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SXSWi explains “social capital”

A couple of weeks ago at SXSWi, one of the more interesting sessions I attended was called “Social Capital: The Billion Dollar Future.” Social capital refers to a person’s or brand’s collective online presence and what it means to the people around them. The session was paneled by Bill Parkes (nFusion), Michael Spataro (Visible Technologies), Zach Hofer-Shall (Forrester Research) and Richard Margetic (Dell).

Hofer-Shall made a point by saying that the current state of social media is equal to everyone being in the same room and shouting. It’s hard to pay attention to just one voice and distinguish what is being said. This is why current marketers are obsessed with the idea of “influence.”  Finding people of influence is like finding the voices in the room that really stand out and that people are listening to.

We rely a lot on the voices of these other people. Before we buy things, we research online, and not just for product info. People now look more to user/customer reviews than they do at any information provided by a company. If the right kind of people, or enough people, recommend a product, our chances for buying it increase significantly. We also rely on these voices for discovering new content and information. We click on links provided by people in our networks more often than those provided to us directly from companies. Hofer-Shall also said that “people still don’t trust social marketers.”

It’s because of this distrust in marketers that we look to ideas, advice and references from our social networks and even online strangers. This is what social capital is. The idea that we can be influenced by simple social connections. All the panelists admitted that social media analytics are becoming more and more essential and are continually developing.

Social capital isn’t just about identifying big influencers though. It’s about finding the people that make a difference in individuals’ lives. Everyone has certain people they look to as experts on one subject or another. Margetic says that these experts will become the best marketers. If companies want to take advantage of this, they must identify these experts. For example, Gary Vaynerchuk is a well-known name in social media with regards to wine, but real wine lovers have their own personal experts that they usually know and trust for advice. Marketers need to identify these lesser-known experts as well. “Influence marketers” will need to find these people by both a mix of online and offline influence, which Spataro believes is three to five years away.

All four panelists agreed that influence goes far beyond the number of followers someone has or how many people are in their social graph. When it comes down to real influence it really comes down to who people trust. Having a lot of followers, but no real trust really amounts to no influence at all. This idea of trust holds true for companies as well as individuals. If you can earn the trust of your public then they will be more likely to listen to what you have to say.

Another thing that all the panelists agreed on was that we are still in the very early stages of social media and it hasn’t reached its potential. However, social capital will be one of the things that drives us and social media forward.

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  • Philip Hotchkiss

    Great post Sheldon. I particularly liked your line, ” It

  • Philip Hotchkiss

    Great post Sheldon. I particularly liked your line, ” It

  • Integr8 Networking

    Social capital isn’t something new and recently discovered by social media. It exists in all network relationships – some are rich in social capital some aren’t. It has been an area of study for the social sciences for decades. The issue of influence now being discussed in social media marketing circles is just that – influence! Don’t confuse it with what online marketers are saying about social capital, the way its spoken about infers two very differenet things. Gary Vaynerchuk’s ability to sell wine is governed by the amount of influence he has – not his social capital.

    Social capital is largely about reciprocity. Put simply if I trust Vaynerchuk and buy wine from him, and the sole reason is because I respect his expertise and his authority as a wine expert – that’s him using his influence. If I trust Gary because he has helped me personally and I want to repay the favour by assisting his business – that’s social capital.

    Powerful brands will come to dominate social media the way they’ve dominated all media. The real opportunity for individuals is that social media is a great iniator of contact – the very foundation of social capital.

  • Pingback: Socialize East talks about the future of mobile and SoMoLo | Marketwire blog()

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