My Interview with E-Commerce Times on Social Media Outsourcing
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I was interviewed by Ned Madden of E-Commerce Times recently for a story on social media outsourcing.
I have earlier written that social media outsourcing is the next big business opportunity for India and may already be leading the third wave of Indian outsourcing.
Here is the full text of the first part of the E-Commerce Times story –
Social Media Outsourcing, Part 1: Choosing an Image Maker
By Ned Madden
E-Commerce Times
12/10/08 8:00 AM PTLike it or not, your enterprise is being talked about extensively in media in which you wield very little control. Customers and potential customers are communicating via social media like wikis, forums, blogs, newsgroups and message boards. Joining the conversation may be worth your while — but who to put in charge is not a decision to be taken lightly.
The familiar social media paradigm of “Listen … Learn … Engage … Earn” has a correlative imperative: “Publish or Perish,” and enterprises probably need to find someone else to do the job for them. But be really careful about whom you select.
I’ve covered the specifics of B2B digital media relations and social media marketing in previous articles. Enterprises can set up corporate Web sites and microsites and push out multimedia news releases, articles, webinars, webcasts, podcasts, corporate blogs, RSS feeds and more. They can listen in on user-generated professional and personal blogs, wikis, Internet forums, newsgroups, message boards, bookmarking and detractor sites created by customers, critics and the world at large who’ve fashioned an online counter-reality for a company.
But just who will do the actual work on a day-to-day basis?
“Most large companies simply do not have the bandwidth to handle social media interactions themselves, especially social media monitoring and B2C community management,” Gaurav Mishra told the E-Commerce Times. Mishra is the Yahoo (Nasdaq: YHOO) Fellow in Residence at Georgetown University’s Institute for the Study of Diplomacy. “Also, most companies don’t have the skill set to design, code and run a social media marketing campaign. So most of them will outsource these functions in one form or another.”
The challenge to the enterprise is in keeping track of the myriad details involved in utilizing all of these social media tools while controlling the process. The incessant demands for attention and action in social media outreach require a company to make significant commitments of time and money.
By 2013, according to Forrester Research, businesses will be spending almost US$4.6 billion on Web 2.0 tools — advanced Internet technology and applications like blogs, wikis, RSS and social bookmarking that promotes greater collaboration among Internet users, content providers and enterprises. In an April 2008 report, the research group forecast 43 percent annual growth in the social media market for so-called Enterprise 2.0, as organizations invest particularly heavily in social networks. The report includes survey results that suggest the world’s biggest companies are the most interested in adopting the new technologies, with 51 percent of firms employing over 20,000 staffers either buying or considering buying Web 2.0 tools. The smallest firms showed the least interest, with just 33 percent of those under 100 employees either deciding to or thinking about purchasing Web 2.0 technologies.
Joining the social media marketing stampede now seems a nearly unavoidable business necessity. However, just whom should a company have do all the site building, optimizing, networking, publishing, sharing, linking, interacting, reaching out and monitoring required to implement an effective social media marketing program? Perhaps on-staff resources are available to handle the assignment, but outsourcing social media marketing, or at least portions of it, is the only realistic solution to covering the innumerable tasks that need to be performed on a regular basis. Whether a company chooses to outsource the job to offsite freelancers or social media marketing services firms, in order to avoid wasting time and money, management needs to be very clear with all concerned as to just what they want to accomplish.
Social Media Outsourcing
Outsourcing is a business arrangement in which one company provides for another company services that could also be or usually have been provided in-house. Social media outsourcing is a form of business process outsourcing (BPO), the contracting of a specific business task (e.g., payroll), to a third-party service provider. Generally, BPO is implemented as a cost-saving measure for tasks that a company requires but does not depend upon to maintain its position in the marketplace.
BPO is often divided into two categories. “Back office” outsourcing includes internal business functions such as billing or purchasing. “Front office” outsourcing includes customer-related services such as marketing, tech support … and social media optimization and outreach.
The goals of a social media marketing program are familiar: Establish the company as an industry leader, protect the brand, inspire customer loyalty and repeat business, boost traffic to the Web site, boost sales, etc. The key questions: Should the company outsource its social media marketing work, and can the chosen outsourced service provider deliver on its promises?
