Every Brand needs a Social Network

[Thomas Power]

Brands face a difficult choice.

Social Networking is exploding worldwide.

Brands can ignore them.

Brands can integrate with them (Toyota Scion and Second Life, Vodafone and MySpace, Microsoft and Facebook, Warner Music and YouTube, CapGemini and Facebook).

Brands can buy them -
(NewsCorp-MySpace, Google-YouTube, Cisco-FiveAcross).

Brands can build their own (Proctor & Gamble-Capessa, Toyota Hybrid Social Network, Barack Obama Presidential Candidate 2008).

Brands can choose some of the above, all of the above or none of the above but whichever they decide the decision is a tough one wrought with pain and the subsequent implementation options likely to involve Boardroom concern.

My name is Thomas Power and I’ve been building (www.ecademy.com), studying and analysing social networks and social media for 10 years. I find the subject fascinating and much more than a passing fad. I like talking to people about social networking, I like listening to people’s view on social networking and I like addressing audiences on social networking. I’ve met 9,000 Ecademy members face to face in 43 countries. I’ve done my homework.

Social Networking is about managing a dialogue with your chosen audience be they consumers, suppliers, shareholders, public institutions, media, fans or business people.

In many ways social networking is an advanced form of Direct Marketing and Customer Relationship Management (CRM) from the 1970s, 80s and 90s.

There is however a big difference because in the past the brand was in control now the tables have turned and your audience is in control. This is scary. They are scary.

Buzzwords like User Generated Content (UGC) and Web 2.0 are not helpful because they do not explain what is really happening and few people know what these phrases mean let alone how to act upon them.

When an audience is in control they can criticise your brand, they can criticise your products, they can criticise your management style, they can criticise your directors and worse they can criticise your share price. They can make your share price go up as well as down. They can hurt you and they do if you deserve it.

I think for publicly listed companies like NewsCorp, Google and Cisco the decision to buy social networks has not been taken lightly.

It does not take a brain surgeon to realise that NewsCorp, Google and Cisco are capable of extending these social networks into mobile phones, credit cards, banking and insurance services. Afterall we have seen this done before with ebay acquiring PayPal (banking payment services) and Skype (telephone services). Do you know the plans of these three organisations? Do you think you should know or at least have a sense of what they are up to? Do you even care?

So what does this all mean for you?

You have to decide what path you wish to take, a slow gentle partnership entrance to the market or a bold strong fast entrance to the market.

Whatever you decide you have to capture and communicate with your chosen audience sooner rather than later. If you don’t, someone else will and they will charge you a king’s ransom to access your audience.

We are in the early stages of brands becoming media companies in their own right and many will choose to stick to their core competence which I consider a risky strategy.

I have never been a fan of core competence thinking. Is Google really just a search engine? Was Microsoft just a software company? Did IBM just make adding machines? Did Virgin just sell records?

So what are the brand benefits of social networking?

Product testing and market research has to be one of the biggest benefits.

Having a direct dialogue and conversation with your consumers in real time 24 hours a day, 7 days a week is another positive benefit.

Yet another benefit is speed and the ability to launch new products within hours rather than months with instant feedback on successes and of course flaws.

Personally I like the benefit of meeting my consumers face to face on a regular basis – Ecademy members organise 400 events a month across the globe. We didn’t realise they would do this themselves. It was not in our business planning.

Consumers teach you things inside social networks. They tell you what they want and how they want it. They tell you about pricing, about product changes and enhancements, about things you have right and things you have wrong.

They do things you are not expecting. They do things you cannot yet imagine. Inside social networks your consumers are alive and kicking, talking to one another, sharing thoughts, supporting one another and expressing themselves.

Brands in many ways are about self expression and choice be that through clothing, be that through cars, be that through hotels, airlines or restaurants.

The internet is a vehicle for consumers to totally engage with brands effectively turning brands “inside out” to form an “outside in” environment. This is a big change for brands, a change that’s likely to transition over 10 years.

[markius]

From talking to other business owners the idea of opening yourself up to the scrutiny of your consumers is indeed a very scary thought. I don't think most grasp the fact that by doing so you actually have the opportunity to gain keen insight into the minds and methods of the consumer. From a consumers side, I believe they hunger for the transparency. Not only does it build trust (if one were to actually listen/act on what they were saying), but loyalty, as well. Consumers want a voice and want it to be heard.

