Feeds:
Posts
Comments

Archive for June, 2010

Don’t believe the hype

If you’re a business owner considering your firm’s social media options, it’s hard not to be distracted by the shiny object that is Twitter. The microblogging service launched in 2006 has purportedly grown to more than 100 million users, been featured on the cover of Time Magazine, and received $48 million a month in free press coverage. If being a media darling signified business value, Twitter would be the Holy Grail of social media. Unfortunately, that’s not the case. For a seemingly simple piece of technology, Twitter is surprisingly complicated – at least insofar as business utility is concerned. Extracting value requires effort, commitment, and an understanding of Twitter’s limitations. Before you cave in to the urge to jump on this social media bandwagon, there are a few things to keep in mind.

Usage statistics are inflated

At April’s Twitter developers conference, Chirp, the company announced their latest usage statistics, including:

  • Twitter has 105,779,710 registered users
  • 300,000 new users sign up per day
  • There are two reasons I suggest these numbers are inflated. First, among these 100,000,000+ registered “users” are single users with multiple accounts and spam accounts. How significant is this phenomenon? According to a study from Edison Research, only 17 million Americans have Twitter accounts, which is an enormous discrepancy even if we factor in Twitter’s claim that 60% of new users are coming from outside the US. Multiple accounts are so pervasive that third-party clients such as Hootsuite, TweetDeck, and Seesmic have made multiple account management a primary feature. Spam accounts not only inflate Twitter’s usage numbers, but also dilute the already anemic follower counts for users (more on this below). Taken together, these factors suggest a high degree of skepticism when it comes to anticipating Twitter’s potential reach.

    Second, and more important than the question of raw user numbers, is the issue of Twitter’s astonishingly low usage statistics. According to a study by Harvard Business Publishing, “among Twitter users, the median number of lifetime tweets per user is one.” The study found that the top 10% of Twitter users account for 90% of tweets, compared to usage statistics for other social networks, where the top 10% account for roughly 30% of contributed content.  A June 2009 report from Sysomos, Inside Twitter: An In-depth Look Inside the Twitter World, found that 85.3% of Twitter users update less than once a day, while only 1.13% of users update more than 10 times  a day.  More than half of Twitter users hadn’t posted a status update in the past week.  According to HubSpot’s State of the Twittersphere report, 54.8% of users have never tweeted. To put this activity data into perspective, consider comparable numbers from Facebook.  According to self-reported statistics, nearly half of all Facebook’s 250 million active users log on daily (48%) and 20% of users update their statuses at least once a day. Media hype aside, Twitter is hardly a hotbed of social activity.

    Twitter takes the “social” out of “social media”

    In addition to Twitter’s inflated usage data, there is the related problem of anemic social connections. One of the primary reasons businesses are excited about social media is the possibility of tapping into the network effects of this new medium – the buzz generated by active, engaged users and disseminated across their peer networks, an amplified version of word of mouth marketing. Unfortunately, Twitter users are among the least connected of any social network. As the Hubspot report notes, 55.5% of users are not following anyone, and 52.71 % have no followers. Moreover, only 18% of all Twitter users have more than 100 followers, and 81% are currently following fewer than 100 people. What this suggests, and as the Harvard Business Publishing study concludes, is that Twitter “resembles more of a one-way, one-to-many publishing service than a two-way, peer-to-peer communication network.” Unless your target audience is among the active 10% of Twitter users, you should probably look elsewhere to capitalize on the network effects of social media.

