Slides and Video Cover What You Need to Know About Search

A client asked me to prepare a one-hour seminar on the basics of search engine optimization (SEO), and I thought it was worth sharing. This is more than your standard chalk talk. I pulled together slides from several presentations I’ve used over the last few years, updated them and wrote a complete script, which is included as slide notes in the in the PowerPoint. You can download the presentation and read the notes or watch the video.

I’m not an SEO expert by any stretch, but I’ve learned a lot by osmosis. For those who are mystified by Google magic, this deck will get you up to speed. If you’re already a guru, skip it and head to more advanced sites like Search Engine Land, SEOmoz, TopRank or Biznology.

Thanks to Mike Moran, HubSpot and McDougall Interactive for permitting me to steal from them.

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How to Calculate Social Marketing ROI

This is a draft of chapter 10 of Social Marketing to the Business Customer by Paul Gillin and Eric Schwartzman. This chapter focuses on how to calculate ROI of social media and Internet marketing programs in general. I’m particularly interested in your feedback on this chapter because it presents some new ideas I’ve been playing with about how to calculate the ROI of almost anything. My biggest concern is that these ideas are overly simplistic. They do assume that a company has a rich set of historical data to work with, which is often not the case.


Please ignore the typos and grammar flaws that invariably appear at this stage.

We’ve told you about a few companies that have achieved a notable return on investment (ROI) from their social marketing initiatives. They include Indium Corp., whose blog-driven search strategy yielded a six-fold increase in leads in just one quarter, and Clickable, whose Gurus drove a 400% one-year growth in billings.

These numbers are impressive, but in our experience, they’re more the exception than the rule. In conversations with hundreds of marketers over the last few years, we’ve observed that few of them closely track the ROI of their social marketing programs. In fact, many of the most successful marketers aren’t that concerned with ROI at all. Rather, they invest in social marketing because they believe that the benefits – customer engagement, market awareness, continuous feedback and professional development – are good for

any company, regardless of the financial impact. They measure like crazy, but they rarely translate the benefits of engagement into hard dollar figures.

Most of these early adopters work for companies with adaptive, change-oriented management. That’s good if you can get it, but the reality is that most top executives are still wary about social marketing. ROI is typically the number one or two most cited concern we hear from the people who work for these companies.

B2B Social Media Metrics

We’re conflicted about the whole ROI debate. On the one hand, we believe that businesses should make decisions based on sound reasoning rather than vague promises or impulse. ROI analysis enforces rigor that leads to better decisions. On the other hand, we believe ROI objections are often used to avoid decisions that executives don’t want to make for other reasons, such as fear of losing control. Few people want to admit that they’re afraid, so they fall back on convenient stalling tactics, of which ROI is a primary one.

The reality is that businesses make decisions without applying hard ROI criteria all the time.  Much of the money that B2B marketers have poured into direct mail campaigns, trade show exhibitions and trade print advertising for the last 50 years has questionable returns. The only reason we make these investments is that these practices are established and businesses are accustomed to them. “ROI calculations don’t work well for social media and they don’t work well for marketing in general,” says Benjamin Ellis, a UK-based serial entrepreneur who now specializes in social marketing.

What’s the return on landscaping, an expensive conference room table or free bagels on Fridays? It may be possible to calculate a payback through extensive customer perception or employee satisfaction analysis, but why bother? We know these investments make people feel better.  If your employees feel better, they do a better job and your customers feel better.

EMC Corp. has been known to charter jets to fly technicians across country in the middle of the night to take care of a customer whose computers are down. Do you suppose the storage giant conducts an ROI analysis before making that decision? Of course not. EMC is a premium-priced provider whose philosophy is to always go the extra mile to take care of the customer. In the aggregate, the company may be able to justify its practices in the form of higher customer satisfaction and repeat sales, but we doubt the support manager who charters the midnight express is required to justify the added expense in advance.

That said, we understand the ROI justification is a hurdle many marketers must clear to get their social programs off the ground. We believe that many social marketing programs can be justified, but the process requires discipline and careful documentation. After all, the Internet is the most measurable medium ever invented. If you can isolate variables, establish correlations and apply a little creativity, it’s remarkable what you can do. In this chapter, we’ll suggest some approaches.

Defining ROI

A lot of marketers would probably like to be in Susan Popper’s shoes. The VP of marketing communications at SAP was recently asked by B-to-B magazine how she is measuring ROI on marketing efforts. Her response: “When [our target audiences comes] to our site, they watch the videos and they are engaging with the content on the site. Our impression-to-visit ratio (as measured by click-through rates) doubled this year versus last year.” That’s an impressive result, but it isn’t a return. In order to compute return, you need to think in financial terms.

According to Wikipedia, ROI is “the ratio of money gained or lost (whether realized or unrealized) on an investment relative to the amount of money invested.” There are two important variables in this equation: Return and Investment. There’s also a third vital term: Money.

Return is payoff as measured in revenue generated or costs avoided. There are other ways to measure return (for example, improvement in customer satisfaction scores), but unless those outputs can be measured financially, they really don’t qualify as considerations in ROI. We believe many of these intangibles actually can be translated into financial terms, and we’ll cover that later in this chapter.

But for now, let’s look at a couple of basic examples. A simple one is an ROI analysis of the impact of hiring a new sales representative. Let’s say the new rep carries a fully loaded cost of $100,000 and delivers $2 million in incremental annual sales revenue at a 10% net profit. In that case, the first-year ROI of hiring the salesperson is 100%, expressed as profit divided by investment:

Cost of sales rep

$100,000

Revenue generated by rep

$2,000,000

Profit margin

10%

Net profit

$200,000

ROI ((net profit – cost)/cost)

100%


We can apply the same type of analysis to cost avoidance. That’s what Pitney Bowes did when a 2007 Postal Service rate increase prompted 430,000 calls from customers. The mailing service provider launched an online forum to deflect some of the most common questions and tracked 40,000 visits in six weeks. Pitney Bowes was able to correlate savings in call center costs and estimate that the forum more than paid for its first-year costs in just a short time.

