Tag Archives: social media

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.

Thoughts on Influencer Strategies in Social Media

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Just as Paris Hilton and Kim Kardashian are famous for being… well… famous, so an increasing number of people are becoming influential today because they continually discuss being influential. Set aside the irony of a space where simply talking about influence can lead to you being labelled influential. The term ‘influence’, as used in today’s discussion of social media, is too generalized in my opinion.

Is conversation, sharing and retweeting a measure of influence? Sometimes.
If a blogger puts out an opinion that is well received and results in numerous retweets and shares, does it mean this blogger has influenced all those retweeters?

By today’s measurement methodology the assumption is yes, but I’m not so sure.

In the world of editorial, someone who agrees with your post enough to retweet it immediately is most likely to have already been in your camp to begin with. The political gridlock in our nation demonstrates this well. Democrats rarely influence Republicans and vice versa. Yet all of the candidates, when they publish perspectives, see them shared rampantly. That’s because the vast majority of this sharing happens among their pre-existing supporters. In this sense, what we today call ‘influence’may in some instances be more a measure of the general acceptability level of an idea rather than of the influence of the blogger. It’s important to remember that social media networks tend to connect us by commonalities not differences.

Leveraging networks organized by commonality is very powerful for certain strategies like rallying a support base or solidifying brand loyalty. There are more challenges, however, when approaching new markets as one would with a growth strategy.

Influence and Growth Strategies
When it comes down to actually influencing people to the point of persuasion, where they change brands, opinions, preferences, etc. leveraging an influencer is trickier. True influence between people sits squarely in the domain of those qualitative human dynamics that semantic keyword analysis is still not very good at accurately recording.

There is more at play when influencers are seeking to succeed at persuasion. Two additional factors, beyond the influencer, play an equal if not greater role. They are the influencee (person being influenced) and the product or idea being decided upon.

For example, if you aspire to be like Katy Perry and Katy Perry drinks fruit juice X, you can probably afford to indulge your desire to be like Katy and buy that fruit juice. Here Katy Perry is very influential on your choice because the barrier to adopting Katy’s preference is low. The same holds true for bloggers who vouch for low-cost, impulse item type purchases.

But if Katy Perry drives a Porsche and you want to be like Katy it’s harder to realize your dream. You can’t necessarily go out and buy a Porsche right? True, Katy is still influential on your desire to have a Porsche but her value as an influencer is compromised by the socio-economic situation of the fan and the high-price of the product.

If you’re targeting people who can afford Porsche’s and those people are not generally influenced by the likes of Katy Perry, well then she’s not the right influencer. Conversely, if you’re targeting people who like Katy Perry and trying to sell them a Porsche but as a group they can’t afford a Porsche (or aren’t old enough to drive yet!), then your strategy (and target) are misaligned with your influencer.

Anyone in marketing will recognize this as the exact same dynamics that play out in traditional celebrity endorsement strategies, which is of course what social media influencers are within their circles of influence.

Higher involvement decisions bring challenges to influencer strategies.
Generally speaking, as products become more expensive they become a higher-involvement choice. Higher involvement decisions tend to mean that the ability of any single influencer is mitigated by the alignment of the influencee and the nature of the product. Other factors come into play beyond simply being influenced.

  • Can I afford the product? Are there sacrifices involved in purchasing it?
  • Does purchasing it lock me into a platform or brand at the expense of others?
  • What is the cost of ownership?
  • Is it compatible with other interacting devices?

These types of questions come up when you buy things like cars, electronics or appliances.

I explored this in a prior post called the Persuasion Paradox.

The original info graphic from The Persuasion Paradox. Click to enlarge.

Of course, this is a moving measure which is dependent upon the community being targeted: A $600 iPad might be an impulse item to some people and a very special treat requiring disciplined saving for others. The person you’d choose as an influencer for the former might be very different than the one chosen for the latter. Especially since the authenticity of the influencer is so important to their influence on a community or group. Someone who can easily drop $600 on an iPad probably is not an authentic voice to the disciplined saver.

Getting down to brass tacs.
Because of the importance of these nuances on the topic of ‘influence’, generalized definitions without context are insufficient for strategic planning purposes. In fact generalized thinking can lead to assumptions that waste resources (say, like signing a Katy Perry as a spokesperson to blog on behalf of an $85K sports car). An influencer’s impact should be considered against at least two factors.

  1. Does the strategy seek to communicate with an existing community who have already accepted the general premise or ideas the influencer will put forth. If so, traditional quantitative measures of influence are a decent starting point for identifying an influencer.
  2. For growth strategies that seek to infiltrate a new constituency, care must be taken to ensure the sponsoring entity/brand, desired influencee and the prospective influencer are aligned to meet the overall strategic goal. This is easier with low-involvement decisions than it is with high involvement decisions.

As social media continue to mature it is time to take a more nuanced look at how we approach and measure the worth of these new tools and the new generation of celebrities/influencers they are creating.

Water cooler 2.0: Why, one day, content will crush channel.

