Small Business Labs

What is Deinfluencing?

One of the hottest new buzzwords is deinfluencing - a form of online influencing where influencers tell people what not to buy.

TikTok, of course, is where most of the deinfluencing influencing is happening.  As the screen grab from TikTok below shows, the hashtag #deinfluencing recently had 268 million views.  

Time's TikTok's 'De-Influencing' Trend Is Here to Tell You What Stuff You Don't Need to Buy nicely describe the trend. Key quote:

"The growing trend is a direct response to the endless deluge of products that beauty and lifestyle influencers insist you simply must have."

But others have pointed out that most deinfluencers are, well, just influencers with a slightly different message.

Yes, they tell you what not to buy. But they also tell you what to buy instead. 

Key quote from the Financial Times article What de-influencing tells us about the state of the creator economy:

De-influencing is not a rejection of consumerism or social media. You can tell that by the fact that many of the videos follow up negative reviews with suggestions of things their followers should buy instead.

Buzzfeed News' Sorry, But The "Deinfluencing Trend" Is Just ... Influencing says:

Deinfluencing is a fun trend and TikTok buzzword, but the media's embrace of the term illustrates some misconceptions about influencers. It doesn't spell the end of the industry at all — it's just another version of the same thing.

Social media influencers are here to stay.  So is social commerce.  

And deinfluencing is just an evolution in how influencers use their influence to promote commerce.  

Teens Embracing YouTube and TikTok; Facebook Usage Declining

Pew Research's Teens, Social Media and Technology covers how American teens' usage of social media has changed since 2014. Key quote:

"TikTok has established itself as one of the top online platforms for U.S. teens, while the share of teens who use Facebook has fallen sharply."

As the Pew chart below shows (click to enlarge), almost all teens (95%) use YouTube, and 2/3rds of teens (67%) use TikTok.  

     

But the share of teens using Facebook has fallen to 32%, down from 71% in 2014-15.  

The study also examined the frequency teens use leading social media platforms.  

YouTube was the leader, with 19% of all teens saying they use YouTube almost constantly, 16% saying this about TikTok, and 15% saying it about Snapchat.

Only 2% of teens say they use Facebook almost constantly.

YouTube and TikTok aren't usually considered social media platforms. But social media and entertainment have been blurring over the past decade, so this usage comparison is valid.

And with the social media platforms adopting TikTok's approach to making recommendations, they will likely blend more in the future.

Is it the Beginning of the End of Social Media?

The Axios article Sunset of the Social Network suggests that the rise of TikTok is leading to the demise of social media as we've known it. Key quote:

"Mark last week as the end of the social networking era, which began with the rise of Friendster in 2003, shaped two decades of internet growth, and now closes with Facebook's rollout of a sweeping TikTok-like redesign."

Facebook's TikTok redesign is based on adding a TikTok-like recommendation algorithm to their existing social graph algorithm.

The best description we've seen of this change, and its likely impacts, is Medium's The End of Social Media, which describes TikTok's approach as "recommendation media." Key quote:

"In recommendation media, content is not distributed to networks of connected people as the primary means of distribution. Instead, the main mechanism for distributing content is through opaque, platform-defined algorithms that favor maximum consumer attention and engagement."

In other words, social media users see content generated by their friends and social connections.

With recommendation media, algorithms distribute content based on the user's likelihood of becoming engaged in the content - regardless of the content's source. 

Not everyone is happy with this shift. Trevor Noah, for example, says Instagram now "sucks" due to its use of recommendation algorithms.  

And reality stars Kylie Jenner and Kim Kardashian are telling Instagram to “stop trying to be TikTok.”

The shift to recommendation media has major implications for small businesses and independent workers using social media for marketing.

Building large audiences of followers will become less important while designing content to appeal to recommendation algorithms will become more important.  

It will also mean spending more time and effort building and cultivating customer communities while using recommendation platforms like TikTok and Instagram (and soon, Facebook) to find new customers.

We think traditional social media will survive. The use case - connecting friends, family, customers and people with like interests - is too strong not to.  

But the rise of recommendation media will change the marketing game for small businesses and independent workers.

