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Can Social Media Create Value for Businesses?

 

Interesting research report from Olgilvy on Social Media creating value for businesses. From the executive summary:

Ogilvy and ChatThreads enlisted approximately 400 US restaurant consumers who tracked and reported 5,295 touch points with five restaurant brands across all major types of media….

What did we find?

1. Social media exposure is directly linked with increases in sales. Integrated social media (social content + one or more other channels) exposure is linked with significant increases in spend and consumption—for example, social media + PR exposure was associated with a 17% spend increase compared to the prior week without these.

2. Integration matters. Exposure to social content was most consistently effective when it was combined with exposure to other types of media channels.

3. Social media is a top driver of impact. Out of the 20 channels analyzed, social media was No. 1 or No. 2 in magnitude of impact on spend and consumption.

4. Social media exposure is directly linked with changes in brand perception. Social media by itself is particularly effective at rapidly impacting brand perception— exposure to social media generated the largest impact on brand perception over a short (one week) period of time.

5. Brand exposure in social media is low. Weekly social media exposure to brand mentions was relatively low (24% of panel) vs. television branded exposure (69% of panel), even in this selected high social media consumption group of consumers

 

 

Ogilvy ChatThreads Social Media Sales Impact Study 2011

How does your business use social media?

In an effort to gain more insight into the usage of social media by marketers, product marketers and product managers, we have a quick survey for you to participate in. The survey should only take like 2 minutes, so your input is appreciated!

Here’s the Survey: https://survey.vovici.com/se.ashx?s=3877A95112A62085

Survey ends Friday 10.28

October 26, 2011 by
(29)

9X Effect: Google+ and Netflix looking at changing markets


Image: A. Stiffler

 

From a product management and product launch perspective the last couple of weeks has provided a good deal of fun for many of us – Google+ launches and Netflix launches new pricing. Each with their own flavor of feedback from the market.  The feedback and insight from the market for each of these activities have been the fodder of 100’s of blog posts and gazillions of tweets (guesstimate) and they both may represent a point in time where their target markets are changing.

Markets move and present opportunities and while significantly different markets, I belief both have put their best foot forward to address the changes in user preferences and technology adoption.  Netflix is transitioning from a legacy market need with DVD‘s and Google looks to be taking advantage of gaps and preferences for users in the social space.

Clearly some segments of the social space are looking for something other than facebook and the buzz in the market from early adopters appears to show significant traction with Google’s launch into social.   The negative feedback and general outrage in the market around Netflix strategic pricing decision is also a launch, but addressing an emerging trend from their user base and the market at large.  A 60% price move is a big lift, so such a decision likely represents a strategic decision in response to research, transactional data and  trends which indicate that streaming is now mass market and maybe DVD’s are on the way out.

10 Million Users, now what?

The momentum with Google+ is undeniable, but the type of content, the participants and available tools are pretty limited: technology focused content (the first week was all G+ content – thank goodness for netflix’s pricing launch!), the early folks from Twitter appear to be the first one to setup shop on G+ and no mobile option on the iphone.

Regardless of the content, network participants or availability of tools – 10 million users in 2 weeks is worth note without a doubt, but what will it do for social networking, users and how we use the internet? Which is something Facebook addresses today for it’s 750 million users.   Olivier Blanchard addresses some of the questions in a recent post:

Will Google+ change the world or the internet? No. Google+ will not change the world. Or the internet…

Will Google+ kill Facebook? No one really knows. I suppose it could…

What about LinkedIn? If Facebook didn’t kill LinkedIn, chances are that Google+ won’t either…

So maybe the question is maybe why is 10 million users interesting?  If I put the 10 million number into context – that’s less than 2% of Facebook‘s 750 million.   So speed to 10 million might be an interesting metric, but what is the point where we all look to G+ over Facebook, Twitter or LinkedIn.  Does Google+ need to kill anything to be successful?  Is it enough to make Twitter boring?  Or as the LinkedIn CEO posits, there isn’t room for another site, since free time is lacking for most.

