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Posts Tagged ‘social business’

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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Why I stopped blogging:

My last post here is dated February 25th. I wish I could say that was the last time I was genuinely interested enough to write and share something pertinent with you guys about brand management or marketing strategy or social business, but that isn’t true. If you scroll back through my posts for 2013 and the second half of 2012, you will probably notice that I was already kind of losing interest in blogging for the sake of blogging. Truth is, sometimes, even someone as outspoken as me just doesn’t have anything really all that pertinent to write about on a blog like this one, and though the discipline to carry on writing “content” day after day anyway is admirable in many ways, I found the exercise pretty much mired in futility.

A friend of mine in the industry told me about a year ago that I needed to publish something on this blog at least 3-5 times per week. He was pretty adamant about it, and I suppose he should know. He has 10x the readership and the twitter followers. He has published 10x more books than I have (I only have the one), he gets paid a shit-ton more than I do to spend half as much time on stage. He’s big time. Career-wise, he is in every way my better. I should listen to him. The thing is, I don’t think that post quantity or post frequency or even an editorial calendar’s consistency really matters. Traffic to this blog remains strong even if I don’t post a single thing for months. I have so many posts here that I could probably never publish anything again and my traffic would stay consistent for the next 3+ years. More importantly, I don’t really care about pulling traffic to my blog anymore. I used to. For ego, mostly. A 12,000 visitor day was like Christmas morning to me once. I felt important and validated. I look back on that now and ask myself what the fuck I was thinking.

Oh yeah… that’s another thing. I probably shouldn’t curse here. This is a business blog. Well, so much for that rule too. I live in the real world, and in that world, people say fuck. In fact, they get pretty creative about it. It may not be everyone’s cup of tea, but at least it’s honest, and there’s a lot to be said for people who aren’t afraid to speak their minds.

I have always prided myself on publishing quality content. As much as I hate the term “content,” I will use it here to describe what you are reading right now, if only to make a point: I stopped doing that months ago. I did. I was just going through the motions. Writing a blog post just because I am supposed to fill space robs a blog like this one of its value. Even though I never intended to shift from publishing quality blog posts to publishing “content,” it’s where I was headed. I woke up one morning and sat at my desk and realized that I was turning into just another social media asshole who publishes shit just to have something to publish. Just to get traffic to a stupid website. Just to see his name mentioned a couple hundred times in a Twitter stream and feel important and validated. That’s not who I want to be and it sure as shit isn’t why I got into blogging. I didn’t like where things were going, and since I didn’t know what else to do, I backed off and worked on other things.

Why some of my “peers” might want to back off for a few months as well:

Top 10 Ways to Create Successful Content

Why Net Promoter Score Is The New ROI

5 Strategies to Better Engage With A social Media Audience

8 Ways Klout Is Revolutionizing Business

11 Reasons Why Google Glass is the Most Important Technology in Human History

Stop. Just stop. Shut the fuck up. Really.

You want to feel important, go do something important, something that actually matters:

Help a company solve a real problem. (Selling them a product doesn’t exactly qualify.)

Help curb domestic violence in your state by even 1/10 of a percent.

Help create a digital bipartisan policy innovation exchange. (Holy shit! Using social media to depolarize discussions about real issues and even crowdsource real solutions to real problems? Shut. Up!)

Develop social business systems and protocols aimed at boosting customer retention (loyalty is a process, not just a marketing buzzword).

Do something. But for fuck’s sake, stop filling empty space with “content.”  It’s gotten so bad, even I was getting sucked into it just to keep up with this shit:

The CMO is dead. 

Digital is Dead. 

Marketing is Dead.

Advertising is Dead.

Print is Dead.

Stop. In case you haven’t noticed, we’re all just writing the same shit over and over again, and most of it is utter nonsense. There’s no value to it. Most of it isn’t even accurate, let alone helpful to anyone. Hell, it isn’t even entertaining. If any of you wrote even one of those blog posts as an email and sent it to your boss, you would probably be fired shortly thereafter for being an incompetent dumbass. So what makes a digital editor or a social media “expert” think it belongs on a blog (or worse, on major pubs’ blogs like Forbes.com or HBR.com or Money.com)?

Please, if you’re that kind of blogger/writer, back away from your computer and give some thought to what you’re about to write. Better yet, go find something relevant to write about. You’re making my brain hurt with this shit. Why are you even here? What are you doing? What value are you bringing to your industry? Stop. Go for a walk or a run or whatever, and think about what you should really be doing instead of throwing your very own personal turds at the same giant pile of turds everyone is already busy throwing their turds at. It’s big enough as it is. It’ll do just fine without your latest “contribution.”

An apology:

Even if my blog posts aren’t quite as awful as some, truth is that it’s been a while since I have contributed anything particularly intelligent or new or even special to our overall conversation. I woke up one morning and I realized I was just creating content, and it really turned me off from the whole thing. That break I just suggested, I took one. I’m not sure I’m really back yet, but I’m back today anyway, and I suppose that’s a start.

I don’t think I need to apologize for my physical absence since my last post on February 25. That was actually a good thing. What I do need to apologize for though, is my substantive absence since whenever the hell it was that I started posting “content” on this blog just to keep the wheels spinning. I let you guys down and I’m sorry. I didn’t mean for that to happen. I’m still trying to figure out exactly how I got sidetracked. Burnout maybe? Caught in the momentum of a flawed trajectory… Maybe it was a bunch of little things. I’ll give it some thought and let you know if I ever figure it out.

What comes next for this blog:

Moving forward, The BrandBuilder Blog will have no set editorial calendar. Maybe I publish something every day for a week, and maybe I don’t publish anything at all for a month. It will all depend on whether I have something relevant to share or even the time to share it. If I have nothing intelligent or pertinent to say, I won’t waste your time pretending that I do. Believe it or not, I don’t have awesome advice to give every damn day of the week. Most days, I’m just like everyone else: busy, confused, and filled with far more questions than answers. I don’t need to pretend that I am an expert or a guru… and though I hope to become an expert at something someday, I sure as shit don’t ever want to be a guru. Robes aren’t a good look for me.

So anyway, stay tuned. I’ll be back with more. Thanks for your patience.

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If you haven’t yet, 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 to help you build, manage and properly measure your social media efforts against business objectives. (You can go to smroi.net and sample a free chapter.)

If English isn’t your first language, you can smROI is also available 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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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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You know how legitimate social business case studies are sometimes hard to come by? Well, Tickr (client) is looking to remedy that with a little contest for the next two months. And the deal only gets sweeter from here. In their own words:

The rules are simple: You sign up, we grant you access to Command Center for a little while, and you submit a cool little case study by March 15, 2013. Whoever comes up with the best case study in each of three categories listed below will win a year’s free access to Command Center, bragging rights, and maybe even a little extra swag. 

The three categories of entries are:

    • For-profit
    • Non-profit
    • Journalism

The case study doesn’t have to be centered on Command Center, but it has to show how you used Command Center to do something. (Read more about that here.)

What’s in it for you?

  1. Free Beta: You get to beta-test the pro version of Command Center for free. (Usually, the free trial version is a throttled-down version. Not this time. You get to use the real thing.)
  2. Case Study Support: Tickr will help you build your case study. I’ve agreed to help out as much as possible, so if you need help with formatting, measurement, process, strategy, etc., it’s likely that I will be assisting you in some way. If you’ve ever wanted to work with me on something, it won’t be exactly like that, but it’ll be close. I only have so many available hours in my day, but I’ll do what I can to help.
  3. Eyeballs, Eyeballs, Eyeballs: If you want to draw a lot of attention to a project, cause or campaign that you’re working on, this contest will be a good way to do that. Solid case studies collected as a result of this contest (whether they win anything or not) will get a lot of mileage out of this.
  4. Street Cred: Impress the world with your social business savvy. Whether you are looking to impress your boss, your peers, your rivals or recruiters is up to you. Just give us your best, show us something real and valuable and clever, and you will be amazed how much you and your project will get out of the process.

Agencies, brands, small organization, big organization, journalism students, consultants, newbies, veterans: all are welcome. The more varied the contestants the better. You can create a completely new project/case study specifically for this contest or you can incorporate the contest into something you are already working on. It’s 100% up to you.

To read a little more about the contest, click here.

To register for the contest, click here.

Note: Once you register, Tickr will send you all the info you need to get started. No strings attached and no obligations. If half-way through the process, you decide you don’t want to submit a case study, no one will hold that against you. The folks at Tickr will do whatever they can to make sure you get all the support you need though, so I hope everyone will complete the process.

My advice: Simple is good. Simple is easy. Simple often wins. This doesn’t have to be a huge time-suck unless you want it to be. It is something you can easily incorporate into your daily routine. The case study submission process amounts to filling out a submission form at the end of the contest. You can do more if you want (videos, presentations, white-papers, etc.), but you don’t have to. The contest is supposed to be really easy. The idea is to make your job easier, not harder. Keep that in mind.

