As I waited, I could see from the teasers the angle that was being developed on the Internet segment: Facebook’s $10B valuation is an indication that we’re in a repeat of the dotcom bubble (smirk knowingly). I contemplated my options for key points to break out of this and came up with a plan. Something simple but pointy enough to break the monotony of condescending skepticism.

So, here’s how it went.

As you might have guessed, Live TV is not a medium I’ve mastered, so my plan was thwarted. Perhaps Dave Asman sensed where I was going when he cut to another guest. Fortunately, unlike Live TV, on the web there’s always a second chance. Here’s what I’d planned to say on this topic.

Asman: …but how will sites like Twitter make any money?

Me (second take): With respect, Dave, I think you might be missing the big picture here. Sure, some social networks might not survive and others might barely break even (or maybe get acquired by companies like Fox) and some investors will no doubt be disappointed because they were hoping for the next Google. But a lot of social sites will survive because they don’t need to make billions to fund their operations, which are steadily declining in cost. So maybe the question you should be asking is, assuming that some of them do survive, what’s going to happen to TV shows like this one when your sponsors discover they can reach your audience for a lot less money than they’re paying you? Social media means disruption – it’s hit the music business, it’s hit the newspaper business, and it looks like TV could be next in line. Think of people like Scott Monty, the head of social media at Ford, who’s able to broadcast his messages whenever he likes directly to over 22,000 followers, for free. Do you think Ford will be eager to continue paying millions of dollars to reach an undifferentiated TV audience with its commercials when Scott can put a link to a YouTube video in a Tweet and get massive exposure online for almost nothing? That kind of communication might not make Twitter wealthy – they’ll have to think of subtler ideas like selling marketing intelligence, or consumer data, or specialized applications – but it sure could change the economics of TV journalism.

Online coverage of President Barack Obama’s inauguration brought new clarity to the media opportunity for social networks, proving the inherent value of varying social graphs and demonstrating what it takes to ignite powerful, meaningful conversations at a huge scale.

With a dizzying array of online coverage, ranging from Hulu’s feed of Fox News to Livestation’s live broadcast of Al Jazeera, there was something for anyone connected to the Internet – by wire or wireless – looking for an alternative or supplement to traditional broadcast coverage. At the forefront of the fusion of broadcast and community, CNN teamed up with Facebook to allow Facebook members to post comments while a live CNN feed played in an adjacent window. By simply offering two tabs, Facebookers could communicate with everyone on the service or interact solely with their own contacts. The degrees of separation for your broadcast chat were up to you.

The results—a few technical glitches aside—held an unfiltered mirror up to whatever community you chose. Participants were funny, sad, insightful, heartfelt or downright loco—just like the people who populate your world or the world at large. The CNN feed provided a contextual stream to fuel commentary that included such whimsy the size of Aretha Franklin’s hat to a micro-evaluation of Obama’s inaugural speech. Moments such as the oath of office miscue were met with instant comments and many tossed in links to underscore their points of view.

CNN and Facebook were not alone in using social connections to enhance the media experience. Simulstreanming companies uStream, Mogulus and Now Live showed live webcasts with chatrooms and Livestation offered live chats with its broadcast feeds. CNN was reporting thousands of comments per minute, surely a data point not lost on incumbent (generally more risk adverse) broadcasters. While mega-events the scale of an historic presidential inauguration are natural catalysts for the fusion of broadcast and social media, there’s no reasons why communal TV viewing wouldn’t work for major sporting events and major news stories.

Beyond reinforcing the traditional broadcast value of capturing the rapt attention of a large audience, the presence of all of this concentrated chatter offers advertisers a glimpse of the elusive goal of measuring engagement in real time. The sheer volume of consumer commentary gives unprecedented evidence of real engagement which broadcasters can take to the bank. Beyond this, media and marketing organizations who know how to listen to this goldmine of unfiltered expressiveness and hear their customers’ voices in the din will quickly outperform competitors.

With CES just a few weeks in the rear view mirror, we have to wonder how the CNN-Facbook simulstream would have worked on a platform such as Yahoo!’s Connected TV. We are excited to find out.

As reported in AdAge, the event was the Digital Non-Conference, a program by Cincinnati’s Digital Hub Initiative presented by the Ad Club of Cincinnati, and his remarks included these:

“I think when we call it ‘consumer-generated media,’ we’re being predatory,” he said. “Who said this is media? Media is something you can buy and sell. Media contains inventory. Media contains blank spaces. Consumers weren’t trying to generate media. They were trying to talk to somebody. So it just seems a bit arrogant. … We hijack their own conversations, their own thoughts and feelings, and try to monetize it.”
While it’s not a company policy, but rather a personal preference, Mr. McConnell said, “I really don’t want to buy any more banner ads on Facebook.”

