The 'Re-Evolution' of Demand

How Social Media Is Challenging Advertiser Roles

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Rick Kash
James Godman
Rick Kash
Marketing and advertising are those rare professions that require both strategic and creative skills. It's even more surprising, therefore, that so few leaders and practitioners have fully internalized the far-reaching implications of the revolution in social media and social networks.

As more people of all ages flock to Facebook, LinkedIn, MySpace and the hundreds of other social networks around the world, something far more important is going on than just creating new channels of media. Seen in their full impact, social media and networks have the potential to completely bypass the traditional business-to-consumer marketing relationship and shift toward a new, consumer-to-consumer marketplace.

As consumers increasingly rely on the advice and input from those similar to themselves, demand is starting to be created, aggregated and satisfied in whole new ways.

None of this should come as a great surprise to anyone who has looked at the history of technology. Great technological revolutions -- and make no mistake, social networking is one of them -- always seem limited at the beginning. But eventually their impact extends across all of society, in the process changing the way we live, learn, work and play. Think of TV, the personal computer and the internet: Each began as an interesting novelty used by a small coterie of techie true believers ... and very quickly became integral to our lives.

Social can also mean private and unique
Social networking is on the same trajectory and will soon have the same impact. And just as the advent of TV and the web required the advertising industry to come up with a whole new set of tools, a new business model and even a new aesthetic, so too will it not be enough to simply carry over the techniques you are using today and expect to succeed in this new world.

Seen in this light, social networks aren't just new platforms for sharing, but private (at least in their minds) places where individuals can assert their own uniqueness. At the same time, this sharing influences the thoughts, beliefs and intentions that create demand.

In other words, your customers are moving into private communities, and marketers will have to earn membership. Behind those walls, the ways that demand is formed, aggregated and fulfilled are being radically reshaped -- so much so that one could argue we are entering a period of "re-evolution" of demand. Nearly 150 years ago, demand creation was person to person, which eventually gave rise to print, then radio, then TV, and ultimately today we are back to person to person, but at the speed of light through online, private communities such as Facebook.

As Sheryl Sandberg, chief operating officer of Facebook, has noted, individuals who post their picture with a recommendation generate four times the response of those who do not add the personal connection with their recommendation. These are powerful statistics, and something all companies should strive to understand and leverage.

Consider one priority "passion pocket" -- or group of consumers unified by their strong energy behind a given product, cause or entity: mommy bloggers, nearly 4 million strong in the U.S. alone. According to Nielsen studies, these moms are three times more likely to blog their opinions vs. the average woman. The multiplier effect of these statistics alone is mind-boggling. Mommy bloggers are yielding increasing influence and power over the product choices and brand preferences of a growing number of women, often superseding the advice of pediatricians and marketers alike. In essence, these Mommy bloggers are shifting demand and taking an active role in defining emerging markets, instead of being marketed to by large companies.

The new social-networked economy
In this new, social-networked economy, marketing becomes membership, advertising becomes explanation and information, and selling becomes trust. Success in small increments will come to those companies who continue to build demand one person at a time. Powerful, market-defining and share-building growth will come to the companies that master the art and strategy of creating demand one group and one large community at a time, much as Best Buy has driven growth through their insights into emerging and latent consumer demand, gaining four share points in just two quarters.

Even in these golden days, where everything Apple does is right, some of the most powerful blogs are now pointing out what Apple is doing wrong. While this is happening on a real-time basis, and results will unfold over months and years, if blogs and communities admonish Apple over abandoning the Adobe Flash, one can only imagine the impact on those companies and brands that don't share Apple's invincibility.

In this economy, where there is chronic oversupply, and demand will be flat to contracting for several years, the emergence of social media, blogs and social networks becomes a once-in-a-lifetime opportunity. We are in the midst of far-reaching economic change. As history has taught us, the constant companion of change is opportunity. There has never been a better time to outperform competition, gain share and earn loyalty among the millions of people for whom social media and social networks are a new way of life.

Rick Kash is founder-CEO of the Cambridge Group and co-author with David Calhoun of "How Companies Win: Profiting From Demand-Driven Business Models No Matter What Business You're In" (HarperBusiness).
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