Social media and business: Two great tastes that go great together, or is the peanut butter scare appropriate for this rotten analogy?
Wednesday morning I head to Babson for a panel with the Babson Alumni Technology Council on social media and business. The panelists will be asked whether this represents a new paradigm or a fleeting trend. I think you know where I fall on the issue.
The audience of more than 120 people has been given the opportunity to ask questions in advance of the panel, which is an enormous help in preparing and level-setting. So here are my responses to these burning questions:
- How do you sort through the amount of social media sites? I get 4-5 invitations per day to join a variety of sites like that. If I choose to attend, it is almost as if I need to spend all day on these sites.
I think you’re asking about social networking sites specifically, and there are a lot of them out there, leading to what I call YASN syndrome – as in Yet Another Social Network. From a marketer’s or a content producer’s side, I’d think twice before trying to launch a private social network for your audience. From a consumer’s standpoint, I’d draw a line in the sand and focus on no more than three social networks. Right now, for me, they are Facebook, LinkedIn and Twitter.
If you’re talking more broadly about social media – sites slightly more focused on content versus community – then I’d say you need to find your “system.” You can do a Google Blog Search on the phrase “social media system” and get a TON of suggestions for how to absorb and contribute to the content that is produced by the people you care about.
- Are we in a social media bubble that is going to explode the same as in 2001 with the dot com companies?
The explosion that’s going on right now is MUCH bigger than the dot com bomb. Sure, you’re going to see companies fail and get absorbed, often for the same miscalculation that those in 2001 made: the wrong business plan. Yes, the hype cycle returned in 2003 and 2004, and was running strong for a few years, but it never reached the noise level of the late 90s. I’m not a finance guy, but I think valuations for all but a few exceptional companies (Google, Facebook, Apple) were much more reasonable in this last cycle.
Despite the current economy, I’m optimistic about the potential for web 2.0 / slash 3.0 / slash social media business models. There are a few basic business trends that will drive innovation over the next few years I think. Here are a few:
- Micro-everything. I’m an avid Twitter user, and I am not alone in saying that I’d be willing to pay a small amount to use Twitter, especially if it gave me access to advanced features. I already pay Flickr for a “pro” account, even though I’m nowhere near a professional photographer. Ad-supported free business models take a very long time to ramp up to profitability, and are extremely vulnerable to economic pressure. With all the content I have up on Flickr, and all the use I get out of it, I’m unlikely to leave the service anytime soon (although my content would stay up if I stopped paying). These aren’t exactly “micropayment” systems, which is also an interesting revenue model, but they’re very easy to swallow subscription costs. Get people hooked with the free version, but offer a compelling (but not a compulsory) reason to upgrade.
- Hyper-everything. I’m thinking specifically about hyper-local, a term that’s being tossed around the publishing industry as one possible way to address diminishing readership due to the ubiquity of news. Dozens of papers, including the Boston Globe, are experimenting with this model of developing intensely local content for neighborhoods, squares, towns, etc. Thinking bigger, hyper-everything means the ability to dive deep into content, and ultimately implies some kind of semantic web, which is one of those “Web 3.0″ terms that gets bandied around quite a lot at nerd cocktail parties (which do happen, by the way).
- Open-everything. The world is heading toward a future where identity and ownership are ubiquitous – where with a single login you are able to access, publish and manipulate content from an incredibly wide variety of sources. In the Web 1.0 world, you had to log in separately to different sites, which had no way of working together to achieve your goals.
In the Web 2.0 world, you have to log into different sites still, but now – usually by sharing your identity information between the two sites – you can share the content and create your own incredibly banal or extremely useful mashups. And the access to information that web have in the Web 2.0 world is incredible. Look at the federal government: you can now go to USAspending.gov and get full access to where your money is being spent. The site publishes what is called an API, which in the spirit of openness allows you to programmatically extract the data and mash it up with other data and applications (such as mapping software). RSS readers are another example of openness – they let you “subscribe” to a web site’s content and view it inside your own special application, a content aggregator that makes it so much easier to consume information.
While tens of thousands of sites have published APIs or made their content available for use, many of them require some form of authentication – typically a login and password. Passing this information between two applications can be challenging, and presents risks. In the Web 3.0 world, you’ll be able to use just a few different logins to gain access to hundreds of sites. Projects like OpenID, OAuth and others are looking to make logins a thing of the past. This is good news for many, but also comes with very important privacy implications.
- Measure everything. Some more good news: social media is measurable! Sure, there’s very little consensus on how to do it yet, but it can be done, which is more than can be said for many traditional forms of marketing.
- More Than Marketing! Sorry, I have to plug my blog. Finally, social media and Web 2.0 will be much more successful when they are applied not just inside the marketing function of an organization. If you don’t read Josh Bernoff, you should. He gives some great examples of how social computing can and should be applied to business strategy, product development, customer support and many other functions.
- Are there any lessons for business in the recent gigantic success by the Obama campaign in internet fund raising?
Yes. Again, I’ll have you do a Google Blog search exercise, this time for Obama “Web 2.0″ lessons. You also ought to read the SocialSphere blogs to get some sense of them. You should also check out Barack, Inc., a book co-authored by Barry Libert and Rick Faulk, who are chairman and CEO respectively for Boston-based Mzinga. Also, Esquire had a great article on David Plouffe, Obama’s campaign manager, and how he created the grassroots organization that helped him win.
- I’ve heard from social experts that “not every business belongs in social media.” How does a business determine which sites are good for them to participate in and which not to?
