Meta-ROI and social media engagement for brands


I want to believe.

Granted, I’m finding it less of a credulity-stretching exercise than taking UFO-ologists seriously,

Charlene Li’s post for the Altimeter Group about their study of how engaged major brands were with social media – called ENGAGEMENTdb – says that there is a link between how deeply an organisation engages with its customers in social media and its performance:

…we also looked at the financial performance of the brands, grouping the companies with the greatest depth and breadth into a group called “Social Media Mavens”. These Mavens on average grew 18% in revenues over the last 12 months, compared to the least engaged companies who on average saw a decline of 6% in revenue during the same period. The same holds true for two other financial metrics, gross margin and net profit.

Note that we are not claiming a causal relationship — but there is clearly a correlation and connection. For example, a company mindset that allows a company to be broadly engage with customers on the whole probably performs better because the the company is more focused on companies than the competition.

I *believe* that this is right. It will be a tough one to defend in the court of cyncicism though, or even against healthy scepticism.

Kathryn Corrick (@kcorrick) Twittered last night that “It’s one of those things that looks mightily convenient. To really know you’d have to see the data and understand other activity.”

Absolutely, an I hope Altimeter and the rest of the network apply some rigour to testing this fascinating hypothesis. Once I’m back to work I will be taking a closer look myself…

One reason it rings true for me is that it gives a path to explaining the value of social media engagement to organisations hat doesn’t get trapped in the cul-de-sac of direct ROI, that is “dollar in, dollar fifty out” marketing as they say.

It makes sense that the value delivered by social media engagement would be delivered at an organisational level, that it would be meta-value rather than transactional value, trackable only to point where individual interacts with brand. It’s meta-ROI, then?

Social media is not about just marketing, it touches the whole organisatioin. Engagement as we are beginning to understand it. Because the principles and processes that are required to engage in social media leads organisations to a philosophical, ethical, strategic position where they need to start being useful in their networks.

…that means creating thick value, as Umair Haque calls it, as opposed to thin value, which is about squeezing the last drops of value of out of markets, systems at any cost.

…as brands develop social web literacy, the pull toward creating thick value becomes ever more compelling. It’s hard to resist, once you begin to understand the power and potential of networks.

…that’s why Andy Lark, VP of global marketing at Dell, starts off talking about social media being the most important thing that Dell (which scores very high in the Altimeter report)

…that’s why Dachis Group, founded by marketers is a “social business design(TM)” company, not a marketing company.

… that’s why if you design an engagement approach (as we do with the social spaces framework at iCrossing) you cannot limit what you do to the group of people known as the marketing department.

: : Bonus link: On the purchase funnel and engagement side of things -which we shouldn’t gloss over at all – @kcorrick recommended listening to this McKinsey podcast “The consumer decision journey”s…


Thick value and re-engineering the marketing value-chain for networks


Thick value is a concept Umair has ben talking about for a while. The idea is that businesses look to create value rather than extract as much as they can get.

Thick value’s a useful neologism that you can use instead of saying things like “that business model is flogging a dead horse”. Or shorthand for “that company doesn’t really care about its customers does it? I think they just want to squeeze as much money out of people as possible. Herd them into the value-extraction (be it cash or attention) corral…


Recently he has started talking about marketing examples – like Mischief‘s brilliant Heathrow / Alain De Boton concept – of creating thick value. A much nicer PR approach than the thin value created by some PR stock-in-trade tactics like pseudo-surveys and pollution of knowledge / information media and network (see Flat Earth News and for more on that)…

There’s a phrase which a lot of people in agency-land use at the moment: “Earned Media“.
It’s a loaded-phrase very much double-edged and justifies a mixed metaphor (which may go off in your hand).

On the one hand, for marketers whose stock in trade has been blockbuster or wannabe-blockbuster creative, distributed via paid media, earned media helps them understand and explain what they are doing when they create content that they want to spread through social networks, through word of mouth. I use the phrase sometimes, because it displaces an old approach with a new approach.

So it describes the future, right? It shows old-school marketing getting its head around the shock of the new, doesn’t it?

Well not entirely. It means that the rest of the value-chain, or value-degrading-chain, the business model, the approach has not changed. Most importantly, the principles have not changed. They have the same ad-creation process that was there before, they are just swapping out the distribution element.

Paid Earned media will do the job of inflicting the message on the masses.

Wrong. Every aspect of marketing needs to be re-engineered, re-designed, to be successful in networks.

It starts with principles. Understand your networks, Be useful in your networks, Be live in your networks. It starts with a desire to create thick value.
If you start, rather than just finish, with the idea of creating thick value in marketing it changes everything about a campaign or the job of looking after a brand. You research to find out what people need, how you can benefit them directly, or create value in networks by making those networks work better, rather than just looking for opportunities to drop message bombs on their world.

