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While the new site is being built and I am on a well deserved workation, here is a piece from the vault that you will find just as relevant today as it was when I first posted it. Back by popular demand, Game Change: Moneyball and the reality of social business.

I finally watched Moneyball over the weekend. I’m not a big baseball fan but it held my interest, partly because it was based on a true story and partly because the movie really wasn’t about baseball at all. It was about old thinking vs. new thinking, about industry politics vs. the heresy of innovation, about dinosaurs desperate to hang on to a failing model that sustains their livelihood even when that model is clearly broken, ineffective and no longer relevant.

The scenes in which Oakland As’ general manager Billy Beane (Brad Pitt) locks horns with his cadre of coaches and scouts over how to do more with less, about how to break the cycle of mediocrity plaguing their organization, about how to get results again is brilliant, not because of the writing or the acting but because it is spot on target. How do I know this? Because I have been in that meeting hundreds of times. Well, not that particular meeting, but in others exactly like it. And every week that goes by, I find myself sitting in that meeting again and again and again.

In the US, in Europe, in Asia, the same meeting goes on almost daily. The conference table is always basically the same, the fluorescent lighting too. The players, they’re the same as well, everywhere I go. Only the vocabulary changes, the industry lingo, but the meeting, it’s the same and it goes pretty much like this:


Billy Beane
: Guys, you’re just talking. Talking, “la-la-la-la”, like this is business as usual. It’s not.
Grady Fuson: We’re trying to solve the problem here, Billy.
Billy Beane: Not like this you’re not. You’re not even looking at the problem.
Grady Fuson: We’re very aware of the problem. I mean…
Billy Beane: Okay, good. What’s the problem?
Grady Fuson: Look, Billy, we all understand what the problem is. We have to…
Billy Beane: Okay, good. What’s the problem?
Grady Fuson: The problem is we have to replace three key players in our lineup.
Billy Beane: Nope. What’s the problem?
Pittaro: Same as it’s ever been. We’ve gotta replace these guys with what we have existing.
Billy Beane: Nope. What’s the problem, Barry?
Scout Barry: We need 38 home runs, 120 RBIs and 47 doubles to replace.
Billy Beane: Ehh! [imitates buzzer]

What we see in this scene is a roomful of insiders with a century and a half of industry experience between them, and yet they haven’t figured out that their model is outdated, that their “experience,” is no longer enough to keep moving forward. They carry on day after day, season after season, doing the same thing over and over again, half-expecting a different result, but then again, maybe not. Worst of all, most of them have no idea what the problems plaguing their organizations actually are. A lot of it is just operational myopia. Some of it is also ego: they couldn’t possibly be wrong. All that experience and intuition, the entire industry’s decades-old model… how could things have changed that much, right?

And yet they are wrong, the model isn’t working anymore, and instead of listening to the guy in the room who sees it and knows how to fix it, they treat him like a punk. When he wants to do something about it, they push back. Hard. In Moneyball, he’s their boss. Imagine when he is just a Director or a VP, or even just an account manager. Imagine how quickly he gets overruled then. I’ve seen amazing people get shut down and pushed out of organizations over this sort of thing. I could give you names and dates. I could make you ill with true stories of stupidity and petty politics, of wasted opportunities and complete operational failures that turned what could have been huge wins for companies that needed them (and customers who demanded them) into case studies in wasted potential. And as tragic as  these stories would be, they are no different from the opportunities that will be wasted this week, and the next, and the one after that, always for the same reasons, always because of the exact same thinking and business management dynamics.

I see that scene, that meeting, that discussion being played out almost everywhere I go, especially when it comes to social media and social business: guys sitting around a table, treating social like it is just an extension of the same old traditional digital marketing game they all understand and desperately want to stick to. And so they make strategy decisions based on models that don’t apply at all to the social space, they insist on using measurement schemes that aren’t the least bit relevant to it or the business as a whole, and worst of all, they make hiring decisions that absolutely make no sense at all for the new requirements of social communications. Why? Because even though the game has changed, no one in the room wants to accept that it has. No one in the room wants to adapt. No one in the room wants to look reality in the eye and do what needs to be done to actually win. Talk about it, sure. Use cool new words like earned media and engagement, definitely. But actually change anything and adapt to a new model? Nope. Not happening. The change management piece that comes with social business integration, the piece that is absolutely vital to it actually working, that piece is still DOA.

