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What's the bigger social media idea: marketing stimulus or business process innnovation?

Lately I've been so busy that I haven't even had time to recap in this blog important, conversation-triggering articles I've penned in my Advertising Age column.  I'm hoping to change that, even if I have to backtrack a bit.  Below are excerpts from perhaps my most read and "shared" (according to Ad Age metrics) article to date, and my core premise is this: the bigger idea in social media might be as much about business process innovation than next-gen communication.  Here's excerpts, and I also encourage folks to skim the comments and blog posts that either build upon or challenge the argument.

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What's the bigger idea: social media as marketing stimulus or social media as a way to innovate business processes?

Every brand manager or CMO should recognize that it's both -- and in a disruptive economy, you need to take advantage of both outcomes. And when the potential dividends of a marketing effort include changes to a company's process, we need to rethink the entire notion of ROI.

This isn't an easy task, as marketers typically leave things such as organizational strategy and technology implementation to other stakeholders -- keeping lines cleaner and allowing marketers to focus on, well, their areas of focus. You let technology folks do technology, quality folks do quality and service folks do service.

But social media softens the silos. It's hard to turn over a rock in social media, dip your toe into Twitter or comment on someone's blog without rethinking the fundamentals of a firm's organization, product development and even listening infrastructure. Such firsthand experience begets inspiration. Inspiration powers change. And change is needed more than ever before as we're asked to contract our resources.

Social media and communication
Social media, at the end of the day, is about reinventing communication. Executed wisely, it's a new covenant of interaction between consumer and consumers, and, more recently, consumers and business. You could even argue that it's the long-overdue realization of one-to-one marketing that we over-romanticized back in the 1990s and inexcusably put on the "direct marketing" shelf.

ABOUT THE AUTHOR

Pete Blackshaw is exec VP of Nielsen Online Digital Strategic Services and author of 'Satisfied Customers Tell Three Friends, Angry Customers Tell 3,000' (DoubleDay). His biweekly column looks at the relationship between marketing and customer service in the age of consumer control.

But "organizational" communication, across thousands of companies and brands, is an area so bankrupt with inefficiency and scared of change that it's hard not to wonder whether your latest Twitter "aha moment" is better shared with the chief information officer or human resources than with the marketing team

Driving innovation
Then there's innovation -- the engine of value creation and company growth. Social media is one massive feedback loop. It's chaotic on the surface, but unmistakably efficient if you consider the life cycle of vetting a good idea or absorbing the ideas of others. If you really peel the onion on what's happening across blogs, Twitter and other online communities, brands are setting up de facto listening labs that rewrite the rules of gathering and managing feedback. We're getting more ideas faster. The funnel is broadening. The filters are sharper, more immediate and grounded in deeper levels of intimacy with the product or proposition.

The end outcome, whether intentional or incidental, is a disintermediation of existing, and potentially more expensive, processes. That alone should be reason enough for the CEO to personally initiate "Social Media Day" or "CGM [consumer-generated media] Day."

Procter & Gamble's Kim Dedeker, speaking to the Advertising Research Foundation's recent Listening Summit, suggested that brands need to reinvent "how to listen" not merely to figure out how to turn on online strategy or social media, but far more importantly, to reinvent and "inspire" the entire market research department. Put another way, listening is about reinvention.

The irony here is that a free tool known as Twitter was being used in real time by many of the attendees, the resulting data streams inspiring new ideas and playback throughout the conference.

Joel Rubinson, chief research officer of the ARF, called it "an amazing record of our research transformation conference, definitely more insightful than my old-school note taking. The big idea was that listening creates a fast-learning organization, which is the only way marketing can catch up to the consumer."

Driving margins, saving money
Let's end by hitting the sweet spot of practicality. At the end of the day, our foray into social media is teaching us how to save money. Consumer-generated media and social-media-enabling tools allow us to create websites and blogs for extremely low prices -- a far cry from the multimillion-dollar websites we built when I was co-leading interactive marketing at P&G back in the 1990s. Brands including Ford, Comcast, Toyota, Southwest, Sony, Denny's and others are testing new models of customer service on platforms such as Twitter that, under the old "enterprise" rules, would have cost millions to launch or even test. It's not that everything's cheap, but the barriers to low-cost earning have plummeted.

