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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.

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.

Outposting & Irrational Exuberance

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Staking a parcel of land in a new digital space is easy. It can lead to big sexy headlines and snap-judgement misassumptions.

Mashable wasted no time last week noting that Google+ has ‘signed up 13% of the U.S. population‘ and could be larger than LinkedIn or Twitter within a year.

Exciting news to be sure. And in some ways, given Google’s reach with its search service, etc. not surprising. I question the prediction though. Via an admittedly unscientific survey across my own Google+ circles I see a lot of outposting going on.

I define outposting as the rushing out to stake a claim to a new site or service online without intention to actively engage with it immediately. Outposting is done to reserve our account name. To be seen there. And to take a peek to see what all the noise is about. The rewards for outposting are well known. Having your name locked up – especially if its John Smith or similar – has a certain first-mover cache and is good for those concerned with their personal brand. Outposting is also a little like investing a small amount in a stock on the chance it gets big someday. Plus, as with many things online, the actual investment made in outposting is pretty small – about 10 minutes of your time – so why wouldn’t you?

I’d casually estimate that 20-25% of the people in my circles on G+ haven’t posted anything yet beyond the bare minimum profile and maybe a test quip or two. Additionally, the vast majority of people who have posted regularly work in media, marketing or technology or are otherwise of your typical early adopter profile. This is fine, and niching in natural in a fragmented media environment, but it should cast a certain light on stats like “G+ could be larger than LinkedIn by next year”. G+ might give Twitter a run for its money – it’s currently appealing to the same market segment – but when I think of all the kinds of people I know on LinkedIn vs. G+, Google still has some distance to go before it has proven its appeal to the broader LinkedIn segment. (The utility of Google+ competing with LinkedIn is also highly suspect at this point.)

Outposting reminds me of the Oklahoma land run scene from the Tom Cruise film Far And Away
(I found the clip and inserted it below) where they rush out onto the frontier and jam a flag in a piece of land. In the film, it was literally a dash to stick a flag in a parcel of land surrounded by equally open, full-of-potential, land. As anyone who follows history knows, some of that land grew to become towns and eventually cities. Some became farmland. And some never became anything at all. It had something to do with the land itself, but more to do with what was being done on neighboring plots around any specific parcel.

That last part is important because the eventual settling and development of G+ will work in a similar way. What the settlers around us do with their piece will largely define if the piece we staked out will be useful and valuable to us.

I am guessing that behind Google+ rapid signup rate, there is a lot of outposting going on. Who wouldn’t take 10 minutes to claim their parcel of this brave new world? The question remains how many of these people will be true frontier settlers willing to pull up stakes and move their stuff from the comfort of Facebook or LinkedIn or wherever to the open frontier of G+.

Then again, maybe it won’t be an either/or but rather like having a summer cottage you visit occasionally. (I realize I am stretching the analogy here.) Many of us already have multiple accounts on multiple sites and visit each for different reasons. This is all well and good, but one place is always our primary residence and as anyone with summer property knows, maintenance of the place you don’t go to frequently can be difficult to keep consistently. And if maintenance drops the face of neighborhood starts to change. Timely updates are the fresh paint and manicuring of Internet land ownership. (Wow, I am beating this analogy to death aren’t I?)

It’s worthing pausing now to consider Twitter as there are some parallels. According to Edison Research, Twitter enjoys 92% awareness among Americans. This is not surprising given that the little blue bird appears on everything from T-shirts to billboards and on the vast majority of websites. However, despite this awareness, which is nearly equal to Facebook’s, regular users of Twitter represent just 11% of the population. A far cry from Facebook’s nearly half of our population.

Twitter’s rocketing growth made headlines just as G+ is today. Publishers spoke of ’100% growth rates’ etc. without detailing the circumstances surrounding those statistics. As it turns out, 22.5% of Twitter users publish 90% of tweets and only 21% of registered users are actually active on the site. (Think about that… 22.5% of 21% represent 90% of all Tweets. That’s the 80-20 rule on steroids.) So while a ’100% growth rate’ is a great stat for headlines, there’s a lot of outposting hidden in there as well as simple old-fashioned account abandonment and user atrophy.

