Baskin Dim Bulb branding advertising social media business strategy

I Am Not A Number

Neuroscientists have found patterns in brain activity that correlate with single digit numbers. They can literally watch your mind count.

Research into the physiology of how our noggins work has advanced mightily in recent years, especially when it comes to witnessing perception and memory. Technologies like fMRI -- an imaging tool that notes differences in water pressure, sort of -- have been heralded as objective ways to measure what happens in brains when things that were once believed to be solely subjective occurred in minds.

The numbers recognition happens in the intraparietal cortex, and suggest that there are unique "signatures" for single digits, at least. The idea is that we possess some ancient ability to understand groups of things we'd encounter in an average day of gathering plants or running away from mastadons. The researchers thing they'll eventually figure out how brains make calculations, as well as learn more about how people learn.

Marketers get really excited about this stuff.

We've long claimed that our poetry and art of branding mattered to commerce, but the proof was always metaphorical, anecdotal, or at best, indirect. If science can start showing us physical proof of our ability to influence minds, it can both help us improve our efforts, as well as improve our stature with clients and employers. Combined with the advances in the hard technologies of capturing and tracking consumer behavior, primarily online, we might well be on the cusp of translating brands into numbers.

I'm going to throw my lot in with the Luddites and say I don't think so.

It's not because I don't think there's a lot to learn and use from the science, because there is. The more we know about how brains affect minds, and visa versa, the better we can communicate with consumers. But none of the science I've seen gets beyond the what of cognition to the why. Consciousness isn't a collection of numbers and thoughts aren't sensible like geometric proofs. For every way that we see science supporting our fantasies of mind control, we risk confusing process with content: human beings are individual, subjectively messy, and ever-changing. We can track the ways they count or remember things, but there's no mechanism for predetermining meaning, let alone relevance or utility.

Well, yes there is, and it's called behavior.

While researchers make progress poking flashlights in the black box of mind, marketers can choose to focus on understanding what people do, where they do it, how often, why, and to what purpose. In other words, flip the telescope, and worry about prompting the actions we want to see, and not trying to decipher the a prior mental states that we hope might someday, somehow, sometime result in something close to what we wanted to see in the first place.

We already possess all of the equipment necessary to see and track it completely.  I'd happily trade photos of neurons firing for an email registration, or a fuzzy brain scan for consumers reading information about my brand.

The more we define brands in terms of these objective, measurable qualities, the better handle we get on what they're worth (activities are always going to be a better metric for value than mental states, however expertly rendered in an X-ray).

The Bulb Asks:

• What would your brand look like if you mapped it in terms of what people do, and not what they think?
• Could you come up with experiments intended to prompt those behaviors?
• While science works to discover the true source of the human soul, are your marketing dollars better spent getting said souls to do corporeal things like buy stuff?

Bank Of The Present

As Citigroup mulls over closing some of its 1,000 or so branches in the U.S. and Canada, it has been exploring technology solutions in a project it calls "Bank of the Future." It hired someone from Travelocity.com to lead the project.

"Citi after all invented the ATM and was once a leader in consumer banking technology," explained CEO Vikram Pandit earlier this month. "It is our aim to make sure we regain that edge." He also said that the key to growth was "much, much better execution." Supposedly the company is looking at possible future Internet and cell phone tools.

I think it should focus more on the present.

Citi doesn't have an execution problem, per se, as much as a legitimacy problem: it required a bailout from the government because its very operations were either failed or suspect. Every presumption of its brand and reputation have been questioned, and in many instances, utterly destroyed, and it suffers within an industry category that commands about as much respect as Congress.

So how Citi executes those last few feet or bytes of connecting with its retail customers is so after the fact to be almost inconsequential. Mulling about possible newfangled ways to distribute account statements or switch funds around is sort of like contemplating your next vacation while sitting on the deck of the Titantic.

Closing branches sends a message about the brand, and it's not good, no matter how the mouseprint might claim otherwise. Citi is bankrupt, and it hasn't told consumers what it has done to fix whatever it did to destroy itself. Those improvements are either a big secret, or it really hasn't fixed anything. Yet it wants to chase consumer deposits as a core strategy. In fact, it wishes it could buy a branch network just as it contemplates closing many of its own.

Where's the "Bank of the Present" project? Instead of touting its futuristic technology brainstorming sessions, why isn't it conducting a campaign to reclaim the here-and-now:

• Internal repair. If substantive structural change is underway inside the company, shouldn't it figure out how to communicate it to the public? How is the bank different now from how it operated a year ago (and different from its competitors)?  Might its internal change address fundamental consumer concerns about the credibility of its brand?
• New products. Forget the tech gizmos or IVR menus, and come up with offers that address the real concerns/interests of depositors. Interest rates stink. People don't have any money to spare. So the answer isn't to invent a cool iPhone app, but rather new, better ways to make deposits. Simple, immediate things. I've got a big idea: how about suspending all of the latest mercenary fees and other whammies that define most banking relationships, and call a moratorium? The lack of bad products might make the other ones look good.
• Conversation. What a natural, obvious opportunity to utilize social networks to involve depositors, would-be customers, and friends and critics alike in an ongoing conversation about what Citi should and could be. Imagine giving people some substantive tasks and the chance to be really involved; understanding what the hell is happening with my finances would qualify as a "high touch" topic.

So it's disappointing that Citi is looking to the future, when it's present is what deserves its full attention.

Lend A Hand

A viral video focused on a woman's boobs jiggling as she walks through a crowd around a pool has been making headlines, not because it's crude or exploitative, but rather because it's crude and exploitative for a good cause.

"Save The Boobs" promotes a breast cancer research charity called "Boobyball" (here's the link to the really irritating web site), and it aspires to make the younger set more aware that the killer disease isn't the purview just of old people.

Most of the reactions have been positive, whether in acknowledgment of using crass sexuality to break through ad clutter, or simply in adoration of Canadian TV host Aliya-Jasmine Souvani's, er, endowment. The point is to get people talking about the disease, and tens of thousands of YouTube views later, the viral video has certainly accomplished its goal.

Or has it?

