Media Badger, Social Media Research & Consultants

Why Not To Start Your Own Social Network

I’ve had 2 calls in the last week from businesses looking to build their own Social Network and over the past several months, similar inquiries. When I ask them if they have about $40 Million to invest in getting it going I either get dead silence or a nervous chuckle. My advice is “forget it and invest elsewhere.”

The space is well established now. The leaders are Facebook and NetLog followed by MySpace and MyYearbook among others. Perception-wise Facebook is leading internationally. The others vary by country (these come from a simple but good site for this data.)

One might and I emphasize “might” succeed with a micro-Social Networking site that caters to a specific ethnic, cultural or special interest group. But often those are well supported by services like Ning. Of course it’s one thing to build it, then you need to attract people. Even in ethnic/cultural group terms, they’ve tended to have found their piece of turf inside Facebook or other services. For clubs and organizations there’s services like Qlubb – well, there’s over 60 of them out there. In the business world it’s a fight now between LinkedIn and FastPitch.

Only about 5% of people spend more than a few hours a week inside a Social Network and less than 3% belong to more than one Social Network (our research, March 2009). Once they have established a presence and entered their personal data and made connections, it’s very hard to move them. Porting the data over is hard enough to do, but porting their connections? Almost impossible.

Venture Capital companies are not financing Social Networks. Raising debt to finance them is personal financial suicide. And quite frankly, you’ll need at least $40 Million to build a presence. If you can figure out a very compelling reason to switch for a person (porting over data and friends included) then you might have something. Over time, opportunities might present themselves. The one sector we see some opportunity through our research is better ethnic/cultural focused Social Networks in countries like America, Canada, England and Europe. Possibly. But there are services for those markets (BlackPlanet and Migente are two) and the revenue opportunities may be limited based on demographics and adoption.

Our advice then is, work within a Social Network to build community if that’s your goal (here’s an example). For big brands, I’ve yet to see a sustainable model – the reality is, once the brand has accomplished it’s marketing objective, are they really going to want to spend the money required to maintain that presence? Not likely.

Addressing Culture In Social Media Marketing

What makes our world so incredible is the mix of cultures on this little planet. This diversity is exemplified and amplified in Social Media applications. One might ponder that Social Media could be a way of uniting us, resulting in less wars, greater societal wealth and more. Coming back to earth for a moment, there are some serious implications in regards to marketing and communications in Social Media in cultural terms.

Failing to understand cultural issues is a key, yet often overlooked, factor in the success or failure of Social Media activities. Done right however, reaching and succeeding with cultural clusters in the U.S., UK and Canada can mean highly loyal customers and vital feedback on product development.

When looking to implement a Social Media marketing effort however, the considerations go beyond just language planning and resource allocations internally. Each cultural group has specific social rules, etiquette and behavioral issues that should be addressed. These can range from who is making the buying decisions and how those buying decisions are divided in the household. Different cultures have different traditions regarding the handling of finances. Then there’s “how” ethnic and cultural groups make decisions on sharing. There are many variables, failure to understand or plan for them can result in a failed effort. If you truly fail, the results can also be very long term.

Simply translating the creative and campaign elements when targeting an ethnic group will likely result in failure. As with language support, you need to have the back-end support and understanding in place. Not doing so can result in abject failure and long-term loss of potential customers. So while implementing a Social Media campaign or strategy that engages cultural groups can be very rewarding, take careful planning and consider you’re ability to commit to maintaining that relationship. Many non-Western cultures place extremely high value on familial and social relationships, so engaging needs commitment, research, resources and empathy.