Financial markets and social media: adapt to adopt

October 29, 2009

Social media and social networks are a part of our daily lives. They’ve now been accepted as more than just entertainment. It’s taken a while but the world of business has now realised that it can no longer ignore them (or the web) as a channel of communication to reach its customers and interact with them. Businesses are all rushing to find a way to utilise Twitter and Facebook, some are doing it well others are failing, but most industries are at least trying. One industry who’s finding it more difficult though is financial services.

Financial services companies such as banks, analysts, brokers, traders and insurers all have a duty under various laws to keep copies of all communications with clients, customers and counterparties (particularly when it comes to discussions giving advice). This paper trail is required to ensure there’s no bias, insider dealing, dodgy advice or plain lying going on. The problem is, social networks like Twitter and Facebook don’t allow these companies to archive and store their communications making it very difficult for them to become meaningfully involved in actual two-way conversations.

This is a recognised issue now in the industry and even regulators recognise the potential benefits of being able to properly engage online. FINRA (the Financial Industry Regulatory Authority) in the U.S. has set up a Social Networking Task Force (discussed at their annual meeting recently) to explore how regulation can embrace these of technological advancements rather than hinder their adoption.

Now, while I can understand the need for due diligence, archiving, transparency and regulation around financial services, surely the industry needs to grow up and realise it’s time to ease these shackles and allow the conversation to flow. The conversation is happening anyway; in phone calls, cafes, restaurants and bars financial industry execs meet with clients, colleagues and competitors and discuss exactly the kind of issues that generally should be on the record (this has been happening for ever). At least if these types of conversations happen online they will be archived by Google if nothing else. Surely the regulators need to accept that their industry will be dragged kicking and screaming into the sociable world of online media whether they like it or not? Time to adapt in order to adopt modern methods of social business communication! The benefits of allowing the conversation to happen far outweigh the negatives.

Of course the other way this could play out is that Twitter and Facebook provide a way for these types of companies to engage through special accounts which allow for archiving and provide regulatory compliance. Personally I don’t think that would be a good thing as it would place restrictions on their interactions and mould financial services use of social media rather than letting it grow and adapt organically. I’ve had many conversations with people from financial services on just this topic and they agree, they don’t want to be restricted and want to use social media as any other business would.

Posted by Steve E
Filed in social business, social media, social network
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Do the socializers need an information diviner?

October 9, 2009

There’s an interesting post over on the Nielsen Wire blog from Jon Gibs (their VP Media Analytics) about the methods people are now using to discover content. Their findings show that a lot of surfers now make social media their starting point when trying to find information online. 18% of the people Nielsen quizzed said they start a search for new information using Wikipedia, blogs or social networks (such as Facebook or Twitter). That’s a pretty big percentage, especially when you consider that only 37% said they started their hunt on a search engine (which you’d traditionally think might be the starting point).

It’s not really a surprise to see web users learning to trust information that is recommended by their peers, or info that comes from within their sphere of influence on social networks. Recommendation is a powerful thing online and crowd sourced recommendations are a great way to answer certain queries. However, as networks are inherently distributed are they as likely to get an accurate answer to their more complex info needs as they would on a search engine?

In the same report 26% of respondents who identified themselves as socializers (the ones likely to start on a socnet) said that they feel ‘there is too much information online’. Perhaps this is what draws them to social networks for their information searching needs? Maybe the trust factor that someone has recommended some information to them gives them the confidence that they will drill through the dross and find the nugget they are looking for. However, if they feel overloaded now that is only going to get worse as networks grow.

Social network contacts are never going to be able to answer all the questions that intelligent use of a search engine would (unless your network includes some of the finest minds). If we, as web users, rely too much on social networks for finding information are we going to lose the ability to really search when we need to? Search can be a bit of an art form; some people struggle to get how to think laterally when searching for a niche topic, others can get there in one or two searches by using word combinations and booleans cleverly. Could reliance on social networks for the answers to questions destroy the art of searching or data mining that the web has historically been so good at encouraging? Social networks are great for recommendation and serendipitous discovery of content but how do they cater for people who just want their questions answered? Do they need to branch out more deeply into indexing and search or perhaps encourage search to begin on their networks by providing tools to do so?

I’m not offering any answers as this is a shift in habits which has been underway for a long time, but as more users become socializers (inevitable), and information becomes more and more realtime, someone needs to provide a way they can divine the realtime stream for the information they seek. Either that or search engines need to provide new, more social ways to search their indexes. What do you think?

