How Can You Make Money from Social Media?

In A Social Strategy, Piskorski sets out to make sense of a social media culture where videos of cats garner 100,000 views but serious news stories sometimes go unwatched.

Above: Social media icons image from Shutterstock.com.

How can we profit from social media?

It’s the question that big businesses and small businesses, businesses that existed long before the internet and businesses that exist only because of the internet are asking. And it’s not just an issue for businesses, either. Non-profits, musicians, authors, mommy-bloggers, and entrepreneurs are asking the question, too.

Let’s face it—it’s easier to find (and make a little fun of) the less-than-successful (or sometimes simply downright stupid) social media campaigns than it is to find the successful ones. And it’s not just the start ups or the folks with no marketing budget that sometimes fail miserably—think about the Coca Cola Chase ads from the 2013 Super Bowl or how McDonald’s #McStories quickly became #McDHorrorStories.

Whoever thinks using social media successfully (i.e., making money from it) is easy needs to think again. So do people who think it’s all one big fad or that creating a successful social media campaign is just blind luck. And that’s where Mikołaj Jan Piskorski and his book A Social Strategy: How We Profit from Social Media come in.

In a data-driven, highly analytical book, Piskorski sets out to make sense of a social media culture where videos of cats garner 100,000 views, but serious news stories sometimes go unwatched.

Piskorski starts with a vocab lesson. He eschews the commonly used term “social media” in favor of “social platform”, “to underscore that people connect online, using whatever means, in whatever form, primarily to improve their relationships with others.” He doesn’t like the term “online social networks”, “because that term implies interacting with one’s existing set of friends and acquaintances”, and does not take into account any new acquaintances made online.

Four other key terms in the book: social failures, social successes, digital strategies and social strategies. Piskorski focuses on the first two in the opening chapters and then turns to digital and social strategies in the second part of the book.

Social failures are not necessarily exactly what one might think; they “are interactions that do not occur, but would make two people better off if they did.” Piskorski blames these failures on interaction costs and notes that all interactions have costs. He focuses on four: breadth, display, search, and communication. Most are exactly what they sound like. Take display. Although Piskorski engages in a somewhat verbose explanation, he includes a perfectly clear example: You bought a new house. You would like all your friends to see it (i.e., you would like to display it), but it may be too expensive to invite all your friends over for a party.

After the terms, Piskorski examines specific entities and shows how they are succeeding or failing and does so using plenty of research and numerous charts. Each chapter includes background and conclusions, and many of the businesses discussed (eHarmony, Twitter, and Facebook) should be familiar. Even with this familiarity, Piskorski’s concise histories are fun—for example, it’s interesting to be reminded that Twitter didn’t always have a Retweet button—it added it in 2009—and it’s even more interesting to see that in 2013 Twitter only made 17 cents per active user per month.

The second section proceeds in much the same way. First, more terminology—Piskorski explains the differences between digital strategies and social strategies. Digital strategies, the more common of the two, seem to focus on things like getting Facebook likes and Twitter followers and leave companies asking “How much do all these social efforts contribute to our bottom line?” Social strategies are more complicated, but have clearer benefits—both for the consumer and the company (think eBay’s Group Gifts app, which allows people to “pool funds to buy gifts for friends”). While sometimes Piskorski’s definitions require rereading, the examples he provides illustrate his concepts nicely.

Both sections of the book contain interesting case studies and good analysis. Piskorski’s focus—trying to understand why people do certain things online—is an admirable (and large) one. Whilehe doesn’t have easy answers or provide information business owners may want to hear (social platforms may be free, but implementing a social strategy probably won’t be), overall he is encouraging and closes the book with “I hope that the frameworks and the examples advanced here will get you to start experimenting with social strategies, so that when I sit down to write the next version of the book, I will be able to use your company as the exemplary case of how to leverage online social platforms for profit!”

Before jumping into A Social Strategy, though, keep in mind that scholars are Piskorski’s primary audience. The book is published by Princeton University Press and more often than not it reads like an academic text. Piskorski does hope that his book with help practicing managers, and it could, but only if they are willing to wade through some relatively dense writing.

RATING 7 / 10
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