It’s times like these I’m glad I’m not a budding social media strategist (FYI… I’m a web strategist… and yes there’s a difference… I advise on social media as an element of a total digital strategy… but I digress). You see, one of Australia’s highest profile specialist social media agencies – The Population – seems to have shut up shop earlier this week. In all honesty I can’t say I’m overly surprised by the revelation. Because while 2009 might have been the year Australian businesses began to consider social media implementation seriously, it certainly wasn’t the year they began (seriously) paying for it…
Working for a large digital agency, the pique in interest in social media from a client perspective has been evident this year. As little as 12 months ago, I rarely heard a client mention social media proactively, at least within our customer base. Yet fast forward a year and every man and his dog wants to meet to talk about their social media opportunities.
Which is all well and good, except that’s where it usually ended. With a lot of hot air.
There are probably a whole lot of reasons for client inactivity. Fear. Resourcing. Budget. Lack of senior level buy in. Preference for in-house management of the social program. The list could go on…
Whatever the reason, the outcome was typically the same. Nada.
And while that’s frustrating for me, I’m not going to sit here and trash brands for failing to jump in head first (although I know plenty would). The economic environment just isn’t privy to companies taking major risks with their marketing budget. And it won’t be for a little while yet.
The reality is that for now social media is an experimental marketing channel for most organisations. Businesses are seeking proof of concept before considering any major expenditure. The recent 5-way Toyota Yaris “pitch off” is the perfect example. While the aggregate $75,000 budget was relatively large within the small Australian market, the client felt the need to hedge their bets by splitting the budget across 5 different agency executions.
All of which makes the existence of a social media agency extremely volatile. The $15,000 pay cheque from Toyota probably didn’t even pay Julian Cole’s wage for the month (joking Jules!). And that’s meant to be the best social opportunity in the country…? It’s hard to see the cash flowing in from smaller clients when global behemoths are treading lightly. There’s no small degree of irony in the fact that the country’s highest profile social media agency folded just a week after participating in the most high profile social pitch ever seen on these shores.
So is there any real money in social media?
Not for niche agencies. At least not for now (without support, revenue & integration with other digital channels). The cash flow simply isn’t likely to be enough to sustain overheads. The Population was probably a few years ahead of its time, if in fact a specialist social media agency is a valid business model. But the way I see it, if specialist agencies can prosper in other digital niches such as SEO, there’s no reason a social agency can’t prosper once the market is ready.
The only problem is… that time isn’t now.
