I’ve been reading the new George Soros book, The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means. While Soros takes his usual pessimistic view he does have some interesting insights into the causes and consequences of the current credit crisis. Interestingly some of his ideas align with those of John Robb in seeing smaller more localised solutions and responses.
One thing to ponder in all of this is what will happen to social media. It has undergone explosive growth in the last few years and has become integral to many people’s lives. But we have never seen how much value people actually place on connectivity to each other via the internet or mobile phones during a time of severe economic stress. The last time we had a major recession the internet was only an infant.
What will happen in a recession where people are losing jobs or homes? Will they retain access to mobile phones and the internet? How how much importance will people in difficult financial circumstances place on connectivity? We do not know what impact this looming recession will have on the demand side of social media and digital. One thing that is certain, changes on the demand side always impact on the supply side and this is no different for social media.
Since social media has already struggled with monetization during good economic times it will be interesting to see how we can address issues of demonstrating value (i.e. profit) in difficult economic times.
There is one sure thing, the social media industry and practitioners need a compelling narrative with good evidence about demonstrating real value to business. Now might be time to get over the feelgood theory of social media and get with the profit theory of social media?