No doubt there is some really interesting discussion going on online around Google+ and the Netflix pricing move.  So I thought I might add my spin from a market perspective.

G+ is the Bomb!

There will always be fans for the newest thing, but with Scoble and Brogan taking pretty hard stances publically, it’s hard to ignore the noise.  Here is a snippet from my Google+ stream which indicates some people are already  betting on Google+, Chris Brogan appears to be “all-in” for Google+ over Facebook and while others are questioning if that’s a wise decision:

It is clearly to0 early to know what will really happen, ultimately the real answer will come out over time.    Maybe Google+ is the next big platform, but at this point it is a niche as David Armano asserts, but the cottage industry for Google+ is already beginning with “How to Use SeminarsWorkshops” already popping up at $49 per attendee and irritating some in the industry.

If Google+ represents a change in the market, it means some people may not make the transition, just like some products and companies won’t make the transition successfully.  Whether it’s the next big thing for social or a movement to a new mode for movies which mean something gets left behind – memories, references, case studies, investments and experience.  When markets change, the participants can get a little huffy.  Remember when Apple left the floppy disk out of a mac for the first time?  That made people mad.

So what will make Google+ successful or users move to support Netflix in the next market move?

Features? Community? Content? Catalog?

In both the Netflix launch and Google+’s, users have a decision to make.  Stay where they are (Use current tools or pay more for DVD’s), make a change (Augment social with G+ or go to a new provider for Movies) or make a radical change (Abandon previous social modes or DVD’s).  While at different points in market maturity, both of the launches represent choices and change, which is stressful for the community of users/customers.

So is there a magic bullet to make people move?  Depends on who you are and what value you have invested in the previous solution (FB/Twitter, DVD’s…), but there has been a good deal of talk around  Google+ and their really nifty features.

Google has change social much in the same way Gmail used a different metaphor, Google+ is no different with circles (this takes a diagram to really understand), real-time update of the stream (this takes time to get used to), sparks (not sure I really get it or it’s just a bad implementation) and easy access to all of the capabilities we already enjoy from Google, but is that enough?

While the content portability, privacy and ownership at Facebook is an issue for many is this enough to drive change?    Does the value offered around community and content in respect to identity and openness at Google+ help drive commerce and collaboration as Facebook has already established for their stakeholders in the market.

It’s not the Numbers, it is the Value for the Users

So where is this post going?  Well, I think the real question is when will Google+ have enough value for a people to abandon their existing investments/endowments in Facebook and move to Google+.   Investments in time, content, relationships…  Has streaming crossed a threshold where we as owners of 100’s of DVD’s are will to start investing in the new medium for our movie catalog?

For Google+ to achieve a “kill Facebook/some existing thing goal”, it needs to break through the 9X effect for perceived value delivery.  The 9X effect is a concept from John Grouville’s paper, Eager Sellers and Stony Buyers, which posits innovation with significantly better value may not actually mean success in many markets.  Success comes in many segments when a previous solution/endowment is abandoned for a new solution.

Below is a graphic which outlines the challenge ahead for Google+ and perhaps a driver in the pricing increase on the legacy endowment of DVD’s at Netflix.

FWIW: The 9X effect relates to displacing any platform/investment in technology, not just Facebook or DVD’s:

Essentially just because it’s different, better and seen by some folks, like early adopters it doesn’t mean success.  Tivo is an example of a business which delivered an innovative product, the incremental value over DVR’s from our cable providers is proving to be a central challenge for Tivo today.

Tivo – Great product, early inertia and a business model which is currently struggling to work,  much of which is rooted in the 9x effect conundrum.   With the catch up of cable DVR’s, existing DVD collections and on demand options most users don’t see a 9X+ lift with Tivo, even early adopters have dropped of the subscriptions, like me.

