RonAmok!

The adventures of an analog engineer and digital storyteller who studies emerging networks and their impact on the great game of business.

For the past two years, this blog has discussed a theory that Audience is an Asset that should be carried on a company’s balance sheet as opposed to the commonly held belief that social media should be tracked as P&L. Over time, the theory has been refined through other posts, such as: Valuating Your Social Media Asset, Social Media is a Mutual Fund and Assets Produce Distributions.

Yet, to be blunt, no matter how much I write, lecture, or consult on this concept, most folks still look at me as if I have two heads. “That’s a nice thought, Ron, but what do I tell my boss when asked about ROI?” Unfortunately, I’ve come to understand that as long as social media budgets are controlled by those afflicted with Communications Myopia, the value of investments in social media activities will remain underestimated–that is, right up until some event forces some of those assumptions to be revisited.

This morning, I read about such an event in the New York Times article: A Dispute Over Who Owns a Twitter Account Goes to Court. The article describes how a company (PhoneDog.com) is suing a former employee (Noah Kravitz) for control over the Twitter audience that he built while working for them.

Originally tweeting under the Twitter handle @Phonedog_Noah, Kravitz had successfully built an audience of over 17,000 followers. Since Twitter allows a user to change their handle without jeopardizing that audience, after leaving Phonedog.com, Kravitz changed his handle to @NoahKravitz. Eight months later, Phonedog.com filed a lawsuit against Kravitz, claiming $340,000 in damages [(17,000 followers) x ($2.50/follower/month) x (8 months)].

Phonedog.com released the following statement to the Times:

โ€œThe costs and resources invested by PhoneDog Media into growing its followers, fans and general brand awareness through social media are substantial and are considered property of PhoneDog Media L.L.C. We intend to aggressively protect our customer lists and confidential information, intellectual property, trademark and brands.โ€

In a nutshell, Phonedog.com isn’t suing him for the handle, which has their brand in it, but instead is seeking to “aggressively protect” its assets (property, fans, followers, lists, trademark). Sound familiar? ๐Ÿ™‚

There’s an old saying that says: “You don’t appreciate what you have ’til it’s gone.” Phonedog.com now has a new appreciation for its social media assets. What about your company? Is it still trying to figure out the ROI of a blog post, tweet, or YouTube video? Or has it come to the conclusion that its investments in social media are compounding into long-term marketable assets?

Comments

In the old days, newspapers used to put a value in their circulation lists and truthfully, their readership constituted a significant portion of their value.ย  This is the same in social media but only in digital form.

Ejordan
December 28, 2011

They still do, Ed. In 2010, the New York Times’s balance sheet held $680 million for Goodwill and Intangible Assets. At last year’s circulation numbers, that translates into about $750/subscriber.

It’s time that companies start thinking about the value of their various “social media” audiences and tracking them on their own balance sheets.

ronploof
December 28, 2011

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