Social networking: the next generation

Have you ever noticed how social networks don’t do a very good job of representing how our personal networks actually function? Sure, places like Facebook and MySpace and LinkedIn have their utility, but their flatness is a problem.

Think about your Facebook, for instance. If it’s like mine, you have friends there who run the gamut from “real life best friend” to “people I know” to “guy I couldn’t pick out of a lineup if my life depended on it.” You may have relatives, friends from school, co-workers and “assorted others.” And they’re all absolutely equal.

Our LinkedIn networks can be even less attuned to how our lives works. There are probably people there with whom you have meaningful working relationships and others who are only around because you can’t rule out the possibility that some day you’ll figure out how to make money off of them. And don’t even get me started on MySpace, which is the worst of the lot.

As a recent British study demonstrates, the “friends” bred by social networking are nothing like real-world friendships. The problem, I think, is that in real life our relationships are arrayed according to categories: relatives, personal friends, co-workers, guys on the soccer team, fellow Killers fans, people in our county political party, etc. I have groups of friends who literally don’t know each other exist. Not only do we have people categorized by function, we also organize them by closeness. Some friends are intimates who know us better than we know ourselves, while others are people we enjoy drinking with, but who have never been (and probably never will be) inside our homes. Facebook now lets you create friend lists, which addresses some of the problem, but it remains an add-on feature instead of an embedded part of the network’s structural and operational assumption.

I believe we’ve just about reached the limit of the utility of flat networking, and I’m starting to wonder to what degree the lack of granularity and user control is to blame for the recent weakening in the social network market.

The average amount of time each user spends on social networking sites has fallen by 14% over the last four months, according to market researcher ComScore. MySpace, the largest social network, has slipped from a peak of 72 million users in October to 68.9 million in December, ComScore says. The total number of people on such sites is still increasing at an 11.5% rate, but that’s down sharply from past growth rates.

Many, including the authors of this Business Week article, blame advertising, and while I have no doubt that’s accurate, I also wonder whether network-based advertising might be less offensive if the application contextualized it within a more nuanced friends environment.

Put another way: there’s a difference between advertising to someone and advertising at them. Mass advertising – like a lot of banners you see – have no apparent awareness of who you are, what you’re doing there, what you care about, etc. It’s like spam. But when a group of teens goes to a skateboard competition, nobody seems to mind the banners for Burton, right? So when the social network itself is constructed in ways that are artificially flat – in ways that don’t look or feel or function like our real-world networks – then how much harder is it to integrate advertising that feels like it belongs? File this as a hunch, of course – as always, it’s hard to know the answer to a question without asking, and I don’t presently have the resources to test my hypothesis. If anybody does do the research, though, don’t bet against it – there’s more at work here, I suspect, than is explained by a simple “people hate the ads.” In any case, the BW authors note that “users appear to be growing less responsive to ads, according to several advertisers and online placement firms. If advertisers can’t figure out how to reverse these trends, social networking could end up as a niche market in the online ad world, smashing hopes and valuations across Silicon Valley.”

The next generation of social networking

On the social net front, the next evolutionary steps seem clear:

  • greater power to array contacts by function
  • the ability to assign “closeness” scores to friends
  • a resulting capacity to embed advertising within appropriate friend/contact contexts

One company that’s already hard at work, especially on the first and third points, is Savannah-based Balaya, which has been beta-testing its new Tick-It application for the past couple of months. (A few of my friends, business colleagues and I have been participating in the beta.) Company CEO Bob Nunnally says that Balaya is about “helping people create closer bonds with those who matter most — your family, your support group, your PTA, your close friends. If most social networks or media are about making new connections, we’re about strengthening the ones that mean the most to you.”

Close, real-world groups create, share, play, plan and communicate in ways that are different from groups that are more casually connected. We understand that dynamic and are geared toward delivering group-focused, Web-based tools that encourage these naturally occurring behaviors.

The Tick-It itself is a nifty little app. Instead of a Facebook-style Web site, it’s a ticker that scrolls across the bottom of your screen. You can set up as many different groups as you need, and other people in the network can have as many as they need, as well. You might set the Tick-It to scroll messages from one group or all, and when you need to post a note, that’s accomplished via an intuitive menu on the right side of the scroll. (View the demo here.)

Nunnally says the Tick-It is the foundation for an expansive suite of applications – over three dozen, in fact – and work is already under way on a richer feature set for the basic ticker application. He believes the Tick-It and subsequent developments (which include the ability to port to mobile devices) will represent significant value for both consumer and business users.

“These applications permit a group to communicate more effectively and efficiently than with e-mail or IM. While it doesn’t replace them, it does provide benefits they don’t — it’s spam-free, private and dynamic. A user creates a group, invites others to join it, and then each can post headlines that scroll news-style where only the other members can see and interact with.”

