Employees, Social Media, and Superstar Economics

I was watching a great video from 1981 the other day talking about how, in the future, it might be possible (albeit absurd) to get the content of a newspaper on your computer. You could tell from the tone of the announcer that this concept was patently absurd to her. Who would ever do that?

So that got me thinking about what we might look back on in 20 or 30 years and laugh at ourselves for thinking it was absurd.

Here’s one thought – what if Marketing begins to recruit and acquire employees who have established their domain expertise via all the tools within the social media realm, in the same way that sports teams recruit and acquire all star players?

It may not be as absurd as it at first seems.

Business has begun to realize that the way buyers gather information has fundamentally changed. Credible online sources are of critical importance in market awareness, education, and solution validation. Increasingly, this information is created, disseminated, and validated by the key online personalities in each space. In wine, a comment from Gary Vaynerchuk has an effect on wine sales, Michael Arrington’s opinion on a new technology product can be a make-or-break moment for a small company. David Armano wrote a great post the other day discussing the overlap between personal and corporate brands with Ford's Scott Monty as a case example.

So, as a marketer, influencing these influencers is critical. The public is smart enough to see through paid endorsements, but other options are possible. Microsoft hired Robert Scoble, Panasonic invited Chris Brogan, Greg Verdino, and others to CES as guests.

The initial reaction is that employment will impact their impartiality, and their audience will reject them. But will that actually happen? There’s reason to believe that it won’t. Converting an independent opinion into a paid advertisement is destructive to both parties. The blogger will lose their audience, which is their most critical asset, so they are motivated to avoid appearing biased at all costs. The sponsoring company would then lose the main reason they hired that blogger in the first place. Rather than a paid advertisement, the best approach is to add new perspectives, highlight ideas and evaluation frameworks that may not be obvious at first glance, and raise awareness that a product exists.

I mentioned the economics of all-stars in sports, which is very different to how marketing salaries are today. I think again, there is an argument to be made that this is actually a reasonable thing to expect. In sports, the pay for the best athletes is many times that of the very good athletes. In social media, the audience sizes, and hence the influence, of the biggest names is many times that of the somewhat big names. This means that hiring the best name in the space might be many times more effective than hiring the second best name in the space. Economics will follow, and the best names will be able to charge rates that are many times the rates of the second best names.

So why not build your own social media presence? Again, the preferential attachment situation comes up. If you are starting now, and there is a social media leader in your space, you may never catch up. All else being equal, having more followers leads to having even more followers.

The need for impartiality also leads to an interesting side effect – the key names in the space will naturally be able to act as free agents. As long as they are within the space their audience cares about, there is no fundamental reason for them not to be able to shift from one employer to another.

So how much will they be worth? That will depend. In the same way that the superstars in sports make differing amounts of money depending on the popularity of the sport, the superstars in social media will make differing amounts of money depending on the size of the audience in their particular specialty. Read More...

The Gambler and the Perfect Path; Retrospective Determinism in Marketing Analysis

Let’s say that your organization gets one of those “ideal” client wins – great logo, fair price, smooth sales process. If you’re like most, one of the things that you’ll probably ask is “how did we market to that organization such that the sales process went so well”. I think that’s one of the more dangerous questions that is being asked today. The reason I think it’s so dangerous is that it can lead to the slippery slope of thinking that the success can be replicated like a prescription. It can’t.

Taking a single, ideal, outcome, and then looking for a “perfect path” through a very chaotic, chance-driven process is what Nassim Taleb, in his book The Black Swan calls “retrospective determinism”. The problem with it, is that it ignores the vast number of data points from people who started the process, but did not end up as the ideal client win. Those who did not end up as an ideal client win do not make a story that is at all interesting, so their story does not get told with the same enthusiasm as the story of the ideal client win.

It’s a lot like the gambler who writes a book on his or her gambling strategy. The only gambler who would write such a book, by definition, is the gambler who was able to achieve success. Those who did not succeed at gambling are highly unlikely to become authors on the subject. The gambler will write about the successful strategy, and the proof is in the winnings. The problem is that because only a winning gambler would write the book, there is no way to tease apart the effects of strategy and blind luck.

