There are interesting strides being made with social media, as companies seek to shape their own direction as well as influencing the direction and decisions of their users. Take Foursquare, for example, and its recent partnership with American Express http://nyti.ms/iC5wx3. Users that link these accounts will receive special deals at shops and restaurants they check in at. There are some definite upsides of this partnership, American Express reaching a younger demographic (Foursquare reaches the 35 and under crowd), American Express users spending more, and more people signing up for American Express cards. For Foursquare, the ROI is that this opens the door for other similar partnerships. This partnership came about through a pilot of the program run at South by Southwest music and technology conference. The results? On average, users in the program (card holders linked to Foursquare) spent 20% more than users not in the program (card users not linked to Foursquare). This definitely indicates more engagement, but what does that really mean? 20% of users spent more money on average. On average means that the majority spent more money, but not all did because the total was averaged out. Also, this was a small demographic and fails to account for other variables. Other variables would be customers own thoughts and desires before receiving the deals, plus their rationality after receiving the deals. These are tough things to measure. While the effort shows promise and indicates some type of engagement, it is indicative of most social media efforts thus far. Moving in the right direction but not quite to the point of completing the equation when it comes to ROI. Farhad Manjoo examines this same topic in his article “Does Social Media Have A Return On Investment?” while looking at a couple of other scenarios. I love social media and see it as having great potential. What I am merely saying is that its measurement metrics are still a work in progress. They are great indicators of engagement but do not directly tie social media and sales together yet. Foursquare’s American Express partnership is an example of social media in progress because it’s a mutually beneficial partnership, but measurement metrics have not advanced enough to measure its full effect.
Something else about social media that needs work, and this is more in the minority than the majority, are websites that develop methods of shaping their direction by offering rewards that do not tie in well with their identity. American Express works for Foursquare because Foursquare is all about rewarding check-ins with deals and getting customers to spend money. If they are spending money on their American Express, and getting unique deals because of that, well then it’s that much better. Wikipedia’s effort to gain more editors and develop a more loving vibe on the website seems ill-matched. Ben Parr talks about how Wikipedia is adding a love button so users can spread the love to reward good edits and updates on the site http://on.mash.to/ljX27o. While this seems like a positive idea, it’s the way they go about it that cheapens the experience. When users click on the heart button on a user page it brings up a ‘WikiLove menu’ that enables users to send things like kittens and beer to other users. First of all this sounds like a direct rip off of Facebook and their free gifts (which eventually had to be paid for in order to send them). Wikipedia’s effort seems very juvenile, it’s unoriginal, and it does not seem like a system that would attract the type of editors needed to improve its content. I do agree with their graph analysis that indicates something must be done about the negativity, but I do not think this is the way to go about it. This is an example of social media in progress because some sites are still developing their own identity. Ok, I’ll admit it. The title for this entry is a double entendre. While I have been discussing how social media is making strides, at the same time I am indicating that it is still a developing medium. I think that is an acknowledged fact and I don’t believe that anyone would say social media has arrived and has all of the answers yet. In time, I believe it will improve and paint a more complete picture of the effect it has now and will have in the future. Social media can be a useful tool, and will only increase in the analysis and development of measuring its ROI.