Even as social media collect an increasing amount of data about our personal preferences, quantifying taste is exceedingly difficult.
The tech journalist Stephen Baker, writing in the NYTimes, frames the recent paradigm shift in advertising like this: Where clever humanists, “Mad Men” advertisers like Don Draper draw from the liberal arts to predict and guide our shopping behavior, search technology like Google has recently enabled a more quantitative approach.
In the last decade however, those numbers people have rocketed to the top. They build and operate the search engines. They’re flexing their quantitative muscles at agencies and starting new ones. And the rise of social networks, which stream a global gabfest into their servers, catapults these quants ever higher. Their most powerful pitches aren’t ideas but rather algorithms. This sends many of today’s Don Drapers into early retirement.
While this narrative may lead one to believe that advertising on social media is the next frontier, Baker provides evidence suggesting otherwise.
Corporate advertisers are devoting only a modest 14 percent of their online budgets to social networks. According to comScore, a firm that tracks online activity, e-commerce soared 16 percent from last year, to nearly $39 billion this holiday season. But advertising from social networks appeared to play only a supporting role. I.B.M. researchers found that on the pivotal opening day of the season, Black Friday, a scant 0.68 percent of online purchases came directly from Facebook. The number from Twitter was undetectable.
Interestingly, Baker goes on to suggest that perhaps social media’s ineffective marketing is merely a function of firms measuring the wrong things.
Baker points out that while Facebook and Twitter may not lead to direct sales, their likes and retweets are potentially valuable, in nudging our inclinations. He writes, “The impact of new technologies is invariably misjudged because we measure the future with yardsticks from the past.”