Facebook Fan: $136.38? $3.60 or $0.00?

I've had this post in my head for a while. And given the fact that many of my Twitter friends were complaining about Facebook being down yesterday, I figured that this was as good a time as any to write this post about the value of a fan on Facebook.

Judy Shapiro of AdAge did a nice job this summer of summarizing the findings from two independent studies conducted by Syncapse and Vitrue (more on those in a minute). And my friend, Augie Ray who is a senior analyst over at Forrester has written a blog post about this. His assertion is that a fan is worth zero. It's a conversation with Augie about this topic that was the original impetus for this post. And believe it or not I completely agree with him.

Before my fellow marketers decide to take me out back and shoot me, I should probably offer a little additional information. First, I don't really believe that a Facebook fan is worth $0. And neither does Augie. In fact, it's what the fan can do for the brand that actually makes them valuable. Without getting into all sorts of facts, figures and methodologies, let me paint a picture for you.

I'm a huge Starbucks addict. My wife and I both drink one of their iced venti Americano's at least five times a week. Maybe more. Up until recently, both of us were mayors of two different Starbucks on FourSquare (I no longer own mine) so every time we go to the store, we let our social networks know we're there. In fact, if you asked a number of my friends what my drink of choice was, they'd be able to answer without even thinking about it. BUT... I'm already a fan of theirs whether I've "liked" them on Starbucks or not. And yes, there is an outside chance I would buy more stuff from them if they gave me additional offers. But probably not.

Iced venti Americano

So I am a valuable customer. And I buy a lot of coffee from them every year. But I don't by more coffee from them because I "like" them on Facebook. This is the fundamental "chicken and egg" problem I have with Syncapse's methodology that pegs a fan at an average worth of $136.38/fan. I'm not valuable because I spend more money with Starbucks (my Facebook fandom is a by-product of my passion for the brand). However, I think I am worth something to them because of my network i.e. 1,700 people that I'm connected to on Facebook and 14,000 on Twitter and my blog. Especially when you consider that a lot of the people I'm connected to are like me... they too have big networks.

The tricky part is, it's hard to put a price tag on what I or my fellow enthusiasts are worth because it all depends on how good a job the "brand" does to activate us and ultimately get us to amplify their message (or share our own versions of their message). Some sites like Atlantis Resorts (a Powered client) has done a nice job of activating their customers and the results are not only a steady growth of fans but a CEO that is now such a believer in social media that he is blogging about it on USA Today. Others like Expedia (a natural for social media) has a mere 12,853 fans (only 11K+ more than yours truly) and very little engagement on their wall. Right now, Expedia isn't working particularly hard to engage or activate it's enthusiasts. Instead, it's more focused on a broadcast strategy... one that has obviously impacted their fan acquisition.

In the spirit of being prescriptive, here are a few suggestions on what companies SHOULD do to engage and ultimately activate their enthusiasts:

• Post educational content vs. informercials. This means teach people how to scrapbook or how to take better pictures instead of telling them how great your products are.
• Run fun contests. Black Star Beer did a fabulous job of this by giving away a dream vacation that focused on experiences versus cash value. Even I signed up for this and I NEVER sign up for sweepstakes.
• Ask people for suggestions. My wife's company, GenConnect, did this and they got some amazing responses on their wall.
• Have some fun! When Dunkin' Donuts is NOT allowing soft core pornos to post on it's wall, they are actually doing an amazing job getting their customers involved in submitting ideas for their dream donut and submitting photos that might get them recognized as the fan of the week on DD's Facebook fan page.

How about you? What are you worth? And are the brands that you love tapping into your full potential?

Quick’n'Dirty 55 – ‘What’s the ROI of this Tweet?’

In the spirit of centralizing the recaps from our weekly Quick'n'Dirty podcast, Jennifer, Rich, Ken and I have launched TheQuicknDirty blog. To that end, this week's recap is over on that site. However, for the regular readers of our blogs, we will keep lite recaps coming.

