. But I don’t see social media (outbound) being replaced by social business (inbound). Both will grow. But eventually it won’t be “social business” it will just be “business”

  18. says

    Love this post Jay,

    I have been talking about this for a while now at my company. I do not think social will necessarily bust, but how marketers refine the strategy towards social are a changing for sure!

    The best social tool is the person who can make sense of all of the data (no matter the software used), and deliver it to a client in a way that proves the value of your service. Standard reporting just does not cut it any more. Reporting with what worked, what didn’t, action items and a strategy for what to do next is what clients desire. Not to mention, clients crave service providers who really care about their business.

    Have a good one Jay!


  19. says

    Great advise and wise to proactively look ahead to what’s beyond the horizon to put yourself in the best position to ensure you have more ahead. I could see those insights being very prophetic for the industry, and it definitely gives those hoping to emerge on the other side something to think about.

    Having worked at a large internet agency before and after that dot-com bubble burst, there certainly feels like some cyclical similarities of the over-inflated rush to an unsupportable fall. But I think you’ll see a similar “recovery” wave for those who wash out from any social media industry burst.

    Back then, the need for websites didn’t go away just because many dot-coms or internet agencies did. The internet and online consumer demand didn’t go away. Many corporations that might have had to hire outside expertise early when it was so readily available (and when the world wide web seemed like such a mystery otherwise) ended up internalizing some of those core new business elements as they became more understandable. Myself, and many I worked with who saw their dot-com era agency close its doors, went from building dozens of different client websites one day to focusing on one for our new smaller business employer that realized they needed to build their own site and bring that personnel aboard.

    The need for businesses to successfully keep pace with the technology their customers are increasingly using isn’t going to change, even if the social media industry experiences some volatility. I’m probably focusing on something a little different perhaps, but for those trying to make their way in this industry and worried about bubbles bursting I’d say this… yes many social services and so-called experts may fade away as markets correct and winners emerge, but if you really have the skills I only see the need for those abilities increasing at corporations and small businesses — many just starting or truly getting re-organized around our new communications realities settling in throughout businesses everywhere.

    Social media will increasingly become less outsourced/isolated/ignored and more integrated into an organization’s everyday processes with advancing internal knowledge. The learning curve for building websites was probably higher then than reaching out on social media now — although doing it right is an artform not everyone can master (the tips above and throughout this blog very helpful to those trying). Even if big industry players shrink ahead and tighter competition forces others out, I believe/hope there will be plenty of opportunities even if in different ways or places further ahead because that’s how our world works today and many organizations still aren’t there yet.

  20. says

    This is really interesting on a couple of fronts. For one, I agree that there is a coming bust in social media but maybe not for the same reasons you do. Social media that doesn’t solve a workplace problem isn’t all that interesting for potential revenue. Twitter and Facebook own that market for now. They work well in an entertainment and personal context but the real bust is coming because there are so many enterprise products that aren’t going to survive. Capture the global corporation and you’re ‘in’…there will be a winnowing.

    Many of the social products that are out for the enterprise miss the point that business context matters enormously. The key isn’t to connect people to have conversations, but to create a social graph and network of networks that really fosters communication, collaboration and engagement. Yammer is interesting but doesn’t really bring that. Jive is interesting but is very tied to the portal concept (which is dying).

    It will be interesting to see what happens.

  21. Cicy says

    Good stuff, great job, but i want to suggest that your ‘tweet this’ opens in another page so we don’t get distracted or totally dump reading the other part of the article. Well done!

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