Poshmark and the Rise of Social Selling

Poshmark is a social e-commerce platform where people buy and sell secondhand goods, mostly used clothes.  It went public last week and closed its first trading day worth $3 billion.  

In the Barron's article Poshmark CEO Sees Huge Market for Used Goods. Investors Agree the firm's CEO described the trends driving their growth and opportunity.  Key quote:

In a Zoom interview on Thursday with Barron’s from his office in Redwood City, Calif., Poshmark CEO Chandra said the company is riding three trends: the acceleration of e-commerce; consumers embracing social selling; and the growing market for second-hand goods. He sees a huge opportunity, and one the company is only just beginning to tap.

While we track all three trends, consumers embracing social selling is a powerful trend that we regularly see in our research.  

Social selling is defined a variety of ways, but at a high level we like LinkedIn's definition:

"Social selling is about leveraging your social network to find the right prospects, build trusted relationships, and ultimately, achieve your sales goals."

Social selling isn't new. 

The traditional direct selling industry (also known as multi-level marketing) has been around at least since the 1940's, with well known brands such as Avon, Tupperware and Mary Kay.  

The direct selling industry is also large, with about 6.8 million direct sellers serving about 37 million customers.  

But the growth of social media has made it easier and cheaper for consumers to leverage their networks to sell things.  This has expanded the interest in social selling.

The chart below (click to enlarge) is from the MBO Partners State of Independence study series.  It shows the percent of independent workers who said social media was their top source of customers (orange) and one of their top 3 sources (blue).

As the data shows, the use of social media by independent workers (self-employed, freelancers, independent contractors, etc.) to find customers has substantially increased since 2014. 

Especially interesting is the percent of independent workers reporting social is their top source of customers has gone from effectively zero in 2014 (it was .3%) to 10% in 2020.  

Social media is just one part of social selling - there are obviously other ways to leverage a network in the sales process.  

But as this data shows, social media has become an important customer acquisition tool for a growing number of independent workers.  We expect this growth to continue.

Does Social Media Work for Sales and Marketing?

Gallup has caused quite a stir with a survey showing that social media has little to no impact on the purchasing decisions of most consumers.  

The key study chart study, which shows 62% of consumers responded social media has no impact on their purchasing decisions, is below.

   

Needless to say, not everyone agrees.  Adweek quickly countered with an article titled Gallup's Buzzy Social Media Report 'Deeply Flawed'. Key quote:

These claims have caused a pretty good media ruckus despite having a methodology that appears flawed on multiple levels. Of all the flags that go up, this is probably the reddest: The social media marketing stats are based on surveys that were performed back in December 2012 and January 2013. In the disruptive world of online marketing, 18 months is a virtual lifetime ago. Nearly every social media platform has gone through significant changes since Gallup collected its data.

It's not only Gallup questioning the use of social media for sales and marketing.

A recent study by the Career Advisory Board and MBO Partners found that very few successful independent workers (freelancers, independent consultants, etc.) rely on social media for sales and marketing.  

Key quote from a Chicago Tribune article on the study:

In-person networking still trumps social media: The survey pool reported that while social media is important for contractors’ branding and reputation, it often does not generate income. In fact, just 6 percent said social media outreach led to paid project work. Therefore, create strong profiles on sites like LinkedIn and Google+, but refrain from spending too much time on these networks and make sure you still build in face time.

The effectiveness of social media for sales and marketing, especially for small businesses, has long been questioned. But two things are very clear: (1) social media works works for some; and, (2) social media doesn't work for others.  

Because of this, our social media advice to small businesses remains the same as it's been for years:

learn about and experiment with the various social media platforms, test them for a mix of business purposes, measure your results, and use them if you're getting a strong ROI relative to other uses of your time and money.

Disclosure: MBO Partners is an Emergent Research client.

Waiting Tables Pays in the Experience Economy

The Wall Street Journal's Waiting Tables at Top-Tier Restaurants is New Career Path for Foodies covers how waiting tables, at least at the growing number of expensive restaurants, has become an attractive career option. Key quote on compensation:

Head waiters at top-tier restaurants can earn from $80,000 to as much as $150,000 a year including tips, according to industry executives.

