A local news and media company is getting into the social media consulting business.  You heard me right.  They’re trying to augment sagging revenues from traditional advertising by leveraging their enormous customer base with this hot new add on: social media marketing!  Step right up and getcha some!

I passionately believe in the need for a strong free press and am all for new revenue streams to keep our news organizations vital but I’m truly disheartened by the business approach of this important company.  Their strategy is to blanket their market with a cookie-cutter social media product. They are COMMODITIZING marketing!

Before I go further I need to be clear that I’m not belly-aching from any competitive  point of view. While I generate revenue from marketing consulting, 98 percent of my services are devoted to national or international clients, so I don’t play ball where these guys are operating.

Here are the “package” social media deals being offered to local businesses. They range from entry level …

• Set up Blog, LinkedIn, Facebook, Twitter
• Content development sessions
• 1 blog post/week
• Will get for you an average of 50 relevant, quality followers/month
• 5-8 custom tweets/business day
• 3 relevant retweets/business day
• Cross-pollination of channels
• Single-source customer service
• Monthly customized reports

… To deluxe, which includes all of the above plus

• MySpace, YouTube, Flickr
• 2-3 blog posts/week
• Avg 200 relevant, quality followers/month
• 12-15 custom tweets/business day
• 5 relevant retweets/business day
• Quarterly contests or promotions
• Trending topics/keyword tie-ins
• Full customer service integration
• Monthly customized reports

It’s uncommon to see much written about individual personalities on the social web — in fact it’s taboo.  However, it’s important to occasionally look at Chris Brogan as a living social media business case study for two reasons:

1) It’s hard to comment on the state of the nation without mentioning the president.

2) Chris Brogan is a pioneer. The issues and opportunities he faces are instructive to all churning in his wake. As Lisa Foote once wrote, Chris is the canary in the social media coal mine.

Chris has created a tremendous amount of value and popularity through his tireless engagement but has also stirred up more controversy than any social media personality, whether through his aggressive use of “sponsored” posts or his apparent sponsorship “flip” at last year’s Consumer Electronics Show.  As I said, he is plowing new ground.  Sometimes you hit a rock.

But last week might have been his biggest buzz-killer when he revealed he charges $22,000 for a day of his services and then subsequently posted (and dropped) an appeal for un-paid interns for his company.

Just to be clear, I’m not in the whiney camp that thinks everything Chris does should be free.  I’m probably the most capitalist, business-driven blogger out here. I like it when people make money. I like it when Chris makes money. I think he should take advantage of his white-hot celebrity, celebrate it, leverage it, and roll in the dough. I hope he can double his consulting fees.

So making money is good.  But from an academic view, it would be useful to look at the “how” — the dramatic shift (or perhaps evolution) in strategy that is enabling Chris to become a money-making machine.

For years, Chris has built his core brand promise on:

• Passionate audience-building through authentic helpfulness
• Relentless nurturing of that audience through tireless engagement
• Putting the audience above personal business needs
• Never, ever “selling”

In one video from last summer, he literally screamed at an audience “This is NOT about YOU and your STUPID COMPANY!”  That effectively sums up his mantra, and the “brand” Chris built around himself.

Around the time of his book release last year, Chris flipped this philosophy upside down and took steps to aggressively monetize his audience.  He explained this change by saying that he had been giving stuff away for a long time and that it was time to make money.  Selling of his products, services, companies, book, affiliate links, and paid sponsors became a common theme. He transformed into the social web’s most visible and highly-paid pitch-man, the Billy Mays of blogging.

Chris also increasingly put himself at the forefront of his topics, including video documentation of a day in the life of himself, photos of himself with near-celebrities, announcements of his new business ventures, and detailed explanations of how hard he works to achieve his success.  As you would expect, some readers expressed disappointment with these changes, and they were sometimes categorized as “haters” instead of “creators” and implored to “get over it.”

In other words, Chris has disassociated himself from that core brand promise to his audience.

In the business world, this would be tantamount to Disney opening a Tia Tequila-themed ride, or Nike doing a fitness cross-promotion with McDonald’s.  When a brand becomes incongruent by building a reputation communicating one thing and then executing another, it can be a recipe for disaster.

