Drill Tip: A Portfolio Approach to Managing Your Social Media Platforms
Setting up an official profile on most social media platforms has no initial cost, so many companies go wild signing up on every site they can find. Inevitably though, they come to the realization that once you sign up, you have to spend time and effort to manage and maintain those presences.
If you find yourself in that situation, or simply wondering how to maximize your investment by finding the “right platforms,” allow us to offer a helpful model:
We call it the “Portfolio Approach to Social Media Management” and it’s based off the Boston Consulting Group product mix strategy. The idea behind the model is that social media platforms, like products, lie somewhere between four scenarios, based on their relative growth in users and mind share, or how many people are aware of the platform.
Starting from lower right, clockwise, the first scenario is when a social media platform is considered a Cow. Cows are like the blue-chip stocks of our model – they’re always a safe bet, but you’re not going to be seen as an innovator just for having a presence. Great examples of cows are Facebook, Linkedin, WordPress blogs and even email.
When a social media platform has low growth and low mind share, it’s a Dog. Dogs aren’t necessarily bad investments, but these platforms aren’t great long-term. You may get a negative return on investment because they don’t have the audience to justify the effort spent on them. Examples of dogs are MySpace, GrooveShark, and Blogger.
A slightly better scenario is when a social media platform is considered a Question Mark. These platforms have high growth but haven’t reached a critical mass of mind share. Question Marks could be hidden gems. Early investment can be the ticket to being seen as a social media innovator. However, the reason they are called question marks is that no one knows what will really happen. They could just as easily lose momentum and become Dogs. Current examples of question marks are SoundCloud, Stumble Upon and Google+.
Finally, when a social media platform exhibits high growth and high mind share they are considered Stars. Stars are the social media equivalent of biotech stocks. They can generate great return on investment. The only risk with stars is that they can fade into dogs or question marks or mature into cows. They also don’t provide the same kind of “first mover advantage” that you may be able to achieve with a question mark. Examples of stars are Instagram, Twitter, and YouTube.
The key to an effective portfolio strategy is to determine how much risk you’re willing to take and allocate your time and effort appropriately among the four scenarios. For example, if you want a high risk, high return strategy invest heavily in Stars and Question Marks. If you prefer a more moderate return with lower risk, stick with Cows.
Ultimately, the sites on this particular graphic represent just one set of social media platforms rather than all. Viewed as a blank slate, though, the model is a great way to gauge where the sites you’re currently investing in stand relative to what kinds of returns you want to achieve.