About the Author

Geoffrey Moore

Managing Director, TCG Advisors Venture Partner, Mohr Davidow Ventures

Geoffrey Moore is a best-selling author, a Managing Director at TCG Advisors and a venture partner at MDV.  More...

November 2008

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« Fortune: “The New Rules of Business” | Main | Brand: Unclear on the Concept »

You, Me, and Dupree, but can I have the ads on the side?

Responding to Robert Young's blog on socially integrated media empires, I, like everyone else on the planet, am fascinated by the self-organized emergence of social media a la YouTube, Flickr, MySpace, Facebook, et al.  Who knew?  How much is fad vs. last paradigm is still anyone’s guess, but let us assume that some subset of the whole is lasting.  The question this raises for me is, what does it mean for marketing?

Media’s relation to marketing—the funding of editorial by advertising—has always been tense and occasionally becomes problematic.  The interests of readers, sellers, and publishers never quite align, but as long as the value proposition is strong enough to each constituency, the system is able to transcend its disconnects.

For this to hold true in social media, however, the industry is going to have to revise or refine the prevailing social contracts pretty dramatically. Creative-expressives—the authors of social content—will not abide by any content code, so advertisers will have to develop some mechanism of their own if they are worried about their ads showing up next to offending content.  Voyeur-viewers—the consumers of social content—are exceptionally adept at deconstructing and filtering out traditional marketing messages, so publishers and advertisers must become even more adept at subtly bringing them back in.  Marketing executives—the ones with the big budgets—are going to find it very hard to be able to spend enough of their budget in one place to make it manageable.  Publishers—the ones who are sponsoring the social site—will have a very fine line to walk: they must maintain their independent status and “cool in order to keep their creators and consumers, but this will make doing business just that more complicated.

Can it be done?  I doubt it can be done at scale.  It is just too hard to maintain.  So I doubt, therefore, that social media is a good business investment for the long term.  I think it will remain—indeed, I would argue that in order to be relevant it must remain—a fringe phenomenon.

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Comments

Wiley Vasquez

In your book Dealing with Darwin, you discuss in the last part of the book about outsourcing context but don't really discuss the management of outsourcing.

Outsourcing functions makes some assumptions that there are economies of scale to tap into. While theoretically this is desired, in practice these economies of scale are largely unfounded and really it boils down to unsustainable lower-cost labor substitution (and questionable quality).

Outsourcing seems to increase context management costs and increases risk. So even though context is non-differentiating, could create other issues.

I'd just be interested in hearing more of your perspective on that issue related to resourcing.

Thanks Geoff

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