Here’s another conversation that also goes on “offline” at every company (agency or brand) around the world right now in regards to hiring decisions that touch on social media management. Here it is again, through the filter ofMoneyball:

Peter Brand: There is an epidemic failure within the game to understand what is really happening. And this leads people who run Major League Baseball teams to misjudge their players and mismanage their teams. I apologize.
Billy Beane: Go on.
Peter Brand: Okay. People who run ball clubs, they think in terms of buying players. Your goal shouldn’t be to buy players, your goal should be to buy wins. And in order to buy wins, you need to buy runs. You’re trying to replace Johnny Damon. The Boston Red Sox see Johnny Damon and they see a star who’s worth seven and half million dollars a year. When I see Johnny Damon, what I see is… is… an imperfect understanding of where runs come from. The guy’s got a great glove. He’s a decent leadoff hitter. He can steal bases. But is he worth the seven and half million dollars a year that the Boston Red Sox are paying him? No. No. Baseball thinking is medieval. They are asking all the wrong questions. And if I say it to anybody, I’m-I’m ostracized. I’m-I’m-I’m a leper. So that’s why I’m-I’m cagey about this with you. That’s why I… I respect you, Mr. Beane, and if you want full disclosure, I think it’s a good thing that you got Damon off your payroll. I think it opens up all kinds of interesting possibilities.

Every company has a Peter Brand either on staff or sitting in a stack of CVs. Not necessarily in the sense that they are geniuses with statistics  but in the sense that they see the forest from the trees, that they see what needs to be done, but every time they open their mouths, they get shot down. Worse, if they open their mouths too much, they’re gone. And if their CV doesn’t have the bullet points and keywords that hiring managers were trained twenty years ago to find relevant, they don’t even get considered for the position.

If I see one more social media leadership position go by default to candidates with “big agency digital experience” or “big brand digital experience,” I am going to throw my pencil at somebody’s head. There is the medieval thinking in action, right there. There’s the primary reason why almost every social media program on the planet is failing to produce results, why three fourths of companies still can’t figure out how to calculate the ROI of their social media programs, why most brands see less than 1% of engagement from their followers and fans after the first touch, why “content is king” is failing, and why increasingly, “social media” strategy and budgets are shifting to ad buys on social networks. That’s right: For all the talk about earned media and engagement and conversations, social media account roles are starting to go to media buyers now. (Here’s some insight into it.) Everyone loves to talk the talk. Almost no company is willing to actually walk the walk. That sound you’re hearing is the banging of traditional marketing hammers pounding nails into social business’ coffin.

You want to know why most big brand social media programs aren’t gaining real traction? Why they don’t work without a constant influx of ad spending? Why nobody sticks around when the “free iPads for likes” promotions are gone? Start there: no one in the room gets it. No one in the room wants to get it. And when someone in the room does get it, he or she doesn’t keep their job for very long. You think most companies are going to hire, promote and support change agents all on their own?

So the real question is this: Do you want to actually score some real wins or do you just want to spend big marketing budgets and play at being a digital big shot?

It’s a real question. In fact, it’s the most important question you might ask yourself all year. Because the answer to that question will determine whether or not you still have a job in two years. No wait… I misspoke. The answer to that question will determine whether or not you have the job you want in two years, and yes, there’s a difference. A big one.

When you find yourself looking for your next gig (and you will eventually,) do you want to just be the guy who was SVP digital at (insert big brand/agency here) or do you want to be the guy who took (insert big brand/agency here)’s theoretical social media and social business programs, and turned them into the new industry standards, into the business model that everyone will be copying and basing theirs on for the next decade? It’s a real question. Which guy do you want to be? The dinosaur or the pioneer? If the answer is the latter, then are you going to have the huevos to go against the grain? To take chances on whom you hire, what kinds of programs you launch, where and how you invest your budgets? Are you willing to stick your neck out and do it right? Or is it more likely that you’ll just play it safe, hoping that the system will just carry you for another decade or two, that the CEO or CMO you will interview with next won’t notice that your job was basically to spend ad dollars and shuffle digital board pieces for the CEO’s monthly show-and-tell meeting?

Who do you want to be? What do you want to build? Do you want to just wear the jersey or do you want to win? Hold that thought. Here’s another key piece of dialogue from the movie, after Billy Beane’s gamble has paid off, after he has started turning some wheels in a big way. He responds to an invitation from John Henry, owner of the Boston Red Sox, who tells him this:

John Henry: I know you’ve taken it in the teeth out there, but the first guy through the wall. It always gets bloody, always. It’s the threat of not just the way of doing business, but in their minds it’s threatening the game. But really what it’s threatening is their livelihoods, it’s threatening their jobs, it’s threatening the way that they do things. And every time that happens, whether it’s the government or a way of doing business or whatever it is, the people are holding the reins, have their hands on the switch. They go bat shit crazy. I mean, anybody who’s not building a team right and rebuilding it using your model, they’re dinosaurs. They’ll be sitting on their ass on the sofa in October, watching the Boston Red Sox win the World Series.

And a couple of years later, they did.

