The New Word-of-Mouth Marketing Infrastructure?

The role of a proprietary community environment for the purposes of marketing (or social marketing program) has been hotly debated among brand marketers and social media insiders. We know that social sites are more engaging (people spend more time on them) than non-social, and marketers want to tap into that power.

So as a marketer, do you build your own community, or do you join others’? If you decide to build a community, what is the best marketing application – a community for your Loyalty Program, a community for building Insight into consumers that Market Research uses, an educational community for those considering your products that is more of a Direct Marketing play?

But it seems like brands are benefiting from building AND joining . . . and we’ve seen applications for social marketing  that are generating value along each (and in many cases, all) of the above dimensions.

Something I learned long ago is that if your questions have multiple correct answers, then you might be asking the wrong questions.

The range of marketing value propositions that a branded online community can serve indicates that the community isn’t really appropriate for just one of them – after all, separating “loyalty program” from “acquisition program,” “pre-purchase” from “post-purchase,” is something that marketers do for ourselves. Consumers don’t classify interactions that cleanly. Plus we’re seeing social tools being applied in almost every dimension of a company’s customer-facing business . . .

Ecommerce – Social Commerce / product presence through ratings and reviews by providers like Bazaarvoice

Support – Enhanced Product/Service Support Forums by providers like Lithium

PR/IR – Blogging and corporate presence platforms by providers like Awareness Networks

Focus Groups and Research – Formal deep online market research environments from providers like Communispace

The problem with the above applications is that while they are powerful when a consumer is ready to hear about what you’re selling, they suffer from what I call the “dinner party egomaniac” problem. If they are the only social applications you have, you risk sounding like the person at the dinner party who is only willing to have conversations about themselves  – your products, your company, your brand. And if your product or brand isn’t particularly sexy, that problem is exacerbated.

This makes it remarkably difficult to drive brand engagement from third party social environments to your properties. On those sites, consumers are busy talking to and relating to each other about the things that matter to them. They are not in a transactional mindset, and the invasive brand-centric presence there will be no more effective than, and probably less effective than, a 30-second TV spot.

What is needed is a transitional space, a place where consumers can go from third party social engagement to brand engagement naturally. A place that “changes the subject” at the dinner party in a way that Emily Post would approve.

This is where a branded online community can enter in – as the platform that reaches into third party social sites, converting third party social engagement into branded social engagement while retaining the context of consumer needs and aspirations. Branded communities need to be focused at the lifestyle and category level for this reason – it’s where the brand connects to consumers and their conversation.

What makes this easier are technologies that most third party social sites are implementing that allow users to take their identity, relationships, content, and features seamlessly from an unbranded environment to a branded one: like Facebook Connect, for instance.


So perhaps all of these things begin to function together in a new-media word-of-mouth marketing infrastructure, as above. Social enablement of the brand presence in all dimensions, and then a social marketing program where the brand connects with the relevant aspirations and needs of the consumer – and which fields participants from social destinations in powerful new ways that wildly outperform more traditional broadcast marketing channels.

I’ll be talking about this topic, social marketing, and how Powered provides these programs every week, starting tomorrow at 2:00 CST, in a webinar called “Powered Social Marketing: How It Can Elevate Your Bottom Line.” Stop by and see what we have to say!


What You Can’t See: 78% of Your Business

eye-chartRecently, I’ve been a little obsessed with ROI as it relates to social marketing, as I seek to put in more tangible terms what I feel intuitively about this new toolset’s value.

To this end, Adam Cohen hit my Reader just right with a nice real-world post on measuring the marketing effectiveness of social media in general (not another post just on how important it is that it be measured, thank goodness). As Powered has done in our 2009 ROI Report he focused on purchase path as the main way to address the value created by social presence. Truly, resultant sales is the most logical way to measure marketing, and Adam rightly calls for social media tools to be linked along the clickstream more directly with end purchase. Powered’s self-reported data is a compelling indicator, as we typically find on the low end that 1 in 5 consumers report a purchase as a result of social engagement within one of Powered’s client communities.

But there is more here than just getting people to consider a purchase. In our ROI report and with our customers we do focus on a number of statistics that address things like loyalty, advocacy, brand affinity, and insight into consumers. All of these words are abstract; they all refer to things that are intangible. But nevertheless, a marketer’s intuition tells you that these things are the essence of what we seek to impact. Unfortunately, those outside of the marketing profession see those terms as arcane and would rather you just “show them the money.” You can’t really blame them.

It was while considering the intangible and social marketing’s impact on it that I found this article by Christopher Kenton (via David Churbuck) that I found fascinating. Christopher’s article isn’t about social media/marketing, but rather about why CMO’s are being pushed more toward true financial measurability of marketing in general. The premise of his article is built around this finding:

According to Jonathan Knowles of Brand Finance, a consultancy that specializes in the valuation of businesses, the tangible assets that used to account for 75 percent of a company’s stock market value in the 1980s now only accounts for 22 percent of market value.

Wow, I can imagine the CFO-head-scratching that this sea change likely causes. Seventy-eight percent of my company’s value is in assets that I can’t see? Granted, some of these intangibles will reside in the internals: the IP, the human capital, the processes and technological know-how of a company. But no doubt much of this intangible value exists outside: in the brand equity that a company has built with consumers/customers – the affinity, loyalty, advocacy, and market insight that is the department of the CMO.

Today, what the stock market knows has forced the CFO into that CMO’s office to ask for a firmer grasp of the unseen – and for less arcane ways to measure it. Popular but still nascent measures like NPS (Net Promoter Score) seek to fill the gap and make loyalty/advocacy tangible, but more research and development is needed to tie it to financial impact – and that impact likely differs structurally from company to company.

In the meantime, as we wait for more widely accepted measures, I would suggest this hypothesis: there is currently no more powerful tool in the marketer’s toolbelt to impact intangible marketing assets like loyalty, affinity, advocacy, and insight than social marketing. Proof points abound outside of Powered’s walls, but our statistics show an extremely powerful effect that I believe dwarfs other marketing mediums when you take into consideration relative cost. Aaron Strout blogged about them earlier.

And when you’re talking about assets that make up as much as 78% of your company’s stock value, you might as well be talking about your entire business.

In the world of the CFO and company valuation, the two main forces on the positive side are cash flow and assets. So it’s reasonable to predict that someday in the not-so-distant future, the ROI of social marketing (and marketing in general) might not only contain a short-term conversion-based model that looks like the ROI models of old, rolling into cash flows . . . but will also include a more powerful new-world long term model that analyzes the impact of social marketing on intangible assets.

Are you already there? If so, how are you measuring?

The “Oprah-ization” of Twitter (HINT: This is a Good Thing)


A big thing happened last week in the world of social networking/lifestreaming site, Twitter. One of the largest media moguls in the world — Oprah Winfrey — decided to sign up. This came on the heels of other celebs like the NBA’s larger than life, Shaquille O’Neal, actors Jimmy Fallon, Ellen DeGeneres, Ashton Kutcher and wife, Demi “@MrsKutcher” Moore, and political savant, George Stephanopoulos joining Twitter’s ever increasingly popular ranks.


Not surprisingly, this created a bit of an uproar on Twitter, especially among folks that have been with it for a while and have been organically growning their follower base during that time. Personally, I could care less because I probably won’t follow Oprah on Twitter. Not because I don’t like or admire what she does but because she’s just not my cup of tea. The same is true with Shaq, Ellen, Ashton Kutcher and Demi Moore.

While some social media folks are taking a balanced if not slightly positive  outlook on this phenomena:

I’m coming out in the Jeremiah Owyang of Forrester Research’s camp of this is a good thing for not only Twitter, but social media and online community in general. As Jeremiah points out in his post, What Happens When Twitter Gets Mainstream Attention, “[with Oprah joining Twitter] expect more brands to jump on board, and within a few months”

Therein lies the beauty of someone like Oprah joining the Twitter ranks. As a leading driver of public opinion and preference — my friend Tim Moore of Pearson says there are two “market makers in the world of bookselling , Oprah and NPR’s morning edition — Ms. Winfrey is endorsing the legitimacy of social by willingly participating in it. If Twitter or “social” is good enough for Oprah, it’s good enough for the millions of Americans to participate as well. And with more participants comes a greater opportunity for businesses to engage, deepen loyalty and ultimately make money.

I’ll be the first to admit that I’m selfish for wanting this to happen on a number of fronts. First and foremost, this “Oprah-ization” of Twitter and thus the world of social should help my company, Powered as we create social marketing programs for big companies. It will also help friends and family members realize that I haven’t completely wasted my last three plus years with all of my blogging, podcasting, Facebooking and Twittering.

Community Powered, Live from SXSW: Aaron Strout


Susan Bratton & Aaron Strout at the SXSW Mashable Party

Susan Bratton & Aaron Strout at the SXSW Mashable Party

Next up in the #CommunityPowered podcast series featuring Susan Bratton of DishyMix, is little old me. That’s right, yours truly. Aaron Strout. Susan thought it was only fair that after working with her to arrange 13 other podcasts, helping her set up shop and then posting all other 13 that I should get a little “time in the sun.” By way of background, I’m the head of marketing at Powered — the company that owns this blog. Prior to that, I was the VP of social media at Burlington, MA-based Mzinga. Before joining Mzinga, I held a variety of director level roles at Fidelity Investments.


During my conversation with the lovely and talented Ms. Bratton, we talk about things like:

In addition to reading me here on this blog, you can also check out my personal (but professionally focused) blog cald Citizen Marketer. It if you really can’t get enough of me, follow me on Twitter at @AaronStrout. I am also the chief tweeter behind our corporate @PoweredInc account (although I’m working on getting our CEO to start tweeting from that account as well).

Right-mouse click to download.

FULL LIST of SXSW #CommunityPowered Podcasts are here.

April 15: Weekly Content/Social Marketing Links

As I mentioned in our first Weekly Content/Social Marketing Links post over on my personal blog, I’ve asked the Powered marketing, business development and product teams to pick one news article, blog post or research report a week that “speaks” to them. With that article, they need to come to our weekly staff meeting prepared to give a 120 second update on what the article was about and why they found it useful. 
My goal is to share this content on a weekly basis. Here’s what our third week netted: 

DP Rabalais (marketing):
I’ve decided that since I like to travel and have an upcoming vacation on my mind, that I’d stick with that industry for the entire month of April. Today’s article is titled, Travel Brands Lacking in Social Media Activity – it is the result of a an article written by Peter Kim titled A List of Social Media Marketing Examples.

Both articles take a look at brands that are using social marketing and to what degree: the Peter Kim article could be of interest to Sales since it outlines the Social activities of over 300 brands. 

Jay MacIntosh (business development):
I’m sharing the highest of highlights from Web 2.0 (i.e. phrases I highlighted from my written notes):

  • Session titled “Why Social Media Marketing Fails” led by Owyang, Charlene Li and Peter Kim. For a thorough review go here.  That said, here are the sound bites that stood out for me: “Don’t think of SM as a campaign, it’s about building relationships…what kind of relationship do I have today, what kind of relationship do I want to build?” “Understand your purpose with metrics…either activity which is analytics or biz metrics which are outcomes” “One large financial services firm decided they weren’t going to allow employees to engage in conversations with customers, therefore, Charlene’s recommendation was don’t do community/social.” “The most common reason for not doing community/social is executives don’t trust employees to engage in customer conversations!” “Does SM matter today? No. Will it? Yes, it will matter a whole lot because humans are and always will be social beings…we’re just having trouble adapting to these new tools/technologies.”
  • Session on measurement. “½ -2 % of people in social networking sites are “answer people” which you gotta have if you want discussions taking place on your community. Find ways to identify, recognize and encourage these people.” “Social media is about collective action…and why does this matter for businesses? Businesses are effectively conversations and measuring conversations is about measuring the context in which the conversations arise.” “If discussion is important to your community make sure you design it for at least audiences 1) the ½-2 % answer people and 2) everyone else. And make sure you validate people’s roles in the community because they value it (i.e. validation).”
  • Session on Ford’s use of content in SM. “Ford wanted to make storytelling for the consumer easy and they did this by enabling them with content to help them tell stories…Monty used the term “democratize the content” “Overall approach to SM at Ford is that it’s not a campaign, it’s about ongoing engagement.” “When asked how measure the ROI…sometimes answer with the question of how do you measure the ROI of phones, email, wearing pants to the office…hard to measure but he guarantees that all have a positive impact on your business!” “Fords vision for SM is to be one of the world’s leading social brands.” “We use the Sharepoint platform from Microsoft for our technology.”
  • Guy from Digg discussing how publishers can integrate with social networks. “Some interesting stats on Facebook…the average user has 120 friends. Of those approx 1/3 will see a Newsfeed item with anywhere from 0.8 – 2 clicking through to the item of interest. TechCrunch experienced a 100% growth in registrations when they implemented Facebook connect. Others like Telegraph, The Onion, Time, etc. saw registrations rise at least 30% with Facebook Connect.”
  • John Maeda the president of Rhode Island School of Design. “Electrons travel at lightspeed…people don’t”
  • Head of Microsoft Business Software unit. “Sharepoint is a social computing platform for within the enterprise…”
  • CTO of Bluestatedigital (the tech company behind the Obama social campaign). “ They sent 71B emails, had 200k offline events planned via the site, 14.5M YouTube viewing HOURS, $770M raised of which 65% occurred online.” “They accomplished this by driving ACTION. Email was the thing that had the biggest impact in terms of opt-ins and donations. The way to get advocacy is to create ownership. For example, as opposed to just having donors ask others to donate, they allowed individuals to create a personal fundraising page with goal, personal commentary, etc. along with tools to then easily contact friends and family to “support” their cause.” “Email is still king…1) There’s not too much email, just too much unwanted email 2) Nobody reads newsletters (give soundbites with links to more) 3) Give more than you ask 4) Your list isn’t an ATM machine, but if you deliver good/relevant content it can be very effective.” “70% of all actions on the site came from 10% of the members. Segment user/member types by pyramid and develop ways to get people to move up the pyramid.” “#1 fundraiser for the campaign was Sarah Palin’s speech at the Republican convention. Within a 24 hour period they had anticipated how their users would react to her and via the site and email rallied people with content and calls-to-action which generated $11M” “Measure everything and test what works good, better, best…for example they had a few different email concepts on one topic…the good email achieved a 30% open rate the lesser had an open rate of 15%. Try and test different content and see what works!” “Biggest unexpected lesson learned is that it’s important not to underestimate what people will do if you provide them with info and tools.”
Doug Wick: (business development):
This is a great article by Chris Kenton (originally published in the CMO Council’s “Marketing Magnified”) that describes at a strategic level the drivers behind marketing measurability, and settles on the biggest impact social marketing has – the effect on intangible assets like goodwill and brand equity. This article shows that path that connects the value of social marketing to the executive suite. 
Bill Fanning: (business development):
This article was written by Adam Weinroth, product manager at Pluck, last week.  The title is “How to craft a social media plan that connects.”  The article emphasizes the fact that there is no “one size fits all” social media plan for all brands.  To demonstrate the point, he outlines 5 tips for strengthening online growth through social media and references examples for each.  The high level points and examples are (check out the article for the details).  

