Data Points from LinkedIn's Study of Affluent, Investments and Social Media

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Last year, LinkedIn conducted a study to evaluate the attitudes, social habits and investment activities of the mass affluent ($100K < $1M in investable assets), affluent ($1M < $5M in investable assets) and ultra affluent ($5M+ in investable assets). The study is embedded below, but here are some of the most interesting data points:

• High net worth social media users are significantly less likely to have an advisor compared to non-social media users. Only 35% of high net worth people under 55 years of age who use social media are advised on their investments.
   
• Only 4% of investors indicate that they currently interact with their advisor via social media, while 52% of these investors would interact with their social advisor, if they could.
    
• Just 28% of social media users are likely to delegate all of their  financial research and decision making to an investment professional (vs. 52% for non-social media users).
   
• 28% of all High Net Worth Investors would perceive a  financial company as “innovative,” “a leader in the industry,” or “on the cutting edge” if they offered social media tools.
   
• More than 2/3 of mass affluent and affluent expect FinServ companies to share market and economic trends/commentary on social media.
   
• More than half of mass affluent, ultra affluent and affluent expect FinServ companies to share new product info on social media.
   
• 66% of investors with investable assets over $100K are active on LinkedIn (use at least monthly), consistent with Facebook (68%) and higher than other social platforms (Google+ at 27% active usage and Twitter at 21%).
   
• When affluent social media users were asked, "Which of the following online sources do you think financial institutions should use to advertise?," the top answer was Financial web sites (such as Bloomberg , but the second answer was LinkedIn.

Social Media's Growing Influence Among High Net Worth Investors from LinkedIn Marketing Solutions

Altimeter Urges Preparation for the Sharing Economy

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If you are a regular reader of this blog over the past few years, you have seen news and insights about social business and the growing sharing economy. In fact, the reason I have been blogging a little less in the past month is that I am working on an ebook on the topic. (Watch for it in the next month or two!) Luckily, Altimeter Group just made the job of researching and writing my ebook a little easier. The firm, which has embraced a sharing model itself in how it collects and distributes research, has just published a terrific report on the sharing economy. 

The publication, by Jeremiah Owyang, defines the Collaborative Economy as:

An economic model where ownership and access are shared between corporations, startups, and people. This results in market efficiencies that bear new products, services, and business growth.

The shift in consumer consumption habits will have an increasingly troublesome impact to some long-standing business models. The report lists six categories of business that the sharing economy will affect, including the automotive business.  Altimeter cites some terrific data to make the point, such as that “every carsharing vehicle replaces 9-13 vehicles” resulting in a revenue loss of $270,000 to auto manufacturers.

The report surveys some 200 sharing economy companies with an average funding of $29 million. Almost two-thirds of these companies focus on peer-to-peer sharing (where an individual who owns an asset or has a skill makes this available for rent to other individuals) as opposed to business-driven sharing (where a business makes goods or services available to consumers). The difference is the difference between RelayRides (which allows consumers to rent their vehicles to other consumers) and Zipcar (which owns and disperses a fleet of vehicles for rent).

Owyang shares some excellent thoughts on what this new form of business will mean to companies. For example, he notes, “Companies risk being disintermediated.” Just like iTunes replaced Musicland and Amazon bumped Borders, the sharing economy will make losers out of the firms who fail to invest in the future.

The report also looks at the changes the sharing economy will bring within companies and not just externally. For example, Altimeter foresees a “porous workforce redefining employer and employee roles.”  And it notes that the “difference between employees and customers blurs,” citing the excellent example of GiffGaff, a UK telecom company that  leverages customer support communities to significantly reduce the need for customer support employees.

Altimeter’s report on the The Collaborative Economy is a great read and highly recommended for those who want to know the future. I hope you will also watch for my upcoming ebook, which explores these same trends and what companies can do today to prepare.

The Collaborative Economy from Altimeter Group Network on SlideShare

The Danger of Facebook Ads That Mislead

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I have been on a bit of a tear on this blog as of late on the topic of authenticity and ethics in social media. While this is a vital issue, I had intended to move on--and then I saw a Facebook advertisement that induced me to click. The experience I had with the Bank of America ad has returned me, once again, to the topics of ethics, authenticity and the danger of chasing "fans" rather than furnishing positive brand experiences.