The key reasons waiters are paid so much are (1) the job is very demanding; and, (2) customers expect waiters to be highly knowledgeable about not just the menu, but food and wine in general. Great quote from the article on customer expectations:

Customer expectations of servers are high. Waiters are expected to be at ease and in command of a wide range of facts and skills. In a 16-course dinner at Eleven Madison Park, a single plate might have 15 ingredients and five preparations ... Servers are expected to have accurate answers to specific questions about food allergens, the type of sea salt in a particular dish or the origin of the duck. 

Top-tier restaurants tend to be quite expensive, generally charging $100 or more per person for dinner. In exchange they not only have to provide great food, but also a great overall dining experience. An important ingredient in this experience is a highly knowledgeable and skilled wait staff.  

We've written in the past on the growing importance of providing experiences instead of just goods and services. High end restaurants are a good example of this trend.

Well paid restaurant wait staff also nicely illustrates another important trend, the rise of high-end personal services.  This is a trend we've long covered and is driven in large part by the growing numbers of affluent but time constrained consumers.  

We expect the demand for high-end personal services to continue to grow. Our 2008 view on this sector remains the same:

... the long-term outlook for these firms and the businesses that support them is strong, as consumers look to outsource tasks they don't enjoy or have time for.

Social Media, Experiences and the Fear of Missing Out

Way back in 1998 a couple of consultants coined the term "the experience economy" and urged companies to offer interesting and unique experiences in addition to products and services.  

According to the consultants:  

"an experience occurs when a company intentionally uses services as the stage, and goods as props, to engage individual customers in a way that creates a memorable event."

While the experience economy gained some traction in the late 90s and early 2000s, the advent and success of social media has driven "experiences" into the mainstream.  The reason is simple - social media allows people to record their experiences and share them with the world.

And people love to share their experiences.  But they also need experiences worthy of sharing - which is driving the growth of experiences that are shareable via social media.  

The growth of food trucks is my favorite examples of an industry being impacted by people wanting to share experiences. There's no doubt one of the drivers of the growth of food trucks is the experience they provide and the ability for their customers to share that experience via social media.

There's a great quote from a post on the Foodess Files blog on this topic:

It’s hard to find a cluster of people standing beside a food truck in Los Angeles, who are NOT on their phones. They are tweeting their experience by the minute, instagramming their orders, and if they’re like me, blogging on the go.

    

The recording and sharing experiences on social media is so common that people are becoming increasingly worried they are missing out.

Psychologists even have a term for this - FOMO, or the fear of missing out.

This is the apprehension that others might be having rewarding experiences that you're missing out on. The number of people suffering from FOMO has dramatically increased due to the Internet and social media.  

Social media, the desire to share experiences and our fear of missing out are combining to drive greater and greater interest in social media shareable experiences.  Businesses that can figure out how to add shareable experiences to their product/service lines will accrue substantial benefits.

Using Twitter's Promoted Tweets

Promoted Tweets are basically paid ads for Tweets.

They are described by Twitter as "ordinary Tweets purchased by advertisers who want to reach a wider group of users or to spark engagement from their existing followers."

Promoted Tweets have been around for a couple of years, but Twitter limited the number of companies allowed to use them.  They recently changed this policy and now anyone can pay to their Tweets promoted. 

Over the last month Small Business Labs has been experimenting with promoted tweets.  Here are our reactions:

1. Promoted Tweets is extremely easy to use. We were up and running in minutes.

2. Targeting is excellent. You can target your promoted Tweets based on broad interest groups, by keyword, by location and/or by selecting the followers of users.  

We tried a number of different approaches but quickly found selecting the followers of influential users most effective for us. For example, if we were promoting a Tweet about coworking we targeted it a the followers of the thought leaders in the coworking space.  

3. Twitter uses a Google-like auction system for Promoted Tweets.  And like with Google, you only pay for performance, with performance being measure on a cost-per-engagement (CPE) basis. This means you only pay when someone clicks, retweets, replies to, or favorites your Promoted Tweet. You can also choose to pay for followers added as an option.

4.  You can set per day limits, so you aren't exposed to big spend overages.  

For our test we allocated $25 per day for a month and promoted one to three tweets per day. We spent about $350 during the test and we generated a bit over 600 engagements.  We didn't pay for followers.