It kinda works like any beer or snack food commercial: a bodacious babe is surrounded by goofy guys going bonkers, with the former tolerating the latter in ways that would never happen in reality (but are somehow enabled by the particular brand being hyped thereby). In this particular instance, the camera stands in for a lecherous pair of eyeballs until the woman finds herself in a wet T-shirt and pulls it up to deliver the Bootyball punchline literally glued across her boobs.

I wonder how many people care more about breast cancer than they did before seeing the segment? I have no problem with the crassness; in fact, I found it so refreshing that I would have gone to town with it:

• Adopt a boob. We can adopt orphans and trees, so why not boobs? Givers could get the chance to give in the name of a favorite mammary gland (or pair), maybe even making it a yearly "investment" in the protection of said assets? Think of the opportunities to send out updates on boob status.
• iPhone boobs. There's a lame list of porno apps floating around on the iPhone App Store, so why not enhance the offering with a program that teed-up a "boob of the day" for a small donation? Higher levels of giving could yield more boobs.
• "I love boobs" UGC. Imagine encouraging people to post their own boob stories, however defined, while perhaps asking them to ante up some donation for "registering" them in the video, audio, and/or textual campaign (or whatever). How about connecting entrants/posts with scheduling mammograms?

Ultimately, it's one thing to break through the clutter, and it's great that people are sending the clip to one another (and that media types are chattering about it). But success will be measured in donations, right? Secondary benefits might be more regular checkups, while a third -- and distant -- deliverable would be general awareness.

For all the ingenuity of melding disparate elements of sexist imagery and meaningful philanthropy, I suspect that the creators of the spot got those benefits backwards, or they would have included a trigger (or triggers) to translate the attention into more specific, tangible next steps. I think the nature of the spot would have allowed them to be far more clear in bluntly asking for the sale. For me, the spot is a great tactic in search of a better strategy.

Lending a hand to save the boobs would have been far more uplifting.

A Glowing Report

I wonder if the subject of cellphone radiation and cancer will be the health issue of our times like cigarettes were in the 1960s.

Isn't it hard to believe that people didn't connect smoking with health problems back in the dark ages of the 20th Century? Hacking coughs and shortness of breath should have been obvious hints, not to mention the painful withdraw symptoms most quitters experienced. Even the statistical correlation between smoking and diseases like emphysema and lung cancer was not enough to convince scientists or court judges.

Like cigarettes then, cellphones are now into their second decade of mass use (cigarettes having greatly expanded distribution with free giveaways to soldiers fighting in WWII), and the research and hints are somewhat similar. Brain tumors are trending up (though slightly), and there's a growing body of evidence on the impact of EM radiation on soft tissue, like this just released report. Ever walk past an FM radio with your cellphone and hear static, or felt it get warm against your head during a long call?

Common sense should tell you that something's going on, even if it's still a big leap to connect it to a real health risk. And everybody relies on cell phones these days.  Just like "everybody" used to smoke cigarettes.

The wireless lobby's response to the possibility has been eerily reminiscent of the tobacco industry's communications strategy: deny the connection by citing the lack of scientific consensus. "The scientific evidence has overwhelmingly indicated that wireless devices do not pose a public health risk," explained a flack for the CTIA in response to the latest report. The statement parses its words very carefully; referencing a conclusion as "overwhelming indicated" is like saying it's "conclusively suggested," or "declaratively hinted." Sure, cellphone hardware might not pose a danger unless you drop it on your toe, but it leaves open the possibility that using it for a few hours each day might be a different story.

The point is to claim that the jury is still out, and that's substantively the truth: even if mobile phones present the same risks as smoking, they won't be dangerous for every user, in every circumstance. The science is nowhere near even making that case, even if the odds are high that there'll be some sort of a connection made as the results come in from decades-plus research. The jury in will come in drips and drabs and tumors.

So does the wireless lobby's approach make sense?  If cigarettes are the model, definitely yes: the industry's primary concern should be to deny it has even considered the possibility of harm, as whatever it publishes now could show up in litigation later on. But they should know how that scenario plays out. Sometime soon, the research findings are somewhat conclusive, enough that public outcry and political opportunism result in warnings and/or limitations on product sale or use. And then come the lawsuits from people with brain tumors.

The industry might genuinely believe that there’s no health concern, but it doesn't matter because there'll always be enough substantive and anecdotal evidence that there is something to worry about. Wouldn't trying to bring the debate "in house" and becoming the true, agnostic resource for information on the topic be the smarter, more sustainable strategy? Doesn't the CTIA have a vested interest in making its position credible and useful to consumers, or does it simply represent one particular POV?

Spam Isn't News

I received my first Lenovo News email last week, telling "Dear Sir/Madam" that "information can be 'the' critical factor in establishing a competitive business advantage,"so I could look forward to having "a direct pipeline to the latest Lenovo and hottest PC industry news."

Only the email doesn't contain any news. It's spam. CRM gone amok. A sales message sent without even the presumption that the recipients are anywhere near even considering the possibility of buying.

What a missed opportunity.

With the endless online blather that equates a muffled burp with political insight or business analysis, the world actually needs better, more thoughtful and agnostic perspectives. We've celebrated the destruction of journalistic authority and credibility, and swapped imperfectly fact-checked reporting with the gibberish tirades of opinion. So we mostly get infinite content that is endlessly useless, unless it's entertaining.

