Monthly Archives: April 2008

Crossing the Social Media Chasm

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The discussions among social media experts about emerging trends in marketing range from the ridiculous to the sublime. For all the ubiquitous two-bit pundits holding forth on the latest new definition of brand 2.0,  there are also incredibly thoughtful and provocative dialogs on practical marketing strategies among groups like the Online Community Unconference, run on the West Coast by Bill Johnson. Forrester is supporting some great work on the frontier of social media marketing, with analysts like Charlene Li, co-author of the latest social media must-read Groundswell, and Jeremiah Owyang.

But when you step out of the social media echo chamber–when you turn off Twitter and Facebook and sit down face to face with enterprise marketing teams to discuss the application of social media to immediate business and marketing objectives–the reality of how much ground we still need to cover to improve marketing’s responsiveness to market changes becomes clear. It’s a classic Crossing-the-Chasm adoption scenario, and we’re still only establishing a beach head.

In the past few months I’ve been meeting with a lot of marketing organizations to discuss social media challenges and opportunities as we build our pilot program for SocialRep. There are a few visionary companies that are really diving into social media as a competitive marketing strategy. But for most companies, a couple of trends are becoming very clear.

1. In most marketing organizations, no one truly owns Social Media as a marketing function–not even the VP of Web Marketing in most cases, at least in any proactive sense. Social Media programs are championed here and there by innovators in the trenches, but there’s little if any coordination among different programs, much less with general marketing strategy.

2. Few marketers can mount or defend a compelling business case for social media programs. Most get tripped up by the demand for marketing ROI and stall out, waiting for point-solution vendors to come up with an ROI story, or for someone on high to suddenly get social media religion. If you’re a savvy marketer and you don’t already have a clear case for ROI, there isn’t one.
If you’re planning a social media campaign to drive customer
acquisition, chances are you already know how to measure the ROI. If
you’re trying to build a community, or drive more market engagement, forget
about ROI—you’re in the domain of Brand Equity, and it will cost you more to
measure it than it will to get started building something on the cheap. Start talking to your CFO about opportunity cost and a budget for innovation. I ranted about this in depth here.

3. Many marketers still don’t understand the fundamental shift that social media represents. I know that sounds hard to believe given the volume of discussion about the Shift in Control Over Brand, but there’s a serious disconnect between buzz theory and practical application. Numerous times over the past few months I’ve connected with marcom people driving social media programs still under the impression that  conversations are generated by the outbound PR cycle–social media has just changed the venue. Natural consumer behavior is not to go online to discuss your latest technology or licensing partnership, but to dialog about why your product sucks, what consumers want next, and where can they get something better than you offer today. When you point that out, everyone gets it, but somehow that message hasn’t reached critical mass in the marketing trenches. 

4. Saas has done a tremendous job in freeing marketing from the leash of IT. Eliminating the cost and risk of data integration is a huge boon to marketers and has opened the floodgates for new marketing applications. But it’s an overwhelming sea of options for marketers who are finding it hard to make sense of what will really help them move the needle. I see companies spending months in paralysis of analysis over  platforms and point solutions, forums and blogs, mashups and viral video, desperate to make the "right" choice before stumbling forward. It’s so much cheaper on every level to go out and fail today, get over it already. Do something cheap. Do it quick. Take your lumps and get smarter so the next time you succeed.

5. The baton is inevitably going to be passed to a new generation. You can already see the transition environment starting to merge with savvy social operators figuring out how build communities all across the web. There’s a huge opportunity for tech-savvy marketers to take up positions of influence in the purchase decision-making process–particularly those who are in their 20s and social media native. But there’s also a big smug factor in this demographic, and not a lot of appreciation for depth on marketing fundamentals. Companies would be smart to put together a partnership program between older and younger marketers. Tons of value to share.

I’m sure there’s a lot I’m missing, which is why I’m continuing my research project to identify and interview the smartest marketing and technology people I can find and hear what they’re up to. I’ll be posting some more videos in the coming week. If you missed the first set of videos, you can find the first one on this post with John Girard. Then just click forward through the posts for Matt Roche and Jack Jia.

If you have suggestions on who I should interview, please let me know. I’m particularly interested right now in finding CMOs from companies that are forward-thinking on social media. Send me some introductions. Please!