Let’s say we implement a customer self-service portal as a way to reduce support costs. We assume that the portal will require half of one full-time equivalent (FTE) employee to administer, that the fully loaded cost of that employee is $70,000 and that the portal will enable the company to eliminate one support position at a fully loaded cost of $70,000. Let’s further assume that efficiencies will enable us to reduce administrative support costs to one-quarter of an FTE the second year and 10% the third year. At the same time, the value generated by the community will enable us to cut an additional one-half customer support position each year.

Here’s what the analysis would look like:

Year

Item

Annual

Cumulative

1

Administrative costs

$           35,000

$                    35,000

Savings

$           70,000

$                    70,000

ROI

100%

100%

2

Administrative costs

$           17,500

$                    52,500

Savings

$          105,000

$                  175,000

ROI

500%

233%

3

Administrative costs

$             7,000

$                    59,500

Savings

$          140,000

$                  315,000

ROI

1900%

429%


The portal looks like a good investment, yielding a positive first-year ROI and blowout value in the third year. The cumulative value is also very strong. Even if our annual savings estimates are off by 50%, we’d still get nearly a 10-fold return on operating costs in year three.

These are two simple examples, but they both require confident forecasting based upon accurate historical data. For many companies, that’s far from simple. In the case of the sales rep, we must be able to predict with reasonable certainty that the person can generate $2 million in incremental business in year one. There are a lot of factors underlying that assumption. For example, we assume predictable growth in the overall market and in our growth rate relative to the market. We must be confident that there is $2 million in new business out there to find. In niche B2B markets with a small number of potential customers, that assumption may be optimistic. And then there are unforeseen circumstances: The bankruptcy of a major competitor could move that revenue goal higher, while the emergence of new competition might force us to trim our forecasts.

There are also nuances of calculating net present value, inflation, opportunity cost, return on capital and other fine points of finance that we won’t try to cover here for the sake of simplicity. ROI calculations are rarely a precise science to begin with.

History and Correlation

Good ROI analysis almost always requires accurate historical information, which few companies have, in our experience. Capturing and analyzing historical data requires time and discipline. It’s easy to cast aside analytical tasks when everyone is focused on generating revenue. However, you can’t forecast the future without understanding the past. Historical data also sets a baseline for measuring change. That change can then be measured and compared to actions that may have caused it. If you can correlate action to impact, then you can calculate ROI.

In the example below, lead activity appears to correlate positively with traffic to a company blog. The positive correlation is indicated by the change from baseline, which appears to correspond with the upward movement in blog traffic. Even then, a definitive correlation can’t be established until other factors are eliminated from consideration, such as a promotion or a new advertising campaign.

Positive Correlation of B2B Blog and SalesIdentifying correlations can be a time-consuming process, requiring new variables to be introduced independently of each other so that change can be isolated. However, you don’t necessarily have to test only one variable at a time. With split testing, you can try two different experiments, each targeting a different segment of your customer base.

Suppose you license e-mail marketing services to customers on a subscription basis. For the last three years, your renewal rate has been about 40% annually, so you can reasonably expect that trend to continue. This gives you a baseline from which to test new tactics.

You’re going to try out two new incentives this year to increase renewal rates. One provides a 10% discount on the annual fee to each customer that renews more than one month ahead of deadline. The other provides access to six customer-only educational webcasts during next 12 months for all customers who renew, regardless of timing. Each eligible customer gets one incentive or the other. This should give you a sound indication of ROI because you can compare your results to historical data.

It turns out that both programs are equally successful in boosting renewal rates, but the webcast promotion has a better ROI. That’s because 40% of the renewing customers who were offered the discount renewed before the one-month deadline, which incurred a higher discount obligation. Not only was the webcast promotion more cost-effective, but it carried a predictable cost of about $1,500 per webcast, compared to the variable cost of the discount. The webcast is probably the smarter incentive to offer.

Historic

With 10% discount

With webcast

Expiring customers

100

100

100

Average subscription cost

$             5,000

$                      5,000

$           5,000

Renewal rate

40%

60%

60%

Profit margin

20%

20%

20%

Profit from renewing customers

$           40,000

$                    60,000

$          60,000

Incremental profit from incentive

N/A

$                    20,000

$          20,000

Cost of incentive

N/A

$                    12,000

$           9,000

ROI

N/A

67%

122%


This example presupposes that the company has good data about past renewals, but many companies lack the systems to capture complete data in the first place. A good CRM system is essential. Many excellent solutions are now available on a software-as-a-service basis today, including Salesforce.com, RightNow Technologies and NetSuite. You can find a complete directory at Saas-showplace.com. But choosing the tool isn’t nearly as important as knowing how to put it to work.

Effective CRM requires discipline to capture every customer contact from initial website visit through sale and continuing with ongoing support. That means involving more than just the sales force in the process. To calculate the ROI on social marketing, you need to understand every dimension of the customer relationship, beginning with the action that creates the first contact. It’s not enough to begin tracking when the lead is generated. Marketing should have the systems in place to identify the action that created the lead, whether that’s a search query, e-mail link, customer referral or some other event. Most CRM systems are good at tracking customer activity after leads come in. The difficult job for marketing is figuring out the sequence of events that brought them there.

