Polygraph Media Blog

Data Proliferation and the rise of the Chief Data Officer

Quick update today -- the "data proliferation problem" is just a theme I've heard from a lot of conversations recently.

A fellow "data" startup CEO mentioned to me the other day that he lamented just how hard it is to sell "data" and "data services" to people in brands and the enterprise.  Marketing departments have millions of dollars to spend on print advertising that they know does not work... but a modest $100,000 investment to help people understand their data opportunity requires significant explanation and is often met with blank stares.

We're in an odd point in time kinda like we were in with social media in 2007. Evolved enough for people to recognize the promise, but too early for budgets and organizational alignment to have taken place. This does not frustrate me all that much -- but it is a growth opportunity for small companies such as ours and a chance or visionary bigger companies to jump out to a quick, early lead.

I have a lot to say on this subject and will follow up here and in some of my guest blogging on how business is evolving. Suffice it to say that winners will be data-driven decision makers. They'll have context about what is important and what is not, and they'll execute well. They will know statistics, business goals/metrics, and they'll understand the interplay between operations, customer data, and their own systems.

Companies will increasingly hire or appoint Chief Data Officers -- and not just those in data-intensive businesses either.  A single person and/or office will handle issues related to making data useful and actionable for a business but will also be careful to not expose private data to people who should not see it. It's a tough problem, but a fascinating opportunity.

Deloitte discussed this recently in a fantastic brief paper. I think it was interesting that Alibaba just appointed their former Chief Data Officer as CEO of the entire business. Expect that trend to continue.

What Lance Armstrong and Facebook Have in Common

Today's blog post comes to you from our Business Development Manager, Craig Carter, who had a little fun speculating about Lance Armstrong and Facebook. I thought it was pretty amusing, so here goes...

(Preface—Except for the Facts and Figures charted below, all statements are pure speculation and have not been confirmed by the World Anti-Doping Agency.)

What do Lance Armstrong and Facebook have in common?

The short answer is they have both given their teammates Performance Enhancing Drugs (PEDs).   Now before you go running off to the mountain top, screaming that Mark Zuckerberg is peddling concentration steroids to his coders, let me explain.  Large brand pages and Facebook are all on the same team.  In one way or the other, they are working together to improve marketing performance, brand image, and make a profit.   So WHEN, HOW, and WHY did Facebook, not only begin to give brands PEDs, but dare I say, try to get them addicted?

It all started around June 6 (conveniently after the FB stock price declined 30 percent in 20 days) when all engagement metrics on large brands and company pages started to track upwards faster than the Cliffhangers Game on “The Price is Right.” 

 

I am sure this is partly because of some great new content, more posts, insights from Facebook Ninjas/Gurus/Rock Stars, and increased ad spending on Facebook, but more so, Facebook hooked up the engagement IV to all its pages and started pumping them full of likes, comments, and shares. Just imagine Lance secretly giving his racing team wondrous enhancers, and then the team started winning!

Ahh the glory days!  Little did brands know Facebook was giving them a PED better than Michael Jordan’s Special Stuff in Space Jam. 

As Social Rock Stars became the one direction of the office, Facebook took the hit as their stock “plummeted.”  I even heard rumors that “Zuck” was selling his couches on Craigslist to pay for dinner.  But just as Lance was the genius behind the doping of his many Tour de France wins, Facebook had a plan—give away marketing, get brands hooked on engagement, and then slowly stop trickling the drug through the IV. 

 

What happened next … just ask any local drug dealer. 
Give away the drug, get ’em addicted, then start charging for it.  Low and behold, right around the time when massive free engagement stopped, Facebook’s stock value started going up!  I feel this really started happening around mid-November—actually after the Facebook pundits started yelling from the rooftops about EdgeRank changes.  

