Social media has become an ad driven selection bias engine.

Image taken from the Wall Street Journal’s Blue Feed, Red Feed

Social media’s revenue is based on ads. You can only make money on ads by getting a huge audience and keeping that audience’s attention.

Show people what makes them feel good so they keep looking. Make sure they only see ideas that they can actively nod along with. Don’t make them think – or absorb ideas outside what makes them comfortable.

You’ll sell a whole lot of ads… and foment intellectual tribalism and hostility…

And if you are the “audience” it might be time to rethink how much of your time and intellect you allocate to a system specifically rigged to encourage bias.

P.S. I strongly recommend you click on the intellectual tribalism link.

We’re Just Not That Into You: 5 Reasons Creating Content Isn’t A Social Media Strategy

Ask anyone about Social Media – what they are doing and what their strategy is and you will get a dissertation on all the places they have to create content. Twitter, Blog, Facebook Fan Pages, Newsletters, Yelp…

Give me a break.

Creating tons of content isn’t a social media strategy. It is just blasting your (usually not very interesting) message out into the world. Predictably the next set of questions that get asked are: How do I get more followers/fans; how can I get more people to read my blog; why don’t people like me?

So let me help you out by resetting your expectations. We just aren’t that into you… and here are 5 reasons why.

1) Content is king – just not your content.

Remember, this is Social Media – not Broadcast Media. It is participatory – you are not in charge. People will go to the content they like. So instead of trying to wedge your way in there find the content that already exists about your product, service or brand and promote it. Odds are it is much better and more honest than what you’ll create. After all, you are trying to sell me something, right?

2) You are not Gary Vaynerchuk

It would be great if you were. It’d be great if by replicating Gary’s tactics you could replicate his success – but you can’t. Gary is Gary – what he does works for him because he is a freakish ball of personality, boundless energy, and (lest we forget) an actual business.

3) We only care about what you DO

I use your product/service because it makes my life better in some way. So how about you skip the 30 posts a day about your interoffice ping pong tournament and go make your product better? I know I’d appreciate it, especially if you are actually listening to your market and evolving your product to better meet our needs.

4) What is in it for me?

Seriously, what do I get from following you on Twitter, being a fan on Facebook and reading your blog every day? How are you making my experience doing business with you better? Geeezzzz… this is like a first date and all you’ve done is yammer on endlessly while swilling an entire bottle of wine and wolfing down the “market price” surf and turf. Date #2 is looking very unlikely.

5) Have you heard a freaking word I’ve said?

I’ve used every imaginable way to communicate to you that you do things that piss me off. I’ve called customer service, I’ve Tweeted my dissatisfaction, I’ve blogged about how annoying what you do is… and you keep right on doing it.

This is a conversation, not a monologue – yet you approach it as if I were at home yearning for you to say something so I could anxiously gobble it up. I hate to break it to you, but we just aren’t that in to you. Especially since your entire strategy is to talk at us without any real effort put in to listening and acting on what we say.

Say Is Great – But Only Do Matters

Marketing and PR are invaluable to any company. They help you tell the story, get the word out and draw attention to your company, product, service and brand.

What they don’t do, what they can’t do – and what they shouldn’t attempt to do is deliver on it.

Marketing and PR all all about say. They define expectations – and you’d better be prepared to deliver on them. Operations (product management, product development, customer service and support, finance, etc) are all about do. And what they do defines your company, product, service and brand in powerful ways – ways no amount of marketing and PR spend can overcome.

This is why I’m so convinced that we haven’t even begun to scratch the surface of the value of Social Media for business. We’ve only talked about Marketing and PR. We’ve focused entirely on say – and ignored do.

What social media does is erode the wall between say and do. It allows your market’s voice to to be heard – and guess what… they only care about what you do. And the bigger the gap between say and do (expectations and delivery) the more strident the voices of the market become.

To put it simply – narrow say/do gap equals promoters; broad say/do gap equals detractors.

