The value of community

John Windsor has an interesting discussion happening on his blog about the YouTube purchase. John suggests that without community your company has issues, whereas one of this commenters challenges him with a question: "how exactly do you value a ‘community’?"

After posting a comment there, I thought it would be worthwhile to expand that comment.

How do you "value" community? Well… how do you value ethical business practices? A friendly handshake at the beginning of a sales call? A willingness to pass along a sales lead for a friend?

Value of community is like value of anything else in business – pointless to discuss without appropriate context. Community value is, or at least should be couched against the larger business objective. Google has a desire to connect the YouTube content to the larger picture of their desire to connect all pieces of Web content. Why did they buy Blogger? Because it connects them to successful content. That success is largely community based.

Before we start talking about the value of community, we must first determine what "community" means in our context. Community can be a destination or it can be a feature. For instance, Facebook is a community. Its main purpose is to build and support social connection. It directly and solely helps support my definition of community. YouTube, however, has incredible community features that support its primary focus of uploading and sharing video. While it may seem like a minor difference, it’s a crucial one for the discussion of "value".

And what does a discussion of "value" really equate to? That right, the concept of Return on Investment (ROI). Many clients have asked many agencies how to  calculate and support blogging/community/social connection ROI. Like the introductory handshake, it’s hard to calculate but easy to feel when it’s working.

ROI and value in the context of community can only be calculated if you first determine what’s important to your business first. There is no one size fits all solution to the ROI discussion. Communities are based on something specific, someting personal. Even between similar community concepts, ROI can be radically different. Think about using a single metric, say total users, when comparing MySpace "value" against Facebook "value". Total users works wonderfully for MySpace, since they make money through sheer volume of site usage that supports ad rates. But Facebook makes money by putting marketing campaigns in front of a truly receptive audience. They charge more for less, and it works because their audience knows that they’re seeing the campaign because Facebook knows they’ll have interest. If you were to judge "value" of Facebook based on the metric that works for MySpace, your results are pointless.

But aside from measuring value based on the proper metric, I’m interested to see when we can stop having this discussion. We asked the same questions when the Web was new and people had to justify the costs of building a new fangled Web site. But these days, no one asks whether there’s an ROI to having a Web site –  it’s just part of the marketing mix. Hopefully soon, we can stop having the ROI discussion about "community"… which really equates to asking if building projects that allow users to contribute and participate is worthwhile.