5 Reasons for Consolidation in the Social Media Monitoring Industry

The social media monitoring (SMM) industry is booming. Pure play SMM software providers, startups, traditional web analytics firms and now the large software companies are making advances in the field.  Ken Burbary has a wiki listing many of them, worth checking out.  If you work for one of the smaller companies, get to know your competitors big and small – in the next couple of years you could be working together or could watch them eclipse the competition.   Here are five reasons to expect more upheaval in the industry – what did I miss?

1. Scale and Demand for Sophistication

We’re all watching big brands like Ford, Pepsi and Starbucks jam away in successful social media endeavors.  The bigger the brand, the bigger the need for processing power to really crunch the data to make it meaningful – and the more internal skills and resources will be required to get access to the data.  A web analytics analogy would be using Google Analytics for a large $100M+ eCommerce site.  Those in the business know it isn’t enough to get the sophisticated level of measurement required, and many of these tools lack the robust UI and toolset to meet all requirements.

2. Business Process Changes

Many SMM tools leverage workflow to route mentions to the right person or department for triage.  Having spent years back in the heyday of SAP ERP configuring workflow, this is a deep rooted business challenge that takes thorough design effort to make effective.  Decision trees are not easy to build, and as more and more companies leverage these features, complex organizations will demand best of breed products.

3. The Data Isn’t Interesting

The numbers are the numbers.  “Number of mentions” is a just pile of comments – they have to be sorted through and made relevant.  It takes people with analytical skills to tell what they mean, intepret the story, and ultimately mine the information to translate them into actionable insights.  The tools that make this job less labor intensive will be more successful at market penetration and meeting the demands of agencies, consultants and internal departments spending energy to leverage them.

4.  Sentiment Analysis is Useless (By Itself)

Maria Ogneva wrote a terrific Mashable article about how to get the most out of  Sentiment Analysis for businesses.  The fact remains that even as these automated tools improve, they require manual labor.  If a tool is 80% accurate in automatic sentiment measurement, someone has to go through to find the 20% that aren’t.  The tool that has the best, most accurate options for making that data useful and less labor intensive will be sought after – but that technology could come from a big company with heavy R&D or a startup.  Who knows, but the best tool will make lives easier for practitioners.

5. Industry Growth

IBM just recently announced an entry into the SMM market.  Big Blue.  That should put smaller competitors on notice – either they need to improve to compete with Big Blue, or work on their exit strategy. Traditional web analytics companies like Webtrends and Omniture are adapting their offerings.  Forrester and other industry data shows continual growth and adoption of social media channels by consumers – increasing the urgency for companies to listen.

What did I miss and where do you think this industry is headed?  For posterity, wondering what the folks from Radian6 and Alterian think – two great companies we tend to see and work with most often.

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Social Media in 2010: Getting Smarter

2426454804_06648486e3It’s that time of year where the pundits predict the death of brands, the trends of new media and the upcoming changes in marketing.  I typically avoid these kinds of posts, but I wanted to weigh in primarily because part of my role at Rosetta next year will be to execute against the predictions.  This is going to be a fun year.

My one primary thought about social media in 2010: Social Media Gets Smarter.  We’re already seeing evidence of companies using social media more strategically. eMarketer‘s recent post highlights a shift in budget and a growing movement of how companies are leveraging social media in a smarter way.  I see social media becoming as sophisticated as more traditional CRM and marketing tactics.  I love studies like this one from comScore and GroupM that demonstrate the effect of social media on paid search results (50% increase in CTR on branded paid search for people who had exposure to a brand in social media – that is compelling alone).

The good folks over at Trendspotting have also assembled a list of quick, “Twitter-sized” tidbits on predicting changes in social media in 2010.  I am thrilled to be included in their list alongside some excellent predictions from folks who have inspired me in the last few years, including Chris Brogan, David Armano, Paul Gillin, Jason Falls and David Meerman ScottMarketing Hot Seat contributor Marc Meyer is also included.

Here are my predictions that show up in the presentation.  I’d highly suggest the read – Trendspotter did a great job keeping the content in an easily digestible format.

