Tag Archives: Facebook

Scarcity, Value & Social Media

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When everyone is doing it, its no longer a competitive advantage.

Most commentary on social media ignores an obvious truth—that the value of things is largely determined by their rarity. The more people tweet, the less attention people will pay to any individual tweet. The more people “friend” even passing acquaintances, the less meaning such connections have. As communication grows ever easier, the important thing is detecting whispers of useful information in a howling hurricane of noise. For speakers, the new world will be expensive. Companies will have to invest in ever more channels to capture the same number of ears. For listeners, it will be baffling. Everyone will need better filters—editors, analysts, middle managers and so on—to help them extract meaning from the blizzard of buzz.

This passage came from an editorial piece in the Economist that I think is well worth reading. Coming on the heels of my ‘I was wrong’ post I’m going to stick my neck out and wonder if 2012 won’t be the year social media loses a little bit of its rock star status. Now, I’m in no way saying social media is going away or even that it’s going to decline in quality or importance. Only that like the telephone, television and Web it is becoming a simple fact of life, not a novelty, and that the conversations around social media are changing from ‘how do we get into it?’ to ‘now that we’re here, what do we do with it and what can we realistically expect to get from it?’

Here are some reasons I think social media will find itself facing many of the challenges of other communications media in the coming years.

1. The category is maturing.
Like prior media, at some point a shift will happen when we’ll talk less about the medium itself than about the content delivered through it. That’s starting to happen already. Just as few people outside of specialized industry circles discuss the nature of telephony, television or the Web, we’ve been moving away from social media’s dominant self-referential nature. Still, there are people tweeting such obvious thoughts as “This social media stuff is here to stay” (I literally saw this a few days ago, and by a credible social media guru type no less), which means we’ve not quite squeezed out all the juice from the novelty just yet.

2. Burnout.
There’s also the matter of fatigue. Even if you’re not a Tweeting, Tumblr-toting, Foursquare-checking, Instagram-shooting geek, many of us have dedicated quite a bit of our time to tinkering on Facebook et. al. over the last few years. We’ve delighted in the joys of reacquainting with old friends, meeting the occasional new person and voyeuristically peeking into the lives of people we’re connected to.

Operationally, though, these new technologies have a price for individuals, institutions and corporations. They further divide our time, resources, budgets and attention. And of course, as noted above, the fact that they are everywhere, in great quantity, applies downward pressure on their value – both in terms of the quality of any individual piece of content distributed and in the price points companies are willing to pay for services in the sector.

3. Higher consumer expectations.
Social technology has also successfully infiltrated other aspects of life – from seeking recommendations to validating facts to answering questions to making purchases. It can’t be overstated how much social technologies have fundamentally changed these tasks. By the same token, we humans get used to things pretty quick. Once we’re used to them, they become expectations not attractors. When they’re an expectation we don’t talk about them as much – unless they’re broken. Today including social technologies in consumer-facing business practices is becoming table stakes not a competitive advantage.

4. High expectations & Modest Results
Then there are the ridiculously high expectations of social media from an enterprise growth perspective. In addition to the starry-eyed and often nonsensical expectations of venture capitalists hungry to cash in quick; everyone from marketing agencies to operations teams have come to expect social media to be a sledgehammer against barriers to success. This is happening at exactly the same time our habits are settling in and social tools are becoming an expectation of daily life. Anything that is an everyday expectation is unlikely to be a barrier breaker for long.

Certainly businesses have seen some results, and up to now some of those results have outperformed other media by some (usually inherently favorable) measurements. It’s safe to say though that for most, social media has not been the ‘holy grail of marketing’ originally hoped for. Social is becoming but one more arrow in the marketer’s quiver with its strengths and weaknesses. Every company has learned that while they need to be using it, they can’t count on social media to replace all (or any, really) of the other stuff they’re doing. So budgets are divided yet again as the marketing ‘pie’ is sliced smaller and smaller each time popular culture latches onto the next Twitter or FourSquare or Pinterest.

In fact, its recently come to light that many of the problems marketers have always faced remain the same. As it turns out, 83% of a brand Facebook fans never see that brand’s missives - the same clutter issue facing all advertising media. We’re finding that the proportion of ‘fans’ to ‘talking about’ is also pretty modest for most brands – in the same neighborhood as email open rates and coupon redemptions. And whether you get their names from a business reply card, email signup or Facebook ‘like’ – the size of your list is only as useful as your plan to do something with it. The days of racking up 1MM ‘likes’ and claiming victory are over.

The hype cycle revisited
Anyone who lived through the dotcom boom knows that we’ve been here before. New technologies bring high expectations, lofty visions and sometimes crazy business models. Inevitably though, reality sets in. The Economist piece summarized the realization of that reality. A fundamental challenge for social media is the relation between scarcity and value. Social media works against scarcity and thereby against value creation in the traditional economic model sense.

