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Business 2.0 and social networks: IDC paper


Another paper for you. I know how you love them. Correction: I know that you know how much the C-level execs expect you to come up with the stats and ‘authoritative’ quotes. So here ya go, from IDC:

Typical Reason Why Companies Deploy Social Networks

Customer
•Increase Web traffic with persistent engagement
•Drive marketing leverage by provoking customer-to-customer communication and viral marketing
•Gather real-time input from customers on their needs and wants
•Provide peer-to-peer customer support (lowering customer support costs)
•Increase brand awareness and loyalty
•Solicit customer-driven innovation

Employee
•Enhance teamwork
•Discover new ideas and accelerate innovation
•Encourage cross-functional inputs to drive better decision making
•Create a company culture of sharing and learning
•Increase communication by leveraging intraemployee communications to a broader audience
•Increase retention and connection between the company and employees

Partner (channel partners, developers, consultants)
•Coordinate communications, accelerating cross-company performance
•Increase sales through real-time market intelligence and collaboration
•Encourage co innovation to better serve joint customers and markets
•Create an interdependent ecosystem of partners that drives increased revenue for all participants.

Again, there’s better papers around – and I had to be Miss No-one from Nowhere again to sign up for a copy – and it’s hard to find the meat. You really want the McKinsey reports with stats like “technical support costs drop to 1/5th with a peer to peer support network”, I guess. Ah well, this is can be a supplement – and ignore the HiveLive advertorials throughout. 🙂

Laurel Papworth

Named by Forbes™ Magazine in the Top 50 Social Media Influencers globally, named Head of Industry, Social Media (Marketing Magazine™) and in the Power150 Media bloggers (AdAge™). CERT IV Training and Assessment certified trainer (Diplomas and Certificates etc) Adult Education. Laurel has manager Facebook Pages for Junior Masterchef, Idol, Big Brother etc. and have consulted on private online communities for banks Westpac, not for profits UNHCR & governments in SE Asia. Lecturer, social media, University of Sydney for 10 years and Laurel has 11,000 online students. Laurel Papworth personally connects to 6 million followers online and has taught around 100,000 people in the last 10 years how to be social media managers.

5 thoughts on “Business 2.0 and social networks: IDC paper

  1. Did you see Datamonitor’s analyst’s report: “Social networking’s explosive growth set to level out in five years”?

    – TCG

  2. Nah, I haven’t seen it – do you have a link? & that is contrary to every report I have seen – especially the growth of mobile social networks. “ABI Research found that “mobile social communities” currently count nearly 50 mln members worldwide, a number that is expected to reach 174 mln in 2011.” – that doesn’t look like levelling out to me… 🙂

  3. Here is the full text. Hope we won’t break any copyright laws.

    –>>

    Social networking’s explosive growth set to level out in five years

    Virtual communities and online social networking sites are providing a new, powerful and extremely popular medium for human connection. Global active memberships in social networking sites are expected to reach 230 million at the end of 2007. However, the impressive growth of this market is set to level out by 2012.

    For social networking services, barriers to entry are virtually non-existent, and both competition and innovation are ferocious. Users have a vast array of options, from Titanic generalists like MySpace and Facebook to tiny individual networks on DIY platforms like Ning. This year, revenues from social networking services should reach $965 million, growing to $2.4 billion by 2012.

    Explosive growth in social networking will plateau by 2012; earlier for the US

    Social networking is growing around the world, everywhere people have internet connections. Most large social networking services, especially those that allow the distribution of content like video, have a very long tail of geographic distribution.

    According to Datamonitor, by year-end 2007, Asia Pacific will account for 35% of the world’s social networking memberships. Europe, the Middle East and Africa (EMEA) will hold 28%, North America 25%, while the Caribbean and Latin America (CALA) will account for 12%. Adoption curves vary dramatically by region, but membership growth in all regions is expected to have peaked by 2009, and to have leveled out by 2012.

    Currently, there are two strains of thought about this market, both strongly influenced by memories of the e-commerce boom at the beginning of the century. At the moment, prevailing sentiment is excitement combined with anxiety. Players fear missing the next Google, the next Yahoo. But mixed with this exuberance is a thread of cynicism. Investors remember how few internet startups survived the market downturn, and are repelled by what they see as overconfidence. The bulk of social networking sites are wise to postpone any consideration of an IPO.

    A sane approach to this market requires balancing the two perspectives. The extraordinary proliferation of online social networks is fueled by real innovation and is substantially changing the way we communicate. However, the hothouse atmosphere of easy capital, media attention, and user curiosity that stimulates creativity will not be sustained indefinitely. All players therefore must develop a two-pronged strategy in order to survive the extremes of heat and eventual chill that this market will undergo.
    A value chain is emerging

    The business of creating a social network and providing the infrastructure on which it runs are beginning to separate. Firms are bringing not just social networks, but social networking platforms to the market. Specialists are becoming involved creating the ‘look and feel’ of social networking sites for a broad range of clientele. This trend looks likely to continue, and so technology providers are advised to look for ways to support social networking services in the key areas of scalability and availability.

    Consolidation is inevitable

    Media properties, search firms and other commercial entities will look to lock down the new constellations of audiences brought together by social networking services. Market experimentation will continue as operators seek the optimal combination of features and functions, as well as more sustainable operational models. However, the sites themselves will not necessarily consolidate; special interest social networking services will continue to play a valuable role.

    As the market becomes more crowded, it will become harder for social networking sites to remain independent. Acquisition can solve scalability issues, improve content and search capabilities, and extend visibility and reach.

    <<-- – TCG

  4. have u guys seen emarketer’s latest report on the subject: “Social Network Marketing: Where to Next?”

    From the exec summary: “The lead players, MySpace and Facebook, continue to perform strongly.They are set to account for 72% of all US online ad revenues in the category this year.The intense activity in the space will continue into 2008 and beyond, with hundreds of new social networking ventures competing for ad dollars. With this increased activity will also come increased scrutiny of the return on investment (ROI) of social network marketing— 2007 will be the year when marketers will demand results.”

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