An article I wrote for Money Marketing magazine, first published on 9th December 2010:
Much is being written about the potential rewards of social media, but after some high-profile PR slip-ups, many are addressing the risks associated with business and employee participation in social media, particularly if you operate in regulated sectors. The first complaint that refers to a firm’s Twitter messages or Facebook page may not yet have hit the headlines but it cannot be too far away.
In a business context, social media is a communication tool that helps with conversations between a business and individuals who may or may not be customers, so it can be a promotional and a customer relationship management tool. The potential for communicating with new audiences is huge, particularly for a service sector such as IFAs where this relatively low-cost medium is a great opportunity to communicate quickly and cheaply with previously difficult to reach potential customers
The FSA has stated its rules and guidance apply in a way that is “media-neutral”, so the rules will apply to mobile phone apps and any future new media as they do to more traditional methods of communication. Issues of risk must be covered and the overall principle of “fair, clear and not misleading” applies.
All businesses need to bear in mind that characteristics of social media platforms can serve to increase risk if not managed correctly. These multipliers include immediacy of communication, the viral nature of the platforms, transparency and ability to search for conversations and the global and open nature of the communications.
On Twitter, for example, you can only message in 140 characters or fewer. Does this give you sufficient space to cover all issues? If you retweet a message from a bank’s social media profile about its new mortgage product, are you recommending that product, or do you even have space to make it clear you are not?
With increasing complexity and particularly searchability of social media, users need to realise these communications, although perhaps not designed for wider public viewing, often end up that way. Tweeting is quicker and more casual than sending an email but has a potentially wider audience and can present greater risks.
If the potential rewards of social media for IFA businesses are to be fully realised, these risks must be managed through a combination of empowering the right people within the business, training these people to appreciate the risk points and the etiquette, putting in place internal and external procedures for problem management and if you are outsourcing these services to a third party, make sure your have robust and clear terms in place.
My top tip before jumping into the social media melee is to take a step back and set clear objectives about what you want to achieve. This will allow you to determine if the time investment required and increased risk represent a good deal for your business.
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Thursday, December 23, 2010
Friday, December 10, 2010
Image: jscreationzs / FreeDigitalPhotos.net
In a previous post "Data is the new Oil" I mentioned that social media platforms and profiles are a goldmine of data for an advertiser or a business undertaking research. Users input their preferences, likes and other habitual comments all of which is valuable data to an advertiser. This may even extend to a users location on platforms like Foursquare and Gowalla.
Obviously, this data has a value and will be exploited by the platforms that collect it (that is the basis on which they provide users with a "free" service) but this will stir emotions with the users who provide the data - think Facebook and privacy settings.
With the value of data apparent and on the edge of mass exploitation, the battle lines will be drawn to protect these assets.
These battles will be between the platforms that collect and commercialise data with others that look to exploit it without being part of their revenue model. There may also be civil wars between apps for platforms where data is being extracted at no cost via APIs.
Whether copyright or database right will be the WMD of choice in battle remains to be seen and a number of questions have been recently referred to the European Court of Justice to clarify the legal protection for databases. The case is: FOOTBALL DATACO LTD & 5 ORS v (1) YAHOO! UK LTD (2) STAN JAMES (ABINGDON) LTD (3) STAN JAMES PLC (4) ENETPULSE APS (2010)
I have speculated why people (including myself) provide all this valuable data to these platforms. My view is that they provide it so that we can create content, interact with content (think youtube, pictures of Flickr and Facebook) and utilise a free communication tool. For me, the quality of the content will determine the data that I provide - ie if 'Like' something it will have to be good!
Therefore, content and data can seen to be symbiotic and equally important. Good content will drive data and in return the revenue generated should increase investment in content.
So in summary I think it is fair to say that data (filtered and distilled) is the key to monetising web £2.0 and beyond but that useful data is only generated when people interact with, and generate content.
Traditional media (if there is such a thing anymore) still produces some of the best content in the web space and they are finding that traffic is driven through social media. These organisations look well placed to increase digital revenues by exploiting content and data together.