Social Networking: What it Means for Business and What the Future Holds

Recently, I was part of an interesting panel discussion on what social networking means for business and what the future holds. This panel was part of the Harvard Business School’s African American Alumni Associations Annual Leadership Summit and included Kevin Colleran from Facebook, Laela Sturdy from YouTube/Google, Julitte Powell, entrepreneur and author of 33 Million People in the Room, and myself as panelists. We covered a lot of territory in the 90 minutes we had to interact with each other and those who attended the session. Here are a few of the more interesting issues that we discussed.

How to start: No one has to be convinced that social networks are important channels, but no one really feels confident that they know how to engage with them. Big brands across the board fear what Leala coined the “dark side” of social networks: not so much what happens when people get on social networks and say bad stuff about your brand but what happens when “rouge” employees get on and do dumb stuff that reflects poorly on the brand (e.g. Dominos and the recent incident re food handling that made its way around You Tube). The consensus is that these media aren’t going away, so having a proactive strategy around mobilizing social media and organizational accountability and ownership is essential. There was also a lot of discussion that “starting” isn’t always a brand’s decision. We did a quick search on FB and Twitter of a few of the big brands in the room without a “formal” strategy around social, only to discover lots of defacto fan pages, and tweets about them. And someone reminded us that the Coca Cola FB fan page was actually started by a couple of kids - and not by Coca Cola, and had thousands of fans before Coca Cola devised a strategy to essentially support and empower the existing “owners” and fans of the site rather than build a new presence. Kevin also made a great point about the merits of starting small and focused in order to drive critical mass. He reminded us that Facebook’s launch strategy was one college campus at a time, building success and creating demand before turning on the next site.

Who's in control, organizationally: There were some interesting questions about who should own social network initiatives and whether that should be outsourced or done internally. This was a very interesting discussion, especially since there were a fair number of agency peeps in the audience. I think that we ended up agreeing that letting tactics drive strategy is a big mistake (although everyone said that was sort of the practice today), and disconnecting social from business strategy is fatal. Consensus is that business strategy should drive social strategy which in turns drives tactical execution, and that social strategy is an emerging discipline that will live outside creative media shops. The group also agreed on the importance of having one touchpoint in the organization who can act as social coordinator, gatekeeper, enabler and integrator who can help to create a consistent and efficient social presence (e.g. one fan page that does a bunch of things rather than a zillion that fragment and dilute the brand’s social presence).

Search versus social: A very senior executive from a media enterprise asked whether social will replace search. Interesting discussion. I think that where we ended up is that they’re different animals. Search is a demand fulfillment activity .. I want a treadmill and I need to know where to buy one, and Social is a demand generator … I see that my friend saw a cool movie and I might like to now go and see it too. So, at least until social commerce becomes more of a dominant activity on networks with applications that enable those sorts of search and find buying opportunities, they are both needed.

Monetizing social: That was actually the topic that I was asked to comment about, and it ended up being a great discussion both among the panelists and around the room. I started by giving a few ways now that people are using social to ring the cash register. Meetup.com uses online channels to actually drive offline (usually sponsored) “meet ups” about just about anything that you can imagine from social networks (~16,300 meet up groups across the country) to Scottish terriers (~390 meet up groups). Estee Lauder just launched a totally clever campaign designed to bring people into their cosmetic counters for a free makeover and profile photo shot for their FB/MySpace profile page. There is one catch, the photo has the EL logos in the backdrop, but three huge big payoffs: great looking profile pic, make-up sales (who wont buy at least one of the makeup items), and viral promotion (people who check out new made-over profile pics will be motivated to run right out to their local department store for a makeover and photo session of their own). Leala showed us the YouTube campaign around Carl Jrs. New Portabella mushroom burger which is designed to drive sales by demonstrating what a great and affordable product it is and engagement around a UG contest for new commercial content around people enjoying the burger. But while all of these are intended to drive sales, none of them provide an online, in network mechanism for directly doing so.

I talked about some of the emerging, still fledgling concepts that are out there designed to more directly tie commerce to social (Zappo’s alpha version of Plurchase which when tried failed to notify my friend that I was online and shopping –big whoops, Whiseo which is an online group gifting application, Fondalo which is a “mob buying” wish list aggregator of items that they then source deals for and getta! which is still in stealth mode, but is a potentially path-breaking social commerce app linked to large online properties and social networks). I think that we agreed that this is where the future of commerce will end up on social networks, but it is still a green field.

Had the next session not been lining up outside the door to take over our spot, I think we could have talked for 90 more minutes. Social is clearly on the minds of executives who see it as an efficient way to extend the reach of their brand, and who are now trying to make it work harder as an enabler of revenue and profit. 2009 was the year of experimenting on social networks, 2010 is the year to make it actually ring the register.

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