Social Media Monitoring: Who’s Making Money?

Luke Brynley-Jones talks with Philip Hofmeyr at Social Media Measurement & Monitoring (photo: Benjamin Ellis)

Luke Brynley-Jones talks with Philip Hofmeyr at Social Media Measurement & Monitoring (photo: Benjamin Ellis)

So who’s making the money in social media measurement and monitoring? I was on a panel asked this question at the Measurement & Monitoring Meetup on Friday. It’s essentially another take on the ROI of social media monitoring question, but with the focus widened to include suppliers and consultants, and at first sight it’s a rather annoying question. Having established at the Chinwag event on Tuesday that social media isn’t (necessarily) all about financial ROI, to be asked where the money is in relation to social media monitoring tools seems regressive.

Yet it’s actually a burning issue for many of the suppliers. Having tried and tested many of the leading services over the last few months (Sysomos, Synthesio, Radian6, Brandwatch among others), I have a new-found respect for the task these guys have taken on. Not only are they sifting through millions of new conversations every day, they are having to linguistically analyse these conversations and then produce results according to often very complex individual algorithms entered by their customers. This isn’t rocket science, but it requires rocket fuel of a variety in it’s processing power. That costs money so they need to charge their users for their services, and most of them do.

But are they making money? Granted, there’s a gold-rush going on, with companies desperate to know and understand what’s being said about them online. But, with some exceptions, social media is not yet accepted wisdom in many boardrooms and budgets in no way match the enthusiasm of individuals in forward-thinking PR and marketing teams. Even the sponsors of highly successful campaigns (such as the Meerkat) have not seen the need to invest in social media monitoring tools.

We’re just not there yet in terms of credibility and investment. The market is too young, too fragmented and too volatile for anyone to be making a fortune out of monitoring yet. As I said in the final Panel session at the event on Friday, I think we need to see some clear market leaders emerging, with easily comparable pricing and feature lists, before customers will have the confidence to invest freely in this exciting new marketplace. And of course, the shadow of a free dinner around the corner (aka Google Social Analytics) is likely to cause some companies to delay their purchasing decisions.

I guess that leaves the Consultants. I’d love to say that in times of uncertainty, it’s the consultants who make all the money, but in truth it isn’t. Consultants are at the bottom of the food chain in this ecosystem. First the brands need to be making money, enough money to feel confident enough to invest in something new. Then the monitoring companies need to be making money, enough money to be a contender. Then, someone has to decide that this is quite a complex field and it might help to bring in a real expert. I can tell you, that doesn’t happen all that often!

On that note – Marshall Sponder and Nathan Gilliatt, two of the best social media monitoring consultants around, will be in the UK at the end of March 2010. Contact us if you’d like to book an appointment with either of them.

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Feb. 08, 2010

  • Anon

    No company is making money – look closely and you’ll see a number have (or are) merged with others, and too many are burning through investor cash.

    The reason? Everyone likes free tools. As one person recently commented, Free tools are like Free Toys. People play with them, but then leave them.

    Some will argue the exception of the single, otherwise-out-of-work consultants pitching themselves as measurement experts, but that does not make an industry. Instead we’ve seen them cloud the advancement of sustainable, industry-accepted metrics.

    The core of the problem are a lack of educated users (by this I mean people with neither an understanding of statistics or familiarity with previous measurement techniques and standards) *and* a rush by social media platforms to follow Google with open API’s (which means even a monkey can tap the keg).

    The result has NOT been innovation. Name ONE innovation in this space. Not sentiment. Not automation. Not demographics. Not integration or statistical soundness. And certainly no opportunity to correlate data with other tools.

    This space has been left to junior folks, with tools built by junior engineers. Until that changes, it’s gonna be more speculation, more statistical Error, and more FREE stuff that burns time faster than money.

  • http://www.observingparticipant.wordpress.com Michelle C

    Hi Luke,

    In my own personal point of view, I see the market as diverging towards two ends of the spectrum : with a “Wal-Mart” of monitoring brands on one end, offering easily affordable monitoring solutions that you can put togehter yourself, and the “J.Crew” at the other end, that will bring you an outfit tailored to fit just you. There may also be, in between, a “Target” that has consistently good quality services and is always a crowd-pleaser..

    Again, these are my own personal views :)
    Best, @MiChmski

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  • http://www.oursocialtimes.com Luke Brynley-Jones

    Always nice to polarise the debate!

