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.
Conclusion
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.
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