Friday, March 11, 2011

High School Confidential.


It began, as revolutions sometimes do, with a small army of people sporting bad haircuts, rumpled khakis and faded “Han Shot First” t-shirts, swearing at us from conference podiums about marketing’s coming age of conversation. Though they did their own credibility no favours by using social media to report on their breakfast menus and transient emotional states, and racking up social influence points on their own obtuse scoreboards, there was no question something was happening here. Every once in while, some airline would break a guitar or some far away people would riot for democracy, and the seeming banality of it all would be briefly eclipsed by portent. The corporate world divided itself along approximately those lines, in fact: Those with imperial feet of clay, and those who madly dove in without checking to see how deep the water was, kindly making our mistakes for us. I think consumers did the same, and have been divided about the same way.

I had always put myself in the “something’s happening here” camp, for sure. Especially where the relationship between consumers and brands is concerned, this sudden leveling of the playing field was bound to produce some kind of permanent, fundamental change. But I haven’t always been sure just what, or how soon, having witnessed the fates of lots of “the death of this and the new that” false idols over the years. Two stories that I came across in the last month made the picture a lot sharper for me.

The first was an item on Google’s blog, announcing some changes to its Social Search feature. In essence, Google said, they’re going to start giving preferential treatment to search results that are endorsed by people in your social network. In other words, the credibility of people who are demonstrably, provably like you is going to weigh more heavily than it has in the past, and the credibility of the world’s billions of strangers a little less so. And the other, just a few days ago, was an article in Bloomberg Businessweek about “sentiment analysis,” a nascent science whereby corporations can keep an eye on what we’re collectively saying about them online, in real time. A nascent science one pundit reckons will soon be a billion dollar business. Corporations are about to become as nervously obsessed with their social reputations as a bunch of high school kids. Which means those social reputations must matter.

I often get asked in interviews about Consumer Republic whether it can really be true that ordinary people have this much power. And I often get asked if it really all just boils down to social media. The answers, in order, are yes, without a doubt. And no, not ultimately. The enabling technologies of social media are something we should be glad of. But what’s really happening here is more basic than this. The corporations who sell things have seen a gradual, decades-long erosion of meaningful competitive advantage in the products they sell, and concomitant growth in the competitive advantage in their brands. In other words, when two toasters are more functionally alike than different, the brands they wear will decide who gets the money. Products are just things made in factories. Those brands, on the other hand, are reputations made in the street. Sanctioned and spread like rumors, by ordinary people and their friends.

And so, finally, here we are. Like those high school kids staring at each other across the gym on prom night, one side desperately hoping for approval and the other hoping not to be disappointed. It doesn’t feel so much like a revolution as it does the way things naturally ought to be. Of course people have this power. Of course they do. They always have, except for a few brief decades when mass media came awkwardly between us like a chaperone. And brands are realizing that if they want people to dance with them, they’re going to have to ask nicely, and then behave with decorum.

Because word gets around.