Or, so says MediaPost News’ Joe Mandese in his post Social Media Fails To Manifest As Marketing Medium, Report Likens Twitter To TiVo: More Hype Than Reality.

I’ll summarize the basic points of the article for you. Mandese says that although social media has “reached critical mass with 83% of the Internet population now using it – and more than half doing so on a regular basis” it isn’t turning into the marketing medium that all it’s media proponents claim it to be. He uses the following research from Knowledge Networks to assert that less than 5% of users “turn to social media for purchase decisions.”

He goes on to use this information to say that TV advertising and WOM are far more effective ways for brands to market to their customers.

I was going to leave a comment with my thoughts on this, but alas, you cannot comment unless you login and since I felt I had so much to say to refute this, I decided to write my own post.

Point #1: Research Issues

Knowledge Networks’ research looked at how many people regularly or sometimes “turn to” social media to make purchase decisions. I would say that there are two major flaws with the question itself that bias the outcome:

1. Who “turns to” anything for purchase decisions? I don’t ”turn to” TV when I want to go on a trip. I don’t think, “Hey, I’d love to go to Hawaii this summer, maybe I should watch hours of TV in hopes that a commercial appears giving me information on that.”
2. Regular consumers don’t know what “social media” is. If you ask them if they use social media to make purchase decisions they think about whether or not they went on Facebook to find information. They don’t realize that if they went to TripAdvisor.com - they were using social media. If they went to Priceline.com and read reviews of the hotel they were considering – they were using social media. If they wanted to buy a new computer and read an article in TechCrunch about it – they were using social media. They just don’t categorize it as that anymore because it’s so natural.

Point #2: TV and Word of Mouth

Knowledge Networks considers social media to be below TV and Word of Mouth in terms of value. But they’re not comparing apples to apples. Their question was “How often do you refer to social media Web sites or features as a resource for information, reviews, or recommendations when in the market for [category]?” So we need to talk about whether people turn to TV and Word of Mouth as resources to make purchase decisions to determine value in this case.

1. Like I mentioned above, you’re not going to “turn to” TV to make a purchase decision, TV is a discovery mechanism. You don’t go there when you’re looking for specific information to make a purchase. If you compare TV as a promotional, awareness increasing marketing tactic to whether people purposefully use social media to make a purchase decision – that’s not a fair comparison. Compare their effectiveness based on reach and awareness driving goals. And I’d argue when you have a social media site with millions to hundreds of millions of users and the ability to hypertarget your message the value of those impressions is actually pretty high, especially when you consider cost.
2. Social media is word of mouth. If my friend posts that she’s headed to Hawaii this summer on her Facebook and links to the review page of the hotel she picked – that’s word of mouth. If my coworker twitters about how he just bought the cool new phone and it’s actually poorly made and already breaking – that’s word of mouth. If you go on your blog and talk about how your trying to decide between a Mac and a PC and your friends all comment back – that’s word of mouth. All of that is actually social media but people probably wouldn’t categorize that as “turning to social media” they would categorize that as asking their friends.

Point #3: You’re Missing the Forrest For the Trees

This whole article is based on the premise that advertising will work the same in social media as it does everywhere else: as ads interrupting people’s experience as they try to connect with their friends online. The questions are all directed towards the effectiveness of advertising in that sense on these sites. But what about actually participating here?

The point isn’t how many people use one service or another, the point is that the people are demanding personal relationships. They want to get advice from people they trust. What if the brand itself is part of that circle of trust? This isn’t a shift from TV ads to Facebook ads – it’s a shift from bullhorn one-to-many advertising to one-on-one relationships. And they’re right – social media doesn’t have the reach that TV has. Yet. But do you really want to be the brand that gets left behind? Do you want to watch while your competitors get comfortable here in the early days and reap the benefits in the future when you’re playing catch up?

I guess those are questions each business will have to answer for themselves. What do you all think? Please feel free to leave me a comment – my comments are open, no login required.