If you look at your company’s efforts to analyze social media data and optimize social media engagement and they seem ill-defined and / or lagging behind what is actually happening in the space, you are not alone. In an exclusive interview with CMSWire, Kushal Saha, Managing Director of the Information Technology Practice at investment bank Cascadia Capital, described how social media’s explosive adoption curve creates an inevitable lag in the capabilities of analytical and optimization technologies and services.
Unprecedented Adoption Curve Creates New Challenges
“Broadly speaking, when you look at the social space, it seems like it has been around forever, but really it’s only been in popular use the last five or six years,” said Saha. “The pace of adoption surpasses anything we’ve seen in the history of technology services. It’s quite unprecedented.”
Even for previous new technologies whose adoption curve was less steep than that of social media, Saha said there was a lag between the pace of adoption and the pace of development for analytics and optimization. For example, he said online ads, which began with a simple CPM model and later grew to include features such as cookies and behavioral data analysis, there was still a gap between adoption and analytics, and that gap is only wider with social media.
The sheer breadth and depth of data made available by social media presents both a significant challenge and opportunity for brands. “With online ads, everything pretty much goes one way,” he said. “You see an ad and may click or not click.”
In contrast, Saha said social media is all about interaction. “There are consumer likes and dislikes,” he explained. “You can post articles, check in at an airport or a bar. The amount of disparate data points is complicated by the volume of data created. As a result, there is a huge pool of unstructured data that we never had in the past.”
Tearing Down the Social Network Wall
Further complicating the situation is the fact that while brands may own the content displayed on their brand pages, the consumer engagement data is owned by the social networks. “Your page is within a walled garden,” commented Saha.
However, within these challenges also lies a huge opportunity for companies to take unstructured data around their brands and make it structured. Saha warned that this is not a “one size fits all” opportunity. “Location-based data is appealing to some brands, while other brands are more concerned with engaging consumers across different form factors,” he said.
Saha used The Hershey Company, which always knew who its customers were but never had one-to-one direct communication with them, as an example of a brand struggling to capitalize on the social media opportunity. “The opportunity exists, but companies don’t know what to do with it,” he said. “The next wave of social media analytics will be to focus on a specific type of data and create a structure that provides meaningful action based on knowing user behavior.”
In the case of Hershey, Saha said the company can now avoid the time-consuming and expensive process of running focus groups and analyzing the results, and instead reach out to hundreds of thousands of individual consumers to obtain real-time interaction and feedback. “This creates huge fodder for reinforcing your brand,” he stated.
Saha cited social media analytics software provider Prosodic as being on the “short list” of IT vendors who take a truly innovative approach that enables this degree of social media insight and engagement. Prosodic examines the differences in a brand’s customer engagement by different social networks.
“Prosodic looks at brand pages and what times of day and what specific content engages users,” he said. “Twitter tends to get less interaction during lunchtime than Facebook, since Facebook interaction takes more time. Twitter is done on the fly.”
Thus Saha said a company may find that Facebook postings are most effective between noon and 2 PM, while tweets work best between 10 and 11 AM and LinkedIn postings work better in the evening hours. “You can catch the same consumer three different times, rather than catching them once on a single blast across social networks,” he said. “It’s like making a rock skip water.”
Social Analytics M&A Activity Focuses on Point Solutions
Saha concluded his commentary by touching upon the flurry of recent M&A activity involving social analytics vendors. This includes the purchases of mobile photo-sharing network Instagram, enterprise social network Yammer, social gifting company Karma and social enterprise marketing software provider Buddy Media.
“The key commonality among all these companies is social,” said Saha. “There are differences in form factor and market focus. Gifting is different than marketing or business communication. Small intimate companies are getting acquired by bigger companies to round out their social portfolio. They have a social beachhead, but want to take their high-level social data to the next level.”