Buzzgain

My daughter  came back from school all excited about the next week. “It’s only a couple of days until summer break”. Nice, I thought, now I have to stress about what’ going to keep her busy for the next couple of months. “Dad”, she continued, “can you come next Monday and explain what you do to my class?” I was elated. Glad my daughter thought I was doing something interesting enough for her to want me to come and share with her eager class of 7 year olds.

“I told them you spend a lot of time on Facebook and Twitter” she continued, adding “my teacher said that’s not a job, its what you do for fun”. I ought to speak to her teacher I thought. First, I had to explain to my daughter what I did though. This query made me realize that my 7-year-olds inquisitiveness ran deeper than merely cracking the meaning of social media monitoring! Skipping the inanity, I plunged straight into giving into 3 main points.

1. First what is it? – “Just like the way a teacher monitors the class and keep tabs on each student’s performance, social media monitoring tools can help you track and keep you informed about what the world is thinking on a particular issue/topic matter a product (in this case read her toy).
2. Second why do it? Brian explains it best. Its because its what customers are doing now. They are talking about products, brands, what they like, what they don’t. Ahh she says – like we all talk about the new teacher during lunch”. “Something like that” I countered, “So if you like the teacher, she will tell others, and if there’s something you think she needs to change it will help her do that”.
3. Finally how do you do it? Blog, twitter, YouTube, Facebook etc. are where people are talking about companies, so you should monitor them and find out what they are saying.

A newly established company ought to make social media monitoring an essential part of their overall communication strategy. The traditional media tools will no wonder help them announce their arrival to the outside world but if the company needs to connect or ‘make conversations’ with his key influencers- a blog, twitter or Facebook can do the trick. Applications such as ours which transcend beyond the traditional media tools will help you connect with your target audience in a much more effective way.

Our good friend Todd posted a very good piece on how PR helps raise venture capital. In it, he quotes a survey from BIGfrontier Communications that has the following statistics:

Startup companies that engage in PR campaigns are 30% more successful in getting funding within one to three months than those that don’t.

Forty-four percent of the respondents who used PR outreach received funding in the one-to-three-month time period versus 14% of those that did not.

Seventy-eight percent of respondents who said PR helped in their funding efforts are planning to use some of their VC dollars for additional PR.

Ironically, the survey also found that only 18% of the 300 startups surveyed had a PR program in place during the funding process.

So it begs the question why dont startups employ PR as a marketing strategy early as they can? Or why dont they hire a PR agency quicker?

Running a startup myself and having a background in Marketing, I can tell you my main reasons are the following:

1. PR is not easy. Putting an ad campaign on Google for paid adwords is dead simple. Buying a target email list is relatively easy. Putting together an email campaign (or a poorly conceived spam campaign) is easier. Attending a trade show and putting together a booth to attract customers is easier than having to build relationships with reporters and bloggers. PR depends on people. Other marketing forms are dependent on money and processes. Entrepreneurs who have a background in technology prefer working with things that are predictable (since everything else about the startup is unpredictable).

2. PR takes time. That’s the one thing entrepreneurs and smaller companies dont have enough of. Yes, everything takes time and there’s a return on time (ROT, not ROI) and PR does provide a great return on time. Only if you have done it before can you navigate the landscape. Most first time entrepreneurs have not.

3. Hiring a PR agency is “expensive”. The average quote from any good PR agency you’d get for even a 2-5 person startup is $10,000 a month in Silicon Valley. I can do a Google ad words campaign with less than $100 budget per month. Here’s the funny part: If that becomes $300 budget daily, that’s as much as PR. But its in bite-sized chunks.

4. PR requires specialists. The first marketing hire is paid to “put together a website, manage a trade show booth”. There are not enough qualified PR individual consultants to help smaller companies with smaller budgets.

5. PR is not tied to the lead generation process or the board level agenda. PR generates awareness and that’s not easily accountable. In my board meeting every month, I get asked about my lead generation funnel. Never have I been asked to show the recent press clips about the company.

Finally, making your mark through the noisy world right now is tough. There are innumerable startups in any given field and there’s way too much noise with multiple companies providing the same message and solutions. Given that reality, how is spending on PR justified if you are going to be yet another startup in the crowd?

Having identfied the reasons why entrepreneurs dont invest in PR, we’ll follow this up with possible solutions for how the PR world can adapt to the challenge in a future post.

