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Facebook, Bebo, Linkedin … what’s the big deal? If markets are conversations, social networks are the biggest markets around. Here’s how (and why) to get involved, without getting in the way. Plus the birth of Bebo, brewing social alcohol and the history of social networking

Facebook, Bebo, LinkedIn … what’s the big deal? If markets are conversations, social networks are the biggest markets around. Here’s how (and why) to get involved, without getting in the way

2007 was the year of the social network. Those niche online communities finally merged into the mainstream as you and I and everyone we know signed up with a social networking site.

But it started a long time before last year. Since the Internet began, people have used bulletin boards and the like to communicate. The arrival of the web and email opened online communities in the 1990s, and the mid-2000s saw a dizzying array of options for communication, self-expression … and the odd bit of vampire biting.

It’s big business, too. News Limited’s purchase of MySpace in 2005 for a jaw-dropping US$580 million shocked the business community and put social networking into the spotlight. Microsoft’s payout of $240 million for just 1.6 percent of Facebook was another jolt. What’s the big deal? And what do social networks mean for businesses that aren’t global behemoths?

For marketing

Most businesses, whether they sell to other businesses or straight to the consumer, strongly benefit from networking and word of mouth. Social media puts these normal behaviour patterns on steroids. Heavy influencers in the past may have simply spread the word among a few hundred people—now they can reach thousands through blogs, Facebook accounts, online videos and podcasts.

But be warned: social media is not a place to conduct one-way advertising blitzes. It’s a conversational medium, and its users expect to have conversations with real people. Many of them feel possessive about their corner of the web, whether it’s their social networking profile or a community they’re part of, and they resent intrusive advertising. You can’t buy influence in social media—only earn it. And if you don’t earn your spot you can do more harm than good (see Gena Tuffery’s column on page 94).

How do you do it right? Acknowledge your customers’ desire to co-create their own experiences. For instance, Coca-Cola conducted the Virtual Thirst competition, an attempt to engage with residents of Second Life. The competition sought a design for a virtual vending machine. Since Second Life avatars can’t drink Coke, what experience should a virtual vending machine provide?

The competition was an outstanding success, not because of the (undisclosed) number of entries, but because it helped Coke move beyond simply blasting a message to connecting with the Second Life community. And when some bloggers criticised parts of the campaign, Coke’s VP of marketing, Michael Donnelly, put his answer on YouTube. That’s a gutsy thing for the world’s largest brand to do. Will it pay off? It’s hard to tell, but Donnelly is thinking long-term, seeing this as the beginning of many forays into extending Coke’s brand and experience into new spaces.

On a smaller scale, local businesses are discovering the power of social media to spread the word. Christchurch entrepreneur Louise de Lore used her Facebook profile and clubbing community Biggie.co.nz to promote her pole-dancing studio and bar. “I started posting on the Biggie forums about my grand opening,” says de Lore. “Then other people started taking the information and placing it in other forums that I didn’t even know existed.”

After only a month of promotion using social networks, de Lore exceeded her targets for bookings a week before opening. “So social networks work even for us small folks,” she says.

Magazine layout

Cartoon by Adrian Maidment

For colleagues

For ten years multinational companies have used intranets to connect their staff and provide a single source of relevant information. Sadly many remain the equivalent of a filing cabinet, holding much useful information that is rarely consulted.

Some corporates have literally taken a page out of Facebook, giving employees an individual profile and letting them take control of the information they use. Microsoft has introduced ‘Academy Mobile’, which distributes information to Microsoft employees worldwide as audio podcasts.

For market research

With thousands of people publicly stating their product or brand preferences on their profiles, companies have access to a wealth of data. Global market research firm GMI is using specialised applications in Facebook to enable survey panellists to complete surveys in a familiar environment—their own Facebook page.

There are also a range of do-it-yourself or ‘white label’ social networks for companies to gather their own online community, such as Ning.com and Kickapps.com. These tools are often offered free of charge (supported by advertising) so anyone has the ability to start their own community.

But market research is also changing, becoming—like everything else—more conversational. Qualitative data is available in spadefuls on blogs, particularly if you’re in high-tech industries.

Market research can learn a lot from the public relations practice of media monitoring, where PR firms monitor news media for mentions of their clients. Media monitoring is super easy on the Internet. You can use search tools like Google Blogsearch or Technorati to track your own brand, competitors’ brands, or a generic product category. The beauty of social networks, and the larger blogosphere, is that people get really specific.

Of course, you can combine monitoring with actively marketing your product by starting a conversation with the bloggers you monitor. Proceed with care and respect, get to know what they want, and be helpful if you can.