So let’s talk about our world again for a minute. Let’s talk about what’s coming, about tipping points, about momentum: Ford not only hired the right guy (Scott Monty) a few years back but gave him the authority to build a solid program there. The result: some serious wins on just about every front, from customer perceptions to purchase intent to customer loyalty and recommendations. Evencar design was impacted in 2010 by the importance of social communications in the Ford organization. Edelman Digital seems to be doing something similar (I keep running into some pretty solid folks there, notably Michael Brito and David Armano). Want to see something cool? This is one of the things they’re working on. Starbucks caught an early train with that too. So did Dell. What sucks is that in 2012, virtually no one else has even tried to keep up with them. For all the money being spent and all the “case studies” being pushed around the conference circuit, most companies are still fighting it, still refusing to accept that the game has changed – worse, trying to keep playing with old methods, with old thinking, with old, outdated skills and CV bullet points. But there will come a day when someone will be given the authority to build out this new model, when it will blow everyone out of the water, and when the blindfolds will have to come off. That day is coming. What side of change do you want to be on then?

Old thinking will not score wins here. Old tactics, old hiring, old measurement, they’re all wrong for these new marketing, communications and business models. They just don’t work anymore. If you don’t believe me, that’s fine. Keep watching your margins erode. Keep watching your digital dollars go to waste. Keep laying people off and outsourcing every last business function you can’t afford to keep in-house anymore. Keep pretending the world is the same today as it was five years ago, and that what you were doing five years ago will still be relevant five years from now. Whatever makes you feel better. Keep doing the same old thing that used to work, back before people carried smart phones and iPads. Keep thinking that the guy you just hired because he spent ten years managing digital for a fast-food brand knows fuck-all about building capacity and traction for a social media program, let alone produce concrete business results for you. Keep coloring the same old boxes with the same old crayons and see how far you’ll get.

_ Okay good. What’s the problem?

We need to fill a VP Digital role.

_ Nope. What’s the problem?

All right… Whatever. We need to fill a VP social media strategy role.

_ Nope. What’s the problem?

We need to hire someone with proven global digital management experience, Billy. Someone with Disney or Nike on their CV. Someone with serious digital campaign experience.

_ Nope. What’s the problem, Barry?

The problem is, we’re not growing our Facebook community fast enough, and our content isn’t seeing the numbers we want. We need a…

_ Nope. [Imitates buzzer]

Get unstuck. Watch Moneyball and let the light bulb go off in your head. Then go find your Peter Brand and hire the shit out of him before someone else does. If you’re lucky, you’ll save both your career and your company in the process.

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Here it is. A whole book on how to make social media work from a business standpoint. ROI is covered, along with a lot of process elements that tie back to it. If your favorite social business “expert” doesn’t seem to get this stuff yet, don’t feel bad about sending them a copy. Knowledge is never a bad gift.

CEO-Read  –  Amazon.com  –  www.smroi.net  –  Barnes & Noble  –  Que

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My post today is over on the Tickr blog and quickly explains how fashion labels are using social media to earn attention, create relevance and drive sales. Or you can just look at the above infographic sans-commentary, but you’ll certainly be missing out.

Bonus: the piece briefly mentions the Democratic Republic of Catistan, but you’ll never know why unless you go read it.

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Don’t forget to pick up your copy of Social Media R.O.I.: Managing and Measuring Social Media Efforts in Your Organization. The book is 300 pages of facts and proven best practices that cover many of the points I will be talking about in Austin. (Don’t take my word for it though: go to smroi.net to sample a free chapter first, just to make sure it’s worth the money.)

And if English isn’t your first language, you can even get it in Spanish, Japanese, German, Korean and Italian now, with more international editions on the way.

CEO-Read  –  Amazon.com  –  www.smroi.net  –  Barnes & Noble  –  Que

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I probably won’t be able to stay for the rest of SxSW, but if you plan on getting to Austin early, I’ll be there on March 7th to speak at the Social Business Summit (#SBS2013) being put on by Dachis Group and Oracle. For more info, click here.

Some of the speakers announced already:

Doug Ulman – President and Chief Executive Officer of LIVESTRONG Foundation. Oversees the strategic vision and direction of the company.  Doug has earned a reputation as the “Most Savvy Health Care Leader in Social Media” for his innovative use of social media to create awareness and knowledge about cancer. His online community includes a Twitter following of more than one million.

Tony Hsieh – CEO of Zappos. Author of the #1 New York Times Bestseller,Delivering Happiness.  Tony has helped Zappos grow from almost no sales to over $1 billion in gross merchandise sales annually, while simultaneously making Fortune Magazine’s annual “Best Companies to Work For” list.

Marisa Thalberg – Vice President of Corporate Digital Marketing Worldwide for The Estée Lauder Companies, Inc. Charged with supporting the development of world-class digital and social marketing across the company’s collection of over 25 prestige beauty brands.  Her efforts have helped propel the company to be ranked as having the highest “Digital IQ” of any global beauty company.

John Hagel – Deloitte. Nearly 30 years’ experience as a management consultant, author, speaker and entrepreneur. He has helped companies around the world improve their performance by crafting creative business strategies that more effectively harness new generations of information technology and shape broader markets and industries.