We can’t emphasize this enough: Being able to predict the future means knowing a lot about the past. If you can’t establish effective baseline expectations, then your forecasts are little more than educated guesses. In order to do ROI right, you need to track every customer contact, not just interactions with the sales force.

Metrics

Web analytics today deliver unprecedented insight about online interactions. The basic features of the free Google Analytics service match the capabilities of products that cost thousands of dollars just a few years ago. Premium services like Webtrends build in sophisticated behavioral and sentiment analysis and can track offsite activity such as a prospect’s comments on Twitter or use of a mobile application. They can even trigger customized e-mails or tweets when a person’s behavior matches certain predefined patterns.

With all this rich data now available, it’s remarkable how many marketers still use the basic metrics of traffic and unique visitors to measure success. We’re not big fans of these measurements; it’s easy to generate spikes of valueless traffic by posting celebrity photos or top-10 lists, for example. In Chapter XX, we listed some common metrics you can use and how they relate to different business goals. We think richer measures such as referring keywords, top content, bounce rate, average time spent on site, pages-per-visit and content analysis yield more actionable insight that will only get better.

The best way to select relevant metrics is to work backwards. Start with sales trends, match them to Web activity and look for the metrics that correlate most closely. Those are the metrics that are most meaningful to you. For example, if an increase in session time spent on site appears to correlate with registrations for a webcast, then that indicates that webcasts resonate with the audience.

You also shouldn’t confine metrics to those which can be measured online. One of the most popular indications of customer satisfaction is the Net Promoter Score (NPS), introduced in 2003 by Fred Reichheld of Bain & Co. Obtaining an NPS requires asking customers a single question on a 0-to-10 rating scale: “How likely is it that you would recommend our company to a friend or colleague?” This simple tactic has been adopted by big B2B companies like General Electric and American Express as a key performance indicator.

You can also choose to monitor classic metrics that have nothing to do with the Internet. These include press mentions, speaking invitations and performance on customer satisfaction surveys.  Metrics also vary by objective. For example, the success of a blog set up to generate leads may be measured by inquiries, time spent on site and to repeat visitors, while one targeted at search optimization may be evaluated based on keyword rankings and inbound links.

For ROI purposes, though, the choice of metrics is less important than your ability to correlate behavior to results. In other words, if certain page views are more valuable than others, then an increase in traffic and session time could be a good starting metric for evaluating ROI. Just be aware that they are imperfect indicators of visitor engagement.

One thing you absolutely need to know, however, is how people reach your site. Unique URLs are a way to measure that. We’re astonished at how many e-mails we still get from brand-name companies that don’t make use of this simple tactic, which enables a marketer to specify a web address that is unique to the e-mail, tweet, wall post or any other message.  Unique URLs use a simple server redirect function to identify the source of an incoming click. They look like this: http://mycompany.23.com/public/?q=ulink&fn=Link&ssid=5155.  Everything after the word “public/” is a unique code that tells where the visitor came from.

Unique URLs enable your analytics software to track inbound traffic from each source separately so you can determine the ROI of each channel. Without unique URLs, visits are simply classified as “direct traffic,” meaning that the source could be a forwarded e-mail, bookmark or an address typed into the browser.

A simple example of how you might use this information is to measure traffic to a landing page and analyze the number of visitors who fill out a registration form according to the referring source. This would show you, for example, that registration rates are twice as high from a newsletter as from a tweet. The value of those registrants divided by the cost of the newsletter is an ROI metric. Unique URLs are also valuable to split testing; you can try out two different invitation messages in the same email and use a different URL for each to measure response to each message.

PUTTING IT ALL TOGETHER

Let’s apply all the factors we’ve described above to two B2B social marketing scenarios. First, we’ll compare the ROI of webcasts to white papers. Start with historical data. What is the conversion rate of webcast viewers versus people who download a white paper? What is the lifetime value of an average customer? Compare the outputs and divide by costs to assess ROI:

Formula for Calculating B2B Social Media ROI

 

 

Let’s assume the following:

·       The average lifetime value of a customer is $50,000 at a 10% profit margin.

·       The average cost of delivering a webcast to 100 registered viewers is $3,000; viewers convert at a 2% rate;

·       The average cost of delivering a white paper to 500 registrants is $10,000; registrants convert at a 1% rate.

Our ROI analysis looks like this:

 

 

Webcast

White paper

Audience size

100

500

Conversion rate

2%

1%

Lifetime profitability

$           10,000

$                    25,000

Cost of acquisition

$             3,000

$                    10,000

ROI

233%

150%


The webcast ROI is superior, but not by much. Armed with this data, we might choose to promote the webcast more aggressively to leverage its stronger ROI. However, another option would be to focus on improving the white paper’s conversion rate. In fact, doubling the rate would drive ROI to 400%, making this a potentially higher return action.

Let’s look at one more example in which we use a blog for lead generation. We know that performance will be slow during the first few quarters until search engine traffic kicks in. Based upon the experience of others, we believe that lead growth will improve steadily as traffic builds. We expect to be at 50 leads per month by the end of the first year and 160 per month by the end of the second. Our historical data tells us that a lead is worth $100. We further estimate our editorial costs at $2,000 per quarter during the first year, doubling to $4,000 during the second. Here’s our analysis of quarterly and cumulative ROI.

 

Leads

Lead value

Cost

Quarterly ROI

Cumulative ROI

Y1Q1

10

$          1,000

$     2,000

-50%

-50%

Y1Q2

25

$          2,500

$     2,000

25%

-13%

Y1Q3

35

$          3,500

$     2,000

75%

17%

Y1Q4

50

$          5,000

$     2,000

150%

50%

Y2Q1

75

$          7,500

$     4,000

88%

63%

Y2Q2

100

$        10,000

$     4,000

150%

84%

Y2Q3

130

$        13,000

$     4,000

225%

113%

Y2Q4

160

$        16,000

$     4,000

300%

144%

This gives us a firm foundation to make the case for investing in the blog. If leads aren’t coming in as quickly as we had estimated, we can adjust costs downward to improve ROI by setting up content-sharing arrangements.

