Where is Social Media Headed in 2010?

Recently, I’ve been asked by a number of executives a direct but complicated question: is it time to jump into social media?  Most pundits generally agree that this year, social media will get even more popular, more mobile, and more exclusive.  I believe 2010 will be the year social media goes mainstream but not necessarily driven purely by marketing considerations.  I weigh in with the following predictions, in no particular order:

Niche sites are where it’s at

The bane of most social media users is information overload and clutter.  To cope with this, many users will increasingly gravitate to sites that have the people, content and applications they really want to engage with.  As a result, a lot of the early money (and profit) will be generated in the more focused sites (for example Club Penguin for children), as opposed to generic sites like Facebook, Twitter and MySpace. Look for social networking sites to boost their relevancy by restricting access to “qualified” users and to deploy better filtering and alert capabilities to improve the user experience.

Cost savings & support drive adoption

Leading companies have begun to recognize the potential for using internal and open social networks to more cost effectively deliver support, content and special offers in real-time.  For example, Best Buy’s Twelpforce leverages Twitter and the skills of hundreds of employees to provide rapid customer troubleshooting.

Regional networks challenge global networks

Regionally-focused social networking sites like Xing (Germany) and Viadeo (France) will emerge as strong competitors to globally-oriented sites like Linkedin and Facebook.  The reason, according to Dan Serfaty of Viadeo (France’s largest business network site) is that focusing on local depth will deliver advertisers and partners more compelling value than offering a narrow slice of the highest-powered people around the world.    Furthermore, unique and under-developed markets like China and India will naturally germinate their own regional networks, which will be able to leverage large scale economies and inexpensive resources.  

Mobile social networking is THE killer app

The next wave of social media penetration and usage will be mobile thanks to the convergence of 3 important developments:  1) heavy social networkers love the convenience of mobile devices that enables ‘always on’ accessibility and portability; 2) the growing penetration of smartphones which combine almost laptop-type functionality with ultra-fast networks;   3) users are being forced to access Twitter etc. using their phones as most corporations ban social networks within their firewalls.    Look for the large social networking sites to launch improved and portable versions of their functionality.  

Revenue models will mature

Large social media sites will develop advertising models that can properly measure traffic and behavior while demonstrating ROI for advertisers.  However, there may be significant user backlash to increased advertising similar to what was seen with MySpace when they went too far trying to monetize eyeballs.  Interestingly, other sources of revenue will become even more lucrative.  According to the NY Times, sales of virtual goods within social media sites (already a $5B global business) by firms like Zynga and Playfish will continue to grow.  Social media sites will also test new revenue-generating applications like social gaming and entertainment shopping (e.g., Swoopo) in order to leverage their millions of users and attract revenue-paying partners.  Finally, after 5 years of providing free services, many sites will begin evaluating new subscription models.  Linkedin already offers a premium service, although no more than 5% of users have signed up.  Considering that newspapers and are beginning to charge for premium content, can YouTube and Facebook be so far behind?  

Brand communities will slowly emerge

Social media-based brand communities are taking shape by design and chance.  These will be internal employee/partner-centric ones as well as external, customer-based communities.  While communities have significant marketing potential for promotion and brand-building, it will be a challenge for firms to establish a credible voice and safeguard brand risk. Look for savvy marketers to develop micro content and marketing programs tailored to different communities.

For more information on our services and work, please visit the Quanta Consulting Inc. web site.


1 comment so far

  1. Aileen on

    I think swoopo is a scam. I tried so often but never won an auction.

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