Experience: The Blog

Facebook's IPO Is Not About Owning Facebook

2012-02-04T17:14:00.000-06:00

Facebook is going public, but that does not mean purchasers of Facebook stock will own the company in any real way. Instead, investors must know that they are buying an ownership interest not in Facebook, Inc. but a share in the vision, judgment and actions of CEO Mark Zuckerberg.

After the IPO, Zuckerberg will own 56.9% of the voting shares. This means he will still get to call the shots in profound ways; for example, the S-1 filing reveals Facebook will be a "controlled company." That means the board of directors will not have an independent nominating function and may elect "not to have a majority of our board of directors be independent or not to have a compensation committee."

In addition, Facebook will have two classes of stock--Class B shares have ten times the voting power as Class A shares. Zuckerberg has a controlling portion of Class B shares, and his control is likely to rise because Class B shares become Class A shares as Class B owners sell. Moreover, the IPO contains an unusual clause that means Zuckerberg will exert power over Facebook even after death:

"…in the event that Mr. Zuckerberg controls our company at the time of his death, control may be transferred to a person or entity that he designates as his successor... As a stockholder, even a controlling stockholder, Mr. Zuckerberg is entitled to vote his shares, and shares over which he has voting control as a result of voting agreements, in his own interests, which may not always be in the interests of our stockholders."

Facebook's S-1 makes it clear what this all means to investors: "Our status as a controlled company could cause our Class A common stock to look less attractive to certain investors or otherwise harm our trading price."

And, "Mr. Zuckerberg will be able to effectively control all matters submitted to our stockholders for a vote, as well as the overall management and direction of our company."

And one of the 13 risk factors cited in the filing is: "Our CEO has control over key decision making as a result of his control of a majority of our voting stock."

Should investors be concerned with this? That depends in large part on what you think of Mark Zuckerberg. Many criticize him for Facebook's approach to privacy (and the S-1 notes that privacy laws "are subject to change and uncertain interpretation, and could harm our business.") But there is another side to Facebook's CEO--the one that demonstrates a commitment to grow the company's revenue model steadily and in a way that does not annoy users. Some investors may shy away from Facebook because of this measured approach to advertising growth, but it leaves me feeling more optimistic about Facebook's future.

Every page on Facebook has some advertising, but it tends to be highly targeted and unobtrusive. There are no banner ads, no interstitials, no dancing animated ads, no Flash ads with hidden "close" buttons and no takeovers. Facebook tries to make advertising as relevant as possible, not merely by permitting typical demographic targeting, but also allowing advertisers to target your and your friends' likes. (Admittedly, the way some brands are accumulating "Likes" undermines the authenticity of this sort of social advertising, but I see Facebook working to make advertising more relevant and not less.)

Facebook's cautious approach is even more evident on mobile, which the S-1 acknowledges is a crucial platform for the firm. At this point, there are no mobile Facebook ads despite the fact more than half of Facebook's 845 million MAUs (monthly active users) utilized a Facebook mobile product in December. Facebook is so careful about launching mobile advertising that the S-1 notes, "Growth in use of Facebook through our mobile products, where we do not currently display ads, as a substitute for use on personal computers may negatively affect our revenue and financial results."

I am not a financial adviser and am not dispensing investment advice, but I have already shared my opinion that a social media bubble has formed and is already bursting. My feelings are no different about the Facebook IPO from other social IPOs--the likely price presupposes a pace of growth that Facebook will be challenged (and probably unwilling) to accomplish. I would not be surprised to see the value of Facebook stock drop in the short-run as has happened with virtually every other social IPO thus far.

While I would not buy Facebook in the immediate future, there is every reason to think the stock will make a smart long-term play at some price in the future. Look at Ebay, which two years after its IPO hit a peak of $30.47 and then dropped to less than $8.00 in the dot-com bubble burst. The stock took three years to recover to its pre-crash price, and in the decade following its January 1, 2001 low, eBay rose 237% while the Dow Jones increased 10%.

Some will avoid Facebook due to the level of control Zuckerberg will exert. If that's a concern for a particular investor, then avoiding this stock will make sense, but those wary of the control Zuckerberg retains should note the success of other companies run by Founder CEOs. One study concluded that companies led by Founder CEOs outperformed others and found these firms “invest more in R&D, have higher capital expenditures, and make more focused mergers and acquisitions”

As with everything Zuckerberg touches, even the IPO is being done his way. What this all means is that those purchasing Facebook stock are not so much getting a share of the company as they are making a bet on Mark Zuckerberg. The IPO is carefully crafted to allow investors and employees to trade their shares on the market without altering the ironclad control held by Facebook's founder.

If you want a share of Zuckerberg's vision, you may wish to monitor the stock and jump in whenever you think the time and price are right. But if you do not share Zuckerberg's worldview or do not trust him, then there is nothing in the IPO filing that would suggest this is the stock for you. Even more than Jeff Bezos at Amazon or Marc Benioff at Salesforce.com, an investment in Facebook is an investment in Mark Zuckerberg.

Facebook S 1

Chrysler, Fiat and the Brand Value of Authenticity

2012-02-02T22:30:00.001-06:00

Chrysler's ad was epic and memorable: Grungy unmistakable scenes of Detroit, a gritty voice expressing the poetry of hard luck and hard work; the rising strains of Eminem's "Lose Yourself" accompanied by gospel choir; and finally the man himself emerging from a Chrysler 200 to point at the camera and assert "This is the Motor City, and this is what we do."

Duplicating this recipe perhaps seemed easy to Fiat, but when they mixed together the same sorts of ingredients, the result was a disaster. Authenticity doesn't have a recipe and brands aren't created by photocopying best practices.

Chrysler's ad is a moving, breathtaking, convincing piece of work that combines art and commerce. This is what advertising should aspire to be, yet vast quantities of marketing budgets go into lookalike ads that fail to alter brand perception or market share. You don't need to take my word that this ad is a success--it earned an Emmy and boosted Chrysler's financial results. Said Chrysler's CFO, “It clearly had a fairly big impact also on market levels with [the] Eminem Super Bowl ad being extremely well-viewed on YouTube."

Fiat tried to recreate the Chrysler recipe. Jennifer Lopez is "Jenny from the Block," so having her drive through the Bronx in a new Fiat 500c seemed like a can't miss concept. Better yet, JLo herself offers, "This is my world, this place inspires me." Ka-ching! The doors of Fiat dealerships must have been ripped from their hinges with the rush of business!

Fiat's outcome with their JLo ads was a bit different from Chrysler's results, however. Fiat sold only 19,769 Fiat 500's in the U.S. last year, less than half their goal. Performance was so bad that the head of the Fiat brand in North America lost her job.

(As if to prove one of my recent posts on how meaningless most social media marketing metrics have become, Fiat at first crowed about the results of this ad, saying they received a 500 percent increase in traffic to their YouTube channel and bump of 47 percent in brand awareness. That's great, but did it increase consideration, sell cars or motivate loyalty--you know, the metrics that matter?)

The reason for the divergent results for Chrysler and Fiat have everything and nothing to do with social media. Brands cannot and never could buy authenticity with a TV ad, but it is possible to earn it with the right advertising campaign. Today in the midst of the social era, authenticity matters more than ever before. There is no "best practice" for how to earn authenticity--it is different for every brand, audience and organization.

Let's count the many ways Chrysler's ad earned authenticity and Fiat's ad did not:

Chrysler's ad was about Detroit; Fiat's was about a car. Chrysler's ad doesn't show the Chrysler 200 until 30 seconds into the ad; Fiat's ad puts the car full frame in the fourth second. Can you imagine the discussion among ad execs at Chrysler--an auto ad that doesn't even show the car for 30 seconds!? That probably sounded risky and dumb, but authenticity isn't earned by impressions and GRPs; it's earned with confidence, context, shared values and history, all of which are on clear display in the Eminem ad.
Chrysler's ad had chemistry between car and spokesperson; Fiat's did not: Marshall and I don't hang out, so I cannot vouch for the fact he cruises around Detroit in a Chrysler, but you and I probably recognize it's possible. JLo, the queen of bling who arrives to her American Idol appearances in a limo, tooling around in a tiny subcompact car? Ridiculous on the face of it. Chemistry is hard to measure and even harder to fake--Leo and Kate's chemistry made Titanic work while real-life couple Ben and JLo caused Gigli to crash. (Hmm, that makes two times Lopez has failed to bring convincing authenticity to a relationship with a costar.)
Eminem isn't just "from" Detroit: Search Google for where JLo lives, and you find answers like Bel-Air and Fisher Island off Miami. Do the same for Eminem and you get results like Rochester Hills, MI and Warren, MI. Eminem isn't just "from" Detroit--he (and Kid Rock) are Detroit for many fans. Eminem gives interviews to eighth graders in Detroit; he is a "Lions fan first and foremost," and two years before the Chrysler ad, Eminem created a video "Love Letter to Detroit" for the NCAA finals. In contrast, JLo's association with the Bronx is so thin, it likely surprised no one when it was reported that JLo never left Los Angeles to film her scenes for the Fiat ad. JLo's spokesperson said "I don't see a problem" and compared shooting the ad to being on a movie set. Fiat found out the hard way that movies are about fantasy, brands are real and authenticity cannot be faked.
JLo is brand promiscuous: Authenticity and trust are a currency--the more you spread them around, the less you have. Eminem, for the most part, is picky about lending his credibility to brands, having appeared in ads for Brisk and Chrysler. Lopez, however, spreads herself around--Fiat, Kohl's, L'Oreal, Harman/Kardon, Gillette Venus, Tous Jewelry, Gucci and her own branded fragrances. The more brands celebs endorse, the less each endorsement means. Some people were surprised Eminem appeared in a Chrysler ad, and that surprise speaks volumes about the value Eminem brought to the brand. No one was surprised to see JLo appear in a Fiat ad, except perhaps that it appeared she was driving in a tiny clown car.

Authenticity is rarely earned by doing something the same way as someone else. Chrysler took risks, created something different, and earned the benefits. In both traditional advertising and social media, we can all learn something from Chrysler's campaign--but please don't try to duplicate the recipe!

Your New Year's Resolution for 2012: Write!

2012-01-31T22:55:00.002-06:00

Is it a little late to make a New Year's resolution? By the first week of February, most of us are already well on our way to breaking our promises to lose weight, quit smoking or get out of debt, but here's a resolution you can and should keep: Write. Religiously. Every week. Starting right now.

I would recommend that you blog, but if (for now) you lack the confidence to share your ideas and observations with the world, start by writing for yourself. Select a topic--I'd recommend a professional one, but you can choose any topic in which you have passion and curiosity--and commit to capture your thoughts every single week.

A young peer recently asked me if I would recommend returning to school for her MBA. I was surprised by the question but more surprised by my answer. I told her I thought she would get more personal and professional benefits if she committed that same time every week to read and comment on others' blogs, watch TED Talks, keep up with news, develop her ideas in a blog and build a network. Since then I have questioned if dismissing education was really the right call, but this soul searching has left me even more convinced that I have gained more through writing this blog than I ever could sitting in a classroom.

Writing was not an easy habit at first, but now it has become so essential that in those periods when I have trouble finding time to write, I become uneasy. The ideas start piling up. I begin to capture them in snippets of text that I email myself. I can actually begin to lose sleep because I lay in bed composing in my mind the blog posts I am not producing. It is not rare for me to wake from a fitful sleep with a developed line of thought, head directly to my PC and furiously type before I lose the idea and perspective. (As with most dreams, sometimes those ideas stand up but other times they melt under the morning light.)

Do I sound like an addict? Perhaps, but there are worst things than being addicted to a habit that leaves you empowered, educated and improved. I have experienced strong and demonstrable benefits because of my work on Experience: The Blog. Here are the ways you might benefit by making a commitment to write regularly:

Reaffirm and strengthen the ideas you bring into the world: The process of blogging forces me to take an idea that I think is fully developed and discover the holes--and trust me, some of your strongest beliefs begin to look awfully shaky as you convert a string of ideas into a cohesive viewpoint. As I compose a blog post to convince others of my perspective, I must first convince myself. I do this by filling in the blanks, taking time to conduct research and citing links that substantiate my arguments. Once the blog post is fully baked, it not only becomes a piece of content for my blog but also a fervently held principle in my brain--one I can call upon in meetings, when I am presenting or when developing strategies on the job.
Discredit ideas before someone discredits them for you: You know those scenes in old movies when the frustrated writer rips a sheet of paper from his or her typewriter and tosses it into a pile of crumbled ideas around the wastebasket? Well, that happens in real life, too. For every four blog posts I publish, I begin and discard one more. I frequently find that something I believed to be a solid and thorough concept is really just a bundle of random notions. Sometimes, I even discredit my own hypothesis--the opinion I was certain would change others' minds is so flimsy it fails to convince even me. There is true value in destroying your own ideas; better you do it while writing alone then have someone else do it for you.
Develop a point of view: We recognize that brands are strengthened not when they are all things to all people but when they focus on one important and meaningful perspective for one important and meaningful audience. Writing helps you focus your thinking in a way that develops your personal brand. When you write--particularly when you blog for others--you begin to think about who you want to read your content and what you want them to think and do. As I have focused my blog's topics, I have also been focusing my thinking and developing a point of view. My blog and my audience force a discipline in the things I read, research and think that I otherwise may lack.
Improve your writing: This benefit is obvious: the more you write, the better you write. I hesitate to say this because you may be thinking, "But Augie, you suffer from run-on sentences, passive voice and just misused the colon in the last sentence." All may be true, but I have come to realize that people inflate the fear of grammar but too often discount the fear of weak thinking. In the midst of a strong and persuasive argument, most will overlook (and not even notice) a missing comma or dropped preposition, but the best grammar in the world cannot save a weak idea. I can look back at my early blog posts and easily recognize the ways my writing and proofreading have improved. Any embarrassment I may feel about my past writing skills is more than compensated by the realization I'd still be stuck at that level had I not started and committed to my blog.
Build a network around ideas: The world is full of curators; millions of Twitterers share links to interesting articles and blog posts. Curating is valuable service, to be sure, but without creators, there would be nothing for curators to curate. At this stage in social media development, it is no longer easy to develop a following by curating--too many people share too many of the same links--but the world can always use more creators. Creators are the people who stop (or decrease) social media from merely being an echo chamber, and creators also earn the most attention. There is no more powerful way to bring attention to you and build an engaged network than by giving others content and ideas to think about, to react to or that they can share with others.
Create your own database of news and statistics: Ever have the experience of vaguely recalling an interesting statistic or survey but being unable to locate the content when you need it? Blogging is a great way to create your own personal database of the content you want to find again in the future. If I find interesting data or the results of a pertinent study, I write about it and link to it, and that means I can always find it by returning to my own blog. Take my last blog post, "Eight Ways Social Business and Mobile Tech are Changing Your Business": That one blog post contains 39 links; as a result, I will never have to waste time searching for the study that found teens sometimes opt to meet friends online rather than drive to meet them in real life. Whenever I need a data point for a deck I'm compiling, I will often use the search engine on my blog rather than go to Google--my blog has better and more helpful results (at least as far as I'm concerned).

So now you know my secret--I write as much for myself as I do for you. Of course, if you and others didn't get value from my content, then this would be an unvisited and unread online diary and not a blog.

I wish the same benefits for you. The process of reading others' content, developing your own ideas, legitimizing your point of view and connecting with others is its own reward.

I hope many of my blog posts change minds, at least a little, but nothing would make me happier than to have someone thank me a year for now for encouraging them to write, share and connect in 2012. You may not get thousands of readers right off the bat, but there are people who are waiting to hear your voice. Do not disappoint them--or you.

Eight Ways Social Business and Mobile Tech Are Changing Your Business

2012-01-30T00:07:00.000-06:00

We are still very early in the social media era, and it will take years for social and mobile technologies and behaviors to affect fully the way business operates. However, some changes are already evident if you look close enough. Is your business watching for these changes and investing so that it is prepared when consumers are ready for new business models?

Today, many companies have happy customers and a sound business model, and they are confident that social media will have a nominal impact on their organization. If this sounds like your enterprise, beware! This was the mindset of companies like Borders and Kodak at the dawn of the Web era, but these organizations scrambled--and failed--to catch up to competitors that were quicker to understand, invest and evolve into new business models.

Whether your company will be Borders or Amazon (or Blockbuster or Netflix) (or MySpace or Facebook) will depend on whether it is willing to continually invest and adapt to fundamental changes in consumer mobile and social behavior over the next decade. Here are eight ways the business landscape will change:

Your purchase funnel becomes more complex and mutable: We already know that social media is affecting the way consumers become aware of products and narrow their consideration set. Brands like McDonald's, Ford and Kellogg's have made social media a substantial part of their strategy to raise awareness in the early potion of the funnel. As an example of using social tools to improve the end of the funnel, Forrester (my former employer) notes that USAA (my current employer) is effectively using ratings and reviews to increase conversions. (Sorry, a subscription is required to read the Forrester report.)

Some say the funnel is dead, flipped, irrelevant, a maze, or a dozen other analogies. They are all right and they are all wrong, which demonstrates the complex, ever-changing world in which we operate. Attracting and binding consumers to your brand will take far different strategies than have worked in the past. The brands that succeed will be the ones that recognize they need agile strategies to capture different customers in different ways and to exploit moments of opportunity as they arise. Think Old Spice, which realized it had a hot property with Isaiah Mustafa's TV spots and rapidly deployed a real-time social media campaign that doubled sales.

Inflexible multi-year marketing plans that focus on traditional tactics and media and that do not connect directly to product development and customer service will result in a disjointed and anemic funnel for the enterprise.
Your employees need new skills: Today's employees, who seem to spend every waking moment updating their Facebook wall or Twitter stream, may seem like they possess the skills your enterprise needs in the social business era. That assumption is wrong--it is akin to saying that people who text friends on their cell phones are prepared for the mobile technology and business models of the future.