You think about measurement as something that will help you refine the creative and conversational elements of what you are doing, rather than an after-the-fact justification for the activity itself. You think of ideas and creative as something that happens in response to what is happening in the networks around you, rather than a single hero-concept that is going to be thrown at consumers until they notice.

Guerilla marketing and earned media might be thought of as troubling phrases then because they extend bad analogies for relating to people that are important to a company. Guerilla marketing is the same bad war on attrition on attention by other means (we’ll plant improvised explosive messages by the roadside, we’ll booby trap bits of media and objects in the real world so that the message will blow up in their faces when they touch it).

Anyway, I need to go and do some more book-writing… As I said before – normal service on this blog will be restored in September. Just need to get this out of my system.
Meantime here’s Mr Haque talking about thick value…


Twenty Commandments

freedom

Curtis points to some TED commandments, that sounds like not only good rules for conferences, but a lot more in life besides… The guy who posted them recounts:

After you’re asked to be a speaker at the TED conference, a number of things happen to you, some of them by mail. The most dramatic so far would have to be a freaking slab of rock with the TED speakers’ guidelines printed on it.

They are:

  1. Thou Shalt Dream a Great Dream, or Show Forth a Wondrous New Thing, Or Share Something Thou Hast Never Shared Before
  2. Thou Shalt Not Simply Trot Out thy Usual Shtick
  3. Thou Shalt Reveal thy Curiosity and Thy Passion
  4. Thou Shalt Tell a Story
  5. Thou Shalt Freely Comment on the Utterances of Other Speakers for the Skae of Blessed Connection and Exquisite Controversy
  6. Thou Shalt Not Flaunt thine Ego. Be Thou Vulnerable. Speak of thy Failure as well as thy Success.
  7. Thou Shalt Not Sell from the Stage: Neither thy Company, thy Goods, thy Writings, nor thy Desparate need for Funding; Lest Thou be Cast Aside into Outer Darkness.
  8. Thou Shalt Remember all the while: Laughter is Good.
  9. Thou Shalt Not Read thy Speech.
  10. Thou Shalt Not Steal the Time of Them that Follow The

Euan loves Umair’s Twitter commandments, which, as Mr Semple says “I reckon are spot on for how to be successful in whatever you do in the future”.

As expected, set my brain sizzling. Like Euan, I will leave them as headings and encourage you to read the whole of Umair’s post.

  1. Ideals beat strategies.
  2. Open beats closed.
  3. Connection beats transaction.
  4. Simplicity beats complexity.
  5. Neighborhoods beat networks.
  6. Circuits beat channels.
  7. Laziness beats business.
  8. Public beats private.
  9. Messy beats clean.
  10. Good beats evil.

Twenty Commandments

freedom

Curtis points to some TED commandments, that sounds like not only good rules for conferences, but a lot more in life besides… The guy who posted them recounts:

After you’re asked to be a speaker at the TED conference, a number of things happen to you, some of them by mail. The most dramatic so far would have to be a freaking slab of rock with the TED speakers’ guidelines printed on it.

They are:

  1. Thou Shalt Dream a Great Dream, or Show Forth a Wondrous New Thing, Or Share Something Thou Hast Never Shared Before
  2. Thou Shalt Not Simply Trot Out thy Usual Shtick
  3. Thou Shalt Reveal thy Curiosity and Thy Passion
  4. Thou Shalt Tell a Story
  5. Thou Shalt Freely Comment on the Utterances of Other Speakers for the Skae of Blessed Connection and Exquisite Controversy
  6. Thou Shalt Not Flaunt thine Ego. Be Thou Vulnerable. Speak of thy Failure as well as thy Success.
  7. Thou Shalt Not Sell from the Stage: Neither thy Company, thy Goods, thy Writings, nor thy Desparate need for Funding; Lest Thou be Cast Aside into Outer Darkness.
  8. Thou Shalt Remember all the while: Laughter is Good.
  9. Thou Shalt Not Read thy Speech.
  10. Thou Shalt Not Steal the Time of Them that Follow The

Euan loves Umair’s Twitter commandments, which, as Mr Semple says “I reckon are spot on for how to be successful in whatever you do in the future”.

As expected, set my brain sizzling. Like Euan, I will leave them as headings and encourage you to read the whole of Umair’s post.

  1. Ideals beat strategies.
  2. Open beats closed.
  3. Connection beats transaction.
  4. Simplicity beats complexity.
  5. Neighborhoods beat networks.
  6. Circuits beat channels.
  7. Laziness beats business.
  8. Public beats private.
  9. Messy beats clean.
  10. Good beats evil.

Twenty Commandments

freedom

Curtis points to some TED commandments, that sounds like not only good rules for conferences, but a lot more in life besides… The guy who posted them recounts:

After you’re asked to be a speaker at the TED conference, a number of things happen to you, some of them by mail. The most dramatic so far would have to be a freaking slab of rock with the TED speakers’ guidelines printed on it.

