27 May, 2010

The Social Media Imperative

At the end of March I attended a seminar titled “Risks Associated with Social Media”, run by Turner Freeman (Lawyers), Aon (Insurance and Risk management Services) and SR7 (Social Media Risk and Reputation Management). I’d like to thank all those involved.

I spoke to a few fellow attendees afterwards and it was pretty obvious that they just didn't get it. They were very concerned about how dangerous social media is – how risky it is. Very very anxious. Not that surprising given what was presented.

What they didn't get was how risky it is to not be involved.
 So I prepared this – hoping that it’d be helpful to them, and perhaps even to you. It's what could be called The Social Media Business Imperative.

Era of Social Innovation

1. Forrester Research

We're entering a new era of Social Innovation, or so say Forrester Research – the research firm focused on the Internet and technology.

The 70's and 80's was led by Technology Innovation, the 90's and early noughties was the Marketing Era, we're now in the era of Social Innovation. Forrester states that innovation will be driven by customers and employees (through Web and Enterprise 2.0 respectively). IT and Marketing will need to join forces and collaborate much more than previously.

They go deeper:
“True Social Innovation goes beyond customer interaction and idea generation, it requires a powerful and coordinated network of players to take customer-generated innovation and to test, scale and implement it”  – the best way to capture and integrate your Web 2.0 insights is with Enterprise 2.0.

Market Share Facebook vs Google (Hitwise)

2. Hitwise

According to Hitwise, in the week ending March 13 2010, Facebook became the most visited site in the US, surpassing Google.
Over the year Facebook’s share went from 2.5% to 7.07% - a 280% increase
Over the same period, Google’s has gone from 6.5% to 7.03% - an 8% increase

Top 10 web brands (Nielsen)

3. Nielsen

The chart this time is from Nielsen, their methodology for measurement is different from that used by Hitwise.
But there are 2 other interesting figures here.

1) Unique visitors – the chart shows Google at 150.1 million. In January the Nielsen figure was 152.7,  so they've dropped 2.6 million. At the same time, Facebook has climbed from 116.3 million to 122.3,  an increase of 6 million.
2) Let's look at the Time Per Person column. People spent 1hr 16m per month with Google per month, but the Facebook audience spent 6hrs 43m per month on Facebook – 5 times more.

It will be interesting to see how the recent Facebook privacy furore impacts on the May (and subsequent) figures – how many will quit Facebook, and will new customer acquisition be influenced. The monthly Nielsen figures are normally published around the middle of the next month, I'll put them up here.

Consumer engagement via Social Media

4. Chadwick Martin Bailey and iModerate Research Technologies

In a research study of over 1,500 consumers, followers of a brand were found to be more likely to recommend and more likely to buy from brands once they'd become fans/followers.
For Facebook – 51% more likely to buy from, and 60% more likely to recommend.

The researchers said “Companies not actively engaging are missing a huge opportunity and are saying something to consumers – intentionally or unintentionally – about how willing they are to engage on consumers’ terms.” The study also uncovered perceptions among consumers that those brands not engaging in social media are out of touch.

What does this mean?
1. Social Media is the next era (and the basis) for innovation
2. Social Media usage will continue to grow
3. What are you saying to your customers by not using social media – that you're unwilling to engage in their terms? That you're out of touch?

Whether you're using Social Media or not – you're being talked about. That's what people do. Whether it’s new products and services, a new CEO, a change in Earnings per Share, or that old chestnut, poor customer service – you'll be mentioned, discussed, stated, argued and sometimes laughed at. Sure, there are dragons in Social Media Land – but there's also flowers, babbling brooks and customers. Lots of them.

Much has been written about how to start using Social Media. I won't go into it here, but the Forbes article "Build your customer experience roadmap" is a good primer as it introdices LIRM, Customer Experience and "Voice of the Customer".

And of remember – it's about call and response, and diversity, not command and control.

Addendum - the future of the Internet shattered?
The Hitwise and Nielsen data give pause for thought. If Google's unique audience is dropping and Facebook's increasing, where will we be in a year? Two years? Will we be spending as much on Search Engine Marketing and Optimisation then? It seems heretical and implausible, but why buy key words when your customers and prospects get their purchase referrals from their networks, not some algorithm? And anyway, which is more fun and engaging – an hour with Facebook or an hour with Google?

And there's another thought – as Josh Bernoff says, our use of the internet is becoming device driven, each device using Apps with their own networks and formats. Sure, our Apps use the internet, but where is Search? Where are those ad words in your Apps?
Josh calls this Splinternet – after 15 years of a standardised web, it's being shattered. Shattered by platforms like Facebook and devices with their Apps.

What do you think?
1. Forrester Research Social Innovation
2. Hitwise Marketshare
3. Nielsen Top US Websites
4. Chadwick Martin Bailey and iModerate Research Technologies Consumer Pulse



Gavin Heaton said...

Nice one, Marc!

Of course, many of the risks raised around social media are the same arguments put forward around the use of email about 20 years ago. We are fundamentally risk averse. Everything old is new again ;)

marc said...

That's right - fear of email! My experience of those early days of email is that it was mostly used for internal communications. "Oh no - we don't want them talking to people in other departments!"

When Lou Gerstner took over IBM in the 1990's, he said that he'd never seen a company filled with so many smart people. If only he could get them to talk to each other.

Now-a-days, if only we can get them to talk to their customers and the community.

Kaye said...

Interesting ! A sign of really shifting paradigms in how we understand the public sphere of mass communications. I agree by not being part of it, you are sending a message to customers and consumers, however, by being part of it, it is important to also be discerning and creative in thinking about how social networking could be used- ie be a leader not just a follower?

Anonymous said...

Interesting stuff, Marc. It has a place, so do old-school communication methods like getting on a plane to see your customers and picking up the phone to talk with them. Basically, different clients need different approaches and you need to be across them all.

Like it.