Making Moolah from Social Media – Alap Bharadwaj & Deepak Srinath

For all the hype surrounding social media and its unique ability to reach a wide range of users, the question still remains: does using networks like Facebook and Twitter help brands directly increase sales? A survey by blogworks.in and exchange4media highlights two very interesting facts – firstly over 80 percent of respondents felt that marketers either do not have a good understanding or only have a cursory understanding of social media and secondly almost 50 percent of respondents felt that agencies either have no understanding or only a cursory understanding of social media.

A lot of consumer brands in India have taken to spending a cut of their ad budgets on developing communities, games, activities and apps on various networks. From a numerical standpoint, the sheer number of signups and community members’ that brands boast of having captures some success. But there is no methodology or mechanism to track whether these users are in fact getting converted into sales. Digital agencies specializing in social media marketing have seen an ‘uptick’ in their revenues. However, they will be soon be asked to demonstrate the relation between spend on social media and sales of the product being promoted. According to the CEO of a top digital agency, “unless agencies can demonstrate a minimum monetization of 15-20 percent through social media, brands will start questioning their spend on it”.

We believe that investing in social media is a great tool for brands to increase their awareness, and absolutely necessary for ‘reputation management’ given the proliferation of blogs and online reviews with internet users (especially those in the younger age   bracket). However, driving sales by using this channel will require methods more sophisticated than just setting up ‘community’ pages. The digital medium needs to be leveraged in such a way that it converges its strengths like interactivity while enabling a dispersal of product information and a tracking methodology that can show a brand its social media RoI. There is clearly a gap between the intentions of marketers and the results that social media delivers to them. It might just be a while before we actually see the “massive potential” of social media marketing that everyone keeps talking about. Moreover, we also sense a huge opportunity of establishing market leadership for a digital agency which cracks the analytics and monetization aspect of social media marketing.

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About Deepak
Venture Capital and M&A advisor, Entrepreneur, Startup enthusiast..

3 Responses to Making Moolah from Social Media – Alap Bharadwaj & Deepak Srinath

  1. Shashikiran says:

    Interesting observation & absolutely true. Check out this product called gizapage
    http://giza.im/new is a Bangalore based startup exactly positioned to solve this very issue agencies & SMEs are facing today.

  2. Ritesh says:

    There are examples of organizations using social media sites for sales pretty successfully. I remember reading about a bakery which tweets every time its fresh batch of cookies is out (can imagine it would be pretty relevant for a store like K.C.Das to do this – given the limited availability of their produce). Also read about an ice cream store which delivers in the Empire State Building coz it was just too time consuming for office goers in the building to go down to get some – all based on tweets they received.
    Having said that, I understand that most of the examples one may find are more ‘small business’ related. Yet to come across larger organizations using it to push up sales volumes.

    • Alap says:

      Great point Ritesh, I think social media definitely could be a game changer for companies that are small business related, especially those in the food and perishable commodities biz…

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