Umair Haque / Bubblegeneration

Thursday, November 16, 2006

Industry Note: Social Media and Marketing

Last night, I dropped into a nice discussion run by the Social Media Club. It was marketing focused - the context, obviously, is that there is a huge shift of value away from mass media, and to micromedia. But this is despite the fact that marketers haven't exactly figured out what marketing/branding 2.0 look, feel, smell, and taste like.

So it's an interesting situation.

Interestingly, the same questions came up that have been coming up for a very long time in these discussions. So let me try and highlight these questions, and give you what little insight I can.

1) Is Myspace (etc) a fad?

I think this is the wrong question.

I think Myspace is definitely not a fad, but is rather a hyperefficient solution to a hugely long standing and vexing economic problem - the music industry's neverending lameness.

Now, many disagree. Fine. We can argue about this forever (despite the fact that pure numbers tell us Myspace/etc most definitely isn't a fad).

The point is that the strategic question is different. If we want to think strategically about Myspace, we should look at what's happening in the real world.

There, consumer behaviour changes radically when consumers get hypersocial - which has powerful implications for market power, switching costs, demand, advantage, etc.

When we ask this question, we have a much more interesting discussion. We begin to see that consumers connect in very specific ways, and that demand gets amplified and attenuated in very specific ways as well - with enormous effects on market power. This is how Myspace is able to already begin redesigning the music value chain.

2) Do corporations always need to tell the truth?

Corporations, like governments, have always lied and hidden the truth. And they always will.

So this question has little meaning.

The strategic question is: does telling more of the truth make us better off? In other words, is the relationship between truth and advantage more powerful today than before?

I think the answer is unequivocal: yes. Take Yahoo vs Google. Yahoo keeps drinking it's own Kool-Aid (viz Semel's recent explanation of Yahoo's dismal performance - I predicted this last year, you guys should have listened to me :)

Google, on the other hand, tells more of the truth. Not totally, to be sure - Google is a very secretive player. But it's truthful enough to know when an experiment's working, and when it's failing (viz, YouTube vs Google Video).

So truth is a powerful component of Google's seemingly unassailable advantage.

Now, this points to a new, deeper, and more powerful rationale for marketers than as simple image-managers. Which is the next point I wanna make.

In all this detailed, tactical discussion, I think the bigger question got lost. And that's unfortunate, because these details aren't so important unless the deeper economics (value creation/capture/etc) works.

To me, that's a simple, if a bit abstract, question: what is the economic point of marketing in the post-network economy?

Is it "facilitating" of discussion? Is it as shapers of messages? Is it "engagement"? What economic meaning do these fuzzy concepts have (if any)? Etc...

The point here is that the economic rationale for marketing is undergoing tectonic shifts (and these shifts are only going to accelerate). These shifts point to the simple fact that the yesterday's economic rationale for marketing is, today, less and less valid.

In other words, there's a huge pie up for grabs - but marketers, imho, should think a little bigger if they want a taste of it (and I say that with special emphasis to the cosmic lamers at Edelman).

-- umair // 11:50 AM // 6 comments

Comments:

"...but marketers, imho, should think a little bigger if they want a taste of it"

As a marketer interested in web marketing, I went to ad:tech in NYC about a week ago and couldn't agree more that there are a lot interesting developing technologies, and a lot of [potentially] cool solutions, but by no means are winning strategies clear when it comes to social media and marketing.

I see a lot of marketers hitting the wall of this fine line between 'pushing a message' and having a genuine dialog with a large target audience. Geniune dialogs are messy and unpredictable, and as a marketer that's not easy to digest.

Madison Avenue is not Silicon Valley and the two places are still quite different, though being pushed together.

# //

CoryS // 4:16 PM

Umair, a very interesting post. I posted my thoughts on last night over at my blog broadstuff here for what its worth.

By the way, my "real world" experience of Myspace is that the amount of Porn, Spam, False Friends and Adverterrorism has rocketed. If its purpose is to endgame the music world I think it is now (for me anyway) less efficient than it was, as the signal to noise ratio has got a lot higher and the quality of the music discovery has not.

To me these Social Nets are like Tourism...great when small, then they get overdeveloped and kill the things they love.

# //

alan patrick // 6:59 PM

Great thoughts, thank you for writing them.

Here's a slightly different angle on number 1 and why it is important to marketers. The hyperefficiency was largely propagated by the simplicity and low cost economics of distribution. Until recently, the music biz ran a monopoly from talent scouting, signing bands, recording, distribution, etc.. Take a platform (myspace), add a (1, at first)theme centric pull, know and hit your target, mix, bake, and you get an industry changing company.

# //

Michael Sevilla // 12:29 AM

# //

Michael Sevilla // 12:30 AM

I have some advice for "Cory," who commented thusly:

"I see a lot of marketers hitting the wall of this fine line between 'pushing a message' and having a genuine dialog with a large target audience. Geniune dialogs are messy and unpredictable, and as a marketer that's not easy to digest."

HAVING A GENUINE DIALOGUE is the only thing that matters! If you are scared of having a genuine dialogue, by definition, YOU are not genuine.

This all goes towards what Umair talks about in one of his ppt presentations: return on quality is extremely high. Companies can not rely on marketers to convince people to use their product. IT HAS TO ACTUALLY WORK! Really well!

Marketers need to realize that traditional marketing channels no longer define their brand identity or product worthiness...THE PEOPLE THAT USE THE PRODUCT OR SERVICE DO!

If you know your product is good, you should easily be able to take the risk of having an "unpredictable" conversation; ultimately the benefits will shine through and you will have turned a consumer into an ADVERTISER for your own wares!!

THERE IS NO "FINE LINE." The ONLY thing that matters is "a genuine dialogue with a large target audience." Geez, doesn't that very phrase sound like a dream come true????

Traditional marketing can only reinforce preexisting satisfaction/identity impressions.

Sorry for all the caps, I couldn't remember how html tags work ;-)

# //

Ethan // 8:15 PM

This is a wonderful article I understand the strategy is more useful to people If you are interesting visit the marketing strategy

# //

Rajaram // 7:01 AM