So before you make your 2010 budgets and slot your social media spend entirely in marketing and PR ask yourself one simple question – are you broadening or narrowing the say/do gap?

Social Media ROI – The Believers and Non-Believers

It appears the Social Media ROI conversation is heating up – and predictably it has split into two camps, the Believers and the Non-Belivers.

The non-belivers are adamant that you simply can’t value conversations. The believers say you can because relationships are valuable. They are both wrong (and right).

Let me try to clarify things – conversations have zero tangible hard value – you can’t put a specific dollar figure on the value of any conversation. In that respect the non-believers are correct. The believers tell you that conversations are valuable because they affect some other valuable thing – and they are correct (however they insist on pointing to the wrong affected things).

Here is a great example:

Shel Israel – who is very bright and who I have immense respect for – is one of the non-belivers. KD Paine – of whom I have no previous knowledge – is one of the believers (at least for the purposes of this post).

Ms. Paine wrote a post taking issue with Mr. Israel’s assertion from his blog that there is value in conversation that can not be measured.

The way to measure the value of conversations is to first measure the degree to which people trust you, and the degree to which your stakeholders are satisfied and committed to your relationships. Find out just how valuable people think those relationships are. Then start a conversation and measure how much MORE valuable people think the relationship after you’ve been talking with them awhile.

I think we would all agree that these statements are accurate – but do they assign hard value to conversations? No, in fact this is simply a list of other intangibles that conversations affect. Ms. Paine lists tangibles (i.e., lowered costs across several functions) but never comes out and says that conversations lower costs in functions x, y and z.

It isn’t that Ms. Paine is terribly far off – it is just that she refuses to make a well formed argument that translates to a hard dollar ROI. She simply refuses to connect the dots and commit to a hard dollar outcome from her “conversations”.

On the other hand, Mr. Israel posits this thought experiment via Tweet:

Screen shot 2009-12-17 at 9.00.19 AM.png

Screen shot 2009-12-17 at 9.00.42 AM.png

Mr. Israel makes the opposite mistake – he is essentially telling us that unless you can directly connect an action with it’s effect you can’t call it an ROI. If that were true about 85% of corporate spending would stop today.

So, just for fun, I’ll complete Mr. Israel’s thought experiment:

First let’s figure out the investment:

  • Assume you need 12 pair of pants that cost $125.00 each – total cost of pants: $1500.00
  • Pants maintenance (i.e., dry cleaning) costs of $18.00 per week – total cost of maintenance: $936.00
  • Total sunk cost for pants (for one year) is: $2436.00

Now, let’s talk about the return side of the equation:

  • Assume an average deal size of $25,000.00
  • You take 42 “business meetings” per year and you currently (wearing pants) convert 62%.
  • That means you win 26 deals per year @ 25k each – for a total of: 650k/year

Here is where the fun begins:

  • Let’s make the conservative (and if you disagree with this being conservative please speak up) estimate that not wearing pants to business meetings would lower your conversion rate by 8%.
  • Now you only convert 54% of your opportunities.
  • You now generate 22.5 deals per year at 25k each – for a total of: 562k

Net change in outcome metric: -88k

ROI on Pants – for an investment of $2436.00 you (conservatively) generate an additional $88,000.00 per year. That is a return of 3600%.

Then non-belivers will read this an suggest that there may be hundreds of reasons that you didn’t win those deals – and they’d be right. But that isn’t the point. The point is that the proximate cause of losing those deals was – with a very high degree of probability – the fact that you were sitting in the meeting with your junk hanging out.

ROIs are built on proximate causes the vast majority of the time – and that isn’t a scam, it simply reflects the reality that most of the things we do directly affect input metrics, not our hard dollar output metrics. In other words, we do things to improve important measures that have no direct tangible dollar value because those metrics have a proven affect on measures that do.

The takeaway here is that we should stop trying to assign hard dollar values to Social Media metrics/measures and get busy showing how they affect the hard dollar metrics for your business.

