From Billboard Magazine:
Social media is a tough nut to crack. Its benefit is hard to measure but it’s become a focal point in sales and marketing efforts. Market research says it plays a minor role relative to traditional media and word of mouth, but an entire industry has been built around the need to use it efficiently and effectively.
Wednesday’s Leadership Music Digital Summit in Nashville, focused solely on social media, helped explain these apparent contradictions. Indeed, social media is both difficult to quantify and impossible to ignore. The running theme of the panels was that social media is simply one of many aspects to a successful career, project or campaign. The panel I moderated on monetizing social media often reminded the audience that email lists and iTunes are still two of the most impactful pieces of any digital strategy.
If anybody had inflated expectations of social media, NPD’s Russ Crupnick brought them back to earth. Crupnick gave a short and sobering presentation that showed social media’s modest – if that – role in music discovery and purchase decisions.
The social media enthusiasts in the room may believe the rise of social media and direct-to-fan marketing are behind the current stabilization in the record business. After all, the rise of Facebook and Twitter has coincided with new digital business models that ease the pain of brick-and-mortar woes. But Crupnick pointed to a host of more likely factors: the staying power of the CD, the ongoing digital conversion, improvements in digital album offerings, the success of Adele and strong discovery vehicles.
To exhibit how social media is “a little bit hyped,” Crupnick showed a slide that shows that traditional AM/FM radio accounts for most music discovery of 40% of the most-engaged music fans. Word of mouth, TV shows, awards shows and video sites all came in around 10%. At the bottom of the list was social media at around 1%.
Continue reading the rest of the story on Billboard