Social Media has had a terrific ride for the past several years, but the days of easy growth are gone. In fact, the days of easy anything in social are behind us. For many brands, 2013 will be a year of social media disappointment.
With so many consumers spending so much time in social media and expecting so much of brands, our investments in social will continue to grow, but that does not mean our results will grow, at least in easily measurable ways. Certainly, all of our brands will earn more fans, see more comments and collect more retweets, but we all know this is no longer enough--our bosses want to know the business results we are delivering, and fans simply are not a business benchmark.
Success in 2013, more than ever, will be measured in difficult metrics and not easy ones, and increasingly, it will come not just from the Marketing department but from every corner of the enterprise. To succeed in 2013 and beyond, organizations must recognize how social media is altering the way we live, work and conduct business and not just the way we kill time on Facebook.
Here is where (I believe) social will grow and where it will stumble and stagnate in 2013:
Stagnate: Number of Social Media Users: Social networking has seen explosive growth in the past decade, but that is ending. It has to, since the point of saturation is nearing. In 2005, just eight percent of US online adults participated in social networking; by 2008, that number had grown to 35%; and today it is 69%. The slowing growth in new users will, for a moment, feed the doubts of some senior executives (who are part of the 50-to-64 crowd of which little over half use social media) that social media is more distraction than it is imperative. This attitude would be wrong, of course, which is why we need to focus not on users but...
Grow: Social Media Usage: The growth in the number of users may slow, but the way users adopt social media into their lives will not. Nielsen/NM Incite tells us that total time spent on social media in the U.S. across PCs and mobile devices increased 37% to 121 billion minutes (230,060 years!) in July 2012, compared to 88 billion in July 2011. People may be multitasking more than ever--40% of us use our phone or tablet while watching TV--but that does not mean that social media's growth is not coming at the expense of other media consumption activities...
Grow: Social and Digital Media Pushes Aside Other Media: Especially in younger demographics, media consumption habits are shifting considerably and show no signs of stopping. comScore data demonstrates that the time spent with web-based email by 18-to-24 year olds declined 34% in the last year and nearly 50% since 2010. Even TV viewership is being affected; the 18-to-24 group watched a weekly average of 22 hours and 32 minutes of traditional TV in Q2 2012, about 1 hour and 45 minutes less than they did the year before. Meanwhile, although online video viewing is still eclipsed by TV, it is growing rapidly; the 18-to-24 folks watched one hour and 45 minutes of online video per week in 2012, a 75% increase in a single year. As for print, it continues to shrink--as Newsweek publishes its final print edition, it is time to consider what it means that Americans now spend more time staring at mobile screens than magazines and newspapers.
Grow: Second-Tier Social Networks (But Who Cares?) Growth of the "big three" social networks is slowing (Facebook and LinkedIn had no growth in desktop visitors in the past year and Twitter's growth was just 13%), but sites like Pinterest, Google+ and Tumblr are still collecting new visitors. If you are in one of the few industries that has a clear strategic interest in social networks such as these, that is good news, but most brands should greet this news with nothing more than casual interest. Within most industry verticals, there are few scalable use cases and precious few case studies for marketing programs on Pinterest, Google+ and Tumblr. (For example, I recently researched what success financial services firms are having on Pinterest and found none.) Unless something notable changes in 2013, I see little reason to do anything more than experiment on these second-tier social networks.
Grow: Mobile Social Media (and Mobile Everything Else): It is no secret that mobile adoption continues to explode, and along with it so does social media usage. The big three social networks may have seen little to no growth in visitors from PCs in the past 12 months, but all three have experienced growth of 85% to 140% in visitors from mobile apps and mobile web sites in the same period. In addition, while Foursquare has not been quite as talkable in 2012 as in prior years, it is still experiencing triple-digit annual growth of its mobile app. (Many of you may be surprised to learn that, as of July of this year, Foursquare's mobile app had a larger audience than either Google+ or Pinterest.) In fact, despite privacy concerns around checking in, comScore found that one-third of smartphone users have shared their location with a retailer. All of this points to more SoLoMo marketing and service in 2013, and that means brands with physical locations have to continue to not simply have a local presence in social networks but drive more meaningful local engagement.
Stagnate: Earned Media on Facebook: Getting people to pay attention to your brand on Facebook will get harder without opening your pocketbook. The issue, believe it or not, is not with Facebook--it's your brand. What makes your brand interesting, engaging and shareable? Why would your brand earn enough EdgeRank with people to be as worthwhile as their own friends? While Mark Cuban may complain, what is it that we expect Facebook to do about it? As marketers, we may want EdgeRank tweaked to show more brands in users' news feeds, but as users, does that sound appealing? (How often have you or one of your friends said, "You know, I just want to see more brands and less friends in my news feed"?) Brands must continue to maintain a presence on Facebook because our customers expect it, but increasingly attention will shift to paid media (or, more appropriately, to how paid, earned and owned media work together.) Of course, opening your pocketbook and buying media is hardly a guarantee of success on Facebook...
Grow (But the Jury Remains Out): Paid Media on Facebook: While some studies have shown Facebook advertising can be effective, many marketers are still struggling to measure it. In a recent Ad Age study, one-third of marketers either did not know or said Facebook is not useful in building purchase intent, and over half felt it was only somewhat useful. Moreover, advertising success on Facebook may be harder to achieve as the year progresses--with modest user growth, little ability (or willingness) to increase ad presence on the platform and more marketers increasing their budgets, Facebook ad prices will rise. Success will require ever more complex targeting and measurement, such as retargeting, CRM targeting by email address or phone number, View Tags, improved first-party data collection and segmentation and custom segmentation from third-party providers to reach influencers on Facebook. There is a cottage industry exploding to help marketers spend their Facebook budget more effectively--check out the long list of Facebook advertising partners--and 2013 will be the year to start separating the wheat from the chaff.