    Thanks for your comment Mr/Mrs Anon. If you had been at the event on Friday you would have heard me make the the point that, in most businesses, the people doing the analysing are called “Analysts”. I’m fully aware that SMM isn’t something to be taken lightly. Then again, there are lots of light-touch solutions that can provide useful insights (see my recent post on Tweepsearch). As for innovations, I would suggest that these are emerging with usage. e.g. Check out Marshall Sponder’s recent post about using SMM solutions to generate keywords for SEO based on a what people are saying (rather than what they are searching for). That *could* be revolutionary in the world of SEO.

    Hi Michelle – I can see your point, but won’t that “crowd pleaser” in middle ground eat up the edges? That’s what I’m expecting, at least.

  • http://ci.biz360.com Maria Ogneva

    Hi Luke,

    Great and thought provoking post. I do agree that the industry is very much in infancy. We, as well as our competitors are finding ourselves educating the market quite a bit. However, we are are finding that most understand that it’s important to incorporate social media into the marketing mix, and to measure it as well. Back in the day, 10 years ago, we had a much more challenging job of educating the market on measuring and monitoring traditional media.

    I think what’s really going to move the needle in acceptance by companies and brands is the ability of these solutions to work with existing enterprise-wide systems like salesforce and others. Because once you find, monitor, and measure, what’s the next step? Engagement. There are different types of engagement. Sometimes you answer a question once, sometimes it’s an ongoing relationship, where that person becomes a client. I think this kind of CRM integration is going to be Chapter 2 for what we are doing.

    Seems like you have tried out quite a few great monitoring and measurement solutions. I would love it if you gave Biz360 Community a spin. Ping me for a demo and free access.

    Maria Ogneva
    Social Media Director, Biz360
    @themaria @biz360

  • http://www.oursocialtimes.com Luke Brynley-Jones

    Hi Maria. Integration with existing CRM tools would definitely be a step forward for any monitoring service. I still think, though, that it would ease the industry’s “growing pains” if the leading players offered customers a clearer range of solutions at easily comparable prices.

    p.s. Yes. I’d love to play with Biz360.

  • http://www.buzzdetector.com gianandrea facchini

    Luke, I believe that we should separate companies looking for the Holy Grail and companies looking for delivering consistent analysis to their clients.

    Me, with my small company, I have positioned myself in the second group: no fancy graphs or catching analysis with less than a reliable base; instead a lot of work reading and categorizing posts and delivering interpretations and strategic insights to clients.

    My point (I hope to be able to fully explain myself over the language barrier) is that today who can claim to have an efficient way to separate positive and negative posts automatically? Who can claim to have find a way to define the influencers? Reading a recent post from Marshal Sponder, my feeling is that no one in the market is able to perform these tasks in a reliable way.

    And forget about the integration with sales data.

    So I think that what the market can buy today is the ability to gather data and read them and understand them.
    This is what we do and this is why we work with multinational clients since three years.

  • http://www.oursocialtimes.com Luke Brynley-Jones

    So you’re the guy making all the money! ;) I definitely agree that human analysis is one way of getting value from social media monitoring. Hard cash for hard work. Seems fair enough to me.

  • http://brandwatch.com Giles Palmer

    hi Luke
    Good post. Relevant post in terms of looking at the ‘sector’ as a whole. I agree with the thrust of your argument. One interesting question in this space is whether there will be consolidation and it’s not at all clear what the business case for that is as it won’t be easy to integrated the different technologies and as you say, none of the companies in this space is big enough …. yet

    However, the appetite from the investor’s side seems strong. Visible Technologies raised $22m in January (http://tinyurl.com/yjlaxxz) and $22m is a VERY BIG NUMBER for a company at their stage

    So what next? well i’m going to play my cards close to my chest, but one thing is sure – 2010 is certainly going to be an interesting year

  • http://www.buzzdetector.com gianandrea facchini

    I wish I was making hard cash but, to be honest, I think that this is the way to earn some money. At least until I find a vc…..

  • http://sethgrimes.com Seth Grimes

    Perhaps if companies aren’t making money, it’s because monitoring and measurement aren’t enough, because you need analytics to deliver substantial business value. I know that companies that are providing social-media analytics — for instance, Clarabridge, Attensity, Lexalytics, and others in the text-analytics space — are making money.

  • http://www.oursocialtimes.com Luke Brynley-Jones

    Yes. Analytics with social media monitoring and measurement is a valuable proposition. I guess that’s where people expect Google to step in though, and we know who’ll be making all the money then. Nobody!

  • http://www.soshallnetwork.com Andrej Volčanšek

    there can be only one per vertical on the web. There is already Facebook. Also, measuring social interaction — it makes no sense.