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.

This is the third and final (for now) personal case study on how the social web delivers unexpected business benefits. This story features LinkedIn, a powerhouse generator of business connections.  

Making connections

I’ve made some of my best business contacts through LinkedIn Group Q&A forums. One example is my relationship with Dr. Ben Hanna, now VP of Dex Interactive. In a casual response to one of my answers in a forum, he mentioned that he was documenting his company’s progress on social media marketing month by month. I thought this was fascinating and asked if I could feature him on {grow}.  This led to a number of articles which remain some of the most popular posts I’ve done.  Ben and I have continued to support each other on various web-related projects.

Human Resources 2.0

Second example of a business benefit: One of my customers was looking to hire a new technician with highly specialized skills. I suggested doing an advanced search on LinkedIn using the zip code (to narrow the location) and keywords indicating the skill set. He followed my advice, identified three viable candidates and he just hired one of them.  I helped my customer with an important personnel issue in one 60-second phone call!

New customers

Another example led to a direct business opportunity.  An account executive from GIS Planning read some of my answers on a LinkedIn Group Forum and became curious enough to click my icon, which took her to my website … which took her to my Twitter account … and my blog.  Of course I had not connected to her directly at this point but that was about to change.

After a couple of months, she called me up out of the blue: “Mr. Schaefer, I’ve been reading your comments on LinkedIn, Twitter and your blog and I’m convinced you are the voice of marketing we need for or company. Can you take on a new account?”

Well, THAT was a nice surprise!

This led to subsequent phone calls with her executive leadership and it resulted in a business partnership with GIS Planning, an amazing company that produces software for economic development institutions.  It pulled me into a whole new industry and allowed me to learn from some wonderful marketing pros.  And, it has helped my bottom line, which is what this is all about, right?

So let’s see how this real-world experience relates to my formula for creating business benefits on the social web: 

Connections + Meaningful content + Authentic helpfulness = Business benefits

• By being active on LinkedIn forums, I was building important new business connections. In the GIS case, I didn’t even realize it.
• The content Ben Hanna provided spurred dialogue and cooperation between us.  Meaningful content in the form of LinkedIn Group answers provided enough value for GIS to take action to learn more about me. Meaningful content comes in many forms!
• When I was participating in the forums, I was genuinely offering help with no intent that I would get anything out of it. Similarly, I enjoy supporting Ben’s projects becuase I always learn something and I truly believe in his vision.

I believe this formula represents the core value of the social web — providing an opportunity to use your life’s blessings to connect to others in a meaningful way. We are living in a historic moment. We are the first generation to have access to free, instantaneous, global communication.  If you use this gift well, the benefits can be astounding.

Don’t you agree?

This is the third installment of the unexpected benefits of the social web. You might enjoy these other articles:

Part 1: How to become a CMO in 10 tweets or less

Part 2: On Twitter, even casual connections can lead to business benefits

A lot of social media content elicits “rants,” “vents” and snark these days.  But today I am overwhelmed by the positive feelings flowing from the blogosphere.  Let me back up a step.

This has been a difficult couple of weeks. I have been very sick, had a string of daily technology disasters, and the perfect storm of critical customer deadlines.  By today I am exhausted.

Then this amazing thing happened.  I started getting all of these little “Follow Friday” love notes.  About every 10 minutes or so my computer would “ping” with an unsolicited little ‘atta boy. I think maybe 30 or so floated in with very touching and generous sentiments on many of them.  How did you know I needed this today?

Did you ever think we could live in a time when you could get 30 love notes from people you’ve never met? 

Even more important are the growing friendships I am developing with you. When I see your comments on my blog, tweets or Facebook posts, I get a smile on my face because I think of the special relationships I’m developing with so many people, and it has been so powerful and unexpected.

I began on Twitter eight months ago. In that time I have:

Collaborated on videos, articles and books with Rebel Brown, Ben Hanna, John Bottom, Jamie Wallace, Robin Frank, Shane Mac, Neicole Crepeau, Kimmo Linkama, Jayme Soulati, Anne Giles Clelland, Jenn Whinnem, Venessa Miemis, Nancy Scott, Rebecca Denison, Michael Winn, Jeremy Victor and Steve Farnsworth.

Started working on customer projects with Steve Dodd and Jeremy Floyd.

Donated to charitable causes with the inspiration of Danny Brown, Billy Mitchell and Kacy Maxwell.

