30 Social Media Predictions for 2012 From the Pros

How will social media impact businesses in 2012?

We sought expert opinions from a wide range of pros you’re likely familiar with.

We are grateful for the dozens of social media professionals who have written over 600 articles for us since we started Social Media Examiner in October 2009.

To give you a glimpse of what we can expect in the next 12 months, we decided to tap their knowledge and expertise. Here are their predictions of where social media is headed in the next 12 months.

#1: Businesses consolidate social media activities

As the social media landscape becomes more crowded in 2012,businesses will pick their battles and dig in. What used to be simply Facebook and Twitter is now Google+, LinkedIn, Facebookand Twitter (and who knows what’s next). On top of this, you have many specialty networks like Foursquare, Yelp and Instagram.

The old mantra of “be everywhere” will quickly be replaced with “be where it matters to our business.”

The major four players have all gone through massive changes in preparation for the battle for users. But don’t let a shiny new wrapping be the motivation to focus on social network A or B. Instead, it will be essential to focus where you’ll see results. And that may not necessarily be Facebook or Twitter for your business.

Have you picked your battle? Image source: Flickr

Michael Stelzner, founder and CEO of Social Media Examiner.

#2: Photo and video social networks will blossom

We’ve been nibbling around it for a while, but 2012 will be the year of the multimedia social network.

Photo- and video-based social interaction will grow. There is more meat on Instagram and Viddy and Tout than bun, and that enables the whole point of social networking—making and perpetuating connections and seeing the world through someone else’s eyes.

I don’t expect these services to dethrone Facebook, as many people simply are not comfortable with multimedia. But already you’re seeing power users reduce their Facebook (and Twitter) musings in favor of multimedia, where a picture (or video) speaks louder than 140 characters.

Given that the camera on your smartphone is almost as good as your actual camera, the multimedia-driven social networks are here to stay and will be an emerging force for brands in 2012, too.

Multimedia-driven social networks are changing the playground.

Jay Baer, author of the popular social media blog Convince & Convert and co-author of The Now Revolution.

#3: Brands embrace real time

Brands should move to agile marketing and real-time thinking. Gone are the days when it took 6 months to develop and launch a campaign or 5 days to answer a disgruntled customer.

Brands need to master the art of opportunistic marketing and the art of real-time response. To break through the online noise, they need to stand out with their creative thinking around capitalizing on current buzz and trends.

For that, brands need the right infrastructure and agile processes that will allow them to intuitively and immediately pick up on the marketing opportunities. They need agencies that can adapt, react and support them in real time as well.

Brands need to be ready for real-time response. Image source: iStockPhoto.

Ekaterina Walter, social media strategist at Intel.

#4: Strategy takes center stage for social media

I firmly believe that 2012 is the year most business start to turn the corner on embracing and understanding social media marketing and using it more strategically. We’ve had enough of the hippie, tree-hugger, Kumbaya nonsense and want to start using social media as a strategic business driver.

Now is the time. Businesses will start to show their chops in 2012.

The tree-hugging time is over. It’s time to focus on social strategy. Image source: iStockPhoto.

Jason Falls, principal of Social Media Explorer and author of No Bullshit Social Media.

#5: New apps help with content overload

I believe that 2012 will be the year that we will see a lot more apps and companies come forward to help free us from content overload. This hopefully means both to make reading content and sharing it more meaningful and less cluttering.

I think this will come down to throttling, filtering and optimizing the content that reaches our eyes and that we share. Especially ifZuckerberg’s Law of sharing holds true, this will be an amazing opportunity.

I am sure there will be some fabulous new inventions coming to the social media world regarding this in 2012.

Freedom from content overload is on the way. Image source: iStockPhoto.

Leo Widrich, co-founder of BufferApp.com.

#6: Businesses outsource content creation

As social media becomes more mainstream, content will continue to play a bigger role. However, stretched marketing teams will continue to struggle with adding content creation to their already full plates.

Therefore, marketers will need to find a sustainable model for creating amazing content, which may include more outsourcing. As social media matures, efficiency will become an increasingly important factor.

Nichole Kelly, founder of FullFrontalROI.com.

#7: Advanced analytics are coming for the masses

Today a lot of what we call social media analytics is actually social media metrics, which is a lot of data telling a story of the past using great data visualizations.

Advanced analytics are already being performed inside large agencies, brands and social networking sites. Data analysts and scientists, many with advanced degrees in statistics and computer science, primarily do the work.

In 2012, we will see social media analytics companies releasing simplified SaaS (software as a service) tools for smaller agencies and brands to perform similar, less complex analytical functions. The tools will tell a story of not only what happened, but also of why it happened, and to model and predict the future.

Small businesses will have access to advanced social media analytics. Image source: iStockPhoto.

Dag Holmboe, CEO of Klurig Analytics.

#8: Regularly creating unique content becomes essential

For a company or brand to be successful marketing with social media in 2012, two main things will need to happen.

1. Create unique content. So many brands and individuals are creating amazing content that you will need to do something not only amazing but unique, so that you gain the attention you’re looking for.
2. Be consistent. You can’t just create this unique content a few times; you need to create a schedule for yourself to come out with unique content on a consistent basis.

If you fail to do both of these, someone else will gain your customers’ attention.

Lewis Howes, co-author of LinkedWorking: Generating Success on the World’s Largest Professional Networking Website and founder of Sports Executives Association and SportsNetworker.com events.

#9: Businesses learn to choose the right channels

In 2012, I think that much of the overzealousness currently in social media will be replaced by a nuts-and-bolts focus on getting the most out of the channels that fit your business.

Companies will focus on fewer channels, and they’ll want todominate them instead of being diluted across all channels. The adage of “master your craft” will ring true for the companies that stay focused.

Ryan Malone runs SmartBug Media.

#10: Facebook’s growth inspires unique Facebook marketing experiences

In early 2012, Facebook will hit ONE BILLION users. With one billion users, you can’t deny the numbers. Facebook is by far the social media powerhouse.

The hype that will surround the one billion milestone will only draw more attention to Facebook. Not only will we see a boom of small businesses setting up shop on Facebook, but also those businesses already on Facebook will feel the heat to get even more creative and strategic with their fan activity.

