Summary of Lecture 3 – 16/08/2012

In the first half of today’s class, we had Wall Street Journal‘s business and technology journalist Lora Kolodny speaking with us on Skype from San Francisco. I know Lora because I subscribe to her Facebook updates and sometime participate in the discussion. Considering that she has written for big names as New York Times, Fast Company, Inc, and TechCrunch, it is a great surprise that she is so approachable!

I invited Lora to speak with our students on primarily two topics–the social media start-up scenario and advice on starting your own business. The call went on for about an hour so I won’t be able to cover everything we spoke about. However, here are a few takeaways from her talk-

1) Although social media companies are getting a beating in the stock market, VC interest in social media start-ups remains high.

2) Any new platform, service, etc. must have a clear mobile strategy.

3) Social media adoption in Asia is growing rapidly.

4) For new start-ups, it is essential to evaluate whether they need large investment. Further, creating a personal brand is critical to reach out to potential investors. She suggested joining newer platforms early to create a significant following. Lora has more than 110,000 subscribers on Facebook!

5) She suggested using services like YouNoodle to connect to other entrepreneurs.

My students could add more to this.

The second half of the session was devoted to discussing the ‘Honeycomb Framework’ for selecting and managing various social media channels. The paper is available for download from here and a case study from Australia is available here. Ian MacCarthy, one of the authors of this paper explains what they propose –

“We explain how a firm can recognize and understand its social media landscape, using the honeycomb framework; develop strategies that are congruent with, or suited to, different social media functionalities and the goals of the firm; develop curating strategies for their own social media interactions and content; and finally use the honeycomb structure as a tool to evaluate the constantly changing social media activity.”

Honeycomb framework identifies seven components of social media – identity, sharing, conversations, presence, relationships, reputation, and groups. The diagram below shows what each component means.

The framework give clear guidance to selecting a social media channel. As a business you need to decide what your community is doing and what the community members’ inherent motivations are. Accordingly, one can select the social media channel. For example, LinkedIn has ‘Identity’ as its clear functionality. I know there are a few users on LinkedIn who are anonymous! Yeah, I keep on getting add requests from such people. But what’s the chance that I will ever accept such a request? If one doesn’t reveal one’s identity on LinkedIn, it defeats the whole purpose of that social network!

Social networks may have multiple functionalities. Consider Twitter. Originally, Twitter was used for broadcasting the message–sharing on the go. Therefore, ‘Sharing’ was its core functionality. However, these days Twitter also acts as a very common conversational tool. Therefore, ‘Conversations’ is an added core functionality to Twitter. The readers should think about other channels such as Facebook, FourSquare, Pinterest, blogs, etc. to see how they fit into this framework.

Once a business identifies the channel, it can use the following diagram to operationalize the channel management. The implications can be different based on the functionality a channel offers. For example, for reputation management, one needs to do a lot of monitoring using tools such as Klout scores.

Overall, honeycomb framework is great for channel selection and community management.

In the last leg of the session, I tried to answer the question “why do people share?” I used ‘Unselfish Gene‘ article to show one perspective. We know for a long time that the classic game ‘prisoner’s dilemma‘ doesn’t always end up with everyone choosing the game-theoretical solution. In other words people don’t like to betray others easily. Reputational concerns aside, human values are equally important in sharing something for the community’s good. Unselfish Gene tries to bring home that point.

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Summary of Lecture 2 – Part 2, 14/08/2012

In part 1 of the summary, I briefly discussed the case study on SAP. In this part I will focus on 5 Cs of social media – community, conversations, content, channels, and collaboration (co-creation).

Before I describe the 5 Cs, I should clarify that these 5 elements of social media are neither original nor all-encompassing. There are, of course, several other aspects of social media strategy that one should take into account. However, as a guideline these five suffice in most cases.