A skill gap is forming. Take the banking industry, as an example. For decades, the single deciding factor that people used to select a bank was the location of branches and ATMs, so banks put the vast majority of their channel dollars into branches. Times are changing quickly, and most banks are not altering their strategies accordingly. In Branch Today, Gone Tomorrow, Brett King predicts the number of bank branches will shrink by 50% in the coming years. Few of today's banks are prepared to differentiate on the products and services they furnish in mobile and social channels rather than the location of or service in their branches.

What new skills will today's change-counting, window-staffing branch employees need tomorrow, and what will happen to employees who do not develop the right skills? Tough times are head for some. Brett King points out that the four largest banks employ just under 1 million people in North America while the three top tech firms manage with only 150,000 employees--and the tech firms earned 37% more profit last year. The employees of banks contribute $22,256 each to the profit of their employers, while the tech employees contribute $195,973 each. Banks must shrink, and they are not alone, so the imperative to adapt or be left behind is no less pressing for individuals than it is for organizations.
You must be (or try to be) early adopters or face dire consequences: Social and mobile technologies are increasing the speed of business. Though many firms identify themselves as "fast followers," the speed of today's business has killed this concept. Today's true "fast followers" are companies that thought and invested as if they would be a leader but got there behind a speedier competitor. If a firm thinks it will sit on the sidelines, watch what develops, and start to invest after new business models and processes are proven, the best they can hope for is to be a laggard and not dead. The business cycle will be increasingly unforgiving to companies who try to follow rather than lead.

We live in a world where consumers on social networks expect answers in hours and where PR disasters evolve in real time. However, this is not just about the speed of your PR and customer service; it is also about the shrinking life cycle of your products.

In 2006, Pure Digital Technologies unveiled the Flip Video camera, and product reviewers and users quickly hailed it as an amazing and revolutionary innovation. In 2010's Empowered, Josh Bernoff and Ted Schadler shared how one employee armed with a cheap Flip video camera rewrote the rules of training at Black & Decker. Yet in April 2011, Cisco announced it would cease to produce the Flip. Forget the "hype curve," this is the survival curve: From groundbreaking, jaw-dropping innovation to yesterday's stale product in just five years. How will your products keep up in the future?
Your products must be social: Social is not something you turn to at the end of a product development cycle merely to promote your new product. In the future, if your product is not innately social, it's nothing. Admittedly, it is difficult to make consumables like chewing gum or bananas more social, but what about the durable goods with which we interact every day?

Cars seemed like an unlikely product for the integration of social, yet innovative automakers are leading the way with social technologies built into their product. You have already seen ads promoting cars such as the Chevy Cruze that permit drivers to interact with social networks. Even more ground breaking is Mercedes-Benz' new telematics app, CarTogether, which allows drivers to find people with whom to share rides and helps to cut down on emissions by reducing the number of car rides people have to make.

Too many brands seem to believe that inserting a "Share This" button or implementing a Facebook widget on their site makes their brand social. Instead, they need to consider why consumers share, when they are most likely to share, and how the brand can facilitate this process from within the product and service experience. For example, after you book a restaurant through OpenTable, the company sends a timely email asking if you would consider rating the restaurant while your memory is still fresh. Another example is Amazon, which gives customers a one-click method to share their recently completed purchase with friends. The key to social won't be to have the most creative social media marketing campaign but to make it easy for your customers to share from within the product or service experience.
You must prepare for significant shifts in people's perceptions of ownership and status: In the Western world, things have come to define us: our address, the car we drive, the clothes we wear, the computer we use. (Everyone wants to be Justin Long and no one wants to be John Hodgman--except me, apparently.)

The status of things will not go away, but today's teens are demonstrating different priorities--they get status from their networks and access to things, not just ownership of things. Ask a parent of a teen what their child's attitude is towards driving, and you are likely to hear a different story than when you were young. A study by the University of Michigan Transportation Research Institute finds that the percentage of 19-year-olds with driver's licenses dropped 14% in the past 18 years. Younger teens have seen an even greater decrease; today 33% fewer 16-year-olds have their driver's licenses compared to 1983.

The decrease in driver's licenses for teens may be due to legal or parental restrictions, but a study by ZipCar suggests that teen and young adult attitudes are considerably different from prior generations. Millennials are twice as likely to be open to public transportation, car sharing and carpooling as seniors. More than half of Millennials drive less in order to protect the environment. In addition, almost seven in ten Millennials say they sometimes choose to spend time with friends online rather than driving to see them. Finally, 18- to 34-year-olds are roughly twice as likely as those over 55 to participate in media sharing, car sharing or home sharing programs.

Can we still call consumers "consumers" if they are actively adopting ways to consume less? And what does this mean to your business model?
You must show consumers what you stand for, not just what you sell or make: Anyone in the world of brand strategy knows that consumers have always considered what your brand stands for when evaluating competitive products. That much is not new, but it has changed in two ways. The first is that who you are has never been more important. As Bob Garfield and Doug Levy shared in Ad Age, the 2006 Edelman Trust Barometer demonstrated that "quality products and services" was the top response in identifying the standard of trust, but by 2010, "quality" had dropped to the third slot. "Transparent and honest practices" is the new number one, with 83% of respondents citing it.

Not only is your reputation more important than ever, your organization has never had less say in your reputation. In the mass media era, your organization was largely defined by your advertising and PR in few tightly controlled media channels. Today, consumers define your brand with their interactions in social networks, rating sites and other online communities (not to mention their face-to-face influence in the real world). Bank of America invested $1.9 billion in marketing in 2010, yet it could not defeat a cost-free groundswell of angry consumers led by a 22-year-old nanny and a 27-year-old gallery owner.

Apple will make an interesting case study in the years to come. To date, it has been the gold standard for how your brand benefits when it means something more to consumers. Apple is the most valuable company in the world, yet for all its wealth the company has escaped the indignation heaped on rich corporations by the Occupy movement. That may be about to change--recent articles have questioned Apple's environmental policies and a blistering New York Times article last week made disturbing accusations about Apple's treatment of workers overseas. Apple CEO Tim Cook has refuted the article, but some observers fear Apple is following a traditional course of PR management by denying the accusations and responding narrowly.

Apple will not retain its valuable place atop the list of trusted brands without a different course of action. Even then, it will be consumer reaction to Apple's policies and not letters from Tim Cook or slick advertising that determine Apple's fate in the future.
Your enterprise must prepare to be on the right side of a new wave of disintermediation and reintermediation: Social and mobile business will affect every enterprise, but some will be more impacted than others will. I predict three broad groups of businesses will be affected sooner than others:

Companies that own assets and make them available to consumers for rent: Hospitality and car rental companies face new competition from peer-to-peer models. In New York, hotels now compete against 10,000 rooms, apartments and even spare couches offered by consumers on Airbnb. (I find Airbnb's self-reported claim that the average New Yorker is making $21,000 per year renting on the social service highly dubious, however.)

For most consumers, their car is one of the most expensive assets owned, yet the average consumer uses their car just 8 percent of the time. It is this low utilization that is leading some to offer their cars for rent, and RelayRides reports the average person using the service makes $250 a month renting their car. (I find this claim less dubious but still would like to see the data.) And as consumers get access to the cars they need when they need them, ownership becomes less attractive; one study found that people who use car sharing services were 72% less likely to buy or lease a car in the future.

For both hotels and cars, more supply means lower costs for consumers and less revenue for providers. In addition, the new social business competition has a vastly different cost structure from traditional providers--Airbnb and RelayRides do not need to purchase, own or maintain assets, while IHG Group holds more than $1.5 billion of fixes assets and Hertz owns more than $13 billion of fixed assets.
Companies that facilitate business between consumers: If you are in the business of earning fees to take something from one customer and get it to another customer, social business models will challenge your business. I am not talking eBay or Craigslist--they already are the standard for peer-to-peer (P2P) disintermediation and reintermediation, having killed newspapers' classified ad business.

Instead, look at banks, which take money from savers and lend it to borrowers. Today, savers get little, but this is not the case for folks lending money on Prosper and LendingClub. Yes, the risks are higher, but so are the rewards (which, any economist will tell you, is the basis for capitalism.) While the regulatory hurdles for being a "bank" are high, companies are skirting the regulations and bringing down costs to consumers with new mobile wallet, P2P money transfer and P2P lending models.
Companies that manufacture durable goods: We have already discussed how younger consumers are less interested in obtaining drivers licenses and prefer to meet friends online and to decrease miles in order to save the environment. It is clear that P2P and sharing business models will affect the auto business (and related industries such as auto parts and auto insurance).

The buck does not stop there, however. Take, for example, garden and home tools. Some people are avid gardeners or DIYers around the house, and these people will want to own their own tools. But what about the average consumer? Must every household in every neighborhood own a circular saw or hedge trimmer--equipment that the owner uses for just a handful of hours each year? Today, many neighbors borrow from one another, but watch for social business models to put this on steroids. If consumers can share what they own more easily, widely and with a profit motive (and not just a neighborly intent), ownership of some durable goods could drop.

It would not surprise me if in ten years Home Depot or Lowe's (or some upstart competitor) made more money from renting or facilitating P2P lending of equipment than from selling durable goods outright. While retailers that move quickly can have a key role in the future of social business, what about manufacturers? What does it mean if the market changes so that millions go from wanting to own an underutilized piece of equipment to merely wanting to rent it in real-time? Answer: Fewer items manufactured and sold and a shift in the market toward commercial-grade products that can withstand more punishment and usage.

You must prepare for consumers empowered with greater information about you, competitors and their own money: Social and mobile business models have a way of empowering consumers to make better decisions. For example, as car owners, we tend to think of short trips as cost free, but this is not the case; we give little thought to how each trip means more costs for gas, maintenance and insurance, so the cost of a single trip is not immediately obvious or relevant to our decision to make that trip. Conversely, when we rent a car and must pay for the trip immediately and directly, the cost becomes a significant part of our decision.

People who rent cars through car-sharing programs make better decisions, combine trips and find alternatives. This is the finding of a ZipCar study one year after introducing the service in Baltimore. The company surveyed customers and found that the number taking five or more car trips in a month decreased from 38 percent to 12 percent, and the number driving fewer than 500 miles per month increased by more than 17 percent.

Mobile wallet applications will have the same affect on consumers by allowing constant monitoring and control of credit card and checking balances. Today, consumers spend by swiping a card, with no immediate feedback; tomorrow, each swipe of our NFC-enabled phone will show our credit balance rising or debit balance falling. In addition, applications can help us track spending to budget, manage cash flow in real time, collect discounts, create more usable records of our spending and furnish a host of benefits that permit better control of our money. In addition, using our phones as barcode readers holds can furnish real-time access to competitive prices, product reviews and, perhaps, to additional information such as the environmental or labor policies of the manufacturer.

Social and mobile business tools hold the promise of making consumers more aware of the effect of each spending action. Will this newfound power overcome the innate human desire to impulse buy? Who knows, but it seems we will all be more empowered and informed in the future.

I am excited about the next decade. Better-informed consumers will have more access to information in real time and can avail themselves of new social and mobile business models that save money. Companies will scramble to keep up with lean new competitors and consumers' rapidly changing technology habits and sharing behaviors. The companies that quickly create a vision and begin to invest against it are the ones who will succeed, but the organizations that take a wait-and-see attitude put their stakeholders' interests in considerable danger.

Ten #Fails in Professional Twitter Profile Pictures

2012-01-26T22:45:00.000-06:00

Not everyone is on Twitter for professional reasons. If not, get the heck off my blog and go read The Oatmeal or TMZ or something. However, if you are on Twitter to create a professional network, learn, educate and build your reputation, let's talk about your profile pic.

I am consistently surprised by the way some professionals portray themselves on Twitter. You have precious few ways to introduce yourself to new people on Twitter. Before someone can access the pearls of wisdom in your tweets, they first need to follow you, recognize you and want to know you. What impression do you create in the split second someone takes to consider following? And when people scan their tweet stream, what does your profile picture do to lend credibility to your tweets?

People who wish to achieve professional goals on Twitter must select profile pictures that advance, not hinder, those goals. Of course, if you are on Twitter to have fun, all of the following advice is null and void, but if you are spending time to construct a professional persona and create a professional network, here are ten ways your profile picture may undermine that effort:

Illustrations: Remember when Mad Men had that app that converted your picture into a hip illustration? That was cool--in 2009. Creative, artful versions of yourself are fun, but if your goals are professional, do you really want to be defined by a cartoon character?
Logos: If you are a company, a logo is fine for a profile picture, but if you are a person, ditch your employer's logo (except, perhaps, a tiny one in the corner). You do not introduce yourself at professional events as "Hi, I'm XYZ Corp," so do not do so on Twitter.
Significant Others: We're so happy that you found your soulmate, but unless you're surgically joined at the hip, think with one mind and have a single conjoined career, two heads are not better than one. Save the romantic couple pictures for your desk, not your Twitter avatar. (And do not get me started about wedding shots as profile pics--it was the happiest day of your lives, not your most professional.)
Crop Crap: If your profile picture contains a mysterious disembodied hand or shoulder or, worse yet, you cropped off your ear to eliminate another person from the shot, it is time to smile for the camera and take a new picture. Severed body parts are for horror movies, not your profile pic.
Webcam: Webcams are amazing devices--for capturing video. If your profile picture is a dark, muddy shot of you hunched over your kitchen table staring into a fish-eye lens, then take a real picture with a real camera already.
Boobs: I am not being sexist--this advice applies to both men and women: Button it up and cover your chest. Twitter is not Match.com. If you do not want people staring at your chest at work, you should not want them to stare at it on Twitter.
Outdated: Ever meet someone in person that you have only known online and thought, "What the hell happened to you?" Your first meeting IRL should not leave people wondering if you borrowed someone else's photo or had a disfiguring accident. If your photo is more than three years, 25 pounds, or two hairstyles different from reality, update it.
Animation: I don't see this often, thank God, but please omit animation from your profile picture. Yes, it makes your avatar more obvious and grabs attention--so much so that many people will unfollow you to avoid the blinking annoyance.
Frequent Changes: Staying fresh is important, but remember that your profile picture is your face to your Twitter friends. When people scan their tweet stream, it is your photo and not your name they are most likely to recognize at a glance. Consistency may be last refuge of the unimaginative, but it is also the best way to be recognized in a sea of tweets and avatars.
PURE ENERGY!!!! You think your wide-open mouth and eyes convey that you are energetic, exciting, and unafraid to express yourself; instead, it tells us you may be slightly crazed, prone to emotional outbursts and apt to break into Richard Simmons' routines. Unless your profession is cheerleading, impress us with your competence, not your exuberance.

I considered the profile pictures of the people I follow most closely, retweet most often and with whom I've built the strongest relationships. With very few exceptions, they all share one thing: Their profile pictures feature high-quality headshots.

It may be a digital world, but your face still matters. It conveys trust and personality more quickly and effectively than your 160-character Twitter bio. Be sure to put your best foot, er, face forward.

The Role (and Death) of Marketing in the Social Media Era

2012-01-24T22:21:00.001-06:00

The other day I noticed that my December 2009 blog post, "2010: The Year Marketing Dies," was my blog's most popular article. Here it is, 2012, and CMOs are still employed and Marketing Departments still exist. Oops!

Should I be embarrassed? Before you answer that, I would like to make the case that Marketing is already dead, but marketers just don't know it yet. Like Wile E. Coyote after he has dashed off the edge of the cliff but before gravity has kicked in, I think the profession of Marketing is hovering and waiting for a fall.

I will cop to employing some hyperbole in both my December 2009 blog post and the one you are reading now, but less than you might think. Exaggeration aside, the discipline of marketing has some profound and painful changes coming.

Just this week, we witnessed yet another in a long string of marketing blunders. McDonald's promoted the #McDStories hashtag as a way to get people talking about their McDonald's experiences. People talked, all right--they used the hashtag to vent on everything from poor service to the chain's treatment of animals. Marketing observers can add this faux pas to a long list of recent marketing missteps:

Earlier this month, Taco Bell irked customers with an insanely misguided promotional tweet on Martin Luther King, Jr. Day about the "dream" of "eating @TacoBell."
In November, Qantas Airlines blundered badly with a hashtag marketing campaign that people appropriated to gripe about the carrier having canceled flights and stranded passengers.
In September, Unilever sparked a "Ragu Hates Dads" meme with an insulting ad campaign that slighted fathers.

It is important to note that I am not citing cases of mistakes or service blunders that became social media disasters (a la PayPal/Regretsy, Chrysler's F-bomb or GoDaddy's Elephant-Killing CEO). Nor are these examples of consumers taking to social media to rail against corporate policies (such as Greenpeace/Mattel or Bank of America's debit fee). Rather, all of these blunders are something entirely different--companies deploying marketing strategies and tactics that consumers reject, resulting in brand damage.

Prior to the social era, it was damn near impossible to have a marketing campaign head south. About the worst that could happen was nothing--a brand might waste its marketing budget on a campaign that fell flat and failed to move consumers. Nowadays, every month brings another story of a marketing campaign that not only fails to help the brand but bites it.

It is at this point in similar blog posts about the state of marketing that the blogger usually says something like, "In the social media era brands cannot control the message, but in reality brands never could." That is a nice narrative--and it is complete horse manure. Whether it was the power of mass media, unsophisticated consumers or a society more willing to trust authority, the truth is that marketers wielded incredible power back in the day. Thanks to pervasive and often misleading marketing, consumers thought smoking was safe and pale skin was unhealthy for decades before the dangers of cigarettes and suntanning were revealed.

