Guess I’m on a roll today – figure I might as well write these ideas down as they come to me, before I forget them, so as to fix them in physical reality, put my stamp on them, before someone else thinks of them (and I’m guessing, a few probably all ready have).

Ok, so the last two posts mapped out that we haven’t make a good case for Social Media and some of it is poor marketing – it’s psychological in my opinion.

But putting tracking code in place and have it “ping” a Social Measurement Platform – tracking a specific set of pattern strings we’ve set up for a campaign – we still have to figure out what that’s all worth and measure it .

Take “Friending” someone – what’s that worth – I compared the value of a “friend” to the value of “Gold”; but how is Gold Valued – how is it’s price fixed?  According to Wikipedia the price of Gold is determined by …:

“…. The price of gold is determined on the open market, but a procedure known as the Gold Fixing in London, originating in September 1919, provides a daily benchmark figure to the industry. The afternoon fixing appeared in 1968 to fix a price when US markets are open.”

What I’m suggesting is the value of a “friendship”, virtual OR real, as long as it pertains to the online world – varies from day to day, hour to hour, person to person.   In fact, like a molecule, a friendship can’t be evaluated entirely by only one node of it – in other words, a “friendship” needs at least one other person – you can’t friend “nothingness” – and in that sense, a virtual friend, can’t, by my thinking, be 100% analogous to a particle of Gold, or a “dollar bill”, as those units of value don’t suddenly change, depending on who holds them (some people will probably argue this point with me) while two nodes of a “network” could be of a different value than another two nodes, if you get my drift.

I thought of water and a glass as an analogy – but I don’t think it applies that well – but anyway, I’m just thinking this through now.

For one thing, you can’t have friendship with out some degree of attention, and that, alone, is difficult to measure.   Also, not everyone’s attention is worth the same amount – so getting, say Kevin Rose of Digg‘s attention may be worth more than getting my attention, especially according to “Blogger King” Allen Stern.

I think it’s fair to say that people who have been online “longer” and invested more time in building relationships online, and leveraging the web, might have a higher “value” placed on the value of their friendship – for example, early adopters to Facebook (after the College Dorm days) like Robert Scoble have well over 5,000 friends – I’m at 623 friends now – and I’ve been  using Facebook actively for well over a year – but someone who just joined and isn’t really into Facebook, or maybe is more into LinkedIn and hardly uses Facebook, all things equal, is probably worth “less” as an Internet friend (again, given a system of determining value) than someone who has put in more time, and therefore, is more likely to have generated more value, online.

But, then again, there’s also a component of offline popularity that is totally applicable to online friendship – someone who is known to the general public, or even to a small community, but never been online, if they suddenly joined Facebook or Myspace, say Henry Kissinger (not that he would, but suppose he did)  the value of having him friend you online, or vice versa, would be higher than, say, me friending you (all things being equal); that’s just a hypothetical example, by the way.

Plus, not all friends are equal, we all know that – just like in the “real world” your close with a few friends, and probably know many more.

And then, if we think about the number of friends, getting back to Robert Scoble or Loic Le Meur, or Jason Calacanis, for example – each has close to or more than the limit of Facebook friends and Scoble has well over 10,000 Twitter followers – maybe double that – he doesn’t probably have that much time to interact with anyone but a few of his contacts … right?

And it goes with out saying, though I’ll say it outright, that the more friends some one has, the less the value of the friendship is for each person – this can be conceptualized in a similar way to the Google PageRank Algorithm – where more “links” on a page (which equate to more nodes a “hub” in social network fan out to, the less each connection, on average, is worth – in what ever unit of value you want to affix to a connection between nodes in a Social Network.

Along with all that I’ve said so far is the concept of “scarcity” and how it might translate into Virtual Friendship – after all, when all is said and done, you only have so many hours in a day – you only have so much that you can spend with anything or anyone – there is a limit.   Therefore, Robert Scoble has a limit, Loic has a limit – they can not, even if they wanted to, respond to every Tweet, or every request that comes to them virtually – no more than they could do it in the real (3D) world.

Another assumption would be that each individual, as they enter into Virtual Relationships, as they get involved with the Internet, has a certain pre set value.  This would be similar to the concept of “reach” in Audience Measurement tools like ComScore and Nielsen NetRatings – for example, for any customer segment you want to examine during a given time period, Comscore will give you the number of Unique Visitors that make up the segment compared to the total number of Internet Users who could, at that time, be online, and might go, or be part of the segment – the “reach” is the number of unique visitors in your segment, or site (if your looking at site numbers) divided by the total number of uniques online at that moment in time (and all Comscore numbers are “estimated” based on Panel data and calculations, just in case your unaware) of it).