Okay, that’s it. Pass it on, have fun, and let me know what you think of the new Command Center. (Here’s a 1-minute tour, by the way.)

This is going to be pretty cool. I can’t wait to see what you all come up with.

Cheers,

Olivier

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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

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Edelman_marquee-01

If you aren’t familiar with Edelman’s Trust Barometer project, you should be. I can’t think of any other organization out there that has been able to peel back the layers of trust in the business world as effectively.  (If you know of other work I should be looking at, please leave a link in the comments.) Anyway, I want to share some of their findings here because understanding them will help everyone build and grow better companies. This isn’t just a PR topic. It affects everything: Brand management, communications, operations, retail, customer service… everything.

First, the checklist. Below is a graphic that shows 16-trust building attributes every organization needs to be aware of (and gauge). It looks like this year, Edelman added categories (what they call trust performance clusters): Engagement, Integrity, Products & Services, Purpose, and Operations. I can’t poke a hole into this. It’s solid.

Edelman Performance-Clusters

Since I am as much a fan of best practices, brand strategy and change management as I am a fan of data, insights and infographics, you can imagine how stuff like this makes me feel like a kid in a candy store.

Here’s another piece of the Trust Barometer project: shifts in trust around the world year over year (YoY). To be clear, the graph does not illustrate consumer trust in the countries listed, but rather how consumers in each of these countries tend to trust companies, media, government institutions and NGOs. (If you think of it as a sort of cynicism graph, the US, the UK, Germany and France are a lot less cynical about all four sectors today than they were a year ago. We’re not out of the woods yet, but it’s a good sign.)

Edelman Slide6

Edelman’s Trust Barometer report for 2013 is summarized really well in this video. (If the link below doesn’t play, click here.) It’s less than 3 minutes long and packed with a ton of really fascinating info, so keep your finger near the pause button. And no, I wasn’t paid by Edelman to push their report or say nice things about them. I ran into this yesterday on the Facebook. I was impressed by it and thought it was well worth sharing with you guys.

What’s particularly fascinating to me:

1) Tech companies seem to inspire the most trust and banking/financial institutions the least amount of trust.

2) Leadership and corporate culture are cited as the primary causes of corporate wrongdoing. (And rightly so.)

3) Globally, CEOs have less than a 50% approval rating. Only 18% of people expect business leaders to tell the truth, and 13% of political leaders to tell the truth. That is execrable.

What it means: a) we have a global leadership problem, and b) people are no longer blind to it. If that shouldn’t trigger a wake-up call, I don’t know what will.

Interestingly, people tend to still trust institutions far more than the leadership of said institutions. In the US, for instance, 50% of people trust business institutions, but only 15% trust their leadership. That’s a  35 point gap. When it comes to government, those numbers fall to 38% and 10% respectively, for a gap of 28 points.

Our trust in people – particularly in those who should be our leaders – is eroding. Fast. This is a major problem and it needs to be addressed. And no, cool Superbowl ads and cosmetic rebrandings won’t fix this. It’s a deeper problem and it is going to take serious, grown-up, deliberate work to fix it.

The only thing I wasn’t super impressed with was the “diamond of influence” and the media clover leaf thingamajigs at the end of the video. It isn’t that they are wrong (they aren’t) as much as they attempt to fix a leadership problem by addressing an operational problem. To use a medical analogy, it’s a little like trying to cure someone’s brain tumor by enrolling them in a social graces class. The solution just doesn’t match the problem.

Here’s a thought: Before you can address changes in operational models, you have to address the gaps in leadership that are the root causes of said operational problems. For instance, if you focus first on working with the organization’s leadership on baking the 16 attributes of trust into their vision for the company and then operationalizing them, maybe you have something that might work. Then and only then do you bring in the diamond and the clover leaf – to address the how of your why and what.

Always match the right solutions to the right problem. Otherwise, your business solution runs the risk of being little more than the corporate version of a cargo cult: a lot of mimicking and parroting, but absolutely no hope of generating real results. If you have a leadership problem, address that. Don’t beat around the bush. Don’t skirt the issue. Address it and fix it. Start with an audit of your organization, using the 16 trust attributes as potential areas of improvement.

Food for thought. Discuss.

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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

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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 »

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Since everyone is rolling our their predictions for 2013, here’s mine. Don’t worry, it isn’t that 2013 will be the year of mobile or Social TV, or that social media “experts” will finally figure out what R.O.I. actually means. (They won’t. They don’t want to.) I have only one prediction for you, and it’s basically this: there is a very good chance that 12 months from now, we will learn that 90% of CEOs have lost faith in marketers.

It should be said that there are tons of solid professionals in Marketing professions, and they will continue to do great work – ethical work – and kick ass. They will solve problems, innovate and teach to others what they’ve learned. Their work and real success will drive everyone forward. Look for new knowledge, new methods and new insights. Real ones. Also look for new software, platforms and products they will have helped design or improve that will help you get more done. You already know who these people are. Even if you’ve never met them, you know who they are inside of five minutes when you hear them talk or watch them work. You know the real deal when you see it.

But the flip side is that the same hacks and posers who faked it all through 2012 and 2011 and 2010 and 2009 and 2008 will continue to lie and sell bullshit in 2013. Why? Because it’s easier. Because they’ve gotten a free pass so far. Because there’s good money to be made, selling bullshit. Because there’s a business model behind it and an “industry” to drive it, complete with metrics and equations and conferences and publishers all lining up to make their buck off confused senior managers with budgets to burn. There’s no incentive for any of this to stop. None. Nobody who has spent the last five years selling bullshit and building a personal brand around it is going to wake up tomorrow and have an epiphany. They know what they’re doing. They’ve been doing it long enough. If they had a conscience or an ounce of professional responsibility, they wouldn’t have chosen that path. They won’t “self-deport” from their trajectory of made-up success and industry status. Not until the speaker invitations and the money dry up. We’ll have to wait until they get fired or move on to the next scam.

So here we are then: 2013. What’s changed? Nothing. As long as there are people who want to believe that President Barack Obama’s birth certificate is fake, there will be people who will want to believe that the “I” in social media ROI stands for influence or interest or insights. As long as some people want to believe that more guns in schools will solve gun violence in schools, there will be people who will want to believe that likes and followers are legitimate measures of brand awareness. As long as some people want to believe that the Earth is only 5,000 years old and came preheated and ready-to-serve, there will be some people who will believe whatever nonsense you want to sell them. An equation. An algorithm. A methodology. A marketing religion. A measurement scheme. It won’t matter that it makes no logical sense, that it is mathematically incorrect, that it is a complete fabrication. It will still sell.

Fact is that if you are willing to lie your ass off, there are people out there who will believe you. Tons of them. Out of stupidity, out of laziness, out of sheer incompetence, it doesn’t matter. They won’t bother to fact-check. They’ll buy the lie, hook, line and sinker, because they don’t know any better, or don’t care, or just don’t want to do the work. If you can sell them something that will deliver good metrics to their bosses with minimal effort or risk from them, you will find eager clients in these people. It’s a simple business arrangement: They need to score that next bonus or promotion. The next case study they publish might even be their ticket to a better job. Sell them a product or vehicle that will make that happen and you’re in. And as long as nobody complains, everybody wins, right?

Well no. The only people who win are the hacks who betrayed the trust of those they ought not have taken advantage of in the first place. The companies that get defrauded don’t win. At all. Their CEOs sure as hell don’t win either. And that’s the rub: every time a social media director or a CMO or a digital consultant repackages a pile of bullshit into a “win” for the executive suite, the already fragile trust between marketers and CEOs further erodes.

For some insights into how bad things are and why, check out this study of the current state of social business. Here are a few takeaways: Only 5% of organizations are highly satisfied with their social media programs. Most of them don’t even have the right goals in place. Almost 40% of social media managers surveyed don’t think that measuring the success of their programs is even important. A business background is only important to 3% of organizations in considering a social media hire.

No wonder hardly anyone in social media understand the first thing about how to measure ROI properly or effectively deploy a social business program across an organization. It’s a shambles. A house of cards. I’ve never seen anything like it.

If you have the time, go to some of the big social media conferences this year and listen to all of the awesome success stories being sold there. Let yourselves be convinced that most companies out there aren’t failing miserably in the social space. Ignore the fact that most of their monitoring practices are operationally disconnected from the rest of their organization, that their “engagement” strategy has slipped into flacid 3rd party content schemes that might as well have been devised by SEO robots, that the connection between social activity and business results is still at best a muddled abstraction, that most brand managers still don’t know that a chunk of the likes and followers they paid digital agencies to acquire for them are fake, or even that the guy they just hired to run their social media program emails and DMs me three times a day to ask me questions someone getting paid what they get paid to do the job they lied about being qualified for shouldn’t be asking in the first place.