Just look at Kodak. They were the poster child for how marketing can create a brand. More than ten years ago, I read an article on branding that contained a line I still recall: "Kodak is memories; the other guys are just film." That was pure, marketing success--a generic product with a powerful brand that delivered decades of protected market share and higher margins.

Today, Kodak is bankrupt. Branding expert Al Ries believes Kodak's problem was not that they failed to adapt to the digital era but that "Kodak means 'film' photography; Kodak doesn't mean 'digital' photography." I believe Ries is wrong--if brands were that inflexible, then Apple would be a defunct desktop computer manufacturer instead of the company that just reported a record quarterly profit of $13 billion derived mostly from sales of music, music players and phones.

The comparison between Kodak and Apple is instructive. Almost every single person who reads these words owns an Apple product, I'd venture, but what about Kodak cameras? I am a photo buff who bought thousands of roles of Kodak film in my lifetime, but I'm on my fourth digital camera and have never once been tempted to purchase a Kodak camera. They were never as small, fast, affordable or feature rich as comparable Nikon, Canon and Fujifilm models. In fact, look at ZDNet's annual holiday buying guides for compact digital cameras in 2008, 2009, 2010 and 2011: out of the thirty cameras listed, just one is from Kodak.

The problem that Kodak faced--that all brands face today--is that marketing in the social era increasingly works only for brands that first furnish a positive experience. In the social era, marketers can amplify brands that create positive experiences with products and services, but great marketing cannot save mediocre products and services.

If the company is unable or unwilling to differentiate the product or service experience, what is left for marketers to do? For brands with little positive sentiment to amplify and an army of empowered consumers ready to pounce at disappointing products and clueless marketing, the best marketers can hope for is to build buzz not about the product or service but about the marketing itself. "Don't like our burgers? Then here's a free social game that will get you buzzing about something other than our burgers." Marketers for undifferentiated products and services can create retweets, likes, comments, engagement and shares--everything except actual improvement in consumer consideration, intent or purchase behavior.

Certainly, there are some great recent examples of marketing that works. I've been impressed with the work being done by P&G, RadioShack, USAA (my employer) and others, but their success begins with the right product and service. P&G's Let Her Jump campaign would not have soared if women didn't trust Secret antiperspirant; RadioShack's #UNeedANewPhone hashtag campaign would have backfired if the retailer didn't carry the phones consumers wanted; and my employer's evocative TV ads wouldn't create trust if our service failed to earn trust in the first place. In recent weeks, USAA has been named the top firm in Forrester's Customer Experience Index, ranked by JD Power among the top auto insurance companies in customer satisfaction, and named a People's Choice insurance company in a study by Insure.com. At USAA, marketing is the icing on a cake baked with great products and services.

Marketing is creaking like an aged man leaning on a cane. The real power to create or destroy brands now rests with product managers and service leaders. If marketers are unable to influence the strategies, investment and staffing that impact customers' product and service experience, they are (much like Wile E. Coyote) running in place in thin air, hoping to gain traction.

I've argued my case. Now I'll repeat the question at the top of this blog post: Should I be embarrassed by my December 2009 blog post, "2010: The Year Marketing Dies"? Feel free to shame me in the comments of this blog post.

Postscript

There is a little story behind my post, "2010: The Year Marketing Dies," that you may find interesting. Shortly after accepting my offer from Forrester's Interactive Marketing team, I received a call from my new boss about a change in their blogging policy. The research firm wanted analysts' content and wisdom in one place rather than spread across hundreds of personal blogs, and so they asked me to give up my personal blog and instead write for Forrester's Interactive Marketing blog.

The strategy made sense, but I was concerned Forrester might not appreciate some of my wilder material. My new boss assured me that Forrester had no interest in censuring bloggers, so to test the waters, I decided to write a blatant provocation: as my first blog post as Forrester's new marketing analyst, I announced marketing would die in the coming year.

I shared my proposed blog post, confident a speedy rejection was forthcoming; instead, the blog post was approved without edit. It was a terrific sign as I started my new job that Forrester would be a great fit. And it was!

That blog post may have been intended as a deliberate affront, and I admit I was exaggerating the point, but I'll still stand by that article. Marketing professionals need to help firms build their brands first with products and services and second with advertising, influencer programs and imaginative social media marketing campaigns.

The Incredibly Difficult and Important Job of Community Manager

2012-01-23T10:10:00.001-06:00

Happy Community Manager Appreciation Day! The idea for this worthy annual event came from Jeremiah Owyang, and it is a terrific idea. Most organizations truly have no idea how much authority and power they have imparted on their Community Managers, and recognizing the people who fill these difficult and important roles seems very appropriate.

This blog post is dedicated to and inspired by the community managers on my team at USAA, who execute their duties with energy, creativity, passion and grace. Analisa, Jessica and Raul, with the support of Josh and Julie, have taught me a great deal about the challenges and rewards of the job. I would like to share that wisdom with you.

One of the great challenges of being a Community Manager is that few people seem to notice when you do something right, but everyone seems to know when a rare mistake is made. When your Community Managers keep all the spinning dishes from crashing to the ground, the outcome is an engaged community that grows steadily, avoids inflaming detractors and creates loyal customers. We ought to celebrate that with banners every day because those are the results that matter, but instead we tend to heap attention on those who spend the brand's dollars on a program that delivers 250,000 retweets or "likes."

When do Community Managers get attention? Their work becomes the focus of leaders and fodder for case studies when an uncommon mistake is made. Answer a thousand difficult and sensitive questions and you may get a pat on the back, but mistakenly post a personal message to the brand Twitter feed or respond with a frustrated and very human message on Facebook, and everyone from the President to the maintenance crew hears about it.

Another challenge that Community Managers face on a day-to-day basis is how much of themselves to bring to the job. A million blog posts tell brands the importance of being "real," "personal" and "human" in social interactions, but what does that mean where the rubber meets the road?

When your Community Manager is sitting at a computer looking at the brand's Facebook page or answering a question in a brand community, is it "I" or "we"? Are humor and emoticons appropriate or not? Can a Community Manager say "I'm sorry" or does that impart legal responsibility and risk to the company? Even with written brand standards, balancing the voice of the brand against the need (and desire) to make human connections is not easy.

The Community Managers at USAA are very cognizant of the need to balance their voice with the brand's. In the past, my team has debated things like whether or not they should append their names to the end of Facebook comments on the brand page. (We do so, now.) And when, in preparation of Community Manager Appreciation Day, I suggested we make a Facebook post to let our community get to know the team a little better, our Community Managers wrestled with whether or not it was appropriate to bring this much attention to themselves. We decided that our Community Managers embody the personal commitment USAA employees have for the military community, so later today we'll introduce our community folks with a post to the USAA Facebook page.

It is one thing to struggle with the balance between being personal and being the brand voice, but it's another thing when your customers make that choice for you. We had one customer accuse one of our Community Managers of manipulating a Facebook contest to benefit her friends. The accusation was baseless and an expression of frustration by a person upset her entry was not receiving more votes, but no matter how much one can logically explain a customer's angry and accusatory post or tweet, it is still difficult and frustrating when it is directed at you personally. There is no situation in which it is more important nor more difficult to set aside personal feelings and bring the brand's voice.

I've shared some of the frustration of the job, but what about the benefits of being a Community Manager? There are some career advantages to being employed at the cutting edge of how brand building is changing; for example, USAA's Community Managers have had the opportunity to directly teach the association's president and other leaders about social media. It also is exciting to be part of every single campaign or important communication initiative within the organization. Plus, one important bonus for handling consumer concerns and needs in social channels is the opportunity to see detractors become advocates.

And finally, there's the autonomy and importance of the job--Community Managers are creating and reinforcing the brand through hundreds of public interactions a week. Your brand's advertising and PR is reviewed by a dozen executives before it is released, but the tweets, posts, comments and replies that fashion your brand in social media go directly from the hearts and minds of your Community Managers to your customers. There are few if any people within the enterprise who so personally epitomize and feel ownership of your brand like your Community Managers.

I hope the USAA Community Managers know how much I appreciate their hard work every day, but I am sure I fall short of bringing this to my daily interactions with Analisa, Jessica and Raul. Today my challenge to you isn't merely to thank your Community Managers on Community Manager Appreciation Day but to consider ways to bring appreciation throughout the year.

In your communities, every day is Community Manager Appreciation Day. Shouldn't it be the same inside your organization?

The Shrinking Half-Life of Never

2012-01-17T23:28:00.000-06:00

"The future belongs to those who see possibilities before they become obvious."
- John Sculley, former CEO of Apple

There are many reasons why people fail to see the future, even when it is pounding down their front door. Some are too busy in the now to see the world changing around them; some see trends and mistake them for fads; and some are simply too invested in today's skills and business models to consider their evolution. No matter the etiology of the disease, the symptom is usually the same--bold and unassailable declarations such as "I will never..." and "Our customers will never..." If you hear these words, recognize them as the danger signs they are.

The threat of overlooking vital market trends is certainly not a new phenomenon. Just ask the powerful railroad companies of the early 20th Century, which failed to understand the changing needs and technology of society. Stuck in the mindset that they were in the rail business and not the transportation business, railroad companies watched as rail passenger travel declined 84 percent between 1945 and 1964. In the first half of the 20th Century, the Pennsylvania Railroad was the largest publicly traded corporation in the world, but by 1970 the merged Penn Central declared bankruptcy.

The forces that undid Pen Central 40 years ago are the same forces that torpedoed Borders in recent years. As recently as two years ago, Borders Group operated 511 superstores across the globe; late in 2011, the company liquidated its last store. Unwilling to see (or adapt) to the way media sales first went online and then went digital, the company struggled. It first turned to Amazon as its online store provider, but by the time Borders tried to establish its own online store in 2008, it was too late.

How do highly compensated executives--recognized and experienced experts in their field--miss profound change on this scale? You do not need deep insight into the railroad or book selling business to understand how this phenomenon works. If you are over 40, you've experienced it firsthand. Chances are you have repeatedly declared (either aloud or silently) "I will never..." only to prove yourself wrong time after time:

In 1994: I will never own a personal computer.
In 1997: I will never waste time on the information superhighway.
In 1999: I will never be tethered to a mobile phone every hour of my life.
In 2001: I will never submit my credit card number through a Web site.
In 2003: I will never need a smartphone--my email can wait until I get to my PC.
In 2007: I will never share my personal information on those crazy social networks.

Never isn't what it used to be. It took most of us no more than two to five years to move from "I will never..." to "I am doing it religiously..." for all of these behaviors.

Many of those who laughed at the nerds typing away on their Atari STs and Commodore Amigas are now on their third generation of personal computing, having transitioned from desktops to laptops to tablets and mobile. The people who declared they would never be stupid enough to trust their credit card number online are today storing their Visa numbers on Amazon and checking their investment accounts on their cell phones.

When we personally misjudge the future, the implications are relatively minor. The folks who mocked Treo and Blackberry addicts changed their minds, bought iPhones and Androids, and caught up to the early adopters. Conversely, the organizational implications of misjudging the future are far more serious. "I will never..." too easily becomes "Our customers will never..." which is expressed as "Our organization will never..." By the time "never" becomes "OMG!," it is too late to steal market share from more agile and established competitors; it is even more difficult for a fading brand to recover lost trust and convince consumers it is still relevant. Buy books at Borders? That is so 2007!

Today, what are you saying you will never do? How will your 2017 self prove your brash and ignorant 2012 self wrongheaded and shortsighted?

How about, "I will never lend money to a stranger through a peer-to-peer (P2P) web site?" Many bankers today think peer lending is a minor blip, but with the leading P2P lending sites growing more than 100% per year, this may well be a social business model many will regret discounting. (Given all that goodwill many of the big banks have accumulated, I'm sure they have nothing to worry about.)

Other executives say "I will never spend more on social media than traditional advertising," even though the transition is already well underway; Coca-Cola has shifted 20 percent of its marketing budget to social, for example. The trend toward social will not abate soon. Forrester reports that 55 percent of marketers expect "created social media" to grow in effectiveness while 21 percent expect the same of television and just 10 percent anticipate radio advertising effectiveness to rise.

The cure for the disease of business myopia is quite simple: Never say never. Recognize that the half-life of "never" has never been shorter. The quicker we appreciate that "never" is not a very long time in today's environment, the sooner we can start leading our organizations to embrace the remarkable changes ahead.

Four Ways to Fix Social Media Marketing

2012-01-12T18:50:00.000-06:00

My last blog post, "Social Media Marketing is Broken," was a rant, and while rants are fun and cathartic, they are not helpful. (I'm also disappointed to note that rants tend to draw more retweets and visits, so perhaps I should aspire to be the Lewis Black of Social Media.) Since I strive be helpful and create positive dialog on this blog, I'd like to explore four ways social media marketing can be fixed:

Don't report fan page increases without reporting engagement level: It's too easy to add fans and followers for the wrong reasons. Run a sweepstakes on Facebook, and hundreds of thousands of freebie hunters with no interest in your brand will click "Like." As a result, your engagement will go down, your EdgeRank will not improve, and your brand's posts will not reach a larger audience. Let's be clear: Increasing your fan count with disinterested fans who do not engage means you've squandered your precious budget dollars.
If you need a simple engagement metric, look no further than Facebook's recent addition to fan pages, the "talking about this" number. Divide your page's "talking about this" figure by the "like this" count, and you get an easy, free measure of engagement. How does your brand's ratio compare to your competition's? More importantly, how does it compare from month to month for your own page? Investing in strategies that increment your fan count while leaving "talking about this" unchanged means you are NOT engaging more people where it counts--on their walls. (And any page administrator who has glanced at his or her Facebook Insights knows that relying on large numbers of people to visit your wall is a losing proposition.)
By the way, I used the word "report" and not "measure" for a reason. It isn't good enough merely to measure your fan count and engagement numbers, you should report both metrics to leaders and peers. This is the only way to educate them on the importance of maintaining and increasing engagement rather than obsessing over the easy to monitor but less important fan count total.
Don't report on engagement level without reporting on quality of engagement: That simple engagement metric I just suggested comes with one major caveat: It is easy to manipulate. If all you do is post jokes, viral videos and silly questions, you will increase engagement, but probably in way that increases your brand's EdgeRank to the wrong people for the wrong reasons.
Don't get me wrong, there's a place for posts that help your brand convey more personality on Facebook, but it is imperative you focus engagement-raising tactics on the people who matter most to the brand. If your target prospects and customers are seniors or B2B buyers, it does no good to increase your EdgeRank with viral videos that appeal to younger people (even if it does boost your "talking about this" number).
How can you report to your boss the quality of engagement? Many Social Media Management Systems can divulge the demographics of the people you're engaging. If you don't have the budget for an SMMS, a simple way to call attention to the people you are engaging and the ways your brand creates engagement is to report the most engaging content posted to the wall each month. If doing so raises difficult questions about the topics you are posting or the audiences you are engaging, that's a strong sign your social content strategy needs tweaking.
Don't report on quality of engagement without reporting on brand or business metrics: What good is investing in social media marketing tactics if all you're getting is digital babble without driving any value for the organization? Driving WOM isn't a true business measure if all those retweets and shares don't change minds, spark consideration or alter buying behaviors.
Remember Taco Bell's "Yo quiero Taco Bell" chihauhua? Of course you do. Back in the late 90s, that campaign became what we'd today call a "viral success." It got lots of people talking and sold 13 million stuffed animals. Alas, what it did not do is sell tacos. The campaign and agency were scrapped after same-store sales dropped six percent. "Viral" and "Engagement" do not equal "successful" if no business value is created.
Business value can be derived in a number of ways. Short-term and direct business measures include site traffic from social sites and tracking links through to conversation. Longer-term measures are harder to come by but are even more important, because we in the social media arena are in the relationship business and not the direct response business. Using brand measures and media mix methodologies validates that today's social media investments equate to tomorrow's consideration, intent and sales.
Make marketing the SECOND most important thing you do in social media: Much of the reason social media marketing is broken is that the medium is not, primarily, a marketing channel. It's a channel for connecting, sharing, conversation, collaboration and sentiment. Your brand may want to connect with customers on marketing matters, but your customers have different goals.
I'm still amazed at the number of brands that will constantly update their status in Facebook while ignoring virtually everything posted by consumers. Regardless of the intent or quality of your content, your actions are delivering the message that your brand only cares about itself. I'm reminded of one of my favorite Ralph Waldo Emerson quotes--a phrase I consider the defining maxim of the social era--"What you do speaks so loud that I cannot hear what you say."
The beauty of prioritizing customer service over marketing in social media is that doing so will actually enhance your marketing. By demonstrating you care about customers, your messages are more likely to be received. Engaging to solve customer problems also increase sentiment. And creating dialog about the issues customers care about increases your EdgeRank, making your posts more likely to get through to your fans' walls.

We can make social media an appropriate and successful medium for marketing--some brands already have--but until we improve upon the metrics and goals in social media, we cannot improve social media marketing itself. The poor grab bag of freebies and sweepstakes that are too common in social media marketing today are hurting more than helping, and it is well past time for Marketing 2.0 thinking to match our Web 2.0 world.

Social Media Marketing is Broken

2012-01-08T13:26:00.000-06:00

"I am going to Germany for seven months," announced my friend on Facebook, and her confused, concerned and excited friends erupted with a dozen urgent questions. An hour later came the explanation: "It was a cancer awareness meme. Sorry to have put bad info out there." Well, I feel so much more aware about cancer now, don't you?

This is just the latest example of how social media marketing has become (or always was) broken--a chase for memes for memes' sake. Social media marketing is an insular and largely meaningless game where the perceived winner is not the brand that gains awareness, consideration or purchase intent but the one with the most retweets and likes.

The problem rests not with social media but with marketers. I blame marketers for focusing on quick fixes and easy metrics rather than appreciating that--as always--brands gain customers' trust, usage and loyalty through hard work and not button clicks.

