This week, news has been circulating that FMCG company Procter & Gamble will eliminate 1,600 jobs and shift more budget into digital media. The headline over at Business Insider is a bit more incendiary: “P&G To Lay Off 1,600 After Discovering It’s Free To Advertise On Facebook.”

The statement that “it’s free to advertise on Facebook” is wrong at minimum and leads executives to a potentially dangerous point of view regarding social business.

Let’s start with Facebook and free. From one perspective, this is true – anyone can start a brand page at no cost. However, building a successful page requires investment in media, social graph activation, and integration with large-scale marketing campaigns to offer custom experiences for fans and prospects. The world will learn more this week about the amount being spent on the Facebook advertising ecosystem – over $3 billion annually. That’s far from free – in fact, P&G’s remarks justify these investments.

What about brands that aren’t pouring money into the ecosystem? At minimum, companies need individuals to manage and moderate conversations. Although communities operating at scale may have members who engage each other with little company involvement, they aren’t free. Consider Wikipedia, a community that serves hundreds of millions of visitors every month – it takes technology and people to keep the site going – supported by donations. A company like Red Bull doesn’t get to over 26 million fans without engaging – which requires FTE/personnel expense.

P&G certainly didn’t pay for every one of the “1.8 billion in free impressions generated by the Old Spice campaign”…at least not directly. This is absolutely a success story and Dion Hinchcliffe and I talk about it in our forthcoming book, Social Business by Design. It’s important to keep in mind that this is an example of successful “big seed” marketing – plenty of money was poured into the initial mass media campaign and even more was spent to keep The Man Your Man Could Smell Like relevant with real-time videos. Free? No way – W+K grew 22% in 2011.

Not too long ago, I had a client who had a problem. He was the head of digital and emerging media for a consumer products brand. Recently, the CEO’s college-age children had come home for Thanksgiving break and showed the CEO this new thing called YouTube, where companies like Coca-Cola were having great success with reposting their TV commercials. As a result, the CEO decided to slash the digital and social media budgets; my client was laid off soon thereafter. Today, they are lagging far behind their industry competition and I have never seen anyone mention their brands or campaigns in social media.

Social media marketing success comes at a cost. Executives must take a social business perspective instead, considering external and internal factors as well as designing for intended and emergent outcomes. Without a holistic perspective, businesses end up operating like blind men around an elephant and a lineup of digital tombstones in online brand graveyards. 

Disclosure: my company Dachis Group operates one of the world’s largest Facebook Preferred Developer Consultant groups. P&G is a client and our recent work includes the People’s Choice Awards and Thank You, Mom. Red Bull is also a client and we launched their Facebook presence.

1. The stats

• Twitter has 100 million active users. Over 600,000 new accounts are added daily.
• Not everyone tweets; 40% of users just listen. They’re seeing one billion tweets produced every 4.5 days.
• Over half of Twitter’s active user base is on mobile. Enhancements like the upcoming iOS5 integration will drive further mobile usage along with overall user base growth. It’s a bit premature to think that Facebook will become the web.

2. You need to plan.

Twitter offers three paid products: Promoted Tweets, Trends, and Accounts. Using these effectively requires a bit more than throwing some budget out there to see what clicks. Campaign integration is key to making spend work and brands need to plan ahead to maximize value.

For example, let’s say you sponsor a big sporting event and assume you already have a Twitter account.

Preparing for your event, you’ll want to build your follower base – this number constitutes your initial reach, the bigger the better. Promoted Accounts help build your base and Twitter’s research shows that these followers are stickier than organic follows. Offline, you should be promoting your Twitter handle in stores and on packaging and other portable materials that consumers can take with them and look you up later.

Leading up to your event, you should be engaging with your ecosystem on an ad-hoc basis to drive organic impressions. In addition, your content calendar should drive conversation topics and you can use Promoted Tweets to target messages to specific demographics, driving customer acquisition. Although consumers always love to hate advertising, research shows that Promoted Tweets don’t spur higher unfollow rates than other tweet types. You should be tracking and optimizing message efficacy, monitoring elements like content and daypart.