Google+, at this point seems to be echoing Twitter’s general trajectory just as Foursquare did a few years ago. Admittedly, G+ probably has higher odds of pulling in more of the masses if only because more of the masses use Google tools and brand awareness and trust is very high. No one needs to learn what Google is or stands for. We all have our idea.

(Playing devil’s advocate though, even with 92% awareness, Twitter hasn’t demonstrated enough utility to enough people to enjoy higher usage.)

Lest I sound like a buzzkill, it’s worth noting here too that having 11% of the U.S. population active on your site (as Twitter does) is not shabby at all. In my opinion its not quite enough market share to warrant the lofty Wall St. valuations, but then again, Wall St. has had a bad week so I’ll be nice to them for now. Instead, 11% marketshare is sort of the equivalent of being one of the ‘big four’ networks of our time – though with Twitter that network is more akin to the Syfy channel and E! combining audience than a general household demographic. (Also, its worth stating here that the dynamics of social networking tools are so different from TV networks that the comparison and utility of being the equivalent of a ‘big four network’ basically ends with the simple quantitative similarity).

I guess my big point here is that I think we working in media, marketing and communications need to check ourselves against irrational exuberance associated with outposting. Outposting is a well-established phenomenon that drives great headline writing and creates really impressive growth charts in meetings. It is not, though, a guarantee of future returns.

Funny, that last sentence sounded like the disclaimer that shows up on financial statements. And finance, as witnessed by this week’s remarkable stock market plunge, is another category full of hyperbole and ‘surprising’ disappointments.

Interesting.

Context Is King: getting more from social media.

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The story of social media is sexy from a marketer’s perspective. As traditional media fragmented and mass audiences scattered, along comes a new technology offering access to huge numbers and at a low cost. Companies were ready to hop in bed straight away as the opportunities became obvious: Crowdsourcing, free video distribution, product evaluation, coupon distribution, followers and friends, even the chance to be seen as ‘liked’ by millions.

More recently, the headlines have started to move on. Facebook and Twitter are old news and the social media elite are now talking about other socially-enhanced topics like business operations. Yet I don’t believe we’re far enough along yet to drop the topic of social media and marketing. Social media, it seems to me, is being held hostage by the past.

I am not a number, I am a free man.
Every marketer worth his/her weight will utter the words, “It’s all about the customer and solving the customer’s problem.” While it’s never occupied the proportion it deserves on the proverbial creative brief, the ‘Target Audience’ heading is omnipresent. Marketing and advertising – ever since their hands were forced by fragmenting media – have been trying to laser in on a customer-centric, target-marketing approach.

Ironically customer-centrism seems to take second seat in much of the dialog around social media.

Have you noticed that social media hype is always about numbers? Millions of views, tens of thousands of followers, memberships the size of nations? Is it me or do these all seem like old-school, mass media ways of thinking about this stuff? The equivalent of Super Bowl viewership stats for the 21st century. I have to ask myself, ‘If we all talk about it this way, are we collectively opting for a cognitive box from the mass media era?’ What would happen if size didn’t matter?  Or more importantly, when we strip out size, what are we left to work with?

Technology today has enabled people to fully customize their exposure to media and yet the marketing industry clings to the old discussions based on volume. One would expect as we transition into this brave new world, we’d let go of the traditional worth-as-measured-by-volume discourse. Have we?

Pedaling Influence.
To hear it sold, the value of social media is predicated on its ability to deliver access to communities. These communities are often self-organized thanks to social media tools. Each community has its own value system and world view which, according to the Marketing 101 noted above must be understood. Access to the broader membership of a community is granted through its leadership, often called ‘Influencers’ in the jargon. Someone with influence and respect within a community is in a position to impact that community’s opinion and behavior around a brand, product, cause, etc. Naturally, social media strategy then has much to do with engaging Influencers.

