Social Media – The Global Story

The world is adopting social media at higher and higher levels according to a recent Neilsen Report.  According to the research by Neilsen, global time spent on social media sites increased by 82% in December 2009 when compared with December 2008. Pretty large increase especially if you look into the footnotes and understand that this research is based upon only U.S., U.K., Australia, Brazil, Japan, Switzerland, Germany, France, Spain and Italy. No China, no India, no Russia, nor are there any Nordic countries listed.

But this growth coincides with what we’re seeing here at Impact Interactions. We’ve helped develop and launch multiple communities in countries such as China, Russia, Italy, France, Germany, Brazil, Argentina, Mexico, Poland, and elsewhere over the past several years. And while clients are still interested in their communities in the U.S. their focus is shifting. We are seeing more interest in companies asking us to help them launch communities and social media plans in countries ranging from Japan to Russia to Brazil to Mexico.

The growth in third party applications such as Twitter and Facebook have helped companies to understand the potential reach of the medium, but it is the local language social networks like StudiVZ (German) which have helped in-country marketing teams decide that they must be engaged with their customers using social tools. So even as Facebook moves past these local social media/networks, the smart marketer understands that it’s not the tool so much as it’s the growth that matters in deciding whether social media is a good tactic in a particular market.

In our experience leading a social media workshop in Innsbruck, Austria at the prestigious Management Center of Innsbruck it was clear that our non-US audience were more engaged on local language social media tools including blogs and social networks than on the U.S. offerings. (In fact, it was there that I learned more about StudiVZ and other offerings.)

That doesn’t mean that non-U.S. members are not on Facebook, Twitter, or LinkedIn. But it does mean that for the savvy global marketer the research and identification of which sites or applications to use is a bit more difficult. While the strategy remains the same, each Internet culture requires a clear focus on localized tactics. That means a cookie cutter approach using the same tools like Twitter, Facebook, or other application across multiple markets will not deliver the results you desire.

Watch the growth, it’s here to stay. But also look for the smaller sites that can deliever more value to your organization when using social media globally. As the old adage goes “All marketing is local.” The same applies to social media.

 

-Mike Rowland, President

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Will Social Media Survive the Recession?

What constitutes a bubble? What constitutes a true business tool?

This was the type of question that those of us running Web 1.0 businesses in 2001-2003 were asking ourselves as we evaluated our prospects for the not to distant future. In our case, it was all about online communities and their ability to help both B2B and B2C companies increase sales, build brand loyalty, and market their products and services more efficiently. We had case studies that showed that online community members on average purchased more frequently, bought more items, and generated more profits than non-community members. We proved that online community could produce a return on investment of more than 100% (in some cases higher than 200%).

Yet for all the research and our expertise, many companies pulled the plug on their communities. The list is long: Transora (Multiple CPG companies), OurHouse (Ace Hardware), MuniGroup (Goldman Sachs), Quote.com, SoapCity (Sony), and many others.

Each company had its own reasons, but in the autopsies we performed several issues came out over and over. They were:

1. Budget taken away from community projects due to over staffing on the client side
2. Executive sponsorship changed due to layoffs
3. Software company providing hosting and platform went out of business
4. Movement of marketing dollars to “proven” traditional marketing methods like direct mail

Remember this was back in the day when for chat clients used eShare or iChat, for message boards they used Web Crossing or eShare, blogs were not widely accepted, wikis were non-existent, video was not used online except for B2B, and most community members were using dial-up connections. The overall conclusion that came back time and time again was that while communities were cool, they were a ’soft’ application in the eyes of senior executives. These executives did not see value in kids chatting about irrelevant issues or fans cheering on their favorite television show or prospects engaging with customers independently.

Now shift to today.

Look at our social media space. We have seen blogs go mainstream, social networks competing with online communities (yes they are very different), broadband adoption bringing video and photos to the masses. Yet we also have the feeling of a bubble again as the world enters another recession. The movement towards cool applications like Twitter, FriendFeed, MySpace & Facebook widgets, and others are viewed as fun to use. However, in practical terms they are all in danger of the same fate that hit many online communities in 2002-2003.

As budgets tighten, will money dry up for experimenting with social media? It’s possible. Remember that many of the same decision makers who turned off communities are still in the position to do so again. If you are running a community or social network, you need to start building a case for why your project must remain funded.

