By Tim Smith Jun 21 2012 Blog

Keeping an Eye on the Consumer Movement

The opening line, “Well, that didn’t take long,” of a Los Angeles Times article, unknowingly captured the reality that makes up the ever-changing behavioral shifts in the digital space.

The line was in reference to the cascading stock price of Facebook, and Mark Zuckerberg’s brief time on Fortune’s ‘Top 40 Richest’ list.  And while the post-IPO struggles of Facebook have been dominating tech news over the past few weeks, the greater story centers around what is causing this drop in perceived company value: consumer movement. In Facebook’s case, consumers are moving to mobile and the company has been slow to respond.  However, this isn’t a unique issue to Facebook alone. Once the trickle of consumer shift begins, it’s exceedingly difficult to dam the flow.

Here are some notable examples taking place right now:

  • When consumer shifts are great: Pinterest is now ranked as the #3 social network on the web due to explosive growth over the past 6 months.  Over that same time period, it has seen an increase of 30x in traffic and it’s presently valued around $1.5B valuation. Not to mention, it is the belle of the ball for both tech insiders and my wife’s circle of perpetual dream wedding planners.
  • When consumer shifts are not great: Zynga, whose success was tied somewhat to Facebook’s growth, has been watching their audience numbers slowly deplete since they went public.  In order to plug the audience leak, they jumped on OMGPop (creator of Draw Something and other apps) for $210M to refill the lost numbers.  Within two months, the consumer movement away from Zynga’s Social games brought the company’s numbers right back to where they started pre-investment.

Such is the challenge. Consumer movement is a hard thing to predict, but an easy thing to recognize, and that’s the key point here. As advertisers and marketers, our biggest challenge is finding profitable consumers at effective scale in order to move the business of the brands we service.  While the digital space is full of these opportunities through social, mobile and other new media, the target is a moving one that requires a watchful eye.