Sunday, December 11, 2011

Predictions for Social Media and Social Business in 2012

The year 2011 was an interesting one for social media. In some ways nothing changed, and in others, everything changed.

Here is what didn't: At the end of 2011, Facebook, Twitter and LinkedIn remain the top social networking sites, despite the entrance of Google+ into the fray. Geolocation tools moved sideways, neither faltering nor becoming mainstream; Foursquare may have tripled users in 2011, but only 5% of Americans use geolocation tools. And despite claims of social fatigue, privacy concerns and frustration over constant Facebook changes, no one abandoned social media--today 61% of those under 30 years of age use social media daily compared to 60% a year ago

What changed in 2011? The last nail was put in the coffin for those who believed social media was just for the young--use of social media among baby boomers is up 60% in one year. More important than demographics is how intertwined the digital social and real worlds have become for many; 58% of teens have had an experience in social media that made them feel closer to another person, one-third of employees use Facebook while at work and one British survey found that people would give up indoor plumbing or coffee before Facebook. And while last year at this time Google, Yahoo and Facebook earned almost equal shares of US online time, today Americans spend roughly 50% more time on Facebook then either Google or Yahoo

So, what will happen in 2012? Nothing will change and everything will change. Here are some of my expectations for the coming year:

Social Business gets serious

Of course, social media will remain a platform for communications, but 2012 will be the year when it becomes evident how much social media will transform business. To date, social commerce strategies have been about grafting Web 1.0 commerce into 2.0 platforms, but a "Shop" tab on Facebook is not a social business model. For example, it's interesting consumers can search for a flight within a tab on Delta's Facebook page, but there's nothing remotely social about the experience.

In 2012, true peer-to-peer commerce and social data models will begin to make headlines. Look for car sharing to get mainstream as OnStar, GM and RelayRides bring peer-to-peer car sharing at scale, and watch for mainstream media to pay attention as peer-to-peer lending in the US approaches $100 million per month by yearend. I also expect we'll see retailers and streaming media sites make a move in social cobrowsing; people thousands of miles apart will be able to shop together or watch a movie simultaneously and make these experiences almost as social online as they are in the real world.

Brands get more control in Facebook

Considering it is 2011's hottest platform for marketing, Facebook remains a frustrating place for many brands. For most of 2011, it seemed Facebook was not all that eager to work with brands other than to sell advertising, but in the past couple of months there have been signs Facebook is listening to the needs of social media marketers. In November, Facebook Insights improved the data available to administrators of brand pages, and just this week comes news Facebook is piloting private messages between brand pages and fans.

As more companies integrate Facebook into their core business processes and services, Facebook will be pressured to make the platform more hospitable for brands. Facebook will need to improve everything from spam protection to phishing prevention to secure user authentication. One new feature I expect (and hope) to see in 2012 is for Facebook to give brands control over the ads that appear on their Facebook pages (for a price, of course); it's asking a lot for brands to build mission-critical features and applications on the Facebook platform only to have these social business services adjacent to ads from competitors.

The fans/followers arms race ends

I'm surprised at how many marketing and communication professionals do not understand Facebook EdgeRank and still believe that every Facebook post made by a brand is posted on every fan's wall. That isn't remotely how Facebook works, which is why the race to buy fans with game freebies, contests, and sweeps will, I expect, be less prevalent next year than in 2011. In the same way Marketers learned that buying email lists was ineffective, they will learn the same thing about "buying" fans in social media.

In 2012, the brands that succeed in social media won't be the ones who add tens of thousands of fans in a single day with a promotion; instead, the winners this year will earn fans the old-fashioned way--with strong business relationships, great service and products, and social business applications that deliver true value in social media. I anticipate that in 2012 we'll see more case studies that validate strong brand and business results from smaller subsets of consumers rather than case studies that trumpet the accumulation of large numbers of meaningless fans. (I hope this turns out to be a true prediction and not merely a wish on my part.)

The slow-motion social media valuation bubble burst continues

The bubble is already bursting for social media valuations. LinkedIn is 40% off its post-IPO high and with a  PE ratio 7000% greater than Google's, LinkedIn will either need to post spectacular profits or face even more downward pressure. GroupOn's stock has been recovering in recent weeks but still remains 25% off its November high (and it has no PE ratio since it has no "E" yet.) And Zynga, possibly the most anticipated social IPO other than Facebook, has seen speculation of its valuation drop as much as 50% in recent weeks.

In 2012 we'll see this pattern repeat: great anticipation of sky-high valuations; then the launch of social IPOs at more reasonable prices; quickly, speculators bid up those shares; but eventually sanity takes hold and prices sink. Just as in the dot-com bubble and burst, we can expect social firms to take years to develop their business models and produce the stable streams of income necessary to support higher stock prices. Look no further than the experience of Web 1.0 success story, Amazon--its stock stood at $107 in December 1999 but did not surpass this price for almost another decade.

A new economic "privacy divide" begins to form along generational lines

It is no secret that young people have a different view of privacy than their older peers. Until now, the generational gap in privacy attitudes primarily affected the rates at which older and younger people adopted and used social networking, although some economic benefits are already accruing to those willing to embrace social media; for example, one recent survey revealed that 16% of employees found their current jobs in social media.

In 2012, the differences in privacy attitudes will create a wider economic divide along generational lines--a separation between social business haves and have-nots. As the Sharing Economy grows, those willing to engage and share more widely will gain access to a greater variety of peer-to-peer products and services compared to those unwilling to embrace transparency. Whether it is access to homes on Airbnb, loans on LendingClub or cars on RelayRides, the doors to new social business models will be most open to those who are most open.

