SocMetrics Leads Growing Cluster of Boston Startups Trying to Cash In on Social Media Tech
Who are the most influential people on Twitter and Facebook? Who has the most friends and followers across the various social media platforms? Who cares?
Advertisers and brands, that’s who—and an increasing number of businesses of all types. (Not to mention all the narcissists and self-promoters out there, but let’s forget about them while we still can.)
If Google mapped the Web to determine which pages were most important, social media analytics companies are trying to do something similar for the social graph, the map of connections between people in social networks. One emerging goal: to identify the top influencers online, and do something about them.
OK, “social media analytics” is a fancy way of saying “who’s popular and what are they talking about?” It’s like high school all over again, except now brands are trying to make money off of insights gleaned from what used to be private conversations.
A cluster of Boston-area companies is riding that wave—and contributing some interesting new approaches. Local techies say social media has become too big to ignore for many companies—and also mainstream enough to be a powerful tool, not just for promoting businesses, but for understanding customers better and managing PR situations (see Netflix, Anthony Weiner, and so forth). While the business case for social media analytics is still evolving, there have been some notable acquisitions around North America in recent months, including BackType (bought by Twitter), PostRank (Google), and Radian6 (Salesforce.com).
The early crop of companies has focused on trying to monitor and summarize large amounts of online chatter—by analyzing the sentiment of consumers or measuring how much they post, for instance—but there’s still a big need for “adding context to that data” and “making it actionable,” says Roy Rodenstein, a tech angel investor and entrepreneur. That means identifying which trends in online conversations are significant and suggesting what next steps to take, he says.
Enter SocMetrics, a Cambridge, MA, startup co-founded by Rodenstein, along with Rebecca Xiong and Jason Toy. (Xiong and Toy pronounce it “Sock-metrics” while Rodenstein says the first syllable like the one in “social.”) SocMetrics determines each social-media user’s influence in a given topic based on how many of their top peers are connected to them, how topically relevant their posts are, how much activity they drive, and so on (across blogs, Twitter, Facebook, LinkedIn, YouTube, Digg, Reddit, and other platforms). Using those metrics, the company gives each person an “influencer” score (between 0 and 100) in specific topic areas—so far there are more than 100 categories, including food, travel, moms, weddings, fashion, and, for you techies out there, things like startups, technology, security, CRM, B2B, and cloud computing. (In the “startups” category, Dave McClure, Eric Ries, and Dharmesh Shah score a 99, while Rodenstein himself rates a modest 70.)
The service differs from Klout, the San Francisco startup with a similar-sounding scoring system, in that it’s open and uses a software-as-a-service model aimed at businesses, rather than an e-mail registration model aimed more at consumers, says Rodenstein. The scoring by specific topics is another differentiator, which bolsters SocMetrics’ claim that its influencer scores are more accurate and meaningful than Klout’s and other competitors.
Beyond that, SocMetrics says its software helps businesses understand who their most promising advocates are, and how to encourage them to promote certain messages and actions. The software can also help customers monitor how a marketing campaign is going (what the top influencers in different categories are saying, for instance) and compare how different brands are faring. SocMetrics has a few dozen customers—mostly PR and social media firms, advertising and marketing agencies, and a few brands, Rodenstein says. The company is self-funded so far.
SocMetrics is certainly not the only game in town. Besides well-known marketing firms like Constant Contact (NASDAQ: CTCT) and HubSpot, a number of other Boston-area companies are working on different elements of the social analytics equation. Crimson Hexagon focuses on helping companies understand customer sentiment by analyzing the text of social media conversations; it has recently been pushing into healthcare and financial services markets. Lexalytics also tracks sentiment, but is more broadly interested in the meaning of text and has been pushing into search, travel, and legal applications.
Meanwhile, Buzzient develops industrial-strength software to track sentiment about specific products, and is particularly deep in Twitter analytics for applications in gaming, finance, and life sciences. And Oneforty, which started as a Twitter app store, is now focused on social media for businesses—including tools for advertising, analytics, brand tracking, marketing, and customer relationship management.
And then there are a couple of local startups coming at the problem from other angles in specific niches. Bluefin Labs, out of the MIT Media Lab, focuses on social-media reactions to TV and entertainment in real time; the company released its first product last week, aimed at helping TV networks, brands, and agencies analyze viewers’ responses to ads and content. Meanwhile, Krush is focused on retail marketing and is trying to own the “product graph” by enabling young people to create and follow micro-trends in apparel, fashion, and accessories via social media.
All of this raises a few deeper questions. What should companies do with all this information, such as who the top influencers are? In Krush’s case, brands can try to harness the trend-setters to help them design new products and get ahead of the fashion curve. In SocMetrics’ case, companies can reach out to top influencers in targeted demographic areas (moms or singles, say) and send them tailored messages about their brand or products.
But is there even a sustainable business model for social analytics, or social commerce for that matter? Are people really saying things that are valuable enough to build businesses around? Rodenstein, for one, would say yes—and I would guess his view reflects that of most companies in the sector.
“There are a lot of organic ways that products and brands and purchasing decisions get talked about. Someone says they just got this [new product], they want to brag, they’re excited about it. People ask for recommendations, and they talk about negative experiences,” he says. “You can try to use it in a proactive, offensive way to score points, but also brands are playing defense, and they need to know what’s being said about them. It’s sustainable in the sense that it’s only going to increase.”
Finally, I asked Rodenstein a few broader questions about some of the entrenched social-media tech giants:
What does he think of Google+? “It’s bold,” he says. It’s being plugged on every Google page and is the first product in a while to carry the full Google name. So time will tell.
And Twitter’s progress? “I’m a huge fan, but they haven’t catered to the mainstream,” he says. “They’ve done so little in the last four years to evolve the product.” (Simple things like following people’s conversations is still hard for most users, he says.)
Lastly, is Facebook vulnerable to the next cool thing? He paused.