Much has been written about the ROI that can be generated by Social Media, I’ve read many kinds of ROI’s, all trying to reflect efforts and its return.

But there’s a paradox when having a closer look at the two terms in relation to the new open business environement.
First let’s decompose ROI and Social Media.

ROI:

A performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. To calculate ROI, the benefit (return) of an investment is divided by the cost of the investment; the result is expressed as a percentage or a ratio.

Keep in mind that the calculation for return on investment and, therefore the definition, can be modified to suit the situation -it all depends on what you include as returns and costs. The definition of the term in the broadest sense just attempts to measure the profitability of an investment and, as such, there is no one “right” calculation.

For example, a marketer may compare two different products by dividing the revenue that each product has generated by its respective marketing expenses. A financial analyst, however, may compare the same two products using an entirely different ROI calculation, perhaps by dividing the net income of an investment by the total value of all resources that have been employed to make and sell the product.

This flexibility has a downside, as ROI calculations can be easily manipulated to suit the user’s purposes, and the result can be expressed in many different ways. When using this metric, make sure you understand what inputs are being used.

Secondly, let’s have a look at the definition of Social Media:

Social Media is media designed to be disseminated through social interaction, created using highly accessible and scalable publishing techniques. Social media uses Internet and web-based technologies to transform broadcast media monologues (one to many) into social media dialogues (many to many). It supports the democratization of knowledge and information, transforming people from content consumers into content producers. Andreas Kaplan and Michael Haenlein define social media as “a group of Internet-based applications that build on the ideological and technological foundations of Web 2.0, and that allow the creation and exchange of user-generated content. Businesses also refer to social media as user-generated content (UGC) or consumer-generated media (CGM). Social media utilization is believed to be a driving factor in the idea that the current period in time will be defined as the Attention Age.

When thinking of both terms and and how they can relate to each other, I conclude that the terms are “forced” in order to create meaning with current understanding and definitions.
The ROI of Social Media is like trying to ascribe ROI to a telephone line.
Part misinterpretation and misunderstanding of both terms and part the necessity to quantify in order to meet business objectives, are reasons why this enigma won’t be solved soon.

Return on Investment is a short term metric, a direct relation between cost and return is calculated, and (short term) objectives don’t have much room for tactics or actions that don’t add direct value to the ROI.
Here’s where the complication is, communication and interaction often do not add direct value to a quantifyable objective (for example sales).
The best example within Social Media is Trust. How can the long term process of gaining and retaining trust be expressed in a ROI?
Surely, when consumers do a purchase (be it a soft or hard conversion), it is the only quantifyable and “visible” action/reaction within a much larger process by the company and other consumers.

The latter is important and the crux within this question.
Social Media is causing a paradigm shift where all conventional wisdoms are becoming obsolete.
One of these wisdoms is the notion of two seperated entities, businesses versus consumers and the interaction between these two, ending up in sales, profit, revenue, ROI and so on.
A revaluation is necessary, in this transparent digital world, the seperation is disolving and consumers are complementing and replacing pieces of business processes.

If consumers become part of the business, how must these external entities be calculated and taken into account?
It’s not only the -direct- cost business cost what counts, but also the indirect and consumer-added related costs which should be taken into account in order to understand the new relationships and impact.

So, what is the real “ROI” of Social Media? I do not have a clear and sustaining answer yet.
A new digital landscape requires as a new way of conducting and quantifying business.
I believe the first step in this paradigm shift is to release the legacy of conventional business rules. Comparison -with old standards- is in this case a devaluation of the real opportunities and power of Social Media.
From there on, known metrics and KPI’s will have new interpretations which explain relations and money flows better than the current ones.

It’s a long learning curve and many challenges won’t be solved within months. Take the business effects of Social Media into long term strategies, set aside budget to research and test this phenomenon. In the mean time, transitions will happen and New and Old ways will meet.

What do you think the ROI of Social Media is?

(Disclaimer: I’m part of the team at Traffic4u that develops TrafficSAM)

In the digital environment where quantification reigns, the importance of Online Advertising has become increasingly evident.
The worldwide success and adaption of Search Engine Advertising (PPC) is the most obvious example of this. Search Engine Advertising rapidly grew as the pull and results driven-channel because it is able to attract and convert visitors in an advanced manner.

Over the years competition has become more fierce, and all sorts of tools have been developed to cope with expanding accounts and the increasing complexity of this channel. The role of Search Engine Advertising is maturing. Companies understand the power of focusing on target groups and Search Engine Advertising’s strategic use for internal processes (competitive intelligence, market research tool, etc.). Along with the maturation of this channel, a demand has arisen for sophisticated technologies that are able to assist marketers in the decision making process.

This is where TrafficSAM comes in. It’s a tool that has been developed in-house from the experience we’ve gained over years of extensive (international) campaign management.

