There is plenty of promise and reason for pause when it comes to social commerce, predicted to be the fastest-growing segment of online retail. But the rush to throw up a storefront on Facebook or Twitter is not for the ill-prepared, as Richard Downs of  Infosys Europe tells us.

We caught up with Richard, the Business Director at Infosys Europe, on the sidelines of Social Media Influence 2011 a few weeks back where he told us about the new reality retailers must live up to in an age where consumers can use the same forum to discuss your product in depth, warts and all, before making a purchase decision.

Editor’s Note: Did you miss SMI 2011? No worries. The videos and presentations can be accessed here.

I have been thinking more and more about the various strands to Social Business Intelligence, which is a major area of focus for us here at Dachis Group in 2011. At our London summit earlier this year, I spoke about the way open data inside and outside organisations can uncover new sources of value and help drive performance improvement. Yesterday, at the lovely Social Media Influence Conference, I spoke about how the field of Social Media Monitoring will become more real-time, operational and valuable as it moves towards Social Business Intelligence.

In summary, I think social media monitoring will evolve towards real-time data-driven business improvement based on socialising customer insight within the firm as a whole, not just within marketing and outbound communications.

Here are the slides, and a longer summary follows below for those of you who were not there:

From Social Media Monitoring to Social Business Intelligence

Listening grows up; becomes more business-focused

We have all been to events where people (sometimes me!) reference the Cluetrain manifesto and say that markets are conversations, and therefore we need to get better at listening before we engage. But in reality, the fact that ‘listening’ is still seen as a new and novel activity just goes to show how alien this has been to the culture of large companies and brands for so long.

But, looking at Altimeter’s survey of social strategists, it seems that listening, customer dialogue and word of mouth are now high on most organisation’s spending priorities for 2011. This is a good sign. Listening tools and techniques have evolved rapidly in the past year or so, and the purchase of the market-leading Radian 6 by Salesforce suggests that listening platforms are now regarded as a key piece of the wider social business infrastructure.

However, current practice is still largely dominated by the ideas of brand monitoring and buzz – in other words, it is still more about the company or brand than the individual and their needs or interests. Brand monitoring is a slightly narcissistic way of engaging – ‘they love me … they love me not’ – and often tend to look at aggregate measures of sentiment (which is, by the way, extremely unreliable) and reach, rather than specific issues. But there are plenty of other ways to use listening platforms to get a better idea of customer needs, opportunities, etc. We are working on some quite specific listening campaigns to help refine clients’ service offerings, and this requires far more linguistic gymnastics than asking “does my brand look big in this?”

Brand perception is obviously important, but I think utility matters more to customers most of the time. This is why I love the way companies like Southwest Airlines and others use Twitter in a very down-to-earth way, responding honestly and openly to complaints, questions and issues.

A fun little story that I think exemplifies the way utility trumps “official” brand communications, and also illustrates the need to listen and engage rather than jump feet first into social media, is the tale of woe surrounding Tom Armitage’s Tower Bridge twitterbot.

I am sure our favourite bridge needs no introduction. We love it and watch it every day (as some of you will know, often from the window of our favourite local eaterie). It’s only downside is that when the bridge raises, we sometimes get stuck in traffic for 10 minutes or so on the way to meetings in the city. Luckily, whilst he worked here, the lovely Tom Armitage created a twitterbot for the bridge that would diligently tweet bridge openings and closings, and even tell you the name of the boat sailing through, all based on public data. Beyond its practical utility, the twitterbot gave the bridge a personality in the social web, and inspired other inanimate objects to do the same (incidentally, the SF writer Bruce Sterling coined the term spimes in 2004 for this very purpose).

At some point, the marketing people at the corporation of London, who run the Tower Bridge Exhibition, decided they had the right to the “official” twitter handle @towerbridge and applied to Twitter to have it handed over to them. After trying and failing to contact Tom, Twitter sadly complied with this request and what began as a public utility (that also did a great job of promoting the bridge) turned into a dull, series of weak marketing messages for the exhibition. Perhaps the Corporation of London thought it had ‘followed a process’ and so everything was ok.

To cut a long story short, a minor twitter storm ensued with over 1,250 tweets mentioning @towerbridge in just a few days (approx. 50% of the 3 year total), almost all of which were very critical of the Corporation of London’s disregard for both Tom, the Twittersphere and the users of the bridge. I would hate to be the one trawling through the sentiment analysis for their newly minted Twitter account. Finally, realising their mistake, and to their credit, the people involved contacted Tom and the bridge now tweets at the rather unmemorable @twrbrdg_itself, presumably to “protect” the brand equity of the exhibition.

Listening and analytics cannot, of course, undo stupidity like this, but there are many other situations in which earlier action in response to product or service problems or user issues could be possible thanks to real-time data.

Some pointers for data-driven business

There are several areas in which I think listening and analytics will grow up to become more business relevant, and if they do, then I think they can play a major role in helping businesses evolve in a more customer-centric way:

• Instead of studying a microcosm of online social activity, we should try to immerse ourselves in the ecosystem and be closer to the context of what is being said and shared.

• In addition to listening to opinion, it also makes sense to gather and connect behavioural data so that future social marketing efforts can build up a rounded picture of customers and their needs.

• Don’t just listen to external conversations – also point analytics at internal conversations and see if there are common themes or correlations between them (e.g. someone in product teams suggesting feature X might be buggy should ideally be picked up before customers begin complaining).

• Share streams of listening data internally as widely as possible to bring everybody closer to customers, and involve the whole company (not just marcomms) in making sense of the data and what actions it suggests.

• Think carefully about who should ideally action customer insight, and bring them into the listening loop. For example, efforts by Gatorade, Dell and others around social media command centres have shown great promise in immersing C-suite execs in the flow of customer insight, and that helps them understand what social media teams are trying to do and why.

• Move beyond reports and dashboards and find new ways to share real-time data ‘in the flow’ of peoples’ work. Reports have never been a particularly effective way of changing behaviour, but in this case their limited distribution and the time lag effect both limit their usefulness.

The “who owns social” question

In order to action some of the points above, the perennial question of how to organise for social cannot be ignored. Who “owns” social (if anybody)? How do different business functions come together to make it work? These are not easy questions to answer after decades of increasing specialisation and silo-building, but without at least an interim answer to this question (even if it is as simple as a co-ordination committee), there may be problems ahead.

Ideally, we would recommend the kind of podular structure that my colleague Dave Gray has written about recently. It is interesting to note how Amazon – a very data-driven business – uses small teams or pods to drive tiny features on each Amazon web page, and how they use he vast amount of behavioural data generated by the site to tweak, improve or remove these features in an approach dubbed ‘Data Darwinism.’

Actions speak louder than algorithms

Why do we listen? We listen to learn and inform action. But how do we act? This is the key question that can help us close the loop between insight and results. All the data in the world will not help if we do nothing with it. Right now, one of the problems we see with listening campaigns is that the insights go no further than the marketing department, but they are not able to pull the right levers within the company to act on them. This was one of the take-aways from Jaimie Punishill’s entertaining talk at the 2010 Social Business Summit in Austin, and from what I understand, it came up in his 2011 SXSW panel on the challenges of doing customer engagement using social media as well.

So how can we both improve the way we make sense of customer insight whilst also encouraging people to take ownership of the issues identified?

We are working on the application of social analytics to this problem for clients that want to take the next step beyond passive listening. The basic idea is this: start by surfacing a stream of potentially actionable events or insights within a social environment inside a client’s organisation, and give people the opportunity to easily flag items as actionable / non-actionable or to claim them as actions. Claiming actions in the open, we believe, encourages a culture of ownership but also helps others learn what sort of actions and resolutions work best. The logical next step is to reward those who are best at filtering, sharing, escalating or claiming actions, perhaps through simple game mechanics or visible rewards.

We believe that open data can encourage greater self-management from staff by giving them the real-time feedback on how their efforts are playing out in terms of results. This can play a vital role in creating the conditions for evolutionary improvement in companies interested in harnessing customer insight to drive performance.

Lee Bryant was a keynote speaker at Social Media Influence 2011. He Tweets at @leebryant.

We’ve just put the wrap on Social Media Influence 2011, our annual conference in which we bring together the top brands, thinkers and practitioners in the world of social business to discuss the big issues impacting the market today and what to expect tomorrow. The event drew speakers from Google, Dell, Unilever, LivingSocial, Orange, O2, Infosys, Viadeo and many more. Here’s some of the highlights and the first batch of photos too.

We do this every year, a morning-after run-through of our notes, pulling out some of the more interesting detail we heard during the day (in between running around, moderating panels, etc.). Here they are in, no particular order:

Benjamin Faes, head of YouTube and Google Display, EMEA

• brands and their agencies are no longer coming to them asking for “a viral,” but they are seeing the power of video in creating attention and even cutting down on sales costs.