PS. Just in case you think I mean divine in the Biblical sense, have a look at this.
Posted by Steve E
Filed in realtime web, search, search engine, social media, social network, social networking
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Why don’t businesses measure ROI on social media?

October 2, 2009

Babson Executive Education and Mzinga have published the results of a survey into businesses use of social media. The report shows that while many businesses are spending both money and resources on social media the number of people measuring ROI is low.

The graph below shows that 40% of respondents spend budget on social media and 57% expend resources on it.

Graph showing answer to do you utilise any budget or people for social media?So you’d think that they’d be measuring its effectiveness. Wouldn’t you? The pie chart below shows the percentage of respondents who said yes/no to the question ‘Do you currently measure ROI for your social media program?’. Only 16% said yes…

Graph showing percentage of respondents who measure the ROI from social media activities

That’s low! It seems to me that there’s a real lack of understanding of online measurement and when it comes to social media that gets even more apparent. Social media measurement requires an understanding of more than just web analytics. You need to grok user behavior, interaction and engagement while also living brand equity, sentiment and what people are saying about you on all mediums. You need to understand the online/offline journey your audience is taking when it interacts with your brand, as an online social campaign could manifest itself as increased (or decreased) offline engagement. It’s a tough mix and there’s no one way to measure all of that right now. The best advice I could offer to businesses who trial social campaigns would be to distill it down to the things that are measurable (there’s always something even if only referrals and changes in rates of sales) and at the same time monitor sentiment like a hawk while listening to your audience (they will tell you a lot about how well you’re doing).

It’s getting better, there are many sentiment analysis tools out there now and you can even create your own dashboards with RSS and something like Netvibes. At the same time smart folk like @willmcinnes and the Measurement Camp crowd are trying to come up with answers to the social media measurement question and there’s a lot of information available on the subject.

So, in my opinion, measuring nothing is inexcusable, measuring or monitoring something is just fine if you’re dabbling in social but if you’re spending a lot of budget and manpower on your social exploits you either need to learn to measure it or find someone who can help you do that.

Posted by Steve E
Filed in analytics, roi, social media
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Rules of engagement (my personal social media policy)

September 23, 2009

I got inspired to write my own personal social media policy after reading various brands policies via this link on the Social Media Governance site (thanks to @jasonryan for sharing it on Twitter). Companies and brands feel the need to publicise the rules they expect their employees to follow when they use social media, or in reality if they choose to publish anything online. I see the benefits of having a policy and trying to keep some level of coherence in the conversations your brands ambassadors (yes, your employees are brand ambassadors), although most seem to be rules rather than guidelines and don’t actually encourage conversation at all. Social media policies or guidelines should encourage participation and conversation and be there to ensure brand values are upheld and continuity is upheld.

Anyway, this is a work in progress so liable to change and will end up on my ‘about’ page soon.

  1. I will engage
    On Twitter, my blogs, by commenting on other blogs, on Facebook (although not that often anymore), on forums and anywhere else I feel the need I will engage and converse with those I want to engage with, who want to listen and want to converse with me.
  2. I will share
    On Delicious, Flickr, Digg, Reddit, Twitter, Dopplr (where I am at least as fast as a duck) and many more places. I like to share stuff I find interesting and would love it if you share your interesting stuff with me too. Discovering other peoples interesting content is really important and a great way to find new information.
  3. I will tell the truth
    Everything you read/hear from me will be the truth, at least it will be the truth to me at the time I say it, should it become less true as facts emerge please don’t blame me I was only acting on the information at hand. At times I may say something that isn’t strictly true; usually, and if you are so skilled, you will be able to spot this as sarcasm or an attempt at humour.
  4. I will not feed the trolls
    Spam, troll comments, purveyors of hate and negativity; I will ignore and probably delete you where possible.
  5. It’s my opinion
    No one elses. Not my employers, nor my friends, nor my families. This is me, and you get the option to take me or leave me. If at any time I do broadcast someone else’s opinion I will be sure to  let you know.
  6. I will debate
    At times I may disagree with you. That’s healthy, don’t be upset, I expect you’ll disagree with something I write at some point too. Discussion and debate is good!
  7. I might follow you
    If I find you particularly interesting I might elect to follow you around, subscribe to your feeds, check out the stuff you share or connect with you on professional networks. Don’t panic, I’m not a stalker it’s a compliment!
  8. If you follow me
    Please play nicely. I welcome all to follow me but please try to ensure we have at least something in common, it could be pretty futile trying to converse with me otherwise. This point goes mainly to brands and sales people; don’t spam me its a conversation I’m looking for not a barrage of brand heavy waffle or a sales pitch.
  9. I might unfollow you
    Don’t get offended. Chances are that you either haven’t got enough in common with my interests or that I can’t take the volume of content you produce. If you think neither of these is the case and you don’t spot something in number 8 that sets alarm bells ringing then try talking to me, perhaps I missed something or you never tried to really connect.
  10. I may bore you
    I reserve the right to be boring and mundane at times and there’s a good possibility that sometimes you might not like the content I produce. That’s fine, just move along, I won’t take offence.
Posted by Steve E
Filed in social media, social network, social networking
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Doing business better (more socially)