The Facebook ad that caught my attention asked, "How can you support service members and veterans?" The answer: "LIKE Bank of America to find out."

So, I liked the brand. Want to know what happened? Nothing.

Of course, I know how Facebook advertising works, so I did not really expect anything to immediately occur, although I wonder if less experienced Facebook users might expect an instantaneous response that furnishes the promised information. I proceeded to the Bank of America Facebook page to see if I could "find out" how to "support service members and veterans" as promised by the ad.

To give credit where credit is due, the page has terrific content. It is obvious Bank of America is trying hard to produce content that educates and informs rather than merely amuses and entertains. In the past week, the page has furnished information on how to save money, teens active in the community and tips for new graduates. You can also find some military-themed posts, including a shout out for Armed Forces day and a link to a community that is a great resource for veterans.

What I did not find--and what the Bank of America ad promised--was any information on how I can support service members and veterans.

What am I to think about Bank of America because of this experience? Do I think they support the military community? Or do I think they trade on people's desire to help veterans in order to collect "likes" for their page? (Hint: It's the latter.)

Perhaps even more troubling is that fact it took Bank of America less than two hours before they turned my "like" into an advertisement to my friends. I received reports from my Facebook network that a sponsored story was appearing conveying that I "like" the brand.

So, to recap: Bank of America promised to tell me how to support service members and veterans if I liked the brand; they did not live up to that promise; instead, they immediately converted my "like," which was intended as a statement of affinity for service members and not for Bank of America, into an advertisement for the bank.

Sadly, this sort of situation is hardly newsworthy. I am sure you have seen ads like this yourself. "Like" an ad because you support the US flag, and you end up being a friend of Walmart.

The curious thing about this sort of advertising is that it is more likely to damage brand reputation than help it. The potential range of outcomes range from anger to apathy:

• Someone clicks "like" and is upset that a brand exploited his or her desire to help military members or support the US flag.
   
• Someone clicks "like" but does not notice they have actually "liked" the brand. Soon, brand posts are appearing in his or her or news feed, but the user does not know why. The brand posts will not be welcome, which means the consumer is likely to report it as spam, immediately unfollow the brand, or complain about the perceived spam in a post to the brand wall. About the best the brand can hope for is that the consumer will merely ignore the posts, which means before long the brand will have disappeared from that person's news feed; Facebook EdgeRank will have correctly intuited the person has no affinity for the brand and will omit future brand posts from the page.

In both cases, the net outcome is that the brand will have paid for advertising that at best leaves the brand no better off and at worst harms the brand perception with consumers. What is highly unlikely to happen is that someone is induced to like the brand based on false pretense, sees the brand's content, welcomes it, engages with it and creates a relationship that keeps the brand in the user's news feed and moves the consumer through the brand journey toward acquisition or loyalty.

There is a better way. A more ethical way. A more successful way. Instead of deceiving people into thinking they are liking one thing (such as support for service members) when they are really liking another (a bank), brands could simply opt to be honest. There are two ways of being honest--the hard way and the easy way.

• The hard way--the more successful way--is to create real fans by offering a great product or service experience, and then inviting those people to like your brand on Facebook. Those real fans will be more likely to welcome and engage with your content, to advocate on behalf of your brand and to become a strong, brand-loyal customer. You know many brands like this, ranging from Disney to USAA to Apple to Whole Foods.
   
• The easy way is to create an ad like Bank of America's ad and then deliver on the promise. Had the brand lived up to its promise of telling me how I can support service members and veterans, there would have been no adverse brand impression (and no negative blog post about the brand.) Bank of America could have opted to dedicate their company page entirely to content that lived up to the promise of the ad, at least for a short period. Conversely, the brand also could have launched its own military-themed page--"Bank of America supports service members"--and committed to engaging over time on nothing but this topic. Either way, the brand would have delivered on the promise in the ad and furnished a positive brand-building experience. 

