The Inter-web is in over-tweet! The citizens of Facebookistan are being phished and spammed. 20-somethings are ditching Facebook and creating LinkedIn profiles so they can join the “real world.” And no one ever speaks of MySpace in polite company. Tweet, tweet, tweet or, should I say, yammer, yammer yammer?
There are a few thousand companies that have emerged in just the last few months, many of which are dedicated to enhancing everyone’s social media experience or … helping to monetize it.
“Can social media be advertiser supported?” That’s a very popular query. Second only to, “Can social media companies make money?”
Facebook raised $200 million in Russian venture money and got a commitment for another $100 million to cash out some employees. You may not have much respect for $300 million as income, but if someone asked you to write a check for $300 million, they would certainly have your undivided attention. You probably would not write the check if you didn’t think you had a chance at a decent ROI. So, one could intuit from the size of this investment, plus fb’s previous capitalization (the company has now raised approximately $600 million all in) that there are some people who believe that you can make money with social media.
According to the Wall Street Journal, “Facebook did not need the money, [CEO] Mark Zuckerberg said. Its revenue is growing 70 percent year over year. He said the company would be able to run its operations from cash flow in 2010, even without the additional capital.” There’s so much Facebook noise, it might even knock Twitter out of the news for a cycle or two. But don’t count on it. Facebook, the more mature of the two organizations, is starting to sound eerily like MySpace sounded just after Facebook started to surpass them. Perhaps history should not be ignored.
While all of this is going on, service levels at both organizations have become top of mind. Facebook spam, phishing attacks and flat-out hijacking of accounts is now rampant. Security is a big problem for them, as is quality of service. New, useful features are few and far between and annoying bugs don’t seem to get fixed. Twitter is faring far worse. They don’t have enough employees and, although the Fail Whale is very cute, it is not a welcome sight.
Perhaps the biggest problem facing social media is the anthropological learning curve. Once your personal social network exceeds a certain number of people, it becomes less and less useful. At a certain point, it becomes simply unmanageable.
Obviously we all know how to communicate one-to-one. We do it everyday of our lives. We also know how to communicate one-to-many. We all make presentations to groups of people all the time. Small groups, big groups, it doesn’t matter. We know how to do it. However, no one knows how to deal with many-to-many communication or many-to-one. In fact, it is only possible to accomplish this type of communication using tools.
The more successful you are at social networking, the more your communicative experience will resemble that of a Kindergarten teacher. It’s sort of like standing in the middle of a circle of 30 kids who all want to get your attention. Since the kids really haven’t learned to raise their hands and wait to be called upon, they all talk at once. Do you have the physiological ability to sort out 30 questions at the same time — there is no real world analog to the new digital toolset we have created. Even if messages come in sequential order, normal people can’t handle the volume. What do you do with 30 responses to your Facebook update? You can’t respond to all of them. Since users don’t know what behaviors they are developing to deal with the new tools and businesses don’t know how to adapt, it may be a while before all of this comes out in the wash.
Can you make money in social media? Absolutely! We don’t need to hold a telethon for Mark Zuckerberg or Biz Stone or any of the individuals who are connected to Facebook and Twitter. They’re going to make a lot of money.
Can users make money using social media? Absolutely! You just need to understand the currencies of the Internet and build a model that allows you to translate the value of the social interaction into wealth. This is way easier than is sounds.
Can social media be advertiser supported? No. (Not the way traditional online advertising is bought and sold.)
Can it be used for advertising? Absolutely! And, it is very, very effective!
Where do I find a social media expert? Look in the mirror! You’ve been interacting socially since the day you were born.
What about the noise? Right now, it’s all noise. Everyone has an opinion about how best to use these new tools. The truth is, it’s early days and no one, not even people who are expert users of the tools, knows how this will ultimately play out.
Is there a good way to think about all of this? Yes. Do you own tools you don’t use very often? You know, the sledge hammer in the garage that your Dad left there after you used it to break up some old shed in the back yard. It was designed for a very specific purpose and, when you need it, nothing else will do. You can drive a finishing nail in with it, however, it’s not really the best tool for that job. Humm … there’s a lot you can learn from an old sledge hammer.