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Is a social media bubble ready to burst?

Is a social media bubble ready to burst? Michael Estrin

Right up front I should say that I think I'm suffering from bubble fatigue. I entered the workforce just before the dotcom bubble went bust. Since then, it seems as though bubbles have dominated much of my adult life. If I'm not hearing about a bubble that just burst, I'm wondering if we're in the middle of some bubble that's about to burst. And yet for all this talk of bubbles, there seems to be no talk of a bubble for bubbles.

I mention this because I was a little wary when an editor at iMedia asked me to write about the possibility of a social media bubble. In March, Umair Haque had written a blog post in the Harvard Business Review hypothesizing that we were indeed in the middle of a social media bubble. (Depending on your definition, blogs can be considered social media, but that irony wasn't mentioned in the post.)

At first, I thought Haque's argument was rather silly. After all, in May Nielsen reported that three out of four U.S. households with internet access logged on to social networks. But as I began reading, I couldn't stop thinking about my Facebook page, and Haque's argument that social networks offered a lot of rather "thin" relationships.

A year ago, I couldn't get enough of Facebook. I referred to it as my morning Facebook, as in my morning paper. It was the first site I checked every day, and it was a pretty awesome news report on the people I cared about most. But then something changed. I'm not sure when or why, but the more interesting people in my social network stopped posting as often. Real life friends, who overlapped but had their own social networks, made similar observations around the same time.

Increasingly, the interesting updates were replaced with a growing stream of cryptic -- and at times -- nonsensical messages. Sadly, that trend has continued. I still check Facebook, but when I do, I wonder why I bother. The value of Facebook -- for me anyway -- has gone down over the last year. And that's what got me thinking that Haque might have a point, or at the very least, that his argument was worth exploring with some of the people who live and work inside that so-called social media bubble.

While many people had their own conclusions about whether there is indeed a social media bubble (it was more or less a 50/50 split), just the mere mention of the bubble prompted some rather interesting -- and candid -- responses. I'll leave you to draw your own conclusion about whether we're truly in a bubble (and if you're feeling really social, by all means share those conclusions with the class in the comments section). For now, I'd like to share some of the responses to Haque's post, as I believe they highlight some of the more interesting issues currently facing social media.

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Millennials wanted
Here's a sign there might be a bubble. While the economy is still weak and job prospects for recent college grads aren't what they once were, there's a lot of opportunity out there for millennials with social media savvy.

I see this all the time. On a regular basis, I get pitches from PR folks who are just dying to put me in touch with a "young genius" at an agency they represent. Invariably, that "genius," "guru," or "ninja" has taken over that agency's social media division by reinventing the wheel. These gurus are everywhere, even at a time when companies are said to be 100 percent sober when it comes to hiring decisions. In other words, there's a feeling that something irrational is going on in the labor market for social media specialists.

"The quality of the social media workforce is a direct reflection on the hiring managers, who in many cases have no idea what skills are needed for this emerging role," says Angela Connor, social media manager at Capstrat. "When the role isn't clearly understood or well-defined, hiring mistakes are unavoidable. There's a growing list of people with titles like social media strategist who have never developed any kinds of strategies in their entire career. They know enough about social media to talk themselves into a position that has no real objectives or success metrics and three months in, everyone is miserable."

According to Connor, a big part of what's driving social media to staff up with a less-than-qualified workforce is the misguided belief that millennials are somehow social media ninjas by birth. The result, Connor says, is that agencies and brands place more responsibility in the hands of their interns than they should.

But Connor isn't fully convinced that blind faith in millennials means there's a bubble. Or, at least, she's not fully convinced that the bubble will burst with devastating effect. According to Connor, the first generation of social media workers (those who began working in the field when nobody was talking about social media) are moving up in the world, and that's a good thing. "If these individuals stay true to what they know, maintain a high-level view of both social media and its potential, and continue to be students of the craft, they will set the bar high and make a real difference," Connor says.

I've stepped in deeper puddles
In simple terms, a bubble just means that we overvalue something. Sometimes that thing we overvalue has no real value at all, and sometimes it's wonderfully valuable and a victim of too much hype. It's the latter that probably best describes the way we presently view social media relationships, if indeed there's a bubble at all. That is, those relationships do matter, but probably not as much as we think. Or, put another way, we value them with a universally high appraisal while failing to dig deeper and realize that not all social media relationships are 1) the same and 2) worth very much.

"Social media is amazing for starting relationships and sufficient at basic relationships maintenance," says Mario Schulzke, senior director, digital strategy, at WONGDOODY. "The problem is that people only have a finite amount of time. And many people are now investing that time to a) establish a large number of relationships and then b) maintaining those at a pretty shallow level."

