As Social Media Boundaries Blur, Is Strategic Advantage Disappearing?

Small only stays beautiful for so long. It's a nice thought and it serves its purpose when the enterprise is still growing, experiencing some initial success but uncertain about whether it will become...scalable.

Suddenly, small seems confining, a harbinger of shortened horizons, muted expectations. In the global economy, who wants limits?

So the conversations begin, tentatively at first, about brand extensions, redefining the market, competitors' vulnerabilities and most emphatically, about not dealing yourself out of the game too early. It's heady stuff: the world seems so open, so accessible, so willing to buy whatever it is you think you're selling.

But there is, of course, a downside. Competition is expensive. Costs are incurred to bring on the machines and the people to program and run them. And costs are also incurred as competitors who thought you safe in your niche suddenly realize, that you, too, aren't perfect at everything, that your eye may have wandered away from the customer or market segment that brought you to The Big Dance - which means something of yours may be vulnerable, as well.

This is the situation now being faced by some social media which, having attained that initial success, find that investors and their own competitive desires are driving them to become many things to many people. Revenues may well be gained, possibly even profits - though those often prove more elusive - but there are serious questions about who they now are, what they stand for - and whether strategic advantage has been gained or lost. JL

Tim Dunn comments in Advertising Age:

Feature-creep is rife among all major social channels
The introduction of Instagram Direct is further evidence that social networks are moving away from the idea that an app or utility should be born to do just one thing, and to do it brilliantly. While Facebook has long been a multi-purpose service, all the major social networks now are travelling in that direction, which soon will leave us with four or five nearly identical competitors.
Just this week Twitter announced the inclusion of images in mobile DMs, and Instagram announced the direct messaging of images -- can you see the similarity?
As Instagram shifts from photo-sharing into messaging, Foursquare has moved from geo-tagging to local search. Twitter is as often about image sharing as microblogging. Digital channels want to be all things to all people.
It's alarming how similar they are already. As the chart shows below, the social networks that started out with distinct purposes are merging into a homogenous soup of social, with little to distinguish them except legacy user demographics quickly being diluted by mass adoption.

Roundarch Isobar

What does this trend mean for brands and marketers? Where once we would define different campaign mechanics that dialed into the behaviors of the different social networks, it's increasingly likely that we'll be able to duplicate campaigns across all social networks with little need to customize.
Ironically it's social media's scramble for revenue that has generated this diminishment of the channel's creative potential. Only so many levers can be deployed to build brand activity, and with all networks after the same advertising dollar, they've all implemented exactly the same product features: hashtags denote campaign participation, location is required for events and discovery, video and images are required for branding, and sharing mechanics are required for viral distribution.
This process means we're likely to see less innovation, fewer risks taken, and the gradual diminishment of brands' ability to achieve stand-out executions.
But there does remain one more frontier for social – integration. Although Facebook's attempt to release a Facebook OS failed in grand style earlier this year, Facebook's and Twitter's integration into iOS and Android remains a major selling point. Google 's integration into the search and content ecosystem and Twitter's headway into news and TV are other interesting fronts.
And there's always hope from the wild west of social innovation, with the likes of SnapChat yet to provide a revenue model to match the scale of its user base.
But my view is that we are going to settle into a social media pattern that looks like this:
Major channels such as Facebook, Instagram and Twitter will get more and more generic treatments by the majority of brands as their audiences and feature offerings merge.
Channels as yet unknown may remain an innovative space for marketers to reach forward-looking consumers who are growing increasingly jaded with the new social norm.