I‘ve been spending the last week digging through data from our social media scans at SocialRep, paying a lot more attention to what content shows up when someone searches on the web, and why. And I have to say, as a marketer, I’m pretty dismayed. For the 15 years I’ve been involved in marketing, one of the most persistent refrains we hear in business is the need to improve Customer Intimacy. And in the span of that 15 years, I’ve seen technology leveraged in countless ways to improve customer pipeline metrics, visibility, and efficiency, but rarely to build meaningful relationships with customers. My newest case-in-point is search marketing and SEO.

One of the things we do at SocialRep is collect all the user generated content about a customer’s particular industry–collecting and analyzing every conversation on blogs, forums, social networks, wikis, video boards. It doesn’t take long to develop a clear picture of how content is generated to influence consumer traffic, especially the persistent problem of splogs–content posted for no other purpose than to game search traffic.

In the SocialRep system, I’ve discovered that about 70% of the splogs we’re filtering out are posted at Blogspot, a free blog service owned by Google. That’s right. Google. The company whose mission it is to help you cut through the noise and clutter on the Internet also happens to be one the biggest enablers of noise and clutter on the Internet–at least the clutter we’re finding in industries such as automotive, consumer electronics, pharma and consumer and enterprise software.

When you first come across a splog, it looks like a regular blog. But the more splogs you see, the more you start noticing something a little bit “off”. Sometimes you’ll be reading a post and it will suddenly veer into gibberish. Sometimes you’ll notice that every post on the blog is an article written by a different author, with little continuity of topic. Sometimes you’ll notice that the content is blatantly ripped off from BusinessWeek or Wired with no attribution. 

If you look at this garbage as much as you must if you’re really trying to understand the media landscape influencing your market, you start to realize how much time, money and ingenuity marketers are pouring down a dark hole trying to game search algorithms instead of building customer intimacy:

• There are article syndication services that will take one article you write, and subtly rewrite it dozens of times to post on countless splogs in order to look like original content pointing back to your web site.
• There are content automation tools that will search the web for content according to keywords you designate, and scrape bits and pieces together from all over the web to generate new “content” for posting on splogs to drive search traffic. Some of these tools are sophisticated enough to preserve certain rules of grammar so that search bots recognize the content as valid.
• There are systems that automate not only splog posting, but splog generation–creating new splogs on the fly to maximize keywords and link juice.
• And of course, there are dozens of search marketing gurus who will sell you their secrets to search traffic success using these and countless other technologies and techniques.

I don’t want to sound like some naive idealist, and I don’t want to impugn the entire search marketing industry. I understand how search drives traffic, and I understand the challenges of cutting through the clutter to reach consumers on the internet. In this day and age, it’s imperative that companies understand how to develop effective content for SEO, and that means writing content that’s optimized for search algorithms

But when we reach the point where we’re writing massive amounts of content that’s designed only for computers to read, we’ve reached a tipping point where marketing becomes a parody of itself. In the name of cutting through the clutter, we create more clutter. In the name of building customer relationships, we develop content that customers would never want to read. Instead of putting our resources and creativity into actually connecting with customers, we focus instead on trying to engineer some immaculately efficient engine to boil the ocean and spit out customers ready to buy our product with the least amount of input or effort.

It’s a brilliant pursuit. One that marketers have been striving toward for decades. We’ve done it with advertising. We’ve done it with DM. We’ve done with email marketing, and viral, and search. We’re on a quest for clinical efficiency, but all the while we keep talking about customer intimacy. And then we wonder why consumers themselves are so drawn to social media, drawn inexplicably to connect with other consumers to share experiences that belie all the marketing bullshit their lives are flooded with every moment.

I gave another in-depth Webcast yesterday at one of BrightTalk’s online summits on social media monitoring and engagement for enterprise marketers. This presentation, “Is Social Media Killing PR?”, is about the strengths and weaknesses of the Public Relations role in Social Media Marketing. The title is a shameless ripoff of Horn Group’s panel of the same name, which I discussed in a recent post. It’s an hour long presentation, but I know that if you’re an enterprise marketer, you’ll find it worthwhile. If you’re not sure about spending the time, fast forward to someplace in the middle and listen for 5 minutes.

