Last week there was a great NextNY event on Disruptive Commerce Models or E-Commerce 2.0. Jordan Cooper later wrote a post claiming that the line between emerging commerce models and ad models is blurring.
I couldn’t agree more, and I think there is a 3rd blurring of the line in the commerce space: and that is social media, or more specifically, User Generated Content that is linked (implicitly or explicitly) to commerce.
I am not talking about user generated inventory, as that is nothing new, just consider the success of product companies like Etsy and Threadless, and also service companies like oDesk and eLance. These are great examples of “commerce light” companies that avoid inventory risks and costs. Jordan argues that these companies can be thought of as more advanced advertisers since they perform the same function of driving consumers towards the suppliers. However, what about social media companies that focus on enabling consumer to consumer interactions and converting them into sales?
For other companies, like SponsoredTweets.com,Twitter is a platform for creating conversations and social engagement that leads down the funnel to sales.
In the same way that Commerce 2.0 companies avoid inventory risk and focus on discovery, these social commerce companies aim to avoid discovery risk, and focus on user generated content. Instead of optimizing for search and advertising, they optimize for the viral loop embedded in social interactions. Yet ultimately these services are all part of the same customer acquisition funnel that results in a sale between a consumer and supplier.
Although no-one wants to think about social interactions as ad units, in the abstracted framework Jordan presents in his blog post, there is no doubt that the user generated, or C2C, commerce model of companies like Blippy and Hunch are also becoming harder to distinguish from the new generation of Ad and Commerce startups.
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