Media Physics

Ian Rogers of Yahoo and elsewhere writes that that scale of the web creates media opportunity through the creation of:

" . . . a loosely-coupled value chain including users as value creators. The value chain is not owned by a single entity (LimeWire, Apple, or Universal). There are many participants in a healthy ecosystem. Furthermore, users are no longer just consumers, they’re active participants adding value and any successful solution will leverage this user-contributed value."

Totally right (and we're betting a whole investment thesis - so-called outside in services - against this proposition). Moreover, its why the music business in particular reminds me of the online ad business years ago. Value - and creativity - come from different places now -- from the outside of where they traditionally have in media. Makes for interesting opportunities and challenges (and investments and things being built).

Advertising on social media

John Borthwick says:

"Ads are often blunt instruments that fail to offer value to a membership engaged in a dynamic conversation – targeting and metadata only get you so far."

Greg Yardley, on the other hand, wonders:

"But what if individual ad targeting gets really good? What if the proportion of ads that don’t work plummet, and start getting replaced with more and more ads that actually make me want new stuff?

What happens to society in general, if due to the increased effectiveness of targeted advertising, we all experience a sudden uptick in the things we want?"

So what about targeted ads that are designed, through their attributes, to reinforce the dynamism of social media? Ads that are delivered based on activities (and conversations, as John says) that are occurring within specific social media. There is alot of value to be created there if someone gets that right.

Who Participates in Social Media

Fascinating chart from Business Week showing what people are doing online:



They don't describe the chart as "social media" - but looking at the online actions listed (creators, critics, collectors, joiners, spectators, inactives) seem to be a decent representation of activities associated with new Internet media/content, and of course all media is becoming social media.

The most interesting aspect of this data is not that it confirms conventional wisdom (that kids/youth are driving the user generated content trend), but that the distribution of participants in social media also contains a fairly large percentage of "older " (22-26, 27-50) also participate actively in contributing to online media.

For example. almost 30% of the 27-40 age group have joined social networking sites; similarly, almost 20% of 41-50 year olds have commented on blogs and posted ratings/reviews. Suggesting, quite naturally, that maybe the user-content shift is deeper, and wider, than had previously been thought.