If you want find the front line on the debate over social media and its impact on marketing and public relations, two posts from late last week are worth reading. The first is a post on Chris Brogan’s blog about “Bob”, an enthusiastic employee at a Fortune 500 who ran afoul of his superiors by engaging customers online in the wake of a direct mail campaign. The post is interesting, but the ensuing debate in the comment thread provides a fascinating look at a number of fault lines companies face over social media–management vs. staff, innovation vs. resistance to change, control vs. collaboration–it’s a veritable cornucopia of management challenges.

I don’t want to rehash the whole discussion here, but I would suggest reading the thread if you’re a marketing manager. It’s a perfect case study on why every company needs an explicit social media policy. Without one, critical decisions over customer engagement that may impact everything from brand equity to employee moral will be left to the kind of petty internal politics that stifle innovation. Whether your policy is a lock-down on social media–which I certainly wouldn’t advocate–or a liberal policy that encourages employees to get involved, there’s really no excuse for allowing a void over social media policy to persist.

The second post worth reading is one by Charles Cooper at CNET, which is a rather dismissive post of a panel held by Horn Group asking whether Social Media is killing PR. Unfortunately I wasn’t able to make it to the event, so I can’t give a first hand account of the debate, but Cooper’s derision is a good view onto another of the social media fault lines, dividing the true believers from the status quo.

As a tool for communications, social media obviously is of keen interest to public relations types. But let’s dispense with the nonsense about it being a paradigm changer. Maybe that day will arrive, but to date, the cheerleaders have overstated the results.

I had to laugh out loud when I read that. As someone who has worked in corporate marketing for 15 years, as someone who has run agencies serving some of the world’s biggest brands, I’ve worked with many Fortune 500 and Global 2000 marketing executives who have felt the impact of social media first hand, and are struggling mightily to adapt. I’ve seen a major telecom provider lose the loyalty of its developer network to a competitor’s wildly successful forum. I’ve seen one of the world’s biggest consumer electronics manufacturers blow their biggest product launch in years because they ignored consumer dialog that clearly pointed in a different direction. I’ve seen one of the world’s biggest software makers struggle to manage a marketing operation fragmented by aggressive consumer engagement. And I’ve watched one of the world’s biggest automakers leverage consumer engagement to drive product development decisions that delighted their customers.

This is nonsense? Was the wildfire of social media backlash against the pricing of the iPhone, and Apple’s initial lame response, nonsense? How about the social media initiatives leveraged by Barack Obama and netroots progressives to defeat Hillary Clinton’s vaunted PR machinery–led by none other than the head of one of the world’s biggest PR agencies? All nonsense, I’m sure.

Cooper’s dismissive denial of the significance of social media, and of those who have “drunk the Kool-Aid”, is based on a tellingly narrow view of social media’s domain–as if social media represents an upstart movement of arrogant whippersnappers wanting to seize the throne of Media Influence. He derides the bleating PR masses who have bought into this illusion.

What’s more, they are scared stiff of antagonizing the “influencers.” Especially when one or another bloviator from the blogosphere wakes up on the wrong side of the bed and issues a fatwa. But does a relatively small circle of (mostly California-based) bloggers still command the same influence it did a year ago?

The answer is “No”, but not because the A-Listers are losing influence as social media broadens, though that’s probably true. The answer is “No” because the influence of A-Listers was only a phenomenon within the echo chamber of early adopters and media personalities afraid they might lose their status and influence to mere “bloggers”. The real story is the day-to-day dialog among millions of ordinary people in little corners of the internet where they influence the brand impressions and purchase behavior of their peers. Like the 65,000 cyclists that frequent a mountain biker’s forum to share experiences with equipment, warranties and customer service. Or the 91,000 members of a hair dresser’s forum that share information about products and brands, as well as tips and techniques.

These are the real influencers, and the real driving force behind social media, and why it matters significantly to marketers as well as PR folks. Instead of putting the Horn Group’s panel into this broader context, Cooper dismisses the influence of A-Listers and then lauds the influence of one of his mainstream media peers:

Then the predictably prescient Kara Swisher from The Wall Street Journal’s All Things Digital cut to the core question which–I believe–outweighs all others: If the message is empty, why bother? There is little point in trying to push a lame product or marketing idea. That’s a message some sales and marketing departments don’t want to hear. But in the end, doesn’t everything come back to value?