Two important aspects define TrafficSAM and the way it meets the needs of businesses:
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In the previous post on our CMSP technology, I explained shortly what the system is, what it can do and why it’s time for this kind of technology which creates new cross media digital experiences.
The CMSP will bring people Entertainment 2.0 !

This post will be about the functionalities which were available in the previous platform based upon the CMSP technology.

From then, technology has evolved, one of our partners is able to transform calls into tweets or text which then will be inserted next to the avatar.
As you can see, the marketing opportunities from an advertiser/exploiter point of view are vast, think of “in-game” advertising, product placements, memberships and so on.

We are looking for early stage investors/angel to revive and redevelop this platform to the needs of current markets.
If you’re interested, have tips or potential leads, do let us know, we can provide an executive summary and business plan upon request.

Below you’ll find a screenshot with the highlights of the technology as it was deployed for that particular network. Click for full screenshot.

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We are looking to take Social Gaming to TV via Social TV platform – think Mafia Wars, Farm Town, and even Second Life on TV.
We have developed and successfully broadcast Social TV in Europe bypassing the remote using telephony 2.0 (mobile and landline), advanced IVR and business logic servers, realtime 3D along with web integration.

We need partners. We need financial backing to redevelop the project.

… where viewers can create a virtual character, pilot it in the TV environment, meet, compete, play and even talk to other viewers/competitors via phone.

What is the Cross Media Social Platform (CMSP)?

The TV market is ‘on the move’ – competition is growing and digital channels via ISP’s and IPTV providers are now crashing through what was once the walled fortress of broadcast television. Interactive content and social media are the buzz and broadcasters are looking for both innovation and revenue generation models that fall outside of the traditional advertising box of the past. And the need for all types of content is growing exponentially, of which one is created by users themselves.

The Cross Media Social Platform is a unique product that not only offers a business model that encompasses current and widely spread advertising revenue – it also has added value by offering broadcasters the opportunity to earn money via telephony (Premium Rate Numbers and Premium SMS) via freemium modelling, as well as web and phone subscription models – where users can augment their profiles and characters on the web for TV and the web.

We created an interactive, virtual world on both television and the Internet that envelops social networking, community, user generated content, competition, and entertainment. And we are interested in developing this further with principles who were involved in the previous project. And it works on both standard broadcast or terrestrial TV as well as IPTV, Satellite, Cable etc.

See video of work we did in the past at Youtube

Visuals of the Cross Media Social Platform (CMSP)

Below you will find a basic CMSP architecture demo and a couple of screenshots.

It evens goes further, technology developments are evolving, partners have released an API enabling developers to create unified communications (telephone, cellular text message, instant message (Jabber, AIM, Yahoo, MSN) applications using traditional document-based web development flow. This sort of technology can be implemented in the Cross Media Social Platform, adapting to the needs and ways of nowadays communication.

Why Agora Media?

We have the experience and know-how, without having to invent the wheel and exploit this competitive advantage, we can respond very fast and accurate to the concretizing needs of the Social TV/Social Media/converging Media community and industry! We have a vast network of 2.0, cross media and technology pioneers, working closely with them to stay on top of trends and developments which will enhance the Cross Media Social Platform.

Why now?

The interest in Social TV is rising, the television landscape is changing, permanently. Media consumption is converging and increasingly socializing. More and more experiments, products and services are initiated and developed to meet these changes. Being on top of these trends and offering new digital cross media experiences to your target audiences and putting you permanently on the map!

Feel free to contact us if interested or wish to receive more information.

Proximity Marketing as described by Wikipedia is “the localized wireless distribution of advertising content associated with a particular place.”
The commercialization of location will get a boost by the power and opportunities offered by Mobile Augmented Reality applications.

Have a look at the first real-time Augmented Reality proximity marketing platform by Insqribe:

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The Online Strategy encompasses those elements of the business- and marketing strategy that must be employed to contribute efficiently and effectively to its goals.

As for all strategies, the Online Strategy should consider the brand, the target audience, products & services and the positioning of the brand. ( read also The Content – Context Diarchy to understand the relation between offer and context in the online landscape )
Be it on an overarching level or on execution level (see the three parts below), consistency is key to achieve brand recognition.
It’s tempting to divert from this focus because the Internet offers lots of possibilities which can be applied, but not neccesarily relevant and this non-relevancy might cause a distanciation of the target audience.

The online strategy for your business can be divided in three main fundaments:
* Website Strategy
* Internet Strategy
* Social Strategy
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A couple of days ago I was watching a show of a Dutch stand-up comedian, who at one point began talking about the excessive choice consumers are given nowadays. He gave the example of having many kinds of toothpaste, which burdens him, because a person becomes indecisive, whilst the only thing he wants is to have clean teeth and a toothpaste which takes care of that.
When he talked about this topic, sociologist Barry Schwartz came to my mind which wrote the book “The Paradox of Choice: Why More is Less” on customer behavior. In the book he explains that choice overload can lead to decision-making paralysis. Choice is the hallmark of individual freedom and does fit the New Consumer which I referred to in The Axiom of Self-Segmentation , a type of person that seeks authenticity, is individualistic, independent and well-informed.

