Lawrence M. Walsh is president and CEO of the 2112 Group, a communications and consulting firm.
Facebook’s long-awaited Wall Street debut will be one of the biggest IPOs in history. Powered by 850 million active users, Facebook is without a doubt the world’s largest social network – a standing that’s earned the 8-year-old company a $100 billion valuation.
The value placed on Facebook isn’t so much a reflection of what the company is doing today; its revenues are paltry compared to many of its rivals. Rather, Wall Street investors are betting on what Facebook will do in the future in terms of influencing and transforming the next generation of commerce.
Facebook is indicative of the rise of social media and the continued evolution of converged media. The impact of this communications and collaboration model – pioneered by the likes of Facebook, MySpace and Twitter – is rapidly changing the way people communicate, collaborate, research and, ultimately, make decisions.
The impact of social media on how tech products are bought and sold is nascent, but growing. Some technology vendors are using social media such as Twitter to promote products and special offers to end users and generate leads for partners. Some vendors are using LinkedIn and Twitter to communicate with reseller partners en masse. And solution providers are developing social links with customers to keep them abreast of technology development. There are even some solution providers experimenting with Twitter as a support notification mechanism.
None of this compares with what’s to come as social media combines with functional and transactional media offerings. In this converged media world, vendors and solution providers alike will soon embrace marketing that draw in partners and end users with essential applications, social connections and communications, and – ultimately – the ability to research and purchase products and services through the same portal.
Here are the three main elements of Converged Media.
- Functional media is an application persistently resourced by end users. Applications are free, which is made possible by sponsorship and marketing underwriting. Good examples of this are Google’s Gmail and Spiceworks IT management tools. Unlike conventional media into which users are drawn for moments periodically, functional media is something actively engaged by the user for long periods of time, which increases the potential for exposure to marketing messages.
- Social media – such as Facebook and Twitter – are well-defined social networking and communications vehicles that enable vendors, solution providers and end users to interact with each other in real time on a level field. This is a far different dynamic than conventional media where interactions typically wait until the sales process begins. In social media, underwritten by marketing, users are able to query peers and the community about product features, benefits and value. They can ask questions about vendor reputation and performance; and they can seek guidance on sourcing, often through solution providers. Vendor and solution provider engagement in social networks will define their market value and drive sales.
- Transactional media is where the communications medium is also the sales channel. The portal that provides an application and social interaction is also where users source product and buy services. Companies like Amazon.com and Microsoft’s Marketplace are good examples of transactional media attached to social or functional marketing assets.
In the marketplace, first social media and then converged media will change the way vendors find, communicate and interact with solution providers. Solution providers will learn to leverage these new mediums to connect with peers, form new business relationships and, find and interact with customers. Already, solution providers use social networks to query peers on technical issues and vent about operational challenges with vendors. Soon, they’ll not only be able to communicate, but also find primary and alternate sources of products for resale.
Paying attention to what’s happening in social media is critical to all companies in the technology value chain. Reputations are being built, tested and devalued in the social media context. Technologies and products are being vetted and recommended. And vendor programs and partner relations are being documented. What happens in the social context will eventually spill over into converged media and have real dollars attached.