In the near-term, Chris and his ubiquity seem to have a limitless ability to capitalize on the goodwill of his audience (heck, loyal customers even bought Toyota cars after the first recall).  From a traditional business perspective, one might predict that if Chris doesn’t practice what he preaches and take steps to return to his core competencies, his brand and his ability to monetize will be increasingly vulnerable.

The furor over the posts last week were not the first signs that people have noticed the new Capitalist Chris.  If it persists, negative outbursts from loyal fans might eventually call attention to the problem with his sponsors and erode his brand and his value.

Or will it?  Another possibility is that Chris is going to be just fine losing some — or even most — of his core followers because he is developing a new audience of corporate folks who don’t care what his brand promise WAS as long as he can deliver results to their bottom line NOW.

In any event, the Trust Agent as we knew him is probably coming to an end as he transitions from social media folk hero to mainstream business consultant.  It will be fascinating to watch the results.

What do you think about this strategy shift?

What are the risks of jeopardizing his core audience for launching a new stage in his career?

With the new demands of the business and publishing worlds, is it possible for Chris to be successful at holding on to both constituencies? If so, how?

Illustration: www.chrisbrogan.com

In all of the posts I’ve read about social media measurement, very few address the possible role of qualitative research — measuring when you don’t have data — so let’s take a look at that today, shall we?  This will not be boring, I promise.

To make sure we’re all on a level playing field, let me quickly review the difference between QUANTITATIVE and QUALITATIVE data.

Quantitative marketing research is descriptive and conclusive.  It addresses research objectives through numerical measurement and statistical analysis.  In the social media world, this means data you can easily collect and measure like tweets, page views, comments, and perhaps even sales.  These are the facts and figures that get all the headlines. 

Qualitative Research is more, well …  touchy-feely.  It uses small samples and may involve focus groups, interviews, and behavioral observation.  Although it does not lend itself to statistical analysis* it can still be a quick and effective way to tell a story.

Because of all the free and voluminous data available through the social web, most of the attention is on the sexy quantitative side, but it might not be the best way to show value or tell your story.

Story time

Let me give an example from my own experience …

In addition to marketing and management, I also have a background in organizational development.  On one of my projects, I was delivering a training program to help correct dysfunctional management-union dynamics in a large company.  The people who went through the program raved about its effectiveness and had concrete examples of how it was dramatically improving the workplace.  The company’s top managers — who would not go through the program — were very skeptical about any progress and, lacking measurable results, were leaning toward cancelling it.  Like most managers, they demanded quantitative measurement … and I didn’t have it.  Sound familiar?

At the next employee training session, I mentioned that the program was probably going to be cancelled. The result was an out-pouring of outrage by both union and management participants. I had a video camera nearby for a training exercise and said, “Excuse me, but would you mind if I just turn this thing on to record your views?”

The group proceeded to tell story after story about the benefits of the training and also scolded upper management for not attending.  I edited the video to conform to the 5-minute executive attention span and played it during their next meeting. The managers sat dumbfounded and impressed as their employees passionately talked about the tangible benefits of the training. By the end of the meeting they all committed to attending the training themselves and expanding the program — without one pie chart!

Apply this to the social web

I use this example because like PR, marketing, or social media programs, training is very hard to quantify on a nice, neat spreadsheet.   This situation was a perfect time to use stories — qualitative data — to define value in a very different, yet compelling, way.

When you’re struggling to measure the value of social media marketing in your company don’t overlook the possibility of using qualitative stories from customers, employees and other stakeholders.  They might be showing up every day in comments, reviews, and customer meetings.

The technology of the social web offers unprecedented ways to capture and display this qualitative output.  And you know, sometimes all it takes is ONE story to provide more new insight than a dozen graphs!

What are your ideas?  What are some of the ways we can use stories to demonstrate the value of marketing through the social web?

