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Social Economy

Social Economy

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Published by Mark Cameron
How social media is changing patterns of commerce
How social media is changing patterns of commerce

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Published by: Mark Cameron on Oct 24, 2010
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The Rise of the Social Economy
Social media has really made it’s mark on 2010. Twitter and Facebook seem to be in the headlinesalmost every day, Hollywood is even making a movie about Facebook, and it seems as if everycompany is now looking to social media to help propel themselves beyond the aftermath of theGFC. But there is still a lot of confusion about what social media actually is and where the threatsand opportunities lie.In this article I take a close look at the social media landscape, describe some of the “platforms”,examine how these are changing the market place and outline a strategic framework for deployingsocial media as a branding, marketing, PR and intelligence tool.
What is social media really?
The big social media brands are YouTube, Twitter, Facebook and LinkedIn but they are just that – brands, and like any brand they are designed to cater to a certain niche to meet a specific need.As with any successful product or service the people behind these brands spotted a market needand developed a solution to it. They then had to work out how to generate revenue. Because socialmedia is able to generate a huge amount of data about each user (age, gender, place of work,where they live, things they like, people they know and so on) the most obvious choice was toprovide highly targeted advertising. Facebook is the brand that has managed to do this mostsuccessfully so far. But it is still early days – and Google is yet to weigh in seriously.
The market leaders do not define the market.
Social media is the convergence of technology and the desire people have to be heard andconnected. In an age where people are feeling increasingly isolated, social media has managed toconnect people with old friends, complete strangers and interest groups - or said another wayconnect people to the "market segments" they wish to belong to. This has happened in a way noother technology has been able to do.We humans are essentially tribal animals and social media has allowed us to gather into thesenew 'location free tribes' incredibly fast. What's more, the users of social media like it and wantmore.The march of social media is now unstoppable. There have been times this year where the amountof time spent on Facebook eclipsed the time spent on Google. This competition is only going tointensify. Facebook recently released some new tools to extend its reach and influence over thewhole of the web. Recently rumours around a new service called GoogleMe have started tosurface.Social media is now becoming more than a marketing experiment. By the end of the year themajority of big name companies will be looking at how social media can be directly integrated intotheir brand strategy. It will be the core of any new digital strategy.
Why has it happened?
Networking and collaboration is fundamental to what it means to be human. In our bodies atomswork together to create cells and cells work together to create our organs. In our brains’ neurons
 
work together to create our thoughts, feelings and language. In your company people are workingtogether in a similar way - to create something bigger and more exciting than the sum of it's parts.We can take this thinking and look at the development of the personal computer and see a verydistinct pattern emerging.Before anyone had a computer or a smart phone, everything was a social event. Meetings wereface-to-face or over the phone. Communication in general was human-to-human based.In the last 30 years things changed. Initially the personal computer made everything a private andsecluded affair. Games, for example, could be played without the help of another human and workcould be carried out sitting in front of a screen. The advent of the early internet exposed the powerof a computer network. But from a personal perspective 'computing' was an insular activity.The first social networks, forums and blogs worked with a huge number of anonymous users.While this was a step forward in person-to-person networking, the anonymity allowed people tobehave in ways they would never dream of in real life. This constrained many of these networks tothe domain of early adopters and special interest groups. The 'rules' that govern effective socialnetworks were yet to be developed.What has happened recently, particularly with Facebook, is that it’s become far easier to transportyour real identity around the web. This means that increasingly people are joining new socialnetworks with their 'real identity' – their real name, their place of work, and other details that definethem as a person in a movement (sometimes referred to as the 'Open Web'). Naturally this makespeople think more carefully about what they say and how they behave on social networks.Because they 'own' their comments the common rules of society come into play. When a person'sreputation is attached to what they say it makes them think carefully about what that commentmight mean to others.Of course people can still misbehave in social networks as they can in real world networks. But thenetworks are now being governed by majority rule so this behaviour is quickly dealt with. Thismakes cooperation and collaboration much easier. Because of this the barriers to entry aredropping at an astronomical rate. Companies are starting to feel more secure in setting up theirown networks, knowing that the majority of users will join to get value out of the information that isprovided and quickly deal with other users who lessen the overall value of that network.So when thinking about why social media has become so widely adopted, and pondering where itis going, avoid getting distracted by in the leaps in technology. These are important of course but itis the behaviour of the network and the development of new social norms that are really driving theprogress. Every individual in this massive network is doing what he or she is preprogrammed to do- communicate, collaborate and continue the march of civilisation's evolution.
The New Web
The age of the "website" as we have known it is coming to an end. People may still go to your sitebut they expect information to be tailored for them and available on the social media platform oftheir choosing and on any device that connects to the web. What’s more they expect to be able tocomment on almost everything they see. The web is no longer a digital version of print. It is thespace where conversation is facilitated. Websites are becoming applications that feed informationout to various social based platforms. This allows people to receive and consume information theway they choose.
 
The more you can utilise your social media presence and leverage the influencers in your networkthe better. It is even possible to embed e-commerce and other web based applications directly intoFacebook. Most brands need to start thinking about their websites as a database that organisesand distributes information and features to specific groups within the world of social media.
Owning the data
One way to think about the forces driving the development of social media is the old saying:“knowledge is power”. To that you need add a more recent motto “and the person with the mostdata wins”. Each social media brand-name earns its money from collecting and analysing data.And they are not too keen on sharing that information.Obviously there’s a huge amount of data that brands can obtain from the many social mediamonitoring tools currently available. But if you really want ‘granular’ information about your brandyou need to devise ways to generate and own your own data. If you are used to thinking aboutcampaigns and short term goals this might feel difficult. If you take a longer term view however, itis possible to generate massive amounts of data relevant and specific to your brand, your productcategory and your competition.
It’s the economy, stupid
During the 1992 presidential campaign in the USA, Bill Clinton’s campaign strategist coined thephrase “...it’s the economy, stupid...”. He did this to make the case that Clinton was a better choicefor president because president George H. W. Bush had not successfully addressed the economy,which had recently undergone a recession. Clinton, of course, won that election.Nearly twenty years later the world is emerging from a period of economic turmoil that has foreverreshaped important elements of the market place. One of the most significant changes is themovement of social media into the mainstream. This is far from surprising. Challenging economictimes always induce consumers to carefully assess how they spend. Being a member of acommunity where you trust the recommendations of people who are real consumers is an obviouschoice. Technology has allowed this to happen in a measurable way and on a global scale.We are now in a time where the phrase “it’s the social economy, stupid” could well become a catchphrase for companies rather than voters. Those that ignore the opportunities social networksprovide may well be putting themselves at a distinct disadvantage.
Fractured or identifiable markets
There has been a lot of talk about how social media is fracturing markets. This is a myth.Social media doesn't 'create' new markets and market segments. It just identifies them. Theinterest groups and needs already existed - we just didn’t know enough about them.The mountain of data that social media produces can now shed light on who these people are, andwhat they like. We now have clearly identifiable and serviceable markets.Of course this has created an additional layer of complexity. But utilising tools to listen to, andmore importantly, understand these market segments gives you an opportunity to talk to them intheir own language and hear what they have to say. You might say this technology can help you

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