• The power of mobile and video: just a few months old, Volkswagen’s “The Force” spot is the most viewed ad all-time on YouTube with, and here’s a twist, over 20% of the views occurring on mobile.

• Salesforce.com instructional videos are so effective in explaining to prospective customers the features and benefits of its software platforms. The company reckons the videos do the job of roughly 750 sales staff.

Stuart Handley, communications director at Dell

• 1/5 of journalists access Twitter at least once per day for story sourcing.
• by 2014, 20% of all business users will rely on social media rather than email for personal communications.
• Dell tracks 25,000 conversations about its products and brands daily. (It listens in 11 languages and engages over 1,000/week through Twitter.)

Richard Downs, business director for Infosys Europe

• By 2015, the average American will have 6 devices connected to the Net; 4.5 in the UK.

Selina Sykes, senior brand manager at Lynx, Unilever

• Emphasis now is on recurring conversation, not campaigns.
• Devise “conversation calendars” in which the team plans down to the daily/weekly Facebook update.
• have found that Facebook fans are 30% more loyal to the product than non-Facebook fans.
• Twitter and video are surprisingly strong traffic drivers.

Chris Reed, managing partner at Brew Digital

• At time of Eurostar Channel Tunnel breakdown and ensuing social media backlash, the company did not own any Twitter handles associated with the brand. Who owned the Eurostar Twitter handle? A Japanese boy band.

Neil Chapman, Alpha Voice Communications, formerly comms chief for BP

• Don’t blame the messenger: “your twitterfeed isn’t ruining your reputation. What happened is ruining it.”
• The art of surprise: learned about sensational, hoax BP Twitter feed during live press interview. Set the policy in response: will continue to monitor it for dis-information and will otherwise continue to keep the public informed. To make a big deal about the fake feed would have created yet further bad PR.
• As Matthew Yeomans, moderator, mentioned: Neil will be working with SMI on a series of social media crisis communications training courses. The first is set for 12 July.

Editor’s Note: Stay tuned here for further wrap-up, analysis and details on how to access the presentations.

Online commerce is one of the few bright spots in retail, once again showing it’s the fastest growing segment in the sector. And what’s the fastest growing part of online commerce? It’s a two-part answer: social- and mobile-commerce, new studies once again show.Last week, comScore reported online retail sales in the U.S. topped $38 billion, its best ever quarter and second-straight quarter of double-digit growth. Looking at the table below, you can see that online commerce has really taken off over the past five quarters after a disappointing 2009, a year in which nobody was buying anything (except maybe governments buying up pieces of distressed banks).

ComCast analysts are casting the surge in e-commerce as a counter-cyclical growth story: as gas prices go up, consumers stay home and buy online. Says comScore chairman Gian Fulgoni:

“Faced with rapidly rising gas prices and stubbornly high unemployment, consumers continued to take advantage of the Internet’s lower prices by shifting their spending from offline retail stores. In fact, in the first quarter, the growth in e-commerce spending was roughly double that observed at offline retail. While we would expect online buying to dampen slightly if gas prices continue to eat into discretionary spending, it’s clear that e-commerce has become a mainstay in consumer behavior, driven by the attraction of both lower prices and convenience.”

But that’s only a part of the story. The rise of social commerce, mobile commerce, and, in particular a subset within mobile commerce – tablet commerce – is driving growth. Last week Amazon’s Diego Piacentini told attendees of the Digital Economy Forum that Amazon last year booked $1 billion in sales on mobile and was seeing even greater growth this year. (To learn more about his insights into the importance of mobile commerce read our wrap-up of the event here.)

How big will mobile commerce get going forward? Groupon’s VP Mobile Partnerships Michael Shim told All Things D that it reckons half of all sales will come from mobile within the next few years. Right now, the most popular activity appears to be mobile check-ins, but that’s largely seen as a pre-cursor to sales. Turns out the check-in king Starbucks, is calling itself the “largest mobile payments company” with 8,000 outlets taking payment through m-commerce.

Editor’s Note: We’ll be discussing the future of mobile- and social-commerce at Social Media Influence 2011 on June 14. We’ve assembled an impressive panel that includes Jemima Garthwaite, Social Media lead at Poke (formerly of Groupon); Peter Briffett, MD, Living Social UK, Ireland & Netherlands; Alex Pearmain, Head of Social Media at O2
Matt McAlister, Director of Digital Strategy, The Guardian Media Group and Azeem Azhar of CEO Peer Index. This esteemed panel will take us through the paces of how successful mobile platforms are built and how switched-on, smartphone-savvy consumers are changing the face of retail.

Azeem Azha, CEO Peer Index

In this age, a few positive words about a product or company can make or break a sales outlook. Consumers are making social networks and digital forums their first research reference point before making a purchase. It’s no wonder then that the so-called social listening and CRM sector is booming.

Social CRM and enterprise-level customer management software are helping companies make sense of the wave of daily comments made about their brand. Monitored in this way, companies can make timely business decisions, tweaks and add-ons to capitalize on the buzz. One firm at the forefront of this is Infosys.

Next month at Social Media Influence 2011, Richard Downs, Business Director, Infosys Europe, will be joined on stage by Selina Sykes from consumer goods giant Unilever to demonstrate how brands are making sense of the conversation buzzing around their brands in the digital domain and how smart marketers are using that to nurture relationships and foment loyalty. Richard is a 23-year veteran of the retail and consumer goods industry, with a particular specialty in e-commerce solutions. Should be a fascinating discussion.

For more details, check out their Digital Consumer blog in which they detail how companies are building next-gen workforces that can adapt to the free-flow of conversation and the art of social buying and selling. For a closer look, come to see them in person at SMI 2011.

Is your company a legal-savvy social media player? There may be more to it than you think. The digital legal experts at Pinsent Mason, publishers of Out-Law.com put together a few tips to keep you social media team out of court. Here’s what you should know.

It all comes down to conscious and responsible communication. Customers have expectations about how a company will interact with them, and they don’t like it when it surprises them. At the same time, customers have a big voice, so any mistake by a big brand could snowball into a potential PR disaster.

You can see the whole presentation here, but here are some of the key points:

• Have an internal social media policy. Keys here: respect the opinions of others, be transparent and respect confidentiality. Make the policy as organic and open as possible. And, if you use common sense you don’t need to have everything reviewed by the lawyers.
• Have an effective governance structure. Yes, governance. It’s good to have employees interacting with the public in the name of the company then there needs to be a structure in place to ensure a consistent corporate message. To wit, gross employee misconduct online has legal risks, and it should be made clear that unprofessional messages will be punished.
• Make sure your published material is updated and relevant. The UK’s Financial Service Authority has strict regulations to ensure customers aren’t mislead. The CAP Code, legislation that obliges companies to be truthful in their published materials, is being extended to company websites and social accounts in March 2011. The UK’s Office of Fair Trading, too, is promising a crack-down on paid-for content.
• Make privacy protection the default of everything you do. Make sure your customers know what they are revealing when they participate on your comment sections. If customers want to share more, then let them opt-in. Never force them.

The co-author of this report is Struan Robertson, a long-time collaborator in the SMI conference series. On occasion of this updated presentation, we thought we’d go back just a year to review his brilliant SMI presentation on the legal dangers of social media marketing and publishing. It’s still as timely as ever, maybe more so. Take a look:

As far as social media integration on the enterprise level goes, these are early days. Scratch that. These are “scary”, early days for corporate executives, says digital pioneer Jeff Dachis, the founder in the 1990s of Razorfish, and now, the Dachis Group. Companies are still in the trial-and-error mode in terms of using the latest social media innovations and technologies to engage with customers and employees. Why the hesitancy?

Because social media integration involves more than getting sign-off from the marketing department. It involves top-to-bottom corporate cultural change and a profound shift in business processes and, yes, the organizational structure. Dachis and Dell’s Adam Brown spoke with us on the sidelines of Social Media Influence 2010 about what to expect from the business leaders of tomorrow about how they will tackle social media integration. Hint: it may involve a whole new generation of corporate leaders.

To view all the SMI video panels and keynotes, and for downloadable versions of the presentations check out our Social Media Influence 2010 page.

Not long ago we posted here the full video of B. Bonin Bough’s SMI keynote presentation where he detailed how PepsiCo had built an organization-wide social media structure and the profound impact it’s already having on the company’s day-to-day operations. But how do you implement such a strategy? Here’s PepsiCo’s head of social media explaining in a follow-up video interview with us the key: getting buy-in from the highest level of the organization. “That’s the win,” he says. And here’s what it means:

Creativity can be a powerful force, particularly in the world of cause-related marketing. But can so-called “good creative” motivate us to change our rigid ways? What if it’s to make the world a better place? Andy Hobsbawm, founder of Do The Green Thing, thinks so. I had the chance to speak to Andy on the sidelines of our Social Media Influence conference (yes, we’ve been promising the publication of this video for some time now; we posted his presentation here a few weeks ago) to ask him about the role of social media in helping companies involve the public in their corporate social responsibility (or, CSR) efforts. Here’s what he had to say:

In the growing list of social media marketing #fails, Coca-Cola’s recently pulled Dr Pepper Facebook campaign marks a new twist on an old marketing axiom: never underestimate your most influential market — moms. Mommy bloggers trump all in influence. That much we know. The Dr Pepper campaign also proves they even understand raunchy porn references that get giggles from the guys in creative, but go over the heads of the starched shirts in marketing. Can you say, Busted!?

