Marketing - Media 2012

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2012 media, marketing, , social media;: . : . . , K. . , . , . , eemu Lehtinen

INTRO

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INTRO

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: 2012 TA MEDIA, : 2012 . : Digital Agencies TEEMU LEHTINEN: DO THE FUNDAMENTALS OF BUSINESS SHIFT WITH SOCIAL MEDIA? : 2012 marketing, media, , social media; 1. : INTERNET MARKETING, , MEDIA

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Digital vs Traditional Advertising: the verdict is not out yetOn two of my earlier posts I dealt with this issue concerning the changing form of communication. (On Oct 17th: Advertising will not be the same a few years from now, and on Oct. 8th: Traditional vs Digital Advertising: and the winner is) Both posts analyzed and presented new evidence on the overwhelming inuence exerted by the web on the advertising industry. On the quantitative side I pointed to evidence that in many countries digital is growing fast and overtakes traditional ad expenditures. On the qualitative side I presented the way the web and digital advertising is leading the way in creating needed content and building close relationships with the customers.

But only a few days ago a great article in Advertising Age points out to a simple truth. Digital agencies are excellent in Exploration, that is thinking and creating new things, uses and applications for communication while advertising agencies are excellent in Exploitation, they are accountable and systematic and on target with the marketing needs of their clients.

It remains to be seen which of the two will improve on their weaknesses and build on their strengths.15

y Teemu Lehtinen* 16

DO THE FUNDAMENTALS OF BUSINESS SHIFT WITH SOCIAL MEDIA?

the globe. Seaman and Hobson represented the opposite extremes, and while it would be easy to jump on

O

ver the last months, Paul Seaman and Neville Hobson engaged with many others in a debate about the possible shift in business fundaments that is or isnt brought by the wide adoption of social media across

either one of the bandwagons, it is perhaps more sensible to look at the evolution taking place in the grey area of compromise that is in between.

If social media indeed changes business fundaments, what business fundaments are those? Strategy in service business is dierent from that of manufacturing, but they also do have common basic requirements as Frances X. Frey (2008) suggests:

Compelling design, ability to produce and good pricing are common to all businesses. However, the dierence comes with customer management which basically is about ensuring that the customer, who can be integral part of the production of service, dont create havoc on costs of marketing, sales, product production itself etc. I am tempted to suggest that Freys view is outdated and that customer management,

DO THE FUNDAMENTALS OF BUSINESS SHIFT WITH SOCIAL MEDIA?

in a wide sense (read: stakeholder/individual interest) is now becoming increasingly important to all types of business.

In order to keep the model working, businesses have traditionally created strongly controlled and organised operational structures which have clearly dened targets and objectives. To ensure that the prot and loss reports remain on black, this has been the way to run any serious company.

But how have these changed in the last two-three years, if they have? Do Internet-based communications make change to these cornerstones of business or are they unchangeable? Can changes in communication methods because that what social media boils down to make a dierence in the basics of business or will it just change the way business is done (and where the same old fundaments still apply)?

We know that content in social networks is decentralised, immediate, uncontrollable and user generated. This is in stark contrast with the way in which business seeks to operate traditionally be that the implementation of the strategy or communications. Suddenly everything that can be published is available to everyone everywhere in an easy manner to use. Nothing seems permanent in the fast moving environment of networks as news, articles, releases etc. are easily edited over and over again.

Advertising Age published recently six reasons why business shies away from social media ranging from time wasted to potential damage to brand, loss of control and so forth. Some of these fears may be well-founded. Some of them may not be. What is certain though is that there is a change going on in the communications environment which cannot be ignored. Whether this change has been monetised eectively by anyone in business really, is altogether another matter. But perhaps social media does not have to be monetised for it to have a role in changing the business fundaments. All of the core characteristics of it imply that the communications is moving towards a people centric model which already has17

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dramatically reduced the power of the gatekeepers. This is where the crux of the change in fundaments starts to become obvious, as gatekeepers and agenda setters are the key of a traditional business operation. This is why I believe that even in manufacturing business, the customer management, or as I would call interested individual management, becomes a business strategy issue. Business of business is now truly is everyones business.

While this change initially only aects one part of the business fundaments, it can grow as companies start changing their communications culture. Once it is accepted that the control of messages and the control to literally manage the customers or individuals who have interest in the business is lost, it is probably a good idea to start consider alternative decision-making models for business and how the old company model may change.

In the above image, I have split the business management to controlled/open and communication/collaboration -driven models. This split also ts well with the development of social media as it is open and collaborative, not controlled and oneway communication oriented. Each of the boxes can be used to describe a business model. The more open the management is and the more collaborative the style of communications is, i.e. the more social media driven the communications is, the more outsiders have access to the inside of the business and the more they will take part in all four strategic fundaments which were touched upon earlier.

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I believe it depends from the management how much impact the social media will have on the business strategy. If the company operates in a closed manner, the impact of social media remains outside the C-suite, but at the same time their communications teams are facing an almost insurmountable challenge of dealing with the pressure from the outside. There are two alternative ways out of this. One is to move towards transparency through a push business where the individual interests are managed by pushing more and more information through existing communications tools.

But the company may also approach the customers in a dierent way. The business may remain closely controlled but it can seeks collaboration with few and selected outsiders (friends so to say). These few preferred partners and inuencers are brought in to share insights and input. This may be a good starting point towards a social business where company applies lessons learned from external collaborative engagement inside the business and manages the customer base and surroundings by close collaboration.

It seems therefore that yes, social media may have an impact on the business fundaments. But this change is evolutive and not necessarily a revolution. It can happen step by step, and it most denitely isnt changing everything; it isnt going to change the need of business to make money. It may just inuence the way that we see the surrounding world and its role in the forming of a business strategy. Or maybe its impact is just in reminding the business leaders that they never should have lost the ability to pay close attention to their customers, as listening and learning has now become easier than ever.

BIO*

Teemu Lehtinen, Executive Vice-President, has 15 years of experience in advising some of worlds foremost businesses and executives on how to communicate with the world of media, politics and international stakeholders. He joined Communication Eect in 2007 after four and a half years at Edelman in Brussels where he led the Public Aairs business of the worlds largest privately held communications agency. Prior to that he was Deputy National Manager of EPPA, a leading private European Public Aairs rm.19

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