This post is third in a series of my Social Media Principles. The base post is 10 Social Media Principles.
Every economy has currencies – items that are traded or exchanged. Items to which the members of the economy ascribe value.
In a social media economy, the currencies are most often a combination of artifacts and recognition.
In Flickr the artifacts are fairly obvious – they are pictures.
Pictures are taken and put on the site, people enjoy your pictures and you enjoy theirs. Affinity groups develop around types of pictures or specific communities.
The cost of entry, though are your pictures. You put them up to demonstrate your activity in the community.
The same is true for links in Delicious, reviews in Digg, or music lists on Last.fm. There is an artifact of exchange that the members of the community exchange and derive value from.
Recognition is a key factor in any social network. Ideally, recognition should come from an automated source (“you did x of these last month, good job!” or “Dave Thomas is the #2 smelt canner in the whole cannery!”) or recognition should come from people in the community (“I vote Dave as the best smelt salter of the week”).
While recognition can be a contest, many studies show that performance in an open and transparent environment yields the best recognition.
The key for both these scores is that you need to use the tool often and effectively.
For blogs, metrics can include number of readers, number of subscribers, number of comments, number of people who link back to you, and so forth.
WHAT WE LEARN FROM THIS
Healthy communities have currencies that they trade in or hoard. If you don’t plan up front for how currency trading will impact your new community – it is very possible that the game will become based on hoarding.
If you have a company and your currencies are information and decisions. This can be (and often is) very damaging. Similarly, if you give rewards based on something that isn’t seen as of value to the community – it’s a value-less currency. It’s like giving them counterfeit money.
This social media principle is a strong warning that if you don’t control the economy of your community, it will spin out of control. If you manage it well, it is much more likely to stay healthy and grow.
Update: See An Bui’s post for Economies have Currencies
Blogged at My House in Seattle, WA