• Social app of the week: SCVNGR - "a game about doing challenges at places"
• Guest of the week: Forrester sr. analyst, Augie Ray - focused on whether or not our addiction to Facebook was good or bad, the death of Google Wave and the ROI of social media.
• Twitterer of the week: Mike Schneider - VP at Allen Gerritsen. Humble, smart, LBS genius.
• Point / counterpoint: Can Google do "social?" Special guest co-host, Kyle Flaherty and I took off the gloves on this one.

Listen to the recording of this week's episode. Or download it on iTunes (go to iTunes and Search for Quick'n'Dirty). And if you want the full recap, head over to our new TheQuicknDirty.com site.

Weekly Social Marketing Links: May 25, 2009

Each week, the members of Powered's marketing, business development and product teams pick a news article, blog post or research report that “speaks” to them. With that article, they need to come to our weekly staff meeting prepared to give a 120 second update on what the article was about and why they found it useful. Links are below:

Beth Lopez (Marketing)

Found the article, The One Word You Can't Say, quite amusing given how we have always advocated the need to view social marketing as a long-term strategy. Seems that it's starting to become a mantra at all of the social marketing events and tradeshows. Per the article, the word you can't say is "campaign" when referring to social marketing...preferred alternatives include terms like "program," "initiative," or even "conversation."

DP Rabalais (Marketing)

Great article aimed at CEO / CMO level. Do You Need a Social Media Marketer? Measurement & analystic seems to be the big reason more companies aren’t embracing social media / social marketing. Another reason we need to continue to plug our analytics/insights capabilities at Powered. To that end, I called out a paragraph from the article that drives our point home:

A recent survey of 110 of the top CMOs by recruiting firm Heidrick & Struggles in Atlanta seems to echo Schwartz’s point. The report found that social media was a relatively low priority—ranked in the bottom third. “Mostly it’s because of analytics,” said Lynne Seid, a partner at the firm. “The things that are measurable are a top priority. Most marketers see [social media] as an experiment.

Bill Fanning (Business Development)

This weeks article is titled Social Media vs. Social Responsibility, written by Reid Carr (president of Red Door Interactive). It's an interesting look at Social Media being the great equalizer to the companies who over the years have behaved more like magicians trying to trick people into buying their product or service rather than honestly marketing and selling their products and services.

His premise is that this behavior has lead to a severe distrust with consumers and social media allows consumers to have a powerful vioce, finally balancing the power that traditional businesses and media outlets once owned. He notes that it's our responsibility as consumers to not only support our favorite businesses by purchasing from them but also by talking about them in various social media outlets. Likewise, it's our duty to responsibly talk about the poor experiences we've had with businesses.

Jay McIntosh (Business Development)
On a self-appointed hiatus this week.

Doug Wick (Business Development)

A very short article about the brand innovation behind Cereality, a café concept based on our favorite cereals. This article struck a chord because of the way that they developed the idea for Cereality, by building on the brand equity of popular cereal brands and focusing on a food category that is both ubiquitous and taps into brand passion. The approach put forth is similar to the process behind the conception of branded online communities, which tap into passion points and truly put the consumer at the center of the experience.

A salient quote from Cereality’s founder – “When you hit that zeitgeist and people are excited and find it relevant to their lives, they start a conversation and you have to be at the center of that conversation.”

Don Sedota (Product Management)
This week I picked a report written by Forrester analyst, Laura Ramos, titled Effective Customer Reference Management Anchors B2B Community Marketing Efforts, that might be helpful to our program managers in the context of setting up community customer reference strategies for our clients and/or for our own corporate marketing efforts. Hopefully validates/supplements our current strategies in both arenas.