Erika Jolly Brookes – Vice President of Product Strategy for Oracle. Works on the Oracle Cloud-Social business to help guide product strategy and development.

Michael Brito – Senior Vice President of Social Business Planning for Edelman Digital. Provides strategic counsel, guidance, and best practices to several of Edelman’s top global tech accounts and is responsible for helping transform their organizations to be more open, collaborative and socially proficient.

Jeff Dachis – Founder and CEO of Dachis Group. Helped establish the digital services industry more than a decade ago when he co-founded Razorfish, Inc. out of a one-bedroom New York City apartment.  Now as CEO of Dachis Group, the world’s leading social software and solutions firm.

Brian Solis – Principal at Altimeter Group. Globally recognized thought leader and published author in new media. His book, The End Of Business As Usual, looks at the changing consumer landscape, it’s impact on business and what companies can do to adapt and lead.

Dion Hinchcliffe – Chief Strategy Officer at Dachis Group. Business strategist, enterprise architect, author, analyst, and blogger. He currently works with the leadership teams of Fortune 500 and Global 2000 firms to devise strategies to help them adapt their organizations to the challenges and opportunities of the 21st century.

Peter Kim – Chief Solutions Architect at Dachis Group. Responsible for the definition, development, and delivery of data-driven social marketing solutions for the company’s current and future clients.  Peter is also the co-author of the popular management book Social Business by Design.

… and me.

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So if you can, come say hello. 🙂

Between now and then, you might also want to check out the contest that Tickr (client) is running. The quick version: You sign up, Tickr hooks you up with a Command Center account, and you submit a small case study or summary of how you used their monitoring tool. You can make it as simple or as intricate as you want, but originality and creativity will probably be the biggest factors in determining who wins. Find out more here.

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If you can’t make it but wish you could, pick up your copy of Social Media R.O.I.: Managing and Measuring Social Media Efforts in Your Organization. The book is 300 pages of facts and proven best practices that cover many of the points I will be talking about in Austin. (Don’t take my word for it though: go to smroi.net to sample a free chapter first, just to make sure it’s worth the money.)

And if English isn’t your first language, you can even get it in Spanish, Japanese, German, Korean and Italian now, with more international editions on the way.

CEO-Read  –  Amazon.com  –  www.smroi.net  –  Barnes & Noble  –  Que

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During the Superbowl on Sunday, there was a little glitch with the lights. They went out. We’re talking blackout. Within minutes, Oreo released the above image across several key social media channels. Not Duracell, not Energizer, not G.E…. Oreo.

Clever. And it paid off for the brand.

Why was this a win? Four interwoven reasons: Velocity, relevance, wit and execution.

Wit, relevance and execution, most ad agencies can handle. Velocity, on the the other hand (generating ad-quality content and publishing it as meme-like social content), not so much. That’s still rare.

I want you to think about obstacles vs. enablement.

I want you to think about culture and operational agility.

Something like this doesn’t happen by accident. You have to have the right people in place, the right presence on key channels, the right support from management, the right kind of relationship with your community, and an eye towards real-time community management and content creation.

How many levels of approvals and sign-off do you think that image had to go through before getting the okay? Judging by the speed with which it appeared on the interwebs when the lights at the Superdome went out, not many. How did Oreo pull that off?

1. At some point, Oreo decided it needed a nimble, agile, self-sufficient social media team.

2. At some point, Oreo decided to trust that team to do its job without having to micromanage it.

Easier said than done? Sure. But only by fine margins. Want to guess what separates Oreo from other companies that haven’t been able to do this yet? They hired the right people.

Instead of assigning social media duties to some intern or the cheapest content creation team they could find, they made sure that the people running that piece of their digital business were witty, capable, professional people who understand brand voice, who understand their fans, and who understand how memes and social marketing work.

This happened because the right people were hired and then allowed to do their job.

We can talk about tools, we can talk about processes, we can talk about platforms, but Oreo’s real genius can be traced straight back to having the right people in place.

If you want to celebrate brand management and superbowl advertising secret sauce today, the two words you should keep in mind are velocity and competence.

 Here’s how they did it. (via Buzzfeed)

Whether or not this ultimately translates to business growth, well played, Oreo. Well played.

Let’s close with two simple graphs:

1. Immediate impact on Twitter:

(Feel free to compare this graph with those of every Super Bowl advertiser.)

Oreo tweets

2. Impact of Twitter on conversations about the Super Bowl:

Superbowl Tickr

See that enormous horizontal blue line up there? That’s the volume of Twitter mentions against Facebook, Instagram, blogs and news for the same time frame. [source]

Long term, platforms like Facebook, Youtube, and Instagram are probably stronger bets for stickiness and reach, but in terms of real-time impact (especially during events), Twitter matters. It matters a lot.

PS: You’ll want to read this too. (Real-time marketing) by David Armano.