Let’s keep pretending that everything’s fine and that those of us who shake our heads at damage being done by the social media guru industry year after year are wrong for demanding more than this giant stinking heap of bullshit.

Here it is again: Only 5% of organizations are highly satisfied with their social media programs80% of CEOs no longer trust marketing professionalsA year ago, that number was 70%.

So welcome to 2012, part 2: Bullshit vs. the real deal. Same people on either side of that divide. The tools have gotten better but no other progress has been made. The cause behind this industry-wide fiasco will be the same in 2013 as it was in 2012, and it boils down to a simple word: choice. We all choose to either know our shit or fake it. We all choose to do the work or pretend to. We all choose to report adequately on what is working and what isn’t, or just select pointless KPIs we can easily manipulate to tell the story we want to tell. None of our choices have changed, and none of us have changed either. In spite of all of our new year’s resolutions, we’re still the same people we were in 2012, and for a lot of organizations, that’s a serious problem.

So what will happen this year? Maybe nothing. Or maybe I’m wrong and things will turn around. Maybe a bunch of social media gurus will retire or go find something else to do with their time. Maybe this will be the year when they finally start to lose traction. We’ll see. I won’t hold my breath, but we’ll see. Looking around though, I won’t be surprised if 12 months from now, a study comes out reporting that 90% of CEOs don’t trust marketers anymore. From 70% to 90% in just two years? Is that where we’re headed? There’s a good chance, yeah. And that really bothers me.

I am usually pretty full of ideas, but I have to admit that this time, I am stumped. I have no clue how to fix this.

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I’m also blogging over on the Tickr blog these days too, so if you want more stats, facts, infographics, insights and less opinion, go check it out. You won’t miss the bite, I promise.

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And as always, 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 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

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I can’t lie, every time I see a list of top social media or digital “influencers” pop up in my stream, I cringe a little. Why? Because 99% of the time, Top 10/25/50/100 lists are nothing more than linkbait and bullshit. Here’s how it usually works:

Agency/consultancy XYZ feels that it isn’t getting enough attention anymore. Their white papers or “content” aren’t all that great this quarter, traffic and lead gen are down, so they need to think of something to do to salvage their waning relevance. The quickest way to do that is to spend an hour or two creating an ass-kissing list that awards some measure of recognition to a predetermined list of social media gurus. It’s easy enough to do. Most of these lists are essentially clones of each other. If you’ve seen one, you’ve seen them all. The names are always the same and you know what they are. The process is as follows:

1. Google “Social Media, Influencer, Top, List.”

2. Cut and paste social media guru names from any of those lists. Make sure that you don’t include companies or organizations as it will defeat the purpose of the exercise. You’ll understand why in a minute.

3. Cut and paste the reason why they were selected by the person whose list you just ripped off, but change a few words so it isn’t technically plagiarism.

4. Come up with a really cool title.

5. Publish the list on your blog.

6. Ping every single social media guru on the list. Do this every hour until they respond and share your post with their entire network.

7. Remind them to do it again the next day and engage in small talk with them on Twitter and Facebook… err… Google Plus.

8. Enjoy free traffic to your blog for months.

Sometimes, gurus create lists like these themselves. It’s… well, you know. It’s done so much that I don’t even bother getting excited when I see a list of top influencers, top experts, top gurus, whatever, anymore. For the most part, they’re just copies of copies of copies. They provide zero insight into why these folks are experts or even valuable in their fields. They are the product of a lazy, cynical, unoriginal exercise in derivative self-promotion by proxy.

However…

Sometimes, someone takes the time to actually do it right. They take a careful look at an industry, research who does what and how, dig into their track records, weigh their actual influence rather than just their Klout score and the size of their network, and… well, sometimes, they put in the work.

This week, when I ran into BSMi’s 2012 Global Influencer Survey, I expected it to be another clone of top influencer/social media guru lists of Christmases past, but instead discovered a thorough, well-researched report that analyzes in detail what the top experts in three particular fields (social media, marketing and digital) have done this year, and explains why they are the best among us. This one really is different. When you browse through it, you’ll understand why. Clever way of presenting it too.

Just really great work all around from BSMi, as always. Click here or on the image below to check it out. (UK readers, click here.)

From now on, every time a “top” influencer list comes out, I want you to think about what you learned here today. 😉

Cheers,

Olivier

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PS: I also blog over at Tickr now, so go check out my posts there. (And take a few minutes to test-drive Tickr’s monitoring platform. Big stuff coming from these guys in the next few months, but shhhhh… I can’t talk about it yet.)

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And if you’re as tired of the bullshit as I am, pick up a copy of Social Media ROI – Managing and Measuring Social Media Efforts in your Organization. It was written 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. No bullshit. Just solid methodology and insights. It makes for a great desk reference.

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

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

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Yesterday, the above infographic popped up on my radar (thanks, V. Harris). At first, I thought “here we go again: another crap social media ROI infographic.” But then I took a closer look and I got it. It’s actually not bad. Well… up to a point.

Part 1 – Showing that basic business literacy is still lacking in the digital marketing space:

Verdict: Good.

Here’s what this part of the infographic tells us:

1. Marketers still mistake metrics like net followers/fans, web traffic, and social mentions (all essentially reach metrics) for ROI. Less than 30% of them consider sales to be an element of ROI. Still.

2. 73% of CEOs think marketers don’t understand basic business terminology and objectives.

3. Is it any surprise that CEOs think that marketers are essentially dumbasses and that social business is bullshit?

If that part of the infographic doesn’t perfectly illustrate the urgent need for an infusion of actual competence on every level of the social business management scale, I don’t know what does. This situation is absurd.

The silver lining: Over 70% of marketers still haven’t read my book, so we still have a lot of potential sales there.

Okay, all kidding aside, the fact that over 70% of marketers still qualify followers and fans as a measure of ROI is… shocking. Seriously. Web traffic? Social mentions? Here’s a fix: Send these people back to school. It’s almost 2013. We should be over this by now. Anyone who still thinks that way needs an intervention. It might have been acceptable in 2008, but not anymore.

Part 2 – Showing some financial outcomes that can be tied back to social media activity (and budgets):

Verdict: Good.

Here, we see examples of social media activity having a direct impact on sales. The cool thing about it is that if you go back and look at how much that social media activity cost (man hours, technology, etc.), you can assign a specific cost to it. If you have the gain figures and the cost figures, you can calculate ROI.

Thumbs-up. More of that, please.

Part 3 – “Last Touch Conversions” and the problem with last-click attribution models:

Verdict: Last click attribution is too limited a model to illustrate the full impact of social media activity on sales.

Here’s where the infographic runs into a wall. We’ve talked about this: It isn’t so much that last click attribution is wrong in assuming a cause and effect relationship between clicking on a link and making a purchase. Clearly, there’s a strong connection there. There’s intent, if anything, and that’s important, so we need to track that and put numbers to it. But focusing too much (or at all) on last click attribution is a lot like looking at consumer behaviors through a simple, robotic, kind of binary lens that only accounts for a very small fraction of the customer journey. It completely ignores the dozen (if not hundreds) of other triggers that led a consumer to eventually click on that link and decide to make a purchase.

Last click attribution doesn’t take into account the full scope of discovery (that is to say, how a consumer found out about the brand and/or product). It doesn’t take into account the impact of advertising, marketing, PR, media exposure and word-of-mouth recommendations. It doesn’t take into account the months, weeks, days or hours of research done by the consumer before clicking on that link. In other words, the entire decision process that takes place before a purchase (discovery, research, preference and validation) is excluded from the last click attribution model. Months of social interactions: gone. Customer service experiences: gone. We’re down to attributing a transaction to the very last thing a consumer did before pulling out a credit card. That’s a lot like a military unit attributing a victory in battle to the last bullet fired. Focusing only on the final few minutes of a long and complex customer journey is terribly-short-sighted, and that sort of methodology (and mentality) drags us into a ditch of assumptions as to cause and effect that generally leads to poor consumer insights and ultimately investments in the wrong types of activities.

Last click attribution is easy, sure, but since when does easy trump smart or relevant? The truth is that it’s a lazy mode of thinking. That’s right, I said it: It’s lazy.

A couple of weeks ago, we looked at how Ohtootay helps companies move beyond last click attribution (and last touch conversions) to map how consumers actually behave – that is to say how they shop. It’s a good start. We need more of that kind of thinking and more of that kind of insightful application of technology. The objective for businesses and marketing teams has always been this: to understand consumer behaviors and how to affect them in a way that leads them to notice, want, buy and ultimately recommend products. Last click attribution doesn’t do that. It’s a snapshot of the final step in a long transaction funnel. That’s all. You want to measure ROI? You want to know what’s working? You want to fine-tune the way your traditional marketing, social channel activity, customer service, product design, packaging, retail experience and competitive landscape work together (or don’t)? Great. Then you’re going to have to work a little harder to figure out how all the pieces fit, and how to make them fit even better.