  • Social media tactics become integrated tools in the relationship marketing arsenal.
  • Companies struggle adapting processes for customer interaction in marketing, sales, customer service & PR.
  • Marketing programs focus more on activating brand advocates than general customers.
  • Social media monitoring industry consolidates and matures, drawing closer to web analytics.

Each of these probably warrant a post on their own.  I based my predictions on day to day what I am experiencing in terms of client demand in the social media space, but it’s one digital agency view.  What do you think?

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7 Inputs to a Social Media Strategy

seedsBuilding a social media strategy is not something that can be whipped together overnight.  For context, any company that is looking to develop a strategy for leveraging social media should first check out the POST methodology from Forrester Research.  The “People” part of the approach (followed by Objectives, Stategy and Technology) has a short description:

Don’t start a social strategy until you know the capabilities of your audience. If you’re targeting college students, use social networks. If you’re reaching out business travelers, consider ratings and reviews. Forrester has great data to help with this, but you can make some estimates on your own. Just don’t start without thinking about it.

This is smart, practical advice.  Yet it doesn’t go deep enough.  Here are seven inputs that need to be considered before defining objectives and developing a strategy to leverage social media tactics.

  1. Social Media Monitoring. There are many self-service tools out there beyond Twitter search and Google blog search.  Two that work well are Radian6 and SM2.  No software is perfect, especially when it comes to analyzing sentiment of what customers are saying, but “hunting and pecking” using point-in-time search tools isn’t going to give you the broad array you need.  These tools also can review data back in time to compare tone and conversations year over year or before and after a key event like a product launch.  It takes time to sift through the chatter, but there are gems in there that constitute unfiltered customer feedback worth paying attention to.
  2. Market research. Survey your customers and ask them what tools they use.  If you are a large company, consider leveraging a segmentation that addresses the needs, wants, attitudes and behaviors of your customers.  This can be a significant source of insight to drive marketing strategies – not just social marketing ones.
  3. Forrester’s Social Technographics. Forrester has a great tool to stratify how your customers are actually using social media.  Do your customers heavily index against the average for Creators or Critics?  Perhaps a user-generated content idea or approach would be more suitable.  While the tool doesn’t give you the answer of what to do, it does provide some data points that help justify approaches down the road.  If you know some basic info about your customers, you can get useful data easily using this tool:

  4. Competitive Analysis. What are your competitors doing? Are you behind the pack or leading by deciding to engage in social technologies to drive your business?  It’s important to know where you stand – better yet to know where you want to be.
  5. Stakeholder Interviews. Some tactics in social media will require different departments to work together – perhaps some that aren’t used to collaborating.  Talk to the following groups: Marketing, Market Research, Innovation, Product Management, IT, Legal, Customer Service, PR and HR.  Chances are they will all have something to say about social media and what they would hope to get from it.
  6. Corporate Objectives.  What is your company’s marketing objectives in 2010?  Are you undertaking a brand refresh?  Have some major product launches teed up in Q2?  Any seasonal or cyclical impact to plan around?  Don’t think you can develop social tactics without considering what is going on in the company.
  7. Corporate Culture. Does your company thrive on innovation or on chopping down new initiatives?  Social media tactics can be measured, effective and game-changing – yet the industry is not as mature of a marketing tactic like pay-per-click search marketing.  “Making the leap” requires top down executive support and a bottoms up desire to make initiatives successful from the teams that will own the strategy going forward.  (Or fail quickly and learn from it, as I’ve heard Todd Defren say – this space is still new).

Frankly, I don’t see how the rest of the POST methodology – Objectives, Strategy and Technology – can be developed without these inputs.  Do you agree? What did I miss?

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Social Media Monitoring: A Glimpse At the Future

crystalballWarren Sukernek shared this presentation recently and it hit home on a variety of fronts. As we spend time with clients working through social media monitoring, we find more and more examples of how it’s not a precise science.  Sitting side by side with folks who work every day in detailed web analytics who continually look for ways to optimize PPC spend, our social media team has experienced first hand many challenges outlined in Marshall Sponder’s presentation.  Some points that resonated strongly:

  • Sentiment analysis today is too much like Quantum Physics
  • There is a lot of manual work to determine influencer lists
  • Social media monitoring tools are not capable of advanced meme clustering or semantic analysis
  • Clients ask all the time around geo-location – the science to identify local influencers and posts is crucial to many businesses and these tools aren’t anywhere near perfect
  • Great to see Ken Burbary‘s Wiki of Social Media Monitoring Solutions getting some props

As for predicting the future? Integration to CRM and web analytics, factoring in new technologies like Google Sidewiki, and evolution to standard business intelligence practices.  Keyword tools will help down the road too – curious if the same that help with PPC and SEO optimization will apply here.  This is a practical, thoughtful guide on where social media monitoring has room to mature.  For now, my experience is showing that labor (smart, social media savvy, analytical folks) is making up the difference, but it’s challenging to “read the tea leaves.”  What is your experience?

