In its brief history, Social Media, as called New Media, has traditionally been viewed as a spot to generally meet new friends, reconnect with old friends and interact in an online social environment. Simply speaking, social networks were “an awesome place to hang out” but held little applicability beyond that. There’s been no shortage of funding in Silicon Valley for firms launching new media platforms. With the emergence of sites like MySpace, Facebook and Twitter, there’s no question that there is value in the vast levels of informative data on people these platforms have been able to get; however, there’s been no clear monetization strategy beyond bringing in advertising revenue. Arguments have been risen regarding true value of the firms; some would claim that their valuations are inflated and artificial, while other declare that the value of their databases alone are enough to justify multi-billion dollar price tags.
The New Value of Social Media and The Social Media Firm
Recently social media marketing has spawned a fresh value proposition, that is the business enterprise applicability of the vast user-bases these social networks have created. Regardless which side of the valuation fence you sit on, it can be said that social media marketing holds vast utility for businesses buying a new method to touch base to customers and engage in two-way communications. It has never been done before from a traditional marketing, advertising or public relations perspective, and has given rise to a fresh business model: The Social Media Firm. This brings forth the argument of if The Social Media Firm is an excellent investment. Social media Strategy CA Is The Social Media Firm a fad that’ll die out in the coming years, or is this a long-term, sustainable industry that’ll one-day drive obsolescence to the traditional methods of advertising, public relations and marketing?
Given their state of the existing economy, Venture Capital and angel funding sources have been keeping their portfolio dollars close with their chest, reserving investment only to businesses with a good operating history, solid revenue streams and unlimited growth potential. Does the Social Media Firm belong to this category? My answer is yes. The bottom line is: social media marketing isn’t going anywhere. Social networking has turned into a staple of the lives of younger generations, and the fastest growing adopters of new media are people over age 30. Because the recognition of the business enterprise potential that social networks holds, large Fortune 500 firms are devoting a great portion of their marketing budgets to social networks and new media campaigns. For example, Pepsi has devoted $20 Million of their marketing budget for a cultural media program called Pepsi refresh, and many large firms are beginning to follow suit. Obviously, the earning possibility of The New Media Firm is substantial.
Is it sustainable?
As stated earlier, new media isn’t going anywhere. For probably the most part it has turned into a standard part of the Internet experience just like email. The sites which can be considered the gorillas in social media marketing may churn; however, there can be something new to which these Internet-based communities will migrate. For instance, the social media marketing migration to-date has gone from MySpace to Facebook to Twitter, and the next major shift and/or addition to this massive online social sphere is probable just across the corner. The long-term sustainability of The Social Media Firm is essentially influenced by these companies’ability to identify and pre-empt the next big shift, and to develop effective methods of leveraging both the old and new platforms for the sake of driving revenue, profitability, sales volume and identity with their clients.
Why Outsource to The Social Media Firm?
One question that will arise is: why would large companies hire a cultural media agency when they have the monetary resources to complete it in-house? The clear answer to this is the simple fact that it’s cheaper to outsource a fresh media campaign to a firm that has an experienced team already in place that is intimately acquainted with navigating the complex world of new media. In the exact same manner that large companies hire advertising agencies to create traditional media campaigns, this process can and will be studied for new media. By hiring The New Media Firm companies can eliminate both the administrative burden that comes with hiring a variety of new employees, as well as the learning curve that’ll inevitably be present when trying to integrate those employees to their corporate culture. It is less expensive, in both monetary and administrative respects, to outsource these campaigns to professional teams which can be fully adept at leveraging the potential of modern media, navigating the codes of conduct of the online communities and staying in front of the curve in regards to identifying the exploiting the latest new media trends.
To sum up, I actually do feel that investment in The Social Media Firm holds great possibility of many funds; however, it’s imperative that when vetting these agencies, Venture Capitalists and Angels need to ensure that the company contains the proper personnel and management team to completely exploit this budding industry. The ditch is high in one-man shops and so-called social media marketing experts which can be only victims of the recession who are actually adept at Facebook or Twitter. It is imperative that the architects of new media campaigns are acquainted with the intricate information on new media, and the vast variety of assets that exist online to for a company to take full benefit of the social media marketing world. Using the lesser known social media marketing outlets such as Digg, BrightKite, hi5, Xanga and countless others could be the difference between a full-scale robust campaign that shows real results, and an ineffective and unorganized attempt at new media that wastes marketing dollars.
As a result of infancy of the industry, you will find few companies on the market that truly learn how to unlock the value of new media for business. The one’s that do will begin to rise to the top, and if sufficient due diligence is completed, these companies are ripe for investment. A strategic infusion of capital is probable the boost needed to take these companies from the sustainable cash-flow business to another industry giant with A-list clientele.