“90% of this game is half-mental.”
- Yogi Berra
The same applies for creating and capturing value for social media. It’s a constant Jedi mind trick. It requires multiple mindsets and the ability to combine ideas from many disciplines within an organization. However, many companies are failing to connect the dots while they let various business functions take ownership without direction. Even worse, we’ve been told for years by the social media mavens, ninjas, rockstars, or whatever the hell you want to call them, that everyone within an organization should own social media.
Um, okay. So, that means everyone in Brooklyn owns the Brooklyn Bridge. I just polled all of Carrot Creative and they’d like to sell their stake in the Brooklyn Bridge. Unfortunately, you encounter what economists call the tragedy of commons.
If everyone owns something, no one does. No one has an incentive to protect and maintain the value of the asset in question. Think public toilet. Species become extinct because no one owns them, such as the American Buffalo; species thrive—such as dogs, cats, and cattle—because they are privately owned.
I’d bet everything I have that McDonald’s isn’t going to let cows become extinct anytime soon.
The same can be said for marketing, specifically social media. You can bet that until social media is elevated to the executive level, it wont receive the resources and alignment with overall corporate strategy it deserves. A McKinsey & Company study conducted a couple of years ago revealed that marketing is poorly linked to corporate strategy. Of the thirty large U.S. based companies surveyed, more than one-third reported their boards spent less than 10% of their time on marketing and customer-related issues. If a company can’t understand the value it’s creating with its social media marketing efforts, let alone marketing efforts, it’ll perform a poor job of communicating it to its employees, key stakeholders, and customers.
Over the years, we’ve been fortunate enough to have had the opportunity to work with and pitch potential work for household name brands. What they do have in common is that the main business function driving social within their company varies greatly. They have ranged from product development, IT, e-commerce, marketing, communications, and HR (just to name a few). The scale of seniority has ranged from the CMO of GE to the Publicity Assistant of ConAgra. We’ve started to see a shift from previous years of working with younger-aged people within an organization, due to their assumed inherent understanding of social, to a more senior level of leadership. The generational gaps in the understanding of technologies has caused initial apprehensiveness, but now, there’s certainly more buy-in for social from a marketing executive level then there has ever been before.
During a recent Internet Week event, a PepsiCo executive stated that 50% of the marketing budget should be spent on social media. Of course, that’s wishful thinking. However, this still doesn’t answer the value proposition question of what social means to a company. Board members and high-level executives know what they’re getting when it comes to TV, radio, and print—or do they really? When it comes to Facebook, Twitter, and YouTube, they have limited to no understanding. These key stakeholders must fundamentally understand that advertising is moving toward content. If you make something that people want to experience and share, you wont have to rely on marketing that interrupts people.
Now, more than ever, brands must take a holistic approach with paid, earned, and owned media. What’s been lacking is a strategic understanding of what all of this means from an ROI perspective. Don’t just focus on gaining Likes or how to game the EdgeRank algorithm. Rather, it’s about empowering the right members of an organization, instead of everybody. If we take a 30,000 foot view of the state of the situation, we see a social media value chain starting to form within organizations:
- Customers create value.
- Stakeholders (e.g. Marketing Manager) assign value.
- Ownership (e.g. CEO, Board) grants value.
By incorporating social media into corporate-level strategy and its core business objectives, a brand can enrich and enlighten its pursuit of profit.
