One simple word……REVENUE

Typical areas of interest:

Counterfeit product marketing or sales
–product
–coupons
–manuals
Unauthorized agents/sales posing as representatives
Traffic Diversion Schemes and SEO
Document Leakage
Reputation
False Endorsement claims
Identity theft

For consumer products it has been estimated that there is a 1 trillion dollars in the market annually or 10% of GDP of purchased goods that are illegal counterfeit. Let’s put that in terms of your revenue. If 10% a company with a 3.5 billion dollar revenue stream was being stolen by counterfeit activities ($350,000,000), don’t you think management would much prefer to have that stream of revenue go to the company or shareholders?

Some may think that traffic diversion may not cost the company anything, but if you take into account your conversion ratios of how many customers come to your site and actually purchase goods or services, you can relate that back to a revenue number as well.

– Average monthly online visitors to your site 50,000
– Average monthly visitors diverted 10%, 5000
– Conversion rate to offending sites 1.5%
– Average monthly customers lost (5000) * (.015) = 75
– Annual loss of 900 customers
– Value/Customer $125
– Total cost of online diversion to competition $112.5K
If $112,500 in cash was missing, would you investigate?

These are just a couple of examples of how you can quantify the cost of ignoring the risks around social media. Start evaluating your company based on where you have seen your name in social media and what types of products or services you offer. How easily would they be subject to any of the above scams for diverting your companies cash?

1. “We meant to do that” – a response when we pointed out that a site a client built (who claims to do web development on the higher end levels) wasn’t visible in Google.

2. “We have too much business” – their continued rebuttal which I found incredibly odd in general, but especially in a down economy. I’ll be sure to check back in with them in 3 months.

3. “We didn’t have any business in January, so we are not going to do any advertising in February” – well, you can see where the flaw is in this one if you know about my rants, but more importantly, the client was on vacation all of January so his phones were not answered. You know how I feel about that.

4. “The internet has only been around for 10 years.” This came from a guy who sells interactive advertising.

5. “There’s not a whole lot of people using the Internet yet.” Self explanatory.

6. “I don’t think we should deal in that social media stuff.” – This from someone who has no ranking in Google for his own name, but there are over 10,000 NEGATIVE posts ABOUT him in Google. 

Got anymore? Share them here!

Shortly after that, you saw a deluge of new sites come up across all industries all with one special moniker…”e” or “i” something or other. For what was really YEARS after the web was already in use, the rest of the world outside us nerds got on board and agencies all over the nation were quick to set up web pages and give them all clever URLs like “eINSERTINDUSTRYHERE.com” or “iINSERTINDUSTRYHERE.com” over and over.  It was maddening.  

Now with the new recognition of what many of us have been doing for years (blogs, community sites, forums, video,) we see the rest of world calling this “Web 2.0″ which is great in so many ways, but also showing the non-creative side of traditional minds getting on board with something us old zealots have been preaching for years. 

So now, you see “Web 2.0″ churning out numerous followers to this tagline.  ”Sales 2.0″ “Real Estate 2.0″ and the “Economy 2.0.”  It makes me wonder though, now that the leaders in our space are forging into “Web 3.0″ to give a name to the NEXT level of integration, will we now see “Dating 3.0″ or “Banking 3.0?” 

I had a wonderful interview with Tim and we talked about a bazilion things that center around social media and where it’s going. Some of my other points I shared were that (a) companies are now trying to embark on a social media plan, but most do not have a clear strategy that ties into their overall business plan, and (b) many companies want the cool “blogs” and “podcasts” but don’t want to do the work involved to maintain them (nor do they want to pay companies like ours to do it for them, and (c) companies come to agencies like mine and others that offer social media as a service, but immediately want to know how they are going to generate revenue off of it…and really don’t like the answer in most cases…there isn’t any to be had, but social media participation is an insurance policy you can’t afford not to carry.

Great stuff, Tim! I can’t wait for the article on the YouTube lawsuit!

There are so many things to discuss over the coming week with regard to this conference, but a specific highlight of course was finally meeting Chris Heuer, the founder of the Social Media Clubwho truly has grasped not only a vision of social media and it’s impact on business, but more exciting to me personally, the once again realization that this “new media” or “internet world” has completely changed the rules of business, entreprenuership, and the economy.

I was joined by many esteemed panelists including Allan Sabo, Pamela Slim, Max Fose, Celia Blackwood, Kevin Donnellan, and
Ben Gordon.

Last, but not least, Robert Scoble closed out the day with many quips from a blogging fanatic – most importantly, a point that I think many missed but really need to remember is to simply pay attention to your customers. Acknowledge them. Period.

I’ll have more in the coming days to chat about, such as a warning not to dislike ice cream or you may be sued, how companies should see blogs as insurance rather than cost centers, and of course why old schoolers tick me off.