Wednesday, May 12, 2010
Facebook: Innovator or Antagonist?
They were right.
Of course, that was when the user had more control over their identifying data. All they had to do was remove the tag, picture, or album. When Facebook reformatted user metadata under the "Like" function, identifying data was no longer completely in control of the user. Many users have been put off with the recent deals Facebook has made with Yelp, Pandora, Microsoft and others to share their identifying data to enhance an internet experience based on sharing and collaboration. Oh, and to make their advertising partners happy. In a recent blog post Zuckerberg said that
"This flow of social information has profound benefits—from driving better decisions to keeping in touch more easily—and we're really proud that Facebook is part of the shift toward more social and personalized experiences everywhere online."
This sounds a lot like a move to the Semantic Web that we have been hearing so much about (often referred to as Web 3.0). And I have to admit that this has wonderful potential for online marketing. Think of all of the consumer data that the "Like" function will bring. It would be a nice addition to the "pay-per-click" data. I think users would be more likely to "Like" something rather than click on add that pops up in their tweet or some viral, kitten video.
But is the consumer/user ready for Sir Tim-Berners Lee's Web 3.0? There has been a lot of backlash about Facebook's new plan. Two consecutive posts on Wired's Epicenter showed the frustration.
Post 1: Only Old Fogies Hate the New Facebook by Ryan Singel speaks about recent data that Facebook users, 35 years and up (not really old fogies after all) have responded negatively to news that Facebook revised its Privacy Policy. This is not good considering for the past two years this age groups makes up the fastest growing demographic on Facebook.
Post 2: NYU Students Aim to Invent Facebook (Again). We’ve Got Your Back. by John C Abell cites the attempts of a bunch of NYU students who want to create an old-school (as in 2004) alternative to the current Facebook. They just want social networking to be social networking again where the only thing you have to worry about is your Mom seeing all the things did last Friday in a well document album entitled "All the things I probably should not have done last Friday!" This article seems to capture the angst from the younger side of that demographic. The ones that Facebook has counted on to maintain its power.
Web 2.0 is about the user conforming the web to meet their needs. Web 3.0 is about the web doing that on its own. That is only going to happen with initiatives like Facebook to share Market relevant data. Amazon does this to a small extent within the bounds of its own servers by selecting products that users might like based on their purchasing history. Facebook isn't inventing the wheel; there just finally bringing it to the masses.
These discussions are also coming in the middle of the Data Wars. In the 70s and 80s it was the hardware wars. In the 90s that battle shifted to software. Since Web 2.0, that war is over where users will store their data, where will they network, where will they make purchases, etc. Facebook wants to be the Virtual Mall of America, as does Google. And Microsoft just wants to get a piece of the pie while maybe throwing a few jabs at Google and Apple along the way. Users love how these tools help them coalesce, shop, analyze, educate, or just vent. There might not have been a Revolution (2009) in Iran without Facebook and Twitter. Ok Go would not be selling songs without YouTube. But consumers/users are put off by big companies that war over market share because it exposes the companies' inner desire to serve their shareholders and not the user. That being said, these companies are not going anywhere.
But that nasty long tail keeps whipping the head of big business. Those NYU students might create another niche in the market with small, personalized, topicized social networking sites. Ning would not be where the are today without a demand for these sites.
The Semantic Web, or some version of it, is coming whether users like it or not. It is already coming to Facebook. What will probably happen? Users will continued to use Facebook for certain things and move on to newer, more gated, social applications for other needs. It is the nature of Web 2.0 and 3.0 to rise to user demand.
Friday, April 23, 2010
Retension and The Long Tail
Answer: Retention and the Long Tail
The Rocky Horror Picture show is a brand that knows how to keep and replenish its base. It is largely kept alive by the fan base, however the fan base doesn't have any control over whether it will stop circulating on DVD or in Theaters or in special big screen releases. 20th Century Fox has the call on that, and as long as they keep making money (as long as there is still a demand), they will continue to supply.
Compared to other movies produced recently, the Rocky Horror Picture Show ranks toward the bottom of the list in overall revenue. Its fan base/followers are a niche group. So why does 20th Century Fox waste their time. Because they are turning a profit. The Rocky Horror Picture show exists somewhere in the Long Tail, a term popularized by Chris Anderson, author of The Long Tail. He says "if you combine enough of the non-hits, you've actually established a market that rivals the hits" (22). So, if the Rocky Horror Picture was the only niche product they had, 20th Century Fox might have had to cut the ropes long ago. But in combination with its other niche, non-hits, Rocky Horror Picture Show is part of a market tap that runs long. For instance, Anderson explains that 1/4 of Amazon's book sales come from books that are not in the top 100,000 titles. 45% of Rhapsodies purchases come from outside of their top titles (Anderson, 23).