While Schulzke's point is easily applied to interpersonal relationships, it has important implications for advertisers as well. For one thing, charting the social graph (something Facebook prides itself on) isn't going to be a very effective tool for leveraging word-of-mouth if those mouths aren't as connected as advertisers hope. But when it comes to valuing a brand's friends, there's only a bubble if the brand (or its agency) makes it so, says Jonathan Richman, director of social media at Bridge Worldwide.

"While social media 'relationships' may not have the same level of connection as real-life relationships, they aren't necessarily less valuable, but rather differently valuable," says Richman, who argues that brands are right to assign an economic value to those relationships so long as they don't overpay.

In other words, there's only a bubble if a brand pays too much for its friends. Which means the question of a bubble depends on ROI.

Or, is it really about friends at all?
Friend has become almost synonymous with social media -- and a comparison of the online phenomenon of friending to the real world equivalent often drives some critics to say brands are overvaluing their "friends." But Lori Dicker, CEO of Karma Media Labs, says it's our vocabulary, not our friends, that is failing us here.

"The increase in social channels enables more people to connect with others who have similar interests, knowledge, or passions," Dicker explains. "Because of the increase in opportunities for people to engage, we see more engagement. [Haque] calls this 'relationship inflation,' and says relationships are cheapened, [but] ultimately the relationships are about sharing, and social media provides a conduit for people to connect."

For Dicker, it's not about creating friendships so much as dialogue. So even the notion of measuring the ROI for a brand based on the total number of friends misses the point. Rather, she says, the goal is a robust dialogue between brand and consumer.

If there were a bubble, how would we know?
While it's impossible to tell if you're in a bubble, the idea of looking at the sheer number of "thin" friendships struck Chris Ebbesen, strategy director for imc2, as particularly odd. For Ebbesen, social media mirrors our everyday relationships with one key difference -- it gives us an extremely efficient way to manage and stay in contact with casual acquaintances.
"[Haque] says that social media is producing too many thin relationships," Ebbesen explains. "[But] I theorize that [social media] has only made them quantifiable for the first time. You always had a bunch of thin relationships in life, but they were intangible and out of sight, thus out of mind."

In fact, according to Jim Spinello, SVP for digital services and youth culture at rEvolution, the strength or weakness of a relationship isn't created by social media at all. "The viscosity of the relationship is derived from a formula of trusted sources and mutual interests," Spinello says. "These are easily weeded out or nourished on the web via social media."

In other words, the blowhard I see at every fifth gathering my girlfriend takes me to doesn't mean any more or less to me because we're now "friends" on Facebook. We're casual acquaintances in real life, and we're casual acquaintances on Facebook, too. In the real world, we'd never make plans to hang out independently, and on Facebook, we likely wouldn't either. But on Facebook, there's one key difference: We're more likely to organize around a shared passion because I can choose to get more information on him than I'd likely glean from a quick chat every two months. Of course, there's also the distinct possibility that I'd find his posts annoying, in which case I'd "hide" his updates and put him in a kind of digital penalty box for casual acquaintances.

The P word
Here's an evergreen headline: "Facebook's new privacy policy upsets users." I've written that headline (or some close approximation of it) numerous times in my career. And recently when Facebook got slammed (again!) for its new privacy policy, I thought it was Beacon all over again. And it basically was -- to a degree. Users were upset. The media cried foul. Privacy advocates talked about how the sky was falling. Advertisers expressed their concerns. A few people closed their Facebook accounts (or said they would), and quite a few more joined Facebook groups expressing their outrage at the cumbersome and difficult-to-use new privacy settings. But in the end, it was much ado about nothing.

But for Patrick Godfrey, founder and managing partner at Godfrey Q and Partners, the privacy debate misses the point slightly.

"Monetizing social networking requires exploiting information that people regard as private," Godfrey says. "The [recent] Facebook privacy blowup wasn't about privacy, per se. It was about money. And Facebook's ability to monetize their 400-plus million connections is in direct opposition to users' desires to remain private."

Does that mean that Facebook might one day have a Pets.com moment? Probably not. But it's worth pointing out that even now, in 2010, many Facebook users are just discovering that the social network's business model involves -- wait for it -- advertising based heavily on information gleaned from their profiles. True, the only shock there is that anyone at all is actually shocked by that revelation. But shocked they are. And with virtually everyone in the U.S. using some form of social networking, it's hard believe that the future of the medium won't somehow be shaped government regulation. And if you don't believe government regulation will have a dramatic impact on the way advertisers conduct messaging in social media, just ask an email marketer out to lunch.

If there's one universal response to the question of a social media bubble, it's been this: "It depends on how you're using social media."

