by Adrian Chan and Andreas Weigend
This post has been translated into German (GDI Impuls 2/2010), Spanish, and Chinese (simplified).
The social data revolution
We live in an age in which social data has become the air we live and breathe. As individuals, our actions, preferences, habits, and even friendships, leave behind a wake of data. Not only data about us, but data that captures our communication and connections. Even our conversations are now data. Conversations that can be captured, stored, and re-distributed as data. Data that connects to us, and is shared with companies and brands with whom we have relationships. Like it or not, the social data revolution is the new business environment. Smart analysis of this social data demands a new mindset.
Business in this new environment has already been profoundly affected by the new datascape. Adaptation is an imperative. But for those who will do more than survive and actually thrive in this environment, the question is not one of adaptation. It is a matter of how best to respond to the world of social data, how to metabolize it, and incorporate it as if it belonged to the very company DNA.
If social data powers the new business ecosystem, then we must ask how it affects company fortunes. The business climate today is tough. It is highly competitive, customers have more choices than ever before, and loyalty is fickle, if it exists at all. Power has moved to the consumer side of the equation. Purchases and consumer power are no longer a matter of branding and brand image, but a matter of customer choice and decision-making. Consumers drive company fortunes today, and they do so with the help of an open marketplace that is overflowing with information. Consumers are empowered by their knowledge.
If we live in an era of social data, it is in part confirmation that the original age of information is behind us. Our technologies have evolved, and with this evolution, what we know and how we know it have changed. Where in the past we produced information, we now produce communication. The history of the information age began with information processing. It continued with machine connectivity, and then document connectivity. Today, it is not only machines and documents that are connected, but people. Information alone may be informative, good for discrete transactions and closed systems. Today, it is conversational, deeply relational, and open.
The era of social data era is marked by a self-empowered consumer, and a consumption-empowered Self. Self, not society, is the new social construct. So the individual today is no longer simply a reflection of social currents and trends, a walking manifesto of cultural forces or a tidy representative of social norms and values.
The self is not an externally-constructed identity, a reflection of social forces, but is a self-constructed identity. The Self of today discloses, shares, contributes, and creates. The value produced by the individual today is visible, is public, is social, and conversational.
Society may be made up of individuals, but the great paradigm shift in consumer trends today is not manifest in the steady march of consumers falling in line with mainstream trends. Individuals are not socialized. Society is now individualized.
Social data is data socialized
The consumer is empowered by the knowledge with which to make his or her own decisions, to share them with friends, and become a public and social identity through them. In sharing, today’s consumers validate their social relevance and capture the attention of friends and peers. These and other efforts facilitated by the use of social media center on the individual. Social data is not data about the social. It is data socialized. Data that may represent social interests, but always starting as individual selections and interests. Data become social through actions and choices shared across social connections.
Brands, businesses, and institutions no longer control their own markets or messaging. They are not even in control of their brand image. All of these belong to and are defined increasingly by the consumer. For the consumer knows as much as he or she needs to know about the brand already. And connected communities know more about company products than many companies do themselves.
GetSatisfaction is an example of a site that handles customer feedback, comments, and questions. It is a site on which consumers tell brands what to do to improve and repair their products, reputations, and even their values. It is an example of how power has shifted to the consumer – for on GetSatisfaction, reputation has moved to the medium.
Transactions that used to entail a high cost of production and distribution, both of products and information, now take place over a medium that is virtually frictionless. We could say that where physical transactions used to distribute consumer media, consumer media today conduct transactions. Social media are the production and distribution of brand image, messaging, of product, and even its consumption.
In the age of social data, the distance between production and consumption collapses because both occur in the same place: online. Music is discovered, purchased, played, and recommended, all in the same place. Television, movies, and videos are discovered, rented, viewed, and shared in the same place. Content is also consumed in more places than in the past, when sound and image were bound to the physical medium on which they were pressed.
We might say that media today are media of transactions, and mean it as a metaphor. But we mean it literally and very concretely indeed. Media that in the past were the physical storage of content mass produced and consumed compete today with an entirely new mode of mediation. Social media not only capture and transmit content, but mediate the social connections along which it is so often distributed. The medium is not only the message. It is the messenger, too.