There isn’t a clearcut mapping from the traditional 4 Ps of marketing–product, price, promotion, and place (distribution)–to the 5 Cs of social media marketing. Social media marketing gives a lot more importance to the community. It is partly because in many cases a community is already in existence and the businesses want to join it. This differs from the traditional “segmentation analysis.” A community is not a segment with characteristics of its members statistically identified by a marketer. Instead a community is a much more cohesive group of individuals who have some common intrinsic motivation for being a part of the community. Such communities can be described just by this motivation and nothing else. No other identifying characteristic may be attributed to them. For example, the popular financial blog www.zerohedge.com is an example of a completely anonymous community. Most of the blog posts are written under the pseudonym ‘Tyler Durden’–the unforgettable and legendary ‘Fight Club’ community leader played by Brad Pitt in the movie Fight Club. (If you haven’t watched this movie, the only advice I can give you is “Stop reading this blog and watch Fight Club, now!”) I was never an active member of Zero Hedge but I used to read their posts and the comments by members very regularly. During the financial crisis of 2008-2009, we were all driven by the same motivation–to read about and discuss the corruption on Wall Street and the dirty nexus between the banks, government officials, and politicians in the USA. Beyond that there was nothing you could know about us. This underscores the problem faced by a traditional marketer in the digital world.

A risky solution is to create your own community. That’s what SAP did. It’s risky because you would never know whether it will capture the attention of your target members, whether they will participate, engage, and contribute, and whether they will spread the word to grow your community. It takes a lot of time and effort (and also a great bit of luck) to organize and manage a successful online community.

The next 4 Cs–conversations, content, channels, and collaboration–will be discussed in detail as we progress in the course. Conversations are a must in social media marketing. The question is how you do it. There is always that temptation to get carried away and be condescending, witty, smart, and sometimes brutal because brands think that they are the leaders. But that’s the recipe for disaster. The conversations must be driven by empathy and honesty. In my opinion, these are the only two things that make conversations meaningful, thereby leading to long-lasting relationships.  Channels consist of different platforms and services on social media such as Facebook, Twitter, Youtube, and Foursquare. Again, I will talk more about this when in Lecture 5 and 6 we start working with the tools directly. Content is an essential part of social media marketing. In case of SAP, the content was the blogs by the developers and SAP employees, as well as the presentations created by SAP. They hold tremendous value for the community members. On August 23, we will dissect content strategy of an Indian business Ayojak in a case study (read the 4th abstract). Finally, collaboration (and co-creation) is the final component of social media strategy. More on this in lecture 3 summary. I had asked students to read ‘Unselfish Gene‘ and 1st chapter from book ‘Share This!

Composition of Corporate Social Media Team

I referred students to the survey results published by Altimeter. According to Altimeter, the typical size of a corporate social media team is 11 employees. Out of these 3 are the heart of the team–the community managers–who engage with customers. Their primary objectives are to create brand awareness, acquire customers, retain them, create the bran culture, and provide customer service. The social strategist, who is sitting at the top of the hierarchy, makes sure that the performance of the entire team is in line with the objectives set by top management. You can read more about the role of corporate social strategist here. The two guys on the left side of the chart, the education manager and the business unit liaison, hold inward looking positions. They chiefly interact with various business units internally, train people, and make sure that everyone uses a consistent strategy. Social media manager is in-charge of the operations. He/she decides the nature of interaction, gamification, what offers to provide, etc. Web developer is a part-time role and technical in nature. Finally, social analyst tracks various social media metrics. The last part of my course is focused on the metrics and crises management issues.

For a small business, 11 social media team members are meaningless. The suggestion from Altimeter is to use the proportions from their compositions. For example, is you want to devote 40 hours for social media in a week, roughly 11 hours (40 x 3/11) should be assigned to community management. Of course, if you hire one person it is impossible for that person to do everything. A person who is good at managing a community not necessarily will be good at doing analytics. A solution is to train your existing workforce to carry out part of these jobs. A person who is good with numbers could be trained to be social media analyst. Further, some of these functions could be automated or outsourced. You may not require an in-house web developer, for example.

Data: Composition of a Corporate Social Media Team

Does Social Medium Liberate Marketers?

