Monday, December 31, 2012

Where Social Media Will Grow in 2013 (and Where It Won't)

Social Media has had a terrific ride for the past several years, but the days of easy growth are gone. In fact, the days of easy anything in social are behind us. For many brands, 2013 will be a year of social media disappointment.

With so many consumers spending so much time in social media and expecting so much of brands, our investments in social will continue to grow, but that does not mean our results will grow, at least in easily measurable ways. Certainly, all of our brands will earn more fans, see more comments and collect more retweets, but we all know this is no longer enough--our bosses want to know the business results we are delivering, and fans simply are not a business benchmark.

Success in 2013, more than ever, will be measured in difficult metrics and not easy ones, and increasingly, it will come not just from the Marketing department but from every corner of the enterprise. To succeed in 2013 and beyond, organizations must recognize how social media is altering the way we live, work and conduct business and not just the way we kill time on Facebook.

Here is where (I believe) social will grow and where it will stumble and stagnate in 2013:

Do you think my forecasts for 2013 are correct or all washed up? I would welcome your dialog--both criticism and agreement--in the comments below or on Twitter (where my handle is @augieray.)

Thursday, December 27, 2012

Miracle on Social Media Street

It may be the week after Christmas, but it is not too late for social media professionals to prepare themselves for 2013 by watching the old, classic, holiday film, "Miracle on 34th Street" (the 1947 original, not the inferior 1994 version.) Not only is it a terrific and heartwarming movie, but it also contains lessons about what we are doing wrong in social media and how we can enhance our brands in 2013.

Early in the movie, a Macy's executive instructs his department store Santa (who may or may not be the real Santa Claus) to push the toys that Macy's has in stock. However, when a child hops on his lap and asks for a toy Macy's does not carry, the Santa tells the child's mother she can get the item for a good price at a Macy's competitor. She is surprised to hear this at Macy's, to which Santa replies, "The only important thing is to make the children happy." The mother seeks out Santa's manager (who is about to fire his well-intended employee) and says,
"I want to congratulate you and Macy's on this wonderful new stunt you're pulling. Imagine, sending people to other stores... Imagine a big outfit like Macy's putting the spirit of Christmas ahead of the commercial. It's wonderful. I never done much shopping here before but from now on, I'm going to be a regular Macy customer."

And there is your social media lesson from the 65-year-old movie: Dedicate your brand to doing what is right for the world and your customers notice, trust more and become loyal.

"From now on, I'm going to be regular Macy customer,"
the astonished mom tells the equally astonished Macy's exec.
What is vital in this example is not that the department story Santa conveyed content but that he conveyed an honest intent to help the customer. We put too much stock in content nowadays; content strategy is vital in 2013, but too often, our brand content conveys our real selfish intent instead of authentically benefiting others. Consumers are beginning to notice the selfishness of our content, and they are not rewarding it: A recent study by MediaBrix found that 86% of consumers find sponsored video ads that appear as content to be misleading; moreover, 85% indicate that when they come across sponsored video ads that appear to be content, it negatively impacts or has no impact on their perception of the brand being advertised. Many people say "Content is king," but history is littered with kings who were awful and unsuccessful (just like most of our branded content)!

When the Santa in "Miracle on 34th Street" told a Macy's customer to go elsewhere to find the toy her child wanted, his goal was not to create "engagement" and build his "brand." He just wanted a child to have a Merry Christmas, and the customer noticed. Actually, in the film many customers notice, and soon Mr. Macy's himself is fending off his annoyed Advertising Department (the paid media folks responding angrily to the selfless acts in earned media), saying,
"I admit this plan sounds idiotic and impossible. Imagine Macy's Santa Claus sending customers to Gimbels, but gentlemen, you cannot argue with success. Look at this. Telegrams, messages, telephone calls. The governor's wife, the mayor's wife, thankful parents expressing undying gratitude to Macy's. Never in my entire career have I seen such a tremendous and immediate response to a merchandising policy. And I'm positive if we expand our policy we'll expand our results as well.  Therefore, from now on, not only will our Santa Claus continue in this manner, but I want every salesperson in this store to do precisely the same thing. If we haven't got exactly what the customer wants, we'll send him where he can get it. No high pressuring and forcing a customer to take something he doesn't really want. We'll be known as the helpful store, the friendly store, the store with a heart, the store that places public service ahead of profits."
And therein lays the business wisdom of "Miracle on 34th Street." Do good, make a difference, give selflessly and people will reward you. In other words, have a positive intent and customers notice. This is not just some silly little contrivance from a fictional, old film; there is science to it, as well:

