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Corporations and social networks in the new “phygital” context

    • Meeting in digital format
    • 9 June 2021

          In the “phygital” world, enterprise is the perpetual fulcrum of a system that hinges on a community of persons. This is true of business, marketing and communications. New priorities are emerging in the race to keep customers – by capturing their attention, boosting credibility and instilling trust – with the primary focus on corporate identity and accountability.

          The rise of the web and social networks has changed the relationship with the consumer. Although commerce retains its central role, the interface with consumers is increasingly direct and also dependent on “influencers”. In the process of enhancing a brand, the speed of perception changes and, as a result, a firm must change the speed of that perception, whether negative or positive. That the relationship with the consumer changes speed in function of an increasingly informed or intentionally misinformed demand, has an impact on consumer constancy. Many believe that the web and social networks are still a sort of Wild West where everything and its opposite can be found, with rising phenomena such as “haters” and “fake news” needing to be countered through ad hoc regulation.

          Thus, the process of brand building is changing and companies are tending to blur the line between internal and external communication: the brand is the only thing and everyone must be involved. Television and social networks are the top target of advertising investments; according to a UPA report on Nielsen data from January to March 2021, 737 million euro went into social networks (38%) and 896 million euro (46%) into television.

          Although television is no longer the queen of investments, it still claims a considerable slice of the pie, and prospects for the future are good. Indeed, big screen television will continue to hold sway thanks to its narrative capacity; yet, is also true that ad campaigns are by now designed essentially for social networks. Social networks – Facebook and Google, in particular – are more suited than television is to stimulating discussion, and offer a strong sense of community. Advertising is very well aware of this fact when it chooses such platforms. Nevertheless, the media diet of the future is destined to remain a balanced one.

          The post-pandemic economy is witnessing a growing commitment to policies that favor the middle class, and America is leading the way, particularly given President Joe Biden’s economic agenda. The newfound digital economy landed a series of tough blows on the middle class, with automation and delocalization generating a widespread discontent only amplified by social media. Over the long run, social networks are going to need to be regulated in America and elsewhere. The fact remains, however, that Democratic and Republican worldviews differ vastly and are divisive in terms of regulation, antitrust and taxation when it comes to major social platforms. It is therefore going to be difficult to reach agreement unless a more cooperative attitude can be created.

          The debate centers on a question to which there is no easy answer: do social networks pose a threat to democracy or are they an innovative tool for maintaining its stability? The intrusion of external influences in electoral campaigns is nothing new: “fake news”, doctored videos and misinformation have abounded for some time now. If social networks provide a vehicle for the unfiltered messages reaching individual voters, they are a powerful tool in the hands of a candidate – a cheap one too thanks to fundraising – that adds legitimacy to his/her credibility. Finally, they are the creators of content made instantly available for other media sources to raid.

          Furthermore, social networks contribute to encouraging participation in the democratic process, strengthening dialogue and adding new voices to electoral campaigns. Donald Trump, who was adept at replacing traditional media with social networks in his campaign, characterized his victory as a people’s-choice outsider. Once president, his substantial use of social media changed the nature of political communication. Following the January 6th 2021 attack on Capitol Hill, the decision by Facebook and Twitter to delete his accounts sparked a lively debate not only in the United States.

          The issue of rules remains strategic for Western democracies: it must not fall to corporations – or a group of monopolistic platforms – to dictate them. There is no doubt that these platforms have become a public forum and marketplace of ideas, but – as ever – it is up to politics to counter excessively monopolistic stances. The present transition will lead to a new and different world, and since the phenomenon is a positive one, optimism must prevail: democracy and politics have never died of an overabundance of ideas when those ideas have been associated with freedom.