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Posts Tagged ‘social media’

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.

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    Distribution of Ratings on YouTube

    Distribution of Ratings on YouTube

    M.G. Siegler announced on TechCrunch that YouTube’s 5-star rating system is useless.  And he’s right, insofar as YouTube’s rating system is concerned – it is underutilized and, as the accompanying graphic illustrates (left), not even able to muster an obliquely meaningful bimodal distribution.  However, Siegler extrapolates from the data a much broader claim:

    “And really, the same seems to be true of basically all 1 to 5 star crowd rating systems. It’s easy to know if a video (or anything) is good or bad, but how on Earth do you determine if it’s 2 star, 3 star, or 4 star-worthy? Everyone likely has their own opinions about what would constitute those ratings, and naturally, they’re all completely subjective.”

    With all due respect, this is a gross overgeneralization, one that represents a fundamental misunderstanding of the important distinctions between different social sites and different types of social activity.  As many of the comments to Siegler’s post correctly point out, 5-star rating systems are extremely effective and widely used on social sites such as AmazonYelp, and iTunes5-star rating systems suffer from inherent limitations, as Christopher Allen points out on his Life with Alacrity blog.  However, the tweaks Allen suggests seem a much better alternative than throwing the baby out with the bathwater, or abandoning rating systems altogether because of their inherently subjective nature.  More importantly, Siegler makes the common mistake of assuming that all online social activity is the same. It’s the same kind of broad-stroke generalization that sends companies down rabbit holes in their quest for social media success.

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    A couple of months back, Tony Welch,  Social Media guru at HP, made the startling prediction that “SEO and SEM as we know it will be dead in 6 months,” knocked off by social media.  Tech pundits have been foretelling the impending obsolence of SEO for at least a couple of years (see here here and here, for example), but anxiety over the threat posed by social media  is a relatively new meme.  Now, before I go any further, I should say that I’m more inclined to side with those who see complementary relationship between SEO & social media, rather than those lined up to write SEO’s obituary.  However, a lot of businesses, small and large alike, are starting to see a declining share of total visits from organic traffic and an increasing share from social media.  I smell a trend, and I seriously doubt it’ll equalize or reverse anytime soon.  I also agree with folks like David Zimmerman who understands the threat as a change in the way we search for information online. Social media allows us to bypass the Google machine when we’re seeking information, instead turning to our vast networks of online connections.  Social search isn’t simply a matter of technological innovation, but a revolution in the way we use the Web.  Chris Voss offers an excellent example of why social media is eclipsing Google page rank in terms of traffic generation.

    Now that Google and Bing have formally introduced social search tools, it will be interesting to see how SEO practices will be impacted, and how the industry will adapt.  But even absent these tools, organic traffic is likely to become a diminished priority, if not an endangered species.

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    Marta Kagan, Managing Director, US, for integrated marketing agency Espresso, and bonafide marketing genius, offers one of the most concise and compelling pitches for social media engagement I’ve ever seen.  Just…wow.

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    I loved this Slideshare presentation from Anna O’Brien‘s Random Acts of Data blog, 15 Ways to Spot a Social Media Fake.  Well done, Ms. O’Brien.  You nailed the stereotype.

    View more presentations from Anna OBrien.

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    strategyAs American consumers spend more and more of their online time interacting on social websites, social media initiatives have become a high priority for businesses large and small.  Social media is a booming industry, but it’s also the new Wild West.  The landscape is constantly changing, the technology is continually evolving, and consumer behavior is an endlessly moving target.  Unfortunately for businesses, there isn’t a clear cut path to social media success.  Even more unfortunately, there’s no shortage of self-proclaimed experts claiming to know the way.

