Spiral Marketing: The More You Know, The More You Can Know

February 10, 2010

Google Buzz or Google Fizzle?

Ah, Google – you evil bastard! You slipped in another Facebook / Twitter / (insert social network of your choosing) Killer into our gmail accounts while we slept, blissfully unaware of your latest misguided attempt at social network domination. At least the Wave and the Buzz make me think that, hey, I need a vacation; Google Docs? Not so much. But at the end of the day, as much as you’d like to, you will be hard-pressed to transplant the Facebooks and Twitters of the world. You have more money than most to spend on technology – but technology has little to do with the problem you are trying to solve.

Here’s the thing: Facebook, Twitter, and other social networks are marginally interesting technology, but I venture to guess that I could pay some very clever college students all the pizza and Meisterbrau they can consume, and they’ll come up with a pretty good approximation of the Facebook, Twitter or ______________ technology in a matter of weeks. Facebook technology has as much value as Twitter or Google Buzz technology: next to nothing.

Yeah, I said it. All this social media technology by itself is worth about as much as, well, Google Wave. Because the value of Facebook is that some enormous number of people use it every day, and they use it a lot. Same with Twitter. It isn’t the technology of the network that matters: it is the network itself that counts. Facebook could easily go away – it happened to MySpace, and it could also happen to Twitter. But MySpace wasn’t killed by technology or Rupert Murdoch’s continued misunderstanding of all thing interwebz (although it hastened its decline).  MySpace is dying because people aren’t using it the way they used to.

The value of a network is generally (and very loosely) based on the number of people that use it (Metcalfe’s Law). The value of a network is more precisely based on the number of possible subgroups within the network (Reed’s Law). On this count alone, your chances of transplanting a Facebook or Twitter go from “No way in Hell” to “Geez, if I drink enough, I could see it happening.”  Why?  Because you brilliantly gave away a veritable plethora of free email accounts (I think I have, like, 87 of them). This gives you a network with an enormous number of users – a necessary precondition to taking over the social networking world.

But this isn’t a network problem alone – it is a value problem. And while having a huge network (through registered gmail users) is a necessary factor in your dastardly global dominance scheme, it is not sufficient.  And this is where you will fall short again.  Because email is more ubiquitous than the largest social network – everyone’s got an account – but the economic value of a network is based upon the aggregate value of the interactions on the network. And people don’t value email interactions. If they did, email would be synonymous with “printing money.”  Which I suspect is what you are trying to do, at the end of the day. But I don’t want to interact socially through my email – I would rather not do ANYTHING through my email, just as I never write letters anymore. There is already enough garbage in email to negate any value it ever might have had – and hey, don’t get me wrong, I use email; I just use it when I have no other possible means of communicating what I need to communicate. But until you can tell me what in the hell “fwd:fwd:fwd:re:fwd:fwd:re:fwd:re:puppies” means without me having to open the damn email, I’ll pass.

The two necessary and sufficient preconditions for achieving social media world dominance and the economic and intellectual imprisonment of the world are 1) a very large and active community; that 2) delivers high perceived value  in the interactions of the community (and “noise” does not equal “value”).   With Google Wave you took a fair (although off target) shot at delivering more valuable interactions, but you couldn’t drive the numbers. With Google Buzz, you are using your huge gmail user base to capture numbers, but without improving the quality of the interactions in that network.

The good news? You’ve got the problem surrounded. The bad news? I think the Buzz you’re hearing is really the sound of a fizzle.

August 18, 2009

Four Questions A CEO Must Ask About Social Media

I’ve read several lists of reasons CEOs are not adopting, and in some cases are “afraid” of social media over the last couple of days – 13 reasons, 11 reasons, 28 reasons the CEO is afraid of social media; I think the purpose of these lists are to help inform and create discussions by describing questions and objections they have encountered.  I am going to add my thoughts to that discussion.

I’ll preface my comments, however, with the observation that I don’t believe that CEOs are “afraid” of social media.  I do believe that some might think social media is just a “flash in the pan” (I think these CEOs underestimate the sea change that is occurring – disregarding social media, the effectiveness of virtually all other forms of marketing have been in steady decline for years).  I also believe others see social media for what it is – a potential game-changing “disruptive” model for integrating one’s customers into the business.  If the latter is true, as I believe it is, then there is tremendous organizational complexity in adopting this game-changing model – complexity not just in fitting social media into the marketing mix, but integrating it across customer touchpoints, all the while addressing the uncertainty, ego issues and performance management questions that will inevitably arise.

First Principles

In thinking about the core “first principles” for adopting social media, I believe there are four key questions the CEO is concerned about, and these, as in any highly functioning and complex business, are all interrelated.  These questions aren’t in any particular order – in fact, they relate to each other, and a key goal when discussing social media with a CEO is to first figure out which question is most important to him / her as an entry point into the conversation.

