Social Media as an Investment


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Social Media as an Investment

  1. 1. ==== ====Become part of the naxt big thing for free and get paid forever. Its called wazzub! ====In its brief history, Social Media, as called New Media, has traditionally been viewed as a place tomeet new friends, reconnect with old friends and interact in an online social environment. In short,social networks were "a cool place to hang out" but held little applicability beyond that. There hasbeen no shortage of funding in Silicon Valley for firms launching new media platforms. With theemergence of sites like MySpace, Facebook and Twitter, there is no question that there is value inthe vast amounts of information on people that these platforms have been able to collect;however, there has been no clear monetization strategy beyond bringing in advertising revenue.Arguments have been risen as to the true value of these firms; some would state that theirvaluations are inflated and artificial, while other claim that the value of their databases alone areenough to justify multi-billion dollar price tags.The New Value of Social Media and The Social Media FirmMore recently social media has spawned a new value proposition, which is the businessapplicability of the vast user-bases these social networks have created. Regardless of which sideof the valuation fence you sit on, it can be said that social media holds vast utility for businesseslooking for a new way to reach out to customers and engage in two-way communications. This hasnever been done before from a traditional marketing, advertising or public relations perspective,and has given rise to a new business model: The Social Media Firm. This brings forth theargument of whether or not The Social Media Firm is a good investment. Is The Social Media Firma fad that will die out in the coming years, or is this a long-term, sustainable industry that will one-day drive obsolescence to the traditional methods of advertising, public relations and marketing?Given the state of the current economy, Venture Capital and angel funding sources have beenkeeping their portfolio dollars close to their chest, reserving investment only to businesses with adecent operating history, solid revenue streams and unlimited growth potential. Does the SocialMedia Firm fall into this category? My answer is yes. The bottom line is: social media is not goinganywhere. Social media has become a staple of the lives of younger generations, and the fastestgrowing adopters of new media are people over the age of 30. Since the recognition of thebusiness potential that social networks holds, large Fortune 500 firms are devoting a good portionof their marketing budgets to social networks and new media campaigns. For instance, Pepsi hasdevoted $20 Million of their marketing budget for a social media program called Pepsi refresh, andmany large firms are beginning to follow suit. Needless to say, the earning potential for The NewMedia Firm is substantial.Is it sustainable?As mentioned earlier, new media is not going anywhere. For the most part it has become astandard part of the Internet experience similar to email. The sites that are considered the gorillasin social media may churn; however, there will always be something new to which these Internet-based communities will migrate. For example, the social media migration to-date has gone from
  2. 2. MySpace to Facebook to Twitter, and the next major shift and/or addition to this massive onlinesocial sphere is likely just around the corner. The long-term sustainability of The Social Media Firmis largely dependent upon these companies ability to identify and pre-empt the next big shift, andto develop effective methods of leveraging both the old and new platforms for the sake of drivingrevenue, profitability, sales volume and identity to their clients.Why Outsource to The Social Media Firm?One question that may arise is: why would large companies hire a social media agency when theyhave the monetary resources to do it in-house? The answer to this is the simple fact that it ischeaper to outsource a new media campaign to a firm that has a skilled team already in place thatis intimately familiar with navigating the complex world of new media. In the same manner thatlarge companies hire advertising agencies to design traditional media campaigns, this approachcan and will be taken for new media. By hiring The New Media Firm companies can eliminate boththe administrative burden that comes with hiring a multitude of new employees, as well as thelearning curve that will inevitably be present when trying to integrate those employees into theircorporate culture. It is more cost effective, in both monetary and administrative respects, tooutsource these campaigns to professional teams that are fully adept at leveraging the potential ofmodern media, navigating the codes of conduct of these online communities and staying ahead ofthe curve when it comes to identifying the exploiting the latest new media trends.Closing RemarksIn summary, I do believe that investment in The Social Media Firm holds great potential for manyfunds; however, it is imperative that when vetting these agencies, Venture Capitalists and Angelsneed to ensure that the company contains the correct personnel and management team to fullyexploit this budding industry. The ditch is full of one-man shops and so-called social media expertsthat are no more than victims of the recession who happen to be adept at Facebook or Twitter. It isimperative that the architects of new media campaigns are familiar with the intricate details of newmedia, and the vast array of assets that exist online to for a business to take full advantage of thesocial media world. Utilization of the lesser known social media outlets such as Digg, BrightKite,hi5, Xanga and countless others could be the difference between a full-scale robust campaign thatshows real results, and an ineffective and unorganized attempt at new media that wastesmarketing dollars.Due to the infancy of this industry, there are few companies out there that truly know how tounlock the value of new media for business. The ones that do will quickly rise to the top, and ifsufficient due diligence is done, these companies are ripe for investment. A strategic infusion ofcapital is likely the boost needed to take these companies from a sustainable cash-flow businessto the next industry giant with A-list clientele.Boom Media, Inc. is a new media optimization firm based in San Diego, California. New Media isthe culmination of all online assets (such as social networking, blogs, micro-blogs, bookmarkingand video sites) and tactics that can be used to drive revenue and identity for businesses. With aproven track record for success, the Boom Media team delivers results with innovative andmeasurable campaigns. Learn more at
  3. 3. Article Source: ====Become part of the naxt big thing for free and get paid forever. Its called wazzub! ====