The 2012 bubble has a name: Social Media & Advertising Agencies
Official blogger Dimitris Kalogeropoulos asks if we're in a social network bubble - or a social media one - and if the bubble bursting will herald the post-digital age.
Everybody around is talking about the soon-to-explode bubble and remembering the dot-com bubble. The 2012 bubble conversations have multiplied after Instagram's acquisition by Facebook for $1 billion. All those "bubble-supporters" have some valid points given that Instagram has never made even one dollar in revenue.
Are social networks just a huge bubble? Is Facebook's upcoming IPO going to follow the same path that Groupon's IPO followed? Or is Facebook is going to be one huge company - maybe bigger than huge? If I had to put my money where my mouth is, then I would bet on Facebook becoming the next Google, or Apple, or Microsoft, or…
Nevertheless, my opinion is that we are not living inside a huge, second .com bubble based on social networks. However, we live inside a social media-related bubble and it has a name: social media & advertising agencies.
They pop up out of nowhere and are full of people who have "digital and/or advertising background". Unfortunately for them and, mostly, for their clients, social media is neither digital or advertising. Social media is something much deeper and meaningful - a company's presence in social networks puts the company's culture in display in front of billions of users and potential customers.
Brand and product managers need to understand that social media requires an holistic strategy that will cover every aspect of their brand or product. Unfortunately, both companies and social media/advertising agencies treat each social media campaign as they did during the TV/Radio/Print days; as standalone actions with limited amount of content.
This may be acceptable to some people out there but the real problem appears when you take a look into every social media campaign's budget. The number of euros spent on each campaign is extremely high given the extremely limited content that is being produced. Agencies may charge up to €4000 for "community management" when there is not even a community; I cannot consider a 2000 user fanbase as a community that requires €4000 per month.
Although everyone agrees that "content is the king", the content production is limited and most of the budget is being spent on other, less important and impactful actions. The good news is that all these scams/campaigns will be evaluated sooner or later and then, all those agencies will be fired. The bad news is that these exact agencies are destroying the social media market and, as a result, brands will not easily trust again anyone who will try to sell a social media campaign to them.
Companies are not familiar with the social media rules as social media is something extremely new that is constantly changing. On the other hand, advertising agencies treat social media as the Holy Grail that will allow them to rip off their customers. When this era will come to an end, agencies and companies will have to deal with the next big challenge: the connection between offline, online and social experiences: a difficult challenge where agencies will have to combine three - well-charted by then - territories. And this challenge has an extremely sexy name: post-digital.
Photo by Mike Carney on Flickr and used under a Creative Commons licence