We have all been told, "Be careful what you wish for." One wonders if this truism shouldn't bear careful consideration by News Corp, given its current monetization ambitions through brands achieving "Never-Ending Friending." This study, commissioned in part by MySpace, focuses on the pervasiveness of social networks in the everyday life of the digital generation and includes case studies of recent successful branding efforts inside the MySpace ecosystem.
While this report may accurately reflect individual successes in social marketing methods, the mass adoption of these methods and, more important, the subsequent mass "gaming" of the marketing methods outlined by this report, will destroy the most valuable social media property of the digital generation. Through the commercialization of the MySpace community, a platform with a lifetime's worth of $100s of billions more than the short-term financial gain from the "friending" monetization method could be broken forever.
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There is a critical point at which the commercialization of any medium erodes the value of that medium for consumers. The point is this: If tomorrow every advertiser began creating profiles within MySpace in parallel with coordinated promotions and friending efforts, the balance of the MySpace ecosystem would shift considerably, likely resulting in stunting MySpace's real growth, and disenfranchising its current population.
Already there is a shift of "real" members of the MySpace community to set their profiles private to avoid "fake" profiles, spamming messages and comments. Imagine the coming SNMO (Social Network Marketing Optimization) industry's efforts to yell over the clutter. Getting bulletins from one brand about sales is "cool"; getting bulletins about sales from 50 brands is suffocating. People may perceive brands as friends, but brands just can't be good friends to all of us (I hope your friends aren't bottom-line focused). The relationship between brands and people is symbiotic, but brands are not people, and therefore lack a pretty significant requirement by most definitions of friendship. But this won't stop brands from trying to be our friends in social media 1.0.
The rush is already on. The study's assessment by Marketing Evolution's Rex Briggs of the meaningful return on marketing for Adidas and EA was right on target. It is very reasonable, however, to believe that any high-attention medium with relatively low professional marketing competition would provide significant returns on marketing efforts. How will returns compare when there is greater competition for brand friending within social media? How will this competition affect MySpace's ecosystem?
It is the very attributes that made MySpace an overwhelming force in digital society that now threaten the social network's future as it pushes towards monetization. The self-serve nature of digital platforms means advertisers can "experiment" with digital media with the same speed and volume as people adopting social networks. Google's self-serve platform allowed for hundreds of thousands of advertisers by tapping into the long tail of direct marketing. Social networks not only will, but must, do the same for brand marketers to sustain themselves. Joe's Fish Shack would love to brand itself. As would the hottest club in Las Vegas, and local retailers...
The problem with hundreds of thousands of advertisers entering MySpace as friends in an unstructured manner is that it will compromise the user experience and significantly under-monetize on MySpace's true value. Brands will continue to extract the most valuable influence at rates far below those that influence market value (potentially even receiving the influence for free), and the social network "black hat" marketers, in combination with the avalanche of the well intentioned marketers, will continue to erode the value of the medium to the MySpace community.
Google handled the volume of advertisers by first deciding what the rules of relevancy would be for advertisers utilizing its system. Next, there was some level of self-regulation by advertisers because erroneous keyword bidding had a financial cost to advertisers, so it was in their best interest to improve marketing effectiveness. Despite its meteoric rise, Google started with baby steps in advertising, careful not to interrupt user experience and clearly notating to users what was advertising. Finally, Google had the benefit of a uniform metric for measuring effectiveness of performance: the click. No matter how relevant you were, you paid a market price for your click.
For social media to leverage brand monetization as effectively as search leveraged direct response monetization, social media needs to determine its set of rules for relevancy, create a marketplace for auctioning its influence, and separate brands from friends so that the social media user community can do the same. All of the above requirements will first require a different type of participation by the social media publishers (aka the social network member).
Finally, measurement of return on branding efforts within social media will not, and should not, be measured in standard performance metrics. Rather, measurement and buying will be in terms of influence delivered. What advertisers and agencies are able to do to attract and leverage that social media influence will be their competitive advantage (this how we look at what Rex refers to as the "momentum effect").
Where I'm in lockstep with the "Never-Ending Friending" report is in agreeing that the potential value of branding through social media is unparalleled in other mediums.