  • Havas Media Labs Meaningful Brand Survey found that more than half (51%) of consumers want to reward responsible companies by shopping there; 53% would pay a 10% premium for products from a responsible company. And they want companies involved: 85% of consumers want companies to be engaged on global issues, but only 22% think they’re getting enough.
  • The Forbes Top 100 Brand study found that the top corporate brands "are organizations increasingly known for their charitable giving, sustainability efforts, environmental cleanups, transparent business practices, clearly labeled packaging, respected leaders, ground-breaking innovation. These are benefits that go far beyond the crispness of corn flakes or the cleaning power of laundry detergent."
  • Interbrand's 2012 brand study found that "Consumers are expecting to see not just great products and services from the brands they choose; they also want to feel that the brands they love are, in fact, worthy of that love." Interbrand points to the importance of corporate citizenship, but it tells it clients, "It’s about more than the spend. It’s about the credibility of a company’s culture of citizenship."
  • A 2011 Weber Shandwick study found that 70% of consumers avoid buying a product if they don’t like the company behind the product. And 56% say they "try to buy products made by a company that does good things for the environment or community."
  • The 2012 Edelman Trust Barometer Study found that the attributes that build future trust are "societally focused," including "listening to customer needs, treating employees well, placing customers ahead of profits and having ethical business practices." The report's first recommendation is that organizations "exercise principles-based leadership instead of rules-based strategy." 
As you plan your social media and content strategies for 2013, think of "Miracle on 34th Street." Are you creating content that truly helps customers and builds trust, or are you creating content to drive traffic but that harms trust? Are you starting your 2013 content calendar by looking at your brand's product release and ad campaign schedule, or are you starting it with an assessment of what will be on customers' minds throughout the year? Are you trying to create relationships and advocates, or are you trying to create sales and customers? In summary, are you being the customer-focused Santa or are you the brand-focused Advertising Department?  

Surely, you don't doubt Santa, do you?


Thursday, December 13, 2012

How Often Should Your Brand Post? Don't Misinterpret the Data

Ask the wrong question and you will get the wrong answer. That is the problem with so many of the studies we see in the digital and social space, particularly those done by vendors with a stake in the outcome.

A classic example of this was the announcement earlier this year that 70% of consumers "said mobile advertising is a welcomed personal invitation from brands, rather than an invasion." Of course, whether people think mobile advertising is a "personal invitation" or a "personal invasion" isn't the pertinent question; the appropriate question is whether people trust mobile ads and whether those ads convert mobile surfers into mobile shoppers and buyers. On those more vital questions, other studies tell a different story--Millward Brown recently found that consumer favorability toward mobile ads was so poor that it ranks with non-opt-in email, and Nielsen found that trust in mobile ads was lower than every other ad medium. Ask the wrong question and you will get the wrong answer.

Source: eMarketer
I had this same reaction today to reading eMarketer's review of SocialVibe's research into brand social media connections. The study found that the number one reason people unfollow a brand is "Too many updates." The second reason is "Brand's values and/or content differed from original perception." 

I would suggest that these two answers are one in the same. If people received what they expected to receive from the brands they follow, it would be difficult for the number of brands' posts to rise to the level of "too much." Follow Mashable on Facebook, for example, and you will get a couple dozen posts a day, but Mashable has a million fans and almost 50,000 people "talking about this," so clearly they are getting something right even though they break every "rule of thumb" for frequency of posts. They offer valuable content people welcome, and so long as they do that, it is hard for Mashable to fall on the wrong side of the "too much" perception barrier. And this isn't just the case for media brands, either--how often could Disney or Harley-Davidson post before people would cry "too much"?

Ask the wrong question and you will get the wrong answer. If you ask people whether they unfollow brands for posting too much, they will answer in the affirmative. But the psychology behind the decision to unfollow is not really about quantity of posts but their value. If consumers saw more value, they would welcome more posts.

This isn't to suggest your brand has carte blanche to post as often as it wishes but to advise you ignore studies that ask the wrong question and instead focus on the needs and expectations of your own audience. If you bring laser focus to how your brand can truly and selflessly serve those needs and expectations, you can pretty much ignore all those studies and "best practices."

No study can tell you how often your audience will accept your brand posting in social media, but your audience can. And that is the right question to ask!

Thursday, December 6, 2012

The False Promise of Pinterest for Financial Services

A year or so ago, as Pinterest started to garner media attention and a mass audience, a host of agencies and consultants that focus on the financial services industry launched a wave of blog posts and presentation decks to champion the power of this new image-sharing platform for banks, insurance firms, credit card companies and credit unions. A year or so later, those optimistic predictions have been largely unrealized. While Pinterest is proving successful for retailhome goodsmedia, style and other categories, it is not proving to be the "next big thing" for financial services.

Clearly, Pinterest has had a great 2012--Nielsen tells us that traffic to Pinterest has increased over 1,000% this year--but traffic and demographics alone do not make a social network useful for business. Marketers must consider consumer behaviors and expectations on the platform. The failure to do so undermined many of the concepts bloggers were so eager to promote to financial services brands. For example, many suggested a bank could start a "wish list" board for photos of items people can save for, and another common idea was to start Pinterest boards that match customers' interests, such as golf or travel. The uselessness of these ideas is obvious to anyone who has spent a few minutes on Pinterest--people share photos of the things they cannot afford and the places they want to travel without any assistance from their financial services providers. Consumers simply do not need their bank or insurance company to help them do on Pinterest what Pinterest exists for in the first place!

Financial services firms have done an outstanding effort of testing the new platform but seen very little by way of evident results. This is not a criticism of Pinterest--no single social network or tool needs to (or should) fit every brand and industry--but perhaps this is a criticism of a marketing machine that pushes every new thing, regardless of the sense or strategy. Now that we can look at 2012 in the rear view mirror, it is easy to see there are few, if any, case studies that demonstrate Pinterest is a match for the goals of financial services brands.