Today, most brands are using social media. But use is a pretty low hurdle to jump. After all, having a Facebook page -- even if nobody monitors it -- is considered a use of social media. My sense is that there are a lot of brands that are doing just that. That is, they've created a Facebook page in response to a meeting where the terms social media and strategy were smashed together so many times that the marketing team came out talking gibberish and everyone else in the company got a clear message: Drink the social media Kool-Aid or don't bother coming in tomorrow.

For brands that pay lip service to social media and expect earth-shattering results, there most certainly will be a day of reckoning. And that day will come when there's a consensus that social media hasn't moved the needle. Of course, in all likelihood, those brands won't say, "Our social media efforts failed to move the needle." They'll just blame social media altogether. For those brands, there probably is a social media bubble. Or, more correctly, from an industry perspective there are lots of little social media bubbles out there. Whether they all pop at once, and to what extent those brands will own their mistakes, will determine whether that "bubble" bursts all over everyone else. And then the question will be: Will the brands that were making good use of social media overreact, or will they remember that the bubble question really does depend on how you use social media? 

Michael Estrin is a freelance writer.

On Twitter? Follow iMedia Connection at @iMediaTweet.

Michael Estrin is freelance writer. He contributes regularly to iMedia, Bankrate.com, and California Lawyer Magazine. But you can also find his byline across the Web (and sometimes in print) at Digiday, Fast...

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to leave comments.

Commenter: Jacob Zuteck

2011, July 27

I think I agree with the bubble. I think that soon people will start boycotting these outlets because they are starting to get made fun of, as seen in the latest Toyota ad. However, I wonder if business will be able to separate itself, for example, a company that I've been designing a website for has started integrating their http://www.exacthire.com/recruiting_software.htm">applicant tracking software package with Facebook. Trying to determine the kind of person that they are interviewing and potentially hiring. It has become a tool that they seem almost dependent on, and I can't see how they can separate from that once they have it established.

Commenter: Bryan Coe

2010, July 09

Interesting post, but the real question lies in how you use social media. If you think it's the end all of communication and marketing. The "bubble" will probably burst. But, if you understand that it is a new effective way to communicate and get exposure for your company and add it to your toolbox, then it can be very powerful.

Ignoring it all together can be a dangerous thing. Missing an opportunity to take advantage of the power of new tool could leave you behind put you at a dissadvantage compared to your competitors.

Commenter: Erick Pettersen

2010, July 09

Just as the physiological properties of a water bubble, as well as the geological conditions surrounding that bubble, make it inevitable that that bubble will burst, so it is with economic/social bubbles. If you look at bubbles we've had in the recent past, they're defined by 1.) Who's put in charge of maintaining them. 2.) How they are maintained. 3.) People's reactions to those bubbles.

With that said, the life of social media, or at least its importance to businesses, will be determined by who's left in charge of companies social media efforts. If businesses continue to put people straight out of college in charge of their social media, there will be a social media bubble. People in their early 20s have primarily been self-taught to use social media. I am sure many universities have social media marketing classes. Though, since social media is so new, and it always changing, it is difficult to teach. For that reason, people rely on personal experience to teach them. A person straight out of college, who has little social media experience beyond keeping in touch with people they already know or using it for a popularity contests, are the worst people to put in charge of a social media marketing campaign.

As to the public's reaction to social media, people are starting to form groups based on location and interest. Niche social media will become more and more popular because people still want to use social media to develop personal connections.

So, is there a social media bubble? If young people, straight out of college, who have learned to use social media as nothing more than a barometer of popularity, continue to be left in charge of it, then yes. If people with the experience to realize that social media must be used to develop new connections that form into lasting relationships (social retention), then no.


Commenter: Dana Webster

2010, July 07

I ended-up as one of those people with the fancy title, but I am far from what you would call an expert. The understanding of the importance of monitoring what is being said about the brand is here, but the brand is still being held-up by the FDA. It will be very interesting to see what happens when all comes to fruition.

Almost every commercial on TV now says, "Visit us on Facebook at......". I have "Liked" some Facebook pages for companies, but I rarely read their posts.

Social Media has been a Godsend today. I'm very outspoken about being a cancer survivor. Getting cancer after the birth of my second child was pivotal in my life. My cousin, 36 this Saturday, has been diagnosed with esophageal cancer, a hard-to-treat form of cancer. Social Media has allowed me to network rapidly to find the names of specialists across the country.

I don't care about where you ate lunch on FourSquare, but tangible advice that could save the life of a new father is worth cutting through the fluff for me today.

For the record, I call myself a Social Media Student. I have a lot to learn and am far from having expertise.