Whether we as marketers admit it or not, our dips into the collective social-media learning lab are making it really hard to justify $5,000-a-pop conference trips where we listen, learn, interact and collect leads. One could easily argue that the collective, real-time wisdom of social media, thoughtfully absorbed, easily substitutes for attending a "live" conference. And online video makes the substitution all the more tolerable. Video is a process innovation that is rewriting all the rules of efficiency.

Across the social-media airways there's no shortage of inspired thinking about what's possible. At a time when organizations are under intense pressure to reinvent themselves -- to take lemons and make lemonade -- it might be the right time to focus our efforts, even for a moment, on the overall "business process" equation. That's probably the easiest and most obvious way to demonstrate ROI around all of these efforts.

Glittering Gold, Viral Birdies, and Other Olympian Buzz Charts

Here's a few fun "data" views from Nielsen's BlogPulse monitoring tool, which tracks nearly 80 million blogs daily.  You can run your own trend charts. 

Don't Dis Badminton:  In the blogosphere at least, the birdie stayed in play with the hot, hip sands of beach volleyball.

Is Bela Karoyli the next Howard Cosell? You never know, but at one point he nearly eclipsed Costas on blog mentions.

Gold Glitters -- Disproportionately:  Yes, indeed.

If you are still hungry for Olympic data and bloggage, my work colleague Jon Gibs is blogging away on Nielsen's Analyst Blog.   

"Tell 3000" NYC Book Launch Notebook: I Love New York!

Time magazing just published a wonderfully positive review of my book, Satisfied Customers Tell Three Friends, Angry Customers Tell 3000.  (The image to the left is from the article.) Notes reviewer Andrea Sachs: "This book deserves a spot on the desk of every executive who worries about his company's reputational risk."   Earlier in the week, CNBC wrote another flattering review in the "Bullish on Book" sections. 

“SATISFIED CUSTOMERS” is a great guide for business leaders and marketing officers who want to build a trusting, authentic and lasting relationship with today’s vocal consumer.

Launch Events: The reviews were just a couple highlights of an absolutely incredible week in NYC related to my book launch, and I'm just winding down. In addition to keeping up with my regular work flow, I participated in three successive book launch events: one by my classmates at HBS (thanks, Rick and Jen Lerner and Bill and Daphne Hildebolt or ExpoTV.com), another absolutely incredible of ("amazing" insists my wife Erika) hosted by Nielsen at the incredible Soho loft of Karen Watson (Nielsen's head of Corporate Communications), and the third hosted by the P&G Alumni Assocation NY chapter (big thanks to Tina Adolfsson) held at the breathtaking offices of Marina Maher communications (thanks, Marina). At each event I had a chance to catch up with old friends, talk briefly about the book themes, and answer a questions. 

Overall Engagement:  We're only a week into the book's official release, but I do sense a real and genuine level of engagement around its themes and issues. Everyone, it seems, is curious and engaged about the big questions: If consumers are in control, what does that mean for me as a business manager or stakeholder?   What is the proper and appropriate protocol for engaging with consumers in this environment?  And most importantly, how does my business stay credible in the process? 

Final Footnote: The ultimate irony of this amazing week is that it actually kicked off on Tuesday at at event entitled "How Should Research Leverage The Ability To Listen To Consumers In A Web 2.0 World?  Joel Rubinson, the new head of research of the Advertising Research Foundation, pulled together a dozen or so industry leaders in the field of market research to vet out this topic, especially around the power of the "unprompted consumer voice."  The discussion was deep, stimulating, uncomfortable and breakthrough -- one of the most gratifying sessions I've participated in all year.  (Huge thanks to Joel and ARF head Bob Barocci for leading this charge). 

