Social Media Monitoring Product Firms to spruce up act for profitability

In my previous post, I had discussed the repercussions of the global economic crisis on the social media industry. One of the segments that I touched upon was vendors selling social media monitoring tools.

It is clearly evident that in order to maintain a respectable bottom line, most companies will try to restrict their spending on public relations, branding, and marketing going forward.

In such a scenario, social media monitoring tool companies will have a tough time selling their products and services in developed markets unless they offer strong value-proposition to clients. At this point in time, if one looks at the value-add these companies offer, the scenario does not look very impressive.

Agreed that these firms monitor the buzz around you, gets you the unedited version of discussions and chats from communities, networking websites, at the most tonality of a comment which definitely require human intervention, is dished out….you get nothing more.

Ok, you may impress you boss by showing him a jazzy report which can serve as a visual treat (with colorful bars and charts), showcase the data in different permutations and combinations by slicing and dicing. However, if you have to make a business decision based on reports which these social media tools generate….you need to think again. These tools just monitor the buzz for you. For analysis, interpretation, and connecting with the audience, you will have to depend on social media specialists. Period!!

Although most of these companies cater to the buzz monitoring needs of public relation agencies and advertising firms, in order to survive during a downturn, the tool markers will have to expand their target segment which in turn would mean expanding their service offerings by providing human intervention capabilities. Otherwise these social media tool companies will not stand the test of time.

How Global Credit Crisis will Impact Social Media

Search for “social media monitoring” on google website and you are bound to find pages on the subject. There are social media trackers, thought leaders, vendors, and a whole new genre of professionals wanting to cash-in on the current buzz word in the industry. If you show ignorance towards this new form of networking, you are not considered to be part of the Web 2.0 revolution.

The success of social networking websites and craze among netizens to be seen on these websites has definitely given a fillip to the social media industry. In a way it is good for the industry and professionals associated with it. However, it looks like the dream run is over before it ever started.

At the time when the world is witnessing economic and credit crisis, layoff and credit squeeze have become the order of the day. Corporates, the world over are trying to tighten their purse strings in order to curtail losses that are bound to reflect in their holy grail---the balance sheet—in the forthcoming quarters.

In such a scenario, when the developed economies in US and Europe are facing fears of recession, one needs to dissect the business repercussion on social media.

It is evident that companies facing credit crisis and reduced business opportunities will try and curtail peripheral costs such as advertising, public relations and marketing budgets. This in turn would mean calling all stop to new initiatives such as activities in social media sphere.

The first casualty might be the vendors selling social media tracking, measurement, and analysis tools. As they bill on the basis of cost per seat, it is likely that going forward companies may not renew their subscription or move over to free social media tracking tools such as technorati, google trends and analytics respectively.

The second casualty would most likely be the in-house social media tracking and measuring team, mainly considered a cost centre. Layoffs and pink slips could become a reality in the social media department of a company.

Till recently we were seeing the launch of social networking websites almost daily. The credit crisis will most likely put a stop to this trend.

Now let us look at the scenario a little differently. It is seen often enough that during economic slowdown or a recession, firms tend to innovate and ideate to curtail expenditure. And what better way to reduce advertising, marketing, public relations cost by using low cost web 2.0 version i.e social media to reach audience globally.

Let us wait and watch if innovation is the virtue companies adopt globally to fight recession.