He went on to cite Facebook applications as “potentially valuable” for advertisers…leaving open the question of how social networks might significantly monetize that opportunity. He also added that, while acknowledging that the targeting “is fantastic,” it makes him uncomfortable, sticking a pin in one of social media’s strongest claims on advertising value.

If McConnell’s comments reflect mainstream advertiser thinking – and mainstream advertiser budgets – then what are the options for social media? Here’s a rundown of some of the possible alternative strategies:

1. Attract brands and advertisers like P&G by making social media look more like MSM. License and promote more professional content and monetize it with video advertising. This appears to be a big part of MySpace’s strategy.
2. Cultivate advertising’s long tail.  After all, that’s what Google does (for the most part). Take the model of self-service PPC search and figure out how to make it work in social networks (but beware of dangerous ideas like “Beacons”).
3. Add more embedded ecommerce to the mix and try to build up commissions and transaction fees, either through third party affiliations or internal social storefronts.
4. Go after the research side of marketing budgets. Figure out how to leverage proprietary data services to capture some of the rising spending on social media monitors (as we’ve been discussing), but be very careful about trust and privacy in the process.
5. Try to push premium services with the “freemium” model. Emulate LinkedIn’s premium subscription concepts.
6. Move beyond marketing entirely and pursue enterprise IT budgets with social platforms and applications. Study Amazon and Google and “the cloud.”

These ideas are not mutually exclusive, nor is the list collectively exhaustive.  Each has merits and challenges, and no one can do them all.

The big question remains: is it enough to meet the high expectations we put on social media only a year ago? Or is more disappointment inevitable?

Whether you believe America is on the brink of another ‘30s-style Great Depression, or you quietly suspect a wave of manic exuberance could turn back the slide as quickly as it came (or, more likely, you’ll take the bell curve in the middle), you must recognize how the media’s growing use of filtered feedback from the audience has formed a trend amplifier that’s taken on a life of its own. Stories from people for whom the economy remains an ominous cloud on the horizon but have yet to miss a mortgage payment don’t make for good listening. They may provide some contrast to put the story in relief, but the story is clear, as told and retold by the audience to itself.

I’m not trying to say things are better than they seem. They rarely are. I’m trying to say that how they seem is an increasingly important determinant of how they are. Media has always played this feedback role, but only recently has its public input channel been opened so far and wide, its volume turned up so high, and its scope and scale been so profoundly global.

This is a spectacular vindication of the ideas of Marshall McLuhan, who emphasized media’s role in “amplifying and accelerating existing processes.” For McLuhan, it was not the content of any message, but the pervasive effects of the media itself that were worth understanding. Many remember McLuhan’s famous line, “the medium is the message,” but few seem to get it. The key impact of social media has nothing to do with what people are saying: it’s the effect of the medium itself on the way the world works that we need to attend to.

The effect of media on our global economy is to accelerate and amplify trends. It does this by converting events into a simple, coherent narrative that everyone can follow. Does anyone really understand what caused this economic crisis? Apparently even Alan Greenspan doesn’t. According to McLuhan it doesn’t matter. It’s the way a phrase – say, “worst crisis since the Great Depression” – can instantly captivate the global village that we must grapple with.

So what, you say? This means that, even if you are carefully monitoring and analyzing social media, you may well be focusing your efforts on the wrong things. You may be focused too much on understanding the content of conversations (especially the subject and sentiment of messages), and not enough on understanding their velocity and resonance. We search for keywords that define the baseline of relevance – our brand, our competitors, our category – but how many are actively looking for fast-spreading stories in the places where they are germinating? And then, how many are defining their own roles in these stories, both through action and communication?

This is the difference between social CRM – an important discipline, to be sure, but one that focuses on responding tactically to specifics – and social media intelligence, a new discipline for the 21st century.

No one knows what will happen to the global economy in the coming months and years. But the ones who use technology and insight to spot and amplify the next high-velocity narrative will know first.

Continuing yesterday’s surge of interest in the dogfood experiment, I’m happy to offer the roundup of rapid responders. Since the responses were unfortunately divided between two blogs, one of which was moderated, the relative order of responses given below is approximate, although I believe the overall timeframe to be accurate.

I probably don’t have to say this, but let me know if you believe there are any errors or omissions here.

Note that this is a more detailed version of the list of respondents posted the day after the initial test, and adds some companies that have commented since.

Company
Names
Notes

Visible Technologies
  Mike Spataro
First response within minutes of initial post (see Note below). Numerous comments

  David Passiak
First response within minutes of initial post (see Note below). Numerous comments.

  Blake Cahill
Note: this thread began when I responded to this post from Blake. Blake also communicated with me via email. Numerous comments.

Converseon
  Rob Key
First response within minutes of initial post.

Radian6
  Marcel LeBrun
First response within minutes of initial post (both blogs). Numerous comments.

