Can social media monitoring be a stand-alone product?

A friend recently commented that social media monitoring as a stand-alone product is a “race to the bottom”.  While it may be a bit of a provocative statement, the fact of the matter is that any company which sells only a listening tool is primarily competing on cost.  Sure there are differences between products which include better algorithms to filter and an enhanced ability to process sentiment and semantic clues, but who among the top-tier companies can claim that they are really doing anything that is significantly different than their closest competitors?

And for those who are not “top-tier”, there is little question that this game is about lowering costs, increasing usage and hoping for an acquisition.  Considering that Lithium bought Scout Labs, Salesforce bought Radian6, Marketwire bought Sysomos and Neilsen bought Buzz Metrics and partnered with McKinsey, even the biggest and strongest fish in the monitoring space are choosing to take the money and become a part of the inevitable consolidation and integration across the social media marketing product set.

Looking at these acquisitions, there are two major use cases for integrated listening: social enterprise and PR monitoring.

Social enterprise is going to be the place to extract the most business value out of listening.  This is about figuring out how you can listen for insights that drive business KPIs, whether it’s around digital marketing, customer service or CRM.  I think the last few acquisitions help to illustrate the possibilities.  Lithium is beginning to use their acquisition of Scout to help with a lot of their community tools, and they’re also starting to power their new LevelUp offering with Scout’s NLP technology to bridge the gap between listening, engagement and measurement.  Salesforce is making huge bets in social, and right now they are using Radian primarily to augment social CRM and customer service.  As, and Rypple become more integrated with the Saleforce product set, we’re going to see even more applications of Radian’s technology across the company.

It’s also helpful to note that the partnership between Neilsen and McKinsey to form the NMIncite offering will offer a way to really dig into the data and provide strategic direction based on listening.  According to a recent Consulting Magazine article, there’s a ton of money to be made by consulting firms like NMIncite and McKinsey, and this is probably another great exit option for a “value priced” social media monitoring tool.

PR monitoring has and will continue to be a significant consumer of social media monitoring.  But as Neilsen’s acquisition of Buzz Metrics and Marketwire’s acquisition of Sysomos prove, social media monitoring on its own can only be so interesting.  In order to be valuable from a PR perspective, you have to combine social listening with traditional PR monitoring in a single dashboard.  We are starting to get to the point where it will matter less about who is creating the content (PR professionals or anyone else) and more about what the content is saying about a company.

In the next couple months, I think we are going to start seeing the acquisition of smaller monitoring tools by the Buddy Media and Wildfire’s of the world.  We also have companies like Adobe getting into social analytics with Omniture and Oracle beefing up their customer service technology with Right Now.  To my knowledge, Deloitte and Accenture have yet to buy or partner with a listening tool to help with work they do around marketing strategy.

I know there are lots of developers in India and across the globe working on different social media monitoring tools that each have their own take on where and how to focus.  With such high interest from companies ready to spend money, I wonder if this is the year that those small start-ups work around the clock on their product, sell their services for essentially nothing, build as big a base of customers as they can, and begin pitching to possible acquirers.  Thoughts?

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  • 40deuce

    You raise an interesting point here, Robin. As one of the acquired companies you mentioned above, I think that there is room for both ways to play out. Yes, social media monitoring can be a super valuable tool when you combine it with other business aspects and tools. However, there will also always be a market for people and companies that are only interested in the listening and monitoring side of things.
    For smaller companies, they may just care to listen to all the chatter and get some minor analytics out of it. For them, just monitoring on it’s own is more than enough. However, larger companies like to go through processes and have everything connected and for those companies, these integrated solutions are going to be their bread and butter.
    I think that both sides of this equation have a role in the future of social media. However, I also think that a lot of companies these days are designing their products with the hopes of being acquired. Money is the ultimate driver for most after all.

    Sheldon, community manager for Sysomos

  • Robin

    Thanks, Sheldon. I think you’re right about the needs of smaller companies. They will definitely require a solution that can provide intelligent filtering (above anything that is free) while still coming in at a low enough price point. It’ll be interesting to see how this plays out over the next two years.