Turning social and customer capital into currency requires a quantum leap
This post is in response to Brian Solis’ A conversation about you, social currency and social capital.
We, users, have always been considered capital for marketers. Times changed and the wiggle dance evolved – but we remained as elusive and are still unable to define our capital value as working currency we can capitalize on.
Our place in the marketing mix evolved, our influence grew – but a quantum leap is still in need. Once companies owned the dancing floor. They had us, but didn’t see us for who we were. They courted us. As we strengthened, they tiptoed around us. Now they see us, infiltrate our spheres, try to converse with us, touch us and create value that would attract us – but they can no longer own us or dictate.
The game changed. Its semantics, power balance and arenas – but we, users, do not have yet full control. That control demands a paradigm shift – only then we will be able to exercise the real core of our capital – the power of sharing and influencing at will, as equal partners negotiating and being rewarded in the food chains created around us.
In the traditional marketing era we were customers, users. Companies’ value increased in parallel to the market chunk they held –it was measured by the percentage of the market share owned and by how much of the customer share they could aspire for.
We, consumers, were targeted through mass media, data companies and sophisticated marketing and sales promotions all across. Marketers owned the scene through aggressive push paradigms aimed at getting to us wherever we are and accumulating numbers of customers as a basis for the company’s value. We were capital as components within the marketing mix to be targeted and translated into siloed captivity schemes that would make it very difficult to switch and abandon loyal customer benefits defined and calculated for us.
With the advent of the internet, new semantics described our customer capital value. It was still measured in mass value terms and we were still faceless. For internet based companies we became eyeballs, and the value of the company was measured by the number of eyeballs it owned. The model story of that era was the story in 1998 when AOL purchased Mirabilis, the Israeli developer of the ICQ IM platform, with a free offering, no business model and no income, for its main asset – its millions of eyeballs.
As web 2.0 evolved, we were no longer faceless. Web 2.0 was our web. We had voices, opinions, conversations. Marketers no longer owned the scene. We could independently comment, recommend, warn against, express our dissatisfaction and our peers would listen and be influenced. Marketing campaigns happened in parallel, detached from our conversations or at best responding.
Marketers had to be more careful about us. They had to become more credible to earn our trust, less intrusive in their attempts to reach us and less aggressive in their means to do so. They had to heavily invest to individually learn about each of us, hire 3rd party companies to monitor us, get to us where we went and develop product lines and personalization schemes that would suit us as individuals. That was the beginning of the long tail economy. Once selection is unlimited, storage is no issue and retailers no longer have to carry only the items their customers demand, each individual customer and each individual product have the same value. A real 1:1 with the hegemony and focal point totally shifted to the customer.
This pull based economic model for digital entertainment offerings meant individualized relations where customers own the scene and pull from providers what suits them best. This shift brought about a new phase of economic value – the value of recommendations. Amazon’s recommendation engine lay the foundations for a passive collaborative thread that allowed me, the individual, to be influenced by the interests of people like me. My choices and interests became of value as recommendations by the mere fact that they were mine and thus made me of value to my peers. The process was still faceless. I influenced and was influenced and marketers passively rode that wagon to enhance the personal suitability of their offerings to me.
The next phase of the web acknowledged individual identity and built on that as user capital. The individuality of each one of us can now be established on the web as a micro universe of one –the long tail recognizes my individuality and singularity. Once the personal targeting phase became personified, my personal capital and value to marketers, got a new twist. I had a face. Marketers wanted to know all about me, in order to target me best, wherever I am.
Relevance to what I am looking at and real time accessibility to the message was the name of the game, targeted ads that match ads to content I interconnect with, was the method. My capital was translated to clicks and the currency was pay per click, first in search engines and later through sites and social platforms as well. But that again spelled as currency to marketers alone.
Once the social web evolved, my value as an asset and my capital exceeded the individual level, to express my significance in my social graph. I could acquire a multifaceted marketing value. My capital was measured by the place I have in my social sphere. If once I was a distinct individual in a social surrounding and had to be individually targeted, now my social dimension entered the game. My whole social graph became of value because marketers saw in me an evangelism potential as a trusted source of recommendation.
Now I already had social capital, as Brian Solis calls it. Not only am I of value for marketers as me, a potential customer, not only is my value defined as a potential influencer to my social sphere, but my expanded social landscape makes me an anchor point to be valued on its social merit – how much do I tweet, comment, converse, participate, how many friends I have, how many, who and on how much do others respond to me. I am being targeted now for completely different reasons and invested in accordingly. Up to this point, my capital is objective and quantifiable for marketers.
But the next phase of the game – the one that will transfer the power of translating this customer capital into a currency that I can trade with – has not begun yet.
Two main components are still missing. Context and control.
contextonomics – the economics of my context – My personal context is the glue to establish my value as capital. My holistic context, that reflects who I am all across.
Companies still pay a lot to try and get closer to relevance – so that their offerings surface above the general marketing noise and get my attention. They measure it in terms of ROI (return on investment) – how much will it cost them to reach me, the individual. But once they reach me, how relevant is their offering to me? Again, the closest they can get through paid targeting is to what I am looking for right now, in search and some sites and social platform. To date my context is fragmented, dispersed all across the web. They don’t have my whole context.
And that’s my real capital.
My holistic context is a subjective scale that places the marketing message or offer at a personal relevance value to me individually. This is what will grab my attention the most and will turn my attention into an ROA ( return on attention) for marketers’ measuring scale.
In the same token, my social relevance to the targeted offer increases or decreases my value as a source of influence to my social sphere for that specific targeting. My being an ardent traveler and social influencer place my capital at still a higher level when I allude to a travelling related offer.
To date this subjective information about me cannot be objectified or turned into a tradable currency that I, the user, can benefit from and capitalize on.
The other missing component in my ability to utilize my social capital is the dominance of a providers’ based top down paradigm.
Contextonomics cannot become part of the loop as long as I don’t have control over my data and my privacy and sharing settings, as I am in no position to turn that data into an alternative currency I can trade with.
Only when paradigms will shift , user centered paradigms will enter the game and ecommerce will become fully pull based, the whole marketing discourse will not ignore me as a natural component in the food chain created around me and will no longer exclude me from it. Providers share their profits with targeting companies, advertising agencies – but do not approach me directly for my relevant data and do not directly trade with over my attention. How about a marketplace where I can choose between a free downloadable movie with 3 targeted ads or 4$ fee?
Only when these two elements that combine the economics of my context can be safely objectified under my control and user centered controlled systems will ensure my data’s privacy on my behalf – we will be able to translate our capital as customers and our social capital as influencers into workable and tradable currency and become equal partners in the marketing mix.