Is this like dating? I have some well planned and thought through moves that I have played over a million times in my mind but it is all a bit different when you are out there playing the field. Will private moments be reconciled with public pronouncements? Will we score?
Now that Tim Kitchin & I have decided to take our chats at the intersection of social capital and brands public, I think that I am starting to have some insight into how Whuffie expert Tara Hunt and open source leader Chris Messina felt during their online adventure.
Where will this lead?
Maybe I am a bit like Chandler Bing? Leading with some boyish humour. Just trying to make the nitty gritty of connecting social media to corporate value a lot more entertaining than it really is.
In any event, what is certain is that while I am full of wonder about where this tangent will lead and can’t promise what “we will” do, I am confident that Tim is a credible thought leader on brands. I am honoured that he is interested in having these public chats. Even if I throw in some high jinks, Social Capital Value Add and memetic brand will be better from this exchange. Along the way there will be something of interest to provoke your thinking or at least a smile.
“Towards Social Branding”, Tim’s post to open this series, starts out with some discussion about brand valuation and the merits of stock values correlating to underlying values. During this time of financial turmoil it may be popular to throw the corporation as a form of organisation under the bus along with the functioning of capital markets, but at the risk of attracting the ire of the double bottom line set, I am convinced that like it or not, the corporation is a very resilient idea and markets suss out efficiency.
You can spend time questioning markets and trying to impose motives beyond profit on the corporation like arbitrarily selected social “good”. Social Capital Value Add is not preoccupied with this. As a farmer’s son, I begin from the basis that I can not change nature. Self interest is undeniable, people trade and, faster than most individuals, the corporation is adapting to new forms of making meaning that have emerged since broadband overtook slower forms of connection. The corporation will be around, purely motivated by profit, long after I am dust.
Brand valuation was developed to try to bring insight into part of the sources of stable future earnings of the corporation. That is why it is, and will continue to be, an important part of the haggling over what a corporation (or a product line) is worth to buyers and seller.
Brand valuation is product centric. It is designed to get a handle on any enduring difference between what a product costs to produce and the price it may command from buyers. There are many sources (not just brand) of the ability to maintain margins. They add up to: the buyers’ perception of the product value is greater than the cost of delivering it (including cost of capital).
Broadcast media - from packaging to television - emerged as the dominate method for the corporation and its agents to shape common perception (in the pursuit of profit). Impact on perception was unbalanced by the articulation of most insiders and virtually all outsiders (the little guys) because broadcast media required lots of capital to emit and has traditionally out scaled (drowned out) alternative interpretations. In this context attributing intangible value to an idea like brand, i.e. a form of broadcast media, makes sense.
The problem is that brand has become a golden hammer of corporate management. There is no shortage of conversation about what brands “do”. Stories, cues, symbols all remain vital parts of value creation. But when Tim starts talking about brand loyalty or another fellow I respect, Stephen Byrne asks me about participant marketing or brand advocacy, I start to worry that we might be getting off the point.
Do brands invent?
I think there is a point when the term brand gets applied too widely. Everything looks pink through rose coloured glasses.
We have entered an era where broadcast’s ability to dominate perception is quickly eroding. (Update, Dec. 3: Tom O’Brien makes this point in a very practical way.) To have insight into stable future earnings in an era where common perception is formed by millions of competing channels (i.e. broadband empowered people) I think we will uncover new keys to productivity and value defense and creation if we open up an equally vital examination of the structural factors that underlie the content layer.
Why confuse the examination of a new media form that is a product of connection by attempting to contort the notion of brand, which is rooted in broadcast?
Lots of smart people like Nan Lin, Olav Sorenson, Brian Uzzi, Barry Wellman, Tom Snijders, Martin Van Der Gaag and Matt Jackson have established ways to describe and analyze connections between people also known as social networks. Social capital describes the resources that reside in these networks and I think social media are artifacts of a new scaled up form of it.
If, in the new context of the networked era we are looking for new competitive advantage as we consider the content layer, then I have found the established work of Richard Dawkins, Susan Blackmore and Ben Mack (who used the term memetic brand first in a powerpoint presentation that I can no longer find online) and other replicators of memetic theories to encompass the content layer but also provoke new insight into the structural factors that cause ideas to spread.
Let’s give the brand establishment the day off. Sorry Tim, Social Capital Value Add is not “a prescription for the measurement of brand value”. I have not proposed it to compete with or replace brand valuation, I think it is a useful compliment to brand valuation. It is proposed to measure scaled up forms of social capital that are an important corporate asset distinct from brand. For example, if I pick up a great idea or contact like Kim Patrick Kobza at Verna Allee & John Maloney’s value networks LinkedIn group, why should we use “brand” to describe that transaction?
Having said all of this, Tim is bang on in noting “a fundamental change in the way that brands drive value” due to the emergence of scaled up forms of social capital. I think bouncing these related concepts back and forth will help all of us understand them.
Tim & I are committed to this effort over a series of posts ahead. We hope our opening two posts are received as an invitation to others to link up their thinking. In addition to the many esteemed thinkers referred to above, Chris Brogan and Julian Smith have a related manifesto and book in the works. Maybe they already have this Whuffie thing figured out in Cory Doctorow’s Magic Kingdom? Tim O’Reilly has been tweeting it up about social capital lately. Jonathan Salem Baskin says Branding Only Works on Cattle.
Feel free to add a tweet or post and please use “SoCap&Brand” as a tag. For example, I hope that Tom Chapman &/or his peeps over at www.socialmediatoday.com add the SoCap&Brand tag to this related post:
Social Capital and building a quality social graph. (I hate registering to leave comments by the way!)
What are the boundaries between social capital management and brand management?
Tim?
