Of all the social media platforms, Twitter is the one that puzzles marketers the most. The typical observation is that they don’t get it and can’t figure out why it’s important.

EMarketer shared some research recently from ExactTarget that provides an easy answer: Twitter gives you a way to reach people who have loud and active voices online. Once you’ve gotten their attention around your message, you’ve got a good chance that they will redistribute that message somewhere on the web.

How’s that work? ExactTarget shows that the 26 million monthly users of Twitter are three to five times more likely to comment on blogs, post to forums, participate in view sites and blog themselves than the average Internet user.

“Consumers active on Twitter are clearly the most influential online,” said Morgan Stewart, principal at ExactTarget’s research and education group, in a statement. “What happens on Twitter doesn’t stay on Twitter. While the number of active Twitter users is less than Facebook or email, the concentration of highly engaged and influential content creators is unrivaled—it’s become the gathering place for content creators whose influence spills over into every other corner of the internet.”

The conclusions suggest that the time spent investing in an audience on Twitter is likely to have an exponential impact. This is the crux of social media marketing, and provides a simple justification for using a service that at first seems fragmented and chaotic.

Another item in the proliferation social media tools in our daily life:  the research firm IDC points to social media as being a driving force of “cultural and process change” for business, according to its new report, The Intersection of Web 2.0, Enterprise 2.0, and Collaboration: The Social Business.

“If you look deep into the social business movement you will see that we are on the brink of a fundamental change in the way businesses interact with customers, partners, suppliers, and employees,” said Michael Fauscette, group vice president, Software Business Strategies. “Businesses today fall into three camps – the social “denyer”, the accidental socialite, and the socially aware. Regardless of where a company falls in these categories, customers expectations of technologies and the way they interact with suppliers have changed, driven greatly by the social Web.”

Rupert Murdoch has been the poster boy for the frustration legacy content creators have with the current way that content moves around on the web. What Murdoch is missing is that the answer lies not in setting up more barriers, but in getting control of his distribution through more aggressive deployment of social media techniques. And that will only happen when his entire content creation teams are mobilized.

Here’s a real-life example of the confusion that is driving Murdoch, and other heads of content companies, batty. On Dec. 6 at 7:49PM, the Wall Street Journal posted a story that used analysis from the advisory firm NYYPEX to estimate enterprise values and revenue for Facebook and LinkedIn.

When I was writing my last post on the lessons Facebook can learn from AOL, I recalled seeing a $700 million revenue figure for Facebook bandied about on the social web yesterday and went to Google to find a citation. Here are the results to the query, “What is Facebook revenue”[Illustration 1].

These results didn’t give me recent enough news, so I used Google options to select content that was published in the last 24 hours.[Illustration 2]

I clicked onto the second page and found an information source that I regularly use, Mashable, and clicked through to the article.  [Illustration 3]

Here was the content I was looking for. And, it has been widely distributed, with more than 700 Tweets recorded by TweetMeMe and 40 instances of Facebook sharing from the article page.

It’s not the originating instance of the story, however. See, Mashable built their article off of an original report in the Wall Street Journal, based on NYYPEX data. Here’s the original article, with a teaser hidden behind the WSJ pay wall. [Illustration 4]

Curious about how the story has disseminated across the web, I went to Twitter Search and typed in “Facebook revenue.” Here are the results as of 12:15EST on December 8. [Illustration 5]

Of note: the majority of these tweets link to Mashable or TheNextWeb, both of which built their stories completely off the Wall Street Journal story.

In the old days, this would be described as stealing a scoop. But, according to the rules of the web, each of the content sources that cited the Wall Street Journal were within the boundaries of “fair use.” (These uses of the articles read to me like they are right on the edge of violating copyright, but that’s semantics.) In citing the Wall Street Journal articles, however, there is no intent to drive traffic to the Wall Street Journal and the original article. The intent is to keep the traffic on the citing web site, generating economic benefit for the content aggregator, not the content originator.

I see this on some of the articles that I post on my blog. I’ll take a chart from another story that I find particularly illuminating and then try to add my perspective on the data as it relates to my experience and my audience. My hope is that the people looking at the piece will then go on to review the original data. Only a small part of my audience clicks through to the original source of content, however. So, I’ve tried to reduce the frequency that I point to other content, and I’ve tried to increase the frequency that I use Twitter to direct people to original sources of information.

For the editors of the Wall Street Journal, and for Murdoch as well as anyone else carrying a high level of content costs, the frustration is profound. What is the right way to craft and share information without losing your audience to a multitude of third-party aggregators?

What is the economic cost? Let’s conservatively assume that the Mashable and NextWeb stories got around 10,000 views each, costing the Wall Street Journal about 15,000 page views. With a $75 cost per thousand (CPM) for video ads and a $15 CPM on display ads, the WSJ would lose roughly $1500 of video revenue and $300 of display revenue on those pages. That doesn’t seem like a lot, and certainly doesn’t outweigh the benefit the Journal gets from the promotion of its story, right?

