Tag Archives: media bubble

Another Thread on the Bursting Media Bubble

Another post in reply to Venkat, and his comment on this thread.

Let’s start breaking this down a little to see if we can find the core.

1. Marketing is all about facilitating an exchange of value. If I can convince you of the value of my offering, we’ll make an exchange.

2. The “convincing” part of marketing can take all manner of forms, from soft requests and artful commercials to hard requests and even expertly constructed situations (economic, social, physical ) where you have, or perceive yourself to have, little alternative but to engage in exchange. (e.g. I need a smoke; I need a memory card compatible with this device.)

3. Each party in an exchange of value, at least in most cultures, is motivated to seek an advantage. I want you to pay more, you want to pay less, and there are many opportunities on both sides to try and game the exchange.

4. Our economy system is hardwired from top to bottom to drive growth. We could have a separate argument over whether this is a fundamental human drive, but clearly the economic drive is wired into our system at the most fundamental levels.

Okay. So, why did I choose those points to make? If you go back to earlier days of history–let’s take medieval England for example–the means of production for any product you were likely to buy, were very close to the marketplace where they were bought and sold. Supply was generally limited. Anyone who was selling in the marketplace was overwhelmingly likely to be known by reputation to the community. You had far fewer alternatives for what you could buy, but you knew pretty well going into the exchange what the playing field was.

As technology enabled producers to create ~more~, it also enabled them to create the means to transport to new markets, or gain new raw materials–for example, the ships that allowed English traders to connect with Dutch markets. The further the market from the production source, the less likely consumers were to know the reputation of the manufacturer. So brands became increasingly important proxies for reputation. And as the remote markets became larger, the need grew to create technology to be a proxy for putting up your stall and shouting your wares. First it was printing that allowed you to push your ad into the hands of people you might never meet, then increasingly efficient mechanisms to reach more and more people.

What I’m interested in is how the relationship between businesses and buyers changed with this growth, how it was enabled by technology, and how it impacts the social fabric of day to day life.

My thesis is that the relationship between businesses and buyers is fundamental, and goes back to the earliest days of social life on earth, accelerating with the division of labor. I have something you need, and vice versa. It’s a fundamental social contract at the very core of human life. But the further technology took us in pursuit of growth, the more imbalanced the contract became, due only, I expect, to the inherent expense of technology–especially in its early phases. Since only businesses, governments, institutions could afford the cost of production, advertising, transportation, they had a massively asymmetrical advantage over consumers. Since, as stated above, there’s an inherent motive to maximize the exchange in your own favor, and an equally inherent motive to grow, businesses have used that advantage (better than governments and institutions) to progressively create the machinery to make the exchange of value ever more efficient–turning consumers effectively into a fungible commodity. To put it bluntly, consumers have become little more than disposable batteries for business. And if you spend enough time in the machinery of modern corporate marketing, you can appreciate how masterfully this machinery can work. In its best incarnations, there is real value and joy on the part of the consumer (Apple products, for example), but make no mistake that the machinery is tuned to maximize the efficiency of converting customers into cash. I’m not putting moral judgment on it, I’m simply saying that’s what we’ve created.

The next part of my thesis is that social media is little more than a signifier that something in this equation has fundamentally changed. Social media is not the cause, it’s the reflection of a cause far deeper than most people realize. And there’s an interesting irony at the heart of it. Because of business’s fundamental drive to grow, they’ve sought and developed new markets for some of the very technology that lent them so much power. They’ve increasingly made computers, communications, production and transportation technology cheaper, more powerful, easier to use for ordinary consumers–not out of the goodness of their hearts, but because there were huge profits to be made doing so. But as soon as consumers got the means of connecting and communicating on a massive scale, the inherent advantage businesses owned began to unravel.

It’s an important part of my thesis that what we’re experiencing is not ~new~, we’re simply seeing the balance of power between buyer and seller shift back to a more level state. Rather than be influenced by your marketing, I can compare notes with other consumers. Rather than have only one option for a product, I now have access to many sources from other places.

So part of my tentative conclusion is that businesses adopting social media as just another new means of influencing customers will not be productive, because the real shift is much deeper than just an adoption of technology. Human beings have been chaffing under the assymetrical power that businesses have used to turn them into disposable batteries, and social media is simply a reflection of how powerful that tide has become once the means to unleash it emerge. This isn’t idle speculation–we’re seeing some of the biggest industries of our lifetime buckle under a new reality where consumers have greater choice, greater access to knowledge, and a growing realization of the opportunities to flex their power. And I think one big part of the equation is also a new realization of the depth of meaning available in the interaction with a broader social group. Look at how many people are thinking more deeply about who they are, even if only for the purpose of creating a Facebook profile, or finding a voice on a blog. Again, I think this is a very real phenomenological shift, not just a surface trend of Web 2.0.

