UPDATED 19:36 EST / APRIL 22 2009

The Social Media Opportunity For Brands

{Editors Note: Neal Blaak is the CEO and cofounder of Brandfolium a stealth startup in Silicon Valley. Neal is a friend of mine and a friend of ours at Silicon Angle. He’s been doing some great work in the brand direct to the consumer area. His company is developing a new product called Brandiki and is currently in private beta with brand advertisers and marketers. Welcome Neal to Silicon Angle}

image Update: MySpace is announcing leadership change mainly due to reasons mentioned in this post – the social media market is changing.

Social Networking and Media you say?

The term “Social Media” is used by almost every company looking to monetize its online content and secure its existence. It is becoming more challenging for brands, advertisers, and their agencies to follow the conversations that are taking place around their company or product. Search of today falls short of what it is supposed to deliver, which is easy access to relevant and desired content.

We have arrived at a new paradigm called “User 2.0” where everyone is connected and is sharing – a world in which social networks have become mainstream. Who does not have a Facebook, MySpace, LinkedIn, or Plaxo account today? Each of the before-mentioned platforms entered the market with a different initial target audience in mind, but significant overlap is becoming evident as most of us have multiple user accounts. And it’s not just with regards to the users they service, but also the features, functionality, and content that is offered. Who owns the customer relationship? Does anybody? Each publisher is competing for the precious minutes each user spends online. Social Media sites have become a destination for users to have public and private conversations, find and connect with friends, share photos, and in some cases more importantly to express themselves or claim their fame.

How did we get here?

image As a result of advances in technology, end-users should be considered at the center of the value proposition. Over the last five years, a massive and rapid change has occurred during which users have gained more and more control to the dismay of many traditional publishers, who were generally in control of most content being distributed and consumed by the main-stream internet user.

The new “User 2.0” is a consumer, publisher, editor, distributor, and reviewer (all at the same time) in a world where users favor to peer group relationships, real-time updates, relevant contextual content, application stores, and direct access to content. User satisfaction has been driving growth faster than ever before.

What are the users looking for? In most cases, it has been entertainment value and a rewarding feeling of being connected. The entertainment value delivered by many publishers like Facebook and Youtube, has been outweighing the utility and value delivered by companies like LinkedIn and twitter. This has been evidenced by the growth and number of users in the network.

We will have to wait and see what recent endorsements of the Twitter utility by celebrities like Oprah and Ashton will mean.

The Opportunity

image What most companies still have not figured out, is how to more efficiently and effectively deliver relevant and engaging content to their targeted audience. Even if it was possible to make that direct connection, that most brands and advertisers are longing for, so much, what would be said? What would the brand or advertiser say and what would the user like to hear?

Advertisers are racing to be relevant right now and are seeking to adapt to the new “User 2.0” behavior by becoming part of the conversation. Brands, large and small, have turned to twitter and Facebook in an attempt to to be in the know of what is being said and where possible to exert some level of control of the content being shared and consumed.

Have these brands been successful? Few if any, current ad products seem to work in social media environments. Most social networks are falling short of providing a perfect solution to brands and advertisers, of delivering more valuable and engaging experiences for users, and ultimately more deepened customer relationships for brands.

The fact that everything online is measurable, and that the economic down-turn has negatively effected many companies, brands and advertisers watch their ROI even more closely than ever before. It will be interesting to see what new business models will emerge over the next coming months.

The Solution

image There is a need for a fresh look at the current situation. Who are the advertisers targeting and who do they end up talking to? Remember one of the classic target marketing rules: “know and understand your customer”?

A combination of contextual, behavioral, and profile targeting will be the key to delivering a win-win-win situation for all parties involved – win for the user, the brand or advertiser, and the publisher. Users are ready for more utility through recommendation and discovery.

The “User 2.0” wants easy access to relevant content and is looking for recognition and rewards in return for their social activity.

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