Wednesday, December 24, 2008

Time to Get Engaged

What does being engaged mean?

The holidays are often the time to get engaged; I did - but that's a different story.

In marketing what does "Engagement" mean? In an iMedia article on predictions for 2008 comes the following:
The American Association of Advertising Agencies and the Advertising Research Foundation, working together with the Interactive Advertising Bureau, came up with this definition: "Engagement is turning on a prospect to a brand idea enhanced by the surrounding context."
This strikes me as a bit one-sided or linear and something a committee came up with. I like the automobile and kindergarten inspired definitions better: "contact by fitting together" as in the clutch or "sharing in the activities of a group"

Engagement is two or more parties coming together and forming a bond around an objective.

Monday, December 22, 2008

The Ying and Yang of Web 2.0

Just how does Web 2.0 actually work as a business model?

Just finished two books on the world of Web 2.0 and how it might work for any company. The first is Paul Gillin's "The New Influencers" which provides insight on how people adapt to the social media tools and use them to achieve their goals. The second is Amy Shuen's "Web 2.0: A Strategy Guide" which is more of a behind the scenes look at how Web 2.0 businesses actually work economically.

So, if you want to understand the J-curve of cash flow along with great examples of how the tools are applied check these outs.

Mr. Gillen covers the conversation side of social media - blogs, podcasts, RSS, etc. Enthusiasm is the common ingredient of all recipes of success.

The End Notes in Ms. Shuen's book will fill your bookshelves with the collection of all things Web 2.0.

Friday, December 19, 2008

When Lightening Strikes

What makes Twitter so powerful?

Several cases of reputation management have been reported lately - Ford, U-Haul and Motrin all had a potential PR problem that spread quickly from sparks on Twitter. Shel Israel concluded on the Ford question:
There is another fundamental issue. If your company finds itself in a reputation crisis, it is highly likely to spill into the social media. When it hits Twitter it is likely to move the fastest and go the furthest.
The triggers for all three cases were very different, yet they all spread like wildfire.
  • Ford - a cease and desist letter to a fan site
  • U-Haul - poor customer service at a rental counter
  • Motrin - an advertising campaign
So, why is Twitter such an incendiary device? Some thoughts:
  • The network effect is extremely powerful - telling a friend of a friend of a friend ... is automatic and in real time. There are no firebreaks when everyone is pre-connected.
  • With its limit on space, I can only post snippets of ideas. Twitter is great for pointing to thoughtful opinions or news articles, but in and of itself it is difficult to tell the whole story. This lends to top-of-mind, gut or knee-jerk reactions.
  • The headline nature of tweets or the 'hey check this out' mode pushes copy writing to elicit a response by using strong, emotive words like 'loser'.
  • It levels the playing field and the consumer as underdog with no way to voice her opinion is gone. There may be some collective 'we're not going to take it any more' and the company is used as an example rather than a specific target of dissatisfaction. I know my comments on Motrin were in this vein.
  • And finally, unfortunately bad news always travels faster than good news because people like reading about it better. My father always called the late evening news 'the grims' because people wanted to know their world was safer than the outside.
In sum, what is perceived as a lack of respect for the customer will catch on fire. Whether this is a flash burn running through the tree tops or a conflagration that destroys the roots only time will tell; but it probably isn't worth the risk to the brand to let it run its course.

If I had but one social media channel to monitor it would be Twitter because of its early-warning nature.

Thursday, December 18, 2008

Brand as Tribal Leader

Can a brand lead people?

Tribes, from Seth Godin, talks about why and how people should lead a group passionate about something, anything. In short, a leader assumes the risks of satisfying an unmet set of needs.

I understand the intent of the book was individuals, not unlike Tom Peter's "Brand You" - but I started thinking about marketing's role in social media. If you can't (shouldn't) advertise then what do you do? Simply 'joining the conversation' or allowing customers to 'hijack a brand' and take control doesn't necessarily achieve a brand's objectives.

Tribes, by definition, need a leader - someone to take them somewhere. Why can't it be a brand? More specifically, can a brand take on the attributes of a leader?

The qualities of a leader (pg 126 of Tribes) are:
  • Leaders create a culture around their goal and involve others in that goal - thinking 'Pepsi Generation' or Fiskateers
  • Leaders have and extraordinary amount of curiosity about the world they're trying to change - thinking Patagonia
  • Leaders use charisma to attract and motivate followers - thinking Apple here and their stellar use of design (talk about charisma) or Harley Davidson's 'freedom'
  • Leaders commit to a vision and make decisions based on that commitment - thinking Geek Squad, Southwest, and Walmart
  • Leaders connect their followers to one another - thinking Being Girl from P&G, and Young and Free from credit union TDECU in Texas.
So, if you can't advertise - lead.