Facebook is getting crowded, and those businesses that create unique user experiences will stand out from the masses. More sophisticated, interactive third-party apps, expanded live video capabilities and greater flexibility with page customization will all play a big part as fan growth and engagement become the most vital components for Facebook success.

Look for more apps to help you market your business on Facebook.

Amy Porterfield, co-author of Facebook Marketing All-In-One for Dummies.

#11: Competition on Google+ rises

I see social networks getting even more competitive with Google+ trying to dominate the market in 2012!

The top networks (Twitter and Facebook) will be looking to compete by adding even more features. Google+ will continue adding similar creature comforts to their network for page functionality and looking to develop hangouts into something more useful for businesses.

The social network that will come out on top will be the one that listens to their users and allows each user’s messages to receive equal exposure without internal ranking systems judging which news goes to the top and which news gets hidden.

Google+ continues to add new features. Google+ Business Pages can now have multiple managers.

Kristi Hines, freelance writer, online marketing consultant and author of the popular blog Kikolani.

#12: YouTube provides a social experience

YouTube will (finally) get recognition and significant use as a major social network.

Google’s social focus demands tighter integration between YouTube and Google+. Google wants to change YouTube consumption from a passive experience to a social one and is primed to do so.

Recent feature additions (like YouTube video viewing in a Google+ hangout) prove that Google will do whatever it takes to make the transition. Those paying attention will respond by focusing on their own personal YouTube networks.

Video production is not required as YouTube members in the content curation and video aggregation space will hold as much sway, if not more, than their content-producing counterparts. Those who do both will, obviously, rise to the top quickly.

#13: YouTube takes the lead

My prediction for social media in 2012 can be boiled down into one word: “video.” …as in, more of it!

At just over six years old, YouTube has just recently made some big changes, and they have a lot in store for us in 2012. Their most recent design and layout changes (including YouTube’s home page, which looks strikingly similar to Facebook’s Live Feed function) begin to indicate that YouTube wants to behave more like a social networking site.

The YouTube audience (not just the content creators) will now have more fun, engagement and interaction while on YouTube. The more activity you as a user (or channel) have and receive from your videos, the more opportunity your content has to get viewed and go viral.

YouTube is becoming highly intuitive. By observing your search and viewing behavior online, YouTube will continue to improve and impress us all with how they display relevant and related content in an efficient manner.

Also, with YouTube’s investment in their 100+ channels of “original content creators,” the video-sharing giant has also waged war (and is winning!) against the big TV networks, as they continue to blur the line separating “offline television” and online entertainment.

Combine this with an ever-decreasing barrier of entry for the average person to quickly become a video-producing master, and you’ll notice that in 2012, video quality (picture and sound) and entertainment quality will rapidly increase across the board. This will inevitably result in higher standards and expectations from the average YouTube viewer and leave those who are resistant to using video in their marketing scrambling to catch up.

It’s time to check out how you can use YouTube for your business.

James Wedmore, founder of Video Traffic Academy.

#14: YouTube rises to top of mind

Most people might think that G+ will get the most attention in the Google suite of services, but I think YouTube will be top of mind. Why? With the latest redesign, YouTube is cleaning up its Wild West image and coming into alignment to be a grown-up social environment.

If your business is not there yet, make haste and set up your channel and start reaping the benefits of the second-largest search engine on the Internet.

Consider creating a YouTube channel for your business.

Phyllis Khare, co-author of Facebook Marketing All-In-One for Dummies, author ofSocial Media Marketing eLearning Kit for Dummies and social media director foriPhone Life.

#15: More social players will join in

I predict that the social media landscape will become more populated with new and powerful players like Pinterest in 2011.

As social media continues to evolve there are opportunities for more multimedia social platforms.

Don’t underestimate the potential for these new sites to start majorly influencing social sharing and traffic—nearly overnight.

Keep an eye open for more useful tools like Pinterest!

Casey Hibbard, Social Media Examiner’s case study writer, president of Compelling Cases Inc. and author of Stories That Sell: Turn Satisfied Customers Into Your Most Powerful Sales & Marketing Asset.

#16: Marketers adopt smarter social media tools

In 2012, social media tools are going to get a lot smarter. Thesetools are going help us make sense of our social media connections and streams. They will help us maximize our visibility and influence while minimizing our time commitment.

Bufferapp is a terrific example of this. Here is a tool that can provide some intelligence as to when your followers and fans are most likely going to be paying attention to your updates. As you direct content from across the web into Buffer, the app will distribute it for you during those optimal time periods. In a sense, it’s an intelligent and personal social media distribution tool! Forget having to “schedule” tweets and updates. Who has the time?

I strongly believe that the people who commit to learning the new and most effective social intelligence tools as they are introduced will create a significant competitive advantage. These tools will make you more productive and grow your online influence while the competition is still floundering around trying to figure out how to be consistently visible and valuable to their target markets!

Find and focus on the tools that can make you more productive and competitive in 2012!

Check out Buffer and other social media tools that make you smarter.

Stephanie Sammons, founder and CEO of Wired Advisor.

#17: Businesses integrate new content consumption practices

The way we read our news and social media streams is changing fast. People are turning to platforms such as Flipboard, Storify, Ziteand others to help curate information and sort through the noise. Google, Facebook and Twitter are also making changes to help users find the information they want to read and block the rest.

Businesses looking to place their content in front of their target reader will need to adapt to these changes and new media. This means 1) a continued effort to publish content of the highest quality that readers will want to share, 2) an even further increase in the importance of headlines and images and 3) creating a following that will help drive your content to the top of these new platforms.

From a user’s perspective, I love the new Flipboard platform for iPhone. From a publisher’s perspective however, it can be somewhat intimidating. That said, I think these new platforms will greatly reward content that makes its way to the top.

Stay up-to-date on where your audience gets its information.

Jim Lodico, copywriter and marketing consultant specializing in creating powerful content and teaching businesses how to use blogs.

#18: The “applification” of social media continues

I think we will see many more social media apps come out in 2012 for social networking, news aggregation, productivity, entertainment, communication and ebooks.

We’ll be accessing more on smaller screens than ever before and with a few touches and swipes across our screens, we’ll be posting and sharing content with people who are in close proximity to our geolocation, stretching on to all corners of the world.

Debbie Hemley, social media consultant and blogger.