So I think, given all that I have discussed, so far, we could begin to map out the idea for a workable formula for the value of friendship, the value of a contribution.

Here’s the basic parts that would make up the formula for the value of a unit of virtual friendship:

First, a “commodities market” that “bets” on the average value of “attention” for a particular segment – a fair trading system would need to be set up – and now would be the perfect time.

why?  The Sub-Prime Meltdown has taken down Wall Street -  consumer and customer credit has almost vanished for the foreseeable future, ever since Lehman’s fall last month, and now Real Estate value is dropping rapidly, even in New York – and yet there’s a lot of “Global” Money floating around – though, there’s not much left in America  to invest in – the Republicans have ensured that by de-regulating securities and all other kinds of “risk” starting in 2002 – that ended up fueling the housing boom that has now “bust”.   In order to revive the economy, at some point – we need a new place to invest – and perhaps, another bubble – maybe not as messed up as the last, though.

For an Avatar who we’re trying to Virtually “Friend”:

• [Formula] for the value of “unit” of virtual friendship – which has a sub dependency on the value of “attention” as determine on the “open market” – similar to the “Gold Market”, see the previous paragraph, above.

• [Variable] the number of friends a “virtual” friend has (both in the Social Network your friending them in, and all other social networks they belong to, along with the friends they have there.
• [Variable] the closeness of a friend vs. all the other friends you have online. I don’t know about you, but the individuals I interact with more (ie: more two way conversations) and the longer they are, the more “probability” that individual is a closer friend, relative to someone else – but of course, that doesn’t cover cardinality – you might have a burst of activity where you interact much more with a virtual friend than normal – maybe a joint project, for example.   I’m suggesting, two or more recent instances of a two way conversation that’s longer than a few minutes counts as the person being in a closer “rung” of friendship.

the first three points I’ve shared, above, would seem to be part of any standard network topology – things you’d expect to see in a social network diagram – such as nodes,  interconnects, with some being closer and others, not – and there’s a weight we can assign the interconnects and the nodes (and they don’t have to agree).

The next set of measurements have to do with the individual -who is “friending” – though some of this may be redundant – in other words – this is just a working idea – it’s not the final version – maybe I’m repeating the same info twice, maybe not -

• [variable] value of the individual’s time who is friending – this too, is determined in the attention commodity market.
• [variable] the number of online friends this person has in this network and in all networks.
• [variable] the online and offline influence the “friender” has.
• [variable] number of “inter-related” nodes – how many connections do you have to friends that are also connected to each other?

The next set of variables might be related to visitor segments a virtual friend is located in, for example:

• [variable] segment value time, segment value reach as a percentage of all visitors in that segment.
• [variable] duration of time between interactions been nodes – individual vs. average

In my mind, the “attention” commodities market would determine the value of units within a segment – maybe that’s what would be swapped, or go up or down.

The rest is “fuzzy” – I can see the outline -but it’s really for wizzards now working on Wall Street  or someone similar  to put this “Trading System” together and make it work, at least, as a computer model.

Then, there needs to be a broad enough agreement that a trading platform is needed – and then the fun begins.  Of course, all of this would need to become “standardized” and written up – no one is going to build Trading System based on something that can’t be codified – just common sense.

Let’s say, in the future, I see betting on the value of an “interaction” and the value of a “friend” say, on FaceBook, being determined and changing by the minute – financial calculations could be modeled – for valuation – this then, could – eventually, become the basis for a Social Media Capital Add, much as Micheal Cayley has in mind – but I’m sure his idea is way different than anything I’ve put forward.

To close this long, long post – what I’ve put forward is what I believe should happen going forward -

1. Way to Measure Social Media – a data collection tag is needed along with a “listener” on the sites whose Social Media traffic you want to measure – the Social Media Platform needs to collect information and correlate it with the the campaigns being run – it’s akin to the Web Analytics model – which is what I come out of – enterprise monitoring as well – so it’s easier for me conceive of something like Social Media Measurement – in sort of an “intelligent agent” communicating back to the “mothership”.  Think that model would work well for this kind of task.
   

   Making a Case for Social Media – are we doing a poor job of Marketing Social Media?

2. The need to find a formula for the Value of Friending / Contribution
   

   More ideas about Social Media Measurement

   - in a universal form, so it can be “traded”/ “swapped”, bought or sold, in some form.   This can’t be done if your just going to value Social Media traffic based on ROI your site produces – because the value of “THAT” is something the site owner decides – but can’t trade that – you have to trade something the MARKET decides, is of value – and that might not agree with what a site or business values the most.

3. Finally, in this post – I’ve worked out part of what you’d make a formula out of – but I have not figured it all out -and I don’t have the exact formula – I’m figuring someone else can figure out what that might be, at this point.    But, if I think of anything more, I’ll share it here.