If you know of great case studies I have missed, please share, but my recent survey of bank, credit card and insurance brands on Pinterest came up very dry:

Citi Jobs for Recruiting:  Recruiting is considered a potential use case for Pinterest, but it is not evident how photos and videos of people in conference rooms and cubicles really help. Citi had eight boards dedicated to their efforts in the community and careers, but it had only 32 followers and, interestingly, from the time I researched this blog post to the time I published it, the Citi Jobs Pinterest board has disappeared. Did Citi find the board was more costly to maintain and monitor than it was worth for the results?

American on Pinterest
American Express for Brand:  AmEx is a true social media leader in the financial services industry. It has blazed trails on Facebook, where the brand has earned 2.7 million likes and has more than 100,000 monthly active users of its Amex Sync Facebook app. If I had to guess the financial services brand that would make Pinterest work, it would be AmEx, but it has a mere 313 followers and a single like. Even terrific visual content such as this infographic on the importance of small business to our economy has earned just three repins and one like. The same image posted to the American Express OPEN Facebook page garnered 75 likes and 22 shares. In a sign of just how bad Pinterest engagement is for this interesting content, American Express had more success posting the infographic to Google+, where this same image earned one share and eight +1s.

PerkStreet Financial for Driving Traffic:  PerkStreet has been experimenting with various Pinterest strategies and has shared its middling results in an interesting deck posted to SlideShare. The brand attempted contests and found them difficult to run, although they did generate interest on Pinterest. (Whether interest in Pinterest pins equates into business is another question altogether, of course.) The company also attempted collaboration boards--encouraging people to post "stuff I didn't buy"--and found it was difficult to get participation. In the end, it seems the most successful thing PerkStreet did with Pinterest was to post more images to its blog and allow easy pinning to Pinterest boards; Pinterest became the fifth highest driver of traffic to its site. Despite these efforts, their board only has 304 followers.

USAA for BrandAt my former employer, we began experimenting with Pinterest in the past year. Given the community served by the organization, the goal on Pinterest was to share evocative images that conveyed the spirit and commitment of the military. Despite posting excellent shots into boards such as the U.S. Coast Guard Birthday and U.S. Army Birthday, the account only has 407 followers. Few of USAA's 155 pins have been repinned more than a handful of times, and almost none has earned more than a couple of likes. Compare this to one recent photo that USAA posted to its Facebook page of a child greeting his mother returning from deployment --12,702 likes, 2,318 shares and 178 comments. I am pleased to see USAA continue to experiment, but it is evident the association gets far more bang for its buck on Facebook than on Pinterest.

Capital One for Promotion: Cap One offers a Pinterest Board focused on its Venture rewards program. It has almost twice as many pins as it has followers--406 pins, 217 followers and 38 likes. Just five percent of these pins have had any repins. It is not possible to tell if these images are proving successful at driving traffic to the Cap One site or interest in Cap One services, but there is no reason to think this is providing any benefits of significant scale.

At best, Pinterest seems an adjunct to the other visual marketing programs that financial services brands are already running rather than the hub of these sorts of programs. Given the modest results to date, the best thing brands in financial services can do is to be sure to implement sharing mechanisms on their sites so that consumers who care to share on Pinterest can easily do so.

Of course, one of the biggest challenges to financial services firms on Pinterest is not the lack of results but the need to manage Pinterest programs in a compliant fashion. Whereas platforms such as Twitter and Facebook are more mature and have APIs that permit the management and archiving through Social Media Management Systems (SMMS) such as Socialware, Sprinklr and Buddy Media, Pinterest still lacks such an API. That creates challenges for financial services firms who are required to archive, monitor and moderate based on the regulations from FINRA, SEC and others.

Pinterest may eventually come of age in the financial services space, but it is difficult for me to see how its core purpose and interactivity will benefit financial services brands in any way with significant scope.  I'd welcome your input if you disagree or can offer good examples of financial services brands succeeding on Pinterest.

Monday, November 26, 2012

How Powerful Is Social Media Sentiment Really?

In the church of social media, there is no concept more sacrosanct than that of public consumer sentiment. In the social era, the gold of the realm is no longer the number of impressions made by your ads but the number of impressions created peer to peer. With brand praise and gripes broadcast to hundreds of friends and followers, public opinion has never been more public, so brands must bow before alter of social media sentiment.

That is the party line among social media professionals, but does it stand up to scrutiny? While it may seem heretical to say, I believe there is ample evidence social media sentiment does not matter equally in every industry to every company in every situation. By focusing attention and altering corporate behaviors where it matters, we might better change sentiment in ways that protect and enhance the bottom line.

Before you sharpen your knives, let's define what social media sentiment is and is not. In our highly networked world, we are exposed to more people saying more about brands than ever in the past, but do all those exposures influence purchase decisions as much as we seem to believe? Clearly individual sentiment matters--what you think about a brand affects your own decisions--but how much do the opinions of crowds impact your buying behaviors?

Look at Hostess Brands. The news of the impending death of  Twinkies, Ding Dongs and Ho Hos has been greeted with the sort of wailing and rending of garments usually reserved for the passing of a beloved public figure. But if we all love Hostess so much, how did it come to such an ignoble end? The positive sentiment the public has for Hostess is based on golden-hued memories of childhood, but in an age of "buy local," organic, health consciousness, these positive feelings drove insufficient sales in the harsh, fluorescent reality of the grocery store aisle. (Of course, while the public sentiment for Twinkies, Ding Dongs and Ho Hos will not save Hostess, it may drive the acquisition of the iconic brands.)

