Archive for February, 2010

Social and the New Model For Market Segmentation

Tuesday, February 23rd, 2010

So you know by now that we attempt to shake things up a bit and challenge people to think differently about topics and their impact on business.  Our topic this week is no exception and with the skills of our moderator, we are going to test those limits.  This week’s discussion is around market segmentation and how social can change how we approach it.

Market segmentation is more than what markers do with homogeneous products before deciding which actress to use in the commercial to best reach a desired consumer group.  Market segmentation is defined by Wikipedia as:

“A market segment is a sub-set of a market made up of people or organizations sharing one or more characteristics that cause them to demand similar product and/or services based on qualities of those products such as price or function.”

This is a good start as a definition, however this does not even begin to scratch the surface.  How do we take this to the next level?  To explore ways by which to re-imagine consumer grouping, we must get past the traditional segmenting like demographics, geographics, income, even behavioral.  For many marketers, they look at data models that break out behavioral with layers of demo and geographics mashed in.  This modeling then determines a budgeted ad spend for a period in time like 3 or 6 months where the messaging is developed, pricing assigned and commercial created.  The problem is that by the time the ads hit, the data models have shifted and the intended groups have moved on.  Now with peer reviews and endless product content the real-time web is heavily influencing consumer preferences  that continue to change with increased velocity.

Savvy marketers have been using insights for more than just marketing also.  Saavy marketers use segmentation for product development, pricing, marketing channel, and even customer retention.  Using the last example, customer retention, the segmenting considers factors like profitability, strategic fit, product version and longevity.  Can you service your customers differently with better targeting for profitability or would you be more proactive with customers who were ripe for renewal or upgrades?  Now consider going beyond your internal gates and imagine the results if you combined internal factors along with external or social listening capabilities.  Maybe that customer who is really loud socially is a drain on your profitability.

So what this means is that the social web is having a profound affect on preferences, therefore insights that are not derived in near-real time are simply missing the mark.  If we open our research and insights departments to the social web, how can they can they use these tools that have never been considered before?  Every company will find different value in different social instances, however there are some great new possibilities that are emerging:

  • What if you titled the buckets of your listening tools with Underserved, Disenfranchised and Contemplators.  Could you use that insight to build better products or price more according to near real-time inputs?
  • What if you targeted people who played Mafia Wars on Facebook or joined relevant fan pages.  Could you use those applications for consumers to self segment themselves and find commonalities?
  • What if you targeted people who used certain hashtags (#) on Twitter or similar platforms.  Could you infer commonalities from everyone who tweeted #farm, #beer or #sweets?

Understanding and using social segmentation is challenging.  The pace at which social moves and the pace by which people flutter around digitally are simply exhausting.  Marketers like General Mills and Coke are early adopters of social segmentation and blazing a trail for others to follow.    This week’s moderator Ken Burbary is going to help us sort out this topic.  Ken manages the social media duties for Ernst & Young where he develops these types of solutions for their respective clients.  The topic this week is:

TOPIC: Social and the New Model For Market Segmentation

Q1) Is traditional market segmentation still relevant?

Q2) What should be more important for Brands: social segmentation or engagement?

Q3) How are you segmenting your customers with Social Media?

Please join us Tuesday 2/23 at noon EST by using #sm48 on Twitter or follow our LIVE page

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Sentiment Analysis: Opinions Matter, If Only You Knew Which Ones

Friday, February 12th, 2010

active_listeningListening is the first step in social media (everyone says so).  Not onlydo you have to listen, you have to listen for 6 months or more before you are allowed to do anything.  Just ask the experts!

Frankly, I think everyone says that just to buy a little time before they have to really figure out what to do with social.  At any rate, most of the people who are told to listen have no idea what to listen for or who to listen to.  I’m not going to get into the depths of all things social media monitoring because that would take all day.  So let’s focus a minute.  

  1. You want to listen for mentions of your company, brand and top executives
  2. You quickly determine there is no way to manually search every blog post, tweet or comment on the web so you turn to automation
  3. Yeah, now you’re tracking buzzzz, but what does it all mean?
  4. So you start running reports and determine they are inadequate at best.
  5. Now you’re back to listening again but still not sure what you’re listening for.

 There is a word in the industry called “Sentiment” that is used when trying to determine a person’s attitude.  Online it’s a digital attitude and you only have text to go by.  No voice inflection.  No hand gestures or facial signals.  Just a bunch of words (or “noise” as they call it in the bubble) with little signal.  The challenge, after aggregating all of the buzz or mentions of everything you are tracking, is to make sense of it all and to make it actionable back inside your company.  So the sticking point here is whether or not you can use automated analysis to provide sentiment or if it has to be all human interface.  For any local or small business, human processing of sentiment might be reasonable.  However with any size at all, you would need a small army to determine if people liked your new product or enjoy working with your company…or would you?

