Just like it was immediately following 9/11, Technology and Marketing spending will now be on the chopping block. Time to throw the ballast over. So why is that good news for social software?
1. With recession comes consolidation
Consolidation is not great news for point solutions but it’s fantastic for “all-in-one” products which can replace lots of point solutions. I.T. departments will begin audits of all the little apps that aren’t being used, gather their value in hard and soft costs and present it to management with recommendations for EA licenses and other consolidation.
2. The Analyst’s noise filters
Next month Forrester’s Wave Report and Gartner’s next Magic Quadrant will be released. This will provide yet more clarity. Some vendors will be on the list, some won’t but either way these reports will help the market know where to look for the value they’re trying to get out of less cost-effective to things like Microsoft Sharepoint or tons of little tools.
3. Marketing budgets go where they can measure
Most folks I’ve talked to haven’t ever seen a traditional Marketing budget. Typically, things like “Social Media” don’t even have a line item. The bulk of the budget goes to broadcast, out of home, direct mail, etc. Mostly to traditional media dollars. In recessions, those expensive line items get cut and Marketers look for where they can be creative, effective and more measurable with their dollars. It’s just as important (or more so) to be present through recessions and Social Software offers the perfect blend of innovation and cost effectiveness. I can foresee budgets tilting much more this direction.
Recessions make strong companies stronger
As tough as they are, recessions automatically separate the wheat from the chaff. As long as you have smart people, a good product, and solid customer relationships you should find yourself a stronger company on the other side. I’d anticipate that, with the elections coming up, people will be voting for change and we will see the hangover lift next year.