STOP Spending Marketing Budget on Social Networks That Might Not Be Here in 5 Years

Social media is a subject that most businesses deal with more because they feel they have to than because they want to. The thinking is & should be – if you’re not at least making some effort in this key modern area of marketing you are losing ground on the competition.

Now before you go and blow your marketing budget on iffy fly by night & entirely self-anointed ‘social media gurus’ I suggest you consider the following: would you spend heavily on advertising only playable on BETAMAX in 1982? Or only playable on VHS in 1998? Is the sustainability & fundamental financial well-being of the platform not a consideration marketers should be considering before investing their marketing budgets – especially on organic (ie. non-paid advertising) footprint growth?

With a hypothetical budget of £100,000 to spend on marketing via social media this is how I’d suggest a median company should generally look to hedge their bets:

  1. Facebook – access to 1,280,000,000 registered users or 18.3% of humanity is an undeniably enormous marketing potential that all digital marketers & online businesses need to attempt to engage with. Whilst links are nofollow there remain 2,250,000,000 pages from Facebook indexed by Google. With a market capitalization of just under $270 billion Facebook Inc. aren’t going anywhere anytime soon either. It is thus fairly prudent to make medium to long term investment in a Facebook presence for your business. Recommended Budget Spend: £45,000.00.
  2. Google+ – with a market capitalization of nearly half a trillion dollars at a comparatively sensible sounding price to earnings ratio of 33.62:1 Google or Alphabet Inc. as the parent company is now called are both the largest and the most sustainable owners of any social media platform. However, social is but one of many areas the company invest in & their efforts here have proven frustrating at times & very much a secondary consideration to their core offering of search. Whilst Google are the most likely of all of the social media platform owners to be around and viable and significant in 5 years time Google+ specifically most certainly is not & as such some caution is recommended. Recommended Budget Spend: £15,000.00.
  3. Instagram – Instagram was thought to be bringing in around $595 million in revenue in 2015 making analysts valuation of $35 billion suitably ludicrous. As a Facebook owned entity, though, and one that has the personal support of Mark Zuckerberg the project should be around and buoyant for a long time to come. Recommended Budget Spend: £12,000.00.
  4. Twitter – Twitter, Inc. has failed to effectively monetize their massive traffic levels perhaps more severely than any other major internet ‘success’ story in recent memory. The platform remains very well used & as such fears over their financial well being should be counterbalanced by an appreciation for the here and now gains possible for the foreseeable future. Recommended Budget Spend: £8,000.00.
  5. LinkedInLinkedIn offer a great service to the professional world. They have, though, struggled to turn revenue into profits and as such despite a market capitalization of around $25 billion they are hardly an ultra sustainable business at this point. Recommended Budget Spend: £7,500.00.
  6. reddit – the site made $8,276,594.93 in revenue in 2014 & would appear to be fairly static in terms of traction although simultaneously appearing a suitably well supported entity with a loyal core fan base. Recommended Budget Spend: £5,000.00.
  7. Tumblr – even if Tumblr did manage $100 million in revenue in 2015, as has been claimed, there is a long way to go to remaining and gaining traction in an increasingly crowded social media landscape for the Yahoo! owned entity. The size of Yahoo!’s pockets and their enthusiasm for the division would imply a reasonable chance of sustainability if at a modest level. Bare in mind $100 million is around 2% of Yahoo!’s total revenue take in a given year. Recommended Budget Spend: £5,000.00.
  8. Pinterest – Pinterest forecast $169 million in revenue in 2015. Pinterest is making $1.44 per active user, based on that forecast. If, and that’s a big if, they managed to do that – and assuming normal profits at a 35% margin we have earnings of $59.15 million making its purported valuation of $11 billion indicative of a 185.96:1 – that is – typical boom-bust fodder. As of January 2015, there were 176 million registered users, but only 88 million active users. The 2015 projection thus expected an increase in both active users & revenue per active user. Recommended Budget Spend: £1,500.00.
  9. Yelp – Yelp Inc. have managed to eak out a profit of $8-9 million dollars per annum in recent times on investment of $1.7 billion one wonders how long investors will keep the faith. Recommended Budget Spend: £1,000.00.
  10. Foursquare – Dennis Crowley resigned as chief executive of Foursquare Inc. after struggling to turn the location-sharing mobile app into a profitable business over the six years since he started it – that news just in. Recommended Budget Spend: Nothing
Tagged with: