The need for services in social technology

Two of my former Forrester colleagues published Wave evaluations this month.  Suresh Vittal evaluated "Listening Platforms," aka brand monitoring vendors and Jeremiah Owyang evaluated "Community Platforms," aka white label social networks.  By the way, you can download both Forrester reports for free - see Telligent for Community Platforms and Visible Technologies for Listening Platforms.

Both analysts outline consulting services as a key success criterion.  To fully understand these technologies and capture value, you're going to need some help.  In the future, this won't be the case when companies integrate social technologies naturally into process and mindset.  During the long transformative transition in the meantime, companies will need help getting there.

I'm seeing a structural issue in these two markets and others related.  Social networking and listening products are in demand, with 100+ and 50+ vendors in each market, respectively.  And they all started as product companies, explaining why most of them still lack a service offering.  Product and services organizations operate with fundamentally different structures.  But as Forrester points out, to successfully implement social technology, companies need both to be successful.

The current economic environment has put immediate pressure on vendors, requiring them to choose between two familiar directions.  At one end, vendors close to full-service already will tout existing service capabilities harder, becoming margin plays affordable only to the largest clients/budgets.  At the other end, self-service vendors will capture the volume end of the market for smaller budgets and experimental dollars.  Vendors in the middle need to choose quickly, or crash and burn.

Either way, marketers should be okay dealing with either approach, trained by their agency relationships.  Some prefer full-service, others prefer to integrate and aggregate on their own.  But social technologies aren't meant to serve marketers alone - they need to support the entire organization.  To that end - I believe that full-service is the best approach...but when you think of the term "platform," shouldn't more than a point solution be involved?  Well, both of these smart analysts also mention integration as a key success criterion.  More to come... 

Comments

[Bryan Person]

Peter:

We actually fall into the camp of a vendor that offers both the technology platform solution (out of the box for a lower price, or with customization for a higher price) and the services. Our revenue actually falls pretty close to Forrester's recommendation of 20% technology and 80% services.

We find that most of our clients just aren't looking for the self-service approach. Because although communities and even social media have been around for a while, most clients we talk to still want the expertise of a community partner/agency to help them build and manage their community. Francois Gossieaux found in his Tribalization study last year that the second biggest reason that communities fail is "finding time to manage community." We still see that being the case over the next few years.

Bryan | @BryanPerson
LiveWorld

[Peter Kim]

Hi Bryan - from my experience, the brand monitoring/listening platforms market sees the same client needs. Free alerts are fine to get started, but driving business value requires industrial expertise. Until we see organizational structure change to support social business process, consulting services will be critical.

[Mike]

Peter,

You are right on the money. Most brands are not prepared to deal with the technology or data without a heavy dose of client service and consulting services. This is probably one of the biggest things that has surprised vendors in the Listening Platforms space. As you know, brands are less interested in platforms and technology and more interested in how the information can enhance their business across the entire enterprise. This is a very new way of thinking and doing business for lots of companies and requires a lot more than just the best technology stack.

Mike

[Max Kalehoff]

Hi Pete,

While I'm not in love with it, I have to say I like the term "listening platforms" better than "brand monitoring," because listening entails interpretation and understanding, and that's a far bolder challenge than monitoring. Semantics aside, your early analysis of the space was instrumental in advancing the category and driving transparency among different approaches of measuring and analyzing public online expression. If anything, it's helped to commodify that space -- some would say for worse, but I'd argue for far better.

But to the point of your post, I agree on the surface, but I can 't help but to go deeper. I've said it before: Most successful entrepreneurs and senior managers across technology, product and professional-services industries will usually confirm one thing: it is extremely difficult for a company to be both a product-technology AND professional-services company. You have to be primarily one or the other because there's a conflict of agenda. The agency mindset is to deliver highly customized solutions for individual customers. But too often long-term product innovations and investments suffer because the model is biased to reward customized services versus a better, scalable product. There are some hybrids, but they are rare. Many of the most successful technology companies are, in fact, agencies -- once you look under the hood or into the books.

I recently commented on Jeremiah's social platforms report, but my thinking holds similar for listening platforms and more generically to so-called social technologies: A more mature community-vendor landscape will probably include a handful of strong platform product plays. They'll exist symbiotically with a diverse and growing base of agencies and consultants who build their businesses on top of those pure platforms. Some marketers will benefit from agencies, while others won't. The most important thing is to separate all these vendor propositions to their essence and then make best-of-breed decisions. Best technology, best agency management, best education, best integration, best analytics, etc.

Lastly, in terms of "companies needing help getting there," I believe the paradox is that we're so early in the game that nobody's really an expert yet. EVERYONE is a student, and some are more informed. Any expertise at this point, in most cases, is relative, and with a relatively low barrier to accomplishment. There are some exceptions, but in most cases I'd put my faith into a smart, intuitive person with six months of "social media" experience versus the majority of so-called experts with many years. (To clarify, I would put you into the exception bucket.) I think there's a lot of noise in terms of what expertise really means. Can anyone help me with that? There's a huge opportunity to unpack that one!

Regards,
Max

[dominique]

Excellent post.

@ Max, as an entrepreneur delivering a social media marketing sw I can't agree more. We're clearly on the "product/technology" side and we partner with experts to do the consulting portion.

Agreed also that everyone is a student and that most people are experimenting, sometimes with success on specific aspects of social media.

@Peter
The market is still not mature and the range of business needs that one can have for a social media program is clearly wide:
- brand monitoring, sentiment analysis
- influence, influencer identification, engagement with relevant communities
- innovation, mining communities for insights and ideas
- lead generation

...

It is not limited to "brand monitoring" or "listening platform", PR.

Reading the Forrester report, I would challenge that one can NOW, with the pace of innovation in Social Media, provide a platform that's optimum for every real business scenario. Even with $50M :-).

What I mean by scenario ?

A scenario where it's clear what is after the "so that" like... we want to listen to the "community of teens using iPod - provided there is a community ", so that we can buzz influencers in that community about a specific new accessory, xx time a week, investing yy hours and with an expected return of zz people writing a post about it, leading to kk access to our site

and NOT a scenario like: we will to what social medias says about "iPod", and we have no clue nor the resources to know what the hell we're going to do with the results.

There is a huge demand for services/ consulting/ starting with helping the client build its strategy, make his choices ( do we listen to twitter, not, do we focus on "best" articles already digged, or stumbled, do we extend our listening to LinkedIn Q&As? do we engage, where ...)

Relative to integration, this is an extremely difficult challenge. As an example, how can you listen, or worse engage with sources as disparate as Youtube, Twitter, Blogs, Forums, Digg, LinkedIn, Facebook with efficiency... and who knows what tomorrow, plurk, yammer, Chinese BBS ??
One can cover it all, but be the best at each and everyone. This is a different story.

The risk is that you integrate the data but you loose the social aspects of each and every of these wonderful channels and end up with something that 's useless for every business scenario.

By the way, we don't know yet, whether at the end of the day, there will be ONE platform or several and this may require application developers to come up with interoperability standards.

Anyway, quite an interesting topic.

Thanks

[Robin Grant]

Hey Peter - really appreciate the links to the free reports. Thanks!

[John Eckman]

Given that I work for a services firm (http://www.optaros.com/), I'm obviously not unbiased in this discussion, but my experience has definitely been that clients need services above and beyond what the technology platform / product vendors produce.

In fact, if you include not just the commercially licensed and hosted products, but the wealth of software in the Open Source space, there are often cases where services represent nearly 100% of the client investment (excluding only hardware).

As a long time consultant in the Enterprise Content Management space, I've seen the shift very clearly from license revenue toward services across the board.

[Jennifer Zeszut]

Peter, I think you're right about the dichotomy that exists right now. But brands need both, plain and simple. Technology can be very powerful (for real-time sentiment scoring, as an example), but the so-what (what we should DO about it) needs to come from people. I think most of us can agree to that. I think the big difference among us “listening” vendors is who we think should offer the insights.

The “big” guys covered by Forrester say that your technology builder and insight-giver should be the same company (one of them). Some agencies are cobbling together their own software to similarly “vertically integrate” their offerings and be a one-stop shop alternative.

But why would you want brand insight to come from the technology company that builds monitoring software? Do they know the ins and outs and nuances of your brand? Or, why would you want your strategic agency brand partners building technology for you? Do they have PhDs on staff who are using machine learning techniques to make sure your data is spam-free? No. Ideally, you want the insight to come from your own people (if you are a company), and your agency partners who know you and your brand – not a tech vendor (or their contract consultants-for-hire).

There is another option – a hybrid platform that uses technology for what its good at (scoring, measuring, ranking, sifting, eliminating spam, real-time monitoring of millions of pieces of data, etc.) and also facilitates people doing what we are good at (adding insight, asking questions, assigning tasks, making decisions). A hybrid solution, like Scout Labs, is a technology solution designed to help agencies and client teams 1) listen to customers 2) add unique insights and custom analyses 3) collaborate around the ‘so-what’ for a brand.

It's not easy to pull off. Of course, the extreme agency OR extreme product approach is by far the cleanest and easiest. But 1) I think it’s the way brands and their agents really work, and 2) in this economy, it will be what companies can afford. 2009 is the year for brands and their extended teams to become good listeners themselves – for so many reasons.

[Peter Kim]

Not sure I understand - in your description of a hybrid model, haven't you outlined what Nielsen Online and Converseon provide today as well?

[Nathan Gilliatt]

The overuse of the word "platform" is adding to the confusion. If we use platform to refer to the sofware, it's easier to sort out. So, revisiting Jennifer's point: A client can select services from Company A that build on the software platform of Company B. Offering both tools and services is a strategy of some, but certainly not all, companies in this space.

http://net-savvy.com/executive/social-media-analysis/listening-tools-vs-services.html

The insight company can be a research specialist, an agency, or an in-house team. Look at all the Radian6 and Visible Technologies announcements with agencies, and the software company strategy becomes clear. Many more companies can do the insight piece than can build a competitive social media analysis platform.

Oh, and I can think of three different categories of professional services in this space, but I'll save that for the blog post I need to write.

[Jeremy Bencken]

I agree that some brands will need a full service agency to engage with social media, but I wonder if most are up to the commitment. This isn't something you can do part way. An agency would need to be /very/ tightly bound to the client (almost to the point of acting like an insider who is empowered to get shit done and interact/engage on the behalf of the client).

Let's say an agency just tried to serve as a listener who routes questions/comments/problems from social media world to the appropriate people within the client organization. To me, there's a big risk nobody does anything about the information.

So someone must own social media engagement, and my guess is few companies are going to put headcount against this, so the only reasonable solution is a very empowered, very close agency. An agency who just notifies you of conversations just produces more email for the brand manager, and (most likely) no real engagement for consumers.

[Douglas Pardoe Wilson]

I agree that there is a need for Social Technology services, but I think you are being both too specific and not specific enough. You mention various business opportunities and possible services, which I think too specific. We don't know enough about what is happening to be that specific -- new Social Technology services pop up and languish all the time. There are too many ideas, without the Social Technology to evaluate them. You are not specific enough when you mention the general need for such services, because you don't address the problem in any kind of detail. I can give you an example of being a bit too specific myself, from a few years ago, http://www.SocialTechnology.ca/casa.html -- a good idea for a good business opportunity, but without enough technical information about the nature of the problem -- and I can give you and example of a technically specific and rather profound review of the problem, in http://www.SocialTechnology.ca/diagrams.html -- please look at both. Or if you are not interested, perhaps direct me to someone who might be.

dpw