Content today can be consumed immediately after its production. This is one source of the transformative power over which social media presides. Note that we say “immediately.” Content available immediately is content already here – delivery is not an obstacle. Mediated transactions provide immediacy: what we want, when we want it, here, and now.
Attention is interest
Of course not all consumption occurs online. But even offline, the social data revolution is driving a transformation. Because what the consumer wants, starts not with your brand or its image, your products or their utility, but with the interests that frame the consumer’s decision-making. If it is said that social media create an attention economy, it is because consumers pay attention to what interests them. They pay for the brand experience with their attention, and on terms that are theirs alone to negotiate.
Consumers have the choice, and the consumer is always right. Interest and attention precede the discovery, precede the comparison, the sale, and the relationship. All of these are anchored in the consumer and the consuming Self: interested, engaged, rational, irrational. But most importantly to us, connected.
What matters to today’s consumer is this freedom of self-determination. An ethos of choice, and an ethic of freedom, for an age in which companies no longer drive their markets. Consumers do the driving. Companies today are driven by customer demands, expressed through social data. This is to say that the enormous power harnessed by connecting machines to machines, documents to documents, and people to people – in short, the socialization of data – now presents us with an indisputable paradigm shift.
Everything changes: the consumer produces, impressions express intentions, brand image has become talk, segments are individuals, communication is listening, sales is service, and transactions are conversation.
The relational economy
At the heart of the social data revolution is the relation. For the new rules of the social data economy are relational. Data in the social age does not just capture value, it captures a relation. By its connections with the intentions, attention, and conversations through which it is shared and distributed, data has is socially connected.
Companies did not bring this about, consumers did. Consumers chose to share, to connect, and to communicate. And on this basis, we can say that the relational economy is the choice of consumers to express themselves not as market segments, but as individuals.
In the relational economy, relations that matter to consumers express interests. Social data captures the interests consumers relate to. Interested, engaged, and knowledgeable consumers relate to what they want, what they like, and what their friends like. They relate because it is through communication and shared connections that they build and maintain relationships.
If an individual wants to share his or her credit card purchases through a site like Blippy, then this is not because they are just a fanatic for sharing data. It is because in sharing data, and in socializing it, they relate. Atomic actions, perhaps, in the form of discrete purchases and transactions. But atomic actions with the valence of social bonding. No company will be as smart at designing the relational bonds among products and brands that matter to a consumer, as the individual consumer is in expressing those relations in the first place.
Consumers disclose their interests and relate their preferences in actions captured in realtime. Forty-thousand tweets per minute, half a million items on Facebook, four million searches on Google. At a rate that doubles every one and a half years, consumers produce enough data about themselves to soon dwarf everything that has until now been so carefully studied by marketers, analysts, and researchers. The bullhorn has flipped, and if there’s any marketing message worth paying attention to, it is the one bellowed by the connected consumer.
The new mode of production
Conversation is the new marketing. Markets are no longer made by the brand, around brand image, and by means of brand messaging. Markets are made by consumers, through their connections, and interests as related in conversation. Distribution through conversation is the new mode of production.
Markets do not make conversation, conversation makes markets. Again, the social data revolution inverts and reverses the relationship of brand and consumer, placing the burden now on brands to behave transparently, honestly, and on terms that interest the consumer. To this end, we encourage brands to listen. To listen to what consumers have to tell them, and to get engaged with what consumers are saying to each other.
It used to be the case that brands had to struggle to supply consumers with information. But the coming age of the internet practically erased the cost of communication. What was once scarce – information – is now available in surplus. Through online access, a vast web of product names, sites, pages, reviews, and other searchable results, consumers face little difficulty learning about the products that meet their needs and interests.
The new marketing, then, listens to the conversations in which consumers express and share their interests through social data. It listens not just for mentions of itself, hoping to see itself and its brand reflected in the consumer. It listens to what consumers share about themselves, in how consumers brand themselves and their identities. The new marketing recognizes the power in helping consumers see themselves reflected in the brand. This is not about image, it’s about interaction. For consumers will recognize themselves in brands that repay their attention and reciprocate their interest.
The social graph and the many sites that tie into it are where much of this interaction is possible. Examples are numerous, from Facebook Connect and its new Open Graph, to twitter, realtime search and more. All of these point to an ever-expanding distributed conversation. One in which the mode of distribution is friends talking to their friends, and brand engagement is mutual, genuine, and reciprocal.
