Seeking the Magic Link Between Social Media and Sales

I don’t usually blog about business here but, in light of the recent news of Twitter’s $15 billion IPO, I thought I’d revisit the idea that social media isn’t particularly good for capitalism. This idea – that social media isn’t a good way for firms to sell goods – would royally fuck with the business model of just about every major social media company, whose revenue is ad-driven. Disappointing revenue from social media ads = fewer ads = no more billion dollar IPOs for social media companies.

Nokia has great social media buzz, but this hasn’t helped sales. (Source: Cheezburger Network)

The logic behind a business model based on ad revenue is that if Y firm places ads on X social media platform, the platform’s users will buy that firm’s goods. But even big social media companies are admitting this isn’t the case.

When Facebook went public last spring and was trying to legitimate its high valuation it needed to show investors that ad revenue would continue to grow. This means it had to make an argument why advertisers should spend their marketing money on the platform. Yet even Facebook staff do not claim that there’s a direct advertising-sales relationship. From the New York Times’ Media Decoder blog:

“It’s a myth that Facebook is trying to figure out R.O.I.,” said Brad Smallwood, the head of measurement and insights at Facebook, using an acronym for “return on investment” or proof that money spent on advertising actually works. “Facebook is a demand-generation platform,” Mr. Smallwood said. “This is demonstrating that as you run messages on Facebook that it impacts people’s behavior when they are in store.”

I’m sorry, but “demand-generation” sounds like another word for “bullshit.” It’s basically taking a causal step backwards, saying that no, there isn’t a direct link between social media advertising and sales, but in some vague way we make people want to buy your product and we call that vague way “demand-generation.”

The same post includes results of research (conducted by Facebook, it seems), that they were able to find a causal link between Facebook advertising and sales for two companies – Target and Starbucks – but what was their total sample? For what percentage of advertisers is their no (or low) sales bump? You can’t just share the findings that support your theory, that’s not good research.

Social media buzz has not reversed the downward trend in Nokia’s smartphone market share. (Source: IDC)

And what about free social media advertising, the so-called “buzz” phenomenon by which ecstatic customers love your brand so much that they share it with their friends for free and those friends then become customers? All I can say is, I have my doubts, and my number one case study is Nokia.

Nokia has great social media buzz. There is actually an entire genre of memes about how their phones are indestructible. But this free peer-to-peer advertising hasn’t helped Nokia’s sluggish sales (purple line in graph at left).

One way to interpret this is that the Nokia meme is a backhanded complement: the old 3310 model’s indestructibility is evidence of old-fashioned stability, which doesn’t help its image in the smartphone market, where style, design, and innovation are prized. However, this could also be seen as evidence that even significant social media buzz can’t counteract the market trends of a company that is hurting in other ways.

Memes mocking fragile iPhones seem to have little effect on sales. (Source: Know Your Meme)

In this way, social media buzz (at least as measured by meme creation), is going against market trends. The meme at left mocks Apple’s fragile iPhone, while raising the Nokia to almost superhero status, yet Apple’s iPhone is outpacing Nokia in sales (red line of graph).

Again, just as Facebook’s evidence that social media advertising and sales are sometimes linked is not proof that theyalwaysare, the Nokia case is not proof that social media marketing and buzz never provide good return on investment. However, it is evidence that paid social media advertising and free social media buzz are only one part of a firm’s total sales context. It’s not a magic bullet. Then again, is anything?

The Power Implications of Sex Work Over Skype

Ad for Interlude, a sex tip game from the 1980′s. Computer sex has advanced far since then.

Today I came across an interesting comment on Jezebel:

…The way I started was I put up one free video on Youtube, got some fans, then I had some pay clips on clipsforsale as well as setting up skype appointments with people. Some of them just wanted to talk to me because they thought that I looked really interesting (I have a shaved head and facial piercing, but I wear fluffy dresses and make up, apparently that is strange to these men) Others wanted to just sit there quietly and watch me smoke/eat/ paint my toe nails.They pay through paypal.