Cross-posted on http://blog.powered.com

May 7: Weekly Content/Social Marketing Links

Each week, the members of Powered's marketing, business development and product teams pick a news article, blog post or research report that “speaks” to them. With that article, they need to come to our weekly staff meeting prepared to give a 120 second update on what the article was about and why they found it useful. Links are below:

Beth Lopez (Marketing)

Will the IAB's Social Media Metrics Definitions Help Crack The Engagement Code?   Found this article interesting particularly since we are solidifying our measurement framework and how we define 'engagement'.  The IAB published social media metrics definitions yesterday and while they aren't different from what you expect, it does help advertisers and marketers that are struggling with measuring their social programs demonstrate the value of it.  This would be good for all customer-facing folks to learn these as the IAB is regarding as the standard in defining how to measure online programs/advertising.

Here are a few of the things the IAB doc defines:

• Application and video installs.
• The number of relevant actions, including newsfeed items posted, comments posted, uploads, poll votes, and so forth.
• Conversation size, which measures the number of content relevant sites and content relevant links, and the monthly uniques spread across those conversations.
• Site relevance, which measures the density with which phrases specific to a client concern are brought up among relevant sites.
• Author credibility, such as how relevant the author's content is and how often it is linked to.
• Content freshness and relevance, which defines how frequently an author posts.
• The average number of friends among users of a specific application.
• Number of people currently using an application.

DP Rabalais (Marketing)

Keeping in line with my commitment to alignment with our Sales Plan, I selected REI as the company to do a search on this week. My post this week is by Albert Maruggi, founder and president of Provident Partners and host and producer of the Marketing Edge podcast. I chose it because I feel like it builds a strong case to support REI as a strong prospect for Powered.

Bill Fanning (Business Development)

Jay McIntosh (Business Development)

My weekly share is actually not an article but a few tidbits from a recently released study by Razorfish entitled “Digital Mom."

1. Women control the majority of spending in the US and the world. To that end:
   

• Consumer spending accounts for approximately 70% of GDP in the U.S.
• Women a.k.a. “Chief Purchasing Officers” control 85% of household buying decisions in the U.S. and the majority handle family finances.
• On the business side, women have accounted for 70% of all privately held start-ups over the last 15 years.

Marketers want to engage with people who buy things…women.

1. Women, by and large, are much more “communal” than men. Think about it, women often turn to others for guidance, recommendations, etc., and they love to share (i.e. tell others about their experiences). Guys, we tend to be more independent and hierarchical. We hate to (i.e. won’t) ask for directions, we compete with each other in almost every- and anything, and usually prefer to conduct our own in-depth research rather than listen to someone who may have “better” research than us. Anyhow, the full report is about 37 pages and talks about a LOT of things, however, the three key takeaways that I found most interesting and relevant to us are the following:
   

• Mom’s areas of interest are lifestyle categories…duh!
• Their purchase decision funnel behaviors fit really well with what Powered does.
• The highest value information sources for moms are a lot of what we provide in a Powered community.

Doug Wick (Business Development)

My post this week is from “Social Media Insider” written by David Berkowitz of 360i (cross-posted on the Agency's website).

David does a nice job of offering his experience in running a self-service Facebook targeted ad campaign, including the results he saw. Many of his results are confirming of what we’ve heard – in a pretty targeted campaign he saw very low clickthrough, and he notes that FB must find another way to monetize if it expects to live out its large valuation. The upside is that Facebook ads are extremely cheap to test, and he predicts (I think rightly) that there may be ways to reach very specific, segmented audiences with compelling content-based ads - so he encourages people to test and see.

Don Sedota (Product Management)
A recent Forrester article called, Four Essential Components of Successful Innovation Initiatives, caught my attention due to the fact that, well I’m in the product innovation business ;-). The first two components, “Creating and getting executive support for an innovation strategy” and “Use central management and coordination to carry out the strategy” are pretty straightforward.

The third component, “Use individual contributors to feed the innovation function” struck a chord because it’s something we’re currently trying to implement more effectively for the internal product strategy process. Examples of this include Dell’s Ideastorm and IBM’s annual Innovation Jam. In fact, we’ve been tossing around the idea of creating an internal Ideastorm where employees can go to submit ideas and fellow employees can comment on them and vote them up/down. This could also tie into Yammer so that everyone gets notified when a new product idea is submitted. As far as I know this actually wouldn’t be that difficult to implement internally.