A Simple Prescription for Social Media ROI

The consensus seems to be that creating an ROI for Social Media is hard. I’d like to suggest that it isn’t.

Formulating an ROI is a very simple formula – and until someone can rationally explain why Social Media is different I’ll get out my cookbook.

  1. Define the desired outcome (e.g., increase conversion rate by 3%).
  2. Define the specific actions that will be taken (e.g., offer specials via blog, Twitter and Facebook with specific landing pages).
  3. Define the metrics and measures that will be used to determine if the actions taken were the proximate cause of the result.
  4. Perform the actions and analyze the metrics and measures.
  5. Determine cost of actions and the value of the resultant change in the outcome.

money clipart, banknote & coins.gif

The flaw in most approaches to Social Media ROI happens on the very first step. If you can’t assign real value to the desired outcome you can’t create an ROI. A perfect example is “We’d like to double our followers on Twitter and fans on Facebook”. Some people will call this a “soft ROI” – which is simply another way of saying that the desired outcome can not be assigned a real value, but affects another metric that can. The relationship between the desired outcome (more followers/fans) and the real value metric (sales) is usually highly theoretical – our just plain wishful thinking. If you believe more followers or fans equates to higher sales – say so. Design your ROI experiment and prove it.

The other flaw is in step 3. Failing to adequately define the input metrics (the metrics that are the proximate cause of the change in outcome) leads to an ROI that does not bear scrutiny. Examples of poorly defined input metrics are:

  • Increase our Social Media Presence
  • Get more engagement
  • Have better sentiment about our brand
  • Be influential in our space

Avoid those two traps and you’ll be well on your way. But there is one mistake I see more than any other:

Stop trying to create a “pure” or “standalone” Social Media ROI!!

Another way to put this – in terms of our recipe above – is:

If your desired outcome is a Social Media metric or measure – think again.

I’ll end the suspense for you right now, it doesn’t exist. The only way to ROI a Social Media effort is by showing that your Social Media effort is the proximate cause of a change in a fundamental business metric (e.g., sales, conversion rate, leads generated, churn, etc).

CRM is a great example of this – I was involved in dozens of large footprint CRM deployments. Well over half of those were done based on a solid ROI – but it had nothing to do with customers. The ROI was based purely on cost savings in IT. Do I believe those deployments had other benefits which were harder to measure and quantify? Sure. But the way to prove the investment had a return was to focus on what was proven, repeatable and tangible.

I think Social Media is much easier to ROI than CRM was. I don’t think we will end up creating ROI based on savings in IT. I am, however, certain that the ROI will have to point to real dollars saved or real dollars generated.

I’m convinced that when you focus on determining which Social Media metrics are the proximate cause of change in core business metrics you’ll find an ROI – and I’m betting it will be both larger and more diverse than you would have predicted.

Let’s Get Serious – Social Media ROI

I’m honestly heartened by the sudden rash of efforts to create a methodology to determine ROI (return on investment) for Social Media efforts. It signals something very important for Social Media – the return of rationality to the debate.

head scratch.pngWhen you consider that a few short months ago the prevailing meme was that creating a basis for your Social Media efforts in terms of ROI was “doing it wrong” – it is impressive how far we’ve come. The realization that moral arguments and scare tactics will only get you so far – and in many cases backfire – has led to an overwhelming need to create an ROI model.

Unfortunately many of these efforts are not really after ROI – they are seeking to justify an already formed point of view.

The reality is we simply don’t know if Social Media has a analytical, fact based ROI. That may sound odd coming from a guy who has bet his personal savings starting a Social Media Engagement and Analytics company – so let me explain both why the ROI hasn’t been proven and why I’m betting it will be.

Social Media is a Niche Opportunity – Today

If you want to know why there is no fact based proven ROI for Social Media investments today, all you need to understand is that Social Media has been adopted in niches. It may be in the Marketing department, or used by your Digital Agency, or perhaps in your Customer Service department. Each of these adoptions was driven out of fear (we have to monitor this and deal with the negative) or the moral (we love our customers – so we are going to do this). The investment was negligible – and in most cases I’d bet it was funded right out of the operating budget of the organization where it was used.

