April 16, 2010
note to social media marketers: do the math
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A Twitter comment from the London-based writer, Alain de Botton got me thinking. We can argue the numbers all day long, but they seem fairly ballpark to me, so let’s just assume for now that Alain is correct:
“The Law of Money & Complexity: An artist needs 20 followers to survive; a writer 20,000; a newspaper 300,000; a TV station, a million.”
That same day I saw something related– this very sobering info-graphic on PSFK.com, about how many “units” a musician needs to sell per month in order to make a minimum, meager monthly wage of US $1,160.
Anywhere between 143 units [Self-Pressed CDs] to 4.5 million units [Spotify], depending on the media.
Selling four-point-five-million units seems to me like an awful lot of work [39 units per penny], just in order to make a lousy Grand…
None of this is rocket science. It’s just that people often forget, building up a massive audience via social media is very, very hard… not to mention, highly unlikely to happen.
Whereas building up a smallish-medium audience (say, 5 – 20 thousand) of committed, interesting people is fairly doable and straightforward, if you know what you’re doing.
Of that audience of 5 – 20 thousand, you can probably expect to turn between maybe one or two percent of them, maybe more, into paying customers annually. So we’re talking about an economic base of around fifty to maybe a couple of hundred customers per year.
Or if what you’re selling is pretty high-end, like my friend, James Governor’s Redmonk [software consultants] you can do well on far fewer bites than that; maybe three or four new clients a year.
Is the profit margin on the product you’re selling large enough to feed your family with such small numbers?
If the answer is “No”, you’ve got yourself a marketing problem.
Please bear in mind that “results may vary”. The numbers I gave aren’t written in stone; the important thing is to always remember that social media marketing is not mass media marketing, and for the most part, doesn’t behave like it. If you want to get successful in this game, unlike TV, you need to align your offering to a comparatively tiny, highly discerning, highly interactive audience.
It’s either that, or pray that one day your site becomes as large as Techcrunch, Huff Post or Boing Boing. Nice work if you can get it.
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Tags: Alain de Botton, James Governor, PSFK, Redmonk, Social Media, techcrunch
Finally, a voice of reason! We’re all inundated with the social media hordes who promise the world: more followers! More leads! More attention (someone else’s)! more, more, more.….but rarely are there rational inputs.
Thank you.
I’m going to re-tweet your post.
GREAT points and a helpful reminder to keep the big picture in mind. Liberating reminder that we don’t need “The Man,” but then again, it’s all on US as individuals to take full responsibilty for our own success.
So if you have issues, you have either a marketing problem or a product problem..
I’ve always known that you ‘get it’ Hugh. Good stuff, as always. Would ad that in social media, it might also be important to not turn off the same amount of people at the same time you’re attempting to monetize the faithful. Bad word of mouth can kill you in an instant.
I saw the music numbers, too, and it’s a bit of a red herring in that business model. The overwhelming majority of musicians make their money on performances, and that’s how it’s been since before iTunes existed. Social media is effective for musicians not because it drives direct sales of their tracks, but because it’s a way to boost awareness and get the word out about gigs.
Jay, totally. Even the Rolling Stones make more money on their concerts, than they ever did selling albums.
That being said, most musicians would love to make a lot of money, selling recordings. Life on the road is tough.
Touring is grueling, sure, but music was a performance art long before it became something you could press onto a disc for resale.
For local, part-time musicians (i.e., 99% of us), social media is perfect for filling a small venue. It can be the difference between making a couple hundred bucks on a Friday night doing something you love vs. having to cover your own bar tab.
Also, if you’re a good musician, it’s not hard to find people who will pay you to learn. Almost every talented instrumentalist I’ve known has taught lessons at one time or another.
Jay, I know all about about what you speak of. My grandfather was a master Scots Highland fiddler… good enough, that one day Yehudi Menuhin traveled all the way to my grandfather’s house– a 2-day journey from London back then, to record Grandpa on his reel-to-reel tape deck, for his own private collection.
Grandpa never made a penny in his life playing fiddle. It was a love & social thing.
i think it’s one of lifes absolute luxuries to make music…most have lost sight of that.….one of the reasons music has no cultural force anymore is down to a zillion average mover/shaker/players expecting money for their half hearted efforts..there’s irony in the fact that the pure remarkable talent is always doing music regardless of money…its a calling…there’s very few of these specimens,and if all the needy deluded fame suckers stood back and stopped wittering on about getting paid,the air in the room would clear..there’d be less freeway noise..the potent music would no longer be drowned in ocean of mediocrity,and an audience could sift through the chaff much more easily.
it’s great that technology or whatever has a zillion people creating music.…but they’ve got to stop expecting money for it.……unless youre a truly formidible talent,its just presumptuous.
how many money moaners are actually truly charismatic.…good writers…good singers,all in one?
technology has duped many people making music into thinking they’re talented.
and making music returns to being fun for the amateur once he gets his head around this
I’ve been puzzling over the book business lately. Publishers World just reported that some 760,000 books were self-published last year (compared to 49,000 traditionally published). So the numbers I’m watching are the ones that indicate the creators (authors, song writers, film makers, artists, photographers…) soon will outnumber the audience or, put another way, be indistinguishable from the audience. Not sure what the implications are, but published and globally accessible creative output is skyrocketing because of so-called social media. One result: I think live performances of all sorts (readings, gallery shows, performances and so on) are potentially far more valuable, possibly just because they are less ubiquitous. Clearly, I haven’t figured this out, but, as I said, I’m puzzling over it. Thanks for adding data to the puzzle.
Kirk, 760,000 people may have self-published books, but these books, for the most part, weren’t about making product, weren’t about making money (Or if they were, God help them). They were about the promotion of something else– an idea, the author, a product etc.
Publishing is easy. The hard part is getting other folk to read your stuff
Hugh, agreed, sort of. Until you realize that the self-publishing business is at least a $200M proposition and those books are being downloaded, collectively, hundreds of millions of times. So somebody is reading this tiff. The real question you raise, I think, is how do you get people to pay for your stuff when your stuff is media. Lots of newspapers now realize that millions of people will read their stuff, but only 20% of them (tops) have any willingness to pay for it online. Same with music. (Easier to steal/share with friends then pay for.) I think the same fate awaits books and movies and.… So what will people pay for? One idea is that they’ll pay for things that can’t be copied digitally. Live performances, for example. Like I said, just thinking out loud.
Very insightful commentary and the thoughts expressed are true for writers as well as musicians and artists. Personal contact — signings etc — are still working better for me than what I am doing through social media. But there still is a place for that, and I have met so many interesting creative people via blogs, Twitter, and Facebook, that I will not stop using them. I just don’t rely on them and ration the time I spend on them.
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