Wednesday, March 11, 2009

Employees, Social Media, and Superstar Economics

I was watching a great video from 1981 the other day talking about how, in the future, it might be possible (albeit absurd) to get the content of a newspaper on your computer. You could tell from the tone of the announcer that this concept was patently absurd to her. Who would ever do that?

So that got me thinking about what we might look back on in 20 or 30 years and laugh at ourselves for thinking it was absurd.

Here’s one thought – what if Marketing begins to recruit and acquire employees who have established their domain expertise via all the tools within the social media realm, in the same way that sports teams recruit and acquire all star players?

It may not be as absurd as it at first seems.

Business has begun to realize that the way buyers gather information has fundamentally changed. Credible online sources are of critical importance in market awareness, education, and solution validation. Increasingly, this information is created, disseminated, and validated by the key online personalities in each space. In wine, a comment from Gary Vaynerchuk has an effect on wine sales, Michael Arrington’s opinion on a new technology product can be a make-or-break moment for a small company. David Armano wrote a great post the other day discussing the overlap between personal and corporate brands with Ford's Scott Monty as a case example.

So, as a marketer, influencing these influencers is critical. The public is smart enough to see through paid endorsements, but other options are possible. Microsoft hired Robert Scoble, Panasonic invited Chris Brogan, Greg Verdino, and others to CES as guests.

The initial reaction is that employment will impact their impartiality, and their audience will reject them. But will that actually happen? There’s reason to believe that it won’t. Converting an independent opinion into a paid advertisement is destructive to both parties. The blogger will lose their audience, which is their most critical asset, so they are motivated to avoid appearing biased at all costs. The sponsoring company would then lose the main reason they hired that blogger in the first place. Rather than a paid advertisement, the best approach is to add new perspectives, highlight ideas and evaluation frameworks that may not be obvious at first glance, and raise awareness that a product exists.

I mentioned the economics of all-stars in sports, which is very different to how marketing salaries are today. I think again, there is an argument to be made that this is actually a reasonable thing to expect. In sports, the pay for the best athletes is many times that of the very good athletes. In social media, the audience sizes, and hence the influence, of the biggest names is many times that of the somewhat big names. This means that hiring the best name in the space might be many times more effective than hiring the second best name in the space. Economics will follow, and the best names will be able to charge rates that are many times the rates of the second best names.

So why not build your own social media presence? Again, the preferential attachment situation comes up. If you are starting now, and there is a social media leader in your space, you may never catch up. All else being equal, having more followers leads to having even more followers.

The need for impartiality also leads to an interesting side effect – the key names in the space will naturally be able to act as free agents. As long as they are within the space their audience cares about, there is no fundamental reason for them not to be able to shift from one employer to another.

So how much will they be worth? That will depend. In the same way that the superstars in sports make differing amounts of money depending on the popularity of the sport, the superstars in social media will make differing amounts of money depending on the size of the audience in their particular specialty.
Many of the topics on this blog are discussed in more detail in my book Digital Body Language
In my day job, I am with Eloqua, the marketing automation software used by the worlds best marketers
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