Online Community Numbers that Don’t Add Up
July 21st, 2008
The Wall Street Journal reported last week on the “failures” of most online communities. It seems that Ed Moran, a Deloitte consultant, did a study of more than 100 business with online communities:
Thirty-five percent of the online communities studied have less than 100 members; less than 25% have more than 1,000 members - despite the fact that close to 60% of these businesses have spent over $1 million on their community projects. “A disturbingly high number of these sites fail,” Moran tells us. (UPDATE: The WSJ article has been edited to say that it’s not 60% of business that have spent over $1 million, it’s 6%.)
The article goes on to say that most companies get caught up in all the technological bells and whistles and blow their big budgets pouring money into these online gadgets. Ed suggests that companies should spend those resources identifying potential members of a community first.
I gotta admit, I love this article. Everyone is running around trying to copy Facebook and MySpace. Online communities are popping up everywhere. And I really can’t see the point behind most of them. Is it so the CMO can point to it and say, “Look! We’re part of Web 2.0, too!?!” And then there’s the numbers game. These companies want 10,000 people in the first week. So they have contests. Giveaways. Gimmicks out the wazoo. And the people come. But the don’t stick around. There’s no community there. It’s just another website. Another registration form. With no sticking power. No reason to come back. The community has no sense of community, because most CMOs see it as just another vehicle to push messages through.
So before you jump into the online community pool, there is a lot of heavy lifting to do up front. A lot of questions to be asked. And a lot of hard work to make sure you create something that’s long-term and sustainable instead of another flash in the pan. The first thing to keep in mind? Ninety-two percent of word of mouth happens offline. So make sure the online supports the offline and vise versa.
Otherwise you’ll have a nice, pretty site that ends up being another community ghost town.
Other posts by Spike.
gianandrea facchini says:
I would add that timing is a crucial factor in these operation. To get into blogging or communities and hoping to get results in few days is one of the wrongest perception, today.
July 21st, 2008 at 7:46 amConnie Reece says:
Well said. Just because you build it does not necessarily mean they will come, or that they will stick around if you do. Building an online community is hard work and you have to be in it for the long haul.
July 21st, 2008 at 7:51 amlinks for 2008-07-21 | Daan Jansonius says:
[...] Brains On Fire Blog » Blog Archive » Online Community Numbers that Don’t Add Up (tags: community) [...]
July 21st, 2008 at 8:40 amDaveMurr says:
I agree with your and with The Wall Street Journal’s comments.
In my opinion, a big part of the reason why these communities fail - is becuase they are being built by companies that don’t understand how they work or more importantly how much work it takes to make one sucessful.
They get caught up in their dance routine. Having been marketing a certain way for so many years, when they try to do that dance in social media - they are told thats not how it works and trip up.
This causes the wheels to spin and momentum, direction, and objectives are never clear.
To the potential member this appears that the company has no idea what they are doing and are just trying to push their message on me.
No thanks - back to my Facebook page to play with my Pieces of Flair application.
Too many comapnies try to make social media work for their marketing agendas when it should be the other way around. This of course presents the scary notion that this may require a 100% change in thier marketing inniatives - and how many companies are willing to do that? OR better yet - how many companies need to do that?
Another thing to think of is the word community - and what does that entail? Do you really need a fancy “Facebook” web site to build a community? Wouldn’t a Blog do the same thing, or a forum, or even a e-newsletter?
I love social media and everything about it but even I would be the first to tell a business that building a community would be a bad move if it doesn’t fit in with their mission or goals.
July 21st, 2008 at 9:06 amRob Jacobs says:
The book Groundswell explains that you need to know your Social Technographic Profile. In other words, who you are trying to reach should determine the web tools you should choose.
The same for us in education. Who we are trying to teach and what we are teaching should determine the tools we use.
Education, like business, to often jumps on the technology bandwagon without much thought to the reason and purpose for doing so.
July 21st, 2008 at 10:28 amfrancois gossieaux says:
Hi Spike - I was part of the study efforts and many of the findings can be found at http://www.beelinelabs.com/tribalization.
I would have a few comments on the article.
First off, I agree with you that many marketers do not get it and that they are setting up brand-centric or product-centric communities as another channel to push their messages through instead of creating user-centric communities with a lot of value for the users. Many also do not understand what makes communities tick nor how to leverage the forces that can create positive feedback loops in those communities.
