I’m a big believer in the Social Media Listening space. I started a company in July, 2009 to provide reports and insights using social data and it has since changed its name three times through a merger and two acquisitions. Yet, the opportunities are just beginning. If you are an entrepreneur or an investor interested in the Social Listening Space, start by segmenting the opportunities into five overlapping but distinctive segments: Social Monitoring, Integrated Campaigns, Social Analytics, Social Consulting and Social CRM.
- Social Monitoring is how it all began. It started mostly with those within the PR function tracking brand mentions that eventually evolved into customer engagement strategies and technological extensions. Currently, there are more than 400 Social Listening and Monitoring tools in the market that range from free (hopeless business plan) to enterprise pricing models. These tools will need to integrate with one or more of the other segments or become much more vertically focused to remain relevant in the future.
- As always, brands will spend a lot of money on campaigns/ads. Social is fast being accepted as not only a legitimate but an effective platform for ad spends. Marketers must now think about an integrated campaign that includes social as part of the strategy. With all the “purchase intents” being tweeted and focused “segments” that are available on social platforms (Facebook, Linkedin), there will be a lot more opportunities moving ahead.
- Social Analytics will disrupt some very large existing markets, such as market research and business intelligence. The more complex and useful application of the social data set to derive insights will change these worlds as we know it. The reason that insights have always been so expensive is because access to relevant data was so limited and difficult. Now, social platforms provide access to an authentic and abundant data set at very low cost in near real-time. Think about that. The biggest application of social data won’t really be for the current “social” buyers (PR). It will be for those who are focused on answering critical business questions. It just so happens that the social data set will provide the best and most cost-effective insights, if applied correctly. At Alterian Social , we provide predictive analytics.
- Social Consulting will be one of the fastest growing segments for years to come. With the incredible speed and impact of Social to all brands, they will look outside the traditional agencies for specialized help. Thus, there will be great growth of companies like Dachis Group, Altimeter, among many others that are about to take advantage of this growing service demand. For entrepreneurs, this may be the safest startup idea given the relatively low start-up costs and easy path to positive cashflow of service companies. Whatever brands spend on technology platforms in Social Listening, they will eventually spend twice as much on services if not more.
- Social CRM should be the biggest bet and the most exciting. Salesforce.com’s acquisition of Radian6 (at a high premium) was with the vision of Social CRM. The problem is that Social CRM means different things to different people. The trust is, however, the idea of a 360 degree view of customers including their social activities may just be too ambitious. The path to Social CRM will start with baby steps and the market will settle for something much less the ideal promise. Take your chances at your own risk here.
As an entrepeneur, follow your passion and your tolerance for risk. As an investor, I would recommend picking 3-5, or 5-7 startups within one of these segments rather than investing across the segments. That should offer the best chance at success in this crazy, disruptive force called Social Listening.