As we are now over a month into 2013, it will be interesting to see what happens with these two pieces of data.  All I can say is ask Lance Armstrong or Barry Bonds if PEDs are just like Pringles, “Once you pop, you can’t stop.”  Meaning these brands are going to be pulling out their pocketbooks to get back to their former glory. 

Data Note: All data presented came from Polygraph Media’s Facebook Data Analytics Engine. The 62,682 posts analyzed were from 125 large brand and company pages from Jan 1, 2012, to Jan 28, 2013.  In order to remove outliers and smooth the data, I removed 599 posts for being 3-standard deviations greater than average and opted to use a 7-day rolling average of the total likes received on all the pages. Give me a shout if you want to see some of this data and analysis first hand!

Polygraph: Solving & more importantly Explaining Big Social Data, Facebook

Howdy everyone -- it's been awhile since I've posted here.  Lots of work on Polygraph and a new addition to my family in the form of a baby.  Margot Ellen Treadaway was born on December 14th and is our first child.  Lots of life changes -- all good.  But the blog has taken a bit of a back seat recently.

That's a-changin'.  Regular blogging is back for us as we bring Polygraph v2 to market.  I'll tell you more about that later.

But for now, I thought I'd better explain how our business has evolved and where it is going.  For those of you who have followed the Notice Technologies ride, you know that we've had quite the journey.

We started in 2009 with a couponing platform for local businesses.  We hit the streets and talked with as many local businesses as possible -- in an effort to build something perhaps a little less one-sided than Groupon in terms of who benefits from the transaction.  Local businesses were tough to work with because they demanded immediate results -- and didn't have the time or energy for anything that failed to generate immediate, incremental revenue.  Hence Groupon.  Groupon built tremendous value for itself, at least early... but much of it was at the *expense* instead of the *benefit* of the local business.  That's why Groupon remains a largely unsustainable business model -- and why we didn't (right or wrong) pursue group purchasing aggressively.  It's also why local businesses haven't gotten a revolutionary marketing platform yet.  It takes iteration, which local businesses simply aren't willing/able to do unlike other classes of customers.

We tried salvaging those couponing assets by offering them to newspaper groups.  But that became its own set of problems as you can imagine, and local media didn't prove to be much of a gainful opportunity for us.

All the while, we'd been hearing from people in agencies, brands, and other larger companies that measurement of social media was a huge pain point.  Facebook Insights didn't do the job well and still doesn't.  We saw an opportunity with our v1 of Polygraph to jump into the analytics fray.  And that's been a very positive move for us.

But we see a bigger trend and a bigger pain point in a lot of companies.  Businesses large and small are trying to better understand what value they're driving from social media.  It isn't enough for the world's leading companies to conduct best practices, adopt a social media management system, hire a consultant, or outsource social media to an agency.  The C-Suite really wants to know a few things:

• What business metrics are being affected by good social media execution?
• Is there a statistical relationship between social data and revenue or other mission-critical business outcomes?
• Do Facebook Ads and the like really work?
• How are competitors grappling with Facebook for customer outreach, customer service, and other marketing purposes?
• Is the social channel truly worthwhile?
• Should social earn a greater or lesser investment moving forward?

Who do CEOs and CMOs turn to for clear, data-driven answers to these questions?  They certainly can't turn to existing agencies of record -- they're too invested in a positive answer.  C-suite execs need a BS detector to tell them what the data says, and we're increasingly that BS detector.

Polygraph does an inventory of available data and collects it from Facebook for a company, its brands, its competitors, and its portfolio of Facebook assets.  We cache it, analyze it, and find relationships in the data.  Companies will sometimes give us other data sets that we'll add to our analysis -- such as web metrics, e-commerce results, or other mission-critical data.  We look at it all holistically to understand the customer engagement system -- how people discover the brand and make decisions to engage, interact, and make purchases (where applicable).  We seek understanding of the customer walk and conflict resolution -- are people using the brand's social assets as a customer service vehicle.