On the day of your event, you’ll want to use a Promoted Trend to drive traffic. The text of that tweet should contain a link leading to a monetizable consumer action. Brands need to plan ahead on this one, as inventory is limited and can sell out. The last thing you want is a competitor purchasing a key hashtag that diverts attention away from you – think about how Pizza Hut generated massive social media attention during the last Super Bowl despite Papa John’s position as official sponsor.

The infrastructure to support all of this includes a communications workflow and trained staff to support consumer engagement before, during, and after your event. Links that you include in messages should facilitate tracking, whether through URL shortener, landing page, or other method, ideally integrated with your existing analytics platform.

This advice might seem familiar, even too simple for some. But many brands still approach Twitter as a domain limited to 1-1 direct engagement, missing opportunities for valuable one-to-many reach. Increasing brand awareness on Twitter takes more than “let’s get retweeted by someone with a lot of followers.” Instead, brands should plan on channel integration to maximize advertising investments.

BUT…

Before I got back into the technology sector in the 90s, I spent a solid few years in the Advertising business.  And not digital or online advertising (it didn’t exist yet). In the real Advertising (TV/Broadcast/Print) world. (With a capital A.)  Think of it as Mad Men for yuppies (late 80s).  I entered the ad world as an Account Executive on the IBM account. The agency I joined, LGFE, was a boutique outfit, a part of JWT.  We had 100% of the IBM business.  In 1980 dollars, we had a $160M annual media budget for IBM and it comprised the lion’s share of the agency’s billings.  The agency was best known for two things: 1. its launch of the IBM PC and 2. its famous Executive “breakaway” which literally made Advertising history.  But those are great stories for another day.  Like most LGFE employees after the breakaway, I skedaddled my way down Madison Avenue to a new position with Ogilvy & Mather where I helped teach our Creatives about the Unix operating system.  Again, great stories for another day, another blog.  I just wanted to establish a little Mad Street Cred before I get to the heart of this post.

When I think about the burgeoning world of social media, I compare its trends and “findings” with what we were doing 30 years ago in Advertising. Even back then, for all the hoopla, big expense accounts, private limos, and 5-star hotels, Advertising was pretty serious stuff.  It was all about the numbers. (We all thanked the technology gods for Lotus 1-2-3.)  Campaigns that strove to cultivate an emotional connection to a brand were paid for by executives who wanted to see stone cold returns on their investment.  And, I’m going way out on a limb here, after 30 years I’m pretty sure that hasn’t changed.  In fact, the pressure to deliver results from media spend is probably more fierce than ever considering the fracturing of a traditional media landscape that was fairly easy to manipulate in the old days before the Internet and mobile technology.

So fast forward to 2011. No, 2010.  Erik Huddleston joined Dachis Group as CTO. When Erik first arrived, I wasn’t sure what he was going to do. Get our wifi working in the office or something.  But, the next thing I knew, Erik was presenting at Defrag, whaaa? and young men in black tee shirts that said, “Hadoop” started skulking around the office.   I finally got briefed on what this little dream team was working on buried away in remote locations around the world, and I was kinda blown away.

A beginning step in that effort is announced today for public consumption.  Erik’s team has built a platform that crunches hundreds of millions of data points in near real time to deliver a view on how social a given company is –  how they compare to their industry, their competitors – broken down as best in class by company, subsidiary, geography, department and brand. Culling from APIs, data buys, data partnerships, page scrapes, crowd-sourced data, company contributions, and our own internal data team, we now offer the Social Business Index (SBI) to anyone who wants to get a view into how your company’s brand is performing on the social web.  Over 100 leading companies participated in the early access program to get the data refined and help develop useful insights for its use.  The SBI offers insights for 26,000 brands from over 20,000 companies by analyzing over 100 million social accounts world wide, and hundreds of millions of other sources.

Again, the SBI is simply a lightweight lens on a massive platform that is compiling ground-breaking social data analytics and analysis.  The SBI is free for the companies covered and anyone can sign up to see how your brand is doing at www.socialbusinessindex.com.

