Social media and the big scale question

Scale is a very important concept in social media and I think there are three reasons for this.

  1. We are all inclined to define the value of scale in terms of reach and frequency, because this is how we defined value in traditional media.  However, social media doesn’t deliver reach or frequency very effectively.
  2. There is the question of scale as a unit of measurement of this thing we call engagement.  The problem is that almost any form of traditional, marketing activity can never register at the social end of the engagement scale.
  3. The social media revolution leaches scale from the business models of every industry it touches and completely changes the scale dynamics (in essence, big stops being beautiful – certainly in a marketing or product design context) – and this is the main long-term challenge all businesses need to address.

Scale is not achieved through reach and frequency

Measurement and metrics in traditional marketing were all about reach and frequency.  This was because marketing was defined as a channel and message challenge and the channels were expensive – thus requiring that they ‘reach’ a large number of people to make them cost-effective to use.  Thus media came with an audience already built into it, and that is effectively what we were buying when we bought, or gained access to, media – we were acquiring scale.  A great deal of time and effort was spent devising creative messages (content) and campaigns and we gave these scale by putting them into media channels.

Social media doesn’t have scale built into it: it doesn’t come with an audience attached.  What is more, social media was not designed as an audience-type platform.  It was designed to allow individuals to connect with each other, usually within the framework of small groups.  As I am fond of saying, Facebook was designed to help geeks get girlfriends, not marketing directors get consumers.  It became popular because anything that could scale the lofty peak of that particular challenge (i.e. getting a geek a girlfriend) would be adept at almost any other social task.

Many marketers react to the fact that social media doesn’t deliver an audience by determining that the challenge is therefore to build an audience within it (creating Facebook ‘fanbases’, Twitter followings, consumer communities etc.).  The problem here is that you are swimming against the tide: you are trying to re-form the space to work in the way you want it to work (so your traditional audience-based approaches and reach and frequency metrics can remain relevant), rather than devise new approaches that are fundamentally routed in how the space actually works.  The futility of this approach is best illustrated by the latest report on Facebook engagement I have seen from SocialBakers.  In the UK, the average engagement with a Facebook post is 0.22 per cent.  This is not 0.22 per cent of a total audience, this is 0.22 per cent of an existing Facebook fanbase – i.e. people who have, for one reason or another, been encouraged to ‘like’ the brand on Facebook.  No matter how successful a brand may have become in establishing a Facebook ‘fanbase’ it is highly unlikely that this group will amount to even 1 per cent of its total target audience – thus if you are engaging 0.22 per cent of it, this is the same as saying that Facebook is a good way of reaching less than 0.0022 per cent of your target audience.  Now it is not necessarily a stupid thing to reach less than 0.0022 per cent of your audience, but that depend on who these people are an what you do when you ‘engage’ with them.  However, this is a stupid activity if all that you are doing is simply presenting them with any form of mass marketing activity, content, competition, promotion or all the various sundry other activities that comprise the bulk of the ‘brandfill’ most brands dump in Facebook.

Now, very, very occasionally a brand may produce something that engages an audience-sized group of people (sometimes even a huge audience).  This is when something goes viral – but this happens so rarely that it is strategically a stupid thing to pursue.  Why place any part of your marketing budget on winning a 1,000 to one bet?

In short, there are no audiences in social media, so simply dragging audience based activity (i.e. all traditional marketing activity) into the space is a waste of time.  This is not where you get the scale effect, or the scalable benefits.  Which neatly brings us to the second issue.

Opposite ends of the engagement scale

A marketing director will define loyalty as incentivised repeat purchase.  A consumer will define loyalty as someone who will put their life on the line for you: same concept but operating at opposite ends of the scale.   Within the social media space, people will expect to operate at the social end of the engagement scale, and brands simply cannot compete in this space because it means trying to establish relationships which are the equivalent of the relationships we have with our friends and family.  As Warren Buffet (I believe) said: “if you can’t compete, don’t compete.”

