The social media bubble has burst. Hmm, where have we heard that before? People have been predicting the end of the social media bubble for some time now – it seems almost since the rise of social media – and an article in Inc is just the latest to reinforce this viewpoint.
Social Investment in Decline
The evidence comes from the National Venture Capital Association's annual survey
on investor confidence which reveals that venture capitalists are losing interest in social media in favor of other sectors. Of course, statistics can tell pretty much any story you want, so let's not get carried away with that headline. Yes, there's an 8 percent decline in investor interest in the social media sector, but it still remains in the top six sectors for investment.
There are also some wide variations globally in investors' approaches to the sector. There's a huge decline in investor interest of 29 percent and 24 percent in the Netherlands and Australia respectively. That's balanced by a 16 percent rise in investor interest in China. Clearly, if the social media bubble is over, then it's not bursting but deflating
. But is it really over? We don't think so.
Social Informs Decision-Making
A piece in the Guardian
by Tim Anderson provides additional insight. He highlights the importance of social media marketing for tech companies. These companies are using social media to get information and help them with decision making and in some cases social technology is integrated into the products themselves. The article cites Play.com's Adam Stewart as saying:
"With social, we're also able to accurately track the value of socially engaged fans. Our research has shown that average revenue increases by 24% once an existing customer becomes a fan."
So, it's not completely over, then. That same survey we cited earlier (which, incidentally, reinforces our view that the future is mobile) points out that all of the top investor targets are technology related. Despite some skepticism about social media
, the fact remains that if they are investing in socially-enabled tech companies, then they are still investing in social – it's just indirect.
Integrating Social into Business
Maybe it's that social is no longer new, but is becoming integrated into the way we do everything. There are countless stats to show how crucial social media has become to doing business. Recent research cited in this infographic
) shows that brands are increasing their use of social media sites. Overwhelmingly many of the tech pundits are no longer questioning whether social is important – it is, for branding
, community building, sales
and more. Instead, they are thinking about how to make sure it's right and relevant for their companies and how to do it well. Perhaps, getting it right is the best antidote
to a burst bubble. What do you think?
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