Why couldn't brands fill the gap? There's a content publishing model here that could be far more meaningful and sustainable than tweeting CEOs, nonsense social media campaigns, or CRM spam claiming to be news:

• Pick a subject worth owning. Lenovo can no more be the source for "compelling PC news" than it could predict the weather. I don't know what its brand intentions might be, but I'd guess it has an interest in selling/supporting localized systems, whether in Bangladesh or Boston, so there must be some pithy way to conceptualize and present that business. Define it with a white paper and give it an acronym; go to town creatively. But pick a subject worth owning.
• Hire real journalists. Journalists are curious and critical in ways that marketers aren't, no matter how otherwise literate they might be. If Lenovo wanted to publish authoritative content on its subject, it would need to build a reporting team (or at least hire the person) who was qualified to research and write the reports.
• Set transparent standards. This is the biggie, since we all know that the standards for reporting at the mainstream outlets are falling to match those of our favorite bloggers (or anonymous posters). Establish clear and consistent rules for what gets covered and why, and share them with the world. Pay special care to how references to Lenovo would be handled, and make sure everyone knows the deal on that, too.
• Pay for it with marketing, not by exploiting readers. The funding engines for news media going back to broadsheet newspapers were subscriptions and ads; this means that headlines have always been written to prompt both, sometimes with more of an eye toward that attraction vs. the actual substance of the reporting (see "standards"above). Imagine reporting under no such conflicts or pressures. It would be like public radio, only without the subscription drives.
• Use it internally, too. An ongoing, authoritative analysis of the substance of Lenovo's business would be a useful tool for educating and involving its employees. Skip the silly social media campaigns, and use this as a platform for exploring new ideas, dealing with problems, etc.

I don't think that such a publishing model would be limited to the subject areas at the center of particular brands; it's about providing meaning, relevance, and utility to people so, for instance, why couldn’t Budweiser decide to publish the authoritative news on local sports? It would probably cost far less than its multi-million dollar experiment hosting an Internet comedy channel (bud.tv). It might also be a lot more credible, which would mean people might want to see it.

But don't sent me anything called "the hottest news," especially when it isn't.

What If They Like Big Brother?

Google announced late last week that it will offer an exchange to help brands place online display ads. Earlier this month, it was revealed that Congressman Rick Boucher is drafting legislation to require businesses to disclose to consumers the information they capture about their Internet behavior, and allow them to control its uses.

The two news items are related, whether they're ever covered in the same story or post.

Brand advertising has always faced a conundrum: it can win creative awards and passing recognition by busy and distracted consumers, but it's hard to make an unequivocal case that it does anything for the business beyond that. Awareness is good, of course, and well-known brands are well-known in part because of all the money spent on that advertising.

There are broad equations that measure the correlation between exposure and sales, but they are only statistically relevant, not content-specific. Putting stuff in front of people you hope will care is still a crapshoot, and banking on them remember the messages long enough to put them to practical use is less business strategy than an article of branding faith.

The online corollary of brand advertising are display ads, and they face the same shortcomings, with one exception: they're a lot cheaper, so companies have swapped them for expensive TV spots, and thus realized some efficiencies in lieu of efficacies. There's still a lot of thinking that the ads don’t do much of anything, though, and I’ve often thought marketers have avoided the deeper questions about its purpose.

So why would Google spend $3.1 billion to buy DoubleClick and chase this spending?

Enter behavioral targeting.

What if brands could tee-up display ads with far more certainty that they're putting them in front of the most likely buyers at the times they're most likely to do something because of the exposure (most notably click through)? Suddenly, you can start pricing based on impressions and CTR (click-through rate), and you have the basis for a variable-pricing scheme based on date, time, location, etc. It's an exchange, which is exactly what Google is going to do: companies will bid on these spots based on their own models of what the exposures might be worth to them.

The deal doesn't work if Boucher's transparency bill becomes law, does it?

You're an educated reader, but most Internet trollers would be aghast at the notion that that their clicks are being watched, collected, and analyzed (on an aggregate level, at a minimum, and often with more detail and household and/or individual specificity). In fact, this behavior is the ultimate source of value for the very ad spaces that Google plans to sell; it's one thing for it to sell access to those eyeballs, but there's no model if those eyeballs decide not to show up. Or if they want to get paid for doing so.

It kind of flips around the entire shebang. Could you imagine consumers becoming participants in an exchange, selling their attention to the highest bidders? Worse, just think how many high-value customers would simply opt-out of being so exploited, er, served?

Boucher promises to reveal Big Brother, but I wonder if anybody will care (not to mention whether Internet commerce lobbyists will let the bill even see the light of day). Maybe consumers like being manipulated? Being shown only content that you're most likely to be interested in might be a prison of the mind as well as the wallet, but it sure sounds like it would be convenient.

The Habits of Fruit Flies

Federated Media and Palm are running a new tool called Trend Tracker that identifies and tracks emerging Twitter trends by tweet volume over time and geography, with the intent of predicting the next hot trend topics.

If this is primary research, then painting-by-numbers is art.

I know that we marketers are starved for consumer information. We're scared that they've abandoned us, or at least they aren't terribly interested in what we have to say about our brands. Twitter is one of those mechanisms that connects them to one another and, as such, can tell us what they care about.

But this tool is pointless, isn't it? It provides snapshots of discreet moments in time, presenting them in a way that suggests some casual or directional purpose but provides no insight into what's going on. The moments look like a pattern, but they're not. Further, what constitutes each shot are the most popular tweets, which themselves reflect what's most popular in the news, and what's been most often tweeted. It's secondary research, at best, or like a survey about how you like a survey about a survey.

The tool doesn't tell us what matters to people; if anything, it reveals how most everything pretty much doesn't matter for too long.

I'm sure there are experts who can wax poetic on the value of such snapshots, and that I'm a digital ingrate for not instinctively realizing it. I'm a bit surprised that there hasn't been some "top ten ways to use Trend Tracker to strengthen the stalagmites of your brand" (which will be a link on Facebook, of course, and get tweeted). Well, I'm not really surprised, because I don't think that this tool is even intended to meet the lower threshold requirements for getting sold to gullible marketers.

It's a promotional tactic in support of Palm's Pre smartphone, and in that sense it's absolutely brilliant branding.

Instead of relying on those nonsense brand image ads it ran on TV for the product launch, this is an actual thing that does something, which is a hellluva lot more compelling. The fact that you don't need a Pre to use it is even smarter; I don't understand why more brands don't invent meaningful, relevant, and (at least somewhat) utilitarian experiences for consumers.

There's a little button on the web site to "learn more" about the Palm Pre; I would have hit the brand connection head-on, with some activity extensions: 

• Users could get re-tweeted the top trend of the day, hour, minute, or nanosecond
• They could try to guess topics and win product-related awards
• Organize into groups to prompt trends, like spectators doing the wave at a baseball game

Who cares if it's a legitimate research tool (it's probably not)?  It's just that calling tweet waves "trends" is like finding high drama in the familial dynamics of fruit flies. Don't blink, or you'll miss both.