Indeed, go ahead and outsource social media functions, said Frank Casale, founder and CEO of The Outsourcing Institute.
“Social media is no different from any function under consideration for outsourcing — you need to run down a checklist,” he told the E-Commerce Times. “First, is it a core company competency? Most businesses would say that social media marketing is not core. Then, is it complex, is it rapidly evolving and changing? Yes, certainly. Next, do the skill sets and resources to do the job exist in-house? In most cases, no, they do not. Therefore, does an array of individuals or organizations exist out there in the marketplace that can deliver this service professionally? Yes. So we will quickly see that social media is an ideal client for outsourcing. The pros — the fast time to market — is significant. With the right individual or organization providing the service, a company can have an effective social media marketing campaign up and running in 30 days or less.”
Choosing the Right Service Provider
As for choosing a service provider, do your due diligence, advises Andrew C. Frank, a research VP for Gartner (NYSE: IT) Media Industry Advisory Services. “In my opinion, the most important issue to keep in mind when sourcing or staffing a social media marketing program is, does my partner have a demonstrated deep understanding of the community we’re addressing and how to communicate with them?” he told the E-Commerce Times.
Care and caution are required in the selection process, concurred Jeremy Epstein, a self-described “marketing navigator for the attention economy” at his Jer979.com blog, a WOM/social media consultant at Johnson & Johnson and a new media blogger at ignitingtherevolution.com. Epstein sees social media marketing as part of what he calls “community-driven marketing.”
“Be careful about whom you select to do this,” Epstein told the E-Commerce Times. “It’s hard to entrust your brand and relationships to someone who doesn’t eat, drink and sleep social media. The decision about who to have do the work — and it is definitely hard work — is less about money and more about the time and commitment it will take to do it correctly. No matter who is tasked to do it, they’re going to have to roll up their sleeves and put things on people’s blogs. The main thing is that, before thinking about outsourcing social media, be sure that you first figure it out for yourself. Otherwise you won’t know if you’re getting what you really want and need.”
Coordinating Role for Communicators
The boom in demand for outsourced social media marketing services has proven to be a timely boon to marketing, advertising and public relations agencies and communications consultants struggling during an economic downturn. The corporate rush to optimize social media has produced a demand for specialized marketing services that traditional communications specialists are eager to step up and satisfy.
Earthbound Media Group (EMG) is an Irvine, Calif.-based strategic marketing agency that offers a full plate of new media services. “Outsourcing the execution of this highly sensitive tactic carries risk because your company or product’s reputation is on the line,” said Blaine Behringer, EMG COO and managing partner. “This is why partnering with a firm who takes the time to wholly understand up front the range of social media channels as well your audience is especially crucial to the success of an initiative like this,” he told the E-Commerce Times.
Behringer’s EMG partner Damien Navarro emphasized appraising a prospective outsourcing service provider by starting with the basic approach they advocate.
“Before making any recommendations, a good agency will always as the first step want to evaluate what a client is currently doing in the online space as well as what their audience is involved in and responding well to,” he told the E-Commerce Times. “The goal is still to always to find the most efficient way to capture a target audience at [the] lowest possible cost to achieve the highest impact.”
Tom Formeski from Silicon Valley Watcher makes a point that PR firms that sell social media services should also have a blog of their own.
For measuring return on investment, rely on a sound set of metrics, according to Ralph Rodheim of Rodheim Marketing Group, a marketing, advertising and public relations agency based in Costa Mesa, Calif.
“You want to know things like the amount of social bookmarks received, customer comments and feedback, comments added to your blog, the number of new links secured by social media marketing, what blogs, forums, etc., are talking about you,” he told the E-Commerce Times. “Indicators should be set to measure social media success by factors such as engagement — the average time spent on a Website; interest — the number of downloads; and conversion — the number of sign-ups for an offer.”
Social media services agencies typically charge on a monthly retainer or fee-for-service basis. Independent social media specialists typically provide their consulting services on an hourly or flat-rate basis.
Stay tuned for Part 2.
