This week the world’s favourite micro-blogging site Twitter announced that it’s crossed the 100 Million users mark. Quite an achievement for any online business and let us not forget that Twitter is a business. Their most recent round of venture capital funding will leave their value at 8 Billion dollars, but where’s the money coming from to justify that value?

Well as we all know, Twitter currently makes no money, it’s free to users and is a bottomless pit for the aforementioned funding. So what are the market speculators valuing at 8 Billion dollars? The site and all its posts? The technology behind the service itself? No, of course not. That myriad of information (purely narcissistic, or otherwise) although interesting is worth nothing, even the news reported on Twitter is usually a short version of what exists elsewhere in a much more readable form. Even the infrastructure itself over the years of R&D and redesign is probably worth somewhere from a few hundred thousand to a few million at the most (although the 24/7 running costs must be remarkable).

So what’s worth 8 Billion US Dollars to the many investors who keep Twitter running? You.
Quick calculation $8,000,000,000 ÷ 100,000,000 = $80

That’s pretty reasonable! Each user being worth $80 is a great deal, for it is you that they own. Unlike Facebook, to date Twitter seems to remain relatively unscathed in this regard. Facebook has come under plenty of fire for user privacy issues in the last 12 months. Mostly this is because Facebook is very clear that the user is their particular commodity, but people don’t like being seen this way. Facebook knows all about you, what you like, where you go, who you talk to.

Twitter is no different. It knows who you follow and therefore what you like. It knows who you tweet to and even where you are when you tweet. The reason it has escaped criticism is largely because it hasn’t taken advantage of this. Yet! But at some point the investors will want their $8 Billion back. Thus the conversation has been sparked, how long will it be until Twitter introduces advertising to their service?

On a wider level this has happened on similar services and successfully too. Google for example saturate you in advertising throughout all their services. They are so good at it though, the advertising itself is so subtle and so well targeted, that users rarely find it irritating. However, they achieve this in much the same way as Facebook, that being collection of personal data. Google know all about you, it’s just not as obvious as Facebook, who are recently the whipping boy for privacy issue gripes.

In fact, when Google bought out YouTube for close to $1.7 Billion in late 2006 they began the process of heavily commercialising the site. At first this resulted in the usual condemnation of any change but has been largely embraced and accepted by the sites users. And no doubt it’s this advertising that brings in the much needed running capital to ensure a site as complex as YouTube keeps going.

The fact is social media companies treat the user as a product, that’s just an underlying principle of online business. If you (the consumer) appear to be getting something for free, then you are the product. Overall, we have to recognise that this is a trend which is prevalent online now, the long game is king.

As members of this industry the strategy of these companies should be obvious to us, find a niche and populate that niche with great content for free. This will draw thousands, millions or even hundreds of millions of users to you. Once traction is that high, sell these users (or at least access to their prefrontal cortex’s) to the highest bidders.

Sounds horrific, doesn’t it but it’s actually not always a bad thing. The reason Facebook came under such scrutiny was their willingness to share user’s details with partners by default. If user’s have the ability to control what’s shared then bad press can be easily prevented, unfortunately Facebook learned this the hard way. That said, the other usage of our information by Facebook was internal, Facebook’s servers simply determined which, of their myriad of available adverts, were relevant to us. This actually works and personally I find it’s always showing me things I’m genuinely interested in. Google’s extensive algorithms seem to do much the same, with plenty of advertising, but all of it related to the searches I’ve made and hence, things I’m interested in.

We can only hope that lessons learned by others are taken into account when Twitter inevitably begins leveraging their huge user base for something more profitable. If adverts appear in my feeds which are relevant to me I should be happy, right? It’s a balance of course; most users accept that adverts are needed to support their favourite sites and services. This is still a learning period and both sides need to forge some tolerance. Users need to understand that who they are and what they like is up for grabs and online services need to understand there’s a limit to this, users will only tolerate being owned by their favourite service if that trust isn’t abused.

"It is not that the internet is a particularly recent invention. It has even had its very own economic crisis. So why are companies still struggling to engage with it?

Of course, every company worth its salt has a website, not least those who have sent their executives to the World Economic Forum in Davos.

But the discussions here suggest that many companies are still struggling to move beyond having a colourful website towards really using the internet to their advantage.

And to make things worse, hardly any company knows how to cope with the rise of social media - the Facebooks, Twitters, blogs and YouTubes of the digital world."

