The transformation that Facebook has triggered this year in social networking dynamics will pale in comparison to the e-commerce revolution it will inspire in 2011.
Recommendations from
Facebook's 600 million-plus members combined with GroupOn-styled discounts, Google-inspired targeted advertising and Apple's rampant connectivity will yield Amazon-sized buying across all mobile
devices. While cross-platform pollination is underway, these players are creating a global template for integrated social, hyper-local, mobile commerce.
Increased integration will collectively
change the way consumers research and buy products and services, and how companies market and sell them.
It won't be long before these and other companies' personalized, real-time mobile buying
services generate more revenues than the billions online alone has mustered. Their success is driven by two factors: consumer relevance and location.
While the recession knocked the wind out of
consumers' sails, mobile interactive technology primed them for a new orientation--especially in communications and commerce. During the painfully slow recovery, there are mounting telltale signs of
this imminent wave of creative disruption. Here are a few:
*In 2011, four out of five U.S. businesses with more than 100 employees will use social media marketing -- double the number from 2008.
Even without the concrete means to measure ROI, marketers are embracing social media online and in mobile instead of or in addition to traditional television and print.
"Social media is no longer
an add-on for marketers; it's been integrated into everything they do," observes eMarketer analyst Debra Aho Williamson. Blue -chip marketers are allocating increased budgets to social media based on
"gut instinct" or the desire to be cutting edge. Social media has grown from 5.9% of their marketing budgets in August 2010 to 9.9% of their marketing budgets.
*Madison Avenue is being spurred
by Facebook's mad dash to monetize its exploding worldwide base, spotlighted in Time's Person of the Year tribute to founding CEO Mark Zuckerberg. Facebook's estimated $56 billion private
market value can more than triple by 2015 on its planned move into transactional target marketing, experts say.
*Consumer eagerness to act on the recommendations and actions of their Facebook
friends is evident in the estimated $5.4 billion value of Facebook-connected game player Zynga and the robust sales of virtual goods 54 million member-linked FarmVille. Like Facebook, they are all
going global.
*Any doubt about the intertwined future of hyper-local couponing, social networks and commerce was swiftly dispelled by Amazon's recent $175 million investment in LivingSocial, a
GroupOn wannabe reportedly booking more than $1 million daily revenue and on track to reach 500 million subscribers by 2011. Google's rejected $6 billion bid for GroupOn says loads about the
exploding importance of mobile location.
*Amazon knows a good thing when it sees it. The e-reader phenomenon it launched with the Kindle a few years ago has created a vibrant category that is
outpacing smart, big screen TVs this holiday season. Although Best Buy's online sales growth has collapsed, Amazon continues to post double-digit revenue gains based on the strength of its engaged
social, recommendation, free shipping and superb customer service.
*Even Google is beating Best Buy to the punch this month. Google's YouTube video platform is leveraging its online community to
give away 100 television sets fortified with the new Google TV operating system that makes viewing truly interactive.
*Shoppers using their smartphones and other mobile devices as shopping aids
want apps that provide discount coupons, personalized notifications of in-store specials and price comparisons outside and inside stores, according to a new Accenture survey. Less privacy-crazed
consumers are increasingly comfortable using a shortcut to the checkout, such as PayPal or Google Checkout. Overall, transaction volume is up about 35% from a year ago, spurred by free shipping and
consumer's increased comfort with shopping online.
*A new Pew Research report indicates that rating and buying products and services are among the key Internet activities popular across all
age groups. More than 60% of all online adults regularly use social networks. Social media has moved ahead of search as a marketing tactic, according to Chief Marketer.
*The global Internet
advertising pot was $54 billion last year--a number that will multiple once marketers learn to more aggressively tap Facebook's undermonetized user base, not only with interactive advertising, but
results-oriented transactions, says Internet guru Mary Meeker. Some ad gurus forecast addressable advertising could push TV ad spending to $100 billion annually from about $60 billion now, based on
higher ad rates, better ROI measurement, potential share grab from other media and enhanced targeting ability. But not if mobile social commerce gets there first.
*Half of all mobile users have
social profiles; that number is expected to rise to 79% by 2015. One-third of all users are aware of the difference in location-based mobile social services--triple from what it was just a year ago.
Such trends explain the meteoric adoption of social commerce-related services, from GroupOn to Facebook's nascent advertising.
*Apps will become the universal means for connecting interested
parties, just based on nearly 1 million apps on the Apple and Facebook platforms. Consumers under 35 are increasingly ditching their browsers for mobile apps because they afford convenience and
instant access, according to Parks Associates. Comparative pricing apps like RedLaser on iPhone and The Find on Google's Android have been all the rage among brick-and-mortar holiday shoppers.