Oct 21 2009

Fads, Trends, and Brands

Categories: Marketing | Entrepreneurialism | Investing | Competitive Advantage

Posted by Paul Orfalea at 3:31 PM
10 comments

As an owner of rental properties in a college town, I witnessed a significant economic trend before the general population saw it. About ten years ago, students stopped installing landline phone service in their apartments. Soon after these students graduated, phone companies saw a rapid decline in the overall number of landline phone customers. Many people still have dsl lines for Internet use, but the all-cell-family now comprises about 25% of households, and that number is expected to double in the next three years.

Similarly, it was easy to see that Blockbuster was in trouble once everyone you ran into was raving about Netflix. Netflix wasn't a competitor - it was an innovator that changed the model for movie rentals. Rental stores large and small have been closing all over the country.

For those with an entrepreneurial spirit, trends and fads are fun to spot, but it's extremely important to distinguish the two. Fads come and go reasonably quickly, with a small window of profitability. Obvious examples are pet rocks, pogs, and Pokemon cards. Trends mirror or exploit large-scale socio-economic shifts, and offer varied and sometimes repeating profit life cycle opportunities. For example, the switch from landline to cell phones ten years ago is part of a much bigger wireless-living phenomenon that more recently crossed paths with the ongoing trend of growing Internet use. We don't know exactly what people will be doing tomorrow, but we can be pretty sure they'll be doing it on wireless web devices.

A friend recently asked some college students about the hype surrounding Twitter. He had read articles suggesting that young people did nothing but "tweet" all day. While most of the students were familiar with Twitter, several had lost interest and some had never even tried it. Does that mean that Twitter is/was a fad?

Not necessarily, but Twitter is just one brand in the marketplace, and however popular the service is today, Twitter's ultimate success will depend entirely on old-school marketing concepts like customer satisfaction and value. Even if the company's "innovation" changes the way an entire generation communicates, there's no guarantee that Twitter will be a financial beneficiary of this shift.

Social networking is clearly a powerful trend in our society, affecting the way we communicate, job-hunt, and promote our products and services. But networking services like LinkedIn, Facebook and Twitter succeed to the extent they can deliver the value of the trend to a mass audience. Facebook is very fortunate to be linked to the very idea of social networking, considering that earlier players in the space were quite successful. Remember MySpace and Classmates.com?

None of the brands we currently associate with social networking are guaranteed a future. As users determine their personal value equations for services like Facebook and Twitter, it will be interesting to see which brands make the most of the social networking trend. What do you think? Is Twitter a fad or something more substantial? 

Comments

Lindsey Franz wrote on 10/25/09 8:30 PM

Personally, I would hope that Twitter is nothing more than a fad, because I find it to be excessively creepy. Does the whole world really need to know that you "just ate an apple" or "are playing video games"? However, despite my own feelings, it is undeniable that Twitter has become a great tool for mass marketing. Companies everywhere are hopping on the bandwagon, advertising their businesses through their Twitter accounts. In a time where even the youngest generations spend hours a day on a computer, it makes sense to advertise businesses on the Internet. And if people all over are constantly staring at their computer screens, active on social networking sites, why not make sure your business "tweet" is right in front of their face? The fact that Twitter and other networking sites can be used for professional advertising lead me to believe that they aren't simply fads, but actually something that will be around for quite some time.

Darcy Pollock wrote on 10/26/09 2:31 AM

As an individual who has a twitter account, but has only posted three or four 'tweets', I hope that twitter is simply a fad as opposed to a trend. While I do realize the value of reaching a large audience at once, especially when marketing one's company, I feel that most people use twitter to internet stalk their friends and celebrities. Now that Facebook has implemented an "@" feature, which was previously unique to Twitter, I believe that Twitter has some competition and has potentially met its match. Only time will tell if Facebook will continue its reign in the social networking market and if Twitter will prove to be a continuing trend, or a solely a short lived fad.

Jonathan Wilkinson wrote on 10/26/09 2:41 AM

I also hope that Twitter is short lived. It makes people feel entitled to knowing what others are doing at any moment, and puts too much of an emphasis on continual updates. That just takes the focus off of the activity, and makes the user less aware of life happening around them.
As for fad versus trend, i think that Twitter itself may be a fad, though social networking sites are a trend, a societal shift. While some people outgrow it, others can't wait to get into it farther and farther. Mafia Wars on Facebook, for example, re-ignited interest in Facebook for many people. Innovations like this keep a brand from getting stale and prolong it's profitable time range.

