We’ve had a new look to the blog at FreshNetworks this month, but our aim is still the same. To bring you the best posts in social media, online communities and customer engagement online. In case you missed them, find below our top five posts in January.

1. Why the retweet is a powerful engagement tool

The retweet on Twitter, and Facebook’s new ‘via’ feature are very powerful tools in these social networks. In any online community or social network, some people are more active than others. In fact, in a natural online community we would expect that out of every 100 users, only one will originate new content. The retweet provides a way for these other users to express their opinion. Say that they agree with something that others have said or just promote content.

Social media is about more than just generating new content, people play many different roles and the retweet is a way to let people do this.

2. Social media as a crisis management tool

When crisis happens, you will typically see a lot of people discussing, debating, and complaining about your brand online. Many of these discussions will be factually inaccurate, and many will be from customers who have had bad experiences. These are the types of discussions that should be responded to, and should be responded to in the right manner.

In this post we looked at a how brands can use social media when a crisis hits, but perhaps more importantly why they should be engaging people in social media before the crisis.

3. The Economist on Social Networking

At the end of January, the Economist published a special report on on social networking.Their special report on A World of Connections, provided an excellent overview of the current state of social media for those still trying to get to grips with it. You can download a free pdf of the report here. Or check out our summary of key highlights in this post.

4. Social Media Case study: Vitamin Water’s newest flavour created by Facebook fans

Vitamin Water’s latest flavour, launching in March this year, was developed and named by the brand’s Facebook fans. The black cherry and lime flavoured drink will be called ‘Connect’ and one Facebook fan, Sarah from Illinois, won $5,000 for her role in developing this new product. In this post we look at what Vitamin Water did and how they used social media to help to test and develop a new flavour.

5. Essential reading for online community managers

There are a whole range of great books out there on how social media is used and the impact this is having on society (anything by Gladwell or Shirky would be a great starting point). In this short post, we look specifically at things that help managing and growing communities online. There are many great books, articles and blogs out there and we’d love you to share your favourites in the comments below the post. But this is a good starting point and we would consider them essential reading for online community managers.

The Economist on social networking - world of connections

What joy. This week,  The Economist, every Capitalist’s favourite magazine, has published a special report on on social networking.

A World of Connections, provides an excellent overview of the current state of social media for those still trying to get to grips with it. You can download a free pdf of the report here. Or check out my summary of key highlights below.

Introduction: A world of connections

1. “Online social networks are changing the way people communicate, work and play”
2. Facebook users post over 55m updates a day. 70% of users live outside the US.
3. Social networks are superb tools for mass communication [NB the report is a bit light on their strategic use as a driver of 1-to-1 customer-to-company communication]
4. “the most avid online networkers are in Australia, followed by those in Britain and Italy”
5. Social Networks have “become important vehicles for news and channels of influence”. Indeed, they “played a starring role in the online campaign strategy that helped sweep Barack Obama”
6. To sceptics all the “talk of twittering, yammering and chattering smacks of another internet bubble in the making“. Social networks still “need to prove to the world that they are here to stay”

“This special report … will argue that social networks are more robust than their critics think … and that social-networking technologies are creating considerable benefits for the businesses that embrace them, whatever their size. Lastly, it will contend that this is just the beginning of an exciting new era of global interconnectedness that will spread ideas and innovations around the world faster than ever before.”

Facebook’s growth: Why social networks have grown so fast—and how Facebook has become so dominant

1. How the network-effect can drive lightning fast growth on a relatively modest marketing budget.
2. An openness to external developers helped create thousands of apps. These apps provide part of the service and additional reasons to spend time on Facebook.
3. Social networks have been beneficiaries of a fall in the cost of data storage and have also been “able to use free, open-source software to build systems that scale quickly and easily”
4. In a feat of technical wizardry, Facebook’s engineers “quintupled the performance of an open-source memory system called memcached, which allows frequently used data to be retrieved faster than if stored in a database.
5. Facebook Connect is one of the firm’s most important innovations as it allows members to take their social graph wherever they go on the web.

Twitter’s transmitters: The magic of 140 characters

1. A key difference between Facebook and Twitter comes from the nature of relationships that underlie them. “On Facebook, users can communicate directly only if one of them has agreed to be a “friend” of the other. On Twitter, people can sign up to follow any public tweets they like”
2. The most prolific 10% of Tweeters account for 90% of all tweets
3. Another big difference between Twitter and Facebook is in the kind of content that gets sent over their networks. Facebook allows people to exchange videos, photos and other material, whereas Twitter is part-blog, part e-mail [I disagree with this. On the surface Twitter looks like a text tool, but many tweets link to videos, photos or other media].