    I’ve spent the better part of the last decade researching consumer uses of social technology, collaborating on the development of social software platforms, cultivating and managing a large online community, and developing social media strategies.  I’ll be the first to tell you that I’m not even close to having a silver bullet solution, and the more I learn about social media, the more I’m convinced such a thing does not yet exist.  As a community, social media “experts” are working diligently to define best practices, to cultivate effective techniques for engagement, to develop accurate metrics, and to discover comprehensive solutions that will deliver on the elusive promise of success.  It’s an on-going process, and anyone that tells you something different isn’t someone you should be listening to.

    Among the social media “experts” that are worthy of the term (and there are many, to be sure), there is currently a good deal of concern about the meaning of social media “strategy.”  As Tom Webster recently pointed out, what usually passes as strategy is actually tactical advice: be human, be authentic, be helpful.  Great advice? Yes.  Strategy?  Not hardly.  In a tweet this morning, Scott Gould wondered “how many ppl talk about social media, and how many have an actual strategy…”?  I think this is one of the most pertinent questions we so-called “experts” should be asking ourselves, and each other.  Here’s a short version of my answer.  Consider it an introduction to what will become a series of posts dedicated to each of the major points.

    A Strategic Guide to Social Media Engagement: 10 Steps to Success

    1.  Define goals: Before you undertake any social media initiative, take a step back to consider the view from 50,000 feet.  Why social media?  What exactly are you trying to achieve?  What does this new fangled technology offer that traditional media channels don’t? Although many businesses and social media advocates tend to view social media primarily as a marketing tool, the benefits of social media engagement are in fact much more far reaching.  Social media can enhance your public image, augment community outreach, improve customer service and increase customer satisfaction, provide new sources of market intelligence and information about your competition, and help improve products, streamline processes, and boost organizational performance beyond the marketing silo.  Define the goals of your social media initiatives with these broader benefits in mind.

    2.  Audit existing efforts: Budgetary constraints may require that social media engagement trade off with other expenditures, but wise investments need not be zero sum.  Social media initiatives should complement rather than supplant existing efforts, whether your goal is to improve marketing, customer service, product development, or organizational efficiency.   Before you implement a social media strategy, take stock of your existing efforts to figure out how to maximize your current resources and expenditures.  This audit will also help you establish baselines for performance against which to measure the results of your social media engagement, and to figure out how best to integrate those results to improve organizational performance.

    3.  Establish baselines for performance: You can’t get where you want to go if you don’t know where you’re starting from.  Social media may offer any number of potential benefits, but they’re impossible to quantify if you don’t have a firm grasp on the successes and shortcomings of your current efforts.  Whether your goal is to convert leads into sales, increase customer satisfaction, or reduce product returns, establishing baselines for performance is the first step in demonstrating a quantifiable ROI for your social media initiatives.

    4.  Identify your audience’s social profile: All social media is not created equal.  One of the first questions you should ask before undertaking any social media engagement is where in the world of social media is my audience? In other words, who are you trying to reach, and what social media sites, applications, and platforms are they using? Don’t waste your time and money chasing an audience that doesn’t exist.  And notice that I’m using the word “audience” here, rather than “customers.”  Social media allows you to engage customers, talent, industry experts, community leaders, and other individuals who can positively impact your business.  Don’t let the marketing aspects dominate your focus.

    5.  Identify applicable social tools: Once you’ve figured out where your audience is you can determine the best social tools with which to engage them.  Should you be building Facebook Pages or Groups, Twittering, blogging, creating mobile apps, sponsoring contests, socializing on MySpace, engaging the LinkedIn community, or joining Orkut, Friendster, Bebo or any of the dozens of other social networks popular outside of the U.S.?  The options are staggering, and figuring out which ones work best will inevitably involve some trial and error, but you needn’t be shooting in the dark.  Thinking strategically about the ways you engage through social media will maximize your returns and minimize your expenditures.

