The Web’s New Social Infrastructure
The Web is a confusing place. It confounds even the most well informed and insightful observers. Whenever a future path seemingly becomes clear, something new arrives and muddies the waters.
For the past few years most of the excitement has been around social media. As regular readers know, I’ve been skeptical about much that has been said (and most of it has indeed been silly).
However, with IPO’s of Facebook, LinkedIn and Twitter now imminent, we’re headed for another curve in the road. It’s not what we were told to expect, but chances are, it will be more far reaching and important than anyone imagined.
The Unquestionable Value of Social Media
Last week, I explained how Facebook is probably worth $50 billion. As better information trickles out, it’s beginning to look as if the company might be worth even more. LinkedIn and Twitter will also be valued in the billions, although most probably in single digits. That’s a lot of moolah!
The question, of course, is why? Certainly not because social media platforms are such fantastic advertising vehicles. Marketing efficiency on these sites is notoriously low and ad rates reflect that. Even the much maligned Yahoo, with less audience, still earns far more than Facebook. Most social sites will fail.
Marketers, it must be said, are only partly concerned with brand impressions which are, after all, only means to an end. What they really want is us. The people who buy things, with all of our passions, quirks and propensities. This is what social media is beginning to unmask.
It’s Not All About The Conversation
Follow me around a cocktail party and eavesdrop for an hour or so and you will soon learn that I drink too much and say lots of stupid things that I don’t really mean. Most conversations are pretty pointless.
That’s not always true, of course. Some have enormous significance, like the ones between Truman, Stalin and Churchill or the Einstein – Bohr debates, but that’s not really social media fare. As social listening tools progress, they are helping us glean meaning from more ordinary conversations, but still, we’re mostly just babbling.
What’s infinitely more interesting is the influence that conversations uncover. We tend to be very willing to pay for the privilege of having someone talk to us from a stage, for instance, but not to mingle in a room full of people. Conversations often tend to be one-sided with one person speaking and others listening.
And that’s where social networks become really important. Not because of what’s being said, but the underlying linkages between entities. Social media is creating a revolution not in media, but in the way information is structured online.
My Friends Are More Influential Than I Am
Authority is often elusive and always contextual. As I pointed out in an earlier post, your influence has little to do with how many people you are connected to. Spreading information involves more than just numbers, but how networks are structured and there has been a deluge of research that is beginning to uncover how it all works.
One thing that is becoming increasingly clear is that people at the center of a network tend to be more influential than those at the periphery, regardless of how many links they have. Christakis and Fowler, in their book, Connected, show that a simple way of targeting the network core is simply to ask people who their friends are. Through a quirk in network math, our friends tend to be more central than we are.
Moreover, it is not only direct connections that influence. Christakis and Fowler have shown that it spreads to three degrees. The friends of our friend’s friends, most of whom we have never met, have a profound effect on how we think, what we buy, how much money we make and even how healthy we are.
The reality that is emerging is far more rich than simple chatter or direct recommendations.
Networks Global and Local
Networks, of course, don’t exist in isolation. We are embedded in networks related to our families, where we work, live, went to school, etc. While these networks may seem unrelated, they are, of course, interconnected through us. Together, they make up a more global network that is greater than the sum of its parts.
While our local networks are comfortable and familiar, they mainly contain information that we already know. It is further out that our networks become truly valuable. Mark Granovetter called this the strength of weak ties. Global networks are therefore much more valuable and interesting than local ones.
Large social media sites, like Facebook, LinkedIn and Twitter function as global networks and that’s why they are becoming important. Not as advertising vehicles, but as informational DNA. Much like real DNA, they have the potential to affect the morphology of the entire organism in subtle, yet pervasive ways.
The Semantics of Social
While the details are far from clear, the outlines are beginning to take shape and they have little to do with the presentation layer of the existing Web, but rather the increasing value of the semantic web for marketers. Underlying the tweets and status updates is rich data about connections and network structures.
The value of profiles is being leveraged further through programs like Facebook Connect, which allow users to log in to sites across the web without having to register anew. Google and Twitter have similar initiatives and the information they uncover goes far beyond demographics or cookie tracking.
The immense reach of social networks will allow advertisers to aggregate information on a global scale, not as isolated data points, but as an interconnected whole which can be used to create advertising packages similar to ad sense, or fed into the demand side platforms that are being developed to run client campaigns. Social data is already being incorporated into search engines.
A Brave New World
The future that is emerging will indeed be different, but in ways far different than many would have us believe.
Professional journalists, directors and producers will continue to provide the content that informs, entertains and excites us. Consumers will be at the center, but because they buy products, not due to any social alchemy that transforms the mundane into the sublime.
Conversations will certainly take place, but mainly by people who actually have something to say to each other. Businesses will need to listen (they always have), yet will continue to devote the bulk of their marketing budgets to broadcasting messages that promote their products.
What’s going to change is far more exciting (and more scary) than was presumed. A media universe empowered by a global database that links us all to each other in ways that we’ve only just begun to imagine.