With the O’Reilly E-Tech conference currently running, and many of the London social media crew heading to SXSW (film, video and interactive festival in Texas), the standard questions about social media are again being raised both at the events and in media. And top of everyone’s list appears to be how social media is going to be monetised and how you go about convincing non-tech executives to adopt social media.
I’m constantly amazed at the simplistic attitude applied to the notion of monetising social media. Everyone seems to think it is the technology itself that needs to operate like a business and ‘make money’. No-one seems to consider either partnerships or technology replication as a means of driving sustainability. Worse, some commentators believe that if the ‘labelled’ technology (let’s use ‘twitter’ as an example) fails to make a profit, then the technology will automatically fail. Umm. No. The value of the technology is potentially totally independent of the value of the business/company, and where the value of the technology is proven, it will survive, regardless of whether the company goes bust or not.
I can already sense my combatants rising from their semi-recumbent positions to argue that the value of the technlogy can’t be independent of the value of the company. All I can say to them is this: rubbish. There have been many instances in history of technologies and inventions that have been developed and replicated by competitors, wiping out the value of any firm that originally devised the device. And more importantly, it has been when technologies have been used in a wider framework or as part of a suite of products that they become individually successful (and thus, profitable). Microsoft Office is a classic example of a series of discrete applications, only some of which achieved success alone, but which collectively reach industry standard status. But even for business processes, it’s often not the process itself or the use of a strategy which is profitable, but rather the partnering with specialist support service providers, strategies, events and books which actually make the money.
Let me make this perfectly clear: twitter doesn’t have to be profitable as a product. Not in the way it functions anyway.
It just needs to partner with strategists and information filtering services to make it fabulously profitable as a competitive intelligence tool for business. And if twitter the company doesn’t do that, then another firm will replicate the technology and do it instead. Thus twitter will not die. Get over it.
On the other issue – how to convince your boss to adopt social media – I’m again trying to suppress a sigh of frustration. It’s undoubtedly an issue, and it requires some intelligent thinking, but what I find most frustrating is the fact that my own social media peers seem to think that the best way to convince a boss is either to show them that Stephen Fry was stuck in a lift or that you can use social media as a new channel for spitting out information cheaply. I know this to be true, because I hear CEOs repeating these lines in private conversations. I also know both these anecdotes are true – I’ve discussed them myself. But they’re not an argument for adoption. One is an exemplar of how tribes can be mobilised in support of a novelty situation and the other is only half the story (you need to be able to converse with consumers, thus even if the cost of outgoing messages is low, the cost of supporting conversations can be high).
I call this the ‘illiterate advocate effect‘. When you have a poor communicator or someone who can’t see/imagine the opportunities for use of social media in a range of contexts, then the only advocacy that occurs is so simplistic that suspicions of its banality are rather confirmed than conquered. This is primarily why I have a rule that social media should be regarded as a middle-to-upper management task, with senior management advocacy and strategy development. And in those middle and senior management roles, expertise with the technologies does need to be supported and demonstrated by experience. Give it to a junior techie or marketing graduate, and they will stuff it up every time.
I’m very pleased that Rebecca Caroe will be speaking at SXSW on convincing execs to adopt social media, as she’s one of the few that understands facilitation of business problem solving, and so she inherently understands that exploring this issue is crucial for marketers and creatives, but that it’s also vital to communicate that there’s no simple solution to stimulate interest in adoption. I’m also hopeful that SXSW will be a space where creative media firms may actually realise that piecemeal investment in social media isn’t something any company should consider. Social media may well bring cost efficiencies to the firm, but if it is poorly executed, and if the wrong arguments are put to executives as incentives to adopt, then the opportunity costs for failing to capitalise will be far greater than a failed marketing campaign.
Concerned about monetising social media? Try staying in business for the next five years without it.