Personally, I think that’s half the fun of the marketing profession: figuring out what works and what doesn’t – and why, solving those kinds of problems, fine-tuning and then fine-tuning some more… That’s what marketing is about: making it work. Understanding how to move all of those needles so your company or product team gets what they want, and your customers do too. Do it right and everyone walks away happy. That’s the goal. Happy customers, happy product managers, happy investors, job creation on the back end… That’s the big picture, one piece of the daisy chain at a time.

So a word of caution: If you’re not into asking questions, doing research, or caring enough to bust your ass to do real work, hard work – sometimes tedious work – to kick ass, maybe you shouldn’t be in the marketing business. There’s a reason why 73% of CEOs think that marketers lack business credibility. It’s because of laziness and apathy. Every marketing pro who still hasn’t learned how to explain the relationship between ROI and social media contributes to that credibility problem. Every marketing pro who still uses last click attribution as their go-to metric to gauge the effectiveness of a social channel contributes to that credibility problem. Every marketing pro who isn’t working in concert (hell, in tandem) with a product group and a sales department contributes to that problem.

Give that some thought. And if that isn’t enough to give you pause, maybe this will: If you work in marketing, 73% of CEOs right now can’t figure out why they’re paying you. And you know what? They’re looking for someone better.

Fix that.

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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 and Spanish.)

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

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Good news: A sizeable piece of the Social Media ROI question seems to have just been answered by tech company called Ohtootay. Here’s what they offer:

According to this story in TechCrunch, “the solution lets companies track their efforts on Facebook, Twitter, Pinterest and elsewhere. But one of its more unique features in this crowded space is something which allows businesses to track their posts all the way through to website conversions, even when the original post didn’t point directly to their e-commerce site.”

This is big. And it only gets bigger.

It also goes beyond last click attribution, which has been a sticking points for all of us working to a) attribute transactions back to social activity when that activity is followed by a daisy chain of pre-transaction behaviors, and b) clearly map these paths to purchase. For instance, say that an investment in a social media program results in specific social activity that, in turn, enables discovery of a product for potential net new customers. (Lead generation.) That discovery may not trigger a purchase for days, weeks, even months. It was just the initial hand shake, the first of a succession of triggers that eventually culminated in a first transaction for that new customer. To prove ROI as it relates to social activity, you have to be able to connect all of those dots. Easier said than done, right? Most tools work backwards from the transaction to the point of origin just before the click that led them to an e-commerce site. That’s last-click attribution.

Most of the time, Google is going to get the credit for that last click attribution even though it really was just the last step in a daisy chain of purchase triggers and touch points.

Let’s look at Pinterest, for instance: Ohtootay lets companies “track Pinterest pins all the way through to website conversions and associated sales.” So far so good, right? But then there’s this: “This works even when a client shares a pin that doesn’t point to their own e-commerce site. […] What if a customer clicks on your pin that points to a relevant infographic not on your own site, later Googles you, and then decides to buy? Other analytics software will mistakenly tell social media managers that ‘Google’ caused this sale even though the customer’s first contact was through content you curated on your Pinterest boards.”

How does it do it? Well, it’s kind of simple, actually: “Ohtootay generates custom URLs (a company can use their preferred URL shortener as well), and then uses cookies to track the user. When that user arrives on the company’s e-commerce site, custom code embedded there will tell Ohtootay when a conversion actually happens.”

If that sounds familiar, it’s because it is the exact same principle you have heard me describe for years. These guys actually built an app around it, and for that, I thank them.

A word of caution though: Ohtootay doesn’t do everything you need it to in terms of calculating the ROI of your social activity. It doesn’t necessarily track offline purchases, for instance, which is a pretty big piece of the social media ROI question. (It’s hard to connect offline and online purchases 24/7, though it is pretty easy to run tests at regular intervals.) It also doesn’t get into the cost-savings piece of ROI. But for those types of limitations, Ohtootay is a huge step forward for companies looking to a) justify their social media program spending, b) connect specific social activity to specific financial outcomes (especially digital ones), and c) understand what channels and activities are having positive effects on transactions and which ones are not.

In terms of helping companies determine the ROI of their social programs, this may be the most important tool out there yet. The price tag may be a bit of a hurdle for smaller businesses though, so an SMB version with a more appropriate price-point wouldn’t be a bad idea. (Hint. Hint.) I will definitely be giving them a shot to see what’s what. (I haven’t yet.)

Okay, that’s it for today. Go forth and kick ass. Oh, and feel free to check out some of my other blog posts over on the Tickr blog (different kind of social media solution altogether: that one is all about monitoring).

Cheers,

O.

Disclosure: I have no material connection to Ohtootay whatsoever. They aren’t a client or a partner, they haven’t reached out to me, I haven’t received as much as smile from them let alone a single shiny peso. I wrote this post purely to share with you this little find because it’s a bit of a game-changer in the context of the #smROI discussion.

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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 and Spanish.)

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

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The 5 basic rules of calculating the value of a Facebook ‘fan’

A question that routinely comes up in social media circles is what is the value of a Facebook fan? (The question also applies to the value of a Twitter follower, Youtube subscriber, email recipient, etc.)

Invariably, whenever the question is asked, some mathematical savant – typically a self-professed digital alchemist – produces a proprietary algorithm that has somehow arrived at answer along the lines of $1.07 (Source: WSJ) or $3.60 (source: Vitrue) or even $136.38 (source: Syncapse), and so begins the race to answer this now quasi-hallowed question of the new digital age. The lure: He who can convince companies that he can calculate the value of a Facebook fan might have a shot at selling them on the notion that fan the more fans they acquire, the more value they generate for their business. (You can imagine the appeal of answering the “what is the ROI” question by explaining to a company that 10,000 net new fans per month x $136.38 = a $1,363,800 value. At a mere $75,000 per month, that’s a bargain, right?

All that is fine and good, except for one thing: Assigning an arbitrary (one might say “cookie-cutter”) value to Facebook fans in general, averaged out over the ENTIRE breadth of the business spectrum, is complete and utter BS.

To illustrate why that is, I give you the 5 basic rules of calculating the value of a Facebook fan:

Rule #1: A Facebook fan’s value is not the same as the cost of that fan’s acquisition.

Many of my friends in the agency world still cling, for example, to the notion that estimated media value or EAV (estimated advertising value), somehow transmutes the cost of reaching x potential customers into the value of these potential customers once reached. Following a media equivalency philosophy, it can be deduced that if the cost of reaching 1,000,000 people is generally $x and you only paid $y, the “value” of your campaign is still $x.

A hypothetical social media agency-client discussion regarding EAV: “Using social media, we generated 1,000,000 impressions that we converted into followers last quarter. At $1.03 per impression/acquired fan, the total cost of the campaign was $1,030,000. The average cost of an impression through traditional media being $3.97, the estimated media value of your campaign was $3,970,000.”

Next thing you know, the client believes 2 things: The first, that the value of each Facebook ‘fan’ is either ($3.97 – $1.03) = $2.94 or simply $3.97 (depending on the agency). The second, that the ROI of the campaign is ($3,970,000 – $1,030,000) = $2,940,000.

So you see what has happened here: Through a common little industry sleight of hand, a cost A vs. cost B comparison has magically produced an arbitrary “value” for something that actually has no tangible value yet. In case you were particularly observant, you may also have noticed how easily some of the authors of the posts I linked to in the intro mixed up costand value. Ooops. So much for expert analysis.

A word about why cost and value cannot be substituted for one another when applied to fans, followers and customers: Cost may be intimately connected to value when you are buying the family car, but the same logic does not apply to customers as a) you don’t really buy them outright, b) they don’t depreciate the way a car does, and c) they tend to generate revenue over time, far in excess (you hope) of what it cost to earn their business.

Even with the cost of acquiring a fan now determined, why has the value of that fan not yet been ascertained? Rule #2 will answer that question.

Rule #2: A Facebook fan’s value is relative to his or her purchasing habits (and/or influence on others’ purchasing habits).

Illustrated, the value of a fan can be calculated thus:

 a)      Direct Value: If a Facebook fan spent $76 on your products and services last month, her value was $76 for that month. If a Facebook fan spent €5697 on your products or services last month, his value was €5697 for the month.

The value of a fan/transacting customer is based on the value of their transaction. It is NOT based on the cost of having acquired them.

Example:

– Cost of acquiring Rick Spazzyfoot as a Facebook fan: €4.08

– Amount Rick Spazzyfoot has spent on our products and services since becoming a fan five months ago: €879.52

Which of the above two € figures represents the value of that fan to the company?