Markets are People

Businesses often opportunistically try to leverage market change to wedge in new offerings and approaches for folks in markets. The challenge is that each person in the market has different experiences, successes/failures, investments and world views which impact how they view market changes.  I mean my dad still is mad about 8 track’s going away and he’s 73.  So when understanding the 9X effect,  Andrew Macaffee set’s  forth 3 considerations as it relates to how given users look at their options around technology adoption/usage:

  • We make relative evaluations, not absolute ones.  When I’m at a poker table deciding whether to call a bet, I don’t think of what my total net worth will be if I win the hand vs. if I lose it.  Instead, I think in relative terms —  whether I’ll be ‘up’ or ‘down.’
  • Our reference point is the status quo.  My poker table comparisons are made with respect to where I am at that point in time.  “If I win this hand I’ll be up $40; if I lose it I’ll be down $10 compared to my current bankroll.”  It’s only at the end of the night that my horizon broadens enough to see if I’m up or down for the whole game.
  • We are loss averse.  A $50 loss looms larger than a $50 gain.  Loss aversion is virtually universal across people and contexts, and is not much affected by how much wealth one already has.  Ample research has demonstrated that people find that a prospective loss of $x is about two to three times as painful as a prospective gain of $x is pleasurable.

These three drivers are significant barriers which innovators and marketers need to overcome to call something a success.  The relative reality of value just may have caused the negative feedback on the new pricing launch from Netflix.  While the outrage was swift and loud online,  the real question is how many of us are really willing to make a move?  The move to another provider?  The move to the new package for 60% more? A move to streaming only?

As a avid user of social media, I haven’t really even thought what it will take to displace Facebook, as a user I actually am pretty tethered due to friends and family I’m connected to and this is the only place they really invest online.  So I’m not sure it’s what would make me move that matters, it is more about delivering enough value to make my network move.   Same thing with my Twitter usage, so that’s a pretty big bar, but I might make G+ serve a specific segment of my life.

When is the mass market of users and the businesses which use Facebook willing to make a move or to even adopt an additional platform.    While the early adopter buzz is interesting, it doesn’t represent the typical user in the market and is almost meaningless.   For right now it is more than likely shiny object syndrome more than anything and may best be a niche platform.

I consider myself a fairly early adopter and usually somewhat susceptible to shiny object syndrome, because what if the next one is it.   To that end, I’ve gone to and started using the platform du jour over the years (Friendfeed, posterous, tumblr, Quora), much like I’m trying Google+, but none of them have really taken off or at least they haven’t been integrated in my life as Twitter and Facebook are.  This early adopter mode which I often find myself in was probably one of the reason I had a Tivo years before DVR’s where common and a several streaming accounts early on (Amazon, Netflix, Hulu..).

Escape Velocity is more than Buzz, it’s a Business Model and Strategy

While I don’t have a crystal ball, I do know that time and value delivery are the key variables which will determine if a product will be a success.  Netflix’s investment in streaming has been significant over time – infrastructure, catalog of movies and strategic partnerships with content providers has changed the market for many who previously didn’t even think streaming was an option.  For many, streaming was a value add around the DVD offering – is it possible both Netflix and Google are both looking a situation where a 9X effect will dictate a move for their business and the products they offer to market.

Maybe Google+ will be niche as Armano asserts and could do this very successfully by many metrics or it could be the next Platform we all use and engage in as Brogan believes it may be.   The current global facebook endowment is pretty big:

  • More than 750 million active users
  • 50% of our active users log on to Facebook in any given day
  • Average user has 130 friends
  • People spend over 700 billion minutes per month on Facebook
  • More than 30 billion pieces of content shared each month.

Add to the users investments, there are businesses as well investing in Facebook – a cottage industry of app developers and a global spin machine of marketing consultants who are focused on FB it’s a really big endowment, but not unlike the investment many of us have in DVD’s.

9X Effect: Mileage and Strategies Will Vary

The main difference between the challenge both Google+ and Netflix have which each of their markets is the adoption of users, while Google is hoping that social provides an opportunity to displace many people and businesses social investment and Netflix just might be hoping that DVD’s are done or near done.