Measuring Intangibles

The trickiest aspect of ROI analysis is accounting for intangibles. These include factors like customer satisfaction, customer loyalty, brand reputation and market influence. Many social marketing projects are justified for these reasons but the outputs are never measured, either because it’s not worth the effort or because the measurements aren’t in place.

In fact, all of these outputs can be measured and have been for years using some of the following tests:

Value

Measurement

Customer satisfaction

Customer surveys; renewal rates; referrals; incremental business; testimonials; Net Promoter Score

Customer loyalty

Renewal rates; incremental business, response rates, event attendance; testimonials; Net Promoter Score

Customer engagement

Newsletter subscriptions; online community activity; response rates; event attendance; testimonials; feedback volume

Reputation

Market share research; awareness research; media citations; analyst research

Market influence

Market share research; lift studies; media/social media citations; speaking invitations; analyst research

Leadership

Attitudinal research; growth rate; media citations; copycat competitors


However, research statistics aren’t sufficient. You have to find a way to translate these measurements into dollars and cents. That’s where creativity comes in handy. Many of the metrics on the right can be mapped to business outcomes, but only if historical data is available to correlate to those changes.

For example, you can calculate the business value of customer loyalty by comparing the revenue derived from customers at different longevity levels, such as five-plus years, three to five years and less than three years. Then look at the support and sales costs allocated to these same customers. You’ll probably find that long-term customers are cheaper to support and have lower sales costs than newer customers. Comparing the ratio of revenue to expense for each longevity segment should give you an idea of where to invest.

What is the business value of reputation? There’s a lot of research to indicate that B2B customers weigh this factor heavily when making buying decisions. A simple telephone survey can identify who these customers are. You can then see where they rank in order of value to your business. If they are near the top (and we believe they will be) then that is compelling evidence that investment in reputation pays off. You can compare the average profitability of these customers versus those who don’t value reputation as highly and see which has more investment upside.

You can even quantify, to some degree, factors that are almost impossible to measure. For example, suppose that a publicity campaign results in five million impressions in mainstream media. By conducting pre- and post-campaign “lift” studies, you can measure changes in awareness. Then drag out the record books to compare previous increases in awareness to corresponding changes in the business, such as lead quality and conversion times. You can quantify the value of those outputs to calculate ROI.

Once again, these analyses require accurate historical data. If you can’t segment your customers according to criteria like these, the justification process is far more difficult. That doesn’t mean it’s impossible, though. Analyst estimates, industry averages and ratios derived from analyzing your competitors and those in other industries may yield similar insights.

How does this all relate to social marketing? We believe it’s critical. The ROI objection is the roadblock you’re most likely to encounter in selling a social marketing initiative. You need to speak the language of your inquisitors. Social marketing has also introduced new cost variables into the business. For example, press tours used to be a standard tactic for increasing market awareness, but today a blog may do the same thing at a much lower cost. In order to understand the true value of these new tools, you need to have a baseline for comparing them to past practices. Get your Excel skills in order, because you’re going to have some explaining to do.


Sidebar –  Valuing Twitter Followers

When marketers get up on stage to describe their social marketing successes these days, they invariably refer to follower and fan totals. On Twitter, follower counts have become a sort of merit badge, despite the fact that anyone can quickly run up that number by simply auto-following everyone who follows them. There are even paid services that inflate follower totals.

What is the true value of a Twitter follower? There is no industry standard to calculate that number, but if you have the right metrics in place, you can do that for your own organization. Here’s how:

Look at the total number of clicks to your site from Twitter in any given month and divide that by the number of tweets you posted. This gives you the average visits per tweet. Once you have this number in hand, you can look at the behavior of visitors who arrive from Twitter and compare it to those who find you from other sources. Look at page views per visit, time spent on site and visitor paths to identify what percentage of Twitter visitors become leads or customers. Using your standard qualifying metrics, you should be able to determine the average value of a Twitter visitor.

For example, if 1,000 visitors arrived from Twitter in a given month as a result of 20 tweets, that yields an average of 50 visits per tweet. If you know that 5% of Twitter visitors register for a download or newsletter, and that the value of an average registrant is $50, then you can calculate that Twitter delivers $2,500 in business value, or an average of $125/tweet. If you have 5,000 followers, then you can also calculate that an average follower is worth 2.5 cents.

This formula is overly simplistic, of course. Not all Twitter followers are created equal. If you want to dive deeper into the mechanics of influence, services like TweetReach.com and Twinfluence.com can calculate the total reach of your followers or tweets according to so-called “second-order followers,” or those who follow the people who follow you. These metrics can also be used to estimate the value of retweets by certain popular members.

This same approach may also be applied to finding the value of Facebook fans, LinkedIn connections, SlideShare followers and the like.

End sidebar




Facebook Grows Up

Thumbs-up logoThe race to socialize the Web got more intense this week with a major new announcement from Facebook that plays to its strengths at Google’s expense. This is shaping up to be an epic battle and the good news is that users stand to benefit regardless of who wins.

On the surface, Facebook’s move to make its famous “Like” button a fixture on many other websites seems unremarkable.  But it’s really the tip of the iceberg for future services that Facebook calls “Open Graph” and which will strengthen its position as the power broker of the social Web. Moreover, the way Facebook is approaching its strategy is a notable evolution from its past behavior.  This company is growing up fast and Google had better be on its toes.

