Social media is a value exchange, and the exchange of value requires common currency.
In 2008, we conducted social media workshops for a number of clients. Below is Part II of the full-day presentation (also see Part I.).
The second part of the workshop introduces the concept of a social economy—the economy in which social currencies are exchanged.
The Social Web has its own economy. Like any, it’s based on value. But it’s not the same as the actual economy. It’s governed by a different set of economic principles, if you will.
John Battelle is a well-known blogger, entrepreneur, and thought leader in search marketing. We picked this quote of his because it speaks to our point about creating value.
Battelle wrote this on OpenForum. He’s one of their bloggers. The conversation he’s referring to is his own, and the underwriter is American Express. His point is that American Express is leveraging the value of that conversation (Battelle’s content) for its own brand. It’s providing value that goes beyond its actual products. When was that last time you saw an advertisement and thought to yourself, “Wow, that was really valuable and useful.”
Just as the actual economy was once based on the gold standard, the economy of the social web is based on the value standard. This begs the questions: How is value created? Who determines what is valuable?
These are some of the basic economic principles. We exchange value for value. Value is subjective, but it is also very real. Unlike the actual economy, where so much wealth was created in the absence of value, the principles of the Social Web are more strict. That also means that the creation of value by anyone benefits everyone. Creating value on the Social Web is an investment with a measurable return.
With all the skill it takes to sign up for an email address, you can start a blog or your own social network…for free. And this is where the trend is headed. Everything is getting more free, if that’s even possible. Chris Anderson is the editor of Wired and wrote the iconic book, The Long Tail. It describes a distribution curve and the new economics of the digital world. His next book is called Free, and it essentially builds on this new economic reality. This is the primary principle behind Social Media Currency. [Remember, this was 2008.]
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