Clubhouse and The Opportunity For Brands

Author: Nora Walker

Clubhouse and The Opportunity For Brands

New trends and platforms are constantly emerging in the Social Media world and can bring with them innovative business opportunities and deliver exponential growth potential for brands, agencies and Influencers. The latest of these on our radar here at GOLD is a new app gaining considerable buzz called Clubhouse.

What is Clubhouse?

Clubhouse is an audio-only social app that allows users to host a chat room in real-time on an endless number of topics, driving authentic discussion and community building. Users have the opportunity to join these rooms on mute and listen in silently, join the conversation in existing rooms, or start their own room where they are the host. Users are also able to filter discussions by interests ranging across categories from wellness, world affairs, entertainment, sports, business, entrepreneurship, technology, and many more.

Why is Clubhouse gaining so much attention?

Launched in early 2020, Clubhouse app downloads grew to a staggering 2.4 million in January 2021 versus just 2,000 in September 2020 (1). While the topics and discussions are endless, education marketing has been rising on Clubhouse as an exciting new way for thought leaders to network with one another alongside leading entrepreneurs, investors, and executives in different industries. Elon Musk and Facebook CEO Mark Zuckerberg are amongst the recent thought-leader adopters of Clubhouse who have been joining chat rooms and driving major buzz around the platform – drawing in crowds so large they maxed out the 5000 per room capacity and forced users to continue the conversation in a whole new room.

What does Clubhouse mean for the Social Media world?

While the concept of audio chat rooms isn’t exactly new (ie: the once popular telephone “party lines” of the 80s), its current impact on the modern world of digital communications certainly is – evolving beyond text, emojis, images and video in a way that feels both throwback and fresh at the same time. At just 11 months old, the jury is still out regarding Clubhouse, however early indicators are that it may signal a paradigm shift in the way the social internet operates and as such is something that any savvy marketer should be keeping keen attention on.

Along with the exciting growth and buzz around any new trend or tool, it’s always important to simultaneously monitor the potential issues and limitations that undoubtedly arise.

For example, if you are curious on how to join in on these trending discussions through Clubhouse you will need to wait until you receive an invite. The app is free to use but new members can only be invited by current app members, who are each limited to only 2-5 invites. While FOMO can certainly be a valuable buzz driver, if Clubhouse is not able to scale to keep up with the demand (on a recent day there was so much user traffic that it crashed the app completely), that could be a concern from a growth perspective. Clubhouse is also limited to iPhone users only, so those with Android smartphones need to wait to be able to join.

Within the current interface, the app does not allow you to leave likes or comments so engagement metrics are limited, but does directly integrate with a user’s Twitter and Instagram accounts, allowing easy access for continuing conversations elsewhere via the more traditional digital means.

As with many new social platforms and features that gain significant early buzz, the more established platform competitors are already quickly working to offer their own iterations on the same functionality. Facebook and Twitter reportedly have begun work on developing audio-chat features to integrate within their platforms (2).

It will be important to track how those powerhouse integrations are rolled out and what impact they may have on Clubhouse’s platform evolution as we have seen in the past with Instagram’s launch of their “Stories” functionality in direct response to Snapchat’s popularity which had a significant negative impact on the latter’s growth trajectory from a user base standpoint (3). The most recent social media platform to launch and see massive success, the video engagement focused TikTok, is also now facing Instagram as a direct competitor since the Instagram Reels functionality launched last year.

In addition to scalability and challenger concerns, Clubhouse has also faced many of the common challenges that all social media platforms have, be they new or established players in the space. The app was recently banned in China and has seen notable early criticism and backlash for its lack of monitoring, reporting mechanisms and clear TOS as it relates to hate speech, bullying, and misinformation as well as concerns around privacy (2). The founders have assured through the media that they are working swiftly to address these issues through a variety of developments and partnerships, but have also admitted that they are currently just trying to keep up with the overwhelming demand.

Potential Opportunities for Brands

Clubhouse offers a unique opportunity to have more intimate, authentic and lengthier conversations with target audiences through audio. To date, brands have not entered the space in any significant capacity but that is sure to come. Early brand adopters of any emerging platform need to carefully measure the risks and benefits before they take the leap into a new form of consumer engagement – and should always have a comprehensive, thoughtful strategy in place to launch and scale prior to doing so. Equally as important, Brands should be mindful that authenticity is still king regardless of the platform and their strategy should reflect that aim and avoid being overly promotional and self serving in its intent. Keeping that in mind, we have highlighted some of the key brand opportunities as well as limitations as they stand right now for consideration.

The Opportunities:

• Brands that have strong thought leadership in certain verticals can integrate their own founders, third-party ambassadors or influencers to host a room speaking to brand ethos and impact or share their personal experiences with products, offering how-to’s or tips and tricks.
• Brand social communities can be evolved by offering a space for open discussion around relevant topics (i.e. a discussion on the emotional toll of teen and adult acne hosted by a skincare brand, or conversations on sustainability led by a fashion brand that has invested in the space).
• Brands can also host an event “after party” where attendees can further discuss the topics covered in your room by your speakers and actively network with one another.
• Beyond ownable presences and hosting rooms, Brand founders and KOL’s can join ongoing industry and vertical related discussions, utilizing Clubhouse as an authentic platform for thought leadership and to raise awareness.
• The platform also has the ability for brands to communicate with their fans and add value through hosted discussions or to unveil potential new product launches and discover improvements based on their real-time feedback.

The Limitations:

Unlike current popular social platforms, Clubhouse isn’t yet built to support brand promotion and ecommerce. Users today are looking to the app for authentic communication and education without being overtly marketed to though as the platform evolves that certainly will as well. While Clubhouse has invested in a creator program that rolled out in December 2020 to help monetize the experience for “power users,” there have been no further business focused development to-date which has translated into significant limitations when it comes to brand engagement.

• No Business portal or business presences to differentiate brands from consumers or the robust tools to effectively moderate and maintain brand standards
• No platform analytics or metrics of any kind to track and measure engagement or success
• No paid advertising – everything within the platform is organic WOM driven and subsequently challenging to raise awareness
• Audio can’t be recorded, edited or re-played. Everything that happens within the platform is truly a real-time, live experience and comes with all the risks that are commonly associated. Just as challenging, given what we know about user attention spans in the modern social media era, long term user adoption could see significant fall off for those who don’t have the time or interest to truly engage in long form, real time experiences on a consistent basis.
• Audience size – as mentioned previously the app is still IOS and invite-only so the ability to reach and engage with a brand’s optimal target audience is limited at best

Conclusion

As the San Francisco based startup continues to evolve in its early beta stage and beyond, as an agency we will closely monitor how the Clubhouse app and this new social trend of audio based digital communications impacts social media marketing and will be identifying opportunities to develop custom strategic plans for each of our clients as they emerge. In the meantime, if you’re one of the lucky few to obtain an invitation, you can start to explore everything that the world of audio based social media has to offer, either as a listener or active voice in the conversation.

Sources
1.) https://www.wsj.com/articles/why-clubhouse-and-other-social-audio-apps-are-drawing-users-11613500951
2.) https://www.nytimes.com/2021/02/15/business/clubhouse.html
3.) https://money.cnn.com/2018/06/28/technology/instagram-stories-users/