LinkedIn is the #1 business social network by a wide margin.  Of the ~25.3 Million registered accounts that we track, ~20 Million have more than 2 connections. We decided to track more than 2 user connections since most folks just login to check things out when they get the first email invite. Of the 20+ Million users, only 1.9 Million (or 9%) have a blog (Or have chosen to add their blog to their profile).

Plaxo in comparison has 13% bloggers registered of their 16.7 active (more than 2 connections) users.

Xing the European business social network in comparison has 14% bloggers.

Now if you blog for business, you would get about 0.2% to 0.5% referral traffic from business social networks (based on relative comparisons). This is not a large amount, but it all adds up.

What are the top 5 reasons for not listing blogs on business network profiles that we heard from our informal survey of 15 bloggers who we know do not have their blogs listed on LinkedIn?

1. Did not bother to do it. Most people fill out their profile on an as needed basis, instead of all at once.

2. Did not know you could. Funnily enough many people who registered over 3 years ago with LinkedIn or Xing do not bother to come back and add their blog to their profile.

3. Not a significant source of traffic. The relative “engagement” of business social networks compared to others (such as Facebook or MySpace) is lower. Hence most users dont check them out very frequently. Even though LinkedIn and Plaxo have added “Status Updates” as part of their capability, they are relatively recent and over 80% of people still dont use them.

4. Blog is behind “closed doors” or is a private blog. This was the #1 reason given for not listing their blogs. Its unfortunate but true, most business blogs are within the 4 confines of intranets (yes they still exist).

5. Dont have a blog. This was the #2 reason. Although over 140 Million blogs exist and over 45 Million in English language alone, most “business folks” dont maintain an active blog.

Have you registered your blog with your business network profile? If not, why are you not doing it?

If you are a Web 2.0 or a social software startup trying to either launch a product or your company, getting relevant Buzz or Press is absolutely important. Long known to be the most cost effective means to generate awareness among potential users, PR gives you the sense of “arrival”. Notice I said cost effective NOT least expensive.

If you have been in the market over the last 2-3 months you already know that the best Web 2.0 PR folks, like Jeremy Pepper or Brian Solis (Disclaimer: Brian’s a cofounder at BuzzGain) are either already taken, or they are very expensive (most charge $10,000 minimum per month, or freelancers who charge $5000 / month). So if you have read about Do It Yourself PR and think that might be the best way to save some cash, the question becomes who (all) do you target to get good coverage.

The usual answer I hear is TechCrunch. They are no doubt the best, but you cant put all your eggs in the TechCrunch basket. Make a good target list just like you would for potential investors or customers.

It does not take a rocket scientist to figure out these folks should be on your list (In no particular order).

1. ReadWriteWeb

2. Mashable

3. Chris Brogan

4. Scobleizer

5. Jake McKee

6. Jeremiah Owyang

7. Webware

8. Louis Gray (Disclaimer: Louis is associated with BuzzGain)

9. Giga Om

10. VentureBeat

The best case situation is to brief them all. But if you dont have time, (which is strange, but not out of the ordinary) then how would you select which ones to focus on? Also remember each of these folks likes exclusives, so it does not hurt to focus on a subset each time.

If you follow the simple rule of thumb that you shoud focus on the ones with the most traffic to their site, I contend you will not have achieved your purpose – which is to get the MOST number of people to effectively have a chance to learn about your offering.

So what metrics do we apply? As we talked about blog authority and influence before, there are a whole host of other criteria, but here are the 3 that I would consider the most important.

1. Sentiment: Of the lot, ReadWriteWeb, Mashable and Chris are the most positive. Their article sentiment ratio is around 50-65% – very high and even with things that are not great, they accentuate the positive.

2. Outlinks: The number of links back to your site will give you a chance to convert awareness from PR into “potential leads” or prospects. The best link to post ratio (# of links per post) come from Louis, VentureBeat and GigaOm.

3. Engagement: Thanks to tagging, bookmarking, sharing Google feeds, tweeting, etc. you have the potential to reach a larger audience than visitors to your blog. So this extended audience should be counted into the overall metric for an individual’s reach. For extended reach Scobleizer, Chris and Louis are the best. Not only do they have a great number of followers on Twitter, friendfeed, delicious, etc., but their users are more engaged, clicking on links sent by these three than others.