There is no point in trying to inject ‘engagement’ steroids into you marketing activity in order to bulk it up a bit and make it more competitive, which is why this concept of ‘engaging content’, or ‘branded content’ is so futile.  A brand will never be able to produce content that is engaging enough to compensate for the fact that it reaches, on average, 0.0022 per cent of the audience.  In fact, the very concept of content itself struggles to compete in the social engagement space.  When do I watch a Hollywood movie (perhaps the most expensive, most engaging type of content out there)?  I watch it on Love Film on a Saturday night if my wife and I have nothing better to do.

The only way a brand can really compete at the social end of the engagement scale is by behaving in the way its consumers want it to.  This does not mean trying to push engaging content at them, it means being available to response precisely as and when a consumer demands – which largely means when they have a question or have a complaint.

The social space is the world of the individual, not the world of the audience and if brands want to create any sort of engagement in this space, it has to be framed in terms of what it is each individual wants from the brand, at the time that they want it (i.e. not some piece of content designed for an audience, published according to a pre-set publication schedule).  The world of the individual is the world of real time information.  It means that the challenge in social media is not about channel and message, it is behaviour identification and response: a process which is routed in listening – both to people and to data.

Big is no longer beautiful

When social media touches a business model, what happens is that scale starts to leak out of it. The music business is a good example, having been one of the first to come into contact with social media. The music business has been shipping scale at a rate of knots for some years now. You don’t have new big bands any more, or if you do, they don’t last more than a year or two. Smallness has proliferated and the space has shattered into thousands of niches because you don’t need money (scale) to distribute music. Music itself has become a utility: you don’t own it as a product, you simply rent access to it. Dealing with a world where the scale advantages are disappearing is probably the biggest business challenge that social media deals up.

Taking an example from the consumer goods sector, Procter & Gamble is successful because it uses its scale to negotiate advantageous terms in renting space within expensive information distribution channels. It is the world’s largest buyer of media. When the channels become free, where is the scale advantage? Likewise, as it becomes easier to succeed by being small, because you can access niche but geographically diverse markets and don’t have to use expensive distribution channels, where is the value in a brand that, in order to achieve scale, has to make itself generic?  In the past any niche brand that could steal 0.1 per cent of the market share of a big brand was regarded as an irrelevance.  But if you create 1,000 such brands the big brand has no market left.   This is an effect I call death by 1,000 niches.

In essence the modern brand is a function of the world where scale was necessary to access expensive distribution channels.  As a result, rather than create product relevance via producing products that are relevant to individual requirements, modern marketing took what were by necessity generic, commodity products produced at volume and persuaded consumers that they were unique, special, premium and therefore desirable (rather than relevant).

Social media allows this myth to be exposed, enabling consumers to access products designed for their specific needs and thus erodes the scale advantage of modern brands.  However, there are scale advantages that remain, but these lie in the area of commodity and utility, rather than within the realms of marketing and branding.  For example, mass production still offers scale advantages – although the fact that China is everyone’s factory undermines this to an extent – as does the ability to negotiate terms with large retailers or suppliers.  Of course, the scale dynamics within retail itself are changing as it moves online, with scale not being defined in terms of volume of product shifted, rather it is defined in terms of connection processes and communities.  Amazon became successful for two reasons: it attached a review process to product purchase and it also connected niche suppliers with niche consumers (or in effect it created the concept of the niche consumer – someone who can find exactly what they want, from almost anywhere, without having their choices restricted by the expense of real-estate).

There now has to be a compelling reason to be big, because it is now much easier to be small. Social media is putting scale back into a box labelled utility and commodity, which actually is where it lives best.

 

3 comments

  1. Ian Brodie

    Appreciate your perspective Richard, but do you not think it’s possible that different ways of using a communications tool can co-exist and both work?

    Maybe not all the time. Maybe not for everyone. Maybe not equally as well. But work nonetheless.

    And does it really matter what a communication tool was designed for in the first place? Frankly I’m not convinced that Twitter was designed for small social groups (I’ve had more than one client shy away from twitter because their perception was the absolute opposite: that it’s a broadcast tool).

    Regardless of what a tool was designed for, what’s important is what it works for. The telephone was designed for 1-1 communication between people who already knew each other, does that make teleconferences and teleseminars an abomination? Does it mean they’ll never work and marketers would be fools to try? Decades of experience would say different.