#19: More branded Facebook apps are on the way

I think we’re going to see more and more companies creating branded Facebook apps in order to leverage Facebook’s real-time news ticker feed. I’m especially interested in news apps such as WSJ Social and The Washington Post Social Reader.

These apps potentially serve as new revenue streams for a rocky industry with advertising opportunities within Facebook. I’m intrigued to see how the digital journalists behind the apps navigate the privacy issues that are all too common to the space as well.

These kinds of Facebook experiences reimagine news consumption as a social activity and I think it’ll be interesting to watch the new apps and partnerships that come out of the space.

Shareaholic’s Top Posts App shows bloggers their most popular content, keywords, traffic sources and demographics for 2011.

Janet Aronica, head of marketing for Shareaholic.

#20: More “do it all” services will become available

We continue to see social media tools and services come and go, as they battle for our time and data. Giants like Facebook, Twitter and Google continue to thrive, but none of them is taking it easy.

From changing designs and new features to acquisitions andcomplete makeovers, we’ve seen the bar raised time and time again, as these big companies compete for the lion’s share of our attention. Google has our email, documents and appointments; Facebook has our photos, videos and family; and Twitter has the best platform for advertisers to engage with us.

I’m guessing this trend will continue into 2012, with more acquisitions and revamps, and fewer new apps gaining ground in the social space.

Corina Mackay, an entertainment-based social media manager and writer.

#21: Convergence of social and mobile (but maybe not what you’re thinking)

Whether you look at it as social media going mobile or mobile apps getting social, you can bet that 2012 will see a lot more social activity on mobile devices.

However, while experimental marketers will continue to push the envelope with innovative mobile-social campaigns, I’m not predicting that the next year will see Foursquare conquer mainstream America or mass adoption of QR codes.

Rather, what you will see is that a significant amount of the online activity that consumers previously conducted through a computer and traditional web browser will now be done through a smartphone or tablet. Some of this activity will migrate from browser to native applications, but much will be done through a mobile browser.

This means that before worrying about the new-new thing, companies need to think about how existing core marketing initiatives carry through to the mobile web. It needs to be just as easy for someone on a mobile device to not only access content but also to act on that content in a social manner—i.e., “Like” it, share it, etc.

In 2012, smart marketers will be thinking first about optimizing current assets for mobile and then about unique attributes of the mobile experience, such as geolocation, that they can tie into their overall marketing strategy.

Is your marketing optimized for the mobile experience? Image source: iStockPhoto.

Ben Pickering, CEO of Strutta.

#22: Marketers embrace mobile

Gartner predicts that by the end of 2012, the number-one way that consumers will be interacting with the Internet is via their smartphones and tablets. Given that, it’s important for marketers of all stripes to embrace mobile.

As intimidating as that may seem, mobile is actually pretty simple to execute. In fact, there are several articles on Social Media Examiner that de-mystify mobile and make using it for small- to mid-sized businesses a snap. Check ‘em out! They’re packed with tips on how to integrate social media into your mobile marketing program.

Are you prepared for communicating with your customers via smartphones? Image source: iStockPhoto.

Jamie Turner, founder, the 60 Second Marketer and co-author of Go Mobile.

#23: Email and social call a truce

Smart marketers understand that social and email marketing are not mutually exclusive. As email becomes more social and social becomes better at finding leads, the platforms will complement one another for smarter, more targeted messaging and list-building efforts.

Jason Miller, programs manager, social media & content at Marketo.

#24: Businesses fall in love with email marketing again

The quick adoption of Google+ both by users and as an infrastructure change for Google highlights a problem with social media marketing: fragmentation. It’s important to interact with customers where they are, so wisely using the increasing number of tools is good.

But I predict in 2012, savvy marketers will fall back in love with email. Email response rates tend to be greater than most other social media tools. And email is fairly “low-tech,” allowing businesspeople to reach more of their customer base. So I think there’ll be a new wave of blog posts and tools helping people grow their email lists.

Marc Pitman, author and speaker dedicated to making it ridiculously easy for people to get nonprofit fundraising training.

#25: Traditional marketing interweaves social media

2012 will be the year of the boomerang. Marketers of all stripes will return to classical marketing thinking. They won’t abandon social media, mobile and the like, but they will demand that those efforts be intelligently interwoven with their existing offline/traditional marketing efforts.

This integration requirement will lead to growth of social media delivered by marketing-oriented firms at the expense of the independent social media guru with little to no actual marketing experience.

Tom Martin, founder of Converse Digital.

#26: The blue-collar blogging revolution heats up

here is a forgotten group—in fact, I’d say it’s a forgotten majority—when it comes to this movement that is social media. And who is this majority? It’s the thousands upon thousands of blue-collar businesses spread across the globe that up to this point have been slow to embrace social media, but are now joining the ranks of other industries in an effort to change the way things in marketing have always been done.

As someone who has owned a swimming pool company for about 10 years now and also works with many blue-collar businesses in this field of social media, I’ve noticed a very interesting trend in the final months of 2011. Each and every day, more and more mechanics, carpenters, plumbers, landscapers, etc., come to understand the need to embrace this new age of marketing. They’re seeing the trends of the way people shop, think and make decisions. Finally, instead of refusing to tackle their online deficiencies, they’re instead confronting the problem head-on.

More than ever, these businesses are blogging, producing educational videos and leveraging all types of social media. The idea that social media and blogging for business will only shine upon white-collar and tech industries will soon be a thing of the past. Do the blue-collars have a long way to go? Yes, that’s certainly true, but without question, eyes are finally opening and the revolution is just around the corner.

This is what I can’t wait to see unfold as 2012 progresses.

More blue-collar businesses will adopt social media marketing. Image source: iStockPhoto.

Marcus Sheridan, small business owner, thought leader, popular social media speaker and founder of The Sales Lion.

#27: Marketers learn to craft messages to get above the noise

My social media prediction for 2012 is that successful marketers willtake greater care to design and package their messaging for attention, usefulness and conversion.

As the tolerance for social media noise approaches a breaking point, the quality of social media content will significantly rise to meet the higher standards of both consumers and search.

Jeff Korhan, professional speaker, consultant and columnist on new media and small business marketing.

#28: The social media gap widens

I predict that in 2012, the gap between businesses that perform well on social media and those that don’t will widen dramatically.

The newness of social media has worn off. People are looking for businesses that offer practical solutions to their present-moment challenges. It comes down to this: If you are looking at your online community in terms of what you can get from them, you might as well pack up and go home.

