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John D. Rockefeller famously saw the Wall Street crash coming and got his money out when the shoeshine boy started giving him stock tips. So what does it mean for the Next New Thing in social media when your parents-in-law start telling you about Twitter?
For one thing, any self-respecting digital trendspotter will have started looking elsewhere at least a year ago. But the more important point for brands is how quickly these social media innovations are moving from the margins to the mainstream. As author and teacher Clay Shirky notes, it's only when technology gets boring—that's to say, routine for the majority, not just the Geekosphere—that it gets interesting.
Twitter is already becoming one of the first places people look for breaking news, often by eyewitnesses, on everything from plane crashes to earthquakes to, sadly, school shootings. It's also the place companies look when trying to monitor not just run-of-the-mill customer opinions ("wow walmart super center employees are rude!") but real-time feedback on their own breaking news stories.
For instance, Domino's Pizza (DPZ) recently used Twitter to engage directly with people spreading the news about a YouTube video that showed employees adding, shall we say, nonstandard ingredients to the food. By responding to the scale and intensity of the customer mood, Domino's averted what could have been a major PR disaster.
Twitter is also becoming an alternative starting point for real-time, social Web searches. Would you rather find a good Indian restaurant trawling Google (GOOG) results based on years' worth of reviews and links (probably polluted by commercial firms using SEO tactics to game the system), or via a recommendation from someone you know who ate there last night, or possibly even a few minutes ago?
Interestingly, Google has just added user-generated voting, like the social news site Digg, where individuals can promote or remove link results depending on how useful they are.
What's next? Imagine a combination of Digg, Twitter, Wikipedia, and consumer review sites like Trip Advisor mashed together into a user-generated decision-making tool that helps you answer any question from "Which laptop should I buy?" to "What color should I paint my nails?"
Where Twitter prompts users with the question "What are you doing?", startup Hunch, from Flickr co-founder Caterina Fake, filters out the miscellaneous conversational buzz. Instead, Hunch is designed to focus on useful information to discover and share by asking: "What are you making a decision about?"
In theory, the more people who use social answer services like Hunch or Aardvark, the more valuable the recommendations will become. But crowdsourcing, or aggregating views on which film to see or tourist attraction to visit, is one thing; outsourcing decisions on religion or serious health issues to people we don't know is quite another.
It's important for companies to understand all aspects of social media to successfully innovate in this space. Social media risks becoming an end in itself when people are constantly broadcasting themselves online in search of affirmation. If users spend more time announcing what they're doing than actually doing it, social media could, paradoxically, end up making people less sociable.
The addictiveness of social networking is partly based on game mechanics, where collecting friends and followers or racking up the number of tweets and status updates is like accumulating points. But a recent study showed that whether a Facebook user had 50 or 500 friends they still end up interacting meaningfully with the same small group of about 12. Advertising your life to an audience of casual acquaintances and sharing opinions with people you vaguely know or trust, it turns out, isn't the same as real friendship.
That's what made a recent Burger King (BKC) campaign that rewarded people with a free Whopper for sacrificing 10 Facebook friends so brilliantly mischievous. Based on this insight about the devalued nature of relationships in a virtual world of "never-ending friending," the brand played with social media conventions while driving the redemption of coupons to influence sales. In this case, online friendship in a large social network was worth about the same as one-tenth of a cheeseburger, or 37¢.
The way to make digital media truly social is by combining it with objects in the physical world. For example, MIT Media Lab's Fluid Interfaces Group is testing a tiny digital projector, connected to your mobile phone, that beams Amazon.com (AMZN) reviews or recommendations from your social network onto products as you pick them up in a shop. You can access this information like a "sixth sense," as naturally as using sight, sound, smell, taste, or touch.
We're now seeing real-time data streamed from tiny sensors in objects and and shared through social media. Take the Botanicalls experiment, where plants tweet whenever they need watering. BakerTweet from digital agency Poke is an interesting e-commerce example: Local bakers tell Twitter followers when freshly baked goods have popped out of their ovens. This clever semi-automated system combines virtual community with real-time inventory information about perishable products like doughnuts. And it's not limited to smaller players: Dell (DELL) has used Twitter as a sales channel, already selling more than $1 million of discounted products through alerts to followers.
In truth, we won't be able to point to the Next New Thing in social media for a while yet. It always takes time to separate temporary fashions from long-term trends. Remember how long it took for Web 2.0 to emerge after the dot-com crash. It will be three to four years before the current waves of social media innovation recede and we can comb the beach to see what fascinating new digital life forms are left behind.
Andy Hobsbawm is European Chairman of Agency.com and co-founder of Dothegreenthing.com.