YouTube, PayPal, Skype, (paid fetish clip site) Clips4Sale- are these the new frontiers of sex work? Is this even still sex work? I’d say yes, since there is a transaction of money for sexual arousal. Why am I writing about this on a digital activism blog? Because it’s an interesting case study of the way technology affects power dynamics. The commenter continues:

I have though, been propositioned to do porn since starting though. Not anything hardcore, but like tickle porn and foot worship stuff, I have not decided if I want to make that jump yet….But meh, it would help me pay off my student loans.

So, not only is this women earning money by doing things she considers weird but not degrading, there is no pimp or other economic exploiter – she’s an independent operator. Also, she’s not putting herself in danger physically, either of contracting an STI or of being raped of physically assaulted by a john. I’d say this is a positive development.

Is Facebook Forcing Our Journalists to Make Lazy Generalizations?

This month’s Atlantic cover story is called “Is Facebook Making Us Lonelier?” and features an arresting image of a couple embracing in an electronic glow, while the man looks at his smartphone. It’s unquestionably a great cover, but it’s also a profoundly bad article. In it, Stephen Marche argues that “we have never been more detached from one another, or lonelier.” He lays the blame, unsurprisingly, on Facebook. The only problem withwith Marche’s thesis is that it is wholly unsupported even by the studies he cherry-picks for his article. Continue reading

Star Wars: George Lucas’ Cold War Vision of the Digital World

The evil Darth Vader stands amid the broken and twisted bodies of his foes. He grabs a wounded Rebel Officer by the neck as an Imperial Officer rushes up to the Dark Lord.

IMPERIAL OFFICER: The Death Star plans are not in the main computer.

Vader squeezes the neck of the Rebel Officer, who struggles in vain.

VADER: Where are those transmissions you intercepted?

Vader lifts the Rebel off his feet by his throat.

VADER: What have you done with those plans?

REBEL OFFICER: We intercepted no transmissions. Aaah….This is a
consular ship. Were on a diplomatic mission.
[source]

George Lucas' Cold War vision saw computers primarily as tools of battle.

Star Wars: A New Hope is one of the greatest movies of all time and one of my personal favorites. So, in a departure from the usual content of this blog – and as an early Christmas present to MAP readers – here is an analysis of the digital vision of Star Wars.

Not only is Star Wars a great work of science fiction, it is a great work of computer science fiction. (The word “computer” appears 48 times in the screenplay, “Jedi” only 19). The digital world of Star War is deeply shaped by the computer science of the early 70′s. This is not surprising, since George Lucas wrote his screenplay at that time in California, a part of the world buzzing with early computer research. In the 1970′s, computers were expensive Cold War command-and-control devices funded by the military, not the personal and social tools we know today. This 1970′s vision of the computer is what we see in Star Wars.

This command-and-control conception of computing is necessary to Lucas’s plot and the difficulty of digital content transmission forms the dramatic tension of the film. The plot revolves around a set of stolen digital plans for the Imperial Death Star, which are ferried across the galaxy to the Rebels by Luke Skywalker in the hard-drive of a robot called Artoo. Darth Vader and the forces of the Empire are hot on their trail, trying to apprehend them and retrieve the plans.

If email existed, the movie’s plot would evaporate. Imagine the scene above, if email existed in the world of Star Wars:

IMPERIAL OFFICER: The Death Star plans are not in the main computer.

VADER: Where are those transmissions you intercepted? What have you done with those plans?

REBEL OFFICER: The moment we received the plans we emailed them immediately to the top Rebel commanders. They are already reviewing them to launch an attack on the Death Star. It’s already too late!

VADER: Well, crap!

The absence of email in the world of Star Wars is an artistic choice by Lucas. If the digital plans could be “transmitted” to Princess Leia’s ship (where the above scene occurs), then why couldn’t they be transmitted by the same means directly to the rebel leaders? They could, of course, but the film’s audience did not know that computers could do that. Though email did exist, the Internet at the time was a military-owned research network, and ordinary Americans did not know email or a computer-based communication networks existed. So the idea that plans could be transmitted one time and then needed to by carried across the galaxy on a physical disk inside a robot was a credible proposition.

