Reminds me of Jiro Dreams of Sushi.
The Doomed Economics of Social Media
Very micro example, but very telling I think.
I just did a deal with American Express and Whole Foods, two pretty savvy and together companies, whereby I get $10 off $75 worth of goods for simply tweeting “AmexWholeFoods.”
Think about this. I get a 13 percent discount for doing something that costs me essentially nothing. Plus to the extent that anyone notices my tweet, I’ve incented them to make the same ridiculous bargain. Talk about a negative feedback loop.
Amex and Whole Foods must think this campaign will somehow bring them new customers. But that seems highly unlikely given that you must be an Amex card holder to get the kickback. Applying for and receiving a credit card is simply not worth $10 — no way, no how. And there are two distinct kinds of grocery shoppers — those who shop at Whole Foods and those who do not. You are talking an extremely thin margin that is going to be swayed by $10 kickback on a $75 outlay on their Amex when we have a clearly demonstrated preference not to shop at Whole Foods.
In sum, when this offer expires at the end of June, Amex and Whole Foods will take stock. If they did attract new customers, then we will quickly see another such offer. But if not…
Then I think you have to doubt that you can ever meaningfully monetize eyeballs on social media platforms.
Update: Did another one of these deals, this time got 30 percent off. Just nuts.