If you want to stay engaged on the book or the book themes, here are a few options:

• The Tell 3000 Group on Facebook is almost up to 400 members.  I expect a host of superb conversation here.  The group draws in part from the Tell3000.com site.
• Twitter Feeds:  My personal feed or the Tell3000 feed (which tracks at the brands that actively use Twitter to engage companies: Dell, Southwest, JetBlue, Comcast, Virgin, Zappos, etc)
• Ad-Tech Chicago Keynote Panel 8/6 featuring Edelman, Nestle, Blogher, Dell, and Comcast.  I'm the moderator. 
• 8/30 Book Chat & Signing: Joseph Beth's Cincinnati

CGM & Forecasting Product Launch: Nielsen BASES/BuzzMetrics Study

Last week I kicked off a New York based Word-of-Mouth Marketing Association (WOMMA) workshop , and a key point I underscored -- and repeat in virtually every presentation -- is that buzz never occurs in a vacuum.  The digital trail of CGM is like a never-ending accountability scorecard that implicates just about everything in business, from advertising to customer service to employee relations.  The key challenge (and opportunity) for managers is to understand and take full advantage of the the "cause and effect" of the various inputs.

BUZZMETRICS/BASES STUDY:  Along these lines, the Nielsen BASES and BuzzMetrics divisions (disclosure/transparency check: Nielsen is my official employer) converged on a study and white paper this week underscoring the symbiotic relationship between CGM and paid media. Authored by Kate Niederhoffer (BuzzMetrics), Rob Mooth (BASES), David Wiesenfeld (AC Nielsen) and a few others, this first stage CPG brand and market-mix modeling study found that high blog interest, or buzz, around new product launches is tightly linked to paid media spending. Notes the study:

After analyzing blog buzz volume, ad spending, purchase intentions and actual product sales, Nielsen found the best predictor of buzz for newly launched consumer-packaged goods (CPG) is a large advertising budget. The study evaluated nearly 80 new CPG products across several subcategories, launched in the U.S. between 2005 and 2006. On average, the top 10% of products with the most buzz, spent nearly $20 million on paid media for the launch. In contrast, the companies that generated the next 40% of blog buzz spent an average of $15 million and the companies that generated the bottom 50% spent an average of only $5 million.

 

Worth also mentioning that 10% of brands accounted for 85% of total CPG buzz in the study. The study also suggests that blog buzz drive greater precision in market forecasting.

The news release is here, and the free white paper download is here (registration required). The authors of the study will host a special Web cast, with a Q&A moderated by Brandweek editor Todd Wasserman, on Friday, July 20 at 12PM EST. Sign up here.

Longer term, I think there are many other key variables that need to be modeled into the mix, and this study is just the first "toe in the water."   Other pieces of the mix that need to be evaluated and studied include the following:

• Ad Types: What are the key nuances between "types" of advertising and buzz; will the growth of ad spending online further confirm these conclusions?
• Role/Impact of Search: Where does online search figure into the mix?  There's no question the Apple iPhone benefited enormously from search placement, and we also know the pet food industry has been significantly scarred in search results because of negative buzz (potentially impacting future product launches)
• Intervention Impact: What's more important: the amount of spend, or how brands make key interventions against the spend, and ensuring buzz, to drive more efficiency?
• Negative Buzz: What if the buzz backfires because no one believes the advertising?  Should the concept of Negative GRPs be integrated into the planning mix?
• Forecasting Against Experience:  As brand "experiences" become more closely linked to word-of-mouth and CGM levels, should business processes like "customer service" also be factored into such forecast models?

This is all where the rubber meets the road with word-of-mouth analysis.  Very exciting!

2006 Buzz Chart Toppers: A CGM Retrospective (Last Post of Year)

I thought I'd take a spin through a few 2006 trends and developments as reflected in CGM.  This is where CGM text-mining and analysis gets really interesting.  Indeed, you can look across vast quantities of unstructured to data to glean a unique view into trends, head-to-head brand match-ups, even spectacular flameouts.  The charts below are from the Nielsen BuzzMetrics (my day job) toolkit.   

2006 Gadget Wars: On the  electronics front, iPods continued to not only facilitate the creation of CGM through playlists and new video features (even the playback of home movies) but also continued to drive so much of the buzz and conversation online related to consumer electronics.  While Microsoft's new music player, Zune, just entered the market, it hasn't yet made a huge CGM splash, and that may stem in part from the fact that folks are still testing it out before offering their first hand testimonials.  Nintendo's Wii Player, by contrast, has seen an impressive explosion of buzz, stemming not only from  highly enthusiastic post-experience buzz, but conversation (and frustration) related to where and how to find the much-in-demand player. Next  gadget battlefield: the CES (Consumer Electronics Show) next week in Las Vegas. 