The problem isn't only in social media, of course. Too many marketers have been lazy, focusing more on saying different things about the brand in paid media rather than helping the brand to be different in meaningful ways. These marketers continue to invest in lookalike ads, hoping the right headline or creative imagery will catapult the brand forward, ignoring the preponderance of evidence that validates people are drawn to brands for deeper reasons.

For example, the 30 companies featured in the book "Firms of Endearment," selected because they are driven by purpose rather than quarterly earnings, grew their stock by 21.06% annually compared to 3.3% for the S&P. These "firms of endearment" advertise, but not like everyone else. Take Patagonia--while other retailers were using Cyber Monday ads and emails to pump discounts, Patagonia used the same channels to tell its customers "Don't Buy This Jacket." Patagonia won not by telling customers "Pick me! Pick me! I've got the best discounts!" but by encouraging customers to "buy less and to reflect before you spend a dime on this jacket or anything else."

IKEA, another "firm of endearment," is again demonstrating why it belongs on the list. IKEA could've had a sweepstakes for a Fado lamp or given away a virtual Klobo loveseat for Farmville farmers; instead, the company listened to the people who launched their own fan page entitled, "I wanna have a sleepover in IKEA." Voilà, a perfect combination of PR, social media and fan-building loyalty program with a 100-person sleepover in an IKEA store.

In social media, marketers suffer from the classic problem of failing to understand cause and effect: "Starbucks is a social media success with 26 million fans on Facebook, so all I need to do is gain fans by giving things away in Cityville and I'll be a success, too!" I am not suggesting Starbucks hasn't done some savvy marketing in social media (more on this later), but Starbucks does not succeed because they have Facebook fans, they have Facebook fans because they succeed at providing a product and experience with which people connect.

Seek social media marketing case studies and you will find a typical assortment of tired marketing promotion tricks ported into the social media era--brands that gained new "fans" by giving away a freebie or offering a sweepstakes. These tactics have been around for decades, so why is it we see them featured in so many social media case studies but so few brand marketing case studies? Because experienced marketers know these tactics do not (for the most part) work.

Freebies and sweepstakes accomplish very specific things--they help launch a new product, promote a new product feature, penetrate a new market or secure display space on retailers' shelves. They may raise trial and awareness, but they do not deliver repeat usage, loyalty and advocacy, the very building blocks of social media success.

If most freebies and sweepstakes are a mismatch for social media, why do social media marketers use them so much? The argument seems to be that providing an incentive to Facebook users to try your fan page is a first step toward building Facebook relationships, but that sort of thinking ignores how Facebook works. Thanks to Facebook's Edgerank, adding a bunch of disinterested "fans" who hide or ignore your posts does not help but rather hurts your brand's chances for success on Facebook. Running a real-world sweepstakes so that 3% of the participants become customers may or may not be a smart marketing investment, but running a Facebook sweepstakes so that 3% of the participants become engaged members of your fan page is a brand-killing play every time.

Is it possible to succeed with a freebie or sweepstakes in social media? Yes, if you focus on two things--the thing you offer has to encourage people to engage with the brand in a meaningful way and the audience on which you focus must be not the largest but the right audience. For most brands, offering an in-game freebie to Cityville's 43 million users makes as much sense as offering a new chess piece that devastates opponents' pieces in an entire rank of the board. Chess players of the world will take it; they will use it to enhance their chess game; but does it make them consider or buy your insurance or peanut butter brand? No, because it fails to provide meaningful brand engagement to the right audience.

I mentioned Starbucks earlier, so let's explore how this "firm of endearment" succeeds with freebies, ads and sweepstakes. It gives away free Wi-Fi in stores and offers free content for customers--meaningful brand interactions to the right customers. Starbucks used Promoted Tweets to serve ads to people who search for "coffee" and "Starbucks" to let them know about the free drinks available for those who use reusable cups--meaningful brand interactions to the right customers. And Starbucks has given away samples of a new coffee available in the aisles of grocery stores, not just to anyone but only to Twitterers who influence others and who tweet frequently about coffee--meaningful brand interactions to the right customers.

If I see one more headline about a brand that adds 100,000 new fans in a day because of a sweepstakes or freebie, I am going to throw my laptop out a window. I'm just tired of it. Not only is it frustrating to see so much attention lavished on poor social media marketing, it also is time consuming to constantly explain to others why there is no easy (and truly beneficial) way to add hundreds of thousands of fans to our own fan page, despite evidence to the contrary.

It is time social media marketers abandon the easy metrics and focus on the ones that matter. It's the NFL postseason and I'm a Packer fan, so I cannot resist the analogy: In the 2010 season, six quarterbacks threw for more yards than Aaron Rodgers did. Nine completed more passes than Aaron Rodgers did. Five threw for more touchdowns than Aaron Rodgers did. Seven even won more games. But Aaron Rodgers led his team to a Super Bowl victory.

Stop counting yards and start focusing on how your brand truly wins in social media. If most social media marketers shifted their attention to metrics and strategies that matter more, social media marketing would matter more.

How To Raise Prices and Avoid a Social Media Backlash from Your Empowered Customers

2012-01-01T20:46:00.000-06:00

The equation for business in 2012 is unmistakable and sobering: Trust in brands is eroding, consumer economic confidence is low, and the ability of frustrated consumers to fight back through social media continues to grow. This past year saw a number of high profile brands attempt to implement fees or raise prices, only to backpedal and grovel after facing a scathing flood of angry and vocal customers.

A lot of time and money is wasted planning, executing and reversing a large-scale business policy, but many of the companies who reversed course lost more than time and money--they lost customers and market share. Bank of America attempted to implement a fee for debit card users, contributing to an exodus of 650,000 bank customers to credit unions in just four weeks--more than the 600,000 customers who joined credit unions during the entirety of 2010--and that was before the Bank Transfer Day organized in social networks. Netflix tried to raise prices by separating their streaming and DVD rental business, resulting in a loss of 800,000 customers in a single quarter.

These two companies didn't just lose some reputation--they lost financial value. Both companies "listened to their customers" and rescinded their derided policies, but that failed to prevent a significant loss of market value. BOA shares are down 10% since it announced its debit card fee and Netflix shares have lost 55% of their value since the company's September 19 announcement. In the old days, angry consumers faced with price increases merely switched brands; today they can organize, attack, broadcast, influence, switch en masse, and adversely affect the value investors place on the brand's future.

It is vital that business leaders realize the trends we are seeing as we move into 2012 are not new or temporary. Trust in brands has been eroding for more than a decade--according to the Young and Rubicam BrandAsset Valuator, consumers in 2008 voted just over one-fifth of brands as trustworthy, less than half the 52% of brands considered trustworthy in 1997. Meanwhile, consumers are cautious to spend due to an economy that no one--particularly not Fed Chairman Ben Bernanke--expects to improve any time soon. And, as consumer adoption of social media grows, so does the number of social media crises faced by business, according to Altimeter.

In 2012, the potent combination of consumer frustration, economic woes and social media empowerment may not simply affect individual brands; these forces could reshape entire industries this year. One consulting firm surveyed 5600 consumers about the brand vulnerability of retail banks in the US and predicted growing customer anger could result in the 10 largest banks losing $185 billion in deposits during the next 12 months--nine percent of total retail deposits at those banks.

Verizon's one-day reversal this past week only underscores the seriousness of the business environment entering 2012. Verizon announced plans to charge a fee for single bill payments online or by telephone. The uproar was so great that in just a single day, Verizon rescinded its plans. Not only were consumers contacting Verizon to complain, but they were broadcasting their frustration in social media. Hundreds of consumers turned an unrelated Verizon Facebook post into an impromptu forum for venting frustration and 160,000 consumers signed an online petition at Change.org (created by the same young woman whose online petition contributed to Bank of America's woes.)

So, does this mean companies cannot charge more for their products or institute new fees? Of course not, but there is no longer any excuse for an organization to be surprised and suffer losses due to these sorts of consumer reactions. Consumers are feeling more empowered and are seeing results from their coordinated actions in social media, so 2012 is going to be rocky for businesses that do not embrace new ways to engage, appease and enlist the empowered consumer. As Edelman Digital's Michael Brito and I discussed on Twitter, the steps to avoid a social media disaster are not difficult:

CONSIDER ALTERNATIVES: Is raising a fee or a price the only possible business decision given the circumstances? Can consumers see this as essential and fair, or will they only view your decision as a way to extract more money for shareholders?

For instance, rather than implementing a $2 fee for customers making single bill payments, could a reasonable alternative be a $2 discount for people who switch to automated bill pay? In the intermediate- to long-term, the result is the same--a two-tier pricing system that encourages consumers to embrace cost-saving methods. At a time when consumers are seeking any way to save money, offer the carrot and not the stick to motivate consumers.

Another way to avoid social media disasters is to focus fees and price increases on the few that are raising costs rather than your brand's entire customer population. TD Bank has faced little backlash to their recent fee increase, and the difference may be that the bank targeted the new fees to those few customers--just one percent--who make excessive savings account transfers and thus increase costs. TD Bank has seen little social media backlash--on the same site where Bank of America and Verizon have faced large-scale petitions, the one created to complain about TD Bank's new fees has the support of just the individual who launched the petition.

Another thing to consider is how consumers will react. Consumers never like price increases, but many of 2012's social media reactions weren't just gripes about higher prices. Much like politicking candidates, consumers often seek to frame company decisions into a sound bite. Customers were incensed that Bank of America would charge "me to access my own money in my own checking account." Verizon customers thought they were "helping the company and the environment" by paying online rather than sending physical payments through the postal mail. The substantive negative reactions had as much to do with the perceived context as with the fees themselves.

EXPLAIN: Consumers are not unreasonable, stupid or powerless. They can support a price increase if it is explained in a way that respects their knowledge of the world and power in the brand relationship. If you find you are unable to craft a reasonable, consumer-facing justification for a new fee or price increase, that should be a big, blinking "danger ahead" sign.

Bloggers hammered Netflix for not explaining the reason behind their price increase to customers using both the streaming and DVD services. It certainly defied any logic that with inflation running under 4% a company would need to increase prices 60% in one fell swoop. Did Netflix underprice their services in the first place? Did the streaming or DVD rental business models change due to some unexplained market change? We don't know because Netflix didn't explain it.

The reasons behind Verizon's fee remained a mystery to its customers, mentioned but not explained in a single sentence in the company's press release: "The fee will help allow us to continue to support these single bill payment options in these channels and is designed to address costs incurred by us for only those customers who choose to make single bill payments in alternate payment channels." Why are costs higher for single bill payers? Are costs really higher for people who make single bill payments online versus showing up at a Verizon store with cash in hand? We don't know because Verizon didn't explain it.

The days of implementing a price or fee increase with little to no explanation and then weathering a tiny customer tempest in a teapot are pretty much over. It's not that that approach cannot work, but it is risky and unnecessary. The B2B world, where single customers have always had greater power, has known this for some time, but B2C brands are not use to worrying about empowered consumers. B2C brands would be wise to learn best practices from those B2B brands that have always had to explain price increases and put them into a context that customers can accept. For brands hoping to charge more to customers in 2012, explaining more and testing the message has never been more important.

ASK AND ENGAGE: Consumers may not be excited to help you figure out ways to charge them more money, but they will help brands solve business problems and reward brands for treating them as partners. For example, which sounds better to you: "We're raising fees for people who pay by credit card" or "We incur fees when customers pay by credit card and this increases costs for all customers, which may not be fair. How can we encourage our customers to help us keep prices low?" When you ask customers to help save you money, they may answer "tough luck" and suggest you eat the costs, but wouldn't you rather know this before you announce a new pricing policy that consumers reject?

Starbucks saw the cost of coffee increase and successfully implemented price increases in 2011. Of course, some complained when their "Venti" price jumped a couple of dimes, but the company avoided damage through its use of social media to ask and engage. It maintains a site asking customers for suggestions and has the 32nd most popular page on Facebook where they engage 26.5 million fans. This permitted Starbucks to surf through the year in fine form--with the Dow up 5.5% in 2011, Starbucks shares rose over 40%.

RESPECT: Consumers may react as much to the lack of respect businesses show when increasing fees as to the fees themselves. Language matters, and turning to "marketing speak" rather than candor can make an already difficult communication challenge even greater. Verizon called their new very inconvenient fee a "convenience fee" and Netflix's blog post announcing a 60% price increase included the phrase, "lowest price(s) ever" three times.

Consumers are perceptive and well informed, and they will react when brands fail to speak with them in an honest and forthright manner. A price or fee increase is a risky proposition in this business environment, so don't add fuel to the fire with language better suited for press releases of the past than for a conversation with the empowered consumer in 2012.

TRANSPARENCY: Finally, it is high time in 2012 to understand what that overused but seldom understood term, transparency, means in the social era. Some companies seem to define transparency as "When the customer base erupts and overruns our social channels, we'll have a discussion with them." That sort of reactive transparency is better than none, but avoiding reputation and business problems requires proactive transparency in 2012.

When you ask a newlywed why they chose their spouse, they will answer, "s/he makes me laugh" or "s/he brightens my life," and not, "Because s/he will tell me bad news so we can have a discussion of how to solve problems." The same thing is true when consumers "marry" brands in social media--they will not say that they connect with brands in order to "To hear bad news and have a discussion about price increases," but as with any relationship, consumers do not want to be lied to or managed by their favorite brands.

Your Facebook and Twitter feeds are not just a means to broadcast advertising in a different form. Just as people react when they find their spouses have been spoon feeding them happy lies while hiding growing financial problems, your customers will be offended and incensed if you engage with them on Facebook about marketing programs while sneaking a price increase into your PR newsroom. Transparency in 2012 means having the guts to announce your price increase on Facebook and Twitter just as you would your latest promotion.

If that sounds risky, then you need to reread the preceding paragraphs. If you have considered alternatives, explained, asked, engaged and respected your consumer, then discussing your business environment and the reasons why a price increase is necessary should not be threatening. Consumers may decline your proposal in a strong and unified fashion, but unlike the customer-sapping stock-depressing embarrassments seen in 2011, your brand can walk away from that discussion with customers having a stronger relationship with the brand. Today's "no price increase" may be tomorrow's higher margins powered by loyal advocates. Handled right, customers won't divorce your brand but instead renew their vows.

A brand has always been a relationship, but too often it has seemed that relationship is defined by what happens at a cash register. That never was the case--the relationship between brand and consumer is consummated well before the purchase, when consumers associate themselves with brands they respect, are proud of and say something about themselves. Communication is the key to any relationship, and in 2012 it has never been more vital for brands.

While the consumer mindset is sobering this year, that does not mean the relationship with your brand cannot be stronger than ever. The difference between a headline-grabbing social media backlash and a successful implementation of a price increase or new fee depends more on how you do it rather than what you do, and how you do it depends more on what your brand stands for than what its prices and fees are.

Predictions for Social Media and Social Business in 2012

2011-12-11T12:54:00.001-06:00

The year 2011 was an interesting one for social media. In some ways nothing changed, and in others, everything changed.

Here is what didn't: At the end of 2011, Facebook, Twitter and LinkedIn remain the top social networking sites, despite the entrance of Google+ into the fray. Geolocation tools moved sideways, neither faltering nor becoming mainstream; Foursquare may have tripled users in 2011, but only 5% of Americans use geolocation tools. And despite claims of social fatigue, privacy concerns and frustration over constant Facebook changes, no one abandoned social media--today 61% of those under 30 years of age use social media daily compared to 60% a year ago.

What changed in 2011? The last nail was put in the coffin for those who believed social media was just for the young--use of social media among baby boomers is up 60% in one year. More important than demographics is how intertwined the digital social and real worlds have become for many; 58% of teens have had an experience in social media that made them feel closer to another person, one-third of employees use Facebook while at work and one British survey found that people would give up indoor plumbing or coffee before Facebook. And while last year at this time Google, Yahoo and Facebook earned almost equal shares of US online time, today Americans spend roughly 50% more time on Facebook then either Google or Yahoo.

So, what will happen in 2012? Nothing will change and everything will change. Here are some of my expectations for the coming year:

Social Business gets serious

Of course, social media will remain a platform for communications, but 2012 will be the year when it becomes evident how much social media will transform business. To date, social commerce strategies have been about grafting Web 1.0 commerce into 2.0 platforms, but a "Shop" tab on Facebook is not a social business model. For example, it's interesting consumers can search for a flight within a tab on Delta's Facebook page, but there's nothing remotely social about the experience.

In 2012, true peer-to-peer commerce and social data models will begin to make headlines. Look for car sharing to get mainstream as OnStar, GM and RelayRides bring peer-to-peer car sharing at scale, and watch for mainstream media to pay attention as peer-to-peer lending in the US approaches $100 million per month by yearend. I also expect we'll see retailers and streaming media sites make a move in social cobrowsing; people thousands of miles apart will be able to shop together or watch a movie simultaneously and make these experiences almost as social online as they are in the real world.

Brands get more control in Facebook

Considering it is 2011's hottest platform for marketing, Facebook remains a frustrating place for many brands. For most of 2011, it seemed Facebook was not all that eager to work with brands other than to sell advertising, but in the past couple of months there have been signs Facebook is listening to the needs of social media marketers. In November, Facebook Insights improved the data available to administrators of brand pages, and just this week comes news Facebook is piloting private messages between brand pages and fans.

As more companies integrate Facebook into their core business processes and services, Facebook will be pressured to make the platform more hospitable for brands. Facebook will need to improve everything from spam protection to phishing prevention to secure user authentication. One new feature I expect (and hope) to see in 2012 is for Facebook to give brands control over the ads that appear on their Facebook pages (for a price, of course); it's asking a lot for brands to build mission-critical features and applications on the Facebook platform only to have these social business services adjacent to ads from competitors.

