Woola Economics for Social Media

April 2, 2012

I admire some azure chip consultants. Now I understand that hiring of middle school teachers and home economics majors have fallen on hard times. Even people with juco degrees in information technology are struggling to find purchase on today’s economic ice hills. Enter Woola economics: fun, fanciful, and better than a job at Kentucky Fried Chicken doing inventory.

It stands to reason that the more motivated college grads and the progeny of helicopter parents would turn to mathematical pursuits. A good example is the story in Virtual Strategy, a heck of a title, but I don’t know what virtual strategy has to do with paying for petrol or retiring one of those pesky education loans. The story “Social Media Advertising Revenue to Show Steep Growth, Reaching $25 Billion by 2015 and $114 Billion by 2020” caught my attention.

Those are decent numbers, particularly the $114 billion. Here’s the best part in my opinion:

Further the Worldwide Social Media revenue is forecast for consistent growth with 2012 revenue totaling $14.9Bn, and the market is projected to reach $29.1Bn in 2014, $58.1Bn in 2016, will touch magical mark of $100Bn towards early part of 2018 and by the end of 2020 it will grow substantially closing at around $233bn.

Note the $233 billion.

Let’s assume that this estimate is accurate, give or take a few billion. Among the azure chip crowd involved in virtual strategy, what’s the risk?

Consider the Google. Replete with mathematicians and stats savvy, socially adjusted wizards, Google would look at these numbers and ask, “What can we do to get as much of this money as possible?? The answers to this question have in our exercise in virtual strategy concluded that Google must dominate social media. We can see the outcome of this type of thinking in Google’s efforts in social media and making everything from colanders to clicking on a Web page a social experience.

The problem, of course, is that social media has some established outfits like Facebook. There are quasi social operations which seem to appeal to specific demographics like Pinterest. And there are giants like Microsoft who want to convert making a phone call into a sharing opportunity.

Are these companies really social? Nah, these outfits are trying to make a buck. The social thing is the current hobby horse. The azure chip crowd knows that wild and crazy estimates are like charcoal starter fluid on dry wood shavings. The bigger the number, the more the frenzy.

Now back to Google and the incumbents. If these estimates are on the money, then the social revolution is going forward whether users care. The notion ignores social media fatigue, automated ghost Google Plus accounts, and the Mad Ave stampede into social media.

The challenge, of course, is keeping the social media revolution going and morphing it into a mainstream activity. Niche markets are great but may have some difficulty pumping out the requisite $233 billion.

My hunch is that in today’s economic climate, projections that reach out eight years are likely to be wide of the mark. Perhaps we have entered a new era of azure chip consulting and market projects. I suggest we call these “John Walker” estimates. The “John Walker” refers to the Disney film which missed its projections and has become one of the biggest money losers in motion picture history. “Disney Says John Carter to Lose $200 Million, Putting It among Biggest Flops Ever” reported that the film is “now officially a flop of galactic proportions.” I wonder how many home economics majors and former middle school teachers ran the numbers when this project was in development? We know that their projections are from the Woola School of Economics.

What is interesting is that hopes and dreams of virtual strategy regarding huge payoffs may be incorrect. What then? I believe that more boom and bust spikes, black swans, and unanticipated trends are likely to have a significant impact on outfits like Facebook and Google.

Azure chip consultants, on the other hand, can rake in the consulting dough or get a job at a Microsoft retail store. I wondered what happened to “Welcome to the Social”?

Stephen E Arnold, April 2, 2012

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Stephen E. Arnold monitors search, content processing, text mining and related topics from his high-tech nerve center in rural Kentucky. He tries to winnow the goose feathers from the giblets. He works with colleagues worldwide to make this Web log useful to those who want to go "beyond search". Contact him at sa [at] arnoldit.com. His Web site with additional information about search is arnoldit.com.