Much has been said about the state of digital audiences today, and even more about the myriad ways to build and engage these loyal consumers across social environments like Facebook, Twitter, Foursquare, Pinterest and more. Promises of overnight brand scaling, more authentic audience relationships, and infinitely deeper behavioral data — made by the first wave of social middleware players like Buddy Media, Wildfire, Vitrue and dozens of other social CRM solutions — have lured everyone from global brands down to local musicians and artisans to the fray. And yet, as this audience revolution continues to unfold across the global business landscape, the pièce de résistance of reducing audience acquisition costs while simultaneously increasing the returns they generate remains an elusive balancing act. There appear to be a few key market principles driving the audience lifetime value ratio, and how digital marketers are using these principles to maximize their returns while shaping the future of the fan experience are cases to be learned from. An audience is simply a group comprised of individuals that share a common affinity or activity.

To understand that audience — and best optimize its experience and potential for returns — we must understand the individual. To do this, we can employ Abraham Maslow’s 1943 paper, “A Theory of Motivation” which presents a framework still popular today for understanding the hierarchy of human needs and desires. Contests, coupons and other transactional rewards are excellent quick-win mechanisms for building audience, but ultimately fall within Maslow’s “Esteem” and “Self-Actualization” categories at the upper layer of human motivation; whereas, deeper engagement and sustained loyalty operates at the more visceral “Belongingness” layer.

This is the community layer of the individual, and is best served with rich content experiences that share story and present opportunities to contribute to the experiences of others within the audience. This shift from transactional to contextual incentives not only increases the quality of individual brought to the audience, but also reinforces the shared sense of “buy-in” required to unify and direct the audience’s attention in a sustainable way over time. A major challenge facing marketers is working with environments where they don’t actually own their audience; rather they are merely renting those relationships.

This difficulty is not by accident. It’s a manufactured problem stemming from the competing interests of the social media platforms on which audiences are being built. On Facebook for instance — whose self-described DNA was as a social utility, “meant to help reinforce pre-existing social connections, not build large groups of new ones” — digital marketers not only compete with each other for the attention of shared “earned” audiences but also with Facebook, which controls the structure of the environment (i.e. owns the game) and whose business model is to increasingly cross-pollinate its user base across advertisers. On top of that, when Facebook sells ads around a brand’s content and experiences, that advertising revenue stays with Facebook.

This false sense of audience ownership further manifests itself when trying to communicate with one’s audience via in-built channels, or when trying to extract data in a way that will support the formation of more precise lifetime value calculations. Again, social middleware helps provide digital marketers and executives with interactive dashboards and tunnel integrations into traditional CRM suites — but the reality remains that these audiences still live in environments largely outside of a marketer’s control. This is why email remains the gold standard of audience ownership in digital, and continues to drive significantly greater ROI when compared to social media.

Yes, email competes with a feed of content like posting in social media (though much slower moving when compared to say, Twitter), but has the advantage that once opened, it is an entirely owned experience, unfettered by artificial restraints and conflicting interests on the part of the channel owner that enabled its’ delivery. Even the email addresses themselves are a material asset as they can be brought to any other emergent social environment. Look back at every social network in it’s early days, and there is always some sort of “import email addresses” function, though there never has been an “export” function. How to Innovate an Owned Audience Environment ? Owned environments (web or mobile) that help contextualize the unwieldy free-for-all surrounding social content and give it direction are examples of areas ripe for return on audience investment. There are certainly many benefits of building audiences across social media, and using the tools these networks provide, but these benefits are largely centered on reducing audience acquisition costs vs. generating returns. Looking forward, social media will increasingly be seen as an onramp for audiences to the much larger opportunity of the owned environment super highway — where back-end data can support cross channel optimization and the interests of every pixel are aligned.

Looking back, are you a fan of the same shows, celebrities, brands etc. that you were two years ago? 20? How about looking forward, will you be a fan of the same things you are now? Chances are in some cases you will, others you won’t, and in some you’ll go back and forth — like rediscovering the Beatles, or a Disney classic with your kids. Your natural tendency (and by proxy your natural lifetime value as a fan of each of these properties) will be to expand and contract your level of engagement with various entertainment and media. This means that businesses building experiences around you that are based solely on static, present-day information will receive diminished returns. The future fan experience will be determined dynamically, in real-time, where environments are architected to take advantage of bilateral discovery between the experiencer and the experience creator.

As time goes on, the historic data driving these experiences will grow deeper and deeper, factoring in past affinity and actions taken months, years, and even decades ago. For example, a LTV model/experience today that categorizes a “soccer dad” will underperform against an experience in the future that also takes into account that this dad was once a huge fan of Disney shows when he was a child himself. The deeper the data value-exchange, the more a three-dimensional fan experience can be unlocked. Albeit a rapidly growing part of the business psyche, fueled by the irresistible promise of reduced customer acquisition costs and yet higher bottom line returns, the science behind managing audiences in the internet enabled age is still young. Social media was a major milestone, opening marketers eyes to the almost unfathomable potential reach of their messaging. Yet, in its current form, social media remains too self-conflicted and limiting to enable marketers to effectively mine the value of the audiences built on these networks.

There will certainly be success stories around reach-expanding campaigns driven by the friction-reducing social environments; however, data has shown us that these benefits can ultimately be distributed to wholly owned environments (i.e. email, landing sites, mobile apps, etc.) where content can be more cohesively contextualized across channels and dynamic calibrations can be made to optimize for returns. It is here, that I believe marketers will ultimately leverage these three suggested market principles to close the loop on reducing customer acquisition costs without sacrificing returns, thereby maximizing their audience lifetime value ratio. ( By Spencer Richardson from via American Express OPEN Forum )