For your business to succeed, you must focus on how you can help your customers succeed. Your business attitude shows up in social media in everything you say and do. Your attitude drives your conversation topics, the way you write your tweets and status updates, and your business offerings.

More than ever, your business success depends on how much you help others reach their business success. Your social media success is the canary in the coalmine that demonstrates the health of your business.

Charlene Kingston, founder of the Social Media DIY Workshop.

#29: Businesses invest in quality content

I believe we’ll see a surge of quality over quantity in content marketing heading into 2012. As more businesses understand and embrace the imperative for integrating social media into their marketing strategy, I hope they will also recognize the need to stand out in the cacophony of brand messages on the social channels.

In 2012, if businesses want to compete effectively for consumer attention, they will need to engage with tailored, customer-focused and relevant content in order to differentiate themselves from the noisy brand broadcasters.

And, as this realization takes hold with companies, I think we’ll see steep growth in the hiring of qualified and experienced individuals who have a strong grasp of creating and developing valuable content that attracts and engages a business’s target audiences while driving profitable customer conversions and actions.

Businesses opt for quality content in 2012. Image source: iStockPhoto.

Stephanie Gehman, marketing manager for Harrisburg International Airport in Pennsylvania.

#30: Rise of the media specialist

In 2011 we’ve seen a trend toward multifaceted social marketing positions, or people within companies who are expected to have “layered” expertise in social media. Content marketers will have to transcend basic sales, and work within the rapidly expanding technology field.

In 2012 we’ll see these positions solidified, as social marketers working online branch out and become involved in the coding/tech world as well.

These positions will become integral to any social marketing campaign, as singular jobs become more complex, transforming people into media specialists.

One individual must be able to blog, market, work on a multitude of platforms, work within the tech sphere and perform high-level SEO tasks. Otherwise, how will he or she be able to spot social opportunities when they arise?

These media specialists will be required to have a 360-degree view of social media, as their job becomes more demanding and competitive. I also feel that there will be urgency to perfect mobile technology and marketing, as it crosses from the virtual realm into the physical world.

In 2012, it would be short-sighted for businesses to overlook the benefits of having a media specialist on their team!

Future social media specialists need skills across many areas. Image source: iStockPhoto.

Carla Dewing, part-owner of Contrast Media and content marketing expert.

Now it’s your turn…

How do you see social media evolving in 2012? What trends do you predict?

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Google Will Change Web Marketing in 2012

Google is poised to completely alter how websites market themselves over the next year. While easing users into changing search results pages, Google has also designed a new method for websites to structure data so that its crawler can better pull information. This is a tremendous strategy. Google doesn’t need to own all of the information in the world, but does own the methods of accessing that information — as well as the ability to advertise to people who use that access.

Search results will include more direct information. Early in 2012, Google will expand how it incorporates data  into its search results. For search queries that are direct questions, it will no longer be necessary to click through to a website. In Google’s parlance, it’s like getting both the search results and the immediate result of the “I’m Feeling Lucky” button at once. It’s not hard to see how this is better for the average Google user. Questions will be answered faster and more simply. No parsing of information will be required. This change, however, will take value away from marketers who rely on visitors clicking through to deeper pages.

Google is looking to collect more data by providing ways for website owners to structure their information so that it can be easily read by a computer. Google’s plans revolve around metadata (literally, special data encoded in the page) that will allow it to access more rich data about a topic, including hours of business, names of products, and virtually anything else that you can think of. Marketers will see better search rankings if they document information using this new format.

Google is entering new industries and markets. The expansion of data into search results pages is also breaking into markets where Google is not yet a force. Google acquired ITA Software in 2010, a software company that created airfare and travel management software for airlines and resellers. Since then, they have worked to become a powerful competitor in the travel industry by promoting their own offers and packages directly on the search results page ahead of other providers. To see this in action, try searching for “BOS to SFO” in Google. This is a tremendous advertising presence that others cannot match.

If you’re a marketer working on making sure your site is visible in an area where Google is competitive, remember that you may need to do more than an organic search or paid advertising in order to be successful. Google has created a system where people must pay in order to compete against it. Regardless of whether the information and options available to searchers are free or paid for by marketers, people will continue to use Google in overwhelming numbers as long as Google continues to have the best results for a given search.

The data that Google makes available will be reduced. Google now sees its ownership of data as a competitive advantage to be protected from marketers and other advertising networks. In the latter half of 2011, Google began to roll out changes that have taken data away from marketers, specifically about how and where visitors found their website. Since October, between 10-15% of visits to websites from Google have no longer sent information to webmasters and marketers. It is safe to assume that Google will continue to expand these changes, further limiting the data available to marketers unless they’re willing to pay.

Google’s activity in the second half of 2011 represents just the beginning of the changes that it will be pushing throughout 2012 as it establishes even stronger relationships with its partners, affiliates, and advertisers. While this happens, every marketer on the web will need to carefully consider and revisit how they are positioned with the search giant and its interests.

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Six Social Media Trends for 2012

Each year at this time, I look forward and predict trends in social media for the coming year. But first, I look back at mypredictions from last year. How’d I do? Not bad.

Social media continues to move forward toward business integration, a trend that I identified last year. In a joint studyfrom Booz Allen and social platform developer Buddy Media, 57 percent of businesses surveyed plan to increase social media spending, while 38 percent of CEO’s label social as a high priority.

I was also partially accurate in predicting that Google would “strike back” in 2011. They did, with Google Plus, a formidable initiative that acts as Google’s “social layer” to the Web. Part social network and part social search, Google Plus has industry observers scratching their heads, wondering if Facebook will be given a run for their money or if the service evolves into something complimentary in a highly social Web.

I had one big swing-and-miss on Facebook’s intrusion in the location-based services war. While Facebook still supports location tracking in a number of ways, it has not put Foursquare out of business. Foursquare still enjoys a niche audience of highly active participants who enjoy telling the world where they are and post pictures to prove it. It is however worth noting that Facebook recently acquired location based network Gowalla, so continue to watch this space.