Social Media in the Insurance Industry

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Jeremiah Owyang has a post up today about his search for social media programs in the insurance industry. In short, he didn’t find many. It’s an industry that’s well behind the curve of adoption–which isn’t all that surprising for a profession based on risk aversion.

A few months ago, I had a long conversation with the VP of Worldwide Web Marketing for one of the largest insurance/financial businesses in the world. It was enlightening. This gentleman was quite web savvy and very much a proponent of social media. But he was fighting an uphill battle against management for anything innovative. In the end, he boiled their problem with social media down to a legal roadblock.

We can’t get anything like this past legal. Their position is, ‘if we know what people are saying, we’re liable. It’s better not to know.’

That’s right, plausible deniability. I was a little incredulous. I mean, aside from the fact that legal is preventing the HUGE potential for social media to drive marketing/sales objectives in order to create some perceived firewall against liability for knowing what customers might be complaining about, plausable deniability is a tough argument to make in the age of Google. I mean, you can find out at least 70% of what’s being said about you by doing a Google search. Could you really stand up in court and say you didn’t know? Sorry, your honor, my head was buried in the sand.

Web 2.0 Expo and Online Community Roundtable

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I spent most of the day yesterday at the Web 2.0 Expo, just looking and listening and trying to gather some impressions about the market. The sessions I attended this year were much better than last. The best session I attended was Stephan Spencer’s seminar on advanced SEO techniques. Practical. Strategic. Engaging. He’s coming out with a book for O’Reilly sometime in the near future. I suspect it will be a must-read.

The sessions I attended on marketing were a mixed bag. For every sharp marketer I heard parsing the native opportunities of Web 2.0, there were dozens just trawling for ways to leverage Web 2.0 to more effectively spam their market. I guess that’s par for the course.

I thought the trends on the exhibition floor were interesting. Last year the dominant theme was collaboration. This year there I only noticed one company positioning themselves prominantly as a collaboration platform, but a sea of companies offering web application dev tools and anything they could stick a cloud computing badge on. I was trying to make sense of the shift when I ran into Kent Langley at the Online Community Roundtable. His take was interesting, informed as it is by his position as an IT director supporting the development of enterprise Web apps at SolutionSet. His opinion is that we’ve moved from the surface concepts of "hey, we can collaborate online" to the more substantial nuts and bolts of actually building web applications that work. Kent has a substantial blog post on cloud computing that is definitely worth a read. 

Thanks, Bill, for yet another great Online Community Roundtable. This month the roundtable was hosted at SixApart, and the discussion was lively. One of the most interesting debates was about what really makes a community online. Clearly the kind of dialog that happens on your Facebook wall signifies a community through discussion. But is playing Scrabulous with a total stranger a community interaction? The underlying question is what, exactly, is the glue that binds a community online? Is it simply a shared experience? Does it require some deeper interpersonal engagement? Does it require dialog–or is sharing photos on Flickr with no comments communal?

This is something that will rattle around in my head for a while. Certainly the point of reference is important. Many people are driving communities simply to build traffic they can monetize. In that sense, viral growth is more important than depth of engagement, and community is just a collection of moths to the flame. But if you’re trying to build value for participants, community means something much different, and requires some kind of sustainable depth–whether it’s personal, professional, or simply a shared affinity.   

Web 2.0 Expo: Bloggers vs. Reporters

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I’m at the Web 2.0 Expo taking the pulse of market buzz. I haven’t yet done the Exhibition Floor Trawl, which to my mind is the best source of data on what’s really happening–who’s exhibiting, what booths are people lining up at, how big is the crowd–but I had to post on a funny initial impression.

After sitting in on a couple of sessions I headed over to the blogger lounge to connect with some friends. The blogger launge is just a couple of doors past the media lounge, so I peaked in there first to see if I knew anyone. The difference between the media lounge and the blogger lounge was telling.

When you walk into the media lounge, it’s deadly silent. There are a couple of rows of banquet tables, about half full. People diligently typing away, head down. You walk two doors down to the blogger lounge, and you can hear the buzz outside the door. Similar rows of tables, but they’re all full. There are couches with people lounging with their laptops. Pandora radio is set up putting out tunes. There’s a small video/sound stage setup for video interviews. But most of all, people are engaged in conversation everywhere–talking while posting, twittering, texting.