(If you answered €4.08, you answered wrong. Try again.)

 b)     Indirect value: If a fan seems to be influencing other people in his or her network to become transacting customers (or increase their buy rate or yield), then you can factor that value in as well for those specific time-frames. Because measurement tools are not yet sophisticated enough to a) properly measure influence and b) accurately tie it to specific transactions, I wouldn’t agonize over this point a whole lot. As long as you understand the value of word-of-mouth, positive recommendations and the relative influence that community members exert on each other, you will hold some valuable insights into your business ecosystem. Don’t lose sleep trying to calculate them just yet. Too soon.

The point being this: Until a Facebook ‘fan’ has transacted with you (or influenced a transaction), the monetary value of that fan is precisely zero.

One could even say that if each fan cost you, say, an average of $1.03 to acquire, the value of a fan before he or she has been converted into a transacting customer is actually -$1.03.

That’s right: A significant portion of your Facebook fans might actually put you in the negative. Something to think about when someone asks you to calculate the “value” of your “community,” especially if you purchased rather than earned a significant portion of your fans and followers (it happens more than you realize).

Rule #3: Each Facebook fan’s value is unique.

Every fan brings his or her unique individual value to the table. One fan may spend an average of €89 per month with your company. Another fan might spend an average of $3.79 per month with your company. Another yet may spend an average of ₤1,295 per month with your company. Is it reasonable to ignore this simple fact and instead assign them an arbitrary “value” based on an equation thought up by some guy you read about on the interwebs?

Three points:

1. The lifestyles, needs, tastes, budgets, purchasing habits, cultural differences, online engagement patterns and degree of emotional investment in your brand of each ‘fan’ may be completely different. These, compounded, lead to a wide range of behaviors in your fans. These behaviors dictate their value to you as a company.

2.  Many of your fans may only do business with you only on occasion. Because of this, you have to factor in the possibility that a significant percentage of your fans’ value may fluctuate in terms of activity rather than spend. How many of your fans are not regular customers? How many do business with you each day vs. each month? How many do business with you once a quarter vs. once every three years? Are you figuring your on/off customer-fans into your value equation?

 3. Lastly, we come to the final type of Facebook fan: The one that doesn’t fall into the transacting customer category.  They might remain “fans” without ever converting into customers. Do you know what percentage of your fans right now falls into this non-transacting category? Do you really think that their value is $3.97 or $139.73 or whatever amount an agency, guru or consulting firm arbitrarily assigned to them? No. They clicked a button and left. Their value, until proven otherwise, is zero.

 With this kind of fan/customer diversity within your company ecosystem, you come to realize that arbitrary values like “the value of a Facebook fan is $x” can’t be applied to the real world.

Rule #4: A Facebook fan’s value is likely to be elastic.

Because the value of a Facebook fan is a result of specific purchasing habits (and impact on others’ purchasing habits), a fan’s value is likely to be elastic over time. If you aren’t familiar with the term, it simply means “flexible.” As in: the value of a Facebook fan will change. It will fluctuate. It will not always be the same from measurement period to measurement period.

Let me illustrate: A Facebook fan might spend $76 on your products and services one month and $36 the following month. This means that her “value” was $76 one month and $36 the following month. If next month, she spends $290, $290 will become her “value” for that month.

Because transaction behaviors change, the value of a fan is also likely to change.

You can average this out over time (the fan’s value might average out to $97/month over the course of a year, for example), or just total her value per month, quarter, or year, depending on your reporting requirements. That is entirely up to you.

Example 1: “Based on her transactions, the value of Jane Jones, a fan since 2007, was $2,398.91 in 2010. Thanks to our fan engagement (digital customer development) program, Jane’s value increased to $2,911.02 in 2011.”

Example 2: Chris Pringle’s average monthly value in Q2 of 2011 was $290.76. His average monthly value in Q3 of 2012 was $476.21. He is one of 17,636 fans we managed to shift from a basic package to a premium package via our Facebook campaign.”

Note: In order to figure this stuff out, you are going to have to either get creative with the way your CRM solution interacts with your Facebook analytics suite or wait until Social CRM solutions get a little more robust. Some are getting close.

Examples of exceptions (where fan value may be somewhat inelastic):

 – You are a bank and a fan’s only transaction with you is a fixed monthly payment.

– You are a cable company and a fan’s only transaction with you is a monthly cable bill.

– You are a publisher and a fan’s only transaction with you is an annual magazine subscription.

– Your fans don’t transact with you. They clicked a button and left. If their value was $0 a month ago, it is still $0 this month.

If your business charges for a monthly service that tends to not fluctuate a whole lot, chances are that the value of each of your fans will remain rather constant. This compared to a Starbucks, a Target or an H&M.

Rule #5: A Facebook fan’s value varies from brand to brand and from product to product.

If a fan/customer’s value can fluctuate from month to month and that value can vary wildly from individual to individual within the same brand or product umbrella, imagine how much it can vary from brand to brand, and from product to product.

Compare, for example, the average value of a fan/customer for Coca Colaand the average value of a fan/customer for BMW. (Hypothetically of course, since I don’t have access to either company’s sales or CRM data.) What you may find is that a fan’s annual value for Coca Cola might average,say, $1,620 per year, while a fan’s annual value for BMW might average $42,000. Why? Because the products are entirely different. One costs less than $3 per unit and requires no maintenance. The other can cost tens of thousands of dollars per unit and requires maintenance, repairs, not to mention the occasional upgrade.

Moreover, a single strong recommendation from a fan can yield an enormous return for BMW, while a single recommendation from a fan will yield a comparatively smaller return for Coca Cola.

You can see how the notion that the “value” of a Facebook fan can be calculated absent the context of purchasing habits, brand affiliations, fluctuations in buying power, market forces and shifts in interests and even value perceptions is bunk. Unless of course you find yourself being asked to transform cost into value. (Less work. Easier to sell.) But that is a completely different conversation.

I hope this helped. From now on, if anyone seems confused about the topic of fan/follower/subscriber “value,” point them to this post.

Cheers,

Olivier

*          *          *

If you haven’t already, check out Social Media R.O.I.: Managing and Measuring Social Media Efforts in Your Organization. Lots of vital advice in there for anyone working with social media in a business environment. Makes a great gift to employees, bosses, contractors and clients too. You can even read a free chapter here: smroi.net

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2010 MIMA Summit: Featured Speaker – Olivier Blanchard from MIMA on Vimeo.

I know it’s been a while since I’ve released a video (well… one that doesn’t involve hanging out with an octopus or trying to crash my bike on mountain descents), so here’s one fished out of the vault by @KrisColvin that might come in handy. It hails back to the 2010 MIMA summit, but everything in the video is fairly straightforward and still applies to your social business programs today, so it’s well worth another pass.

If the embedded video at the top of the post doesn’t launch, watch it here.

Also, some news:

You know by now that I am generally pretty guarded about who my clients are, but my latest project calls for a little bit of transparency since I am giving them some visibility on Facebook and Twitter and helping manage some of their accounts. I have recently started working pretty closely with the folks at Tickr. They’re the folks behind the one-screen multi-channel aggregator you’ve probably seen in videos of social/digital control centers – like the one PepsiCo built for Gatorade. It’s kind of hard to run into a mission control center that doesn’t have a screen dedicated to Tickr now. Anyway, they’re launching a free version and a pay-as-you-go version to complement the enterprise version that big brands are already using, so they’ve asked me to help out for a few months. Check it out and tell me (or them) what you think.

Aside from the shameless plug, you may be interested to know that I’ll be blogging there as well as here for a bit, so if you are looking for more basic social media how to stuff than what I usually post here, news about the world of digital monitoring, digital brand management, and the rise of digital mission control centers, look for some of that there. The short list:

The blog

The Facebook page

The Twitter account (@TickrUS)

The website

You can start a free account and test drive Tickr in minutes, so give them a shot. It’s a pretty cool little app that works super well with the Radian6’s, Alterians and Spiral 16’s of the world.

Cheers. Let me know if you want more videos. There are more in the vault.

*          *          *

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 and Spanish.)

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

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Here’s the question that most companies still don’t ask themselves at the start of a project: what problem am I trying to solve?

Start with that, and you’re 80% of the way there. Blow it off, and you can be sure that you and your organization will waste a shit-ton of time and resources on something that won’t yield any concrete results.

For instance: discussions at planning & management meetings increasingly point towards three “projects” that seem increasingly inevitable – Your CMO wants to revamp the logo. Your CEO wants to get into social media. Your SVP Digital wants to redo the website.

Now what? Well, now begins the process of getting the projects approved. What questions will be asked? Well…

Why are we doing this?

How much will it cost?

Who will be in charge?

Who will do the work?

And that’s about it. That’s as far as it goes.

Why are we doing this? Because it’s been a while. Because it’s time. Because we need change. Because our competitors are doing it. Because it will improve our image.

How much will it cost? Somewhere between $x and $y.

Who will be in charge? Fill in the blanks.

Who will do the work? Fill in the blanks.