The Bulb Asks:

• Are you able to extrapolate ‘why’ from the ‘what’ of something like tweet trends?
• How do you even define a trend?  Do you base business decisions on them?
• Would you ever consider an activity like the Trend Tracker for your own brand, even if your business had nothing to do with technology?  Why not? 

Psst...Aliens Visited Jupiter

 

A "so-called" comet spent 12 years orbiting Jupiter before it was flung back into the cosmos, which is the same thing Pioneer 10 did in order to gain speed for its journey out of the solar system. Pass it on.

I don't want to wait for this conspiracy theory to surface on the web; I want to prompt it, and see how widespread its currency might become.

It's a loss less crazy than theories that the moon landings were filmed on a movie soundstage, or that aliens visited the ancient Egyptians and built the pyramids. I wonder if that’s good or bad; my gut tells me that there's a direct correlation with how unbelievable an idea might be, and how many people choose to believe it. The more insane the better.

You really don't have to twist the facts on this one. Mainstream astronomers observed that a comet called 147P/Kushida-Muramatsu spun around Jupiter twice between 1949 and 1961. Though an event seen only four times before, the science is simple: the Universe is filled is loose crud that gets captured and released by the various gravity wells through which it passes. No extraordinary explanation required.

But we also know that taking a spin around a planet is a great way to increase speed, and that the rarer the occurrences in any experience, whether scientific or social, the more likely a second look is deserved. We've never had concrete proof that aliens exist, but lots of reasonable people have a gut feeling that they just might. By those facts alone, this comet flyby seems like the perfect candidate for some crazy speculation.

So how should I craft the conspiracy? Do I post comments on UFO enthusiast sites as a question, or as a declaration of fact? It seems that nonsense ideas carry more weight when they're supported with confidence and fervor; perhaps the idea is not only a fact, but I should claim that the Men in Black want to quash it?

Nutty ideas also need to connect to context, primarily to make the crazy parts seem somehow inevitably true, if not mainstream. Maybe there were other things going on at the time...Alan Shepard's Freedom 7 Mercury mission was that year, and President Kennedy was sworn in. If only I could find an earthquake or volcanic eruption.

I probably need a special interest with an agenda that my conspiracy theory will support. Who has a vested interest in making people believe that aliens are slingshooting around Jupiter? UFO believers are the natural starting point, but they don't have such great access to general chat communities (they usually reinforce one another’s views). If I could allude to a political cover-up, maybe I could get a liberal or conservative-leaning cable chatter to embrace it?

I know! I need a corporate sponsor. Maybe a missile defense contractor? A telescope manufacturer? Why couldn't just about any brand choose to publish nutty content?  

The Bulb Asks:

• Even if we can chart the mechanisms of online viral transmission, we can't control them, can we?
• Do we craft messages (or "memes") that can survive this incessant exchange, especially considering its not just transmission but additive/subtractive?
• If any appreciable number of consumers could actually believe the conspiracy theory I'm proposing, should we reconsider how we imagine they reach conclusions about things like toothpaste or insurance?

Social Media In The Post-Crash World

Evaluating Reputational Risk 

(this post is the third in a three-part series by Jonathan Low, a co-founder and partner of Predictiv LLC, a firm that specializes in providing business leaders with strategic insights on how to better measure, manage and improve the performance of their organizations.  The series is debuting on Dim Bulb). 

For corporate communications specialists and reputation managers in the post financial crisis universe, the combined elements of distrust for authority and demand for transparency converge on the internet, specifically in the realm of social media. 

Hardly a day goes by without a breathless email announcing yet another conference, video, webinar or book providing the definitive answer to the mysteries of bending social media to one’s will. However, the relentless hype that has accompanied its growth may exaggerate or misconstrue its impact. 

Professionals would do well to take a deep breath and begin to think about how to build a detailed business strategy that includes but does not necessarily focus on social media so as to create sustainable value. Specifically, 

• Define goals specific to SMB involving messages, audiences and media but within the context of broader organizational strategic objectives
• Be flexible; SMB is not appropriate nor effective in all situations; consider it one element of a much larger collection, not the answer to all questions
• Integrate SMB into the organizational and cultural framework of the entity employing it; isolating SMB in its own silo reduces its value and assures its eventual irrelevance

Challenge #1 is figuring out what social media is. Comprised of a loosely defined collection of blogs and cyber-space gathering spots like Facebook, the list of what can be called SMB (social media/blogs) is growing. Traditional media have seen revenues plunge as advertisers follow their customers to the web.  These info-consumers have moved on-line to gather news, opinion and data – increasingly through mobile devices. 

Social media/blog (SMB) growth data

The numbers around social media impact seem compelling. 48% of the total population in the US, 36% of the population in Europe and 11% of the population in Asia access social media.

According to Nielsen’s 2009 "Global Faces, Networked Places" report on social networking trends, social media and blogs are now the fourth most popular on-line category, just ahead of email. Furthermore, the study notes that the "active reach" of social media/blogs grew 5.4% from 2007 to 2008, more than any other category.

Focusing more specifically on business benefits, DEI's study on the impact of social media on purchasing behavior states that of those who report using on-line sources for researching purchases, 70% use social media. PR Newswire claims that companies with the greatest depth and breadth of social media ‘engagement’ grew revenues 4% over a twelve month period versus the least engaged, which saw revenues shrink 6%. The Pew Foundation’s 2009 State of the Media reports that social media use grew 9% in 2008.

These unspecific and sometimes conflicting data underscore Challenge #2; the lack of one comparable and credible data set about SMB usage, which has led to widely disparate statistics about audience, usage and other relevant metrics.

The numbers do agree that growth of SMB usage has continued to increase globally. Usage figures suggest that 104 million people in the US accessed some sort of social media site in 2008. It is apparent that these SMB users are interactive rather than passive.