It’s a striking metaphor for old vs. new media. Why the two lounges are even separate is an interesting question, and I can only speculate that enough old line reporters don’t want to hang out in a cluttered social environment where there’s music and conversation going on that they need their own room. Maybe it’s distracting. Maybe it’s annoying. But speculation aside, the different environments are a compelling symbol of the different worlds of traditional and social media.

I wonder how many of the people in the blogger lounge have defected from the media lounge.

Following the Flow of Conversation

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Continuing on the theme of social media trends and implications.

One of the major themes that social media experts talk about incessantly is the shift in control over the message. In the world of mainstream media where content is created by a few and broadcast to the many, whoever controls publication controls the message. In a world of social media where anyone with access to a computer can put a message into play among millions of readers, the most compelling messages win the day.

There are a lot of fascinating implications in this shift–enough to fill an entire year of blog posts. But the trend I want to talk about right now is the changing role of PR and marketing in the influence of market dialog. Many people say PR and marketing are effectively dead, while others try to recast social media as just another new vehicle for revitalizing PR and marketing. Marketing 2.0.

Let me first say where I come down in this discussion about marketing and PR in the age of social media. The rumors of their death are greatly exaggerated. There will always be a need for companies to advocate on their own behalf–to develop and communicate a compelling market position. How that message is developed and communicated has changed forever. Unfortunately, many marketers haven’t figured this out yet, and until they do marketing will continue to decline until a new generation takes over.

The problem for marketers is that they’ve grown up in a bubble–just like the Internet Bubble that gave rise to irrational exuberance and a general belief that business fundamentals were no longer relevant. Let’s call it the Marketing Bubble. Before the Marketing Bubble, we had more than 5000 years of social media–a world in which word-of-mouth was the dominant form of commercial dialog. As the means of mass communication emerged, marketers naturally adopted new tactics for communicating with a larger market. Print. Radio. Television. Computer. Internet. Mobile.

These continuously evolving forms of communication weren’t cheap. In fact, getting a message out over any of these channels was enormously expensive, which kept control over the message sharply limited to those who could afford it. The Marketing and PR we know today grew up in this world, and  evolved around the power structure of a highly controlled media. PR was never about developing relationships with customers–it was about developing relationships with publishers and reporters in order to influence customers. Marketing may have a slightly more robust claim to customer intimacy, but not much. How many marketing organizations do you know that actually own customer service? The vast amount of marketing dollars go to advertising–another practice focused on the power brokers rather than the consumers. If you can’t shape the message through PR, then buy a message to piggy-back on the stream of media the market consumes.   

This is–or was–the bubble. It emerged with the tools of mass media, but was not a fundamental shift in the thousand-years trajectory of commercial dialog. Just as we had thousands of years of history of consumers discussing products among their peers before mass media, we are returning to that natural state for one very compelling, even Darwinian, reason: consumers will always seek out information from their peers because it provides an economic survival advantage. The Internet has simply provided the means for consumers to elevate their conversation to the same volume as mass media. 

Now that the bubble is bursting, Marketing and PR are mostly blind to the historical trendline; they are inclined to see social media as just another new technology like Web sites, or SMS. This is a huge problem. The Marketing and PR organizations we know today are organized not to listen and engage, but to listen just enough to craft messages and find effective channels to influence the market. Success is measured in the tiny percentage of people who took the bait on your latest campaign, rather than the development of an engaged community of customers–customers who become partners in the development and distribution of more successful products and services.

There’s a lot to drill into on this concept, which I’ll continue to do. But there’s one important concept I want to leave off on today. Companies that are trying to figure out social media are going to their PR and Marketing agencies by default–those are the people, after all, who are supposed to understand how to communicate with customers. But a facility for social media is not an inherent strand of DNA for any marketing, advertising or PR agency–despite the cool case studies and hip 2.0 language. Communicating at customers is not the same as communicating with customers, and if you have any hope of success in social media, you need to understand how to tell the difference.

Social Mixing Makes Consumers Smarter

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Another social media trend I’m following:

I mentioned in my last post that certain conversational trends emerge in the first few days of tracking any particular market, but that deeper and often more significant trends only appear when you follow a market over many different channels over a longer period of time. The deeper trend I discussed last time was the globalization of market conversations, and how that’s impacting consumer awareness and preference. There’s another closely related trend that is also having a big impact on consumers, and that’s the broadening of participation in openly accessible discussions, which I believe will make the market increasingly smarter.

