John Battelle wrote a great post last week titled “What Marketers Want from Twitter Metrics” in which he recounts a conversation with Twitter COO Dick Costolo and lists some data he hopes we’ll soon see from Twitter. These metrics include:
- How many people *really* see a tweet. Even though @gnipsupport has 150 followers, it’s unlikely that they all saw our tweet about this post.
- Better information around engagement, such as retweets and co-incidence data. There’s a classic VC saying: “the first time I hear about something I don’t notice; the second time, I take an interest and the third time I take action.”
For me, marketing is about sending a signal into the marketplace and then measuring how effectively it is received. For instance, Gnip is trying to better engage with companies that use third-party APIs, and since we’re a startup, low cost matters. One mechanism is this blog and the article you’re reading now. That’s the “sending a signal” part. While you’re reading this, I’m likely logged into Google Analytics, monitoring how people find this article, and watching Twitter to see if anyone mentions this post. That’s the “measuring effectiveness” part. And this isn’t a static, one-time cycle. Based upon the feedback I get (some direct, some inferred), I’ll write and promote future posts a little differently.
I am positive that Twitter and other forms of social media will be hugely beneficial to marketing and the surrounding fields of sales, advertising and customer service. Highly measurable and disintermediated low-friction customer interactions with the marketplace is a wonderful thing. However, if five years from now we’re still primarily talking about social media in terms of marketing, then an opportunity has been squandered.
If marketing is a company sending a signal to the marketplace and measuring how it is received, then business intelligence (from a product perspective) is the process of measuring and acting on the signal that the marketplace itself is sending. For instance, last holiday season, a major discount chain wanted to know why, in the midst of the a recession, many of their traditional customers were opting to shop at more expensive competitors. After examining Twitter, Facebook and other social services, they discovered that customers were unhappy with their stores’ lack of parking and cashiers. Apparently, even in a financial crunch, convenience trumps price. The store took steps to increase the number of cashiers and sales immediately increased. THIS is where I’d like to see more emphasis in social media.
It’s a function of magnitude
With marketing, the product or service has already been created and success is now predicated on successfully engaging as many people as possible with your pitch. The primary question is “How do we take this product and make it sound as appealing as possible to the market?” Great marketing can create far greater demand than a shoddy one, but in the end, the product is fairly static by that point. Sales is plotted on a continuum defined as “customer need multiplied by customer awareness,” where need is static and awareness if a variable. What if you could change the scale of customer need?
When the product or service is still being defined, the size of the opportunity is extremely fluid. A product that doesn’t address a customer need isn’t going to sell a ton, regardless of how well it’s marketed. A product that addresses a massive customer need can still fail with poor marketing, but it will be a game changer with the right guidance. Business intelligence is crucial to the process of identifying the biggest need in a market and building the appropriate solution.
Steve Ballmer is very vocal about how he only cares about ideas that will move his stock price a dollar. But to move his stock price by even $0.10 at today’s P/E is to increase earnings (earnings!) by almost $100MM annually. In other words, if you’re a startup whose product can’t generate a billion dollars, then it’s not worth Microsoft’s time to talk to you. And if you’re a MS product manager who isn’t working on a billion dollar product, you might want to put in a transfer request. Or better yet, listen to the market and retool what you’re currently building, because no amount of marketing is going to save you.
Yeah, “billion” with a “b”
Typically, entrepreneurs use personal experience and anecdotal evidence to design their offering. Larger companies may conduct market research panels or send out surveys to better understand a market. We are now blessed with the ability to directly interact with the marketplace at a scale never previously imagined. The market is broadcasting desire and intent though a billion antennae every day, yet product managers are still casting a deaf ear. Maybe we need better tools and data so that the business world to start tuning in.
First off, when you’re launching a product, you ought to know what the market looks like. We need better access to user demographics, both at the service level (who uses Twitter) as well as the individual level (who just tweeted X). A number of companies are starting to serve this need (folks like Klout, who offers reputation data for Twitter users, and Rapleaf, who offers social and demographic data based on email address) but there is a massive way to go. I would kill for the ability to derive aggregated demographics — tell me about all the people who tweeted Y in the last year.
Secondly, access to historical data is critical. When deciding whether to even begin planning a new product, it’s important to know whether the marketplace’s need is acute or a long-standing problem. Right now, it’s nearly impossible to access data about something from before the moment you realize you should be tracking it. This has led to all sorts of “data hoarding” as social media monitoring services attempt to squirrel away as much data as possible just in case they should need it in the future. The world would be so much better with mature search interfaces. Think about your average OLAP interface and then think about Facebook Search. Twitter has already said that they are taking steps to increase the size of their search corpus; let’s make sure they know this is important and let’s encourage other social services to make historical data available as well.
The best part of all this is that Marketers and Product Managers need many of the same things — they’re in the same universe, you might say. The best companies engage marketing as the product is being defined, and a result, a lot of these metrics will be benefit product managers and marketers alike.
Dell selling $6 million of computers on Twitter? That’s pretty great. Dell identifying a new $600M market because of signals sent on Twitter… that’s simply amazing. And that’s the level of impact I hope to see social media have in the next few years. Got your own ideas on how we can get there from here? Post ‘em in the comments.
(Thanks to Brad Feld, Eric Norlin and Om Malik for helping me edit this post into something more readable and accurate.)