So what can we expect in 2012 in a world that seems to grow ever connected by the hour? Here are six predictions to ponder, in no particular order:

Convergence Emergence. For a glimpse into how social will further integrate with “real life,” we can look at what Coca Cola experimented with all the way back in 2010. Coke created an amusement park where participants could “swipe” their RFID-equipped wristbands at kiosks, which posted to their Facebook account what they were doing and where. Also, as part of a marketing campaign, Domino’s Pizza posted feedback — unfiltered feedback — on a large billboard in Times Square, bringing together real opinions from real people pulled from a digital source and displayed in the real world. These types of “trans-media” experiences are likely to define “social” in the year to come.

The Cult of Influence. In much the same way that Google has defined a system that rewards those who produce findable content, there is a race on to develop a system that will reward those who wield the most social influence. One particular player has emerged, Klout, determined to establish their platform as the authority of digital influence. Klout’s attempt to convert digital influence into business value underscores a much bigger movement which we’ll continue to see play out in the next year. To some degree everyone now has some digital influence (not just celebrities, academics, policy makers or those who sway public opinion). But for the next year, the cult of influence becomes less about consumer plays like Klout and more about the tools and techniques professionals use to “score” digital influence and actually harness, scale and measure the results of it.

Gamification Nation. No we’re not taking about video games. Rather, game-like qualities are emerging within a number of social apps in your browser or mobile device. From levels, to leaderboards, to badges or points, rewards for participation abound. It’s likely that the trend will have to evolve given how competition for our time and attention this gaming creates. Primarily, gamification has been used in consumer settings, but look for it in other areas from HR, to government, healthcare and even business management. Perhaps negotiating your next raise will be tied to your position on the company’s digital leaderboard.

Social Sharing. Ideas, opinions, media, status updates are all part of what makes social media a powerful and often disruptive force. The media industry was one of the first to understand this, adding sharing options to content, which led to more page views and better status in search results. What comes next in social sharing is more closely aligned with e-commerce or web transactions. For example, Sears allows a user to share a product or review with their networks directly from the site. Sharing that vacation you just booked, or recommending a product, or service from any site to a social network is where sharing goes next. We probably don’t know what we are willing to share until we see the option to do it.

Social Television. For many of us, watching television is already a social act, whether it’s talking to the person next to you, or texting, tweeting, and calling friends about what you’re watching. But television is about to become a social experience in a bigger and broader sense. The X Factor nowallows voting via Twitter and highlights other social promotions, which encourages viewers to tap social networks while they watch. Another way media consumption is becoming social comes from a network called Get Glue which acts as something of a Foursquare for media. Participants can “check-in” to their favorite shows (or other forms of media) and collect stickers to tell the world what programs they love. Watch for more of this this year as ratings rise for socially integrated shows.

The Micro Economy. Lastly as we roll into 2012, watch for a more social approach to solving business problems through a sort of micro-economy. Kickstarter gives anyone with a project, the opportunity to get that initiative funded by those who choose to (and patrons receive something in return). A crowdsourcing platform for would be inventors called Quirky lets the best product ideas rise to the top and then helps them get produced and sold while the “inventor” takes a cut. Air BnB turns homes into hotels and travelers into guests, providing both parties with an opportunity to make and save money. These examples may point to a new future reality where economic value is directly negotiated and exchanged between individuals over institutions.

These are a few emerging trends which come to mind. As with anything, looking to the past often gives us clues for what may come in the future. Please weigh in with your thoughts: where do you see “social” going in 2012?

 

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The Three Things LinkedIn Is Doing Really Well Right Now

LinkedIn is getting an upgrade from JP Morgan this morning from “neutral” to “overweight.”

 

The reason? Its three lines of business are on fire right now.

Here’s JP Morgan analyst Doug Anmuth:

Continued strength across business lines. LinkedIn’s three business segments continued to deliver strong growth in 3Q, with Hiring Solutions (+160%), Marketing Solutions (+113%), and Premium Subscriptions (+81%), outpacing our prior estimates of 133%, 99%, and 56%, respectively. We are encouraged by the company’s growing penetration in the enterprise market (~7,400 customers), accelerating member growth, and strong user engagement trends. Importantly, despite very heavy investments in field sales, international expansion, and new products, LinkedIn continues to post solid mid-teens EBITDA margins and we look for margin expansion into 2012

SOURCE

A Primer on Reverse Mortgages

Today the concept has gained widespread acceptance as seniors have found it to be a great solution to rising expenses and fixed incomes.

 

Unless you have been living on Mars or some other distant planet, by now you must have heard about Reverse Mortgages. Wherever you go in this country or even abroad, you can see Reverse Mortgages discussed on television, hear about it on radio, or read about it in a newspaper. Just turn on your television now and see what I mean.
The topic is frequently written about in local and national news media. As often as not, the authors of these stories project themselves to be authorities on the topic but don’t have a clear understanding themselves. They haven’t done their homework, or they simply took uninformed comments made by someone else and treated those comments as fact.

Their lack of knowledge does not stop them from spreading misinformation with no remorse.

Last summer, a major news network personal finance commentator announced that a reverse mortgage was a way for senior citizen to receive money by selling their home to the bank, who then took the house from them when they died. We immediately emailed the commentator to make the correction but to no avail.

Today, let’s try to help you have a better understanding of this wonderful retirement funding tool that all this hoopla is about.

Simply put, Reverse Mortgages date all the way back to the 19th century France where it is said the first Reverse Mortgages were done. In England, back in 1940, the story goes that a resourceful lady came up with an idea to buy homes, and rather than pay cash for them she allowed the homeowner to remain in the home, for an agreed lifetime rent. However, Instead of collecting rent, she deducted it from the purchase price of the home. Then, at a later date when the sale was completed she would deduct the unpaid rent from the proceeds of the sale. She was able to buy five homes this way, where the people died before they used up their rental arrangement. She was then able to resell the homes, to someone else, and in some cases the same home several times.

“This could have been the first Lease Option!”
In Modern times the Reverse Mortgage concept had a resurgence in Portland, Maine when Nellie Young and Deering Savings and Loan Bank collaborated on a Reverse Mortgage in 1961. In 1977 the RAM (Reverse Annuity Mortgage) was introduced by a savings and loan firm in Ohio.

Today the concept has gained widespread acceptance as seniors have found it to be a great solution to rising expenses and fixed incomes. Some folks are using Reverse Mortgages for increased monthly income. Many seniors are using Reverse Mortgages to pay off a mortgage with undesirable terms. Some folks are taking advantage of the cash option and using the large sums of available cash for a variety of other purposes, while others simply leave the funds in a line of credit with the lending institution that allows them to access the money whenever they need it.

