Explosion in Social Media Fails To Create Many Jobs—So Far
Special to CNBC.com
There’s no shortage of companies turning to Twitter and other social media websites to promote their brands. But the trend hasn't created many new jobs—at least not yet.
Many companies see the Internet phenomenon as a cheap alternative to traditional marketing during the recession. And they can exploit these tools without adding much—if any—staff.
"You can’t spend money on Twitter even if you wanted," says Greg Galant, CEO of Twitter aggregator Sawhorse Media. This makes Twitter, compared with traditional marketing, "a much more powerful turn on investment."
Twitter has generated the most buzz as the fastest growing new kid on the social media block. Like rival platforms and News Corp.'sMySpace, it is freely available to companies and individuals. Hundreds of firms are using these sites for branding, direct marketing and providing customer service to an estimated 250 million users.
But unlike traditional online advertising, companies have to walk a fine line when using social media sites. Though they are eager to capitalize on the free communications to promote their brand, they are careful not to be overbearing. (Click here to read more about how firms use Twitter.)
On Twitter, a firm sets up a personalized account just as an individual might, and begins sending out "tweets"—140-character statements—with links to the company's website, responses to customer comments and more. If users choose to become "followers" of a company, they will receive notifications whenever that company tweets.
On a platform like Facebook, brands set up fan pages, similar to the profiles that people set up, hoping to attract users to "become a fan" and receive regular updates from the company.
According to the latest statistics by Nielsen, Twitter attracted 7 million unique users in February 2009, up from just 475,000 in February of last year. That marks an annual growth rate of over 1,000 percent for the micro-blogging site, which went online just over two years ago. These statistics don't even include those who access Twitter on mobile phones.
The pace of the growth is forcing brands to scramble to keep up, says Jeremiah Owyang, senior social media analyst at consultancy Forrester Research, and firms are shifting resources to fill the gap.
Even as total advertising budgets shrink—down 6 percent this year, according to WPP CEO Sir Martin Sorrell—the amount spent on social media marketing continues to grow.
Forrester recently estimated social media marketing budgets will increase by more than 30 percent each year for the next five years, putting spending on pace to reach $3 billion by 2014. Firms spent just $258 million on social media tools in 2008, according to a separate Forrester study.
"The economy pushed social media to go faster than it might have," says Lauren Perkins, CEO of marketing strategist Perks Consulting. "It’s relatively inexpensive, with manpower and strategy the only costs."
Most of the money for now is being spent on administrative and consulting costs, though it's not translating into a lot of new jobs. Instead, current employees are adding social media to their regular duties.
"There are new roles appearing in companies," Owyang says, "but not necessary new hires."
New Hats, Same Heads
Recession-hit companies are leery to staff for a phenomenon that is still in the exploration phase, according to Sawhorse’s Galant.
"Everyone is making up the rules as they go along," he says. "It may take a year or more for firms to figure out how it fits into their company."
Chris Brogan, president of online media strategist New Marketing Labs, says: "It's not big, maybe a few full-time employees for Fortune 100 firms. There won't be a mad wash."
In fact, some of the most successful brands on Twitter—grocer Whole Foods , airline JetBlue , and online retailer Zappos—have each attracted about 1 million followers without hiring anyone additional, according to company officials.
Although 200 employees are involved in Dell’s highly successful Twitter accounts, "social media is not 100 percent of the job for anyone," says spokesman Richard Binhammer. "Employees get online for a few hours a day and then do the rest of their job."
Notably, Dell estimates it has generated more than $2 million in revenue directly from Twitter in the past two years.
JetBlue has a total of 10 employees working on Twitter, with two or three on the site at all times.
"Rather than hiring external social-media savvy people," says spokesman Morgan Johnston, "we looked internally for people who happened to be active on social media in their personal lives."
As the voice of a brand, Johnston believes that a twitterer's knowledge of a company's culture and resources is more important than being a social media expert.
"Having a conversation is easy," says Johnston, "but giving the best answers requires a deeper knowledge of the internal workings of company."
Bring in the Consultants
But that hasn’t stopped some companies such as Blackrock and Chevron from paying consultants an average of about $10,000 a month for their services.
"I think in the future most companies will outsource social media because it's not part of their core business," says Barry Libert, CEO of Mzinga, one of the largest social media consulting firms.
Libert expects social media marketing eventually to stand alongside green energy as the fastest growing sector of the post-recession economy.
"This is just starting; it’s the beginning of the match," he says. "Companies are going to figure out that if they fail to have a two-way interaction with customers, customers will go somewhere else."
He expect there to be new roles emerging such social media technologists, consultants, moderators, managers, strategists, analysts and researchers.
At the moment, the consulting firms are doing the most hiring in this sector, according to Forrester’s Owyang.
"Twenty-four months ago none of these roles existed," points out Paul Dunay, head of social media for Avaya and author of Facebook Marketing for Dummies. Many of these consultancies have sprung up in just the past last year.
Those interviewing for these jobs tend to be younger. When Perks Consulting, a small marketing firm, recently hired a dedicated media manager and a content manager, many of the applicants were recent college grads, MBAs and "PR people retooling themselves to be social media experts," says CEO Perkins.
Other firms weary to spend cash on consulting are taking the novel approach of using interns to fill the void.
Yum Brands' Pizza Hut made headlines when it dubbed this role the "twintern," tapping recent college grad Alexa Robinson to be the brand’s voice online. She describes her role as an “in-house journalist who gives the inside scoop of Pizza Hut.”
But "hiring an intern can be dangerous," warns Forrester’s Owyang, since those interacting with consumers on Twitter are a "living and breathing part of a brand."
Some companies are using the interns as a way to test the waters of social media marketing.
"With the landscape still emerging and the economy being a factor, we wanted someone newly out of college," says Mark Horowsoski of healthcare marketing firm Whitespace Healthcare, which recently hired a twintern for college credit.
"Somewhere down the line I could see the potential for a full time job," he says. Horowsoski claims he wouldn’t be surprised if he saw more postings for social media hires over the next 6 months.
More aggresive social media hiring may soon pick up as more firms accept the need for two-way communication with customers.
"I don’t know if we can deny it much longer," says Michelle Lapierre, senior director of customer relationship marketing for Marriott Rewards. "I think the age of consumer-driven opinions and assessments and comments is here to stay, so you either join in on that conversation or you don’t."