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By the rivers of Data, there we sat down…

By the rivers of Data, there we sat down

Yea we wept, when we remembered Nielsen.

(After @Psalm137, RT@TheMelodians, RT@BoneyM)

Times were indeed simpler not so long ago, when TGI and Nielsen were the main data tools within the box of the brand planner.  Now we have this thing that is being called Big Data.  (Check this recent post from Useful Social Media for a quick overview).

In recent years the rise of CRM has given us more exposure to the world of data, but the main channel here was mostly email or point-of-sale and the quantity of data was relatively containable and reasonably static.  Now, however, usage of social tools has caused an explosion.  What is more, the data has become dynamic.  It moves and changes over time – hence why people are starting to talk about flow and data streams, rivers or even floods.  The challenge of simply logging all this data now looks pretty horrendous let alone the challenge of converting it into some sort of actionable intelligence.

However, before we shed too many tears, it is worth remembering that there are two ways of looking at a river.  I studied fluvial geomorphology at university – so I know this.  The first way (the Big Data way) is to try process as much as the whole flow is possible – measuring speed and volume of flow, calculating turbidity, assessing cross-sectional areas, ‘wetted perimeters’ etc.  The other way is to stand on the bank, notebook in hand, and simply look at it.  This form of observation, rather than measurement, can actually give you a lot of intelligence about how the river is behaving, certainly to an experienced eye.  What is more, it is highly actionable intelligence – if you wanted to take a kayak down that river, the Big Data about that river is not very useful to you, whereas observation is critical.

I can’ t help thinking that there is a lesson here for social media and Big Data.  You have to start with looking at the overall shape of things, rather than try to process the specifics of every interaction.  This observation is something only a person can do, and the role of technology is simply to create visibility on the flow, rather than to process the flow. The problem at the moment, however, is that most of the approaches to Big Data are based on trying to swallow the whole flow rather than creating observational tools.

There is, of course, another problem, referred to in a previous post, which is securing permission to have access to the data in the first place – even at an observational level and certainly when it comes to taking actions as a result.  Individuals are happy to be observed when they are regarded as an anonymous individual within the flow.  But once you pull them out of the stream a whole different set of rules apply, where it not so much what you know, but how you got to know it that becomes important.

Update: Just read this from Stowe Boyd for another perspective on the Big Problems with Big Data.

So, consider it this way: Big data is unlikely to increase the certainty about what is going to happen in anything but the nearest of near futures — in weather, politics, and buying behavior — because uncertainty and volatility grow along with the interconnectedness of human activities and institutions across the world. Big data is itself a factor in the increased interconnectedness of the world: as companies, governments, and individuals take advantage of insights gleaned from big data, we are making the world more tightly interconnected, and as a result (perhaps unintuitively) less predictable.

Update 2014:  I wrote this before I realised that algorithms can swallow the entire river.  None-the-less, it doesn’t take away from the fundamental point about the role of observation versus analysis.

Media is not converging, it is diverging (convergence only leads to conflict)

Way back in 2006 the ever prescient Hugh MacLeod scribbled “If you talked to people the way advertising talked to people, they’d punch you in the face”.  This truism illustrates the dangers of convergence.  ‘Converge’ a one-to-many approach with a personalised situation and you end up with a fight.  Why then is advertising deemed to be effective and not result in brands being punched in the face?  It works because advertising’s great strength is that no-one takes it personally.

In 2009, in an excellent Slideshare presentation, John Willshire proposed the analogy of fireworks and bonfires to differentiate between advertising and social media.  He concludes this analogy with the warning “putting fireworks on a bonfire is not a good idea”.  Again, the danger of convergence.

Yesterday Altimeter Group published a report called The Converged Media Imperative.  The basic thrust of this report was that media are converging and that brands need to recognise this and learn how to operate within a converged media space.  The types of media that Altimeter said were converging were the Blessed Trinity of Paid, Owned and Earned.

Hold on a moment here, it is time to reign in a few assumptions.

Assumption number one: Paid, Owned and Earned.  As I have previously posted, I don’t think this is a useful definition.  I think it is far better to see media as being on a scale that has participatory media at one end and non-participatory media at the other.   The approach a brand adopts depends on where on this scale they decide to sit.  You can’t be everywhere on this scale with a universal ‘converged’ approach.