A Reverse Mortgage is a retirement funding solution that helps seniors remain independent thru their golden years with safety and security not offered by any other mortgage product.
The advantage of a reverse mortgage can be endless, but different, so have your questions answered by an expert, not the news media.

Case in point, we were working with the Founder of an investment club who is in his 70’s and has a home worth $1,500,000. Due to the fact he could not prove income and there was some credit issues on his credit he was receiving a high interest rate on his loan. By securing a Reverse Mortgage he was able to pay off the existing mortgage and received cash in excess of $300,000.00.

He then was able to lend out money and receive a high interest rate. Which allowed him to earn more money then it cost him. By not making payments on the old mortgage he had money to spend on other items. I have found many seniors working with their family in this way and are able to invest in investment properties. Some have even been able to secure foreclosure properties since they had the funds to pursue them and cash to rehab them.

With the increase of foreclosure properties and having cash available this can open many opportunities for people.
“I know that I know what know, I know what I don’t know, and I know what I need to know”

How to Explode your Wealth in Emerging Markets in the US

Emerging real estate markets are truly virginal opportunities for profit, provided you get in there early and make your mark.
Everyone who is involved in real estate knows that an emerging market is like a goldmine. It creates a pressure-cooker environment of development where all the normal conditions of the real estate market are compressed in a tight space of time.

Demand for real estate properties goes through the roof, prices are adjusted upwards to reflect an insufficient supply and profitable deals can be made fast.

If you are in real estate you want to make money as well as help the local and national economy and in an emerging market there is plenty of scope to do all of this. Money can be made fast because properties appreciate quickly and buyers are eager for the properties that are on the market. The local economy begins to boom as properties sold become cash cows as their owners update them, renovate them and furnish them, helping to revitalise, in this manner, the local economy.

Any local economy doing well has a positive contribution to make in the national economy and the country as a whole.

This is a lot of good you actually do all round not to mention the benefit you can reap for yourself.

It does beg the question however how exactly do you recognize an emerging market and how do you strike it rich when you do?

 

Well, if we take things in reverse order the secret to making money from an emerging market is to get in there at the beginning, capitalize on the upward pressures and sudden growth spurt and get out before it begins to run out of steam, get crowded with other investors and suffer from slimming profit margins. Over the past 3 years, I have closely been analyzing emerging markets around the US. During this period I have acquired over 5,000 units!
To locate an emerging market successfully, you need to be in the market before the masses are. Signing up for the local government newsletters, becoming aware of large industries moving into new areas and local regeneration schemes backed by hefty government subsidies and investments are always good signs of the beginning of an emerging market.

Where your skill will have to come in is exactly in the way you develop all these alerts and then work to analyse them so you can make an assessment ahead of everyone else. The good news is that these skills are easy to learn and easy to apply.

As a real estate investor discovering an emerging real estate market a few times in your career can give you enough of a cash boost to really push you well on your way to total financial independence.

Ok, stop me if you have read this one before: the US is one of the world’s biggest developing countries. That’s right! I know we are considered to be a fully developed rather than a developing nation with a market that has, in many places, reached its peak and is now in a state of differentiation but that’s only the larger picture.

Within that there are a lot of micro-economically controlled areas where the picture is no different to an emerging market like we see in Eastern Europe.

As a real estate investor who has managed to get in first in an emerging real estate market in the US and make big money, fast, I know that the reason we are so blessed in terms of local economics is the size of our great nation.
By the same token, this very size creates specific pockets of real estate development which, to the savvy investor represent an opportunity that simply must not be allowed to pass by.

The reasons an emerging market is so important to a real estate investor are simple: money, money and more money.

 

Emerging real estate markets, as the name suggests, are free from the constraints of the more developed, rarefied, matured markets where the only way to make your mark is through the far more difficult method of service differentiation and market segmentation.
In an emerging real estate market it is possible to experience the heady feeling of being, again, a pioneer, moving forward into new territories and developing new markets ahead of the pack. I know, from direct experience, that there are certain signs that you can learn to be on the look out for which are a dead giveaway of an emerging market.

The best news, of course, is that almost anyone can learn how to do it, provided they are prepared to put in the time and effort.

Emerging real estate markets, for example, are almost always marked by a total employment boom and an expanding zone of out-of-towners looking to move in.

These demographics are readily available if you know where to look and, when analysed correctly, will give you the indicators you are looking for.
Emerging real estate markets are truly virginal opportunities for profit, provided you get in there early and make your mark. To the savvy real estate investor they represent areas of development which simply cannot be overlooked.

Foreign Investing Fun

Put your plan in writing. Plans equal profit when well thought out and properly implemented.

To stay on top of your game, you must stay on top of the market. It’s current major news that investors from foreign lands are coming in droves to take advantage of the low home prices in America. For them, the exchange on money is nearly equal and our home prices are far lower than theirs, earning them a nice return on their investment.

What do you think when you hear this news? Do you think good for them, or do you think about how you can help them and earn a living yourself? If you are a smart investor, then I hope it’s the latter.

Why not become the go-to person in your area to provide the deals foreign investors are seeking? Simply find out what they are looking for, how much they are spending and for what return, and put together that package for a fee.

Obviously they want properties with tenants that cash flow, they need property management in place and they seek a certain rate of return on their investment. There are attorneys, real estate agents, accountants and others who specialize in catering to foreign investors. Why not make them a part of your team and learn this market.
Build your network with the team players these investors need. You’re already in the real estate business so making these contacts is easy. Marketing is the next step. You’ll need to study online sites that cater to foreign investors to get an understanding of the lingo they use and learn how to advertise to them.

You’ll need to be sure to offer online information and online communication portals since they are sleeping while you are working and vice versa.

Be sure to put the plan together as you think through the entire process. You must be ready for opportunity when it arrives. Imagine marketing to foreign investors and the first contact wants 5 properties within the next 30 days. Would you be ready to handle that?

This should be your minimum goal when putting together the plan. Our plan entails buying the property, fixing it up, renting it out and then offering it as a performing property along with property management. When it meets their criteria, then you make it simple for the buyer to make a quick decision.
Catering to a new client that makes a decision quickly and then wires cash has been fun to say the least. We love what we do and have changed our business model to add catering to foreign investors as a huge niche in our current market.