Here is the full text of the second part of the E-Commerce Times story –
Social Media Outsourcing, Part 2: Weighing Risks and Rewards
By Ned Madden
E-Commerce Times
12/17/08 8:00 AM PTYour customers are talking about you — you might as well have a word in the conversation. Once you’ve committed to doing so, decisions must be made as to which tasks to outsource to whom, and what, if any, third-party vendor should be brought on board. Even if you do everything right, results may still vary widely.
Part 1 of this two-part series discusses the importance of choosing the right partner when considering whether to outsource social media tasks. Part 2 focuses on vendors, risks and outcomes.
Social media outsourcing will be the next big business opportunity for India after business process outsourcing (BPO) and knowledge process outsourcing (KPO), contends Gaurav Mishra, Yahoo (Nasdaq: YHOO) fellow in residence at Georgetown University’s Institute for the Study of Diplomacy (and serious social media blogger at http://www.gauravonomics.com/blog).
“Some functions are best handled by a local U.S., agency while some others like social media monitoring and B2C (business to consumer) community management are best outsourced to a low-cost country like India,” Mishra told the E-Commerce Times.
“Local, domestic U.S. expertise and relationships will continue to be important for consulting and parts of insight delivery like client interaction and solution delivery — design and B2B (business to business) community management,” he said.
But man-hour intensive parts of the social media delivery process, like data mining (basically content tagging), and parts of data analysis and parts of solution transmittal (coding and B2C community management) will be outsourced to “countries that have a low-cost, Web-savvy workforce with a good understanding of the language,” he said.
Be Careful
“Because social media is about building an online reputation and becoming an authority amongst the people you are trying to reach, it is all about a service provider clearly and comprehensively understanding the client and their audience before taking tactical steps,” said Brandon Reiser, lead online marketing analyst for Earthbound Media Group (EMG), an Irvine, Calif.-based strategic marketing agency.
“If you’re going to outsource your social media marketing to an offshore company — just like a domestic one — you’d better make sure your agency understands what you are trying to achieve in regards to your message,” Reiser told the E-Commerce Times. “People in social media channels are pretty hip to technology and they are going to smell out someone who has ulterior motives pretty easily.”
Andrew C. Frank is a research VP for Gartner (NYSE: IT) Media Industry Advisory Services. “Offshoring is appropriate if your needs are to develop or test applications that are well specified,” he said. “There may also be parts of the process that can be put into offshore managed services once they’re well understood.”
“But engaging with social media is a fluid and sometimes volatile process that requires strong communication skills and cultural sensitivity, both between you and your marketing partners and with your communities,” Frank told the E-Commerce Times. “Keep in mind that social media relations are human relationships, not static communications, and the stakes of getting it wrong can be quite high.”
The choice of outsourcing onshore or offshore is never “black and white,” said social media consultant Jeremy Epstein.
“Going offshore may mean spending less money, but there’s always a quality issue,” he told the E-Commerce Times. “A company has to make a commitment to building customer relations no matter where the service provider is located. If they don’t make that commitment, then it doesn’t really matter what service costs, it won’t succeed.”
Software and Technology Platforms
An extensive collaboration and social media technology platform marketplace has arisen in response to growing demand in the nascent social media marketing space. Leading examples of companies include:
Socialtext: In the enterprise social software segment, Socialtext, (Palo Alto, Calif.) provides hosted and appliance-based solutions to more than 4,000 customers worldwide, including BASF, Boston College, CondeNet, Epitaph Records, Humana, IKEA, Intel, MicroStrategy (Nasdaq: MSTR) , MWW Group, Nokia, Ogilvy, SAP, Sunguard, Symantec, USA Today and The Washington Post. Socialtext’s flagship product, Socialtext Workspace, is the foundation of its social software platform.
Jive Software: Clearspace and Clearspace Community, Jive’s flagship products, are used by more than 2,500 customers worldwide, including more than 15 percent of the Fortune 500. The Portland, Ore.-based Jive’s products combine content creation tools with community-driven intelligence software.
Powered: Austin-based Powered promises to provide a way for large brands to use social marketing to drive sales, build brand loyalty, gain insights into consumer attitudes and buying behavior and deliver a high return on investment. Powered works with HP, iVillage, Motorola, Radio Shack, Sony and assorted manufacturers, retailers, media properties and Web publishers.