Assumption number two: forms of media are converging.   The only people who are converging media are brand and media owners and agencies for whom this convergence is a convenience that allows them to appropriate social media and export traditional one-to-many mass marketing approaches into the social / participatory space.  Consumers are going the other way.  There is a huge divergence appearing between the way consumers are using social media and the ways in which brands would like them to use it.  That’s the issue brands have to deal with.

Assumption number three: Facebook is a form of media.  It is not.  Facebook, like most other forms of social media, is an infrastructure or even a form of behaviour.

It seems to me the challenge for brands is not how to manage the convergence of media, it is quite the opposite.  The challenge is how to manage divergence.  There are now two very distinct spaces opening up.  The first is the space where you talk to everyone and no-one takes it personally.  Then there is the space where you talk to individuals, where being personal is essential.  The rules of how you operate in these two spaces are completely different.  The spaces can hold hands, and they need to talk to each other but crunch them together and you get into difficulties – you either end up with a black eye or you end up wasting a lot of time and money.  The management challenge is therefore not so much about how get silos to talk to each other, it is about you keep traditional marketing contained within its appropriate silo while you develop a new set of approaches adapted to encouraging consumers to participate in your brand, rather than participate in your marketing.

How then to account for the case studies of successful media convergence that Altimeter highlight at the end of their report.  Well, you can use social tools to encourage consumers to participate in traditional campaigns, but you have to be conscious of two things.  First, this space where social and traditional can be said to converge is actually tiny – it is not going to become The Space as the ‘everything is headed towards converged media’ argument might suggest.  As referred to above, it will be a space that deals only with how you get consumers to participate in your marketing, rather than the much more important space that relates to how you get people to participate in your business.  Second, you have to be careful how you measure success in this space.  All too often, success is measured as though social media were traditional media – i.e. an increase in Twitter followers or growth of Facebook fan-base is seen as a useful objective in, and of, itself.  Or else vague exhortations are made about supposed increases in Amplification, Awareness or the ever popular Engagement.  The sad truth is that social hardly ever delivers scale in terms of reach – the numbers, from a reach perspective, rarely add-up compared to the reach you can achieve with traditional media.

When we look back on this, in a few years hence, I think we will see that this so-called ‘converged space’ was actually a side-show to the main event.  The brands that will emerge as the winners will be those that have learned how to manage divergent approaches and two very different spaces: one is the one-to-many space where you talk to everyone and no-one takes it personally and the other is the space where brands create the permission to talk to their consumers personally (hopefully without getting punched in the face).

Creating permission to get personal: why marketers need to listen to The Spice Girls

A couple of weeks ago I took part in an interesting experiment at the Marketing Week Live show at London’s Earls Court.  The instigators of the experiment were Collaboration Matters and IBM and the purpose of the experiment was to try and dramatise the role of digital community in influencing retail behaviour.  The set for the experiment was a stand at the show ‘selling’ top-end fashion womens’ shoes, constructed as part-catwalk, part-high street store.  The slightly more commercial purpose of the experiment was to try and create a presence that was markedly more engaging to those attending than the bog-standard trade show display.

As an experiment, it certainly worked in the later aspect but it also highlighted some important truths about the role and relevance of consumers and digital community.  In my opinion, these were:

  • The consumer cannot be considered as simply an individual any more.  The consumer is now a connected individual whose decisions are influenced by the communities of which they are a part.
  • These communities can vary from close and fixed communities of friendship, communities defined by providing answers to specific questions, through to very loose ‘Google communities’ where we tap into collective intelligence.
  • Brands cannot expect consumers to join brand communities, rather brands have to understand what role they have, if any, in participating in consumers’ communities.
  • The role for community, with a brand, is to create an internal community based on fostering the behaviours necessary to have an effective relationship with the connected consumer.

The whole ‘story’ of the event was pulled together by Mike Morrison on Storify – you can see it here.

Just because you can doesn’t mean you should

It was good to be at the event and see the experiment in action, and also to talk to some of the other participants and organisers; Marie Wallace from IBM’s social business unit, Mike Morrison, Will McInnes from Nixon McInnes and Rooven Pakkiri and Dale Roberts from Collaboration Matters.