In 2010, Harris Interactive released a list of most and least respected companies. Given how networked we were in the intervening two years, it stands to reason that all the buzz shared about the most respected companies would be lifting those stocks while the anger and frustration directed at the least respected firms would be evident in depressed share prices. Of the ten most respected companies, seven are, in fact, on the list of the United States' 50 most profitable corporations, but so are five of the least respected. Moreover, in the last twelve months, the seven publicly traded companies on the 2010 "least respected" list have outperformed the DJIA by more than 200%. The fact so many people dislike these companies and share those feelings online does not seem to dent the financial success of these firms.

Scan the list of the most hated companies in America according to the American Customer Satisfaction Index and you will see that certain industry segments seem immune to the power of consumer sentiment.  Corporations in cable and internet service, banking, power and airlines, many of which are among the most profitable companies in the U.S., dominate that list. How can these industries be continuing to thrive in the social era despite the negative public sentiment? They share some commonalities that help to inoculate them from the dangers of negative sentiment--they are capital intensive, highly regulated industries with limited competition and have both great barriers to entry for new competitors and high switching costs for consumers.

Other factors may also be at play. For example, banks often make the lion share of their money off a small minority of their customers. Bank of America suffered what should have been a damaging blow to its business results due to the wave of negative sentiment associated with Bank Transfer Day, but BoA seemed to emerge not just unscathed but stronger for it. At least part of the reason the bank did so well is that the lowest-profit, highest-cost customers likely were the ones who abandoned BoA for credit unions. In other words, not all sentiment is equal in a vertical where customer contribution to the bottom line is wildly unequal.

Even within some industries, it can be impossible to see the impact of sentiment on business results. Look at the retail vertical, where the ACSI tells us Nordstrom, J.C. Penney and Kohl's enjoy customer satisfaction rates well above average while Walmart not only anchors the bottom of the list by a substantial margin but actually saw a decrease in satisfaction in the prior twelve months. Now look at the stock performance of these retailers in the past year--J.C. Penney is the worst performing stock of the bunch,  Kohl's is one of the few with a stock price down in the past year and Nordstrom's stock performance is in the middle of the pack. Despised Walmart? Its stock is up more in the past year than the three retailers with the strongest customer satisfaction ratings. Many hate shopping at Walmart, but apparently low prices trump sentiment, reputation and customer satisfaction.

Obviously, a year or two of stock performance and social media sentiment data is not a lengthy enough period to evaluate the interrelationship. Strong negative sentiment is not an explosion that tears apart the financial foundation of a company but is more like a river that wears it away over long periods. Nevertheless, some of the most hated companies have been hated for many years and remain solidly in the black--the consistent revenue and profitability of AT&T, Comcast, Walmart and others seem to mock our current obsession with public sentiment.

It is easy to understand why the adoption of social media caused us to worry more about the public sentiment around our brands, but step back and ask yourself what has really changed. People's perceptions of companies such as McDonald's, Walmart or Comcast did not change simply because Facebook was adopted by a billion people on the planet, nor were the attitudes of these brands shrouded in secrecy until Twitter ripped the blinders from our eyes. Did anyone really get on Twitter, see what people are saying and think, "Holy cow--I had no idea people find shopping at Walmart a bit unpleasant, that cable companies offer poor customer service or that McDonald's serves food of dubious health value"?

Let's move this out of the realm of the theoretical and into the real and personal:
Another way to explore this is to look at the companies who earned headlines in the early days of social media for leading the charge to listen and respond to social media sentiment. If public sentiment is as vital as we have been led to believe, it stands to reason the leaders in listening and managing consumer sentiment must be soaring, but instead many are struggling:
  • In December 2010, Dell created waves with a social media command center that would make NORAD blush--and since then the stock is down 33% and the company is now facing layoffs.
  • The first brand I recall launching its own command center to listen and respond to social media sentiment was Gatorade, but while the brand's marketing lifted sales for a while, it has continued to lose market share to Powerade.
  • Remember Twelpforce, Best Buy's all-hands-on-deck push to respond to public comments and questions on Twitter? It launched in mid 2009 to much praise and is still going strong on Twitter, yet since Twelpforce was deployed, Best Buy's stock is down two-thirds while the DJIA has climbed nearly 50%.

Social media sentiment has been elevated to God-like status when really it is more of a minor deity. In most situations, what others are saying does not trump our own personal experiences. Nor does it trump our laziness and the costs of switching (or even our own well-worn habits) in the vast majority of cases. In addition, while public sentiment may be a factor in our purchase decisions, we weigh it against many other important factors such as price, convenience, perception of quality, etc.

Let's face it, we all expect brands to disappoint us some of the time, so individual complaints we see on Twitter or Facebook become part of the fog of social media sentiment--none of us have the brain cells to receive, store, recall and evaluate every gripe we see on social media. Hell, I can barely recall my own gripes! I know I have tweeted complaints about airlines, but I couldn't tell you if I have shared more criticism about United, US Airways or Delta. Like most consumers, I continue to fly the same airlines (and gripe about them) because they have the routes and prices I need.