Branding and the “innercircle”

In describing the company’s philosophy and vision, Nunnally talks about the “innercircle” and the migration from Internet to “Inner-Net.” The broader Internet is about the world at large and includes Web 2.0’s flat-network sites. The innercircle is where deeper, more connected activities occur. With respect to product brands, for instance:

Through family and friend behaviors, consumers associate with brands. For example my “family” is about Ford, Crisco, White Lily Flour, and Kraft Mayo to name a few. My mom or dad or in-laws or best friends rely on the innercircle for something I enjoy and hence associate with our group. A brand can use the “me-focused” Internet to support that — I can join the Campbell’s Recipe community — but what if I could bring the whole gang in to something that was provided by the brand but not all about the brand?At the most basic level that is want many brands are all about — I don’t buy Crisco because I like the taste of Crisco, I buy it because how and where I use it improves the things I enjoy and/or makes my life better. It’s like the old BASF ad…BASF doesn’t make your bowling ball, it makes it better. So we’re focused on seeing social media as an extension of how my brand excels within the innercircle and then getting into the network.

So what if there was a tool that let me expose that brand to another innercircle that is outside but adjacent to the innercircle the brand is currently in? For example, White Lily Flour is the brand of choice for my family but my son’s friends have no set “affiliation”…his friends enjoy his cooking and through the tool come to know his affiliation — and it becomes theirs.

The Tick-It is structured with an ad banner, but the product’s philosophy clearly is aimed at fostering a deeper engagement by considering how users can align with naturally occurring group behaviors.

Is this advertising’s salvation?

When I first began playing with the Tick-It beta one of the things that immediately struck me was its potential for re-engineering the relationship between user, community and advertiser. My suspicion was, and remains, that the more the social networking context reflects our real-world communities, the greater the potential for the sponsor to function less like advertising and more like customer relationship management. That is, greater relevancy, increased ability to contribute something meaningful and desirable – at the very least there’s the opportunity for the banner to feel less intrusive (done properly, that is – done improperly the risk is perhaps even higher, because the more intimate the venue, the less welcome the interloper).

A new Forrester report suggesting that agencies need a major reboot seems to bear out my thinking here.

In Forrester’s view, a simple fact is driving the need for wrenching change in how advertising agencies are structured: consumers increasingly do not trust marketing messages. Instead, they rely on advice from friends and others in their various communities to make product decisions, while using tech tools to tune out ad messages they deem irrelevant. On top of that, consumer media choice has made the notion of a “captive audience,” other than during some sporting events, a thing of the past.

Advertising is a mess right now, and I see no reason to think that the industry is capable of leading. However, a tremendous commitment has been made to online channels and I can only hope that an agency or two will look more deeply than “Web 2.0 users don’t like ads.” Maybe not, but perhaps Web 2.5 users are fine with ads in an environment where social nets act like real-space nets and online branding behaves like deeply integrated real-world brand relationships have traditionally.

We’ll see. In the meantime, have a look at the Tick-It and see what you think.

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19 responses to “Social networking: the next generation

  1. Pingback: Scholars and Rogues » Social networking: the next generation·

  2. I found your site on google blog search and read a few of your other posts. Keep up the good work. Just added your RSS feed to my feed reader. Look forward to reading more from you.

    – Sue.

  3. Sam,
    Interesting. I definitely need to check out Tick-It.

    When I think of the ultimate in online ads, I think of Amazon.com. For years, they have been giving me relevant book ideas. More often than not I already own a book they recommend; I tell them so and wah-la there’s another recommendation which I am truly interested in.

    Now I know a little of the science (computer and statistical) behind what they do. The problem I see with online sites like Facebook et. al. placing relevant ads is the privacy aspect. I hate signing up for new apps on Facebook because I hate giving access to my profile. A lot of people are like me and fear (rational or not) the internet SPAM or identity theft giving too much information could lead to. This is why, in my opinion, Facebook with the greater privacy and control has started to outgrow and will probably over take MySpace.

    The trick is going to be soothing the consumers privacy fears. Amazon.com is a trusted website and they only market their own products. No one cares that they keep track of every mouse click made on their site. With enough users, and anonymous network “link” sharing, Tick-It could well be the next great ad revenue generator.

    For the record, this is why I have always thought that the valuation numbers thrown around for Facebook were way too high.

    Dom

  4. Dr. Slammy:

    Great post.

    My kid told me that all of his friends still use networking sites, but their usage is down. They still prefer to IM. We like to use the video chat feature. I know that since my lovely wife has been gravely ill, my time on LJ is way down….I just don’t feel very social. I still go to blogs that I like, keep my blog up, and write a little here and there.

    I was discussing social networking with some people who are my age and was surprised to find that I was the only one with a Facebook, LJ, or MySpace page. My peers associate networking sites with the younger set.

    Great post.

    Jeff

  5. Why would I create a log in to view a demo? I guess they’re not really interested in marketing their product to me.

  6. Social networking is just a waste of time to prevent real connections with real people. It is alienating, it does not bring people togehter in any real way and it is commercial driven which means it is evil at heart. I don’t trust Amazon with my personal data and I sure don’t trust Rupert Murdoch with anything.