    Advertising opportunities are extremely limited

    Twitter’s recently introduced Promoted Tweets – a search-based advertising program very similar to Google’s AdWords – marks the company’s initial foray into paid advertising. It’s too early to gauge user reactions or measure the success of this new advertising vehicle, but there are several reasons to approach with caution. Although Twitter boasts 600 million search queries a day, 75% of Twitter traffic comes from third-party applications, which don’t display Promoted Tweets. Twitter’s acquisition of the popular Tweetie iPhone app has led to speculation that promoted tweets will be integrated into the mobile client, and there’s no reason to believe that Twitter won’t pursue integrations with other popular clients, but that hasn’t happened yet. Additionally, Promoted Tweets only appear in search results – not in user’s feeds – although that too may change in the near future. Until that happens, Promoted Tweets will deliver a very limited number of impressions, and user reactions will be difficult to measure. A number of high-profile brands are taking Promoted Tweets for a test run, and businesses would be well-advised to keep a close eye on this emerging advertising opportunity. However, it is far to early for most businesses to allocate precious marketing dollars to this experiment.

    Aside from paid advertising, many businesses are looking to Twitter primarily as a marketing channel, and there’s no shortage of how-to advice from ambitious online marketing mavens. And there are plenty of success stories, to be sure. However, inflated usage numbers and limited network effects make Twitter a less than optimal marketing tool. If you are going to push marketing messages to Twitter users, you would be well advised to follow the approach of Dell and others who have reaped rewards by providing Twitter users with exclusive offers and other incentives. Trying to tailor your brand messaging to the confines of Twitter’s 140 character limit is hardly a recipe for success in and of itself. And if your social media resources are constrained, or you are  under pressure to deliver tangible results, there are other social media outlets that will provide bigger bang for your buck.

    Do the right thing

    So, avoid Twitter like the plague, right? Wrong. Although it’s far from a mature marketing channel, there are some indications that Twitter is a viable component of your marketing strategy. According to comScore’s Q1 2010 e-Commerce Spending Report, 23% of Twitter users follow businesses to find special deals, promotions, or sales. Of that, 14% of Twitter users reported taking to the stream to find and share product reviews and opinions. As users become more active and the social aspects of the site become more robust, marketers are likely to find a number of opportunities to engage consumers. In the meantime, Twitter offers an important case study for the value of social media beyond the marketing silo.

    Customer Service & Brand Equity

    Twitter’s primary business value at this point is derived from the feedback users’ offer about your brand and products. Whether positive or negative, user reviews and recommendations provide valuable insight into your customers’ experiences. A variety of social media monitoring tools make it relatively easy to find out what your biggest fans and harshest critics are saying about you. Companies that are willing to listen, respond, and react to these compliments and complaints have a lot to gain from engagement. Best of all, you don’t have to cultivate a large following or worry about the breadth of your reach to see tangible results.

    Market Intelligence

    Just as customers are talking about your brand, they’re also talking about your competitors. Twitter allows you to learn about consumer needs, capitalize on your competitors’ weaknesses, and draw on their strengths. A well-developed monitoring strategy will allow you to keep your finger on the pulse of consumers, and to stay ahead of the curve when it comes to emerging developments in your market.

    Product Development

    Consumer tweets are not just an index of customer satisfaction, but also a great way to learn about what your customers like – and dislike – about your products and services. Rather than simply reacting to complaints, the most successful companies will proactively respond by incorporating feedback into future development plans. Even a relatively small number of suggestions will provide direction for further investigation through focus groups and other targeted research. Consumer-driven innovation may provide the critical edge your business needs to achieve or maintain dominance in your market.

    These are just a few examples of the real business utility of Twitter as it stands now. Building relationships with influencers and thought leaders in your market, creating relationships with potential strategic partners, and building connections to facilitate sales are also potential benefits that are independent of Twitter’s marketing value. And that’s the main point here: with limited resources and a variety of other social marketing channels available, why spend valuable time and energy trying to make Twitter something that it’s not, when there’s already a lot of value in what it is? So yes, you should be playing with Twitter. Just don’t allow marketing imperatives to skew your focus.

    Advertisements

    Read Full Post »

    Note: This is the first in a series of posts intended to help businesses evaluate their social media engagement options. All social media technology is not created equal, and different channels require different approaches. By understanding the benefits and limitations of each, businesses will be in a better position to choose the ones that best fit their budgets and abilities.