1.       Know your audience

2.       Get real

3.       Provide relevant content

4.       Drive community back to you

5.       Leverage social syndication

It’s important to note that before you begin thinking about the technology and content needed to connect with a particular segment, you must first understand why you want to connect with them.  Are you trying to drive customer acquisition, build brand loyalty, listen to the community or some combination of the three?  Answering these questions first will start you on the right path to building a comprehensive strategy that not only addresses how to connect with your segment (as outlined above) but also how to achieve your business / marketing objectives once you have them engaged (intelligent merchandising or driving specific calls to action etc.) and how to measure the success of the program in order to continually optimize effectiveness.  This is the difference between a Social Media Plan and a Social Marketing Strategy.

Beth Lopez (marketing):
On vacation this week – she gets a hall pass.

Don Sedota (product management):

This is another product management related article but I thought it was timely given PM’s recent effort to make product strategy a more collaborative effort and to enhance the level of documentation available per product releases. The article, entitled How to Turn Sales Engineers into Your Biggest Fans, is geared towards the information flow between PM and Sales but the article can easily be applied to AM, Content, Ops, Tech Services, etc. as well.

The author offers the following (selected) advice for PMs in making key business groups more a part of product strategy and release processes and enabling them to do their jobs better:  

  • Transparency (builds trust)
    o Clear feature selection process for each release
    o Provide the “why” behind features
    o Share the roadmap
    o Solicit customer/prospect input and involve business groups in product direction
  • Formal Process (sets expectations and provides consistency)
    o Involve key business groups in release cycle
    o Clear and transparent enhancement request process
  • Transference
    o Provide sufficient documentation so that business groups can be self-sufficient in certain situations
    o Provide performance data via efficacy reports, case studies, etc.
    o Competitive data
    o Training
It will obviously take a while before we are hitting on all cylinders for all of this, but I’m excited that we’ve recently started improvement initiatives across many of these facets and that we seem to be heading in the right direction.

Community Powered, Live from SXSW: Tara Hunt


Tara Hunt

Tara Hunt

Next up in the #CommunityPowered podcast series featuring Susan Bratton of DishyMix, is Tara Hunt, marketing lead at Intuit. Prior to joining joining Intuit, Tara has been involved in innovative projects and companies like Riya, Pinko Marketing, Citizen Agency, Barcamp and the Whuffle Factor.

During her conversation with Susan, Tara talks about how powerful online communities can be for companies, her love for FourSquare (formerly Dodgeball) and her thoughts of the difference between working at a large corporation (Intuit) vs. going the smaller, startup route.



In addition to reading her on her Horse Pig Cow blog, you can follow Tara on Twitter at @MissRogue.

Right-mouse click to download.

NEXT UP: Aaron Strout (that’s me) of Powered Inc.

Community Powered, Live from SXSW: Cathy Brooks


Cathy Brooks and Susan Bratton

Cathy Brooks and Susan Bratton

Next up in the #CommunityPowered podcast series featuring Susan Bratton of DishyMix, is Cathy Brooks principal of Other Than That Consulting and head of content and bizdev at Seesmic. By way of background, Cathy has spent more than two decades working in and around media and communications beginning in 1982 with a job ripping wire copy (yes they actually still had wire copy machines) at the largest all news radio station in Philadelphia, PA. All these years later, Cathy’s experience as a Journalist encompasses reporting, writing, editing, broadcast management, and most recently media training and strategy development. She also writes/broadcasts at the Other Than That blog.


During her conversation with Susan, Cathy touches on a point that is near and dear to my heart… namely that “social media is only as social as the people who are in it. And so, that means you actually need to see people in carbon-based life form.” Cathy also notes the importance of “quality” in terms of “quantity” in terms of those that engage with you and/or read your blogs or Twitter stream. Please note that Cathy had less of a voice at SXSW than I did so if you find it too hard to hear her,a transcript of the podcast is here).

In addition to reading her on the Other Than That blog, you can follow Cathy on Twitter at @CathyBrooks

Right-mouse click to download.

NEXT UP: Tara Hunt – Intuit