We’ve even started a property management division and have put the team players in place to offer effective and efficient management. When these buyers are happy and the return keeps on coming in, they will buy more properties, tell their friends and family to buy properties from you and well…you get the picture.

Remember to be the best at what you do and as I always harp in every article, regardless of the subject, put your plan in writing. Plans equal profit when well thought out and properly implemented. Have fun with your foreign investor clients!

Private Money – Where is it?

There is no time like now to take advantage of all of the real estate opportunity available so take what you learn and go for it.

It seems we have to start all over again with regard to this subject since so many of the hard money lenders went out of business just like the big banks did. Large loan amounts collateralized by investor owned property that many investors just walked away from since these lenders weren’t keen on short sales but I’m sure they changed their tunes quickly.

Hard money a/k/a private money is money loaned by private individuals either licensed as lenders or arranged through mortgage brokers to collateralize investor purchased property.

They are high interest – interest only, short term loans designed to offer investors the opportunity for easy access to money based on a properties equity, regardless of its’ condition and with less consideration on the borrower’s credit, employment or assets.

With the brand new laws regarding mortgage licensing, it will only get tougher before it gets easier.
For investors, relationships is where it’s at when it comes to obtaining private money to use to invest in real estate.
With folks losing so much in the stock market and with their retirement funds, people are eager to invest their money into real estate but they either don’t know how or don’t have the time. These are your private lenders – they just don’t know it yet.

Investors are paying as much as 18% interest and 3 points (minimum) for the use of hard money when they can find it, so why not offer folks who want a place to park their money a better than bank return and at the same time, obtain a huge savings from the normal 18% usually being paid.

Investors aren’t just the ones buying real estate; they are folks with money to invest into an investment vehicle that will give them a return greater than they are currently earning. The level of risk taken will be different based on the investor. Real estate mortgage investments can be designed to offer lower risk, higher return investment vehicles.

The real estate investor can determine a loan amount based on a percentage of a property’s value. The lower the loan amount in comparison to the value of the property makes the investment appear more attractive. Offering first mortgage positions gives the financial investor’s loan a priority position if a foreclosure suit must be used to collect the debt. High interest and/or points can be offered to attract financial investment partners.

To avoid falling into securities legal red-tape, keep all investor money separate and do not combine investor money into the same mortgage.

For example, if two investors make a loan to you and both loans are for $50,000 and you buy a property for $70,000, do not combine the money to purchase the home. Give one investor a first mortgage for their loan amount and the other investor a second mortgage for his/her loan amount. You can make these two equal amounts or divide them whichever way is agreed. You may offer investors a slightly higher interest rate for taking a second position but all of that is negotiable.

In the relationship building stage, you will want to take the investor out for lunch or dinner to discuss the process and give them any sample documentation they can expect to receive once they are working with you as well as an outline of a sample investment along with disclosures galore.

As soon as one of your investors earns a nice return, what will they do? That’s right, they will begin sharing their new found fortune with their friends. It’s that word of mouth that helps you grow your private money tree.

Here are a few tips to create a rewarding relationship that your investors will appreciate:

• Once you have investor money in your stewardship, keep them informed of what is happening with each penny (we email them spreadsheets that show their investment amount, how much is being used and what it is earning, as well as the address of the collateral and photos).

• Give them the proper documentation that confirms that their investment is secured within 24-48 hours of the investment being made.

• Do not conduct any process such as this without the help of your savvy attorney who will bring proper disclosures to the table to protect you, correct documentation to protect your lender-investor, and a sense of security to your prospective investor that you do everything legally and properly.

• Confirm with your investor that the financial relationship between you and he/her will be strictly confidential.

• After conducting business and solidifying your relationship with your investor, ask for a letter of recommendation for your portfolio to share with future potential investors.

One final tip: don’t be so quick to offer the usual hard money rates of return this industry is known for to investors who aren’t familiar with those rates. Why? Something that sounds too good to be true will scare them away. Instead, offer rates better than banks are offering but lower than real estate industry rates commonly offered. Perhaps 7% to 8% for example. These rates are higher than mortgage rates being offered, better than bank rates for CDs, etc. but much lower than what you could get anywhere in the real estate investment industry scene.

You can also offer the investor a piece of the action if you will. If they are willing to allow you to use their money for a long-term hold at a low rate, then you may want to offer them a percentage of the future sale or cash flow. This would change the relationship between you and the investor as far as the documentation is concerned and that’s why it’s vital to use the right attorney to help you put these relationships together legally so everyone wins as they expect.

So there may be a forest of dead private money trees out there, but you can begin planting new seeds and bringing in the harvest of the many investors out there who aren’t hard money lenders but aren’t happy with the returns they are currently earning elsewhere.

There is no time like now to take advantage of all of the real estate opportunity available so take what you learn and go for it.

Deducting Real Estate Education – Yes or No?

“Al, my CPA says I cannot deduct my real estate education courses and events because I only own one rental property and therefore am not in a business. Is this true?” 

Here is a question I recently got from one of my students, “Al, my CPA says I cannot deduct my real estate education courses and events because I only own one rental property and therefore am not in a business. Is this true?” This is a very frequent Q that I get.

Many of you know the power of education, so you astutely attend real estate conferences, boot camps as well as invest in home study courses and coaching programs. The cost of which can add up to substantial amounts. Naturally you want to deduct the education (and any related travel) so the tax savings can offset the costs (at least in part).

But even before the IRS, many CPA’s will say > NO deduction! Even if you own investment property!! Why? One reason is that many CPA’s are just plain overly conservative and only will allow obvious “safe” deductions such as real estate taxes and mortgage interest. Please don’t shock them with education or travel!

Another reason is that many take the position that real estate is an “investment” and not a “business”. (We know it’s really both, but here I am talking tax terminology). Education deductions for “investments” (such as stocks) are very limited, but for a “business” they are not. So from a tax viewpoint, is real estate an “investment” or a “business”?

Most tax law authority says it’s a business, even one rental property. But such tax law authority requires you essentially to do 8 things to document your real estate as a business.

Here are 3 of them: 1. Run it like a business (having a business plan helps). 2. Keep good separate business records 3. Use a separate business checking account, which should not be used for personal expenditures (no commingling).

