The Year in Social Media: Blazing the Trail to the Future

Article ImageBy all measures, 2012 was a boom year for social media. From big acquisitions and huge IPOs to increasing engagement on every screen, social media was omnipresent-growing bigger at every turn.

The Money Trail

The biggest news of the year was the Facebook IPO in May. It was not only the biggest of the year but the largest tech IPO of all time, as well as the third largest U.S. IPO in history. A week later, enterprise software giant Oracle acquired Vitrue for $300 million, which began a 3-month social media acquisition spree at the company. A day after the Vitrue acquisition, Salesforce acquired Buddy Media for $689 million. In June, Microsoft announced it was acquiring the enterprise social networking platform Yammer for $1.2 billion while Google acquired Wildfire for $350 million a month later. This list is not comprehensive, and it is unlikely that this social media company acquisition binge has come to a conclusion. Now that major enterprise software vendors such as Microsoft and Oracle have a stake in the space, it's very likely that top competitors such as IBM and SAP will enter the fray.

The Eyeball Trail

With the introduction of digital video accessible via the PC several years ago-and via mobile devices only a few years ago-there was a widespread misconception that the growth of digital video viewing would cannibalize TV viewing. We now know that expanded access to video via digital devices is actually increasing the amount of total video content people consume.

However, consumers' increasing ability to access video content anywhere, anytime, has major implications for marketers. In fact, video traffic already comprises more than half of all global consumer internet traffic and more than half of all global mobile broadband traffic in 2011. Furthermore, 42% of U.S. consumers reported streaming video last year versus 28% in 2009. In this environment increasingly dominated by video, the banner ad-which is essentially a carryover from print-may not be as effective.

Smartphone adoption in the U.S. reached more than half of the mobile phone population this year according to Nielsen estimates. What began with foursquare in 2009 has rapidly evolved into a collection of applications that enable users to share their real-world location in public spaces via mobile device, as well as rich content captured live from that location. This year it became clear that virtual communities are present everywhere, in real space in real time.
In fact, Nielsen has found that 68% of smartphone owners and 70% of tablet owners use their mobile devices while watching TV. There's good news: A recent study by the Time Warner Research Council showed that connecting with friends on social networks via mobile devices or PCs while watching TV actually increases engagement. Other research from the Coalition for Innovative Media Measurement has shown that the three screens actually work together in synergy to augment consumer engagement with brands. This relationship between TV viewing and social media has entered the lexicon as "Social TV."

The Brand Trail

Major brand marketers announced plans to shift significant proportions of their brand-building investments into digital media early this year. This long list of brands-including such global brand-marketing powerhouses as Procter & Gamble; General Mills, Inc.; and L'Oréal-attests to the growing recognition among CMOs of the brand-marketing power of digital media. Moreover, these brand marketing leaders were referring to more than just paid media placements-they made specific references in their announcements to increasing their investments in earned and owned social media. Most of these announcements preceded the release of a study by comScore, Inc. during the second half of the year that demonstrated what many social media marketing professionals had already known from experience-that exposure to earned social media impressions results in sales over time.

What Lies Ahead

Next year we'll likely see even more social media data layered into real-world experiences through visual social search applications. These could be applications that use embedded-vision technology in mobile devices, such as the Goggles app for Android devices, to recognize objects, people, and places in the real world.

Branded entertainment, especially long-form video content produced by brands, will continue to play a much greater role in brand marketing in digital media. Forward-thinking marketers, armed with the insight that consumers simply cannot get enough video content, will continue to experiment with various forms of branded video. Increasingly, the prime mode of distribution of this content will be user sharing across social networks.

Although the attempt to pass piracy legislation (SOPA) that would have crippled the social web failed this year, it is unlikely that the fight is over. Hopefully legislators will seek counsel from digital media companies such as Amazon, Google, and Facebook to help craft legislation that protects copyright without endangering the free-flow of culture and ideas that is the essence of the social web.

Social TV will continue to grow as more companies seek to capitalize on the convergence of TV viewing and social media behaviors. Startups will develop technologies and platforms that enable richer, more engaging Social TV experiences for users-while everyone will confront the challenge of monetizing these behaviors.

Related Articles

The 2012-2013 EContent 100, a list of the 100 Companies that Matter Most in the Digital Content Industry.