Off the Internet, there are a lot of dividing lines between different groups of people that might converse about a given product or market. Market insiders have their associations and professional networks where they talk shop; enthusiasts have their clubs and conferences; general consumers have their friends and family, and sales associates. As these conversations have moved online, the biggest change has been in the consumer category, where people can vastly extend their research beyond friends, family and sales associates to talk with like-minded consumers who have experience with every conceivable product. Market insiders and enthusiasts have mostly just recreated their existing networks online.

When you track market conversations over many channels and over a sufficient amount of time, it becomes apparent that these previously well segmented groups are beginning to blur in places, aided primarily by the power of search. It often isn’t obvious at first–you simply notice that there are many people engaged in the broader dialog with different levels of knowledge and understanding about a given product or market. You find people who are obviously new to the dialog, people who are informed, people who are know-it-alls.

It’s often difficult when you first start tracking the conversation to distinguish between people who are really well-informed and people who just like to spout what they think they know. But if you follow the dialog over time, you realize that right alongside the newbies and know-it-alls, there are often people weighing in with substantial insights, including industry executives, market analysts, economists and engineers. I’m not talking here about the vaunted blogs of industry experts–but about insiders who join the fray, hobnobing right alongside consumers on some of the broader discussions without trumpeting their status.

Most often you find this broad mix of participants in discussions that focus on industry news and trends, while technical product discussions tend to segment into the traditionally stratified groups. But the impact of this mixing in the broader dialog is an obvious increase in the sophistication of conversation. When a consumer Googles a product they want to purchase, along with the focused discussions on features and benefits they’ll also find discussions about the latest product and market news. And when they tap into those discussions they start reading dialog in which experts often drop substantial insights about what’s shaping the market–from technological advances to impending regulation.

For some consumers that might just be noise, but the more complex or expensive the purchase decision, the more likely that added information will be influential. I first saw this play out in the automotive market, where I found automotive engineers engaged in conversation right alongside consumers about the implications of the next generation of hybrid vehicles and when they might be expected to roll out. For a consumer considering a $25-30k purchase, knowing that an improved hybrid technology might be only a few months away can make a huge impact on when and what they buy. But it turns out you’ll find similar conversations happening all the way down the line to a $300 cell phone/PDA.

Why, exactly, apparently high level market insiders are sometimes anonymously engaging in dialog on broad discussion boards is an interesting question–you often can’t even tell they’re insiders until you follow the dialog long enough to pick up on something that gives them away. It may be they find the broad dialog about market trends compelling to engage in but don’t want to be known, it may be they want to demonstrate their expertise, it may be they are motivated to be a knowledge provider, it may be they want to engage with a broader swath of the market beyond their professional echo chambers, it may even be they want to seed the market with information beneficial to their business interests.

Whatever the reason, you can find them if you look, and they’re often quietly adding information far beyond product features and benefits that can shape consumer attitudes and purchasing behavior. The result is a greater likelihood that your customers and prospects are going to have access to more information about the market than ever before. It’s hard to imagine that kind of trend leveling off any time soon, as social media continues to grow and as indexing of content penetrates more types of social content.

The obvious counterpoint to the notion that consumers are becoming more informed is the increasing noise factor of superfluous dialog, misinformation and shilling, which some say will even dampen participation in social media. That’s a long post on it’s own, but I’ll say that from what I’ve seen I think the evolution of online dialog is quite Darwinian. Consumers are learning quickly from direct experience what level of trust to put into what they read online, and they’re developing skills to read more effectively between the lines. Again, I think this points to the long-term development of a more sophisticated and more informed consumer.

What do you think? Will a smarter breed of consumer affect your market? 

Social Media Disrupting Market Landscape

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I’m still deep in the self-imposed exile of stealth startup mode. But there are some fascinating market and business trends in Social Media that I’m closely tracking and happy to discuss in the abstract, especially as they start to intersect with other discussions in the public sphere.

One of the trends that I’ve been analyzing in some depth over the past few months is the dynamic of social media conversations that span traditional market boundaries–geographic, demographic and psychographic boundaries, as well as other boundaries that are not neatly defined, in part because no one has had to really classify them before. But the Internet is a vast melting pot where conversations involve people that never would have connected in the physical world. The way that influences and transforms the discussion is remarkable. And from a market standpoint, it’s game changing.