The fans/followers arms race ends

I'm surprised at how many marketing and communication professionals do not understand Facebook EdgeRank and still believe that every Facebook post made by a brand is posted on every fan's wall. That isn't remotely how Facebook works, which is why the race to buy fans with game freebies, contests, and sweeps will, I expect, be less prevalent next year than in 2011. In the same way Marketers learned that buying email lists was ineffective, they will learn the same thing about "buying" fans in social media.

In 2012, the brands that succeed in social media won't be the ones who add tens of thousands of fans in a single day with a promotion; instead, the winners this year will earn fans the old-fashioned way--with strong business relationships, great service and products, and social business applications that deliver true value in social media. I anticipate that in 2012 we'll see more case studies that validate strong brand and business results from smaller subsets of consumers rather than case studies that trumpet the accumulation of large numbers of meaningless fans. (I hope this turns out to be a true prediction and not merely a wish on my part.)

The slow-motion social media valuation bubble burst continues

The bubble is already bursting for social media valuations. LinkedIn is 40% off its post-IPO high and with a PE ratio 7000% greater than Google's, LinkedIn will either need to post spectacular profits or face even more downward pressure. GroupOn's stock has been recovering in recent weeks but still remains 25% off its November high (and it has no PE ratio since it has no "E" yet.) And Zynga, possibly the most anticipated social IPO other than Facebook, has seen speculation of its valuation drop as much as 50% in recent weeks.

In 2012 we'll see this pattern repeat: great anticipation of sky-high valuations; then the launch of social IPOs at more reasonable prices; quickly, speculators bid up those shares; but eventually sanity takes hold and prices sink. Just as in the dot-com bubble and burst, we can expect social firms to take years to develop their business models and produce the stable streams of income necessary to support higher stock prices. Look no further than the experience of Web 1.0 success story, Amazon--its stock stood at $107 in December 1999 but did not surpass this price for almost another decade.

A new economic "privacy divide" begins to form along generational lines

It is no secret that young people have a different view of privacy than their older peers. Until now, the generational gap in privacy attitudes primarily affected the rates at which older and younger people adopted and used social networking, although some economic benefits are already accruing to those willing to embrace social media; for example, one recent survey revealed that 16% of employees found their current jobs in social media.

In 2012, the differences in privacy attitudes will create a wider economic divide along generational lines--a separation between social business haves and have-nots. As the Sharing Economy grows, those willing to engage and share more widely will gain access to a greater variety of peer-to-peer products and services compared to those unwilling to embrace transparency. Whether it is access to homes on Airbnb, loans on LendingClub or cars on RelayRides, the doors to new social business models will be most open to those who are most open.

Google+ Continues to Lag

Hitwise recently announced that Google+ had its third best week, but the headline hid a sobering fact about G+ traffic: whenever Google+ rolls out a new feature, traffic spikes as people visit to check it out but then traffic declines until the next G+ feature is launched. To date, G+ is not showing the sort of stickiness or growth curve that would cause one to think it will pull time or users away from Twitter and Facebook.

While some social media pros suggest Google+ will grow because it is friendlier to brands or essential to SEO efforts, it is not brands but consumers who will decide if Google+ is a winner. I predict Google+ will continue to grow slowly in fits and starts, may become important in certain niches, and will require large brands to maintain presence and monitoring in 2012. While it will not follow Google Wave into obsolescence, neither will Google+ battle Twitter or Facebook for share of time or traffic next year.

Welcomed and Damned: More Social Media Filtering

When Facebook altered its news feed a few months ago, you might have thought the company deliberately severed users' personal friendships. The reaction to Facebook's new filtering methodology was so ferocious, some started predicting the beginning of the end for Facebook. (This prediction, like every other "Facebook is dying" prediction, quickly proved false.)

While users may not like the sound of it, the fact of the matter is that we are going to need our social tools to do more of the work for us. None of us has the time or capacity to consume and consider every tweet, post, checkin, and like from our ever-growing networks. In 2012, look for Facebook, Twitter and a host of startups (such as Bottlenose) to improve filtering, giving each of us a view of the things we most want to see while excluding the junk we'd otherwise ignore. (Twitter just made a big step in this direction with the launch of its #Discover feature.)

Some will scream about the automated filtering but in the end, the right personalized filtering tools only make our social media experiences better. As filtering improves, the losers won't be consumers but brands that lack relevance, because who really signs on to Facebook to find out what their favorite antiperspirant or gasoline brand is saying?

So, what are your predictions for 2012? Think I am on the mark or off base? Please share your thoughts and comments!

The Predictable Unpredictable Social Media Disaster

2011-12-05T07:34:00.000-06:00

I was reading about the latest so-called "social media disaster"--this one from Qantas Airlines--when I was struck by a sentence in the Reuters article: "PR experts said the campaign was... a classic example of the dangers of unpredictable social media." I don't mean to be hard on Qantas--any company or human can inadvertently make mistakes--but this situation was about as unpredictable as the sun rising or Groupon's stock falling.

Qantas' social media campaign was intended to get travelers using the hashtag #QantasLuxury and describing their "dream luxury inflight experience." The timing was, at best, dubious, coming just a day after Qantas and its unions broke off contract negotiations and one month after Qantas stranded 70,000 travelers by grounding its fleet due to union woes. Furthermore, the prizes in this promotion weren't, as you might expect, trips to exotic locales but pajamas and toiletry kits. The effect was to spur many negative, sarcastic and angry responses about Qantas in social media channels.

So, are you shocked at the outcome? Do you find the social media backlash "unpredictable?"

How many instances of social media PR disasters are truly unpredictable? There are cases when a brand can be caught by surprise--such as when activists launch a critical social media campaign or a single consumers' complaint becomes a meme--but are most social media issues really fluky and unforeseeable? This isn't an inconsequential question; if social media is a flaky and erratic channel, then it is an inhospitable medium for business.

I believe social media is not a game of chance but more akin to the weather. Weather forecasters may frequently get tomorrow's forecast wrong, but that doesn't mean we consider sun, rain, snow or lightning unpredictable.

This year, lightning strikes will ignite around 24,600 fires to which US fire departments will respond. One lightning strike is unpredictable; tens of thousands of them across the country is not. Because we know this, we prepare. We purchase insurance, install lightning rods, use surge protectors and tune into the National Weather Service to stay informed when weather turns severe.

Any brand can be struck by social media lightning at any time, so the smart ones prepare--they engage advocates, provide excellent products and services, amass fans and followers, deploy social business strategies, use listening platforms and employ community managers to respond with speed, empathy and care for the customer. These are the components that ensure if and when a brand is struck by social media lightning, brand damage is limited.

But while any brand can be struck, we also have to recognize there are actions our organizations may do that can make it a target. Golfers know better than to stand in the middle of a fairway holding a metal club above their head in a thunderstorm, yet brands seem to do the social media equivalent quite frequently.

Many of the social media PR disasters that have occurred weren't unpredictable. Brands may not be able forecast the specific social media reaction, but we know risk increases when brands raise prices or fees, redesign products or logos without engaging loyal customers, fail to hear concerns about environmental policies, ignore consumer complaints, engage in dubious business practices, or--as in Qantas' case--deploy marketing or take other actions that fail to understand the brand's current relationship with consumers.

Social media is not unpredictable. I can predict that your organization, if it is any size at all, it will be struck with social media lightning this week. Your brand will receive critical posts on its Facebook wall, earn one-star ratings on review sites and get a handful of gripes on complaint sites like PissedConsumer.com.

There is no insurance for social media lightning--no one will compensate your brand should a misstep cause lost business or brand damage--but smart organizations can prepare and protect. They do so by understanding the social media climate, conducting business in ways consumers expect, setting their business and communication strategies appropriately and investing in social media to protect their brand from the inevitable.

Consumer storm clouds are brewing. There is a 60% chance of consumer complaints, some industries will face a hard sentiment freeze and companies may experience localized areas of brand flooding. Whether social media will be shelter from the storm or the storm itself has more to do with your enterprise than the "unpredictable" nature of social media.

What is Social Business?

2011-11-27T22:11:00.001-06:00

Ask fifty people for a definition of "social business" and you will likely get 51 answers. At last year's SXSW, I shared a panel with a social media leader annoyed that every new startup promoted itself as a "social business," whether or not it was very social or had a reasonable business plan. Then last week I chatted with another well-known social media consultant, and he defined social business as anything organizations buy or acquire to participate in social media--listening platforms, community software, social media management apps, agency services, etc.

I'd like to share my own definition of social business:

A new form of commerce where consumers, empowered by new social technologies and behaviors, bypass traditional channels and acquire more information, goods and services directly from each other.

We are at the beginning of a new era in social media, where the medium turns from being primarily about communication to become as much about knowledge and business.

Web 2.0 is evolving much as Web 1.0 did. The World Wide Web began as an interconnected network of static web pages that conveyed text information, but it matured into a tool of business, interactivity and rich media. The same is happening with Web 2.0, but there will be one enormous difference in how business develops in the Web 2.0 era: This time, the new tools won't be about replacing big companies with other big companies (Amazon replaced Borders, Apple iTunes replaced Tower Records, etc.) Instead, social business will be more about facilitating business from peer to peer rather than from corporation to consumer.

Tools like Facebook and Twitter have taught people the power of sharing more widely and altered attitudes about privacy. They have created the current environment that will enable the next big wave of change. But while Facebook and Twitter may participate or even lead us into the social business era, the coming five to ten years will not be about sharing pictures or posting status updates but rather how consumers can gain more economic power, make better decisions and save money.

This process has already begun, of course. Take, for example, information you use to make decisions about travel. When is the last time you purchased a Mobil Travel Guide? Once the indispensable travel bible for selecting hotels and attractions, the Mobil book series has been replaced by ratings and reviews provided by online travel agencies (such as Orbitz or Expedia) or ratings sites (such as TripAdvisor or Yelp). In 2011 Forbes Travel Guide, which licenses the Mobile Guide, published its last set of guidebooks and launched its own Yelp-like site, Startle.com.

Increasingly social business won't be about just the information you use to make purchase decisions but about the transactions themselves. The availability of other consumers' cars to rent in real time (from RelayRides and others) may begin to make a dent in Avis and Zipcar. The opportunity to lend or borrow money directly with other consumers (via LendingClub and Prosper) may challenge banking business models. And access to people's extra bedrooms or homes (via Airbnb and VRBO) could affect the hospitality industry.

It will not take much for social business to alter industries and challenge established players. For comparison, just look to ecommerce, which represents less than five percent of all retail in the US. That tiny slice of the retail pie was enough to rewrite the rules for entire industries and sink companies once among the powerful Fortune 500.

To me, the term "social business" is not about startups or social media budgets. Instead, I see social business as a wave of transformation that will alter fundamental business models and reset the relationships between consumers and suppliers.

In ten years, the idea of someone "liking" a brand may seem as quaint as non-functional brochureware sites seem to us today. Successful social business will not be determined by who has the biggest fan page but by who best rethinks their marketplace and empowers consumers.

The Death of Google: A Work of Speculative Fiction

2011-11-02T23:52:00.000-05:00

The following is a work of speculative fiction, not a prediction; however, I believe this is one possible outcome of the decisions Google is making today. Do you agree? Read on and please criticize or comment.

Please note: all characters appearing in this work are fictitious. Any resemblance to real persons, living or dead, is most likely coincidental. And, as always, this and other posts on my blog are my opinion and do not reflect the opinions of others.

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SXSW 2015 was amazing; I can't believe another South by Southwest is here and gone so soon.

The hot new startups this year were Splork, Thlong and Yitchy--all wearable hardware concepts that auto-report your bodily functions to social networks. Facebook launched FBClassic, a version of the service based on its 2009 interface, to appease those people chronically unable to adapt to its regular upgrades. Also, Ford showed off the new Focus with a physical Like button built into the dashboard--drivers will be unable to start the car without first "liking" the brand.

Of course, the big buzz was about Google. The mighty and revered internet giant has fallen on hard times as of late. In February 2015, the once unimaginable happened; Google accounted for less than 50% of U.S. search volume for the first time in almost ten years. Google is still very profitable, of course, but the loss of over 3 billion search queries every month has sorely reduced advertising revenue, once Google's core cash cow. The news was merely the latest insult to injury for Google, which saw its ad revenues surpassed by Facebook's in 2013. The company founded on search now earns more from its mobile products than it does online operations.

So, what happened? How did the house that search built lose its firm foundation? Some would say that Google's inability to launch a successful social platform was the problem, and they'd be partially correct. After Orkut, Wave and Buzz crashed to earth, Google shot for the stars with Google+. As it turned out, G+ was more like a child's model rocket than an Atlas V--it had a terrific trajectory after opening to the public, but soon it lost traffic and active users. G+ continues to do well in certain circles (no pun intended), but it has not thrived as Google hoped.

The fact Google never found the right social recipe wasn't the real problem; instead, it was how the company reacted (some now say overreacted) to the fear of a Facebook planet. In early 2011, CEO Larry Page announced that 25% of employees' bonuses would be tied to how the company performed in the social space. With that incentive in place, it was off the races to succeed in social, no matter the cost. Cost it did--in ways Google never expected.

Google's first step was the "+1" button. It seemed a fine idea, but Google's search algorithm was already the gold standard for providing highly valued and trusted search results. When Google decided the "+1" button should affect search engine rankings, it opened Pandora's Box.

SEO experts questioned if +1 could be used to manipulate search results, and their answer seemed to come from an article posted on Forbes.com entitled, “Stick Google Plus Buttons On Your Pages, Or Your Search Traffic Dies.” After meeting with Google's ad team, author Kashmir Hill came to the conclusion declared in the article's title--sites had better implement "+1" or suffer the Google consequences. Suspicions were aroused when that piece suddenly disappeared from the Forbes web site without explanation.

Fears that Google's "+1" button might spark a new wave of black hat SEO tactics were validated by Stephen Colbert, of all people. The Comedy Central star took a cue from his 2006 Wikipedia stunt and urged fans to click a "+1" button on his fake Web site announcing his candidacy for the 2012 GOP nomination. Within days, the Google search for "GOP 2012" featured Colbert's site in the top position.

Google's search and social problems did not stop with the "+1" button. The launch of Google+ raised more questions about how Google's search results would be affected by activity on Google's social network. Within months, people who signed up but never or rarely used Google+ noticed that their G+ profiles appeared on Google's first page when they searched for their name; people questioned why their lightly-trafficked G+ profiles appeared in front of far more relevant links to their blogs, articles and more active social profiles.

These issues came to a head in 2014 when the DOJ filed an antitrust suit against Google. The blogosphere erupted when a popular tech blogger was called to testify. He often spoke of his close relationships with Google engineers, and he was probed about the information and opinions he posted on G+ and his blog. In one such post he stated, "I hope everyone leaves Google+. Why? ... If everyone left Google+ that would leave the best SEO technology out there to just, well, me. Which means my videos, blogs, and photos would appear higher on search than yours."

Asked if he was aware whether a share on Twitter or a public post on Facebook was less influential in Google's search results than a G+ post, the blogger confirmed that was his understanding. When he was asked if it made sense that Google+ shares counted more than shares on social networks that are substantially larger and more active, the blogger's attorney objected.

That question was never answered, but the damage was done. Between Colbert, the DOJ lawsuit and a host of criticism on social networks, the impervious Google began to look mortal. Bing began to chip away more at Google's search share, and with the 2013 launch of its first true search engine, Facebook's search queries soared. More important than stealing search volume from Google, both Bing and Facebook also stole search ad revenue.

The moral of the story seems clear in retrospect--don't be evil. That old and unofficial Google motto seems more relevant than ever. Attempting to leverage its strength in search to close the considerable lead others had in social wasn't the right thing to do for Google or its many users. It undermined trust in Google--once the most respected brand in the world, Google let its social ambitions get in the way of its commitment to users.

Of course, no one should count Google out. It is still among the largest tech brands in the world, and its OS runs more than 60% of the smartphones in the US. Google's early and somewhat disappointing work in serendipitous search back in 2013 is developing into a truly robust and powerful tool in 2015. A new alpha version of Google Me was demoed at SXSW last week and caused jaws to drop--watch for it on your Android phone before 2016.

Google has an advantage in the serendipitous search space but it also has real competition, even on its own mobile platform. Competitors range from enormous (Microsoft's Sense) to a small but interesting new startup out of Ev Williams and Biz Stone's incubator, Obvious Corp.

I am anxious to see where Google, Microsoft, Facebook and the latest slew of startups find themselves this time next year at SXSW 2016. Maybe by next year, the Google buzz won't be about the decline of search but about its driverless, autonomous vehicles. Rumors were rampant in advance of SXSW that Google would launch their next-generation vehicles as a taxi service at this year's conference. They were a no show in 2015, but SXSW 2016 is just twelve short months away!

The Future of Social Media Data vs Information: Sharing More, Consuming Less

2011-10-24T11:36:00.000-05:00

I recently mocked a friend because Spotify revealed on his Facebook page that he was listening to the 2010 Ibiza Party Workout. (I accused him of being a metrosexual several years too late.) Turns out that he, like many others, had no idea Spotify shared every single tune to which he was listening, and we discussed whether this much sharing made sense. The answer is no today but yes tomorrow, because the future of social media depends on smarter tools that permit us to share more but consume less.

How can more sharing become less consumption? Think of it this way: If you drive a newer auto, it is constantly collecting information about the status of the vehicle, but what do you see on your dashboard? Are you presented with the tire pressure in all four tires and the voltage running through each fuse? That is data you just don't need; however, your vehicle monitors that data and alerts you the moment your tire pressure is too low or a fuse is blown. Your car is always sharing, but your dashboard allows you to consume only the information you need in the moment--speed, fuel level and the like.

