Tuesday, November 3, 2009

Transactions define social networking, not SEO

Me and My Shadows album cover

Understanding who we really are online is difficult. The more involved we become with social networks the more we become a digital shadow. But the shadow we are should be the same as the shadow we want to be. Our reputation is based on how we are perceived.

We should look at ourselves by the boundaries of what kinds of activity we conduct and create three basic identities of individual, professional and corporate to best manage our online lives. Individual identity is about friends and family. Professional identity is about the knowledge service we are offering people online. And corporate identity is about the company image we work for but do not have executive control over. We understand that each identity has a different business goal and is represented by a different set of keywords if we distill down our presence using SEO tactics. That’s relevant but not complete.

Most people are online to conduct a type of business that gives them value. It’s the context of those transactional events that give us a view of who we are and the meaning behind the activity we conduct. Just looking at a set of SEO keywords is as good as reading about the ingredients in a dinner on the best date of your life. They accurately convey data but lose the context. Business is conducted because of value and not because of raw data. People want the data to sizzle and not just become processed steak in a tube.

For the most part, the boundaries of ourselves online are determined by the cost of the transactions that we do. It’s not just a PayPal payment or a vote on Digg which is an individual type of transaction cost. But it’s the total cost of value exchange between you and another party that involves costs of finding content to post, the account setup and maintenance, the cost of another reading and clicking through to your content, and managing the content sources so you always get the best information the soonest to make sure that you are putting out what your social subscribers expect from you.

If you are using another knowledge service (person, web site, news feed, etc.)  to deliver content either to you or to the social marketplace so that you can become a better knowledge service, you will have costs associated with making sure that your content stays online and taking action when things don’t always go the expected way, say like when servers die or networks get overloaded.

Sometimes the cost is worth owning the hardware yourself so you have in-house control over the assets that your information service depends on. Sometimes, it’s more sensible to place the risk in the cloud and have a web site manage the service. These boundaries that govern the choice of whether to “build or buy” or sometimes rent, and are likely to expand or contract with the current infrastructure and technology advancements. It was Ronald Coase that won the Nobel Prize in Economics for this idea. He would probably say that the increase in the number of independent self-employed people who are contracting with one another over the web today is a result of the lowering of transaction costs of marketing.

The ability of an owner of a computer and a web browser to access free software has increased to where doing basic business on the web has no cost at all. Free Google office software, web sites services, blogs, graphic manipulation, access to audio, photo and video files, and much more are all at the end of a URL typed into a simple browser.

But the transaction costs of a social relationship are not just financial. It is in the other types of assets that the value of your knowledge service also increases. It’s in the ability to compete, the sharing of your content, and in the quality that you provide that gives you the best customer service for a common commodity like Zappo’s shoes. The more we understand all of the values of these types of transactions, the more we will understand ourselves online.

This is part of a series on an ITIL view of social networks covering business functions such as marketing, sales and PR using technology down to the individual knowledge service, a person who is using social networking to provide value to others.
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