Social media and the big scale question

Scale is a very important concept in social media and I think there are three reasons for this.

  1. We are all inclined to define the value of scale in terms of reach and frequency, because this is how we defined value in traditional media.  However, social media doesn’t deliver reach or frequency very effectively.
  2. There is the question of scale as a unit of measurement of this thing we call engagement.  The problem is that almost any form of traditional, marketing activity can never register at the social end of the engagement scale.
  3. The social media revolution leaches scale from the business models of every industry it touches and completely changes the scale dynamics (in essence, big stops being beautiful – certainly in a marketing or product design context) – and this is the main long-term challenge all businesses need to address.

Scale is not achieved through reach and frequency

Measurement and metrics in traditional marketing were all about reach and frequency.  This was because marketing was defined as a channel and message challenge and the channels were expensive – thus requiring that they ‘reach’ a large number of people to make them cost-effective to use.  Thus media came with an audience already built into it, and that is effectively what we were buying when we bought, or gained access to, media – we were acquiring scale.  A great deal of time and effort was spent devising creative messages (content) and campaigns and we gave these scale by putting them into media channels.

Social media doesn’t have scale built into it: it doesn’t come with an audience attached.  What is more, social media was not designed as an audience-type platform.  It was designed to allow individuals to connect with each other, usually within the framework of small groups.  As I am fond of saying, Facebook was designed to help geeks get girlfriends, not marketing directors get consumers.  It became popular because anything that could scale the lofty peak of that particular challenge (i.e. getting a geek a girlfriend) would be adept at almost any other social task.

Many marketers react to the fact that social media doesn’t deliver an audience by determining that the challenge is therefore to build an audience within it (creating Facebook ‘fanbases’, Twitter followings, consumer communities etc.).  The problem here is that you are swimming against the tide: you are trying to re-form the space to work in the way you want it to work (so your traditional audience-based approaches and reach and frequency metrics can remain relevant), rather than devise new approaches that are fundamentally routed in how the space actually works.  The futility of this approach is best illustrated by the latest report on Facebook engagement I have seen from SocialBakers.  In the UK, the average engagement with a Facebook post is 0.22 per cent.  This is not 0.22 per cent of a total audience, this is 0.22 per cent of an existing Facebook fanbase – i.e. people who have, for one reason or another, been encouraged to ‘like’ the brand on Facebook.  No matter how successful a brand may have become in establishing a Facebook ‘fanbase’ it is highly unlikely that this group will amount to even 1 per cent of its total target audience – thus if you are engaging 0.22 per cent of it, this is the same as saying that Facebook is a good way of reaching less than 0.0022 per cent of your target audience.  Now it is not necessarily a stupid thing to reach less than 0.0022 per cent of your audience, but that depend on who these people are an what you do when you ‘engage’ with them.  However, this is a stupid activity if all that you are doing is simply presenting them with any form of mass marketing activity, content, competition, promotion or all the various sundry other activities that comprise the bulk of the ‘brandfill’ most brands dump in Facebook.

Now, very, very occasionally a brand may produce something that engages an audience-sized group of people (sometimes even a huge audience).  This is when something goes viral – but this happens so rarely that it is strategically a stupid thing to pursue.  Why place any part of your marketing budget on winning a 1,000 to one bet?

In short, there are no audiences in social media, so simply dragging audience based activity (i.e. all traditional marketing activity) into the space is a waste of time.  This is not where you get the scale effect, or the scalable benefits.  Which neatly brings us to the second issue.

Opposite ends of the engagement scale

A marketing director will define loyalty as incentivised repeat purchase.  A consumer will define loyalty as someone who will put their life on the line for you: same concept but operating at opposite ends of the scale.   Within the social media space, people will expect to operate at the social end of the engagement scale, and brands simply cannot compete in this space because it means trying to establish relationships which are the equivalent of the relationships we have with our friends and family.  As Warren Buffet (I believe) said: “if you can’t compete, don’t compete.”

There is no point in trying to inject ‘engagement’ steroids into you marketing activity in order to bulk it up a bit and make it more competitive, which is why this concept of ‘engaging content’, or ‘branded content’ is so futile.  A brand will never be able to produce content that is engaging enough to compensate for the fact that it reaches, on average, 0.0022 per cent of the audience.  In fact, the very concept of content itself struggles to compete in the social engagement space.  When do I watch a Hollywood movie (perhaps the most expensive, most engaging type of content out there)?  I watch it on Love Film on a Saturday night if my wife and I have nothing better to do.

The only way a brand can really compete at the social end of the engagement scale is by behaving in the way its consumers want it to.  This does not mean trying to push engaging content at them, it means being available to response precisely as and when a consumer demands – which largely means when they have a question or have a complaint.

The social space is the world of the individual, not the world of the audience and if brands want to create any sort of engagement in this space, it has to be framed in terms of what it is each individual wants from the brand, at the time that they want it (i.e. not some piece of content designed for an audience, published according to a pre-set publication schedule).  The world of the individual is the world of real time information.  It means that the challenge in social media is not about channel and message, it is behaviour identification and response: a process which is routed in listening – both to people and to data.

Big is no longer beautiful

When social media touches a business model, what happens is that scale starts to leak out of it. The music business is a good example, having been one of the first to come into contact with social media. The music business has been shipping scale at a rate of knots for some years now. You don’t have new big bands any more, or if you do, they don’t last more than a year or two. Smallness has proliferated and the space has shattered into thousands of niches because you don’t need money (scale) to distribute music. Music itself has become a utility: you don’t own it as a product, you simply rent access to it. Dealing with a world where the scale advantages are disappearing is probably the biggest business challenge that social media deals up.

Taking an example from the consumer goods sector, Procter & Gamble is successful because it uses its scale to negotiate advantageous terms in renting space within expensive information distribution channels. It is the world’s largest buyer of media. When the channels become free, where is the scale advantage? Likewise, as it becomes easier to succeed by being small, because you can access niche but geographically diverse markets and don’t have to use expensive distribution channels, where is the value in a brand that, in order to achieve scale, has to make itself generic?  In the past any niche brand that could steal 0.1 per cent of the market share of a big brand was regarded as an irrelevance.  But if you create 1,000 such brands the big brand has no market left.   This is an effect I call death by 1,000 niches.

In essence the modern brand is a function of the world where scale was necessary to access expensive distribution channels.  As a result, rather than create product relevance via producing products that are relevant to individual requirements, modern marketing took what were by necessity generic, commodity products produced at volume and persuaded consumers that they were unique, special, premium and therefore desirable (rather than relevant).

Social media allows this myth to be exposed, enabling consumers to access products designed for their specific needs and thus erodes the scale advantage of modern brands.  However, there are scale advantages that remain, but these lie in the area of commodity and utility, rather than within the realms of marketing and branding.  For example, mass production still offers scale advantages – although the fact that China is everyone’s factory undermines this to an extent – as does the ability to negotiate terms with large retailers or suppliers.  Of course, the scale dynamics within retail itself are changing as it moves online, with scale not being defined in terms of volume of product shifted, rather it is defined in terms of connection processes and communities.  Amazon became successful for two reasons: it attached a review process to product purchase and it also connected niche suppliers with niche consumers (or in effect it created the concept of the niche consumer – someone who can find exactly what they want, from almost anywhere, without having their choices restricted by the expense of real-estate).

There now has to be a compelling reason to be big, because it is now much easier to be small. Social media is putting scale back into a box labelled utility and commodity, which actually is where it lives best.



  1. Pingback: Must read: Haydn Shaughnessy on the new 'creative' economy - Richard StacyRichard Stacy

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