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If you’re interested in how to make something like that happen, then convert that attention into real sales, pick up a copy of Social Media R.O.I.: Managing and Measuring Social Media Efforts in Your Organization. The book is 300 pages of facts and proven best practices that explain how to do what Oreo just did – and then some. (Go to smroi.net to sample a free chapter first, just to make sure it’s worth the money.)

And if English isn’t your first language, you can even get it in Spanish, Japanese, German, Korean and Italian now, with more international editions on the way.

CEO-Read  –  Amazon.com  –  www.smroi.net  –  Barnes & Noble  –  Que

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 FGS

Facebook Graph Search explained in 15 seconds. It’s really simple. Ready?

Think search your community/network instead of search the web.

That’s all it is.

If that doesn’t work for you, think about search in terms of degrees of separation. Remember David Armano’s influence ripples? Imagine search working the same way. It’s basically search coupled with social relevance.

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If that still doesn’t work for you, here’s Zuck:

ZuckAlso check out Christopher Penn’s insights here. (Relevant to marketing, digital and bizdev pros.)

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Looking for straight answers to real questions about value, process, planning, measurement, management and reporting in the social business space? pick up a copy of Social Media R.O.I.: Managing and Measuring Social Media Efforts in Your Organization. The book is 300 pages of facts and proven best practices. (Go to smroi.net to sample a free chapter first, just to make sure it’s worth the money.)

And if English isn’t your first language, you can even get it in Spanish, Japanese, German, Korean and Italian now, with more international editions on the way.

CEO-Read  –  Amazon.com  –  www.smroi.net  –  Barnes & Noble  –  Que

Read Full Post »

You can actually do the work, or you can fake it and try to make an easy buck. It doesn’t matter what industry or profession you’re in. Athletes cheat. Accountant cut corners. Political consultants adjust poll numbers. Teachers hire surrogates to take their certifications for them. And yes, social media gurus make up magic equations that promise to measure everything from ROI to the value of a like.

We are surrounded by people who have chosen to make bullshit their vehicle of “success.”

Why? Because it’s easier than doing the work. Because it’s a faster path to revenue. Because for every executive or fan or client who sees bullshit or bad science for what they are, there are two or three who won’t know any better and will gladly pay for the next “big” thing.

Selling bullshit isn’t any different from selling anything else: at its core, it’s just a numbers game. You don’t have to sell to everyone. You won’t. You just have to sell to enough people who don’t know better and you will make a living. If you care more about positive cash flow than your reputation, about your next bonus or potential book deal than professional responsibility, about appearing to build value than actually providing any, then you can do pretty well selling complete crap.

Welcome to the world of gurus, of cult leaders, of chief tribe strategists.

About once or twice a year, I run into an example of social media bullshit that I find worthy of sharing with you on this blog. Sometimes, it’s a egregious money-making scheme whose sole intent is to prey on desperate, gullible, underemployed would-be “consultants” looking for an easy in to the “social media expert” space. Sometimes, it’s just bad science – a lousy equation or even a poorly conceived (insert acronym here) “calculator” whose authors didn’t really take the time to test and submit to any kind of legitimate peer review. Assumptions were made. Corners were cut. The whole thing was rushed.

I want to stress that not all social media gurus and self-professed digital experts are out to rip you off or sneak a sordid scheme past your bullshit detector. Many are just scam artists, but many are not. Sometimes, bad science just happens. Bad math, silly equations, erroneous reporting and made-up acronyms don’t get chucked into the FAIL pile because their author didn’t really know any better. Because they didn’t take the time to really put their own work to the test. They weren’t diligent with the proofing and peer review part of their experiment. Whether it’s laziness, incompetence, distraction, convenience or denial is for you to decide. All I know is that regardless of intent or reason, bad math is still bad math, and bad science is still bad science, and none of that ads net positive outcomes for those of us trying to make things work better in the social business space.

Today’s example illustrates how easily this sort of thing can happen. And before I get into the meat of it, let me just say that this post is in no way meant to be a bashing of Dan Zarrella. I’m sure he is very knowledgeable and supremely competent in a number of areas. I don’t know Dan. We’ve never worked on a project together. I have no idea who he is or what he does other than that he works for HubSpot. So what I am sharing here today isn’t meant as an attack on his character or competence or on whatever HubSpot is selling with this VOAL “model.” I just want to show you how easily business measurement nonsense can become “legitimized” by leveraging and combining personal brands, trusted publishing channels, market confusion, and the absence of a legitimate academic peer review process in the publishing of mathematical and measurement models anymore.

So before some of you jump on me for criticizing your best bud, stop. Breathe. Get some perspective. I’m not trying to hurt Dan or Hubspot. I am doing what someone around them should have done before this equation was published. This isn’t me bitching or making noise because I like the attention. This is me explaining something important and making sure that unsuspecting executives and decision-makers don’t fall for the latest flavor of bad social business measurement “science.” We’re never going to get out of this vicious cycle of “hey look at me, I invented a whole new social media equation” bullshit unless we have these kinds of discussions. We need to have them, even when they aren’t pleasant.