The recipe for success with Facebook advertising isn't that tough, at least at a high level: Target the right people; test creative; and be honest in your advertising promises. The latter requires some work to make sure your paid media aligns with the information the brand posts on Facebook. Creating this synergy between paid and earned media is a strategy that works--and one that Bank of America failed to exploit.

Two Reasons Why Content Is Not King

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"Content is king." This is something I hear every week in conversations, at conferences and on blogs, but does the fact it is so often repeated make it true? Content is vital, no question about it, so perhaps it does not matter whether we coronate it as king, queen, prince or duke, but I question if giving the throne to content might not cause marketers to lose focus of more important needs and strategies in the social era.

There are two reasons why I believe content is not king but something less.

Customer Experience Trumps Content

At a conference last week, I heard someone declare that "Content creates relationships." Is this really true? Do you love your spouse because he or she produces great content? Your friends may be funny, insightful or informative, but are they your friends because of what they say or because of who they are?

Brand relationships are no different. Think of the brands you hold most dear--are you brand loyal because they produce great content? Of course, you may love Disney or FOX News, but in those cases content IS their business, but what about other brands you cannot live without? Do you love Google, Amazon, Zappos, Apple, Walgreens, Lowe's, Subway, Ford and Target because these brands produce engaging content?

Content is not king. It is important, but it is not king. The king is customer experience. Give customers what they want when they want it, support them in new and innovative ways, make their lives better, and do this all at a reasonable value, and your brand wins. If you get the customer experience right, consumers will spread the word for you. Think of how you first learned about Amazon, Google, the iPhone, Instagram, Square, Facebook, Twitter and Zappos--was it from brand content or was it from friends and family?

If you look at the brands that top YouGov's BrandIndex list, you will find some that produce good content, but many are not known for their content. What they all share is an obsession with furnishing the customer something different. Sure, you can read Subway's site to get tips on eating better, but what came first for Subway was not content but good, healthier, convenient, fresh fast food. Amazon produces almost no content, but it holds a special place in people's hearts and wallets by providing the most efficient and innovative retail experience around. Lowe's may offer some helpful DIY content, but is beloved for its competent employees, great online experience that enables shoppers to get info about past purchases and schedule reminders, and innovative Iris smart home kits.

The lesson from strong and popular brands is that content is not king. Content cannot save your brand if it offers lousy customer service, a disappointing product and a terrible digital experience. In the social era, great content cannot overcome poor experience--your blog posts, infographics, tweets and Pinterest pins cannot win over customers who see poor ratings, hear friends gripe and observe brands focusing more effort on getting the word out than in changing the actual brand experience.

The Supply and Demand of Attention

One of the things that I think brands lose sight of in the rush to become social media publishers is that the laws of supply and demand apply as much to consumers' attention as to consumers' wallets. Fifteen years ago, brands spoke infrequently through infrequent channels--marketers may have produced a campaign every quarter, sent a direct marketing piece once a month and tried to get their information into traditional media via PR, but brand content was limited and sporadic at best. Today, brands' content machines rival newspapers'--every brand  is attempting to be interesting, educational, funny and endearing through a constant, daily stream of content across dozens of channels.

The supply of content is exploding in the social era, but what about the demand for it? Consumers may be multitasking more, but they still have just two ears, two eyes and so many hours in the day to consume media. Brands are broadcasting more information than ever before, but customers' brains have not changed--there is only so much interest and ability to focus on, ingest, parse, evaluate and remember information (and let's not forget that the new tsunami of brand content is also competing for attention against larger amounts of entertainment and news content on Twitter, YouTube, Hulu, Netflix, Funny or Die, LiveLeak and the like.) 

What happens when the supply of something explodes while the demand stay steady? The price drops. Content distributed via blogs, Facebook, Instagram, Pinterest and Twitter may be free to consumers, but the price is dropping nonetheless--in this case, people pay for content with their attention, recall and trust, and the bottom is falling out in this market:

• Consumers punish brands when content is perceived as advertising: Late last year, MediaBrix released the results of a study that found that advertising appearing as content (so called "native advertising") negatively impacted or had no impact on brand perception. For example, 85% of people who had seen sponsored video ads that appear to be content said the content negatively impacted or had no impact on their perception of the brand being advertised. The 2012 Digital Advertising Attitudes Report found that 20% of US consumers would stop using a company’s products or services entirely as a result of receiving too many advertising messages, while 28% would be less likely to respond positively to that company in the future.
     