What does it mean to “socialize the Web?”  As I’ve written in the past, the next great evolution of the Internet will be to move beyond static websites and toward services that travel with the user.  The most important of these will be persistent connections to the members of one’s social circle.  Basically, the experiences and advice of the people we trust will become part of our information-gathering experience, influencing and guiding us whenever we choose to consult them.

Facebook’s new features are an important first step. Visitors to a partner website will now be able to register their recommendations by pressing the famous blue button and having that endorsement added to their Facebook profile as well as to the destination website.  Their friends will then be able to see that opinion when they visit the parter site or check the person’s profile or news feed on Facebook.

Services that choose to partner with Facebook will benefit from immediately adding content from Facebook’s 400 million-plus members with minimal effort. They’ll also enjoy easier cross-enrollment with the social network. Facebook, Google, Twitter and LinkedIn have all been nibbling around the integration issue with features like Facebook Connect and Google Friend Connect, which enable people to log onto one social network using credentials from another.  Now Facebook is making this cross-registration so easy that it says it will discontinue Facebook Connect entirely.

Services like the consumer review site Yelp, which is one of Facebook’s early partners, are positively bubbly about these new developments. Yelp believes that the addition of Facebook friend recommendations will deepen the quality of its reviews and juice its membership. Yelp members will benefit from having their friends’ advice appear next to that of the strangers who now contribute most of the site’s content. Another partner, CNN, stands to gain from having Facebook members recommend stories and drive traffic to its website without any additional promotion of CNN’s part. Meanwhile, Facebook made it clear in its announcement that the “Like” button is just the first of many possible extensions of its service to other partners.

Good Citizen

One aspect of this week’s announcement that particularly impressed me was Facebook’s decision to work with partners.  CEO Mark Zuckerberg (left) declared that “In the first 24 hours alone we’re going to serve one billion ‘Like’ buttons on the Web,”  meaning that Facebook has done its homework to enlist partners that will give its strategy instant legitimacy. This is an impressive evolution for a company that has a history of being arrogant and difficult to deal with.  It also demonstrates that Facebook is aware of the need to add value to other services instead of trying to steamroll them.

Contrast that with Google, which has appeared positively inept in some of its recent web socialization attempts.  Google Buzz has none.  Google Wave, which sounded good in theory, has been a flop in practice. I don’t know anyone who uses it. Knol, which was once seen as a competitor to Wikipedia, is all but invisible. Sidewiki attempts to add integrate friends’ recommendations into the Web browsing experience, but implementation is awkward and website owners may see it as more of a threat than a benefit.

In short, Google’s reputation as a good partner seems to be giving way to the kind of go-it-alone approach that’s typical of market dominators. This is happening just as Facebook is learning the value of collaboration. All in all, this is not a good omen for Google. While a company with 70% of the search market is in no immediate trouble, history has shown that even dominant companies can fall fast when the rules change. Facebook is trying to change the rules.

Why is Facebook’s initiative good for Joe and Jane Web user? Because it continues to move the value equation toward quality content. The more that online success is tied to peer endorsements, the more incumbent it is upon content providers to deliver value that others can recommend. The influence of marketing dollars continues to ebb while the influence of good information grows. What could possibly be bad about that?

A New Kind of Search Engine

Between South by Southwest and the Cognizant Community 2010 Conference, I’ve heard some fascinating presentations over the last couple of weeks. I want to tell you about one in particular, though, because it introduced me to whole new ideas about how we acquire information.

The speaker was Andrew McAfee, principal research scientist at the MIT Sloan School, fellow at the Harvard Berkman Center and author of Enterprise 2.0. McAfee specializes in the application of advanced Internet technologies to corporate communications, and his observations about the impact of Twitter and Facebook on the way we find information raise the possibility that a new kind of search is emerging.

Speaking at the Cognizant conference earlier this week in Scottsdale, McAfee described how much the process of finding information has changed in just the last 15 years. As recently as 1995, the most common reference source we had was a library where professional human curators made decisions about what we needed to know.  Information was not only scarce but constrained by space and the limitations of indexing systems that forced information into uncomfortable categories (David Weinberger’s Everything is Miscellaneous describes this brilliantly).

When the Internet went mainstream, we initially tried to recreate the curated model online. Remember that Yahoo started as a structured taxonomy designed by humans that organized the Web into categories. There is some value to that, but few people access information that way today.

Instead, we discovered that search engines are faster and bring us directly to the information we’re seeking. It’s amazing how quickly people have discarded the library metaphor that dominated our thinking just a decade ago in favor of search. In December, people conducted more than 4.7 billion searches worldwide every day.

A New Approach to Search

Now there may be a new kind of search taking shape based upon the ask-and-answer principles introduced by social networking. Twitter users understand this well. Let’s say I’m in Chicago looking for a place to take business colleagues to dinner. I can search the Web for restaurant reviews, but I can also ask a question of my followers: “Recommend a good restaurant within 10 minutes of McCormick Place?” Both actions yield useful information, but the Twitter inquiry may actually provide superior value because the response comes in real time from people I know and trust.

I’ve already noticed my behavior changing as a result of this network effect, and perhaps you have, too. When I’m about to make a major purchase decision, I often ask my Twitter followers for advice. In effect, I’m conducting a search against a database of unpublished information that’s stored in people’s memories.

If we can unlock and share this untapped resource, we can potentially open a treasure trove of new information. In McAfee’s words, “Your ignorance makes everyone smarter.”

Organizations that are experimenting with Web 2.0 tools behind the firewall are discovering that this is remarkably powerful idea. For 20 years, we’ve tried to capture knowledge by interviewing veteran employees and storing what they told us in databases. That’s never worked very well because it’s an unnatural knowledge-transfer mechanism. It turns out that people are more generous and spontaneous with expertise when they answer ad hoc questions from peers. Some organizations are beginning to scrap the old tools in favor of this free-form exchange.