This is not just a matter of the eyeballs having turned from one screen, the TV, to another. It’s not just a matter of changing medium – it’s about talking now instead of looking. And this is new, even still, to many brands. Of course brands like to see themselves mentioned and reflected in consumer opinion. But then so, too, do consumers. Consumers are the new brands, and they do their branding in person. Conversation is the highest form of shared value, individually produced, and mutually engaging.
Conversation is the new marketing because it is the right way to engage with the medium. Indeed, social media carry so much conversation that it is the consumer’s attention that presents the new bottleneck. We have left the old paradigm, in which information presented the bottleneck for its scarcity and unavailability – a problem now solved by search. Today’s paradigm is marked by the scarcity of consumer attention. So much information is now available, in the form of blogs, comments, reviews, recommendations, status messages, and tweets, that the greatest challenge facing the marketer is capturing the consumer’s attention.
Consumers do the branding
When conversation replaces image-making and messaging as the new marketing, old techniques of market segmentation and targeting fall by the wayside. Communication becomes relational. Social networks and online social spaces, including those carved out by streaming applications for status and short messaging, replace display spaces and screens. Marcom and online social interaction are fundamentally different. They engage consumers by means of the interests that consumers take up in brands and companies. Products valued not just for image or function, but for the values expressed by the companies that make them.
In any marketplace, sharing is of the essence. Sharing builds relations that communicate to friends and across social circles. Shared values, interests, and pastimes spark and engender conversations that are more meaningful to consumers than at any time in the past. Because what consumers share is always within a context that is relevant to them, through a medium that has become a daily habit, and at a time when it counts. Consumers create conversation around their tastes and interests that is rich in social utility. The ways that consumers identify themselves in their talk weaves a web of personal and social interests in which the relationships in data can be deeply human and meaningful.
It is the brand that now wants to be seen in the proximity of the consumer, not the consumer who desires to identify with the brand. The social self is now so self-constructed and socially connected that consumers expect to see themselves reflected in the brands they relate to. Consumers make brands in their own image, revealing this in their own words and interests. Brands that adopt a conversational approach to marketing will benefit from this shift the most. For it is then that brands can best anticipate, respond to, and engage with consumers.
The relational economy comes to life across the many screens and through the many channels that social media make available today. At the present time, mobile devices promise perhaps the greatest set of new opportunities. Mobile devices belong firmly in the hands of the consumer, and involve deeply personal and habitual uses and practices. They are the closest to the consumer and provide honest and accurate social data. Increasingly, this data tells us where a consumer is, and what he or she is doing, and sometimes even with whom. Conversations held in public and across services like Foursquare will soon unfold across and around Facebook and twitter.
Join the revolution
With the participation of savvy merchants and brands, consumers embrace deals and offers that they receive dynamically, socially, and situationally. Situational awareness in fact represents an entirely new frontier to the socialized brand. For it provides the opportunity for the salesperson to greet consumers before they have even stepped into the store. Street-aware marketing, not on the basis of the guerrilla tactics of past viral agencies, but using relational and personal sensibility. Imagine a day when marketing may not have to approach the consumer, because it will instead be able to anticipate the consumer’s approach. Many consumers may willingly disclose that they are on their way, with products on their mind, and with a little company from their friends.
If service is the new sales, helping customers serve themselves is the new customer service. With social media today providing consumers the means to get their satisfaction, brands are realizing that the new consumer not only helps him or herself, but helps others, too. Service is leaving the call center and joining the web, driven not by corporate headquarters, but by consumers themselves. Service of this kind happens whether you like it or not, for it is in helping others that proactive consumers find their motivation. Smart brands will connect these consumers, will listen in, and provide expertise when needed and gratitude when it is not.
Mobile devices will bridge the digital divide between off and online, providing a view of the customer rich in dynamic perspectives onto their interests and interactions. In such a realtime environment, the challenge of social data becomes not one of how to obtain it, but of how to extract meaning from it. Yesterday was the best time to start learning from this data. Today is too late, and tomorrow will belong to your competitors. Data sourcing and measurement, data analysis and metrics, these are the new marketplace. Success will come to those companies that have learned how to use it.
So join the social data revolution. This one, for sure, will not be televised.
Andreas Weigend is former Chief Scientist at Amazon.com, and teaches at Stanford and UC Berkeley.
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