Grow (in Fits and Starts): Big Data: I have seen many year-end predictions that 2013 will be the year that social helps "Big Data" succeed. I do not believe it, not because I doubt the promise of Big Data but because it seems apparent the road to Big Data success will be a long one. The current hype and optimism for Big Data reminds me of the exuberance we saw for ERP (Enterprise Resource Planning) in recent decades, but success with ERP implementations has come slowly and with many failures. Even now, twenty years after Gartner coined the term "ERP," we still see high-profile ERP failures that cost hundreds of millions of dollars. Big Data is not a system you merely switch on and see results; it will take time, care, investment, and incremental improvement to turn petabytes of data into useful knowledge that drives business success.
Shrink: Bad Social Media Research: Increasingly, when I speak to peers within the discipline of social media, I am hearing frustration about the amount of bad research being shared. Blogs, podcasts and YouTube may have democratized the mass broadcast of information, but they also opened the door to every Tom, Dick and Harry to misreport, misinterpret or misrepresent data. We continue to see ridiculous "what is the value of a fan" studies and blog posts, even though it has been long evident that fans are a means to an end and not the end itself. Having 4.5 million fans did not prevent Dippin' Dots from declaring bankruptcy, nor did Best Buy's 6.5 million fans (and its widely praised Twelpforce Twitter program) prevent the company from being one of the worst stock performers of 2012, losing more than 50% of its value. From analysis that confuses cause and effect to studies that rely on the self-awareness of consumers to biased surveys, there is an astounding amount of bad information being disseminated. I sense social media professionals are growing tired of it, and I think this is the year where we see gravitation toward fewer information sources that we trust. This may be more wish than prediction on my part, but if you join me, we can make it happen!
Growing: Consumer Expectations of Social Customer Service: Increasingly, the reason to be in social media (to paraphrase John F. Kennedy) is not because of what your fans can do for you but what you can do for your fans. Social media is becoming a customer service channel of choice for many customers. Almost one in five consumers have used social media at least once in the last year to obtain a customer service response. Not only are the number of customers expecting service in social media rising, so are their expectations: One recent study found that 42% of consumers who post a service request to a brand via social media expect a response within 60 minutes, and 57% expect the same response time at night and on weekends as during normal business hours. Unsurprisingly, the stakes continue to rise for brands; an American Express study found that consumers tell an average of 15 people about positive experiences – up 67% from last year--and tell an average of 24 people about poor experiences – up 50% from 2011. Given this data, it is baffling to see a company like Charter Communications announce it is disbanding its social media customer service team and shuttering its customer service profiles in social media. A Charter representative stated, “We believe speaking directly with a customer is a more personal, effective and consistent way to answer questions," which demonstrates both an astounding lack of understanding of social media and a remarkable arrogance in believing that companies have the power to decide which service channels customers prefer. My prediction: All brands will be beefing up customer service in social media in 2013, and Charter will be back furnishing service via Twitter and Facebook before long.
Exploding: Social Business: Almost everything I have included in this blog post thus far is the appetizer to this, the main course: Social business models may still be nascent, but they are exploding at a spectacular rate. As I have written in 2012, social is not just changing the way we communicate but the way we conduct business. The evolution of the Web followed a similar path over the past 15 years--the Internet altered not just the way we gather information but the way we make product decisions (search, ratings and reviews), purchase items (ecommerce) and use products (digital downloads, ebooks, streaming video, digital photos, etc.) Social media is already doing the same thing to certain industries, and I expect 2013 will be the year more companies take notice:
P2P Lending: Midway through 2012, Lending Club and Prosper, the two leading peer-to-peer (P2P) loan services, surpassed $1 billion of loans issued since their founding. Lending Club, the larger of the two, issued $88 million in loans in November 2012, an increase of 200% over its November 2011 volume, and--in a sign of how P2P models will soon challenge traditional banking--the firm recently added Larry Summers, former World Bank VP and US Treasury Secretary, to its board of directors.
Car sharing continues to grow, albeit more slowly than P2P lending; Zipcar's stock was battered after its last quarterly report announced it "only" had year-to-year membership growth of 21%. Meanwhile, virtually all the major car manufacturers and car rental agencies are making their own investments in car sharing models, including General Motors, Ford, Toyota, Enterprise and Hertz. We Americans love our cars, so change here will come slow and steady. Don't expect a "hockey stick" moment for car sharing in 2013, just more growth that chips away at traditional car ownership habits.
Space sharing: Airbnb continues its rapid growth, allowing people to rent out homes and rooms to others. In June, the company announced the number of guest nights booked had grown from 5 million to 10 million in less than six months, and recently CEO Brian Chesky was quoted saying that by the end of 2012, Airbnb would be filling more room nights than Hilton Hotels. Meanwhile, mobile continues to be a huge growth driver, with 26% of Airbnb’s overall traffic coming from mobile devices (compared to only 12% last year) and downloads of its iOS app increasing 80% over the past three months.
Other Collaborative Consumption Models: Social business does not stop at cash loans, autos and places to sleep. A great deal of experimentation is underway, including P2P parking, home-cooked meals, chores, free stuff, home goods and rides. Sure, these businesses are small, but ecommerce in 2000 was less than one percent of total US retail; twelve years later ecommerce accounts for five percent, a small percentage of retail in the US but more than enough to knock former giants like Kodak and Borders into bankruptcy. What will happen as these P2P business models continue to grow and chip away at existing business models? In 2013, watch for larger numbers of traditional companies to increase their experimentation and investments to hedge their bets for the future growth of social business.
Do you think my forecasts for 2013 are correct or all washed up? I would welcome your dialog--both criticism and agreement--in the comments below or on Twitter (where my handle is @augieray.)