Again, the answer is “No”, not because value isn’t important, but because there is a long and messy process of discovering and defining value–a process in which good PR plays a role by interacting with, and understanding, the market. Social media is a game changer in this respect, because today, marketers have the opportunity to listen to customers like never before–not through focus groups or surveys, but through real engagement and active listening. Whether PR folks take that opportunity to broaden their focus and listen to consumers, instead of focusing solely on “influencing the influencers”, is a fault line that Cooper nicely illuminates.

One last nit. Cooper is dismissive of Jeremiah Owyang in a way I want to call out.

As I listened to the panelists debate the question, I began to fidget as Forrester Research’s Jeremiah Oywang offered a marketing-heavy spiel on the central role social media should occupy in any effective PR strategy. Oywang is earnest about this stuff so I can’t come down too hard, and yes, social media has its place. Still, it sounded like so much gobbledygook to me.

If saying “Owyang is earnest about gobbledygook” is not coming down too hard, I’d hate to see what Cooper really thinks. The reason not to come down too hard on Owyang is not because he’s “earnest”, but because he’s a professional. Owyang spends more time every day with a larger group of marketing executives and marketing practitioners than anyone I know; he’s one of the hardest working analysts in social or mainstream media. Maybe he didn’t lay things out in a way that Cooper understood, or maybe Cooper isn’t a position to want to understand what Owyang has to say. Owyang wrote his own post about the event. You be the judge.

I wrote in my last post about an emerging trend we’re seeing at SocialRep: prospects are telling us they’re adjusting their marketing budgets by shifting money from Public Relations to Social Media Marketing. This is a touchy subject to discuss in public; the tension between PR and Social Media professionals has been percolating for a long time. Many of the same PR pros who dismissed the significance of social media now claim to be the natural heirs to corporate social media communications, while many social media pundits see PR as entirely antithetical to authentic market dialog. Unfortunately, client-side marketers are now getting caught in the cross-fire, not sure who to trust or what programs to explore.

Having been a PR executive before leaving the industry in 2005 to launch a social media venture, I see both sides of the argument. The PR industry bears enormous responsibility for the kind of mercenary marketing and message manipulation that consumers have embraced social media to defeat. Those PR practitioners who see social media as just another new vehicle to cynically drive market influence—even while embracing a veneer of authenticity—should be continually and publicly exposed. But PR practitioners who built their agencies on the belief that effective communications and advocacy are built on a foundation of meaningful relationships and market knowledge have a lot of expertise and value to offer. The trouble is, even for good PR agencies, their DNA is fundamentally mismatched to the reality of Social Media, and even the purest intentions can’t overcome that fact if the challenge isn’t understood.

The argument about why PR is so mismatched for social media is not a discussion about the ethics of PR or its practices, which I touched on in my last post, but a discussion about the nature of media and how it’s changed. To tell that story, I’ll poach a few slides from one of my SocialRep presentations.

The most important thing to understand about social media is that it isn’t new. The technology that enables it in our wired world is certainly new, but the dynamics of social media are as old as trade itself. If you look at the history of business over thousands of years, word-of-mouth has always been the dominant form of commercial influence. It’s Darwinian. If you’re about to spend your hard-earned money on a product and you don’t want to get cheated, who will you trust to tell you the true value of the product you want to buy: the person selling it, or someone else who’s already bought one? You gain a huge survival advantage as a consumer any time you can find a third party without a vested interest to validate the value of things you want to buy.

But as populations grew, as manufacturing and transportation capabilities exploded, businesses began to reach far beyond the host communities where they were known by their neighbors, and reputations were abstracted into brands. New technologies for communicating to ever larger audiences enabled businesses to tell their brand stories in print, in packaging, on radio and eventually television. But the mode of communication was overwhelmingly asymmetrical. Since the technology for communication was enormously expensive, control was highly centralized in the hands of a few power brokers—the owners of printing presses, publishing houses, radio stations and television networks. These technologies had the power to flood a market with highly choreographed messages, while word-of-mouth only traveled point-to-point within localized community networks of families and friends. This gave rise to what I call the Media Bubble—a temporary imbalance in the flow of communication arising from the early expense of emerging technology, placing control in the hands of those who could afford it.