Created a video (you’ll see it soon!) with Michelle Chmielewski.

Wrote a case study with Nathan Dube.

Provided potential new business opportunities to Trey Pennington, Nitin Gupta, Tim Knight, Stuart Mease, Lisa Foote, Michele Linn, Rebecca Renner, Christina Kerley, and Rebekkah Hilgraves.

Received new business opportunities from Nathan Egan, Lisa Worley, and Leil Lowndes.

Worked through problems on phone calls and meetings with Jason Falls, Dianna Huff, Olivier Blanchard,  Joseph Fiore, Christina Kerley, Gavin Baker, Karl Yeh, Dean Holmes, Jen McClurg-Roth, Dan Levine, Sidney Eve Matrix, Gregg Morris, Bill Sledzik, Jennifer Yeager and many others.

In less than a year, there been nearly 2,000 comments on my blog from hundreds of people.  Thank you so very much.

If you’re not on the list and we’re connected, it’s just a matter of time until we find some way to work together.  Let’s make it happen!

Thanks for making {grow} the greatest community on the social web.

P.S. I’m sorry if i missed somebody. Remind me and I’ll add you to the list!

U.S. wireless revenue is up 7.6 percent for the year led by data messaging.  It isn’t news that the wireless industry has been growing or that data has been off-setting a slowdown in voice. What is striking is that data’s contribution to growth has been accelerating through the recession, while the voice slowdown has been steepening. 

This has surprised some analysts who expected people to tighten their budgets on “discretionary” data services such as text messaging while holding on to a core service such as phone voice services.  But the opposite has happened. What’s going on here?

1. Rapid technological advancements (better devices, applicatiions and networks) are powerful drivers of growth. Growth would be even stronger without the recession.
2.  To some degree, data messaging is substituting for voice services.
3. Voice markets are maturing.
4. Alternatives like Skype has some impact on voice
5. Price competition has been severe for voice while high-end data services are still commanding a premium price.

By the way this is a U.S. trend only.  Data show messaging growth much slower in Europe, Latin America and developing countries, while voice is still growing in places such as Asia, Latin America and Eastern Europe.

If you make the leap (and I think you can) that trends in wireless data growth would also correspond to growth in social media usage, this is how the world stacks up, by approximate two-year data usage growth trends:

• U.S.              12.7%
• Asia-Pacific        10.2%
• Latin America         8.2%
• Emerging Europe     8.7%
• Emerging Asia     7.9%
• Developed Europe    5.1%

Why is Europe lagging so significantly in wireless data usage?  Wouldn’t you think the same trends would apply? Any opinions?

*Illustration: Bank of America Securities-Merrill Lynch Global Wireless Matrix database

One of my favorite thought leaders and {grow} community members is John Bottom, a director at the Base One marketing agency in London.  John and I have had an on-going dialogue about the evolution of socal media and one of his recent comments caught my attention:

The people benefiting most from Twitter right now are obviously in the information businesses.  We are all marketers here and we are sharing views and ideas because that’s what we ultimately sell. If you’re selling something more physical, you need to first create the information-surround market (or at least understand the information-surround market) before you can start to get benefit from Twitter and other social media platforms.

What I mean is that, if you sell power tools, you rely on people talking about power tools online before Twitter starts to have relevance to you – and these people are taking longer to embrace Twitter than the rest of us, because our benefits are more immediate. That doesn’t mean it won’t come, but it makes it harder for us to convince them at those marketing meetings.

In this simple statement John sums up one of the biggest obstacles facing B2B marketers.

As I look at the social media landscape, at least for small and medium businesses, he appears to be correct … at least based in my own experience.  I think there are a couple of important business implications from this simple observation:

1) About 75% of Fortune 100 companies are actively involved in social media. Some of them (Boeing, GE) are industrial B2B’s.  Small businesses can learn from them to see how their brand-builidng online strategies might parallel their own.

2) This emphasizes the importance of considering social media as just one part of an overall marketing strategy.

3) It also implies the importance of doing a customer audit as part of that strategy development.  Are your customers online? If so, where?  If not, why not?  Don’t spend money in this area if the customers aren’t there.

4) One key to a successful marketing strategy is finding meaningful points of differentiation. This does not necessarily have to be in the product or service itself. It can be in HOW the goods are marketed and sold. So if competitors are not using the social web as a marketing channel and your customers are there, this can be a wonderful opportunity.