Except here’s the problem: companies have limited resources. When you think of resources in terms of money, talent, technology and man hours (and you should), you quickly come to realize that focusing a significant percentage of those resources on Project A rather than Projects B, C, and D means that you’ve just introduced an opportunity cost into your planning. In other words, choosing to monopolize these resources on Project A could limit your ability to really kick ass with Projects B, C and D.

If Project A is necessary or really smart, that’s probably a good thing. You’ve prioritized possible outcomes and you’ve decided that Project A has a high potential for ROI or impact on x, or whatever it is you’re after.

But of Project A isn’t necessary, what you’ve done is you’ve just taken essential resources away from essential projects… to feed a wasteful endeavor that won’t yield a whole lot of benefits to your company.

You know what question helps determine whether or not a project is worthwhile? This one: what problem am I trying to solve?

A practical overview: new logo.

We need a new logo. 

Yeah? Why? What problem are we trying to solve?

If you can show that your old logo is hindering your sales, you might be on to something. Do your customers complain about it? Do your competitors’ customers make fun of it? Okay. Time to consider an upgrade. In your considerations, ask yourself this: will the new logo solve a real problem for consumers? Will it solve a real problem for us?

If the answer is yes, and you can identify these problems clearly, move forward.

What problems will the new logo aim to solve?

If the answer is no, or you can’t quantify the “problem,” consider what else you might be able to focus on this quarter or this year that will solve a real problem. (Like customer service, R&D, packaging, messaging, shopping experience, etc.)

A practical overview: new website.

We need a new website. 

Yeah? Why? What problem are we trying to solve?

If the answer falls along the lines of “It looks like it was designed in 1995, the UX is horrible, it uses flash, it’s horrendous on mobile devices, our customers complain about it all the time,” then you’re good to go. Dig deeper and move forward. What is it that your customers complain about? What can we improve in terms of user experience? What do we wish the site could do that it can’t in its present form (and why)? What kinds of functionality would we like to build into it (and why)?

What problems will a new website aim to solve?

If the answer falls along the lines of “It’s been two years since we redesigned it, and I want to rebuild it in Drupal,” then that meeting is adjourned. (No offense to Drupal. I just needed to throw something in there real quick.)

A practical overview: new social media strategy/program.

We need a social media strategy. 

Yeah? Why? What problem are we trying to solve?

If the answer falls along the lines of “we physically can’t continue to do business without it anymore,” then you’re on to something. Dig deeper. Your next conversation should include items like these:

47% of our customers prefer to engage CSRs through Twitter and Facebook than by calling a toll-free number now. We can also serve 5x more customers per hour via these channels than we can via traditional call centers, so we’ll even save money that way.

We’re losing traction in category and keyword searches because we have no fresh content for the Googlenets and the Bingwebs to index. If we had a blog and some social media properties, we could potentially double our web traffic and digital exposure.

We can’t really get into mobile commerce without it. It’s already costing us $23,000,000 per quarter, and we’re even losing customers and market share as a result. if we keep operating like this, we’ll be out of business in 5-7 years.

We’re spending $12,000,000 on outsourced digital marketing research every year that we could do ourselves if we just assigned two people to monitor the web using social media monitoring platforms.

Our PR department can’t anticipate, monitor, respond or manage PR crises without it. The cost to the company each year in lost revenue is $x, and our brand image is suffering more and more each year as a result.

40% of our net new customers leave us after 12 months. We think we can use social media to engage them, find out why they’re think of  leaving, and give them a reason to stay. Potential impact on the business: an additional $xM per year.

Social media can help drive word-of-mouth recommendations. We want to use social media as an in-network lead generation engine. The impact we expect: a) more leads. b) more qualified leads. c) a higher conversion rate (prospect to customer).

It will help us recruit better talent. Period.

It will amplify our advertising’s reach and make it stickier. Look at the numbers that Coca Cola, Pepsi, Ford and Old Spice have been getting against companies that only use traditional (paid) media.

If done properly, engagement = loyalty. Right now, only 23% of our customers consider themselves loyal. We want to bring that up to 60% over the next four years. Some of it will be offline, but we need an online piece as well.

69% less expenditures on each new product launch.

Etc.

All of these suggestions solve one or more of the following problems:

1. Not enough leads? Doing this will attract net new potential customers.

2. Not enough new customers? Doing this will convert net new prospects into net new customers.

3. Short term customer attrition? Doing this will develop net new customers into returning customers.

4. Long term customer attrition? Doing this will develop returning customers into loyal customers.

5. Budget cuts getting in the way? Doing this will cut costs while delivering equal or better outcomes.

6. Frozen budgets getting in the way? Doing this will keep costs level while delivering better outcomes.

7. Wasting money on outdated services you feel locked into? Doing this will help you free your operation from unnecessary burdens.

8. The chasm between you and your customers has been widening? Doing this will shrink it.

9. Feeling less relevant than you were 10 years ago? Doing this will help you find your way again.

10. Shrinking profitability is an increasing concern? See 1-9 (above), particularly 5 and 6.

11. Not reaching enough potential customers? Doing this fixes that. See 1 (above).

But if the answer to “what problem are we trying to solve with a social media program” is never asked (or worse, answered incorrectly,) then you will basically end up with an endless churning out of cheaply produced, keyword-optimized “content” that will vaguely boost web traffic and online mentions without ever yielding particularly helpful results. Say hello to crap metrics like “likes, Return on Influence, and all of the rest of the bullshit that still plagues the digital world and social business these days.

Because… we need to be on Facebook so we can engage with people and have conversations.

Because… we have to have a social media strategy.

Because… “content is king.”

Because… our competitors are doing it.

Because… our agency told us we should be in social media.

Because… something about owned, paid and earned media.

Because… we need followers and likes.

Because… we don’t know, but we’ll eventually figure it out.

Okay. Good luck with that.

The reason why snake oil, incompetence and irrelevant metrics are still so prevalent in the social business space is because they fill the gap created by the absence of proper questions and answers at the start. Starting with: what problem am I trying to solve?

Which is to say: what is the purpose of doing this in the first place?

New product feature? What problem am I trying to solve?

New packaging? What problem am I trying to solve?

New logo? What problem am I trying to solve?

New branding strategy? What problem am I trying to solve?

New campaign? What problem am I trying to solve?

New Facebook page? What problem am I trying to solve?

New blog? What problem am I trying to solve?

New hire? What problem am I trying to solve?

Don’t just go through the motions of doing something or going somewhere just because the rest of the herd is shuffling that way. I know it might make you the annoying guy in the room to be the one who asks the question (so… do so judiciously), but the question MUST be asked by someone. And more importantly, it must be answered. Otherwise, you’ll be wasting resources and a chunk of your potential for real success.

Cheers,

Olivier

*          *          *

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 and Spanish.)

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

Read Full Post »

So evidently, the ideal age for a social media manager is under 25.

Wait… no… the ideal age for a social media manager is over 25.

Are you kidding me? Age? We’re talking about age? Like… the ideal age to be a CEO is 45-65? Or the ideal age to be an HR manager is 43-52? Would anyone with the slightest bit of credibility ever write a piece like that? No. Not without concrete research to back it up, at any rate. So why is it acceptable when it comes to social media? Why? Because it’s still en vogue to write complete nonsense about social media management?

There is no ideal age to manage a social media program, just like there is no ideal age to manage a PR or marketing or HR campaign, program or department. Unless you’re a professional athlete, age is pretty much irrelevant when it comes to your ability to do a job. Any job. Some people are already good at 20. Others still suck at 40. There is no magic formula. What you are looking for is competence, professionalism and a sharp, agile mind. That is what you should focus on. Not age.

Let’s take a look at this piece published by Inc. just a few days ago: 11 Reasons a 23-year-old Shouldn’t Run Your Social Media, by Hollis Thomases.

So first… who is this Hollis Thomases person, and more importantly, why does Inc. feel that she is qualified to write an article on this topic? Well, there’s this:

Hollis Thomases is the President & CEO of Web Ad.vantage, which provides outcome-based digital marketing and advertising services to up-and-coming brands. She is also the author of Twitter Marketing: An Hour a Day, a contributing expert to Social Media Marketing Magazine, and has been a Media Planning columnist for ClickZ since 2005. She has taken her subject matter expertise to television, radio, and trade conferences. Here is her Twitter account: @hollisthomases (6,820 followers).

Note the url, by the way, which is different from the title Inc. eventually went with: http://www.inc.com/hollis-thomases/social-media-dont-put-intern-in-charge.html – don’t put intern in charge. Ah, well. We’re already off to a killer start: what’s a 23-year-old good for? Being an intern. Great.

Now don’t get me wrong: anyone who puts an intern in charge of their social media program is clearly being negligent. But we aren’t talking about interns here. We are talking about 23-year-olds and “young hires.”