The fourth component, “Ties to community bring objective insight and can deepen relationships” has to do with using community (external resources) to inform product strategy. This struck a chord because it’s something that’s come up recently in the context of our product roadmapping discussions due to interest from Clinique and Sony. This form of product strategy “crowdsourcing” is becoming more and more popular.

April 10: Weekly Content/Social Marketing Links

As I mentioned in my last Weekly Content/Social Marketing Links post, I've asked the Powered marketing, business development and product teams to pick one news article, blog post or research report a week that "speaks" to them. With that article, they need to come to our weekly staff meeting prepared to give a 120 second update on what the article was about and why they found it useful.

My goal is to share this content on a weekly basis. Here's what our second week netted:

DP Rabalais (marketing):

My article from the Marketing Leadership Council talks about how several mega brands are incorporating social media into their overall marketing strategy.
Topics included in the article are:

• Growth of Social Networks
• Demographics of Social Networking Site Users
• Implications of Social Networking Sites for Marketing

Key Objectives Companies had for integrating social media site into their marketing mix are:

1. Improve Customer Understanding
2. Promote Issues of Social Concern
3. Promote Products and Services
4. Facilitate Internal Knowledge Sharing
5. Increase Brand Awareness

Note: this is from a PDF downloaded from the Marketing Leadership Council's site. If you're really interested in the article and don't have a subscription, e-mail me and I might be able to send you a copy. [aaron DOT strout AT powered DOT com]

Jay MacIntosh (business development):

This week's article titled, Social Media vs. Email  written by the CEO of an email service provider proposes that email doesn’t/won’t work with the under 35 crowd....perhaps he’s right? However, his theory got me wondering why is it that when a new medium comes on the scene people diminish the use/importance of the previous one(s)? Whether the medium is stylus and paper, Gutenberg’s printing press, radio, telephone, television, instant messaging, social networks, etc. aren’t all of these just different ways in which people communicate?

The core issue isn’t so much print vs. digital or broadcast vs. direct response, or face-to-face vs. video conferencing, etc. Rather it’s given the target audience and objectives, what’s the most cost-effective medium (or combination of mediums…aka integrated marketing) to increase the “signal-to-noise” ratio? This is what marketers care about (or at least should) and why managed online communities are an extremely cost-effective medium with a very high “signal-to-noise” ratio.

Doug Wick: (business development):

My choice for this week's post is from Adam Cohen’s blog. The title of the post is Social Media Impacts the Purchase Path. I liked this post because it’s relevant to our ROI discussion as well as the "ecommerce" focus that many of our prospects and customers take when it comes to "social."

One area where I disagree slightly with Adam is on his argument that purchase consideration is the easiest way to measure performance of social media on third party sites. While I agree that it might be the "easiest," my belief is that most third party sites aren’t optimized to capture people in buying mode, whereas other online spends like search placements are. So if you measure social media the way you measure other media you are setting yourself up for failure. 

Of course, social media on third party sites is very different from social media on branded sites. I describe this a bit in the comments.

Bill Fanning:  (business development):
My post for this week from Mediapost is titled Critics Of Influencer Model are Missing The Boat . It’s an interesting look at the definition of market “influencers”. It does a good job of categorizing and defining the 5 different types of influencers. Because of the internet and the ability of everyday people to give their opinions, the masses have become the most important influencer category. While the traditional influencers are still important, companies no longer need to rely on them to get the word out. Word of mouth from the masses of everyday people have become the most important “influencer” category.

This certainly validates our Facebook connect integration with our platform. If used properly, this will serve as a major traffic driver to the communities we build in the future. It also validates our own marketing efforts. While it’s important to reach out to the major analyst influencers like Gartner and Forrester, we are doing a good job of reaching out our own group of influencers to get them talking, growing our webinar participation with everyday influencers exponentially, and focusing on getting involved with the smaller social media and marketing groups regionally. This will take time, but we’ve come a long way over the last several months.

