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The Rise of the Social Economy, Part 2: The new web and its market opportunities

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It seems as if every company is now looking to social media as a marketing panacea for the woes of the GFC. In this three-part series, Mark Cameron takes a close look at the social media landscape, describes some of the ‘platforms’, examines how these are changing the market place and outlines a strategic framework for deploying social media as a branding, marketing, PR and intelligence tool.

The New Web

Having explained the evolutionary instinct for networking that social media fulfills, Cameron continues his presentation of the opportunities that social networks provide, including the identification of market segments.

The age of the ‘website’ as we know it is coming to an end. People may still go to your site but they expect information to be tailored for them and available on the social media platform of their choosing, and on any other device that connects to the web. What’s more, they expect to be able to comment on almost everything they see.

The web is no longer a digital version of print. It is the space where conversation is facilitated. Websites are becoming applications that feed information out to various social-based platforms. This allows people to receive and consume information the way they choose.

The more you can utilise your social media presence and leverage the influencers in your network, the better.

It is even possible to embed e-commerce and other web-based applications directly into many social media site, like Facebook. Most brands need to start thinking about their website as a database that organises and 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 to add a more recent motto: “and the person with the most data 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 media monitoring tools currently available. But if you really want ‘granular’ information about your brand, you need to devise ways to generate and own your own data.

If you have grown comfortable focusing your attention short-term campaigns, this might seem difficult. If you take a longer-term view however, it is possible to generate massive amounts of data relevant and specific to your brand, your product category and your competition.

It’s the (social) economy, stupid

During the 1992 presidential campaign in the USA, Bill Clinton’s campaign strategist coined the phrase, “It’s the economy, stupid.”

He did this to make the case that Clinton was a better choice for 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 forever reshaped important elements of the marketplace. One of the most significant changes is the movement of social media into the mainstream.

This is far from surprising. Challenging economic times always induce consumers to carefully assess how they spend. Being a member of a community where you trust the recommendations of people who are real consumers is an obvious choice. 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 catch phrase for companies rather than voters. Those that ignore the opportunities social networks provide may well be putting themselves at a distinct disadvantage.

Fractured markets 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. The interest 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 and what 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, and more importantly, understand these market segments gives you an opportunity to talk to them in their own language and hear what they have to say.

You could say that this technology can help you treat your customers like humans – something that most forms of marketing and communication have not been good at thus far.

Defining value

A recent survey of the social media activity of major brands, including Nokia, Adidas, Nike, Coca-Cola and Red Bull, showed that some brands are engaging well with their Facebook fans.

The people who have voluntarily decided to follow what these brands have to say tend to spend significantly more than non-fans – sometimes more than twice as much.

Further, fans were more loyal and 68% were inclined to recommend the product to their peers. Nike was able to put a value of $209.83 on each Facebook fan – even though some fans spend nothing at all.

It could be argued that these fans would be loyal brand advocates anyway. But even so, social media has given them a convenient platform to stay engaged and share their views and preferences with others.

What comes next

So, how does one come up with an effective strategy to seize on this opportunity? We’ll look at this next time in detail, because social media takes time to get right – and it’s worth taking that time seriously to find the strategy that works for you.

Mark Cameron is the creative director and a partner at Working Three. He has been developing digital strategy for a range of clients for the last eight years. Read more of his articles on the Working Three blog.

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