What followed in the late 90s was the dot-com era, a period filled with confusion, fear, and opportunity. Organizations tested many different Web tactics, both outside the organization (Web sites, email service, banner ads, microsites, etc.) and inside (intranets, partner extranets, Internet-enabled applications), but the impact of the Internet was far greater than the sum of those tactics; the Internet changed everything, and organizations struggled to adapt to those changes.
Social Media will bring the same sorts of changes to the business environment, and those who do not learn from history are doomed to repeat it. In the coming years, Social Media will follow a similar path and see the same type of rapid expansion and eventual convergence as in the dot-com era of '95 to '00. Here's what that earlier period tells us about what we can expect and how we can prepare for the changes to come:
How Social Media will change Consumers and their ExpectationsIn 1995, the Internet was dismissed by serious business people as a playground for kids and geeks. (Hear any echoes in Social Media discussions today?) This assessment wasn't necessarily wrong; it was just short sighted. In the years that followed, it became evident that Internet usage was rapidly cutting across age, gender, race and (almost) every other demographic category. (Today, the digital divide between rich and poor has narrowed but persists.)
More important than recognizing that virtually everyone was going to be online was the realization Internet users were not homogeneous. While everyone used search engines and email, other online habits--such as listening to podcasts, buying online, and reading news--varied considerably. This meant organizations couldn't rely on a single online strategy to reach a uniform audience but needed to bring just as much segmentation, consumer understanding, and strategic thinking to servicing and marketing online as offline.
Finally, a last realization that has driven successful Internet strategies is that consumers' use of the Internet is constantly in flux. For decades, business had come to rely on a fairly static environment--TV, radio, newspaper, and phone penetration, usage, and habits changed very slowly. But on the Internet, consumer habits have continued to evolve year by year. For example, the percentage of seniors online almost tripled between 2000 and 2006 and the number of people who watched video on their mobile devices increased 34% in just eight months last year. Today we understand that staying abreast of consumer habits and preferences on the Internet is a constant requirement for business success.
What this means for the future: Consumers will not all adopt Social Media in the same way, nor will their Social Media habits stay consistent. The onus will be on each business to understand the expectations and interactions of their particular audiences with respect to Social Media.
As a starting point, Forrester has identified six different types of Social Media profiles: Creators, Critics, Collectors, Joiners, Spectators, and Inactives. The percentage of people who fall into each of these categories is quite varied today and will evolve rapidly. Every brand will have its own unique mix of Social Media profiles, and this mix will shift considerably before settling into any sort of consistent pattern years from now.
While these categories help to give some structure to our understanding of consumers' interactions with social media, they are still too broad to help drive the strategic insights that separate success from disappointment. There will be no substitute for companies constantly monitoring and assessing their unique audiences' expectations, needs, and participation in Social Media.
How our understanding of the Social Media environment will evolveIn 1995, some foresaw the impact the Internet would have, but no one could predict precisely what would work, under what conditions, in what timeframe, for which consumers, and for which brands. What resulted was a period of trial and error, spurred in part by the explosion of new tools and models that competed for attention and dollars.
For a while, it was impossible to separate the winners from the losers; high-profile Web businesses like Pets.com and eToys.com struck fear into the hearts of established retailers, but these e-tailers quickly failed. Meanwhile, new businesses like eBay, AOL, Google, and Amazon came out of nowhere to amass amazing market capitalizations that dwarfed long-established Fortune 500 companies. And online tools, concepts, and languages came and went even more quickly: VRML, CueCat, ColdFusion, Applets, VBScript, link farms, adware, free ad-supported Internet access, PointCast, SVG, Beanz Internet currency, push channels, and RealNames all threatened to change the Internet or alter the way brands market online but are now in the dustbin of Internet failures.
In the end, the tools mattered, but strategy mattered more. Our understanding of just how complex and specific strategy needed to be changed during the dot-com era: In the early years, some treated the Internet as if it had a single checklist ("Web site: Check; Banners: Check; Search Engine Submission: Check..."), but as the Internet matured, we realized that while there were some best practices, every brand's and enterprise's use of the Internet would need to be more different than alike. In short, online strategies are no less nuanced, varied, and unique as those in the real world.
What this means: Buckle up. We can expect to see the rapid development (and disappearance) of new tools and concepts over the next few years. Today Twitter is on top of the microcontent heap, but tomorrow it may be identi.ca or Plurk--or perhaps standalone microblogging won't end up being sustainable to a large audience. In the Social Network world, consumers have already shifted from Friendster to MySpace to Facebook, and all three sites continue to seek new tools (and business models) to draw and keep users.
The explosion of social concepts will continue with multiple tools and sites competing to solve a wide array of overlapping needs--social documents, crowdsourcing, video sharing and editing, geolocation, customer service networks, wikis, social bookmarks, product ratings, lifestreams, and social concepts we can't even yet imagine. It will be a dizzying and confusing time as organizations track, assess, test, implement and reject different Social Media sites, tools and approaches.
We'll come to appreciate (as we did with the Internet) that Social Media is not monolithic; it is not a single set of tools or strategies that every organization can simply plug and play. Best practices are still evolving, but soon it will be understood there are no simple checklists. Brands and organizations will share some similarities in the way Social Media is adopted, but there will be important and strategic differences that reflect and help to create points of differentiation.
Much like in the era before the Internet matured and tools converged, companies that stay abreast of the rapid changes and embrace small risks will gain competitive advantage, evolving their tactics and programs as Social Media evolves. Those that sit on the sideline and wait for it to get sorted out will quickly find themselves at a competitive disadvantage.
Every relationship consists of three components: The two parties and the environment in which the relationship develops and is maintained. We've thus far explored two of these three components--your customers and the Social Media environment--but what about you? With rapid changes coming to consumers and the Social Media world, how will your enterprise change?
How your organization will adapt and react to Social Media is the most important question of all. Tomorrow on Experience: The Blog, we'll explore how you can prepare for the uncertainty to come and how your enterprise can manage the changes rather than allowing them to manage you.