What’s the most critical strength of social media? Freedom! Pick any reasonable book on social media marketing and you will find in them that freedom to communicate and bond with your consumers is the core benefit of social media. Marketers are no more bound by the one-way mode of communication. They can reach their consumers freely without bounds, seek their opinions, engage in conversations, and provide the offering (product or service) while earning brand loyalty and profits.

Now let’s come back to reality! Social medium is not turning out to be the marketing utopia in which many would like to live. When I read Tara Hunt‘s amazing book, The Whuffie Factor, I realized that there will be soon a bunch of great writers and content creators who will hold the power to influence people’s minds. Their reputation will be built over the period and the reputed bloggers (or social media celebrities) will be able to promote products with a much higher success rate. This model is now well established. However, where is the freedom that was promised to the marketers by this social media revolution? Marketers have been using celebrities such as NBA players for a long time to endorse their products and reach these players’ huge fan bases. Now they have a choice of using these micro celebrities (bloggers, etc.) and target smaller consumer segments. However, the marketer is still not directly talking to the consumer. For example, look at the technology blogs such as TechCrunch, Gizmodo, or Engadget. They review and rate consumer electronics products all the time. But does that help a marketer to reach the consumer “directly”? Similarly, you can extend this example to any type of blogs and you will see that there is a layer in between the marketer and the consumer.

Talk about Facebook, Twitter, and other social media. I don’t have ready statistics here (it’s late Friday night folks!) but my guess is that most businesses that have a Facebook page don’t handle it themselves. Social media efforts are outsourced, similar to the advertising campaigns and marketing research. But note that both advertising and marketing research require skill sets that are cheaper to get from specialized agencies rather than developing in-house (marketing strategy students, this is an explanation from transaction cost theory).  On the other hand social media, which enable two-way communication, should be handled in-house in order to exploit this benefit. Imagine a firm communicating with its consumers via social media marketing agency. I will be surprised if such an agency doesn’t add noise to the communication. However, social media experts are now available dime a dozen. You get to see more blog posts about how to choose social media consultants than how to engage consumers using social media.

I find this model a sort of cheating. This is nothing but the old model of celebrity endorsements and/or advertising agency. And this also means that marketers are still not liberated by social media. But we shall wait!

Social Business Forecast 2011

Earlier I had shared a report by Altimeter’s Jeremiah Owyang. Below is the presentation from the same report. It will help you in understanding the key points if you don’t have time to read through the entire report. My students should look at slides 19 and 20 carefully where the priorities in social media domain are depicted. Not surprisingly ROI calculation is the most critical issue.

After the spring break, we are going to spend time in understanding social media and web analytics. The students will be setting up dashboards to monitor and evaluate the performance of their social media campaigns. Personally I am quite excited about this because performance metrics is my research area!

 

Old Spice Case Study

Old Spice social media campaign has created history. With the combination of creativity, strategy, and great execution, Old Spice gave us a model social media marketing campaign! The attached 5-minutes video is from Wieden+Kennedy, the brains behind the campaign. On Tuesday Feb 15, we are going to discuss this case study in more details.

By the time this video was released in August 2010,  Old Spice Bodywash sales were up 27%; up 55% in the previous 3 months and in the last month up 107%!!

How Corporations Should Prioritize Social Business Budgets

In the last two classes we discussed how social media will change the corporate culture. Of course the issue of reverse causality is nagging–it is perhaps the more open corporations that adopt social media better! But I sidestep it for the time being in this post.

Altimeter has released a new report on social media budget allocation. A critical finding is–

Novice programs must focus on getting their internal teams in order; Intermediate programs must scale customer-facing initiatives; and Advanced programs must integrate social business throughout the enterprise.

This is a nice roadmap for the organizational change! It is important to note that rather than focusing on setting up Facebook pages, Twitter accounts, blogs, creating widgets, making smartphone apps, etc., novice programs should first hire and train the staff to manage social media. The shift in the corporate culture will be visible for the advanced programs.

The great news for my students is that corporates are gearing up hiring of staff to manage social media!