B2B marketing is in a similar situation when looking for the “perfect path”. It is an amalgamation of 100s if not 1000s of influences that cause a client to buy a product of any reasonable size. We can analyze individual efforts in the chain, and look at certain measurable aspects to see how well they performed (on those measurements) compared to similar efforts. However, when we attempt to look for the “perfect path”, we are fooling ourselves into thinking that we have more control of a process than we really do.

In each marketing interaction that you have with a prospective buyer, many factors are well outside of your control or knowledge. What is happening in their organization, their mood, whether they are distracted by another thought at that moment. At a high level we can see one campaign performing better or worse than another in general, but predicting whether a given individual will respond to a campaign in a certain way is not possible.

So, the advice I always give to people who are looking for the “perfect path” in B2B marketing – don’t. Optimize individual tactics, look for which campaigns were the best contributors in general to results, but don’t fall into the trap of thinking that there is one perfect path through your marketing messaging that is waiting to be found. The world is too random for that. Read More...

Twitter, Chris Brogan, and Black Swans

Chris Brogan asked an interesting question the other day on Twitter, and it got me thinking. He asked "Why do you try to acquire followers? Meaning vs just building relationships?" It's a great question because we've all seen people on Twitter aggressively trying to acquire new followers. Why? Past about 500, it's virtually impossible to have a meaningful relationship.

Peter Kim wrote a great piece on this a while ago, that describes it as an "Ego Trap". The piece was brilliant, and a fun read, and it describes the various social tools "counting" mechanisms, and the trap we all fall into to have the most followers/friends/etc.

http://www.beingpeterkim.com/2008/11/ego-trap-social-media-ranking-tools.html

But then, the underlying question is; why does that even work. We are all smart enough to know that these numbers are not meaningful in themselves.

I just finished reading "The Black Swan" from Nassim Nicholas Taleb, and he has an interesting theory that might apply. He calls it "preferential attachment", and the idea is that for some systems, the dynamic is such that the more of X there is, the more of X there is likely to be. Think of things like personal wealth, the population of a city, bacteria populations, and project overruns. It's an interesting dynamic with interesting effects.

I was curious, so I pulled some data off of Twitterholic that looks at the 1000 Twitterers with the most followers to see whether the Twitter follower counts followed a pattern that would suggest they obey that dynamic. The raw data is above, and you can see an interesting Long Tail on it. Think about things that don't follow this pattern to realize how this is interesting. Things like human heights and weights would fall off extremely rapidly after about 7 feet, and there are none over 12 feet.

Looking at the data another way, the chart on the right shows the number of users who have more than a certain number of followers. With 35,812 followers, there are 25 people out there who have as many followers as Chris Brogan or more. Guy Kawasaki at 51,506 is among only 10 peers, and Barack Obama caps the list at 144,000.

This gets very interesting, because follower counts are what is called "scale invariant". The chance of someone having twice as many followers as someone else follows the same ratio whether the two users being compared are in the low follower counts or the high follower counts.

If we look at some of the ratios, you'll see what I mean. If we compare the number of people who have more than 5k followers with the number who have more than 10k (a 2x ratio), there is a 3.1x reduction in the number of users. If we compare the users with 10k and 20k followers (again, a 2x ratio), it is a 3.0x reduction in numbers. Between 20k and 40k, and between 75k and 140k, the numbers are again very similar at only a 4x reduction in user counts.

(*Note that this data is ONLY the absolute top end of the scale - just the top 1000 - but I would be willing to bet that the same trend is followed throughout the population.)

But so what? Well, to get back to Chris's original question, why do we all try for followers? Because followers attract more followers according to the theory of preferential attachment. That's why the big names on Twitter become even bigger names on Twitter. That's why Chris Brogan and Guy Kawasaki are who they are.

I'm absolutely not saying that (a) content and integrity have nothing to do with it, and (b) the mighty cannot fall. Similarly, great cities can crumble if they neglect the things that make them great, the wealthy can become poor if they do not invest wisely, and large bacteria populations can die off for a multitude of reasons. However, the dynamics of the system are such that all else being equal, having more followers will lead to having even more followers.

**Data from Twitterholic - http://www.twitterholic.com/ - January 22, 2009**

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