The trick is how to preserve, organized and rank this wisdom. You can bet that Google and others are trying to figure that out right now. I was a little mystified last month when Google acquired Aardvark, a “social search engine,” for a pricey sum of $50 million. Aardvark is sort of a structured Twitter; its members can ask questions of others who have a self-declared area of expertise. Having listened to Andrew McAfee’s insights, I now understand better what Google executives were thinking.

This doesn’t mean that today’s search engines will become irrelevant. Social search is an extension of an already-powerful metaphor, and it has some very exciting implications. What do you think? Are there scenarios in which social search could replace the ubiquitous Google query box?

This Crafter is No Dummy

Jenny Rohrs of Craft Test DummiesI met a woman this week at the Supergenius conference  who’s quietly making her mark on the giant crafting business. If I was writing a book, I might even call Jenny Barnett Rohrs a New Influencer.

Jenny is a professional music therapist who put that career aside for a few years to care of her kids. But the artistic instinct didn’t die amid the PBJ sandwiches and homework. The Lakewood, Ohio mom continued her passion of crafting and nearly two years ago launched a blog under the clever name of Craft Test Dummies.

Jenny was urged on by husband Jeff, who works at ExactTarget, an e-mail marketing term. Jeff knows a thing or two about digital promotion, and he urged Jenny to sweat the basics in organizing her site, writing good headlines and tagging all content. Jenny further promoted her own brand by volunteering to write for CraftCritique.com, a popular reviews site. Her Facebook fan page is a cornucopia of advice and offers. There’s a Ning community. And she’s on Twitter because, well, who isn’t?

The result: Craft Test Dummies is now the number nine result on Google for the keyword “crafting,” beating out even very large retail enterprises. Imagine that. In a population of hundreds of millions of crafting enthusiasts worldwide, this blogger has reached search nirvana in less than two years all by herself. Now Jenny gets hundreds of daily visitors, invitations to speak and samples from crafting supply makers around the country who hope to get one of her coveted reviews. She gets paid to demonstrate at trade shows and craft fairs and recently signed a contract to consult for an online retailer.

Jenny Rohrs is successful because she took care of the basics:

  • The blog is polished and well-organized. Categories are selected with care. Entries are thoroughly tagged;
  • The site is optimized for search. One trick: nearly every page title contains the word “craft” or “crafting;”
  • Jenny’s a good member of the community. She links to crafters she respects and they return the favor;
  • She uses every platform to her advantage, and the cross-links create more search awareness;
  • Most importantly, Jenny writes good stuff. Her entries are conversational, friendly and easy to read. They’re also full of ideas and advice. Not only does this appeal to crafting enthusiasts, but Google is tuned to love that kind of content.

With so many millions of blogs out there, you might fear that it’s too late to get into the game. But look at the results that this recent entrant has achieved. The secret is to deliver good content in an accessible format and to spread the word through as many channels as possible. The total cost of all the social media platforms Jenny Rohrs uses is $0. Her time may be invaluable, but the tools are cheap.

Message to Marketing Graduates

Photo by Shoshanah (click for Flickr page)

Photo by Shoshanah (click for Flickr page)

I spent 90 minutes speaking to Dr. Nora Barnes’ social media marketing class at the University of Massachusetts/Dartmouth this morning. I try to speak to college classes at least four or five times a year, in part to give back something to the next generation and in part to learn more about what’s on their minds.

I asked the students – all of them senior marketing majors – the same question I always ask college classes: How many of you subscribe to a daily newspaper? The response was pretty typical: three students out of a class of 34.

Here are some of the things I told them:

  • Much of what you’ve learned about marketing over the last four years will be irrelevant five years from now. The field is changing too quickly. You’ve been learning about how to tell a story and position a brand, but in the future your job will be much more about listening to customers and working collaboratively on brand definition.
  • You should discard much of what your teachers have been telling you about the media. Traditional media is collapsing and what emerges from the rubble will look very different than the institutions we now know.
  • The best skills you can bring into the marketing field today are resourcefulness and curiosity. You must be willing to reinvent your skills constantly because the playing field is in a constant state of turmoil. This is very exciting for you and it’s very scary for the people you will be working for. Be sympathetic, but don’t get stuck doing things the old way.
  • Traditional media was built upon a foundation of inefficiency. The clothing retailer who wanted to reach the .01% of the population who want to buy a wedding gown at any given time has had to pay for the 99.9% who don’t. That’s crazy, but it’s the only way we could get a message across in the past.
  • The worlds of media and marketing are undergoing enormous improvements in efficiency right now. Unfortunately, efficiency is usually painful because it destroys institutions that were built upon inefficiency – institutions like newspapers and magazines. In the end, we’ll be better off, but we’re still in the ugly destruction phase right now.
  • In the last decade, Americans have shift from browsing to searching for information. This has huge implications for the way decisions of all kinds will be made in the future. Search engine marketing and search engine optimization should be part of any core university marketing curriculum today.
  • The shriveling of traditional media creates new opportunities for organizations — and that includes businesses — to fill the trust gap that’s been left behind. Businesses can become media if they so choose. Most of them haven’t accommodated themselves to that fact.
  • Trust is complex in the new world because we are losing our traditional trusted brands. I trust Wikipedia to tell me the date the Yalta Treaty was signed, but not necessarily to interpret the poetry of Edgar Allan Poe. Trust is also situational. We are learning to trust some sources for certain kinds of information but not for others. It will take time for us to sort this out.
  • Today, individuals can choose to be celebrities all by themselves. They need to have something interesting to say and the knowledge to use new channels to say it. This is very cool. We no longer have to depend on others to decide if we can be important or not
  • This is a great time to be a college student getting into marketing. The old guard is struggling to learn the new tools that this generation intuitively understands. Companies like Edelman are going so far as to create reverse mentoring programs in which younger employees train senior executives. This doesn’t mean you young people know it all. Be open-minded about learning from the experience of others and be generous about sharing what you know.
  • In the old days, the marketer’s job was to media-train a few key executives. In the future, the marketer’s job will be to media-train the entire company. This will be enormously empowering for marketers.
  • Marketing’s traditional role has been to talk. Its future role will be to listen. Branding and positioning will be defined as much by a company’s constituents as by its employees. If you choose simply to talk, people will choose simply not to hear you. Marketers have an unprecedented opportunity to increase their importance in the organization by becoming listeners.
  • Messages spread from the bottom up much faster than they spread from the top down. Cindy Gordon’s story at Universal Studios is just one example. She told seven people the news and within a couple of days, 250 million others knew.