To give you a short insight in the overwhelming offer, here a part from chapter one “Let’s go shopping” of Schwartz’s book:

A Day at the Supermarket

Scanning the shelves of my local supermarket, recently, I found 85 different varieties andbrands of crackers. As I read the packages, I discovered that some brands had sodium, othersdidn’t. Some were fat-free, others weren’t. They came in big boxes and small ones. They camein normal size and bite size. There were mundane saltines and exotic and expensive imports.

My neighborhood supermarket is not a particularly large store, and yet next to the crackerswere 285 varieties of cookies. Among chocolate chip cookies, there were 21 options. Among“goldfish” (I don’t know whether to count them as cookies or crackers), there were 20 different varieties to choose from. Across the aisle were juices—13 “sports drinks,” 65 “box drinks” for kids, 85 other flavors andbrands of juices, and 75 iced teas and adult drinks. I could get these tea drinks sweetened(sugar or artificial sweetener), lemoned, and flavored. My neighborhood supermarket is not a particularly large store, and yet next to the crackers, were 285 varieties of cookies.
Next, in the snack aisle, there were 95 options in all—chips (taco and potato, ridged and flat, flavored and unflavored, salted and unsalted, high fat, low fat, no fat), pretzels, and the like, including a dozen varieties of “Pringles.” Nearby was seltzer, no doubt to wash down thesnacks. Bubbled water was displayed in at least 15 flavors.

In the pharmaceutical aisles, I found 61 varieties of sun tan oil and sunblock, and 80 differentpain relievers—aspirin, acetaminophen, ibuprofin, 350 milligrams or 500 milligrams, caplets, capsules, and tablets, coated or uncoated. There were 40 options for toothpaste, 150 lipsticks, 75 eyeliners and 90 colors of nail polish from one brand alone. There were 116 kindsof skin cream, and 360 types of shampoo, conditioner, gel, and mousse. Next to them were90 different cold remedies and decongestants. Finally, there was dental floss. Waxed andunwaxed, flavored and unflavored, offered in a variety of thicknesses.
[...]
A typical supermarket carries more than 30,000 items. That’s a lot to choose from. And morethan 20,000 new products hit the shelves every year, almost all of them doomed to failure.

These figures to refer to American supermarkets, but I do think these scenarios count for many other countries as well.

The ambiguous title of this article is The Paradox of Choice 2.0 , the aforementioned supermarket example is analog, if we move such a scenario to the digital world, we get a squared choice overload.
First because online stores like Amazon.com have many titles along the Long Tail terms. Secondly, global is the new local, besides the increased choice related to the books themselves, the amount of e-stores from where a customer can order, has increased drastically as well.
The second explenation of the title is the fact that the Social Web adds a new layer to shopping -opinions- which only will add more to the decision-making paralysis next to the online characteristic.
Due to collaborative filtering, recommendations, opinions, ratings and implicit and explicit personalization tools, customers are getting quality assistance in their decision-making which paradoxically is relevant to their search, but at the same time could be paralyzing in achieving their goal.
Think of Amazon.com which recommends other books in the same category, recommends books which are bought together with a certain book, shows the actual % of people which in the end bought that particular book and the % of people who did buy another one. Next to the recommendations, the large amount of reviews and rating does add value to being well-informed, but does make it harder to decide.

There is a fine balance that C-level and seniors need to find in terms of portfolio, product lines, offer and effects on customer behavior like this, responsibility needs to be taken towards customers in regulating the choice overload.
This is referred to as strategic clarity ,this goes hand in hand with More is Less, where these kind of decisions are not made by businesses and therefore will be emotionally and psychologically detrimental.
Too much is not and won’t be a success factor business-wise and customers will ignore all that is too much, from either perspective too much doesn’t get each of the two further.

How will the two entities -advancing technologies/business and online customer behavior- behave and react to each other now and in the future when the freedom of choice is most probably squared once again?
Will the effect of too much choice reach the top which will negatively impact business or shall strategic clarity diffuse more amongst businesses and prove its importancy?

That is what Adam Hartung proclaims in an article on Forbes.

Customers are often locked in your solution and proposition and customers often don’t advice beyond short term business tactics and enhancements which are advantageous for their needs.
The two examples given in the article are clear that customers have other objectives than the suppliers, and this difference can be fatal when it comes to adapting and thriving in fast-changing environments.

