At Social Starts we are big believers in markets. We think market economics will dominate advertising, media and commerce as the social/mobile revolution continues to deepen its impacts on business and consumer behavior.
We have felt this way for a long time. In a world where every individual is connected and where deep profiles of individual behaviors, attitudes, influences and intentions can be captured and weighed, market economics represent a better way to determine who to reach with messages and monetization. But only now are we beginning to see a regular flow of strong startups embodying these ideas in ways that we feel have a chance to produce real value.
The keys to market based startups are:
Must be based on math, not just connections. We have seen dozens of companies touting their connection to one or another group of individuals: actors, athletes, artists, high rollers, political pundits, you name it. But simply being aware of a tribe in today's digital world is a straightforward expression of analytics. What matters much more is the market math a platform uses to weigh its target population. Imagine if a Wall Street platform claimed victory simply because it could connect to a stock, but couldn't track its performance or characteristics to other shares. In markets, math is king.
Must control the market end-to-end. We have also seen plenty of platforms that act like simply making the connection between a brand and an individual is the heart of the matter. You can't have a market if you can't define, and then close, transactions based on the connections you make. Great ad/commerce market platforms have to drive the connections they make to actual contracts, oversee those contracts and even dive into analytics in successful cases. Success with market based startups demands end-to-end control.
Must be able to deliver value in a way that goes beyond traditional advertising. We think ads are a great, but waning way to connect brand messages to people. Ads and ad campaigns were created for a time when audiences could only be gathered and reached in bulk. When that was the case, cyclical delivery of small sets of recurrent messages made sense. What other choice was there? But now, every person can be weighed in every circumstance, measured against all others and reached individually. In this kind of world single-message ads not only don’t cut it, they brand their author as out of date. Highly personalized messages and message streams are the obvious and essential way to go. Strong ad/commerce market platforms will need to tie themselves to these new, more powerful forms; they can't just be a better way to deliver ads.
Ultimately, in fact, we see many of the characteristics of today's media fading away. Media in the traditional sense was necessary when audiences could only be reached in large groups through slow, heavy, physically distant channels.
Now, each individual can be reached as a distinct node on the world network. The focus for emerging markets will be the unique and valuable behaviors associated with that particular human, rather than some intermediated gathering point. Whether that person is reached via Facebook or phone, or through a digital billboard he/she is walking in front of, the target will be the valuable behaviors that person encompasses.
As we move forward in this digital revolution, marketers won't look for bridal channels, they will target the behaviors and expressed and inferred needs of individual brides. It will become possible, through markets, to purchase "bride futures" as today one can a buy stock futures on Wall Street. Those individual behaviors will be able to be bundled into packages, and those bundles will be bid upon. So the price of access for marketers will float, like a stock market. Supply and demand, uniqueness and hosts of other factors will determine how much our behaviors are worth to marketers.
Today, we are seeing the first companies taking big strides in that direction: from market dynamics for backing eSports teams for acquiring access to celebrity, to encouraging good works among employees.
What we aren't yet seeing, but are looking forward to eagerly, is the next big step: direct sharing of economic value with the individuals whose behavior is being sought. We see hints of it today in influencer marketing; much of the value in those connections flows to the influencer and not just to Snapchat or Instagram. We believe, inevitably, this will extend to all of us. It is our behaviors that have created billions of dollars of value for Facebook, Twitter and dozens of other social platforms. Currently, those intermediaries retain all the value derived from all we do, all our connections, our feelings, our passions. We don't believe that can hold. We believe the powerful markets of the future will share the value marketers derive from reaching us, with us.
This doesn’t mean the death of platforms like Facebook. But it means that Facebook and other social platforms will have to become facilitators of this market dynamic. It’ll be a hard transition to make. And ultimately there will be newcomers. We’re in the business of betting that some startup is now inventing the next market making monetizer for every one of our actions, interactions and transactions.