• Consumers do not trust content from brands: Forrester finds that consumers have little trust in the things brand say. Just 18% trust emails from brands and 15% trust social network posts from brands. The most trusted brand channel was web sites, where 32% of consumers trust content, but consumers have considerably greater trust for consumer-written online reviews (46%), professionally-written reviews (55%) and recommendations from family and friends (70%). (These results, of course, track closely with Nielsen's findings on trust in corporate messaging.)
   
• Consumers suffering information overload turn attention away from brands:  Do you sign in to Facebook to see what brands are saying or what friends and family have to say? It's no different for your customers, and the result is that brand engagement is meager. According to the Ehrenberg-Bass Institute, just 1.4% of the fans and friends of fans of the top 200 brand pages on Facebook are actually engaging with those pages. A recent Forrester study found that over the previous three months, less than half of people on social networks have interacted with a brand through social media; moreover, just 7% say they've followed a brand on Twitter and 7% say they've posted feedback on a company's social networking profile.

Conclusion

Content is vital. I am not suggesting content is not a worthy marketing investment, but when I read that marketers are investing more in content creation and management than in search engine marketing, web site usability and design, mobile and the commerce experience, I question if the priorities are right and we are allocating budgets where they are most needed. Content strategies are easy to grasp and "in the wheelhouse" for marketers, but we must first ensure our organizations are prepared for the era when customer sentiment trumps advertising, press releases, blog posts and other forms of branded content.

Brands have their own version of Maslow's Hierarchy of Needs, and content does not rest at the top of the pyramid. Getting your product and service right, having the right digital and mobile tools customers need and want, and being responsive to customer needs in all channels are more important than content. The best content in the world may help to gain a little attention, but it will not sustain a brand that does not get the fundamentals right.

Four Recent Studies on the Rapid Adoption of Social Media by Financial Advisors and Investors

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In the Financial Services vertical, you can still find some who think that social media is not that important--that wealthy investors and licensed financial professionals are too busy and too serious to pay attention to (much less create) tweets and posts. The time has come to look at the data and discard groundless and dangerous beliefs about social media. Here are four recent studies that demonstrate social media has a key place in FinServ strategies:

Forrester Finds a Strong Correlation Between Social Communications and Financial Advisor Payments

In his July 2012 report, "Collaborative Advice: Using Digital Touchpoints To Enhance Advisor-Client Relationships," Forrester Vice President Bill Doyle shared data about affluent investors' digital interactions with advisors. The study demonstrated a strong correlation between the number of times these investors interact with financial advisors in social networks and the investors' payments for advisors' services. The correlation between advisor payments and the number of social media interactions (0.461) was almost twice as strong as the correlation with the number of interactions in person (0.234) or by phone (0.246).

It is important to point out that correlation is not causation. Doyle's data does not suggest that social media interactions are twice as powerful as in-person or phone interactions but that frequent interactions between affluent investors and advisors in social media are associated with greater revenue for advisors. While an advisor can interact with just one client at a time on the phone or in person, social media provides a way for advisors to reach and interact with many clients simultaneously. This study demonstrates the power of social media scale and social network relationships to financial professionals.

Accenture Finds Social Media Helps Financial Advisors Retain Clients and Increase Assets Under Management

Last Fall, Accenture surveyed 400 U.S. Financial Advisors and published "Closing the Gap: How Tech-Savvy Advisors Can Regain Investor Trust." The research found that digital and social tools "offer Financial Advisors unprecedented opportunities for more frequent interactions with their clients, helping them forge deeper, stronger relationships."

Among the Financial Advisors surveyed:

• 60% have daily contact with clients through social media
• 77% affirm that social media helps with client retention
• 74% agree that social media helps them increase assets under management 
• 73% say it has led to an overall increase in client interactions
• 40% indicate they have gotten new clients through Facebook
• 25% have developed new clients through LinkedIn
• 21% have earned new clients through Twitter

Brunswick Group Finds Social Media Drives Investment Recommendations and Research

In its 2012 survey of 476 investment professionals (including both buy-side investors and sell-side analysts), Brunswick Group found considerable adoption of social media compared to its earlier 2010 survey. More importantly, the study found that investors are using social media to drive investment recommendations and research.