In a member survey completed in June of 2008, the online community research network published that 57% of all respondents stated that their communities contributed no revenues, less than 2% of revenues, or did not know how much the community contributed. 33% of respondents had budgets for community projects in excess of $100,000 per year (18% over $500,000). The average number of staff working on the community was 6.6 FTEs! But here is the astonishing fact from the report: 67% reported that they had no strategy for their online communities.

Will these communities survive a budget cut? Probably not. The respondents did not know how to prove the value as Alan Warms used to preach. The issue of ROI becomes much more important as the economy gets tighter. While we all know that intuitively communities help the hosting organization, intuition doesn’t get funded.

Community and social network management teams must get comfortable with metrics and with building an ROI Case for their project. Hard data is difficult to deny… soft data of conversations is easy to dismiss…

Want to learn more about how to prove the value of your community or social network? Learn more about our consulting services, experience, and then contact us with your questions. Or leave us a comment.

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Thinking Beyond the Community Website – Oglivy 360 Digital

Rohit Bhargava SVP of Digital Strategy for Ogilvy gave a presentation using a couple of cases studies.

Case Study One Winelibrary.tv:

Dynamic community to watch his videos. Build additional growth by providing members with outside features such as Twitter where he provides promotions for discounts on wine or other merchandise. He has another community called corked to interact in more traditional community features like message boards, and is promoting his book about wine. His irreverence towards the wine snobs is helping members to enjoy their wine.

Case Study Two: Personality Not Included

Rohit has written a book and is using community to promote it. He is not restricting his activities to his own branded site, but is using third party sites like FaceBook and Twitter. He invited visitors to submit questions to him expecting 5-10 in a single day. He received 50. He then promoted the blog of the top member by questions asked and set up a marketing campaign contest. The top member comes back 5 times a day and continues to add content.

So, you don’t have to go big to get results, you just have to target your ideas in an appropriate way to meet the needs of your customers.

4/22/08 UPDATE: There is a nice summary of Rohit’s findings in this week’s eWeek Magazine (digital copy here).

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The More Things Change, The More They Stay The Same…Research on Online Community ROI Techniques

As part of our industry leadership role, we belong to the Online Community Research Network. We’ve been mildly intrigued with the research surveys the network has performed over the past several months, but the most recent survey based report “Online Community ROI: Models and Reports” surprised us. Call it a case of “The More Things Change, The More They Stay The Same” syndrome.

Here are some of the report’s findings:

1. Only 31% of respondents have a comprehensive online community strategy in place (53% are developing their strategy as they go!)
2. 59% of respondents say their goals are closely aligned with their organization’s corporate goals.

We find this response interesting as if only 31% of respondents have a strategy in place, how can 59% have closely aligned goals?

Additional findings:

1. Metrics are still confusing people in terms of how to use them for ROI. The top ranking metrics be noted as critical for ROI are listed as traffic patterns and statistics (visitors, visits, page views, etc.).
2. Cost savings for Customer Service/Tech Support, Trial Downloads of products, both scored the lowest as critical metrics for ROI. Yet, these two metrics are the easiest to use to demonstrate a base level of support for an ROI case.

Community Managers who responded to the initial survey ranked Membership Growth as the number one success or performance indicator they report on regularly. The most important data that they report upward include (in ranked order): number of members, basic metrics (whatever that means), online content, number of visitors, number of posts, and other meaningless metrics.

More shocking than this is the response to the level of satisfaction/believability of the data with your executives and how satisfied the executives are with the reports they are receiving. A whopping 23% responded very satisfied with 19% responding satisfied. The executive teams we deal with want clear, concise and relevant reporting. That doesn’t sound like what the respondents are delivering to us.

Think there might be a correlation between the lack of a cohesive online community strategy that closely aligns with corporate goals and the lack of sophisticated measurement and reporting? We do.

Many of the respondents (and members of the OCRN) are still confused when it comes to demonstrating the value of their communities to management. With the lack of refinement comes the claim that online community is a soft application that doesn’t deliver results. During budgeting, how can your online community efforts get the funding you need if your team cannot prove its value to management?

Based upon the responses, we wonder how many of the vendors in the Online Community space don’t understand measurement and reporting issues. With budgets tightening, it is clear to us that this has to be a key issue for the industry. Yet in our opinion, the methodology and understanding regressed to pre-2000 levels. That’s a shame, because our ROI analysis does deliver an easy to understand measurement of how the community is delivering on organizational goals.