    Why focus on Facebook?

    As my grandpa was fond of saying, the best place to fish is where the fish are. In the case of social media, the most populous pond is clearly Facebook. With more than 400 million active users, a vibrant developer ecosystem, integrations across the social media spectrum, and myriad brand engagement opportunities, businesses would be well-advised to make Facebook a focal point of their social media strategies. If your target customers aren’t on Facebook, the chances are they’re not easily accessible through other social media channels. But sheer numbers aren’t the only reason businesses should make Facebook a cornerstone of their social media efforts.

    1. Facebook has a functional, trusted social architecture

    In early 2006, I was hired as a consultant on a social networking platform development project. When I first met with the company’s co-founder, he told me “We want to build the next MySpace,” to which I responded, “Why on earth would you want to do that?” I explained that MySpace had a dysfunctional social architecture. Anemic profile data and search functionality made it virtually impossible to find like-minded peers. Communication tools were severely lacking. Visually assaulting page layouts made for a nightmarish user experience. Proprietary applications stifled innovation, created unnecessary competition with other social media technologies, and confined users within MySpace’s “walled garden”. “It’s an anti-social network,” I told him. Given the massive success and popularity of MySpace up to that point, I was going out on a limb by pointing out its many flaws. When Mashable’s Pete Cashmore declared MySpace’s unassailable dominance and Rupert Murdoch shelled out $580 million to acquire the site, I’m sure everyone was second guessing their decision to listen to me.

    And then came Facebook. What began as a closed social site for students at Harvard eventually expanded to include other universities, then select businesses before finally opening up to the general public in September of 2006. Over the next 6 months, Facebook’s membership doubled, then doubled again only months later. By December of 2008, Facebook surpassed MySpace in terms of monthly unique visitors from the U.S. There are many reasons for Facebook’s meteoric rise to prominence, but none is more important than the fact that they got social right. Facebook allows users to connect with real people, to rekindle friendships lost to time & distance, and to build meaningful relationships online.  “Friends” on MySpace were little more than numbers, and high friend counts merely status symbols. Whereas MySpace’s version of “community” was monolithic and dedifferentiated, Facebook’s networks – based on regions, workplaces, and schools – make community a pivotal point of social organization on the site. Facebook’s News Feed pulls the UX focus away from our own profile pages and shifts it to the activities and interests of our friends, and Comments and Likes on News Feed content introduce us to their friends. Pages and Groups (don’t get me started on Facebook’s Group problem) allow users to connect with strangers over shared interests and form affinity-based communities. Even the shift from an exclusive club to an open society included measures to preserve the privacy and security of existing users and communities. Privacy controls allow users to determine the extent of their publicity, and to control what they share and with whom (Facebook’s recent privacy row notwithstanding, but that’s beyond the scope of this post, and a subject for another). Authenticity, shared affinity, trust and autonomy are all prerequisites to functional, meaningful communities, whether online or in the real world. And as Facebook’s eclipse of MySpace demonstrates, a functional social architecture is a prerequisite to success for online social networks. As long as users are invested in these meaningful relationships and communities, they’ll remain active on Facebook.

    Aside from the fact that Facebook’s social architecture means the site is likely to remain vibrant and vital, why should businesses care about the quality of online social experiences? Simply put, relationships are the heart of social media. Technology enables content generation and sharing, but relationships are the reason we adopt and use social technologies. Social media works when it inspires us to connect, create, and share. Participation and investment go hand in hand. For businesses to tap into the enormous potential of social media, they must look first toward the platforms and applications that foster real relationships. Following from this, businesses should make Facebook a primary point of social media engagement because the site engages users as real people. For the most part, Facebook users don’t hide behind aliases and fake personae. They are real people – friends, family, colleagues, citizens, comrades, and importantly, consumers – able to express their real interests and affinities, and encouraged to explore and expand all aspects of their multidimensional identities. For businesses, this means an opportunity to engage with customers in an environment that mirrors their real world experiences, including consumer activities. Facebook users share ratings and reviews, seek out recommendations and advice, and transform themselves into brand advocates – and vocal critics. Keeping with the fishing metaphor, Facebook users are the blue fin tuna of the social media universe. The coveted social graph – the global mapping of all Facebook users and their interrelationships – is especially valuable because the rich profile data Facebook records for each user – not just demographic data, but interests, affiliations, likes and dislikes – provides businesses with an in-depth perspective on consumer behavior they’re unlikely to find anywhere else. Think of it as the largest, most detailed focus group ever assembled. The benefits to be gained from engaging this particular universe of users are incalculably huge.

