Information Proliferation & the Segment of One

Readings:

Origins of Social Media

IBM’s CEO on data, the death of segmentation and the 18-month deadline

Community Relations 2.0

The LongTail

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The evolution of the internet from a read and learn to an inform and disseminate has occurred at an extremely rapid pace – blame ubiquitous connectivity for it. Never before has information, people and their opinions had the reach or the influence they wield today. Social media has redefined the way news- national, international or local spreads. Viral, a term previously associated with the spread of infectious diseases, today is commonly used to describe how news proliferates. This power in the hands of the individual has in my opinion created the “Segment of One”, where each of us has the ability to take a stand, express an opinion, share an idea, collaborate, contribute and clearly articulate our likes/ dislikes, needs and wants & be heard. Companies that used to build and experiment with their product or services now have a conduit into their customer’s use habits. This of course comes with the added baggage of catering to those needs or losing the customer to your competitor. In the old way, firms could afford to ignore the customer’s voice and still do business as usual. The social web has networked all these customers and there is indeed strength in number! The AOL and Comcast customer services are instances of how firms that had a culture of ignoring customers in the past continued to do so and paid the price!

Crowdsourcing and crowd-funding are great examples of how venture financing has changed since the spread of social media. As a part of my other course this semester, The Integrative Capstone, I am spending two full days around start-up at a New Venture workshop in Indianapolis in a couple of weeks. It will be interesting to see how many of the new ventures build on this social media platform and also leverage this medium for funding, ideas and feedback. The HBR article on community relations is a great example. Most of us reach out to google every time we come across a roadblock- be it a personal one related to a medical condition or a professional one related to our work lives. Just as there are social groups discussing specific cures, there are groups that tackle challenging problems- aerospace, computing , engineering - all only for personal gratification. The social web has indeed made the world a village where individuals can make contributions to worthy causes in any corner of the world. A typical example is “Narayana Hrudayalaya”- a heart-care center that performs heart surgeries free of cost for those who need it- based in Bangalore, India. People all over the world make charitable contributions that help with keeping the mission alive. Would this have been possible without the social web- I am sure it would have, but not at its current pace.

However, the use of social media has other ramifications. People leave their footprints all over the web and social media-either knowingly or involuntarily- it is this data regarding their preferences, buying habits, activities, personal and professional life etc. that is invaluable to companies and helps create a segment of one.  I think this is where the concept of longtail creeps into the picture. I work in modeling risk- mainly risk of failure of aerospace components, an area of engineering that is extremely risk averse. Distributions play a critical role in driving failures- a rate/ low probability event can sometimes cause catastrophic failure- so a long tail with low probability of occurrence events is a concept I am intimately familiar with. In the context of marketing, unless the cost of selling to these long tails can be justified or the product is a niche’ offering it makes little sense to build a business around it. A significant percentage of products in today’s world are commoditized- where margins are low and profitability is dictated by volumes. You can see it even in the media business- where books, music and movie offerings are tailored for the majority. The segment of one helps in understanding the individual needs and better, informing the customer of the product and influencing his buying habits. A lot of firms were ambushed by the proliferation of social media and were caught wrong footed. But over time they have developed means to use this to listen to their customers and sell them the products they want.