These organizations are beginning to declare victory and are being challenged to prove it. This presents unique challenges, because Social Media runs on anecdotes, not analysis. Dell sells 3 million in product from Dell Outlet after offering those products on Twitter. That is a great anecdote – but it isn’t analysis. When you ask the critical questions:

  • What would you have sold without Twitter?
  • Was that a 3MM increase in sales – or just 3MM net sales from those links?
  • How much did it cost to generate the 3MM in sales and how does that compare to email?
  • Is this repeatable – can it be replicated in other parts of the business – and how do you know?

you quickly find that the anecdote doesn’t equate to ROI. It might… but it isn’t there yet.

These types of anecdotes are justifications. They are about proving the correctness of an already made assumption.

I’ve seen this movie before – it exactly parallels the pattern for CRM in the late 1990’s.


NOTE: For simplicity I’ve omitted the case where a technology/methodology has a niche ROI without broader adoption.

We are squarely in the middle of the justification phase for Social Media. This roughly corresponds to the height of the expectations (the big peak on the Gartner Magic Quadrant) and always directly precedes the Trough of Disillusionment. This is a recognizable and predictable pattern for adoption of new technologies and methodologies – and here is why.

The initial opportunity is too good to stay on the sidelines for some early adopter group. They – almost always within existing operating budgets and using the promise as a bulwark defense – adopt the technology/methodology. Once they believe they have seen tangible results they attempt to socialize the “win” outside the organization by creating justifications for what they’ve already done. These justifications bring broader scrutiny.

That scrutiny happens in two phases:

  1. Was it worth it?
  2. Can it be done systemically – can I forecast a x% increase in metric z if I do this again.

The second is ROI. A systemic way of proving that adoption generates a return. If, and only if, that can be proven will the technology escape the niche application and be applied on a broad scale.

Why does it work this way – because enterprises are first and foremost risk management systems. They systemically avoid large risks.

Why Will Social Media Attain Broad Adoption

The primary reasons I believe Social Media will in fact generate a valid ROI and attain broad adoption:

  1. It is measurable.
  2. The unrecognized value far exceeds the recognized value.


As you might imagine, it is very difficult to justify and create a systemic ROI for something that is exceptionally difficult to measure. Social Media is – in contrast – eminently measurable. Rational decisions must be made about what to measure – and we need more focus on connecting those measures to the core business metrics – but there is no fundamental barrier to creating valuable measures.

The Value Proposition

Today, we’ve put all our Social Media eggs in the PR/Marketing basket. Even the small amount of credibility given to customer service via Social Media has been driven by the (C-Level Down) idea that customer service should “avert disasters” by monitoring Social Media and addressing customer issues. Make no mistake, this is customer service acting in a PR role – the goal isn’t to provide service so much as to avoid negative perceptions.

However, if you take one large step back and think about the opportunity Social Media presents – you can quickly see that the value proposition is in having a huge, open back channel to your market. We’ve had channels to our customers, and sometimes even our prospects – but this is bigger. It is the entire market for your product or service. You get to listen in on what they have to say about what they want and need. You can engage them to better understand their motivations. You can apply what you learn to create incremental improvements in every phase of your business.

Yes, you can send out special offers. Yes, you can address customer concerns. But the real return will come from having a robust back channel with your entire market; and the resulting market intelligence can – if you apply it – help you make every part of your business more appealing to your target market.

So let’s get serious about ROI. Let’s talk about how companies operate and win by continually tuning their processes to better address the needs of their target market. Let’s talk about how Social Media provides them a back channel to that market, a back channel that is an invaluable source of intelligence about the market.

Let’s talk about how a business that applies the intelligence gained via Social Media to all of their decision making processes is faster and more agile in addressing the needs of their market – and thereby wins market share.

