I spend a fair bit of time puncturing organisations’ belief in The Facebook Fairy. This is the belief that having ‘conversations’ and ‘engagement’ with a handful of your customers or consumers is a sensible thing to do because The Facebook Fairy will sprinkle some magic dust such that this ‘engagement’ will spread to all of your customers or consumers who also happen to be on Facebook. (Note: this doesn’t mean that you shouldn’t have conversations with your consumers in Facebook – just not the type of conversations that are predicated on creating a business benefit via the ability to spread a small conversation to lots of people).
I have also been critical of Facebook’s long-term viability because its’ business model is based on the idea that it is a form of media, when in fact it is an infrastructure (or even a form of behaviour). However, until this point I had never really questioned its utility as an advertising platform, albeit a platform that would never be able to fulfil the revenue expectations its current valuation suggests. But then I read this piece by Doc Searls and also the article by Michael Wolff that Searls’ references. The Michael Wolff piece is a withering exposure of the viability of the ad-supported web, largely based on research into the decreasing effectiveness of on-line advertising, whereas Doc Searls’ piece probes more deeply into the idea that advertising decreases in effectiveness as it becomes more targeted and personal – important given that increased personalisation is assumed to be the on-line salvation of advertising. He cites two posts by Don Marti looking at the phenomenon. Marti says in one of these pieces:
The more targeted that advertising is, the less effective that it is. Internet technology can be more efficient at targeting, but the closer it gets to perfectly tracking users, the less profitable it has to become.
The profits are in advertising that informs, entertains, or creates a spectacle—because that’s what sends a signal. Targeting is a dead end. Maybe “Do Not Track” will save online advertising from itself.
Marti also suggests that the value of advertising lies in the fact that it is, well – advertising: something that puts a single message in front of lots of people. Its value as a statement – a signal as Marti puts it – derives from its scale and lack of personalisation. Or to put it another way, not only does The Facebook Fairy of network influence not exist, neither does the Facebook Fairy Godmother of on-line advertising.
This idea that advertising only really works as a way of talking to lots of people seems to make eminent sense. I am always telling people to recognise that traditional media and social media are different – what works in one doesn’t work in the other. Social media really only works when you are dealing with small groups of people - therefore, as a business – you need to create a benefit other than that which is derived from reaching a significant proportion of your audience. You can’t rely on the Facebook Fairy to spread your Facebook activity across the Facebook world, as though it were a media platform or channel. These benefits have to be based on the ability to consult with, or respond to, your audience (something which an ad cannot do) and this response has to be based around what people are doing (behaviour) not who they are or what channels they are using.
This brings us onto the second part of Doc Searl’s piece. His contention is that the role for organisations that wish to perform some sort of intermediary between individual consumers, or between institutions and consumers, lies in the area of Vendor Relationship Management (VRM). This is the idea that the business opportunity lies in providing customers or consumers with the tools and data they need to manage their relationships with brands / organisations: basically a reversal of the current approach where value is assumed to lie in the ability for brands to hold the data in order to control the consumer relationship. It is an approach supported by Sir Tim Himself. VRM is indeed a fascinating subject – but I am not yet convinced this is the way to go. While it is almost certain that one of the principal shifts inherent in ‘The Social Media Revolution’ is the ability for individuals (consumers or citizens) to connect with each other to either manage, or by-pass, their relationships with institutions (governments or business), this doesn’t necessarily mean that the response from institutions should be to co-opt, or even support, this process.
Rather than become involved in the business of helping consumers connect with each other, I think business has to start from a recognition that consumers have, or will become, connected and deal with the challenges and opportunities that this presents. Increasingly I think the real ‘paradigm shift’ businesses need to take is making the break from thinking about channels, tools and messages (and to a large extent VRM is still a channel / tool based approach) and think instead about identifying and responding to behaviours (see these recent posts in response to Altimeter’s Dynamic Customer Journey and also digital influence).