If you ask 10 people how to measure sentiment, you will most certainly get 12 answers (yes 12).  The popular themes of managing sentiment revolve around polarity and intensity.  Polarity meaning either good/bad, positive/negative, like/dislike, etc and intensity meaning the volume or amount of mentions.  These are not wrong by any means, but I use a little different formula and you might say it’s probably for different purpose.  I like to consider the following:

  • Mentions – which is broken into volume, intensity and opinion (polarity)
  • Influence – of the person it comes from. How many followers, how often they interact (like a TwitterGrader)
  • Severity – of the content itself. “X product just saved my life or killed my brother” would be Sev1, where “Boss caught me goofing off and fired me, X company sucks” would be low severity.  Further defined by a direct vs indirect mention and context of the content.

OK, try managing that formula through reports.  No way, Jose!  And, by the way, I usually change what I am monitoring (at least the focus) to match what I am working on.  There are companies who are working on ways to automate forms of sentiment through natural language processing and machine based or community based learning.  They have their claims on successes and what they have may work for a lot of people in a lot of situations.  It has to be an individual call.  So how do you know what’s right for you?  That’s where this week’s moderator Katie Paine comes in.  Katie, affectionately known as the “queen of measurement”, spends most of her day answering these questions for her customers.  She will host our next chat with the following topic and questions:

TOPIC: Sentiment Analysis: Opinions Matter, If Only You Knew Which Ones

Q1:  How do you define positive sentiment?
Q2:  How does that impact your organizational goals?
Q3:  How do you know that what you are measuring matters?

Please join us Tuesday 02/16 at noon est and become part of the conversation.  Learn insights and have an opportunity to capture Katie’s attention for a solid hour.  Follow along using #sm47 or simply go to our LIVE page.

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Posted in Listening, Measurement | 1 Comment »

Destruction of the Media Industry: Will We Be Better Off In the Long Run?

Friday, February 5th, 2010

Laying out the fundamental issues and challenges in a post has become an integral part of the success of our weekly events.  Usually I produce the post and the moderator comes on Tuesdays and facilitates the discussion.  This week is an exception.  Our moderator, Paul Gillin, has delightfully taken the initiative to not only come up with his own topic, but to construct a post as well.  The following is the guest post by Paul Gillin:

———————

tough-times-newspaperAs we head into the second decade of the new millennium, it’s amazing to think how much has changed in such a short time

January, 2000, few people had heard of Google.  Online advertising was banners and e-mails.  Big media brands dominated the Web. US newspaper ad revenue would hit record levels that year.  Newsroom employment would peak in 2001 as newsstand sales of the top 100 magazines approached 30 million.  No one had heard of blogs.  People used mobile phones to talk.

Fast forward to 2009.  Last year, people spent six billion minutes on Facebook, downloaded one billion YouTube videos and logged over 1.4 million blog entries every day.  The iPhone became the first mobile phone to be used more for data than for voice.  The Internet became the second most popular news medium behind television.  Wikipedia posted its three millionth article.

Meanwhile, US newsroom employment fell to a 25-year low and magazine newsstand sales dropped 63% from of their 2001 peaks.  Reader’s Digest declared bankruptcy.  Comcast said it would buy NBC.

The statistics go on and on. In just 10 years, our century-old mass-market media model has given way to a new structure dominated by the economics of one.  Customers now take their opinions directly to the market.  Woe to organizations that don’t listen.

The contraction of mass-market media has brought plenty of pain.  Tens of thousands of media professionals have lost their jobs in the past two years, crowdsourcing has sent some professional fees into a tailspin and veteran marketers are under threat if they don’t “get” social media.  But is this pain necessary, even beneficial in the long run?

Media has historically been one of the least efficient disciplines on the planet. It’s a profession that declares success if only 97% of its audience ignores an ad or tosses the mailer into the trash. It gains one customer at the expense of annoying 50 bystanders. When department store magnate John Wanamaker said half his ad dollars were wasted, but “I don’t know which half,” he was being generous.

The new Internet has flipped the economics. As media control has passed from institutions to individuals, waste has begun to be worked out of the system. The cost of reaching a targeted customer will only decline in the years to come.  Sadly, efficiency will also devastate those industries and professions that thrived on media’s historical inefficiency.

There’s no question we’re in a period of media destruction, but is this a necessary precursor to a better world?  Today, everyone can be the media.  That means we have unprecedented access to information from all points of view, but we’ve also lost our sense of whom to trust.  Is ubiquitous access to unlimited information a blessing or a curse?  What will we be saying about his period a decade from now?