So against that backdrop, my point is that businesses need to have a deeper understanding of what’s really shifting in the marketplace. The “Magnificent Machinery” of turning customers into cash is being challenged. Businesses need to look carefully at the inherent mindset of “acquiring” “targets” with their sales “force”, and start understanding how their markets are becoming more like real communities, where businesses need to find a role that adds real value for consumers.

Let me say really clearly that this isn’t fuzzy humanistic and wishful thinking. I think there is a fundamental need for business to create products that people both need and want. I think there is a fundamental need for businesses to advocate on their own behalf, and to develop core competencies and ultimately new products based on a vision and not just a servile response to market requests. But they need to understand that the old asymmetry that allowed so much power over consumers is eroding, and eroding quickly.

The Bursting Media Bubble: Is this the death of Public Relations?

I wrote in my last post about an emerging trend we’re seeing at SocialRep: prospects are telling us they’re adjusting their marketing budgets by shifting money from Public Relations to Social Media Marketing. This is a touchy subject to discuss in public; the tension between PR and Social Media professionals has been percolating for a long time. Many of the same PR pros who dismissed the significance of social media now claim to be the natural heirs to corporate social media communications, while many social media pundits see PR as entirely antithetical to authentic market dialog. Unfortunately, client-side marketers are now getting caught in the cross-fire, not sure who to trust or what programs to explore.

Having been a PR executive before leaving the industry in 2005 to launch a social media venture, I see both sides of the argument. The PR industry bears enormous responsibility for the kind of mercenary marketing and message manipulation that consumers have embraced social media to defeat. Those PR practitioners who see social media as just another new vehicle to cynically drive market influence—even while embracing a veneer of authenticity—should be continually and publicly exposed. But PR practitioners who built their agencies on the belief that effective communications and advocacy are built on a foundation of meaningful relationships and market knowledge have a lot of expertise and value to offer. The trouble is, even for good PR agencies, their DNA is fundamentally mismatched to the reality of Social Media, and even the purest intentions can’t overcome that fact if the challenge isn’t understood.

The argument about why PR is so mismatched for social media is not a discussion about the ethics of PR or its practices, which I touched on in my last post, but a discussion about the nature of media and how it’s changed. To tell that story, I’ll poach a few slides from one of my SocialRep presentations.

The most important thing to understand about social media is that it isn’t new. The technology that enables it in our wired world is certainly new, but the dynamics of social media are as old as trade itself. If you look at the history of business over thousands of years, word-of-mouth has always been the dominant form of commercial influence. It’s Darwinian. If you’re about to spend your hard-earned money on a product and you don’t want to get cheated, who will you trust to tell you the true value of the product you want to buy: the person selling it, or someone else who’s already bought one? You gain a huge survival advantage as a consumer any time you can find a third party without a vested interest to validate the value of things you want to buy.

But as populations grew, as manufacturing and transportation capabilities exploded, businesses began to reach far beyond the host communities where they were known by their neighbors, and reputations were abstracted into brands. New technologies for communicating to ever larger audiences enabled businesses to tell their brand stories in print, in packaging, on radio and eventually television. But the mode of communication was overwhelmingly asymmetrical. Since the technology for communication was enormously expensive, control was highly centralized in the hands of a few power brokers—the owners of printing presses, publishing houses, radio stations and television networks. These technologies had the power to flood a market with highly choreographed messages, while word-of-mouth only traveled point-to-point within localized community networks of families and friends. This gave rise to what I call the Media Bubble—a temporary imbalance in the flow of communication arising from the early expense of emerging technology, placing control in the hands of those who could afford it.

The Media Bubble arose because the expense of early mass communications technology ensured that it was controlled by the few that could afford it.

The Media Bubble arose because the expense of early mass communications technology ensured it was controlled by the few that could afford it.

