Saturday, April 25, 2009

MySpace Moves, Facebook Surprises

Turn and Face the Strain

"Baby, I was never cool enough to get a job at a record store; but if I had, I
wouldn't want you anymore." - The Refreshments

We knew MySpace needed a new CEO. Small surprise, they picked the guy from Facebook who brought in all that dough from Microsoft. http://www.nytimes.com/2009/04/25/technology/companies/25myspace.html?_r=1&ref=technology.

Does this mean MySpace now starts to try to look and feel more like Facebook? And if so, which version of Facebook? The one that created all the buzz, flying to 200 members and gaining working professionals who are almost as likely to purchase a music store as they are digital music? Or the one that wants to be Twitter and that has initiated a large degree of denial and resistance among the faithful?

Swiftly, now, those "social media strategists" whose big idea is, "make a Facebook page for your business" can now turn their brains back on. This industry is nascent. Product quality across the board is poor. We are not anywhere close to having any sort of standardization. The lead dog will change. Cultures and demographics will continue to change. A stupendous amount of money has been invested by extremely large players in companies that can't, despite massive popularity and ubiquitous media exposure, settle on a revenue model that brings them to break even against their soaring infrastructure costs. Mildly problematic (he asked facetiously)?

Everything about the social media industry will change and change again. If you're telling your clients you have, "the answer," you'd best follow up immediately with, "for the moment." Letting your clients in on the fact that things are changing isn't good enough. To formulate strategies that position them--and you--to ride atop the crest of the change curve, you must be ready for the changes that haven't happened yet.


Look Out, You Rock and Rollers

One more chance, I'll try this time
I'll give you yours, I won't take mine
I'll listen up, pretend to care
Go on ahead, I'll meet you there - Blink 182

Why did Facebook accept the terms of service its users wrote despite the fact that turnout for the vote was so low? http://www.sfgate.com/cgi-bin/blogs/techchron/detail?blogid=19&entry_id=38986 Lots of reasons. Here are some:
  1. Good business move. Worst thing you can do is alienate your customers.
  2. Though turnout was low, margin was disparate. 74 percent of the vote? Obama didn't even get that.
  3. A gift for the Facebook PR department, and an act consistent with Facebook's culture.
  4. The only justification they had for going with the rules they drew up would be that their self-defined threshhold of 30 percent
    http://www.readwriteweb.com/archives/facebooks_site_governance_vote_a_massive_con.php wasn't reached. Imagine the uproar.

Okay, let's talk about these numbers. "In most online communities," writes usability guru Jakob Nielsen, "90 percent of users never contribute, nine percent...contribute a little and one percent of users account for almost all of the action. (http://www.useit.com/alertbox/participation_inequality.html)"

Quick math that explains a few things:

  • If Facebook charged $1 per YEAR for a subscription, and it has 200 million users, that equates to a gross revenue bump of $200 million per year, right? Wrong. It's at best ten percent of 200 million, as a few users will quit due to (completely misplaced) outrage (that demonstrates our lack of ability to separate "entitlement" and "utility" from "business" and "luxury item." But I digress...) and the vast majority of the passive 90 percent would choose to forego the experience entirely if they had to maintain a subscription at any cost. What makes Facebook attractive to investors? 400 million eyeballs.
  • It's safe to assume Facebook picked 30 percent--60 million--because they knew they were safe. Now they've done us all a favor. They've given the people what they want. They'll play their hits, not just the album cuts they're trying to promote. And maybe we'll cut them some slack about the new look and feel...
  • The turnout was three tenths of one percent. Not even Nielsen's activist one percent turned out. This is a troubling item for Facebook's leadership.

They're Quite Aware of What They're Going Through

So, Facebook regains some legitimacy, acts like a partner instead of a distant corporation and prepares to do battle with one of its own. This is a fun ride, y'all. Keep kickin'.

Saturday, April 18, 2009

Involuntary Engagement

The Domino's Effect

Any of my coaching clients, marketing prospects or speaking audiences have heard me say this: "If you have a business with customers, you're engaged in social media whether you want to be or not." Of course, if you have a business without customers, you have no business.


For any skeptics or those who find the statement to be ambiguous, please take a moment to review this week's activity on YouTube and Twitter regarding Domino's Pizza. This USA Today article gives a mercifully brief summary of the affair and some fine strategy points: http://www.usatoday.com/money/industries/food/2009-04-15-kitchen-pr-dominos-pizza_N.htm.




You are not immune.
This week, I had a LinkedIn exchange with a former colleague who now works in the PR department for a major US airport. Within current leadership, there exists some debate on the wisdom of maintaining a social media presence. Within 30 seconds of being alerted this debate existed, I learned that two people at that airport were tired of waiting to board a plane, another thought it was too hot in the shuttle bus and there was a ticket counter line in which at least one customer was behaving in a "volatile" fashion.

The next day, we had a spring snowstorm here in Denver. The online rumor mill was alive and well with road closings, snowfall estimates and, yes, postings about planes. Even if the rumors were true, they weren't newsworthy--at this writing, Denver International Airport has announced no flight cancellations associated with the storm--but that doesn't mean people don't attach validity to them, or that all "twits" with large numbers of "followers" care about truth before "retweeting."

