Social Media Bubble: Roundup in the Cloud

Social Media Hype Cycle: Cloudy chance of showers

 There’s been a fair bit of discussion in the past couple of weeks about the topic “Social Media Bubble”. Like most bubbles, it rages as a fad, peaks, then crashes. In the Gartner vernacular, social media goes through a hype cycle – early adoption followed by high expectations of value delivery, then a crash into a trough of disillusionment. The idea or technology either dies or survives and moves on to being a real, viable business. Based on recent questioning, social media, as a tool for business, is losing some altitude. Here’s a roundup of some recent opinion from Umair Haque – Harvard Business Review, Rachel Happe – The Community Roundtable, Peter Autidore – The Social Customer and yours truly (previous 2 posts).      

This dialogue started with Haque’s piece in HBR. His main hypothesis is that social media produces a lot of thin relationships. He draws a metafor to ‘low quality’ as in those in the sub-prime mortgage meltdown. This context implies that bankers didn’t take the time to get to know their borrowers. They relied on short cycle time approvals using only quantitative data. Ironic, given that real relationships are about getting to know people, not just seeing them on a data sheet or as a ‘follower/fan’ on a social media network. Haque goes on to outline the keys to real relationships – mainly trust, disintermediation, community and value. It’s not a beauty contest or about shouting out to be heard about the rest of the crowd. It’s about real relationships that have the equity required to build brands and extend a company’s customer franchise.     

Rachel Happe offers a perspective that builds on Haque’s by focusing on the value element of relationships. Rachel digs a bit deeper into the weeds by hightlighting the role that online communities play in the formation of relationships – people come together because of a mutual interest and build from there. There is an important point here in that online communities are something much different from Social Networks such as Facebook and Twitter: “Social media is not going to be sufficient to build that kind of relationship.” Face time – that qualitative dimension, it key to building deep relationships, something that technology alone cannot accomplish and at most, falls short. This was a hard-learned lesson in pionner days of CRM of the early 2000’s.

Peter Auditore takes an opposing stance. He thinks Haque’s view is “myopic” though we’re not sure why. Auditore is also adamant that the sub prime metaphor is “bizarre”. Seems to me that in the old days, before loan approval processes were automated, your local bank manger got to know you and was an integral member of the lcoal community. People met face-to-face. Familiary and trust were built as a result. In the subprime case, bankers and borrowers alike had very thin relationships indeed that resulted in unbridled risk in the marketplace. Auditor also mixes Word-of-Mouth marketing with social media. To quote Andy Sernovitz, the founder of WOMMA, “WOM marketing is not about social media at all. Social media is just one WOM tool.” Andy goes on to say that WOM only works for good companies that make good products. This last point is core to Haque hypothesis and one that I fully support (see “My New Levis Jeans: Outside the Social Bubble”). Competitive advantage is gained by a specific core competency, not just by the use of social media tools – Kodak and Procter & Gamble had strong franchises pre-Internet.  

I think there needs to be a better balance overall between leading with technology and considering the importance of the brand’s overall value proposition. Many brands that are market leaders established solid consumer franchises well before the Internet and may or may not benefit to varying degrees from social media. Many enterprises are experimenting with various social media technologies and tools to channel content, engage consumers and build their brands at the tactical level. They also admit that while there’s a lot of beta testing going they’re not ready to declare mainstream adoption of social media tools. One proof point: most adspend goes to television; consumers are watching more TV than ever whether on a TV screen via computer (see Nielsen for the data). Large enterprises especially are approaching social media with a curiosity and critical eye. 

Let’s remember that Haque makes it clear that his view is a hypothesis and not the final word on social media. There’s plenty of room for constructive dialogue (one way of sharing and buidling mutual trust amongst people). What’s most important is to take a critical eye, be dispassionate about the issues and ask key business questions.    

Until such time as the business merits of social media are proven, we’re all still somewhere in the cloudy part of the Hype Cycle.   

(cross-posted at CloudAve)

-Ted Morris, 4ScreensCRM   

Marketing Research and the Rise of the Social Machines

I recently had the pleasure of providing a guest post for the AMA – American Marketing Association’s Marketing Research Conference held last week. These are times of transformation for an industry reputed to see the world through a rear-view mirror rather than drive marketing innovation. With this in mind, here are some further musings:
Mobile and the Generation ‘Effect’: Verizon just announced it is exiting the land line business by 2012. This gives credence to what some telecom industry analysts have been suggesting – the general public will have completely disconnected from land lines by 2020. Most consumers aged 16-29 currently do not have a landline subscription and are one of the most difficult target markets to contact for survey research. If you think your teenage son or daughter are hard to reach because of their preoccupation with mobile devices and the Internet, just imagine how mobile the world will be in 5, 10, 20 years. It’s quite possible that some market segments will only being reachable via a social site or mobile device; with portability or ‘go anywhere computing’ a term once coined by IBM, it will be difficult to ascertain whether or not the target respondent is actually based in a specific geographic location or physical market.

Brand Community Building: While some say “the consumer now controls the brand”, brands have commissioned companies such as Communispace to establish brand communities – online aggregations of consumers who have a specific loyalty, interest and adherence to a brand. Communispace has built over 300 online brand communities for clients such as HP, Kraft, Reebok, Starwood, and GSK. Brands use communities for direct feedback on product experience, innovation, service ideas, and value augmentation, allocating dollars that would normally go to marketing research budgets.

The complexity of business challenges will be augmented by the emergence of Owned Platforms. Owned Platforms, essentially a form of private label media, is moving the locus of brand management and control back to the brand. Procter & Gamble provides a great example of this with the multi-platform launch of Rouge Magazine www.rougemagazine.com. According to a recent report by WARC, P&G is also launching Supersavvyme,  a digital place for “savvy” mothers to gather. This Owned Platform will feature articles, blogs, discussion forum and special offers. In fact, P&G has put the ‘freemium’ concept on its ear by offering choc-a-block assortments of coupons and offers, a notable feature of the free Rouge quarterly.

Social Media Monitoring (SMM) Platforms: Five years ago the marketing research industry scoffed at such listening platforms. The biggest objection I heard was that social media monitoring “wasn’t market research.”  This would have been like saying that digital advertising wasn’t true advertising since it did not use traditional creative, media and pricing models. SMM Platforms will continue to grow in terms of capabilities, scope, cost and business applications. Back in 2003 there were less that a dozen viable SMMs in business; today there are over 50, at that is just in the US alone — and clients are buying their services with monies previously allocated to traditional survey-based research.

Many of the world’s largest and most well known brands are going digital in a large way – Coca-Cola, Ford, Dell and Lufthansa, are already there and leading the way; many others are migrating in that direction. In response, agency networks are reshuffling the deck. WPP, Omnicom, Publicis for example have acquired significant digital capabilities.  All are using social media applications to ‘sense and respond’ to customer requirements at times bypassing traditional marketing research as the need for “real time/on demand” consumer feedback grows.

These challenges also touch many related professional services including business intelligence and management consulting. Taking an ‘Outside-In view’, that of our the client, similar challenges exist at the functional and execution levels. The silver lining for marketing research in all this is the opportunity to take an active role in providing a foreword view for the brand. This means being a catalyst in the convergence of digital technology and marketing and placing innovation and invention at the forefront – Ted Morris ©4ScreenMedia