———————

That’s a great foundation for this week’s topic.  I’ll add a couple of thoughts directed squarely at the corporate side of this discussion that relate to content, trust and brands.

Today anyone can produce content and distribute to a potentially sizeable market.  The capabilities are ubiquitous and the cost is next to nothing.  With so much content now available, many forms of content quickly become commoditized and thereby become almost irrelevant.  With that, think about your company for a minute and the brand/s you represent.  These brands are usually strongest when consumers view them as a resource for their specified purpose whether it’s household cleaning, motor oil lubrication, exercise equipment or anything else. 

Since commoditized content is counter-intuitive to your brand strategies, aggregating stuff (content) just so you have more stuff does not fit with most corporate objectives.  Whether it’s for your customers, employees or partners, you want them to come to you as a resource for trusted content rather than as an aggregator of everything. 

Harnessing appropriate and relevant content as a resource for your customers / audience is becoming a significant differentiator in the market. 

Topic:  Destruction of the Media Industry: Will We Be Better Off In the Long Run?

Q1:  Does the proliferation of new media make us more informed or just more confused?

Q2:  Can businesses and institutions legitimately fill some of the trust gap that’s been created by the collapse of media institutions?

Q3:  Can armies of bloggers and citizen journalists fill the void left by the loss of media institutions?

So the chat will take place Tuesday 2/9/10 at noon EST.  Participate by following #sm46.

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Fear Factor: Understanding the Value of Adding Social Media to the Mix

Monday, February 1st, 2010

FUDFUD! (Fear, Uncertainty & Doubt) is typically used by sales and marketing types to position themselves against competitors.  IBM used to be renown for using this tactic and now it’s being used in a different way.  Executives are turning FUD around and using it on their own organizations with regards to the use of social media.  While companies widely accept that social media is transforming the business landscape, executives are still reluctant to approve anything more than small tests or pilot programs. 

This reluctance by executives is being translated by many to simply infer that they are scared.  Looking at it from an executive point of view however might shed a different light on the use of social media.  Companies have spent decades building out their networks of consumers, partners, suppliers, employees, and special interests.  So why does management shudder whenever you begin to put a “social” in front of the network?  Consider, today’s business models are developed with layers of hierarchy and managed very linearly.  By this, I refer to the typical order of developing product, inserting the supply chain, managing distribution, creating point of sale campaigns and attracting consumers.  There is a very linear process for managing corporate messaging, customer service, measuring consumer sentiment, channel partner alignment and so on.  What social media does is dis-intermediates most linear processes and connects disparate networks in ways that enterprises have not yet created “management” solutions for.  Like the classic management book implies, we have moved the preverbial manager’s cheese.   So what does this mean to social media champions inside companies?

In order to make decisions, executives need clear objectives, relative impact on short term and long term business and data points to back it all up…not theory.  Introducing a company’s employees to be social is one way to start (a good post by Rachael Happewill help identify ways to get started).  This helps to build confidence, trust and develop skills for those tactical purposes.  What is still missing though is the bigger issues surrounding change management and working procedurally in a non-linear environment.  For instance, at its most basic, what happens when corporate messaging is spread by consumer reviews not Corp Comms department?  What happens when consumers demand (or request) product features instead of market research?  Take it a step further now and consider what might happen if your consumers could connect directly with your suppliers and eliminate your company’s rolein assembly?  Now it moves beyond ratty little conversationalists to a complete dis-intermediation of non-essential middlemen and your company is no longer relevant (think newspaper business). 

In order for companies to consider adopting social across an enterprise, social media strategists need to move beyond campaigns and tactics and begin considering corporate lineages.  A research study commissioned by Cisco contained keen observations for agencies and strategists to consider.

        “Only one in seven of the companies that participated in the research noted a formal process associated with adopting consumer-based social networking tools for business purposes, indicating that the potential risks associated with these tools in the enterprise are either overlooked or not well understood.”

This is only one of the findings that was pointed out.  The entire excerpt was reported by CNNMoney here.

How do we ease executive’s minds and begin socially infusing companies?  Our moderator this week is tasked with helping connect those dots.   Helping us out this week, B.L. Ochman will provide her years of insight and success at convincing executives to get past dipping their toes in the water.  Our topic and questions follow:

Topic: Fear Factor: Understanding the Value of Adding Social Media to the Mix

Q1) Why do executives still doubt social media?

Q2) Do companies have time for social media?

Q3) Are there quick tactics that can be used to build company enthusiasm around SMM?

The twitter based chat will take place on Tuesday 02/02/2010 at noon EST.  To participate follow #sm45 on your favorite Twitter client or on our live site.

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