• by Max Kalehoff , December 4, 2012

Owning a direct, one-to-one connection with the right consumer is the holy grail for consumer brand marketers. In spite of this, the rise of social media has prompted consumer brands to shift their CRM focus from owning to renting consumer connections. That’s according to a recent blog post by my colleague Matt Ramella, VP of strategy and intelligence at Syncapse (aka media measurement guru).

The attraction of Facebook connections -- or Fans -- is that you can quickly achieve great audience scale with hyper-targeted precision. The barrier to achieving always-on connections to optimize reach, frequency and recency is generally low, and many would argue the cost has been relatively low as well.

Ramella also underscores that, just like monthly rental fees, the cost to reach your fans and followers will continue to increase over time, rising faster in the short term until forces of supply-and-demand equalize. But as more money is spent, the benefits of owning a valuable group of consumers will not be realized. That’s why, when planning for the future, it is critical to consider borrowing versus making connections.

This is a great point and really mandates that marketers act deliberately in context of  the “total cost of consumer connections” -- or TCCC (for those who like acronyms).

Understanding Total Cost of Consumer Connections

Developing a TCCC model means defining and evaluating the quality and volume of profiles in your consumer connections database, whether rented or owned. You may factor in attributes like home addresses, demographics, psychographics, interests, shopping and other behavioral data. You must also weigh the cost of acquiring and managing these connections.

In addition to profile attributes, you also must factor in the practicality of deployment and propensity for response. Renting connections through a social network may be preferable if the social network can efficiently connect brand messaging to media that deliver superior returns in the form of response or brand outcomes.

In addition to massive scale, consider that one of the factors that made Facebook’s rented connections so valuable in the first place was the low resistence to consumer engagement. While Facebook is getting more crowded and the price for connections and attention is increasing, it’s still a great place to go to achieve high response with hyper-targeted prospects at great scale. This partly explains why most calls-for-response -- whether owned or paid -- focus natively within Facebook, versus some external, off-network experience.

There are other factors to consider, depending on a marketer’s category and brand. But profile richness and ability to deploy connections and segments to scalable marketing action are among the most important considerations in understanding TCCC and its relationship to overall marketing ROI.

Maximizing Rented And Owned Connections Through “Audience Relationship Management”

The major social networks like Facebook and Twitter are betting their future on publishing revenue models. But their strategic purpose is to become a master identity grid that enables interaction and information-sharing -- like a utility. These social utilities are heralding a new era where CRM and media are colliding, and enabling unprecedented targeting and marketing action at high scale.

If this trend continues (and it most likely will), then brand marketers must actively invest in the evolving science of “audience relationship management.” That demands strategic, integrated management of both rented and owned consumer databases, and linking them across your entire media and marketing operations.

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