Ultimately, all of this data tells us a compelling story that can drive next steps.  Should you keep your existing agency or find a new one?  Does your portfolio of assets provide a return on investment?  Does social data correlate to real-world business metrics that matter to you?  Can we find evidence of causation?  Does social data move the needle or vice versa?

Understanding is what the C-suite craves today.  But the C-suite doesn't have it today. Agencies aren't independent arbiters aligned with the interests of a C-suite exec responsible for driving revenue and profit.  Unfortunately, very few marketers are equipped with the analysis chops necessary to make the case effectively also.  Sometimes, a marketer is equipped but isn't viewed as an independent, disinterested judge.

We're doing some fascinating projects right now in several major consumer industries that I wish we could talk more about -- but we're under NDA.  It's admittedly a little frustrating in that regard.  But you should know that the data unlocks fascinating insights that leading brands are beginning to uncover today. Truth lies in the social data. That's what we do -- collect, analyze, and drive insights from social data.

Social, the Salesforce acquisition of Buddy Media, and Real Value

Tonight, this blog post summarizing year 1 of the Salesforce acquisition of Buddy Media.  The numbers, if taken on face value, are brutal as the endeavor is a big money loser so far.

The picture painted is probably a tad on the pessimistic side.  If your Salesforce, you don't buy a Buddy Media to harvest but rather capture market share.  I'm sure a conscious decision was made to spend whatever necessary to win share asap -- so costs are going to be higher in the short-term than revenue.  This is why people invest in Salesforce.com, for the prospect of future cash flows and the benefit of capturing share now at the expense of optimizing short-term financial results.

Remember also that this particular business is super competitive with Salesforce, Adobe, Google, and Oracle all competing in the SMMS space against a few independents (Sprinklr, Spredfast).  Keep in mind also that a lot of SMMS work is still being done manually by service businesses from IBM to digital agencies to traditional agencies now competing aggressively in social marketing.

But I do think there is a lesson lurking in here -- that social is still an unproven commodity in the short-term.  Folks like us and others are doing what we can to find value in social media.  Investors who get into social media plays, whether through publicly traded companies or those selling privately held stock, do so on the belief that their picks will help the marketing ecosystem in some way.  But it's still the wild west when it comes to delivering real value.

Whether it's Buddy Media struggling or Facebook ads struggling or folks like Mark Cuban questioning whether or not he should pay for Facebook News Feed visibility, it all comes down to one critical and unanswered question -- what is the value of social marketing for marketers?

When the answer to this question is as simple as it is for search... i.e. Google Adwords... billions of dollars of new shareholder value will be unlocked.  Now where exactly will that be, and when?

Social Media Measurement & ROI - the next big thing

According to The Center for Marketing Research at The University of Massachusetts.

We agree.  Link below:

http://www.customerthink.com/blog/social_media_measurement_and_roi_next_focus_of_inc_500_fortune_500

The Origins of Polygraph Facebook Data Mining Analytics

First a quick thanks to all of you who visited the blog yesterday.  Our blog traffic exploded yesterday, which means I'll be writing here frequently. :-)

Today, I thought I'd talk about where we got the idea for Polygraph and the feedback we heard from the marketplace in the 9 months preceding our launch.

As some of you may know, our company's origins came from the couponing world.  Our first product was a couponing system that businesses could use to publish coupons on the Web, Facebook, Twitter, and to e-mail lists.  We built this as a DIY system for local businesses and brands, and as such talked with a bunch of customers.

The feedback we got was that couponing really needed to be conditional for businesses to get really fired up about it.  Businesses pay significant $$ for new customers, but treat existing customers as people from which the ARPU (average revenue per user) must be raised.  So if you offer say a 20% coupon to anyone who would take it, the business might get some new customers but it is much more likely to be giving a discount to the very people who will be a customer anyway. 

Businesses market to existing customers differently than they market to new customers, and so if couponing is going to deliver a real ROI, as a tactic it has to become "intelligent".  (Incidentally, I think this is a problem that Groupon and LivingSocial have today.)