Maybe the price increase is based on Netflix looking at their market and believes streaming has finally achieved enough value that DVD’s are no longer relevant for a majority of the market.  And if you want to be part of the laggard DVD market, you can pay more – makes sense to me.

Strategically, Netflix’s decision may have changed the market with the a $6 price increase.  This decision may actually accelerate the abandonment DVD’s endowment in the market.  When I first got notified on the new pricing,  I looked at the $6 dollars not a price increase, but a continued investment in my existing DVD endowment.  For me, I’ve chosen that now is the time move on from DVD’s, not Netflix because the streaming fees are still worth it from my perspective.

So where is the point in time that some social platform displaces our Facebook investment?  I suspect it is some time off and requires a significant amount of value for all constituents on the platform – users, advertisers, app developers and marketers.

It may well be that Google+ never will never successfully address the 9X effect for displacing Facebook/other social platform, but does it have to be successful?  Does Netflix have to kill the DVD to be successful?

July 19, 2011 by
(10)

What Color is Your Kool-Aid?

After looking around and trying just to figure out the value and metrics for many social marketers last set of projects,  I’ve come to 2 conclusions that everyone’s a social media expert or a life coach and I’m unable to validate if they are any good at what they do.  As an aside, it also appears that neither of which appear to generate significant cash outside of the typical Ketchum global account, which didn’t really work out for 1 particular expert.

Is social media a sustainable niche for marketing consultants?   Is it a hype market?   Is social media a market about a concept, rather than a problem or unmet need? Is it just another channel in the promotional mix?

The central concept around why you might need to have a social media expert on the payroll is plausible:  Things are changing thanks to the internet and you need smart people to help you out who “get it”.

The real change in the marketplace is that anyone can be anything online and anything can happen. The good, the bad and the ugly.  Social Media’s core value thread is effectively chaos management as it relates to online content and interactions for brands/products.  Noble goal, definitely a big problem – almost too big.  Too much room around the edges and way too many corner cases.

Wanted Social Media Expert

So when do you need this social media thing and who can help?  Just about anyone apparently.  There are like hundreds of experts on LinkedIn and Google returns over 45,000 pages on “social media strategist“.  The good news is there are folks out there doing good things for the industry in the industry like the Social Media Club who try to educate and connect folks to learn and do good.

What specifically qualifies you as a social media strategist?  Just what is the social media benchmark?   “Authority”, followers, the number of stickers of cool start ups with lame business models on your financed MacAir and other social media “validation” metrics are interesting components of how folks decision who is important and who is not, but it doesn’t seem to have any direct relationship to a persons ability to build strategies and execute.

Buzzwords and Platforms

Well – if they know about Facebook, Twitter and Friendfeed then they have to be an expert.  The curious thing is how folks people equate social media with tool usage and understanding.  TechWag thinks you should inquire on the following when looking for a social media guru:

Are they using the tools, ask them to show you their blog, their twitter, their LinkedIn , their Facebook, their friend feed, their social median, their digg, and all the other systems they tie into. Ask them in-depth questions about how well this worked for them, what they learned, how that differed from their expectations. If they are not using the tools, or they do not know how they work, or have no personal or at least empirical information about what has been successful and what has not been successful based on their own experience, then it is time to move along now.

To drawn on a personal parallel: I know how to use MSFT Access and use the query builder thingy, but you do NOT want me running your production Oracle instance.

Tool awareness does appear to be an important check box in the “is someone qualified process”, but it shouldn’t be the decision criteria.  Maybe it a better way is to understand if they are in on the trends and have a futurist view on things.  That’s hard too, since there a a bunch of reasonable researchers and writers out there, which are important skills, but may not be deliver results.   Take Matt Rhodes, which demonstrates that sometimes just making assertions and predictions on tools and social media might make you an expert :

But in 2009 I think we will see the total number of people using Twitter, and the number of networks that go with this, increase quite dramatically. I think we will start to see prime time television using Twitter as a means of getting audience feedback or even running competitions; and newspapers taking comment through Twitter into print.

