Circos Brand Karma

Official Blog of Circos

Is Social Media David or the Emperor?

with 4 comments

Recently there have been articles and things said at conferences about social media that question its use in travel.  I think this is a healthy debate and I’m glad that there are skeptics because they keep things honest.  So is social media the emperor with new clothes or is it David in David v. Goliath, where Goliath is the traditional way of doing things?

The main reason I hear from skeptics as to why social media is the emperor with no clothes is because while it’s the hot topic nowadays, it has offered almost nothing in the way of hardcore ROI that many people in the digital space are used to.  And, as a communications channel to engage fans and customers, that road only has a few bright lights.  So it’s tempting to leave social media as a playground for the twentysomethings.  After all, by spending $X dollars on SEM one can consistent get Y bookings, so why not stick with something that’s proven?

Those that are in the David camp thinks that social media is the next big thing — the media to change the way brands connect with consumers; it’s at least an evolution, if not a revolution from the web connections of the 2000s.  Many see the potential in social media’s distribution power, particularly because they feel their own direct bookings have been impacted by positive social media even if the positive social media isn’t always directly linked to their booking engine.  Most often, they’ll cite movements in their TripAdvisor rankings as having a discernible impact on bookings.  They get to this conclusion by talking to their actual guests and asking them where they found out about their brand.  Though I’ve yet to seen a specific model that says (N move upward in Ranking on Tripadvisor) = (+X bookings), hoteliers generally believe there is a connection, however tenuous, between those 2 variables.  The more daring ones then venture out to facilitate the creation of more positive social media by establishing a presence in social networks in the forms of fan pages and tweet accounts, sometimes without their corp management company’s consent… to leverage social media as a resource to possible convert in the future.

What is Social Media ROI?

To figure out whether social media has any validity or not in the way of ROI — let me start by saying that it’s hard to figure out what business you’re actually losing, which makes it hard to come up with the strongest answer.  Did a customer not book because they didn’t discover you, because they didn’t like the review they read about you, because your competitor offered a cheaper price, a combination of all of the above, or some other unknown factor?  Who knows, but I’d say — most of the other factors have been around for a while — and most businesses have figured out a way to deal with the other factors (e.g. awareness, competitive pricing).  However, people reading public reviews about you written by strangers — now that’s a new thing.  Hence it is worth your investment just to see whether bad reviews relative to your comp set is having an impact on your business.  Therefore, the first and most basic rule of social media ROI is: don’t lose business due to bad reviews… put your best foot forward to make sure you have a good showing.  It won’t hurt that whatever improvements you make in response to bad reviews will also make future customers happier for the most part.

Early in Brand Karma’s journey in 2008, we met with someone from the PR team of a famous historic hotel that is well-known.  The hotel already had a lot of reviews, and many were negative for a hotel of this stature — most were complaints of how the service wasn’t worth the history or the high rates.  When I pointed this out, the woman we met nodded, then told me the hotel was really not for people who would write reviews or research reviews online.  Their clienteles were ‘CEOS and Heads of States’ and they don’t necessarily value or want the business of people who would write reviews online.  You can imagine how shocked I was.  In the economic downturn, the hotel was sold.  Of course we never know what exactly happened, but I’ve got to imagine that the previous owner wasn’t too happy with the financial performance.

Was the PR team wrong? No, not necessarily.  It’s within every business’ right to have a target customer base.  But the thinking was incomplete in assuming that CEOs and Heads of States don’t use social media — even then.  Barack Obama, a Head of State, successfully used social media and micro-donations to raise a war chest that helped him become the President of the United States in that same year.  On the other hand, Heads of States who didn’t pay attention to social media until it was too late are failing recently in the Middle East.  As far as CEOs are concerned — I’ve not met one CEO in the last 12 months who isn’t curious about how to make social media work for his/her company.

But perhaps because it’s difficult to measure the business you unintentionally lose, it’s hard to answer the social media ROI question with the strongest numerical answer.  Nonetheless, the most basic thing you can do with social media is to protect your business.  I think it would be foolish for any brand that has a lot of user-generated reviews and posts to ignore what’s being said.  It’s just common sense to pay attention to how your brand is being perceived.  As for brands that don’t have enough user-generated reviews?  You want people to talk about your brand, so you’ve got to figure out how to get your brand into the conversation in a relevant manner.  That’s where using social media as an ‘engagement channel’ part can come into play.

[In Part II of this post, I will discuss more about the effectiveness of social media as an engagement channel]


Written by Morris

March 29, 2011 at 7:23 pm

4 Responses

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  1. Hello Morris,

    Thank you for this first part of this very constructive post. I can’t agree more to what you say. Using social media sites is above all taking the – should I dare to say “risk” – to engage with your customers and prospects. During my conversation with hotels, it pains to me to hear “I don’t have a lot of reviews about my hotel but my competitor does. I guess I am not in trouble then” and I respond you’re in trouble because nobody cares about your hotel/brand/value proposition.

    Looking forward to reading the 2nd part of your post.

    All the best, Guillaume


    April 1, 2011 at 6:31 am

    • Guillaume, thanks for your kind remarks! We have to do our bit to help educate everyone. By the way — I just posted Part II. Hope you enjoy reading it.



      April 4, 2011 at 12:17 pm

  2. […] following is a continuation of a post that discussed whether social media is the Emperor without clothes or David in David v. Golia….  This post focuses on brand engagement in social […]

  3. […] with David Ransom, who is one of our new contributing authors.  If you're interested, here are Part I and Part […]

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