This first effort is just a taste of what is coming.  Big data will yield something that has been inconveniently missing in marketing on a large scale: evidence-based marketing with business outcomes correlated to measurable metrics. Internet marketers have done a great job with what’s known as performance marketing, but with the advent of big data, marketing spend can be targeted with much greater precision and brands can engage meaningfully in near real time. In fact, interactive advertising has finally matched broadcast TV spend.  Forrester recently reported that, “By 2016, advertisers will spend $77 billion on interactive marketing – as much as they do on television today.”

I was on an Alaska Airlines flight last week from Austin to San Jose. This route is nicknamed “the nerd bird.” However, Alaska announced that it would be canceling the route in May. While we were boarding, a passenger was lamenting its demise to a flight attendant. She told him that another frequent flyer had been on a mission collecting comment cards from the in-flight magazine to stage a write-in campaign to save the route.

Which reminds me of another write-in campaign that was once touted a feel-good best practice example of the POWER OF SOCIAL MEDIA. As background, I disclose that I’m no stranger to being on the business end of multiple write-in campaigns. I’ve heard an earful about chimpanzee exploitation, racist reggae artists, and sexually suggestive advertising. But that was before social media – faxes, phone calls, and email are all one-to-one communication. Today, detractors can voice their displeasure publicly and incite others more quickly to their cause; examples like Comcast Must Die abound. The apparent takeaway for brands: customers are in control whether you like it or not.

In 2006, US television network CBS piloted a new show called “Jericho.” It was a tale about a small town in middle America and nuclear holocaust, with plot driven by the protagonists having a lack of information. CBS programming executives had all the information they needed, watching show ratings drop like a bomb. The show was cancelled. That was when social media swung into action.

Jericho fanatics started a write-in campaign to save their show. But they took it a step further. In the show’s final episode, a protagonist utters the rallying cry “nuts!” before heading into battle. Jericho enthusiasts embraced the idea and decided to send nuts to CBS President Nina Tassler. 40 tons of nuts. Finally, the network makes the decision to bring Jericho back for another season and tells fans, “P.S. Please stop sending us nuts.”

The story is described as a victory of social media. Power to the people! Consumers are in control!

But that’s not where the story ends. Jericho came back to TV – but no one was watching. Ratings were worse than when the show went off the air. Without ratings, a network can’t drive advertising revenue – and fans aren’t enough to offset a lack of corporate sponsorship. Jericho was cancelled again and finally put to rest. People rarely tell the part of the story where social media is proven wrong and that’s important to understand.

It’s true that consumers vote with their dollars. Social media can also generate business results when used properly. Plenty of opportunities exist for applying new thinking to content, operations, viewer engagement, commercial support, cross-platform integration, and elsewhere. It’s dangerous to rely on blanket statements from the early days of social media to today’s social business operating environment.

Pete Blackshaw of Nestle offers great advice regarding customers in control:

The overheated rhetoric acts as a deceptive rationalization. We marketers have far more control than we let on. We buy the media, make the product, write the message, pick the messaging platform, select the suppliers, and hire the employees who ultimately do all the above.

I’m not sure what’s going to happen to the Alaska Airlines route, but it’ll most likely go away as scheduled. I doubt loyalists think strategically about the decision – passenger loads, fuel costs, competition from Southwest, better yield on Hawaii flights – before beating their social and traditional media drums in complaint.

Organizations must have process and policy in place to deal with detractors (individuals and groups) rather than using a blanket approach based on the wisdom of the crowd – or lack thereof. And confidence that control is best shared in carefully measured cases.

As I struggled to put my iPhone down Sunday night and go to bed after President Obama’s speech, I reflected on how involved I felt on a global scale as each situation unfolded. The high level of participation is directly tied to our world filled with always-on connectivity and participatory mediums. With someone in London live streaming their view of Westminster Abbey and @reallyvirtual’s moment-by-moment account of helicopters landing in Abbottabad, I didn’t have to leave Austin, Texas to share in the experiences.

