The Pareto Principle, or Why I Decided I Was Twittering My Life Away

Monday, August 24, 2009

On Sale Now at SpeedCineShopThe first thing you learn when you go on Twitter is that nearly everyone onthere is a Social Media Marketing Expert. There are literally millions of them. I realize that being a Social Media Marketing Maven on Twitter is commensurate to writing that you savor long walks on the beach in your Match.com profile, but it got me thinking: if each one of these geniuses could generate a thousand dollars out of their social media skills, we are talking billions of dollars. And if there were ten thousand of them that were really savvy… that is trillions of dollars, my friends. That’s starting to look like some serious money. And it’s all from tweets.

Why are you reading this? My friends told me I would be insane to launch a business without taking advantage of this action. All I had to do was join Facebook and Twitter, learn about Digg and reddit and Delicious and StumbleUpon and I could sit back and people would link to my site in droves.

I probably spent over a thousand hours learning how to get the fullest use out of these things, and that doesn’t count the endless posting and tweeting. And these things were like heroin; they started to take over my life. I couldn’t look at a sunset without wanting to take a picture on my iPhone and post it to my FaceBook account. I would have serious anxiety about how many utter strangers I would allow to join my real friends on Facebook.

But I also used pre-social media skills, like writing a blog and sending out emails and press releases.

When I opened up SpeedCine a few weeks ago, I was very surprised when I looked at my analytics. There was no arguing with the facts. The links from my conventional marketing efforts were in the thousands; the links from Twitter were in the tens. For example, I wrote a blog post on John Hughes and posted a link on Twitter, and didn’t get a single retweet. But some people who got my email put a link to my post up on their blogs, which were seen by other bloggers until I got almost 4000 unique visitors in a single day.

Vilfredo Pareto Which leads me to Joseph M. Juran and his Pareto Principle, (aka the 80-20 rule) which he named for Italian economist Vilfredo Pareto, who noted that 80% of the land in Italy was owned by 20% of the people.

As Anders Toxboe  wrote:

The 80-20 rule claims that for any large system 80 percent of the effects are generated by 20 percent of the variables in that system. The rule has proven true in all large systems including those in user interface design as well as economics, management, quality control, and engineering, among others.

Examples of the 80-20 rule include:

  • 80 percent of a product’s usage involves 20 percent of its features.
  • 80 percent of a town’s traffic is on 20 percent of its roads
  • 80 percent of a company’s revenue comes from 20 percent of its products
  • 80 percent of innovation comes from 20 percent of the people
  • 80 percent of progress comes from 20 percent of the effort
  • 80 percent of errors are caused by 20 percent of the components

I realized that I had just spent 90% of my time on something that got me 2% of my results.

Having previously run two PR companies, I learned how to think strategically and mobilize my staff in the most efficient way. I understood that making the best use of time was one of the most important things we could do. Not that it often worked out that way-- my staff was obliged by clients to burn though weeks on guest lists for parties, utterly hopeless awards campaigns, and chowder-headed stunts—but we strived for that goal.  And we made sure we got that 20% of stuff done that was going to have 80% of the impact.

So if you send out tweets to people who have 10,000 followers and some of them send them out to their followers,what is that all about, really?  

Let’s talk about one of the most widely-hyped uses of Social Media lately—the Obama campaign.  As a friend, an avid user of social of media, wrote me:

Of the online tools used to motivate that captive and motivated audience, social media was a very small, almost insignificant piece. By the Obama camp's own admission, email and the good ol' database were the most crucial tools used here, for organizing and for raising gajillions of dollars. And guess what they raised all those gajillions of dollars for? For TV ads. Radio ads. PR. Because that's where the big numbers are.

Why has usage of Social Media shot up so much in the last year?  Because the regular media has started to cover it more. 

Ashton Kutcher is one of the best-known people who use Twitter.  But obviously he got his success offline and before he started doing it.  In fact, he got leveraged more offline press because he was one of the first celebrities to get into Twitter in a big way.   Likewise for all the other actors, politicians, athletes, journalists, and porn stars you can follow there.  There is value and fun in the way they interact with their fans though this new medium.  But will you be able to promote your business there?  I’m sure you can.  But the Pareto Principle will get you.  You will waste time, a very precious commodity.

The only thing I know about marketing is that it’s about believing in what you are selling and trying to pass that enthusiasm on to others.  And it takes time to make an appeal like that—much more than 140 characters.   After you make your spiel, people will either buy what you’re selling  or they won’t. What social network marketing has to do with this I have no idea.  There is something missing in all those  mini-thoughts twirling around like maple tree seeds—and it is called authority.  Publicists know that the value of even getting a few words in a magazine or an important blog is that there are lots of people trying to get a spot in that same space.  It has been curated so that it has implicit value. Does that value balance on the scale with hundreds of mentions from  people who have ten seconds of time on their hands?   

To those who say that Social Media Marketing offers opportunities for people who have no access to traditional marketing methods, Papa Pareto says--get a book on publicity.  Or read about it online.  And then do the work.  Find the people you want to reach and get their contact information.  Write your press release.  It’s not brain surgery.  You will invest 20% of your time and you will get 80% of the results.  Which will leave you plenty of time to diddle around with Social Media. 

By the way, I would really appreciate it if you would push the Digg Button below to help me promote this splendid post.  You will have to take some time to register, but if you do I think I will get something or other out of it, and it might alleviate my curiosity about what that might be.

Also, if you are one of my 476 Facebook friends please check out my post on my Facebook Home Page, where I plug this post.  And on top of this very page is a useful link to help you follow me on Twitter.

Addendum:  Shortly after I posted this screed, SpeedCine got its best plug ever, on Lifehacker.   That mention scattered birdseed all over my TweetDeck.  Social Media, I love ya!