So we went back to the drawing board and asked "are there any ways for us to get an idea of if someone is a customer?"  And we turned to Facebook and said "well, Facebook Pages might be an interesting proxy for loyalty."  If someone is associated with a Facebook Page, they are probably a customer of that business in some way.  And hence, Polygraph was born.

We took our core technology to brands and agencies, and surprisingly (to us at least) heard a number of other related requests.  The core of the feedback was that Facebook Insights (or any existing analytics provider) did not adequately explain cause & effect on Facebook.  For example,

• I post something, what happens?
• I don't post something today or for a week, what are the implications?
• I use a particular agency to manage my pages, are they doing what I want?
• I think my competitor is beating me, how can I tell?
• What goals should I set for my team/consultant/self?
• What are the right metrics?
• Are we winning?
• Are we getting closer to something resembling a ROI?

The problem was that social metrics had not "grown up" to answer basic questions about marketing and the competitive landscape.  The ones that had existed were almost all built using Facebook Insights data, which is incomplete, confusing, and does not give you any information on your competitors.

So we applied the same data mining techniques we used to determine Fan activity to all the analytics a marketer would/should care about.  This is probably our #1 differentiator.  We record every social interaction on a page and discard absolutely nothing.

Take for example the illustration below, from the Healthy Choice Facebook Page.  This one User Post was written by Julez, liked by Jennifer, responded to by the Healthy Choice Page 4 hours later, commented on by Tim, and both the comments were liked by someone.  Apply this rigor to any Facebook Page, and you can learn some truly insightful things.  Apply it across multiple pages, and you can learn a lot about a competitive market, an industry, or how people are interacting with Pages on Facebook as a whole.

Polygraph is the only product that dives deep into the available data and makes sense of it for marketers.  We think there is a ton of knowledge trapped in this publicly available data, and we're unlocking it using data mining, data science, and world-class analytics.

More to come as we go along -- examples, how people are using the information we provide, creative uses of Polygraph, and where we're going in the future -- but now you know how we conceived of Polygraph!

Polygraph Facebook Data Mining, Analytics Launch!!

Howdy everyone.  Today is an exciting day for us at Polygraph -- we've released our first product into the marketplace!

First of all, congratulations to our team.  We ran hard to the deadline, and released something that I'm very proud of, especially for a v1.  Now everyone is pretty much exhausted, but I suppose that's par for the course.

We're excited about our mission to democratize access to social data -- and make it easy for marketers to truly understand the competitive landscape on Facebook.  There are a lot of companies doing deep analytics on Twitter, but not very many doing it for Facebook.  We think Polygraph is a great innovation and a step to help people better understand cause & effect on Facebook as well as ROI.

We are unique in the marketplace because we treat the problem of analytics as a data mining problem.  Every social interaction for a brand is an important, discrete event that must be captured, recorded, and presented to marketers in a way that is actionable.  Facebook Insights is a good start, but doesn't provide enough for genius left-brained marketers.  And, of course, you can't get competitor data out of Facebook Insights either.  Polygraph gives you both.

We will turn our attention to customer feedback now -- and rapidly iterate to improve the product.  As with any launch, we have some things that we want to immediately improve.  We have a long feature request list from early adopters and friends that we want to tackle as well.  We will work with a handful of selected big brands, technology partners, and agencies to work on advanced applications/uses of the data as well.

This first release of Polygraph is the beginning of big things for us.  We'd love you to join us for the ride.  Visit http://www.polygraphmedia.com/free-stuff for access to some samples and to create a free account.  You can also order your own Polygraph Reports from the web site.  

Later this week, we'll start to publish some analysis on this blog as we find things in the data that are simply fascinating!