The Media Bubble arose because the expense of early mass communications technology ensured it was controlled by the few that could afford it.

This media bubble has been our reality for generations. All of the institutions that govern our lives, particularly business institutions, have evolved to make optimal use of this bubble—to leverage the asymmetrical control of a message that can be directed to flood a market. Think about it. Advertising is not organized as a function for connecting with customers. Advertising is organized to maintain relationships with media owners to purchase space within the stream of media that has the subscribing audience we want to reach. Public relations is not organized as a function for connecting with customers either. Public relations is organized to maintain relationships with the reporters and analysts who develop the content that goes into the stream of media that has the subscribing audience we want to reach. In both cases, our business functions are not about connecting with customers directly, but about connecting with the power brokers that control the stream of media that reaches the customers. It’s efficient, as long as that paradigm holds.

But now the media bubble is bursting. And it’s not a mystery why.

Within the media bubble, the media message is a one-way broadcast of information that floods a market of media subscribers. Corporate functions like PR and Advertising evolved to insert their message into the stream of media, or to influence its content.

As we all know from experience, as technology evolves it tends to get cheaper. Companies find ways to innovate production in order to compete for customers on price. Companies also strive to grow markets for their products to expand volume and profits. In that way, industry has inevitably worked to make the expensive communications technologies available to a wider audience at ever decreasing prices—telephones in every home, then televisions, then computers, and internet access, and mobile phones. In what some may find a poetic irony, the very institutions that enjoyed the power of controlling media couldn’t help themselves but to follow the profit motive and sell the components of power to an ever larger market of consumers. The Internet was the tipping point, when consumers and a new wave of businesses that served them assembled the pieces of a massive platform that enabled the rebirth of word-of-mouth communications on a scale that could directly challenge the primacy of corporate-controlled media.

As mass communications technology has evolved, industry developed cheaper components that could be sold profitably to the masses, which eventually made possible the massive social communications platform that allows word-of-mouth media to challenge the primacy of corporate-controlled media.

This is the world we are seeing emerge. It’s not that social media is new, even though the technology that enables it is indeed new. It’s that a media bubble that arose from the expense of communications technology is finally being challenged by an equal and opposite force of democratized communication. Social media represents a return to a broader balance of media control, a world in which consumers challenge the neatly packaged messages of marketers by validating the professed value of products with other consumers before they buy. In this environment, consumers create content that challenges the supremacy of mainstream media—in the early stages by simply writing their own reviews of products on blogs or forums, but then organizing to create their own media properties to gain subscribers based on content more tightly tuned to special interests. As these new media properties emerge, they compete for audience and revenue, undermining the business models and revenue streams of established media companies, and the media market begins to fragment.

Of course, we’re already watching this play out. The effect is what I think of as a fundamental shift from what we used to think of as market segments, often defined by the media through which members of the segment self-reference, to networked customer communities, defined by their interests through which media emerges.

In a world of social media, corporate and media interests are no longer able to asymmetrically control the media and messages. Instead, media is more fragmented and specialized, forcing corporate interests to find a way to play a meaningful role within the customer communities they serve in order to be successful.

So what does this all have to do with PR? Remember how I said the problem for PR is that their DNA is fundamentally mismatched to social media? PR is organized for the old paradigm—to influence the power brokers that control media. Their fundamental DNA is about influencing the influencers, about cultivating relationships with power brokers, not about developing dialog with consumers. Even as many PR companies try to embrace social media, they still see it through the prism of influencing the influencers rather than connecting with consumers. The challenge is not that this is inherently wrong—if as a business you can influence the influencers, that’s an efficient way to advocate on your own behalf. The challenge is that consumers, even while socially wired to follow influencers, are drawn to social media precisely because of its power to defuse the influence of influencers—to continually look behind the veil of influence and expose any inconvenient truths. Influencers will still emerge, but counterveiling truths will also emerge, and rapidly, which means businesses that only focus on trying to develop and influence the influencers will miss the more sustainable advantage of connecting authentically with consumers and playing a valued role in customer communities.