    2. Facebook’s open API’s foster innovation and integration

    One of the most significant developments in social media was the introduction of Facebook’s open API’s (Application Programming Interfaces), which allow developers to tap into the social activity of the site to create integrated applications, simplify third-party authentication, and import Facebook data to third-party sites. Unlike MySpace, which adopted a proprietary development philosophy designed to maintain control over applications and features, Facebook’s approach has resulted in a robust developer ecosystem, innovative applications for users, and interconnectivity with other websites. For businesses, this approach allows for innovation and experimentation with novel user engagement strategies. While I’m not the biggest fan of Facebook Pages (no pun intended) as they’re currently constituted and executed – engagement is often thin, the interface is flat, and value to users is rarely added – all of the essential pieces are in place to make them truly engaging interactive brand experiences. Given Facebook’s willingness to allow developer-initiated innovation, there is an opportunity for forward-thinking brands to take the lead and push these novel advertising spaces toward their full potential. Because the developer ecosystem operates in a fairly autonomous fashion, leading edge brands can team up with developers of popular applications to introduce branded versions or components.

    Aside from developing interactive applications native to the Facebook platform, businesses can leverage Facebook’s API’s to improve consumer engagement experiences on their own websites, and across the Web. Facebook Connect, which allowed users to use their Facebook username and password to login to sites and applications across the Web, massively improved registration conversions for third-party sites (it’s recently been abandoned in favor of OAuth 2.o, an open source authentication protocol, but the basic idea – simplified authentication – remains unchanged). Facebook’s Graph API allows developers to “read and write data to Facebook…(and) provides a simple and consistent view of the social graph, uniformly representing objects (like people, photos, events, and pages) and the connections between them (like friendships, likes, and photo tags).” When users connect to third-party sites via their Facebook profile, those sites have access to any publicly available user data – from favorite foods to favorite books – and will be able to take that into account to provide tailored offers and unique consumer experiences. Social Plugins, like the recently introduced portable “Like” button, “make it easy for users to see information from or about their Facebook friends, share things with their friends without leaving a site or going through a time-consuming login process.” One of the most important ways that businesses can improve online interactive experiences for users is to simplify and streamline the engagement process, and with Facebook’s open API’s, there is no quicker and easier way to do just that.

    3. Facebook provides a variety of consumer engagement opportunities

    For those businesses that aren’t quite ready to undertake a full-blown integration strategy, the vast universe of Facebook Applications provide ready-made user engagement tools and toys. Games, quizzes, virtual gifts, and even mobile applications can be dropped into Facebook Pages to provide instant entertainment for visitors. Coupled with videos, blog posts, discussion boards and other brand-centric content, these applications allow even the smallest of businesses to create rich interactive experiences (caveat: unless you’re a top interactive agency of Fortune 500 brand with a sizable social media budget, forget what I said about the problems with Pages – they’re still one of the best social marketing opportunities around). For businesses taking their initial steps into the social media arena, Facebook offers a wide variety of consumer engagement options that can be deployed with minimal effort. Pages, targeted ads, customized social games, and brandable applications allow brands to test engagement tactics before committing significant resources.

