Stock and Flow: not just for Economists anymore

A continuing challenge for community managers for brands is to keep the conversation relevant and fresh. At the Signal Chicago conference in Sept. 2011, a presentation by James Gross of Percolate introduced me to a new way of thinking about this challenge. He quoted an idea from SnarkMarket: the concept that economists call Stock and Flow is a great way to think about conversations and social content.

“Stock is the durable stuff. It’s the content you produce that’s as interesting in two months (or two years) as it is today. Flow is the feed. It’s the posts and the tweets. It’s the stream of daily and sub-daily updates that remind people that you exist.”

I went to Wikipedia to get a better understanding of the economic theory behind the Stock and Flow idea and found this very helpful illustration. It helped me to visualize the division of a brand’s marketing investments between the development of enduring content and the tactics to distribute that content to consumers. A brand can’t post / tweet/ send the same content over and over: it “depreciates” in value to an individual consumer as soon as it is consumed (and hopefully shared). The brand needs to continually add to the “stock” of share-worthy content to earn the continued interest of its existing consumers.

When a brand is new in the marketplace, more of the brand’s resources may need to be devoted to developing “stock”. As the brand gains traction and gathers friends and consumers, the conversations from these consumers can help the brand identify new sources for stock content; the consumer-generated content may even be repurposed.

Since brands are adding new “friends” all the time, brands should create tactics that help these new consumers discover the already existing “stock” content. Brands must own usage rights for images, sounds and words in perpetuity, to allow the stock content to maintain its value and availability for continued use. Stock content allows a brand to be “always on”, and allows brands to look at the development of this content as an investment in a mid- to long-term asset.