This is a guest post from Pierre Far, who recently launched a very cool program called Social Alerter which notifies you as soon as your website has a solid chance of hitting the Digg or del.icio.us frontpage.
We have all engaged in debates over the past few years about social media. Is it new? If so, how? Even a recent thread on Cre8asite Forums discussed this, kicking off by someone stating they find social media very intimidating.
Then and Now
In the good old days, say from the 1850s onwards, marketing was mostly a one way “communication”: companies advertized their wares via local media like newspapers, magazines, and traveling salespeople. We certainly we had word of mouth back then, but it was geographically limited to a large degree due to travel and communication constraints. Ideas and product use spread slowly: what was a very popular product in one town was not necessarily popular in another nearby town.
With advent of commercial radio (and TV later) and the rise of national magazines and newspapers, the media became truly about the masses. This gave rise to regional marketing with the first hints of large scale world-wide marketing. Ideas and good products spread faster. More people were reached using one advert or one advertising channel. Again, this was not new – the British Empire enabled inter-continental trade centuries earlier – but the mechanism was still similar: a product was global by being sold in a series of local markets.
Crucially though, people now had a means to cause a fuss if the product was not good giving rise to an important feedback mechanism. Simply put, the new mass media helped organize, and influence, large numbers of consumers. To take two examples: people complain about an issue to an important newspaper prompting them to push the issue into the mainstream, or if a TV station covers an event, that becomes an important topic. However, this feedback was still time-consuming and not necessarily effective: there was still a bottleneck in the form of editors and producers. The reason is that people didn’t have aggregate power: they were individual voices that a news channel or a company can choose to ignore. The only effective feedback mechanism was the free market: people choose to buy something else, if the option existed.
Finally, we come to the present day. People have the internet, and anyone can write up his or her thoughts – good or bad – and get thousands of people to read them. If a product is bad, there will be enough people raising their concerns loudly enough that companies have no option but to react very quickly: a few bad reviews could kill a product launch. Companies have to engage with their buyers, especially the early adopters, and make sure they’re happy.
Why is this different than a few years ago? Why do consumers now have great and collective power to, well, dictate what companies do? Yes, it’s all to do with social media. Anyone can set up a website for their personal voice; we call that a blog. Anyone can visit online meeting places like Digg and Reddit and promote the voices and opinions of others, and anyone can mobilize a group of people around a common cause on Facebook or elsewhere. Anyone can post a review on Amazon saying this product is broken and negatively affect future sales. And that’s the key differentiator of social media: we, the consumers, can have one loud voice, that companies and other people listen to. Actually, people value other people’s opinions: Amazon lets you vote on reviews. On eBay you give feedback as vote of trust for others to see and seek positive for your sellers you’re buying from.
Closing the Loop
The most productive communication is always two-way: two people talking to each other, not at each other. The images you see summarize what I said above. You can see that without consumer feedback, advertising is mostly one entity (the seller) talking at another (the consumer). With the new powerful feedback mechanism implemented in social media, the loop is closed: the communication becomes two-way.
It also becomes direct. No need for the traditional media to be the conduit of communication. Now companies can talk directly to consumers and consumers talk back with the company.
A great example, one that recently affected me: A mobile phone manufacturer, called HTC, released a phone that had sub-par video performance. Geeks being geeks figured out the problem (it was the video drivers) and demanded a fix. HTC said no, and this spurred a very efficient consumer movement. Through bad reviews, forums, and a threat of a class action suit organized through a website, HTC listened and now the consumers got what they wanted – a software update is promised for the end of March. All this took a few weeks, a time scale we’ve never seen before.
Again, by no means is this new. There is no re-invention of marketing or public relations. That’s not the point. The point is that consumers now have a more potent aggregate power: someone with a problem can now reach others with the same problem faster, build a community around this shared problem easily, and mobilize lots of people behind the common cause more efficiently. That’s what’s new: a significant leap in efficiency. This gives consumers a loud voice that companies have to listen to.
So What Next?
Now we have to ask: our model tell us that the loop is now closed. All possible arrows of communication have been drawn. So what happens next? What will the new innovation, the new leap, the Web 3.0 (I hate that moniker) of marketing be?
Answer that, and you’ll be the next Seth Godin.
Pierre recently launched Social Alerter. He writes a science blog, maintains a set of SEO tools and moderates at Cre8asite Forums. He has a PhD from the University of Cambridge, UK, and works as an innovation consultant.