SocialSocial Media2010 and Web 3.0: The Year of the Social Business

2010 and Web 3.0: The Year of the Social Business

As the social Web continues to impact the business world, it's time to reconsider business design.

2010 is underway, and “social media marketing” nomenclature is fast giving way to “what’s real.” So, what’s real? For starters, the core technologies of Web 2.0, a.k.a. “the social Web.” They are part of the mainstream-Internet use around the world, and their impact on business — worldwide — is significant. The continued evolution of the Web-based technology — whether deployed on a desktop, laptop, netbook, or smartphone — is pushing businesses to reconsider business design. The shift extends to the entire c-suite, not just the marketing department.

Living and working in India, it’s striking how closely the Americas, Europe, and India parallel each other for those who have adopted and regularly use broadband social applications. Outside of these Internet users, the three are worlds apart. But for the creators and adopters of online social technology, the distinctions are minimal at best, and in most cases essentially non-existent. No less than eight chapters of Social Media Club have sprung up in India in the past six months. Philips, based in Amsterdam, has an incredible awareness of its own social presence. Starbucks and Dell in the U,S, are practically cliché examples of social media and the impact of connected consumers on these businesses — and far beyond the marketing departments.

Compared with the mass markets, where undifferentiated goods and services are still sold on little more than price, the “social” markets have armed consumers with the information needed to make holistic decisions. These “informed” markets are growing, too, as low-cost technology pushes richer information deeper into the market. In a striking example of technology adoption, India is poised to go to 11-digit mobile phone numbers in 2010: the country’s combined operators have issued roughly 800 million phone numbers to date. With 30 new market entrants vying for a share of India’s 3G spectrum the capacity limit of one billion phone numbers (all mobile numbers in India begin with “9”) will surely be crossed in 2010. This kind of latent technology acceptance can dramatically — and rapidly — change marketplace dynamics.

But why wait? The current “digital/social” market is already in place. Take half the U.S. market and a good chunk of Europe — call it 100 million people, give or take — and then add to that 5 percent of the Indian market — which is to say, “add 50 million more.” Throw in savvy Net users in Canada and Latin America, and a growing segment in China and you’re probably up to around 250 million regular users of advanced, social Web technology worldwide. As a business that is looking for global growth, you’ve got the beginning of a real market. These 250 million consumers are surprisingly homogenous too: largely English speaking (outside the U.S., typically with the command of one or two additional world languages) and upwardly mobile (the Indian economy is booming; it is creating a significant upper middle class that is more alike than different no matter where you are). These consumers are largely within the important 15- to 45-year-old age bracket. They are very aware of the technologies that facilitate smart purchases, and of the global issues they face. They are connected, and they think collectively.

2010 brings an opportunity for savvy businesses — adopting nothing short of comprehensive social business design — to chart their paths into the global consumer markets that are just now emerging. To be sure, we’ve had global, multi-national businesses for years: centrally run, they have approached national markets as distinct — citing regional and cultural differences. But a sense of shared experience — of commonality versus exclusivity — is also developing and is powered in a large part by global social communities. Facebook has 400 million members worldwide, in something approaching 50 languages. Travel and discovery is no longer about going someplace far away and bringing back artifacts of exotic foreign experiences that friends and family have never heard of. Now, it’s more about going someplace far away to connect in person with someone you’ve already virtually met, and to experience what you’ve become familiar with through shared personal media and online social interaction. For the digitally aware, the social Web offers the world: travel just makes it real.

PepsiCo CEO Indra K. Nooyi is a powerful example of just this kind of transformative approach to global business leadership. The Chennai, India born 50-something executive was formerly associated with the Boston Consulting Group. Raised as a vegetarian, she now heads a soft-drinks and snack foods firm. She visited China recently and chose locations outside the typical corporate must-sees purposely to “understand what makes China’s markets tick.” She’s the new model of a global executive.

Consider the impact getting China right will have on Pepsi: average soft drink consumption in China last year amounted to about 35 eight-ounce servings per person — less than one soda per week — compared with 125 worldwide and a whopping 789 — or roughly three sodas per day — in the U.S. And that’s just the soft drink business. Personally, I’ve become a big fan of Kurkure (pronounced KER-ker-ay), a PepsiCo snack food in India that would be a smash hit as a part of Southwestern U.S. football TV spreads and tailgate parties. Combined with its introduction of fully compostable packaging, Pepsi’s global awareness is tapping the connectedness and sensibilities of the emerging social markets: by smartly innovating and participating through well-designed social applications, Pepsi is building the organic conversations that will drive its continued success.

Let’s dial it back to the development of marketing and business programs that leverage the increasingly connected and social nature of marketplace interactions. The contemporary social business builds on this — call it Web 2.0 — and then takes it one step further: it uses the information gained through the extraction of meaning to shape and evolve the business itself. In other words, the business feeds off of what its customers are saying by connecting the substance of the conversation to its own employees, suppliers, and business partners. This is the emergence of Web 3.0 — the semantic or “meaning-based” Web — and the application of consumer-driven business design. What might this look like in practice?

Consider the “Good Guide,” a socially connected mobile application that presents itself as a marketing application, but in reality carries a stick that reaches far beyond the CMO. Mobile applications for smartphones that scan barcodes and present pricing data along with customer reviews are becoming common, and in particular within this 250 million-strong and growing globally-connected consumer base. I used my Android-based G1 to scan the barcodes in the aisles at Target when I was looking for a portable spin-style toothbrush for my travel kit. If I’m doing it, trust me: everyone is doing it.

In addition to features and reviews, the Good Guide serves up health, environmental, and societal impact ratings: a high score on “society,” for example, means the product in question is offered by a company with responsible investment polices, equitable hiring practices, an appropriate commitment to philanthropy, and a firm policy toward workplace diversity. Say what? Yes, all of the above are now in-store purchase decision factors. For those who have attended my American Marketing Association social media workshops, you’ve heard me talk about “carbon footprint” as the decision factor for household purchases.

For a growing segment of your market, it’s no longer just price and availability. As a CMO, what is your strategy for dealing with an “advocate mom” who is making her decision — and influencing her friends — based on your firm’s hiring practices, investment policies, and social impact and hiring policies? Your strategy had better involve the CEO, COO, and the rest of the c-suite. And it should definitely involve your customers, suppliers, and employees.

If this seems a stretch, consider that 250 million globally connected, influential customers are moving up fast on Maslow’s triangle. For them, the factors driving a purchase decision are not limited to price, proximity, and basic features. More and more it’s about larger issues with personal relevance, about the way in which this immediate decision plays out over a lifetime of consequence, of shared global responsibility, and the realization that the world around us is the world we make it. The evolution of the social business — and the Web 3.0 technologies that will power it — are built out of this shared and collective knowledge. Make 2010 the year you put it to work in the design and operation of your business.

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