September 5, 2009

There’s a lot of buzz about social media and how it can be embedded into the heart of businesses at the moment. I love the idea, it resonates really strongly with the idea of being truly customer centric which is something I strongly believe will help you grow your business and increase customer satisfaction and retention. Being social means being open, listening, responding, having conversations with your customers all things which any customer focused business needs to do. It’s how you fix the pain points, grow up as a business and learn to take criticism and proactively respond and make amends when you have screwed up royally. Social media is a great vehicle for these conversations.

This great presentation from David Armano of Dachis Group hints at how businesses can embrace being social and some of the benefits. The slides that resonate most strongly with me are 44 and 45 where David says it’s time to grow up and realise that being social should just become the way we do business (at least if we want our brands to succeed). The change David mentions in his blog post here is the same as the transformation that’s required to become a customer focused organisation, it needs to come from the top and be embraced throughout the business, there’s no half measures if you really want to reap the full benefits. Consumers have grown up and want more from brands these days, they expect them to listen and respond. It’s time for brands to grow up and realise they need to support this consumer desire for a conversation or risk alienating their audience and pushing them to competitors who will.

Found via Paul Papadimitiou.

Posted by Steve E
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Can social media make your company more successful?

September 3, 2009

Altimeter Group announced an interesting fact in the last week, blogged by Charlene Li on their behalf, that their latest study shows that companies who engage more in social media perform better in the marketplace. I was drawn to this by a timely piece from Anthony Mayfield of iCrossing.

The Altimeter report finds that companies who engage and embrace social media tend to be the ones who are performing best at this moment in time. That’s great! It’s always good to be able to have cause and effect proof on company profits isn’t it?

It’s really good to look at the effect that social media may be having on performance on businesses. It gives a direct indicator of the reponse of consumers to brands that seek to engage and have a conversation with them rather than a one-way direct marketing approach.

However, where I think this falls short is in the analysis of what other activities these same brands are undertaking to ensure tighter connections with their customers and audience. If engaging in social media alone was the answer there would be much more successful major brands out there. It’s actually a question of learning to engage and communicate in the right way through whatever channel is most appropriate at that point of your customer journey. By default, a brand who has spent the time to really understand it’s customer journey and all the touchpoints along the way (no matter what channel, online and offline) is bound to benefit. Mapping out the numerous touchpoints you have with your customers and addressing each one in the most appropriate manner to optimise it and remove any pain points is the way to deal with this. That includes offline channels such as call centres and direct mail and online channels such as your website and social media.

Brands who really engage in social media are by default likely to be the same brands who really understand their customers so it’s really not at all surprising to see a correlation between social media engagement and performance. Saying that the performance boost is down to social media alone is however just not telling the whole story.

Don’t get me wrong, studies like this are important and will really help brands who haven’t yet stepped into the social media world find a reason and justification for doing so, but they really need to think cross-channel and ensure that they aren’t neglecting their whole customer base. I particularly like what Anthony calls ‘social business design’ in his post, maybe that’s a route to being really customer centric. Learning to communicate with your audience should be such a basic tenet of business but unfortunately most people just tend to broadcast in the hope that someone is listening. You’d think they’d have learnt by now?

Indeed, wouldn’t it be great if engaging in social media alone could propel your business to new heights? I think this is more about how well a company engages with it’s customers across any channel and the whole customer journey rather than just on social media.

Companies who really get being customer focused, who get the benefit of being open and honest with their audience and strive to be customer centric are most likely to also be engaged in social media. Just doing social media alone though won’t create the success the report hints at, although becoming ‘social centric’ is a good step on the way to becoming a listening, engaging, customer centric organisation. Perhaps social centric is the new customer centric?