One of the discussions stands out.  Marie was talking about the goal for technologists, such as IBM, and brand owners or retailers.  This was the possibility of extending the environment within which brands can have contact with a consumer – reaching backwards to whatever triggers an interest or desire in a product and forwards, beyond purchase, into creating brand loyalty and repeat purchase.  Essentially, this was an examination of where social technology can be overlaid onto the classic consumer journey, opening up many more opportunities than those which exist with the traditional one-to-many marketing process.

From a retail perspective we were focusing on what needed to happen to ‘seal the deal’ i.e. make sure that the retailer was able to create an environment that would lead to a purchase decision, either through increasing the numbers of people through the door with a high propensity to purchase or through the ability to supply information that would help the retailer convert a sales prospect.

As we sat there, we were starting to imagine a future world where a woman would walk into a shoe shop, and she wouldn’t be just another person off the street, she would come surrounded by a digital cloud which would interact (or had already been interacting) with the digital persona of the shop itself, such that the shop assistant would be able to have the pair of shoes she was interested in, plus the two alternatives her friends had suggested, ready and waiting for her.  Or alternatively, said shop assistant would be able to weave information about the prospect into the sales conversation, based on knowledge about what celebrities she may admire, what bands she followed etc.

All very exciting stuff and certainly something which is coming within the technical competence of organisations such as IBM.  But as I sat there, I started to wonder if the real barriers to be overcome here were not technical ones, they were social ones.  While it might be technically possible to know and analyse a huge amount of data about an individual, is it socially possible to use this information?  It is not a case of what you know, it is how you got to know it.

Here is an analogy from dating.  Within the world of dating there are established rules and processes that are basically designed to help two people find out about each other and thus work-out if they have the basis for a relationship.  Interestingly, it is possible for any one of the protagonists to find out much more about the other besides the relatively restricted palette of ‘data’ which might be offered-up on a date.  They could spy on them through their windows with a telescope.  They could go through their rubbish bins.  They could follow them around for a while and see what they do and who they hand-out with.  But while this is behaviour which is technically possible, it is behaviour which is socially unacceptable.  And even if you can do it without detection, to reveal knowledge of information thus gleaned is to court social disaster.

It seems to me that a lot of what we are talking about here is basically the equivalent of digital stalking.  Brands are proposing to use technology to find out information about people for which they have not been granted social permission.  And the reaction of the consumer is not going to be “hey, how amazing that X brand knows so much about me that it can offer me such a uniquely personalised brand experience” it’s going to be “go away and stop spying on my life”.

The great thing about advertising is that no-one takes it personally

We need to redefine the rules of permission within social marketing.  Within traditional marketing these were relatively clear, in that we actually had permission to be crass and intrusive.  Interrupting a TV programme with an ad is pretty intrusive, but consumers accepted that there was a trade-off here.  Also, consumers could accept such behaviour because it was never intended to be taken personally.   However, as soon as you create personalised approaches, you can’t be surprised if consumers start to take it personally.  In the world of personalised behaviour a whole different set of rules therefore apply – social rules.  Marketing has never been social, indeed the term social marketing could be seen as an oxymoron.

It is interesting to note, as this piece by Doc Searls points out, that digital advertising becomes less efficient, the more targeted it becomes.  It seems as though at a certain level of personalisation, advertising stops working.  It is as though a boundary has been crossed.  On one side of that boundary a consumer will accept advertising on the basis that this is designed as a piece of communication intended for them as an anonymous individual who is part of a large group.  On the other side of that boundary, people are in effect saying now you have crossed this fence new rules apply.  Your advertising either has to be hugely more relevant (in a way that probably means it can no longer be classified as advertising) or else you have to have a proper relationship with me as an individual.  The intrusive rules and behaviours of mass marketing are simply not acceptable if you want to make it personal.

I think that studying and understanding this boundary is the single most important thing marketers need to do and the role of the technologists should be to help them do this, rather than providing them with the tools that help them spy on their consumers.  There seem to be two issues here.  One is establishing how and when a brand has the permission to recognise a consumer as an individual and the other is helping a brand adopt appropriate behaviour once that permission has been granted.