Google+ Continues to Lag

Hitwise recently announced that Google+ had its third best week, but the headline hid a sobering fact about G+ traffic: whenever Google+ rolls out a new feature, traffic spikes as people visit to check it out but then traffic declines until the next G+ feature is launched. To date, G+ is not showing the sort of stickiness or growth curve that would cause one to think it will pull time or users away from Twitter and Facebook.

While some social media pros suggest Google+ will grow because it is friendlier to brands or essential to SEO efforts, it is not brands but consumers who will decide if Google+ is a winner. I predict Google+ will continue to grow slowly in fits and starts, may become important in certain niches, and will require large brands to maintain presence and monitoring in 2012. While it will not follow Google Wave into obsolescence, neither will Google+ battle Twitter or Facebook for share of time or traffic next year.

Welcomed and Damned:  More Social Media Filtering

When Facebook altered its news feed a few months ago, you might have thought the company deliberately severed users' personal friendships. The reaction to Facebook's new filtering methodology was so ferocious, some started predicting the beginning of the end for Facebook. (This prediction, like every other "Facebook is dying" prediction, quickly proved false.)

While users may not like the sound of it, the fact of the matter is that we are going to need our social tools to do more of the work for us. None of us has the time or capacity to consume and consider every tweet, post, checkin, and like from our ever-growing networks. In 2012, look for Facebook, Twitter and a host of startups (such as Bottlenose) to improve filtering, giving each of us a view of the things we most want to see while excluding the junk we'd otherwise ignore. (Twitter just made a big step in this direction with the launch of its #Discover feature.)

Some will scream about the automated filtering but in the end, the right personalized filtering tools only make our social media experiences better. As filtering improves, the losers won't be consumers but brands that lack relevance, because who really signs on to Facebook to find out what their favorite antiperspirant or gasoline brand is saying?

So, what are your predictions for 2012?  Think I am on the mark or off base?  Please share your thoughts and comments!

Monday, December 5, 2011

The Predictable Unpredictable Social Media Disaster

I was reading about the latest so-called "social media disaster"--this one from Qantas Airlines--when I was struck by a sentence in the Reuters article: "PR experts said the campaign was... a classic example of the dangers of unpredictable social media." I don't mean to be hard on Qantas--any company or human can inadvertently make mistakes--but this situation was about as unpredictable as the sun rising or Groupon's stock falling.

Qantas' social media campaign was intended to get travelers using the hashtag #QantasLuxury and describing their "dream luxury inflight experience." The timing was, at best, dubious, coming just a day after Qantas and its unions broke off contract negotiations and one month after Qantas stranded 70,000 travelers by grounding its fleet due to union woes. Furthermore, the prizes in this promotion weren't, as you might expect, trips to exotic locales but pajamas and toiletry kits. The effect was to spur many negative, sarcastic and angry responses about Qantas in social media channels.

So, are you shocked at the outcome? Do you find the social media backlash "unpredictable?"

How many instances of social media PR disasters are truly unpredictable? There are cases when a brand can be caught by surprise--such as when activists launch a critical social media campaign or a single consumers' complaint becomes a meme--but are most social media issues really fluky and unforeseeable? This isn't an inconsequential question; if social media is a flaky and erratic channel, then it is an inhospitable medium for business.

I believe social media is not a game of chance but more akin to the weather. Weather forecasters may frequently get tomorrow's forecast wrong, but that doesn't mean we consider sun, rain, snow or lightning unpredictable.

This year, lightning strikes will ignite around 24,600 fires to which US fire departments will respond. One lightning strike is unpredictable;  tens of thousands of them across the country is not. Because we know this, we prepare. We purchase insurance, install lightning rods, use surge protectors and tune into the National Weather Service to stay informed when weather turns severe.

Any brand can be struck by social media lightning at any time, so the smart ones prepare--they engage advocates, provide excellent products and services, amass fans and followers, deploy social business strategies, use listening platforms and employ community managers to respond with speed, empathy and care for the customer. These are the components that ensure if and when a brand is struck by social media lightning, brand damage is limited.

But while any brand can be struck, we also have to recognize there are actions our organizations may do that can make it a target.  Golfers know better than to stand in the middle of a fairway holding a metal club above their head in a thunderstorm, yet brands seem to do the social media equivalent quite frequently.

Many of the social media PR disasters that have occurred weren't unpredictable. Brands may not be able forecast the specific social media reaction, but we know risk increases when brands raise prices or fees, redesign products or logos without engaging loyal customers, fail to hear concerns about environmental policies, ignore consumer complaints, engage in dubious business practices, or--as in Qantas' case--deploy marketing or take other actions that fail to understand the brand's current relationship with consumers.

Social media is not unpredictable. I can predict that your organization, if it is any size at all, it will be struck with social media lightning this week. Your brand will receive critical posts on its Facebook wall, earn one-star ratings on review sites and get a handful of gripes on complaint sites like

There is no insurance for social media lightning--no one will compensate your brand should a misstep cause lost business or brand damage--but smart organizations can prepare and protect. They do so by understanding the social media climate, conducting business in ways consumers expect, setting their business and communication strategies appropriately and investing in social media to protect their brand from the inevitable.

Consumer storm clouds are brewing. There is a 60% chance of consumer complaints, some industries will face a hard sentiment freeze and companies may experience localized areas of brand flooding. Whether social media will be shelter from the storm or the storm itself has more to do with your enterprise than the "unpredictable" nature of social media.