The following blog post is from Greg Phipps, our managing director of investment here at Innovacorp.

After the recent merger of InNetwork (one of our investment portfolio companies) with gShift, and an introduction to social entertainment forerunner Diply (all three of which are Canadian, BTW), I began thinking about the promise converging their respective verticals might hold.

I can clearly see how influencer marketing, content performance and engagement measurement, combined with the creation and delivery of viral content through a “native advertising” model, could achieve some form of golden convergence in the social media/ad tech/mar tech world. Their aggregation and delivery in an integrated B2B solution “stack” would surely provide brands with a formidable toolset for social outreach, marketing and the ultimate objective – market share and revenue growth.

Social media and entertainment have been flirting with each other for years, of course. Much internet content has become recognized as entertainment, even if traditional media companies have reluctantly accepted the disruption of their historic content creation and delivery models. 

Social entertainment is exactly what it sounds like: engaging internet content with social media functionality that enables sharing and location options, often linking to a social networking platform like Facebook. 

Blending entertainment and social experiences is hardly rare. Most sites offering entertainment content now incorporate various social experiences to enhance user engagement with content and often feature a brand reference as part of an advertising-based revenue model. Leaders in the social entertainment vertical currently include Diply, BuzzFeed and Mashable.

How is social entertainment different from social networking? 
Social entertainment is, or at least was, differentiated from social networking in that the former is based on interaction with content, while the latter is (or was) based primarily on building and maintaining relationships with other users in a network. 

That distinction has been forever blurred through the evolution of social networking sites melding with people’s desire to share content they’re watching, listening to, engaged with, or even creating themselves. Social entertainment is less about a collection of discrete web pages, and more about assembling relevant and related content and other interactive elements into an entertaining experience that is then shared across social networks. 

Native what?  
Banner ads have become increasingly ineffective as viewers become desensitized to their presence. Ad click-through numbers continue to decline. Native advertising, the love-child spawned when embedded marketing and branded content hooked-up, seeks to seamlessly incorporate relevant advertising-based content in a non-obvious, subliminal level, as part of the content.

Native advertising’s goal is to recapture, reach and combat “banner blindness.” It does so by attempting to match the form, function and appearance of the site or platform on which it’s featured – like a chameleon clinging to a leaf. If it’s done well, the advertising content adds value to the content, and actually becomes the content!  

Some maintain that native advertising is merely a sub-set of content marketing, with the latter using a much broader range of tools and types of content (videos, white papers, e-books, infographics, case studies, podcasts, how-to guides, etc.). Semantics aside, native advertising is emerging as a more effective tool for companies seeking to connect with potential customers/followers and, once the “message” is connected to social networks and influencers whose voices frequently dominate a network, it can go viral and reach becomes exponential.

The influence of…influencers.
Brands want to hook themselves to content that is viral. They also strive to appear honest and authentic. The best way to achieve both of those objectives is to associate the brand with content that is entertaining, has achieved virality, and is delivered by a source that is trusted: a friend, family member or credible blogger who is considered an authority or subject-matter expert.

Influencer marketing leverages credible social influencers and inspires them, or remunerates them, to advocate for a brand. For the marketing professional, the rise of the social media influencer creates tremendous possibilities. It is an effective channel for brands to connect with consumers directly and at scale. By creating branded and entertaining content in conjunction with social media influencers, brands can amplify their message. Native advertising joins the party through its creation and delivery of, well… content that is the brand, and a brand that is the content. 

Winner in this convergence initiative will own the internet. 
Last year, Mike Proulx wrote in an article in Ad Age entitled, There Is No More Social Media – Just Advertising: “Let’s call it what it is: Social media marketing is now advertising. It’s largely a media planning and buying exercise — emphasizing viewed impressions. Brands must pay if they really want their message to be seen. It’s the opposite of connecting or listening — it’s once again broadcasting.” 

Proulx is right of course, even if his perspective sounds entirely cynical. Brands have figured out that the most cost-effective form of marketing revolves around finding and connecting with potential consumers through social networks and paid influencers that can deliver the advertising content.  

A theoretic model for convergence of all these elements would incorporate a B2B platform that enables brands to easily identify and target social media influencers; engage and motivate influencers to recommend a brand, product, service or experience; and deliver relevant, entertaining content with an embedded advertising message to followers that link to social media platforms.

The solution would drive virality and reinforce the relationship between the brand, the trusted influencer, and the consumer and his/her social network. It would also include the ability to monitor and measure the effectiveness of a social outreach campaign so brands and influencers could work together to tweak “the message” to maximize reach and engagement.  

Ownership by a single company of this integrated “stack” – with its capacity for creation and delivery of entertaining and relevant native content (advertising) and leveraging the reach of influencers across social media networks – would provide for absolute domination of this prevailing marketing model and its potential for stimulating advertising-based revenue. 

When I think of this model’s potential, all I can hear is Kenny Bania’s enthusiastic voice in my head: “That’s gold, Jerry! Gold.”