Stories like the one in the Wisconsin State Journal on Thursday about a $15 million venture cash infusion for Madison-based tech company Shoutlet remind me of the dot-com boom and bust of the late 1990s and early 2000s.
I’m not saying Shoutlet and other social media marketing companies that use Facebook, Twitter and other online tools to promote and monitor their clients’ products are bound to go belly-up.
But young Internet firms of questionable profitability pulling in venture capital, getting bought for huge sums and talking about initial public offerings always make me wonder: Is it hype?
Don Stanley, a UW-Madison faculty associate and social media consultant, doesn’t think so.
"This is definitely going to stick," he said.
Traditional forms of marketing — TV, radio, newspaper ads — are always going to be around, he said, but more and more companies are getting into social media.
I’m the first to admit I don’t necessarily know what that means. An English degree and 12 years in newspapers don’t exactly prepare a person for the leading edge of marketing technology.
But I do spend — some might say waste — a lot of time on social media, and I can’t say it’s ever led me to spend actual money on an actual product.
In fact, that would seem contrary to the social media ethos. Facebook, Twitter and the like have become wildly popular in no small part because they are free. You go there looking for information and to socialize, not spend money.
Social media marketing isn’t simply about getting you to "like" Burger King on Facebook or follow it on Twitter in the hopes that doing so will make you more likely to buy a Whopper, though.
For clients of Shoutlet, it’s "way easier to use" its software to manage a company’s image and keep it consistent on more than 100 social media sites than for the company to manage all those sites on its own, said Jason Weaver, Shoutlet’s CEO.
Shoutlet also claims to provide proof of social media marketing’s effectiveness by, say, being able to track the sale of a product on an e-commerce site back to the client’s Tweet of a coupon for that product, he said.
Stanley said he tells clients to spend significant time simply watching what people are saying about you or your products by doing a keyword search on Facebook, for example, or hashtag searches on Twitter, because social media users essentially are one "massive focus group."
Some companies even involve users in the marketing itself, by giving them free products in exchange for posting content about the products — even if they don’t necessarily say good things.
He described a seminal 2009 campaign by Ford that involved giving social media users free use of new Ford Fiestas for six months in exchange for producing content about their experiences.
"It’s more about reaching individuals who have the ability to amplify (awareness of a product), either positively or negatively," Stanley said.
Companies would love us to be carriers of their marketing messages because they know an advertising-weary population is more likely to take a friend’s recommendation for a product than a company’s, in other words.
(Full disclosure break: The Wisconsin State Journal uses Shoutlet’s products in its advertising efforts.)
Some of this is a little creepy in an intrusive, Big-Brother sort of way, and that might be the biggest threat to how far marketers can go on social media.
If social media becomes just another forum for imbedding marketing pitches in otherwise marketing-free content, people already can get plenty of that by watching the average Hollywood film or listening to Bob Uecker hawk Usinger sausages between calling balls and strikes during Milwaukee Brewers broadcasts.
Worse would be if marketing starts to undermine social media users’ confidence in the authenticity of social media content: Is that Facebook friend of yours posting a status update about how good a Starbucks coffee would taste right now because she really wants one or because she’s getting a coupon for a free Starbucks coffee?
Stanley told me the direct pay-for-positive-posts approach has been tried and proven ineffective.
"If you start doing that you get kicked out of social circles," he said, because people can see through it.
But as more and more of our social lives are conducted online, be aware that your "friends" might also be your pitchmen.
Contact Chris Rickert at 608-252-6198 or firstname.lastname@example.org, as well as on Facebook and Twitter (@ChrisRickertWSJ). His column appears Tuesday, Thursday, Saturday and Sunday.