Identifying these Influencers can be tricky though. Many of the measurement tools I’ve worked with use traditional quantitative measures like number of posts, number of comments, number of inbound links, etc. All of these in various combinations might well point to influence however these measurement are most appropriate to bloggers and perhaps forums. Unfortunately, bloggers (and by this I mean those who tend to blogs followed by more than a handful of their family and friends) and heavy forum participants are a small proportion of the social media space that is advertised as beings hundreds of millions strong.

Most of the citizens of the social sphere belong to the networks like Facebook. Another sizable subset (with significant overlap) use popular tools like Twitter and increasingly Foursquare. These are the social media masses advertisers are promised access to. On the surface, these sites and tools are the new NBC’s of the world, the place where mass groups gather (even if now, they gather for very different reasons and sort themselves into millions of subset groups). My question is, do we as marketers know more about these people than we did about the TV viewer of the mass media world? I would say yes, we do, but not as much as is often advertised. For this reason, we should give pause to consider a few things. Let me explain:

For privacy reasons, Facebook, LinkedIn and MySpace are reluctant to grant automated systems access to user profile pages or information through their APIs. When these companies even hint at it, their memberships protest quite loudly. What they do offer is access to groups, fan pages, video pages (on MySpace) and the like. The trouble here is that these types of pages are notoriously static (fan it and forget it behaviors) and in addition these pages provide little information on the people who are associated with them (basically their name and anything these people post on the comment boards which in turn tends to be minimal, see ‘fan it and forget it’ above).

For tools like Twitter, profile information is by its nature shallow. In addition the posts are short, making evaluation difficult. Sentiment dictionaries, used by automated tools to guess at the overall positive or negative nature of a collection of words, are at best only ‘somewhat accurate’ owing to the complexities and ambiguity of so many words in our language. With only 140 characters to work with, determining sentiment is very difficult. To take sentiment numbers at face value can be very misleading. Add to this that being ‘the shit’ in some communities is good while in others its bad. Slang matters too.

The result in both these cases is that identifying influencers in social networks and Twitter-type tools through any sort of automated process is quite difficult to do and comes with a significant margin of error. This is through no lack of effort on behalf of the tool creators, its just that the really useful information is not being made available that way.

By way of example, if you wanted to find the opinion leaders of urban, inner city males aged 18-22 with an interest in video gaming, it would be impossible to do this through any of the automated tools. Yet this is precisely the type of target profile many brands (rightly) are building their marketing strategies around. A quick search for ‘urban youth’ on Facebook is disappointing. So too is a search on ‘video game fans’ which returns no shortage of groups (1900+) but their memberships are in the double-digits.

That leaves blogs and forums which are indeed good places to look for opinion leaders. Here the automated tools deliver even greater value. The nice part about blogs and forums is that they tend to be topical which means by tracking a specific URL you’re already honed in a little. On the downside, the reality is that consistent, steady bloggers and forum participants are a significant minority of the massive numbers sold as accessible through social media. The Internet, being a longtail technology, has millions of blogs but most only have a handful of followers. The number of mass blogs delivering access to large communities is a much smaller proportion. Again, those mass media expectations are inappropriate for social media.

In this way, all the talk of access to millions sounds a lot more cut and dry than it is if you’re trying to tie your market strategy down to a well-defined customer set.

Managing social media: Less money, more manpower.
Compared to traditional advertising which has for decades been trending more expensive and less effective, social media definitely costs less money. However, despite the advertising of access to hundreds of millions of people, its reach is not nearly as great as the old mass media used to be. This means reaching a large community meaningfully through social media will require an investment, even if its not as heavily on cash.

What a company will save in hard costs it will make up for in softer costs, namely people and processes. This is the part that’s often overlooked on proposals and strategic plans. Unlike advertising campaigns which have a beginning and an end and a media schedule and a concrete list of deliverables, social media outreach is an ongoing commitment that requires continual monitoring and manual intervention if its to be used well.

Making this commitment means installing processes for listening, filtering, responding, measuring, making sense of the measurements, acting on the outcomes of the measurement and finally keeping management in the loop. By corporate standards that’s a tall order and not an insignificant amount of work. Therefore that social media budget adds up in different ways.

Social media also sets up an expectation with customers. Like good advertising for a bad product, to tease interest and then disappoint can be a big misstep and do more harm than having not participated in social media at all.