I guess he didn’t know about Hack the Debate, since I sorta think this is already happening – Rick Sanchez, the Denver plane crash, Israel and Gaza and a host of others leverage social content.  The point is – Matt’s statements can easily be seen as authoritative, futuristic and thought leading by the uninitiated, when it may actually just be a series of assertions based on already happening activities.  This guy might even interview well on some podcast somewhere, but might not actually be a guru.

The thing is, if you think you are, then maybe you are.  I think I can, I think I can…  chug, chug, chug.  I’ve always been an attitude is everything kinda person, but these Zen-like qualifications for being a social media expert is super intriguing to me.

Blogs, microblogging, social networks and buzzwords are important too, as you may have notice with them littered throughout this point.  What is the right mix, I mean blogging is out right?   Experts have blogs and use twitter and have conversations online line. No really – see below and pick the expert:

picthexpert

In theory one could assert each is an expert – they know the tools, one was interviewed on web 2.0 and the other apparently knows something about blogging per his tweet.  Your content as your proof points is an interesting social media dynamic. Your posts, your links and your interactions are your qualifications in social media.  So if you Tweet well, you do well.

Remix and Replay

Social media appears to remix news, manufacture thought leaders and generally allow for content generation without validation.  The limited ability to validate isn’t just part of the challenge when looking for “experts”, but it also impacts the overall marketplace.  There is however no doubt social media is a legitimate discipline, the doubt/challenge lies instead how do you qualify to consider yourself a social media expert/guru/strategist.  It could be that once you know the tools, then it’s all about managing the marketing mix and the brand which are skills which are reasonably verifiable, right?

Drink the Kool-Aid

So it appears that social marketer may be plagued with the same soft qualifications as the traditional marketer segment.  So how can you differentiate?  Go to conferences, Tweetups and other social events where other social media folks gather to increase your understanding.  Street cred appears also to be directly associated with the number of air miles logged to attend industry events.   So as you can see once you immerse yourself in the industry, there are clearly some social media metrics to track outside of followers, which could help qualify yourself to be a social media person.  If you don’t have metrics, use someone else’s metrics who is commonly held as an expert.

If we keep participating in social media event, staying on top of the tools and collaborate with other social media leaders, then may be social media will save the planet.    Think about it, social media experts recycle content from other social media-ites, use anecdotal examples from Fortune 500 companies or “a client of mine” statements to bolster expertise.  Vague client references are also a rant at Techwag:

Watch out for people who have generic case studies. I have seen this one far too many times in the last few months. People talking about case studies, but not understanding the dynamics behind them. Dell didn’t just throw together their social networking system, they thought it out, they figured out who was doing what, and took what worked for them. Anyone who says “well Dell does it”, but does not understand how Dell did it probably cannot help you very much in the social networking space.

I have no idea how Dell does it, but that is consistently the quality of use cases which are out there from a bunch of folks.  Social media content production and trends are be propagated by those that stand to make the most from it – content creators and “expert” consultants.  It’s sorta like Amway without structure, metrics and precious gem status goals.

In the end, I wonder if everyone isn’t drinking their own kool-aid in this mad dash for social media expertise.  I wonder how many followers Jim Jones would have on Twitter and fans on Facebook?  If traditional authority metrics continue to be used rather than traditional metrics, then just about anything can happen.

Maybe Carvalho has it right when trying to find a person to help you with social media:

You need to find somebody (who) believes in the product, maybe somebody that’s an evangelist, and really help that person get the job done online,” Carvalho said. “You can’t expect a person (who) knows the tools to also be able to genuinely go into a community and ignite people to start talking.”

Maybe it isn’t about metrics, evangelism, references and case studies, perhaps the tastiness of one’s Kool-aid is all that matters to be an expert.

January 24, 2009 by
(18)