What Happens After Social Media Markets Peak?

By: Debbie Meltzer

Three years ago a video presentation landed in my email box and boomed; Social media is here to stay! Maybe so, but every trend, every movement or social experience, rides its own roller coaster adventure. And every ride eventually takes a dip.


As I ink this blog, LinkedIn is experiencing “float euphoria” and the thrill of a Wall Street rush. Within hours, their 7.84 million shares, created a market value of over $9 billion. So how much will LinkedIn make in profits in 2011? Zero… That’s right, with all the hyperbolic aggrandizement – a big fat zero.

LinkedIn is the first social network to go public, trail blazing ahead of Facebook, Twitter, Zynga and Groupon. These sites are set to pursue their own IPO in the next few months. Oh yeah, this is a hot industry. It’s sizzling.

Punters say Facebook and LinkedIn’s potential revenue growth, has not even scratched the surface of markets and opportunities.

How could they? They haven’t even begun to ankle their way through the largest Internet user’s market – China.

Zuckerman gets this… So much so, he is learning Chinese, co-habitating with his Chinese girlfriend and planning a second visit to the mainland shortly.

But China and its freedom-of-information phobia is no match, even for the invincible Zuck.

Somehow I won’t be surprised if Facebook announces plans to float soon after Zuckerman’s Chinese courtship capitulates at the feet of the Chinese Firewall. After all, that is the precise moment when the daunting truth will sink in: Facebook’s market share is about to reach its peak.

“With fewer new users signing up, social network users will be more sophisticated and discerning about the people and brands they want to engage with,” said Debra Aho Williamson, eMarketer principal analyst.

From this year onwards, social networks will need to cement their relationships with users, particularly people aged 35 and older, to keep them engaged.

Although market share is about to peak, market opportunities will continue to grow…For now.

B-2-B Social Media is finally carving its own slice in the action. More than half (54%) of B-2-B companies plan to increase spending on social media this year, according to a report from Worldcom PR Group.

But those who will neglect a holistic approach to customer engagement, those who get caught up in the Social Media whirlwind, are bound to experience a profit backlash. I am a staunch believer that using a wide range of marketing methods produces better results than executing only one or two activities.

According to Gary Halliwel, co-founder of NetProspex, Social Media will penetrate deeper into company structures. A study his company conducted showed marketers were still the biggest social media users. Interestingly, human resources professionals ranked 2nd while CEOs were number 11 on the list, outpaced by office managers and customer service representatives.

But a growing number of CEOs, who realize the potential to grow opinion leadership, are embracing the “Power of Now.”

What about the B-2-C market? What about brands? According to Social Media Futurist Brian Solis: “We are looking at decades of almost anti-social brand behavior…..”

I tend to agree, brands to date, nurtured a one way channel between them and the consumer. As marketers we were all structured to create compelling stories and indoctrinate them through persuasion.

Social media is forcing all of us to become more intimate, more transparent and engaging. Companies are not structured to be so today. Brands and their entire organizations need to undergo organizational transformations to accommodate for a new social speak, social intelligence and social connect. The transition, although painful, is inevitable.