You should also use an entity such as an LLC, especially if you do not yet own any properties. Reason:

An LLC, as a separate entity from you, with the proper documents (esp. the operating agreement) can give you legal authorization to take real estate education courses as a requirement to maintain the business purpose of the LLC entity. This is excellent support for your real estate education.

Wholesaling Do’s & Don’t's

 The biggest do’s and don’ts of the wholesaling business to keep you not only informed, but working at your highest potential.

Keeping yourself out of trouble, avoiding mistakes and making great profits is the name of the game in the investing niche called wholesaling. If you’ve been following my recent series, you’ll get the impression that I just love to wholesale property…and you’re right!

Wholesaling is a great way to bring in cash while you’re working on other projects that take a while to bring in their expected income.

Having been investing and wholesaling for over 15 years, I’ve learned plenty…either by mistakes (the best lessons overall), by sheer coincidence, or from experience. Based on this, I thought it best to share the biggest do’s and don’ts of the wholesaling business to keep you not only informed, but working at your highest potential. Let’s start with the don’ts.

DON’T

• *Overpay for the property

• *Over-price the property

• *Lie to your seller about your plans

• *Be afraid to wholesale listed property

• *Give out the address prior to obtaining the seller’s signature

Allow me to explain the reasons behind these “don’ts.” When you overpay for a property, it’s tougher to sell because you will price it too high to earn your profit. When you over-price a property, you will end up taking much less than you would have earned if you would have priced it correctly because you will wait until your time is up and become a desperate seller so to speak. If you price the property correctly from the beginning of your marketing process, you will sell it faster and earn more.

When you lie to your seller about wholesaling the property, you start off on the wrong foot immediately. You have to continue to lie about who’s looking at the home and so on. Sooner or later, the seller begins to distrust you and the deal begins to go downhill from there. Most investors, especially newer investors, don’t believe sellers will allow certain things because the investor wouldn’t allow it himself (so he thinks because he’s not in his seller’s shoes). When you doubt another person would agree with you, you have a tendency to tell them something they would agree to and that’s when the lies begin.

An honest, smart investor will tell the sellers the truth even if the truth is ugly. When the seller agrees, you are already starting out great. If the seller doesn’t agree, simply say NEXT!

If a property you are purchasing to wholesale is listed, then you would be “that” buyer. The listing agent will be paid their commission on the deal with you. Your assignment to another buyer does not involve that agent. When you go to closing with your assignee, the commission to the listing agent is on the closing statement and so is your assignment fee. If another agent brings you an assignee-buyer and you agree to compensate that agent from your assignment fee proceeds, then you can do that too. Be sure that the listing agent marks the property “contingent” or “pending” in the MLS so that other potential assignees don’t try to cut you out by calling the agent directly.
Lastly, do not begin to market the property before you get the fully signed contract between you and the seller in your hands. This is a sure way to lose the deal. Why? Often, folks are too eager or too greedy to get the deal themselves before they lose out on it. They can purposely or innocently ruin your deal by speaking with your seller about the price you gave them for the property and if the seller hasn’t signed your deal yet, he or she could sign a new deal with your assignee, cutting you out completely.

As you can probably imagine, there are plenty of do’s in this business, but these are a few good ones to start with.

DO

• *Use the best Assignment of Contract form

• *Place your deposit in escrow immediately

• *Use small initial deposits

• *Pre-qualify your potential buyers

• *Clean out the yard & house

Now, let’s review your do’s. Using the best of any form is vital to your success in this business. There are special clauses that will save you money, protect your money and give you the control you need to get your deals closed smoothly and without hassle. The Assignment of Contract form is no exception. If you do not have a form that you’ve purchased specifically for assigning deals, then ask your real estate investor-friendly attorney to prepare one for you that you can use repeatedly.

When a contract is fully executed, the buyer must place his/her deposit in escrow immediately. It only takes $1.00 to make a deal legal and I teach my students to use $10.00. Please don’t lose a deal because you failed to put up your escrow money, especially when it’s so little. We often just keep $100 or so in escrow with our closing agent so when we write any new deal, we already have the deposit part taken care of.

We use small deposits to protect ourselves. Here’s why…if we decide not to continue with the deal based on our inspection period or any other contingency during our appropriate contingency timeline, we don’t want to have a headache getting our deposit back. Regardless of who is “right” in a contract and regardless of how clear that contract is, no escrow agent can release any deposit money without the signature of both buyer and seller. Often, the seller may be upset if you cancel the deal, even though they know you have that legal right. If they don’t sign the release of deposit, the money will sit in escrow until you take legal action or offer the seller some of the money to sign the release. Because of this, I teach my students to use small deposits.

In other words, place something in escrow that you are willing to walk away from if the seller refuses to sign the release for any reason.

If the seller just won’t do your deal because they want a stronger deposit, then make that stronger deposit following the expiration of your contingency period. For example, put up an initial $10 upon signing and then $990 when the contingency period is over and you are sure you are moving forward with the deal. You get the idea.
Just because you are dealing with investors, don’t think that they all have cash or even know about hard money. If you are taking calls from potential buyers, be sure to qualify them as to how much work the property needs and if they are capable of getting that work done, and that they have the cash or equity lender who can close the deal in your timeframe. If they lack either, then don’t waste your time. This is especially important if the sellers still live in the home. You don’t want to send any more folks through that home than necessary.

Lastly, if the property is vacant and you know you have a great deal on your hands, get permission from the sellers to clean up or clean out the property and yard. Obviously, this would only apply if there is debris everywhere. Emptying the property also helps to take bad odors away. One time, a partner of mine, Herb, and myself, had a contract on a property for $50,000. The home smelled real bad and had miscellaneous items inside and out, as well as an extremely overgrown lawn. We were getting offers of $70,000 on the property and it was Herb’s insistence on cleaning up the whole place and mowing the lawn that persuaded me. We spent $800 and our next offer was $80,000! An extra $10,000 thanks to Herb – I’d love to take credit for that but I just couldn’t believe that “investors” paid that much attention to looks and smell versus the condition of the physical structure and the visualization of what it would look like after they completed their work.

That’s the beauty of this business. When we work together, whether novice or seasoned, we can all benefit from each other’s experiences and ideas.

I hope that this article helps you immensely.