One Word CGM Tipping Point: Macaca: Who would have guessed the balance of power in the US Senate would rest on one word: macaca? This was the term former (yes, hard to believe...this guy was slated to run for President) Virginia Senator George Allen used to describe a worker for his opponent's campaign during a speech that was subsequently captured on YouTube. The incident and term, considered a racial slur, found permanent residence not online online in the blogosphere (see chart) but also on YouTube, where the remark was watched (and replayed) hundreds of thousands of times.  As you can see from the chart, the vast majority of blog buzz Allen received in the critical last phase of the campaign pertained to the "macaca" term, and no one, it seemed, including the national media (which draws heavily from blogs and CGM2) could let it go! He lost the election by a razor thin margin, and now the Democrats hold power.  The power of CGM!

YouTube Trumps the Tube?  Even with Donald Trump,  the term "television"  found some real competition with YouTube, which advanced in 2006 from a sliver of online conversation to a level few would have guessed.  But there's a critical lingering question: did YouTube trump television, or did it facilitate the rebirth and repositioning of television to a new platform.

TV and cable networks, without question, are now among the most aggressive users of YouTube to seed, disseminate, amplify and reinforce their offline content, and now we're seeing the same approach spillover into advertising. (Just wait till the Super Bowl!) They are also using YouTube as a non-regulated channel to make available "not ready for primetime" content (pun intended).  Story to watch in 2007: the continued renaissance of the medium formerly known as television. Trust me, TV is not going away.

Swedish H&M Finds a Buzz (and sales) Niche:  The first time I walked a fast-growing Swedish clothing retailer H&M's doors,  a year ago last November in San Francisco's Union Square, I went nuts. The environment was electrifying, the crowd was funky, the clothing had an edge (but without being totally over-the-top), and the prices were outrageously accessible.  While I only bought a t-shirt for myself, I loaded up on goodies for my wife and kids (including funky neclaces and brakelets and earings), which yielded happy and grateful yet incredulous  ("how could you buy such hip stuff") looks. If you carefully analyze the buzz related to H&M, especially among teens and tweens, you'll understand why it's rising in the charts.  Signing up Madonna as a model undoubtedly helped the buzz factor, but the brand affinity here is deeper. Intense might be a better word.  Get's especially interesting when you company H&M related conversation relative to brands like Abercrombie & Fitch, Gap, and Banana Republic.  Will this hoopla last?   Well, when guys like me start raving about the brand, you never know whether the true cool kids will hang one.  But the stores keep popping up all over the place, so someone cool must still be talking. 

Triumph of New Marketing Models: 2006 taught us lots of great lessons about the "new marketing." What we don't know for certain yet is how much of this we can bottle up for future use (At P&G all our key lessons went into massive white notebooks -- or "Fact Books" -- which always carried an expectation of "reapplicable" use). On YouTube, we saw a largely unknown band "OK Go" dramatically rise in both the buzz and sales charts on the basis of low-cost, yet highly originally, and wildly "passed along," video featuring guys doing the treadmill equivalent of synchronized swimming.  Oh, and their music isn't bad either. We also saw, and continue to see, lots of buzz around Bono initiated "Red" campaign, which earmarks a percentage of revenue for select product to address the African aids crisis.   That said, I'm surprised (and disappointed) the level of buzz hasn't been higher, and I wonder whether the Red campaign (at least so far) has missed opportunities to real consumers (or people...which ever term you prefer) in the message creation.  Even on YouTube, the Red videos are not getting as much pick up as you might expect.  (Footnote: some of the video-reactions to the Red campaign are quite good and insightful...here's an example.) Which brings me to Unilever, which produced what I consider to be one of the best marketing campaigns of the year in the form Dove Real Beauty, especially the "Evolution" video, which drew strength from what I term consumer-fortified media.   Lots of excellent learning here, and I have lots to say about this in one of my ClickZ columns entitled "Real Beauty, Real Breakthrough."

Crocodile Man Bites Big into Buzz Share: As personalities go, Steve Irwin topped the charts this year into terms of buzz and conversation.  Whether it's because we love him or our kids love him, his tragic death hit a nerve, and we all talked about it. And we also linked to him via Wikipedia more than just about any other term in 2006.  Meanwhile, Mark Foley triggered enough buzz to create a mess for Republicans leading into the mid-term elections, and Gerald Ford triggered a huge still-continuing level of (mostly respectful) conversation about his Presidency, his role as national-healer in the wake of Watergate, and of course, his still-controversial decision to pardon former President Richard Nixon. 