Recent research from Burson Marstellar reports that in the US alone, there are now 20 million bloggers, some 2 million of whom are paid something for their efforts and almost 500 thousand of whom blog full time for a living. To put that in perspective, more people in the US make their living as bloggers than as computer programmers or firemen.

This means that a growing though not yet dominant element of the population is forming its views based on sources which are not traditionally filtered or necessarily expert. In addition, the demographics on social media participation are shifting: in the US; 52% are women and 45% men. Women over age 40 are the fastest growing segment. The data for Facebook, now the dominant social networking site, support the broader trends; the age cohort demonstrating the greatest growth has been among people aged 35-49 (24 million) and it has added almost twice as many 50-64 year olds (13.6 million) as under 18 year olds (7.3 million). Highly engaged SMB usage is escaping its original youth-oriented demographic and spreading through the wider population.

Exuberantly and - mistakenly - extrapolating from SMB growth data

Social media have become an omni-directional force in communications between and among individuals and companies. It reinforces broader trends that people have lost trust in institutions, government, pundits, celebrities and other authority figures, relying more on family, friends and others they know. Nielsen has reported that traditional forms of ‘outbound’ corporate communication, like advertising, suffer from a ‘major lack of trust,’ with ‘false’ being the word most commonly used. The 2009 Edelman Trust Barometer reports that trust in advertising dropped from an already low 20% to an astonishing 13%, while trust in information provided by CEOs dropped from 36% to 29%.

However, SMB enthusiasts have tended to extrapolate from the positive growth trend data and have ascribed across-the-board benefits to SMB that may well be overstated.

The first problem is that for all the compelling data about gross SMB growth numbers, there is little evidence that these have yet to be converted into confirmed purchases. The language is vague: 80% of companies ‘worry about’ SMB, according to Russell Herder Associates. A Marketing Executives Networking Group survey that detailed views on SMB benefits: ‘customer engagement,’ 85.4%; customer communication, 65%; and speed/feedback, 59.9%. Though encouraging, these categories are not explicitly linked to customer purchase decisions. Even ‘harder’ categories – which can be proved to link to sales - were ranked by the MENG members as the SMB benefits they were least likely to obtain; reach, lead generation and customer service.

A poll of office workers by Workplace Media reports, “96% of respondents said their opinion of a product brand did not change if that brand had no presence on a social networking site.” Only 11% of SMB users report following a major brand through an SMB site. Just 12% of respondents said their opinion of a brand changes if that brand maintains a social networking site.

EmailVision surveyed 102 company representatives; they found that just 3% were using SMB or Twitter for promotional purposes. Their second finding points to the problem facing SMB as a competitive marketing tool; 50% of those surveyed said they preferred search engine optimization and email to drive their on-line strategies. 

The news for Twitter as a sustainable communications platform is ominous. Despite the fascination with this phenomenon, business usage has been minimal. Again, research data suggest that despite the increase in people signing up to use Twitter, the retention rate for the service is less than 30%, which is less than half the retention rate for Facebook and MySpace. According to LinkedIn Research Network and Harris Interactive, only 8% marketers responding to a survey thought that Twitter was an effective marketing tool.

Who is the audience and why?

A broader question has to do with the changing demographics of SMB participation. As noted above, SMB usage is transitioning from an under-30 orientation to a more representative portrait of the overall population, though the percentage of those over 50 using the net still hovers around 22%. Those who seek news on-line still skew more educated and affluent than the population at large. For the past decade, college graduates have been three times more likely to go on-line for news, a percentage that has not changed despite the astronomical growth in on-line access. 61% of college graduates go on-line versus 19% of those with only a high school degree.

This is not bad news for communicators as it suggests influencers can best be reached through these media. For those aiming to target broader demographics – or specifically lower economic cohorts – it means a less comprehensive reach than network, cable and in some cases, radio. This reinforces the questions about allocation of budget and impact.

These questions are exacerbated by the comparative data on viewership among the various media. The number of people who use the internet is about equal to those who watch cable TV. Of those two segments, about 40% get their news from the web, versus 70% who get it from TV. The network nightly news, for all the deterioration in audience, still dwarfs cable as a news source. 22.8 million viewers watched the three network TV evening news shows in 2008, almost seven times the number that watched the three most popular cable news shows.

Related to this, the top internet news sites are primarily the on-line arms of mainstream media providers or consolidators of such news like Yahoo. The top ten news sites in 2008 were, in order, Yahoo, CNN, MSNBC, Google, Drudge, the New York Times, Fox, USA Today, BBC and the Washington Post. By comparison, the three largest news-oriented blogs – Huffington Post, Politico and Real Clear News – drew 3.9 million more participants from 2007 to 2008. Yahoo, by itself, drew 4.5 million more in that period.

For communicators, the point is not to discount the value of SMB but to reinforce the notion that SMB is only one channel among many. Depending on the demographic the communicators wish to target, the most comprehensive and cost-effective means of penetrating that market segment almost certainly lies in a multi-dimensional strategy which incorporates multiple channels.

This raises the crucial question that has plagued SMB and other internet-based enterprises which rely on revenue to support their activities: what is the sustainable business model?

In 2008, total ad spending was down 2.6%. TV remained the dominant medium, with 60% of the total ad spend. Broadcast TV was down 3.5%, internet ad spending was down 6.4% while cable TV ad spending was up 7.8%.

According to Nielsen, "As the value of on-line real estate is increasingly measured by time spent rather than pages viewed, a shift in ad revenue towards social media could be realized if the successful ad model can be found" (italics added).

Conclusions; Towards a credible model for valuing SMB impact

In order for that requisite ad model to be created, it behooves corporate communicators to develop a better understanding of how social media participants choose and sustain affiliations, form opinions and make their social or economic decisions.

The data suggest that while there is rampant experimentation with new forms of media in a time of economic and communications transition, traditional media may currently provide the most sustainable impact on target audiences. The crucial missing element is a set of credible, comparable measurements that provide advertisers with the assurance that their investment in SMB advertising is having an impact.

