The social media bandwagon continues

I fully expect the next year to be very grim – and that will impact the social media sector as much as everywhere else, maybe even more.  Time Warner’s announcement yesterday of a $25bn goodwill writedown was partially attributed to slowdown at AOL and we can expect more news like this.

But the fundamentals for social media remain strong – I picked the following Forrester chart up via the blog of Ted Shelton, CEO of The Conversation Group.

The chart shows that the percentage of people who are engaging with social media is increasing – across the board.  More people are actively creating (bloggers etc.), more people are commenting, and so on (you can find the definitions of each category in the presentation behind this link).  Perhaps the best stat is the one at the bottom – the number of ‘Inactives’, that is to say people who don’t engage with social media at all, has fallen from 44% of the US population in 2007 to 25% in 2008.  Just about everybody who is online now interatcts with social media in some way.

In summary the message here is very clear – engagement with social media is increasing rapidly. 

Shifts like this lead to value shifts and hence value creation – every time.  It might not be this year, and the monetisation mechanism may not yet be clear, but it will happen.

  • Hi Nic! Thanks for visiting my blog. Value creation and value destruction go hand in hand. The FT had a great line yesterday about advertising — “…whether this year's advertising market will be very bad, dismal, or catastrophic.” I have to admit I sort of hope it is catastrophic. The market needs to shake out the businesses with “no purpose” (in the words of David Cushman on his blog — http://fasterfuture.blogspot.com/2009/01/whos-a… ) and I think this one-way flogging of products in markets that we call advertising will be one of the first to go, along with businesses that insist upon relying upon advertising. Look for example at your own page — what is the difference between the box on the upper left — flogging love films — and the box on the lower right — telling me what you are reading? One is just clutter (why would I be interested in love films, the ad doesn't tell me). The other is about enhancing the engagement between the two of us — I could very well be interested in reading the books you are reading since I am interested in what you write.

    Sorry if this is posting a second time – have been having trouble with your comment user validation system

  • Thanks David, and apologies for the comment validation problem. It came to me for approval, but clearly didn’t tell you. There is something up with my Disqus account – I will get to it.

    Whilst I don’t think the current forms of internet advertising are going to die any time soon I do think they might start to grow much more slowly, or maybe even not at all, as dollars divert to forms of engagement that deliver more value. So I think we are largely on the same page.

    The interesting question for me is where the scalable product opportunities emerge.

  • Hi Nic! Thanks for visiting my blog. Value creation and value destruction go hand in hand. The FT had a great line yesterday about advertising — “…whether this year’s advertising market will be very bad, dismal, or catastrophic.” I have to admit I sort of hope it is catastrophic. The market needs to shake out the businesses with “no purpose” (in the words of David Cushman on his blog — http://fasterfuture.blogspot.com/2009/01/whos-afraid-of-2009.html ) and I think this one-way flogging of products in markets that we call advertising will be one of the first to go, along with businesses that insist upon relying upon advertising. Look for example at your own page — what is the difference between the box on the upper left — flogging love films — and the box on the lower right — telling me what you are reading? One is just clutter (why would I be interested in love films, the ad doesn’t tell me). The other is about enhancing the engagement between the two of us — I could very well be interested in reading the books you are reading since I am interested in what you write.

    Since I now risk writing a longer comment than your post, I will stop 🙂 looking forward to reading more of your posts now that I have discovered you. Best, Ted Shelton (p.s. your facebook connect registration link isn’t working)

  • Interesting comments to the post. When writing fiction, the golden rule is 'show, don't tell'. Internet advertising (or put differently 'new forms of engagement') could learn a lot from that, especially the travel sector.

  • Nic and Tim – The Forrester trends are very interesting, most specifically the significant growth in spectators and the reduction in “inactives”. If we consider this as a product adoption curve, the spectators will start commenting, the commentators will create etc. Then we have the very exciting situation when everyone is conversing.

    Once businesses and brands start to engage with their customers in this way – we have a new and open way of doing business.

    PS. We've launched public beta of IGOpeople. http://www.igopeople.com

  • Interesting comments to the post. When writing fiction, the golden rule is 'show, don't tell'. Internet advertising (or put differently 'new forms of engagement') could learn a lot from that, especially the travel sector.

  • Nic and Tim – The Forrester trends are very interesting, most specifically the significant growth in spectators and the reduction in “inactives”. If we consider this as a product adoption curve, the spectators will start commenting, the commentators will create etc. Then we have the very exciting situation when everyone is conversing.

    Once businesses and brands start to engage with their customers in this way – we have a new and open way of doing business.

    PS. We've launched public beta of IGOpeople. http://www.igopeople.com