That's the difference between data and information--data is raw facts, while information informs, entertains, enlightens and alerts us. We rarely want raw data, and we crave information.

Social networking sites strive to be dashboards, but they're really fire hoses of data. That's not a criticism--we tend to forget how nascent social media still is today, and among the problems of this immature medium is that we have too much data and too little information. How many of you have missed essential tweets or posts about a friend's job change or pregnancy while being distracted by a barrage of noise about lunch selections, checkins at gas stations, gripes about jobs or FDAs (Facebook Displays of Affection)? My (safe) guess is that everyone reading this post has experienced this problem.

Clearly, no one really needs to know every song their friends are hearing at every moment--that is simply too much data--but if Spotify, Facebook or other parties collect that data and convert it into useful information, we could learn:

To what song have your different sets of friends listened most this week? The next time you hang with your work associates or school pals, you can be prepared to chat about the tune everyone has top of mind.
What new song is trending? Don't be the only one left out when your friends are in the know about a hot new single.
Who is listening to the same music I am? I may not care to be alerted to every song my friends hear, but it would be cool to know if we're listening to the same CD at the same time and chat about our opinions.

The social media data overload problem is hardly limited to Spotify. Checkins on Foursquare and Facebook are another excellent example. I really don't need to see every grocery store, gas station, gym, barber, doctor, dentist, bar or restaurant visited by my friends. But if Foursquare, Yelp or Facebook could take this data and turn it into relevant real-time information, I'd welcome the chance to know that:

My friends are eating at a place I've rated highly or poorly: "Man, that's a favorite of mine--what did you think?"
My friends are nearby: "Hey, you're a block away--want to catch a cup of coffee?"
My friends are at a restaurant at which I've dined a lot: "If you haven't ordered yet, avoid the lasagna and order the Risotto!"
My friends rated a business considerably different than I did: "I hated that barber shop, but maybe I just got the wrong barber; let me know who you had and I'll give it a second chance!"

Facebook and Twitter are dumb and they need to get smarter if they hope to retain users. When people get too much social data and not enough information, they experience "social media fatigue." The problem isn't with social media per se; after all, we're social creatures and spend most of our lives interacting with others. Instead, the problem is with our social tools furnishing too much noise and too little information.

Facebook is trying, at least. The latest round of changes caused many people to gripe that they were missing some posts they used to see, but that's exactly the point--Facebook must evolve to present you with things you want to know while filtering the stuff you wouldn't care about.

Perhaps you don't trust Facebook to decide what you should and shouldn't see, and I'd be the first to admit their algorithm needs work. Still, we must recognize that the last thing we want is to be presented with every one of our friends' posts, locations, songs heard, websites visited, articles read, (are you getting tired yet?) TV shows watched, books completed, magazines perused, shoes purchased, (seriously, isn't this tiring?) games played, documents created, videos viewed, (please make it stop!) products rated, concerts attended, celebrities liked--you get the idea. You may not know it yet, but you do NOT want to see everything your friends share; instead, you want all this data collected and turned into information you can use.

This point was made for me recently when my niece complained that Facebook's new interface was making it more difficult for her to see everything all of her friends posted. She has 675 Facebook friends (substantially more than the average of 103). I calculated that if each of her friends posted 15 items every 24 hours and it took my niece an average of five seconds to review each item, she'd need 14 hours every day to consume all of friends' social media. (That's okay--she's young and doesn't need much sleep.)

There are already excellent examples of services that turn social media data into usable information. For example, I'm fond of The Tweeted Times, which does the same thing within a browser that Zite and Flipboard do on the iPad--turning thousands of my peers' tweets into a personalized magazine of relevant news. Klout and PeerIndex turn individuals' social data into a measure of influence. And Twylah is the reverse of The Tweeted Times, turning your shared content into a personalized brand page.

In the future, we'll not only be sharing more but sharing more automatically rather than manually. That doesn't mean more social media fatigue; it means that our apps, sites and features must convert social media data into information. If there is a battle between Facebook and Google+ (and I'm not convinced there is, at least not yet) that is the key--not what games are available or how many video streams can be accommodated simultaneously on the competing platforms, but instead which social media service does a better job of surfacing the social media signals we want and filtering out the noise we don't.

Politics and Social Media: Is Your Company Prepared for 2012?

2011-10-19T22:41:00.000-05:00

Following the 2008 presidential campaign, many were quick to dub it the "first social media election." There is no question that social media played a part in the 2008 contest--the Pew Research Center found it was the first time more than half of the voting-age population used the Internet to connect to the political process and many observers felt Obama succeeded by attracting a younger voter through his use of digital and social media.

Despite the headlines following the last presidential election, social media was still too nascent to be a significant part of most voters' election research and activities. Back in 2008, just 18% posted their thoughts, comments or questions about the campaign on a website, blog, social networking site or other online forum. Why such a small percentage? Because in November 2008, Facebook had barely 100 million users and Twitter was seeing 100 million tweets per quarter. Today, Facebook is eight times larger and Twitter hosts that same quantity of tweets every ten hours.

In 2012, it isn't just the political parties and campaign teams that must be prepared for social media challenges. Companies need to fasten their seatbelts; it's going to be a bumpy ride!

Next year's election is shaping up to be a combative and dangerous one in social media. Battle lines are already drawn brightly over taxes, deficit reduction, unions, war, government bailouts, marriage equality, health care, education, social issues and the role and size of government. In addition, a 2010 Supreme Court ruling reversed many of the limitations that had been in place on corporate political spending. Add to this a potent combination of newfound social media influence and dramatically open social media communications, and 2012 is likely to see a number of high-profile campaign-related social media crises within the corporate world.

Companies may find themselves battling social media issues on three fronts:

Internal - Employees: Politics used to have no place in the workplace. They still don't, but consider how many places your employees can come into conflict in 2012. Work and politics were relatively easy to keep separate four years ago, but this year they'll be as obvious as your workers' latest posts on communities, Facebook, and Twitter. What happens when two coworkers lock horns over a political issue outside of work and it spills over into the workplace? Are you prepared when an employee complains about unfair treatment because he or she made a critical comment to a boss's Facebook post in support of a candidate?
External - Employees: Between checkins, LinkedIn and social media profiles, it isn't hard to know where virtually anyone works. That means the separation between employees' political opinions and your company's name is equal to the number of pixels between their tweet and their bio. What happens when a customer takes umbrage to political statements made by an employee? Must your workers' political beliefs match your brand's or your customers'? Of course not, but take note of the media storm that occurred when Whole Foods' CEO expressed a "personal opinion" that contradicted many shoppers' attitudes toward health care reform.
External - Corporate: Does your organization make campaign contributions? Does it support every single position of every single candidate it supports? Target, an employer with a track record of supporting same-sex employment policies, faced a vocal boycott when it donated to a group running ads to aid a candidate opposed to same-gender marriage. Target said it was donating to the group for its pro-business policies, not its social positions, but that mattered little to people who signed online petitions and cut up their Target charge cards. There are countless examples of companies forced to grapple with unwanted and unexpected transparency in social media, and this means companies must be prepared to deal with questions, criticism, anger and calls for consumer or shareholder intervention in reaction to every dollar spent during the upcoming election. Against this backdrop, Starbucks CEO Howard Schultz's call to boycott any and all campaign contributions seems as much a shrewd and cautious approach to protect his brand as it is a political statement.

You cannot dampen your employees' free speech in social channels. Nor is it likely many companies will follow Schultz's lead and simply cease all political activities--the business, regulatory and tax stakes are too high within most industries for business merely to sit on the sidelines. There is little your company can do to avoid the coming twin tsunamis of social media and politics, so preparation is the best course of action.

Do not get caught unprepared when the inevitable questions arise on your Facebook wall, on Twitter or in other social venues, and don't make the mistake of thinking you have the luxury of time to collaborate on a response and secure approvals from multiple executives and committees. The difference between a single irate customer and a wave of online boycotts, Facebook groups, email-writing campaigns and YouTube gripes may be measured in minutes rather than hours or days.

Activists are gearing up to put corporate actions under the microscope in the coming twelve months. You won't be able to appease all of the people all of the time, but you can be prepared to have an honest, candid discussion about your employees' rights to express their political beliefs and your company's reasons for supporting the political groups and candidates that it does. And social media professionals would be smart to make sure those making political decisions for their organizations consider the transparency social media will bring to those decisions.

Your enterprise will be writing checks this campaign season, and you better have your social media messaging prepared before the ink is dry on those checks!

The Failure of Steve Jobs and Walt Disney

2011-10-07T13:39:00.001-05:00

There is an awful lot one can learn from the remarkable Steve Jobs, of course, but one thing stands out to me--one single thing that can get lost among the many lessons his story offers: Failure.

The people who change the world are not brighter than everyone else is; there are many bright people with great ideas. It isn't that Steve had vision; when I worked in the Bay Area, I found I couldn't take a dozen steps without running into someone with an exciting vision for the future. And it isn't that Steve better focused on the needs of humans; that is certainly an integral part of his success, but every organization is full of people capable of putting customers first.

No, the one thing that sets Steve Jobs apart from others is not success but failure. Reading his biographies and tributes this week reminded me of another hero of mine, Walt Disney. Their tales are remarkably similar in many ways.

We Americans have a terrible habit of distilling the stories of our great men and women into simplified and boring soundbites of success--Walt Disney invented Mickey Mouse! Steve Jobs invented the iPad!--while ignoring the long, crooked, difficult, brave roads they took to realize that success. We like to believe that success is what defines the American spirit, but the truth is the opposite: Failure is what defines the people who achieve greatness.

Steve Jobs and Walt Disney are American success stories--and they both failed in spectacular fashion. Steve Jobs produced the Apple III, a computer with so many hardware issues that one of the solutions (I'm not kidding) was to drop the computer two inches to reseat the chips on the motherboard. Walt Disney's first animation effort went bankrupt and he lost the rights to his first commercially successful character (the forgotten Oswald the Lucky Rabbit.)

For most, the story would have ended there. Steve Jobs, pushed out of the very company he founded, could have spent his life developing products that didn't push the envelope but delivered his family a very comfortable standard of living. Walt Disney could have given up animation--something he'd briefly attempted in the past--and sought work in the booming Hollywood movie business. But neither did--they learned from failure and eagerly dove back into the deep end of the risk pool. Said Steve Jobs, "It turned out that getting fired from Apple was the best thing that could have ever happened to me... Sometimes life hits you in the head with a brick. Don’t lose faith.”

What is remarkable about both Steve Jobs and Walt Disney isn't merely that they persevered after failure; instead, the defining characteristic of these great men--the one thing we can and should learn from Jobs and Disney--is that they never stopped embracing risk even after they achieved success. It is difficult enough to make risky decisions after one is prosperous and comfortable, but imagine making those same risky decisions after having suffered the kind of confidence-shaking flameouts that Jobs and Disney experienced.

Disney achieved great success and recognition with Mickey Mouse, Donald Duck and The Three Pigs, yet he risked it all to push his company into the dangerous and untested waters of full-length animated movies. He was forced to release "Snow White" sooner than he wanted when the banks funding what had come to be known as "Disney's Folly" refused to advance any more credit. Snow White earned Walt money and recognition, yet he risked it again and again on pet animation projects, live-action films and the riskiest bet of all--theme parks. Having tasted the bitter pill of failure, he nonetheless risked his reputation and wealth frequently.

Steve Jobs did the same. After being dumped from the company he founded, Jobs turned his attention to new risky endeavors. He launched a new software company called NeXT, Inc. and invested $50 million of his own money into Pixar. NeXT floundered, Pixar soared and Jobs was soon back at the helm at Apple. For most of us, the satisfaction and recognition of a triumphant return to the company that dumped us would be validation enough, yet Jobs took a salary of $1 a year and repeatedly placed risky bets on new business models and innovative technology. Jobs might have stopped at any point in his journey and retired with the kind of wealth and accolades most can only dream of, yet his risks and hits kept coming--iMac, Macbook Air, iPod, iTunes, iPhone and the iPad.

Most within corporate America work their entire careers avoiding risk. Some do it blatantly, taking pride in saying "no" to anything new that comes along, protecting the bottom line and corporate reputation from anything that feels a little dicey. Others avoid risk superstitiously, hiding behind focus groups, best practices and spreadsheets that promise (but rarely deliver) ROI.

In Human Resource departments, for example, the risk avoiders hire only candidates who present excellent education records; Steve Jobs dropped out of college and Walt Disney left high school after one year. In Marketing Departments, the risk avoiders spend big money on TV and print while moving cautiously into digital and social; Disney made huge bets before others on Technicolor in movies and on the nascent television medium, and Steve Jobs doubled down on mobile computing at a time when few expressed a desire for expensive mobile devices.

Avoiding risks doesn't get someone fired. No one is ever called into a senior executive's office to justify why he or she declined to invest the company's money in a bold but untested idea. The risk avoiders rise slowly and steadily in corporate ranks, producing modest results. They never risk their reputations or career achievement, and when they fail, they fail small and justifiably--"The creative tested well!" or "The candidate had a great GPA from a respected school!"

Most of the time, these people guide companies to outcomes within a safe and expected range, perhaps stealing a point of market share from the competition. Little is risked, lost or gained. But the road to failure is paved with a thousand tiny successes, and while risk avoiders don't fail spectacularly, their companies can. Risk avoiders cannot change quickly enough; they miss threats to their marketplace and are unable to rapidly steer a new course. Blockbuster, Borders, GM, and many other firms were full of risk avoiders who were constantly and modestly successful until they suddenly were not.

Of course, there are many in corporate America who embrace risk, but few do so like Jobs and Disney. If you are a risk taker, you probably do so only part way. You likely don't bet your job, your home and your family's future on your vision. Walt Disney would have lost Mickey Mouse and his home had Snow White failed, and he later borrowed against his own life insurance policy to fund the construction of Disneyland. You don't take that kind of risk, and neither do I.

How much are you willing to risk failure? After being promoted and earning a healthy income, are you inclined to put that at risk to pursue your vision and deliver exceptional results for your employer? Can you defend and support an employee's new idea when their last one failed thoroughly?

The lessons of Walt Disney and Steve Jobs aren't simple or easy. Very few of us have the power to achieve anything close to their level of greatness, but the way we choose to view failure and our willingness to risk what we have achieved is, in my opinion, the defining difference between those who are merely successful and those who bring vital change to their organizations.

Most of us desire success and fear failure. What the stories of Jobs and Disney tell me is that we ought to embrace failure and fear success. The more we succeed and achieve, the less likely we become to accept risks. Jobs and Disney remind me of a Steinbeck quote--one I learned from Epcot's American Adventure (Thanks, Walt!) Steinbeck was speaking of our nation, but he may have well been speaking to every company and individual who has tasted success:

We now face the danger which in the past has been the most destructive to nations. Success, plenty, comfort and ever-increasing leisure: no dynamic people have ever survived these dangers.

Think Different, indeed!

Four Ways Corporate Social Media Professionals Undermine Their Authority

2011-09-30T00:16:00.001-05:00

The Los Angeles Times today published an article, "Employers are Liking -- and Hiring -- Social Media Workers," that included a couple of comments from me. The gist of the article is that the demand for social media professionals is growing (shocking!), and along with it so are the demands of those jobs.

As I speak with peers online and at conferences, there can be a sense that our profession isn't taken seriously at every organization. For every Dell, IBM, PepsiCo, Best Buy and (my employer) USAA where social media is recognized as a compelling strategic advantage, there are a lot of companies where social media is treated as, well, fluffy.

It's easy to blame the lack of stature that social media has within some organizations on conservative (and typically older) senior leaders who may have little to no personal experience with social media, but is it too easy to lay the blame there? Might social media pros themselves be part of the problem? That question stuck in my head as I read this statement from the LA Times article, furnished by a person with the title executive director of search engine optimization and social media programming: "I have a hard time keeping a straight face when I tell people what I do for a living."

It is appalling to me that someone employed in the most significant evolution in business and communications since the advent of the web would utter those words. If he is embarrassed to tell his friends about his job, how must he fare promoting his ideas to the decision makers at his firm?

Social media is becoming too vital for companies to take lightly. If social media professionals contribute to this underestimation by subverting their own authority, they do harm not just to their careers but also to their employers' competitiveness, brand awareness, reputation and profitability.

Do you have any bad habits? Here are four ways corporate social media pros may damage their opportunities and influence:

You have a cutesy job title: It seems gurus, wizards and ninjas are thankfully on the wane, but if you're still clinging to a job title more appropriate for a Dungeons and Dragons board than a boardroom, it's time to get new business cards--your job title isn't earning you respect among your serious peers. Unless the CFO in your firm is called the "Money Wizard" and the CIO is "the Ninja of Electronic Wonders," talk to your boss and claim a proper title that includes words such as "specialist," "manager," "director" or "vice president."
You hype rather than educate: Are you guilty of eagerly regaling peers with how Dell Outlet earned $6.5 million selling products via its Twitter account? That old and tired case study is great if the company you work at sells refurbished consumer electronics, but it means absolutely nothing if you're in the travel, pharmaceutical, auto or financial service industry. Too many social media pros are quick to promote the latest social media case study without considering whether the industry or the strategy is pertinent to their firms. Your peers are likely hungry for news about what your competitors are doing in social media, but every irrelevant example shared becomes more noise and feeds a suspicion harbored by some of your associates that social isn't as pertinent in your industry as in others.
You measure success by fans, friends and tweets: While metrics such as your Facebook fan count and number of retweets are useful for tracking your tactics, they are meaningless to most of your peers. The fact you have tens of thousands of fans on Facebook means little when the number of interactions on your posts (likes, comments and shares) number in the mere hundreds. Most organizations get tremendously more emails and phone calls than they do tweets and posts, which can reinforce the sense some have that social media hasn't yet scaled sufficiently to be vital. That perception is incorrect, of course, because it ignores the multiplier effect of public social communications and consumers' social graphs. Social media professionals must not rely only on measures of engagement but look for ways of tracking leads, inbound clicks, conversions, awareness, and other measures that communicate business results to decision makers.
You focus only on the positive: It's easy to get excited about the opportunities in social media, but smart professionals also define risks, divulge them widely, and work to mitigate the potential costs. I've met social media workers who are hesitant to talk about the risks, afraid their bosses will find it easier to pull the plug rather than maintain a Facebook fan page where activists and detractors might shame the organization. Avoiding or minimizing the compliance, legal and reputation risks is precisely the wrong approach. Your peers may not know the specific risks in social media, but they know the risks are there; you earn trust by preparing and protecting your employer rather than dismissing those risks.

