A few years ago, Sundance Catalog Company opened a store inside Boca Park in Las Vegas, a retail center that continues to offer great dining, apparel, art, and accessory boutiques. We were working for the developers of Boca Park at the time, the same developers responsible for the acclaimed the Mall of America in Minneapolis.
There was no question that Boca Park was the right place for Sundance. Boca Park is located in Summerlin, a master-planned community surrounded by more than 100 square miles of luxury, executive, custom, and gated residential developments with thousands of homes priced at more than $1 million.
From a social media perspective, Robert Redford’s brick and mortar store was a virtual gold mine. It had it all. A prime location. An attractive corner building. Friendly employees. A high traffic count. Celebrities stopping by. Great content. Dozens of “link-like” plugs from various newspapers and magazines. It was hot!
Oh, except for one little thing. Sales. Nobody bought anything. It was all eye candy; a window shopper’s paradise. I once bought a very nice light switch cover there. It cost about $10.
Not surprisingly, Sundance moved out. It was replaced by Tilly’s, which does very well at Boca Park because, well, people buy things. Sometimes I buy too many things.
Sure, I know precisely what was wrong with the Sundance store and how it could have been amazingly successful given the surrounding area, but that’s not really what this post is about. What this post is about is the growing pressure on social media measurements and why these measures are slowing down businesses that want to migrate to social media. More often than not, social media is measured like the Sundance store.
I’ve been brooding about this for some time now. And no, it’s not the kind of stuff that makes you popular in some circles, especially those who rank. However, other people are starting to wonder if I might not be right, at least a little bit.
Where does the hype end and the real measure begin? At least those are the kind of questions that Geoff Livingston, author of the new book, Now Is Gone, is starting to ask about what is now called the Ad Age Power 150. (We’ll be opening up more discussion about this later today at BlogStraightTalk on Bumpzee and BlogStraightTalk’s newest home on BlogCatalog.) But I wanted to touch on a question raised by Andrew Graham, an account executive for Cognito, on Linkedin.
“How should social media companies be valued?” Graham asked in response to my query, what social media question is not being adequately answered by communication experts? “Given a lot of these companies are more or less built for acquisition, I think it's a legitimate question.”
Exactly. Right now, traffic counts, clicks, rank, and links are considered the most relevant measures of social media. Don’t get me wrong; these measures can play an important role in the greater scope. But, unfortunately for businesses, they provide a skewed sense of reality.
In other words, there are a whole lot of Sundance brick and mortar stores (like the one mentioned above) online. They have everything going for them, except a tangible measure like sales. And the reason is pretty simple. Many of them are chasing social media measures instead of strategic business goals. To what end?
As preliminary answer to Graham, in my opinion, a social media company is worth what someone will pay for it, but the social media measures that are currently in play (like clicks and links) over inflate the value unless proprietary technology is part of the package.
In terms of blogs or other social media tools, the best measures are based on its ability to meet strategic goals: things that range from brand awareness and market share to member engagement and sales. All the other stuff, while helpful and not to be discounted en masse, are not really valid measures unless the buyer is equipped to turn traffic into something tangible.
Likewise, companies entering social media to expand their communication plan might consider what goals they want to meet on the front end. And no, I don't mean rank as much as bank. That's what we've been doing for several companies over the last few weeks, determining what real goals they can tie to their social media plan.

There was no question that Boca Park was the right place for Sundance. Boca Park is located in Summerlin, a master-planned community surrounded by more than 100 square miles of luxury, executive, custom, and gated residential developments with thousands of homes priced at more than $1 million.
From a social media perspective, Robert Redford’s brick and mortar store was a virtual gold mine. It had it all. A prime location. An attractive corner building. Friendly employees. A high traffic count. Celebrities stopping by. Great content. Dozens of “link-like” plugs from various newspapers and magazines. It was hot!
Oh, except for one little thing. Sales. Nobody bought anything. It was all eye candy; a window shopper’s paradise. I once bought a very nice light switch cover there. It cost about $10.
Not surprisingly, Sundance moved out. It was replaced by Tilly’s, which does very well at Boca Park because, well, people buy things. Sometimes I buy too many things.
Sure, I know precisely what was wrong with the Sundance store and how it could have been amazingly successful given the surrounding area, but that’s not really what this post is about. What this post is about is the growing pressure on social media measurements and why these measures are slowing down businesses that want to migrate to social media. More often than not, social media is measured like the Sundance store.
I’ve been brooding about this for some time now. And no, it’s not the kind of stuff that makes you popular in some circles, especially those who rank. However, other people are starting to wonder if I might not be right, at least a little bit.
Where does the hype end and the real measure begin? At least those are the kind of questions that Geoff Livingston, author of the new book, Now Is Gone, is starting to ask about what is now called the Ad Age Power 150. (We’ll be opening up more discussion about this later today at BlogStraightTalk on Bumpzee and BlogStraightTalk’s newest home on BlogCatalog.) But I wanted to touch on a question raised by Andrew Graham, an account executive for Cognito, on Linkedin.
“How should social media companies be valued?” Graham asked in response to my query, what social media question is not being adequately answered by communication experts? “Given a lot of these companies are more or less built for acquisition, I think it's a legitimate question.”
Exactly. Right now, traffic counts, clicks, rank, and links are considered the most relevant measures of social media. Don’t get me wrong; these measures can play an important role in the greater scope. But, unfortunately for businesses, they provide a skewed sense of reality.
In other words, there are a whole lot of Sundance brick and mortar stores (like the one mentioned above) online. They have everything going for them, except a tangible measure like sales. And the reason is pretty simple. Many of them are chasing social media measures instead of strategic business goals. To what end?
As preliminary answer to Graham, in my opinion, a social media company is worth what someone will pay for it, but the social media measures that are currently in play (like clicks and links) over inflate the value unless proprietary technology is part of the package.
In terms of blogs or other social media tools, the best measures are based on its ability to meet strategic goals: things that range from brand awareness and market share to member engagement and sales. All the other stuff, while helpful and not to be discounted en masse, are not really valid measures unless the buyer is equipped to turn traffic into something tangible.
Likewise, companies entering social media to expand their communication plan might consider what goals they want to meet on the front end. And no, I don't mean rank as much as bank. That's what we've been doing for several companies over the last few weeks, determining what real goals they can tie to their social media plan.
