Creative destruction came to the world of information gathering and redistribution during the attacks in Mumbai, India in November.
The New York Times reported, “At the peak of the violence, more than one message per second with the word “Mumbai” in it was being posted onto Twitter, a short-message service that has evolved from an oddity to a full-fledged news platform in just two years.”
The longstanding model of American media is a one way communication pipeline with a central hub that gathers, organizes and distributes news, entertainment, sports and financial data. The central planning model of information flows.
As traditional news media channels wither (think print and evening network news) activity on new channels surges in volume and sophistication. These new channels mashup volumes of information from all participants.
It’s YouTube (GOOG), Twitter, Digg, blogs, Facebook, LinkedIn, MySpace… it’s all about the “people’s content” being gathered, organized and redistributed. I got a excellent and condensed view of the ways that social media can be integrated into business strategies at the Social Media Smarts conference organized by the Direct Marketing Association. They will be offering several more seminars in Chicago and New York on this topic in the spring.
The expanding world of social media is like the armies of Attila the Hun sweeping down to overrun the exhausted, old world media empires.
Massive clouds of the people’s content are forming and blending and who has time for traditional media?
Traditional media is joining the “social cloud” by adding social media tools … the New York Times (NYT), the Wall Street Journal (NWS), and the Financial Times have all successfully incorporated forms of social media into their web platforms. And it has enriched the user experience and increased traffic to the sites.
2009 will be an important chapter in the war between ”open” and “closed” channels of information flow.
2009 is also the year when everyone ponders how to take all this content and make new products from it.
Business models for major corporations and startups are being created and revamped in this process… social media can support marketing, customer service, product development, client acquisition, and corporate image control.
Small and large companies are creating new ways to reach their existing clients and be on the spot where communities are forming around specific interests like investing.
The Consumerist writes about Bank of America using Twitter for customer service, “Several readers have reported getting their problems solved after contacting Bank of America’s new Twitter-based rep.
One reader had tried contacting Bank of America (BAC) a dozen different times and three different ways, but one tweet to BofA_help got him in touch with executive customer service.…”
Nice… maybe Twitter will be the route to executive customer service from corporations and service providers.
Roger Ehrenberg of Information Arbitrage talks about how investment banks might approach creating and distributing equity research in an “open sourced” manner…
~~~~ “The difference between how it used to work and how it will work in the future is the disaggregation of equity research. The major securities houses will have global distribution platforms for connecting issuers and investors, and to provide markets on a worldwide basis. There will be relatively few of these players as the cost of maintaining a global distribution platform is huge and, in my opinion, a natural oligopoly. But research will be “open sourced,” as the charade sometimes called “Wall Street single-stock research” is finally exposed…” ~~~~
I’m not in agreement with Roger Ehrenberg on the “natural oligopoly” of the broker/dealers providing research and content to retail investors. Financial portals like Yahoo! Finance and MSN Money are already aggregating user generated content with “corporate content” and are where investors spend their time researching and monitoring their portfolios. They lead the markets in content and should be considered “social media” platforms.
Retail investors generally shift to broker/dealer sites when they are ready to make a trade. What could a Morgan Stanley (MS) or Schwab (SCHW) bring to the content party that other platforms aren’t providing? Broker/dealers face regulatory constraints interacting with investors that other players compensated in other ways don’t face.
Smaller market participants don’t face as many of these constraints and this helps drive disaggregation in the financial media space. Zack Miller of New Rules of Investing has developed an excellent list of the top 12 financial commenter’s or advisors who use social media … you’ll see some familiar names from Seeking Alpha…
Timothy Sykes: Blog, Covestor, Twitter, Facebook, YouTube, subscription products Jim Cramer, TheStreet.com: Blog, video, Twitter, subscription newsletter John Reese, Validea: blog, SeekingAlpha, Twitter, subscription newsletter Todd Sullivan: blog, SeekingAlpha, Twitter, LinkedIn, YouTube, subscription newsletter Mebane Faber: blog, SeekingAlpha, subscription research site David Merkel: blog, SeekingAlpha Richard Shaw, QVM Group: blog, SeekingAlpha Roger Nusbaum: blogging, SeekingAlpha Sean Hannon, EPIC Advisors: blogging, SeekingAlpha, Covestor Chris Fernandez, PeakStocks.com: blogging, Covestor, subscription newsletter Trader Mark: blogging, SeekingAlpha, Twitter Zachary Scheidt: blogging, SeekingAlpha, subscription newsletter Expect this form of disaggregation to increase… expect more non-affiliated “experts” to rise up in the blogosphere as economic conditions favor various industries and asset classes.( WHY CAN'T THIS BE USED TO MONITOR INVESTMENTS? )
The much beleaguered SEC is on Twitter and recently appointed a “Director of New Media”. Expect other agencies of the federal government to follow.
FT.com reports on the efforts large companies are making to surf the social media cloud.
“But now a growing number of companies, including Ford Motor (F), PepsiCo (PEP), Wells Fargo (WFC) and Dell (DELL), are creating new high-level jobs to ready themselves for engagement with social media, with titles such as director of social media, head of communities and conversation, vice-president of experiential marketing and digital communications manager. The role of these new executives is to monitor and influence what is being said about their companies on the internet.
These new jobs represent a broad shift in media relations strategy at large companies. “Corporate communications has radically changed,” says Andy Sernovitz, chief executive of the Blog Council, an organisation for heads of social media at big companies. “It’s no longer just companies talking to the press, and customer service talking to customers. All these other people showed up in the -middle. They may not be press and they may not be customers, but suddenly their collective voice is bigger than the traditional channels.”
The essence of social media is conversation. Rather than a one-way stream of information, where companies make announcements to the press and customers, social media enables a great deal of interaction, where companies are in constant dialogue with the public. “We’ve seen a shift from doing things the old way to now having conversations with our customers,” says Jeanette Gibson, director of new media for Cisco Systems (CSCO).”
The money quote for the new paradigm of information flows … “All these other people showed up in the -middle. They may not be press and they may not be customers, but suddenly their collective voice is bigger than the traditional channels.”
The train has left the station. Let’s get on board with social media. It should be an excellent ride.
Here is a great series of YouTubes from CommonCraft which gives a quick primer on the various social media platforms and tools…
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