The above comes from an article on BBC News written by Tim Weber during the World Economic Forum. Weber reports that most companies simply haven't got a clue about social media, and either bore, ignore or upset their potential audiences. Even if there are some great examples to prove to the contrary - Zappos on Twitter, Blendtec on Youtube, MyStarbucksIdea to get consumer feedback or Southwest Airlines on Facebook - I agree with Weber that most companies are struggling to enter the social media world and are not properly using the power of the network to gain opportunities and build relationships.

Does your company really get what social media is all about?

Social Media is people having conversations online. These may be your customers, employees or investors. It is the shift from a broadcast and unidirectional mechanic to a many-to-many model. Conversations are facilitated by online tools that people use to share content, stories, opinions, insights, experiences. These tools include blogging, social networking, micro-blogging, video-sharing, bookmarking, photo sharing, wikis...

Social Media is empowering people. They are now able to create, select, share and converse on any topic they like. As already discussed in a previous article, there is nothing you can do about these conversations happening online. You don’t have control anymore! However, you can certainly participate and engage with people using these Social Media tools. The key is to start now.

Well, that being said, you might be one of those who don’t know where to begin to join the conversation. That’s not a problem at all; it is never too late to connect. What you do need are some guidelines. The thoughts and links below will help you have a better idea about where to start.

You may have already started to enter the social world. After all it is shiny, new and so many people are using it. It’s the ideal channel for advertising! But that is the wrong purpose, you need some direction! Why don’t you read on as well?

Fundamentals of a Social Media Strategy

"We need to be on Twitter", "Oh, and we want a blog" Don't jump into social media just because everyone else is doing it. Take a step back and take a closer look at the POST method invented by Forrester’s analysts Josh Bernoff and Charlene Li authors of Groundswell, one of the most important books on the phenomenon of Social Media. POST stands for People, Objectives, Strategy and Technologies. It’s a four-step process for social strategy which will help you define the appropriate tools to implement in order to get the most of Social Media.

Firstly, People. Know your customers and assess their social activities. You should already have a rough idea of who you are targeting but most importantly you should identify how they use social media technologies. The Forrester’s Social Technographics™ Ladder classifies consumers into six overlapping levels of participation: Creators, Critics, Collectors, Joiners, Spectators and Inactives.



If you are not sure how to profile your customers, you can use the Social Technology Profile Tool. This free tool will allow you to define your audience’s social computing behaviour. Just select age, country and gender to see the result.

Beyond Forrester’s Social Technographics™ Ladder it is highly recommended to listen and monitor the good, the bad and the ugly. The list below offers some great FREE tools to listen and learn what your consumers are saying about your brand, how they participate, the tone of voice they employ, the information they are looking for etc. The only advice I could give is to be prepared for what you might discover.

Google Blog Search - Google's index of blog posts.
Google Trends - shows amount of searches and Google news stories.
TECHNORATI Search - search the blogosphere.
WhosTalkin - social media search tool that allows you to search for conversations surrounding the topics that you care about most.
SocialMention - social media search engine that searches user-generated content such as blogs, comments, bookmarks, events, news, videos, and microblogging services.
HowSociable? - provides a simple way for you to begin measuring your brand’s visibility on the social web across 22 metrics.
Twitter Search - Search keywords on Twitter which "self-refreshes".
TweetScan – search for words on Twitter.
Twitrratr - distinguish negative from positive tweets surrounding a brand, product, person or topic.
Twilert - Twitter application that lets you receive regular email updates of tweets containing your brand, product, service.
Hashtags - Realtime Tracking of Twitter Hashtags.
Friendfeed Search - Conversation tracker.

Objectives - Ask yourself what you want to accomplish. What are you trying to achieve with Social Media? No, getting rich is not the answer! Although an effective strategy should pay off financially in the long run with increased brand awareness and customer loyalty. So do you want to:

• Listen to your customers?
• Talk to them?
• Support them?
• Energize your best customers to evangelize others?
• Embrace them and their ideas?

If you don’t know where you want to go, how can you know the direction to take? Stop utilising Social Media because it’s cool, slick and popular and use it because it is effective in helping you to reach your goals. Deciding what you want from Social Media will directly determine the best strategy to adopt and the right tools to use.

Strategy - plan for how relationships with customers will change. Start figuring out what will be different after you have implemented the tools. Determine the strategy for achieving your objectives.

Technologies - Despite the impressive number of social media tools available, you should only join and participate in the platforms that matter to you, and make sure you don’t waste your time in the ones that don’t. (ie: Building a blog just because it's trendy and because your competitor has a blog) But honestly, if you have properly determined your people, objectives, and strategy, then you can easily decide what tools are appropriate to you: wikis, blogs, podcasts, content communities, micro-blogging, social networks...

