President-elect Barack Obama raised a record total of $745M for his presidential campaign and much of it was done using social media technologies. No wonder then that I found myself sitting next to a Liberal Party Lieutenant at a presentation of Obama campaign’s social media strategy by Rahaf Harfoush at Rotman Business School – the very same day Stephen Harper presented his infamous economic update that proposed to eliminate public subsidies for political parties at a federal level.
The Liberal representative took detailed notes from Harfoush’ presentation, but if I understood his scribblings right – I tried to be discrete – he repeatedly wrote “Must find next Obama! Must find next Obama!”
For the rest of us – most of the audience seemed to come from the advertising and interactive world – the evening’s quest was much more mundane, but almost equally elusive: understanding how social media can be successfully exploited for commercial causes.
A number of social media entrepreneurs come to MaRS for assistance. Mostly, they have creative ideas for applications that they would like to launch on platforms like Facebook or MySpace. As the World’s biggest Facebook community until it was overtaken by London,UK in July 2007, it is no surprise the GTA should also have a large number of social media start-ups. Just last week several hundred developers and business leaderes were gathered at MaRS for FacebookCamp Toronto 5.
To help these social media entrepreneurs we decided to summarize some of the research that has been written on social media by some of the leading research providers in the area. This “Snapshot on Social Networking” is meant as a primer on the topic for those seeking a top line understanding of the key issues in social media. The Market Snapshot is available as a PDF document here.
From the research we came across, it is clear that social networks like Facebook, Twitter MySpace and LinkedIn still have a lot of innovating in order to find a viable business model. Despite the potential represented by the larger membership bases, analysts say that none of the social networks are cash flow positive.
The latest innovations from the networks seem to be in interactivity and advertising formats in order to offer advertisers greater scope for delivering advertising in line with GenY’s expectations of interactivity and entertainment. While these innovations serve to solve the networks’ immediate business model concerns, it is clear that social media will eventually change marketing as we have come to know it through traditional mass media.
While most of today’s marketers function in an environment that emphasizes control, tomorrow’s marketers must learn to let go and live with a greater sense of ambiguity in order to benefit from the potential for engagement offered by social networks. Traditional print, online, TV and radio advertising offered marketers control of both the medium (placement) and the message. Much of the creative effort in traditional media is focused on simply getting the audience to pay attention.
Social media offers a radically different environment, because it is no longer one way communication; advertisers in social media engage in a interactive dialogue – whether they like it or not. On top of that, the power of the medium is such that the dialogue can become viral – a frightening prospect for many marketers. But slowly some successful examples are emerging; recently FedEx launched an application that allows social network users to send files to each other. Closer to home, TD Canada Trust developed an application that allows co-habitants to manage joint expenses.
In both cases, the emphasis is on providing interaction with positive value for the user which is in line with the brand’s underlying value. In other words, the marketing creativity has shifted from attention-grabbing to value-generating. The implications of this trend are significant and we will keep following this development at MaRS on behalf of Ontario based start-ups in the social media space.
Meanwhile, please let us know if you see anything that we have missed in the Snapshot on Social Networks!