[Thomas Power]

Hungering for the transparency is dead right however the price of that hunger can be damage to your share price if your (brand) followers choose to attack you or criticise the management. Sure enough they will at some time.

Building Ecademy these last 9 years has tested every bone in my body and Ecademy is not a publicly listed vehicle.

[Dan McComb]

It's only scary if you have something to lose. Big companies have a lot to lose, which is why most of them are followers in this space, not leaders. Personally, I'm not interested in changing their minds - I'm interested in building real community for and with people who have little to lose, and much to gain, from being radically authentic. It's a great time for doing that now - the required technology is powerful, easy and cheap, and lots of people "get it" and want it and are excited about it. Kudos to you, Thomas, for being way ahead of the game.

[Thomas Power]

Dan you are very right of course that's why we have spent 9 years building Ecademy to create that authentication but be encouraged somewhat, because this year (2007) I have been called for the first time by Nokia, The Royal Mail, Zurich Insurance, Zopa, RBS, Audi, Norwich Union, Citigroup, Thomson Local, Symantec, HP, The Telegraph, Barclays, HSBC, Orange, Reed Publishing and KPMG all of which are exploring the possibility of building their own Social Network or at least participating in others beyond just a few flashing banner ads.

The change is coming but like all things with large organisations the transition takes 10 years, just like the Internet and Ecommerce did, the forerunners to Social Networking.

Power Mobile devices from around 2010 onward with 4G bandwidth (10mb) will create the movement toward mobile social networking already well underway in Japan and that apply increased pressure on the Brands.

[BakeSpace]

I think it's a mistake for a brand to build their own social network - why? Because it's too obvious and savvy members (their consumers) see right through it. I would never think to go to coke.com to chat or hang out. Brands have started to "get into the fun" by building pages on places like myspace, but that is a very one-sided relationship. Where's the value?

[Thomas Power]

Brands will do this also.

Embedding brands inside MySpace, Facebook, Linkedin, Ecademy, Second Life and so on is a must but these places are just one audience and one bar or pub as we say in the UK for people to hang out in.

Many people want to visit the brand at their own website not one of the above social networks and therefore every brand needs to build a social network for their users to meet one another inside.

Coke have already started by the way.

[Piotr Wrzosiński]

Don't you think that it depends on brand (or rather product or service) and its target group?
Some brands are so social, that people will create SN even if the brand would not like it. From Polish market there are such cases with Canon and BMW or SAAB.
Some brands has to build social networks, as they cannot communicate effectively in different way (because of legal reasons - in EU its mainly tobacco, pharmacy etc.).
Some brands need even more than one SN - great examples are Nokia and Microsoft.
On the other hand I can imagine brands that are very hard to build SN for their Clients - all those consulting services or factory equipment providers. But they still can build SN for their dealers or workers - as an internal way to communicate and improve skills.
Regards,
Piotr

[Norman Dragt]

I find that Piotr has a good point, were it comes to markets and customers. Could I call a SN for a forklift truck manufacturer a SN? Or is it more a specific variety of a forum? Will the users of these SN not rather have a forum in which they can ask questions anonymous, especially because they know their competitors would love a look into their kitchen.
And how useful is it for a company to have a SN, if it only gets critique or praise? Which raises the question with me: how many users of the SN, will use it to openly give critique? And are the users that give critique the ones you really want to give the opportunity? I would expect it to be cultural dependent, the kind of use you will find on a SN. Certain cultures, that find it highly important to openly give critique, as proof of ones matureness, will use SN to give information that company owners of a SN can use. But in cultures in which restraint is seen as a sign of matureness, a SN will be no more then a nice place to exchange personal experiences and knowledge with a product.
Which then raises the question: Do you need to create several SN’s, catering to the different cultures a company comes in contact with? Or is one SN with different pages for companies and districts a better solution?

[Koen Bogaert]

At least brands are getting aware that something is changing outside their office doors. Question is, are they aware how fast things are going? For the first time brands are encountering customers who are more than a record in a CRM. Say it loud, they can type and they are proud. Which raises another question: how does a brand owner evaluate the output of a SN? Companies who are as agile as a stick insect will be forced to react in a snap. Do they have a plan on the shelf or are the pants already under the force of gravity? Which makes me conclude: it are really interesting times.