*Michelle Chmielewski wrote in a {grow} comment that values can indeed be assigned to qualitative data to create numerical analysis. In effect this is how sentiment analysis is conducted. However, I was just trying to keep it simple today! : )

There is an argument around the blogosphere that is DRIVING ME CRAZY.

When it turns to the topic of measurement and social media marketing, many “authorities” flippantly rely on the “double standard” argument — If you’re trying to measure the value of SM, you might as well measure the value of a cell phone, the company car and the receptionist.    One popular blogger and author recently said if your manager asks for the ROI of your social media initiative, you should ask him for the ROI of his pants.  Their point is that you just need to accept the social web as something ubiquitous and necessary, so why worry about it?

This is lunacy.  Here are three reasons why this “no need to measure” view is an irresponsible position:

1) Never get caught with your stats down

Let’s examine the argument that you don’t measure the value of a company car, or email so insisting that we measure social media is a double standard.

Even if you don’t directly account for the on-going value of these items on a spreadsheet, there is an implied economic value to cars and cell phones and all this everyday stuff.

Part 5 of a series

Writing a series of posts on Twitter scams has been pretty depressing.

I found there is a thriving subculture of deceivers that is bizarre and disturbing. The scammers exploit the elderly, the vulnerable, the under-educated, and the desperate.  This is typical: A Twitter page of a friendly looking man who is a “Husband, Dad, Blogger and Entrepreneur” peddling this product: From Food Stamps To 7 Figures Online Free Video.

The scam sub-culture blogs about dodging regulations and adjusting tactics to capitalize on loopholes.  “Best practices” spread at the speed of light and the pyramid schemes can vanish behind the social web’s cloak of anonymity, free access and fake accounts. The scum has become more powerful through the recession, persistent unemployment and evolving technology that feeds their need to deceive.

The mere fact that I wrote articles containing the words “MLM” attracted automated spammers that nearly snowed me under with deceitful tweets.   I am sickened by the vast resources devoted to tricking us into clicking.

What can be done about it?

On a macro-level, very little.   Most regulations or policies could also hurt legitimate enterprises.  We have to take the fight to the streets.

Here are some ideas to help you fight back and at least take control in your part of the blogosphere.

Use Twitter “report for spam” option.  Any time I am spammed by porn-peddling, teeth-whitening, Trump Network sludge, I hit the report for spam button. Twitter seems to be processing at least some of these requests manually to avoid mob-rule against legitimate but unpopular tweeters, so I don’t really know what it takes to get people kicked out.  Just do your part. If enough people take the time to do it, it is in Twitter’s best interest to figure out a way to handle it.

There’s an app for that? — There is a new app called Stop Tweet that may provide hope to the idea of automatically blocking some spammers.  This utility allows you to tweak your personal settings to block and report people based on two tell-tale characteristics – no or low number of tweets and a high following-to-follower ratio.  It can also show you who among your followers who is a known spammer.  I tried this app out and unfortunately it did block several legitimate small businesses just starting Twitter accounts.  Play around with the settings and let me know what you think.

Separate email addresses — I have one email address I try to keep “pure” for correspondence with real people and another one I use for ANY app, service, or website. I even use my “spam” address when posting comments. Face it, it is only a matter of time before a database is hacked and all your identification and passwords violated. Minimize this inevitable risk by containing it to one account.

Mind the basics — You know the routine. Use strong passwords that are long, a mixture of letters and numbers, and nonsense words unrelated to any personal information. I just did research for a client project that showed the number one password for elderly people is “password.”  Help educate your loved ones, too.

Ignore them — Don’t be tempted to do what I did and explore the spam underworld. Don’t visit their sites or ask for more information, even in fun. If you respond to their spam, you’re encouraging them to continue, and they only need a tiny response to be profitable. Take my advice based on experience — ignore them completely!

What are YOUR strategies for dealing with the spam tsunamai?  What could Twitter do to step-up to the problem?

Part 1 in the series on Twitter’s Biggest Scams: Multi-level marketing

Part 2:  The teeth whiteners

Part 3: The Twitter follower scam

Part 4: The Trump Network

Part 4 of a series

Yes, it’s THAT Trump.  “The Donald” is actually behind this Multi-Level Marketing (MLM) program.  A key difference between this and the other MLM programs explained this week is that there is an actual product exchanging hands – nutritional aids.