This industry is in desperate need of a serious dose of reality.  And if that sometimes comes with a swift kick to the balls, then sorry but that’s just what needs to happen.

An overview of the VOAL Equation:

This week, Dan Zarrella published a piece in the Harvard Business Review blog titled “How To Calculate The Value of a Like.” In it, he attempts to loosely equate the value of a like (VOAL) to ROI, then offers the following equation to calculate this so-called “value”:

The beauty of an equation like this is that virtually no one is going to take the time to try and make sense of it. Most marketing execs looking for a simple and easy way to calculate the ROI of their activities in digital channels will simply assume that the person behind the mathematical model is qualified and smart and competent. In fact, this was one of the argument provided by Dan on twitter yesterday when I questioned the equation.

For sport, we could dig into the equation itself. We could look at all of its components and determine whether they can be thrown into a bucket together, and through the alchemy of selective math, be twisted and bent into a legitimate measure of the value of a like. here’s how it breaks down:

L (Total Likes): The total number of audience members connected to your social media account. On Facebook, these are Likes of your page, and on Twitter, these are followers.

UpM (Unlikes-per-Month): The average number of fans who “unlike” your social network account each month. On Facebook, this is an “unlike,” and on Twitter, this is an “unfollow.”

LpD (Links-per-Day): The average number of times you’re posting links, and potentially converting links driven from your social media account. On Facebook, this is the number of posts you’re making, per day, that lead to a page on your website. On Twitter, this is the number of times, per day, you’re Tweeting these kinds of links.

C (Average Clicks): The average number of clicks on the links to your site you’re posting on your social media accounts.

CR (Conversion Rate): The average conversion rate of your website, from visit to sale or visit to lead. This can be an overall average, but for increased accuracy, use the conversion rate measured from traffic coming from the social network you’re calculating.

ACV (Average Conversion Value): The average value of each “conversion.” In this context, a “conversion” is the action you’ve used to measure CR for. It could be average sale price or average lead value. For increased accuracy, use the average conversion value of traffic coming from the specific social network.

If you went through the process of actually making sense of the equation, you would realize fairly quickly that because the ACV is a subjective value that can be pretty much anything you want it to be, the math can be bent to deliver any kind of “value” you want it to. You might also notice that for whatever reason, “unlikes” are measured monthly but likes are measured along an indeterminate timeline. You might also be driven to ask yourself why LpD (links per day) even needs to be part of this equation or why it is multiplied by 30 (days per month) when the clicks and likes are not.

Let me pause here. The point is that, already, the logic behind equation is already a mess.

What is wrong with this VOAL “model” (first sweep):

1. Its bits and pieces don’t make a whole lot of sense.  We have “total likes” up against “average clicks.” If we have total likes, why not also have total clicks? As an aside, what does one even have to do with the other? (Which brings me to item number 2…)

2. The relationship between the bits and pieces doesn’t make a lot of sense. Why are we multiplying net likes by links per day x30, then again by clicks divided by likes, then again by the conversion rate, and then again by (an admittedly subjective) conversion value? That’s a lot of multiplication. A x B x C x D  = LV? Really? That’s the model?

3. The cost of any of these activities is not taken into account anywhere. Tip: It’s hard to calculate the value of anything without factoring the cost somewhere in the equation. That’s a problem.

4. C = Average Clicks. Okay. Per day? Per month? Per day x 30? What am I even plugging into the equation? Not clear.

5. In what currency is the “value” of a like measured? Is this value a monthly value? An average value? An average monthly value? Is it even a $ value? Not clear. (Again.) What about offline transactions? What about transactions that can’t be measured by a last-click-attribution model? Are they divorced from the “value” of a like?

6. I see no metric for shares or comments. Another major oversight given the importance of sharing and commenting in regards to attention and propensity to click on a link or consider a purchase.

What else is wrong with this VOAL “model” (second pass, caffeinated this time):

For what little time we just wasted on this pointless exercise, we haven’t even touched on the more relevant aspects of why this equation fails to deliver a mathematical solution to the question of like value. Seven of them in particular:

1. A Facebook fan’s value (now called a like) is not the same as the cost of that fan’s acquisition. I bring this up because measuring the value of a like without taking into account the cost of that like makes the process null and void.

Also, give some thought to the difference between page likes (fans) and update/content (likes). What likes are we measuring again? Oh wait… here it is:

L (Total Likes): The total number of audience members connected to your social media account. On Facebook, these are Likes of your page, and on Twitter, these are followers.

So… the equation doesn’t measure those daily “little” likes. The ones that are attached to content and updates. To measure that kind of engagement on a Facebook page, the equation instead looks at clicks on posted links. But for some reason, it looks at average clicks, not net clicks.