Devon Mailhot wrote on 10/26/09 6:53 AM

I have to agree with all the above posters. Right now, it looks to me like twitter is only going to be a fad, and unless they change something, it will die out fairly soon. All you have to do is listen to how people talk about twitter compared to Facebook. When you talk about Facebook, you are talking about what you did or saw on it. The only conversations I’ve had about twitter are when people ask me if I have ever used twitter and what it is used for. Just by hearing this you can see that most people are confused about who uses twitter and why. So unless these questions get answered quickly, twitter will have a short life.

Robert Boggs wrote on 10/26/09 6:41 PM

Twitter does seem to be more of a fad in the bigger trend of social networking on the web. It is susceptible as much as any social network to people moving onto the new big thing. However, If gossip magazines still get sold, I have a feeling that people will continue to use some sort of website to get up to date information on their favorite celebrities. It may not be Twitter but at least some social network that reflects the need to know everything about celebrities and friends. I think it’s kind of silly but there’s still a large audience that like constant status updates.

Lindsey Murray wrote on 10/26/09 10:56 PM

Personally, I think Twitter is a fad. Quite honestly, I don't use it myself because I find it somewhat useless and the people I do know who use it, seem to only "tweet" sporadically and some have stopped "tweeting" altogether. I think the few dedicated souls along with the numerous celebrities seemingly addicted to documenting their every move, will not provide enough of a base to support the technology. If analyzing the social networking opportunity by applying "old school marketing concepts" as suggested in the above blog, I just don't think that Twitter provides enough value to its customer. I don't see that it is delivering much value at all. It seems to be piggy backing on a opportunity already presented by the wildly popular Facebook. Facebook offers it users the status bar for updates as well as a whole array of other social networking tools and I think people would rather take advantage of that whole package rather than just the update feature offered by Twitter. When push comes to shove, I think people will stay loyal to Facebook and won't see the need to "tweet" when they are also offered the same opportunity via Facebook.

Lauren Wagner wrote on 10/27/09 4:35 AM

I really hope Twitter is a fad. I personally don't care what Hannah Montana just had for lunch. Although I agree that Twitter is an excellent way to get a short message/advertisement out to the masses, I think Twitter's popularity will be short-lived because it can't offer as much as Facebook does. Social networking sites are the trend, and Facebook is in the best position to continually innovate and keep its fans interested. Twitter, on the other hand, is limited to a 140-character statement.

Jacki Iwanski wrote on 10/28/09 5:05 AM

I agree with Lindsey that Twitter will be short-lived, since Facebook offers the same features. The only way I could see Twitter reaching long term growth is by specializing its features for specific target markets. For example, investors can receive updates, news releases, and stock tips for specific companies in their portfolios. Music buffs can hear music clips off their favorite band's new album or receive tour dates before they are released to the general public. If enough perks are given to users, Twitter will establish long term customer loyalty, so it can eventually charge a membership fee for its services. By catering to specific groups in an innovative, user-friendly way, Twitter will differentiate itself from social networking competitors and achieve continued growth.

Yun Ah Rha wrote on 11/01/09 9:42 PM

I have yet to see the Twitter website. Having been abroad for a whole year, it took me a couple of weeks to figure out what all this twitting was about. Immediately, I labeled it a fad... it would die away in a couple of months. A year later, I still cannot go a day without hearing the twitter word somewhere- on tv, people's conversations. However, I still believe it will die out and will lose the interest of people slowly. I stay with facebook because it really is a convenient and a cheap way to keep in contact with old friends. Stalking other people's photo albums is also pretty fun, too. These two things are a function of facebook that I doubt I will ever get tired of. On twitter, once you turn a certain age, are you really going to care what club Paris Hilton is going to party at?

Vincent Vo wrote on 11/06/09 6:45 PM

Twitter is successful because it fulfills the need to be socially interconnected and up to date with organizations that utilize it. However, I don't think the Twitter that we know today will be around in 5 years. Twitter today is just scratching the surface on what is possible and how people want to be connected.
I personally use Facebook and do not have a Twitter account. I think Facebook is enough procrastination for me and it offers more features to socially connect with others than Twitter.

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