Understanding the new rules – what marketers should learn from the Spice Girls

I think the most important recognition principle is that the consumer has to give an explicit indication that they are willing to accept a personalised approach.  At one level this could be very obvious in that they have posed a question directly to a brand and are expecting a specific response.  This is the sort of thing that basic monitoring capabilities can currently pick-up.  However, the area of probably the greatest opportunity, but also difficulty, lies in interpreting the more subtle and sophisticated signals a potential consumer may give-off.  But the key is recognising that this cannot be a deductive process – i.e. because we know that you as a consumer have done A, B and C that therefore means you have given permission for D.  A consumer cannot be surprised, pleasantly or otherwise, by an approach – they will need to be able to make the link between cause and effect.

It is also important to recognise that just because a consumer is giving the right signals, this doesn’t mean they have surrendered the right to anonymity.  To return to the dating analogy, just because someone has agreed to go out for a drink doesn’t mean they have given permission for the content of their bins to be examined.  Consumers will expect to retain control over what information they surrender and even if a brand has already been able gather data about them, the consumer will not expect to see this data coming up in the conversation and might possibly end the relationship if they see it appearing.

This brings us onto the issue of behaviour and also onto the Spice Girls.  Back in 1996, when the Spice Girls were telling us what they wanted (what they really, really wanted) .  They said “If you want to be my lover, you gotta get with my friends”.   What they were really, really saying is that they can no longer be treated as an individual, they are now part of a community.  Power comes through connection – Girl Power in this instance.  And the explicit instruction to those that wished to be their lover was that they had to ‘get with’ that community.  The Spice Girls also gave further instruction.  “So what do you think of that now you know how I feel, can you handle my love, are you for real? I won’t be hasty, I’ll give you a try, but if you really bug me then I’ll say goodbye”.

I think all marketing directors should pin those lyrics above their desks .

The net effect of this may well be that there is a big consumer space that will become a DMZ – a de-marketingized zone – into which brands cannot go except with very explicit permission and subject to very stringent rules of respect for community behaviour.  If they can’t handle that, if they are not for real and if they bug people, they will get thrown-out.  In this space, the individual consumer is almost beyond direct reach – they can only be accessed through the communities which act as their gatekeepers.

This takes us to the role of brand communities.  Brand communities will have a very, very tough time trying to establish themselves in the DMZ.  This is not to say that they won’t exist, but their role has to be 100 per cent focused on supporting what it is that consumers want a community to do.  In reality, and this is something that the experiment at the show demonstrated, the most powerful role a brand community can fulfill is as an internal community within the brand’s business that helps create appropriate external behaviours.

I suspect that the social enterprise tools that will become successful will be those that help businesses understand and operate within the communities of their consumers or customers.  Rather than exploit the ability to crunch data about individual consumers, they will exploit the ability to develop and share intelligence about collective consumer behaviour.  They will help brands understand the community in order to understand the individual.

Media is not like God: it doesn’t come in three flavours

Christians believe that God comes in three flavours: God the Father, God the Son and God the Holy Spirit.  It seems to now be an established article of faith that Media is a bit like this: Media the Bought, Media the Earned and Media the Wholly Owned.   I think it is time we abandoned this doctrine.

The idea of bought, owned and earned is a definition constructed by someone who accustomed to thinking of media as simply a commodity – i.e. a traditional media planner, media buyer or media sales rep (the clergy of the old media religion if you like).  It may have once been a useful classification, although it has always struggled to extend its relevance into the ‘earned’ category.  As a former PR, I spent 20 years creating what a media planner would call earned media – but is there anyone actually in PR who uses this as a useful way of understanding what they do?  No.  However – as we move into a more social media world, I think this definition has completely outlived its usefulness.

Media is now needs to be seen as a spectrum that has participatory media at one end and non-participatory media at the other. The action is now mostly taking place at the participatory end – hence the challenge for most traditional media operations is how to make themselves more participatory.  Look at media this way – and it becomes a much more useful perspective to help understand  both what is going on and what traditional media needs to do about it (content as raw material not finished product, liberating media to find the content it works best with etc.)

Anyway – that’s my thought for Friday.

