Since social media’s inception naysayers have been ringing its death knell. The problem is – for every Luddite ready to call it done, there were a million more people waiting to sign-up, which meant their end-of-days prognostications never proved out.
However, now with the recent downturn in social media stocks (read the article), investors made leery by memories of the dot-com pop appear to be worried that social sites are headed for a redo of 15 years ago with a bubble big enough to take out heavy hitters like Facebook, Twitter, and even the ever shelf-stable, LinkedIn.
Is social media going down?
If we’re talking recent stock valuations, then yes – but that’s not necessarily a bad thing as many financial experts have noted that social media sites are currently overvalued and probably need to be adjusted.
However, when it comes to marketing tools, the importance of social media really cannot be overstated, especially as it pertains to SEO. Certainly the industry is in constant flux, new platforms, new algorithms, and new ways to receive, collect, and consume information through social media are ever evolving.
With 60% of all searches being done on mobile devices these days (Forbes article), marketers do well to post short, frequent, and relevant quality content that works best for mobile devices – first. In fact, there’s nothing more tailor-made for this kind of content – social media is THE solution. But social is not just about SEO results, it’s also about collecting real-time market research data direct from your existing base and your targets.
Moreover, that means sifting through all that Big Data, which experts have already projected will increase to 4300% annually by 2020. With individuals creating 70% of all this data and enterprises storing 80% of it – there can be no doubt that this represents a massive market growth sector – one in desperate need of analysis and stewardship. In short, to prove useful, all this data must be mined for insights and managed for maximum returns on a regular basis.
(EnableVue can help you make sense of data insights requiring human subjectivity, removing many of the inevitable data headaches.)
So while bloated stock valuations may be something social sites have in common with the dot-com boom of the past, there are a few other important distinctions to be made. This includes the inescapable advantages that real-time data gives us and how the growth of that industry will continue to fuel the realm of social.
Even though the stock values for these social media sites are potentially beyond what they can produce in revenue at the current moment, they are not as astronomically overvalued as those during the dot-com debacle. In essence, when it comes to bursting – social sites simply haven’t generated as much hot air as their dot-com counterparts.
In fact, at this point, it might be more accurate to say that if there’s a bubble, it’s more like a balloon that has been overinflated and has now been gently untied to release a little of its air, deflating it a bit in order to keep it from popping. These drops in stock prices are the inevitable fluctuations that must occur in order to bring values more in line with what these companies can actually sustain – and when it comes to bubble watching, that’s a good thing.
The other difference? Dot-com came first, which means those in the know understand what to look for. As noted by Amish Shah at Business Insider, serious investors have seen this all before – they know the game and they’re not expecting to cash in on quick returns. They’re looking towards long-term earnings and have been keeping an eye on things a bit closer than in the past.
Watch for the shake-out
Though analysts are somewhat divided on the long-term picture for social, most agree that if titans like Facebook, Twitter and LinkedIn are going anywhere – it will be a while.
In fact, as referenced in Amish Shah’s article above, folks like Dallas Mavericks owner, entrepreneur and reality TV Shark, Mark Cuban, went public on his blog earlier this year with his predictions of the worst kind of tech bubble bursting due to privately held startups. Mark stated these startups have “no valuations and no liquidity.”
While Mark may be talking about the most anticipated potential IPOs this year, Uber and AirBnB, he’s no doubt referring to the less effective or newer startups hitting the scene. Whether you agree or not with Mark’s comments, these are the first companies in line to take a beating during a market shake out.
And it all will inevitably shake out.
Because it’s technology – and technology is always moving the goal post. Innovation = newer is better. However, that doesn’t spell the end of social media. It will most likely result in stabilization, growth and new ways to parse the data it generates to help feed long-term business growth and strategy. It will also increase the usage of the platforms we all like the most, while the losers and latecomers – those without the popularity, solvency and fresh innovation to capture our collective attention, will clear out, making the arena ripe for the next great thing.
If you’d like to get a jump on the future with trusted solutions to your Big Data needs, call us today at: 800-991-4641