Why social media is like the fashion industry and what's next for the world of marcoms!

Ten years ago I ran an online advertising agency in Dublin. We used to have a saying which used to make us chortle as we poked fun at the digitally uninitiated...."if you don't think that email is the new fax then go ahead and telex us about it"

Gosh weren't we witty!

Now of course we're twitty,,,,,, and facebooky and stumbledupon and "dug" and to poke someone can have several different meanings instead of one.

Business cards now face real estate issues as good old fashioned addresses and phone numbers make room for email addresses, urls, skype addresses, mobile numbers, twitter handles, linkedin labels and more.

Many would say social media has to start experiencing consolidation and we can't possibly keep up with the explosion of new digital media brands adding more and more buzzwords to the mountain of destinations available - there's a list of around 400 or so I have been perusing while researching this piece

The other $240m* question hanging over Social Media is monetisation - how on earth are all these fab new online media properties going to make a return on their investment for shareholders?

We hear from a recent piece of Sapient Research that over 40% of UK marketers don't invest in social media because of a lack of understanding.

We also hear Facebook revenues are now projecting $230m for 09 (emarketer.com) but against this achievement there is still a burn rate of$20million per month (techcrunch.com)

Yes it's certainly all happening in the fast moving world of social media but I suspect, unlike other media trends we have encountered throughout the digital story to date, and at risk of sounding dangerously tabloid....a new dynamic has arisen: the blistering pace of adoption.

Quick recap (because of our shortening attention spans)

• Murdoch - Myspace
• Google - Youtube
• AOL - Bebo
• *Microsoft invests 240m for 1.6% stake in Facebook valuing the brand at 15billion
• The world goes mad and Ashton Kutcher becomes (@aplusk) the world's first "million follower man" on Twitter.

Where now?

• Traditional media owners experiencing severe declines in advertising revenue
• Digital continues to grow - now worth 23billion in the states
• 220m now visit Facebook each month - not much wrong with that Mr Zuckerberg.
• Emarketer.com tell us they expect 50% of all UK internet users to be social media users by 2013 and it's not necessarily the domain of the young. SM transcends all barriers, demographics and suchlike.

Where to?

I thought Plaxo was a terrific idea and now I suddenly realised that I haven't had an email, a reminder, or even a postcard from these guys for a few years. Is it me?

According to Nielsen Wire over 60% of Twitter users fail to return the following month after signing up to the service compared to 70% retention of MySpace and Facebook users - so what's going on?

Life is faster, and media is fashion

Firstly I believe we are seeing an accelerated life cycle for digital media brands. The catalysts are competition, apathy and improving platforms or devices. Media changes as fast as fashion. Think about this - most teenagers have never worn a watch and think email is for their parents. If they want to know the time they check out their phone and if they want to communicate they are more likely to resort to Instant Messenger or tweet - isn't it weird how a technology such as IM is reminiscent of Morse code. Or is it?

Marshall McLuhan (Laws of Media 1988 - published posthumously) summarised his ideas about media in a concise tetrad of media effects - the tetrad being a way to measure or question the effects of a medium on society by way of the following four questions

1. What does the medium enhance?
2. What does the medium make obsolete?
3. What does the medium retrieve that had been obsolesced earlier?
4. What does the medium flip into when pushed to extremes?

We can see where social media fits by trying to answer the above questions:

• Enhancement - social media clearly intensifies one's use of the Internet
• Obsolescence - social media reduces the importance of the printed word and disrupts "official" media such as radio, television etc.
• Retrieval - social media restores written communication between people in way reminiscent of pen pals and postcards
• Reversal - what will happen to social media sites like Facebook when pushed to extremes?? Will it become (say) a television channel? Maybe that's the real $240m question!

While the tetrad supports the adoption of social media as a medium in its own right, it doesn't warn of the accelerated pace of adoption which we are now seeing with each new "next big thing".

This represents a growing nightmare for investors and industry stakeholders as they learn to grapple not only with emerging technologies but also with new media being spat at them at a seemingly unstoppable rate. Bear in mind I only found 400 social media sites - there are probably another 1000 in planning!

