Social Capital - making sense of the ROI of social media
March 22, 2010 by allan · Leave a Comment
We’ve been talking for a while about how to measure the impact and value of what people and brands do in online social spaces. And what’s the value of a conversation? There is no silver bullet to this, but having a good model of how it might work is going to be a hell of a lot more constructive than sitting around in Social Media ROI denial. We’re working on our own model and we’re calling Social Capital.
What is Social Capital?
Social Capital is the value exchanged in online social spaces. It’s really quite simple: People earn Social Capital and they spend it. Brands also have Social Capital, sometimes they increase it, sometimes they decrease it. And sometimes both people and brands go into the red (the irritating over-tweeter you just unfriended, the Toyota product recalls you heard about). It’s worth noting that Social Capital is not driven solely by what people or brands do in social spaces. Your Social Capital with friends is much increased by you having dinner and drinks with them in the real world. And so it goes for brands, real world performance, products and even advertising can build or diminish their stock of Social Capital.
This isn’t a completely new idea; there appears to be a Sociological view of Social Capital and others have written about it here. But we believe its something worthy of a deeper look and more practical application in a commercial context.
What is Social Capital made of?
Social Capital doesn’t directly equate with money, though I believe it will become more clearly monetised in future. For now, I’d argue Social Capital is made up of a combination of:
(1) People’s time/attention and interactions. I have a limited amount of disposable time, I’ll spend it on things that interest or entertain me. As the Attention Economy concept showed, this has a commercial value. Time and attention are tied implicitly to currency, or newsworthiness. For example, lots of time and attention (and green profile pics) were devoted to the Iranian election protests on Twitter back in 2009. Whereas now hardly anyone tweets about it, so currency is a big driver of time and attention.
People will also trade time/attention for excitement, interest, relevancy, entertainment and so on. Things that really engage people get them interacting. From the humble click-through to making films and building apps, people’s time and attention is a function of their engagement. As with friendships, if they aren’t spending time interacting with you, you’re probably not very engaging.
(2) People’s influence, their goodwill and their collaboration. In social networks, people can also trade their influence and goodwill with brands. There are only so many brands people have a strong opinion on, so goodwill is a limited resource. The more of it the brand has, the better it will perform.
The NPS crowd are big on this and have demonstrated that a positive disposition towards someone or something is predictive of revenue growth. This is critical, since you want time, attention, interactions and influence to be positively, rather than negatively, viewed.
But its not just about goodwill, influence is an important contributor to Social Capital. If people are prepared to use their influence on behalf of your brand, then that influence has a value. You’d prefer them to be using their influence for you rather than the competition. We would definitely value influence more than sheer numbers of connections. Influence would include people being prepared to retweet your message, become your fan on Facebook and sharing a link to your content.
Finally, people collaborating with a brand to create content or just something useful is worth including. Social gatherings and conversations tend to coalesce around Social Objects (the things people talk about, use and share in social spaces), so if people are prepared to create things with you, that has a value.
So What?
Assessing someone’s Social Capital is one way to estimate their value in the social web. Twittratr and Twinfluence are good examples of tools designed to allow people to do just this, albeit in a limited way.
Social Capital might also be a good way for brands to work out just how much sway they hold on the social web. It would provide a benchmark for their performance over time and a way to compare themselves to competitors. I’m not advocating anything so simplistic as a single metric (we’re not trying to recreate Millward Brown’s much derided AI score here). Its more useful to understand a brand performance along the different dimensions of Social Capital.
But I would like to work out a correlation between Social Capital and revenue growth, I bet you’d find a strongly predictive link. We’re working on this right now.
But is isn’t just about measurement…
Businesses are already earning and spending Social Capital. When Apple releases a new product, they immediately increase their stock of Social Capital as people devote time, attention, their opinions and their influence to it. When Habitat began spamming Iranian election Hashtags on Twitter, they reduced their Social Capital as the Twitterati began to criticise them.
But it goes further than that, if businesses can understand just how they can help people build their Social Capital, I think they’ll end-up building Social Capital of their own. When OfficeMax created Elf Yourself, an amusing and viral personalised animation, they generated enormous Social Capital for themselves because they helped others be funny, amusing, smart and earn Social Capital from their own social networks.
It’s all about the people
March 12, 2010 by allan · 2 Comments
Despite working in the technology sector for over a decade I have never really considered myself a typical “Tech” person. I love technology, but I quickly glaze over at the talk of MBs, VCs, CSS and APIs, I own very few gadgets and I still struggle to set my video recorder… in fact I still own a video recorder! For me, technology has never been about the software, circuit boards and plastic casings, but the people who use it and how they adapt what it can do to make their lives easier, better and whole lot more fun.
I find the same thing fascinating about social media. Sure, it’s very clever and the technology is moving at a ridiculously fast pace – so what! The thing most people care about is the ability it gives them to catch up with long lost school friends, stalk ex-lovers, chat about the latest Eastenders plot, play games or complain about their mobile phone service to anyone who will listen. For them it’s not really about the technology at all, but the conversations they have and the relationships they form. It’s all about the people.
This may seem blindingly obvious, but at the moment the social media industry seems entirely focused on ushering in the end of traditional media and predicting the next Facebook and Twitter style success stories. This completely overlooks the end user and limits many to viewing social media purely as a new form of mass media.
The majority of the social media campaigns we currently see lauded online and in the trade press are actually just traditional PR, CRM or marketing efforts which use the latest and greatest social media platform to broadcast a message to a mass audience. There is no doubt that it is a hugely powerful new form of mass media, and that technological advances are giving us increasingly inventive new ways to get our messages across to a large number of people really quickly, however, a growing number of organisations are recognising that the unique value in social media is the ability to listen directly to, and connect with their consumers.