So we now get to the interesting question - is a Twitter engagement worth the 58 cents we paid per engagement?  

Each business will need to make their own call on this. But for business the answer is subjective and not fully quantifiable. I can easily measure the ROI of clicks that come from my Tweets. But at least for our business, I don't see how to quantify the impact of the other engagement methods - retweets, favoriting and replies. 

Our subjective view is some of our promoted Tweets were well worth the cost, others not so.

Our bottom line is we think we're getting enough value to continue promoting Tweets, but we're going to do so on a very selective basis.

Our advice for small businesses is:

1. If you are an active Twitter user, Promoted Tweets are well worth experimenting with. A test campaign is simple, cheap and takes little time.  

Make sure you measure what you can and minimize your costs. Like with Google Adwords, minimizing cost per engagement is going to be key to a positive ROI. .  

2. If you aren't an active Twitter user, Promoted Tweets are unlikely to be effective and not worth the time and effort associated with a test campaign.

As always, we recommend small businesses experiement with a variety of social media platforms. So if you aren't a Twitter user, consider playing around with it to see if it could be of value to your business.  

The Power of LinkedIn Groups

We spend a lot of time on social media here at Small Business Labs. Twitter is an important resource for information discovery and, of course, we read of a wide variety of blogs. We're also active on other social media platforms.  

But over the last year or so LinkedIn Groups has emerged as one of our key go to sources for information. We've found the discussions in our favorite groups to be excellent, the content relevant and the networking opportunities outstanding.  

Two examples of the 8-10 groups we regularly follow are:

Gen Y Lounge:  a group with 139 members dedicated to all things Gen Y. One of my favorite aspects of this group is the international flavor. The group is moderated by Martina Mangelsdorf, who is Swiss and the managing director of Gaia Insights, a firm focused on Gen Y and the workplace.

Due to our location and the interests of our clients, we tend to be a bit American-centric in our work. Groups like Gen Y lounge provide us with a broader, multinational perspective.  

If you're interested in Gen Y, it's a great group to join.

AWE: is officially the Alternative Work Environments group. It has about 700 members focused on the future of work and workplaces. It's moderated by Mike Hackett, an HR expert and consultant.

AWE brings together people from a wide range of disciplines and backgrounds who are interested in the future of work. The group has excellent insights on the topic and the diversity of views is really useful.

If you're interested in the future of work or workplaces, join AWE.   

I'd like to say we're consistently happy with LinkedIn Groups, but we're not. Many are worthless.

But the good ones tend to be very good. The key, we think, is to find groups that are tightly focused on a specific topic and are well moderated.  

Most groups don't meet either criteria. This is because moderation is not easy. It takes a lot of time and skill to keep a group conversation going and focused.

But when they're done well - like Martina and Mike have done with their groups - LinkedIn groups are extremely useful.  

Using Kickstarter to Fund a Space Elevator

Kickstarter has a project that is looking for funding to help with space elevator research. For those who aren't Star Trek fans, a space elevator is a device for lifting things into space.

Long the staple of science fiction - a space elevator plays a role in the most recent Star Trek picture -the science behind the space elevator is real.  All it takes is:

1. A space station in geosynchronous orbit (also serves as a counterweight)
2. A tether line made of carbon nanotubes stretching from the space station to the ground - about 25,000 miles or so.
3. A freight car propelled by a laser beam (or some other exotic method).
4. A location where no one would mind if this thing fell on them if something went wrong (like in the Star Trek movie).

The folks looking for funding, the LiftPort Group, have blown past their request for $8,000 (they are over $25k).  They are going to use this funding to launch a balloon with a tether 2k up in the sky. After launching, a robot will climb the tether.  

According to an article in TG Daily, the end goal is building a space elevator on the moon.  Except for being pretty far away, the moon is a much easier place to build a space elevator than the earth (less gravity, fewer land use laws, no neighbors to complain, etc).

Needless to say, there are a few technical kinks to be worked out before a true space elevator can be built.  So it's good that the Kickstarter community is willing to fund this effort.  

This illustrates a couple of interesting trends.  First, crowdfunding is becoming a serious option for funding small projects.  Second, the commercialization of space is happening.  We written before about space being the final small business frontier.  LiftPort is an example.