Even if public sentiment has been overvalued, there are situations where it matters a great deal. Moreover, the way we deal with these situations cannot be to conduct business as usual, wait passively for bad sentiment to bubble to the surface and then try to appease people with responsive tweets and comments. We need to recognize when social media sentiment matters most and alter not just our communications and service strategies but our business practices. For example:
If brands come to realize social media sentiment is not as strong a factor for success as we first thought, how should they react? First, they should not pull away from social, because it is becoming a channel of choice for many consumers. Whether or not public sentiment is as powerful as predicted, individual sentiment still matters, and you can no more ignore consumers tweeting your company as you can ignore their phone calls.

Secondly, as I have shared on this blog many times, social business and peer-to-peer models are changing products and services themselves. Today we are much too focused on how to tweet and post while ignoring how the social era demands changes in the way we conduct business. Brands that ignore the changing nature of the consumer/brand relationship in the social era may find themselves facing the same fate as those companies who ignored it in the web era. Ask Borders, Kodak, Blockbuster and others how that worked out for them.

I had difficulty writing this blog post, because it was hard for me as a social media professional to wrap my head around the idea that social media sentiment may be overvalued. In addition, I knew (and hoped) that this blog post would be subject to criticism among my peers. What do you think?  Am I missing key data points and concepts that tie social media sentiment to business results? Or are there additional instances when social media sentiment becomes more vital to brands?  Your input would be greatly appreciated.

Tuesday, November 20, 2012

Book Review: The Power Formula for LinkedIn Success

I recently was provided an evaluation copy of The Power Formula for LinkedIn Success by Wayne Breitbarth. I expected to find the book most helpful for those who are not yet fully engaged on LinkedIn, and that is, in fact, the case. That said, the book encouraged me--an experienced social media professional--to consider some LinkedIn features and applications more deeply and make a few tweaks to my own LinkedIn profile. I think most professionals will find something helpful to take away from this book.

One of the most interesting parts of the book is the way it explores who you should or should not connect with on LinkedIn. I do it wrong, according to Breitbarth. My strategy has been to connect with people on LinkedIn who I have met professionally either online or in real life; in this way, LinkedIn acts as my cloud-based address book.

"LinkedIn Success" posits that connecting with people you know weakly has a cost, diminishing the value of the network; instead, it recommends you connect only with the people you trust and would recommend. In this way, you can have confidence in your ability make trusted recommendations and introductions between any of your connections, and (of course) you hope the same is true for all of your connections' connections.

Breitbarth does allow for other use cases, such as recruiters who can benefit from amassing tens of thousands of professional connections. After reading "LinkedIn Success," my impression of my own connecting strategy did not change that much, because I believe different strategies can work for different people. Even though I am not altering my approach to LinkedIn, I appreciate that "LinkedIn Success" encouraged me to consider my goals and strategies, and I think others may get value from the book's thoughtful approach to this topic.

The book primarily focuses on the value of building out your professional profile as completely as possible. It contains many good ideas, such as taking the time to review the profiles of your competitors for good (and bad) ideas. "LinkedIn Success" also advises you to take full advantage of every available character in the summary section and offers guidance on the appropriate tone and format.

Breitbarth also encourages people to do something that many find difficult--ask for recommendations. He says, "If you are hesitant to go about getting recommendations, let me ask you this question: Aren't you any good?" If you are--and trust me, you are--then your LinkedIn profile should convey this through the testimonials of others.

After reading "LinkedIn Success," I was encouraged to make a few tweaks to my own profile. For example, I had neglected to add the "Events" application to my profile, which is a silly oversight that decreases opportunities to meet others at upcoming events and demonstrate my professional activities at past events. I also added the Box application to my LinkedIn profile as a way of conveying some interesting white papers and documents that I find worthwhile. In short, even though I was pretty darn sure I knew my way around LinkedIn, the book sparked some awareness and action on my part, which I guess says more about the book than any opinion I may convey.

"The Power Formula for LinkedIn Success" has one major shortfall: Despite the fact it is subtitled, "Kick-start Your Business, Brand and Job Search," it gives virtually no advice to brands on how to succeed on LinkedIn.  Page after page is dedicated to the personal profile, the search functions, how to participate in groups and individual preference settings, but very little conveyed in "The Power Formula for LinkedIn Success" will help brands understand how to create value on the platform.  This is a book that may help you polish your social resume, find a job or gain reputation, but it will do little to help your company navigate its way through LinkedIn.

If you are just getting started or have always suspected you are not getting what you should from your personal efforts on LinkedIn, I recommend Breitbarth's book. Heck, even if you feel you are a power user, you may find that "LinkedIn Success" provides you a few more tips to build out your LinkedIn presence.  You can purchase "The Power Formula for LinkedIn Success" for Kindle and paperback on Amazon. 

Monday, November 19, 2012

Book Review: The Social Commerce Handbook

What does a social and digital addict do when the power goes out for seven days (courtesy of Superstorm Sandy)? He goes old school and reads books about social and digital topics. The first of two books that I read during the powerless days following the hurricane was "The Social Commerce Handbook" by Paul Marsden and Paul Chaney. I found it interesting and worthwhile, but lacking in a couple vital ways. (Disclosure: I was provided a free evaluation copy of this book.)