SMI12: Doing social at scale

Just back from SMI12.  As usual, very thought provoking.  The theme of this year’s event was social media success stories, but for me, the real theme was doing social at scale.  We had Lee Bryant talking about engagement at scale and measurement being key to securing the investment necessary to do this.  We then had Bian Salins from BT and Alex Pearmain  from 02 talking about the industrialisation of the customer service process and creating scale by having a team of 25 people (as O2 has) embedded across a number of departments and business functions (essentially managing the scale issue by decentralising the function).  We also had a great presentation from Prelini Udayan-Chiechi at Lithium, demonstrating the scale effects created from the effective use of communities (creating communities of people whom you don’t pay, but will none-the-less help you do your business).

That said, scale may be the wrong word, at least scale in the context of being big, because what most of the case studies showed was that success (in terms of measurable business benefit) came from working out how to operate at the small scale.  The exception was a presentation by Luca Benini of Buddy Media which was firmly rooted in what I think is the old fashioned, traditional marketing, view of scale – i.e. the ability to reach out to lots of people.  The emphasis here was all about building a Facebook fanbase and turning your Facebook presence into a sort of slightly interactive website.  (I have posted my views on this approach previously).  I now know, for Buddy Media has told me, that I can go to the Pringles Facebook page, press like and then the Pringles moustache will wiggle – just for me.  How’s that for a uniquely personalised and relevant brand experience.  Marvellous.

Understanding scale is very important.  Traditional media channels had scale built into them – get your message into the channel and there was a guarantee of reaching a certain number of people.  Social media doesn’t have that guarantee, largely because social media is not a form of media or even a channel, it is better understood as a set of tools or infrastructures.  While an infrastructure may have many users, a mobile network for example, simply using the infrastructure doesn’t guarantee you will reach all (or any) of the users.  Because social media doesn’t bring scale with it, the scale effect is something you have to build into your usage of it. This requirement is further complicated by the fact that social ‘media’ is usually very ineffective at reaching lots of people – the exception being the very rare instance where something goes viral.   Facebook became successful because it was a tool designed to allow small groups of people, most of whom already knew each other, to talk amongst themselves.  Its success in doing this meant that it became a platform for the masses, but this is not the same thing as being a mass platform.

The scale effect in social media comes from understanding how to talk to small numbers of people at any given time, with the benefit being generated by the ability to talk to exactly the right people, about exactly the right thing, at exactly the right time (‘right’ in this instance usually being defined by what it is the customer/consumer wants to know at the point in time when they need to know it – a behaviour-based attribute, not a channel-based attribute).  This is essentially an extension of the customer service function, as the BT and O2 examples illustrate. Customer service, which was previously locked-up in email and phone channels, has become liberated and transformed from something you had to do as a business hygiene factor, to something which can become a front-line marketing or reputation tool.

The other scale benefit is derived from that (still very small) group of people who are your brand loyalists.  Prelini Udayan-Chiechi showed us the example of the ‘super-fan’, an example being KachiWachi a fan of Logitech products whose contributions within a customer service community that Logitech set up had been valued at $250,000.  Critically, you don’t get the scale effect by trying to turn all of your consumers into super-fans – that will never happen – or by imagining that super-fans will become a form of digital influencer who will amplify or spread a band message.  (As previously posted, I don’t think digital influencers actually exist).  You get the scale effect by how you allow the super-fans to help you run your business.

(More on the whole scale and engagement thing here and here).

Finally, I was glad to see that the conference touched upon the whole thorny issue of data – who owns it and controls it.  This first came up with a fascinating and scary presentation by Andy Hobsbawn setting out a future within which objects are connected to the internet and have their own digital identities and thus data attached to them – including, of course, data about their usage and their users.  So now you can be friends with your jeans – and we will live in a world in which your trousers can spy on your life.  Who needs Big Brother when you can have Big Denim.   The issue was also raised as a question in the session on social commerce by Chris Reed and got the “yes – important issue” nod from all the panellists and reference from Antony Mayfield to Doc Searls and Vendor Relationship Management – although I must confess that I am a bit of a VRM sceptic (see this with follow-up comment from the  Doc himself).

All-in-all, a great event.  The only problem was that there wasn’t enough time to have much discussion and q&a after the presentations, and that I had to leave early to catch a train.

