Tuesday, March 31, 2009

Is social media an industry or just a channel?

Arguments have been raging in the past 3 or 4 months about whether or not social media is an industry ready to explode or just a nifty new media channel that marketers can make the most of free of charge.

To be able to make such an analysis its imperative to first define the terms 'industry' and 'communication channel'. An 'industry' can be broken down to mean a collection of like enterprises in a particular field that exist due to the generation of revenue whilst on the other hand a communication channel fits within an industry to promote a brand's marketing activities.

On first thought it would seem obvious that by the definition above social media acts only as a communication channel as it is simply a promotional tool. It does not seem that we are not at a stage yet where we have a vast collection of like enterprises and definately not at a stage where many are making much revenue let's be honest!

However any industry needs time to develop.

One can't forget that in the early days of the internet 10 year + ago, all businesses had was a website. There was no google to drive traffic to a website, there was now adsense to generate revenue for a website owner and no-one had heard of the term 'SEO.' Moreover there was no display advertising, no websites where yo could buy, sell or trade, nowhere you could buy a concert ticket over and certainly no such word as 'the digital economy.' Therefore an industry can devleop only with the progression of technology and the innovation of businesses. Hey, was there an automobile industry when Henry Ford first bought out a machine that can transport people at 10km per hr? Absolutely not.

So it is with time that industry grows and can generate revenue for itself. At this stage social media can only be called a communication channel becasue at the moment that's all a marketer can really do with it.. But in the very fast moving world of the digital economy it surely won't be long now before social media businesses are born and the genuis of these businesses transform the channel into a money making machine.

I'm ready to jump on!

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