I also agree that many companies have no reason to create their own communities, but that they should instead go where their customers already hang out, whether it’d be on Facebook, Myspace or some other user-managed community like the Tivo community.
All that being said, you do not need thousands or millions of users to have a successful community. We have spoken with companies that were very successful in leveraging communities with just a few hundred people in the area of product innovation, or in the area of uncovering consumer insights. It comes down to understanding the role of content and moderation in the success of those communities.
But if you can get people excited about scissors, or get a virtual community to help you with new product development for a potato chip manufacturer, I am sure that you can uncover hidden passions within your customer base that will help your company no matter what vertical you are in.
Francois
July 21st, 2008 at 11:53 amBIG Kahuna says:
It really depends on the strategy. Many companies don’t really care if they build a massive network. The goal for them is too add value and possibly deliver better service.
I developed a blog with my wife http://www.stthomasblog.com and built up readership and got a great following before I introduced the forum, http://www.stthomasblog.com/forum (just released).
Next up is a social network, but not until the forum gets some traction. Everything was done carefully and in steps. The key is developing a focused brand identity and then delivering that to the right target market.
If done correctly you can really own a niche market. In this case I focus soley on St. Thomas (while all our “competition” focuses on the 3 US Virgin Islands). We have such a good following because of that clear focus that we will have a very good chance of success on the social network.
It also helps that my wife and I are extremely passionate about what we’re doing. We really care about helping St. Thomas, visitors and locals. So having some passion can get you over the hump.
We also did a lot of stuff offline like introducing the Best of St. Thomas Awards. This got us in front of owners and managers of many top restaurants, bars, shops etc. Word of mouth spread like crazy on our blog because of these awards. It was very time consuming and costly from our standpoint but the word of mouth was amazing.
We’re trying to work with the major radio station (we only have 2) where we go to their events and then blog on the event. Then they interview us once a week on air to talk about the blog article. It’s fun and it helps us and the radio station and our followers.
Next year we are going to the high schools and reqruiting students as guest bloggers. So a nice mix of offline stuff does make a big difference.
July 21st, 2008 at 4:10 pmBigger . . . and Better » The Buzz Bin says:
[...] with disabilities (Ideal-Way), and straight on ’til morning. Communities are surging, too (as tricky as they can be). Via NetSquared, the recent launch of CARE Connections, an online community dedicated to global [...]
July 22nd, 2008 at 6:12 amSara Rasco says:
Totally agree that companies should spend their money *first* finding and meeting their customers where they already are. Secondly, the social initiatives you do should be of real, practical use to them.
I want to know how many of these companies were already participating in social media in some way beyond making a branded bit of code that people can pick up and drop in a sidebar or a MySpace page.
You want a blog because everyone else has one? Ok. There are some things you might need to do to keep pace with the rest of the business world. But are you reading them right now, using them? No? Start doing it, along with some of the people in management, then let’s talk about it in a couple of months and see if you still want to make that commitment. If you build it and work it, they may or may not come and stay. If you just build it and leave the half-framed shell on the foundation, that’s worse than never having started at all.
July 22nd, 2008 at 6:21 amMatt says:
There are already so many social networks all over the interwebs today. There is Facebook, Myspace, XUQA and 20 other copycats. Those networks are already so advanced that I just don’t think a startup network (especially a really specialized one) should even bother.
Facebook has made it so easy to search for people with similar interest as you I can’t help but think that a company would be better off developing a Facebook app instead of a separate network.
July 22nd, 2008 at 9:18 amGreg says:
Dave Murr and Big Kahuna hit the nail on the head. There’s a lot of heavy lifting - research, strategy, offline activities, understanding customer passions - to make SM work. There’s so much buzz about SM that many feel the need to ‘do it’ and jump in without doing (at least some of) the work first.
July 23rd, 2008 at 11:33 amAn old post on ‘the times they are a changin’ http://5691gerg.com/?p=3
olivier blanchard says:
Check out the link to the Tribalization study on the brandbuilder blog. You can get the complete stats there.
July 23rd, 2008 at 2:13 pm6 leviers d’activation pour une communauté en ligne | Espresso Interactif says:
[...] lisais un article très intéressant sur le blog de Brains on Fire qui me fait justement poser plusieurs questions quant à l’efficacité - ou non - des [...]
July 30th, 2008 at 3:06 am