Not to put too fine a point on it, but that hoodied 23-year-old you just crossed in the hallway might not be the intern anymore. In this day and age, he or she might be the CEO, and a solid one at that. There are “kids” right now building  companies at 23 that will reshape the face of business, technology and communications in the next ten years. There are guys leading combat teams at 23, and I can tell you from experience that they are supremely competent and plenty mature. There are young women right now, today, already on their way to revolutionizing dozens of fields, from particle physics and presidential campaign strategy to industrial design and popular fashion. A few of them even won Olympic medals in London over the last few weeks. So how about this: instead of discounting young twenty-somethings as quasi-worthless, not particularly dependable assclowns, why not get to know them instead?

But no. It’s much easier to fall back on crap stereotypes to write a poorly researched article, and then somehow get Inc.’s editorial staff to give it the go-ahead. And thus begins an 11-point exercise in shameless clichés and assumptions. Let’s have a look-see:

  1. They’re not mature enough.
  2. They may be focused on their own social media activity.
  3. They may not have the same experience – or etiquette.
  4. You can’t control their friends.
  5. No class can replace on-the-job-training.
  6. They may not understand your business.
  7. Communications skills are critical.
  8. Humor is tricky business.
  9. Social media savvy is not the same as technical savvy.
  10. Social media management can become crisis management.
  11. You need to keep the keys.

Where do I begin? Do I even need to explain how absurd this is? It seems that professional, capable twenty-somethings have suddenly become as immature as ninth-graders on a school field trip.

1. They’re not mature enough. Right. Based on what data? And compared to whom?

I have a friend. Let’s call him Tim. Tim is 48. Tim has been going through a mid-life crisis for the last four years. You want to talk to me about the maturity level of a 23-year-old? You don’t get to unless you’ve spent a Friday evening around Tim. Tim is a CEO, by the way.

But that isn’t even the point. The real point here is this: if someone isn’t mature enough to manage your social media program, regardless of their age, don’t be an asshole and put them in charge of your social media program. Instead, hire someone who is qualified and well-suited for the job. Is that too simple? Too obvious maybe?  Or should we keep going on the stupid stereotypes?

Okay. Let’s keep going then.

2. They may be focused on their own social media activity. Yeah, and they also may not. Because age has not a damn thing to do with that.

Not hiring unprofessional assholes usually takes care of that problem.

3. They may not have the... oh, whatever. If they don’t have the experience or etiquette, why did you hire them to manage anything, let alone your social media program? Regardless of their age, if they don’t have the skills or experience or etiquette, don’t put them in charge. But if they have the experience, skills and etiquette, and they happen to be 23, don’t be stupid: hire the shit out of them before someone else does.

I know. This stuff is really hard to grasp.

4. You can’t control their friends. Really? Is that because 23-year-olds are just party-going loudmouths who will post obnoxious updates on Facebook? So naturally, yeah… a 23-year-old is going to be a liability to your brand, right? Nice!

Except, no. Show me the data that supports your theory. What… no data? Hmmm. That’s too bad. My next question would have dealt with how you intend to “control” angry customers and trolls.

Ms. Thomases, your personal prejudices against this age group suck.

5. No class can replace on-the-job-training. I have no idea what that even means or what it has to do with age.

6. They may not understand your business.

This article is starting to give me a headache.

What if that 23-year-old has been a fan of your business since they were a kid? Say you’re Nike or Disney or Nintendo, you really think a 23-year-old managed to live their whole lives without knowing what you do and how? Why do you think they’re applying for a job at your company in the first place?

Here’s another one: a 40-year-old new hire and a 23-year-old new hire are going to go through the same onboarding process. Why would the 23-year-old be somehow less qualified than the 40-year-old to manage the company’s social media program solely based on “not understanding the business?” Is there something physiological about 23-year olds that makes them incapable of learning your business model?

If you are hiring someone to manage your social media program, they’ll need to understand your business, regardless of their age. Train them. Get them ready to manage that function. This is not an age issue, it’s a preparation issue.

This argument is invalid.

7. Communications skills are critical. I can’t even wrap my mind around this. Let me just quote the writer and see if you can make any sense of it:

“Communication is critical to solid social-media execution. Before you let a young hire take over your company blog posts, take stock of his or her writing skills. Also: Many young people have not yet learned the “art” of communicating. Make sure they know how to read between the lines, rather than taking things too literally.”

That’s it. That’s the whole explanation.

Between you and me, I have no idea what half of that means. “Many young people have not yet learned the ‘art’ of communicating?”

“Make sure they know how to read between the lines, rather than taking things literally?”

Let that be the point: communication is indeed critical to solid social-media execution. Which is why social media professionals who write expert commentary for Inc. should learn how to express themselves clearly. “Make sure they know how to read” between what lines, exactly? Is there something about 23-year-olds that makes them read everything literally? And can we at least get some kind of idea as to what the “art” of communicating is? I wonder if it involves learning proper comma usage. Here’s an example: “Make sure they know how to read between the lines rather than taking things too literally” instead of “make sure they know how to read between the lines, rather than taking things too literally.”

I know a bunch of young 20-somethings with terrific communications skills and a shit-ton of people my age with horrendous communications skills (and many of them are in PR and marketing). So can we please stick to competence and skill instead of crapping on young twenty-somethings for the sake of it?

8. Humor is tricky business. Let me guess… because young twenty-somethings are incapable of understanding the boundaries and cultural nuances of certain types of humor… As opposed to 35-year-olds or 50-year-olds?

You’re right. Humor is tricky business. Unfortunately, it has nothing to do with age. Not one thing.

Something just occurred to me: if you took that piece and replaced “young hire” with “women” or “old people,” it would be taken offline immediately. Prejudice is prejudice, and the opinions listed in these eleven points reek of it.

9. Social media savvy is not the same as technical savvy. Excuse my French, but… (cover your ears) what the fuck does that have to do with age?

This argument is invalid.

10. Social media management can become crisis management. Yes. It can and it does. What does that have to do with age? Do you want me to list every PR crisis in the last ten years that was completely botched by people over the age of 25? Here’s a taste: BP, Nestle, Enron, Toyota, Southwest Airlines, Chic-Fil-a, United Airlines, Eurostar, FEMA… We could be here all day.

This argument is frightfully invalid.

11. You need to keep the keys. Yes. That’s a basic social media program management 101 lesson that is applicable regardless of your social media manager’s age.

This argument isn’t just invalid, it isn’t even an argument.

Here’s an idea: instead of writing (and publishing) pointless pieces of hateful, misinformed garbage that fail to a) offer relevant reasons why young professionals under the age of 25 are somehow not qualified (or under-qualified) to manage a social communications program, and b) provide evidence to back up the writer’s opinion, why not write a piece that outlines the qualities and skills you should look for in someone who will help you build and manage a social media program? You know, things like competence, skill, talent, personality, adaptability, resourcefulness, even cultural fit with the company, for instance?

But no. Let’s focus on age instead. Let’s talk about age as a qualification to run a social media program… Good grief. How did we even get here? Really. WTF.

I can’t leave you like this though, so here’s basically all you need to know about the ideal candidate for your social media management job. Are you ready? Here it is:

Hire someone wonderful and competent. Who gives a shit how old they are?

Okay? And if you want some pointers on what to look for, I’ll be back tomorrow with a few.

Cheers,

Olivier

*          *          *

As an aside, you can find some pointers on how to hire (and train) a social media manager in Chapter 6. (Pages 73-82.)

Social Media ROI – Managing and Measuring Social Media Efforts in yourOrganization 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 and Spanish.)

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

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That.

 

*          *          *

Problem? Solution:

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

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Moneyball - Courtesy of Sony Pictures.

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 of Moneyball:

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. Even car 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.

*          *          *

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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The 5 basic rules of calculating the value of a Facebook ‘fan’

A question that routinely comes up in social media circles is what is the value of a Facebook fan? (The question also applies to the value of a Twitter follower, Youtube subscriber, email recipient, etc.)

Invariably, whenever the question is asked, some mathematical savant – typically a self-professed digital alchemist – produces a proprietary algorithm that has somehow arrived at answer along the lines of $1.07 (Source: WSJ) or $3.60 (source: Vitrue) or even $136.38 (source: Syncapse), and so begins the race to answer this now quasi-hallowed question of the new digital age. The lure: He who can convince companies that he can calculate the value of a Facebook fan might have a shot at selling them on the notion that fan the more fans they acquire, the more value they generate for their business. (You can imagine the appeal of answering the “what is the ROI” question by explaining to a company that 10,000 net new fans per month x $136.38 = a $1,363,800 value. At a mere $75,000 per month, that’s a bargain, right?

All that is fine and good, except for one thing: Assigning an arbitrary (one might say “cookie-cutter”) value to Facebook fans in general, averaged out over the ENTIRE breadth of the business spectrum, is complete and utter BS.

To illustrate why that is, I give you the 5 basic rules of calculating the value of a Facebook fan:

Rule #1: A Facebook fan’s value is not the same as the cost of that fan’s acquisition.

