Social media has really made it’s mark on 2010. Twitter and Facebook seem to be in the headlines almost every day, Hollywood is even making a movie about Facebook, and it seems as if every company is now looking to social media to help propel themselves beyond the aftermath of the GFC. But there is still a lot of confusion about what social media actually is and where the threats and opportunities lie.

In this article I take a close look at the social media landscape, describe some of the “platforms”, examine how these are changing the market place and outline a strategic framework for deploying social media as a branding, marketing, PR and intelligence tool.

What is social media really?

The big social media brands are YouTube, Twitter, Facebook and LinkedIn but they are just that – brands, and like any brand they are designed to cater to a certain niche to meet a specific need.

As with any successful product or service the people behind these brands spotted a market need and developed a solution to it. They then had to work out how to generate revenue. Because social media is able to generate a huge amount of data about each user (age, gender, place of work, where they live, things they like, people they know and so on) the most obvious choice was to provide highly targeted advertising. Facebook is the brand that has managed to do this most successfully so far. But it is still early days – and Google is yet to weigh in seriously.

The market leaders do not define the market.

Social media is the convergence of technology and the desire people have to be heard and connected. In an age where people are feeling increasingly isolated, social media has managed to connect people with old friends, complete strangers and interest groups – or said another way connect people to the “market segments” they wish to belong to. This has happened in a way no other technology has been able to do.

We humans are essentially tribal animals and social media has allowed us to gather into these new ‘location free tribes’ incredibly fast. What’s more, the users of social media like it and want more.

The march of social media is now unstoppable. There have been times this year where the amount of time spent on Facebook eclipsed the time spent on Google. This competition is only going to intensify. Facebook recently released some new tools to extend its reach and influence over the whole of the web. Recently rumours around a new service called GoogleMe have started to surface.

Social media is now becoming more than a marketing experiment. By the end of the year the majority of big name companies will be looking at how social media can be directly integrated into their brand strategy. It will be the core of any new digital strategy.

Why has it happened?

Networking and collaboration is fundamental to what it means to be human. In our bodies atoms work together to create cells and cells work together to create our organs. In our brains’ neurons work together to create our thoughts, feelings and language. In your company people are working together in a similar way – to create something bigger and more exciting than the sum of it’s parts.

We can take this thinking and look at the development of the personal computer and see a very distinct pattern emerging.

Before anyone had a computer or a smart phone, everything was a social event. Meetings were face-to-face or over the phone. Communication in general was human-to-human based.

In the last 30 years things changed. Initially the personal computer made everything a private and secluded affair. Games, for example, could be played without the help of another human and work could be carried out sitting in front of a screen. The advent of the early internet exposed the power of a computer network. But from a personal perspective ‘computing’ was an insular activity.

The first social networks, forums and blogs worked with a huge number of anonymous users. While this was a step forward in person-to-person networking, the anonymity allowed people to behave in ways they would never dream of in real life. This constrained many of these networks to the domain of early adopters and special interest groups. The ‘rules’ that govern effective social networks were yet to be developed.

What has happened recently, particularly with Facebook, is that it’s become far easier to transport your real identity around the web. This means that increasingly people are joining new social networks with their ‘real identity’ – their real name, their place of work, and other details that define them as a person in a movement (sometimes referred to as the ‘Open Web’). Naturally this makes people think more carefully about what they say and how they behave on social networks.  Because they ‘own’ their comments the common rules of society come into play. When a person’s reputation is attached to what they say it makes them think carefully about what that comment might mean to others.

Of course people can still misbehave in social networks as they can in real world networks. But the networks are now being governed by majority rule so this behaviour is quickly dealt with. This makes cooperation and collaboration much easier. Because of this the barriers to entry are dropping at an astronomical rate. Companies are starting to feel more secure in setting up their own networks, knowing that the majority of users will join to get value out of the information that is provided and quickly deal with other users who lessen the overall value of that network.

So when thinking about why social media has become so widely adopted, and pondering where it is going, avoid getting distracted by in the leaps in technology. These are important of course but it is the behaviour of the network and the development of new social norms that are really driving the progress. Every individual in this massive network is doing what he or she is preprogrammed to do – communicate, collaborate and continue the march of civilisation’s evolution.

The New Web

The age of the “website” as we have known it is coming to an end. People may still go to your site but they expect information to be tailored for them and available on the social media platform of their choosing and on any device that connects to the web. What’s more they expect to be able to comment on almost everything they see. The web is no longer a digital version of print. It is the space where conversation is facilitated. Websites are becoming applications that feed information out to various social based platforms. This allows people to receive and consume information the way they choose.

The more you can utilise your social media presence and leverage the influencers in your network the better. It is even possible to embed e-commerce and other web based applications directly into Facebook. Most brands need to start thinking about their websites as a database that organises and distributes information and features to specific groups within the world of social media.