That older Americans have begun to embrace SMB is a positive sign, since the perception that this was a younger person’s venue was a limiting factor. The primary challenge to broader acceptance of social media as a dominant channel for communications and reputation building is two-fold: its uncertain growth across all segments of the population, not just better educated or wealthier individuals, and the absence, to date, of a sustainable revenue model that will underpin the continued investment necessary to build the channel’s strength.

In its current evolution, SMB is following a well-trod historical innovation adaptation process. As with automobiles, electricity, information technology, quality, knowledge and most other bleeding edge concepts, companies are appointing executives with exclusive responsibility for social media and blogs, e.g,, the VP of whatever is perceived to be new and meaningful. Though slow and wasteful, this approach has led to success over the longer term both for the innovations and for the companies that adapted them.

However, it was not until an integrated solution strategy was created that these innovations were able to deliver on their truly scalable and sustainable promise. The putative "VP for Social Media" is a step on the path, but his or her very existence is a demonstration of the as-yet unfulfilled promise that SMB holds. Only when line managers understand that SMB is one of their responsibilities, will it have arrived.

There are particular economic challenges in the SMB realm. First, the SMB arena has developed as a highly personal rather than commercial space. Participants have embraced the opportunity to share themselves on-line with friends and relatives, as well as to meet others who share their interests or passions. Measuring social impacts on target audiences and resultant financial results – common in most business fields – is in its infancy in SMB and may be regarded as an intrusion.

SMB partisans have been vocal about what they see as violations of their engagement with the sites and each other. Privacy concerns have been raised about records. There is also a pervasive sense that advertisers are gate-crashers thereby lessening their effectiveness for the advertiser.

The problem these obstacles pose is one of reach and impact: if fewer people are participating or they are not from a target demographic or the ethos of the medium is hostile to commercial messaging, the ultimate utility of that medium is questionable.

How, then, can communicators and reputation managers most efficiently utilize the SMB opportunity?

• Define goals specific to SMB but within the context of broader organizational strategic objectives  involving messages, audiences and media
• Be flexible; SMB is not appropriate nor effective in all situations (for instance, on-line readers may be most interested only in breaking news); consider it one element of a much larger collection, not the answer to all questions
• Integrate SMB into the organizational and cultural framework of the entity employing it; isolating SMB in its own silo reduces its value and assures its eventual irrelevance
• Remember that legacy systems like TV, radio and email remain immensely powerful and may be the most effective means for disseminating a specific message or reaching a particular audience
• Think strategically about new opportunities to utilize SMB and other tools; mobile communications may be the ultimate vehicle for SMB messaging; how does your message or reputation defense play in that context?

SMB is going to be with us for the foreseeable future. How exactly that plays out is not yet clear. Twitter, for instance, may become a crucial shorthand supplanting instant messaging, texting or breaking TV news. On the other hand, it may be an evolutionary dead-end like Neanderthal man or the SUV. Facebook itself, will continue to evolve; while the broadening of its demographic could be positive, there is no surer way to kill a youth trend than for your mom to embrace it. 

As the Edelman White Paper on Social Media put it, "Corporations can’t buy reputation or broad loyalty anymore. These are earned through performance over the long term."

Communicators and reputation managers have both clasped and fueled the hype around SMB. It has provided a raison d’etre for industry professionals during a period of economic dislocation and downsizing. It has also presented them with an opportunity to appear as experts on a subject of great interest to many others. There is nothing wrong with this – and much to be admired. Ultimately, however, for communicators and reputation managers this must be about business impact; falling in love with a technology or a process reduces ones ability to see the next application opportunity clearly. To be sustainable as a profession, communicators must be clear-eyed and cold-hearted about using SMB only so far as it demonstrably benefits the client.

The second essay in this three-part series ran yesterday, entitled Public Actions; Private Reactions

The first essay ran Wednesday, entitled From Pitchforks To Profits

Public Actions; Private Realities

 

The Impact of Communications on Reputation and Public Attitudes 

(this post is the second in a three-part series by Jonathan Low, a co-founder and partner of Predictiv LLC, a firm that specializes in providing business leaders with strategic insights on how to better measure, manage and improve the performance of their organizations.  The series is debuting on Dim Bulb). 

The financial markets' collapse and a growing distrust of global leaders both public and private has increased the importance of thinking strategically about communications and its impact on reputation.

Government officials, political candidates and all those operating in the public realm are increasingly asking how they can measure with greater certainty the dynamics that drive their communications performance. With upcoming battles in the US on climate change, healthcare, Supreme Court confirmations, financial reform and a new Middle East peace initiative, among others, there is ample opportunity to evaluate communicators’ ability to drive public opinion.

The corporate sector has been measuring the impact of communications and reputation for some time, using the results of these analyses to determine how their allocation of resources and themes affect financial outcomes such as stock price, P/E ration, revenues and profits. The earliest iteration of measurement centered on clip counts and evaluations—the most basic tenets of media relations—but has since evolved to include more robust scientific metrics. This is spurred by the diminishing effectiveness of traditional advertising. One recent survey revealed that only 13% of respondents believe advertising claims.

Executives have begun to tackle media relations like a quantifiable business decision, not a vaguely mysterious art. This approach can be applied in the context of influencing public policy, public attitudes and voter preference.

Communications and reputation are no longer intangible in the traditional sense, as analysis has created a new basis for understanding their impact. To whom does the organization or individual want the communication or reputation to matter most? What behavior does the organization or candidate want that asset to drive? What sort of measurable outcome is expected?

Forbes magazine reported that the 25 Most Valuable Corporate Brands demonstrated that some corporate brand values are greater than the parent company’s market value. Related research has even established causal relationships between intangibles and outcomes such as market share and stock price.

Extensions of this research have further demonstrated the impact that communications about reputation has on financial and operational results. In one case, 3.5% of the company’s weekly stock price change could be attributed to reputational factors, with a dollar impact of as much as $687 million on an annual basis.

The demands of demographic and psychographic analysis as refracted through the mainstream and alternative media prism are also requiring individuals and institutions in the public sector to provide more data about their allocations of people and capital. The markets are demanding that the efficacy of "investments" in candidates, legislative initiatives and lobbying be demonstrated quantitatively.

