New Business Models for Social Media and Hyperlocal Media in Australia

Sydney.
We're now starting the post-lunch session here at the Australasian Media & Broadcasting Congress. The speaker is Tony Surtees, CEO of Australian regional broadcaster Prime's digital arm iPrime. He begins by noting that complacency is the enemy of innovation - and for that reason, starting new businesses during times of recession is actually very appropriate, as this added pressure means that complacency goes away.

By way of a very funny video from Bring the Love Back, Tony suggests that consumers have changed, but advertisers haven't. Time investment and advertising spend on different media no longer match - online advertising significantly lags behind take-up, while newspaper advertising remains significantly above circulation figures. Additionally, of course, people increasingly multitask (especially also between TV and online). Each time new media are introduced, we begin consuming them, but we consume them in multiple, different ways.

Social media, for example, include a variety of platforms, and in the process turn media around on themselves. Media used to push content out, now they guide users in; with multiple devices, consumers are now in control. Relevance brings attention, and attention brings more users (who bring more users). These are now attractive from a reach and targetting point of view. Content today is less important - it's not what you own, it's what you share, and the more is shared, the larger is the network which is being reached.

Tony notes that Twitter is currently the fastest-growing social media site, Ning is the third fastest grower. Tony points to the impact of social media sites like this in promoting the recent run of Saturday Night Life, featuring Tina Fey as Sarah Palin; promos for these shows were released first on social media and generated a 49% of boost in audience numbers compared to last year.

Further, data ownership is redefining media. Data that consumers create inadvertently as they participate online are being shared, and are becoming key sources in content development - this undermines the business of existing market research companies, and offers an avenue for the development of new market research approaches.

Currently, all social media platforms are growing, and online video on such sites is growing especially fast, now commanding 81% penetration worldwide. Tony now runs through a few figures to demonstrate the massive growth in social media - and notes the overall trends that many users are engaging with multiple social media sites simultaneously; that new niche networks are complementing generic social networking sites; that Google is getting into the game through OpenSocial and FriendConnect; that social networking activity aggregators are emerging, and that more microblogging sites in addition to Twitter have emerged. Many brands are now engaging with such services in marketing their products. Many such sites are less than three years old; seven-month old Ning, for example, now hosts more than 200,000 individual social network sites. This is a major structural shift.

Of course there are concerns, too - security issues, perhaps particularly for older demographics; ownership of personal data and content on social networking sites; a demand for industry-wide standards to effectively measure the effect of buzz marketing and social networking. There are fears that opening up a brand to social networking may generate negative comments, but opening up in the first place also generates positive user attitudes towards the brand; rating and reviews can drive up conversion rates, and lift customer satisfaction levels (as they set customer expectations more realistically, making them less likely to leave dissatisfied); there also is a tendency for conformity in social media sites - negative comments are often themselves criticised if the overall attitude is positive. Vodafone UK found that more customers were posting on their eForum than calling the call centre (saving a good deal of money in the process); brands must demonstrate that they are listening, however.

There are interesting trends in demographics, too: user inactivity (or lurking) is diminishing, while higher levels of participation are increasing. Such trends were exploited for example in a recent Sony Bravia ad campaign, which invited users to remix their ads and reupload them; this drove up the number of links to Sony's site, improving search results and brand awareness. Making quality content available significantly boosted the distribution of the ad, even while giving up some degree of control.

iPrime is in the process of launching a hyperlocal network of sites - because traffic is no longer concentrated in 'mountain peaks', but instead in the smaller foothills of traffic; in the near future, this will increase even more, through long tail effects, and so developing multiple local iPrimes made a great deal more sense than setting up one central site. (This sounds awfully like the argument I made in my recent Information Polity article, and in chapter 10 of my produsage book.)

Such local content connects local communities in significant ways. So, these sites are a network of hyperlocal sites, but advertising can be bought across all of them; local and social media deliver relevance and engagement, with a celebrity blogger (e.g. local radio personalities or sportspeople) in each area who will function as a network hub. Another project is Sportsplay - a vertical grassroots network for local sporting groups - which has been launched in Newcastle. The underlying philosophy (or hope) here is that - as proven in the past - advertising follows eyeballs, so that these properties will be highly lucrative in the future.

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