And finally: By the time you graduate, have a LinkedIn profile. And for goodness sake, clean up your Facebook profile!

    Overcoming Blogger’s Block

    Writers blockThe best way to sustain visibility, name recognition and search-engine love in our information-saturated world is to write a lot, particularly on a blog, which is a magnet for search engines.

    But writing is hard for most people. Just coming up with a topic to write about and something new to say is often the biggest struggle.

    I’ve learned a few tricks about how to overcome Web 2.0 writer’s block that I thought I’d share with you over the next couple of issues. I also hope you’ll come to the blog version of this article and add your own. We’ll start at the beginning.

    Choosing a Topic

    The first step is to write about things that inspire you and about which you have strong opinions. If the subject doesn’t move you, it’s hard to get motivated and create ideas.

    Use Feeds. All blogs and most news sites support RSS feeds. In some cases, the feed delivers the entire content of the site. In other cases, they’re organized by topic. You assemble feeds in RSS reader.

    RSS readers are basically mini newspapers you create out of information streams from online sources. I use Google Reader to set up topical feeds from bloggers and publishers I like who cover these topics. Here’s an example of one I set up about journalism and news. It’s usually a two-click process to add a feed to Google Reader, and another couple of steps to organize the feed into a folder. You can even republish the collection of feeds as a single feed of its own.

    Topical feeds inspire great ideas. You can easily see if a topic is trending by the amount of attention it’s getting. Feed collections also give you a quick idea of whether a topic is controversial, since you can easily see if a lot of people are writing about it.

    Tweet and be Tweeted. I’ll admit to not being very good at jotting down ideas when I have them. My teachers always told me to carry around a notebook for this purpose, but I’d either forgot the notebook, the pen or both.

    Twitter has helped me surmount this disability. Now when I see something interesting, or have an idea, I tweet it. I can then go through my own tweet stream later and look for ideas that have since slipped my mind.

    Twitter is also an endless source of ideas. If you carefully manage the list of people you follow, the stream of tweets is a great source of inspiration. With the new Twitter Lists feature, I can now read tweets from people who share interests or affiliations. It’s like the topical RSS feeds described above, only shorter and less predictable.

    Bookmark. When you see an interesting article or video, bookmark it and write a comment. Services like Delicious, Reddit and Clipmarks make this easy. My personal favorite is Diigo, because it allows me to highlight and annotate the items I bookmark. Here’s my personal list of the most interesting articles I’ve bookmarked recently. Choose a tag you’ll remember, like “ideas.”

    Listen to Your Audience. Conferences, meetings and consulting work are good sources of material because they tap into what’s on people’s minds right now. Find an article that interests you and look at the comments to see what questions people are asking. Maybe you can be the one to answer them.

    Refresh old material. If you’ve been writing for more than a year, chances are there’s some material in your archives that could use a fresh look. Revisit an old prediction and see if it came true. Or discuss new ideas on an old subject. Be sure to link to the original article to drive a little more traffic to it.

    I’ll continue with more ideas next week. Also, as I was writing this piece, I came upon an article by Steve Aitchison on the very same topic. He suggests 100 ways to generate ideas, and many of his suggestions are very good.

    Will All You Learned About SEO Be Worthless?

    Search_LightLast week, Google changed the rules of Web search with a relatively low-key innovation that I expect will permeate the search engine giant’s future strategy.

    Google Social Search is an experimental program that integrates content from a user’s social network into search results. When enabled, the first page of Google search results includes a few links at the bottom to related content from a member’s social network. Google derives this information from the profiles people build when creating a Google account. It also taps into other Google tools to make assumptions about what’s important to a member.

    For example, if you subscribe to blogs in Google Reader, the search engine now presumes that that content is important to you and elevates it in search results.

    Social Search continues Google’s efforts – which began with a year ago with SearchWiki – to customize the search process. SearchWiki enables logged-in users to shuffle their own search results, promoting some and demoting or eliminating others. Users can also annotate their search results. Social Search goes one step further, and it’s a big step. The search engine now makes assumptions about your interests based upon your friends network.

    This has tremendous utility. If I want to find a steakhouse in Dallas, I can now see recommendations from my friends directly in my search results. Google already annotates some commercial results with reviews it gathers from online review sites. It’s a small step to expect that I’ll soon be able to promote my friends’ reviews to the top of the heap.

    Social Web

    Last week, I had the chance to discuss these developments with Mike Moran, whose book, Search Engine Marketing, Inc., remains one of my favorite texts for understanding the Internet. I proposed to Mike that Google’s ambition was to make the entire Internet a social network. His response was that they’re already mostly there.

