As a Forrester analyst, I used to hate the saying, "Figures lie and liars figure." Data accurately gathered does not lie, but data poorly analyzed or intentionally misrepresented can mislead. This thought has come to mind several times over recent weeks as I've read varying reports and interpretations of social media and business data. In the years to come, we will be awash in ever greater quantities of data and analysis, and it will be increasingly vital that we focus on what is truly important or else we'll lose sight of what matters.
Case in point: I recently saw a presentation that boldly stated that Groupon reached $1 billion faster than any other company in history. An eye-popping accomplishment to be sure, except Groupon's recent prospectus revealed it lost $420 million last year and $117 million in the first quarter of this year. Groupon may grow to achieve meaningful business success in the future, but reaching a billion dollars while losing half a billion isn't nearly as impressive as it first sounded, because revenue is important but net income is more important.
Another example was shared by a peer who saw a presentation by a social media consultant who claimed that "celebrities still dominate social media sites like Facebook and Twitter, while for the most part businesses haven't been able to drum up much interest." His evidence? Lady Gaga has 40 million "likes" on Facebook while MetLife only has 7,500. Are "likes" what is truly important, and do Gaga and Metlife have the same goals and audience? From Blendtec ("Will it Blend?") to Dave Carroll ("United Breaks Guitars") to Greenpeace ("Barbie, It's Over"), we've seen enough social media success from smaller players to recognize that there's a big difference between popularity and influence, "friends" and customers, followers and advocates and big fan pages and success. As for Gaga and MetLife, last year Gaga made $62 million while MetLife earned $2.7 billion, so while MetLife has room for improvement in social media, they really don't need to compare themselves to Gaga to evaluate their success.
And then there's Google+, Google's new social media offering. Some of the figures being bounced around are amazing--just weeks after its launch, Google+ is already poised to hit 10 million users and some are predicting it could hit 100 million users faster than any service in history. Google+ is clearly Google's most interesting social offering since it purchased YouTube, but are users the relevant metric for evaluating its success? For example, Google has long claimed its Latitude geolocation tool has more users than Foursquare, but you don't need to be a social media guru to know Foursquare has active and engaged users while Latitude users tend to "set it and forget it."
We can expect Google+ to sign up huge numbers of people; Google will be able to do so because of the incredible user base it has for Gmail, its search engine and other products. But the number of users won't determine Google+'s success; engagement will (because consumer engagement is what will draw marketing dollars). If and when Google+ makes a serious dent in the 1.3 million years consumers spend on Facebook each month, then it can claim success.
Steven Covey said "The main thing is to keep the main thing the main thing." This adage could be applied to the business of social media where the wrong data and analysis can easily distract us from the main thing. Friends, followers, users and revenue are important, but they are not more important than meaningful engagement, customers, advocates and net income.
Note: The saying "Figures lie and liars figure" is a cynical twist on an older saying that has been misattributed to Mark Twain: "Figures don't lie, but liars figure." You will find a wonderful exploration of the history of this phrase on the Quote Investigator blog.
Photo: Sean MacEntee/Flickr (Creative Commons)