Computers have a role in Star Wars beyond the central drama of the plot. Computers enter the action in ways large and small. In the world of Star Wars, however, they are command-and-control devices used in the operation of complex industrial and military machinery. Lucas has a Cold War vision of computing.

A computer runs the complex agricultural machines on Luke’s home planet of Tatooine:

Uncle Owen: What I really need is a droid that understands the binary language of moisture vaporators.

A computer helps Han Solo navigate his ship, the Millennium Falcon:

Obi Wan Kenobi: How long before you can make the jump to light speed?

Han: It’ll take a few moments to get the coordinates from the navi-computer.

The ship begins to rock violently as lasers hit it.

Luke: Are you kidding? At the rate they’re gaining…

Han: Traveling through hyperspace isn’t like dusting crops, boy! Without precise calculations we could fly right through a star or bounce too close to a supernova and that’d end your trip real quick, wouldn’t it?

Computers also help Luke and Han fight spaceship-to-spaceship through a neat 3D targeting interface on their laser cannons (this would be a Cold Warrior’s wet dream). A targeting computer is also used by the pilots when they attack the Death Star at the end of the movie (though Luke ultimately relies on the intuitive power of the Force over the computer).

Again, this is a fairly old-fashioned vision of the future of computing. Targeting was the technology that first got the American military into the business of funding computer research during WWII, when the military realized computers could be useful in calculating trajectories for firing missiles at fast-moving aircraft.

A single computer system also runs the Death Star itself. This computer is a little different, because it is part of a network – yes, like the Internet! In the middle of the movie, Luke and his friends are captured on the Death Star and one of the robots accesses its computer:

THREEPIO: We found the computer outlet, sir.

Ben feeds some information into the computer and a map of the city appears on the monitor. He begins to inspect it carefully. Threepio and Artoo look over the control panel. Artoo finds something that makes him whistle wildly.

BEN: Plug in. He should be able to interpret the entire Imperial computer network.

Artoo punches his claw arm into the computer socket and the vast Imperial brain network comes to life, feeding information to the little robot. After a few moments, he beeps something.

THREEPIO: He says he’s found the main computer to power the tractor beam that’s holding the ship here. He’ll try to make the precise location appear on the monitor.

Again this is a classic Cold War view of the Internet. In the 1970′s Vint Cerf, the Father of the Internet, was a scientist at DARPA, the Pentagon-funded research center that built the Internet. In a 2010 talk, Cerf described DARPA’s vision in building the Internet: “DARPA was looking for ways to build command-and-control systems that had no central structure, and were highly distributed, and that could be readily reconstituted.” A computer network that could run a huge military facility like the Death Star was very much what the Pentagon had in mind when they funded research on computer networking.

George Lucas and the Pentagon shared the same vision of the value of computing: better war machines. Today computers are certainly used by the military, but the most transformative use of computers is not targeting technology, but the Internet, another Pentagon-funded computer research project that received relatively little attention during its development in the 1960′s, 70′s, and 80′s.

Targeting systems, military aircraft navigation, a command-and-control network for a military facility: this was the Cold War vision of computing in the 1970′s, but it wasn’t the only vision. At the same time counter-culture technologists envisioned computers in the way they act today: as personal devices for individual expression and creativity. In his 1974 book Computer Lib/Dream Machines, philosopher of technology Ted Nelson wrote:

Somehow the idea is abroad that computer activities are uncreative…. This is categorically false. Computers involve imagination and creation at the highest level. Computers are an involvement you can really get into, regardless of your trip or your karma…. COMPUTERS BELONG TO ALL HUMAN KIND.

This touchy-feely personal vision of computers is diametrically opposed to Lucas’ military vision, but it was a more accurate prediction of what computers became.(Ironically, Lucas embraced the intuitive and metaphysical worldview of the counterculture in the idea of the “Force,” created by all living things and used by the Jedi. Yet in his conception the Force and the computer are in opposition to one another. This is why Luke turns off his targeting computer and instead relies on the Force to guide him during the film’s climax.)

In the end, George Lucas got it wrong. The Cold War vision of computing was more a function of the prejudices and priorities of than period than the actual capacities of the computer. He would never guess that one day the Force would run through the Internet.

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