Many of my friends in the agency world still cling, for example, to the notion that estimated media value or EAV (estimated advertising value), somehow transmutes the cost of reaching x potential customers into the value of these potential customers once reached. Following a media equivalency philosophy, it can be deduced that if the cost of reaching 1,000,000 people is generally $x and you only paid $y, the “value” of your campaign is still $x.

A hypothetical social media agency-client discussion regarding EAV: “Using social media, we generated 1,000,000 impressions that we converted into followers last quarter. At $1.03 per impression/acquired fan, the total cost of the campaign was $1,030,000. The average cost of an impression through traditional media being $3.97, the estimated media value of your campaign was $3,970,000.”

Next thing you know, the client believes 2 things: The first, that the value of each Facebook ‘fan’ is either ($3.97 – $1.03) = $2.94 or simply $3.97 (depending on the agency). The second, that the ROI of the campaign is ($3,970,000 – $1,030,000) = $2,940,000.

So you see what has happened here: Through a common little industry sleight of hand, a cost A vs. cost B comparison has magically produced an arbitrary “value” for something that actually has no tangible value yet. In case you were particularly observant, you may also have noticed how easily some of the authors of the posts I linked to in the intro mixed up costand value. Ooops. So much for expert analysis.

A word about why cost and value cannot be substituted for one another when applied to fans, followers and customers: Cost may be intimately connected to value when you are buying the family car, but the same logic does not apply to customers as a) you don’t really buy them outright, b) they don’t depreciate the way a car does, and c) they tend to generate revenue over time, far in excess (you hope) of what it cost to earn their business.

Even with the cost of acquiring a fan now determined, why has the value of that fan not yet been ascertained? Rule #2 will answer that question.

Rule #2: A Facebook fan’s value is relative to his or her purchasing habits (and/or influence on others’ purchasing habits).

Illustrated, the value of a fan can be calculated thus:

 a)      Direct Value: If a Facebook fan spent $76 on your products and services last month, her value was $76 for that month. If a Facebook fan spent €5697 on your products or services last month, his value was €5697 for the month.

The value of a fan/transacting customer is based on the value of their transaction. It is NOT based on the cost of having acquired them.

Example:

– Cost of acquiring Rick Spazzyfoot as a Facebook fan: €4.08

– Amount Rick Spazzyfoot has spent on our products and services since becoming a fan five months ago: €879.52

Which of the above two € figures represents the value of that fan to the company?

(If you answered €4.08, you answered wrong. Try again.)

 b)     Indirect value: If a fan seems to be influencing other people in his or her network to become transacting customers (or increase their buy rate or yield), then you can factor that value in as well for those specific time-frames. Because measurement tools are not yet sophisticated enough to a) properly measure influence and b) accurately tie it to specific transactions, I wouldn’t agonize over this point a whole lot. As long as you understand the value of word-of-mouth, positive recommendations and the relative influence that community members exert on each other, you will hold some valuable insights into your business ecosystem. Don’t lose sleep trying to calculate them just yet. Too soon.

The point being this: Until a Facebook ‘fan’ has transacted with you (or influenced a transaction), the monetary value of that fan is precisely zero.

One could even say that if each fan cost you, say, an average of $1.03 to acquire, the value of a fan before he or she has been converted into a transacting customer is actually -$1.03.

That’s right: A significant portion of your Facebook fans might actually put you in the negative. Something to think about when someone asks you to calculate the “value” of your “community,” especially if you purchased rather than earned a significant portion of your fans and followers (it happens more than you realize).

Rule #3: Each Facebook fan’s value is unique.

Every fan brings his or her unique individual value to the table. One fan may spend an average of €89 per month with your company. Another fan might spend an average of $3.79 per month with your company. Another yet may spend an average of ₤1,295 per month with your company. Is it reasonable to ignore this simple fact and instead assign them an arbitrary “value” based on an equation thought up by some guy you read about on the interwebs?

Three points:

1. The lifestyles, needs, tastes, budgets, purchasing habits, cultural differences, online engagement patterns and degree of emotional investment in your brand of each ‘fan’ may be completely different. These, compounded, lead to a wide range of behaviors in your fans. These behaviors dictate their value to you as a company.

2.  Many of your fans may only do business with you only on occasion. Because of this, you have to factor in the possibility that a significant percentage of your fans’ value may fluctuate in terms of activity rather than spend. How many of your fans are not regular customers? How many do business with you each day vs. each month? How many do business with you once a quarter vs. once every three years? Are you figuring your on/off customer-fans into your value equation?

 3. Lastly, we come to the final type of Facebook fan: The one that doesn’t fall into the transacting customer category.  They might remain “fans” without ever converting into customers. Do you know what percentage of your fans right now falls into this non-transacting category? Do you really think that their value is $3.97 or $139.73 or whatever amount an agency, guru or consulting firm arbitrarily assigned to them? No. They clicked a button and left. Their value, until proven otherwise, is zero.

 With this kind of fan/customer diversity within your company ecosystem, you come to realize that arbitrary values like “the value of a Facebook fan is $x” can’t be applied to the real world.

Rule #4: A Facebook fan’s value is likely to be elastic.

Because the value of a Facebook fan is a result of specific purchasing habits (and impact on others’ purchasing habits), a fan’s value is likely to be elastic over time. If you aren’t familiar with the term, it simply means “flexible.” As in: the value of a Facebook fan will change. It will fluctuate. It will not always be the same from measurement period to measurement period.

Let me illustrate: A Facebook fan might spend $76 on your products and services one month and $36 the following month. This means that her “value” was $76 one month and $36 the following month. If next month, she spends $290, $290 will become her “value” for that month.

Because transaction behaviors change, the value of a fan is also likely to change.

You can average this out over time (the fan’s value might average out to $97/month over the course of a year, for example), or just total her value per month, quarter, or year, depending on your reporting requirements. That is entirely up to you.

Example 1: “Based on her transactions, the value of Jane Jones, a fan since 2007, was $2,398.91 in 2010. Thanks to our fan engagement (digital customer development) program, Jane’s value increased to $2,911.02 in 2011.”

Example 2: Chris Pringle’s average monthly value in Q2 of 2011 was $290.76. His average monthly value in Q3 of 2012 was $476.21. He is one of 17,636 fans we managed to shift from a basic package to a premium package via our Facebook campaign.”

Note: In order to figure this stuff out, you are going to have to either get creative with the way your CRM solution interacts with your Facebook analytics suite or wait until Social CRM solutions get a little more robust. Some are getting close.

Examples of exceptions (where fan value may be somewhat inelastic):

 – You are a bank and a fan’s only transaction with you is a fixed monthly payment.

– You are a cable company and a fan’s only transaction with you is a monthly cable bill.

– You are a publisher and a fan’s only transaction with you is an annual magazine subscription.

– Your fans don’t transact with you. They clicked a button and left. If their value was $0 a month ago, it is still $0 this month.

If your business charges for a monthly service that tends to not fluctuate a whole lot, chances are that the value of each of your fans will remain rather constant. This compared to a Starbucks, a Target or an H&M.

Rule #5: A Facebook fan’s value varies from brand to brand and from product to product.

If a fan/customer’s value can fluctuate from month to month and that value can vary wildly from individual to individual within the same brand or product umbrella, imagine how much it can vary from brand to brand, and from product to product.

Compare, for example, the average value of a fan/customer for Coca Colaand the average value of a fan/customer for BMW. (Hypothetically of course, since I don’t have access to either company’s sales or CRM data.) What you may find is that a fan’s annual value for Coca Cola might average,say, $1,620 per year, while a fan’s annual value for BMW might average $42,000. Why? Because the products are entirely different. One costs less than $3 per unit and requires no maintenance. The other can cost tens of thousands of dollars per unit and requires maintenance, repairs, not to mention the occasional upgrade.

Moreover, a single strong recommendation from a fan can yield an enormous return for BMW, while a single recommendation from a fan will yield a comparatively smaller return for Coca Cola.

You can see how the notion that the “value” of a Facebook fan can be calculated absent the context of purchasing habits, brand affiliations, fluctuations in buying power, market forces and shifts in interests and even value perceptions is bunk. Unless of course you find yourself being asked to transform cost into value. Less work. Easier to sell.

So why does this happen?  Tune in next week for Part 2 of this post, in which we will talk about why so many “social media gurus,” digital agencies and “industry analysts” still seem to be having trouble with something that should be pretty simple.

I hope this helped. From now on, if anyone seems confused about the topic of fan/follower/subscriber “value,” point them to this post.

Cheers,

Olivier

*          *          *

If you haven’t already, check out Social Media R.O.I.: Managing and Measuring Social Media Efforts in Your Organization. Lots of vital advice in there for anyone working with social media in a business environment. Makes a great gift to employees, bosses, contractors and clients too. You can even read a free chapter here: smroi.net

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