Of course this is all predicated on an assumption that B2B customers will eventually pick up on social media. I’m wondering what the timeframe will be … I have to tell you I still see a lot of blank stares at meetings with industrial clients!  What do you think about this?  Will we see a day when a larger diversity of products will benefit from the social web?

I’ve had the great privilege of teaching a college-sponsored class on social media marketing and as usual, I’m learning more from the class than what they’ve learned from me … but that will be our little secret, OK?

As I was providing examples of how you can leverage content across various channels to increase awareness, I had to admit that I didn’t practice this very well myself.  Why?  I just don’t have the time.  

My marketing consulting practice has been very strong, and as I strive for an ideal work-life balance, something has to give.  Time spent on incremental efforts like Facebook and Twitter has to take a back seat to family and customer needs.  

This may seem like heresy from somebody who lives and breathes marketing, but I think this will be reality for more and more people.  As the economy heats up, unemployed, or under-employed, individuals spending vast amounts of time on the social web and networking will have to make new choices as they return to work.  

Here’s my hypothesis:  The growth of social media will slow as the economy improves.  And in areas where the economy is doing extremely well, social media usage may actually decline slightly.

Other possible implications:

• As people return to work, the prime activity level on social media will be more heavily-weighted to the evening hours, since many companies restrict social media usage in the workplace.
• The number of channels in which people participate will narrow. This may hasten the decline of some platforms like MySpace.
• There may even be a slight shift in advertising budgets BACK to traditional media (drive-time radio?) since access to Internet-based impressions will be limited in a workplace.  How do you see a Facebook ad when you’re working a construction job?

I believe that use of the social web will still grow overall as people and companies find clever new ways to make the underlying technologies more useful and fun. But I think it is unavoidable that an improving economy will temper this growth.  The best environment for social media growth is when people have a lot of time on their hands and a shift is in our future.  Do you agree?

Note:  In addition to some wonderful comments below, you can find a nice counterpoint perspective on Gregg Morris’s related blog post: http://bit.ly/3tQtiW

One of the reasons I’ve been such a blogging hard-ass over the issue of ROI, measurement, and social media is that I was smack in the middle of the 1990s Internet Bust and I don’t want to see responsible professionals (like you!) go through that all over again.

What caused that cataclysmic, wealth-destroying nuclear melt-down? Companies poured millions into Internet-based businesses and marketing efforts with no clear monetization plan, simply because they were afraid to be left behind. When the loan payments came due, they discovered the banks would not accept “page views” as collateral. : )

Does that sound familiar? Of course it does. That’s exactly what’s happening now.

What will keep you from falling into the next melt-down? Setting up practical, rational value measurements that are aligned with the objectives of the enterprise.

As my teacher and mentor Peter Drucker would tell us, “If you can’t measure it, you can’t manage it.” The good news is, comparatively speaking, social media is easy to measure and exciting new developments are emerging almost daily.

No matter what social media frenzy is taking hold of your organization, as a leader, you must insist on meaningful measurement and accountability. This is a DIFFICULT challenge in an environment that is so over-hyped. I actually heard one consultant say that it was “good” that a company was not asking for data on social media initiatives because it gave them a license to do whatever they wanted (and pay him to do it!). That is simply irresponsible advice … and I told him so!

In the midst of hype like that, keep your eye on business fundamentals. Be prepared to stand up and demonstrate the value of your program to your stakeholders at any time. Your initial measurement systems don’t have to be expensive, complicated, or even 100% accurate as long as they are directionally-correct and aligned with the company’s over-arching goals.

And have the courage to change. If you find that your measurement process doesn’t work, or isn’t as relevant as you hoped, tear it up and do something better! I know how disappointing it is to abandon months of now-meaningless data and those gorgeous spreadsheets, but leaders have the strength to put their own ideas aside if better ones come along. Here is the worst thing you can do to a business — consistently execute a flawed strategy! So be flexible and adjust as needed, especially as the measurement technology improves.

If you’re struggling with measurement issues, here are a few posts that might help:

The biggest lie in social media marketing
Social media ROI shock treatment
Social media impact on brand equity
The most important question to ask in social media marketing
Social media measurement is like a bartender

Let me know how it’s going for you. What measurement/political dilemmas do you face?