The Next Engine: Beyond Campaign Thinking

Plenty of blogosphere and media commentary over the past couple of days about the big three social networks (Facebook, MySpace and LinkedIn) and their ongoing struggles to convert their millions of users into hard cash. Opinion falls into two camps - those who think it’s only a matter of time before the networks start generating sack-fulls of dough, and those who think they’re completely hosed.

The first group look at the overall user base, the time users spend engaging with ‘friends’, the wealth of personal information they make available and the power of the personal recommendations made within each person’s network as a potential nirvana for advertisers.

The second see huge privacy issues, the failure of Facebook’s Beacon concept, hideous banner ad click through rates and a general sense that these networks are an intermediary step towards something better as a reason to think otherwise.

It’s hard not to get the sense that Facebook and co are the 2008 equivalent of AOL in the early days of the web, trying to trap users in ‘walled gardens’ so that advertisers can get lots of ‘eyeballs’ for their push messaging. Admittedly OpenSocial, Open ID and Google’s FriendConnect are solid first steps in opening things up but like it or not, the only business model in town is to carry on bombarding users with push advertising and hope that the increased ‘relevance’ gained by mining user data will miraculously persuade people to start clicking on ads like crazy. How else can Facebook justify a $15bn valuation on current revenue of $150M?

Here at The Next Engine we believe the unique power of the web is in its empowerment of individuals and leveling the playing field between consumers and corporations. In a world where the opinion of an individual can fundamentally alter corporate behavior, and where an alternative competitors’ product (or a new social network) is only a click away, companies are learning they need to tread extremely carefully as they seek to influence consumer opinions and perceptions online.

As Facebook discovered, try to tilt things back in favor of corporations and the groundswell of consumer and influencer opinion will whack you harder than a Joel Zumiah fastball.

Maybe the genius and millions behind the digital incumbents will figure out a solution. Or maybe social networks will end up like another digital killer app that stubbornly refused to lay the golden egg and yet changed communication forever - email.

Tags: Facebook, Google, social marketing, Social Media, social networking