    To paraphrase Hakim Bey in the TAZ: the real revolution is face to face.

  7. Sue: You caught me on a good day. I’ve been too busy trying to get some work done lately that I’ve been a bad blogger. Good to have you on board.

    DomPazz: Hiya – how’s it been?

    You’re dead on the money. Relevancy really is the issue here, and the social nets have tried to find ways of targeting ads to lend the appearance of relevance without grasping the impotance associated with the relevance of their application. This is just huge, and surely we can’t be the only people who see it, right?

    Jeff: It is about the younger set, but I wonder what the implications will be for older users once the tech starts to emulate their lives? It makes okay sense to younger users because this is what they know, but the flatness has to be alienating to older users. You know, the ones with all the money.

    Will Balaya (or someone like them) break through into older demos? We’ll see.

  8. Pingback: Flat Friends? « Thing of the Day·

  9. Dr. S:
    Balaya’s comment: “Close, real-world groups create, share, play, plan and communicate in ways that are different from groups that are more casually connected.”, is certainly true.

    The “problem” is that “real-world” and “real-WEB-world” are two different dynamics. An online relationship will never (and I don’t think that is too strong a word) have an equal dynamic as an up-close, personal, “I-can-smell-your-breath” relationship. This MAY be why the younger demographic is not using “friends” sites as much any more – they are realizing that “online friends” still don’t satisfy the need of personal, DIRECT relationship. (Online relationships are still like two people talking through a mediator/medium.

    As for advertising – for me, and probably many others, since I don’t think I’m that unique when it comes to advertising influence – the BEST way to get me to buy a new product is to give me a sample at WalMart, Price Club, etc. No medium. It’s personal and REAL.

    (Maybe if advertisers could find a way for us to hear, read, and TASTE a new product online…?)

    jl

  10. Jeff: You can’t use the Net to give someone an actual sample, of course, but you can give them coupons for samples. In order for this to work, though, you have to engineer the greater relevancy I’m talking about here. You’re right that this doesn’t completely replicate the real world, but does it get us a step or two closer? Maybe.

    Denny: The inmates may not get it right away, but that doesn’t mean you can’t make the experience better for them. They’ll notice soon enough, I suspect.

  11. Great post, Sam.

    I think your insight on the flatness of on-line friend relationships is right on. I understand the idea of rating friends on “closeness” but I think that one thing that is hard about social networks is their openness.

    In real life, you can have several best friends that are closer to you then some other friends, but it doesn’t have to be readily apparent to all involved. On-line, a key question would be whether everyone could see how close you’ve rated them to be to you, or whether that was information only you saw.

    One compromise would be for the ratings to be done based on actions (how many times you IM, e-mail, etc.) that seems less subjective and more objective, but the tranparency of the closeness ratings seem to trigger some basic human relationship questions that technology won’t answer by itself.

    It’s possible that social networks are messy because people are.

  12. Hi Mike. I think my theory about how it would work is that you’d set a closeness rating which would either be invisible to others or that you’d have the option of making visible or invisible. Again, this would sort of mimic how real life works.

    The idea of action-based ratings is interesting, too, although I can’t help thinking that most people are going to want to have control of how that works. Could be wrong, and it will be interesting to see what works and what doesn’t.

  13. As has been said elsewhere, I think that social networking speeds up existing and relevant aspects of human nature. Sure, systems can be re-designed, new variables added and even some AI (ish!) stuff thrown in. With or without this, I think we’re all going back to those fundamental aspects of Maslow, its just that the internet and social networking speeds it up.

    Put another way, I can quickly create and dismantle real world relationships along with expressing myself more easily to more people via the web. This is great and sure, it helps me on my quest of getting up Maslow’s triangle. What is missing for me though is something of a shortcut, or a gain in efficiency that is an order of magnitude (e.g. email v. letters etc.) rather than small incremental steps…

  14. Bruce: Maslow continues to be incredibly useful in parsing things, huh? This kind of reminds me of a conversation I was having yesterday. A very senior officer in a major consultancy put her finger right on it – when companies are talking about social media, they need to stop and ask themselves “what problem are we trying to solve?”

    Very Maslowian, if you ask me.

  15. The problem with non-flat advertising is that it requires knowing a lot about people. And as we’ve seen recently folks don’t like trusting social networking sites wtih that much personal info. It’s pretty creepy when marketing drones start customizing thier pitches to you.

  16. Hi, Ian. You’re right, and I think the theory behind what Balaya is trying to do is take some of the creepiness out by making that relationship a user choice. When I have the ability to choose who can advertise to me according to what my group is about I think that solves everybody’s problem. In theory, anyway.

  17. Pingback: Balaya: a nice success story in innovation marketing « Black Dog Strategic·

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