It’s a fad…
We’ve all heard that about social media, and eBooks, the Web, television, automobiles, democracy.
Anything that fundamentally changes the status quo, especially for those who are well-established in positions of power with a vested interest in how things are, is called a “fad”. We’ve had experiences (or heard about them) where a silver-haired 50-something boss—who fires off press releases like weapons of war—wearing a suit and tie tells their 20-something employee (wearing jeans and a collared-shirt they feel compelled to wear) that Twitter has no value, to ignore it, that it can’t be taken seriously. Social media is for kids, they say, has no business value and will be gone soon.
Then that 20-something, with 7,000 Twitter followers, vents his frustration to the ether, where it is shared and passed along, all the while secure in the knowledge that his boss will never see these rants (nor understanding the damage he might be doing to the company’s reputation).
Meanwhile, Jetblue continues to receive awards for excellent customer service based on Twitter.
Now, I don’t say this to insult late-Boomers (I wonder what I will consider a “fad” when I am in my 50s), but to state it’s time to conclude social media is not a fad and it is here to stay in one form or another.
Just like the Internet itself.
Social media is mirroring the growth of the Web
Getting out of university in the mid-90s and going to work in Web Communications, I’ve always compared the current social media growth with the early days of the Web. It started with a few experimental users, caught some media buzz as something “new and different”, and then suddenly it seemed to be everywhere. Companies rose and (sometimes) fell: Google and Facebook, Excite and Friendster, AOL and MySpace.
A few years ago, before Twitter, Facebook and YouTube were dominant (but on their way), I said it was 1996 all over again. So many ideas, so many companies—all fighting for exposure as well as fans. And, most importantly, these were the pre-commercial days. It was OK to just be cool because people would fund you.
Then we hit 2000 and we had to make money…
But this year things have changed. Twitter is experimenting with advertising models. Facebook, which has been pushing ads at us for a while, wants to push even more. (To say nothing of its IPO falling on its face.) And you can’t watch a YouTube video with moving ads on the page and a video advertisement playing before the video starts.
It seems we are entering 2000 all over again. Remember that year? Remember Pets.com? If you don’t, monetization flooded the Web in 1999-2000. Everyone was trying to build an online business with the goal of selling something. While some (Amazon.com) nailed it, most failed. The reason was while many of the ideas were cool, people don’t pay for cool. They pay for value. A book they will pay for; access to a news site they might not (because news can be found elsewhere).
Can social media make money?
In the Web 2.0 world, how many more ads will we sit through to watch a video when we can click away to something else? Might more people jump to Google+ when too many tweets from companies urging them to buy something show up in their feed?
Maybe. Or maybe not. We still have banners ads, as annoying and ineffectual as they may be. (But still a big revenue generator for Google.)
But the main thing is the question companies faced twelve years ago: How to turn a popular, cool website into a self-sustaining business? Honestly, aside from advertising, how can Twitter or Facebook make money? Twitter can charge for access to its “firehouse”, but if Twitter or Facebook started charging even $1 per year for access, we would see a mass exodus. (Online, we want it for free.)
If I had the answers, I would be rich, but I think we are at the tipping point where Twitter and Facebook (and others) need to figure it out. Demand is growing, more and more users are signing up, so how can these sites sustain this demand in absense of a massive revenue stream? One idea Twitter has is to allow payment throught tweets, which is intriguing.
My prediction is in 2013 we will find the answer. Either things will change, or things will get shut down.