    To demonstrate the potential of Facebook Pages, consider the example of Starbucks. In their July 2009 report, Engagement db: Ranking the Top 100 Global Brands, the Altimeter Group’s Charlene Li and Wetpaint’s Ben Elowitz gave Starbucks the highest social media engagement score among the top 100 brands. One of the keys to Starbucks’ success is an awareness of the different dimensions of engagement offered by each social media channel. On Facebook, Starbucks has grown their community of fans from about 200,000 when they initiated engagement efforts in October of 2008, to 3.5 million as of the publication of the Engagement db report, to nearly 8.1 million as of today. Chris Bruzzo, Starbucks VP of Brand, Content and Online, attributes this phenomenal growth to user-initiated interactions unique to the Facebook platform: “Recently, we found that for every four people that interacted with a particular news item, another three people added virally as friends of these people.” What Starbucks discovered is that Facebook is not only about messaging to their fans, but also “allowing fans to talk with each other about their love for the product and experience.” To facilitate user-initiated interactions, Starbucks developed branded applications utilizing Facebook’s API’s. The Starbucks Card application allows users to manage their card balance, view their rewards, and will eventually allow users to surprise friends by reloading their Starbucks cards. The Starbucks Around The World application invites users to share their passion for coffee with users from across the globe. The Starbucks Instant Story application lets users create MadLibs-style status updates – and earn a dollar off their next purchase of Starbucks VIA instant coffee. In addition to these customized branded applications, the Starbucks Page includes off-the-shelf applications, including videos, notes (the functional equivalent of a blog), discussions, polls, links, and even product reviews. There’s no shortage of interactive opportunities for users, and 3,950% growth over the past 23 months certainly demonstrates the success of their approach.

    Importantly, Starbucks’ Facebook success is also a result of their unique perspective on social media engagement. As Bruzzo explains, “If we had approached it not from ‘what you know and love about Starbucks’ but as a marketing channel, we would have taken this down a path that would have been very different…This was not [built as a] marketing channel, but as a consumer relationship-building environment.” The success of this approach is not only reflected in the tremendous growth of their following on Facebook (and other social media channels), but also in the company’s bottom-line revenue. After suffering through a disastrous first half of 2008, during which sales and traffic slipped for the first time in the company’s history, “Starbucks posted its first U.S. same-store sales gain in two years for the last quarter during a time when the company relied on digital and social-media promotions instead of what had become an annual TV blitz.” The critical lesson here is not that social media engagement can translate into measurable financial success, although the Starbucks experience certainly counters this frequently heard complaint from social media skeptics; rather, it is that Starbucks properly understands the differences between social media engagement and traditional marketing strategies. As Bruzzo continues, “It’s not like we started our Facebook community, got to a million people and started pushing offers at them. We built up a community of people who enjoy engaging with our photo albums from our trip to Rwanda, who loved to have these shared moments around their favorite drinks.” Then, fans started asking the company what was going on, and how they could be included. Although Starbucks results may be difficult for other brands to replicate, their experience provides a solid blueprint for businesses venturing into the Facebook space.

    4. Facebook still has room to grow

    As I said earlier, the Facebook platform is not without its drawbacks. The recent privacy fiasco illustrates the need for brands to tread lightly when it comes to utilizing user data. Although the user interface is light years ahead of MySpace, it doesn’t exactly push the envelope of UX possibilities. The structure and organization of Groups just plain sucks. As the Starbucks examples demonstrates, Pages can be done extremely well, but this is the exception rather than the rule, and it takes some effort and ingenuity. Still, Facebook is one of the more promising social media channels for businesses. And as businesses deepen their investment in the site, they will have an opportunity to steer future development in directions that enhance consumer engagement even further. As such, a commitment to the Facebook platform is likely to provide both short-term and long-term returns for forward-thinking businesses.

