In Gartner's Hype Cycle, the Peak of Inflated Expectations is followed by the Trough of Disillusionment. While Social Media as a business practice is hitting that crest, I don't believe this spells doom for the industry. And it's all going to come down to one word: value.
How Did We Get Inflated Expectations?
Social Media is regularly being misunderstood and misreported. The digital social dynamic is in it's formative young teen years, and in the interest of growing business and driving investment we as a society may have over-promised. And as an industry, I cannot say that we have not over-hyped. The market now has unrealistic expectations of social marketing, social media advertising, the impact of privacy, the dangers of youth engagement, etc. And because of all the promises of results and postulations that implied maturity, we are now being put it on trial as an adult.
And the stakes are only getting higher. With an estimated 21% growth rate reaching over $10B by 2016, this is a sizeable ad business. But is social marketing good only as an ad business, or is this real business? Is this business model here to stay?
The Trough Of Disillusionment
The press is awash in stories like GM pulling their advertising from Facebook, and half of Facebook users don't trust Facebook or think it's a fad. This is the usual media hype leading up to an IPO. But are they right? And is this a broader trend? Is Facebook at its peak or is it just getting started? And what does this mean to marketers? What does this mean to the social marketing industry?
Let's put this into perspective. Facebook is far more profitable today than Google was when they went for their IPO. Investment is not just about present returns, it's about the future of the business. Facebook is a fast evolving business in a rapidly evolving sector. Facebook is still regularly evolving their business solutions as well as their platform. They have demonstrated that they can drive media investment, and there have been hints at additional revenue streams. Let's not forget, their revenue models need not be limited to on-site media. Off-site media targeted based on Facebook data could be a huge revenue generator. Richer API access and big data are also significant potential streams for Facebook, particularly as their user base transitions into mobile.
But this isn't just about Facebook, it's about our industry. Facebook is the biggest player in our space, and while social is far larger than Facebook, Facebook is also the most central player in the social marketing industry. Let's be honest for a moment. How many brands can show the dollars and cents impact of their social marketing? How many brands can demonstrate the long term value of a fan? We sold the idea that millions of fans equals the lifetime engagement of millions of constituents, but few pages have higher than a 1-2% read rate on their posts. Other than promotions and customer support, how many studies have shown that social changes consumer shopping behavior at scale? Most importantly, how many brands can say that they have truly provided VALUE to their users, to their community and to their business through their social marketing?
And from a user perspective, what is Facebook's long term value? As one of my good friends wrote today on Facebook,
I spend plenty of time on FB... but that's simply because it's an easy, mindless, moderately interesting site for me. I also find it to be a huge waste of time, I don't find that I get much from it, and I consistently debate deleting my account altogether (and would if more people were on G+ :P ). Most of all, when I don't use it for a few days, I don't find that I miss it whatsoever.
I can't say that I disagree. But I don't know that this means that we won't still be using Facebook to do these same or similar activities in three to five years from now. Facebook has long been a relationship respirator, and particularly when coupled with a better email product, Facebook is positioned to maintain this value for years to come.
Facebook is losing the excitement of being new, but this doesn't mean that it's dead. Much like a new car, once the initial "love affair" stage is over, we look to the car for the value it provides us. Facebook, and our industry are now at this stage, at the value justification crossroads.
Riding Into the Slope Of Enlightenment
There are businesses driving their growth through social media marketing and Facebook is part of that equation. All strong social businesses share one common attribute, and this attribute separates them from all failing social businesses. All social businesses provide VALUE. Value to their community, value to their users, and value to their business. They have used the interpersonal social dynamic to foster a meaningful social brand equity statement. Being on Facebook doesn't make ones value to the community social-value, and advertising without this value-offering is a poor excuse for a band-aid. Social must be engineered to create a virtuous circle, to create a new market around their social equity statement.
Facebook and Google+ and Twitter and all of the other platforms are in the same position. Once the excitement of the platform's newness wears off, these platforms must begin to operate like utilities, providing us with real value. Whether it's value in the connections (Ala LinkedIn), value in conversations (Ala Twitter) or value in content and commenting (Ala Facebook and G+), the user value is what is going to keep us coming back.
Agencies, consultants and solutions providers that deliver business value by engineering a market of social value exchange with their users and community will ride out the waves of hype by demonstrating continued improvement and success. The good news is that I strongly believe that there are more people getting this than ever before.