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I read recently the analogy that social media had brought back the proverbial water cooler. The original water cooler (v1.0) was defined by mass media. With limited channels we all saw shades of the same programming thereby having something in common to talk about at the office water cooler the next day. Then came the media fragmentation. While the number of hours we spent watching TV programs didn’t decrease (it continues to increase actually) we were all watching different channels (and more recently, different screens). On Monday morning, fewer and fewer people saw the same program and those water cooler chats were among smaller and smaller groups. It’s been a slippery slope ever since.

Along comes social media. Today our social graphs in many ways curate our programming. We see things our friends recommend to us – the breadth of our serendipitous discovery is very directly connected to the variety of people our social graph (which is why it can be limiting to surround ourselves with people who are like us). We can also share information both ways now. We can recommend content to each other, increasingly view that content on demand, and then talk with each other about it in the moment. This is water cooler 2.0. Like everything Internet it has no geographic boundaries. Instead its organized around the topics that connect us to our friends. That could be a sense of humor, an appreciation for sci-fi, or a mutual hobby like pastry making.

You’re probably nodding your head here – what I’m saying is nothing new, right? There is, however, a profound (to me, anyhow) realization that came with this water cooler analogy. Water cooler 1.0 was an asset to advertisers. It made the distribution channels valuable. It’s what ensured superbowl spots would sell for insane amounts of money. The advertiser wanted their ad to be talked about at the water cooler, so they hitched their message to the distribution system – the TV channel with the rights to air the Superbowl. The Superbowl itself was what drew the audience, true, but because of an essential monopoly on the distribution of that program – you couldn’t watch it live any other way – the channel commanded the high prices.

That’s all disappearing now. Now the content  – be it news, an MP3, or the next Subserviant Chicken – increasingly travels across media jumping from a blog post to a Facebook wall to a Twitter link to a Tosh.O clip (back on TV) to the Nightly News. While the content ricochets through these channels it also replicates, cloning itself along the way so that it can exist in multiple media at the same time.

The point is this: The distribution channel matters less and less because the information lives in multiple media simultaneously and our seeing it is more a function of our social graph than our tuning into any particular distribution channel. In fact, most of us are probably used to getting the same piece of content multiple times due to overlap in our media usage and social graphs.

What am I getting at?

If I were an advertiser looking to be talked about at water cooler 2.0 – absent real-world practicality for a moment – I would be less interested in sponsoring a particular channel or network. Instead I’d want to sponsor a piece of content itself. I’d want my message to travel with that content. On a basic level that’s what viral videos try to do, but they’re usually either shallow product shills or they leverage so much borrowed interest to be entertaining as to be forgettable (or irrelevant) as advertising.

What if instead of AMC selling the advertising space during Breaking Bad, the producers of Breaking Bad sold those rights and they traveled with the show and its video clips – on TV, across the internet, onto Facebook, through Twitter, etc.? It’s a little like the 360 contracts labels are offering their artists in the music business.

(And yes, I know, what I just stated would turn the entire entertainment industry upside down. That’s sort of happening anyway right? What I’m articulating may be wholly distasteful today but Spotify also would’ve been despised ten years ago too. Now the music industry is hailing it as a savior. Desperation has that effect.)

Dream with me now because I’m going into La La Land… What if a company could sponsor a piece of news or information? What if every time someone broadcast, tweeted, posted or shared a piece of information (e.g. “Emergency Session Held to Rescue Greece” – the top news item on CNN as I type this) a brand’s message rode along (e.g. “Having financial troubles, talk to Chuck!”). By hitching the message to the news, you’d get the highest possible exposure to the aggregate audience during that piece of information’s lifetime across all the media channels people carried it through. And because that piece of information is curated by social graphs, the advertiser would have an incentive to ensure their message was relevant to that news item and the people who would be tuned into it (otherwise they’d reduce the likelihood of it being further shared).

In a way, it’s almost like watermarking a piece of content metaphysically.

I understand that this is entirely impossible right now. But at one point a lot of science fiction and pie-in-the-sky thinking was dismissed as impossible and later became possible by wholly unforeseen technologies. Who knows what opportunities will be afforded down the line?

My point is this  – content is becoming more valuable because ultimately it is what is shared. The channel is less valuable because increasingly people have access to multiple channels which have redundancy of content built in due to their social graph curation and inevitable overlap.

That’s the opposite of the way the media industry views its value and organizes its revenue models right now. Even today, every social network start-up seeks members first as a way to legitimize itself as a business. With so many social media systems in play and with the content so easily transmittable between them, the channels themselves become less important with every new competitive network. The boundaries between media channels is porous and the distribution of content absolutely fluid. Exclusivity, the basic selling proposition of all media, is more or less unsustainable today with very few exceptions. The content, meanwhile, is much more valuable because it is ultimately what most people will seek out through whatever channel is most convenient at that moment.

What we do with that realization I’m unsure. We’re a long way from being able to act on it for technical, political and business reasons. But it feels like its going to be important to grapple with somewhere down the line.