Market Research: Social Media’s Killer App

Monetization. ROI. Revenue. A Business Plan. If these words sound foreign to you...they shouldn't (or you've been drinking the social media kool-aid for far far too long). Twitter and Facebook, two of the heavy hitters in the social media world don't exactly have the most rock solid business plans. Their valuations are based on inflated figures regarding stock, hype, user bases and extraordinary growth. So how are these types of companies going to make their cash? The answer is simple: your information.

Credit card companies have made their bread and butter profits by selling lists and information about their customers for years. Facebook acts as the ultimate market research tool. You provide it with a wealth of knowledge when you fill out your interests. Think about the marketing opportunities that could come about from having such deep dive list. You could ruthlessly target specific niches if you knew who your ideal customer was. The information is there (and owned by Facebook) and available for monetization.

Screw Beacon, advertising revenue models, and any other model that doesn't offer results. You can mine the data provided by your users and make massive amounts of money. Does this go against a lot of tenets that supposedly make up the golden rule of social media (.ie don't exploit)? Absolutely. However, if you provide a free essential service to a huge swath of consumers...no one can really do much to stop you. People are going to continue to use Facebook regardless because the service has become to ingrained into their everyday lives.

The school I went to (Bates) was the second set of colleges to receive access to Facebook in 2004. The dynamic of Facebook was so revolutionary (thus becoming a staple of a college student's life) and it fulfilled an essential hole in communication and interaction. The idea to make it exclusive to .edu's was genius. It provided a core group of people exclusive access to one of the coolest pieces of technology to come out in our lifetimes.

I can't imagine my life without facebook because I was one of the first to join. It is an essential part of my everyday life (it's strange if I don't check it at least 2-4 times a day). Because of this (and my marketing background) I say that Facebook should go for it. It will certainly make our lives a lot easier as marketers. To be able to target a niche with that amount of accuracy is almost unheard of today. Facebook would basically be shoveling money into our pockets. The people at Facebook are completely aware of this and are moving to position themselves to take advantage of the vast amount of information that their databases contain.

Social Media companies and start-ups preach the tenets of "keeping it real", being outside the mainstream, and creating a core group of followers. Facebook is now mainstream and has been for about 2-3 years. Mainstream=Cashing in Huge. I'm going to be very curious to see where this idealism about their product goes when they realize how much money they are sitting on. This will obviously have a major impact on the other big gun in social media: Twitter. How will the company with no business plan counter Facebook's play? I for one will be excited to see how this battle is won (and if the consumer or the corporation will win out).

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