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In my update on the 2008 Tribalization of Business study on business communities that we are doing with Deloitte and The Society for New Communications Research last week - I pointed out how some companies are totally misaligning their measurements of community effectiveness with their goals.

As you will see from the slides, many companies measure effectiveness by looking at page views and time spent on the site. Yet not one company listed ad revenue as a goal for the community - which is what page views and time spent on the site would be good for. Let’s assume that your goal is to have a support community - one in which people can help one another or get help from some your employees. If you could deliver the support in a way that never required people to come to your site, you would still achieve your goals. In fact, if you build your community so that people do not have to come to it, chances are that you will have more people participating in it. There are only so many destinations that a person will visit on a regular basis, and chances that your business community becomes one of them are fairly slim.

Another interesting wrong-headed metric-related finding from the study is that a majority of respondents found that “getting people to engage” was one of the biggest obstacles to making a community work. Now if you have a small community, chances are that you could get a fairly high engagement rate. The larger your community becomes, however, the more its profile will resemble that of large public communities - 1% of hardcore contributors, 10% of active users and 80-90% of lurkers. Now does that mean that the lurkers do not get value from your community? In the case of the customer support community, lurkers who do not contribute could still find the help they need and feel better about you than if they had not found it and also save you the cost of a call into the call center. So measuring community effectiveness by measuring engagement is just not a representative metric of community success.

Now the real issue with all this is that if you have a community development team who is being measured by those wrong-headed metrics, they will invariably develop bad behaviors in order to maximize these metrics. They could in fact develop community features that will stand in the way of success for your communities, or close down communities that are in fact doing really well.

If you missed it, there is a dynamic conversation on managing communities going on right now…Chris Brogan kicked it off and Nancy White wrote some interesting musings and also kept track of many of the other interesting links.

The Online Publisher Association announced that it added Community as a category to its Internet Activity Index (IAI). So they will now measure how much time consumers spend online with Content, Communications, Commerce, Search and Community.

The OPA defines community as:

“Web sites and applications that combine user-generated content with communications in order to foster relationships between individual members and groups of members. Many Community sites are content driven, and they were previously accounted for in the Content category. However Community’s content is largely user-generated, and when merged with communication, creates a specific category of online activity.”

The IAI numbers for January show that consumers spent 42.7% of their online time interacting with content, 28.7% with communications, 16.1% with commerce, 7.5% with community and 5.0% with search.

AdAge picked up on the story, declaring “When It Comes to Time Spent Online, Content Trumps Community.”

But wait a minute here, adding community as a category at the same level as content, communications, search and commerce, is like comparing apples and oranges. Or better yet, comparing apples and oranges with air or water. Communities are combinations of content, commerce, communications and search. And communities affect the usage pattern of all the above categories and vice versa. So if I am spending time on Amazon.com, am I spending time with commerce, content, search or community? Obviously the end result is commerce if I buy something, but it could also be searching without buying or interacting with content (both user generated reviews and published content) without commerce. The fact that Amazon is a community which leverages my personal profile very well (another component of communities) is determining my interactions and time consumption on that site. The same can be said for many other sites that combine content with community. If I am spending time on the WSJ Health blog, I am spending time with content or community? If as a car buff I spend time on Carspace.com, I am spending time with commerce, content or community? Would I spend as much time conducting commerce, searching for stuff or interacting with the content on those sites if there were no community component to them?

Probably not…

Besides the fact something does not sit right with the categories, many conclusions drawn from the new numbers by AdAge and the IPA are equally flawed. Jim Nail at the Cymphony’s Influence 2.0 blog captures those flaws in detail in his post today (well worth the read). A couple of highlights include:

• The fact that page views per person in content dropped 225 pages suggests that a number of content sites were just moved to community.
• Content sites show 480 pages per month per user vs. 380 pages for community sites. So from an ad perspective, the reach may be just the same.
• Another factor not reflected in the new numbers is influence. If a third of people below 30 don’t make buying decisions before checking with their social networks, the impact of communities on the commerce is obviously not reflected in those numbers.

We should of course remember the agendas that both organizations are representing - those of advertisers and publishers.

The Society for New Communications Research released preliminary results of their New Influencer Study at the SNCR Research Symposium last week.

While there is no question that social media is rapidly gaining importance, it was interesting to see how they are (or not) measuring the effects of social media initiatives. Only 51% reported to be measuring the effects, and of those, the metrics they most value are enhancement of relationships with key audiences, enhancement of reputation, customer awareness of program and comments/posts relevant to organization/products.

As was brought up in the discussion following the presentation last week - it is interesting to see how soft most of those measurements are. First off, how many companies really measure “enhancement” of relationships or reputation? And how many measure customer awareness? Sure, large consumer-facing companies probably still do some of that - but aren’t those yesterday’s measurements cooked up by the advertising industry? Those that were meant to hide the fact that advertising cannot be effectively measured?