 

 

SXSW Interactive 2012 Observations

Some thoughts following the blur that was SXSW Interactive 2012:

• I very much agree with the sentiment that "nobody won SXSW" this year, but I also don't think you can expect that every year.  Twitter "won" the conference in 2007.  4sq arguably stole the show in 2009.  GroupMe "won" in 2011.  In my mind, the latter won it only because the tech press had to give the title to *someone*.  But also look at the years... in the even years nobody "won" at all per se.  You don't have a  "press-designated" winner every year and this year was no different.
• Location-based services proved again that their primary use case is in places where a lot of people are in the same place at the same time.
• Interesting to me that Facebook, Apple, Twitter, and Square... amongst others... had little/no presence at SXSW.  A few folks wandering around but no "presence".
• Again, the action for startups was in the hallways and backroom meetings, small group VIP events, etc.  The action for enterprise folks remains in the sessions and in the private parties, where basic education takes place.  I don't mean that to sound bad, but it's almost two different shows depending on why you're there.

Looking forward to a great show in 2013!

8 Observations from #mashcon (Mashable Connect)

I was fortunate to attend Mashable Connect late last week -- a great conference down in Orlando.  I don't have a ton of time to write right now, but I thought I'd jot down some observations.  Here were my takeaways:

1. Surprisingly (to me at least), I didn't hear a lot of innovation from the speakers.  The bigger companies innovating were really just showing off or describing their incremental advances on the iPad and in social.  The agency folks didn't really share anything I hadn't heard before and the startups were "eh".  No big deal but I didn't hear anything earthshattering and that shocked me a bit.
2. I though Michael Lazerow (@lazerow) from Buddy Media had an interesting vision.  It was almost a mini-pivot in that Buddy is moving from customized Facebook apps (where FBML once provided a "moat" but with the iFrame no longer does) to Social ROI.  Who knows how that will work.
3. I did talk with a lot of "social media cheerleaders', which is fine but to me indicative of both the fact that I was indeed at an industry event and that we're in a bubble.  Bubbles occur in any industry where there is rampant optimism and where skeptics are unpopular and their opinions are almost shocking.  An interesting data point for me was when @districtjoe (great guy) pointed out that I'm skeptical about everything and that he doesn't hear that often.  It's called an echo chamber & most folks at the event were squarely in it.
4. I loved @steverubel's clarity -- overall his presentation was great.  His explanation of the cloverleaf really made a lot of sense to me -- I had seen the illustration before but had not heard it described so well.
5. As is typically the case, there are a few brands who are silently & humbly kicking ass.  You know who you are -- and you know far more about the business than many of the invited speakers.
6. @scrollmotion dragged me kicking and screaming into submission.  The iPad (and the "tablet movement") is indeed real and here to stay.  Really impressive stuff.
7. I heard a great argument for Twitter from @jkrohrs, a new friend I made from ExactTarget.  I am not sure I totally agree with his points that Twitter is better for marketing than Facebook, but I understand the argument better just from spending a few minutes with him.  Smart guy.
8. Finally, this one has been covered a bit but I'll say it again -- tech startups are starting to behave more like agencies and vice versa.  Agencies control customer relationships and are finding small development projects that can be productized.  Tech companies are realizing the limitations of a software business model & can be much more profitable if they include a services/consulting component.  That's a dirty word for a lot of VC-funded tech startups, but it may make them financially viable and it can work out that way faster than the alternative.
9. (bonus) I really like Gowalla's clarity now.  They seemed to get caught up in "check-in mania" last year & it confused their value proposition.  Now they are enhancing experiences with location and vice versa.  Much clearer.  Much better.  The messaging and the approach fits them.  I hope they succeed.

Congrats to the Mashable team for a great event -- I really enjoyed it (maybe at times too much!!).

 

Thoughts for Corporate Marketing Executives

This post is a long time coming -- as our company has shifted focus a bit to brands, I have been thinking a lot lately about how bigger companies make decisions and draw conclusions about social media and where the will focus attention.  For every person who says that they want to increase Facebook investments (a good idea considering the data), there is a person who says that they also need to increase investments in QR codes or Instagram (a bad idea considering the data).  This coming from a set of customers that is supposedly concerned about Social ROI?

