I like The Economist magazine for a lot of different reasons. Insightful writing, balanced coverage, a global perspective and often a harbinger of trends to come. And then sometimes, it misses the point just a tad bit. Let me explain how.
The latest issue includes a thoughtful article on buyer psychology and how this downturn is resulting in a significant shift in how American consumers purchase and what they purchase. It's the whole post consumer world story and emphasizes that -
Few people seem consumed by a desire to consume, instead they are planning to live within their means, and there has been a backlash against bling.
Half of respondents to a survey from America and Europe say that the crisis has intensified their distrust of big business.
Companies will also need to show they empathize with consumers' new concerns. "There will need to be a move from passion to compassion in marketing," reckons John Gerzema of of Young & Rubicam, a marketing-services firm.
And finally, in discussing social influence marketing concepts specifically the article states,
The downturn will also accelerate the use of social media, such as blogs and social-networking sites, by consumers looking for intelligence on firms and their products. As trust in brands is eroded, people will place more value on recommendations from friends. Social media make it harder for brands to pull the wool over consumers' eyes, but they also offer canny companies a powerful new channel through which to promote their wares and test new products and pricing strategies.
Now as any reader of this blog would know I subscribe to this philosophy. Social Influence Marketing is having a transformative impact on marketing and businesses as a whole. However, I'll be the first to admit that there's often too much hyperbole out there. And we've seen this cycle before. I'm not totally convinced that consumers will give up on bling the way the article implies. Yes, maybe temporarily but not in any significant macro sense if you ask me.
And sure we distrust big business and are turning to each other increasingly for advice. But that too really depends on the type of advice that we're seeking. We still go to the hospitals for medical care, we still watch cable news and we still by expensive products from large corporations. As we make these purchasing and brand affinity decisions we may depend upon each other more but we're still trusting those brands. In fact, they've become so ingrained in our lifestyles that at least here in the States we simply cannot do without them. They define us more than anything else.
And finally, the downturn is not accelerating the use of social media. That was already happening before the downturn really hit us. We're placing more value in recommendations from friends not just because we trust big business less (a little less) but because we have easier access to our friends. As I emphasized at a South by Southwest Interactive presentation over a year ago, the online world is starting to mirror the offline world more and more. And that's why social influence marketing is special.
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I think the Economist piece gets most things right (I'm also a subscriber).
As for the growth of social media, the downturn has clearly had an impact. The most recent wave of social media growth has been with an older demographic, LinkedIn in currently the fastest growing player in the space, and older adult users of Facebook use it differently than teens/twenty-somethings -- largely to business network, and reconnect with old friends (once again, often with the intent to business network).
Yes, I think its really interesting how most of the growth is coming from an older demographic now. Maybe the downturn has had an impact but a lot of the major shifts were taking place before the downturn and the technologies and the social networks have driven it more than anything else. I suppose marketers are looking more to social media now largely because they think its cheap.