Retaining these niche groups is becoming of vital importance to companies. Anderson explains that The Long tail can be attributed to lower production, shipping, and storage costs along with rises in demand. But, it can also be attributed to social media. These niche groups tend form around an idea or some brand identity like the Rocky Horror Picture Show or some obscure indie rapper. These groups use Facebook, blogs, wikis, YouTube, Twitter and other social platforms to organize and ultimately make purchasing decisions. As long as this group maintains its size in relation to other groups in the Long Tail, then the companies who supply these niche groups will continue to turn a profit. That means that members have to remain involved or be replaced if they become inactive.
So when Jeremy Richardson of Mixpanel, Inc. said in his Mashable post that Retention should be a greater Analytical concern than virality, he may have had a point. He says that virality is measured in three factors:
"It’s computed by multiplying the percentage of current users who invite other people (X), the average number of people who are invited per user (Y), and the percentage of invited people who accept an invitation (Z). Many companies use this –- and only this — to determine the success of a product" (Richardson). This equation is known as the K-Factor. The problem is that Y is the middle man in this this equation.
As Richardson puts it . . .
The first and last numbers, X and Z, are conversion rates. By definition, they are always going to have a finite limit –- 100% engagement. While having perfect conversion rates would be amazing, it wouldn’t really mean much if Y, the number of people invited, was only one.
So, if conversion rates are maxed out, then the only thing left to tweak is the number of invites sent out. There are two main contributors to this:
Invite Rate: The frequency with which users send out invites
Engagement Period: The duration that users actively use a product
By determining the Invitation Rate and Period of Engagement, a social media analyst can determine how well a product, video, idea, application, game, etc. retains consumer demand. Richardson argues that by tracking retention rates, an analyst can determine why consumer demand is decreasing or why users are not sharing at high frequencies.
In a market driven by non-hits, retention becomes vital to the bottom line. Niche groups gather around a product, movement, idea, etc. because they strongly identify with it in some way. If the consumer is not able to act on that feeling, then there goes the business. By analyzing why videos are not being shared, a social media analyst could respond by redeveloping the social media strategy to maintain the community of consumers. That means building strategies for retention and building strategies for virality are both separate and interwoven tasks. Different calculations are applied to determining both, but both are applied for the same goal: positive Returns on Engagement
Wednesday, April 7, 2010
Return on Engagement (Investment)
A good company fosters a good return on engagement (ROE) and a bad company does not.
I define Return on Engagement as data that shows the effort a business puts into social media versus the amount of exposure their brand and products generate through social media (the increased fans on Facebook, Retweets on Twitter, traffic on the website and microsites, reviews on Yelp, Posts through foursquare, etc).
But what does a good social media strategy look like? What elements of a social media strategy foster a positive ROE?
There are two companies that do this particularly well and one company that is struggling in the age of transparency and conversation.
Effective Social Media Strategies: Starbucks and Toyota
Wetpaint and Altimeter keep rankings on the most socially engaged companies. They call it the Engagement Database. In their rankings, Starbucks (ranked #1) and Toyota (ranked #21) have two of the most effective social media strategies among the ranked companies. There is an interesting correlations between these companies. Their social media strategies are very similar, and both have high levels of ROE.
Strategy 1: Social Media is a Company Wide Effort
Both Starbucks and Toyota are limited in their social media teams; Starbucks has six people on their team, and Toyota has three people on theirs. In addition, I doubt anyone on the Starbucks team can make a Frappuccino or anyone on the Toyota team can explain how the sticking accelerator is being fixed. But each company has employees that are experts in these areas.
So, when Starbucks created MyStarbucksidea.com, the social media team wasn't creating content and responding to ideas posted by customers. Instead, "Starbucks set out to ensure the departments impacted by the site (which includes practically every department) had a representative who was responsible for being the liaison" (from Engagement Database Report found on the website). The Mini-Starbucks Card was actually a customer idea that made its way to Chuck Davidson, an employee at Starbucks. He traced the comments, wrote a proposal, and put it into action.
Toyota has as similar breakdown in roles:
"Take a look at the Twitter account and you’ll see that in addition to DeYager, three public relations specialists from sales, environment/safety, and public affairs/community outreach contribute posts. The Toyota Twitter team uses monitoring software to identify tweets mentioning Toyota, then responds from a respective area of expertise using technology from CoTweet to manage multiple authors on the single Twitter account. This same mode is utilized on Toyota’s Facebook pages — response requests are sent out and come back from around the company, depending on the topic" (from Engagement Database Report found on the website)
Clay Shirky talks about how standard company hierarchies are breaking down due to social media, but existent companies are finding ways of incorporating it into their standing organizations. Building through ways to company experts is the beginning of an effective social media strategy with positive ROE.
