Tuesday, August 18, 2009

Social Media – Is It A Fad?

August 14, 2009: summarized from Huffington Post -- Erik Qualman has been doing his homework on the social media phenomenon that has been spreading faster than (insert your own tasteless swine flu metaphor here).

His new book called Socialnomics comes out later this month. I think you'll be hearing a lot about it in the days to come because there is no hotter topic in business today than how to leverage social media to build communities around brands and then leverage them into revenue. The thinking is that as we build out our online personas -- migrate toward certain online groups centered around our interests, our likes, dislikes, opinions and friends -- products and services will find their way to us rather than we having to go out to find them. It changes the entire nature of advertising and how companies strive to create brand awareness and loyalty. When word of mouth and peer endorsements become the primary means by which products are sold, making a better product and having a sterling reputation becomes the absolute king of all currencies. Business school teaches us that good will is hard to quantify but having it in spades among your target market has never been more important.

The realization that a competitor who is socially networked better than you will eat your lunch has started a stampede of businesses and brands that are jumping on the social media bandwagon even faster than individual users were adopting Facebook last year -- when 100 million users joined in just 9 months, according to Qualman's statistics. He points out that 34% of bloggers (and there are over 200,000,000 blogs) post opinions about products and brands.

When you start to contemplate the impact of the statistics he cites and sources in his book you begin to understand the rapid shift in how business is seeing and reacting to the social media cascade. Erik discusses how two of the best marketers of the 20th century were Dale Carnegie and David Ogilvy. He says that today's consumers want to be related to "more in the Carnegie way." They want to be listened to and engaged in a dialog and not just hyped at. It no longer matters what you say about yourself. In fact, Qualman highlights that only 14% of people trust advertisers yet 78% of consumers trust peer recommendations. What matters is what others say about you.

Another interesting point Qualman makes is how Internet search is evolving to the extent that Google does not see its competition as Bing or Ask but rather Twitter and Facebook. I experienced this personally just the other day when my company's website went down. Our head of technology told me it was due to our DNS host having an outage. I knew if that were the case there would be a number of other companies experiencing the same thing. I Googled their name and came up empty handed. I then typed in a Twitter search and it came back with several tweets by other users complaining about the same issue and asking if others were experiencing the problem. Instantly, I was connected with kindred spirits with whom if nothing else, we could gripe to each other until the service was restored. In this case, the company missed the opportunity to monitor Twitter for their brand name. Had they been paying attention they could have been alerted to the issue quicker and they could have directly responded to those of us whose business was disrupted by the outage to reassure us it was being handled.

Qualman offers that today, 80% of companies now use LinkedIn (a social network dedicated to business networking) as a primary tool to find new talent. It's getting to the point you can't even compete to get a job if you're not versed in the ins and outs of social networking. That doesn't seem to be a problem for most. The fastest growing demographic on Facebook is females aged 55 to 65. That's probably because most other demographics just don't have that much more growth in them. With their recently updated figure of 250 million users, if Facebook were a country it would be the forth largest in the world (another statistical gem from Qualman's book).

Others are more skeptical of social media's ability to sell products and it must be said that there's a difference between social media advertising and building real communities around your brand. Many companies have been successful at generating a little buzz around their product for a short time by offering special Twitter promotions and giving away prizes to Twitter users who use their brand in tweets. But it's companies like Coca-Cola, who have built a Facebook community with over 3.5 million members (compared to Pepsi's paltry-by-comparison 226,000 member community) who are playing the game to win.

Read more at: http://bit.ly/SzldE

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