A subtle but powerful shift is underway as brands and platforms that have thrived, in part, through social media are now trading up into traditional media territory on the strengths of the eyeballs and engagement they have captured. To illustrate I want to share three examples.
1. GOOGLE HANG-OUTS ON AIR: Google wants this new live studio format to revolutionize the music industry by optimizing the sound quality for live performances rather than just voice. While this is early days, what will this do for artists? How will it impact the concert tour model? How will affect the business model of concert and tour companies like Live Nation? What new crop of artists and legions of fans will it connect and unleash independent of the traditional music industry? Here is a quick look at how it works and then, just imagine what this will do to the traditional music industry already reeling from illegal downloads, piracy and artist’s (most recently, like Beck) who are constantly exploring independent business models? Meanwhile, enjoy Suite 709’s new track using the platform.
2. HUFFINGTON POST LIVE: Yesterday Huffington Post Live did just that – went Live for the first time. It did so, in their own words, to build on the depth of conversations across on and around its platform in the comments sections and across social media. It was this deep engagement that gave them the confidence to threaten traditional media territory and also to allow user interest to drive the content rather than prescriptive programming. Such engagement is the type of feedback loop that traditional news outlets are so desperately trying to earn and struggling to maintain.
3. INSTAGRAM SHOPPING: The popularity of Instragram – the mobile only app that lets you apply filters to photos and share them – has captured the attention of brands as well who are now tapping into that popularity and sharability to sell product at a fraction of the cost of traditional media. In short, it’s social shopping in an instant with a peer recommendation built in. So it’s little wonder you see big brand adoption rates and community growing so quickly in the latest Interbrand research below.
All three efforts are nothing shot of a land grab in the gap between “the way things have always been done” and how they are now. These companies are reverse engineering out of the eyeballs and conversations they are capturing through social media back into traditional media territory effectively severing the ties of pre-existing media companies to the future.
The window of time in which companies (whose media plans and profit centers turn on traditional media alone) can change and adapt to new social technology and consumer behavior is closing. And left too long, they will find themselves on the wrong side of history.
Do you agree social media is changing the way your industry does business? If so, what is the greatest threat?
An extraordinary thing happened this week. Ben Bernacke, the Federal Reserve Chairman made a compelling case for the quality of life we live over the quantity of life we consume. This is critical because this fundamental – and some no doubt will argue simplistic – approach to measuring economic success sits at the heart of any substantive change in the practice of capitalism. Citizens and consumers, armed with social media, can only do so much against selfish corporate behavior when the underlying beliefs remain unchanged. But when the market started to recognize and reward new metrics for sustainable success, the essential partnership between people and institutions can evolve – with difficulty and resistance – to a place that better serves the well-being of the majority and the planet. With that in mind, I wanted to share Bernacke’s words which are important in and of themselves, and also because he spoke them.
Although the field is still young, there have been interesting developments in the measurement of economic well-being. In a commencement address two years ago titled “The Economics of Happiness,” I spoke about the concepts of happiness and life satisfaction from the perspective of economics and other social science research.1 Following the growing literature, I define “happiness” as a short-term state of awareness that depends on a person’s perceptions of one’s immediate reality, as well as on immediate external circumstances and outcomes. By “life satisfaction” I mean a longer-term state of contentment and well-being that results from a person’s experiences over time. Surveys and experimental studies have made progress in identifying the determinants of happiness and life satisfaction. Interestingly, income and wealth do contribute to self-reported happiness, but the relationship is more complex and context-dependent than standard utility theory would suggest.2 Other important contributors to individuals’ life satisfaction are a strong sense of support from belonging to a family or core group and a broader community, a sense of control over one’s life, a feeling of confidence or optimism about the future, and an ability to adapt to changing circumstances. Indeed, an interesting finding in the literature is that the overwhelming majority of people in the United States and in many other countries report being very happy or pretty happy on a daily basis–a finding that researchers link to people’s intrinsic abilities to adapt and find satisfaction in their lives even in very difficult circumstances.3
This line of research has generated alternative measures of well-being that are frequently survey-based and incorporate elements such as psychological wellness, the level of education, physical health and safety, community vitality and the strength of family and social ties, and time spent in leisure activities. These measures have begun to inform official statistics and have started to be discussed in policy debates. An interesting and unique case is the Kingdom of Bhutan, which abandoned tracking gross national product in 1972 in favor of its Gross National Happiness index based on a survey that incorporates these types of indicators. Taking the measurement of well-being in a cross-country framework, the Organisation for Economic Co-operation and Development (OECD), as part of its OECD Better Life Initiative, has created a “better life index” that allows a side-by-side comparison of countries according to various quality-of-life indicators that could, at least in principle, be followed over time.4 Other somewhat-more-conventional economic indicators that bear on quality of life, and that accordingly might be developed and followed in more detail, include changes in the distribution of income, wealth, or consumption; the degree of upward mobility in material measures of well-being; indications of job security and confidence about future employment prospects; and households’ liquidity buffers or other measures of their ability to absorb financial shocks. All of these indicators could be useful in measuring economic progress or setbacks as well as in explaining economic decision making or projecting future economic outcomes.
Do you believe Bernacke is genuinely committed to a new measure of economic progress? Do you think the economic vision that Bernacke describes is possible in our lifetimes? And, if it’s not, what will that cost generations to come?
Goldman Sachs is making an unusual loan of $9.6 million to keep young men out of New York City jail. And while, yes, they can make millions out of the deal, there are good intentions behind it. It’s all part of the introduction of a Social Impact Bond, invented in the UK and now launched here by Mayor Bloomberg, in which the private sector seeks to privide a solution to a problem that would cost the government money.
If the plan works, the investors and city split the profits, while if it doesn’t, tax payers don’t pay and the investors bear the loss. Specifically, Goldman’s loan will go to a non-profit called MDRC to pay for a selection of services for teen offenders. And if none of it works out, Bloomberg Philanthropies has guaranteed the bulk of the loan capping Goldman’s exposure to 25%. And that’s what’s so interesting because it prompts a series of questions that speak to the heart of the role of the private sector in scaling (and bankrolling) social change:
1. Does such an effort by Goldman Sachs do anything to improve its reputation in your mind since the revelations of banking practices since 2008?
2. Does the potential upside of the deal for Goldman diminish any reputational benefit especially when they ultimately bear so little risk?
3. Is it alright in the tax payers mind to empower private sector companies to profit by doing projects that government agencies should manage themselves?
4. Do consumers believe such efforts are motivated by a genuine intentions to help or are they seen as yet another (and quite literal) way to profit from the disadvantaged?
5. Is a feature in which private sector companies underwrite social change of all types feasible, both in terms of consumers and citizen support and the bottom line value to those companies?
6. Is it appropriate that Goldman gets a good deal in order to inspire other companies to follow suit?
With government burdened by debt and bipartisan inertia, and non-profits under-resourced, we have little recourse but to look to the private sector to spearhead social change. Yet with it will come even greater scrutiny of the mixed motives and competing agendas of for-profit companies empowering change.
If corporations such as Goldman Sachs cynically view such efforts as merely money-making opportunities they will rob themselves of the reputational benefits they so desperately need. If they re-characterize such efforts as investments in long term customer loyalty through social impact, they can quickly take the lead in what is both a necessary and expanding marketplace opportunity.
Do you support such efforts by Goldman Sachs? Do you believe their motives are genuine, cynical, or a mixture of both?
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Simon Mainwaring is the founder of We First, a leading brand consultancy that provides purpose-driven strategy, content, and training that empowers companies to lead business, shape culture, and better our world.