First of all, let me say that I was prepared to hate "The Social Commerce Handbook." It's not that I do not think social media can be and is a platform for commerce; in fact, I've often written (such as here and here) about how social will continue to grow, mature and profoundly change products, services and business models.

My concern was that "The Social Commerce Handbook" would focus on short-term thinking that exploits fans for sales (Post discounts! Track conversions!) rather than on strategies to build value-driving awareness, affinity and advocacy. My worst fears were confirmed from the very first sentence. It is a quote from Gordon Gekko, the reviled, greedy and destructive character from the film, "Wall Street": "It's all about the money, the rest is just conversation." That is not a promising start for a book about commerce in an era of transparency, trust and reciprocity.

Happily, "The Social Commerce Handbook" overcame my bias and a rough start, and I was soon eagerly turning pages. It won me over in several ways, not the least of which is the recurrent mining of research and thought leadership from the past. As technology changes, it can be too easy to get caught up in the new and forget that human nature changes little and slowly. Marsden and Chaney recognize this and reference a wide range of historic research and ideas, including Molière's theories on social transactions, the 1924 Hawthorne Studies,  Robert Cialdini's 1966 "Big Billboard" experiment and how the Deadhead movement began with a subscription insert in the Grateful Dead's 1971 LP, "Skull and Roses."

The authors also make clear from the start that social commerce is not just about marketing to get fans to buy stuff. Marsden and Chaney hit the nail on the head in the introduction when they state, "The big secret to selling with social media is to offer social utility by deploying social technology that helps people solve problems socially and solve social problems." The book continues with this two-prong approach throughout every chapter, which include separate sections on "Commerce Mindset" and "Social Mindset."

Hallmark's "Tell Them"
app on Facebook
Perhaps the best reason to read this book is to spark ideas. Marsden and Chaney share many fine approaches to social media commerce, and while one may not suit you, the next may plant a seed for your brand. Whether it is Derrick Rose's tweets for Power Balance, Walmart's gift recommendation app, Hallmark's "Tell Them" app, event-based shopping clubs like Gilt Group and Rue La La, Widespread Panic's virtual concert, American Express loyalty rewards or the pop-up store for Pamper's diapers, there are plenty of concepts to draw upon in "The Social Commerce Handbook."

The book is not perfect. Ironically, one of my concerns by the end of the book was the exact opposite of the one I had upon beginning it; not only doesn't the book obsess over ROI, it offers very little by way of business metrics. It is exciting to hear that Nestle piloted a digital "Marketplatz" to sell 72 brands in Germany, but the case study does not conclude with how this project raised awareness and sales; instead, the authors note, "The Nestle Marketplatz--if managed well--will drive footfall and e-commerce traffic." Optimistic and incomplete case studies such as this are repeated time and again; Marsden and Chaney write about many brand programs that sound good, but lacking long-term brand metrics or short-term sales results, it is impossible to tell if these ideas are good.

Another concern I had with "The Social Commerce Handbook" is that my enthusiasm peaked halfway through and started diminishing with each subsequent chapter. The reason is that there is an awful lot of redundancy in the book's 168 pages. In one chapter, using Kim Kardashian to tweet about shoes is "arming yourself with authority," while in the next chapter a Chicago Bull posting for a brand is "Like and be loved." Group selling gets mention in virtually every other chapter--it is an example of "Interest pays," "Incentive Intelligently," "Shopping first, social second" and "Selling to niche markets." By the time I was two-thirds of the way through "The Social Commerce Handbook," I had the impression the book had already conveyed all the ideas it was going to offer (and I was largely correct.)

The last concern is that authors do not explore risks and risk mitigation in any depth. While Marsden and Chaney have much to say about motivating and compensating people to tell friends about brands and purchases, I saw no mention of FTC guidelines around disclosure of material relationships. And while the use of experts and celebrities are mentioned frequently, the authors omit any discussion of the potential risks of tapping the personal brands of the famous. After numerous missteps including Lance Armstrong's doping scandal and Gilbert Gottfried's sickening tweets, it is an oversight to omit any consideration of the dangers of celebrity endorsements and spokespeople. "The Social Commerce Handbook" could be a much more helpful read if the authors defined the potential risks of each concept and shared steps to reduce or eliminate these risks.

While "The Social Commerce Handbook" has some shortcomings, the book does offer a valuable perspective on the research, psychology and utility of social business to today's brands. It may not guide you the entire way from concept to execution to measurement, but I believe readers will find themselves jotting ideas and sparking dialog with peers while reading this book. I look forward to future books from Marsden and Chaney as the social commerce experience continues to grow and mature.

 You can purchase this book for Kindle and in paperback on Amazon.

Monday, November 5, 2012

The Complete Facebook Success Formula Every Marketer Should Know

At the f8 Developer Conference in April 2010, two Facebook engineers shared Facebook's EdgeRank formula, and since then most marketers have misinterpreted how to apply it to their own brand challenges. Simply put, this is Facebook's equation, not your brand's. This formula reveals how Facebook determines what will appear in users' newsfeeds, but it does not tell your brand what is needed to drive business success on Facebook.

