Harvard Business Review recently published an article on why Social Media Won’t Consolidate. Word around town is that the “participation web” (social media, blogging, and other markets in the Web 2.0 world) has peaked and that its best years are behind it. Take a look around the social web – Facebook is seemingly stalled, the blogosphere looks like its losing its luster, and new social networks are struggling to find traction.
Despite the growing consensus is that the future only holds industry maturity and decline, I think something different is taking place – a scenario is unfolding that is extremely frustrating yet holds enormous potential. In the midst of a decade of development involving hundreds of companies (some of them now among the most valuable in the world) and billions of dollars of investment, is one painful fact – the science of social engagement, which lies at the heart of this world, still hasn’t been solved.
I’m convinced that what appears to simply be a market that peaked is, in fact, more complicated. The participation web has not yet reached its climax. The good news is that it is only stalled as developers search for a better solution for developing, nurturing, and maintaining virtual relationships. The bad news is that a almost decade has passed with no sign that the players are any closer to a developing a solution.
Let’s take a closer look at sharing and publishing technologies. For years companies have inundated users with endless options to deepen their engagement while simultaneously sharing content. Yet this industry has yet to settle on a winner. Major players like Hootsuite and TweetDeck are plagued by a lack of customer loyalty as users continue to switch back and forth – the classic signal of a customer universe deeply disappointed with what it can buy. This also means that this corner of Web 2.0 has barely even gotten started. Sharing and publishing companies won’t really see this industry take off until they find that perfect balance and functionality in their offerings that finally capture and retain excited customers.
Consider now-famous companies like StumbleUpon and Reddit who try to foster engagement across social channels. These companies have targeted content suggestions but there are other, less celebrated companies doing the same type of work in publishing syndication, scheduling and measurement, and other applications. These companies raced across the social networking landscape in an effort to capture and convert as many users as possible to their services. And they have been hugely successful as many now have millions of regular users. One major reason for their success is that they really do deliver positive results, not just hype, to their advertisers.
Social media use continues to grow year after year, making this space extremely fertile and ripe for new ideas and businesses. In fact, between 2010 and 2012 the number of users that followed brands on social media jumped 106 percent while average budget spent on blogs and social media almost. In an analysis of more than sixty Facebook marketing campaigns, 49 percent reported a return on investment of more than five times, while 70 percent had a return on investment greater than three times. These impressive numbers prove that marketing through social media is not a fluke or a phase as it continues to get better every year.
Looking at these numbers, it’s evident that there is a need to find the perfect tool to help manage social media marketing. This tool would need to excel at promoting engagement on social media as well as enhance and amplify it. As of today, one such tool has yet to make an appearance.
Our own experiences at Viralheat have only confirmed this alternate view on the state of Web 2.0. In October 2011, we introduced a free plug-in extension to Google Chrome designed to give any user the power to analyze the sentiment of tweets, Twitter streams, Facebook news feeds, timelines, fan pages, posts and comments — directly from the browser. Within days of our announcing the extension, thousands of users had already downloaded the product.
Despite its success, this is not an indicator of a mature market, nor of one that has found the ultimate solution to its customers’ needs. The perfect engagement tool is still out there, tantalizing customer and supplier alike.
When will we find that tool? That’s the million – even billion – dollar question for companies targeting this marketplace. I wish I had an answer I could stand behind with certainty. But for now, I think that all we can say is that there are three likely scenarios:
1. The users will find it – Today’s social network users may not know exactly what they want, but they are already coming up with ideas. For example, users are increasingly interested in multiple account types – everything from Facebook Pages and accounts, Twitter, LinkedIn, and Google+ to Instagram, Pinterest and more. Geo-targeting on social platforms grows by the week, as individuals and especially brands want precise control over message delivery. Conversation analysis is starting to become a popular social media tactic as brands want to know which of their conversations are making the most progress for their organization, how to prioritize the ongoing conversations, and what phrasing works best for analysis later on. Somewhere in this competitive chaos may lurk that perfect tool for social engagement.
2. We’ll never find it – The “perfect engagement tool” may, in fact, never exist. Large enterprises have drastically different needs than small business owners or individual users. Agencies (marketing, PR, advertising, etc.) have yet another set of needs that are often the trickiest due to differing relationships and needs of each client. Brands themselves don’t often know what solution works for them until they try everything that doesn’t work, leaving them with an idea of what they truly need. All of this suggests that this industry may be too complex for a simple solution. More frustratingly, even if that simple solution is out there, the world of social media changes so constantly that even if we found it, it might still take years to implement.
3. Industry will find it – The odds may be long, but the potential reward of owning the engine of the social networking and blogging universes is so immense that it’s worth the financial risk for suppliers to pursue that perfect tool. Many companies now are already on the right track. For example, a growing number of companies are beginning to offer lightweight, free features that integrate across social channels and browsers for individuals, making them at ease with an engagement tool and more open to a single dashboard concept. For agency clients, some of these firms are also offering a la carte options that are locked and loaded to help meet tight deadlines. These options include reporting, analytics, monitoring, custom dashboards, and team management features that can be scaled up or down with changing client needs. Other companies are maximizing their reporting options – so that they can be downloaded via .xls and csv, or exported in nice-looking graphic layouts to help customers make quick and effective use of analytics whether it’s for a metrics spreadsheet or a board meeting. These efforts may not get us any closer to that perfect solution – but they do guarantee that if and when that solution is found it will be quickly adopted and applied.
So as someone who watches and measures this industry, which of the three scenarios do I think will play out? I refuse to believe it is #2 because I believe in the infinite power of human ingenuity. I don’t think #3 will find the solution either. Instead, I’m betting on the combined intellectual capital of those two billion social networkers and blogging fans out there.
In the end, I’m convinced they’ll not only find the answer and that industry will be ready with a new infrastructure that can apply it. And when that happens, we’ll instantly stop worrying if social networking is past its prime and instead will be searching for ways to keep up with this revitalized industry as it continues to accelerate.
image credit: Shutterstock