// what do you think?


How Will 5 More Years of Recession Affect Social Media?

I’ve been working in New Media/Web 2.0/Social Media for 7 years now. The first 3-4 were pretty rough. It was hard to sell in the vision that many of us saw. The last 2-3 years has been amazing. Companies are practically falling over themselves to implement social media. It’s a bit counter intuitive that the recession would spark so much growth in this industry. Except for the fact that social media is so much more cost effective on many levels.

But now I’m wondering what comes next (I always wonder this actually).

Two years ago this month we saw the market drop 777 points (and things only got worse from there). That was two years ago and I  believe that we have 5 more years of recession left. I don’t know if things will get worse before they get better (I hope not) but I do believe they won’t get better for another 5 years.

I’ve read a lot of reports lately about some perplexing trends in the economy.

Corporate profits are reaching pre-recession peaks

Tech layoffs are increasing

More jobs are being created but despite high unemployment there are no qualified applicants

Many people are flooding back to college, internships are getting more competitive and some fear an education bubble

I’m no economist and I don’t even pretend to be one but I’ve recently written two posts on the longer term affect these trends will have on a subset of the population that isn’t able to adjust to the massive changes we’ve experienced or are yet to come.

At the end of last year I made 5 predictions for the next 5 years in social media. My very first prediction was how the recession would fuel the growth of our industry (this is just an excerpt):

The Recovery Will Accelerate Social Media Investments-

The recession is not over, but it will feel like it’s over for most of us. The recession, however, will flatten out in most industries and begin to recover in several key industries. This will feel like a full recovery to most everyone. Everyone except those who still wont find jobs in 2010. A jobless recovery is not much of a recovery in my opinion.

But this partial recovery will dramatically accelerate social media investments. Those companies that spent a little will spend a lot and many who didn’t spend any will make at least small, if not dramatic, investments beginning in 2010. As the market truly recovers over the next 5 years the investments will grow dramatically. The disruption we’ve felt over the last 5 years will only be matched by the level of adoption we’ll see over the next 5.

I’ve thought a lot about what the next 5 years will look like and I am still going to do a lot more thinking. Here’s where I’m at today:

  • Spending will continue to increase at year over year rate that will surprise all of us (I hesitate to say exponential but close to it).
  • I think the job problem will not change anytime soon. Companies will try to automate and outsource more and more.
  • This will lead to agencies doing more and more of the social media work for brands. Good for agencies bad for brands if not done transparently and strategically.
  • To do this well I think we’ll see “Social Media Ambassadors” and more consultants embedded within brands.
  • Interns will get a lot of experience running social media. This is great for them and bad for brands if they aren’t provided proper training and guidance.

What do you think? I’d love to hear your thoughts.

Photo credit by Balakov

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About Tac

Social media anthropologist. Communications strategist. Business model junkie. Chief blogger here at New Comm Biz.

  • http://blog.ecairn.com Laurent Pfertzel

    I tend to agree with you.
    Somewhere I read that salaries for social media are replacing media buy (to some extent of course given the huge media buy budget of the average brand). It makes sense as people are spending more of their time in social media. Budgets follow.
    Probably enterprises will want to keep their marketing headcount stable (I’ve never seen those grow much, especially in tough time like what we experience nowadays).
    So yes, I see agencies getting the big chunk of it.
    2 Challenges I see:
    1) Social media (engagement) is a natural fit for enterprises to go direct: If you’re a customer or an industry specialist, you want to talk to the people who make the strategy or the product. You may not like the idea of a proxy who isn’t a company employee.
    2) Social media isn’t a campaign. It’s about networks, relationships, conversations thus it realizes its full potential in the long run. The high turn over in agencies, the nature of the campaign base business will have to adapt.
    There are solutions to those challenges but it will require a change on the part of agencies.

  • http://twitter.com/Neilmajor Neil Major

    I think you’re right. What

  • http://twitter.com/prpeep Vanessa Williams

    I think you are spot on. As a social media person within an economic development entity I have unique perspective on this topic. The most common mistakes I see with social media is that companies don’t give it enough attention and therefore dump it on an intern or someone straight out of college. Those individuals may understand the tools, but not the strategy. Conversely managers who are using social media get the strategy, but don’t understand the tools.

    As with any bad financial times, companies look to outsource services until they are positive they need a longer term commitment (and the benefits package that goes along with it). The problem that comes in with any outsourced services is that they are likely not just offering services to your company, but many others. Therefore, you may not be their priority, and they may not understand your brand. This becomes very apparent in social media which requires a full understanding of a product or company and constant monitoring/attention. That’s why for ongoing social media use I think an internal person is essential. For a short term campaign or giveaway, I think outsourcing is fine.

    Social media is hot right now and everyone wants a piece of the pie, so I agree that job growth will occur within this sector. As someone who recently left the unemployment ranks I can tell you that almost ALL the jobs I interviewed for in pr/marketing had social media expertise as a requirement. I don’t think this is going to change anytime soon.

  • Tonal2010

    Perfect post..
    Thank you for the post..Locksmith in Bronx NY

  • http://www.linkedin.com/in/internetmarketingnickstamoulis Nick Stamoulis

    Social Media will continue to play a huge roll, and I don’t see it being affected much. I do believe however, that if you are going to undertake social media, which everyone looking to create online presence should do, that you do it fully or not at all. It is a huge commitment that will produce results, if done right. I also don’t see that there is any value in outsourcing it, because no one knows your business like you do, no one can produce the results that you can when you are heavily invested in your company.

  • http://www.newcommbiz.com/the-future-of-employee-retention/ The Future of Employee Retention | New Comm Biz

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  • http://www.24hrlocksmithsleeds.co.uk Bigbadben1986

    Hi tac, Interesting topic but i feel social media marketing will live on forever now. I know the reccesion is going to carry on for what looks like a long time but the likes of facebook and twitter will still hold the power even after the reccesion is over. Especially if what people are saying about googles panda update is true that links from these sites will carry more weight with google then they will only grow in popularity for business’s no matter what the economic climate is like.

  • http://www.24hrlocksmithswakefield.co.uk Locksmiths Wakefield

    Social media is too big to fail. I think social media will be with us for the rest of our lives and will grow and grow. I dont think the reccesion will effect them too much, but hey i could be wrong.

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  • http://www.newcommbiz.com/ tacanderson

    Great points Jamie and I don’t necessarily disagree. I think you’re pointing out what many companies will do, because as you point out, it’s what they do today. I think I’m a little more optimistic and speaking to the opportunity the shift provides. 

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