What Facebook shared about EdgeRank is important for marketers to understand, but it is merely a portion of the Facebook brand success formula. It is a little like the owner's manual for your car, which is helpful for learning how to operate the vehicle but does not tell you how to successfully, safely and efficiently get from point A to point B. Marketers must recognize EdgeRank, both for what it is and what it is not.

What is EdgeRank? 

EdgeRank is Facebook's secret sauce. It is designed to make the site as useful, engaging and sticky as possible. Its purpose is not to enhance marketers' experiences but users' (which ultimately benefits Facebook itself with more traffic and ad revenue, of course.)

You are probably aware that when you sign on to Facebook, your newsfeed is not simply a stream of every friend's and brand's posts in reverse chronological order. Facebook knows that you would not find a raw stream of posts very interesting--you are fonder of some friends than others, and not everything your friends post is equally appealing-- and so Facebook filters your newsfeed. Based on your past interactions on the platform, Facebook knows who and what you find most relevant, and it applies this knowledge to make your newsfeed as interesting as possible. (For the record, I think Facebook's current EdgeRank formula does a good job, but it has a long way to go before its filtering feels as natural and accurate as it should for users.)

To understand how EdgeRank works, you first must realize that everything that occurs on Facebook is an "edge" in the parlance of Facebook. Which of your friends' edges you see in your newsfeed and which ones Facebook omits depend on three factors:

Ue: Affinity between user and edge creator: Facebook monitors how much you interact with friends and brands. Those people and brands that earn your engagement--liking, sharing, commenting and so on--are more likely to appear in your newsfeed. The people and brands you tend to ignore eventually disappear because Facebook (correctly) interprets that you simply do not find their content interesting.

Right off the bat, you can see the enormous challenge for brands: How can a brand possibly be as interesting to a user as his or her own friends? You can see this challenge demonstrated within your own personal newsfeed--you are presented with posts made by your friends much more often than from brands you have liked. In fact, many of the brands you have "liked" never appear in your newsfeed. This is not (just) Facebook's way to encourage brands to use paid sponsored posts to increase visibility; instead, it is the reality of your own Facebook habits. You find the people in your life more interesting than brands, and Facebook recognizes and reflects your authentic affinity.

We: Weight for this edge: Every one of us reacts with different types of content differently--you may love videos, I may enjoy photos and someone else may prefer text. This means each content type has a different "weight" for each user. In addition, as an "edge" gains comments and likes, it gains more "weight;" thus, as others interact with an edge, it increases the likelihood that edge will appear in other people's newsfeeds. The more your brand posts match topics and content type to users' interests, the greater the weight of your content and the higher the likelihood your content will appear in fans' newsfeeds.

De: Time decay factor for this edge: The last of Facebook’s EdgeRank attributes is a simple one: The more recent the post, the more likely you are to see it. You do not often launch Facebook and see something posted a week ago. Facebook knows that we are all real-time junkies--if a band is hot, a TV show is great, a meme is growing or our friends found a great party, we must know now!

Facebook's EdgeRank is not rocket science--the more affinity an individual has for your brand, the more interest he or she has for the types of content your brand posts, the more others find your content engaging and the more timely your posts, the greater your brand's chances of being included in a fan's newsfeed. While this all seems obvious, marketers must take note of several vital things about EdgeRank:

  • Facebook does not exist to give your brand the opportunity for free earned media. Its purpose is to give users a great social experience, which may include the brands that authentically earn their attention.
  • The same rules apply to people as to brands. If your brand posts interesting content that gets people engaging, the content is seen in more users' newsfeeds. If not...
  • A brand that fails to engage fans can disappear from fans' newsfeeds. If this happens...
  • Your brand can become invisible on Facebook. Consumers rarely visit brand pages; in fact, Facebook reports that fans are 40 to 150 times more likely to interact with brands on their newsfeeds than going to a brand page. If you disappear from consumers' newsfeeds, you disappear from Facebook.
  • EdgeRank is Facebook's formula for keeping users' newsfeeds as interesting and relevant as possible, but this is far from the entire equation for brand success on Facebook. Two key components for Facebook marketing success are missing, and far too many marketers overlook these.

Missing Facebook Attribute #1: Fans that matter

What is missing? Well the first thing should be evident:  Fans, but not just any fans, the right fans.

Not all fans are created equal, although you would not know this given some of the relatively desperate methods brands use to accumulate "fans." EdgeRank tells us that brands must collect signals of affinity as quickly as possible, so the primary goal in your brand's fan accumulation strategy should not be raw numbers of fans but collecting the right fans--ones that arrive with some level of affinity or immediate potential for affinity.

An interested customer is likely to interact with your brand, which tells Facebook he or she wants to see more from your brand. On the other hand, a disinterested fan fails to interact, resulting in the expulsion of the your brand from the fan's newsfeed.

I have never understood why brands turn to general-interest sweepstakes and contests to earn "likes," for this seems to offer no path to Facebook success.  The theory is that a fan acquired through these means will move up the value ladder--he or she may start as a disinterested prospect, but soon this person will become so enamored with the brand's wonderful content that the individual will rise to prospect, then customer and finally loyal advocate. This is the traditional advertising funnel view of the brand journey, and applying it to Facebook is, in the words of the immortal Joe Biden, "Malarkey!"