 

 

Doc Searls, Michael Wolff and The Facebook Fairy

I spend a fair bit of time puncturing organisations’ belief in The Facebook Fairy.  This is the belief that having ‘conversations’ and ‘engagement’ with a handful of your customers or consumers is a sensible thing to do because The Facebook Fairy will sprinkle some magic dust such that this ‘engagement’ will spread to all of your customers or consumers who also happen to be on Facebook.  (Note: this doesn’t mean that you shouldn’t have conversations with your consumers in Facebook – just not the type of conversations that are predicated on creating a business benefit via the ability to spread a small conversation to lots of people).

I have also been critical of Facebook’s long-term viability because its’ business model is based on the idea that it is a form of media, when in fact it is an infrastructure (or even a form of behaviour).  However, until this point I had never really questioned its utility as an advertising platform, albeit a platform that would never be able to fulfil the revenue expectations its current valuation suggests.  But then I read this piece by Doc Searls and also the article by Michael Wolff that Searls’ references.  The Michael Wolff piece is a withering exposure of the viability of the ad-supported web, largely based on research into the decreasing effectiveness of on-line advertising, whereas Doc Searls’ piece probes more deeply into the idea that advertising decreases in effectiveness as it becomes more targeted and personal – important given that increased personalisation is assumed to be the on-line salvation of advertising.  He cites two posts by Don Marti looking at the phenomenon.  Marti says in one of these pieces:

The more targeted that advertising is, the less effective that it is. Internet technology can be more efficient at targeting, but the closer it gets to perfectly tracking users, the less profitable it has to become.

The profits are in advertising that informs, entertains, or creates a spectacle—because that’s what sends a signal. Targeting is a dead end. Maybe “Do Not Track” will save online advertising from itself.

Marti also suggests that the value of advertising lies in the fact that it is, well – advertising: something that puts a single message in front of lots of people.  Its value as a statement – a signal as Marti puts it – derives from its scale and lack of personalisation.  Or to put it another way, not only does The Facebook Fairy of network influence not exist, neither does the Facebook Fairy Godmother of on-line advertising.

This idea that advertising only really works as a way of talking to lots of people seems to make eminent sense.  I am always telling people to recognise that traditional media and social media are different – what works in one doesn’t work in the other.  Social media really only works when you are dealing with small groups of people – therefore, as a business – you need to create a benefit other than that which is derived from reaching a significant proportion of your audience.  You can’t rely on the Facebook Fairy to spread your Facebook activity across the Facebook world, as though it were a media platform or channel.  These benefits have to be based on the ability to consult with, or respond to, your audience (something which an ad cannot do) and this response has to be based around what people are doing (behaviour) not who they are or what channels they are using.

This brings us onto the second part of Doc Searl’s piece.  His contention is that the role for organisations that wish to perform some sort of intermediary between individual consumers, or between institutions and consumers, lies in the area of  Vendor Relationship Management (VRM).  This is the idea that the business opportunity lies in providing customers or consumers with the tools and data they need to manage their relationships with brands / organisations: basically a reversal of the current approach where value is assumed to lie in the ability for brands to hold the data in order to control the consumer relationship.  It is an approach supported by Sir Tim Himself.  VRM is indeed a fascinating subject – but I am not yet convinced this is the way to go.  While it is almost certain that one of the principal shifts inherent in ‘The Social Media Revolution’ is the ability for individuals (consumers or citizens) to connect with each other to either manage, or by-pass, their relationships with institutions (governments or business), this doesn’t necessarily mean that the response from institutions should be to co-opt, or even support, this process.

Rather than become involved in the business of helping consumers connect with each other, I think business has to start from a recognition that consumers have, or will become, connected and deal with the challenges and opportunities that this presents.  Increasingly I think the real ‘paradigm shift’ businesses need to take is making the break from thinking about channels, tools and messages (and to a large extent VRM is still a channel / tool based approach) and think instead about identifying and responding to behaviours (see these recent posts in response to Altimeter’s Dynamic Customer Journey and also digital influence).

The Dynamic Customer Journey – is it a channel problem or is it a behaviour problem?

The Altimeter Group is doing some research on what it is calling the Dynamic Customer Journey.  It is inviting people to contribute their thoughts.  Here are mine.