Among the findings:

• 52% read business information postings on blogs (up from 47% in 2010) and 24% have made an investment decision or recommendation after initially sourcing information from blogs.
    
• 30% read business information postings on micro-blog services (up from 11% in 2010); 12% of investors have made an investment decision or recommendation after sourcing information from micro-blog services (an increase of 200% since 2010).
    
• 24% read business information postings on social networks (up from 17% in 2010), and 9% have made an investment decision or recommendation after initially sourcing info from a social network.
    
• Investment professionals are increasingly posting and not just consuming information in social channels. In 2012, 11% said they post investment information to blogs (more than doubling since 2009), 8% post investment info to microblogs (up 50% since 2010) and 10% post investment information to social networks (doubling since 2010).
    
• Overall, 56% of investment professionals say the role of digital and social media in the investment decision process is increasing compared to 6% who felt it was decreasing.

2012 Brunswick Investor Use of Digital and Social Media Survey from Brunswick Group

Cogent Research Finds Many Wealthy Investors Use Social Media for Finance and Investing 

In a survey of 4,000 US investors with more than $100,000 in investable assets, Cogent Research found that a growing number of affluent investors use social media specifically to help inform their personal finance and investment decisions. Among the findings:

• About 34% of affluent investors specifically use social media such as Facebook, LinkedIn, Twitter and company blogs for personal finance and actual investing
   
• Another 41% said they use social media and sometimes come across investment information even though that wasn't the specific reason they went to those sites
    
• About 36% said social-media research has caused them to reach out to their advisers to ask questions
    
• Seven out of ten wealthy investors who use social media for investment research (which is 24% of all investors) have either have changed their relationship with an investment provider or reallocated actual investments because of something they read on social media
    
• Even for high net worth individuals with more than $1 million in investable assets, 25% seek investment advice from social media.

While many firms are proceeding slowly and cautiously into social media, it seems many of our licensed financial professionals and our wealthy customers are adopting social media with more haste. In fact, the Accenture report notes that so many financial advisors are using social media that many are "likely flouting their firms’ current policies against this type of activity."

Forget keeping up with the competition. Financial Service firms ought to worry more about keeping up with their own sales networks, employees and customers.

Three Steps to Improve Ethics in Social Media Marketing

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In my last blog post, "The Rapidly Diminishing Authenticity of Social Media Marketing," I explored how social media professionals have turned to tactics that undermine some of the core tenets promised by social media. We set larger fan counts as a goal above authentic advocacy, and when meaningful engagement became difficult to achieve, we settled for anything that would earn a like, reply or retweet rather than striving for content that fostered relationships and created value.

I will not rehash how I think these poor priorities and tactics undermined brand success in social media. (You can read my last blog post for that.) Instead, I want to explore a more sensitive question: Have social media marketers acted ethically or not?

For example, if we accept that a basic principle of social media is that "likes" represented something important--authentic brand affinity that others would see and rely upon--then what are we to think of those marketers and brands that took shortcuts to accumulate new fans who had no established relationship with the brand? Was it ethical to launch sweepstakes, contests and giveaways that motivated "likes" from people who otherwise were not inclined to express affinity for our brands?

And if we further agree that engagement such as replies, retweets and shares ought to be authentic signals of interest in what brands have to say, then are we acting ethically when we solicit engagement merely to elevate our brands' EdgeRank? Is asking Facebook users to "like" a post if they are on "team peanut butter" an ethical way to collect signals of affinity between consumer and brand, or is this a dishonest way to get our content into more users' news feeds?

Social Media Ethics on Display (or Not) During Week of Boston Marathon Tragedy

Instead of considering this in the abstract, let's examine two brands' actions last week, during the frightening events in Boston. NBC Bay Area posted a photo of a young bombing victim and implored people to "'Like' this to wish him a continued speedy recovery."  This desperate attempt to trade on people's feelings for a young victim of the bombing in order to receive a bit of EdgeRank-building engagement is horrifyingly unethical, in my book. (And if you do not agree, then please tell me how "liking" an NBC post lends support to or otherwise helps this poor hospitalized child.)

