Social Business, Opinions for Hire
Phil is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
There was a time not long ago when the media celebrated the success of iconic American companies, especially when those companies successfully defended their turf against foreign intrusion. That was before smart companies learned to use modern social tools to manipulate the media and confuse consumers.
Welcome to the social revolution, where sponsored bloggers, paid product reviewers, and professional commentators flood the media with carefully orchestrated, seemingly independent commentary to sway public opinion. This is marketing in the social age, and the winners will use social technologies to gain competitive advantage.
The Court of Public Opinion
The high profile patent law suit between Oracle (NASDAQ: ORCL) and Google (NASDAQ: GOOG) last May played out in two distinctly different courts at the same time; the federal court of law, and the court of public opinion. Oracle sued Google over copyright and fair use of Java in Google’s Android mobile operating system, seeking over $1 billion in damages. The civil case was mildly interesting, but the commentary in the social sphere was far more stimulating.
The jury in the case believed what Google had done was not right, but was deadlocked on whether it was permissible under fair use. Judge William Alsup broke the deadlock and ruled in favor of Google. But then he demanded both parties disclose their list of paid bloggers and journalists that may have influenced the case. Oracle complied but Google argued it had paid so many commentators that it was impossible to list them all.
The social blogosphere was on fire again last month as a jury in California delivered their verdict in the Apple (NASDAQ: AAPL) versus Samsung patent case. Although Samsung was found guilty of willfully ripping off Apple’s iPhone designs, and penalized $1.05 billion in damages, the social commentary was largely critical of Apple, with many attacking judge Lucy Koh; some calling her an idiot. The dialog in articles, public comments, blogs and various social sites is divided, emotional and controversial. There is no way for readers to determine what content has been “funded” by the litigants in the case, or what the true sentiment of the public at large would be without these hired opinions. But it appears Google and Samsung have mastered the social chess game better than either Apple or Oracle.
This is War
When a company comes under attack in the social sphere, there is little it can do to counter the damage. Entering the fray with its own guns blazing may be tempting, but it doesn’t expunge the damaging content that is immediately indexed, categorized, mirrored, cached and distributed throughout the Internet. Companies are finding they have to staff trained social media response teams to be on constant watch, while another team is constantly on the offensive keeping the competition occupied defending themselves.
The stakes are high and the future dominance of world markets is worth tens… maybe hundreds of billions of dollars for the victors. Consumers are left to sort it out on their own as the combatants aggressively and relentlessly wage their social campaigns. Companies like Google have the advantage since they helped create the social phenomenon emerging as the new battleground. But other companies are growing their social intelligence too. Ford (NYSE: F) is one of the early adopters, allocating a quarter of their marketing budget to social and digital media, creating 11 million social networking impressions, 5 million engagements on social networks, 11,000 videos, 15,000 tweets, and 13,000 photos as part of their 2009 Fiesta Movement campaign. Ford even loaned bloggers cars to drive.
Judging by some of the early criticisms to Apple’s iPhone 5 launch a few days ago, Apple hasn’t quite gotten the lay of the social landscape just yet. Most of the early criticisms were petty and insignificant things like lack of Near Field Communication (NFC) and wireless charging. However, given the brisk pre-sales of the iPhone 5, selling 2 million iPhones in just the first 24 hours, it appears the Cupertino gadget master still has the best selling smart phone in the business, for now.
The Business of Social
Research shows socially active consumers tend to follow a circular pattern where they find inspiration in the insights of others, and their experiences are then fed back into the social cycle to rally and influence others. Yet most consumers are simply unaware that many comments and reviews are often strategically planted by paid influencers. Smart companies are adjusting to doing business in this social age, recruiting bloggers and commentators to rally and inspire like-minded individuals to participate in their cause. Laggards that fail to get social risk having opinions funded by their competition become the defacto public opinion.
Blogging sites like Huffington Post, Engadget, Gizmodo, Mashable and other popular sites tend to attract a lot of paid influencers and bloggers, and a lot of those contributors have many enthusiastic followers. Popular ratings and review sites like CNET, Yelp, Angie’s List, Epinions and many of the eCommerce sites that host customer feedback, such as Amazon.com, Buy.com, Newegg.com and many others, also attract paid influencers, often affecting the ratings of the items reviewed. Social mega-sites like Facebook and Twitter are not as popular for paid influencers because users have to invite them into their social circles to receive their posts.
Despite the ethical implications of these practices, political and regulatory officials aren’t likely to step into the constitutional first amendment morass. Subsequently, public opinion on everything, including the upcoming presidential election, mobile phones, cars, restaurants… everything, can be bought.
Invest wisely, my friends.
FoolSolo owns shares of Apple. The Motley Fool owns shares of Apple, Ford, Google, and Oracle. Motley Fool newsletter services recommend Apple, Ford, and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.