Owning the data

One way to think about the forces driving the development of social media is the old saying: “knowledge is power”. To that you need add a more recent motto “and the person with the most data wins”. Each social media brand-name earns its money from collecting and analysing data. And they are not too keen on sharing that information.

Obviously there’s a huge amount of data that brands can obtain from the many social media monitoring tools currently available. But if you really want ‘granular’ information about your brand you need to devise ways to generate and own your own data. If you are used to thinking about campaigns and short term goals this might feel difficult. If you take a longer term view however, it is possible to generate massive amounts of data relevant and specific to your brand, your product category and your competition.

It’s the economy, stupid

During the 1992 presidential campaign in the USA, Bill Clinton’s campaign strategist coined the phrase “…it’s the economy, stupid…”. He did this to make the case that Clinton was a better choice for president because president George H. W. Bush had not successfully addressed the economy, which had recently undergone a recession. Clinton, of course, won that election.

Nearly twenty years later the world is emerging from a period of economic turmoil that has forever reshaped important elements of the market place. One of the most significant changes is the movement of social media into the mainstream. This is far from surprising. Challenging economic times always induce consumers to carefully assess how they spend. Being a member of a community where you trust the recommendations of people who are real consumers is an obvious choice. Technology has allowed this to happen in a measurable way and on a global scale.

We are now in a time where the phrase “it’s the social economy, stupid” could well become a catch phrase for companies rather than voters. Those that ignore the opportunities social networks provide may well be putting themselves at a distinct disadvantage.

Fractured or identifiable markets

There has been a lot of talk about how social media is fracturing markets. This is a myth.

Social media doesn’t ‘create’ new markets and market segments. It just identifies them. The interest groups and needs already existed – we just didn’t know enough about them.

The mountain of data that social media produces can now shed light on who these people are, and what they like. We now have clearly identifiable and serviceable markets.

Of course this has created an additional layer of complexity. But utilising tools to listen to, and more importantly, understand these market segments gives you an opportunity to talk to them in their own language and hear what they have to say. You might say this technology can help you treat your customers like humans – something that most forms of marketing and communication have not been good at thus far.

Defining value

A recent survey of the social media activity of major brands, including Nokia, Adidas, Nike, Coca-Cola and Red Bull, showed that some brands are engaging well with their Facebook fans. The people who have voluntarily decided to follow what these brands have to say tend to spend significantly more than non-fans – sometimes more than twice as much. Further, fans were more loyal and 68% were inclined to recommend the product to their peers. Nike was able to put a value of $209.83 on each Facebook fan – even though some fans spend nothing at all.

It could be argued that these fans would be loyal brand advocates anyway. But even so social media has given them a convenient platform to stay engaged and and share their views and preferences with others.

Starting a social media strategy

With this background we are now equipped to discuss how to form a social media strategy. Before we start a couple of principles need to be highlighted. First there is no “one size fits all” when it comes to strategy. Secondly it’s worth taking time to get a strategy right.

Many companies have been adopting an approach to social media based on an assumption that it is ‘free’. They have set up accounts and hoped it will work. It won’t. Hope is not a strategy, and social media takes time to get right – so it can’t be free.

So let’s walk through the basic steps…

Define your goal

A brand needs to first define it’s goal. Social media can be used for customer service, customer acquisition, brand awareness or public relations. But trying to do everything will produce unfocused results. Understanding what stage your company is at and setting goals to propel communications to your desired stakeholders is the first step.

Listen to gain context

Once you have defined your goal you need to measure what is already happening. Before meaningful KPIs can be set it helps to know what measurement tools are available and the quality of the data they generate. These tools can be categorised into three groups.

Site analytics – One of the most important tools you will need to utilise is website analytics – tools that measure the activity on your website. Google analytics is an extremely good free option but there are many others depending on what it is you are actually trying to do. Make sure you do your research get advice and know what option is right for you.

Social media monitoring – There are a number of ways to monitor what is happening in the social media space. Who is talking to who, who is influential and why the conversations are happening. There are free tools available but some of these lack precision as the technology is not constantly upgraded or not enough effort is put into collecting the data. A well developed tool is worth the investment. Good monitoring tools can give you extremely detailed information – what people are saying about your brand, who is saying it, details of the demographics of your social media following and even what people are saying about your competition. The right data allows you to snare the ‘low hanging fruit’.

Data mining tools – To dig deeper into data it may be necessary to employ more advanced tools. You may need ‘text mining’ to get an overview of what words or themes seem to be surrounding your brand online or ‘geo-locating’ comments to identify potential new markets.

Good choices require knowledge of what type of data is available, and how to best get your hands on it.

Choose your communication platforms

Platforms then need to be chosen. Twitter, Facebook and YouTube are a few of the big ones but there are many more. Each is focused on a different demographic. There is also the possibility of creating your own platform to fulfil a need that may only exist for your market

Set KPIs

Once you know your goal, have chosen the tools you will use to measure it and the platforms through which you will focus your communications you are ready to set your KPIs. There are many ways of doing this. One of the most effective is aiming to ‘increase positive sentiment’ – basically getting more people on side.