So are we to expect a defined life cycle for digital media brands - yes I believe so. This however does not mean the publisher is defunct. Rumours of their demise will be rife based on their future investment strategy - and THIS is no exaggeration.

Consider the games industry - look how quickly they have to renew and upgrade titles and how much buzz is now created by the seemingly increased frequency of new model releases (wii, PS etc.) Clearly the games sector realise that time is a thief and I believe the traditional media industry is coming to the same realisation.

You can no longer sit on your laurels with one great title. It's an era of constant reinvention and continuous investment in media brands to innovate, attract talent, retain audiences and then migrate them to new platforms or risking boring them to death.

Google became the biggest media company in the world after six years in business. Facebook is only 5.

The Irish Times was 150 the other day (congrats lads).

What if media becomes faster than fashion?

It's hard to measure speeds in a business which moves as fast as ours but imagine a world when media is faster than that other great icon.....music.

Picture your agencies struggling to get their heads around this week's Top 40 - the forty most popular online destinations for your brand to reach their target audience. Having to explain to your client that what you did last week is fundamentally different the following week and then having to explain why "sites" that you dropped from the schedule two weeks ago and are now back on top again. Maybe not such a crazy vision after all but measuring this and creating tools and processes around this furiously paced mania may become the focus of the media agencies of the future.

Specialists will thrive on social media

Stakeholder relationships are as fundamental to the future success of media owners as they have been in the past. I refer to their relationship with readers, or viewers and advertisers. To date social media has focussed on the largely populated groups - music fans, friends, tech heads and so on. The more social media developed, the more specialised it will become. It will drill its way through every special interest group that exists providing real alternatives to trade magazines, newsletters and other specialist old media.

Geography will play a key role too. The first big examples of social media have shown the power of "the globally connected". Now the power of "the locally dependent" will surely come into the fore threatening the survival of regional press, local radio and so on if......and here's a big "if".....the specialists and landlords of these relationships do NOT invest for the future and start to think about securing the promised new lands of digital rather than observing the death throes of traditional.

Fashion, tetrads, and even the Top 40 - what impact will this have on the agencies charged with the delivery of audience for their client brands in a future landscape ruled by the many rather than the few....

What will agencies look like?

Laura Desmond, ceo of Starcom Mediavest was quoted in the FT recently. She believes the industry is heading into a 50/50 world in which half of revenues are digital or interactive. I recall this easily as I was quickly reminded of the oldest adage in our business - half the money we spend on advertising etc. etc.

But how will agencies respond to the massive changes brought about by social media, the fashionable acceleration of new media brands and the potential for even faster times ahead. Firstly I don't think the answer lies in the past - agencies would hire a direct marketing expert if this was required or a sales promotion expert if clients expected same. This is not something solved by throwing people at the problem. It requires a change of mindset and structure. It requires investment for the future in a new kind of business model based on performance, analytics and skills. In fact everything will change with possibly the exception of "creative" oh, and that will probably change too! Here are three guesses:

Performance

Agencies and account teams will become deal makers and traders. Some would say they are already there. Their ROI measured by sales and the level of risk they are prepared to undertake on behalf of the client who will ultimately become their business partners in the real sense of the word. Awards will be made based on accountability and ROI - creative will continue to win business and lack of performance will continue to lose business - the key difference will be the move towards greater shares of risk and greater rewards.

Ubiquity and speed

Agencies will adopt a ubiquitous approach to sales (advertising) campaigns. The key watchword will be "data" and the in-house analysts will work hand in hand with creative ensuring they understand the most effective ways to reach fast moving audiences with fast moving media. Only then will be decisions about media plans come into play and the speed at which these can be coordinated between client and agency will have a significant bearing on the campaign's success. Whether or not the agency has the specialist skills or not isn't really the chief concern as the clients will be increasingly focussed on results rather than method.

Flatter and finer

Winning agencies will boast a combination of knowledge (data and technology) and experience. They will have to adopt a fresh approach to seniority as undoubtedly they will have to rely on people young enough to understand where the buzz exists, number crunchers who can prove the data question and with technologists prepared to learn about advertising.

A final thought springs to mind.....if an ad exec designed a smart phone or a computer terminal what would it look like?