Friendly Debates. Buzz Divides. WOM Wars?

The KellerFay Group, in conjuction with BzzAgent, just dropped a new report on word-of-mouth, drawing largely from solicited opinions from the BzzAgent panel.  Very good read, with key learnings that both reinforce (with more focused clarity) what we know and suspect, as well as break open a few new opportunity zones.  I particularly agree with the conclusion that "word of mouth marketing can produce impacts beyond spreading the word."  Among their headline recos for marketers: "aim for higher impacts" (get consumers to website, drop samples, drop coupons), Go in-store ("foster interactions at point of purchase"...recall my "Ex-Spot" piece), Be Social ("build socialability in campaigns"), and Help Your Advocates be online and offline (create a blog, upload a demo video, etc).  I'm always a bit skeptical about comments like "Again, the interactions need to be natural" (far easier said than done when marketing of any sort is at the heart of the process), but the spirit and intent of the comment (like the online video panel last week emphasizing "authenticity") is right. 

Intimate versus Incidental WOM Revised: In skimming through the charts, the one question that keeps jumping to mind is one I've called out before: is there any risk that such research is too anchored to the world of "familiars" versus the "incidental" impact of word-of-mouth.  Moreover, does the process of emphasizing intimate (e.g. I know this person) offline connections discount or undervalue true word-of-mouth impact, especially online.  In one of the KellerFay/BzzAgent report charts, its reported that between 9 and 16% of agents suggest they talk about products in "chat rooms or blogs," versus 99% who talk face-to-face.  The latter is irrefutable, but the former seems to betrays 90 million MySpace pages, 50 million blogs, 10 million LiveJournal accounts, and more online Skype accounts than the average person can count.  Every day, I see product recos, explicit reviews, and de facto brand-centered buzz across the gamut of online venues, and the numbers, if broadly distributed across the population, beat the 9-16% number hands-down.  Which begs some very important questions:

• Definitional Scope: Is our definition of WOM too narrow?  I'm obsessed with the term consumer-generated media (of which I consider WOM to be a subset) because I believe it speaks to a bigger tent of consumer expression, inclusive of "familiars" but well beyond that. 
• Solicited Omissions: Do consumers have a precise handle on what they actually recommend or tell others about when you ask them directly?  Do we as marketers even know how to ask the question in the right way? What are the right questions?
• Recommendational Parameters:  What constitutes a recommendation or an endorsement, especially in the age of social media. Most of us are walking billboards for products and brands, often without even knowing it.  It's especially common online where photo and video imagery allows us to capture a more complete picture of who we are, what we buy, and even the values we wrap around those attributes.  I call this "indirect product placement." Is this word-of-mouth?
• Incidental WOM: How do we account for the indirect or incidental effect of WOM, especially via search engines.  Most offline and online rumors are turbo-charged at the moment of search.  Search results reinforce and "affirm" hunches and suspicions or curiousity-triggers, and the fact that the validation expressed in search results comes from consumers (i.e. more trusted than advertisers...even though we no earthly clue who these folks are) makes it even more powerful.   Is this part of word-of-mouth?
• Quantifying Latency:  Related, what's the "Net Present Value" of buzz that's permanent -- not fleeting or ephemeral.  Just think about Jeff Jarvis and Dell. The power of that incident is the "latency effect" of the negative experience.  The incident continues to create media...almost in perpetuity.  How do we account for that?

So What's Next:  Anyway, it dawned on me a couple days ago after having a rather petty ("Dude, you're WRONG!") e-mail back and forth with my friend Dave Balter on this topic that we need to break open a fresh new conversation (a meme perhaps?) on this topic.  Just to make it interesting -- dare I say, engaging -- I went ahead and registered the domain "WomWars.com" so we can really focus this debate.  This is a really important conversation. If you agree, let me know, and I'll include you in the follow-up.  Thanks for listening!