What PR is missing in its DNA is a fundamental drive to connect with customers. To listen, to learn, to play a meaningful role within a customer community. And that’s the litmus test for client-side marketers looking for someone to help them understand social media. The question isn’t how is this partner going to help me drive my message into the market to attract customers, but how is this partner going to help me develop meaningful relationships, and a meaningful role, within the customer communities that define my market. That’s not impossible for a PR company to do, but for most that I see pushing themselves forward as social media experts today, it’s still a big stretch because they don’t see the fundamental shift in the media paradigm.

At this point, I’ll say quite clearly that I think there is tremendous value PR and corporate communications can offer to the emerging practice of social media marketing. But delivering that value will require a substantial shift in philosophy that defines most PR firms. I’ll save that for my next post.

I haven’t been up for air in weeks. Somehow, despite the economic downturn, despite the nuclear winter in venture capital markets for early stage startups, SocialRep is humming. I’ve been buried in social media tracking scans for customers and prospects, and new inquiries are coming in over the transom. I’m also excited about an invitation to present at Thunderbird’s Winterim in New York in January, where I’ll be talking about our emerging framework for integrated social media marketing and technology. So how can I account for the uptick in energy despite the gloomy market? I’m starting to see my theory about natural selection play out.

Over the past couple of months, SocialRep has been tracking a massive swath of online dialog about marketing. Not surprisingly, the trends in dialog are overwhelmingly focused on the impact of the economic downturn, with various flavors of speculation, panic and punditry. Some examples:

• A few weeks ago, various reports on budget planning for 2009 highlighted a marked migration in marketing spend from traditional to digital media. The nearly universal read on this move is that online marketing is more measureable than offline, but there was surprisingly little citical analysis of  the challenges with online metrics, and how those challenges are being addressed.
• As the economic crisis deepened, the panic did too. Sequoia Capital stoked the flames with a presentation they posted online telling their entrepreneurs to “get real or go home”. The presentation went massively viral, spreading the talking points for belt tightening and death pool speculation for various startup sectors, but few specifics on the tactics companies should pursue to refine their market approach.
• As if in response to the panic–and mindful of the bloodbath marketing usually suffers in a downturn–marketing pundits took up the mantra that, whatever you do, DON’T STOP SPENDING. Some (myself included) cited the anecdotes that companies like P&G, Kellogg and Chevy increased ad spending during the Great Depression and pulled ahead of competitors. But most simply pronounced the incantation forcefully, that smart companies don’t cut marketing, but didn’t offer specifics on how companies should adjust their programs. Jonathan Baskin called this trend perfectly.
  

Notice a pattern here? Lots of punditry and trend analysis, but very few specific recommendations for how companies should adjust their marketing programs to deal with the economic crisis. There were a couple of exceptions, most notably a lot of dialog about the dangers of discounting and how price cuts undermine brand equity. But in terms of substantive recommendations for adjusting marketing strategy and operations, not so much. So I was interested to see a tangible sign of how some companies are adjusting based on the sudden increase of inquiries at SocialRep.

We’re still in the early stages at SocialRep. After beating the streets for Series A funding over the summer, we read the tea leaves and readjusted to focus our energy on customers and product. In this market, we’re going to live or die by our success in serving customers, not VCs. But bootstrapping a technology company can be tenuous. You need customers, but if you’re too opportunistic and grab at anything you can drag over the doorstep, you’ll quickly fragment your product and team by trying to be all things to all prospects. So you have to be deliberate in choosing customers, which means being a little more slow and quiet than would otherwise seem prudent. When you find a good market vein, you mine it, and pay close attention to the way your prospects frame the problem they want you to solve.

What surprised me was the sudden influx over the past few weeks in the number of companies that found us, and how they framed their interest in our social media offering. The common refrain was that, in the face of an emerging recession, these companies were aggressively reviewing every dollar of their marketing spend. One area in particular was not standing up to scrutiny: Public Relations. These companies complained about spending 5-figure monthly PR budgets on activities that produced activity without results. The mandate these companies had been given was to take the PR budget that was not performing and invest it in something innovative, like social media marketing.

