|Ian Schafer also blogs at IanSchafer.com.|
But so much of technology is hidden from plain view because it doesn't make money. Financial gain is arguably the most important aspect of technological innovation, because without it, all but the most altruistic of reasons cease to exist.
We are living in a time in which the media we consume are undergoing the most rapid technological transformation since the advent of TV. Back then, there was a lot for companies to gain by having a TV in every home in America. It gave advertisers the ability to pitch their wares to TV's captive audience. And over the years, those advertisers have shelled out billions upon billions of dollars continuing to do so because it was perhaps the best-performing media, but one that delivered a passive audience.
We are now witnessing a migration of ad dollars from lesser-performing media to online's active audience.
Even within a rapidly growing medium such as the web, there is a still more-quickly growing form of online media that we call social media. This includes social networks, blogs, virtual worlds, widgets, applications, communities and any other format where the individuals who use it create or distribute the majority of the content.
According to last month's Internet Trends report from Morgan Stanley, 16% of the world's time online is spent on "social connections." "Communications" makes up 22% of the time spent online.
The world's habits are changing. Not just in terms of technology usage, but in terms of media usage. Media are becoming more social. The problem we face is that habits are changing faster than our advertising models can, and unless we figure out how to make those habits make money, social media could face serious challenges to its historically rapid growth. Venture capital and big-media acquisitions have kept social media afloat. But in order for it to swim, there are several things that we need to do right now.
Establishing a standardized set of metrics is a start. It will allow us to be able to determine at least some kind of ROI on the dollars we spend within social media. But those metrics, unlike standard media-efficiency metrics, will need to gauge longer-term efforts, as opposed to typical reach, frequency, click-through and other similar measurements.
Targeting (or "addressability") has arrived, and is another key component—but only if the advertising that is targeted can be proved to be effective. Whether behavioral, contextual, demographic or psychographic, targeting will need to be good and -- more important -- effective enough to justify higher CPMs that can actually make money.
Education will be integral to the proper understanding of both metrics and targeting, and to having as much innovation happen on the agency and brand sides, as they do on the social media technology sides. We will need leaders in all aspects of social media -- technology, media buying, communications, creative -- to step up and share best practices, research and anecdotes about what works, what doesn't, and what just might.
We have spent years living within the comforts of the symbiotic relationship between TV programming and advertising. Technology has given consumers the power to weaken that particular relationship, but it has also given advertisers the possibilities to strengthen it through social media.
Social media's relatively organic emergence, but hyper-funded hyper-growth should serve as a call to everyone -- publishers, agencies, advertisers -- that we need to stop trying to force old-habit sensibilities to work with new-media behavior. It's not working for the music industry, and it won't work with social media, either.
But this isn't MySpace's problem. It's not Facebook's problem. It's everyone's problem. Because if we don't figure it out soon, we risk not being able to take advantage of the greatest gift we advertising folks may have ever been given: the opportunity to use existing, available technology to build relationships, create rewarding experiences, tell stories, and engage in conversations with consumers that need (and deserve) a reason to do so.
We need to reaffirm our commitment to discovering the long-term positive effects that relationships built through social media and its related technologies can yield. The longer we wait, the higher the risk.