    6.  Develop an action plan for implementation: To achieve the full benefits of social media, you have to develop a plan for implementation.  This plan includes tactical considerations, such as the timing and targeting of initiatives, defining roles and responsibilities, training personnel, developing monitoring and accounting procedures, and most importantly, determining how to integrate the fruits of your labor into your organization.  As the goals of social media engagement differ, so will organizational responsibilities.  Within larger organizations, social media engagement will involve marketing departments, customer service teams, HR, product design and manufacturing, and product delivery systems, just to name a few.  Even if these departments aren’t directly involved in social media efforts, the information gleaned from these initiatives is only useful if it’s integrated into the appropriate operational context.

    7.  Establish engagement metrics and deploy tracking tools: Measurement is the key to success in any corporate communication effort, and social media is no exception.  Developing accurate engagement metrics will allow you to discover which of your efforts are most effective and which are falling flat.  One of the primary advantages of social media engagement is that it offers opportunities for measurement that aren’t as easily accessed through traditional media channels.  Thanks to a variety of tracking software, the digital footprint of social media users is highly visible, and the mountains of data they churn up allow you to revise and retarget your efforts to maximize effectiveness.

    8.  Develop social media content and engagement tactics: Social media isn’t just another channel through which to push a corporate message, and companies that treat it as such are going to be sorely disappointed.  The conversation about your brand and market is already happening, and if you jump into it without considering the value of your contribution, you’ll either be tuned out or you’ll take a beating.  Giving the people what they want means developing content that informs, entertains, and engages your audience.  And content is only the beginning.  To capture the value of social media, you have to be social.  That means listening, understanding, responding, and incorporating the conversational feedback into your products and processes.  This is where that tactical advice comes into play: be human, be authentic, be helpful.  Successful social media initiatives require a commitment to engagement over the long-term, and an effective strategy will include a sustainable plan for monitoring, responding, and reacting to conversational feedback.

    9.  Incorporate feedback: This part of the equation is probably the most difficult for organizations to put into practice.  What you learn from social media engagement can help you improve your products and processes, discover hidden markets, and get a leg up on the competition, but only if you’re prepared to change the way you do business.  Being a good conversational partner requires a willingness to change your beliefs based upon your interactions with others.  The same is true for businesses engaging customers through social media.  Only those organizations that internalize feedback and adapt accordingly will reap the benefits of engagement.

    10.  Measure ROI and revise engagement tactics: A common misconception about social media is the difficulty of measuring effectiveness.  If you’ve established pre-engagement baselines, identified appropriate metrics, and deployed tracking tools, accurate measurement is far from impossible.  Crunch the numbers to determine the real, bottom-line value of your social media investment, and revise your engagement tactics accordingly.

    I’m sure there are things I’ve left off this list, and I know some of this requires elaboration.  As I said at the outset, this is my contribution to a much broader conversation, and a brief introduction to a more in-depth discussion of each point.  I hope you’ll share your thoughts, point out my glaring lapses, and point me in the direction of any resources you think might be useful.  And please pass this along to anyone you think may benefit from or contribute to the conversation.  Thanks!

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    Maddie Grant has a must read post on Social Media Today that lists 6 Must Read Posts about the ROI of Social Media.  They are:

    NTEN – The Three Dimensions of Social Media ROI

    The BrandBuilder Blog – Defining Social Media ROI once and for all, and understanding the action-reactive-return narrative

    Adam Cohen (A Thousand Cuts) – The Basics of Social Media ROI

    Social Computing Journal – Measuring Social Media ROI: Does size matter?

    BrandSavant – What’s Wrong With Social Media Marketing Strategy

    Jacob Morgan – The Importance of a Social Media ROI Diagnostic

    Demonstrating the ROI of Social Media is perhaps the single biggest obstacle to widespread adoption of SM initiatives by businesses and other organizations, and these 6 articles are a great starting point for anyone trying to wrap their head around the issue.  Maddie’s post has already racked up 1150 views, but the comments are a little thin (so far, I’m the only contributor to the conversation).  If you have any suggestions, please click here and share them with the class.  Thanks, Maddie!

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