The Trump Network was launched in the fall of 2009 — actually a re-branding of a pre-existing 12-year-old company — apparently endorsed by Trump himself.

They sell vitamins and supplements, which are popular with many other recruiting MLM companies. It costs $48 to join the program, and then you buy a marketing kit for $497 to start selling. Trump pitches it as a “gift” to the recession-wounded America, and says it is geared toward making Americans healthier.

Like a lot of MLM companies, it’s light on product information and heavy on buzzwords (the recession, the national debate over healthcare, green/organic product popularity). The actual product being sold is an afterthought on the website, highlighting opportunities in the “explosive health and wellness wave” instead.

Becauset they sell vitamins, The Trump Network can skirt being called a ”pyramid scheme” but it still looks that way in practice.  People who join the network earn most of their money from enrollment fees and maintenance costs. The independent “distributors” are then pushed to recruit more distributors of their own. In many schemes of this kind, they are required to buy more inventory than they can probably ever sell, shifting focus toward recruitment as a means of re-couping their investment, which is unlikely.

One MLM resource website did a “review” of the Trump network and explained the “get rich” process:

“You call your sponsor, and they tell you what they were told, which is basically useless, and so you fall for the most gullible, stupid strategies that you could possible engage in – depending on your friends, neighbors, and relatives to make you rich.”

I think one of the most disturbing aspects of this initiative is the judgment of Donald Trump to lend his name to something that is built on such shaky ground. Here’s a guy whose brand is synonymous with the gold standard of quality – why jeopardize his brand by implying  riches are at hand to people who are probably suffering?

Note: some of the debate in the comment section of this post focuses on the real value of the Trump brand name. This is addressed in WSJ article on a court case on this topic: click for article

Part 1 in the series: Multi-level marketing

Part 2:  The teeth whiteners

Part 3: The Twitter follower scam

Part 5: What to do about Twitter scams

Part 3 of a series

“EXTREME traffic and EXTREME income!”  the tweets scream at you. How is anybody making money off of this ridiculous offer?  Let’s investigate the “Build Twitter Followers” scam:

There are many sites dedicated to this scheme, but the one I investigated was The MLM Mastermind System.

After submitting your name, email address, and phone number (we used fakes), you are redirected to one of the longest, strangest web pages I have ever seen. It goes on for miles! There are dozens of testimonials, anecdotes, and metaphors to explain why it’s imperative for you to expand your network, create new leads, and brand yourself to start earning money.

The spam-meisters explain that if you use their system, you can do all of these things on “COMPLETE AUTOPILOT” and start raking in the cash for free, with zero effort.  As you work your way through the page, there is not a single mention of a product of any kind. You grow your business by suckering other people into growing their business, which is growing more people to grow their business, ad infinitum.

There are all the telltale signs of a pyramid scheme—promises of get rich quick, low risk, high gain, work from home, etc. The system they describe for building this network consists of software tools that will perpetuate the type of spam Twitter messages we frequently receive. These are the terms to buy into the system:

“So here’s the thing, After your 7 day trial period for only $1, the ENTIRE system is still only a measly $49.77 a month. And you don’t even have to pay that until you’ve already started USING the system, and seeing how profitable it really is. After that, for literally a buck and a half a day you will be at THE cutting edge of this industry, and using technology to build your business easier than most could imagine.”

Unwilling to surrender my credit card or Twitter account information, I can only guess at what happens next. There are volumes of reports across the web about how companies like this use your information — charging exorbitant fees, signing you up for other similar services, and other types unsavory exploitation.

Since it’s all automated, as their network expands, they can tweet these messages every few seconds, and only a very small fraction of the people that receive the messages need to click through and sign up for it to become profitable very quickly. As it grows it creates a large, viral, financial ecosystem of its own.

Tomorrow: The Trump Network.