Surely we can come up with better metrics to measure the impact of social media initiatives - what about new customer acquisition, customer loyalty and customer lifecycle value, new product innovation success ratios, return on information, and customer referral ratios & values.

Both Target and Wal-Mart have sponsored groups on Facebook - both of which are targeted at college kids.

Target has over 7,000 members and mostly positive comments in a vibrant set of discussions. The Wal-Mart group on the other hand has a little over 1,200 members, no discussions are allowed, and the wall postings are mostly negative.

What is the difference do you think, except for the fact that a large portion of the population believes that one of the two companies is truly evil?

The Wal-Mart home page looks like another interactive ad.. The Target home page is more inviting and enlists the help of users to co-create the experience. Any other differences that you can think of that would result in such a difference in membership and tone of conversation?

We can take the discussion to Facebook - in fact I started a thread on the subject in the Marketing 2.0 group, where we now have more members than the Wal-Mart Facebook group.

[Tags: marketing social networking facebook wal-mart target]

Reveries.com conducted a survey on the potential of social networking sites like Facebook, LinkedIn and Myspace as media for marketing activities (pdf download of survey summary results and analysis are here). The main finding seems to be that marketers are in the very early stages of truly understanding the potential of these new networks - with only 18% of the respondents calling the potential of online social networks as a medium for marketing “huge”.

Other interesting tidbits from the survey include the fact that marketers see “word of mouth” as the most promising aspect of social networking sites, and that many pointed out that marketers should participate in the conversations that take place on those sites without interrupting them.

Unfortunately, the reality is that many spammers have already invaded Facebook, Myspace and other similar sites. Go check the walls of the most popular interest groups in Facebook to see for yourself - many are littered with posts that are total sales pitches or with information that is totally irrelevant to the group’s conversation.

[Tags: marketing social networking conversational marketing social media facebook myspace linkedin]

According to recent research from Sophos, 50% of employees are blocked from accessing Facebook at work…

I guess most companies do not get it

The most recent Harvard Business Review reports on a study (requires subscription) that was done on the impact of customer communities on customer behavior at eBay in Germany (disclosure - I have an active interest in this topic as I have agreed to chair a conference on the business of communities - Community 2.0 - but more on that later).

The numbers are quite interesting. The experiment involved 140,120 eBay customers who had bought or sold on eBay but who had not participated in the eBay customer communities before. 79.242 were invited to join the online customer community, while the remaining 60,878 were used as a control group. Of the people who were asked to join the community, 3,299 became active participants and 11,242 became lurkers. Over the course of a year they compared the behavior of the active participants and lurkers to that of the control group and found that:

• Lurkers and active participants won up to 25% more auctions
• Lurkers and participants paid prices that were as much as 24% higher
• Lurkers and participants spent up to 54% more money in total
• Active participants listed up to 4 times as many items
• Active participants earned up up 6 times as much monthly sales revenue
• For first time sellers who were lurkers and participants, 10 times as many of them started selling on eBay after joining the community

All in all the activities of the lurkers and participants resulted in 56% more sales during the year of the study - bringing in millions of additional dollars into eBay’s bottom line.

So can the results of this experiment be replicated in more traditional businesses?

Some people clearly think so, while others who used to be very enthusiastic about the business of communities are starting to become very skeptical.

Communities require a certain critical mass to get going - and not all companies have a large enough customer base to get to that point. They also require a lot more work and resources than most companies are willing to invest - to set up the infrastructure, to nurture the communities, to acquire content, etc.

Active communities of employees, customers and partners are clearly powerful management instruments that can dramatically improve core business processes like innovation, product development and marketing & sales. They can also backfire and have very negative impact if they are not managed properly, or set up wrongly. Before embarking on this path, companies have to truly understand the dynamics as well as the pros and cons of communities. They also need to find out if they have the resources and wherewithal to create their own communities or whether they should play in someone else’s sandbox.

Unfortunately, many will start the process by throwing technology at the problem - let’s just hope that those ignorants won’t destroy the market for the rest of us like email spammers destroyed email marketing and (un)ethical zealots are slowly destroying word of mouth marketing.

[Tags: community management customer community community marketing wom word of mouth marketing]

Crowdsourcing has been a popular term ever since it appeared in a Wired Magazine article earlier this summer. This past week, Business Week jumped on the crowdsourcing bandwagon with an article in their second issue of Inside Innovation (may require subscription - but you can find a good description of the article by Renee Hopkins Callahan over at IdeaFlow).

