Social Networks: Paradigm Shift, or Overhyped Fad?

Recently I decided to argue with, err, talk to Brian of MadPropstoBakedPotatoes about his enduring enthusiasm for social networks. While I've had lots of fun playing around on various forumboards, blogs, and social networks, I don't think that social networks will truly transform our world. I thought it would be a good time to discuss this, as Twitter/Facebook's recent popularity may represent the moment where social networks truly become mainstream. Part 1 of our edited chat is here.

Brian: I'm here - hit the wrong window and nav'd away
MC: See, problem #1 with social networks, ha
when someone doesn't reply, you don't know if they hate you or if its tech problems
But ok, explain to me how social networks represent a paradigm shift.
Brian: What's the best way to get more business, attention, connections?
IN the real world?
MC: What I do is look for powerful people I can relate to and have some sort of possible in with
or just befriend as many people who are slightly higher on the ladder than me
and hope it pays off.
If you're a company, you search for a snazzy marketing campaign.
MC: How does the world of social networking change this?
Brian: Well, I would answer my own question differently.
Brian: OKay, best ways to get business:
In order of importance:
1) Word of mouth, personal referral
2) Personal connection or attachment to product or service
3) Advertising
Would you agree with this?
MC: I would say that yes, 1) is the best place to start early on, but pretty soon you run out of new fans and word of mouth runs out
it's like telephone, eventually the message starts getting misheard as it's being transferred
But I definitely agree with the order for new companies/starting out.
Brian: Well that's my entire point - you now have the ability to connect on a personal level with as many people as you want to - there's no reason word of mouth has to ever run out
I'm surprised you don't see this frankly
MC: Ah, but see, to keep up those relationships requires quite a bit of effort
once you cross the 500 fan mark
it's very difficult to continue growing and adding to your network
Brian: OMG you mean it's not EASY lol
MC: LOL yes, sometimes I have to write the pretty girls first before they write me back
this makes me sad
But the ads make it seem so easy!
err, never mind
Brian: We are about the same age, right?
MC: close-ish, I'm 29
Brian: I don't know about you, but I can't be sold to
As soon as I feel you're trying to sell me something I'm tuning you out
MC: true
Brian: But be my friend, and I'll do anything for you (without reason har har)
Best Buy is a great example - I would read up on what they're doing
You don't need to be best friends with everyone
MC: But see, all of this is only succeeding because social networks are new. Let me give a quick example
First blogger to write a book? I rush to buy his book, go to two of his signings
Second blogger? I pick it up when I next go to the bookstore
Third? I skim it at the bookstore, decide he sucks, ha
I mean, do you really think we're talking about lasting value here? The novelty factor is high.
Brian: I don't understand the correlation - you're talking about a product, I'm talking about a platform of interaction
This isn't new - none of it. On a conceptual level it's not any different from how things have always been.
MC: Ok, good, at least we agree there.
Brian: Since the beginning of time, one of the primary rules of marketing is to make a personal connection between product and consumer
You quite literally have an ability to do that on a massive and real scale
The tools are one part. The other part is the transparency that social networks are giving us.
The days of "hotbabe453" are leaving.
MC: I feel that social networks have two advantages: (1) speed and (2) rapid search capabilities for the exact type of person you're looking for.
Thank goodness, hotbabe453 would never return my messages anyway.
Err, I mean...
Brian: Let me give you some examples:
MC: But what I'm not seeing is true follow-through from social networks.
Brian: 1) Joe writes a book with a very narrow target audience. Let's say only 10,000 people on earth would like Joe's book. Joe now has the capability to go find those 10,000 people, connect with them on a real level, and eventually they may read his book.
Does this make sense?
MC: Yes, Wired went crazy about this--saying that this enables people to design products for the long tail
Brian: So scale that concept out 50 different ways - it makes sense.
MC: But my counter-argument is, are those people really going to rush to buy Joe's book in the real world? They may think Joe is cool, and makes funny jokes.
But when push comes to shove, will they break out their wallets? open their homes? etc.
I have real doubts about this. Any time actual dollars are stated, and people seriously want commitment from their social network, I see no follow-through.
And I'd love to hear your experience on this--perhaps you have mastered it.

Part 2, including Brian's response and an interesting discussion of personal branding, will be posted tomorrow.