Twitter's Field of Dreams

[canadiansk-blog]

Credit where credit is due.

So I'll be honest - I started out very skeptical of social media. I felt like I was too old to ever have to use Twitter. I complained flagrantly about the impossibility of creating value in a message under 140 characters long. 

After taking Social Media & Entrepreneurship, I guess I have to admit my attitude has changed. I may not be a frequent tweeter, or have any desire to check-in anywhere, but I can say, that I now see the use of Social Media channels, as an essential component of any company's marketing strategy. More importantly, social media will actually very fundamentally alter the way companies interact with their customers, and the public at large. With over 500MM facebook users, 126MM blogs, 2Bn+ Tweets each year, social media outlets are fundamentally changing both the way companies reach out to their customers but also provides them with a much more content rich vehicle to do so. And while I believe this change will require greater investment in employees to manage all of these different social media channels, it also has a significant impact on the cost of marketing their products and services to customers. As we can see below, the greater the number of blog posts a company develops has a direct correlation with the number of leads they generate. This means, companies will need to add headcount to ensure they have individuals to generate content for these social media outlets. Furthermore, these tools provide real-time feedback about customer sentiments about their products. 

In fact, we are now starting to see hard data about the lead generation and customer acquisition that can be driven using social media resources. In fact, we're seeing that across the most popular channels (FB, twitter, blogs, and LinkedIn) a minimum of 40% of companies have already started to employ these tools as a way to market their products to customers. 40%! that's nearing the majority. And i'm sure that all new companies will actually use these tools as a method to significantly reduce customer acquisition costs. I'm part of the Entrepreneurial Greenhouse Program and there's no question that many students actually reduce the overall customer acquisition cost as a result of using social media tools to reach their customers. A commercial during the superbowl costs a couple million bucks and last about a minute, a daily blogpost, or Tweet costs nothing, and can provide the audience with significantly more information and content. In fact, one can argue that these vehicles allow companies to create richer content for their customer, and provide seamless access to purchase their products. 

Now - let's not go crazy. I'm not going to start Tweeting regularly, nor will anyone ever see me Check In anywhere, ever. But, I'll at least admit my eyes have been opened to the unique value social media provides. 

@CanadianSK

[canadiansk-blog]

Twitter - The Spectator Sport

A "Field of Dreams" idea in business refers to a business or idea where a company develops a product or service they believe will attract a very large user base without any concern for how the company will generate revenue. The belief being that they do not need to focus on perfecting the revenue generation model, because they will acquire such a large customer base, money will never be an issue. 

If you build it... they will come!

Twitter went out and built a new platform for communication. And people did come. In fact, it is estimated that Twitter will reach 200MM users by the end of 2011. A lot of people came.

Having just recently joined Twitter (my 4 followers is a testament to this fact), I have observed that while millions of people signed up for the service, they "came" to watch, not to play. In fact, 50% of tweets come from 0.05% of users, meaning that certain twitter accounts ("the players") generate an overwhelming majority of tweets - most users joining the service, only to observe and read what other have to say.

When I joined Twitter, I started following 15 different users. The scope of accounts I followed ranged from industry experts (@JackWelch) to interesting media outlets, I was accustomed to checking at least a few times each day (@TheOnion, @NewYorkTime, @CNN, etc.).

The problem is that those few users who generate content, generate so much content that their tweets act more as SPAM messages than any form of useful content. To continue the analogy, "the players" play so often, that no one wants to watch them play. In fact, over the course of my membership with Twitter, I have un-followed all but 2 of the individuals I followed. In fact, I was so turned off with the frequency with which the New York Times and The Onion sent me tweets, that I not only stopped following them, but I lost my desire to view their online articles. It was if Twitter removed my ability to decide which content I wanted to view, and when I wanted to view it. 

It is not secret that Twitter is in the process of trying to monetize their user base. When I look at the fact that so few users actually proactively engage in the product (unlike Facebook) it seems highly unclear how the service will manage to generate income. 

@CanadianSK