5 Reasons Why the Social Media Frontier is like the Wild West?
Today’s Social Media era reminds me of an old western film.
Like one of the classic John Wayne cowboy films.
The dusty little towns are booming with new enterprise and Pioneers are always risking their life savings in hope of a better life.
Like in those old depictions of the Wild West, the new Frontier of Social Media is full of possibility and promise.
There are outposts of success, rumors and stories of veins of gold being discovered.
But it is far from settled. It is still wild.
1) New tools keep us in a constant state of discovery.
I am sure if you are like me you are finding this a challenge.
Just when you settle in on a software tool suite to use there are three new one’s that pop up that you have never heard of.
The ease of creation of new software tools has never been easier.
And the Social Economy rewards artists who can create a better mousetrap than the next guy. (Click to Tweet)
I suspect this is the new landscape of the world we live in.
There are so many choices (x) the speed of creation = constant invention.
It also depends on who you ask. Here are a couple of great examples:
- Tim Ferris-21 WordPress Plugins that keep me sane
- Michael Hyatt-15 Resources for Pro Bloggers
- Entrepreneur-10 Little Known Social Media Tools You Should Be Using
- Daily Tekk-10 Powerful Social Media Monitoring Tools
Expert Insight: By Clay Hebert
“There will always be more and more new tools to get distracted by. The key is to not get distracted by them, understand how they work and how to apply them to your specific goals and objectives. People think the right new hammer will build the house (and throw the housewarming party) for them. Of course, it doesn’t.”
2) There is Gold in the Hills.
During the mid-to-late 90’s the mantra for the Internet new frontier was “build it and they will come.”
The dot bomb era was full of arsenals of venture capital investment enabling the next college kid to become a CEO.
The challenge was no one had figured out how to monetize the traffic beyond banner ads.
I see this same boom town trend today.
Like in the Old West when there was a hint of gold in the hills above, a town popped up to support the prospectors.
My guess is the biggest winners of those stories were the saloon owners.
Two Business Models Today
Today there are two distinct business models driving successful companies.
1) “Freemium” is based on the premise that we use the free version of the software/ap and then upgrade to the paid for version.
Most companies are experiencing a 2-5% conversion rate.
That means if you have 10,000 people using your free version, 200 to 500 will pay to purchase your product.
The challenge for these companies is to define a product/service that customers derive enough perceived value from the use of the Freemium product. Then even the best of products have to be marketed and sold.
2) Advertising-Anything that is free is being paid for by advertising. Today’s rates vary based on how targeted an audience is to whether the ad is served on a desktop browser or on your mobile device. They can range from $.60 to $40+ per 1000 impressions.
In the 90’s these ad rates were sky rocket high, but came crashing down to smaller CPM rates (cost per impression). Will history repeat itself here again?
Like with any new frontier, there are winners and losers.
The promise of being a winner, finding the mother-load, keeps us all picking away in the dirt. Yet, the companies, the investors, the individuals investing their time, effort, energy and resources into this boom town promise may not last.
Expert Insight: By Clay Hebert
“Companies like Twitter and Facebook are selling their users / eyeballs / impressions to advertisers. I can’t remember who said it but the quote goes like this, “If you’re not paying for the service, you’re not the customer…..you’re the product being sold.”
3) Converting Followers to Customers.
It is great that your company may have 50K followers on Twitter. In order for the followers to become customers, we still need to remember to provide something of value, something compelling.
Content is King
These days they say “Content is king” and more than 90% of what is provided by companies through Social Media are facts, “We are open from 8 am to Midnight today“.
Distributing facts is temporarily interesting.
Chris Guillebeau says that 95% of his followers never purchase anything from him.
For most people they are not willing to put in the amount of time and emotional, intellectual investment to
give away 95% of what they create for free.
It is only those few like Chris that will survive this new frontier.
Check out Chris’s new book, The $100 Startup.
4) The Territory is Large.
Sustainable success can be found in a couple of easy to acknowledge industries.
Retail Restaurants: If you are not using Yelp or a competitor to Yelp, then you can add one more reason why your restaurant may struggle.
The new frontier demands that you engage your customers.
Your comment cards that you put on the table? Yeah, go ahead and throw those out.
Every customer who walks in your door is carrying a comment card in their pocket, their iPhone. (click to Tweet)
But how will a law firm use Social Media?
Will an attorney tweet “Kicked their zzz” after they leave the court room?
We know the answer.
Not every industry is as clear as to how it will maximize the opportunity of Social Media, yet.
Expert Insight: By Clay Hebert
“I agree that the territory is large but I tell clients / people to not to even think or worry about “mapping it all”. Nobody ever will, nor should they. They’re worried about understanding every item in Home Depot (and what next season’s catalog will contain) when they should be using the saw and hammer they know how to use to build their house. Some people have already built a wonderful house (or a few) while others waste time waiting for the next new tool catalog. Stop waiting. Start building.”
5) There are high rewards for Pioneers.
In the old world, if you were an author, speaker, musician, software company, etc you needed big money behind you in order to succeed.
Today, we each own a factory, a publishing company, a record studio, a software development team-Your computer.
CD baby-Derek Sivers flattened the world for musicians.
He created the “buy now” button for musicians to distribute their music to their fans through a central location (distribution) CD Baby.
Derek was a pioneer uniting the tribe of independent musicians who would not have made the cut in the world of big record deals. He was faithful in providing his fellow musicians a platform to be heard by new customers.
And they rewarded him for it. (Read his book)
How else do you see that the Social Media Frontier is still wild?