    Read Full Post »

    For those of you who think the Facebook privacy row has fizzled out, think again. This past week, ten  privacy advocacy groups sent an open letter to Facebook CEO Mark Zuckerberg calling for greater  user control over their own data. Zuckerberg himself has issued his mea culpa for what many  perceive as callous indifference to privacy concerns (a perception that was bolstered by the leak of    Zuckerberg’s personal IM’s dating back to his Harvard days), and Facebook has introduced new  privacy controls designed to assuage critics, but as the open letter from the Electronic Frontier  Foundation and other privacy advocates indicates, the furor is far from over.

    To be sure, the consequences of Facebook’s privacy missteps have not been as dire as some  predicted. There have been some high-profile Facebook account cancellations and even calls for  mass defection from the site, but none of this has amounted to a crippling blow. I don’t agree with  the naïve apologists who attribute Facebook’s weathering of this storm to the irrelevance of privacy  concerns, nor do I think it’s due to the success of Facebook’s damage control efforts. Facebook will  continue to dominate the social networking platform space because privacy issues don’t trump the  myriad things Facebook has done right: enabling users to create trusted personal networks based on  real relationships (what Jeff Jarvis might call “private publics”); creating open API’s to foster a developer ecosystem that delivers sticky apps for users; simplifying content generation and social sharing; and providing brands and advertisers with (relatively) innovative ways to reach and engage with consumers. Facebook’s continued success is also attributable to inertia – users have spent months or years creating peer connections, uploading content, investing time and energy in addictive games, and learning to navigate what for many is an utterly novel online experience. Simply put, moving to another social network would be a pain in the ass even if a better option existed, which at this time it doesn’t.  So, for the time being, Facebook will remain the 800 pound gorilla of social networking platforms. That being said, there remains much room for improvement in their handling of the privacy fracas.

    Plenty has been written about this controversy, and I’m not going to rehash the plethora of arguments on both sides. Instead, I want to make a simple – but important – point: Facebook is missing a HUGE opportunity to further their stated goal of encouraging a more open Web, AND to advance the interests of brands, whose adoption of the platform is critical to Facebook’s financial future. One of the primary objections to Zuckerberg’s aggressive pursuit of openness is that it appears to be a cynical ploy designed to grant corporations access to the wealth of consumer data wrapped up in Facebook users’ social graphs. Instead of denying this ulterior motive or cloaking itself in the noble rhetoric of openness, Facebook should instead shift the terms of the debate by declaring the apparently-not-so-obvious: corporate access to consumer data is a good thing – for Facebook users! If I were Zuck, I’d be making the same couple of arguments over and over to anyone who’d listen:

    1. Advertising happens – but it doesn’t have to suck. Remember the Web of 1998? Pages were plastered with garish banner ads, every spare inch crammed full of ridiculous animated gif’s, the actual content eclipsed by the surrounding noise. We’ve come a long way since then. Online advertisers have become more sophisticated. Content publishers have improved the signal-to-noise ratio of their pages. Targeted advertising has introduced relevance into the mix. And still we have a long way to go. Zuckerberg should be championing the user experience benefits of openness. Letting businesses get a glimpse of your actual consumer habits will help them deliver rich, relevant ads that actually enhance your online experience. And that’s a good thing. Why aren’t we hearing more about this?
    2. The flipside of access is accountability. Companies are falling all over themselves to push marketing messages through social channels, but unlike other media, social technology enables two-way communication. In other words, customers get to talk back, and companies that fail to listen will ultimately lose as more responsive competitors respond to unmet consumer needs. Access to users’ social graphs creates a reciprocal obligation on the part of businesses, which will ultimately benefit consumers. Again, this is a good thing that Zuckerberg should be shouting from the peak of Mount Facebook.

    None of this is intended to excuse Facebook’s many missteps, nor is it to deny that privacy should be the default and sharing a decision left to individual users. However, there’s no reason for Zuckerberg to muddy the debate with calls for greater openness or diatribes about the obsolescence of privacy. Instead, he should provide users with a solid rationale to encourage sharing, a move that would simultaneously advance their interests as consumers and help realize the tremendous commercial potential of the Facebook platform.

    Read Full Post »