    In his analysis, Google is extending the customization features of SearchWiki to now include input from trusted third parties. We’re already at the point where no two registered Google users see the same results for most of their queries. And this is just the beginning. For better or for worse, Google knows a lot more about our online behavior than it uses.

    For people like myself who regularly use Gmail, Google Calendar and Google Documents, the company is now in a position to capture a great deal of information about what I do online because it can peek inside most of the written content I create. The obvious privacy issues aside (and I’m not a believer in Big Brother), this puts Google in a position to evolve its search strategy in a much more customized direction. Google can only go so far before the “creepiness” factor sets in, but there’s still plenty of runway to experiment in making the search experience more personal.

    Search Party

    For marketers, this has interesting implications. Many of us are now comfortable with the basics of search engine optimization (SEO) but what will we do when every user’s search results are unique? We could be looking at a future in which search engine performance is determined as much by opinions from people online as it is by page titles and domain names. Although inbound links already factor into Google’s search results, the relationship of the people doing the linking to the person doing the searching will be a new variable. SEO itself may become a social pursuit.

    Don’t underestimate the value of social search. Compete.com estimates that search.twitter.com attracted nearly 3,000,000 unique visitors in September. That’s a drop in the bucket compared to Google, but it’s up 550% year-over-year. Now that Twitter has a deal with Microsoft to deliver its search results over Bing (and speculation is that a deal with Google will follow) we are likely to see more creative efforts to integrate social content.Three years from now, the SEO tactics we’ve work so hard to learn may seem quaint indeed.

    A New Media Book That’s Actually Fun to Read

    The Chaos Scenario cover imageI start lots of books about new media, but I finish very few of them. My ADD is only part of the reason. I often find that authors don’t have much to say beyond a few points that are stated clearly in the first 100 pages or so and repeated for the remaining 200.

    Not so with The Chaos Scenario, the new volume by veteran advertising critic Bob Garfield. I devoured this book and was sorry to see it end. One reason: It is so much fun to read.

    Garfield is a gifted writer and he’s funny as hell. Of the video for OK Go’s YouTube hit “Here It Goes Again,” he writes, “Everyone on earth has seen the video at least four times, except for certain remote areas in the mountains of Papua New Guinea, where several tribesmen had seen only twice.” Or “If it were Japanese steel Google was flooding the market with, instead of kitten videos, it would be called dumping.”

    Such asides are garnish on a viciously insightful treatise on the death of advertising by someone who has the street cred to make that judgment. Garfield’s quarter century of experience qualifies him to say when media is badly broken, which he clearly believes it is.

    In an opening chapter entitled “The Death of Everything,” he documents the implosion of mainstream media channels of every kind under the weight of new-media competition and changing audience behavior. If your CEO still insists on throwing away money on TV ads, put this chapter in front of him.

    Listenomics

    Much of the book outlines the principles of “Listenomics,” or the premise that institutions that fail to listen to and engage with their newly empowered customers will die. The power that now exists in the hands of ordinary citizens can humble even the most arrogant corporate giants.

    Among the examples of this Garfield cites is a grassroots campaign called “Comcast Must Die” which he and a core of frustrated cable subscribers mounted in 2007. Through blogs and message boards, an angry mob of customers turned the tables on a giant utility, forcing meaningful change across its vast customer service operation. As besieged Senior VP Rick Germano ultimately admits, “I’m crying ‘uncle’ now.’”

    Bob Garfield

    Bob Garfield

    Garfield believes in the power of the crowd but not necessarily in its wisdom. Chapter 9 (“Off, Off, Off Madison”) presents a scathing indictment of consumer-generated advertising (CGA), which Garfield characterizes as mostly a dull imitation of what non-professionals believe advertising should be.

    “Most CGA has been the stuff of tiny little talents with tiny little budgets pursuing tiny little ideas,” he writes.  Which is not to say that pitting crowds against each other is always a bad thing, as long as the crowds know what they’re doing. Garfield praises CrowdSPRING, a competitive foundry for design professionals that created dozens of choices for the book’s logo for just $500.

    The power of the crowd is not so much to create advertising as it is to keep institutions honest, he asserts. In that respect, the balance of power has completely changed. “Never pick a fight with someone who buys zeros and ones by the barrel,” he writes at the close of the Comcast chapter, “which, nowadays, is everyone.”

    Time to Lego

    The story of Lego Mindstorms is a vivid example of Listenomics at work. The staid Danish company allowed customers to take an active role in turning a marginal product into a global geek megahit. Customers paid their own way to come to Denmark and help Lego build a more profitable business. Crowds are at their best when they help guide brands they like, Garfield asserts, but rarely when they build the products themselves. Brands like Dell Computer and Procter & Gamble are now embracing this idea of customer involvement with a vengeance through initiatives like Dell IdeaStorm and Innocentive.

    The book closes on a somber note, distinguishing itself from the relentlessly upbeat message of many marketing titles. In a chapter entitled “Nobody Is Safe from Everybody” Garfield recites chapter and verse of people whose careers and even lives have been ruined by character assassination, “trolling,” and the sometimes devastating choices of search engines.

    In a world in which less and less information is private, ordinary citizens are increasingly vulnerable to the whims of a malicious few whose vendettas may be artificially magnified by unknown algorithms. “You have very little to fear from 1984, but every reason to quake about Lord of the Flies,” he writes.

    In the final analysis, this clarity is one of the book’s most endearing traits. Garfield isn’t afraid to piss off his critics or to make fun of himself. He also doesn’t hesitate to point out that information democratization is hardly a win-win proposition. It is inevitable though, which is why marketers would do well to heed his well-reasoned advice. “Why, all of a sudden, is it so important to listen?” He asks in the first chapter “Because hardly anyone anymore is listening to you.”