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Social Media Is Not Right For Your Business If…

hearnoevil

…you don’t like to listen to your customers.

…your company mantra is “It’s All About the Revenue” and not “It’s All About the Customer (the Revenue Will Follow).”

…your product is known to annoy or frustrate customers, but you don’t really think their gripes are legitimate.

…you don’t like to listen to your employees, and getting employees to change their thinking is impossible.

…you outsource 100% of your marketing, sales and customer service functions.

…you think that you have control over conversations about your brand and products.

…you think that Facebook is a good channel to leverage just because it’s mentioned often in USAToday.

…you think your company should be on Twitter because celebrities are doing it.

…you like to spend a lot of money for slow market research projects that are a single point in time.

…you think it’s a myth how social media can impact the enterprise.

…you could care less about being marginalized by your customers.

…you think SEO is voodoo and has no benefit or correlation to social media.

…you think your customers are too stupid to come up with real product ideas.

…you don’t think it matters what your competitors are doing.

…you think the content on your website isn’t going to drive sales.

…you don’t believe there are proven applications of social media.

What did I miss?

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Understanding How Social Media Impacts the Purchase Path

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Few marketers dispute PPC as an effective and measurable online channel.  Social media, in contrast, is currently subject to dispute.

One of the more compelling arguments for pay-per-click search marketing is the ability to attribute web sales directly to clicks from search advertising.  ROI can be measured to multiple decimal points tying the amount of spend invested in bidding on keywords to the direct revenue and conversion.  When the conversation changes to social media, there are debates about ROI, a lack of proven approaches and many marketers still viewing social media as experimental.  [“Conversion” for those not familiar with web analytics is defined as a visitor to a web property who completes a targeted action, including signing up for an email newsletter, adding a product to a shopping cart, or completing checkout.]

Skepticism Abounds

A way to address the skepticism marketers have about social media is to draw the same correlation to the purchase path as search marketing.  Notice I did not suggest “the” way to address the skepticism —  providing better metrics won’t give the complete picture of social media benefits, but it will start to quantify the role social media can play in a marketing strategy in terms that internet marketers deal with already.  For example, today Webtrends and Radian6 made a joint product announcement tying traditional web analytics to social media monitoring, through Webtrends’ Open Exchange platform.  This is just the tip of the iceberg.

Establishing Credit

Traditional analytics tools give credit for conversion to the tracked marketing activity before the conversion takes place – a “last click” methodology.  This could be a search query prior to a site visit, an ad clicked through on a search results page or a banner ad.  Those in the SEM and Display Advertising industries would tell you that while these metrics are precisely measured,  a major challenge is to quantify all the “other” touchpoints a consumer has prior to conversion.  (Rosetta, my agency, has a differentiated approach to marketing analytics that does capture “view-thru” – tracking that a user saw a display ad days or even weeks prior to a conversion event).

Here is what I would like to see analytics vendors or social media monitoring platforms do to start to quantify the measurement:

  • Track participation in social technologies in similar fashion to traditional ecommerce sites (defined conversion events, page views, length of visit).  A potential limitation is that brands may only be able to track measurements based on assets they control (hosted communities, hosted blogs, custom widgets, etc).
  • Tie search engine queries, organic search site visits and PPC ad clicks – and ultimately, conversion – back to whether the user had participated in a social technology, and measure typical length of visit/level of engagement both before and after conversion.
  • Provide in one dashboard the ability to identify the direct correlation between social marketing initiatives to conversion and revenue.

This level of data would help marketers more directly measure the success of social marketing initiaitves and make at least part of the intangible, tangible.  Is that a lot to ask?

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