Monetizing you and your friends: The Social Web seeks social brand dollars
How much is friendship worth? Billions, to the likes of social networking sites Facebook and MySpace. Facebook recently floated a $2 billion asking price and is in the process of “selling” a 0.5% equity stake to an ad agency for $10 million plus in trade and cash, and Fox is doing all in its power to make its MySpace $580 million plus acquisition multiply in value.
To reach the frothy financial goals, both MySpace and Facebook are commercializing “friendship” through social branding.
At MySpace, brands have member profiles and make friends with other MySpace members. At Facebook, members join Facebook brand groups, just like they join Facebook fraternity or hobby groups, and display brand logos on their personal profiles.
Social branding may prove to be the ultimate product placement strategy.
In his scholarly work, “Some Economics of Personal Activity and Implications for the Digital Economy,” Douglas Galbi positis:
to understand the digital economy, one should focus not on atoms or bits, but on persons' activities and how persons interact with each other…personal activity, creativity, and sociability are goods in any sort of economy. Persons seek ways to occupy their time, they seek ways to make their own personal mark on their surroundings, and they seek interaction with and recognition from other persons. The most important aspects of new digital information processing and communications technologies are likely to relate to how they affect general patterns of personal activity, creativity, and sociability.
Galbi traces:
important historical facts about personal activity and commercial efforts to attract personal attention. First, increases in personal time spent with media as the primary focus of activity match closely increases in total personal discretionary time. Second, the share of advertising spending in total economic output (GDP) has been roughly constant long-term. Third, real advertising spending per person-hour spent with media has been roughly constant long-term. These historical facts suggest that the traditional approach of buying personal attention through media advertising cannot support relatively rapid growth in the digital economy, even with significant changes in media technology such as higher bandwidth and greater interactivity. The growth of the digital economy is likely to depend instead on growth of discretionary time and integration of digital technology into new forms of socializing, transacting, and spending time.
The most important characteristic of the new digital economy may be the increasing dependence of revenue on personal habits and norms rather than on the characteristics and values of products. While transactions for physical goods are simple and well-recognized, services compete in a much broader field of human interactions.
An example cited by Galbi—VOD:
As silly as it might seem to some, the success of video on demand may depend less on technology and content availability than on adequately replacing the perceived sociability of persons going together to a video store to look over pictures on empty boxes to select a movie to watch.