????…

(Why? Your guess is as good as mine.)

No details on whether those are average daily clicks or average monthly clicks either. Could they be average hourly clicks x 24 x 30 x 12? No idea.

2. Since “likes” really stand for fans of a page, let’s talk about that: A Facebook fan’s value is relative to his or her purchasing habits (and/or influence on others’ purchasing habits). A like/fan is worth absolutely $0 unless that individual actually purchases something. Let’s start there.

If your intent is to measure fans/likes to transaction dollars attributable to your Facebook page, no need for a complicated VOAL equation. Save yourself the trouble and just measure inbound traffic from Facebook against online sales $. It will only speak to a last-click attribution model (a pretty limited way to measure the impact of a channel on sales if you ask me) but at least it will be much easier to measure and far more accurate than a bullshit equation that makes no sense at all. Then just divide your online sales from Facebook links by the number of fans/likes on your page, and voila. Done. It’s still a crap way to measure the average “value” of your Facebook fans/likes, but at least your math won’t be wrong.

3. Determining the average value of a fan may be interesting as a baseline for other measurements, but give some thought to the fact that each Facebook fan’s value is unique. One fan may engage with your content in a measurable way 300x per month but never spend a penny on your products. Another may engage with your content only on occasion but spend $3K per month on your products. Averaging your fans “value” won’t only give you a false sense of the relationship between likes and transactions, it will also obscure genuine lead generation and customer relationship development opportunities in a space that begs to be social. What’s the value to your business of averaging out net lead generation values again? None. If this is what you spend your time on, you might as well stop wasting your time on social channels.

4. A Facebook fan’s value is also likely to be very elastic. Some customers just have erratic purchasing habits. They might spend $3K with you one month and not buy from you again for a year. Depending on the size of your community and your type of business, this elasticity’s effect on that equation will drive you nuts and won’t help you make sense of what is going on with your Facebook strategy.

5. There is little correlation between a Facebook like and an actual transaction in the real world. (Maybe I should have started with that.)

6. Likes can be bought and/or manufactured, and often are, rendering this kind of equation (even if it made any sense at all) completely worthless. If you have no idea how many fake followers/fans/likes you have and try to measure VOAL you’re basically screwed. Have fun with that.

7. Once again, what about offline transactions? (What about any and all transaction behaviors that don’t neatly fall into a last-click-attribution model, for that matter?) The equation seems to completely ignore the relationship between Facebook fans/likes and offline sales. For most businesses, that’s going to be a tough pill to swallow.

And since I haven’t yet mentioned proxy sales structures (distribution channels, like Ford dealerships vs Ford’s brand pages, or Best Buy vs. HP for instance), maybe this is a good time to bring them up, because this “model” doesn’t address that either. At all. If I ask my local VW dealer to measure his page’s likes against his monthly car sales using Zarrella’s VOAL & digital conversion model, somebody is going to walk out of that discussion with serious hypertension, and a social media manager somewhere is going to be out of a job.

(If you still need convincing, click here for a more in depth discussion.)

Bad Math in Action: Try the VOAL Equation for yourself.

If you can’t make heads or tails of Zarrella’s equation or my explanation, don’t worry. He has built a nice little website for you where you can just fill in the blanks and go see how it works for yourself. Here it is: www.valueofalike.com. Try it. I plugged in several of my clients’ numbers and according to the tool, the average value of their fans/likes seems to hover around $73,736.25.

Yes, you read that right: According to the site’s math, every additional 14 fans/likes I bring to their respective pages amounts to over $1,000,000.00 in value/potential revenue. (Over how long, nobody knows, though evidently, the average fan-customer spending $25/month with them has an lifespan of about 245 years.) My clients will be thrilled to hear all about that. Maybe I should start charging more for my services.

In the meantime, check your numbers against the math and see if you get more accurate results than I did. Maybe I did it wrong. I’ve been known to be wrong before, so it’s possible. Or maybe the calculator is off somehow. That’s possible too. Or am I just missing something? Was I supposed to move a decimal point over at some point?  I’ll try to do this using the long form of the equation later, just to see if I can make it work. Or maybe not. I don’t really care anymore. This whole thing is so stupid, pointless and overly complicated that it’s giving me a genuine headache.

We get it. It doesn’t work. Now what?

Let me share four final things with you and we can all get back to work:

1. If all you are looking to do is determine the average value of a fan/like in the context of a last-click attribution model (linking a transaction to the last link someone clicked on to get to your site before pressing “buy”), then just add up sales $ resulting from inbound traffic from Facebook and divide that by the number of fans/likes on your page. That will tell you the average value of a fan/like – which is to say it won’t really tell you a whole lot but at least you’ll be done in under a minute instead of spending ten minutes filling the blanks of Zarrella’s VOAL equation, and then another week trying to figure out why your numbers look so weird. Bonus: It will be just as useless, but it’ll be so quick that you’ll have more time to get back to doing real work.