They are:

  1. Thou Shalt Dream a Great Dream, or Show Forth a Wondrous New Thing, Or Share Something Thou Hast Never Shared Before
  2. Thou Shalt Not Simply Trot Out thy Usual Shtick
  3. Thou Shalt Reveal thy Curiosity and Thy Passion
  4. Thou Shalt Tell a Story
  5. Thou Shalt Freely Comment on the Utterances of Other Speakers for the Skae of Blessed Connection and Exquisite Controversy
  6. Thou Shalt Not Flaunt thine Ego. Be Thou Vulnerable. Speak of thy Failure as well as thy Success.
  7. Thou Shalt Not Sell from the Stage: Neither thy Company, thy Goods, thy Writings, nor thy Desparate need for Funding; Lest Thou be Cast Aside into Outer Darkness.
  8. Thou Shalt Remember all the while: Laughter is Good.
  9. Thou Shalt Not Read thy Speech.
  10. Thou Shalt Not Steal the Time of Them that Follow The

Euan loves Umair’s Twitter commandments, which, as Mr Semple says “I reckon are spot on for how to be successful in whatever you do in the future”.

As expected, set my brain sizzling. Like Euan, I will leave them as headings and encourage you to read the whole of Umair’s post.

  1. Ideals beat strategies.
  2. Open beats closed.
  3. Connection beats transaction.
  4. Simplicity beats complexity.
  5. Neighborhoods beat networks.
  6. Circuits beat channels.
  7. Laziness beats business.
  8. Public beats private.
  9. Messy beats clean.
  10. Good beats evil.

Communities of purpose

big-bird-is-watching-you

I like David Cushman’s take on the way that the web disrupts everything it touches.

My main focus has been in thinking about the shift from channels to networks in media. Reading David reminds me that it is everything that looks like a chain, especially value chains, that are things that networks will rip apart.

Then, as he should, he makes it personal:

If you can find part – a kernel – a piece that is truly yours and which you truly believe in, congratulations, that is something of great valuable, which others will find value in and join you in building on. (image courtesy cayusa)

That is your contribution to the new creation webs which will emerge as communities of purpose become the business units of the 21st century.

Communities of purpose. Yes – that’s something to remember. And those purposes might last a few hours or a few decades. That purpose might be the marketer’s fantasy of grouping around the purpose of buying a product, celebrating a scrap of content, or a politician’s nightmare of an organised poplace come to dictate terms on a piece of legislation.

“Command and control is dead”: the shape of next gen organisations is social networks

john-chambers

Image: John Chambers, CEO of Cisco: “command and control is dead”.

A lot of the questions I have had floating around my head for the past few years are beginning to be answered by innovative companies. Questions about how you manage companies, organisations, in the age of networks, when you have to move beyond the cloying constrictions of command and control hierarchies.

I was listening to a fantastic episode of Peter Day’s Global Business (can’t find it to link to on the BBC website – subscribe to it on iTunes if you don’t already). He was interviewing John Chambers, the CEO of Cisco, about how the company was developing to keep up witht he pace of the web revolution.

The answer was that over the past two years Mr Chambers has been tearing down command and control as a way of doing things at Cisco. Why? Because “command and control is dead”, as will the companies that cling to it over the next five to ten years, he says.

Hunting around for more on the Cisco approach, I came across this lecture (can’t embed the video, please follow the link) John Chambers gave at MIT in January. It’s very, very good indeed – my ears pricked up especially at about 18 minutes in when he started talking about managing the 65.000 person business via social netowrks.

  • Uses a system of global councils (which build around a social networking group) to tackle any business need or challenge – they sketch out an outline approach within a couple of days and have a business plan in place in a couple of weeks (each council on market opportunities tends to be looking at $10 billion+ markets).
  • This networked, cross-functional approach is prioritised for all. Leaders are incentivised most of all on cross-functional success. [This is brilliant – focusing energy on tearing down divisions, siloes etc.] Behaviours changed very quickly once incentives were altered.
  • “I have 26 [of these Global Council networks] at the moment – I think it may be too few.” Previously Cisco’s operating committee were able to to tackle perhaps two or three of these issues a year.
  • “Speed and scale” – this is the imperative for adopting networks as a way of working. More gets done faster.
    “I blog. I would never have said I would blog two years ago. I video blog all of my messaging.”
  • Currently there Social networking approach means that instead of bringing 10 top leaders to bear on problems in the company he is able to get 50 to 500 leading. [Flatter organisations mean more leaders.]
  • Listen to how he had to adapt as a leader (59 minutes) – this was an effort of will for John personally. He had to sit on his hands and learn how not to be directive, among other things. But very quickly people were “making better decisions than I could have”.

zz3c5e78a5

Comrade Excel and the Glorious Five Year Plan

Image: Tragically, Zepplin trips were outside of Lenin's core value proposition
Image: Tragically, Zepplin trips were outside of Lenin's core value proposition

Spreadsheets aren’t strategy, as Umair Haque is fond of saying.

