As several hundred magazine executives gathered at MPA’s 2011 American Magazine Conference in New York last month to hear speakers dissect social media, tablets and e-commerce, Scott Galloway, New York University Professor of marketing and founder of L2 Digital Think Tank—authors of the Digital IQ Index—struck a nerve with his frank dressing down of publishers’ social media strategies.
“About 19 percent of our budgets are now going to digital,” he said to the audience. “But 40 percent of media consumption for those under 40 is digital based.”
Galloway said the magazine industry is doing itself a disservice by not aggressively tapping into the benefits of the digital space and in particular Facebook. “The reason you’re having trouble making money is because you’re not relevant—profits are an indicator of relevance,” he said, adding, “Not a brand in here is managing capital allocation correctly in relation to Facebook.”
The professor said that Facebook is the number one medium in every market and that magazine professionals need to view the social media platform as a marketplace, citing statistics that reveal that 50 percent of people on Facebook make at least $50,000 a year and that 38 percent of all online referral traffic now originates from Facebook.
“The new young affluent want innovation from brands,” he said. “Right now, social media is the least expensive way to do that.”
Galloway turned to fashion company Burberry to make his point. The British based clothing company has over 8.6 million “likes” on Facebook, while the internationally recognized women’s magazine Cosmopolitan has only 1.1 million.