Also, if you want to measure the ROI of your Facebook activity, you’ll have to work a little harder at it, but item 3 on this list ought to give you a few simple guidelines that will get you on the right track. What’s nice about it is that my example focuses mostly on linking offline (brick and mortar) transactions to channel activity, and that’s actually harder than linking digital activity to digital transactions. So have fun with it and I’ll be glad to answer any questions.

2. Because Zarrella’s article was published via the Harvard Business Review’s blog, scores of people won’t think to question it. The fact that he works for Hubspot (a reputable company) makes the equation seem that much more legitimate. And because it looks complicated as hell, who is going to take the time to figure out if it actually works (or how)? Nobody.

In other words, the assumption of competence on the part of the author (a) the perceived complexity of the equation itself (b) and the assumption of an editorial review process on the side of the publisher (c) will combine to ease readers into assuming that the contents of that article are solid. This is why we can’t have nice things.

Too many assumptions, not enough fact-checking. Again.

Shame on HBR for not making sure that what they publish has been verified, by the way. It isn’t the first time something like this has slipped through their editorial review process (assuming there even is one). Remember this gem?

Tip: Next time someone tells you they’ve invented a metric, run. Seriously. Turn around and start hoofing it.

3. I spent a little time explaining to Dan on Twitter how to actually measure the value of channels as they relate to actual sales, so you might want to check that out. (Feel free to skip the initial petty bickering and scroll straight to the process I outline in the example.) There are two versions of that exchange for you to pick from:

Rick Stillwell’s capture (go say hello) and Paul Shapiro’s capture (both unfortunately miss a few of our wittier exchanges, but that’s okay. The process part of it is far more important.) That method can be replicated by small and mid-sized businesses with little to no access to social media management tools like Radian 6, by the way. It takes a little work, but it’s simple. And yes, simple works. if you need more details on it, I talk about it in Social Media ROI.

4. Dan and HubSpot: Let me extend the following invitation. If you are serious about building a channel and fan/follower measurement model that actually works online and offline and will bring value to organizations you work with, I will gladly help. I can show you how to do this and how not to do it too. Get in touch if you want to. Or don’t. Totally your call.

For everyone else, also check out this piece by Zachary Chastain on Thought Labs. He gets to the point a lot faster than I do, and with far less bite. And also Sean Golliher’s brilliant piece, which outlines further problems with Zarrella’s VOAL model.

And if you’ve noticed that my writing has been scarce here lately, it’s because I have been writing about digital command centers and real-time social business intelligence over on the Tickr blog. No worries, I’m still here, but I have to split my time between both blogs right now. New project with exciting developments coming very soon, so stay tuned. (And go check it out.)

Until next time, have a great day. 🙂

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Not to take advantage of bad science to sell books, but since I go over real measurement methodology vs. bogus social media “measurement” in  Social Media R.O.I.: Managing and Measuring Social Media Efforts in Your Organization, it’s worth a mention. If you are tired of bullshit and just want straight answers to real questions about value, process, planning, measurement, management and reporting in the social business space, pick up a copy. The book is 300 pages of facts and proven best practices. You can read a free chapter and decide for yourself if it’s worth the money (go to smroi.net).

And if English isn’t your first language, you can even get it in Spanish, Japanese, German, Korean and Italian now, with more international editions on the way.

CEO-Read  –  Amazon.com  –  www.smroi.net  –  Barnes & Noble  –  Que

Read Full Post »

Digital Crisis management is hard work. It’s complicated work. But it’s also not rocket science once you understand the mechanics of the process. Today, let’s break down crisis management into five simple components (or phases) and briefly explore the structure of each one. Understanding how to break down a digital crisis management model that way, looking at what types of tools to use and how,  and going through a few general observations in regards to best practices will hopefully arm you with helpful guidelines should your organization ever find itself having to deal with… an unfortunate circumstance involving a lot of very angry people.

To illustrate how this works, we will look at screen shots of what @KitchenAid’s recent PR crisis looked like on a basic Tickr dashboard. If you aren’t familiar with what happened and what the crisis was about, you can catch up here (just remember to come back). Hang on… before you go anywhere, let’s start at the beginning:

… (Continue reading).

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Oh, and while you’re here…

Social Media ROI – Managing and Measuring Social Media Efforts in your Organization was written specifically to teach managers and executives how to build and manage social media friendly business programs and incorporate social technologies and networks into everyday business operations. The book is divided into four parts: social media program strategy & development, social media program operationalization, social media program management, and best practices in measurement and reporting. If your boss doesn’t yet have a copy, time to fix that. If everyone on your team doesn’t yet have their own copy, fix that too. It makes for a great desk reference.

(Now available in several languages including German, Korean, Japanese, Italian and Spanish.)

CEO-Read  –  Amazon.com  –  www.smroi.net  –  Barnes & Noble  –  Que

Read Full Post »

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