Social Media 2.0
Date: Tuesday , March 03, 2009
Social media has become a well-understood term for Internet entrepreneurs, digital marketers, and enterprises. Often one relates social media to the emergence of social networks like Facebook, LinkedIn, Ning, Twitter, SiliconIndia.com, and YouTube.
These networks of people provide a platform for users to express themselves and allow for user generated content. SiliconIndia.com itself has over 2.5 million Indian professionals networked to help each other with their career goals and entrepreneurial ambitions. These large networks offer a great platform for marketers and advertisers to reach out to users. That explains why Facebook is on its way to reach $1 billion in revenues, if it attempted to monetize its current ad inventory. But, one of the key questions on everyone’s mind is that where is the ‘social media’ headed and what does it mean for traditional businesses to take advantage of this phenomenon. Clearly, many businesses can use the power of viral marketing and communication in Facebook, linkedIn, and YouTube to get the word out about their products or services, but is that an appropriate social media strategy today? How can one tap the fullest potential of social media – that is a question for all executives and entrepreneurs.
Beyond Social Networks 1.0
Social media is on its way to becoming a mainstream media not just for the early adopters like Facebook, LinkedIn, and YouTubes of the world, but the opportunity now extends to each and every business in the world. The notion is that every Web and Internet strategy must be relooked through a ‘social lens’ and one has to understand how it must embrace the social Web. Websites are no more a broadcast media, where the company offers up to communicate to the world about its product and services whether in the b2b or b2c environments. The company must now engage its entire community of users, customers, prospects, and employees in a level playing field, yet maintaining editorial and quality control, to drive their Web strategy.
Let me take an example from SiliconIndia.com itself. SiliconIndia has been traditionally a magazine, where the SiliconIndia employees were producing great content, and its website did a good job of sharing the content online. The challenge was that back in 2006 it was not leveraging its user base to create and grow the content needed to accomplish its vision. Over the last two years, SiliconIndia.com has done a wonderful job of transforming itself from a news website into a true social media where millions of professionals are expressing themselves through all the social tools, while stringent content and editorial qualities are maintained. This transformation to social media is a great example of how every business has to see itself in the future.
Another example I can share is that of MetricStream, which is a market leader in governance, risk management, and compliance enterprise software. Being an enterprise software company, one would think that it had little to do with social media. But quite on the contrary, MetricStream has now created one of the largest online communities for governance, risk management, and compliance professionals at ComplianceOnline.com where they are connected with each other and are sharing their professional knowledge. SiliconIndia.com and ComplianceOnline.com are two completely different yet successful examples of social media, from two completely different market segments. But they both illustrate how one can create effective social media strategies. For both MetricStream and SiliconIndia, the benefits of social media strategies have been significant. MetricStream offers webinars on ComplianceOnline through the experts in the ‘cloud’ and is able to create relationships with prospects as they enter the sales funnel. MetricStream is also able to monetize its funnel by turning prospects into paid customers for webinars, thereby generating significant revenues and profits for the company.
Now is a good time for entrepreneurs and companies to relook at their Web strategy and ask the tough question – Are you indeed engaging your entire user base in helping create the value proposition for your website? If the answer is partial Yes or a No, you are on your way to extinction! That sounds too harsh but it carries a potent warning about a future business tide that could be devastating if you are not prepared.
Traditional Web is Dead
Facebook now has 200 million members, and growing. They could reach a billion people over the next three years. How hard it would be for them to add a search engine capability right from the comfort from your social network? What does that mean for Google? Well, google has to redefine itself, or else it faces significant threat from Facebook. Just a few years back Google looked invincible; but today the world is different. Facebook has done a good job of embracing social media, while google has failed to innovate.
Another good example of the far reaching impact of the digital Web is seen in the print industry. Newspapers and magazines are under significant attack from online usage and shift of revenues online. These news agencies must transform themselves and turn their readers and users into true participants in the news creation process instead of remaining passive readers. Companies that do a good job will survive and thrive; others will face the threat of extinction. SiliconIndia has done a good job in redefining itself into a social media company through its business model innovation. Many more publishing and news magazine companies will have to embrace the social media or face the serious threat of declining viewership.
Large companies like Pfizer, Citibank, IBM, Infosys, Cisco, and BMW also have to think about their Web and Internet strategies through the lens of social media. Are they doing enough to engage and create a social platform for their user base, or are they still stuck in the traditional mindset of depending only on the broadcast media? If these companies don’t embrace the social Web to its fullest potential, their competitors will.
Tremendous Opportunities for Entrepreneurs
As social media moves from early adopters to mainstream, entrepreneurs can seize significant business opportunities. Most businesses don’t get the social Web, and are looking for help through tools, technologies, and services. Also, leading Internet sites must be challenged by next generation social sites, which do a good job of embracing and enhancing user participation. NexTag.com leads comparison-shopping and has built itself into a significant business; and perhaps, the time has come for an entrepreneurial startup to redefine comparison-shopping, using social concepts. One can come up with numerous examples like this. You can look at each and every segment of the Internet – comparison-shopping, jobs and career, news, communication, online shopping, publishing, and so on – and look for how effectively one can drive a social strategy, leapfrogging the current incumbents in these segments.
Of late, we have seen significant meltdown in global financial markets. Citibank, Bank of America, and every large financial institution is stuck with huge issues. Is it time for a social media company to dream the next generation community bank and financial institution of the future? Perhaps, we can get away with less bail-out capital than the trillions drained out to bail out these traditional institutions.