The Next Big Thing Won’t Be Social Media
Even with 10 million+ subscribers in two weeks, Google+ is NOT the next big thing!
The Internet has been awash with conversation over the past few weeks about Google+, the new social network from Google which attracted 10 million users in its first two weeks. Is it a Facebook buster? Will it Survive? Is it the next big thing?
I am going to join the masses and venture an opinion here as I feel that Google+ has pushed the envelope to a point where I can now see a NEW opportunity for business owners…
For the past few years, I have been saying that the Internet has to eventually revert back to a paying model – that the free mindset will eventually bring many online marketers unstuck.
This was rammed home when one of my Google+ connections posted a link to the following report: http://gigaom.com/2011/07/17/is-it-really-a-tech-boom-or-a-bubble-infographic/
Inside this report is an incredible statistic: Twitter revenues average $0.50 per user, Facebook averages $4.00 and Groupon averages $16 per user.
This reinforces that transaction based operations – like Groupon – offer much more upside than ones driven by advertising revenues alone. Yes, I’d love to have 700 million x $4 as is the case with Facebook, but very few online sites actually achieve mass market acceptance of any magnitude, let alone what Facebook has achieved.
The Internet is an ever changing medium and therefore to stay on top, you really need to develop a concept / business which takes advantage of all the medium has to offer … and produces good transaction flow.
The three things that have to be brought together by whoever is going to succeed (be the next big thing) in the future are:
#1: A Targeted Social Media Strategy
- The current demand for staying in touch with friends, etc as Facebook provides will remain. However, there can be a clutter element involved in this which diminishes its value – e.g. if you have 1,000 friends, do you really have the time to sit down and read every posting they make?
- Segmentation and hence the ability to target communications – is therefore going to become vital, particularly if you are using the social media platform for business. Google have recognized this by incorporating the Circles facility into Google+.
#2: A Targeted Mobile Strategy
- This is the killer channel as almost everyone has a cell phone – and to a lesser extent a Tablet – and it goes with them everywhere. (In Asia, many consumers have more than one cell and / or a dual sim card cell).
- Provided correct opt in procedures are pursued, SMS offers a much better communication channel than email or social networks as consumers typically do not disregard SMS messages.
- This allows a business owner to target special offers to consumers via their cell when close to their store / business. This is already happening and will grow in demand.
- The key is OPT-IN … and ensuring the consumer is not paying for SMS receipt (unlike those scammy promotions which require you to pay $2.50 per SMS message).
- Integration with a social media platform provides a mechanism for the consumer to manage the opt-in process … and if it can be managed at the time of receipt of an unwanted SMS, even better. Google have a running start here with their Android platform.
#3: Quality Content Which Drives Transaction Flow
- Specifically, more content which touches peoples (or businesses) everyday needs as opposed to information.
- The focus will be on savings which can be achieved in real life – similar to what Groupon delivers.
- This focus can be applied to either consumer or business needs.
- There will be a transaction involved or else the business is most likely going to be unsustainable.
Ideally, Google, Facebook and other social media groups will continue to serve as facilitators / service providers only – i.e. they learn from the AOL experience and do not become content owners / developers.
Google is already well advanced in bringing together an “integrated” technology-based platform for business owners now that they have released Google+.
There’s no reason why Facebook cannot add similar facilities to Google+ Circles plus work with cell phone companies to provide mobile phone integration and emulate Google+.
This brings us back to content – the vital 3rd element mentioned above.
Once the technologies are all in place, the real driver – for transaction revenue – will become content.
Attention will therefore swing back to that and THE NEW INTERNET DARLINGS OF THE FUTURE WILL BE CONTENT COMPANIES – people of a similar ilk to Groupon, Zynga, travel sites, etc – who have a real product and are not driven by advertising revenues and hence having to compete against groups such as Google and Facebook. We will see some iterations in between, but this is where things will – and MUST – go.
Most importantly, they will be companies who etch themselves into our lives along similar lines to what Amazon and eBay have achieved – yes, they are both Internet companies although they are viewed now as much mainstream as Internet operations.
There are still lots of content areas open for a fresh approach.
And the best way to identify them is to go back and look at what worked best in the heydays of direct marketing. Some of those operations commanded up to 40% market penetration. They weren’t info products for those of you who go back as far as I do … and they were NOT FREE!
(Groupon has hit the mark well with 15+ million transactions … with a concept which has been around for ever and a day. That beats 150 million free subscribers to a social network every day of the week for me. The underlying question with Groupon though is whether their business model is sustainable which, personally, I don’t think it is.)
At some point, the Internet world has to come back to reality with valuations based on earnings rather than hype which drives valuations to 30, 40, or 50+ times revenues. It doesn’t make sense under normal economic conditions – and even less sense in a world where whole countries (and states) are experiencing severe economic problems.
When reality sets in, companies who have strong transaction / revenue flow will be the big winners.
I am looking forward to seeing how Google+ in particular evolves because I can see the potential it offers for business owners to perform target marketing. Of course, I also hope Facebook responds to the Google+ challenge in this area and continues to flourish as vibrant social media platforms are going to be an important part of the marketing mix for a very long time.
It’s important to keep these services in perspective …
Social media services is purely a platform – and whilst they can generate cash in terms of royalties (from games) and advertising revenue, their biggest contribution will be connecting individuals and businesses, including the companies who will become contenders for being called THE NEXT BIG THING!
What do you think?