Poor Pareto, if he was around these days he wouldn’t be having a very good time. Especially if he held a position such as Social Media or Community Manager, he would probably be spending his days in desperation, and nights in bars, drinking to try to forget.

Why? What’s happening in the thriving Social Media world that would upset him so much?

In order to answer this question we need to step back a little and remind ourselves what is he famous for. Pareto was an Italian sociologist (1848 — 1923), whose studies in economics and sociology led to important findings and observations: the already mentioned Pareto Principle and the concept of Pareto Efficiency. They are related to each other and both come from research in the area of distribution of power and wealth among a population.

The Pareto principle argues in fact that, for many events, around 80% of the outcomes can be attributed to 20% of the causes. This notion had a widespread diffusion and profound effect in the world of economics. The same equilibrium found validation in the business arena, where companies found out for example that 80% of orders would come from just 20% of suppliers and that 80% of a company’s profits come from 20% of its customers.

What was its application then?

Following this principle, managers and business owners found rules of thumb to follow in order to focus on what had the most important implications and outsource, delegate or simply ignore the rest. It was (and still is), such a widely recognized principle that there even are online tools to apply it to sales and marketing to identify potential profit centers: http://www.8020curve.com/.

In addition to this, the same principle has found applications in a wide array of fields: starting from software development to healthcare, but also logistics and financial services.

Well, then we get to the emerging field of Social Media, and this “golden rule” doesn’t seem to apply anymore. At least in terms of users activity and content, the percentages change, and the equilibrium seems to disappear. How do we know it? Research in this field is not extensive but the data available are clear:

- on Facebook, 52% of users produce roughly 98% of content.
- on Twitter, 7% of users account for 79% of traffic.
- on Linkedin, the data are similar: 5% of users determine roughly 50% of its content.

What clearly appears is a power balance shift, creating different equilibriums which can’t be related in any way to Pareto’s studies. Obviously, interpretation of these data is subjective and not necessarily straightforward, but we’ll get back to this in a minute. First of all in fact it’s important to remind that the original observation was related to population and land distribution: Pareto in fact noticed that 80% of Italy’s land was owned by 20% of the population. However, subsequent research in different countries highlighted similar figures also across the Italian borders.

But then one here could say: “Hey but this is stuff from a hundred years ago! That can’t be applied today!”. And this is where the most interesting and surprising part comes: these data are not just confined to Pareto’s studies in the 19th century: also results contained in a research published in 1992 highlight the same balance. A report by the 1992 United Nations Development Program on the distribution of the world’s GDP found in fact that the richest 20% of the population controlled roughly 80% of the world’s whealth.

This makes it easier to understand why these numbers had such a big influence in various fields in the past decades, and have been applied to so many different contexts. The distinction between the “trivial many” and the “vital few” is often regarded as a given, an accepted fact that nobody tries to escape from, even in Social Media.

But what if we were wrong? What if the introduction of internet and mobile technologies invalidated long standing concepts? Are we relying on assumptions that make no more sense in certain business areas? These numbers in the Social Media environment seem to suggest this, as if in an area where what counts is not not ownership but personal content and motivation new rules are emerging.

Social Media has changed the way we interact with each other and with organizations, but what if this could have an even wider impact on areas we didn’t expect? It seems centuries have already passed since this era started, but the reality is that the social networks analyzed here began capturing large audiences from 2007/2008. This is, well, only six or seven years ago! In the digital era it is truly perceived as decades, but the truth is that we are are the very beginning of this new world. As a matter of fact, this environment is so fluid and unstable that we already witness new networks such as Instagram, Snapchat, Whatsapp, or the same Google+ contrasting the three incumbent giants.

The digital and social age has just begun, carrying along new rules and we are excited to see what’s coming next behind the corner. Stay tuned.