The LA Times article was difficult for me to read. I know too many bright and serious professionals in this space to read about people who "stumbled into" their social media careers and landed a job "because I'm young, and people assume you know what you're doing."

Social media is called Web 2.0, but I think it's time for Social media 2.0. Social media 1.0 was about marketing, promoting, tweeting, and posting; social media 2.0 is about driving business results and adapting to new social business models. It can be enough of an uphill battle getting traditionalists in your organization to understand the importance of social media--be cautious not to make that climb steeper with bad habits that undermine your own experience, authority and abilities.

New Subscribe Feature Hints at Bold New Direction for Facebook

2011-09-15T00:38:00.000-05:00

Applications and websites are like brands--each has its own particular reason for being. Build products and services around that singular reason, and consumers are more likely to understand, accept and adopt those new features. However, if a software package, site or brand attempts to expand in ways that violate their one essential purpose, consumers can become confused and reject the new (or even the core) offering.

Cosmopolitan Magazine Yogurt, Smith and Wesson Mountain Bikes, Walmart luxury goods, and Barbie clothing and accessories for adults--all of these brand extensions (must have) seemed like good ideas at one time but failed. Facebook is now embarking on its own brand and functional expansion, and it will be interesting to see what happens as the social network pushes beyond its traditional sandbox.

From the start, Mark Zuckerberg has had a clear vision of what Facebook is and is not. The social network is designed to be the online place for your existing, offline relationships. Zuckerberg once said, "we're not trying to build a community — we're not trying to make new connections."

This focus on facilitating real world relationships versus new connections is evident in everything Facebook does. Facebook's commitment to being a place for real friendships explains the social network's limits on the number of friends one can collect, the way groups were designed to degrade if they became too large and the way friends could add one another to groups without permission. It is also is why every Facebook relationship is required to be reciprocal--both parties must consent before a connection is made.

Facebook seemed content to let Twitter be the social tool for amassing influence and thousands of loose connections while Facebook focused on those dozens or few hundreds of firm and meaningful relationships we value in real life. But with the entrance of Google+ into the social networking world, Facebook seems to be innovating rapidly and, perhaps, giving up its commitment to real relationships.

Today, Facebook made a significant change to the way connections are created. People can still choose to "friend" you, which requires you to approve the connection in order to establish the relationship, but now users can also activate a new "Subscribe" button for their profiles. This Twitter-like feature allows people to subscribe to an individual's public posts while excluding their private posts. For the first time, you can follow a person's public Facebook posts without reciprocity. (I've added the subscriber feature to my profile, and you can learn more and add this button to your profile on the Facebook Subscriptions page.)

Third parties have attempted to launch apps that push and pull Facebook away from its core mission of enhancing real world relationships. For example, in June Monster launched BeKnown, a professional networking application for Facebook. The application earns just 1.4 million active users, a fraction of the 82 million monthly users claimed by LinkedIn. Perhaps the low participation is due to flaws with the application, but it's at least equally likely that people just don't wish to make professional connections with bosses, vendors, suppliers and peers within the same network where they post their kids' pictures and personal data. All that may change now that Facebook has deployed new tools furnishing you control over who sees your posts and for permitting others to subscribe and not just friend you.

Although others have tried to launch expansive networking tools on Facebook, today's news represents the first time I've noted Facebook itself taking a step away from its traditional foundation of firm, real, personal relationships. Is this a strategic move on their part to increase usage further? A reaction to Google+'s Circles? Or a mistake? Time will tell if this brand expansion will go the way of failed ideas like Bic Underwear (really!) or successful brand expansions like Arm & Hammer Toothpaste.

What do you think? Will Facebook be able to attract influencers who want to reach tens or hundreds of thousands with their public posts? Or will Facebook undermine its core mission?

Google+ and Social Media: The Future Is Not Anonymous

2011-09-13T22:27:00.001-05:00

It is amazing to me that social media professionals, after years of delivering the message to organizations that transparency is a requirement, are suddenly shocked to find transparency is a two-way street. I've read dozens of blog posts by people gnashing their teeth at Google+'s policy of requiring real names, and a blogger I respect recently raged at Klout for having the audacity to use his public Twitter social graph to create a profile of his influence without his consent.

Did we really expect that the information walls surrounding corporations would crumble but that our individual cones of privacy would remain intact? Did we think we would use free and public tools to launch ourselves to greater levels of influence but that our reach and clout would remain protected and unquantified?

Social media is forcing greater transparency on our world, but we do not get to choose where and how this happens. Our new, open culture that is being created one post and tweet at a time does not play favorites. As with every change that occurs in society, the growth of transparency will come in ways that are both welcome and not.

Consumers may cheer every brand forced to defend their environmental footprint, outed for paying for product reviews or embarrassed into owning up to defective merchandise, but consumers will also face the very same forces. Individuals are likely to find it increasingly difficult to hide behind cartoon avatars and cutesy profile names, particularly in environments where serious networking and business are conducted. And perhaps in the future some things we believe today are sacrosanct--our debt payment history or our driving habits, for example--may be as freely available as are companies' Better Business Bureau files, balance sheets and employer reputations. (If that sounds ludicrous, remember that it was equally ludicrous just a few years ago that one might publicly share a complete list of friends and family members, current location or photos of a spouse and children.)

The metaphor some use when criticizing Google's real name policy is that of walking through a public space where no one knows your name. We don't, some point out, travel through life with a "Hi, I'm Augie" sticker our lapel.

True, but this is the wrong comparison because we can only remain anonymous in the real world until we begin to interact with others, at which point we often surrender the expectation of anonymity. Ask for directions to the bathroom and you remain John Doe, but request someone else's contact info, break the rules or attempt to conduct business, and you are very likely required to authenticate your identity. We cannot walk through a busy mall or airport wearing a mask without drawing suspicion, so why should be it be different in most online social venues?

Some feel that the reason Google and Facebook want our actual identity is to provide marketers with better data to permit more accurate targeting of advertising. That is the merest tip of the iceberg. The real reasons run much deeper than advertising.

The next wave of social behaviors won't merely be sharing jokes and insights; we will soon be conducting business in innovative social ways. While it's true that the Fortune 500 want to be able to deal with real people and not fake pseudonyms, it isn't just the big dogs who benefit when you are really you. Soon, it will be as important to individuals as it is to companies that you are a real, accountable, trustworthy, authenticated human being.

An evolution in our economy is underway, and a new "sharing economy" is on the rise. Increasingly, consumers will be turning to each other not just for news, product reviews and opinions; we'll also be renting cars, sharing homes and loaning money to each other. According to Fast Company, peer-to-peer financial-lending will reach $5 billion by 2013; car-sharing revenues will hit $3.3 billion by 2016, and the entire sharing economy sector could soon represent $110 billion.

When you rent your car to a stranger or let one sleep in your spare bedroom, do you want them to be CrazyPartyGal06 who loves Glee, Katy Perry and planking? Or do you want to rent to Susan Smith who's worked at P&G for 10 years, has 300 connections on LinkedIn and Facebook and has accumulated 20 recommendations from people who vouch she's a trustworthy and reliable soul? If you aren't certain how to answer that question, feel free to read the experience that one woman had renting her apartment via Airbnb to "Dj Pattrson." She asks, "Was it a guy? A girl? I still don't know," but she darn well wishes she had Dj's real identity after finding her entire home trashed by this anonymous person.

I'm not suggesting that every social network must require people to disclose their real identity; it's great to have places like Twitter where we can be FakeMicheleBachmann, CrazyPartyGal06 or an anonymous political activist operating in a country with little to no freedoms. But we shouldn't be surprised when social venues like Facebook and Google increasingly strive to ensure their networks are comprised of verifiable and authentic people. The future of trust, commerce, and business depends on us being real.

Danny Brown, the blogger who complained that Klout is opt-out rather than opt-in, perhaps said it best in a two-year-old blog post: "You know the old saying, 'Honesty is the best policy'? Take that with you into the social media arena and you’ll learn more and gain more than if you try being something you’re not... Be open, be clear, and be honest." That's the kind of advice that social media consultants have been giving to brands for years now; it's time we begin to provide that same counsel to individuals, as well.

Good and Evil: The Role of Social Media since 9/11 and in the Future

2011-09-11T11:48:00.000-05:00

Today, social networks are full of posts declaring "we will never forget," as if washing the images and emotions of 9/11 from our collective memory was an option. On days like today, social media is a tool that brings us together, but in the decade since September 11, 2001, has social media been a force for good or evil?

The first decade after 9/11 coincides with the first decade of social media. In September 2001, social media was in its infancy--sites like Geocities and LiveJournal provided a place for people to share widely and sixdegrees.com, an ahead-of-its-time tool that demonstrated how connected we are, had recently shuttered. In the year following 9/11, Friendster would launch. The year after that, MySpace came into being and Mark Zuckerberg launched Facemash. Within another twelve months, Facebook, LinkedIn, Last.fm, Hi5, Orkut, Dodgeball, and Flickr were online, and you know the story since then.

There are times social media appears to have been a force for "good," or at least a means to empower people to come together for positive change. Social media helped usher in "The Arab Spring," a wave of civil uprisings that toppled authoritative regimes and brought economic concessions in over a dozen Middle East countries. Social Media helped raise $5 million following the devastating earthquake in Haiti. Social media reunites loved ones following natural disasters, brought positive political change to Columbia, is being used to prevent children from being recruited into begging and crime, has located kidnapped children and helps medical professionals track and react to flu outbreaks.

But social media has also been used for evil. Social media has made people vulnerable to kidnapping, enabled bullying that ends young lives, connects pedophiles and victims, facilitates the planning of criminal flashmobs, allows misinformation to disseminate rapidly and spreads malware.

More broadly, one cannot look at our country and suggest we are a more united and collaborative people a decade after 9/11 and into the social media revolution--political campaigns have gotten uglier and divisions in Washington have grown poisonous. On September 11, 2011, America is a deeply divided society. Where is the cooperation, commitment to greater good, shared values and openness to others' viewpoints promised by both the post-9/11 and social media period?

Is social media destined to merely reflect all that is wonderful and horrible in humanity? Or is social media a force for good?

Just as mass media changed our habits and beliefs, so too will Social media alter human nature, but it will take time. When humans are faced with change, they sometimes rebel because change can be scary--witness the painful journey through civil rights in the US or the violence in the Middle East and Europe this year.

Today, change is faster and more profound than ever. The growth of software and digital media is undermining traditional job security; social media is calling into question long-held beliefs about privacy; terrorism and tribalism have forever altered our sense of security and perceptions of geopolitical boundaries; environmental threats are forcing new considerations of growth and consumption; fluid international trade and migration are changing attitudes about multiculturalism and economic globalization; and governmental debt is causing many to reassess the role of government, taxes and social programs. Some welcome these changes but many are not sure what these changes mean for them and their children, and this concern is being expressed in ways both explicit and not in social media and the real world.

But we will adapt to the new realities--we always do!--and from this will come a new sense of our place in the world. Prior to mass media we only knew what happened in the tiny corner of the world in which we lived, and our actions were informed by the people and events within mere miles of us. In the mass media era, we saw the world more widely, but that view was fashioned for us by the entities that controlled the media.

Today, thanks to digital and social media, we have the means to understand the entire world as it is, only filtered by our own biases, perceptions and attitudes. If we get a stilted and incorrect view of the world, it is no longer the fault of politicians, media conglomerates and the powerful but ourselves. Some will willfully create a network of people and information sources that fit their world view, but whether we choose to be comforted or challenged is no one's decision but our own.

In the years to come, those who will be best prepared for the future won't be the ones with insular networks that tell them what they want to hear but will be the individuals who recognize and act based on how interconnected we have become. And therein lies the power of social media--transparency and the free dissemination of information may not make us different humans right now, but it will separate the people who see the future and lead others to it from those who choose to hide.

One painful and profound change that social media will force upon us is a new sense about what privacy is and is not. Just a few years ago, privacy was a right and we elected to hide virtually everything about ourselves; even today, some want to blur their homes in Google Street View and are annoyed Google+ won't permit anonymity.

Traditionally, people have been deeply suspicious about a loss of privacy because the collection, control and use of personal data has been undisclosed, occurred without permission and managed by opaque entities. But what will happen to attitudes about privacy when wider swathes of personal data are not owned by government agencies and market research firms but offered freely and made available to all?

A transition to a more transparent world will happen slowly and painfully and many will fight it, but consider how that list I shared of "evils" perpetrated within social media is altered in a transparent world. Bullying cannot happen when inappropriate and hateful behavior is immediately surfaced and parents and educators are alerted; pedophiles cannot harm others when they are not protected by false identities and anonymity; stalkers cannot hide in the shadows when their real world and digital whereabouts are known; and malware cannot so easily spread when the source is exposed for all to see.

We still need places like Twitter where anonymity is embraced, but our increasingly transparent and interconnected world cannot advance with outdated attitudes about privacy. Or, perhaps more accurately, our outdated attitudes about privacy cannot survive in our increasingly transparent and interconnected world.

I foresee a world where social media helps good thrive and forces evil out of the shadows and into the bright spotlight of public scrutiny. Do you agree? Please share your opinions below in the comments.

Email Message From the Past Captures My September 11 Experience

2011-09-09T01:27:00.000-05:00

My experiences ten years ago this week were not terribly exceptional—I was not in New York, Washington D.C. or Pennsylvania and did not lose a loved one—but like all Americans and many in the world, the horrifying events of that day resonated deeply.

Caught 2,000 miles from home when the air travel system was shut down, it took me days to make my way to the warm embrace of home, friends and family. I captured the events of my strange road trip from San Francisco (where I would move eight years later) to home in Milwaukee in an email that I sent to friends on September 15^th, 2001. I thought it might be of some interest to share that email.

In my message, I mention Lindsey, a young woman who sat next to me most of the way cross country. She was paying a last visit to her grandma in Madison, WI prior to reporting for duty in the Air Force. I've thought of Lindsey often in the years since. She's been a small reminder of the people who sacrifice and serve to keep us safe, and I hope wherever Lindsey is that she is well and happy.

Here is my message from the past:

What a week--what a sad, confusing, and strange week. What follows is rather lengthy, so I don’t blame you if you don’t read it. Either the long time out of touch, the peculiarity of my experiences, or just the emotion of this past week seemed to take over my fingers as I sat down at a computer for the first time in almost four days. I wanted to share some of my experiences.

I know what I went through is nothing but a minor annoyance while so many are dealing with so much more. Still, my experience makes me wonder how many millions of Americans have been "inconvenienced" in the sort of way I was. In the past week, I was stuck 2,000 miles from family and friends, unable to comfort or be comforted, at the moment of the most tragic event our nation has had to face on its own soil perhaps since Pearl Harbor or the Civil War.

I was awakened Tuesday morning by a panicked call from Geri. Her first words were, "Are you all right?" I responded with some annoyance, "I'm sleeping." She told me to turn on the TV and I saw the smoke pouring from the World Trade Center. For a day and a half I was glued to the television and computer in my hotel room, alone as I watched the sad and frightening coverage and searched for options to get me home as soon as possible.

My only break from the non-stop coverage came the evening of September 11th. An uncle and aunt in San Francisco picked me up and we went to Fisherman's Wharf. It was a surreal and forced experience to be a tourist that evening. Many of the restaurants were closed and the mood was somber, despite the fact the evening was quite beautiful. We heard servers talking about their fear of losing their jobs or income because tourism might be harmed, and we left a very generous tip.

At one point the following day, I had reservations for three separate means to get home: My original air tickets (on a flight that was, in fact, canceled yesterday), Amtrak tickets (which would've cost almost as much as my round-trip air fare and would not have gotten me home until Monday after routing me through Portland), and my bus tickets (which I eventually used.) That doesn't even count the three-day, $1,300 rental car I briefly considered reserving to make a solo drive home.

The trip home was strange. Fifty-three hours on the road, interrupted only by brief stops throughout the day and night in disgusting bus stations or the more appreciated and cleaner fast food restaurants. I spent the better part of three days crammed into a space smaller than any airline seat, not showering, hardly sleeping, and eating virtually nothing except food that was pre-prepared, sealed in plastic, and warmed in the dirtiest microwave ovens on earth. (The food was so bad that a Wendy's in a truck stop in Iowa was a welcome and appreciated stop!)

Certain experiences added to the strangeness of the trip:

In Sacramento, special agents with badges (no one caught what agency they were from) boarded our bus, briefly interviewed everyone, and searched several pieces of luggage. Several of us later wondered if the woman who boarded and sat next to me at that stop was hiding something. She seemed nervous as she loudly announced that she had to have extra carry-ons because she had forgotten to get address tags for some of her bags, a requirement to check the luggage in the cargo area of the bus. Later, after we were on our way, she announced equally loudly that the reason the agents had searched her bags (and almost no one else’s) was because she had an Arab friend. She also noisily said that she felt safer that the agents had searched the bus, but it ironically left the rest of us, who had previously felt safe, wondering if there was cause for worry. We were all glad when she exited the bus without incident the next morning in Salt Lake City. (She took her pillow with her every time she left the bus, leaving us conspiracy theorists to wonder if she was hiding drugs; and of course, the agents never searched her pillow.)

