Social media: The new marketplace?
We’ve all read stories detailing how the newspaper business is under siege because of declining ad
revenue within print publications. And unfortunately, even the growing popularity of web advertising on
news sites – traditionally cheaper than its in-print counterparts – hasn’t managed to stop the bleeding.
Many news sites, such as the New York Times and some Postmedia websites, are even re-experimenting
with the concept of full or limited paywalls – which could end up doing more harm than good in our
increasingly social and wired world.
The disruptive power of the web
It’s fair to say that most news organizations were taken by surprise by the emergence of the Internet
when it first gained prominence in the mid to late 1990s.
That disruption inflicted great pain on the news organizations' ability to turn a profit, and directed a lot of
misplaced animosity towards Google. Google was blamed for, among other things, draining newspapers
of ad revenue.
There’s some truth to that. It’s been reported that Google makes more money than the entire newspaper
industry (http://www.complex.com/tech/2012/03/google-makes-more-money-than-the-entire-usnewspaper-industry).
But Google isn’t to blame.
The industry simply failed to adjust its business model as the times changed.
With the emergence of social media, the next wave of innovations and challenges will not only have a
direct impact on newspapers' bottom-lines, but potentially on all businesses.
It is true that Google was extremely disruptive to the newspaper industry's overall ad revenues. But that
wasn’t their only source of income – the classified pages, as well, were a hearty revenue stream for most
newspapers.
But the Internet didn't just change the way information was delivered and consumed. It changed the way
people interacted with one another.
The classified pages go digital
The Internet’s rapid growth spawned dating sites, chat rooms, the crowd-sourcing of content and ideas,
and – to the newspapers' horror – free or very cheap online directories and classifieds, such as Craigslist
and eBay. The need to interact or do business through a static, paper-based medium began to dissipate.
Via the web deals could be done quicker and cheaper, and users were suddenly able to tweak their ad
content on the fly, in real-time.
This is the true value of the Internet.
Innovations such as online dating sites and digital classifieds paved the way for social media. These
technological icebreakers helped dull the inhibitions of older generations, and created a new social world
for new generations that, quite frankly, don’t view social media as something revolutionary. No, for the
next generation, it’s simply something that’s always been there.
Now everything from finding a good restaurant to engaging in commercial transactions is migrating to
social media, thanks to its open framework. This facilitates greater speed of communication and
interaction between individuals.
And that’s the takeaway from the experience of the newspapers in the 1990s and beyond. Instead of
fighting it, businesses of all types must now embrace social media as a way to generate leads, engage
current and future customers, and market themselves in innovative ways.
Not only is the commercialization of social media happening right now, but when companies engage and
listen to social chatter, they are able to be proactive by addressing issues as they appear – such as a
steak restaurant responding to a tweet asking where to find a good steak in their area – and, in turn,
better serve the public.