Social Media’s Big Problem – Marketers

I hate to say it, but Social Media (and Twitter in particular) has a big problem… and that big problem is marketers.

I know, I know, marketers made Social Media – and setting aside weather or not that is true, let’s focus on the facts.

  1. Nearly any relatively popular topic is quickly overrun with marketers trying to get their message into your stream.
  2. The line between spam and marketing is non-exisitent in Social Media.
  3. Any analytical analysis of a topic is becoming more and more difficult as the topic gets filled with marketing.
  4. Traditional marketing approaches work in Social Media… get your message/link in front of enough eyeballs and some percentage will click.


Case in point. I own a Social Media solutions company – justSignal – and we have a Signal set up to track everything people say is “great” (via a variety of term searches and exclusions using our proprietary filtering mechanism) on Twitter. We’ve just released our SignalLinks Analytic in beta (you can learn more about SignalLinks here). So today I decided to look at SignalLinks for our everything great on Twitter Signal.

The results were disappointing to put it mildly. There is no authentic user voice in this data… only marketing and/or spam (you find the line there).

Here are the most mentioned links over the last 30 days:


























silence_noise_143829_tns.png Let me make one thing perfectly clear – I belive that Social Media provides the best opportunity for opt-in targeted marketing. But when the Signal is so clogged with marketing and/or spam that adds zero value the only effect will be user apathy.

From a development/partner point of view, some of Twitter’s actions to “curate” seem rather annoying – but from an end user’s point of view they are doing exactly what they need to do. After all, at some point Twitter will launch their business model, and the two best bets are:

a) Targeted opt-in Ads

b) Analytics

Both of those revenue paths are put in serious jeopardy if users become apathetic because their Signal if full of marketing noise.

TweetsForBoobs – How justSignal Helped Make it Happen

200910090957.jpgReposted from the justSignal Blog (

Sometimes the best way to illustrate how justSignal can accelerate your strategy is by providing concrete examples of how others have accelerated theirs.

TweetsForBoobs is raising money for the Susan G. Komen foundation by encouraging folks to tweet the #tweetsforboobs hash tag on Twitter. It is the brain child of Chase Granberry and Josh Strebel – justSignal (and I for that matter) claim no credit for the idea or it’s successful execution.

In the interest of full disclosure, we did donate justSignal to TweetsForBoobs.

TweetsForBoobs needed four things in order to complete their vision.

  1. A way to capture Tweets about the site and with the hashtag
  2. The ability to put those Tweets on the site in real time.
  3. A way to count how many times a Twitter User used the hashtag.
  4. A way to measure the effectiveness of their efforts.

justSignal, because we focus on the complete Social Media Lifecycle, was uniquely suited to get them there – fast.

TweetsForBoobs was able to create a Signal that pulled in the content they were interested in. They were also able to – using our Exclusion Engine – remove spam and re-tweet bots from their Signal.

In order to create an engaging user experience on the site TweetsForBoobs dropped in and customized our real-time Twitter widget.   

Using our API service, TweetsForBoobs was able to pull in all mentions of the hashtag and the site in near real-time. This enabled them to count how many times each user tweeted the hash tag and update the site with current pledge totals.

Finally, TweetsForBoobs wanted to have some information (analysis) that gave them some indication of how the campaign was going. Since every Signal comes with our SignalReports (SignalMeter, SignalDensity and User Activity) they had basic who, when, and how much information.


That is execution of the complete Social Media Lifecycle enabled by justSignal.

  1. Signal – Getting the #tweetsforboobs content.
  2. Engagement – Using our Widgets to put the content on the site, and using the API to create site specific information.
  3. Analytics – Using our SignalReports to gauge the effectiveness of the effort.

What makes TweetsForBoobs even more interesting is that they clearly show the benefit of our approach to data and analytics. When Chase wanted to understand the “Reach” of the hashtag he wasn’t confined by the data we provide “out of the box”.