What is confusing about the “crowdsourcing” terminology in both articles is that they use “crowd” to refer to the “wisdom of crowds” - a term introduced a few years back by James Surowiecki to describe the fairly simple idea that large groups of people are smarter than an elite few. Many of the crowdsourcing examples used in both articles, however, like the use of iStockphoto to source images cheaply, do not rely on wisdom of crowds at all. Getting your images from iStockphoto instead of from a professional photographer is like outsourcing your photography to the public - where everyone can be a semi-pro with high end cameras below $1,000 these days. In the end you still buy your images from individual photographers. There may be a crowd, but there is no wisdom of crowds involved here.

When a company like John Fluevog Boots & Shoes asks its fans to submit and vote on new shoe designs - that is a model based on the wisdom of crowds. The wisdom of the mass is more likely to identify a winner than a select few (see also related post on when wisdom of crowds does not work).

The Business Week article spells out four rules for successful crowdsourcing - or should it be to outsource your task/process to an outside community.

First, be focused and provide clear guidelines to what you want to have done. Not really all that different from any outsourced project. If you give vague guidelines you will likely get something back that you did not expect.

Second - get your filters right. Since by outsourcing a task to a large set of people you will get a large number of ideas, you need to filter all those ideas so that you can find the gems. But why not use the wisdom of the crowd to do the filtering? IBM solicits ideas from customers and employees during two day innovation jams - which led to 37,000 ideas the last time around. They then use their own employee “crowd” to filter those ideas. As most companies do not have 140,000 employees to draw upon, they could use their fans and customers to select the best ideas. An idea could be emailed to a randomly selected set of active people for voting, rating or ranking.

The third is to tap the right crowd. Pretty obvious when you think about it. Just like you would not outsource a complex engineering problem to a company of 14 year old summer students, you need to be picky about the community you outsource your task to.

Lastly is to build your community into social networks. While this may be key to success in getting certain communities to function in the long run, enabling networks or teams to form within your community goes against the principle of the wisdom of crowds - adding to the terminology confusion.

Renee adds two more rules in her post - find ways to feed the ideas into your company’s existing processes and fund the process - as incentives fuel creativity.

In the end, successfully outsourcing product innovation and other processes to outside communities comes down to a deep understanding of two factors:

• understanding of the traditional keys to success for that particular process
• understanding of the fundamentals to successfully create (if needed), manage and interact with communities - virtual or otherwise

[Tags: crowdsourcing community community management outsourcing]

ClickZ Experts has an interesting article on Social Network Marketing by Sean Carton. In it he lists some of the profiles of advertisers on MySpace.

• Helga - for Volkswagen, a 25 year old female from Germany has 9144 friends
• The Original MySpace Burger King King - male, 52yo - has 3255 friends (he’s probably too old for MySpace)
• Smart - the Wendy’s Square - a 28 yo single male (and with an unsure orientation) - has 79,840 friends

It all looks pretty cheesy - surely there must be better ways to promote products to the youth market.

[Tags: social networking myspace advertising online advertising]

As you probably will have noticed, the “social marketing” terminology has been popping up left and right lately.

Nedra Weinreich from Spare Change and others, who had been using “social marketing” for decades to refer to the use of marketing to address health and social issues, took issue with the new usage of the terminology - especially when Forrester launched a “Social Marketing Bootcamp” and Jupiter launched a “Social Marketing” practice. Forrester backed down and renamed their bootcamp “Social Computing Boot Camp,” while Jupiter refused to rename it’s practice - fueling the ongoing feud over the use of the terminology.

While it is unclear to me how good a term “social marketing” is to refer to the marketing of social issues - I disliked the new usage of the terminology from the get go.

Using “social marketing” as a catch-all category for the (not-so-new) marketing techniques which include viral marketing, word-of-mouth marketing, community marketing, consumer-generated-content-based marketing, and other social media-based marketing “techniques,” not only “hypes up” the value of those methods unnecessarily - it also engenders the danger for misuse, abuse and the ultimate destruction of those marketing techniques for everyone.

Many clueless and panicky marketers, who have witnessed the decline of marketing programs like email marketing and other interrupt-based marketing methods - which incidentally they destroyed in the first place - will now jump on this latest craze and screw it all up! As usual, they will throw dollars and especially technology at the issue without understanding the underlying fundamentals and ethical considerations that allow those methods work in the first place.

You don’t believe it? By now, the value of word-of-mouth marketing is being threatened by the lack of disclosure by very large and respected marketers like P&G and others. And with so much “fake” consumer-generated content going around, some people are already asking for some sort of “organic labeling” before it is too late. When it comes to “community marketing,” the jury is still out as it is one of the younger hot new marketing memes - but history shows that it will only take time for some clueless marketers to latch on to that one as well and potentially spoil it for the rest of us.

I really hope that Jupiter and other industry analysts and industry associations will show leadership in this space and try to create some sort of self-governance amongst their clients and members - but somehow, and based on the descriptions of those new services, I am not so sure that is part of the agenda.

Hopefully I am wrong!

[Tags: social marketing marketing word of mouth wom cgm community marketing]