Social Networks making money: Profiting from friendship

1. When it comes to turning users into profits, social networks face two issues. Firstly, users are taking part to spend time with friends, so they do not pay attention to ads. Secondly, brands are nervous about appearing alongside unregulated comments and other content.
2. Click-through rates are low, but the amount spent on adverts is increasing despite the recession.
3. In part this may be because Marketers recognise the value that personal recommendations can have on buying behaviour. And social networks provide an opportunity for viral marketing.
4. During 2009, Facebook turned cash-flow positive on revenues thought to be in the region of $500m.
5. Games, virtual gifts, premium services and search rights are becoming an important part of some social networks’ revenue streams

Social Media for Small Business: A peach of an opportunity

1. They cover the well known Kogi BBQ social media success story and mention that according to Razorfish 44% of people follow brands on Twitter  for deals [NB the methodology used in this research was rightly brought into question by Susan Braton in a recent DishyMix podcast]
2. Social networks can provide a great launchpad for startups thanks to their reach.
3. This article then randomly veers off into social gaming. A subject that deserves it’s own dedicated piece. But you can’t have everything.

Internal social networks: Yammering away at the office

1. Social networks are being used to break down internal barriers in the corporate world.
2. Informal conversations they allow can be a catalyst for creativity and new ideas.
3. “The networks are also a great way to capture knowledge and identify experts on different subjects within an organisation”

Recruitment in a social world: Social Contracts: the smart way to hire workers

1. Social networks, such as Linkedin and Xing help firms cut search costs
2. Business social networks help improve the efficiency of the labour market
3. They have also made recruitment more transparent as recruiters go onto social networks to check up on candidates ahead of making an hire

As an aside, if you’re interested in social media for recruitment here are a few relevant posts from our sister company, FreshMinds Talent:

How to use Web2.0 for recruitment
Social Media and the forefront of the job market
How to imporve your Linkedin profile

Privacy in social media: Privacy 2.0

1. Privacy could be the Achilles heel of social networks. Users could decide to start reducing what they are prepared to share with the world online.
2. Social networks have been developing privacy controls that give users the ability to edit what can and cannot be seen. However these are often hidden away within sites and social networks are making blatant attempts to encourage more sharing of data not less.

The Future of Social Media Towards a socialised state

1. Social connectivity could become ubiquitous
2. Mobile adoption will fuel future growth in social networking
3. Facebook says that mobile users of the site are almost 50% more active than regular users
4. Geo-networking apps may be the next big thing [unsurprisingly, the Economist can't resist a fleeting mention of Foursquare, the social network tipped for big things in 2010]

Conclusion

It’s great to see social media and social networking getting reported in such depth by mainstream media. This Economist report is not exactly cutting edge when it comes to social media insight or analysis. However it does provide a great base level for the 99% of the business world who do not spend their days glued to Tweetdeck.

Even if the above is not new to you, I recommend you read the report purely for a lesson in good business writing. As ever, The Economist delivers on elegant prose that neatly and efficiently flows from point to point.

Was there anything in the report that leapt out at you?

LEGO is a brand that many people are very passionate about, a brand people love and we’ve written before about how they use segmentation to engage their consumer base from children to enthusiasts in an innovative way. Now they have continued their innovative approaches to engagement and embraced social media. In a big way.

They have launched LEGO CLICK, an online community that brings together innovators, designers, artists and creative thinkers to develop new ideas related to toys. The site is designed to bring together ideas in written form, images and videos. They want to capture and catalogue ‘lightbulb moments’, ideas that are relevant to toys and to the market LEGO serves.

Unlike other ideas communities, LEGO CLICK does not (at least not yet) allow users to rank and rate the ideas. It merely allows you to suggest your idea or to share ideas that you see and like or are interested in. What makes this site particularly interesting, though, is its use of Twitter, Facebook and Flickr as a way of generating content for the site and promoting participation.

The LEGO CLICK community is a great example of the hub-and-spoke model of social media engagement. Users can contribute their ideas by tweeting with the hashtag #legoclick. They can contribute images by tagging their Flickr contributions with the same tag. And they can suggest ideas by video by tagging on YouTube in the same manner.

This is an interesting use of social networks to drive content to a community. In parts it is not dissimilar to the California Governor’s use of Twitter to harvest ideas for MyIdea4CA in 2009. It relies on contributions from users of other social networks and then brings them together in a single hub where different types of content from different sources meet.