Start multiplying that effect by 100 stories a day, every day, and you quickly reach an estimate of about $5 million a month of lost revenue opportunities because of redistribution by third-party aggregators.

Murdoch may be focusing on the issues of Google’s search engine, but a profound economic disruption is found ion the broad redistribution of his content. That’s a problem that has no easy solution.

The logical first step is to take the fight to the streets. Use social media tools to distribute your content more broadly and more aggressively through your own social media brands, as well as the personal brands of your staffers. That’s what Business Week has done so well, and, for the most part, Business Week appears to get more traffic to their “scoops” than most other legacy media brands.

The new skill is going to be about wading into the fray, not keeping the fray away by erecting false barriers.

People I work with know that nothing frustrates me more than expedient context. That is the practice of using a set of facts and projected outcome to increase resource allocation, and then neglecting to track the future outcomes against the proposals.

It’s all right to be wrong. It’s not all right to ignore when you’re wrong.

Harvard professor Greg Mankiw has been tracking how the unemployment figures have squared with the Obama administrations projections as they justified the initial stimulus plan.

From his original post in May:

To be clear, this lack of accountability is not a feature on this specific administration but is, instead, a reflection of the inherent uncertainties associated with macroeconomics. The administration, however, has not been particularly forthright in admitting to this lack of accountability. Indeed, the act of releasing quarterly reports on how many jobs have been “created or saved” gives the illusion of accountability without the reality.

I don’t point this out to quibble with the need for the stimulus plan, nor the kind of political gamesmanship required to drive a program through Congress. I do believe, however, that the American public has a finely-tuned ear, and that above all they want a kind of pragmatic vision from their leaders. To be a pragmatist and to have vision, you need to be able to face up to facts.

With no job recovery in sight, American’s don’t want to hear about the number of jobs that haven’t been lost. They want to hear about how many more jobs will be made.

Americans have increasingly less confidence in the President and the administration. They don’t believe that key issues are going to get resolved effectively. Two-thirds of Americans say the country is more deeply divided on major issues than it has been for several years. And since the beginning of the summer, Obama’s approval rating has declined sharply, making him one of the least popular presidents one year into a term since World War II.

Of course, Reagan was in a similar place after one year and rebounded strongly. (Who can forget the leaks from David Stockman and the OMB during the budget process in those early years?) Obama can revive his charter.

I don’t believe it will happen without the American public hearing a message that helps them feel reassured that the focus of the Office of the President is on reclaiming vitality and purpose for the country, at home and abroad. To do that, Obama will have to narrow his charter and create a plan that is accountable to everyone.

I’ve been musing the last couple of days over the trajectory of the economy and the housing market, wondering what the recent trends portend. One by-product of the economic decline, neatly summed up in Paul Krugman’s New York Times piece this past Sunday, is that no expert is reliable. The future is unknowable and no one point of view has any great insight.

But I’m at a point in the book where I want to peek ahead a couple of chapters and find out how things are going to end up. Our company has gone through a radical shift over the past two years, with the bursting of the housing bubble and the subsequent crash of the economy cutting our business in two of our three largest areas in half.

The contraction has taken its toll, but we’re still standing. We’ve maintained our energy with our customers, have worked to keep our financial standing solid and have kept our equity stakeholders whole.

We know we have another challenging winter ahead. The question is, How challenging?

The driver of that answer will be in the housing market.

Look at the momentum of the past six months in the resale market and the circumstances appear rosy: sales are improving, prices have posted month-over-month increases, and pending home sales have been up for six straight months. Inventory has worked down from a high of 11 months last November to 9.4 months in July. An expert as august as Robert Schiller has declared that the housing market may have found a bottom — the kind of qualified forecast that most experts are limiting themselves to in these uncertain times.

The last two months of home sales data, though, have presented an interesting anomaly, one that suggests the the market is either at a key recovery inflection point, or that the market is experiencing a mini-bubble, being driven by unnatural market forces.

The charts to the right illustrate the anomaly. The first chart shows the number of homes sold by month from 2007 to June 2009. The fourth data series presents the average of homes sold in each month over the course of the last decade. (Interestingly, the boom and bust of the middle and end of the decade even out to roughly align with the average for the first four years of the decade.)

Traditionally, June is the peak month for home sales in the year, with units sold tailing off quickly through September. In 2007, the most challenging year of the slump, home sales dropped so much that December sales were lower than January sales, the only time in the decade such a phenomenon happened. Conversely, this year sales increased from June to July, only the second time in the decade (the other was in 2004, at the start of the boom), that this happened.

The second chart indexes the sales in each month against January, showing the relative velocity of home sales through the year. The trend in this chart against supports the observation that 2007 was a very weak year for home sales, with velocity never reaching normal highs and dropping more sharply than in other years. The chart also illustrates the rapid shift in velocity experienced this June and July. Through May, sales were gaining at a fairly typical rate during the year. The last two months, however, posted much sharper growth than a typical year: the July velocity, as measured against January sales numbers, was 20% higher than average.