The data is yours, when you have a question we don’t answer – because it is the really, really important kind, those specific to your business, company, product or service – you have access to the entire data set and the unfettered ability to mine out what is important to you.

You can read Chase’s excellent summary of the data and his thoughts on justSignal at the Authority Labs Blog.

What about action?

That is where you come in… head over to TweetsForBoobs or just grab your favorite Twitter client and send a tweet with #tweetsforboobs in it. Every time you do you pledge $1.00 to the Susan G. Komen foundation.

The Business of Social Media – Better Decisions (NOT Better Reactions)

js_icon_favicon.png The prevailing wisdom is clear. Social Media is for “Listening” (which is code for brand monitoring) and Marketing. I won’t make any attempt to talk about Marketing – since today everything seems to be a tool/platform for marketing. I will however talk about this notion of “Listening”.

There are two (and only two ways) to sell something, opportunity and fear. Objectively fear is easy – all you have to do is figure out what your target market is afraid of and make your product a way to alleviate that fear. Sadly, this is the state of the “Listening” segment of the Social Media consulting/tools market today.

CEO’s are terrified of Social Media. The feel they can’t predict when their “Motrin Moment” will occur or why – and the Social Media “experts” are no help:

Maybe you’re not even ready for full-time social media monitoring. That’s your call. But not tuning in while you launch a new tactic borders on gross negligence, in this day and age.

From Pistacio Consulting

Negligence – that is a powerful and scary word. One thing no CEO wants to hear when facing the board is the word Negligence.

The problem for the Social Media Experts and “Listening” vendors is this, if the fear isn’t real, if it doesn’t turn into an actual negative business outcome those same CEO’s will quickly learn to ignore it as noise. The problem is, none of the high visibility Social Media brand events have had any tangible negative business impact.

Here is Johnson and Johnson’s Stock Chart for the last year:


The Motrin Moment occurred on November 16th 2008. I can’t discern an appreciable change in stock price following the event. While I couldn’t find any public data which specifically detailed Motin’s month by month sales numbers – I’d feel pretty safe saying that there was no appreciable change.

Another great example is the “United Broke My Guitar” incident. On July 6th a United customer posted a video on YouTube featuring a song about how United broke his guitar and failed to resolve the issue to his satisfaction. That video has 5.5 million views so far, has been cross posted on MSNBC, Huffington Post, and played on air on CNN and others.

Here is United Airlines Stock Chart for the last 6 months:


Shockingly, UAL’s stock price has more than doubled since the Social Media event. United hasn’t released a new quarterly report since July 23rd – so ticket sales numbers are not publicly available, but based on the stock’s performance and current guidance from UAL management – I’d (again) feel pretty safe saying there was no appreciable negative change.

What is clear from these two high profile Social Media events is that they have little or no impact on a brand – by the only meaningful measure – revenue, and return of value to share holders.

What can damage a brand isn’t the isolated incident that creates Social Media Buzz. What damages a brand is consistently making bad decisions which make your product or service less useful, less valuable to your target market. For brands there is no “Waterloo” moment (thank @jaybaer of Convince and Convert for the quotable moment). There is only the slow agonizing descent into irrelevance that occurs when you make bad decisions over and over again.

The real value of Social Media for businesses is in the ability to make better decisions – not reacting to bad decisions already made.


Every business needs better information upon which to make those decisions – every business can benefit from better understanding the needs, aggravations, and problems of their target customer. Every business can improve their decision making processes by driving the information found in Social Media into every decision making process in the company.

The challenge with this approach is that it is far more Six Sigma than sexy. It will force vendors, consultants and companies to work harder, be open to information that contradicts the prevailing wisdom and invest significant time and resources into extracting the information that is meaningful to their business and their decision making processes.

This isn’t terribly different than the original aim of CRM. And it isn’t terribly controversial. What it is is the opportunity selling position in the Social Media Tools market. It is time for Social Media consultants and vendors to ditch the hype and scare tactics and get down to business… the business of creating value for companies by helping them avoid Motrin Moments by making better decisions consistently.