In this acutely competitive environment where knowledge is capital, perceptions matter. And perceptions of reputation are particularly vulnerable to manipulation. Most public organizations do not have accurate, detailed knowledge about the components of their reputation, a significant risk. The sustainability of an organization or candidate—their very license to operate—may depend on their ability to measure communications and adapt with agility.

To begin, it is essential to identify the messages/themes the organization or candidate has employed over a given period of time. The factors that constitute value or awareness as well as those that influence reputation can be singled out and ranked. Using statistics, the impact of these messages on outcomes can then be measured with a significant degree of certainty. Organizations can track the causal relationship between the introduction of messages or stories and impact over time. More significantly, the future impact of messaging can also be determined with a high degree of certainty. This method quantifies the causal relationship between communications about an organization or individual's accomplishments and the resulting attitudinal implications for change.

A correlation simply establishes that a relationship exists between two factors. Causality measures the impact of that relationship. These analyses can be focused on a particular topic or public relations/communications message. Further evaluation can assess how those messages impact increases and decreases in the outcomes such as approval, inclination to support and trending.

This is also relevant in the case of companies doing business with the government—an increasingly common event, especially in a more stringent regulatory environment. According to the 11th Annual PricewaterhouseCoopers Global CEO Survey, 63% of CEOs factor the regulatory framework into their business decisions to "a great extent." Given this reality, it is more critical than ever for a company to determine what message is most effective in driving response to initiative components such as price, governance and historical performance. Companies are able to statistically establish the impact messaging has on RFP or contract acceptance rates.

Message life or endurance can also be tracked through metrics. This enables public and private sector executives to determine whether their messages are fading too quickly, particularly in the brutally fast modern news cycle, aided and abetted by the proliferation of social media platforms. This type of quantitative analysis encourages scenario planning based on data rather than hunches. The result permits optimization of good news and mitigation of potentially bad news.

Because a causal relationship between reputation, service delivery and operational outcomes can be firmly established, it is possible to reduce uncertainty and increase the likelihood of success in the messaging used by public officials to shape perceptions and preferences. Measurement-based services can be employed by government agencies, political candidates and corporations seeking government contracts or aid.

Using existing organizational, operational and financial data, the impact of organizational or individual value drivers on the performance outcomes about which principals care most can be accurately quantified. Public officials can:

• Quantify the current and potential impact of communications and reputation on potential voting, budgetary or operational outcomes
• Measure senior officials’ reputation influence on voter or legislative decisions
• Calculate which communications messages have the greatest positive or negative effect on financial and operational results
• Determine the impact of specific messages or advertising themes on demographic or psychographic voter segments, as well as geographical regions or urban areas
• Allocate financial or operational resources based on market assessment of reputation-related factors
• Create opportunities for "communications arbitrage" to offset the potential impact of bad news with positive messages of equal statistical importance, and
• Deploy communications assets in line with strategic goals.

How can public sector communicators reap them in their own day-to-day activities? The question is best answered by seeing the process in action.

When Barack Obama won the presidency in November 2008 and took office two months later, one of his first orders of business was to address the economic meltdown. Stimulus packages and bailout plans were rolled as skyrocketing unemployment, devastating investment losses and widespread foreclosures dominated headlines. Calls for the wholesale replacement of bank and insurance company CEOs became commonplace.

To general audiences watching Congressional hearings, arrogant, overpaid bankers were receiving a well-deserved comeuppance. The bankers, who had enjoyed a generation’s worth of obeisance as the best, brightest and richest, were, in the words of Financial Times commentator John Authers, "Raging against the dying of the light."

The challenge faced by the Obama Administration was to avoid unsettling capital markets further. In policy terms, the firing of bank CEOs, compensation curbs or oppressive regulatory schemes could be counterproductive. Public desire for retribution might be sated, but the markets could sink further, taking the general economy with them.

In early 2009, stories began to emerge about abusive credit card practices when many people desperately needed credit cards to carry them through the crisis. Issuers were reportedly charging punitive fees and changing rules governing card usage while receiving billions in public largesse.

From a communications strategy standpoint, there was still a chance to shape the debate over credit card "reform." Financial firms had not recently lost such a battle; their hard line against any sort of increased regulation (or opposition to decreased regulation) was legendary, based on their ability to muster local financial powers to pressure politicians. However, a dispassionate analysis of the political currents might have suggested a more strategic "pick your battles" approach, rather than a chest-thumping "not on my watch" attitude towards virtually all regulatory change.

Having determined to fight, card issuers then inexplicably appeared to choose a bloodless, technical set of themes, rather than countering the emotional appeal of their opponents. Quantitative message analysis might have shown that themes such as "the need to price credit for risk," or "the threat of reducing available credit" might work for obscure amendments to complex legislation, but they could not swing the tide of public opinion driven by concerns about "fairness" and "personal control of family finances."

Against a backdrop of allegations about punitive penalties, undisclosed fees and abusive interest rate increases, appeal to reason was unlikely to sway votes. With the media feeding the perception that card holders were suffering from unjust card issuer behavior, banks failed to allay concerns about whose side the credit card industry was on.

Politicians grasped the makings of an opportunity to redress the grievances of millions across the political spectrum.

In April 2009, President Barack Obama publicly admonished financial services CEO at a White House meeting, saying, "My administration is the only thing between you and the pitchforks." The gauntlet was down, and a bill to formally restrict credit card issuers' freedoms was up for a vote. The bill passed with overwhelmingly bipartisan pluralities: 357-70 in the House and 90-5 in the Senate. President Obama was photographed happily signing it surrounded by grinning Democrats and Republicans.

The card issuers had:

• Refused to acknowledge that the conditions framing previous legislative success had dramatically changed prompting the industry's rejectionist, one-size-fits-all attitude towards all forms of government intervention, which ultimately worked to its disadvantage
• Rejected a more nuanced strategy based on message analysis that would, statistically, provide the optimal ability to achieve their outcomes. If such analysis was conducted, entrenched belief systems beat out the data provided by information systems
• Neglected a communications strategy addressing the underlying concerns of legislators, the press and public

It would be presumptuous to state that this outcome could have been avoided. Some analysts have since suggested that the industry "threw the Administration a bone" by caving in on the credit card bill as a trade-off for defeat of what they perceived as the more threatening Mortgage Renegotiation Act.