We help our clients understand exactly how their communities can help with organizational goals and how to measure their success. We start with targeted audience attraction through PPC efforts and sponsored content efforts, then follow these members through the online community value chain to demonstrate the ROI and value that online communities bring to an organization.

Want to learn more about this topic? Leave us a comment or contact us.

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Are we doomed to repeat the mistakes of Community’s past?

Reading the media’s accounts of online community becoming an important component of marketing, I am struck by the fact that many of the people being quoted think that online community is something new and exciting to offer customers and site visitors.

Take P&G’s latest foray into communities with its interactive agency ZiZo Group for example:

“Capessa.com is an innovative example of how companies are strategically innovating with digital media,” adds Roger Fishman, founder and president of The ZiZo Group. “Developing sustainable digital business models provides new ways to listen to, learn from and engage with online communities and is key for long term brand-building.”

Um, Roger this is not new in any sense of the word…

And from CSO’s blog post, Gartner’s comments:

Peter Sondergaard, global head of research for Gartner, told CEOs at Cebit on Wednesday that blogs and online communities like MySpace may have started in the consumer realm, but they’ll have a big impact on businesses in the coming years.

Peter, where have you been?

Yes, online communities should be part of the mix of any organization that wants and desires to get closer to their customers/members/prospects. But thinking this is something new is silly.

It reminds me of several comments made during the initial BlogOn 2004 meeting in Berkeley where most of the bloggers presenting spoke of how blogs were going to revolutionize the world, change how people interact with each other, and dominate how organizations delivered content to everyone. These comments were usually followed up with discussions about the lack of a business model that worked or a discussion on whether advertising on blogs would be enough to cover a salary plus expenses. What these folks never even contemplated was that all these discussions had taken place before. They assumed that because they had found something new, it was new. They misunderstood the power of a new tool with the power of community. The knowledge of the past work in online communities was irrelevant to them because blogs were new.

The same thing is starting to happen again as the online community world grows. Too many people who are covering this industry believe that it’s new, shiny, and exciting without ever researching what has already happened. When I see companies like SAP, HP, and others labeled as old world or as traditional companies I cringe. Companies like these (and I’d add Cisco and Microsoft as well), have embedded the idea of online community so deeply into their organizations that there is true enterprise knowledge being gained.

For every MySpace there is a GeoCities. For every Capessa there is an iVillage. There is knowledge and experience to be mined in order to avoid stepping on the landmines that await new online communities. Whether it will ever be tapped into is another question.

(Cross posted to the FUTURE OF COMMUNITY blog) Want to gain that experience and learn how to avoid the common pitfalls of launching and operating an online community? Contact us for a free consultation.

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Live from the Community 2.0 Conference

We’ve been sitting in on several sessions of the Community 2.0 Conference in Las Vegas hosted by Shared Insights. Having been in the business of helping companies start and run online communities for the past seven years, we’ve learned a lot and we’ve seen a lot.

Here is what we see in this conference:

• Online community is taking off again. The number of new projects and inexperienced people trying to start online communities is growing and that’s a good thing.
• Many of the speakers are providing information as industry best practices based upon a single community experience. That’s a little troubling.
• Attendees are looking to network and build up a group of folks who can share best practices. Lots of card sharing.

But here is a disturbing issue that has come up repeatedly, stated as fact, but just plain wrong:

You Must Surrender Control to Your Community

Whoa! This is such a mistake to believe in this as the gospel of online community.

Based upon our experiences with many large organizations, if you say that to a VP the project is dead on arrival. So, if you were at the conference and believe that, your project is in trouble.

So what is the truth? Again, based upon our experience:

For Best Results, SHARE Control with Your Community

Does this mean let the members run the site? No it does not.

Does this mean allow your members to dictate what the community will become? No, it does not.

What it does mean, is that your community members are important to the success of your project (no brainer, right?). That means that you need to listen to them and work with them to make the improvements that work for both your organization as well as for the members themselves.

We teach our community teams to identify the hyper-affiliates who are balanced and fair in their ideas and critiques. Not everyone’s voice is equal (online community mistake #2).

Our experience shows us through ROIs of over 100% for our clients, that if you give up control you lose your ROI. It’s that simple.

Want to learn more? Contact us or leave a comment.

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