Making time

Networking the old-fashioned way was relatively easy to manage. If you were in a networking meeting, you networked. If you weren’t, there wasn’t anyone to network with, so you did something else—like work.

Now you can network every waking hour. Reading and commenting on blogs, leaving voice comments on podcasts, posting messages to your social network profile, micro-blogging on Twitter—these all have the potential to take up more time than you could ever have.

It’s a spectrum. At one end is efficiency and order. Here you’re completely on top of your timetable, getting everything done and experiencing absolutely no innovation.

At the other end of the spectrum is innovation and experimentation. This is where groundbreaking new ideas come from, unexpected connections are made, and sudden breakthroughs happen. This is a good place to be—some of the time.

The key is to tailor your social networking activity to your personality, technical ability and most importantly your purpose. Do you want to make new business contacts? Find out the latest developments in a particular field? Break into a new market? Build a reputation as an expert? Start by finding like-minded individuals and learn how they’ve done it.

Some people can handle more technology than others. Find your personal comfort zone and experiment within that. For some, that means exploring every new toy that becomes available and assessing it’s potential. For others, that means finding a few proven tools and sticking to them.

Keeping secrets

Some people fret that they might inadvertently reveal too much information about themselves online. On the flip side, though, is the credibility issue. As a rule, people in social networks expect to deal with people, not brands.

The answer is simple: decide early on how much you want to reveal about yourself. It’s entirely possible to remain friendly and accessible while hiding your age, gender, political views or deep, dark secrets.

Keeping control

Perhaps the biggest issue facing businesses that want to engage in social media and online communities is the potential loss of control. It’s scary, particularly if you’re a middle manager, squeezed between a boss demanding return on investment and a community demanding genuine interaction.

Unfortunately, there’s no easy answer. The smart companies are embracing the lack of control, letting their customers have more say in not just marketing but areas like product development and long-term strategy. It makes sense, but old habits are hard to break.

Treating technofear

Maybe there’s a tweaking gene, I don’t know, but technology should always be a bridge, not a barrier. If it is becoming a barrier, check out some of the easy-to-understand videos explaining social media at Common Craft.

It’s just another fad

Oh no it’s not. Social networking and social media are just two expressions of a fundamental change in our culture, one that’s been going on since the ’Net was cast.

It’s a societal transformation that’s affecting everything. Marketers are talking about co-creation of value and service-dominant logic. The psychology profession is talking about client-directed therapy. Theologians are talking about open source theology. Economists are coining terms like ‘wikinomics’, referring to the products of mass collaboration.

What’s behind all these changes? The line between producer and consumer is blurring. Everyone’s a potential producer; everyone’s a potential consumer. Social networking is just one of the many symptoms of this. It’s staying. Get used to it.

Social networking timeline

5000 BC

According to the 11th chapter of Genesis, God confuses the languages of the human race. You could say we’ve been trying to get back together ever since

1960s

The Internet is invented, apparently by Al Gore

1978

The first Internet bulletin board is launched

1996

Classmates.com launches to reunite old school friends. The site continues today

1997

SixDegrees, the first social networking site as we would recognise it now, is launched. It closed down at the end of 2000

1999

Two ethnic social networks, BlackPlanet.com and AsianAve.com, are launched. They’re still networking today

2001

Photo-sharing and social networking site Ringo.com is launched. It is later sold by the founders to careers website Monster. Business networking site Ryze launches

2002

Friendster launches, perhaps the first well-known major online social network. It is considered the top of the bunch until eclipsed by MySpace in early 2004

2003

MySpace and Bebo launch, as does business networking site LinkedIn. Social networking also gets musical with the launch of music-comparison service Last.fm 

2004

Facebook launches, initially restricted to college students in the US. R.E.M. uses MySpace to launch their album Around the Sun. Photo-sharing site Flickr launches. Niche social networking starts to get silly with the arrival of Dogster and Catster

2005

Facebook extends to high school students. Social networking gets audio-visual with the launch of YouTube. Yahoo buys Flickr; Rupert Murdoch’s News Corporation purchases MySpace for US$580 million

2006

Facebook opens up to the world, and becomes a media darling overnight. Microblogging service Twitter launches

2008

‘The year of the social network.’ Social networking dominates technology news and speculations for the coming year. Will News Corp buy LinkedIn? Will Google’s OpenSocial platform beat Facebook? Will Bebo sell? What will Microsoft do in this area?

It’s an exciting game. You could sit back and watch, or you could join in the fun