In the middle of the Utah salt flats we passed within 200 yards of a train wreck that had occurred just hours earlier. The accident involved two trains—one hauling passenger cars—and looked bad. Several cars were derailed, still smoldering and surrounded by dozens of fire trucks and ambulances (not to mention TV trucks), and we all worried about the injuries or fatalities. We were relieved to learn a day later by newspaper that no one was killed.

While we were in Salt Lake City, one passenger heard a rumor about an American Airlines plane leaving for Chicago that still had seats available. She abruptly abandoned our bus, leaving behind the pillows she said she no longer needed, and left for the airport. (Her pillows were a lifesaver--on the second night I got my first minutes of sleep against one of the pillows she abandoned.) We all wondered as we arrived home Friday night if she had gotten home ahead of us, although we agreed it was likely she was still camped in the airport, wishing she had stayed on the bus or at least kept her pillows.

Greyhound bus stations are the butt of many jokes, and I now understand them. Perhaps the worst station I saw was the Omaha bus station. Having arrived in the morning, we were anxious to get to the bathrooms to freshen up. I took one step into the mens’ room and almost left in disgust--a half-inch pool of dirty water covered the floor and every surface was grimy. I was so desperate to brush my teeth and shave that I rolled up my pants legs and managed to do my morning routine while holding my travel bag and never setting a single item down on any surface. That bathroom was so bad that a man who had gotten on the bus in San Francisco looking much like a vagrant (and smelling like one), stepped into the bathroom, looked around, and immediately turned and left.

(I know Greyhound was sagging under the burden placed on our transportation systems, but wild horses couldn't drag me onto a long-distance Greyhound bus after seeing the neglected bathrooms, inedible food, derelict bus stations, and indifferent and untrained employees we all endured on the trip. If you are thinking of buying stock in Greyhound with the idea that millions of Americans are being exposed to the joys of Greyhound, don’t. Around a third of the newbies started the trip by saying they’d never fly again after seeing the scary scenes on television but by the end, 100% of these same people agreed they’d hop on a plane tomorrow rather than set foot in a Greyhound for a second time.)

Of course, none of us knew what was going on in the outside world. It made me marvel at how connected we’ve all become—television and the Internet seem like necessities and not luxuries here in the 21st century. I was thrilled when, at the very first stop after boarding, I found an Internet terminal in the Sacramento bus station, and I was disappointed when scouring every other bus station along the route failed to reveal a similar one. (I suppose the average Greyhound rider isn’t quite as connected as I am.) Along the route, we picked up rumors in bus stations and tidbits of news from family by phone, and we debated if the US would be at war and retaliating by the time we arrived home.

On the bright side--and there are bright sides to these sorts of experiences, after all--there were nice people to be met on the bus and several of us became fast friends: Joyce, a nurse from Iowa; Jeanie, a banker from Minneapolis; and Lindsey, a teen from Reno about to join the Air Force. None of us were “regular Greyhounders,” which made us a part of the majority on the bus who had never set foot in a long-distance bus. My small group of new friends looked out for each other, held places in line, and shared stories, family photos, information, newspapers, and snacks. In short, we kept each other sane in the face of conditions and at a time when sanity was stretched just a bit. Another bright spot, I suppose, is that I did get to see parts of the country that were new to me, although driving through Utah and Wyoming at 75 miles an hour and stopping at truck stops seems a pretty poor way to see these states for the very first time.

I got home last night and enjoyed my first night back—my wife, my cat, my bed, and my own bathroom seemed like luxuries, and for a while anyways it felt like life was back to normal. It isn’t, of course, and as my focus changed from the petty problems of my own uncomfortable journey to the world at large, it struck me harder than I had imagined.

I had cried during the initial coverage on Tuesday, and I find myself crying again. Geri compared her emotions to when my mother died—the way the tears sneak up you at unexpected times—and I find this is the case today. These are sad and scary times.

Obviously, this week will be remembered for a long, long time. In the future, historians will assess how the rest of our lives were shaped by one Tuesday morning in September of the first full year of the new millennia. In the future, composers will write songs and moviemakers will create films about this week. (Those movies, perhaps sadly but definitely suitably, will not feature Bruce Willis or Arnold Schwarzenegger, saving the day single-handedly.) In the future, much will be said about the lives lost, the heroism demonstrated, the actions of presidents, kings, and common people, and the way our world was changed on one horrible day. All of that is in the future, however, and right now I am trying to sort it all out. For days, my attention has been focused primarily on my own trip home. Now, I am catching up with the rest of you who have been watching 24-hour coverage and dealing with this tragedy since it occurred.

I am mourning the life lost and the pain this is causing to so many people. Today, 100,000 people are grieving the loss of a wife, husband, son, daughter, sister, brother, father, or mother. Perhaps another million are mourning the loss of a friend, acquaintance, or coworker. But all of us, in the US and the rest of the world, are mourning with them.

I also search for things I can do—something that can help my country, my family, and myself. I know everyone’s already been bombarded with ways to donate, so I won’t belabor the point, but it has helped Geri and I to feel as if we’ve somehow contributed to the cause by donating cash to several organizations.

I hope you don’t mind this lengthy message. I’ve had a lot of time to think (and do just about nothing but think) over the past week. I appreciate your friendship and the messages you sent while I was stuck half a continent away. These are dark times, but those we keep around us make them lighter.

Five Reasons NOT to Monetize Social Media

2011-09-02T12:32:00.003-05:00

I've been alarmed at the recent surge in the number of blog posts listing ways to monetize social media. According to Google, there are 855,000 hits on the search term "monetize social media" since July 1st. It's budget season and everyone wants a piece of the 2012 pie, so it's "Show me the money" time. But is this really the right way to approach the question of social media outcomes? I do not think it is, and not because of some philosophical belief in the sanctity of authentic earned media but because focusing on monetizing social media can lead to bad business decisions and results.

We all understand that businesses exist to earn a return for owners. We also recognize that social media must bring demonstrable value to our enterprises or else it cannot earn the investments required for resources, IT development, consultants, tools, social marketing programs and other expenditures.

It is also vital to acknowledge that while social media can be used for direct marketing and increasingly will be used for commerce, that does not mean we can or will be able to easily tie financial results to social media investments. Social media isn't simply a sales and marketing channel; it is also a medium for relationships, reputation, community, service, advice, education, recruiting and awareness. This puts social media in the same category as other investments that firms typically will make without an eye to financial ROI. For example, customer service, employee education, hiring, corporate giving, sponsorships and public relations are rarely held to hard standards of ROI, yet that doesn't prevent businesses from investing as necessary.

I believe it is a sign of social media immaturity if a firm will only fund social media programs that can validate a positive ROI. This isn't to say that we social media professionals shouldn't measure every penny of business results that we deliver, but there are many benefits that cannot so easily be measured in dollars and cents. While I was at Forrester, we recommended a balanced scorecard approach to consider the range of short- and long-term benefits that are both quantitative and qualitative.

What are the dangers of holding social media to an expectation of measurable positive ROI? Here are five:

Don't limit innovation: A major transformation in the way business operates is underway, and now is not the time to be on the wrong side of the innovation imperative. Amazon launched in 1995 and didn't turn a profit until 2001; Borders waited for Amazon to validate the value of online business (and in fact for seven years relied on Amazon for its ecommerce operation), and today, Amazon's market cap is $95 billion and Borders' is $3.2 million.

A while back, my former peer Nate Elliott criticized a tweet in which I quoted Erik Qualman who said that the ROI of social media is that you'll still be in business in five years. Nate's right--that statement is soft and misleading; Apple, for example, has yet to significantly embrace social media, yet I doubt anyone would predict Apple's demise in the next five years. Still, chances are your company isn't Apple and exists in a category that will see significant shifts in market share and profitability based on which players best leverage social media and adopt new ways to conduct social business. That doesn't mean you should simply waste money, but it does mean that your organization must embrace investments with uncertain ROI to help find what works and doesn't work for your brand, audience and category.
Don't lose top talent: In a world awash with social media ninjas and gurus, there are precious few professionals who know social media, understand business processes, and are familiar with all the legal, regulatory and reputation risks inherent in social media. Finding people who tweet isn't hard; finding people who can earn the confidence of your CEO is another matter altogether.

I know two experienced and respected social media executives who've left their employers in recent months because they lost battles on funding for important social media programs. Both went to other firms who are hungrier and more ready for social media risks and rewards. I'm not suggesting companies fund every pet project offered up by their social media executives, but part of the value of funding social media isn't that it delivers immediate sales but instead that it prevents your company from losing experienced talent and incurring the cost of recruiting and onboarding new social media leaders.
Don't let attribution problems stop you from doing what's right: While there are solutions to the problem of attribution, the simple fact is that most firms lack good metrics that permit them to attribute a portion of their sales to social media (or many other marketing tactics, for that matter). What channel gets credit when someone picks up the phone and completes a transaction after seeing 50 brand tweets, visiting the Web site, seeing a print ad and perusing the companies' online community? Chances are it's the phone channel, ignoring the impact of many social, digital and traditional touchpoints that contributed.

My advice to addressing this problem is twofold. First, if your firm uses marketing mix modeling and doesn't yet include social within its consideration set, change that immediately; validating that social contributes even a couple of percentage points to your overall revenue will be more than enough to fund most social media programs today. Secondly, play the attribution game. If your organization tracks inbound links from search engines and attributes same-session sales or inquiries to the search channel, then be sure to do the same for social media. While this approach is subject to all the same weaknesses and problems that attribution entails, there is no reason why your social media programs shouldn't get credit for sales or other beneficial transactions when people clickthrough from Facebook, Twitter and other social venues.
Don't undermine your future advocacy: If you knew today that in 2013 you'd face a PR crisis, how would that affect your planning for 2012? If you knew for a fact that in two years your Facebook page would be flooded with Greenpeace protests or that you'll face a damaging accusation from consumer advocates, how would you prepare in the coming twelve months? Here's what you'd do: You'd invest more in PR and social media today. In traditional channels you'd strive for more positive press and stronger relationships with media contacts, and in social media you'd want to amass a much larger and more vibrant community of advocates who would help you defend your reputation and counteract negative content with positive and supportive feedback. And you'd do that in 2012 without consideration of the ROI.

That is one of the key problems with the idea of monetizing social media--it focuses on wringing value out of fans and followers today rather than building your reputation tomorrow. I had two occasions while at Forrester to speak with firms who faced large product recalls, and in both instances I was told that leaders wished they'd taken social media more seriously prior to the incident. Don't wait until your firm is forced to painfully recognize the qualitative value of reputation management in social media before letting go of the fixation on quantitative ROI and monetization.
Don't trade tomorrow's brand value for today's sales: My favorite professional conversation in the past three years was with a peer who shared the story of a brand that came to realize it was delivering positive ROI in Facebook while eviscerating brand value. The brand's Facebook page collected thousands of fans who had positive affinity for the brand, and the company wanted to monetize these assets. The solution was simple--make posts containing discount offers with trackable links, then measure the clickthrough and conversion. The ROI was astronomical because, of course, the cost of a Facebook post was essentially zero; in fact, it worked so well, the brand starting pushing more discount offers and delivering more ROI.

Sounds like a success story, doesn't it? It was for a while, but then social media managers began to see the tone of the Facebook fan page change. Engagement on brand topics was down and posts from fans complaining about insufficient offers were up. The brand did a small online focus group and found that people "liked" the fan page because they truly liked the brand and its products, but over time the stream of discounts taught them to avoid making purchases until the right discount arrived (as it always would eventually.) The social media tactics were delivering demonstrable ROI; they also happened to be killing the brand and reducing margins. The focus on trackable offers and ROI had taken high-value fans--the kind who would purchase the brand regardless of price--and turned them into low-value price-conscious buyers.

People who focus too greatly on monetizing social media are not seeing the forest for the trees. It is too easy to measure the financial outcome of a given tactic while ignoring the wider impact to the reputation, affinity and advocacy of your brand. Your goal must never simply be to monetize social media but instead to do so while maintaining the value of your brand and consumer relationships. Otherwise, you risk chopping down trees and valuing the firewood produced while ignoring the damage done to your brand forest.

Smart social media leaders must find a myriad of ways to validate their efforts, but they also must remain vocal advocates against tactics that monetize social media today at the expense of tomorrow's success. I honestly believe this is what separates the true social media leaders from the self-declared ninjas; the least-experienced social media professional can wallpaper a Facebook fan page with discounts and tweet offers, but the mature, visionary social media leader must convey to peers why the potential that social media will deliver in years to come must not be traded for a few dollars of sales this quarter.

The Emerging RFMInow Model for Customer Service, Marketing and Social Media

2011-08-28T21:24:00.000-05:00

Do you gift people for praising you in social media? Do you over-deliver to particular customers because of their sizable social media footprint? Should you? While it is not standard operating procedure for many brands, there have been great examples of companies who listen to social media, recognize opportunities to create viral goodwill, and act in very real and immediate ways. Done right, the results of these actions are greater than the sum of their parts.

Perhaps the earliest such example that comes to mind was Michael Arrington's April 2008 dustup with Comcast. Upset that his internet service was down, the well-known tech blogger turned to Twitter and started complaining about Comcast. Turns out Comcast was listening. Frank Eliason, a former Comcast executive who is now with Citibank, reached out by phone to find out what he could do to help. The situation pleased Arrington and garnered great media attention.

Wheat Thins sent a delicious box
of snacks to thank me for blogging
about them. I loved the snacks &
my cat enjoyed the box they came in.

Three-and-a-half years later, similar tales of social media disasters and opportunities turned into PR coups are more frequent, but this sort of data gathering, connecting, listening and acting are still not par for the course for most companies. This is why Morton's Steakhouse earned plenty of WOM and media attention (including in UK's Daily Mail, PC Magazine and Forbes) by showing up at an airport to give a steak to a hungry traveler who tweeted a joking plea. And last week I had my own "aha" moment in the form of a gift of Wheat Thins--a thank you for blogging about Wheat Thins' program of thanking people who mention them in social media. (How meta!)

Are these authentic signals of gratitude or just good business? Is there a difference? Would Morton's have shown up bearing a delicious steak had the Twitterer not been Peter Shankman, who has 100,000 followers on Twitter and a Klout score of 88? Peter thinks so; he blogged, "I’m a bit of a steak lover... (and) I’ve developed an affinity for Morton’s Steakhouses... I’m a frequent diner, and Morton’s knows it... I think it’s about Morton’s knowing I’m a good customer, who frequents their establishments regularly."

Peter suggests that this act of generosity wasn't due to his social media status but his RFM at Morton's. RFM is a broad way of considering the value a specific customer has to a business; it stands for Recency, Frequency and Monetary Value. The more recent a customer's transaction, the more frequent the purchases and the greater the spend, the more value the customer represents to the business.

I think Peter is naive (or feigning it) if he thinks Morton's would drive 47 miles roundtrip to deliver a steak to a good customer whose tweet reached just 50 followers. However, I also do not believe that Morton's would have lifted a finger to help Peter if he were not a regular tweeter about steaks and a great customer of the steakhouse chain. It was the combination of Peter's loyalty to Morton's, his social media influence and his instant of need that brought about a serendipitous moment for customer and brand.

Peter's situation represents the new model for integrating customer service, social media, marketing and public relations--a new model that builds on the old, tired RFM approach using the new tools at our disposal. Let's call this new approach RFMInow:

Traditional RFM: Know the customer
Influence in social media: Connect with the customer, and
Real-time customer service that delivers now: Listen constantly.

Like any three-legged stool, RFMInow can be wobbly when the three legs do not work in concert. If a brand reaches out with a lavish expression of appreciation to a consumer who lacks a rich, existing relationship with the brand, the result can feel fake and trigger alarms about brand authenticity. An effusive gift to a customer who has little influence cannot produce corresponding viral benefits or ROI. And without the agility to recognize a customer's need and immediately act upon it, the brand misses the chance to rise to the occasion in exactly the right moment.

There are challenges to implementing an effective RFMInow model. First, some social media "experts" whine that considering a person's influence makes any action less than authentic, but it's time we mature and appreciate that business needs demand we scale the effort and expense to the potential benefits. Second, care must be taken to avoid violating FTC regulations governing endorsements; any action that creates a material relationship between brand and consumer must be disclosed when the consumer subsequently tells others about the brand.

Perhaps the biggest challenge to RFMInow is that it sounds easy but is not, at least not for organizations of even modest scale. To know customers, brands must earn their business, develop ways to collect consumer data, and implement robust CRM systems. To connect to customers, brands must earn their trust, create connections in preferred social media channels, implement powerful social media management programs and integrate all of that social and CRM data. And to listen constantly, brands must have the right empowered employees using the right listening tools to find opportunity and act in the moment.

Wheat Thins' thank you gift is an example of RFMInow. As is the case with most consumer packaged brands, Wheat Thins lacks good RFM data on its customers--they can't know how many packages of Wheat Thins I purchase, but they do know I've tweeted and blogged about the brand. (In this case, the low cost of the reward reduces the need for detailed RFM.) The brand recognized that I have moderate influence on Twitter and that other sites aggregate my blog posts. In addition, the brand acted quickly--they asked for my address two days after I posted the blog post and the tasty gift arrived days later.

Wheat Thins and Morton's cannot afford to reward every customer for each tweet or post, but the brands can look for the right convergence of RFM, social media influence and moments of opportunity. What are your brand's moments of opportunity--the instant in time when someone tweets about your brand, or the minute one of your customers is in need but hasn't picked up the phone to let you know? Are you aware who your customers are in social media and are you listening?

RFMInow will become common for companies within a few years, but at the moment it's RFMIlater for most organizations.