Ford, a brand I praised for authenticity in my last blog post, waded into dubious water with a Facebook status update following the capture of the second bombing suspect. The brand said, "To the first responders of Boston: Thank you. You are true American heroes." Nothing wrong with that--in fact, I love that a brand like Ford feels it can express sincere appreciation for the sacrifices of those who serve. The problem was that Ford didn't post that as text but included it within a beauty shot of their products, complete with the Ford logo and tagline.

Not everyone will agree, but I feel that Ford's use of brand imagery not only reduced the sincerity of the message but demonstrated questionable ethics. Before you disagree, I would ask you to view the two status updates below--one Ford could have posted and the other it actually did--and consider three questions:

1. Which is a more authentic expression of appreciation to people who sacrificed their safety to protect us?
2. What does the product and brand imagery of the post on the right add (if anything) to the sincerity of the gratitude compared to the simple text version?
3. Which version more clearly puts the focus on the heroes in Boston? 

The version on the left imagines what Ford could have posted as text while the one on the right is what Ford actually posted following the capture of the second bombing suspect in Watertown, MA. 

Issues of ethics are difficult to discuss. They often are not clear cut, and while it is easy to see when a company crosses the line with both feet (as did NBC Bay Area), it can tough to discern as brands toe the gray line (as did Ford, in my opinion).

It is even tougher to see when you yourself cross ethical lines. If your boss wants to know why your brand has half a million customers but only 25,000 fans on Facebook, a sweepstakes to accumulate fans may not seem unethical. Your perspective may change, however, if you put yourself on the other side of this equation; if you do not want to see your friends becoming shills for brands in return for freebies and giveaways, then your brand should not follow this path. It is unethical to treat your own customers in a way you would not appreciate from the brands you buy or the people you know. (Fifty years ago, David Ogilvy, the father of modern advertising, expressed the same sentiment when he said, "Never write an advertisement which you wouldn’t want your family to read. You wouldn’t tell lies to your own wife. Don’t tell them to mine.")

We are roughly five years into the social media era, and I think perhaps it is time to reset our moral compasses, not to save our souls but to improve business results. Study after study demonstrate that consumers want something more from brands than silly images and memes; they want ethical behaviors and communications. The 2012 Edelman Trust Barometer Study found that customers increasingly expect brands to "place customers ahead of profits and have ethical business practices," and Interbrand's 2012 brand study noted that "Consumers... want to feel that the brands they love are, in fact, worthy of that love."

I'd like to believe this is always the case in every business situation, but when it comes to social media marketing, the ethical path also happens to be the best one for enhancing brands and business results. How can we improve both the ethics of social media marketing and our brands? Here are three steps:

STEP ONE: Understand Long-Standing Marketing Ethics, Advertising Rules and Regulation

"Those that fail to learn from history, are doomed to repeat it". 
- Winston Churchill

I am frequently disappointed to find social media professionals who do not understand the basics of ethics and regulation in the advertising industry. Marketing has a long and well established history of recognizing and enforcing ethical practices, and government regulation of advertising is over one hundred years old. The issues we struggle with today in social media marketing are not new, nor are the core beliefs of ethical marketing. The latter can inform the former for those who care to learn history.

In 1911, the Associated Advertising Clubs issued the Ten Commandments of ethical advertising, and the first Commandment was unequivocal: "Thou shalt have no other gods in advertising but truth." (The italics are theirs, not mine.) Shortly thereafter, the Postal Act of 1912 required that advertising content be differentiated from editorial content. Together, these two actions established one of the most basic tenets of advertising ethics: That consumers must know when they are seeing advertising and not mistake it for editorial content. This is as true in the pages of newspapers as in the tweets and posts of your customers.

