I don’t think that social media has impacted the necessity for good content, good tracking, and ROI.  That is still and will always be relevant.  The hype of social media makes it all too easy for brands to start demanding that agencies get them engaged in before they have actually thought through their objectives.

But from my perspective, social media is subtly impacting the ways in which brands relate to people.  And I believe we have only seen a fraction of the changes that social media will have on both marketing and businesses in general.

But the changes we are seeing in our culture did not start with what we are currently defining as social media. Forums have been in full force long before Facebook ever appeared. Conversation using technology was happening even prior to the World Wide Web with Usenet.

But the huge participation and growth we are seeing in social media applications like Twitter and Facebook might be viewed in part as a response to the growing shift towards segmentation.  In the attempt to deliver targeted messages or products to sub-groups we are creating more options, more choice, and much more information to sift through.

In the 60’s we only had a few television channels to choose from as a result of bandwidths restrictions.  But this changed in the 70’s when we saw the development of cable and satellite ultimately resulting in having hundreds of channels to choose from depending on our particular interests.  Commercials no longer have the hold they used to.  We simply cannot absorb it all.

In his 2004 presentation, “What we can learn from spaghetti sauce”, Malcolm Gladwell, tells a story about the change in the food industry that lead to why we saw 7 different kinds of vinegar,14 different kinds of mustard, and 36 different types of Ragu. http://www.ted.com/index.php/talks/malcolm_gladwell_on_spaghetti_sauce.html

Brands have to work harder and more creatively to make sure their message gets heard in the cluttered market place.

As a result, we have become increasingly immune to and suspicious of brand messages.  The way we learn about products is becoming more and more dependent on word of mouth. We are more likely to take the word of a complete stranger, simply because their views appear to be more authentic.

This is the reason why we love product ratings so much and why people will turn to Amazon even when they have the intention of buying from their local book store. Amazon has turned into a resource of authentic information and provides value to consumers by helping people feel like they are making more informed decisions based on real feedback.

Consumers are spending more time figuring out what is real and what is not. Lonely Girl 16 on YouTube fooled us.  Dove’s short film Evolution captured people’s imagination by demystifying tricks of the advertising trade. The fascination around whether a celebrity has had plastic surgery or is homosexual is less about the discovery of truth than it is about the investigation of deception.

Ed Stivala writes, “a major downside of social media is that they can talk back at you.”  In fact social media presents a tremendous opportunity for market research that can help improve your product, provided you are prepared to listen.

Bigger concerns about social media are the negative outcomes as a result of group think and the lightening speed in which misguided conclusions can be accepted and in turn further perpetuated.  Once committed to an idea, it can be a challenge to change our minds.

The Twitter trend #amazonfail that peaked on Easter weekend this year is an example of how a brand can so quickly face public scrutiny within a short number of days, even hours. In the grand scheme of things the idea that a scandal could arise from a basic bug in a database seems ridiculous.  It’s easy to imagine how an organization could brush it off and assume that the short attention span of the twitter crowd will have moved on to something else days later.

But the dissatisfaction that resulted from the perception that Amazon did not respond genuinely and on a human level to the concerns of a group that felt devalued, will last in the minds of many.

When authenticity is valued at such a premium, I believe it has to impact how we engage with consumers at every touch point.  In time, it’s possible that authenticity as a business value will need to be internalized at every level within an organization itself, in order to further humanize an organization’s connection to the public.

In the age of dial up, we started to become a voice among many, our big-fish-small-pond selves moved to the big city where our worlds opened up.  Pockets of subgroups, with interests, hobbies and fetishes you never even heard of formed, and like sought like.  You could do and say anything anonymously and probably find someone who agreed with you.

And then the pendulum swung back.  People needed to feel more than a voice in the wind.  They needed to be where they feel they mattered, where everyone knew their name.  And with that, social media evolved to the point where what you did on your day off while “sick” would be discovered by your boss because you got a little too comfortable with Facebook.   In the flip of a switch we went from our big city living to small town where everyone knows your business.

And not unlike a small town, news travels fast.

#Amazonfail started to grow in leaps and bounds over the weekend.  The very tag “#amazonfail” not only captured our interest, but conveyed everything that would generate a value attribution.  We all understood the context of any words that followed “fail”. For the first short while it was all emotional response.

While we talk about the wisdom of crowds, we also need to consider the power of mob think.  People will make an initial value judgment that can be very hard to change, especially after they have committed to it (let’s say, by tweeting about it to all they know).  Human inclination is to stick with your opinions.  Right or wrong.

Unfortunately for Amazon, time was not on their side.  Social media runs with rapid speed, as individuals operate independently. Larger businesses simply can’t move that fast.   They can’t afford to. A function of bureaucratic hurdles is to specifically to manage and minimize risk.  There will always be individuals looking to destabilize perceived power and larger companies have a lot more to lose.

But in the meantime social media was feeding on itself.  Every unaddressed hour was an example of how Amazon was trying to exercise control over the people. At best they did not care, at worse there was a sinister agenda.  Every hour that went by was fuel for the fire.

And, unfortunately for Amazon, they failed to understand another component of human nature: if we were all screenwriters, we would instinctively know that the audience needs a payoff.  No longer can we write our endings with “they woke up and it was all a dream”.  Once the crowd gets worked up over injustice they require atonement.  It’s human nature and the movies know all about this.  The crowd will not be satisfied with “glitch” as an explanation at this point.  The resulting #glitchmyass is good example of that.

The public wants an apology.   Something sincere.  And corporate speak is not cutting it.

The bottom line here is authenticity. When we receive a pat response, we know it is a pat response. It leads people to think there is a lie involved.  But at one time, and some even suggest that even just a month ago, Amazon corporate speak was smoothing ruffled feathers when dealing with a few powerless individuals.  Today for Amazon that has changed. The power has shifted.

To what degree this will affect Amazon’s business is hard to say.  Their stock took a dip today, but not a significant one.  All the same, some people are communicating that they will not support Amazon now.  And even if it does not significantly affect Amazon now, it is one more tiny seed of mistrust that has been planted in general. It could be forgotten about. Or it could lie dormant until another time.

The gap between organizations and individuals is closing on many levels. If brands hope to enter into the social media Conversation as so many hope to do, they will need to understand that risks come with it.