Sunday, April 24, 2011

The Currencies of Social Media; Social Media as Currency

 It's been said many times that the two currencies of business are Time and Money. In order to succeed at business, at least one of these two will have to be spent. This is true for successful use of Social Media for your business, as well. In reality, Your time is worth more than money. Money can be replaced, time spent can never be regained.

But, Social Media is changing as rapidly as the needs of the audience. There are more currencies than just Time or Money being used. Not all of these currencies have real-world applicability, but many do. Let's take a look at the currencies of the Social Media landscape right now.

Expertise - Sites such as Quora and LinkedIn and any of the spaces on which you communicate with your customers are built on the currency of Expertise. People have questions - you have answers. Good answers are rewarded with cognitive authority and future trust. Indications of this on LinkedIn are "Best Answers," on Quora your status rises physically. In your own spaces, you build a reputation for being someone to do business with. You gain the trust of your customers and, with the proper tools, they will share their feelings with their peers.

Expertise is a strong currency in Social Media, with rising real-world value. 

Entertainment/Interest - Social Media platforms like Facebook, MySpace, LiveJournal  use the currency of Entertainment or Interest. What are you doing? Is it interesting? Can you provide links, photos or statuses that entertain your "friends?" The nature of entertainment on these sites is going to be set by the tone of the account - a political awareness account or charity will have a different tone, but the currency remains entertainment and intertest. Your friends and followers want you to keep them informed and aware. They want to know that you are paying attention to them.

Entertainment/Interest is an unstable currency, expect a lot of ups and downs as fads change needs. 

Information/Communication - Platforms such as Twitter and your own Blog or website are based on the Twin currencies of Information and Communication.  These two currencies are inextricably linked. Your really can't buy into one without the other. Once you begin Communicating with people, Information is shared between you. The value of that Information is for you to decide - conversation with a best friend about nothing over dinner may in fact have more value to you than an important meeting at work. Likewise any discussion about your business may be of high value to you, but less to the other person. Or, you may discuss an "irrelevant" topic that brings you and the other person more closely together. These currencies are critical, but personal.

Information/Communication are slow-growth currencies that gain in value steadily over time.

Physical Presence -  Like Time, your actual physical presence is limited by the laws of physics. You only have one you. You can only be in one place at a time. Foursquare, Gowalla, GetGlue and review sites bank on the fact that YOU are the most valuable thing to you. Your physical presence, your efforts, your time are combined into one currency which they use to measure your worth to a business.

Physical Presence is a currency that is undervalued by traders. Is your time/self really worth a badge or a sticker?

Social Media Use - The newest currency in Social Media is...Social Media itself. Sites like Klout measure your worth relative to other Social Media users. With the current interest in gamification of Social Media, it's no surprise that a Social Media platform that transforms Social media use into virtual currency now exists. The problem with these is that for many people, there is a tendency to forget the use of Social Media for purposes of sharing information, communicating with people and being entertained, for the sake of amassing virtual status. Like the many individuals and businesses who spent a lot of time doing the same on Second Life, they may find that the use of Social Media itself as currency leaves them with very little value in the real world.

Social Media Use is a very weak currency.

For small- and medium-sized business owners, trading on their own reputation - when it provides real-life value - is a good use of precious resources.  Avoid sacrificing real value for virtual currency and you'll keep your Social Media on track for growth.
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