It’s been a week now since the press caught on to the fuss being kicked up on Mumsnet over what’s been dubbed Coca-Cola’s “Facebook porn campaign.” What happened? Let’s start from the beginning.

In trying to add a bit of edgyness to the Dr Pepper brand, Coca-Cola, which owns the trademark and distribution rights in the UK and much of Europe, recently hired London-based agency Lean Mean Fighting Machine to create a social media marketing campaign whereby fans willingly gave up the controls to their Facebook status to the good doctor (a.k.a. the agency, LMFM), all for the chance to win a grand. Self-deprecating status updates then appeared on participants’ Facebook pages included lines like:

“Lost my special blankie. How will I go sleepies?”

… and this doozie…

“I watched 2 girls one cup and felt hungry afterwards.”

A parent, wise to the “Two Girls, One Cup” reference, objected to seeing it as her child’s Facebook reference. Why? As most any Howard Stern fan could tell you, “Two Girls, One Cup” is the name given to a video trailer that hit the web a few years back for a scat-fetish porn flick called “Hungry Bitches.” We’ll spare you a description of this wretchedly foul video, but it’s safe to say no brand would want to be associated with the gag. As the mom herself writes:

My 14 yo dd participated and I was HORRIFIED to log into FB and see that her status read – ‘I watched 2 girls one cup and felt hungry afterwards’. For anyone who doesn’t know what this means, please stay ignorant, for those who do, you can imagine how I felt. This was compounded later on when a quick search through dds internet history revealed she had tried to find out what it was for herself. Thankfully, our ISP has a wonderful child filter!!

I too would caution ignorance-is-best when it comes to this video, but I do need to point out that Two Girls, One Cup does hold a significant place in net lore: it may just be the first truly viral video sensation. About three years ago, YouTubers started posting scores of home-made videos depicting a viewer’s close-up facial reactions as he/she watched the action unfold off screen. There are now thousands of such reaction videos and they’ve been viewed tens of millions of times. There are even celebrity reactions (actual and fictional mash-ups) featuring the likes of Ron Jeremy (“unbelievably disgusting,” he says), Jack Bauer (tears) and Chuck Norris (speechless). Here’s an example (we promise; it’s SFW):

You can cut the Coca-Cola marketing team some slack for not being hip to scat porn references. (A red-faced Coca-Cola PR later copped to its ignorance.) But they did commit the cardinal sin here in not bothering to vet the comments first, instead relying wholly on the cleverness of a presumably younger, hipper, more digitally-savvy outside firm known for its edge. As eConsultancy points out, LMFM big attention-grabber prior to this Facebook campaign was to punk Chat Roulette users on April Fool’s Day, leading the publication to wonder, “it wasn’t clear what the brand got out of it, other than first mover status.”

Now Coca-Cola says it’s reviewing its ties with Lean Mean Fighting Machine. At the launch of the campaign, the agency tweeted what now reads like prophetic words for itself and its client:

Stitched up, indeed. Coca-Cola looks at best clueless and at worst negligent after this incident. You have to wonder: nobody at Coke could speak up and ask, What does this “two girls one cup” reference mean? A simple Google search would have clued them in. Instead, they get angry mommy bloggers to explain it.

As of today, there are 1,320 heated responses to the Facebook Dr Pepper discussion thread on Mumsnet.com. Not surprisingly, they take Coca-Cola, not the clever twenty-somethings at Lean Mean Fighting Machine, to task. Coca-Cola has responded by apologizing for the offensive material and the social media account with LMFM is officially under review, a not so subtle finger-pointing at who Coke believes to be the real culprit here.

And that’s probably not entirely fair for the agency. Yes, it took recklessly irresponsible liberties with the brand, an absolute no-no in the agency world. But it did deliver for its client something big: a lot of buzz for a pretty flat cola brand.

Clarification: in a previous version, we included a graph showing the Facebook user gain for Dr Pepper’s Facebook page in the U.S., not Dr Pepper UK. We regret the error.

Reporting by Brian Skepys; Writing by Bernhard Warner.