"If I Were a Rich Man"; The Social Media Roll-Up Strategy

If I were a rich man, sometimes referred to as an "Angel Investor," and I were examining all the different companies in the social media space, I'd gather together a little more investment money and do a roll-up strategy that could package a very effective offering for brand marketers.

The beauty of social media is much like the early days of the Web, where the rules are being written and we know consumers are spending more time here. The challenge of social media is also that the rules are being written and no single idea has emerged as the "killer app," so to speak. The unifying theme amongst all of the social media opportunities is that of integration into a platform; Facebook and Twitter provide platforms for users to interact with one another and a number of companies have emerged as providing solutions for integrating into those platforms. Some offer paid opportunities that range from ads to badges to virtual goods and social games. Some offer non-paid opportunities such as seeding and distribution, though one could argue that there is a better term than "non-paid" since all of these opportunities do have costs associated with them. None of these offer a truly effective or efficient solution by themselves, but if you aggregate them together you can create a very effective, targeted solution for brand marketers.



The biggest problem lies in sorting through all of these companies and understanding the ins and outs and the proper ways to use any of them. It can be overwhelming because you have to sit with reps from each, learn what they're offering and understand the limitations of each (which the reps rarely, if ever, broadcast) and determine how much time, budget and effort you should allocate to any one of them. If one works, then you try to scale it (which can be a challenge in and of itself), but if it doesn't then it's back to the drawing board and back to your database of "unique" ideas. This is not an efficient use of time, but if they were packaged together and offered as one-stop shopping where you could try multiple paths and reallocate based on performance, then more brand marketers could set aside the budgets and the time to test them accordingly.

The social media space is one of those cases where the whole would be greater than the sum of its parts. Social media is growing in importance, but it is also expanding in complexity and brand marketers don't want complexity. They want proof that these tools can affect consumer behavior and they want flexibility in case something is not working. These two deliverables are what will effectively drive dollars towards the medium in general. To use another played out cliché; all ships would rise with the tide.

Of course, there are many companies that would fit into this consolidated effort. Social gaming even fits into this space; any tool where a consumer is interacting with a consumer in some conversational or viral fashion, utilizing a third party offering that integrates cleanly into one of the primary social media platforms.

The cost analysis is the one challenge that an investor would face. How to make sense of the market opportunity for these companies and how to properly value their offerings? Any one of these companies would most likely value themselves higher than the market would, but the opportunity is stronger if they're easy to use for the brand marketers and so the investor would need to calculate the added benefit of the consolidation vs. the stand-alone opportunity offered by any single player.

It's also difficult to raise money in this environment and the turnaround for this kind of investment might be 4-5 years out, which can be disconcerting for some investors. I feel very positive about this space and the inevitable success that it will have, so consider me bullish on the topic. I can sense the growth of social media from a baseline stance right now, but I can also see the challenges it faces for growth. By this time next year, the proof will be there and brands won't question whether they should have a role in this environment, just how they should be involved. Wouldn't you want to be able to provide them with the answer?

I would.

6 comments about ""If I Were a Rich Man"; The Social Media Roll-Up Strategy".
Check to receive email when comments are posted.
  1. Roy Perry from Greater Media Philadelphia, August 5, 2009 at 3 p.m.

    Well put. Timeless, in fact. I read it again, swapped 'World Wide Web' for 'social media', dated it 1995, and found it worked quite well.

  2. Dale Knoop, August 5, 2009 at 3:19 p.m.

    Great article.
    As someone with a new mobile marketing product just launched called Ruxter ( I know what the challenges in raising money are firsthand but we feel good about the future like you do. Indeed, we created Ruxter as a simple way for anyone to build a mobile site and share it with their customers and audience via texting their chosen (free) keyword to a short code. Brands could use Ruxter now for mobile outreach and feedback and use the mobile internet to augment what they already do today.

  3. Bob Hallock, August 5, 2009 at 3:38 p.m.

    We are leveraging a three-pronged approach to maximize the returns from social media. We combine 1. brand-centric applications (tools, widgets, etc.), 2. customized social media (in addition to Facebook, etc.), and 3. Dynamic personal content dependant upon the user's profile. This approach has proven to drive dramatic results for our clients.

  4. Kathy Sharpe from Resonate Networks, August 5, 2009 at 5:01 p.m.

    Integrate and ad network into the social networks and it works for me. Tell JD to pay you more.

  5. Alison Broomall from Knowledgent Group, August 5, 2009 at 9:44 p.m.

    Great piece....key take-away however is the emphasis on integration. This is the biggest challenge with any social media strategy, and the tools currently available for reputation monitoring don't really have all the requisite integration points necessary to truly measure and monitor the performance their social strategy.

  6. vivian mabou, October 21, 2009 at 10:12 a.m.

    With love and trust vivianmabou1

    Hello Dear,
    I saw your profile today and i stopped to take a very good look at it.
    I want you to know that i will be interested to know you better because you sounded very sweet in your profile and i will like us to become friends and know each other the more.
    Here is my email address ( send me an email today please!(Remember that what matters alot in a real relationship is love), I am waiting for your reply now.thanks
    Your's vivian.

Next story loading loading..