Holiday Greetings Card - Snowmen

Can you get your message in a holiday card?

From MarketingNPV - the folks that keep our eyes collectively on how marketing performs.


Made me smile a bunch.

Now the interactive part of me wanted to click on the image and be taken to a seasonal page that showed me how to balance the short term and long term; that's my real pain. Or maybe to something like JibJab's 'snowmen' site where I can upload pictures of the sales and marketing teams to create a snowball fight.

Wednesday, December 17, 2008

Emulsifier Needed for Marketing

What's the right recipe for social networks and advertising?

Several articles this week on the lack of effectiveness of advertising in social networks; here's one on eMarketer. These articles raise the question: can advertising and social networks mix? It seems like they're oil and vinegar.

I'm a fan of vinaigrette and here's a simple recipe that I use that is a bit out of the ordinary since it is equal parts oil and vinegar rather than the traditional ratio of 3:1.

3 T Olive Oil
3 T Balsamic Vinegar
1 t Dijon-style mustard
1 t Kosher salt

Oil and vinegar don't normally mix, but the secret ingredient - mustard - does something to create a smooth and harmonious mixture that doesn't separate.

Why don't oil and vinegar blend?

The molecules involved aren't designed to attach to one another because one is charged (water) and one isn't (oil). As a result they each much prefer their own community and they band together. So, if their physical properties are incompatible with one another how do emulsifiers work? They broker a truce by fitting in within both communities - usually they are a wrapper around one of the ingredients to make the mixture more compatible. In a vinaigrette the charged water molecules (Balsamic vinegar) are wrapped by the mustard to eliminate the polarity. The result is a nice salad dressing.

So, if social networks and advertising are oil and vinegar, what's the emulsifier?

Advertising is charged. The worst offenders, or those with the highest charge, are likely the direct response ads goading you to do something now. Social network advertising should not entice to you leave the the community, what's the point of that?

Marketers have a message that they'd like to circulate easily among a social network, just like Balsamic vinegar in EVOO. They need to think like a mustard and wrap them in something that is much more compatible with the non-charged social network environment. Messages should be delivered as content with relevance and even amusement so that it stays within the community and adds to the overall experience.

If the acidic nature of advertising isn't smoothed over, it will end up in isolated pools off to the side being completely ignored.

Tuesday, December 16, 2008

Funding an Idea vs. a Company

What it is the difference between innovation and entrepreneurship?

In a recent post by my friend Allan Young on "The Startup Myth" he argues that what we need is entrepreneurs not start-ups. To understand the difference he makes the vivid point that entrepreneurs build companies not just try to get money for an idea. The end game is a viable, growing, successful business - the idea is merely a supporting player. This distinction suggests that entrepreneurship and innovation are not the same thing. This post attempts to make that distinction.

First, we need some definitions to work with. From the Web....
  • Entrepreneur: "A person who takes the risk of organizing and operating a new business venture."
  • Innovation: "The process whereby ideas for new (or improved) products, processes or services are developed and commercialized in the marketplace."

Based on these definitions its easy to see that not all innovations are appropriate for the entrepreneur, e.g. 'new and improved, version 3.0, and next generation.' McDonald's Big Mac was created to better compete in a local market. Conversely, there are opportunities for the entrepreneur that don't require an innovative idea, e.g. franchises and opening new markets. The Egyptian company building the cell phone network for North Korea is very entrepreneurial, but not necessarily innovative in the sense that cell phone networks are relatively mature (although I'd guess their way of doing this is different).

The economic model of angel investors or venture capitalists drives them to focus on the intersection because that is where the home runs are. Financially, for every 10 investments made only one will be successful, so EVERY opportunity funded has to have the chance of being the next big thing that covers all the other investments and produces a decent return for the entire portfolio. Since successful entrepreneurs are much scarcer than good ideas, the emphasis is nearly always on the team and not necessarily the idea. As proof, there are people who could get funding without an idea; but no idea will get funded without people.

So if your looking to fund a company what type of innovations should entrepreneurs pursue?