KickApps: Based in New York, KickApps provides a hosted platform for creating social networks and adding social software features, programmable video players and widgets to Web sites. According to the company, more than 27,000 sites use KickApps, including major media companies like ABC Family, the BBC, the CW and Scripps Networks along with a variety of niche Web sites. KickApps is a hosted platform that provides Web site developers and publishers with a range of social media programs designed to accelerate deployment of user-generated content, media management and sharing, profiles and webcam applications.
Awareness: Formerly known as “iUpload,” the Waltham, Mass.-based vendor builds online communities for companies that want to leverage social media marketing to engage with their customers, build their brand and increase revenues. Awareness works with brands like Kodak, McDonald’s, Procter and Gamble, Marriott and Hershey’s to transform their marketing and create deeper relationships with customers. The Awareness solution features an on-demand Social Media Marketing Platform that combines user-generated content and social networking with security and control. Along with the platform, Awareness also provides clients with strategic guidance, best practices and expert services to design, implement and manage social communities.
Awareness is an interesting example of the dynamic collaboration and social media technology space. “Awareness has a good track record among large organizations, using its products for customer communities, extranet collaboration and, to a lesser extent, for internal deployments (to support communities of interest, for example). There is some integration with other workplace applications,” according to Gartner Research’s 2007 Magic Quadrant for Team Collaboration and Social Software. Cautions in the report include: “Hosted-only availability will limit its appeal. There is limited ability to execute due to its small size, with about 25 employees, and no significant activities outside the U.S.”“The founding principle driving social media marketing and the technologies that support it is that people want to hear from people” said Eric Schurr, the Awareness VP of marketing and direct sales. “People trust friends and family more than they trust industry or corporate experts. People have a voice and they want to be heard.”
Awareness primarily builds online communities, which come in different shapes and sizes matched to the client’s business goal, according to Schurr.
“When you invest in social media marketing technology, you have to keep in mind your business goal and what you’re trying to achieve, then make that goal manifest in the campaign,” he told the E-Commerce Times. “Mostly, companies want engage in a two-way dialogue with their market. We recommend that they pick a solution/offering that allows them to achieve the immediate goal and then to scale it, because business goals will change quickly and you do not want get stuck in a dead-end strategy with dead-end technology.”
Risks Come with the Rewards
There are many potential technical risks associated with outsourcing social media to a third-party platform, according to Outsourcing Institute CEO Frank Casale. One large concern is the real or perceived vulnerability of customer marketplace intelligence residing in databases hosted on remote third-party servers.
“It comes down to how comfortable a company is in believing that this customer data will not somehow be exploited,” he told the E-Commerce Times.
When it comes to technology for a social media marketing initiative, Casale recommends a four-step process.
“Step one, hire your expert,” he said. “I wouldn’t necessarily pick a social media expert because their range of expertise might not be wide enough, unless it’s an SMM expert who understands general marketing applications. Step two, define the strategy that is going to be driven by the expert. Step three, select the technology. Step four, go.”
The platform of choice follows the marketing strategy, according to EMG’s Reiser. “We’ve found you have to immerse yourself in a number of channels to varying degrees for a long time before you see results. And the channel or application used is completely dependent on the audience the client wants to reach. If we’re trying to reach life insurance salespeople, we’re likely not going to recommend Twitter as a key part of the mix.”
The very nature of the Web itself precludes an over-reliance on any single technology solution, according to Georgetown Yahoo Fellow Mishra.
“Companies may build a proprietary social network using KickApps or Ning or even Drupal as part of their social media strategy,” he said. “However, the conversations about companies will remain distributed all over the Web, and the proprietary social network will (and should) remain only a small part of the company’s social media strategy.”
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], i have received many times news, beta service invitation .etc. from CEO’s, CTO’s directly to blog upon.
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jeremy 2:35 pm on December 11, 2008 Permalink |
Great to connect through the article! nice blog, man. I’ll be reading more.
Jim Edwards 7:46 pm on December 11, 2008 Permalink |
Social media is changing the rules, that’s for sure. Today, you can leverage dozens of other website to get buzz about your venture started. But when people speak about your organization, they can say good or bad things. The trick is to keep an ongoing flow of positive comments coming, diluting any negative remarks that surface along the way.
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If you might be interested, you can click on my name to watch a video with all the details.