    I’m not saying that mass communication via social media is going to work for everyone, or even lots of people. But it’s worth at least testing. And I appreciate that you’re right to say that organisations who think it’s the only way with social media are making a mistake. But to put up “here lie dragons” symbols and to say it can never work is wrong too. And to those who are already having success using social media to reach a wide audience it damages the credibility of your message to hear that it can’t work.

    Ian

    • RichardStacy

      Ian,

      Almost by definition a tool will have a number of different uses – or rather it can be used to create a number of different things (a carpenter can use a relatively few number of simple tools to create a huge variety of often quite complex objects). So I am not saying that the individual tools within the social media space can’t be used for mass communication – because there are many of examples of where something posted on YouTube or Twitter reaches a mass audience. But the reason this happens has nothing to do with the tool or channel used – it is much more determined by the nature of the information being published. The social media revolution is all about the separation of information from restrictive means of distribution. In the past the media (channels or tools) had an audience (distribution) built into them, but they were also restrictive on account of their scarcity and expense. But the flip side of this coin was that you could reach an audience irrespective of what content you put in the channel. Social media doesn’t have the audience built in – in fact it is not really a form of media. Therefore the ability to reach an audience is entirely dependent on the content / message – the tool or channel brings nothing to the party anymore. The problem for brands is that when we can no longer rely on the channels / media to bring them an audience, there is almost no form of message or content that a brand can produce that will be sufficiently interesting or engaging that, in an of itself, it can attract an audience-sized group of people. The exception here is what we call viral content – but viral almost never happens and when it does its real impact or effectiveness on the brand behind it is often questionable.

      Also – if we look at the behaviours of people within the social space, we will see that in large part, they don’t want to be treated as a member of an audience – they want to be treated as an individual. Brands can create a significant amount of value via activities designed to identify and respond to individuals – (see chapter 3 of my ebook) but the key point is that once you have identified these individuals, if all that you do with them is some variant of an audience based activity, you will be wasting your time. You have to identify individuals who have the ability to have a very significant impact on your business. This impact, (rather than influence) is determined by their behaviours and what they are doing or wanting at any moment in time. For example, you may know what a target audience for a particular business service looks like (in terms of demographics or other forms of segmentation) and you may also know where to reach them as a group / audience (which is what traditional media does for you). However, what you don’t know is who, within that group, is looking to make a purchase right now – but in social media you can find these people (check out IBM’s Listening for Leads programme). Likewise, the person who has just identified a fault with your product and is talking about it on Twitter is a very important person for you to identify and deal with right now. This person is not an influencer – they become important to your business not because of who they are (or the tool channel they are using) but because of something that happens to them / their behaviour. Solve the problem, and they just become another customer, they fade away back into the audience.

      In short – audience-based communication is not impossible in social media, it is just very hard because there are no audiences there naturally, nor do people in the space generally want to be treated as a member of an audience. So you are really pushing the boulder up the hill. It is much easier to create value in the space by going with the flow – creating activities that are are in synch with how the space operates and support the behaviours of the people within it. The problem with this is that it involves breaking with the traditional channel and message / reach and frequency thinking that defines we call marketing – which is why people still feel more comfortable trying to push the boulder up the hill.

  2. Jeremy

    Great post, Richard. I think you’ve nailed many of the core issues on the end.

    Disclosure: I’m VP/Marketing @Sprinklr.

    We do believe that Social@Scale is possible as it represents the hybrid between scale and the reality of the parameters that social media creates.

    It is possible when you have an enterprise wide social relationship infrastructure that connects multiple functions, teams, divisions, and locations and allows for a consistent user experience by maintaining a consistent user profile.

    In other words, if everyone in the organization knows that it is THE Richard Stacy, then no matter who is interacting with you at that time, a marketer, a service agent, a PR professional, each person will treat you that way based upon your relationship history with the brand.

    When this is coupled by real-time knowledge about your personal interests, profile AND the best performing content that would be most relevant to you, it’s possible to drive intimacy across a large organization.

    One of our clients that is deployed across over 1000 people and more than 50 countries sees this. One of their teams (a group of 40) publishes 1,100 individualized pieces of content a day based upon the profile and relationship data they have.

    The reality of the world you describe is here. The challenge is whether large brands are going to empower themselves to communicate at scale (size of company) and not at scale (size of channel).

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