  Chris Newton
First response within hours of initial post

J.D. Power & Associates (formerly Umbria)
  Bill Tuohig
First response within hours of initial post

  Dave Howlett
First response within hours of initial post

Scout Labs
  Jennifer Zeszut
First response within hours of initial post. (Currently in closed beta.)

RelevantNoise
  Jennifer Manning
First response within hours of initial post.

New Media Strategies
  Leslie Bradshaw
First response within hours of initial post. Noted discrepancy with alternate blog.

Trackur
  Andy Beal
First response within hours of initial post.

Cision
  Cision
First response within hours of initial post.

Nielsen Online (BuzzMetrics)
  Elliot Bricker
First response within hours of initial post.

  Jerry Needel
First response within hours of initial post.

  Erika Ammerman
First response within hours of initial post (from UK).

  Pete Blackshaw
First response within hours of initial post. Follow-up received within days.

Enterprise RSS
  Israel Kloss
First response within hours of initial post.

dna13
  Alecia O-Brien
First response within hours of initial post. Special notice as dna13 was not on the original callout list. Followed up on alternate blog.

Market Sentinel
  Leon Bailey Green
First response within hours of initial post.

BuzzLogic
  Valerie Combs
First response within hours of initial post.

CustomScoop
  Jen Zingsheim
First response within hours of initial post. Followed up on alternate blog.

PopularMedia
  Ashish Desai
First response within hours of initial post.

Techrigy
  Aaron Newman
First response within hours of initial post. Followed up on alternate blog.

  Martin Edic
First response within hours of initial post.

  Bob Pease
First response within hours of initial post.

Biz360
  Dan Kidd
First response within hours of initial post.

MotiveQuest
  David Rabjohns, CEO MotiveQuest
First response within hours of initial post (both blogs).

VibeMetrix
  Adam Green
First response within hours of initial post (both blogs). Special notice as VibeMetrix was not on original callout list.

Onalytica
  Flemming Madsen
First response within hours of initial post. Special notice for responding on both blogs.

Sysomos
  Steve Dodd
First response within hours of initial post. Special notice as Sysomos was not on original callout list.

Sports Media Challenge
  Jake Rosen
First response within day after initial post. Special notice as Sports Media Challenge was not on original callout list.

CyberAlert
  Bill Comcowich
First response within day after initial post. Special notice as CyberAlert was not on original callout list.

Clarabridge
  Sid Banerjee
First response within day after initial post. Special notice as CyberAlert was not on original callout list.

Networked Insights
  Dan Neely
First response within day after initial post.

TNS Cymfony
  Michelle Vangel
First response within days of initial post.

Networked Insights
  Todd Hoskins
First response within days of initial post. Not focused on monitoring.

BrandIntel
  Kevin Joy
First response within days of initial post.

BurrellesLuce
  Gail Nelson
First response within days of initial post. Special notice as BurrellesLuce was not on original callout list.

Lexalytics
  Christine Sierra
First response within days of initial post. Special notice as Lexalytics was not on original callout list.

BuzzGain
  Mukund Mohan
First response within days of initial post. Special notice as BuzzGain was not on original callout list.

The Customer Insight Portal
Leximancer
  Neil Hartley
First response within days of initial post. Special notice as The Customer Insight Portal and Leximancer were not on original callout list.

Waggener Edstrom Worldwide
  Derek Whiteside
First response within days of initial post.

Attentio
  Simon McDermott
First response within days of initial post. Special notice as Attentio was not on original callout list.

Brandwatch
  Giles Palmer
First response within days of initial post. Special notice as Brandwatch was not on original callout list.

Which brings us back to our conversation about social media.

Opinions are mixed on the question of whether social media monitoring can predict the future, but I think it’s safe to say that everyone reading this will agree that informed participation in the blogosphere can certainly influence the future as determined by public perception. This, at least, is intuitive.

A less intuitive claim is that social media defies our instincts about large-scale phenomena. Intuitively we imagine huge structures, like, say, the global economy, to be like mountains: stable and slow-moving by virtue of their size. If nothing else, recent events have shown us that such structures are shockingly dynamic and volatile. Because of their extreme connectedness, they exhibit the so-called butterfly effect of chaos theory: large-scale sensitivity to small – even minute – changes.

This picture stands in sharp contrast to traditional media wisdom, which holds reach and frequency – the ability to blanket the largest possible audience with a message – as the keys to influence.

This leads to some key ideas about social media marketing strategy.