Weaving the ideas of Trout's "Differentiate or Die", Christensen's "Innovators Dilemma" and Kim & Mauborgne's "Blue Ocean Strategy" the best ideas are those that:
  1. Disrupt the current thinking about how the 'category' is defined in people's mind
  2. Change the way business is done
  3. Find net-new money from clients rather than redistributing an existing pot

Hindsight suggests that the successful new companies solve all three requirements simultaneously. They define new categories and hence reap the rewards as it grows as the recognized 'leader' because order of entry is very important. They apply a different business model to the problem at hand - be it distribution model, how and where value is exchanged, mix of product and services, or something nobody else thought of yet so that competitors have to say 'we can't do it that way'. They create a new line-item in people's budget so it isn't so obvious that the money is coming from incumbents who fight to maintain their revenue streams. The definition of competition is the sales guy whose commission check you take.

In summary, violate every possible rule you've been taught and do the impossible:
  1. Create a need then fill it; people can't tell you what they don't know so don't ask them.
  2. Do things the industry doesn't do; don't do things they do do.
  3. Rearrange the rank order of attribute importance; if speed is important sell power consumption.
Talk about risk! If you don't take on all three aspects at the same time any established player can squash you.
  • A start up in an existing category will suffer from the classic 'fear, uncertainty, and doubt' sales strategy of the market leader. So, damn them with faint praise as you explain that you do something different.
  • A start up that doesn't change the rules of the game, will lose since 'those with money write the rules.' So find that differentiator and make it your sole beachhead.
  • A start up that doesn't make people see a problem in a new light will always fail to overcome the inertia to change. So be patient with your audience as they learn to change their way of thinking.
Borrowing some oft-cited examples:
  • Southwest Airlines: provided access to second-tier markets; flew point-to-point, not hub-and-spoke; and made affordability the ONLY driver
  • Cirque-du-Soleil: circus with a plot line in a strange language; stay-put, integrate music, get rid of animals, stars, and travel; theatrical value vs. individual acts
  • Facebook: organize student communities; open the platform to third parties, ignore music; think of it as a cocktail party and not a teenager's bedroom (source)
I spent a good part of the year working and reworking a business plan that focuses on the 'architecture of influence' and social media. In the process I have sat across the table from investors and answered a lot of questions. They want to hear about scale (how will this pay off the others bets we made?), barriers to entry (how will you prevent others from ripping off the idea?), monetization (where is the annuity revenue stream?) and experience (do you have any idea what you're doing?). I probably focused on the innovation side too much, I need to go back to simultaneously addressing all three risks.

In this space "Are you nuts?" is a compliment and means your on the right track.

The Social Side of Search

Is search social media?

In response to Jermiah Owyang's query on twitter I said "maybe". Since 140 characters is a bit short, here's my thinking.

The original question came from part of a post entitled 'so who do consumers trust?' It includes the following with italics added:

50%: Say they trust portals/search engines: In Google We Trust, is that Charlene Li frequently used to tell me, and it still holds true. When you look closely, the search engine results in Google are really social recommendations. How so? The Google algorithm (while I’m over simplifying) puts a great deal of weight on how humans organize, link, and create content.

So to the question at hand: Are search results social media?

First, some definitions and assumptions:
1. Search refers to organic results and not paid.
2. Media are vehicles by which messages are carried, e.g broadcast media, online media, and social media.
3. Social is a fuzzy concept, but generally refers to people interacting in communities or groups.

Given the above, search results are definitely a medium by which a message is conveyed. "This page has several things we think you'll find relevant based on the keywords you entered." Reducing a bazillion pages to a simple set of 3-line bites that can be quickly scanned is the essence of search engines. With the help of the people writing those pages we have a very powerful medium for getting a message out.

But is it social?

The original point was that the engines use the human activities of organizing, linking and creating content (in part) to produce the set of recommendations shown. This makes it a set of 'social recommendations'.

In the strictest sense it is not direct, social interaction in the way word-of-mouth is. Nor is there an opportunity to clear up the issues of intent and context in the way that conversations allow. Finally, there is a fair amount of manipulation going on to get to the top of the page - when that is the sole objective it is only social to the extent that bullies are also social.

The second thought was about the search engine's role in the process. In a group or community, participants play an active role and usually stay involved. Search, and Google in particular, is a way station. They can be described as the world's largest and most successful travel agencies. Their mission is not to just organize the world's information but more importantly put us on the correct path toward a destination. If 'time on site' is a measure of engagement, then Google doesn't play a significant role as an active member of a community.