All of us are now a click away from providing CNN, FoxNews and virtually every other media outlet with filler fodder. Think you can depend on the media to check facts before reporting a story? Think again. If it ever actually worked like that, it doesn't now. Social media as an entity has never even attempted to act like it wants to bear that burden. We can safely assume it won't in the future. (Want proof? Do a search for "Groups" on Facebook and take a look at some of the garbage passing for "common interests." "Soldiers are not Heroes?" Please.)

Want another example? Thursday night, I met a gentleman who works for Wells Fargo. He wasn't sure if his company was exposed in this regard. Know what I just found at the top of a Twitter stream? This: "Looks like my assumption that #wellsfargo will screw my fiancee out of her severance is probably going to be correct. Any pro bono lawyers?" Let's assume this is an empty threat and that the claim is unfounded. Does that mean that Wells Fargo has no risk, or that it has something to gain by not engaging in this now-public conversation?



The Medium is the Message
Nothing is less accountable or more dangerous than a mob. One of the downsides of social media is its capacity to degenerate into a mob mentality. The message--any message--is bound to find people with a proclivity to pour gasoline on a fire. If it's your fire, you'll want to know immediately.

Perception is reality. Don't let the mob decide how your business is perceived. Form and execute your social media strategy before someone sticks your cheese in his nose and swiftly kicks you where it hurts.

Saturday, April 11, 2009

More Debunking...

A story about my kid
My kids are aspiring actors. This week, the talent agency called and my daughter auditioned for a radio commercial. The agency emailed me the script, we phoned the contact and my little Goofball delivered her lines beautifully. Later that afternoon, three representatives from the Denver-based advertising agency to which our talent agency had referred us would hear I-don't-know-how-many additional auditions. From this pool they will select their favorites for a second round of auditions next week, and bring in the talent fortunate enough to be cast in the part next Friday to actually lay down the audio. For Goofball, this consists of three sentences as part of a single 60-second spot. Then the agency assembles all the elements and goes into post-production...

Certainly, the end client, a Baltimore-based hospital, has assured itself of a quality product that stands a very good chance of gaining approval on first pass and of being well received by the consumer. They've put their faith in reputable consultants and a proven process. Big investment, high accountability, big return.

Conversely, my 20 years as a promotions producer are full of, "You got pipes, you can read, you do the voice over." Need a female voice? Grab the news anchor on her way to the edit bay or see if the lady from PR can do you a solid. This saves time, money, and...er, time and money. Lots. It also provides flexibility, which is especially important in dynamic corporate environments where pricing and messaging points change because the right person changed her mind or because
you have an opportunity to get out in front of a competitor. Re-voice? No problem. Breakeven is exponentially easier to reach. So long as you have the horses in your stable, you can keep running them.

Why is he talking about his kid?
Here's a good article: Five Phases of Social Media Marketing by Janet Lee Johnson: http://socialcomputingjournal.com/viewcolumn.cfm?colid=789. This is an excellent read for anyone trying to make sense of social networks as a marketing vehicle. Johnson's walk through the approach demystifies the medium by applying steps and tactics fundamental not just to marketing planning but to any targeted effort. Whether you're thinking about launching a new product line, acquiring a competitor, hosting an event or finishing your basement, Johnson's phases: Discovery, Strategy, Skills [identification], Execution and Maintenance are solid pillars for any implementation.

Johnson stresses, "that social media marketing is not free." She cites and endorses the $50K figure cited in the BusinessWeek article previously argued in this blog space (http://mikehanbery.blogspot.com/2009/03/swift-kickin-rebuttal-debunking-six.html). Johnson amplifies and clarifies the argument that effective use of the free tools out there (e.g. Facebook, Twitter, blogs, Search Engine Optimization of website) requires expertise, which doesn't come free.

This is true. The time and effort you invest are quantifiable. Training costs money. Bringing in a consultant to execute the plan through phases adds time and money to the process in exchange for better returns on the end product. Why do you hire a bookkeeper? Because you're not an accountant. Why don't you fix your own computer? Because you'd only make it worse (and void the warranty). Why don't you construct your own marketing plan? Because it will be worth what you paid for it, fraught with missed opportunities.

Here's another perspective, courtesy of an April 7, 2009, Financial Times article, "Social Media Puts Fizz into Coke (http://www.ft.com/cms/s/0/3b8b4cf2-230b-11de-9c99-00144feabdc0.html?nclick_check=1)":

Liz Miller, Vice President...at the CMO Council...warns that in such a nascent
market there remains a risk of being sold snake oil. "Please don't ever hire
a Twitter consultant," [says Miller].

Get to the point, Mike.
Do you need to be an expert in social media to use it to your advantage? No. Should you get some help?