• First, recognize that social media opinion behaves just like a global market: it can shift on a dime with tremendous impact. That’s why it’s both important and fundamentally different to deal with than mainstream media. Traditional analysis-and-response cycles are just too slow and too crude to be effective.
• Next, understand that the origins of such a shift are usually obscure: some small group somewhere finds, for example, a rootkit in your copy protection scheme, and next you know you have a full-scale PR disaster on your hands. That’s why, when evaluating social media monitors, you need to insist on truly comprehensive coverage, not just sampling, of the social web. That’s a technologically demanding requirement to fulfill.
• Finally, although the emphasis has shifted from talking to listening, engagement is key to both nipping potential outbreaks before they start to mushroom, and planting the right seeds in the right places to start the right kind of resonance. And resonance is the key: if your message does not resonate with your audience, it will quickly vanish – if you’re lucky. That means combining workflow with communication talent in new ways.

So, are today’s social media marketing solutions up to the challenge? Over to you…

But many social media analysts make an even stronger claim: that social media holds the key to strategic trend-spotting, providing specific, otherwise hidden, predictive insights into high-level decision-making processes. BrandIntel, for instance, claims, “we’ve cracked the code on early and predictive.”

Since this blog has recently gotten the attention of a number of these firms, who were quick to provide impressive proof of their listening power, perhaps a few will indulge me once more in exploring (and showcasing) this aspect of their craft.

How many social media monitors are specifically focused on extracting predictions? …and who will offer a sample prediction from the social media world? (Predictions about the future only please.)

Needless to say, predictions are inherently risky, and the most valuable the ones come with the longest odds. But understanding the kinds of predictions a firm can extract from the corners of the social web might help change perceptions about just how significant a domain this is. Think of it this way: a clipping service: a few thousand a month; actionable intelligence about the future: priceless. That’s why I’m predicting that social media monitoring will be a three billion dollar business by 2012. (Please refer to the disclaimer at the bottom of this page.)

Thanks again to all the firms who have responded over the past few days (and sorry to zap you again):

Biz360, Buzz.io, Buzzlogic, Cision, Converseon, Custom Scoop, CyberAlert, Enterprise RSS, Market Sentinel, MotiveQuest, Nielsen, New Media Strategies, Onalytica, PopularMedia, Radian6, RelevantNoise, Scout Labs, Sysomos, Techrigy, Trackur, Umbria, VibeMetrix, Visible Technologies…

Of the 34 companies I mentioned, 16 responded (some more than once). In addition, 4 responded whom I hadn’t mentioned.

The ones I mentioned who responded as of this posting were: 

Converseon, Radian6 (two responses), Scout Labs, RelevantNoise, New Media Strategies, Trackur, Nielsen (2 responses), Visible Technologies* (3 responses), Market Sentinel, Buzzlogic, Custom Scoop, PopularMedia, Techrigy (three responses), Biz360, MotiveQuest, Onalytica, Umbria,

and the ones who I didn’t mention but who picked it up anyway were:

Cision, Enterprise RSS, VibeMetrix, CyberAlert

Still hoping to hear from the rest.

Although this was in no way meant to be a scientific poll, it does strongly support the thesis that these technologies are for real, and agencies and marketers must take notice or risk being left behind. If you really want to know what’s happening to your brands in social media, you need to find the right tools and the right partners.

This made me wonder whether social media monitoring vendors in general are mining the social net for references to their own products. So here’s simple – and, yes, self-serving – test: check in below if you are monitoring the net for blog posts (however obscure) that mention your social media monitoring service. Or, if let me know if I’ve missed you.

How many can say “we’re listening?”

1st2c, Biz360, BrandIntel, BuzzLogic, Nielsen Buzzmetrics, CIC, Clarabridge, Collective Intellect, Converseon, CoreX Technologies, Crawdad Technologies, CSC NameProtect, CustomScoop, TNS Cymfony, Echo Research, Envisional, Factiva, Kaava, Market Sentinel, MotiveQuest, Networked Insights, New Media Strategies, Onalytica, Opinmind, Popularmedia, Radian6 Technologies, RelevantNoise, ScoutLabs, SentiMetrix, Techrigy, Trackur, Umbria, Unbound Technologies, Visible Technologies, Waggener Edstrom Narrative Network

This week I’m heading out to LA for Gartner’s Web Innovation conference, where I’ll do a pitch called “Brands in Social Media.” Among other things, I’m going to suggest that there are two ways to approach the burgeoning blogosphere. You could sit there and read – I mean, actually read – as many blogs as you can from people you judge to be influential in topics of interest, and perhaps assign your staff or an agency to scan even more, or you can apply advanced technology to the problem of scanning the whole web for stuff you need to know about and constructing workflow around how to respond. Then I’m going to suggest that, if your job has anything to do with worrying about the public perceptions of your organization and you haven’t already done so, you should look into the second way.  

(Subscribers may want to check out Social Media Delivers Marketing Intelligence for more on what this entails.)

So read the blogs you like, but don’t ignore the rest. Gartner has just launched 45 new blogs – are you going to read them all?

Yes? Good.