The basic premise, outlined here in a post by Jeremiah Owyang, is that reaching the customer has become more complicated.  The growth in information sources, channels and technolgies has, he has calculated, resulted in their now being 525 different permutations of channel for reaching an individual.  Complicated indeed.  However, could it be that this complication is created by the way we are defining the problem?  Perhaps we are making one of the classic mistakes that many are making when trying to enter the social digital space, namely restricting our ability to understand the new space by our desire to make it appear and behave like the old space we understood?

Here is what I mean.  The complexity of the problem stems from the fact that we are seeing it as a channel problem.  We are assuming that the challenge is to reach our customers and to therefore find the most effective channels to do this.  However, this is a traditional marketing way of undrestanding the situation and the one thing we are now starting to realise is that dragging traditional approaches into the social digital space very rarely works – because the social digital space works in a very different way. The interesting thing about the social digital space is that it is not really behaving like a series of channels.  99.99% of everything that is going on out there is not actually organisations reaching out to individuals, or even individuals reaching out to organisations – it is individuals making connections with each other. This is the activity that we should seek to understand in order to frame effective relationships with our customers, rather than focusing on the tiny part of the space that is available for organisations to use as a channel to reach people.

The critical thing about this activity is that it is driven by behaviours and context, not by channel.  It is therefore realistic to assume that the problem – and therefore solution – is not a channel one, it is a behaviour one.  Here is what I mean.  I am fond of saying that there are only 10 people who are critical to your business and social media can help you find them.  This is a promise that every traditional media / channel planner would love to be able to make, but can’t.  The catch is that these people are not defined by who they are (and therefore who can be identified and reached via a traditional channel based strategy) – they are defined by what they are doing at any given moment in time.  And, of course, as time moves on and the context changes, so some people will pass out of this group and more people will enter it.  Over a period of time a very considerable number of customers may pass into the space, but at any given time, it is only a small and therefore manageable number.

You identify these people by what they are doing, not be who they are, or by the channels you need to find them. This also has implications for the currently fashionable discussion on digital influence and digital influencers. As I posted a couple of days ago, digital influencers are not actually that important.

If you re-frame the problem of the Dynamic Customer Journey as being a behavior identification problem, not a channel identification problem – it suddenly becomes a whole lot easier to solve.  It is about digital spaces, not digital places or channels.  In essence it revolves around tuning into and dealing with what I see as the four key digital space: those spaces where people are

  • Saying something nice about your brand
  • Saying something nasty about your brand
  • Asking a question for which your brand is the answer
  • Making a suggestion as to how to make your brand better

In summary, the customer journey needs to be understood not by the route customers take (channel), but by what they do along the way (behaviour).

Anyone who wants to make their own contributions to the research can do so via this form.

Why Facebook is worth only $5.6 billion

Given today is Facebook listing day I figured I had to add my pennyworth (again) to the whole “is it worth it” debate.  I reckon the true value of Facebook is something in the order of $5.6 billion.  Here is how I derive that figure.

First I take a stab at guessing what it costs to deliver A Facebook (i.e. the service that Facebook delivers to its users, rather than the service it delivers to advertisers).  I reckon this is around £300 million.  It is the costs for the server space and the techy maintenance.  Now I know Facebook states it has much higher costs than this, but these are the costs associated within maintaining a business model that it needs to sustain a valuation of $100 billion – not the costs associated with delivering the service to its users.

Then I add a respectable margin to that figure (say 25%).  That gives me revenue of $375 million.  Then put a 15x multiple on that and you get $5.6 billion.

Now, Facebook is already generating much more revenue than the $375 million I think it should be earning.  So my figures are already wrong, right?  Well go back to basic economics.  In the long-term in functioning competitive markets, companies cannot generate significantly more for providing a service than it costs to deliver that service – because that simply creates a window for a competitor to come in at a lower price.  You can only break this rule by distorting the competitive framework in which you operate.  Facebook is currently operating in a distorted market because there isn’t a competitor and all the clever analysts haven’t yet actually worked out a realistic model for valuing something like Facebook – they all rely on a derivation of the old media platfrom model, forgeting that Facebook is not a media platform and its users are not an audience.  Facebook is actually an infrastructure – an infrastructure that cannot basically charge for the majority of the cost of that infrastructure because we already pay for it through what we pay to our internet service provider.