Pardon the generalization, but I've found that corporate middle-manager thinking about marketing is about as paradoxical as it gets.  The world's best companies optimize their operations and their marketing campaigns on data.  The top companies hire the best and brightest from the world's top business schools to analyze outcomes and redirect tactics.  Yet when it comes to marketing and social media, I often hear the most optimistic and laughable things about social media from brand stewards and corporate marketers.  Some of the biggest cheerleaders about social media come from the corporate world.  Their observations are based on personal preferences and usage patterns, and are devoid of persuasive statistics as if numbers are unimportant.  Very few (when pressed for specifics) can tell you that a meaningful business outcome improved dramatically because of using anything other than Facebook and maybe Twitter.

Why is this the case?

1. Individuals want a job in a hot startup & get attention by showing support.
2. Individuals want to stand out from their "moribund" corporate employer that "doesn't innovate".
3. Individuals are not held to a high standard about "data-driven" thinking.
4. The brand's need to "innovate" outweighs the need to develop Social ROI.  Put differently, the brand needs to connect with younger demographics and is willing to accept some inefficient spend to experiment.
5. Agencies and experts dominate thought leadership, and the echo chamber is winning.

The first two make a lot of sense when you consider the divergent interests of individuals and the companies they work for.  A middle manager may be making a great career move by encouraging new technologies -- it may land him/her in a job, an advisory role, a spot among experts in the social media community, VIP invites at events, etc.  Individual branding trumps all in today's world, and that's just a reality of marketing in the present day.

#s 3 and 4 are more management issues -- which may or may not be an accident.  Brands seeking to redefine themselves, especially those that are viewed as being "old fashioned", are desperate to do anything that appears to be innovative.  A handful of experiments may just provide the serendipity needed to do something meaningful and important down the road.  But I find all too often that the middle managers report to senior executives with very little understanding of social media platforms, much less how to use them for marketing purposes.  Sorry, but if you don't use at least Facebook regularly, it's hard to coach middle managers on what success looks like.  So often times, middle managers are really creating the agenda for "social marketing" whatever it means, and ROI is tough to get because 1) they may not be doing the right things, and 2) their managers may not know exactly how to improve the situation.

#5 is a misalignment of incentives.  Over the last decade, agencies have done a particularly crafty job of getting between corporate marketing dollars and technology providers who make things simple.  Agencies have sold social media marketing, management, monitoring, community management, and a wealth of supporting platforms as a cocktail of unnecessarily confusing, yet important set of tools that any "smart" business would utilize.  Of course, managing it all is easier if you just hire the agency. ;-)   A vast majority of thought leaders work for the very agencies that have gotten so adept at selling this complexity to the corporate world.  Oddly enough, the skill sets required to conduct good social media marketing and community management are not terribly complicated.  But because corporate marketing groups don't yet have the talent to develop an internal competency -- intern to executive -- they outsource this.

But to repeat -- the very people selling highly profitable agency retainers to your company are the ones setting the thought leadership agenda.

Now before anyone accuses me otherwise, I am a friend to agencies.  There are a lot of great people in agencies and I have a lot of friends there.  But if you're an exec managing a brand, you have to recognize this dynamic to do your job well.

I suspect that this tech boom cycle will end a lot like the last one.  Companies that provide real value will survive.  The vast majority that don't will not survive.  Brands and bigger companies will gradually bring things in house as they get smarter.  As new technologies mature and get "less cool", investments in them will wane.  Investments in things that truly do move the marketing needle will increase and will disrupt the old way of doing things... much as you're starting to see investments increase in Facebook over existing web sites and e-mail.

But the way to get ahead of the curve today is to rein in middle managers and talk in terms of data -- measurable success.  That is, if you really care.