Return on social media investment.
It is true, making social media work means identifying the influencers and engaging them. It also means having proper expectation about how great a group any one influencer will reach and how long it will take to propagate a message through a community. Despite the ‘instant success’ nature of public relations around social media, most initiatives take time to propagate across the Internet.

Today’s automated tools can only do half of the necessary work in managing a social media effort. In some ways, I would say they are even dangerous in the wrong hands. If you have an old-school mass-media mind, its easy to get all excited by a simple keyword search whereby your brand is mentioned thousands of times. On the surface this looks good right? But mentioned by whom? At what sentiment? Are the people talking about your brand the people you’re targeting with that customer-centric strategy you have? It’s tempting to say all chatter is good chatter and who cares who is talking as long as they are talking. This is a slippery slope. Talk to everyone in one voice and you talk to no one – that’s a lasting outcome of the decline of mass media. People expect to be addressed on their terms, not generic ones. In fact, we all tune out anything that doesn’t speak to us on our own terms. (Ask a 16 year old how many diaper ads they’ve seen vs. a new mother.)

So casting wide social media nets to accrue stacks of mentions in some aggregate score card might begin dumbing down your strategy, making it generic and eventually impotent. The numbers thrown around in social media presentations can easily lead one astray because, God love them, those big numbers feel like the security of the old mass media world we’ve been dragged away from kicking and screaming.

‘Socializing’ a brand means aligning it with a constituency.
To make social media work it needs to remain customer-centric – otherwise its noise and shallow tactics, neither of which offer enduring value. Companies need a concrete strategy based on constituency insights that go deeper than having a Twitter feed and being a Millennial. People don’t organize themselves that crudely online and neither should companies in their outreach strategies. This means acknowledging that the measurement tools of social media are an initial filter and that manual intervention by someone trained in the company strategy is required.

Those constituency insights become ever more important once you’ve identified a real influencer. Engaging that person, who is savvy and ahead of the curve by definition, will take some skill. It’s mandatory that what you’re offering is aligned with their own values and world view, otherwise they’ll pass. You have to know what makes them tick beyond just the fact that they use social media a lot and well.

What makes people tick is more anthropological and psychological than it is technological. Technology is a means to an end, not the end itself. Views on government and institutions (of which corporations are included), concepts of success, wealth and status, definitions of family and community… these are the real drivers that make influencers and by extension their communities act. Aligning with these drivers therefore is critical.

The social media measurement tools of today can bluntly separate wheat from chaff but they are not well set up to provide insight into the individuals within a community. For that, you need to begin with a deep investigation into the constituency you want to reach. You the must map your company’s vision and values to that constituency group and align your offer with their action drivers. Finally you have to investigate the people behind the numbers returned in your social media reports to ferret out the influencers. Done right, the power of social media to create preference in a grassroots, authentic way is unleashed.

Social media isn’t about access to 500 million people. That’s yesterday’s measure from yesterday’s dynamics. Social media today should be viewed as the conduit, a tool, used by people within their self-defined communities. From a marketers perspective it brings the added benefit of allowing us to catalog some of people’s behaviors and to find places where they organize around other like-minded people.

The word ‘media’ itself might even be part of the problem because it makes us think this is a marketing tool like TV, radio and print. It’s really not. It wasn’t created to be and despite ad units sold in the margins (with their abysmal click through rates), it still isn’t thought of that way by anyone but marketers. People don’t like being sold to as a rule of thumb.

This isn’t to say using social media as media doesn’t work. Companies have succeeded in using it for tried-and-true tactics like sampling, coupon distribution, sweepstakes, etc. How deep the relationship with the brand or company is because of this is suspect in my mind though. You may get my attention by offering me a sale but now we’re competing on price which is another slippery slope (and brutal on margins).

When the strategy changes to engaging a community its best to look less at the gross numbers spit out by systems measuring clicks and comments and to look instead at the behaviors of the people you want to reach and how they might be happening in social media. Then you can create an engagement that is about something more personal than winning a prize or getting 20% off.

The mass media age was about size and numbers. Today context is king.