That social media is now a fact of life means that in coming years it will have to work harder to prove itself and it will have to wrestle with the same challenges other media struggle with. Until now social media has enjoyed a near monopoly on the headlines in the media industry space. Moving forward though, share will be about more than just enabling the act of distributing content between friends. For social media it will mean maintaining share – of our time, our attention and our budgets – by proving its comparative value against other media.

Social Media and the big browser bias.

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It’s easy to think everyone in the world shares certain experiences. When we hear 800MM people use Facebook we can easily assume they use it just like we do – opening their laptops at work or tapping into a tablet computer. The social media revolution we’re steeped in seems to be happening all around us and the media go to great lengths to remind us of just how much everything is changing.

Occasionally though, we come across a piece of information that calls this into question.

This article on the ‘digital divide’ was pretty interesting reading. The data from the Department of Commerce is in some ways hard to believe given the seeming ubiquity of all things digital.  For example, only 40% of households with an HHI under $25K have wired Internet access in their homes. Now, you may say those are America’s poor, so its not surprising. True, but what about one of America’s fastest-growing market segments? A segment with over $1 Trillion in buying power today which is expected to grow to $1.4 trillion by 2013. Of this highly desirable and rapidly growing market group only 57% of households have wired Internet access. They are the Hispanic American population and they show up on many marketing briefs today. Similarly, of the African American population only 55% have wired access to their home.

When you consider all the hubbub being made about engaging Twitter’s 20MM or so regular U.S. users, the following market segments are worth reflecting on: Today there are 17.5MM African American people and 21MM Hispanic people accessing the Internet primarily via mobile devices.

Internet usage, including Facebook usage, is very different on a mobile device. Mobile websites are far simpler, often little more than navigation, text, images and the occasional video clip. Standard websites, viewed through a mobile browser are arguably even less engaging. They usually require a lot of pinching and pulling to make a page anywhere near legible. Oh, and filling out forms on a 320px wide screen if not especially gratifying. Even Facebook’s smartphone app pares down the experience for mobile by stripping out the custom pages from brand sites and reducing the experience to a wall, info page and photo gallery. That of course is for the 40% of cell phone users have smart phones anyhow. The other 60% on feature phones, more or less miss out altogether.

Those of us working in the digital media space tend to have smart phones and very likely tablet devices too. We tend to use laptops or have big display monitors at our work stations. Our homes tend to have wireless broadband connections too. And because we work this way, its easy to forget there are significant portions of the population who don’t. If we do forget, we can also neglect to address the unique environment these people are experiencing digital content in.

With budgets tight and time also short, its easy to focus on the big browser experience and leave the small screen an afterthought. Yet for some businesses, this can mean leaving a trillion dollar market segment unattended to.

Pulling The Plug on Your Social Media Strategy

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Today your business has dozens of choices for measuring social media. Platforms exist for evaluating everything from influence to engagement using various counters and algorithms. I recommend you begin with something simpler though. I think you should ask yourself one simple, illuminating question…

“If I pulled the plug on my social media efforts – closed it all down starting tomorrow – what would my business lose?”

To answer that question, first clear the playing field. Set aside for now the industry pressure of having all your competitors in social, therefore you have to be. Set aside too any mandate coming from the corner office.

Instead, ask yourself what your company would be like next week without your Facebooking, Twittering, YouTube channel, Foursquare badges, Tumblrs, etc. etc.

Draw two columns on a sheet of paper. In column A, add up everything you’d save by shutting it all down; the man-hours internally, the cost of content creation, the meetings, the analytics software licenses, the agency retainer fees. This all amounts to the true cost of what you’re doing now and its a good thing to have in mind.

Now in column B write down all the things you’d lose as a business without your social media campaign in place. What would happen if all those Facebook fans and Twitter followers simply went away?

Take a cold, hard look. If closing your social media campaign means losing a few coupon redemptions, the occasional mention among the bazillions of tweets happening daily, and the bragging rights to some six-figure ‘fan’ count you’ve yet to figure out how to make use of, then your social media strategy is probably in need of some refinement.

On the other hand, maybe closing down your social media stuff would mean you’d know less about your customers. Maybe it would mean you’d not have that convenient focus group for getting feedback on new product ideas. Maybe it would mean you couldn’t service your customers as efficiently, or detect and address their concerns as quickly. Maybe it would mean your brand awareness would drop because your name wouldn’t circulate as much on the blogs your customers frequent. If any of that’s the case, then your investment in social media is probably paying off even if you still haven’t been able to attribute sales to it, let alone define what an ‘engagement’ really is. (That’s okay, by the way, the entire social media industry is struggling to agree on terms like ‘engagement’, ‘activate’, and ‘influencer’.)