Commenter: Richard Meyer

2010, July 06

BRAVO ! I cannot say enough about how spot on this piece is and I have added some excepts to my BLOG giving credit to the author.

Social media does not make up for bad marketing nor does it make sense for a lot of brands. Here in CA I often see ads for social media interns which to me shows how clueless these companies really are. I mean do you want an intern to be the brand's voice and contact ?

Too many bad marketers out there using social media as a hail Mary pass and it shows. Well written I salute you sir


Commenter: Michael Estrin

2010, July 06

Thanks everyone for your comments and for keeping this article *social.* Really nice to return from a holiday weekend and have comments galore.

Commenter: Bill Grunau

2010, July 06

Great blog post Michael and THANK YOU for being bold enough to call out the self annointed social media gurus and self declared ninjas. I agree most have very little real experience and are basing their advice on the last few years they have been involved in business.

I agree there is a social media bubble developing if for no other reason than the fact that corp marketing ignored it until very recently, now there is a mad rush to catch, be "first" (fyi too late for that guys), and be the best. This is going to induce a pendulum effect where it will swing from nearly zero investment to dramatic over investment. The result of the over investment will be too much money spent with hyper-inflated expectations, followed by disappointment, which will be followed by "I told you so" and budget cuts... resulting in a bubble.

Great post Michael, I could not agree more!
Bill Grunau

Commenter: Katheryn Starr

2010, July 06

Perhaps a look at the bubble of bubbles may be a more interesting study. I was an early adopter of facebook and by the time I had found my long lost very best friend from the second grade that I hadn't seen in, well, a long time, I was back to a cup of tea in the morning foregoing the facebook wake-up. Generally, when we see the decline of a technology, we are seeing it replaced with something else. From computers for online activity to our mobile device, from the original social network nightmare of myspace to facebook, many predicted that twitter would replace facebook because of its rapid increase of tweeters. However, twitter does not offer the same easy access to many of the features that loyal facebookers log on for. With some of the recent updates of being able 'to like' a product or article (like this one), right from the page, I suspect this will re-engage many users as we have seen that social opinions for purchasing have overtaken other sources of information years ago. The bubble may have not burst, it just may have broken away from the magic wand floating to a new direction.

Commenter: Marv Dorner

2010, July 02

Just comparing it to a "normal" business cycle of introduction, growth, maturity and decline I would say social networking hasn't even gotten out of the Growth stage.

Facebook, Twitter and LinkedIn are adding uses like crazy and other competitors are still trying to make a dent. The fact that companies are basing their entire business model on one or more of the big sites indicates that we are reaching a maturity stage with many years to come.

So no, in my opinion we aren't in danger of a bubble bursting on the social media front.

Commenter: Julio Hernandez-Miyares

2010, July 02

For me - 1 out of the millions of Facebook users, I too followed the same patterns you mentioned - my morning newspaper (after the NY Times of course). Well, I just got sick of the syrupy stuff from my friends. Most of my facebook friends are either real friends or business friends. Could not take one more baby picture or "Honey I love you , you are the greatest wife or husband" or similar nonsense which is not nonsense but part of life except I realized I don'r need to be so much a part of it for all those I consider friends.
I do spend a lot of time on LinkedIn as at least there is an obvious decorum based on it's professional thrust.

Commenter: Bud Layne

2010, July 02

It seems that anything that generates a high level of excitement will go through a natural 'cycle' of usefulness. The Internet is a classic example.

Phase 1 (the Birth) is an idea and acceptance by early adopters. The 'buzz' generated is based on the perceived value of the idea.

Phase 2 (the Storm) is widespread usage and the 'feeding frenzy'. The idea gains much wider acceptance, the number of users increases wildly. Other imagineers get on board with ways to expand the use of the idea and capitalize on it. This phase will begin the 'bubble' effect and may last a short time or a few years. The duration of the bubble may be attributed to the number of bad ideas that are implemented - the larger the number of bad ideas, the shorter the duration of the bubble.

There is usually a cycling of peaks and valleys in the bubble period much like the stock market. What makes it hard to predict is that the good ideas send the value higher, and the bad ideas send it lower. Consumers grow weary of the bad ideas, because they have wasted resources - time or money.

Phase 3 (the Norm) is settling period or period of adjustment. If there have been a large number of good ideas, followed closely by the bad ideas, then you might get the 'burst' effect of the bubble. If there was a real value in the idea in the first place, then it will eventually regain momentum - the cycle starts again.

Social Media is a fairly young phenomenon. Because of technology and the use of the Internet these phases, or cycles, are becoming shorter and shorter.

This seems to be the way a capitalistic economy works. We get the bad with the good. Hopefully in the end, the good will have outweighed the bad - and we're better off for it.