Now I know this will provoke some howls, so let me make a preemptive disclaimer. I believe in PR. Or, I should say, I believe in good PR. And having spent 15 years on every side of PR, I can define the difference between good and bad PR. Years ago, when I was the editor of a magazine, my inbox overflowed every day with pitches and press releases that had absolutely no relation to what my magazine covered. Today as a blogger, I still get totally irrelevant PR-spam, more artfully framed as “blogger relations”. This is the lazily “scientific” ethic of bad PR: blast a fire hose of pitches and press releases at everyone that looks like they might be a journalist or blogger, and hope someone picks up your story. In the place of actual stories that influence the market, this approach produces monthly “activity reports” and media mentions in off-the-beaten-path blogs or news feeds.

Good PR is different. It’s about relationships and market expertise. PR companies in this category take the time to hire and train smart people who get to know a market, the competitive landscape, the products, and of course, the analysts, reporters and bloggers. They don’t spam their contacts with press releases; they build relationships based on sharing knowledge and insight. Reporters and bloggers answer their calls because they know their time won’t be wasted, and they may get an important tip. This kind of PR produces relevant stories that influence markets.

The problem is, the ratio of good to bad PR is not good. And even among the better PR companies, an understanding of how to manage the dramatic shift from traditional to social media is still largely predicated on the notion of cultivating asymmetrical influence more than reciprocal dialog. Moreover, few traditional PR companies have the culture to passionately embrace the tech-driven social media paradigm. So in the face of a market downturn, when belts are tightening, we’re seeing companies looking at the money poured into PR, and deciding that now is the time to try something new.

What does “something new” look like? That’s the topic of my next post. In the meantime, here’s a hint: social media marketing is just like PR, in the sense that there’s “good” and “bad” SMM. And the distinction is based largely on the same dynamic–activity vs. results, influence vs. relationships.

I took a couple of hours out tonight to watch the Frontline special “Heat”, a poignant and well-produced look at the climate crisis, the tacit complicity in ignoring the problem by both consumers and corporations, and the expedient lack of leadership on the issues that really matter by both presidential candidates. The more the documentary played out, the more familiar it sounded.

Over the past few years, we’ve had very public discussions and analysis of the housing bubble and the subprime mortgange crisis, along with constant speculation of when the bottom would eventually fall out of the market. Anyone who claims to be surprised by the financial meltdown either hasn’t been paying attention or has a stake in denying the obvious and longstanding evidence of impending trouble. Now we’re on the brink of a global financial meltdown.

The Nobel Prize winning economist Paul Krugman was on FreshAir today discussing Ben Bernanke, and remarking how he was, by fate, the most informed person possible to heading the Fed, having based his academic career on studying financial catastrophes from the Great Depression to Japan’s banking crisis. He has more knowledge about how to fight the crisis than any predecessor, and more resources and support in attacking the problem aggressively. And yet, everything he’s thrown at the crisis so far hasn’t had the intended effect. We may have simply passed the point of being able to manipulate the the system to produce desired outcomes.

Patterns like this make my synapses light up, because patterns often show you the future in a complex system. We are living right now in tremendous fear of financial meltdown, even though we were all complicit in the leveraged consumption that drove us to this point, despite the evidence of danger–and even now, many of us are whistling past the graveyard.

Is this what we’re doing with the climate? If you missed Frontline’s “Heat”, it’s worth a look.

Sequoia Capital dumped a bucket of cold water over their portfolio companies, with this presentation on the economy and the road ahead for venture-backed start-ups. The message: cut costs, focus on quality, drive sales, lower your expectations for investment and valuation. Oh, and you better have a product people need.

Great creative take on the road ahead by Screaming Frog.

I gave an in-depth presentation yesterday at the BrightTalk Social Media Summit on the state of social media monitoring and engagement management for enterprise marketers. This is essentially a view of the business landscape from the perspective of SocialRep. It’s an hour long presentation, but I guarantee that if you’re an enterprise marketer, you’ll find it worthwhile. If you’re not sure about spending the time, fast forward to someplace in the middle and listen for 5 minutes.