This media bubble has been our reality for generations. All of the institutions that govern our lives, particularly business institutions, have evolved to make optimal use of this bubble—to leverage the asymmetrical control of a message that can be directed to flood a market. Think about it. Advertising is not organized as a function for connecting with customers. Advertising is organized to maintain relationships with media owners to purchase space within the stream of media that has the subscribing audience we want to reach. Public relations is not organized as a function for connecting with customers either. Public relations is organized to maintain relationships with the reporters and analysts who develop the content that goes into the stream of media that has the subscribing audience we want to reach. In both cases, our business functions are not about connecting with customers directly, but about connecting with the power brokers that control the stream of media that reaches the customers. It’s efficient, as long as that paradigm holds.

But now the media bubble is bursting. And it’s not a mystery why.

Within the media bubble, the media message is a one-way broadcast of information that floods a market of media subscribers. Corporate functions like PR and Advertising evolved to insert their message into the stream of media, or to influence its content.

As we all know from experience, as technology evolves it tends to get cheaper. Companies find ways to innovate production in order to compete for customers on price. Companies also strive to grow markets for their products to expand volume and profits. In that way, industry has inevitably worked to make the expensive communications technologies available to a wider audience at ever decreasing prices—telephones in every home, then televisions, then computers, and internet access, and mobile phones. In what some may find a poetic irony, the very institutions that enjoyed the power of controlling media couldn’t help themselves but to follow the profit motive and sell the components of power to an ever larger market of consumers. The Internet was the tipping point, when consumers and a new wave of businesses that served them assembled the pieces of a massive platform that enabled the rebirth of word-of-mouth communications on a scale that could directly challenge the primacy of corporate-controlled media.

As mass communications technology has evolved, industry developed cheaper components that could be sold profitably to the masses, which eventually made possible the massive social communications platform that allows word-of-mouth media to challenge the primacy of corporate-controlled media.

This is the world we are seeing emerge. It’s not that social media is new, even though the technology that enables it is indeed new. It’s that a media bubble that arose from the expense of communications technology is finally being challenged by an equal and opposite force of democratized communication. Social media represents a return to a broader balance of media control, a world in which consumers challenge the neatly packaged messages of marketers by validating the professed value of products with other consumers before they buy. In this environment, consumers create content that challenges the supremacy of mainstream media—in the early stages by simply writing their own reviews of products on blogs or forums, but then organizing to create their own media properties to gain subscribers based on content more tightly tuned to special interests. As these new media properties emerge, they compete for audience and revenue, undermining the business models and revenue streams of established media companies, and the media market begins to fragment.

Of course, we’re already watching this play out. The effect is what I think of as a fundamental shift from what we used to think of as market segments, often defined by the media through which members of the segment self-reference, to networked customer communities, defined by their interests through which media emerges.

In a world of social media, corporate and media interests are no longer able to asymmetrically control the media and messages. Instead, media is more fragmented and specialized, forcing corporate interests to find a way to play a meaningful role within the customer communities they serve in order to be successful.

So what does this all have to do with PR? Remember how I said the problem for PR is that their DNA is fundamentally mismatched to social media? PR is organized for the old paradigm—to influence the power brokers that control media. Their fundamental DNA is about influencing the influencers, about cultivating relationships with power brokers, not about developing dialog with consumers. Even as many PR companies try to embrace social media, they still see it through the prism of influencing the influencers rather than connecting with consumers. The challenge is not that this is inherently wrong—if as a business you can influence the influencers, that’s an efficient way to advocate on your own behalf. The challenge is that consumers, even while socially wired to follow influencers, are drawn to social media precisely because of its power to defuse the influence of influencers—to continually look behind the veil of influence and expose any inconvenient truths. Influencers will still emerge, but counterveiling truths will also emerge, and rapidly, which means businesses that only focus on trying to develop and influence the influencers will miss the more sustainable advantage of connecting authentically with consumers and playing a valued role in customer communities.

What PR is missing in its DNA is a fundamental drive to connect with customers. To listen, to learn, to play a meaningful role within a customer community. And that’s the litmus test for client-side marketers looking for someone to help them understand social media. The question isn’t how is this partner going to help me drive my message into the market to attract customers, but how is this partner going to help me develop meaningful relationships, and a meaningful role, within the customer communities that define my market. That’s not impossible for a PR company to do, but for most that I see pushing themselves forward as social media experts today, it’s still a big stretch because they don’t see the fundamental shift in the media paradigm.

At this point, I’ll say quite clearly that I think there is tremendous value PR and corporate communications can offer to the emerging practice of social media marketing. But delivering that value will require a substantial shift in philosophy that defines most PR firms. I’ll save that for my next post.