Social Media Marketing Is an Oxymoron

Zipcar and its zippy, failed $7,400-a-Week CMO

In 2004, we started noticing snappy little red and blue automobiles parked all over Philadelphia with the PhillyCarShare logo on the door. [See the first image in the mediaplayer to the right.]

This transportation is available by the hour or by the day. We’ve talked to people that use the service and like it just fine. If a family’s driving is di minimis and economizing makes sense, getting rid of the family car and using PhillyCarShare is certainly one way to go.

Three years later, Zipcar arrived on the scene in direct competition with PhillyCarShare. It became a blip on my radar when I noticed a few of their vehicles parked not only around town, but also claiming prime real estate in our public parking garage.

The Avis Acquisition
On Jan. 2 this year, it was announced that Avis (“We try harder”) acquired Zipcar for $500 million. Two paragraphs in Dennis K. Berman’s Wall Street Journal column—“Zipcar: Startup Genius, Public Failure”—intrigued me:

Zipcar was a prodigious money-loser over the years. Funding its growth around the world, it never once turned an annual profit, losing cumulatively about $55 million since 2007. And the entry of rental-car behemoth Hertz Global Holdings, Inc. made its task all the more costly.

The odd thing is that Zipcar came very close to perfecting its technology and customer experience. Its problem was that it just couldn’t find a cost-efficient way of luring ever more members.

The last sentence above threw down the gauntlet to this old-time direct marketer. Acquiring customers (share of market) and getting them to spend more money (share of wallet) are what I have been doing for the last 50 years.

I sniffed blood. In this digital age, the place to start was the online marketing of these two companies. First, a page from the PhillyCarShare website.

Denny Hatch is the author of six books on marketing and four novels, and is a direct marketing writer, designer and consultant. His latest book is “Write Everything Right!” Visit him at dennyhatch.com.

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Comments
  • CrowdHydrant

    How exactly does this article demonstrate that social media is an oxymoron, and how is social media responsible for Zipcar’s results? As they mentioned in the press release, their social media promotion was intended to grow their fan base and help them crowdsource content ideas. Nothing was said about revenue generation. Seemed pretty successful. Maybe the biggest question is though, how did they manage to sell for $500 million when they "lost cumulatively $55 million since 2007?" They must have been doing something right.

  • helstoski

    Denny,
    Thanks for getting back to me…..my email address is………
    rhelstoski@gmail.com
    stuffforguys@yahoo.com

    Bob Helstoski
    Stuff-For-Guys, Inc.
    201-755-8000

  • Tia Dobi

    The copy of this $1,000,000 USA TODAY print ad contest winner is equally puzzling. http://www.usatoday.com/story/money/2013/01/20/michael-wolff-dont-write-off-print-ads/1849857/

    Tia Dobi, Copywriter
    "Squeeze every cent from your content"
    http://linkd.in/VIxGRW

  • Brent Gardner

    I love this takeaway: "Social media marketing is an oxymoron. You cannot monetize a giant cocktail party."

  • Lee

    Denny Hatch is on "target" as usual. 99% of the B-2-B businesses find absolutely no use for social media. (I own two B2B companies.) However — and this is a BIG however — in order to compete in the search engines these days, social media presence is one of the criteria, especially with Google. We get 100% of our business from online shoppers looking for our services. We are in highly competitive fields and are very fortunate in maintaining our Page 1 status for our top keywords. We don’t like social media but it’s a game we have to play until Google changes the rules (again.) Does social media get us customers? No. Does social media maintain our search rankings? Yes. And those search rankings bring us our steady stream of customers.

  • tony the pitiful copywriter

    This story reminds me of the pitfalls of marketing to yourself. As much as I hate it, I always run my copy past people I’m almost certain aren’t very informed, or "cool" or up to date on…anything. Their feedback may feel like "dumbing down" to me, the witty writer, but these folks share profiles with my potential customers in lifestyle, income and education.

    I also write with a mental picture of the different customers I’m trying to reach. It’s a technique similar to public speaking where you imagine the audience is naked, except I’m not calming my nerves, I’m communicating with real people.

    The Zipcar website IS geared toward one age group. It reminds me of the comical efforts of the Tom Haverford character in "Parks and Recreation," whose startup is called Entertainment 720. But that’s inside the world of a television comedy, not a real business trying to serve customers and make money.

  • David

    Wow – great piece, Denny. A model of right-on-target analysis and commentary.

    The celebration/fetishizing of “Social Media Marketing” is a perfect extension of the brand marketing witchdoctors’ approach to advertising (i.e., Brand and Image Uber Alles) which so many anxious marketers swallow wholesale.

    Thus the keywords in the Zipcar PR blurb you quote: “high levels of interaction” and “engage.” Instead of focusing on and measuring success in terms of an increase in the number of rentals and/or revenues per rental attributable to the campaign, the chief marketing officer bragged about the way members “really showed their passion and enthusiasm for the Zipcar brand.”

    Passion and enthusiasm are wonderful, of course. But their sincerest form of expression is in purchases made and dollars spent by customers.

    David Rosen
    Rock Hill Direct
    http://www.rockhilldirect.com

  • Will Ezell

    Once again, another insightful and great article by Denny.

    At 56, I would like to believe I am still "hip", but everything you say rings accurate. Like the Sharks on Shark Tank say – "I’m out", or like a "Zipster" may say – "I’m zipping out" on this one.

  • Jeff Laurie

    Hey Denny — I agree that times changes, but people don’t. But on the other hand, with new technologies come necessary adjustments to the ways things were done in the past. While the psychological levers that motivate people to act are the same, I’m wondering if you have any ideas about "new rules" in direct response marketing for digital media, which would include adjustments/tweaks to the classic rules.

  • Textmail

    Denny right on the button again. Friendly, direct simplicity wins.

  • helstoski

    Denny….don’t these so-called marketers, website designers, CEO, CIO, CFO’s….subscribe to your newsletters???
    If not…WHY? What’s wrong with these people? Again….you are right as usual and I will be contacting you soon when my website is up, plus also your take on my direct mail pieces I plan to send out when my retail store in Ridgewood, New Jersey is ready to open. Thanks again!
    Bob Helstoski
    stuff-for-guys.com

  • rhc

    The title was a bit misleading… I feel social media has a place in almost everyone’s marketing plan, especially if you are a local business or an e-commerce business. However, I am 37 years old and do not profess to be a hipster, although I have much of the latest technology available. ZipCar’s marketing does not appeal to me whatsoever.