In the marketplace of ideas, barriers to entry are thankfully low. Experts are not always swimming in the same pond. Some social media marketing experts are working to establish a price point--$50,000--for social media marketing consulting. Now, I'll be more than happy to work for that figure but I don't think my audience has it to invest. For most of the people I see at networking events, who have sat at my kitchen table on Saturday sipping coffee, who delicately walk the line between deliberate pursuit of business growth and alienating friends with the "hard sell," and who invite me to speak to their groups about the social media phenomenon, $50K is a huge chunk of their annual revenue figure, and may well be equivalent to the annual salary an entrepreneur affords herself.

The $50K price point creates a false barrier to entry for small and emerging businesses in an area that provides outstanding opportunities for collaboration, brand recognition, market development and leads generation.

Social media strategies are not an area where absolutes are safely applicable. If you have the resources to take weeks to employ multiple levels of agencies for a single radio spot, you may well benefit from $50K worth of consultants to research, launch and maintain your social media program. If you don't, there are people out here swiftly kicking to help you for less.

In sum...
Even if you don't have $50K, you can--and should--play in the social media sandbox. As with all other aspects of your business, scale your expectations. If you talk to a Twitter consultant who tells you to expect the same results from a self-managed strategy as you would from a $50K investment, swiftly kick that snake oil salesman to the proverbial curb. Just as there are those of us who write, source, voice and turn out TV and radio spots in hours or days rather than weeks, there are social media strategits willing, able and modeled to work on a smaller scale.

But if you have $50K and decide I'm your man, I'm sure Goofball can help me spend it.

About the Blogger
Mike Hanbery (http://www.linkedin.com/in/mikehanbery) is an Executive MBA with
20 years of experience in marketing and media at the national and local level
for startups to Fortune 500. His company, Hanbery & Hanbery, Inc.
(http://www.hanbery.com) works with small nonprofit and for profit businesses in
accounting, business development and marketing. Mike speaks on, trains, designs
and implements social media strategies and is co-author of the soon to be
released book: Connect and Contribute: Creating a Social Business.

Sunday, April 5, 2009

Twitter: Show Me the Money

Time is money...?
Saying it has "lots of time for experimentation (http://www.foxnews.com/story/0,2933,511000,00.html," Twitter will explore and probably offer commercial accounts this year, using a subscription model as a revenue generator
(http://www.eweek.com/c/a/Messaging-and-Collaboration/Twitter-Offering-Commercial-Accounts-For-a-Price-723430/).

Twitter as SaaS
Another or perhaps ancillary potential revenue source for Twitter is its inclusion on the dashboard of CRM giant SalesForce
(http://www.eweek.com/c/a/Enterprise-Applications/Salesforcecom-Puts-Twitter-in-Its-Service-Cloud-351280/).

Giving the Big Dogs a Bone
Microsoft is Facebook's biggest backer and may be the source that fosters cooperation, or at least "coopetition," between the two surging social networks as it recently announced its sponsorship of ExecTweets, which is designed to deliver the microblogs of big dog American execs to the great unwashed (us)
(http://www.eweek.com/c/a/Search-Engines/Microsoft-Now-Sponsoring-Twitter-Enterprise-Site-725461/). While sponsorship is not a revenue stream, this strikes me as a kickin' marketing tactic: Well-timed and presenting directly the value of the service to a vain set of decision-makers who in recent years have probably authorized thousands of dollars on high-priced, low-paid, twenty-something consultants to poke around their companies and deliver reports stating
that everything will turn around if they just communicate better.

What is leads generation worth to you?
Applications like TweetDeck and Twhirl are being used for leads generation but Twitter hasn't figured out exactly how to procure a "finder's fee" for the business deals it helps facilitate. Twitter remains overtly committed to avoid an advertising model. This sets an interesting converse relationship with Facebook, which continues to vow it will not charge for subscriptions but is experimenting with advertising, and shows a bold willingness--determination?--to
participate in what would surely be a large share of a projected $2.4 billion chunk of cash flow in 2009 (http://www.imediaconnection.com/news/22493.asp).

Turn and face the strain.
Just because these networks started out "free" doesn't mean they're going to remain that way. According to your user agreement, they owe you little or nothing and can change the terms at any time. The more social media fits into your marketing and sales strategy, the more important it is to follow these developments and plan for changes.

Twitter and especially ExecTweets will be interesting to follow to see not only how well it takes hold at the corporate CEO level and what happens from there but to watch what happens within the social media industry thereafter. These folks didn't get to where they are by not thinking ahead.

The fact that Microsoft is Facebook's sugar daddy and chief investor in ExecTweets indicates rubber is getting closer to meeting road in the developing...er, relationship...between the two networks. Astute social media users and strategists will be ready for any and all possible changes. That is, to swiftly kick with the current.

About the Blogger
Mike Hanbery (http://www.linkedin.com/in/mikehanbery) is an Executive MBA with 20 years of experience in marketing and media at the national and local level
for startups to Fortune 500. His company, Hanbery & Hanbery, Inc. (http://www.hanbery.com) works with small nonprofit and for profit businesses in
accounting, business development and marketing. Mike speaks on, trains, designs and implements social media strategies and is co-author of the soon to be
released book: Connect and Contribute: Creating a Social Business.