So, if you had to make a call on exclusives, no doubt, focus on Rafe Needleman, Om Malik, Michael Arrington. Your best bang for the buck (for actual users) might come from some of these others.

Lets define ROI first as the simple return on the money or time invested in an activity. There are 2 kinds of returns – financial and non financial.

When they ask for financial returns they use certain metrics to track it, including:

Payback Period. The amount of time required for the benefits to pay back the cost of the project.

Net Present Value (NPV). The value of future benefits restated in terms of today’s money.

Internal Rate of Return (IRR). The benefits restated as an interest rate.

Non financial benefits include “intangibles”, “soft”, or “unquantifiable” benefits.

Leveraging social media to provide better customer service, get product feedback, etc. is great, but the financial impact of those is not easily measurable.

Why do we say that? Lets take just one example of using social media for customer service. Since social media for marketing is a big mess anyway.

1. Having customers help each other: For any large enterprise, less than 2% of customers actually use twitter, get Satisfaction or multiple other tools for customer service. The ideal scenario for a customer service organization is if customers help each other without the organization even being involved.

There are some implications for that unfortunately, especially if customers provide the wrong information or incorrect solutions. So if your customer service organization is going to monitor social media for support this is yet another channel which incurs costs for the organization.

2. Allowing customers to manage a Wiki for support. There are many situations when you realize your customers who use your product on a daily basis know more about it than your company does. Ideally they can form an extension of your “documentation” to leverage the wiki. Similar to the argument above though, the time and resources required do not go away because you have a wiki. A new channel for communicating now is opened, which brings with it, costs with no clear financial ROI.

3. Using social media to reduce escalations. Everytime an issue gets escalated the cost of the issue goes up dramatically. If you can provide a solution using social media to reduce escalations by proactively pushing out information to customers on potential issues, instead of reacting to the issues as they come though, your cost of customer service goes down. The problem with proactive outreach is one of reducing signal to noise ratio. What’s good for one customer scenario is not useful for most. If it were, then it would be documented anyway.

Does this mean you should not leverage social media for customer service? Absolutely not. Dont expect to show a financial ROI towards it that is justifiable to senior management, is the point we are making.

Image credit http://www.solutionmatrix.com/return-on-investment.html

There are over 50 social bookmarking websiteswhich primarily perform the function of allowing users to bookmark, share and annotate the web. We track 10 of them includingDelicious, Ma.gnolia.com,StumbleUpon, Diigo,Backflip, Blogmarks,Clipmarks, Furl, Simpyand Buddymarks.

We wanted to capture the value and difference of these sites not as a user of social bookmarks, but more from the standpoint of generating viral behavior and target specific audiences. To that end we also wanted to make some recommendations on which sites provide you specific value and hence might be a better use of your time to target and nurture the users of.

The value these bookmarking sites provide includes:

1. Traffic increase: If you get StumbledUpon expect a significant traffic increase within a short period (bursty) followed by a lull.

2. Relevance and link priority: As users tag your blog post or web page, they add their own filters, which help you understand a) your brand perception and b) your relavance with that communities sphere of influence

3. Ability to understand and create your early adopter base. For our solution, it was relatively easy to find out the users who bookmarked the content, hence were very interested in the relevant solution and would be keen on learning more when the beta was available. We built our entire list of 1033 beta users to provide us feedback on our product based on who bookmarked us and who they recommended us to.

Here are the recommendations:

1. Most # of users: Delicious and StumbleUpon are way ahead of the pack. StumbleUpon users tend to be more casual users and the traffic you’ll get will be fast and swift. Delicious traffic is more like a simmering pot, but depending on your content can get you

2. Topic focus: If you are an enterprise software company, Diigo and Backflip have the most users with content relevant for that space. ForMusic, Furl and BackFlip do a great job, and for Lifestyle topics Blogmarks is the most extensive. Its probably a function of the initial users and their likes / dislikes, but the content relevance for those topics is the most in those sites. Health related topics makes Delicious and Clipmarks the best. Finance related topics are most frequent onFurl.

3. Speed of propogation (Virality): Although Delicious has the most users, StumbleUpon, Furl and Diigo have the fastest velocity to user traction.

What do you think? Which ones do you use and why?