Although the core principles of ethical advertising have not changed in one hundred years, the regulatory language has evolved with technology. In 2009, the Federal Trade Commission (FTC) issued "Guides Concerning the Use of Endorsements and Testimonials in Advertising." This document established that "When there exists a connection between the endorser and the seller of the advertised product that might materially affect the weight or credibility of the endorsement, such connection must be fully disclosed." In other words, if it would impact a person's perception of a friend's post about a brand to know that the individual was posting in exchange for a contest entry or a giveaway, that creates a material connection that must be disclosed.

Just last month, the FTC updated disclosure guidelines, providing quite detailed guidance. For example, the FTC notes that "#spon" is not a sufficient disclosure of a sponsored tweet since, "Consumers might not understand that '#spon' means that the message was sponsored by an advertiser." And to those who might protest that Twitter's 140-character limit does not provide sufficient room for a clear and conspicuous disclosure, the FTC says, "Tough luck." (Really, what the agency says is, "If a particular platform does not provide an opportunity to make clear and conspicuous disclosures, then that platform should not be used to disseminate advertisements that require disclosures.")

An understanding of the history of advertising ethics and FTC regulations is only the start. The National Labor Relations Board (NLRB) has issued several decisions pertaining to social media that brands' must consider for their social media guidelines, monitoring policies and employment practices. The Federal Communications Commission (FCC) has oversight into how and when social media may be used to share information pertinent to investors. Different states have enacted laws with varied requirements for consumer and employee privacy in social media. And then there are the terms and conditions of the social networks themselves, which define what is and is not permissible. (It is shocking how often pages violate Facebook's Promotions rules as defined in the Facebook Pages Terms.)

In the relatively brief period since social media's birth, brands have been tripped up by a variety of unethical and unlawful behavior including meddling with competitors Wikipedia entries, fake community groups, fake endorsements, fake blogs, fake accounts, and other questionable activities. It is vital social media professionals know the laws, rules and ethical standards that have stood the test of time, and it is necessary for marketing leaders to ensure their social media teams are adequately trained and supervised.

STEP TWO: Improve Social Media Metrics

“Not everything that counts can be counted, and not everything that can be counted counts”
- Albert Einstein

Bad metrics lead to bad strategies. More than that, bad metrics can lead to unethical behaviors.

The Great Recession of 2009 was caused by many factors, but President Obama laid blame on the way executives were measured and compensated. He noted in a June 2009 speech that a "culture of irresponsibility" was an important cause of the crisis, and he criticized executive compensation that "rewarded recklessness rather than responsibility."

In some ways, many social media professionals are today being rewarded for recklessness rather than responsibility. Fans and engagement are not business metrics, but these are common line items on many social media scorecards and are used by social media agencies and vendors to validate performance. Any brand can count new fans, but how many are measuring the value delivered to the brand via social media? Instead of turning to the metrics that are easiest to collect, social media marketers must determine the metrics that best validate that their social media investments deliver upon the objectives (and if one of your goals is merely to collect fans, then the problem is not the metric but the goal).

This is the point in the blog post when I am supposed to furnish an easy answer for how to measure social media success; unfortunately, I cannot. The ways to measure success are as diverse as brands, audiences and corporate objectives. If you want to better educate your customers on your products, measure that. If you need to raise awareness, measure that. If increasing inbound traffic to your site is desired, measure it. If your brand is challenged to improve a particular perception attribute, then that is what you should measure. Start with your corporate goals and challenges; pick the metrics that align to those; determine the social media strategies that best deliver on those metrics; and execute!

As our investments in social media increase, so must the science and insightfulness of our metrics. Too many brands are merely counting things--fans, retweets, comments and likes--while ignoring the deeper and more meaningful measures of brand awareness, recall, consideration, association, preference and advocacy.  Smart social media professionals do not settle for ineffective metrics but work to educate peers and leaders on the social media metrics that matter for their brands.

STEP THREE: Be Honest

"Of all feats of skill, the most difficult is that of being honest."
- Comtesse Diane

Honesty sounds easy, but complete honesty can be surprisingly tricky. Honesty is not merely the absence of falsehoods; telling no lies in your social networks is only the starting point. Thorough honesty requires something more--more self-reflection, more care and more vigilance. It requires integrity and sometimes even courage.