Re-Engagement on Engagement

Per my earlier post regarding the "Engagement blog," I strongly -- nay, loudly -- encourage you to check it out.  It's more than a blog; it's de facto on demand TV.  OK, not exactly, but there are enough thought-leader videos to keep you engaged for some time. Moreover, my colleague (and Engagement blog maestro) Max Kalehoff pens some thoughtful and reflective commentary per last week's Advertising Research Foundation's (ARF) research conference. Other content from the blog includes: notes from the Gerald Zaltman (see my book reco below) speech on so-called "Depth Deficit," notes from Taddy Hall preso on "winning," notes on panel discussion re: "Measuring the Turn-On" moderated by Barbara Bacci-Mirque of ANA,  notes from NBC's Alan Wurtzel on media measurements, notes from Patrick Keane of Google and Lisa Baird of NFL, and notes on Joe Plummer preso (also see Max's MediaPost Joe Plummer interview), and ARF's Bob Borocci event kickoff.  Video snippets include Gerald Zaltman, "Father of Media Planning" Erwin Efron, AAAA's Mike Donahue, CNET's Ted Smith, ZenithOptimedia's Bruce Goerlich, Interactive Television Alliance's Bed Mendelson, Nielsen Media Research's Paul Donato, Big Research's Joe Pilotta (lots of constructive criticism re: engagement),  Nielsen NetRatings Mainak Mazumdar, Ogilvy's 360' Digital Influence's John Bell, Comscore MediaMetrix's Jack Flanagan, AC/Nielsen's Mark Green (podcast format),  ANA's Barbara Bacci-Mirque, Millward Brown's Michelle de Montigny, 360i's David Berkowitz, MediaWeek's Michael Burgi, and Noah Brier. Jim Nail also offers some thoughtful comments on his blog. 

NEXT UP:  Don't miss the Ad:Tech New York "Engagement" panel entitled "Consumer Generated Media's Role in the Engagement Equation," which includes Bob De Sena, AOL's Terry Pittman, and Huffington Post founding editor Jonah Paretti, and Ze Frank. (I'll be moderating.) 

 

Bloggable Blogs: Engagement by Engagement

One of the most popular webinar's I've led or co-led this year is entitled "CGM and Engagement," and the key theme is whether a consumer's propensity to speak out or express themselved online represents a form of so-called "engagement."  It's a timely question, because engagement has become a new rallying cry for fresh new thinking about advertising effectiveness, and everyone, it seems, is jumping into this important conversation.  Toward that end, I'm participating in a blog my colleague Max Kalehoff initiated on behalf of the Advertising Research Foundation (ARF) to create a more sustained and spirited dialogue and conversation this topic.  It's name, true to its mission, is "Engagement by Engagement." Expect to see lots of great content, including video interviews with key thought-leaders. Are you ready to engage.

Back to the Web 1.0 Future?

I'm a huge believer in social-media and this next great wave of "Web 2.0" innovation, but I'm also getting nervous about the hype.  Maybe I'm just seeing too many cover-stories at the same time.  This is why I penned a column this morning entitled "Back to the Future: Bold, Timeless Truths from Web 1.0.", which attempts to ground much of our thinking today in  stable set of marketing fundamentals going as far back to the late 1990s.  I write:

"...after rummaging through an old box of articles, conference trinkets, and memos from my late 1990s stint as co-leader of Procter & Gamble's early interactive efforts, I'm convinced the core fundamentals were in place before we even heard the term "Web 2.0." I raise this question not to pooh-pooh the current Web 2.0 exuberance but to ground it in a more stable set of fundamentals. As marketers, and certainly at the CMO level, we have a deeply rooted penchant for preaching the new while funding the old.

Among the core "1.0" tenets cited:  (1) The web is a focus group of unlimited conversation, (2) Digital is the most measurable medium, (3) Content is king, (4) Brand websites nurture trust and conversation, (5) Deeper engagement matters: advertise that URL, (6) Time to shift from branding to bonding, (7) Behold the "Network Effect," and (8) Influencers Matter.  Again, here's the link.   For deeper perspective on my point about the value of brand websites, please see the following excellent post by Laurent Flores.    Welcome your feedback!

Interested in Marketing CGM?

Here at Nielsen BuzzMetrics, where I serve as CMO, we're looking for to fill a key marketing position.  Here's details.  Job will be based in New York, and you'll be working with a fast-growing team of passsionate experts in consumer-generated media.  Check it out!