If you’re using social media to distribute coupons you’re essentially treating it like an online FSI or DRTV spot. That may provide some sales, but the cost of maintaining that program almost always comes out of profit margins as you continue to give away coupons in return for nothing more than a click count.

For a real return on your social media investment, your column B should be full of words like ‘insights’, ‘higher satisfaction’, ‘feedback’, ‘efficiency’ and ‘quicker’. These are the things social media can do that FSIs, DRTV, and advertising simply can’t.

Most companies are looking at 2012 and asking themselves what to do with social media. Everyone is going to invest in it, true, because no one wants to be the Luddite in their competitive set. But how much do you invest? And where?

Look down again at column B on your sheet of paper. What’s missing from that list that social media could do for you? Whatever it is, that’s where you should aim your strategy and make your investment this year.

Facebook brings social (media) Darwinism to brand pages

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As a pragmatist it was with great joy that I read of Facebook’s new metrics for brand pages. Hailed as giving brands new tools to measure engagement and word of mouth, I think these new metrics will be game changing in the Thunderdome of marketing.

Among the new batch of stats are a few sizzly big number metrics to make myopic brand managers dewey eyed. Measures like ‘friends of fans’ will have some folks salivating at the huge aggregate numbers of people that *could* be reached. That’s been social media’s big selling point for the past three years – the potential of the cumulative network effect – and no doubt it will continue to sell. Plus, these new numbers will make it personal – now your brand will be able to see its very own potential Facebook reach.

But the really useful numbers, in my opinion, lie outside the big potential reach values and are the ones that help contextualize measurements like fan counts.

Up until now trying to get a bead on what ‘engagement’ really means has been tricky. While terms such as ‘like’, ‘fan’ and ‘follow’ imply a certain level of conscious attention toward the liked/fanned/followed brand, there’s been scant real proof as to just how active those fans really are.

Facebook is starting to change that.

They like you, but do they really like you?
Soon a brand will be able to look at the proportion of its ‘fans’ who actually talk about and share the pages and content they’ve ‘liked’. They’ll be able to see the “weekly total reach” too, which will help indicate how many people (and news channels) spread the brand’s content across those delicious networks of potential reach.

These new metrics will be helpful in contextualizing the actual engagement of one’s fan count. For example, one very well-fanned Facebook page had wall postings averaging 4000-7000 ‘likes’. At first blush, that sounds awesome. Then I looked and saw they have 22MM ‘fans’. Taken as a proportion of the overall fanbase, that’s a response rate of three hundredths of a percent. By contrast email open rates seem to hover in the area of at least single percentage points (more here, and here too). Even FSI’s seem to score in a similar neighborhood (also, here) in terms of their redemption rates.

Now, before you get all disgruntled and start calling me a hater, I am not saying social media don’t work. Far from it. Social media are extremely powerful. More direct and intimate than any other media channel today.

I am also acknowledging that comparing comments on a wall post to FSI redemption rates is apples-to-oranges. The point is not the percentages. I am simply calling attention to the fact that that social media statistics are often served up without context. When context is provided – as above – it can at least give us reason to stop and think. (And that is never a bad thing.)

Yes, yes, I agree that using social media is not all about getting ‘likes’ and comments to posts. And yes, it’s true, you might be getting a lot of impressions with those posts and may be building some good brand perceptions along the way. All of this is very important and should not be dismissed.

But a big premise of social media is ‘engagement’ and ‘earned impressions’. As noted before, social media has been selling against these terms since its commercialization. But ‘engagement’ implies people DOING SOMETHING, not just observing a wall post as they would a banner ad. You can’t call yourself an engagement medium and then measure yourself by impressions and perception building alone. Social media is growing up, it’s time to ditch the kid gloves and raise our expectations.

Asking better from brands and agencies.
Facebook is raising the bar and doing so in a way that is truly authentic to the spirit of social media – right out in the open for everyone to see and share. By including the “people talking about” metric in public view, right on a brand’s page, visitors and page administrators alike will know whether the page is popular. That’s dropping the glove in a big way. No more can brands quickly claim victory simply by accruing six figure fan bases. A quarter of a million fans won’t matter as much if right below that head count is another number saying that only a few are bothering to talk about the page and its contents.

Moving forward, engagement will move from theory to practice and agencies and brands are going to have to do something to earn the attention and interaction of Facebook fans. The numbers won’t let us hide behind vapid claims.

Facebook has issued a challenge and client and agency will have to work together to be truly remarkable now. It’s a brilliant move on Facebook’s part (they’re on a roll) because they’re essentially guaranteeing their advertising partners will have to up their game and provide a better Facebook experience.

In some ways, it will be survival of the fittest. Then again, as my college mentor once said, “Nothing motivates like the fear of extinction.”