A couple of months ago my 13-year-old son came to me with a true story. One of his acquaintances had given him control of an Instagram profile with roughly 3,500 followers as a gift.
A few days later, my son and his friends met some famous rappers. They took a few selfies with them and posted the images on the Instagram profile. Almost immediately the number of followers exploded from 3,500 to about 9,000. Then my son’s friend offered to buy the profile from him. There is apparently so much social value, acclaim and recognition associated with the account that it is now worth actual money.
Social capital is being traded for hard capital online now. Social media profiles function as online campaigns for selling an image or perception of yourself. It’s even stranger than bubble economics because at least when stocks are at the centre of hype, they are still worth something tangible to begin with.
In a cyber-social bubble you don’t even need the fundamental value of the asset as long as you can get people to believe that everybody else believes that whatever you are selling is in some sense worth something to others.
A classic example of this phenomenon can be found in Denmark, where a Justin Bieber lookalike called Benjamin Lasnier has been propelled into stardom. In 2012, Lasnier joined Instagram and posted some pictures of himself. He attracted a few likes at first but quickly gathered a large following.
Now Lasnier has a record contract with Sony, despite having no obvious musical talent. On top of that, brand names are standing in line trying to get their products placed in his selfies.
All of this is the result of Lasnier’s carefully planned marketing campaign. He posted 12 pictures a day, factoring in different time zones for optimal exposure and peak periods. Each picture apparently attracted around 60,000 likes, which elevated his page to Instagram’s list of popular pages, exposing him to even more users.
Lasnier now has more than a million followers. He follows almost no one himself so being on his list is an exclusive deal. If you don’t make the grade, you can join 40,000 other Instagram users following his dog and hope that his pet might add you to its feed.
This at least is an age-old technique. A nightclub will run a special VIP line that only the most important celebrities can use. Ensuring that not everyone can participate makes it so much more desirable to join and may do wonders for your business.
Dodgy dealing without the pay off
The OECD recently defined social capital as “networks together with shared norms, values and understandings that facilitate co-operation within or among groups”. That capital can then be divided into bonds, which exist between agents with a common identity, and bridges with more peripheral relations that don’t have an immediate common identity. Then there are linkages with people who you aren’t actually connected with anything more than through, say, a shared interest.
Cyber-social bubble economics, like the kind used by Justin Bieber lookalikes, play on all three forms. But the aim is not to connect people. Instead the goal is to boost social value, acclaim and recognition among Beliebers, Benzilers or other “people like us”.
This new kind of economics is about bonding, bridging or signalling to others at the perimeter of an epicentre through tweets, retweets, posts, likes, upvotes and other online gestures. These very gestures are the common currencies with which social capital is instantiated, aggregated, exchanged and recognised among users.
The signal is that you’re part of what appears to be cool, hot, trending, and that has a recognisable currency of relational value. Hence why my son’s Instagram account presumably was worth real money, why Benjamin Lasnier has a record deal and why a black market for Twitter handles is emerging.
And it’s not just teenagers who are at it. Facebook has recently been accused of reassigning desirable Instagram handles to staff after purchasing the company – although it has since promised to give them back.
Aggregating social capital on social media may just amount to the worst kind of bubble economics. There is no fundamental value of the asset beyond appearance, no means for pricing the asset in monetary terms, no corrective procedures for realigning the asset to market value besides fictions, no selling the asset at a discount. Nothing besides the hot air that emanates from the social media servers that have become the temples of human interaction in the 21st century.