By listening to conversations that are taking place brands can get an invaluable insight into what their customers are thinking, doing and saying about them. It also gives many of the braver companies out there the opportunity to enter these conversations and start talking to their customers directly, to find out how they can improve their products and services, harness criticisms in a positive way and even influence opinion. It’s a real opportunity for many brands to form strong relationships by focusing on their customers as people and treating them as peers, helping them regain brand loyalty, not in the traditional sense, but one based on mutual respect and trust.
So when planning your social media strategy, don’t forget that it’s the people who matter. Don’t be seduced by headlines of being the first to take advantage of the newest, shiniest social network. It might get your brand some great PR in the short term, but if you take your time to listen and talk to your customers then you will be positioned for much greater success in the long run.
Time to stop playing around
March 3, 2010 by allan · Leave a Comment
I think we’re all becoming more than a little bored by the endless rounds of tweets about just how important Social is, case studies about how Dell is making peanuts through direct Twitter sales and the top ten ways to make social work for your business/charity/newspaper/grandmother/dog/cat/etc.
Every Social presentation on the planet starts with a hyperbolic rant about the vast and ever-growing scale of social networks. Every social-ist rubs his hands with glee each time a giant corporate suffers a social reputation crisis. Everyone is recommending the same process for doing ‘Social’. Everyone is saying the same thing. Social is the Wild West and there are a hell of a lot of cowboys.
But it is time to stop playing at Cowboys and Indians and time to get serious. We need to unmask the frauds, the snake oil salesmen and conmen trading on client ignorance… here comes The Cavalry.
The truth is the Social is actually pretty simple. There are a few principles you need to grasp and by participating yourself you quickly get a sense of what these are. The devil, as ever, is in the detail. Doing the detail well is the really clever bit.
So if its time to stop playing around and time to start working, where does the work lie?
Strategy over tactics.
I am particularly dubious about the work of the specialist social media agencies. Why? Because these guys are so down in the tactical weeds that they are unlikely to be able to link it seriously to a client’s business strategy. These are the same people whinging on about how you can’t measure Social, how you shouldn’t look for an ROI and so on. Sure it’s not easy, but if you’ve got clear objectives then it is absolutely possible to evaluate social media participation. For me, the pure social agencies are going to end-up in the same place in the food chain as small consumer PR outfits. They do good work but they’re downstream from client decision making and readily interchangeable. Good luck to you but I know where I’d rather be.
Business integration
Most clients aren’t struggling with questions over why Social is important and how it relates to their business, but are instead looking at what they can do and the effect this new force will have on their existing processes, people and structures. What is missing here is precedent, project management and a new organogram. It ain’t glamorous but it is what will make or break the success of a business-wide social participation programme. Again, the winners here are the people with a deeper understanding of business, and the expertise and clout to help clients reorganise themselves. These are the same people with a network of partners that means they can provide joined-up customer service, crisis, IT and HR advice. It’s still not looking good for the small shops…
Interpretation not Information
There are still too many examples of tactics first, strategy and insight later. Sure there are a hundred free social analytic tools. But serious players need serious data crunching abilities. How far back does your data go? How wide is its coverage? What’s the quality of the data? Above all though, the calibre of the people interpreting the data is paramount. No one really expects the cheap quantitative survey firm to tell a client how to drive the brand strategy. We shouldn’t expect social insight to play out any differently. So ask yourself who owns the strategic relationship with the client? Because in time, they’ll be the ones making the best margins off social data.
Get serious
Its time to get serious and take a mature, strategic approach to integrating social media into the business. Client’s ignorance isn’t a license to print money by rolling out a load of social media theory picked up on Twitter. Its about process, business strategy, objectives, scale and competency. Boring I know, but exactly what clients want to buy.
The future for the social media specialist agency? Possibly a rosy one. But only if they get bought by a big holding company with the scale and depth of expertise to turn pipe dreams into reality. For the little specialists, sowing the seeds of doubt and ignorance makes a lot of sense… it will scare the big boys into buying you up.
Welcome to Tribal DDB Radar UK
February 25, 2010 by allan · Leave a Comment
Welcome to the blog from Tribal DDB Radar UK, the new social media offering from Tribal DDB London.
Tribal DDB Radar isn’t DDB UK ‘s first venture into the social media space, but it is a completely new approach from us. Instead of a stand-alone social media business we are integrating what we do throughout the DDB UK agency network, allowing us to bring our not inconsiderable expertise to clients alongside some of the UK’s best creatives, developers, programmers, designers, planners and account managers.
Our approach to social media is different too – we don’t believe in showing you a whole load of complicated and nonsensical charts with frightening diagrams which explain that without a social media strategy your business will fail in less than 6 months. We know that social media can be confusing, and that each business has different expectations and goals, but we believe that all you really need to make social media a success is an understanding of people. This isn’t a new concept to us, it’s a belief that has been at the core of the entire DDB business since day one. We are taking this belief to the social space, listening to what your customers are saying, applying some creative thinking, a little common sense and a whole lot of hard work. Tribal DDB Radar’s aim is to work with you to help achieve your objectives and make the process of taking part in social media a whole lot easier.
Tribal DDB Radar offers a full service social media service, using the best software packages on the market to offer a range of bespoke listening products, strategy development, content creation, community management and even business integration.
We are working with some great clients and are currently putting together one of the best teams in London encompassing a range of expertise from across the spectrum of marketing and business disciplines. Over the next few weeks we will introduce you to the Tribal DDB Radar team members and giving you more insight into our processes and thinking. We will also be using the blog to share our thoughts on social media, advertising, digital and generally cool stuff we have seen. So stay tuned!
If you want to learn more about what we have to offer, have some great ideas you want to share with us or just want to say hello then drop me a line at allan.blair@ddblondon.com.