The Market Conversation: People, Locations and Tools
Came across an interesting blog post today: The Evolving Face of Social Networks. A bit more science-ish than I normally would be interested in, but as it pertains to social networking I was intrigued. The blog post raised two interesting thoughts (and I am paraphrasing): 1) If social networks are so popular/widely being adopted, why haven’t the social network companies figured out how to monetize better? and 2) The use of social networks by companies to create positive externalities for consumers and influence network members may have in choosing to pass along a stimulus created by a company that will increase purchases (or other actions) for that company.
Here’s a bit from the article that will shed some light:
Evolutionary graph theory provides a quantitative language for describing how replicators behave on networks – and may lead to new ways of quantifying the value of influence on the web.
The Gist: “Replicators” being the people who seem to get other people to join the social networks, thus growing the networks’ size. So, in the conversation marketing lingo, these are mostly the Influencers (individuals or organizations that wield enough influence in some way to attract the interest of others to join their “club” (i.e. social network).
“When a company pollutes, it is often the case that they don’t have to pay for the pollution they generate. By destroying a collective resource without paying for it, the company does us all a disservice. Economists call this a ‘negative externality.’ But companies can create ‘positive externalities,’ too, and social networking sites might be one example. They create all this wonderful collective resource, without really getting paid much to do it.”
The Gist: Hmmmm? Did the social network itself “create” the positive externality or did the Replicators/Influencers (and anyone else who adds content that people want to view onto the network) actually “create” the wonderfulness that inspires people to join in droves? If you know me, you know how I see it. The medium does not create the draw. People (people as reps for their company or organization) joining and creating groups and fan pages, etc., on these networks is what has created the “everyone join” factor. So what does that mean for the social networks and the fact that they aren’t making much money? I don’t really know. That’s up to brilliant business people to figure out. As a marketing professional, though, it’s clear that selling ad space for more companies to advertise at people within this new space of social media/networks isn’t the answer. Let’s think about that? Print newspapers and magazines, radio and TV have been struggling for a good number of years now because they can’t sell enough ad space. Why can’t they sell it? Because it doesn’t seem to give companies the return on investment (in other words, people tune out the ads so they aren’t buying stuff from those companies because of an ad, thus companies are realizing that traditional advertisements don’t work well anymore.)
What is the likelihood of people forwarding on items that they receive in a social network such as Facebook (news items, links, video clips)? What is the likelihood of people responding to messages, or re-tweeting other people’s tweets on Twitter? “The idea we need to explore is this: what is the likelihood that a particular stimulus within a social network leads to a particular response?” says Lieberman.
The Gist: Now this is what I’d like to see scientists and research experts look into further. Social networks aren’t a new concepts. Oh sure, as we know them today, to be these online locations where people can communicate and companies can build fan pages, haven’t been around long, but only the medium, the technology, is new. People have been gathering together to build relationships and exchange ideas since the beginning of time (ok, the beginning of modern man’s time.) Online social networks are simply a fantastic new way for people to “gather”. Just because they gather there, though, doesn’t mean they want advertisements in the way. The more interesting aspect mentioned here is “influence”. In the market conversations happening on and offline there are 3 groups: Influencers, Participants and Listeners. Influencers are the ones who raise topics, invite discussion, pass on information, and more. Participants comment on what Influencers do or pass along the info to others. Listeners really join in the conversation–they prefer to read the conversation and just Be.
“In my opinion, as we get better at measuring what happens within social networks, I predict a lot more organised marketing efforts on social networks as well as systematic influence campaigns.”
The Gist: The post ends with this statement. This is the real crux of what inspired me to write this post. Marketing professionals have known for years now that traditional advertising activities were not yielding the return on investment that they once did. They also know that social networks and other types of social media have made a major impact, but many can’t seem to figure out how to make use of that to benefit their companies. As the science of measuring what happens on social networks and what drives human nature to share information with others within the social networks companies will have a better idea of how to participate in their market conversations.
