Remember last month when a rise of "oh noes!" went up over projections showing that social network ad spending would be down in '09? (Epsilon and eMarketer) Well, just give it a few days for the bean counters to dig up some concomitant good news, it looks like the money that's being pulled from advertising is being put into content development for social initiatives (12/08 study by Junta42 as reported in MediaPost).
Now, this won't exactly be great news for the social networks right off the bat because they're still looking for a revenue model. However, overall I see it as extremely positive because it means that marketers are starting to grok that they can't just buy their way into the social dialog with ads, but have to contribute actual value (in the form of content).
From the social network provider's point of view, I bet this will end up benefiting them greatly as well, because it will stimulate further product development designed to assist companies in participating profitably. As the companies start coming in to participate, the smart players will watch them carefully to see what they do and what works for them.
From those observations should come new and innovative features from the networks. The really valuable features may require a paid upgrade, but the fee becomes the basis for ROI calculations. Critics are already moaning over Facebook's clumsy attempt to do this with its Application Verification program (a measly $375/year) but you see where this is going?
As the companies participate in the conversation and content creation model, which social media is all about, their participation will help evolve the model in a direction that will help the industry move forward to figure out how to make money and feed the need users have to be social at the same time.
And to the extent the social interaction model downplays value-light advertising in favor of value-heavy content, I think this is a good thing!From a personal standpoint I see this move towards content creation as important for another reason, which is that marketers who have to create content end up understanding their product and customers a whole lot better; they become better marketers in the process. Here's to hoping for a win-win and maybe even a full-full.
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