It is my humble opinion that every company belongs in social media – at one level or another. Don’t believe me? Do another exercise: google “social media examples” and look at the incredible lists of both B2B and B2C companies that are successfully engaging their customers, stakeholders and influencers through social media.
So how do you get started? When I was heading up the social media practice at PR firm Topaz Partners, I came up with five levels of social media engagement. They are:
- Lurking. I don’t like the argument that “social media is so cheap there’s no reason you shouldn’t be doing it,” but I make an exception for monitoring – what I like to call lurking. There’s no excuse for not monitoring what’s being said about your brand and your people online. If you’re not using Google Alerts at the very least, then by God fire up your laptop right now and sign up for them right now! You do not want to have your brand caught up in a “groundswell,” or, at the other extreme, what some people have called a “social media shit storm,” at midnight on Friday and not be aware of it until Monday morning, like what happened to Motrin.
- Evaluating. Okay, now that you know what’s being said, the next challenge is to figure out what to do with it. Social media is measurable. Influence is measurable. Marketing efficacy is measurable, at least it’s a LOT more measurable than before. What should you respond to, and what shouldn’t you bother with? What outreach strategy will get you the most bang for your buck. There are a lot of companies out there that can help you devise the best strategy for how to proceed – how to decide how far down the social media rabbit hole you go: of course I think my current company is one of the better ones to do that! I joke about the rabbit hole, but only partly. There are some fundamental changes you’ll have to make to really be successful online. But then again, there are some fundamental changes you’re going to have to make if you want your company to survive the next few years too – and I happen to think you can kill two birds with one stone here.
- Conversing. The next level is joining the conversation. This takes time and effort, and probably some kind of dedicated community manager. You’re not creating your own community here, but you’re joining the conversation on other communities.
- Optimizing. Now that you’re measuring and conversing, you can start testing the efficacy of your conversations and content online. This is the optimizing level, which includes search engine optimization and search engine marketing, among other things.
- Creating. At this next level, you’re actually creating your own community and/or content. This is even more work, requiring a significant chunk of one person’s time, or a little bit of time from a small group of people.
- It is very difficult to explain to C-level executives the impact that social sites can have to SEO and branding, among other things. How would you suggest approaching this challenge?
You need to set some tangible goals, tie them to specific social media programs, and put some clear measurement mechanisms in place. I’d encourage you look at the slide show and presentation that HubSpot CEO Brian Halligan gave at the Social Media Breakfast a couple months ago. First, HubSpot understands marketing in the online world. He asks his marketing team to show him, in as little as three slides, a snapshot of their overall marketing program. Slide one is a bar chart showing web traffic to their site broken down by source on a month-by-month basis. Slide two is a pie chart breaking down referrals for the last month. Slide three is the marketing funnel chart that puts metrics in place that define visitors, prospects, leads, opportunities and customers – broken down by source by month. You can clearly see in these charts the positive impact that social media efforts have made.
I’ll tell you from personal experience that getting a hit in a popular blog can often be incredibly more important than getting a hit in a major local or national daily or weekly, for instance. I can show you traffic numbers that compare site traffic after a USA Today mention with a TechCrunch mention—there’s no comparison.
Now take that a few steps further—from traffic to leads to sales, and HubSpot will show you how even more niche social media properties can be even more effective when it comes to generating sales than TechCrunch! They share source-specific sales funnels that really highlight the value of social media to their business. Now, they sell inbound marketing software, not widgets, but this does translate well for both B2B and B2C.
- Can you give examples of how companies have used these technologies internally to help bridge distributed groups, or improve internal support organizations?
This is Boston, a huge biotech and pharma hub. The biotech industry is incredibly antisocial. But if you were paying attention at last year’s Enterprise 2.0 conference (and I encourage you to go to this), you would’ve seen dozens of examples of the use of wikis, blogs and other social sharing technologies for collaboration and support purposes. Pfizer has was is probably the third largest wiki behind Wikipedia and the CIA – yes they BOTH use wikis extensively! You won’t find the Pfizer wiki online—it’s only available on their intranet.
- How are companies deciding which social networking sites to use in their marketing? And how they are deciding which tools to use (video, widgets, apps etc.)?
Again I think it comes down to measurement first and foremost. There are dozens if not hundreds of tools out there that can help you focus your social media efforts. This is still relatively new territory, so there are a lot of companies out there testing the waters, and not every campaign is going to be successful. My advice is pick a tool that you have some level of comfort with, make sure you understand the written and unwritten rules of marketing with that tool, and then hit the ground running. Be transparent and responsive. Hire a community manager who can be your eyes and ears, and support that manager with internal and external resources.
- How are businesses measuring the success of their social media marketing campaigns? What metrics are they using to measure performance?
What metrics aren’t being used to track the success social media?
Okay, first off, don’t limit yourself to social media marketing – that’s a loaded term anyway and it really shows the limited perspective that most companies are still taking on social media.
Next, remember that although we’re asking you to think a little differently, and social media does have implications on how you run your business, the basic measures of business success have not changed, you just need to figure out a way to tie social media metrics to your traditional business metrics. Think in terms of an engagement latter or marketing funnel and your part of the way there.
Finally, think outside the marketing box! Yes, you still need metrics like CPM, impressions, leads, sales, etc. But remember that social media has implications beyond marketing. Can you find a way to measure social media’s impact on improving customer satisfaction? lowering support costs? accelerating product development lifecycles?