Peeling back the onion on Social Media Intelligence services

GUEST BLOG - Jonathan Alford

The idea of Social Media Intelligence (SMI), aka Social Media Monitoring (SMM) has been around for a while, but in the last 18-24 months, perhaps 150 or more generalist SMIs have emerged to scour the social web for content on explicitly-defined topics like retail brands, consumer products, travel companies, fashion designers, or anything lifestyle-related in a “Listen, Engage, Analyze” model enhanced by “Sentiment” and “Influencer” analysis.

How do they apply to retail and merchandising?
Most social marketing buzz revolves around Facebook and Twitter, but SMIs can capture content from millions of other sites to enable merchandisers to monitor web presences, develop tactics to engage customers, identify operating issues, listen to how people perceive their competitors, and potentially capture revenue.

Consider Best Buy. Its FY11 revenue increased, but comp sales dropped, especially in bread-and-butter entertainment hardware and software categories as it tries to adapt and compete in the cutthroat digital media space.

So to inform strategy and keep from turning slowly toward the fates of Blockbuster and Circuit City, it can now listen to how consumers and “influencers” talk online about itself, Netflix, and other competitive forces in ways it never could before.

Another lifestyle brand, Electronic Arts, co-branded The Masters with Tiger Woods PGA Tour 12. It’s not a stretch to imagine that The Masters, one of the most stringently managed brands, carefully gauged consumer sentiment on Tiger before doing the deal.

Other examples? Southwest can track sentiment and volume on its Bags Fly Free campaign while doing the same on competitors – and potentially engage to convert travelers fed-up with competitors’ fees. Virgin America engaged “influencers” to help launch a new flight route, and traditionally-conservative Marriott can capture sentiment about its hip new Edition Hotels.

The bottom line? Whether you’re Best Buy, Target, Marriott, Disney, EA, Nordstrom, or a smaller regional retailer, you can learn much about how consumers engage with your brands.

Peeling back the onion.
As with any nascent technology space, the hype (“Listen to 9 BILLION conversations about YOUR brand!”) can easily obscure the realities. In one telling case we tested, the top influencer identified by a prominent brand in the space, for its own brand name, was an Amazon video product page for “Breaking Bad: Season One”.

So while the technology is compelling and will improve, there are holes, it can be overwhelming to evaluate the services, pricing varies considerably across business models, and you could incur significant indirect costs to develop effective marketing and brand intelligence.

Since different companies have different needs, we set out to help “peel back the onion” in the key areas of “Listen, Engage, Analyze” competency to separate the bells, whistles and hype from truly practical and strategic capabilities, and we also believe 7 key trends we identified originally still hold true:

1. Low initial barriers to entry enable a hot, but highly competitive market space.
2. Listening capabilities are commoditized – what matters is quality of content and what you can do with it, not the quantity of “sources”.
3. Continued consolidation, roll-up, and failure among vendors in the space.
4. Vertical-specific players (like Revinate for hotels) will continue to emerge.
5. Pricing varies considerably, and a key challenge is understanding and managing direct and indirect costs.
6. Convergence of the SMI space and broader web marketing and analytics services.
7. Integration of social media Listening content into search results.

Consider #6. The ability of SMIs to “Analyze” topic-specific trend and sentiment analytics is impressive, but we feel their capabilities fall short of what’s needed to develop effective market insight or brand strategy and cannot deliver tangible conversion and revenue analytics (yet).

We did believe the gaps could begin to close if Omniture entered the space and audience marketing powers like Nielsen continued to invest, and now we have seen Adobe acquire Omniture and launch a new SocialAnalytics product, Nielsen’s relaunch of BuzzMetrics as NM Incite in a new JV with McKinsey, and Salesforce acquire Radian6 to integrate SMI “Engage” capabilities into CRM / lead gen systems.

So, along with shakeout in the SMI space, we should continue to see various forms of convergence into more comprehensive social media engagement, CRM, intelligence and revenue analytics models to form more integrated value propositions for customers.

But that whooshing sound you may have heard was the collective balloon deflating for perhaps dozens of startups trying to claw their way into corporate markets.

The bottom line?
The SMI space is still hot, and the need for technology and analytics to improve will only intensify as social media use continues to expand – especially as a younger generation sharing everything online grows.


Jonathan Alford is a consultant with Lenati, an award-winning boutique firm that designs, implements, and optimizes marketing and sales solutions for companies to build stronger customer connections. Lenati can be found at www.Lenati.com, and Jonathan's blog on Travel Technology and Consumer Experience can be found at www.MakeTravelBetter.com.