• by Diane Mermigas , May 18, 2009

Fascination with social media discounts the ultimate power individual consumers have over mining for digital gold -- a process that will be driven more by personal relevance than by sheer numbers.

The reason is simple. While like-minded communities exchanging recommendations, resources and real-time chatter can be useful in promoting specific goods and services, only the individual consumer can pull the trigger. But spending in response to savvy marketing, a committee vote or just plain need is being complicated by high unemployment, a depressed economy and scarce credit. A virtual group hug and a smart sales pitch just won't cut it.

Still, the fuss continues over Twitter's meteoric growth, nearly doubling its national users last month to 17 million, which remains a fraction of Facebook's nearly 300 million reach. MySpace is struggling to regain its footing, having been all the rage just a year ago. But none has produced the steady notable profit of business social network LinkedIn.

There may never be very effective ways to monetize the social Web because of its eclectic, spontaneous nature. (Imagine trying to interrupt a lively conversation among friends with a commercial.) Or, it could be that the medium is evolving into the de facto critical mass that television commanded and capitalized on in its heyday.

Even as tailored information on goods and services can be pushed out to targeted Web users on mobile devices, its effectiveness can only be measured by individual connections and response. Interactivity holds the promise of measuring and managing individual consumer connections in ways that static media never could.

That is the financial sweet spot of the new media age for content providers and distributors, advertisers and even consumers. While the social Web is undeniably an important part of the equation, there should be more focus on establishing and maintaining ties to individual consumers. The phenomenon of social networking is a means to that end.

Despite the recommendations Amazon generates from consumers' prior online searches and purchases, the refined search choices Google provides, or electronic coupon codes from merchants, individuals will be guided in their digital choices by what is most pressing and relevant. Remarkably, the power of one concept continues to get lost in a social networking frenzy that delivers relatively little business value.

Incredibly, the notoriously social teenage segment finds that online networking has its limits. Three-quarters of U.S. Internet users ages 12 to 17 (or 15.5 million) use social networks, mostly for interacting with friends, according to Pew Internet & American Life Project. Although the median age of a Twitter user is 31, its apparent brief appeal is hardly a function of age. Sixty percent of all Twitter users fail to return to the 140-character conversation after the first month, according to Nielsen.

While uniquely cross-platform brand media companies and advertisers continue to innovate on social networks, their success will be limited. No matter how strong the group dynamic, consumer self-interest conquers all.

The eventual development of universal identification codes will be used to securely transport users' profile and personal data across Web sites and social networks, aiding e-commerce, CRM, and advertising. Only then can an integrated experience and critical mass be created across all social networks that can more easily be monetized, according to Forrester Research analyst Jeremiah Owyang.

Although interactivity holds the promise of meaningful qualitative and quantitative measurement, click-through, page views and even engagement (time spent) are -- so far -- nearly as ineffective as CPMs in resetting values and creating social capital. As it is, ad spending on social networks will decline 3% this year to a mere $1.14 billion, per e-Marketer.

While social networks can function like an operating system -- for the creation, management and distribution of content and communications -- their reach and impact are limited until the semantic Web, social graphs and Web 3.0 advance the intuitive use of stored and shared individual data.

For now, social networks remain a novelty with elusive price tags. (Was that Facebook for $15 billion or Twitter for $700 million?) Nightline's new late-night alliance with Twitter is "NightTline," a digital forum for discussion and debate around the news. It features dueling tweets on hot issues, identified by the trending topics word search, backed by the 1 million-plus Twitter followers of "Nightline" anchors and correspondents.

Glam Media solicited Oscar tweets earlier this year in a widget sponsored by skincare brand Aveeno, a good example of how social networking can revitalize TV and newspaper content for the digital age relying on what Forrester calls "social technographics" or comparing consumer behavior in different social settings online.

But the real power is not as much about "The Future of the Social Web" and its five eras of development, as Owyang describes them, as it is about the digital development of individual consumers and the way they use technology to meet their unique needs. Consumers increasingly will demonstrate a willingness to provide their personal data in exchange for relevant information and access.

The novelty of knowing what your friends are doing or thinking at a given moment will never hold a candle to individual consumers' most urgent needs, concerns and preferences. Advertisers, broadcasters, and newspaper publishers that learn how to monetize that will have a prosperous digital future.

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