That the industry was forced to make such a choice—if, in fact, a choice was really necessary—suggests the degree to which the debate had shifted against the industry's interests. What does seem clear is that a more effective analysis of communications might have provided a less hurtful outcome.

A more positive example of communications analysis can be found in the tale of US Treasury Secretary Timothy Geithner’s redemption as the public face of the Obama Administration’s financial rescue plan.

Geithner was President Obama’s first important cabinet appointment. His selection sent a strong signal about the quality of the people Obama would choose to tackle the still-deepening crisis. On paper, Geithner was the perfect man for the job: Ivy League-educated, an experienced financial technocrat and cool of demeanor, Geithner had weathered the first spate of financial storms in 2008 from his post as President of the New York Federal Reserve Bank.

His leadership role in managing the collapse of Bear Stearns in the spring of 2008, followed by his work with then-Treasury Secretary Henry Paulson on stemming the burgeoning crisis, earned him plaudits. Some progressives expressed concern that he was too close to the banking powers and had done less than he might have to anticipate the crisis, but his appointment was generally greeted with approval. There was relief that a steady hand was on the tiller.

Almost immediately following the announcement of Geithner's appointment, a scandal broke concerning his failure to pay taxes while working at the International Monetary Fund earlier in his career. This incident removed the aura of saintliness he had maintained and opened the door for the media antagonism to come.

Having survived the tax imbroglio, Secretary Geithner prepared for his eagerly anticipated first major policy address in early February 2009, days after the new President’s inauguration. The speech proved an inauspicious beginning to what was hoped to be a new economic era. The New York Times reported, "The initial assessment of the plan from the markets, lawmakers and economists was brutally negative."

The plan was criticized for being vague, "conceptually hollow" and, cruelest of all, a rehash of the Bush Administration policies. The reaction was harsh because hopes had been raised so high by Obama's own rhetoric about the plan and Geithner, and because of media hype surrounding Geithner’s ability to "solve" the crisis. As Barron's commentator Jim McTague noted after the speech, "The old adage is that the Street abhors uncertainty. Geithner served a three-course meal of the stuff."

The disappointment in Geithner's speech was based on public hopes—and the modern news-cycle dynamic—that a problem could be solved more quickly than is realistically possible. The negative reaction was amplified by heightened fears surrounding the financial meltdown’s severity, by Geithner's tax problem, by the suspicion he was too close to Wall Street, and was therefore doing their bidding. Fair or not, the nation and the world were looking to the US for a way out of the crisis, and to Geithner as the champion selected to provide deliverance.

For the next month, as the economic situation remained bleak, the criticism became even harsher. Headlines carried unrelentingly negative messages such as "First to go?" (implying Geithner would be fired), "Dead Secretary Walking," and "Can Geithner Bounce Back?" The low point came when President Obama felt compelled to say he had complete confidence in Geithner. Such statements are commonly regarded as anticipatory eulogies, with only the date of the fall from grace to be determined.

But Obama and Geithner refused to panic or abandon their plan. Rather than punish Geithner, the Obama team accepted responsibility for creating the conditions that led to his poor reception. They recognized that by insisting the plan be offered before it met expected standards, and by not fully supporting Geithner with staffing and developing an appropriate media strategy, they had contributed to the debacle.

Advisors at the Treasury and White House evaluated what had happened and how it could be corrected. The financial rescue plan had to be revised and filled in with greater detail. Advisors dispassionately assessed Geithner’s strengths and weaknesses as a communicator. Critics had noted that, for someone who was known for his confidence and lucidity with small groups, he regularly struggled when attempting to connect with a broader public audience.  The impression had been created of an intelligent technocrat who could not allay the fears of those less well-informed than he.

Analysis suggested that, to address the mismatch between Geithner's obvious skills and the communications challenge at hand, changes needed to be made regarding his style, approach, setting and audience.  He was made more accessible to more journalists and public groups to overcome the public's belief that he felt superior to others. He was provided with more one-on-one or small group speaking opportunities, rather than being forced to make big speeches in front of large audiences. His visibility was increased to underscore his importance to the economic recovery. As often as possible, he was placed in public settings off-camera so that his every nuance would not be endlessly dissected for flaws. Finally, he began to speak in clear, direct language to remove the taint of Wall Street in-group jargon.

Within two months, positive results became noticeable. Instead of calling for his resignation, the media were reporting "Geithner Gains Confidence," "Geithner Gains New Strength," "Geithner Gains Currency," and, perhaps most significantly, "Image Overhaul has been a key part of the Administration’s economic plan."

No public figure is ever more than one mistake away from public calls for dismissal. However, Tim Geithner’s resurrection as the economic standard bearer for a nation in financial crisis stands as benchmark for reputational renewal.

The lessons are that critical analysis, detailed, quantitative and qualitative evaluation of strengths, weaknesses, opportunities and threats must be conducted to develop a successful communications plan. In the Geithner case, recognition that effectively communicating the economic recovery plan was inextricably linked with the success of the plan’s component parts. It also reflects that executives frequently embody the reputation of the entity they represent, whether public sector or private. Leaders must be focused on melding personal and organizational strengths. Finally, the Obama Administration’s refusal to panic after Geithner's first, unsuccessful effort shows that strategic stability and execution are crucial to sustainable, long-term success.

Critical analysis, along with detailed quantitative and qualitative evaluations of strengths, weaknesses, opportunities and threats, must be conducted to develop a successful communications plan.

Executives operating in the public realm have the ability to more effectively and efficiently manage communications and their impact. Crying "politics" when faced with public sector challenges, as if that is some sort of kryptonite-like substance that renders moot all analytical judgment, will no longer suffice in a world in which the public and private sectors increasingly interact on a global scale. The tools are available, what is required is the will and the commitment.

The first essay in this three-part series ran yesterday, entitled From Pitchforks To Profits

The third essay will run tomorrow, entitled Social Media In The Post-Crash World