Social Networking vs. Social Commerce

networkI remember well the first request I got, back in 2003, to become friends with someone on Friendster. The idea was pretty simple – you logged in, you created a profile, and you created a hard link from your profile to the profile of the person who invited you. You invited your other friends to do the same (if you had any), and over time this network of online links started to resemble the linkages you had in your offline life.

This foundation is what all social networking websites have in common. By setting up your virtual identity and establishing virtual relationships, you are able to accomplish many of multitude of things you would accomplish by networking offline.

You might be trying to find a new job, make new friends, plan a vacation, buy a digital camera, stay connected with old friends, sell your consulting services, promote your retail store, explore new music – any activity that is enhanced by having relationships offline can be enhanced by social networking online.

Over time literally thousands of social networking sites have sprung up to serve those varied purposes. Some are generalized and serve many purposes, like Facebook, MySpace, or even LinkedIn. Others are very specific, such as Lending Club (Borrow money from someone), Neighborrow (Borrow stuff from your neighbors), Cafemom (Meet other moms). Depending on the purpose of the network, they will have different, specialized features to serve their purpose.

Social commerce has come along as what I view as simply a newly defined sub-category of social networking – the group of people who are networking with others for the purpose of shopping and eventually purchasing something. Because people are focused on this task, certain networking features don’t make sense, such as the ability to form groups, add friends, or play games (all prominently part of Facebook and MySpace).

So you may not encounter some of these features in heavy use within Social Commerce sites. But you will see other things you don’t run into on popular general-use social networks, like Ask an Expert or User Badges. Good social commerce technology isn’t simply white-label social networking, it’s a different and select subset of social features.

But is social commerce social networking? Yes. But it is social networking with a purpose. People engage with brands when they are in a shopping mood, not when they are just looking to hang out with their friends. So give them a social network that remains tightly bound to their focus on shopping, and they will pay you back for it. Literally.

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Outspend or Outteach?

Outspend or OutteachThis classic 2005 article on the Creating Passionate Users blog contains some great thoughts about how marketing has changed and how “education has become the killer app in a newer, more ethical approach to marketing.” It also contains a lot of good links, trackbacks, and comments to good educational marketing resources to explore. Worth a careful read.

Of course, despite the forward-thinking wisdom in this article and many of the others linked to it, traditional marketing (Out-spend instead of Out-teach) still has a very strong toehold. And even though it won’t make people “passionate” about your brand, outspending still works. My experience in marketing states that the “consumer education” message hasn’t been quite compelling enough to break that toehold.

Instead, the disruption necessary to really change marketers’ minds, and open them up to the importance of consumer learning and research, is coming with the advent of Social Networking and User-Generated Content. The content users weren’t getting from brands, they now seek from each other. Marketers who have been sitting on the sidelines watching this happen are suddenly getting this nagging feeling that if they don’t understand this new social world and figure out how to be a part of it . . . well, they might have to find something else to do for a living. When you say “social,” marketers are ready to listen.

At its root, Social Commerce is about education: brands teaching consumers and consumers teaching each other. Learning is key to the buying process, and even more broadly it is key to making consumers care (or become passionate) about your brand.

The New Focus Groups: Social Networks

BulldogA recent article in the Wall Street Journal is an interesting piece on how big brands are using social networking software to establish their own mini-networks to act as focus groups for the development of new products and services.

Some key outtakes:

  • The article highlights the creation of the “I Love My Dog” network by Del Monte whose 400 members actually collaborated with the brand to conceive “Snausages Breakfast Bites” – a breakfast food for dogs that tastes like eggs and bacon.
  • Del Monte’s product conception cycle took 6 months instead of 12 due to the continuous availability of this group of dog lovers.
  • The article sites engaging content as the biggest challenge:

. . . the consumer companies that run these private networks face the constant risk of member boredom – and ultimately, member flight . . . the companies that set them up have to constantly add games and other features – as well as provide incentives such as coupons, giveaways and sneak peeks at new products – to keep members around.

  • Other example of brands doing this are Coca Cola, Walt Disney, Proctor & Gamble, and Sylvan Learning Center (who has a group of mothers they use to test ad campaigns).
  • According to Inside Research, spending on proprietary panels came to $40 MM in 2007, and will grow to $69 MM in 2008.

The article mentioned that Myspace and other big networks are looking at providing the ability for brands to tap into segments of their user base for this purpose.

What does this mean in the broader context of Social Commerce? I think it highlights the importance of data – and the resulting insight – that these types of buying communities can generate for a brand. Most social commerce communities get launched to educate and aid the consumer in the research and buying process, while capitalizing on that engagement to learn more about their audience as a side activity. This trend indicates that there is an opportunity to move even further, growing the focus from learning about the consumer to learning from the consumer.