Part 1 in the series: Multi-level marketing

Part 2:  The teeth whiteners

Part 4: The Trump Network

Part 5: What to do about Twitter scams

Part 2 in a series

One of the most seemingly ludicrous, annoying, and pervasive Twitter scams is the promise of free teeth whitening.  So, what is this all about?

The teeth whitening scams work by creating fake websites that appear to be blogs with personal testimonials. An example would be www.karensteeth.com.  These sites advertise a “special combination” of two separate products, and give instructions for signing up for free trials. The combination of two products makes it seem less like advertising and more like an economical way to “beat the system,” but the products are almost always fake. Usually these fake blogs appear to have been created by an “ordinary mom” to provide an aura of home-spun credibility.

A Twitter search for “teeth whitening” delivers hundreds of tweets, all linking to similar  types of “mom blogs.” Cross-checking the link stats through bit.ly show that most of them get at least a few clicks.

The product websites purport to offer you a trial of the whitening treatment for the cost of shipping only, but they typically also charge mysterious, non-refundable fees without ever shipping any product. The web is filled with complaints from consumers who sent in money and received nothing in return.

Here’s what the Better Business Bureau says about this scam:

“Complaintants report being billed as much as $79 for the free trial and are charged for several other services—such as a weight loss program.”

These teeth-whitening spam sites frequently carry “endorsements” from ABC, CNN, FOX, USA TODAY at the tops of their websites.  But if you take a closer look, you’ll see that the actual testimonials are quotes touting the ease/benefits of teeth whitening treatments in general, not the specific products advertised. Often, these websites simply use these media logos without any testimonial at all.

It’s important to note that it’s always just the logos of these companies that appear, never the name of ABC, CNN, etc. in plain text. This would make it searchable, and these media outlets could find them to pursue legal action.

The Twitter accounts posting this scam update several times a minute, often using trending topic  hashtags or specific usernames to lure more interest.

Bottom line, there does not seem to be anything legitimate about this scheme at all.  If you see anyone perpetuating this Twitter scam, my recommendation is to block and report as spam.

Tomorrow the series continues with spammers claiming to help you find “Extreme Wealth Through Twitter Followers!”

Part 1 in the series of Twitter’s Biggest Scams: Multi-level marketing

Part 3: Building wealth through Twitter follower lists

Part 4: The Trump Network

Part 5: What to do about Twitter scams

Article one of a five-part series

Have you ever wondered about those annoying followers you get on Twitter promising to whiten your teeth for free, make you rich in the Trump network, or help you attract thousands of followers?  I’ve been curious about these folks and how they could possibly make money off these spurious claims.

So, I figured if I was wondering, you might be wondering too.   Over the next few blog posts, I’ll try to lift the veil of mystery surrounding these business models. To understand many of these scams, you need to start with the basics of …

Multi-Level Marketing (MLM)

First let me be clear that there are many successful and legitimate “real-world” MLM businesses like Mary Kay, Discovery Toys, and Pampered Chef.  These business models rely on independent distributors to sell directly to their friends and families. The distributors profit from the sale of real products and from commissions for recruiting new distributors — so the more “levels,” the more profitable they are.

However, Internet MLM schemes seldom rely on the sale of a physical product or legitmate service.  Instead, the Twitter-variety MLM’s primary objective is to recruit new members, with revenue generated from the start-up and “maintenance” costs paid by new members to take part in this “can’t miss” route to riches.  The MLM pyramid scheme takes your money and then uses you to recruit other suckers distributors to send their money.

Does it work?  Obviously data on a shadowy industry like MLM is difficult to obtain, but an article from wikipedia.org opines:

“The vast majority of MLM’s are recruiting MLM’s, in which participants must recruit aggressively to profit. Based on available data from the companies themselves, the loss rate for recruiting MLM’s is approximately 99.9%; i.e., 99.9% of participants lose money after subtracting all expenses, including purchases from the company.”

Telltale signs of an MLM pyramid scheme:

1) Requirement to “invest” a large amount of money up front to become a distributor.

2) Upfront costs to buy “inventory.”

3) No mention of an actual product or service.

4) Plan designed so that you make money by recruiting new members rather than through your own sales efforts.