When news breaks, what would have been shared among just a few, years ago is now a real-time, multi-way — forget ‘two-way’ — conversation that spans the globe. Our processing of news and events such as these now involves participation in multiple layers of communication and sharing across social platforms.

So, what do a wedding and a death mean for your business?
Let’s recap last week’s major happenings for a moment so that you can use the insights to consider how traditional communication flows in your business today.

The Royal Wedding
The public had unprecedented access leading up to, during and after the marriage of Prince William to Catherine Middleton. And we took full advantage of it whether it was an early morning watch party (my co-workers attended this one in Austin), a street party, tea with Oprah that afternoon or host of other offline and online activities.

Source: The Telegraph

The connective tissue that made all of this possible was social media. While I did wake up early to watch Barbara Walter’s live coverage and stay up late that evening watching my recorded Oprah and Entertainment Tonight (ET) wedding specials, it was the participation with friends and strangers in-between that cemented my hand in the discussion of this historic event.

Source: Facebook (post by a friend)

Osama Bin Laden’s Death
The ability to discuss and share is especially impactful after an announcement like the death of the most-wanted terrorist of our time. The sequence of events at my house last night played out as follows:

• Several friends alerted me via text message after the leak at 9:45 p.m.
• I checked Twitter on my phone to confirm the news.
• Immediately turned on CNN.
• Talked to family members on the phone (wishing I wasn’t on Verizon with the iPhone 4 so that I could check Twitter and Facebook while chatting).
• Anxiously awaited the President’s speech.
• Tweeted during the end of the speech after 11 p.m.
• Checked back with friends and family via a couple phone calls before bed.
• Prolonged turning out the light to continue following the conversation on news sites (local and national), Twitter, Facebook and YouTube.

Source: Twitter

Consider how the information flow might change to more effectively serve today’s connected employees and consumers
The process around consumption of major news events sheds light on the process that many businesses are struggling to define both internally and externally. While there’s no doubting this massive shift in process consumption, most organizations aren’t sure how to optimize their own communications ecosystems. In that regard, the information flow and value exchange during large events such as these is worth a closer look. Perhaps it can help businesses define a process to get its own news to move.

At first glance, there’s little reason why the Queensland Police Service’s traditional modes of communication needed social media. But when you look closely, the structural issues become evident:

• People. “We were putting out information rather than responding to requests for information.” Culture and mindset were limiting the effectiveness of communication.
• Process. “Traditionally, it could take a few hours and go through several layers of responsibility before even a one-paragraph media statement would be issued.” The throughput of existing processes had physical limits.
• Technology. “If the QPS website was used during the floods and cyclone to post information, we would still be in band-aids.” The mechanics of publishing were constrained by platform functionality, or lack thereof.

The Queensland Police Service had relied on press releases sent to journalists (1-1 private distribution) who in turn broadcast the messages (one-to-many public transmission), with time-dependent engagement – i.e. message recipient had to be listening/watching/reading at the right place at the right time. Moving to Facebook bypassed a step and released content straight to public/all communication, with the added benefit of persistent online presence.

But don’t leave here thinking that social media is a silver bullet as solution or killer of traditional media – QPS realizes that channel integration, content curation, and participation policy are critical to success.

I hope to never encounter the difficulties that Queensland did, but if I do I hope that my local first responders communicate as effectively as this great example of social business design in municipal management.

Thanks to @ej_butler for the tip.

As social media marketing becomes more mainstream, more and more people are asking for real evidence that these activities generate a positive return on investment (ROI). Measuring ROI isn’t just a problem for social media marketers – it’s a problem with the marketing industry in general. No one can demonstrate, beyond a doubt, that the £30 million television advertising campaign company X ran last year caused the 5% increase in year on year sales rather than low interest rates, the good weather, or some other external factor. Sure, the industry has come up with all sorts of qualitative and quantitative measurements for marketing ROI, but these measurements do still require at least some suspension of disbelief.