What will be interesting to watch as this site develops is the amount, and the relevance of content that is created and added to LEGO CLICK. Currently there is a lot of content being dragged into the site that is discursive about the concept rather than the kind of ideas that the site is designed to harvest. It is getting a fair bit of content that is more like this particular blog post than an idea of lightbulb moment. This is one of the real problems with using tagging and a feed from other social networks to populate any site, but an online community in particular. You could end up with a lot of irrelevant content.

One of the things that MyIdea4CA did, and that it will be interesting to look for as LEGO CLICK develops, is to use rating and even commenting in the community as a way of sorting and prioritising ideas. The most popular or interesting ideas are likely to get the most votes or comments. And so these will rise to the top on the site, leaving the less relevant comment much further down.

But even without this kind of feature, LEGO CLICK is an interesting site and itself an innovative use of social media. Really driving the hub-and-spoke engagement model. Now we just need to watch to see what happens.

Read more of our Social Media Case Studies

Vitamin Water’s latest flavour, launching in March this year, was developed and named by the brand’s Facebook fans. The black cherry and lime flavoured drink will be called ‘Connect’ and one Facebook fan, Sarah from Illinois, won $5,000 for her role in developing this new product.

The competition was interesting and unique in that it used Facebook fans to develop all aspects of the product:

• Choosing the flavour – over the summer Facebook fans were able to monitor and add to buzz about different flavours. The more chatter about a flavour online, the higher it was rated on the Facebook page. And by mid-September the most ten talked-about flavours were put to Facebook fans for them to vote for their favourite. This is a good example of using a community to help sort and rank ideas in a co-creation process. Fans couldn’t create their own flavours from scratch, but could influence the top 10 flavours and then vote for the best.
• Designing the packaging – when the flavour had been selected (in October last year), the Facebook fans were able to use the app to design the packaging – the look and feel, the blurb and colours used on the label. Fans could collaborate with up to two more Facebook friends to develop the packaging and the final winners were chosen by a panel of experts.
• Naming the product - alongside the packaging and look-and-feel, Facebook Fans were asked to name the product. The team who created the winning name would be given a prize of $5,000.

This is a great example of co-creation and working with your customers and fans to help to develop your product. Using experts from the brand at critical input stages – choosing the original flavours that could be shortlisted and then selected, and reviewing and agreeing on the winning product design and name. The community was used to help shortlist and select the flavour to be produced, and to create a range of options for the design and name of the product itself. Many brands would be anxious of allowing consumers to create a product like this, but at every stage the brand and consumers were playing different roles and doing different things. It is true that some of the best and most intelligent people don’t work for your company (whoever you are) and so working with them in a controlled but creative way like this can have great results.

And for the more than one million Fans of of the Vitamin Water Facebook Page, they feel like they have had real involvement in the development of the new product. That’s one million people who feel ownership of this product. One million potential purchasers when it launches.

Read more of our Social Media Case Studies

Last Wednesday, illusionist, Derren Brown, correctly predicted the winning number in the National Lottery live on air. Quite a feat. But one he achieved with 100% accuracy.

Between the Wednesday live prediction and the Friday explanation, social media sites were awash with theories and conspiracies explaining what had happened. From discussions on Twitter to videos on YouTube. Most of these suggested a slight-of-hand or other such trick. The real answer was much more interesting. Brown cited ‘crowdsourcing’ as the magic behind his impressive prediction.

The explanation was actually quite simple, at least on face value. He got 24 people to collectively predict the numbers using crowdsourcing, The Wisdom of Crowds.  The theory that together people can more accurately resolve a problem or reach a decision when working as a group than when operating alone. Whether you believe this explanation or not (and there are certainly those who are sceptics), the use of crowdsourcing in this mass-media entertainment show highlights the widespread understanding and acceptance of this tool.

We’ve written before about the power of co-creation for businesses and how working with your customers to crowdsource new products and ideas for your organisation can produce better ideas and better products than you might have developed internally. From creating t-shirts (in the case of Threadless), encyclopedias (in the case of Wikipedia) or maps (in the case of OpenStreetMap), using crowds to solve problems has proven to be very successful. In a business-environment it can be incredibly effective.

The most intelligent people probably don’t work in your firm, and so if you can find them and let them work  with you to solve a problem you will often get the kind of innovation that you just can’t get internally. This is where online communities such as Innocentive come to the fore. They allow companies to ask the community to solve a specific problem or issue and reward them (in this case financially). Community product design is used in such cases to provide extra support and input either when internal resources don’t have  the time or the ability to solve the problem.

So whether Derren Brown’s crowdsourcing explanation holds water or not, it is clear that  there is a lot you can do when you get people to work together in a community to solve a problem.

If you missed the show, then you can watch it (at least in the UK) on 4OD.