Another difference between these web-based pyramid schemes and the traditional Mary Kay-style MLM is that a great deal of it has become automated, which accounts for the sheer volume of annoying tweets we suffer through.   The automation tools (or “bots”)  they employ make it easier to spread their links more quickly.

In fact, there are lots of websites and even huge conventions dedicated to helping these MLM spammers find new spam-generating automation tricks for clicks.

And here’s a surprise …

People actually do click on the links.  URL services like bit.ly allow you to track the clicks of links hosted there, and if you take a look at any one of these spam messages, people are actually clicking on them. Whether they make appeals to the rough economic times or high unemployment, teeth whitening, weight loss, or whatever, there are lots of people who click, even if you and I wouldn’t.

Like you, I get strange Twitter followers almost daily wanting me to sign up for EXTREME WEALTH!  In an effort to provide a balanced report, I contacted more than a dozen of these MLM marketers for their perspective, but none of them responded to my requests.

Part 2 of this series on Twitter’s Biggest Scams:   The teeth whiteners

Part 3: Building wealth through Twitter follower lists

Part 4: The Trump Network

Part 5: What to do about Twitter scams

The Economist is one of my favorite magazines. I usually read it cover to cover. So imagine my excitement when I saw their special report this week, Social Networking: A World of Connections.

After I read the report, I concluded — to my surprise — that there was really not much new in the report. This is not a negative reflection on The Economist. I believe it’s a positive reflection on the efficiency of Twitter to stream the most important news and trends my way before they get summarized by a business periodical.

Nevertheless, there were a few interesting nuggets I wanted to pass along:

>>Follow me on Twitter signs are appearing on the doors and windows of small businesses around the world. Asurvey found that 17 percent of Britain’s small businesses were using Twitter. They saved an average of $8,000 a year by cutting out other forms of advertising.

>>  A survey of 1,400 chief information officers conducted last year by Robert Half Technology, a recruitment firm, found that only 10 percent of them gave employees full access to social media networksduring the day, and that many were blocking Facebook and Twitter altogether. The  executives’  biggest  concern was that social networking would lead to “social not-working.”  Some bosses also fretted that the sites would be used to leak sensitive corporate information.

>> An astonishing amount of time is being wasted on investigating the amount of time being wasted on social networks.  One study estimated that personal use of social networks during the working day was costing the British economy almost $2.3 billion a year in lost productivity. Another concluded that if companies banned employees from using Facebook while at work, their productivity would improve by 1.5%.

>> The magazine described Facebook’s “hacker culture.”  Their head of engineering’s motto is “move fast and break stuff.”  What matters is getting fresh products out to users quickly, even if they do not always work as intended. To generate new  ideas, they hold all-night hack-a-thons to at which engineers work on their pet projects. This Red Bull culture maybe why Facebook has just one engineer for every 1.2 million users.

>> Survey of 300,000 Twitters users showed more than half tweeted less than once every 74 days and 10 percent of all users account for 90 percent of all tweets.

>> Facebook’s audience is bigger than any TV network that has ever existed on  the  face  of  the  earth.

>>In Asia several social media companies such as Japan’s GREE, South Korea’s Cyworld and China’s Tencent, are already making healthy profits from sales of games, premium personalization options, virtual goods, and custom backgrounds.

>>Salesforce.com predicts that demand for corporate internal social networking services will riseas managers realize that they now know more about strangers on Twitter and Facebook than they do about the people in their own companies.

>>Intel estimates it has saved millions of dollars a year in fees by recruiting senior managers through LinkedIn rather  than using headhunters. US Cellular said it saved more than $1 mm last year by using a LinkedIn system that produced good candidates faster than traditional recruitment channels.

>> Social networks have made the labor market more transparentin another way too. A survey by CareerBuilder.com of  2,700 executives last year found that 45 percent of them looked at job candidates’ social network pages as part of their research, and more than a third of those had unearthed information that put them out of contention. Time to turn up those privacy settings?

Some interesting stuff!  Of these facts and trends, which jumps out for you as having an impact on the way you do business?

Illustrations: Part of The Economist report.