By Bill Matthies on Jan 14 2011 - 10:22pm


The Lessons Of Social-Media Failure

The following appeared in the Jan. 12 online edition of Home Media Magazine.

“Netflix said it is halting a two-year-old program with Facebook that encouraged subscribers to share movie and television program ratings on the social media behemoth’s website.

” ‘Very few of you have signed on for this so we’re pulling it back today to regroup, which includes testing new concepts, and ultimately finding a more appealing program for all of our members,’ said Paul Willerer, Netflix Director of Product Management.”

Having read this, I can imagine the following being the conclusion many will reach regarding the efficacy of social-media marketing.

“It doesn’t work.”

Social-media marketing does one thing extremely well: You can define and measure performance, or, as we used to refer to it, the “call to action.” It would appear Netflix predicted that X number would register on their Facebook page, with X number of those regularly sharing opinion regarding the movies they had seen.  And beyond this, I’m sure they expected this direct connection to existing and potential consumers would translate into $X in incremental revenue. When those uppercase X’s turned out to be lowercase x’s, they killed the program, but not the concept.

If you are one of those who believe social-media marketing “doesn’t work”, in this case, at least on one level, it did. Netflix took what was presumably their best shot at a specific Facebook-centric social-media marketing program, and in the process they learned exactly how many would act as they predicted. What other form of marketing expenditure can you think of where all doubt of effectiveness is removed?

Based on what they learned, they will now move on, they hope, “ultimately finding a more appealing program for all of our members.” They could, and then again they might not, but either way, whatever social-media marketing they do, they will clearly see the link, or lack thereof, between their marketing expenditures and sales, in the process gaining marketing intelligence.

Had Henry Ford known what a company called Netflix would one day do with a media channel called Facebook, he might well have had both companies in mind when he said,

“Failure is only the opportunity to begin again more intelligently.”

William Matthies is the CEO of Coyote Insight (www.coyoteinsight.com) and can be reached at wmatthies@coyoteinsight.com or at (714) 726-2901. Visit Business Wisdom at http://businesswisdom101.blogspot.com/

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