And as for competitors, they will come.  And their competitive edge will come from promising users that they won’t sell the users’ data.  And they will be able to do this, because they won’t need to sell the data, because they won’t need the revenue, because they won’t have to sustain a silly valuation.

Therefore, if you place a bet on Facebook at its current price, you are betting on Facebook’s ability to maintain a distorted market.   Long-term this is an absurdly risky proposition.

Long exposition on the value of Facebook and Google here.

Let’s ban the word content

I don’t like the word content when it comes to social media: I much prefer the word information.  Content is something you receive and consume, information is something that you share.  Content is a word that comes out of the traditional one-to-many mass communications space.  A content strategy infers that the challenge is to produce much more stuff simply because we no longer need to pay for the channels to put this stuff in.   I have to hold my hand up at this point and say that for a long time I subscribed to this view of content – I saw content as a volume challenge rather than a relevancy challenge.

However, the social media space is largely defined by people asking questions and searching for answers.  As I am fond of saying, an ad is an answer to a question that no-one ever asked.  The opportunity, for brands, lies in providing the answers to these questions.  The questions are very specific and so must be the answers.  Traditional content is very rarely the answer, because it is not specific or relevant enough.

Make the shift from thinking about content to thinking about information, and this helps organisations understand what they need to do.  When we had content strategies, this created the expectation that the output of the strategy was going to be a series of pre-determined bits of content: stuff that you plan in advance.  When you have an information strategy, it helps you recognise that the output has to be a process based on listening, and responding, to the questions that are being asked.

So – experiment with this one.  Do search and replace.  Wherever the word content appears in your strategy, replace it with information.  If you have to change the strategy to accommodate that shift comfortably, that is probably a change for the better.

UK Government Digital Service – a brilliant example of a social content hub

I often get asked to recommend social media tools (e.g. should we use Twitter? What should be our Twitter strategy?).  My reply is always “forget the tools, you can’t have a strategy based on the use of a tool, a carpenter doesn’t have a hammer strategy.  Work out what you want to achieve and this will then tell what tools you need and how to use them.”  That said, there are two basic functions that any organisation who wishes to operate in the social digital space needs to address and these do have tools attached which I am happy to recommend.  The first function is real-time listening (for which I recommend Socialmention and Netvibes) and the second is publication (for which I recommend WordPress).

The publication function involves creating a socially optimised publishing platform designed to launch content into digital space rather than be a content destination (or content prison as I like to call websites).  I call this a content hub, or a social hub, or sometimes a social content hub, or a social media newsroom.  I never want to call it a blog, because this creates some unhelpful preconceptions and means you fall into the old Gutenberg trap of describing content by its means of distribution.  You can see the problem.  Describing one of these things and understanding how it is different from a website is often quite difficult.  It requires both a conceptual understanding of the fact that information doesn’t live in digital places anymore, but in digital spaces (often created when people ask Google questions) and a structural understanding of how you now identify and optimise individual bits of information (posts) as distinct from sources of information (websites).

I therefore tend to fall back on examples and good ones are quite hard to find.  I was therefore delighted to discover the ‘socially-optimised-publishing-platfrom / content hub / social hub / social media newsroom’ from the UK Government Digital Service.  It is brilliant.  It uses a WordPress.com template (albeit a premium one that costs about $70 rather than one of the free ones), with some minor customisation.  It is beautifully simple and clean – information that is being published (launched) on the left and content from the various GDS Twitter accounts on the right – with two simple subscription options (RSS and Twitter) clearly available top right.

The issue of content segmentation is covered by use of categories which accord to each of the GDS project areas.  The GDS positions these as separate blogs, when in reality they are simply category pages.  This represents a very elegant way of overcoming what is often a common structural and design issue for many organisations, namely how to accommodate the increasing need to give identity to very specific subject areas, without creating a huge mess of individual blogs and platforms.  Add a new specialism or project and you simply add a category – the work of an instant.

And perhaps best of all, here is an organisation of the scale and resource (and presumed competence) of the UK Government using something that would fit within the budget and technical competence of even the smallest organisation.  It also gives me some faith that there are people at the heart of Government who understand social media.