Saturday, July 1, 2006

Social Share Part 2: Share of Participation

I'm changing my mind. Go figure.

I've been thinking about my definition of "Social Share" for the last two weeks or so. What I put down in my last post:

Social Share: the relative importance of participation in a group to a member of that group — or association of one group to another group — as measured by activities that involve resources or influence.

is still something that really resonates well in my great, huge haid. But I'm changing what I call it. Yes, I know... changing the new term right away is a bad idea. But I don't get that many readers, and it's only two weeks, so calm down. I'll get it right this time, and then call the nice people at the OED.

Compared to various economic terms, the above definition seems more akin to "share of wallet" to me; that is, how much of a person or company's total finances are spent on a partiular resource or brand. So if, in 1970, companies spent 10% of their operating expenses on IT infrastucture, but in 2000, they spent 15%, we'd say that IT infrastructure experienced a "50% growth in share-of-wallet." Therefore, with slight changes only...

Share of Participation: the relative value of participation in a particular type or brand of social activity by an individual or a group as measured by resource or influence.

 I, myself, regard "influence" to be a measureable resource... but I don't think that that is a widely held belief. So I'm putting it in there explicity. Share of Participation, therefore, measures the personal side of the equation, which is what I was trying to get at -- how important a particular social activity or tool is to an individual or group.

What, then of "Social Share?" That should have been the "market lookin' at itself" measurement from the get-go. My bad. Because "market share," in economic terms, looks at how much of the market "belongs" to a particular brand or segment, not the other way around; object focus, not subject focus. So here we go.

Social Share: how much of the total participation in social activities of a desired audience is aggregated to a particular brand or segment.

There we go. All better.

But, clearly, I have not been long-winded enough yet today. Nor have I given an example (which the teacher in me says I must). Nor have I explained why it’s important to have two terms. Sooo….

Lorcan Dempsey is the VP of Research and Chief Strategist for OCLC, where I work. In a recent blog entry, he discusses some of the implications of which photo sharing sites are most popular and used by MySpace (and, I would make the implication, other social sites). The blog reportHitwise Intelligence — he sites uses the term "market share" and measures this in terms of site visits and hits to the various photo sharing sites.

The particular report entry talks about how Photobucket basically kicks Flickr’s bahooky in terms of marketshare (again, measured in hits… which we assume will translate into ad revenue). Graph looks like:

Some of the comments on the report make part of the point I’m about to — that there is a qualitative difference between a site for hosting your media files (such as Photobucket) and a site that is for the storing, tagging, organizing, and sharing of "photographs;" i.e., Flickr. The basic point being that Flickr is a more "social" site — a destination — and Photobucket is a "pass through" kind of utility thingamabob platform where you put up photos, anime, illustrations, movies, etc., that will actually "live" on your blog, site, MySpace space, etc.

You can guess what’s coming, right?

Using my new terminology, what I would argue is that although Photobucket has a greater market share, Flickr may have greater Social Share to the entire photo sharing community/sector, and, in the case of individual users, may occupy a much greater Share of Participation on a case-by-case basis. I have no idea if this is true, can’t measure it, and won’t defend it… but it makes for a good "vacuum example."

What does this mean and who cares? Well, as I said below, in the "old, old days," nobody cared much about "mind share." Market share was the only real measure of worth. How much of the dollars being spent came to your product or segment? Now, in fact, we are so used to treating mind share as a stand-in for market share — we grok that "mind" leads to "market" — that we assume it’s true. In the above example, for instance, the folks at Hitwise are using Website hits as a measure of market share. Well…. technically, "market share" is only concerned with sales. Not traffic. The number of people who comes into your store, looks into your window, sees your ad, reads your flyer, visits your counter, remembers your name… all that stuff is something that can be used to measure mind share, and can be assumed/hoped to lead to market share. See? We "feel" that the two are inextricably linked.

But they ain’t necessarily. There are all kinds of products (Mac anyone?) that have much greater mind share than marketshare. And who have dormant mind share that eventually (iPod) translates into market share in another way. And other examples of products (Levis) that for years, didn’t have anywhere near as much mind share in terms of buzz, but who were in the constant top spots in market share. Quiet leaders.

So there is often, but not always, a connection between mind share and market share. What about Social Share and Share of Participation? My argument is that businesses and organizations looking to make their sites/offerings "social" should be considering the same kinds of connections between the "social qualities" of what they’re doing and the end results they are looking for. In the photo sharing example given, as a marketing guy, for instance, I’d ask these questions beyond the "hit stats" that show market (ahem… mind) share:

  • How many items do individual users on average store on each site?

  • How often do users add new materials?

  • How many comments are left? Aggregate and per item?

  • What is the average length of tenure of users?

  • What is the ratio of paid users to free accounts?

  • Is the API open and mashable?

  • What kind of PR does the site get? Is the service itself being "socialized?"

  • How many users are using advanced features? Mashing the API?

  • How many new accounts come from referrals vs. advertising?

  • How much traffic is from other social sites vs. more "static" usage?

Measuring this stuff would not be easy, no. But going bankrupt isn’t easy either. If the whole point of Everything 2.0 is that "socialness with provide the engine of continued growth/value" for the next phase of the Web economy, then we need to be discussing socialness in business terms that relate sensibly to the ones we already have. Terms that I made up in the shower.

The marketing world is littered with cases of flash-in-the-pan stories of products that were "Hot! Hot! Hot!" in the public mind for a day, week or month… but inevitably cost their users, employees and shareholders lots of money. Using mind share in an overbalanced way to gague the value of a property can be foolish. Similarly, simply saying something is "2.0" or "social" without a framework in which to evaluate "how social" it is, or whether or not those particular social aspects make it a good long-term competitor is also foolish. Maybe having some terms with which to start the discussion will be helpful.

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