If you track the social media conversations in any of the hot consumer markets, a lot of the market driving memes emerge in the first couple of weeks. You learn quickly what kinds of questions consumers are asking, what they complain about, what they hope to see in the future. But when you follow those conversations across many different channels over a few months, some deeper trends emerge that are a clear sign of the future. I’ll give just one example now, but I’ll explore some additional examples over the next few weeks.

One of the clearest market changing trends is the globalization of market conversations. Back in the day when people talked about the Information Superhighway, the reduction of geographic boundaries was one of the most popular tropes that marketers used to signify the new world we were creating. You’d see commercials with a New York executive chatting on a cell phone with a Buddhist monk in Asia, or with a tribal leader in Africa. The exotic contrasts of business suits juxtaposed with colorful costumes made for great marketing imagery. But now that global dialog is a mundane reality, it’s less the mixing of sharply different groups of people online that is changing the market than the reduction of smaller boundaries–the blending of parallel market segments into a larger homogenized whole.

One of the most obvious and striking examples is visible in the automotive market, where hundreds of conversations take place daily on every conceivable channel of social media across the globe. If you follow these conversations for any length of time, you begin to realize just how anachronistic our current marketing landscape is today. Our markets evolved in a world where large markets like Europe, North America and Asia were entirely distinct. As an American abroad, it was somewhat surprising to see entirely different and unrecognizable Fords being sold overseas, or seeing diesel sports cars that you can’t buy in the US. In fact, the cultural and regulatory landscape that evolved in these isolated consumer megaspheres created entirely different but parallel markets. For example,both Europe and North America have evolved  environmentally conscious automotive consumers, but in the US we’ve embraced hybrid vehicles while in Europe they’ve embraced clean diesels.

But social media is making these differences seem rather quaint. If you follow the dialog on blogs and forums, you’ll find Europeans talking to Americans, who are talking to Asians, who are talking to Africans, and on it goes. And they’re all asking why we have one thing and you have another, which inevitably leads to why can’t I have what you have. Europeans increasingly want hybrids, and Americans increasingly want clean diesels. Honda recently announced a diesel hybrid for the European market, and within weeks thousands of consumers in North America had signed onto a petition demanding Honda offer the same car in America.

You don’t have to be an ivory-tower marketing guru to see what will happen in the next five years. Automakers will start offering similar vehicles in what used to be sharply defined and isolated market segments, which will have enormous economic benefits for the automakers, and maybe for consumers as the cost of more standardized production and marketing falls. But the longer term future is a little less clear. While the initial impact of global social media seems to lead toward a large-scale homogenization of global consumer tastes, this is in striking contrast to the phenomena of long tail economics. There is plenty of evidence that mainstream tastes often spur a backlash against consumer conformity, and the ability for smaller consumer segments to congeal online does create demand for more highly differentiated products.

It may be that Social Media’s long-term impact is a fundamental shift of scale that defined these large and small market segments. Social media seems to be accelerating the merging of isolated global markets in megamarkets, while what we now now as micromarkets will also grow in a similar scale under the influence of global consumer conversations. In any case, it’s clear that Social Media is creating an enormous transforming influence on consumer markets, and the implications for marketing are just as significant. If you’re not actively following the conversations that are changing your market–beyond just what your customers are saying about your product–you really should be. The future is being written right before our eyes.

Media Innovators Meeting on Content

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I almost never pitch anything, but this is a cool opportunity with some of my favorite people in business, so here comes the windup:

Next month some of the world’s most influential media innovators will gather at Clickability’s annual user conference in San Francisco. I participated last year and had the opportunity to talk shop with content strategists and technologists from media companies like CNN, Wall Street Journal, USAToday and Cox. Among other highlights,I talked with a CNN executive about video production on the web, listened to Chris Alden from Six Apart talk about the emerging trends in business blogging, and heard Stowe Boyd challenge the media industry’s assumptions about user generated content.

This year I’m participating on a social media panel and Clickability offered me a few tickets for readers of my blog. This is a classy event that will be held at the Bently Reserve, May 5-7. You can find out more at the conference web site. If you want a preview of the caliber of conversation, check out the interview I did with the CEO of Clickability, John Girard.

If you’re interested in attending as my guest, just a few tickets, so grab one while you can.