Turns out they can actually be quite dangerous, for the temptation they bring to reduce a business (a complex, human enterprise) to a set of numbers on a page. Even more dangerous when they trick us into thinking we can predict the future and call the extended line of equations based on assumptions facts. And then, once the “facts” are there, start getting upset when behaviours in your lovely bundle of corporate human potential don’t follow the script.

I loved this post yesterday by Mark Earls about how central planning was utterly discredited at a macroeconomic level (i.e. communism was a disaster) but at a micro-economic level (in our businesses) we persist with command and control approaches.

Mark  muses on an excellent article by Simon Caulkin in Sunday’s Observer called Inside Every Chief Exec There’s a Soviet Planner:

Does your CEO tell the shareholders (and the other stakeholders of the business) stuff like, “we’re not sure what’s going to happen….”? Probably not – certainty in what will happen and the plan to meet it are essential fictions of today’s CEO.

All of which leads to the bloating of the managerial classes in any large organisation

“Central planning imposes a huge co-ordination burden – which is why there is just so much management.”

Curious then, as Caulkin observes, that when coupled with a fervent commitment by the same folk to laisser faire macroeconomics, we get oh….a total mess.

I think I totally failed to post a comment yesterday, so here’s what I was going to say:

It seems such an obvious contradiction now, but we’ve indulged the spreadsheet fantasy of control and predictability in our companies. In fact, to be outside it is to be a heretic.
“What are your projections for Q-whatever, FY-blah?” are questions that seem to demand a suspension of disbelief by all involved.

I recommend standing to attention, staring straight ahead and appending the word “comrade” to the end of any response to such questions from now on. It’s the only sane response…

Large organisations need to plan, but plan in a more agile way. One Truth is a lie. A spread, a loose plotting of your possible courses, and some ideas about how you would react to different scenarios…

There are three things this all boils down to for me:

  1. Organisations aren’t machines.They are far more human and complicated than that. If you treat them like machines they will break.
  2. Don’t be trapped by your plan.  Spreadsheets, business plans – as with all innovations, tech, methods – should serve us, support human potential, not make servants of those gathered round them.
  3. Management is a burden. It needs to be kept light or it destroys value.

Otherwise you end up, Like Hugo Chavez and his cohorts here in this public examining of the accounts trying to work out how you went off-plan…

how-many-beans

And when the answer doesn’t match the spreadsheet…

it-cannot-be

Questions need to be asked. The spreadsheet can’t be wrong, so who is…

there-is-no-excuse

Oops.

Anyway, thanks to Mark for summing it up nicely like that. He and the ever-wonderful Johnnie Moore have put together a podcast yesterday on the same subject which I shall be listening to with great interest later…

Strategy and innovation: Head for the edge

Image: John Hagel & John Seely Brown's book, The Only Sustainable Edge
Image: John Hagel & John Seely Brown's book "The Only Sustainable Edge"

Business thinkers John Seely Brown and John Hagel are always worth listening to. Their perspectives on innovation and concepts like FAST Strategy have not only resonated as theories for me in recent years but have given practical, effective models for the work we’ve been doing at iCrossing, especially in “edge” areas like social media research, strategy, marketing and measurement.

Like Umair Haque, who also thinks and discusses the economics of the edge, their writing seems even more urgently relevant to businesses, activists and governments in the face of multiple economic, geo-political and environmental disruptions.

If you’re confused slightly by what “edge” means in the context of commerce, politics, society etc., there’s a nice illustration given in an article by Hagel & Brown in a BusinessWeek article about Google and the phone business:

Two decades ago, wireless telephone networks created a vibrant new edge to the wire-line telephony business. Many analysts at the time viewed mobile phones as a fringe event, something that would never take hold in the mainstream telephone business, except perhaps as a status symbol among the very wealthy.

Twenty years later mobile telephones are ubiquitous in the U.S. despite continuing challenges in service coverage, particularly in buildings. In many other parts of the world, these devices have replaced the old wire-line phone as the primary means of communication. What was on the edge has now become the core.

If you’re thinking and planning right now for the year or years ahead – and many people I know are – then the piece is reading, especially for the advice the duo give. The headlines are:

  • Don’t get distracted by your existing competitors (where are the start-ups who will compete with you tomorrow)
  • Look beyond product innovation (to really develop new models and markets changing how the world works may be required)
  • Mobilise others in support of your innovation initiatives (heroic entrepreneur myths oversimplify)
  • Don’t be deceived by theoretical concepts like “emergent” and “self-organising” (leadership required!)
  • Target the edges (find where there’s high value for your customers)