Honesty requires a tenacious commitment to complete transparency. If you encourage people to tweet a photo of your product in return for a chance to win a prize, complete transparency demands those tweets be accompanied with a disclosure. It is one thing for consumers to choose to tweet their brand love with no expectation of reward (even if the brand solicits those recommendations), but if your brand creates the conditions where someone is motivated to promote your brand in order to win something, you must ensure transparency. It is deceptive to look the other way and allow consumers to be exposed to sponsored advertising communications without disclosure.

Honesty necessitates assertive vigilance to ensure that your employees, vendors and agencies are doing the right thing. It is not sufficient to assume your employees and partners know how to act with integrity, nor is satisfactory to set expectations and assume adherence. Honesty requires a commitment to education and engagement around ethics, and it demands that your brand supervises and monitors activities to ensure policies and regulations are followed.

Honesty demands sincerity in the intent of your communications. In paid media, brands communicate to persuade and sell, but in social media consumers expect something different from brands--it is a medium where consumers can choose to follow, comment and share, or they can choose to unfollow, block and ignore. Engagement should be earned with content that actually engages, not with tricks. For example, if you care to take a poll on Facebook, use Facebook's "Ask question" tool to do so; do not mislead your customers with fake surveys that request they "like" if they believe one thing or "share" if they believe another. Your intent with this sort of deceptive status update is not to engage consumers or learn from their answers but to manipulate Facebook's EdgeRank system. Honest relationships cannot be built with dishonest communications.

Honesty requires that you enter conversations to authentically join the conversation, not to co-opt the conversation. A new trend in social media is so-called "real-time marketing" (or RTM), where brands attempt to engage in the conversations consumers are having about sports, entertainment or world events as they occur. While it is possible for brands to post just the right thing at just the right time in a way that consumers will welcome, much of the recent RTM has been brazenly self interested and thus unsuccessful. The problem is that brands have dishonestly attempted to inject advertising messaging into consumer conversations rather than trying to authentically express themselves or add value to those conversations. If your brand can bring value to the conversation, do so honestly, but if you just want to interrupt consumers' conversations with brand advertising, then stay silent honestly (or honestly pay for media).

Honesty demands that you walk the talk. Consumers are so jaded about the way brands try to obfuscate their actions behind dishonest communications that an entire new lexicon has developed, including terms like greenwashing, astroturfing, sugging and flogs. Social media allows brands to chart a different course, not simply talking about how much they care but highlighting their care through real actions. At a time when some brands will hold their charitable donations hostage in return for likes, shares and replies, New Balance donated $1 million to the One Boston fund and did so without asking for a single "like." The actions of the Chicago Tribune went viral this week after the news organization sent pizzas to the Boston Globe newsroom along with a note that said news colleagues "across the country stand in awe of your tenacious coverage. You made us all proud to be journalists." The honest actions of New Balance and The Trib speak louder than any words could, and they are resonating honestly throughout social media. (How does Ford's branded expression of gratitude fare in comparison?)

Social media may feel quite mature, given that virtually every brand and the vast majority of people in the US have adopted social behaviors, but the medium is still very young. Social media professionals may understand today's best practices, but these continue to evolve as brands gain experience, laws and regulations change and the medium matures. In periods of rapid evolution, it can be difficult to discern the ethical from the unethical, but it starts with you. Ethical social media starts with ethical social media professionals--ones who consider the impact of their strategies, constantly challenge their own beliefs and are willing to stand up for what is right and not merely what is easy.

The idea that ethics comes from within rather than externally is not new. For support, I turn to a philosopher who died 2400 years ago and an animated insect. Aristotle believed self-knowledge was the key to individual ethics, and he wrote, “Knowing yourself is the beginning of all wisdom.” Jiminy Cricket, Pinocchio's sidekick, echoed Aristotle's advice, reinforcing that ethics starts from self-knowledge: "Always let your conscience be your guide."

Before you click "submit" to your next social media post, do not simply ask if it will achieve its goal, fits best practices and suits the brand. Ask yourself if it is honest, transparent and ethical. That is a much higher standard, but higher standards are what consumers want and what brands increasingly wish to deliver, aren't they?