Here’s a great video from Gary Vaynerchuck that explains social media for those old school MBA types that learned that ‘cash is king’. Check out around 10:05 into the video for the real reason why social media has become relevant, Gary goes on to say that his particular skill is to recognize those things that people say they are not going to do; but end up doing anyway.

Couple of great questions:

How many of you have a DVR and record most of the shows you watch? Now how many watch the commercials that are recorded along with the show?

How many people pay attention to the signs along the road?

Couple of observations:

Gary argues that the game is changing, and old school marketing methods are losing market share, but old school business is not. Gary changes the paradigm from ‘content is king’ to ‘context is king’, as the amount of content that is being produced in 48 hours, is equal to the entire amount of content created between the beginning of time until 2003, context will be the only way that your information gets noticed.

So what is Context?

Gary sees business going back to the days of the small corner store where personalization is the key. You know, where Amazon knows your name, and has a customized list waiting for you. Around the 23rd minute Gary starts to explain how his company uses Twitter to create that small store feel. His company winelibrary.com actually mines twitter data to see what their customers are passionate about and has used this information to send personalized thank you gifts to customers. The story about the customer in Chicago that really likes Jay Cutler and follows the Bears, who was contacted by their ‘thank you department’ and sent a signed jersey with a thank you note, after using the mined twitter data. The response, of course, was a new loyal customer, who used to spend hundreds of thousands of dollars with a local wine store, and will now shift his business to winelibrary.com. Another interesting take away, his company actually calls every new customer and thanks them for their orders.

These are examples of creating context, which is an emotional relationship with a product, instead of content, the traditional information that was non-individualized and disseminated to the masses. Winelibrary.com claims that their customers that are on twitter are outperforming customers that are not on twitter by 60%, as they have been able to create context with this customer segment.

Finally, some take aways, “How many of you have used twitter’s live search?”, the prediction is that this will outperform google searches in the future, and real time ads will outperform google ads. Have a try: http://twitter.com/#!/search-home.