In January 1848 a worker at Sutter's Mill, California found gold at a lumber mill. As news of the find spread, tens of thousands flocked to the state in search of the previous metal - the California Gold Rush had begun. Over the next three or four years some 370 tons of gold were recovered, a lot of it by using simple techniques such as panning in rivers and streams. From the early 1850s more sophisticated methods were being developed, as the easily accessible deposits became worked out.

Some miners became rich from their efforts, while many managed to turn at least a decent profit. However, about half of the miners made little or no money, or even made a loss. Some people set up profitable businesses serving the mining community - Levi Strauss being most notable - but even there, some businesses went broke, often by being in the wrong place at the wrong time.

What's the relevance of this story? Well, it strikes me that it's possible to draw parallels to current attitudes towards social media. It is the hot topic for marketing, with companies large and small wanting to get in on the act. Twitter, Facebook, LinkedIn - whatever the venue, people are eager to build up their social media presence and profile. Some of the most common questions I hear revolve around determining which venue (or venues) they should be using; such questions are usually followed by ones about what they should be doing there.

For me, too many people are ignoring a fundamental question: is social media marketing right for me, and for my business? Yes, lots of other businesses are doing it - but how many of them are actually making money out of it, and how many are doing it because of the 'me, too' factor? Yes, Facebook has a huge number of active users - but it's still only around 10% of the overall population. Get it right, and it can be a very effective marketing tool - but in general, only for 10% of your client base.

Another common mistake is to think that social media marketing can be done 'on the cheap', because the cost of entry is zero. Actually, it's one of the more expensive ways of marketing - because it is so time-consuming. It's all too easy to ignore that side of things - ten minutes here, ten minutes there, no big deal. But can you really afford to spend, say, an hour a day on social media marketing, when it reaches less than a quarter of your target market?

To be clear, I'm not arguing that social media should be written off. It can be valuable for gauging what people are thinking and saying - provided you remember that it's a small percentage of the overall market. But if you are going to use social media, you should be clear on your strategy, clear on what it is you want to achieve - and clear on what it will cost, in terms of time and effort.