Define a voice

Finally you need to create a ‘voice’. A tone for how you will communicate. Will you be informative, humorous or serious? What language will your market respond to?  Making the correct choice and implementing well is important. Get this right and your market will follow.

Get good advice

Ultimately a good social media strategy needs good advice. So make sure you talk to people who know this space well.

Looking to the future

Social media is here to stay. These methods of communicating have become embedded in our technologies and culture. Companies will soon be interacting with a generation that will find it impossible to imagine a time where the individual didn’t have a voice and an ability to exert influence.

This gives those companies a huge opportunity to be involved in conversations about their brands and to learn and respond to the views and preferences of their customers.

We are moving into the age of the ‘people organised web’ – information organised by people, for people and recommended by people in your network. We have moved beyond the ‘industrialised’ view of the world where markets are represented by impersonal statistics. Markets are made of individuals and they demand to be treated as such.

This is the beginning of the next great step in the evolution of human civilisation. It’s happening. Time to get on board and be part of that evolution.

For more of the interview click here.

This new environment has enabled a quite different approach to growing markets and winning market share. Technology has both facilitated the “fracture” of markets into specialised interest groups and provided the wherewithal to identify and communicate with these groups – in real time. It’s time to get granular!

Stop guessing and start knowing

Not many companies have been able to turn the massive amounts of data that social networks create into profit. This is because they lack the ability or simply do not have the courage to make the steps necessary. In fact, the vast majority of companies have not managed to develop a management structure and marketing strategy that is in line with the fracturing of the market place they play in. Many are still guessing their way through mass media insights and market research based on small sample sizes extrapolated out to the entire population.

This will change very quickly in the coming months. As Hal Varian, the chief economist of Google, recently stated in the McKinsey Quarterly; “I keep saying the sexy job in the next ten years will be statisticians. People think I‚Äôm joking, but who would‚Äôve guessed that computer engineers would‚Äôve been the sexy job of the 1990s?”.*

Companies develop far better growth strategies if they choose to focus on granular information – in both identifying and attacking new market segments and in cutting costs.

The concept in practice

The Harvard Business Review recently explored the ramifications of exploring granular data. In that article they discussed how Amazon leverages it’s virtual and low cost supply chain to “efficiently indulge the tastes of narrow customer segments, literally down to the individual buyer, at very low marginal cost”.

The article went on to discuss how the strongest contribution to performance comes, not necessarily from focusing on acquiring overall market share, but identifying and investing in markets with the most vitality. The example they illustrated was that of a construction and services business face near zero growth. The company used granular data to divide its world into geographic, customer and product segments. They quickly discovered that they had very weak market share in the fastest growing market spaces revealing over $10 billion in potential that could be tapped into.

Steps to take

So here is what you need to do:

• Accept that a fundamental change in communication is in place and be prepared to adapt.
• Allocate budget towards methods and technologies that can gather relevant data.
• Use this data to identify new market opportunities, the strongest growth areas will be apparent quickly.
• Invest in these new segments ¬†and be prepared to ditch low growth market segments.
• Develop a method for managing the multiple market segments you may now be playing in.

Life’s a beach

In the good times it’s easy to be complacent as customers come to you easily – like all of those people flocking to the beach this summer. But in the wintery phase the world economy is currently going through understanding the needs and wants of the micro-markets you can have most influence over is a winning strategy – that is easy to scale up when things begin to warm back up.

Now’s the time to get out your microscope and look carefully at the grains of data you have available to you.

* to see videos of Hal Varian talking about how the market place has changes click here.

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Digg Dialogg with Google’s Marissa Mayer from Digg Videos on Vimeo.

It said:

“Before the latest social media revolution, Jessica Gottlieb would have probably watched helplessly when her kids, Jane and Alexander, were trapped on the tarmac, waiting for their Virgin America flight to take off.

But that’s so 2008. When it happened to her last week, the Los Angeles-based blogger reached for her iPhone and twittered about her troubles. “Dear Virgin Air,” she wrote. “My children have been on the tarmac for one hour with 90 more minutes to wait. I am at JFK gate b25. Pls RT.”

That last request — please “RT” — is shorthand for Gottlieb’s nearly 10,000 followers to “retweet” her message, or rebroadcast it to their followers. And re-tweet they did. Within minutes, Virgin had phoned Gottlieb to reassure her that her kids would be fine.

“They contacted the gate agent manager and explained to us the entire weather situation,” she says. “Within 20 minutes of that conversation, the plane took off.”

The same forces that threaten to unravel a repressive Iranian regime are revolutionizing the way Americans travel. Social media sites that allow people to interact in the moment are changing how travel companies talk to their customers — and how their customers talk back. ”

The full article can be read here

You can read it here.