Some final tips before you really join the conversation

• Always be yourself, real, human, transparent, helpful, and give more than you get.
• Try to humanise your brand as much as you can.
• To really see the result, invest time into it and to resource it properly. It takes time to develop relationships in the social media world. Finding your BBF (British Best Friend) in one tweet is exceptional. Think of Social Media as a long-term strategy!
• Remember that you’re not in control anymore. Members are.
• Relationships are the new currency in Social Media (see The Essential Guide to Social Media)
• Stay connected on a constant basis and be responsive.
• Don’t broadcast yourself, instead contribute to the conversation and provide something of value.
• Finally, keeping it simple is sometimes the best route.

At codegent we have been helping to develop our clients’ social media strategy as well as benchmarking them against their competitors and tracking their reach and results. Drop us an email if you would like to find out more.

I hope this post will give you a better idea on how to develop a successful Social Media strategy. Please feel free to share your own experience on entering the Social Media world.

Next time, we will look at how to measure your social media effort.

Illustration credit: Matt Hamm

Every day we use something called Social Media. Social networks like Facebook, Myspace or Linkedin are really pervasive in our life and we use them either for professional or friendship networking, events planning, pictures sharing, comments or chatting...

We spend so much time sitting in front of our screen connected to our online communities that we are even putting on weight! Facebook 'makes you fat' as Britons pile on the pounds.

But Social Media is far larger than social networking websites. It is actually about all the available online tools that allow us to communicate, create, share, listen, recommend, network... in fact, it is a new world of free media transforming the passive user into the content creator.

When you think Social Media, you have to think blogs (Blogger, Wordpress), video sharing (YouTube, Dailymotion), microblogs (Twitter, Pownce, Jaiku), wikis (Wikipedia), social bookmarking (del.icio.us, Digg), virtual worlds (Second Life, Entropia Universe)…

The internet is becoming social and users' behaviour is inevitably being altered by this trend. Indeed, consumers are less receptive to interruptive and monologue communication from advertisers. Instead they turn to Social Media for information, real life experience, opinion and recommendation. Trust is shifting to the network and therefore marketers must re-adapt their techniques and their strategies in order to engage consumers and build strong relationships.

Marketing professionals must understand that people are overwhelmed by messages and that the old communication model is not as effective anymore. Companies must learn to move from interruption to inviting participation. The new communication model is a transparent, authentic, vibrant and consumer driven dialogue. Social media offer tools which allow companies to listen to what consumers have to say about their brands. More importantly, it offers companies the opportunity to interact with their customers. However, to make efficient use of social media marketers must relinquish control. The goal is not to control messages but to inform, share, inspire, engage and satisfy. Finally, marketers should aim to leverage consumers as a Media.

Here are some companies making the most of social media:

Dell:
Blogging: Direct2Dell
Crowdsourcing: Ideastorm permits users to suggest and vote on ideas
Microblogging: Dell on Twitter
Virtual Worlds: Dell on Second Life

Jeep:
Online video: YouTube The Jeep channel
Photo sharing: Flickr Jeep Experience
Social networks: Facebook Jeep fan page - MySpace Jeep page - Jeep community

Doritos:
Crowdsourcing: Consumer-generated Super Bowl ads

Many other renowned brands harness the power of communities and YOU, are you ready to embrace social media marketing?

I had a play with Hulu this morning, and I have to say WOW. This is the beginning of the end of YouTube. Hulu has an ambitious and never-ending mission to help you find and enjoy the world's premium content when, where and how you want it. They have all the television shows, feature films, clips, you will ever need, in a quality which will leave YouTube a pixelated memory.

Future of film and tv on the web

We went to a talk last night, given mainly by broadcasters. Predictably the view was that broadcasters had a future in the changing landscape, but that the challenge was really how much they could get down with the kids.

In some ways, a bunch of middle aged men in Soho talking about how 14 year olds are going to be consuming media in a decade's time is probably more about them convincing themselves that they will still have a job then. But it did raise some interesting points.

It is only a matter of time before the broadcast quality of video on the internet, or on mobile phones will become the same quality as TV.  So broadcasters will lose their oligopoly in that sense. Which means they will be left with what? As far as I can see, they will be left with a budget to commission content and hopefully a way of shoe-horning their traditional advertising revenue model into new formats.

But there will be thousands of other people doing the same thing and in the way that YouTube doesn't rely on anything other than a search function and word of mouth, the decision when and what to watch will be impossible for the broadcasters to control on any way near the level they do currently.

The talk ended by everyone saying how exciting it was to be in our industry, and that everything is up for grabs. It IS exciting, but it's also pretty scary and the only certainty is that whatever we think we know or understand about media consumption today will no doubt look hopelessly naive in years to come.