Despite the strong acceleration in performance, observers point to various risk factors to suggest that the increase in home sales is a temporary bubble, and that the market will settle back into a moribund phase.

The two biggest factors cited are the home-buyer tax credit and the significant inventory of foreclosures still to come onto the market. These two factors have driven a high percentage of home sales this year, offsetting weak demand among move-up and existing home owners, many of whom are under water on their mortgages.

Washington has a key decision to make: Should the home buyer credit expire in November, should it be extended, or should it be revised to include all home buyers and create a higher economic incentive? There are few signals coming out of Congress today, as all eyes are focused on the health bills and Obama’s political future. If Congress extends or amends the bill favorably, the demand from first-time home buyers will remain strong enough to create a solid foundation for future sales.

Some observers close to the real estate are less concerned about the impact of foreclosures on the resale market. This is due to an interesting redistribution of housing stock. As a result of the credit crunch and increased unemployment, very little rental stock has been developed over the past two years. Investors are accumulating existing homes at foreclosure prices and creating new rental units. This demand is helping to move foreclosed homes off the market quickly, observers say.

In the short term, consumer confidence will be the primary driver the performance of the housing market. Will consumers believe that they are making a reasonable investment when they buy a house? Will they believe that prices are reasonably stable, and that they have got a good deal on the house they are buying? Will they have enough confidence in their own economic future to risk the transaction?

The Conference Board has tracked a steady uptick in consumer confidence since it reached its low in February. This uptick has been driven by a consensus among consumers that future expectations are improving, despite risk in their current circumstances.

This improvement comes despite a $10 trillion decline in consumer wealth in the last 12 months, despite a conviction that unemployment will top 10%, despite the knowledge that more than 16 million people are currently out of work, despite a sense of political helplessness across a country increasingly out of touch with Washington. The improvement in confidence suggests that consumers have baked these realities into their assessment of their circumstances, and that, on balance, more consumers feel good than they did six months ago.

But the fall will be telling. Lawrence Yeung, the economist for the National Association of Realtors, cites favorable economic data in projecting a recovery for the housing market in 2010, but warns that the psychology of home buyers, and consumers in general, could suffer in November, following the decline of the home buying tax credit. “A decline in the market following the tax credit could shift consumer psychology,” Yeung warns.

These concerns are short-term, but critical. For the long-term, the new normal for housing has begun to take shape. Bill Gross of PIMCO in his September letter forecasts a decline in home ownership from a peak of 69% to about 65% as one element of the new normal. As we climb out of the bottom of this epic trough, we’ll participate in a more orderly and disciplined market, where real estate offers a relatively stable, but slow-growing haven for personal assets.

Over the past three years, I’ve gathered data, analyzed trends and presented projections for our business and the markets.  While the events have unfolded generally along the lines I’ve outlined, the degrees and the timing have been widely divergent from my estimates.  So, as I came to the end of this exercise and looked at all of the information I’d gathered, I found two impulses warring inside me:  an exuberant relief that the market may be on the upturn tempered by a consciousness that more pain is most likely ahead.  Through it all, I’m amazed by the resilience of people and their ability to persevere.  That’s not a forecast.  It’s a fact.

In a recent letter, economic observer John Mauldin discussed the impact of the system-wide deleveraging occuring across the the economy.

This shift marks the end of a 30-year period of growth driven by financial innovation.

The current rate of government borrowing is likely to keep total debt to GDP continue to rise, but consumers and businesses are going to continue to work to wind down their levels of debt.

As Mauldin observes, that is a problem.

The world of finance is going to its own New Normal. It will be a world that is less leveraged. The growth in leverage that helped spur growth on the way up is a drag on growth as it is wound down.

The chart to the right shows the growth in debt in relation gross domestic product since 1951.  Today, debt stands at nearly 4 times our annual domestic economic output.

In the simplest terms, the relationship indicates that we would it would nearly four years of productivity, at our current rate, to pay down the debt.

You can’t layer any more debt onto consumers.  Businesses need profits to grow to justify increased leverage.  Consumer consumption is the primary driver of business profits.  Consumers will only be able to consume at rates consistent with their wage growth.

The outcome: a slow, grinding recovery that Mauldin describes so eloquently.

Here’s another entry for the things-aren’t-good-but-they’re-better-than-six-months-ago file.

The Association of National Advertisers polled its members to see how they are thinking about marketing spending over the next year. The net result? 87% of respondents are looking to cut costs in marketing, down from 93% six months ago.

That’s improvement.

ANA looks for the bright spots: fewer marketers are delaying projects and a smaller percent of marketers are looking to cut spending by more than 20%.

You can read a summary of the survey here and find complete results at this link.