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Making Money During the Gold Rush

Posted on : 08-01-2011 | By : Frank Eliason | In : Business, Social Media, Technology

Tags: , , , , ,


This week I have had the gold rush on my mind a lot, and for a variety of reasons it just will not leave, so it calls for a blog post.  I do get worried that we are looking at a bubble ready to burst.  When you look at markets you usually know when it will turn based on what people are talking about.  When everyone was talking about house flipping (all those shows came out on the topic) you knew the housing bubble was set to burst.  When everyone is talking about putting money into stocks, you just know the market will collapse.  When everyone is scared the market will go down to a 1000 on the Dow, you know it is time to buy, just like when people were talking about Dow 30,000 I knew it was time to go the other direction.  Today I am seeing the same with social media!  Is social media euphoria going to cause a collapse?

First I do not think social media is going anywhere.  During my last post I did make a few predictions for the coming year that may be a little contrarian.  I do think we will see usage go down as people pull back to determine how much of their life they want public.  More important than that, and where I think the social bubble will burst is regarding the marketing excitement I have seen.  You would not believe the amount of companies are looking to hire people to lead them to the gold in social media.  I think this is the bubble that is set to burst.  As marketers do not make the money they anticipate, they inevitably will have their own bubble burst.

I have been contacted a lot recently by companies with new ways to market to ‘influencers’ and get this gold of new Customers.  Each one seems to have the same theme talking about how they have proprietary software that has deep analytics that will get this message to the right people, and they guarantee they will act.  I have no doubt that companies are wasting a lot of money buying these maps to the gold, or hiring agencies that promise the same performance.  When the returns are just not there, marketers will be very upset and swear off social media.  I think that is the wrong approach, but a more holistic approach to the business could prove successful.

The trouble is social media is different, especially when you compare to other broadcast mediums like TV and print.  In the other mediums you had the Customer, or potential Customer undivided attention, but on the web, especially in social websites, the attention goes to so many other things, such as the people they are interacting with.  If people believe they are being sold too, or others were paid for their influence, it is very easy thing to turn off.  I know I do.

As part of this we have also seen influence model websites come about like Klout, Twitalyzer, and Peerindex.  Each of the links I provided go directly to my profile on those websites.  I also have seen some interesting discussion regarding these websites on Quora (more to come on this website later next week).  I would recommend reading this post by @ShelIsrael ‘Twitalyzer: How Does it Measure Up.’ and Matt Creamer’s Ad Age post ‘Your Followers are No Measure of Your Influence.’  My overall take on these analytics sites is they are interesting and can add a little fun, but they will never truly understand the human impact.  I do fear they will add into the inaccurate marketers belief of targeting influencers, but they will learn over time that all their Customers are influencers.  The trouble I have always had with these type of measures is there are some people, who walk into a room, say a few words and they change everything.  The same type of people are in spaces like Twitter and have great influence even when they are quiet.  In the past I have also talked about the influence a certain video about a sleepy technician had (and still does) on a brand I used to work for.  No tool would be able to predict influence like that.

What started me down this path were 3 emails and a call I received over the past week regarding these new social media influencer tools.  The one email was internal one that I was cc’ed on talking about this as the future.  I did something I typically strive not to, but I replied to all with this simple statement:

‘During the Gold Rush the people who made the most money sold the maps to the gold.  Keep this in mind.’

If you want to make money in this gold rush, jump in and sell the maps.  For me, I believe in the long term, and I will focus on the Customer experience which I think will deliver greater gold.