Facebook's EdgeRank prevents disinterested prospects from gaining value. A new fan who was seduced by a contest or sweepstakes will see a few posts from your brand, and if they ignore these posts (and they will), your brand is gone. When this happens, your marketing investment will have incremented a number at the top of your fan page but delivered nothing else, least of all a prospect with an opportunity to see your brand's content within his or her newsfeed.

Brands are treating Facebook "likes" as if they are email subscription requests, but EdgeRank tells us this is not an effective strategy. Instead, you must find fans with affinity and keep that affinity to remain part of fans' Facebook experience. The path to greater brand awareness is not to collect disinterested fans and hope your content reaches them, because it won't; instead, brands achieve awareness on Facebook by collecting fans with existing or immediately available affinity and giving them content and interactions they will share with others (either purposely or inadvertently through Facebook's platform.)

In my Facebook success equation, I call this "Fans to the power of Affinity." Affinity does not grow your brand's Facebook success mathematically but exponentially. A fan with zero affinity stands almost no chance of seeing your content; a fan with modest affinity may or may not interact sufficiently to keep your brand present within his or her newsfeed; but a fan with strong existing affinity or the opportunity to gain it immediately can be a regular receiver, engager and sharer of your content.

To affinity and beyond! (Sorry, the Disney fan in me came out there.)

Missing Facebook Attribute #2: Brand Vector

The second component that we must add to Facebook's EdgeRank equation is brand vector. This means that your content and interactions must move people closer to the brand.

Engagement for engagement's sake may get your brand on fans' newsfeeds, but your brand must drive marketing value and not merely be seen. It is not enough to capture attention; you have to capture hearts and minds. If you collect "eyeballs" but fail to change perception or behavior around your brand, you've failed, no matter what your fan count or "talking about this" number says.

Brands have long fallen into the trap of settling for mere likeability and engagement. One of my favorite pre-social-era examples of this is Taco Bell's Chihuahua. For years, Taco Bell ran ads with the popular pup telling people “Yo Quiero Taco Bell.” The dog abruptly disappeared from airwaves because the Chihuahua was more effective at selling T-shirts and plush animals than he was at selling tacos. In the language of the social era, Taco Bell settled for engagement but lacked brand vector.

For a more recent example, look at Progressive's recent social media PR event. Angry customers flooded into Progressive's fan page to protest the company's handling of a claim. Progressive has the most popular fan page in insurance, at least as measured in simple metrics--4.7 million likes and 30,000 people talking about the brand--but despite those amazing numbers, Progressive saw little to no advocacy in the midst of the company's negative PR event. It is easy to see why: Flo posts lots of fun and games, but where is the discussion about risk, protecting families, the value of insurance or why Progressive is worth consideration? There is little brand vector evident in the engagement Flo creates, so Flo is just another popular character. That's great if Progressive produces sitcoms but is of dubious value if Progressive wishes to change awareness, consideration and intent around its financial products.

Here, in its complete form, is the entire Facebook success equation for marketers. Not just Facebook's EdgeRank formula, but also the inclusion of the right fans and the right messaging. What do you think? Have I missed anything? Your comments are welcome and appreciated.

Sunday, October 28, 2012

#Hurricane #Sandy and Social Media

As I type this, I'm looking out my apartment window at the Hudson River, which is likely to rise up and flood portions of my neighborhood in the next 36 hours, pushed by 70 mph gusts of wind. Like many up and down the Atlantic Coast, I am turning to social media for news and support, and once again I am reminded how important social communications have become to daily life.

Here are some ways social media can help in the coming days as Hurricane Sandy affects the eastern seaboard:

  • Alert friends and family: The most simple and obvious use for social media is to let others know what is happening. A simple tweet or Facebook post is sufficient to let hundreds of concerned friends and family know you are in one piece. The American Red Cross has a Hurricane app you can download to your Android or iPhone, including features for alerting loved ones you are safe. The phone app also includes checklists for protecting yourself and your home, features to turn your phone into a flashlight or strobe light and methods for finding nearby shelters. The Red Cross also offers a way to register yourself as "safe and well" so that others can search and find your status.
  • Ask for help:  Of course, if you are not safe and in need of assistance, social can also help there. When emergencies strike, phone lines can be compromised and emergency phone centers can become overloaded. So long as your phone is charged and mobile service is available, you can always tweet for help--many local emergency government offices have twitter handles, and you can always enlist your Twitter and Facebook friends for assistance. Following last year's Japanese earthquake, U.S. Ambassador John Roos used Twitter to communicate with Americans in Japan; upon learning of eighty people trapped in a hospital, he alerted authorities. "It was incredibly effective," he said of Twitter.
  • Stay informed: Twitter is an incredible hub of information right now. Here are some accounts to follow to keep up to date about evacuations, mass transit suspensions and other important information:
  • Watch for #Hashtags: There is no such thing as a hashtag issuing authority, which means they tend to spring up organically. Already dozens of different localized and topical hashtags are in use, such as #sandypets, #sandynj, #nhsandy and #sandycenpa. In this year's Colorado wildfires, spontaneous hashtags appeared (such as #HighParkFire and #FlagstaffFire) to keep people informed about fire status and support needs. 
For other good tips, check out USAA's "Why You Need a Social Media Disaster Plan." If you have other social media tips to help prepare for Sandy, please share them. And if you have an interest in how I am faring in Jersey City, NJ, feel free to follow me at @augieray