Social Media is a Cocktail Party: Sneak Peek #4 (The Power Shift)

Social Media is a Cocktail PartyLisa shared some thoughts on social media as a segmentation tool in Sneak Peek #3 on Friday and that’s important. It’s part of Chapter 2, “What is Social Media?”, we explain the basics of the tools, the power of the tools, how it impacts marketing and, in this section, we talk about how this is a continuum of a larger power shift that’s been occurring for the last few decades.

“I’m a fan of Professor Robert Lauterborn, who wrote the books Integrated Marketing Communications and The New Marketing Paradigm. In the latter book, as far back as 1994, Lauterborn and his co-authors wrote: ‘The marketing systems created in the United States [from the 1950s to the 1970s] worked like well-oiled machines through the mid-1980s. Then technology collided with society and human wants and needs.’ Lauterborn termed it ‘demassification.’

“Increasingly pundits are speculating that the mass media era was an anomaly in our society. In fact, the seminal book on social media, ‘The Cluetrain Manifesto’ argues that social media is pulling us back into a more natural system of niche marketplaces that are smaller and more finely honed than any mass market. This is, of course, chilling to the CMO trying to plan a traditional advertising campaign.

“What’s more, Lauterborn also describes a shift in power that has occurred over the last 50 years that has profound impact on marketing in a social media era. The diagram explaining it is below.

Social Media Power Shift

“In the 1950s, the Marketer had the power, and could dictate to the channel and the consumer. In the 1980s, the Channel got the power and began to dictate to the marketer and the consumer. In the 1990s and beyond, the Consumer got the power and is now dictating to the channel and the marketer.

“The 1950s and 60s were the glory days of advertising, now being chronicled on AMC‘s ‘Mad Men’. Post World War II, the ravenous appetite for material goods fueled tremendous growth. Things were good for the marketer. Over time, however, the channel gained power. Suddenly grocery stores, Wal-Mart and others began to realize they had power in the transaction and could dictate terms of the transaction to both the marketer and the consumer. Suddenly the manufacturer was paying for shelf space.

“That has shifted profoundly yet again, and in the 1990s, the Internet empowered people with information like car buying guides, consumer reviews, price comparison websites and more. Suddenly, we were all walking into auto dealerships knowing not just the invoice price, but that the invoice price wasn’t the real price the dealer paid. The rise of ‘Web 1.0′ gave the consumer an incredible amount of power in determining the terms of a transaction.

“Social media and Web 2.0 have turned this dynamic even more solidly in favor of the consumer. Bad service? Low quality manufacturing? Where to find the best price? Who has the better features? In the 1990s, we could tell our friends and colleagues. But with social media tools, we can tell the world about it, and our reviews can live in search engine results for years to come. Unquestionably, the power has shifted. Have your strategies?”

You can buy Social Media is a Cocktail Party here.

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