Mr. Hartung concludes the focus on competitors instead of customers, nicely in two paragraphs:

To succeed you have to obsess about competitors. And not just about traditional ones, but about fringe ones as well. What customers won’t tell you, the market will, through competitive activity.[...]

[...]Leaders can move beyond surviving and enter the world of thriving only if they obsess about their competition. Watch the competitors that grow, and watch the competitors that don’t grow, and understand why. Look at how customers behave, not at what they say, and see what tests they are undertaking with competitors–especially with fringe competitors with alternative solutions. See what revenues are shifting to other, often emerging, competitors, even if they’re very small. If you want to remain viable, your competition will give you more insight than all the strategic customer councils in the world.

Both groups represent different goals, competitive intelligence is much more suitable for moulding and planning long term strategies than customers can provide you.
Closely watching the competitors is an objective way of analysis, where self-preservation -by customers- is not the first key-objective and peril.
Acquired customers are a great source when it comes to retention, product enhancement, customer satisfaction and so on.
It’s a refinement that concerns internal versus external, short-term versus long-term.
In the end it all revolves around customers, be it yours or someone else’s that will give you -by action- the intelligence to thrive.

What’s your opinion, is it all wrong or subject to refinement?

This is great news for the industry, a technology and platform that services online media content to a large amount of devices from any manufacturer.
Another step towards media and device convergence!

Press release taken from the DivX website:

DivX Launches New Internet TV Platform to Redefine the Future of Entertainment
DivX TV(TM) Receives Widespread Support from Consumer Electronics Companies and Content Providers

LAS VEGAS, Jan 06, 2010 /PRNewswire via COMTEX News Network/ — DivX, Inc. (Nasdaq: DIVX), a leading digital media company, today announced the launch of DivX TV(TM), a comprehensive embedded Internet TV platform that provides access to a diverse line-up of online media content streamed directly to any connected device from any manufacturer.

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How to spot and where to look at when it comes to disruptive innovations, that is what the video clearly explains by an Harvard Business Publishing interview with Scott Anthony, President of Innosight.
Before giving the key points from the video, a brief comparison between disruptive- and sustaining innovations.

The counterpart of disruptive innovations are sustaining innovations, the two are layed out and discussed in Clayton Christensen and Michael Raynor’s book The Innovator’s Solution.
Sustaining innovations take what exists and make it better, companies can sell products for higher margins to their best target group(s) (segments). There’s a high gain for present competitors to battle each other on sustaining innovations.
Becasuse they’re established organizations, there are resources to support.

Be it sustaining- vs. disruptive- or incrementa-l vs. radical innovations, the topic is important for two reasons:
The first is by what Peter Drucker said:

“Because the purpose of business is to create a customer, the business enterprise has two–and only two–basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.”

The second one is business-strategic wise.
Agora Media focusses on media convergence like Social TV and IPTV, new technologies like Augmented Reality and fields as Internet Marketing, Social Media, ePublishing, innovations are ball games that can be played within these fields that are yet not fully defined, that are evolving, growing and morphing.
An understanding in the concept of innovation is important to build and maintain a clear overview of the landscape, how relationships establish, from whom and why products are build and so on.
This overview counts for any business, for both internal and external reasons and understanding.

Disruptive innovation is about overcoming a marketing myopia, entering a new stage within the market cycle, how does it relate to Creative Destruction?

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How to Spot Disruptive Innovation Opportunities + key take aways

Key take aways from the HBP video:

* Disruptive innovation is a type of innovation that create accesible, simple, convenient, affordable products. Products that are changing the game.
Sustaining innovation on the other hand is an innovation that takes what exists and make it better (see aforementioned comment on sustaining innovations).

* The disruptive innovator transforms existing markets and creates new ones by playing innovation game in fundamental different way.

* It’s the business model that drives disruption, not the technology, which often is trivial.

* Who’s responsible for disruptive innovation: everyone, but senior management must lead and create space for disruption.

* Identify opportunities for disruptive innovations:

1. Look for markets where there’s a kind of constraint that inhibits consumption (skills, money, time). Find Barriers that prevent consumption and try to solve them.
2. Identify people’s important unsatisfied job(s) to be done. Easing the pain is a ticket to disruptive innovation.
3. Play the innovation game different. Not better, but simpler, cheaper, more accessible, more affordable.
The Wii is given as an example, the Wii does not aim to the core-gamers but the large group of people who don’t identify themselves as gamers. The console has made gaming easier and more accesible.

* Often customers don’t clearly articulate their needs, the innovative company should trust on intuition as well when needs are not (well-) identified.

* Think of markets which you’re going to analyse, not necessarily the most demanding markets, but relatively the undemanding markets. Explore these for disruption.

* Key is putting the customer and the problem at the center of the innovation equation.

* Disruptive innovation doesn’t have to be expensive: Invest a little, learn a lot!