“Must be the money” was originally posted on October 6, 2010. Worth revisiting on the day of Twitter’s IPO.
Social media is finally coming to a critical inflection point and make no mistake – it’s all about the money.
When I started blogging five years ago – early, but by no means among the earliest – the prevailing inclination among bloggers was to share and connect on an individual basis. Bloggers shared their content and built each other up by linking to each other in posts, creating blogrolls containing links to friend lists, even commented on blogs of individuals who worked for industry competitors. Corporations had presence through individuals; Bob Lutz at GM and Randy Baseler at Boeing were like the Columbus and Magellan of corporate social media.
Between 2005 – 2008, consumer adoption of social media shot up at a rapid pace. According to Forrester Social Technographics data, US online adults active in social media increased rapidly from just under 50% to 75%. Naturally, brands began to follow consumers into the medium. Early adopters were not happy. Debates between “purists” and “corporatists” began to emerge. What they didn’t realize is what Mark Cuban had called out years earlier – the social internet is a long tail ghetto where no content creator wants to be stuck.
In 2008, I left Forrester to start Dachis Group, seeing the potential for companies to go far beyond what had been imagined possible using social media to date – and the thinking eventually crystallized as social business design. We knew that there was money to be made in “social media marketing” and “Enterprise 2.0” – and we weren’t alone.
I’ve been observing these trends emerge as social business evolves:
- The nature of “social” has become much less social over the past three years. It’s now increasingly private and profit driven. The bloggers I followed in the early days write blog posts much less frequently today, if at all. However, they’re still writing and thinking about the industry – they’re just doing it behind the firewall and delivering value to paying customers. Smaller, private virtual salons have cropped up to host and monetize conversations – for example, Third Tribe Marketing, the Social Media Business Council, or the 2.0 Adoption Council. You think #Angelgate is only about Silicon Valley and startup money? Think again – similarly, there are private communities thriving today that keep thought leaders connected to one another and others, out.
- Companies are cashing out, performing their final tricks off of Cuban’s hypothetical vert ramp. From following the brand monitoring space, we’ve seen Cymfony, Umbria, Techrigy, and Scout Labs sell off. You’re probably more familiar with TechCrunch’s recent sale to AOL or Six Apart sold to VideoEgg. From what I hear on some of the tech deals, the companies may not be shaking the glitter off their clothes as much as pawning off whatever usable parts they’ve got left after crashing and burning.
- Free social media sites are moving to monetize. Ning moved early and very direct. As any MBA could see, penetration pricing strategy, duh. Free doesn’t last forever, but its spectre does sell books. Dick Costolo is Twitter’s new CEO and he has one mission – to make money.
- Executives are migrating to small, socially-oriented businesses. This time around it’s not limited to traditional-to-dot-com; the similarity is from public to private. Talent is leaving Google, Yahoo, and Microsoft and heading to Twitter, Zynga, and Facebook. In a more old-school way, Erin Nelson is moving from CMO of Dell to CMO of Bazaarvoice. It’s not Shaheen from Andersen to Webvan or Dobbs from CNN to Space.com…yet.
Perhaps if the global economy didn’t crash in 2008, social media could’ve floated on in its cordial state indefinitely. But now we’ve seen more than enough proof of the concept that social media and technology drive tangible results for companies. That’s why Dachis Group calls it “social business” – we started using the phrase in January 2009 and have seen many others adopt it since.
Anyone in business knows you need to eventually capture the value you create. That time has come for social business.