However, in a broader sense - what other medium do we have that allows us a peek at how others view the world? How do we find like minded individuals? How do we coalesce around the common interests that are the new demographics? Certainly advertising media don't provide this; they simply have another objective to achieve. It seems that in this sense search results provide an abstraction or snapshot of a set of human endeavors geared at telling their story. Since the algorithms look over their shoulders at what other people are doing (thinking?) it could be argued that they are in fact social recommendations.

So, I came up with the 'maybe.'

Why does this matter? Because the language of social media often defines how people talk about their needs, wants and desires. Thus, it should certainly be used in search marketing - both natural and paid. In fact, your brand monitoring efforts should report on the popularity not only of key words and their relationship with one another but also where they are likely to occur and with what other concepts and ideas to they relate to.

Friday, December 12, 2008

Marketing 2.0 as Defined by IT

What do IT deployment strategies offer marketing?

Amy Shuen's "Web 2.0: A Strategy Guide" offers a wide-ranging view of how business can work in this environment. Of particular interest is the relationship between 'Value' and 'Function'. In the IT world, only the most valuable projects get funded. Those that don't slip into the hack or do-without mode. SaaS, or software as a service, sits between the Build/Buy models and the muck about with Excel and hope it works.

SaaS and its 'on-demand' cousins create an opportunity to extend the reach of a solution by changing the cost-model to one that is shared across a group of clients. This effectively allows SaaS models to reach the long tail of business opportunities. Companies that can not afford to make or buy now can 'rent' so to speak. If the functionality is good enough, the competitive landscape changes radically because their is a real fuzzy line between the 'haves and have-nots'.

From the book:

It seems that social media, and its relationship to marketing objectives, falls into the same pattern. There are certain activities that clearly fall into the high-value therefore we control category. There are other marketing activities that accrue like the post-it notes illustrated above - ideas that may never see the light of day.

Certainly people are talking about things, i.e they are 'hacking' in the sense that it is not highly organized. In between are the functions that a community needs - sharing, opnionating, feedback, and sometimes bitching. If we consider social media as a service then it extends the reach of marketing into the long tail of both customers and marketing activities. To be sure, there are trade-offs on both sides but it seems that it is way to find common ground and level this playing field as well.

Completing the Social Graph

How many connections does a marketer need?

Mark Niehaus recently wrote a piece about the idea of linking social network data with traditional data to create a complete picture of every person in the US.

For a guy who spent a lot of time in the trenches of data analysis and systems; I love the challenge - in fact parts are being worked on right now by numerous players. For instance, we routinely append demographic, psychographic and purchase data to social network profiles to help understand where and how social networks are used.

The marketer in me has a different opinion. A couple of thoughts:

1. While 'data-driven marketing' is great, the ultimate marketing objective is more strategic: How do we design and deliver goods that satisfy people's needs? The risk of using a humongous 1-to-1 database is tempting, but that is one-directional.

2. Influence, the mystical concept of one person's leverage on another (or many), is a function of trust and relevance. This implies that there isn't just one social graph for marketing, but a bazillion - one for each decision being made.

3. Even if we know the connections, the interests, and the purchase history - do we have the restraint to use it appropriately? Sure, the data is public or generated from opt-in but unless we have an invitation to use it; we shouldn't. I was at an open house the other night where Governor Huntsman was also attending and talking with one of our joint connections. But unless someone brokered that introduction I wasn't going to barge in and show him my wares. I had all the data, the interests and connections - but the timing was in appropriate.

4. Data is a like a silent movie - we can see a lot things, but can't hear anything at all. Those verbal cues are critical for developing relationships.

Thursday, December 11, 2008

Language Skills

What else can we learn from social media?

How your company and brand are portrayed is an obvious use of social media. Another application is understanding a new market. If your targeting either a new audience or entering a new category, understanding the language is key.

Working with a client on understanding a new category segment we found the following:
1. The sophistication of the language is very different, even when talking about the same thing.
2. Language and terminology can be perceived as either a barrier to entry or a protective shield around a club of those in the know.
3. There appears to be a trickle down effect of language -certain sources often create phrases or 'sound bytes' that work there way into the vernacular. (It would be interesting to trend the adoption of these over time - like a diffusion model.)
4. The hard part is identifying the appropriate terminology. Since social media monitoring typically works with a list of key words it becomes an iterative approach to find the next set of words.

Linguistic and semantic skills are required to leverage social media this way.