I was chatting with blogger Francine McKenna on social media messaging/communications and its relationship to ROI and I had a revelation! Social media is playing out (with virtual currency i.e. “social capital”) many of the business strategies of the last four decades in response to the “breakdown of the Bretton Woods agreements” (1). Basically, people with money shifted focus from the local to the global, investing anywhere they could turn a quick and mucho-lucrative profit. Slow growth? Pshaw! Capital wants to double itself. This path was hugely adopted over this current decade, which I call the McBiz Era.
In social media, however, since there is less “real” money in play (time and effort vs. $dollars in investment) being “spent” within an immense amount of uncharted waters, delusions are freely adopted (mermaids!) and invisible corruptions (like undertows) are pulling folks all over the ocean. There IS great value in social media, I’m a firm believer and have data to support my beliefs (innovation, connection, and yes, new business), still, there are many layers to this onion, and some pointed symptoms that poke dangerously against the membrane, but yet without the force to pop the whole bubble.
In the financial sector this change has taken forty years to develop (and with the current recession, possibly fail). Twenty years ago a business could allow itself 5-10 years to make money relying on the “patient” capital of investors and bankers. Now most have two quarters to one year to produce or fail. This spawns business models aimed at immediately serving (conquering) the world, a McBiz i.e. Google, Twitter, Facebook (act local, think global). They follow in the dinosaur footprints of TimeWarner, Disney and McDonalds on a global path. The former pushes a PR agenda to keep an appearance of lean and mean: all it takes is 3 people, an idea, and an internet connection to start a McBiz (YouTube formed at a barbeque?, Twitter on a napkin?). This fuels more delusional business models while catering to impatient capital which seeks more McBiz.
Within the social media arena (echo-chamber) impatient capital is manifesting itself as a “behavior” (need results now!) instead of “returns” (show me the money). Without a strong business (too big to fail) already in place (i.e. Best Buy or Zappos who are now using social media), revenues (Google made money from the get-go, right?), or good backing (oh Twitter!) its a long haul, and a potentially devastating path to take. Some entrepreneurs are leveraged to the hilt.
The social media delusion of the McBiz era manifests itself via personal branding: individuals seek to have ever-expanding “influence” (investment) by growing huge contact/friend/follower lists (returns) on social networks. The social media space enables virtual growth in place of revenue growth (social capital) with a belief that the ROI will be shared influence (scratching backs?). But the %’s are low (inactive accounts, visibility, resonation) so the social media player needs more more more. This envelops the users, infesting many great ideas with scalability pangs; I want my message re-tweeted, I want my idea to go global NOW, I want more friends.
Some players see the the bubble bursting and seek to stake a claim and cash in their social capital chips for hard currency. The current models I see being adopted for social media monetization are based on driving those lists of friends to old-school cash-registers:
1. Sell tickets to an event or a conference
2. Sell a book
3. Sell consulting
4. Sell ads to match my content
5. Sell subscriptions to premium content
Soon we will all be doing one of the above (if not already, I’m obviously a consultant), yet it’s the purveyors of the products (Amazon?) who will reap the bigger rewards (I’m using my Mac, WordPress and Twitter to develop and distribute this message).
As an example, the veritable Social Media Club (of which I’m a co-founder of the local chapter here in Indy) is now monetizing the chapters via “boot camps.” I have no issue with these folks trying to find sustaining support for their efforts, who doesn’t want that! BUT is the pay-out worth the investment to date? How many hours has the SMC put into building chapters? Do they make that value back? How do you define this value?
Does it matter? Did Best Buy gain new sales from Twitter or just from the PR they gained from using Twitter? Will Twitter ever make their investors money back, or will it take a sale to a larger company who knows how to monetize the old fashioned way, by earning it?
Or is it all intangible? Un-trackable? What are you gaining from social media, and is it worth the time/effort you’re putting into it?
Be wary of the mermaids, don’t get caught in the undertow.
(1) Richard Sennett. The Culture of the New Capitalism, Yale University Press, 2006. Pgs 37-38.