The Law of Diminishing Social Returns

by Jay Deragon on 05/23/2011

Results are but for the moment. Knowing what influences results is a never-ending process of learning and improving.

Measuring social media moments is an exercise that creates diminishing returns. Why? Because people’s attention, attraction, affinity, audience preferences and subsequent actions change often. Trying to use technology to control rather than influence human behavior is a fruitless exercise that produces useless data.

any observed statistical regularity will tend to collapse once pressure

is placed upon it for control purposes.”

The Law of Diminishing Returns

The law of diminishing return  is that once a social or economic indicator or other surrogate measure is made a target for the purpose of creating social or economic policy, then it will lose the information content that would qualify it to play such a role. In other words as all things social change the context of its current state and loses its measurable value as soon as the context of value changes.

The law of diminishing returns states “that we will get less and less extra output when we add extra doses of an input while holding other inputs fixed. In other words, the marginal effort of input will decline as the amount of that input increases holding all other inputs constant.  The diminishing return (in output) of social media comes from “too many” constant  efforts trying to measure and creates results from a dynamic process.

Given the dynamic nature of how people use social technology, how suppliers are advancing the technology and the subsequent dynamics everything is but for a moment.  If things are in a dynamic state then measuring a moment becomes irrelevant to what is happening the next moment.

Obsessed with ROI While the Hope of Return Diminishes

Today we still see organizations holding on to part of the old mind-set, the measurement part. Measurement mentality continues on as a sacred goal to prove actions against the holy grail of results. Meanwhile market have become more and more dynamic fueling constant changes largely because of the influence of technology and communications.

Obsessed with measures we jump around measuring the impact of changes only to realize new influences are changing the dynamics which changes the result.

Unless an organization understands and improves the attributes that influence all things downstream than efforts to measure and improve downstream actions become fruitless. While chasing all things social all efforts will produce diminishing returns unless the goal is learning and gaining new knowledge.

The Law of Increasing Return

This is a simple law. Improve your thinking, the 5 “A’s” of social media, and  never stop studying and seeking the answer to the 6 questions and you will learn to improve over and over. Improvement is the only result that produces the kind of results organizations are obsessed with. If you only measure the result you miss the real data that will lead you to new knowledge from learning what needs to improve.  Study the 5 “A’s” and ask the 6 questions for each A. Do it over and over and over. Why? Because human behavior is fickle and social dynamics are constantly changing.

What might be working for you today will likely not work for you tomorrow. So you think you understand social media?  You never will unless you study to show thyself approved. Get it?

{ 1 comment }

John Maloney May 25, 2011 at 12:22 pm

Hi —

thanks. Good blog of Goodhart’s Law –

When a measure becomes an objective, it ceases to be a measure.

http://en.wikipedia.org/wiki/Goodhart's_law

Or my simple version – “The race to the bottom.’

Cheers!

-j

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