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How does Social Media fit within our company?

One question a CEO must answer is “How does social media and social marketing fit within my company?” If one seeks to implement an overarching social media strategy for a company of any size and complexity, this is no small question: in large companies, this might extend across multiple departments in marketing alone – marketing communications, PR, investor relations, and any number of product marketing groups.  Forgetting about social media, most companies have a difficult time getting their sales and marketing functions to get along, and then, expanding this to all customer-facing functions?  There is tremendous coordination and effort in getting key stakeholders all in the same tent at the same time.

Adding to this complexity is that in the vast majority of companies there is not a single officer dedicated to “owning the customer relationship.” That’s right – the customer, the fundamental source of value in all companies, has no single champion, and instead is usually passed from one functional silo to another.  It is possible to trace the path that led corporations toward managing activities, such as sales, marcomm and support, and away from managing relationships, but the implication is that, while social media and social marketing is and should be about engaging customers, most companies are not yet very well organized to support that conversation.  To embrace the potential of social media to its fullest, a company must rethink its way back to relationship-based management.

How do we control the message?

Another question a CEO is concerned with is “How do we control the message?”  There is an internal aspect to this question – “how do I control internal communications and proprietary information?”; and an external aspect – “how do I manage my brand if I don’t control the message?”  Breaking this down a bit further, the potential for unauthorized disclosures of proprietary and confidential information exists with or without social media.  Social media does not create the motives to share this information, or the carelessness that leads to leaking it.  Whether a company embraces social media as a key component of its strategy, it does at least need to update its HR policies regarding treatment of confidential information to incorporate appropriate uses of social media.

The external component of this question is perhaps the more difficult for CEOs to come to terms with.  After spending considerable time and effort crafting a finely honed, targeted message, on the face of it social media would appear to be a threat to that effort.  Of course, there has always been information from customers that has contradicted the marketing message of a given company, but never before has one voice had the power to amplify and repeat a message to so many than with social media.  But to effectively use social media and marketing is to engage with and embrace the customer’s voice within a company, and by doing so, a company opens itself to the bad with the good.  Although perhaps obvious, a company must remember that negative comments will be put forth, whether the company likes it or not.  It is therefore in the best interests of the company to be engaged in a conversation, rather than letting a monologue propagate without the company’s voice.  And the company must be prepared to respond quickly to any negative or off-point commentary in this environment where damage accrues in minutes and hours, rather than the days and weeks of the past.

How do we measure results?

A third question is “how do we measure results?”  This is a weakness in the social media landscape – being a relatively immature discipline, metrics that have evolved over decades of direct mail marketing, print and broadcast advertising, etc. and many years of online advertising have not yet evolved for social marketing.  There does exist, however, various techniques for linking social media efforts with strategic social marketing goals.

The more interesting point regarding metrics for marketing spend is that, across the board, the effectiveness of traditional marketing techniques is rapidly declining.  It is also true that early adopters of successful strategies benefit disproportionately from those strategies than do “me-too” adopters.  So the conundrum is whether a company stick with easily measurable media with appreciable and consistent long term declines in effectiveness; or it takes an early adopter position, build in the appropriate goals, benchmarks and controls, and trust that the anecdotal evidence of social media success, combined with tangential but highly relevant metrics of word of mouth marketing effectiveness, audience growth, adoption, mindshare, etc. lead to early adopter success?

How do we overcome “Cultural Inertia” in adopting Social Media?

Finally, the CEO has to ask “how do we overcome ‘cultural inertia’ in adopting social media?”  This is perhaps one of the most problematic questions because it is where social media touches employees: one has to understand that companies have ingrained processes, defined roles and responsibilities, established budgets and resources, and performance plans / incentives for existing functions.  By introducing social media into the marketing / sales / support mix – bridging all customer-facing functions – a company must deal with tough questions of where social media fits within the organization, who is responsible for it, how it impacts other functions, and how it will be funded through the budget.  These are important questions that relate directly to established departments’ and executives’ sense of security and of delivering value to the organization. These topics are very sensitive on many levels, and must be addressed carefully to ensure the entire organization adopts and is aligned with the success of social media and marketing, and the new customer intimacy that results.

There are clearly many tactical questions a company must ask and answer in developing and implementing a social media / social marketing presence.  The questions above are, however, “first principle” questions from which I believe all others will derive.  CEOs, and those that seek to promote a social media strategy, must address these questions, and address them carefully; if properly implemented, I believe it inevitable that social media will be a valuable and increasingly important component of a company’s marketing mix and customer support capability.

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