Social Network Advertising and the VRM effect

Interesting karma / zeitgeist / whatever...last week I was accused of "jeering" at the Forrester view (I prefer to say disagreeing with wit ) that Social Nets would survive the recession better than most due to their superior Ad vector (ie my "buds" - that's you lot), yesterday came a post confirming I may be on the right track, and today comes another one from Esther Dyson, writing in the Wall Street Journal, talking about how it is more likely to work:

....consider the new world of social networks. Facebook, unwittingly or on purpose, has been teaching people to manage their own data about themselves. Facebook's launch of the Beacon service -- which informs Facebook of members' activities (i.e., purchases) on other sites -- was a PR fiasco. But it still familiarized millions of users with the notion that they can control information about themselves online -- and determine to whom it is visible.

What might seem like a horribly complex and tedious task to their elders -- categorizing "friends," managing news feeds, handling intersecting communities of contacts -- feels natural to the Facebook users of today. They want more granularity of control, not less.

Actually, their elders already do all this - just they do it in real life and in electronic networks outside of social nets, and as they adopt social nets they will demand the extra nuance (as they are doing) because todays ones only really work where people are in the same circumstances - eg all college kids - rather than where they are more grown up and in multiple overlapping social sub-nets. Anyway, I think Esther's view of how money will flow is far more likely to be on target than me allowing my "buds" to pimp stuff.

So what's the business model? I'll "friend" British Airways, which will say, "We see you're going to Moscow next month. Why not fly through London and we'll give you 10,000 extra miles?" I'm no longer in a bucket of frequent travelers, my privacy protected. I'm an individual with specific travel plans, which I intentionally make visible to preferred vendors. British Airways, of course, will pay Dopplr a handsome sponsorship fee to be eligible to be my "friend" (just as a Nike rep might pay to sponsor a basketball game and be part of the community). Someday NetJets may show up, offering to ferry me and my friends to a conference we'll be attending together.

I think this is a far more likely scenario than "fan-sumers" and bud-pimping, for two reasons:

(i) Trust - the technology is increasingly giving the user more control, and they will take it, simply because no-one trusts most "brands" - and service providers like Facebook et al - not to abuse it.

(ii) If one looks at the way VRM will probably work, this is the most efficient way for companies to market their services in that sort of environment. Every customer is a potential buyer.

But Esther, I do have some bad news for you - I won't need Dopplr, or Facebook, etc to make those arrangements. The tools coming down the pipe allow me to manage my own Net Present Value to BA for flying arrangements. I'll still use Dopplr ror meeting friends in strange places, but I will manage the relationship with BA, using C2B enabling systems provide via VRM service providers.