Social Media

Why Social Media is the New Public Relations

Brad Smith
January 16, 2012

Most people misunderstand the benefits of social media.

It’s not about “embracing your audience”, “joining the conversation” or “being authentic”.

For businesses, social media is much more valuable.

When you do it right, the potential is limitless.

Image courtesy of “>tallmariah

The Tim Ferriss Effect

Forbes columnist Michael Ellsberg recently wrote an article about the Tim Ferriss Effect, and the surprising strength of single-author blogs with passionate audiences.

(For those who don’t know, Tim Ferriss is the widely successful author of the Four Hour Work Week, and Four Hour Body, as well as an entrepreneur and angel investor.)

Michael witnessed this effect first-hand. While promoting his recent book, Michael did all types of PR and interviews to try and push book sales.

He appeared on primetime CNN, had an article in the New York Times Sunday edition, and published a guest post on Tim Ferriss’s popular blog.

Guess which performed best?

When the guest post on Tim Ferriss’s blog went live, it shot Michael’s book up the charts to #45 on the Amazon Bestsellers list.

That single guest post had the largest direct impact on Michael’s books sales. Bigger than an interview on CNN, and bigger than a story on the New York Times.


How does that make sense?

Examining the Halo Effect

The Halo Effect is a real, cognitive bias that explains why people become star-struck.

The Halo Effect says that physically attractive people are automatically assumed to be smarter, happier, and more successful than their average peers.

Apple benefits from the Halo Effect because people love their products.

If Oprah recommended a book to her passionate audience, then it would immediately make the New York Times Best Sellers list.

The “Oprah Effect” was coined years ago because of her amazing ability to make a “hit” product simply by recommending it to her audience.

And now, that effect is being passed down to individual, influential bloggers.

This has a profound impact on how we understand digital marketing.

It should also show you exactly how important social media is for business.

Public Relations 2.0: New and Improved

What is the ROI of social media?

I don’t know… but it’s a hell of a lot better than traditional public relations.

Here’s why.

It doesn’t matter if you reach a million people through CNN if none of them take action.

Michael and other authors have learned first-hand that the strength of a single-author blog community is incredibly powerful.

It’s like a mini Oprah Effect. The blog’s readership completely trusts the author, so they don’t hesitate to buy. Getting people to take action and buy something is much easier when people are already interested.

The problem with traditional PR is that the world today is too fragmented. People simply have too many choices.

Our attention is fragmented, so we only pay attention to the things we absolutely love.

In the past, it didn’t matter that these mass-media response rates were so small. You were able to reach enough people, so it was eventually worth it. But that’s not true anymore.

When there was only network TV and AM/FM radio, traditional advertising and PR worked really well. But now there’s thousands of TV channels and plenty of different options to listen to music. These channels have become fragmented. So you’re reaching less people, but still paying high premiums to reach them.

Instead of reaching a lot of people who barely take action, it’s a lot smarter to target smaller, passionate audiences that will convert at a higher percentage.

Getting people to take action online is much easier. The Call-To-Action brings you directly to the point of purchase. If you give an interview on CNN, then people will have to remember the name of the book and hunt it down at a local store or buy it when they’re in front of their computer.

That time difference kills action. People become distracted, or simply forget. And then they move on.

So the response rate of Social Relations is much better than Public Relations. That means more money, faster. And that’s why the new social media definition has merged with public relations.

Here’s how that works…

How Social Media Really Works

Every business has two key marketing metrics that have a huge impact on their ability to generate a profit.

  1. The Cost to Acquire a Customer
  2. The Lifetime Value of that Customer

It doesn’t matter if you’re buying AdWords or spending millions on television commercials, you will always have a cost to acquire each customer.

And in a world where the prices of everything are being driven down by competition and technology, the lifetime value of a customer becomes incredibly important.

It may cost you more to acquire a customer than when they make a single purchase. But you can grow a thriving business on tiny revenues through scalable repeat purchases.

Social media dramatically lowers the cost of customer acquisition, and increases the lifetime value of a customer exponentially.

That’s how good social media marketing really works. You invest indirectly in building a marketing asset (a blog) that will grow in value over time (as more content is added and relationships are made).

It also has the added bonus of being inherently viral, which means that when you reach a certain point, your customers will do your marketing for you. Each new customer will bring one or two customers of their own, simply through recommendations.

That gives you scale.

Scale lets you escape the problems you face in advertising. For example, when you acquire customers through advertising, you have to spend a certain amount, to get a little more back.

You inevitably get caught in a fixed ratio. So you have to spend $5 on advertising to bring in $10 of revenue. When you try to scale that into large numbers, you have to spend a significant amount to bring in each new customer.

Social media helps you scale your reach and frequency, while avoiding a fixed return for investment.

But that’s not all.

Evoking an emotional response from people is what makes them stick around. And it’s why they buy.

One of the biggest advantages of social media is that it allows you to have a two-way discussion with people. This helps you to create a bond, and makes sure they remain happy customers. Social media is the new CRM.