Beth Lopez:
My submission this week is not a blog article but a Forrester report called Social Brand Strategy by Lisa Bradner. The premise of this report (will be available on Powered.com soon) revolves around how to create a successful brand-centric social media strategy and what companies and CMO's must do to engage consumers with their brands.  While the report discusses in context of social media, it does contain validating points that we talk of in sales situations:

1. Think strategically about social media and social marketing
2. Understand who your target is, how that target seeks to engage, and the role that distinct social media channels play in their brand experience.
3. Turn off the reach and frequency blinders - marketers need to spend more time thinking about preference and loyalty than awareness.
4. Give brand advocates tools to evangelize and reasons to get involved!
   

Trey Anderson: (product management):

Forbes carried an article from the CMO council titled Turning Customer Pain into Customer Gain. While I like the article a lot, the title is a bit misleading as the majority of the article covers the increasing need to manage customer experience (being custom centric) and the affinity this creates.  The premise is that CMO’s should take ownership of the customer experience.  It goes on to explain that customer experience should be leveraged to develop affinity and that affinity is the key to driving business performance through word-of-mouth (referring customers) and loyalty (additional customer purchases).  It continues to discuss the challenge’s CMO face:

• Regardless of the fact that 59% of companies have a CEO driven customer centric culture, actions display a lack of execution
• Lack of accountability
• The difficulties associated with implementing the necessary lines of communication across all business units, partners, and channels

 It paints a nice picture for our business:

• Affinity, brand perception, retention, and Net Promoter scopes are critical metrics for driving business objectives through word-of-mouth and brand loyalty
• It is difficult and expensive for brands to implement across all business units, partners, and channels
• We can impact these same metrics in a fraction of the time and cost

Don Sedota (product management):

My post comes from ReadWriteWeb and is entitled Community Building 101 for the Bootstrapped Startup.  The post focuses on a four month old financial news community called Tip’d that has risen to success in a very short period of time. The secret to their success... "There really isn't any secret to our success. In fact, it's community building 101 in the truest sense. Instead of focusing on ourselves, we're focusing on what the financial blogosphere (i.e. the content creators) wants, and what the financial news readership (i.e. the content consumers) wants."

The article goes on to talk about some of the compelling features they’ve implemented. This may be an obvious strategy (focus on customer needs) but one that is commonly overlooked for the sake of implementing the latest and greatest technologies that might not be in the best interest of the customer. Definitely advice that we can all take to heart and especially interesting to me as a product manager in that customer feedback/needs should always be first and foremost when formulating product strategy. 

Experts in the Industry: Peter Kim (7 of 45)

Peter Kim, Sr. Partner at the Dachis Group, is one of my favorite people in the "social" space right now. Partly because he spends a good chunk of his time in Austin so I'm able to grab him for the occasional coffee or dinner, but mainly because of his no nonsense approach to blogging and business. Interestingly enough, Peter and I actually worked together briefly at Fidelity Investments but really got to know each other over the last year and a half.

Onto the questions from the Experts in the Industry: 45 Interviews in 45 Days series:

In one sentence, please describe what you do and why you’re good at it.

I think about disparate, ambiguous information and analyze to create opportunity - currently in support of building a new software + services company.

How did you get into the world of online community, social media or social marketing?

After working in strategy consulting and digital marketing, I merged my personal inclinations with my professional investigations - first as an industry analyst and now as a business builder.

 

If you had $10 million to invest in one company and one company only based on their use of “social,” which company would it be and why?

My own, of course.  We operate by the principles and structure we advise companies to adopt.  Other than mine?  Cisco.  They're not using social technologies just for point solutions like marketing campaigns.  Social is in their culture and approach to business.

 

Which business leader, politician or public figure do you most respect?

Tough question.  I don't idolize anyone and skipped this question on all of my college application essays.  All of us are human with strengths and weaknesses, capable of influencing one another equally.

Would you join a toothpaste community? Why?