As I’ve discussed here before, during the 20th Century, production and service delivery became profit, rather than consumer, focused. What this means is that product and service offerings are now frequently devised on the basis of their potential profitability, not upon genuine consumer needs. In this situation, marketing is an essential activity as it helps to create a market for products and services that most of us otherwise would never realise we “need”. And when consumers have to be convinced that they need something, some are likely to be disappointed as they realise that those products and services don’t, actually, meet their requirements – that’s where after sales support and PR come in.

The vast majority of marketing and public relations activities, if you really sit down and think about it, probably contribute very little to society other than jobs in the industry and, those involved in that industry might argue, generating the sales required to sustain economic growth. They’re not, however, activities that are really central to much of anything, at least not as those industries are configured today. This doesn’t have to be the case.

I know a lot of skilled, creative, thoughtful people who work in marketing and public relations. They are natural communicators, skilled at creating positive messages about brands, listening to consumers and audiences, and providing helpful responses where appropriate. These are skills that can be deployed so much more usefully – and measurably – within a more socially calibrated business.

Several of the panel members touched, briefly, on the idea of using social media for business transformation. Marshall Manson from Edelman said that although social media can be transformative, giving the example of Dell, most of his clients aren’t asking for that – they just want a social media campaign. Robin Grant, too, mentioned how Eurostar shifted it’s approach, following the recent problems with cancellations due to trains stuck in the Channel Tunnel, from trying to explain what had gone wrong to trying to help people get home.

In both these examples, the shift has been from getting the message out, to listening, engaging in conversations with customers, learning from those conversations, then providing better products or services based upon those conversations.

Many marketing and public relations people are familiar with social monitoring tools and techniques of engaging on social networking sites, content sharing services, blogs and forums. The problem is, at present, most businesses that undertake these activities deploy small, specialist teams that effectively act as a blockage between audiences and consumers “out there” and business processes behind the firewall.

StyleSignal, one of the companies represented on the panel last night, has turned this sort of thing into a business: they monitor what fashionistas are saying online and provide trend forecasts for their fashion industry clients, allowing them to react immediately with new styles and designs.

Yet it’s possible to do even more by integrating social tools into core business processes: invite audiences and consumers to co-create innovative product and service offerings, bounce ideas off them, let them get their hands on and provide early feedback about new products, involve them in marketing, encourage them to assist other customers – essentially, involve them in a range of activities which have a known cost, but also a measurable ROI, to your business.

Sticking, for a moment, with the fashion industry, let’s talk t-shirts. Say you’re a t-shirt company. You invite people to submit their own designs to your site, potentially with incentives such as a design competition, free products, or a revenue sharing agreement. Marketing people come up with this sort of thing all the time, but keep reading, because here comes the measurable ROI. You know that it usually takes you 5 people days to create a new t-shirt design, and this has a known cost to your business. Each time a design contributed by a member of the public goes into production, you have reduced your cost base. Perhaps you don’t even need to employ designers anymore (boooo!). Before you print up any of those t-shirts, you put the designs on the site and let people vote and comment on them, effectively doing your market testing and helping refine your offering. Then, once you do print the shirts, the person who designed it, and people who pro-actively took an interest in voting for it or helping improving the the design, will feel a sense of pride and ownership in the resultant product. They’ll probably buy it themselves – because they actually want it – and send links to their friends, add it to their facebook wall, post images of themselves proudly wearing the design on flickr, etc. This is exactly the idea behind Threadless, which is a great example of a business that puts the consumer community at the very centre of everything they do – they’re a social business.

Not everyone has the desire, or skills, to engage directly with members of the public, but marketing and public relations professionals tend to have these skills in abundance. Social tools offer opportunities for those with these skills to do so much more than protect a brand’s reputation or sell stuff – it offers the opportunity to be at the centre of a transformation in business critical processes. The result will essentially be the same – brand reputation will be secured and more stuff will get sold – but it will, at last, also result in directly measurable ROI that doesn’t require any suspension of disbelief at all.