And here is it, the inevitable Internet Marketing/Social Media backlash. We all saw it coming. It was like watching a car crash in a 3D movie where is starts off in slow motion as it heads your way and then suddenly the action moves into real time and the crash ends up right in your lap.
The catalyst for the crash seems to be the IPOs of Groupon and Facebook. The IPOs were initially greeted with fanfare and pageantry and then BOOM! CRASH! They resulted in a botched IPO and accounting issues. And now we have a giant mess sitting in our laps.
It all seems to boil down to the fact that neither business model was sustainable. In fact, Groupon is now changing its business model and moving away from Daily Deals. But will this help? The Internet is littered with articles on how Groupon doesn’t help small businesses and in some instances hurts them. Is it too little too late?
With Facebook, the issue is similar. It all comes down to the effectiveness of the advertising. Can companies that advertise on Facebook make money? And how do you get users to pay attention to advertisements without them being in your face and obnoxious. On top of that, do “Likes” really result in measureable revenue for companies?
So, I started thinking about my own use of Groupon and Facebook. I will start with Facebook because that is the service I use the most. Now I cannot say that I am a typical Facebook user. I am not on it often and when I am I find myself getting quickly tired of it (I mean how many cat photos/videos are there and where are they coming from). The best part to me is being able to keep in touch with friends and family that don’t live near me. So I am not that person that is sitting on it all day Liking this and that, and I rarely post. I don’t follow too many companies. I mainly follow bands and interesting blogs.
Ironically enough I follow Groupon on Facebook, mainly out of curiosity. I would categorize them as power users. They try very hard to engage with people. They post photos, start conversations, answer questions, etc. I have only purchased one Groupon and it was for 50% off of a massage years ago. When I receive a Groupon I think “do I need that right now?” and the answer is usually “no.”
Peter Cohan in his article “Why Groupon Is Over and Facebook and Twitter Should Follow” likens Facebook to a drug. Facebook was engaging when it fun, new, and interesting. But now Facebook feels like an old pair of shoes. You know those old, smelly Birkenstocks that you bring out every summer? They are fairly comfortable. You know you should stop wearing them. They don’t really go with anything and are out of style. The smell annoys your family and friends. But you feel an emotional attachment, and you just can’t bear to let them go. But one day you will stop wearing them. You will lose one, or your significant other will stage a secret offensive and throw them out, but I can guarantee that you will move on. You will find the new shiny pair of shoes.
The same is true for anything on the Internet. The Internet is highly dynamic. It is always changing and people are always looking for that great new way to engage. That is why the IPOs were such bad ideas. An IPO in its nature denotes permanency. But not much on the Internet is permanent. It is only a matter of time before people move away from sites like Groupon and Facebook completely and move on to the next new thing. Do I even need to bring up MySpace?