Maybe.  But I've never been invited to join one! [NOTE FROM AARON HERE - MY FRIEND SARA DORNSIFE JUST ALERTED ME TO THE PRESENCE OF SOMEONE THAT ACTUALLY PLAYS IN THIS SPACE - http://toothhugger.com]

 

Freeform – here’s where you can riff on anyone or anything – good or bad. Or just share a pearl of wisdom.

I believe that we haven't yet seen the potential of what social technologies can do for the enterprise.  I'm building a company to address this opportunity that happens to be in Austin, so I look forward to connecting with anyone heading down for SXSW who wants to discuss further.

3 Reasons Why Social Marketing Critical to Success in a Downturn

Let's get this out of the way right up front. We're in one of the worst economic slumps in the history of the U.S. The week before Thanksgiving, the Dow Jones Industrial Average closed below 8,000 for the first time in five and a half years. We're also in the midst of a horrific credit crisis that is crippling the financial, auto and housing markets in the U.S. If that wasn't bad enough, earlier in November, the unemployment rate in the U.S. hit a high of 529,000 -- the highest it's been since the grand old days of President Jimmy Carter in 1983.

Do you feel all warm and fuzzy yet? At least you know I'm not going into this post with rose colored glasses on. I know that the economy stinks right now but here's the good part. Not all hope is lost. In fact, I'd argue that there is no time like the present to shore up that leaky bucket businesses call "customer attrition" with a healthy dose of retention, loyalty and a greater willingness to recommend.

1. Let's kick off with some research from our friends at Forrester Research that uber-analsyt, Josh Bernoff, included in a report back in April of this year. The piece titled, Interactive Marketers Are Bullish In A Recession (requires login), was based on a survey of 333 interactive marketers conducted by Forrester. The essence of the post was that interactive marketers were still bullish on things like e-mail, search engine, web and social marketing even though the economic outlook for the country was less than rosy. While it's true that things have gotten worse since Josh put the report together, I think a majority of the takeaways still apply. Below are excerpts from some of the major bullets from the report along with a diagram below that of the response by marketing channel/tool:
   
   
   
   • Interactive budgets will mostly hold steady or increase. Seventy-two percent of the interactive marketers we surveyed expect to keep their interactive spend on plan or increase it in a recession.
   • Social applications will garner the greatest increases. Interactive marketers are most likely to increase investment in social networks, with 48% planning an increase and another 34% keeping investment steady. Marketers are also bullish on user-generated content and blogs. Podcasts, RSS, and widgets, while less popular, will still generate increased investment from at least 20% of interactive marketers (see Figure 2). These channels actively engage customers, are fueled by user contributions, and scale without significant additional marketer resources.
   • Display ads could lose ground. More than 40% of respondents expect to decrease spending on display ads, while only 10% plan an increase.





2. Josh isn't the only one that's bullish on the fact that social media/social marketing is a good bet in a down economy. In fact, successful entrepreneur AND social media guru, Gary Vaynerchuck provides good rationale as to why it's impossible to ignore social media as the effectiveness of marketing and advertising vehicles like banner ads and SEM, continue to erode (note: this is mostly video but it's worth the watch).


3. Back to Josh on this one - it's MEASURABLE! And not just in a "we got 18 comments on our blog" measurable. I'm talking, "we know that our customers are xx% more likely to buy from us and xx% more likely to recommend this product/service to a friend or family member. See my recent post on ROI for more details on results we've seen with some of our clients.

What, three reasons isn't good enough for you? Here are a few more posts that give their own reasons as to why you should think about social media/social marketing during the downturn.

• A Good post from Streamyx that re-inforces Josh's message and in particular, provides a list of 6 reasons how to think about your social media strategy. - http://www.streamxy.com/2008/10/16/is-social-media-recession-proof/


• Five more ways to include social media in your small business during a recession from BusinessPundit.


• More goodness from Convince and Convert - in particular the two bullets on:
  - More Juice for the Squeeze
  - Waste Not
  

What ways are you including social media/social marketing into your business during this time of opportunity? Thoughts are welcome in the comments below...

Cross-posted on http://theengagedconsumer.powered.com