Getting happy customers to stick around longer will also help you get them to buy more often, drastically improving the lifetime value of each customer. And that goes straight to the bottom line. It’s like free money, because you don’t have to spend anymore time or money to “sell” them again.

All of this sounds great, right?

But there’s a catch…

It won’t work like this for everyone.

Here’s why.

The Secret to Making Social Media Work

If you want to be wildly successful in social media, then you have to play for the long-term.

That means trying to build friendly relationships with bloggers, not pitching them.

That means slowly growing an authentic fan base, not buying Fans and Followers.

That means building a high-quality email list, not buying bulk-spam lists.

That means acting like a farmer, instead of a hunter.

You have to plant your seeds, and tend to them over time. You have to be methodical, strategic, and consistent.

You can’t go out looking for the big kill everyday, praying for that instant gratification.

Before Michael was able to guest post on Tim’s influential blog, he’d actually known Tim for close to 10 years. He didn’t pitch him or send him a cold email. He developed a relationship over time, never asking for something in return. But when the time came, he was easily able to ask Tim for a favor.

And that favor paid off handsomely.

13 thoughts on “Why Social Media is the New Public Relations

  1. “That time difference kills action.”

    I love it. And it’s absolutely true. I often wish I had a way to click from a newscast (or tv program) to a website. There’s a huge disconnect in getting traditional PR coverage and getting people to act to go to your site or buy from it.

    This is a fantastic article, and one I could see helping marketing managers convince their execs to buy in on social media!

  2. Thanks so much Susan, really appreciate it!

    I would assume (and hope) that we will be able to someday soon! But until then, it just makes a lot more sense (and cents) to invest a SMB’s limited resources on higher converting channels.

    Thanks again for your comment!

  3. From Spain, Europe. I think that your post is really clever, basicly for one reason: beacuse it´s a perfect translations of what social media theory says and how to convert it into business. Thank you.


  4. Brad, great article.

    But a question for you: Do you think Social Media might be one of the best and most powerful tools in the kit of Public Relations, but perhaps not the “new” Public Relations?

    I certainly don’t disagree that Social Media has transformed the landscape infinitely, and is replacing traditional (outdated) methods, but I’m curious to hear your POV on my question.

    Perhaps I’m being too literal, but given the size, scope and multiple platforms and uses of Social Media, might it be more accurate to suggest that PR has a very comfortable new home in the Social Media universe but that one isn’t necessarily replacing the other?

    Again, great article. Thanks very much.


    1. Hi Mike, thanks for your comment!

      I definitely see where you’re coming from… personally, I think it really depends on who we’re talking about.

      For start-ups and SMBs, I really do think social media (good social media… like blogger outreach, etc.) is your PR (because of the lower barriers to entry and high potential to drive traffic, etc.). But for enterprises (who have much deeper resources like time, money, and people), then I would definitely agree that social media would be more of a subset of a larger PR program (that includes more offline and traditional channels).

      What do you think?

      1. Hi Brad, thanks for the response.

        In this context of startups/SMBs versus enterprises, I completely agree that Social Media is indeed the new PR. If nothing else, it’s the versatile (and expansive) starter kit with a manageable price of entry.

        And as you said, good social media like blogger outreach can make a world of difference to such businesses. I also think a thoughtful and consistent presence on suitable Social Media platforms can also reap rewards for both reputation and ROI.

        And since for many startup/SMB owners, the investment is typically the precious little time they have – therefore, a strong and sensible PR approach to Social Media is paramount for results.


        1. Agreed! I think too many people equate social media with community management… when it should be more business development… so I was trying to generalize and paint a picture of the real value you can get out of it. Thanks again for your comment.

  5. Appreciate that you make it clear that social media can be a great method of avoiding fixed ROI. Targeting is an essential aspect that helps to ensure that your online efforts produce an efficient return, and that’s what we focus on doing at eCairn by allowing the data and natural order of the social web help us provide a targeting platform.

    Keep up the great posts!

  6. Great article Brad!

    I was intrigued by your comment, “I think too many people equate social media with community management… when it should be more business development…”

    I definitely understand the concept of how someone managing social media for a small biz could facilitate research and development but do you think that should be more the focus when pitching small biz on “social media” services than lets say connecting businesses with their target customer and building those relationships? Obviously its not one or the other and would depend on the client but overall whats your thoughts? What about offline brand development?

    Thanks Brad!

    1. Hey Matt – thanks for your question. I think if you’re pitching social media services to small businesses, then you should lead more with connecting them with their target customers, building relationships, etc. like you said.

      It’s a more tangible product/service offering, so they will have a better time understanding what that includes. And I think that small businesses usually have major gaps when it comes to basic social media understanding (so there’s a greater need for that service).

      Using social media to actually fuel business development should be a goal, but it’s more advanced and relies more on having a solid social media foundation to begin with.

      Hope that helps!

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