Posted by Steve E
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Social media expert = passionate web person?

August 19, 2009

Couldn’t agree more with this post (or as he says rant, though I think I sense some holding back) from @builtbydave today. Expert is a phrase used far too often in many fields, particularly in relation to social media. Being social is a skill in its own right, and one that far too many overlook.

People often use the term social media to describe online communities and blogging and seem to think they’re something new, where as anyone who remembers newsgroups would remember just how social they used to be (uk.music.rave anyone?). I used to work for a company who specialised in community portals in the mid to late 1990′s, the concept isn’t new, just the technology has moved on significantly. Campaigns have been built around places people congregate on the web for many years.

But there are people who are very good at building campaigns based around various community platforms, blogging, networks, forums etc and specialise in that as a discipline so we do need a word for what they do. Perhaps ‘social media’ is just the wrong one, is it trying to encompass too much?

It’s a hard thing to define though, and I’m not going to pretend I can do it, but I am going to pose a few questions. Do we need to define social media? Can you define it acceptably? Should we segment the skills into online PR, community building & management, blog media experts etc; would that make it more palatable? Or do we just need to accept that the best person for the job is one with an open mind, a sociable demeanour and a deep understanding & passion for the web as a whole? I tend to side with something an old boss of mine used to say before we interviewed ‘the best people are web people’.

Posted by Steve E
Filed in community, digital, social media, social network
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Has the marketing funnel become a loop?

August 14, 2009

Just read an interesting post on Socialmediatoday.com about the marketing funnel. They’ve extended it to add an extra level of advocacy to the funnel which makes sense. Most models of consumer behavior stop at loyalty, when as we all know in this time of connectedness it’s the advocates who breed awareness among new potential customers. This is particularly relevant when you consider social networks and the review and recommend online culture that services like Twitter encourage. The brand advocates are the people we all want to encourage and retain.

This suggests to me that a funnel may no longer be the most relevant shape/metaphor to use. The behavior of customers as they become more and more engaged with your brand is cyclical and we cant’ just consider the model a representation of a ‘persons’ journey, rather it’s the way they engage and then help others to engage thus creating community around your brand. Maybe we should call it a circle of buzz…

circle of buzz

Posted by Steve E
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Will Facebook share the wealth they make from your social graph?

February 4, 2009

20071102104425backhander_istockj203jpgIt’s one thing to make money from adverts served to and targeted at your audience based on their behavior and connections on your site. Most people accept that this is how sites like Facebook intend to kick start a revenue stream. We allow sites to serve us adverts based on our preferences, past behavior, groups we join, friends we have and interests we disclose under the knowledge that this is now happening across the web on most advertising funded websites.

Now we’re told (via the Telegraph) that Facebook has a new revenue model, by turning the platform into a tool corporates can use for market research. Facebook will (says the Telegraph) allow companies to selectively target Facebook users to research their new products. They say companies will be able to pose questions to selected members, using the social network as a kind of straw poll. That’s great for companies, it can take a long time to get the right people selected for a survey or focus group, but you can make the selection process much quicker when you have access to the kind of data Facebook has about users.

So, what incentive for the users? I don’t know about you, but if I start getting random questions popping up in Facebook from brands who want my opinion I’m unlikely to respond unless I feel there’s some value in me doing so. If brands are going to use me to improve their product offering; and out of that Facebook is going to make some money, then should they be paying users for their time and opinions?

Posted by Steve E
Filed in facebook, social media, social network
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Facebooks dip; seaonal adjustment or something to worry about?

February 21, 2008

Another big news story today is the dip in Facebook users from the UK of 5% from December to January. Much is being made about this being the backlash to the poorly executed advertising projects or the natural move away as it becomes fad rather than fashion.

I have my own opinion… I think it’s purely the January blues. Think about it; December is a huge month for keeping up with friends, arranging events and parties and reconnecting with old acquaintances. Come January though, we’re all back at work, busy, tired, dieting, looking for holidays and generally keeping a lid on the credit card as we recover from the spending excess.

Now does a dip in January seem that unusual for a social network which basically encourages social interaction between friends?

Alright, I may be being a little blaise but I wouldn’t read too much into the dip and I certainly wouldn’t be talking about the demise of Facebook quite yet.

Posted by Steve E
Filed in facebook, social media, social network, traffic
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