Strategy 2: Choosing Platforms Requires Effort
Besides being good at spreading social media through the company, Starbucks and Toyota are also picky about which platforms they use to engage. For instance, Starbucks discovered that for every three person that interacted with a particular news item on their Facebook Page, three of their friends joined the page. Facebook enhanced their ROE.
The social media team at Toyota wanted to blog. But organizing it would have been a logistical nightmare. In addition, the higher ups were not so keen on being that transparent. But the team knew that breaking into social media was necessary if they wanted to see the sort of results that Starbucks was getting. So, they began with a YouTube Channel and uploaded pre-made content from Toyota PR. After that, the higher ups became comfortable with the idea of a Twitter feed. They also work with an independent blog, priuschat.com.
Reasons for Social Media Strategies: Dasani.
My last post explained how bottled water companies are coming under fire due to social media. But Dasani has no social brand identity. They have no social way to engage customers. This is a bad decision because the customers are already talking about their brand (once again, see my previous post) on social platforms. They may still engage customers in traditional modes, but customers are no longer engaging them there.
In addition, the report from the producers of the Engagement database charts another reason to engage customers on Social Media.

The chart above shows that the more engaged companies have a better bottom line. This the point at which ROE turns into ROI.
Tuesday, March 30, 2010
A Social Market
The video above has had 1,373 Tweets over the course of its existence. The average number of followers for any given Twitter account is 126. After some multiplication, "The History of Bottled Water" could potentially be seen by 172,998 people. All of which have the option to Retweet this video.
This video's point is clear: Bottled water is a large environmental risk, and bottle water companies are doing nothing about it.
However, the negative affects of bottled water are not directly connected to these companies. That doesn't mean that they lack responsibility in an ethical and environmental sense, but it does mean they are not legally responsible for the problems in water bottles being downcycled (being turned into lower grade plastics that get tossed out anyway), the mountains of plastics bottles thrown out each year, or the large amounts of money people spend on bottled water when tap water comes at a fraction of the cost.
In the business world, these are called Externalities, indirect affects of the functioning of a business or organization. And previously, these externalities were easily ignored or snuffed out (Not all externalities are negative: adding a competing product to the market may drive down prices of that product across the market--a positive for the consumer). However, in a Web 2.0 economy, externalites go from small problems to potential threats to a company's market share.
In an article by Christopher Meyer and Julia Kirby, "Leadership in the Age of Transparency" published in the April 2010 edition of the Harvard Business Review, three main factors are cited for this change: Scale, Sensors, and Sensibilities.
Scale: Many small problems became very large very quickly. For instance, as more water bottles were used, those mountains of plastic grew larger and larger. In a word, they became harder for consumers to ignore or for companies to hide.
That brings us to Sensors: These problems are increasingly harder to hide because information on pollution, campaign finance, or drinking habits are tracked, logged, and published instantly somewhere online. For instance, the EPA makes its statistics readily available for free.
Finally, Sensibilities: Now that consumers and stakeholders have this information, what are they going to do with it? They take action. That is what Meyer and Kirby said: "The effect of instantaneous communications has been a rising sense of global connectedness and responsibility" (42). Sharing information is extraordinarily easy. Coalescing under a single cause for a very specific action is extraordinarily easy. All due to social tools like Facebook, Twitter, or YouTube.
This means that there is a change in cost. Previously, it cost companies little to hide and ignore externalities. Today, it cost to much. Meyer and Kirby are merely pointing out that businesses have no choice but to internalize externalities. In a word, businesses have to become less institutional and more social. That might explains Dasani's new "Plant Bottle"--made of 30% plant matter. This costs Dasani more then their previous bottle design. I don't now how much environmental impact this is having, but they are addressing an externality through internal policy.
Saturday, March 20, 2010
Missing Social Opportunities
The above is a link to a baseball lover's app. Ballpark Envi brings Major League Ballpark images to your iPhone or iPod Touch complete past and present parks and information about each. So, for $0.99, you can buy a really bad book on Major League Ball Parks. It's apps like this that miss the social potential of the iPhone. Just to be clear, social capital is invalualbe in today's information driven economy.
Let's go through a user scenario: Imagine you want to buy tickets quickly. The Yankee's are coming in town and Cliff Lee is pitching. You learned this while sitting at your surfing your iPhone while your boss was talking about his daughter's recital somewhere in between the red and your pension. But you want to see the game from just anywhere. You wanna be in the seats where you can feel the wind from Yankee bats as the make increasing feeble attempts to hit the ball. You want to see the dugout so you can watch the Yankees wait for Lee to tire. So, you open your Stadium App. Click on your hometown team. And click in the section you want to sit in. Up pops reviews from fans who sat in those seats, organized by row. A lot of good reviews for the first base line. You click on "view" to see a picture of the stadiums from those seats. You like what you see so, you select seats there. You click on "buy the tickets." In 10 minutes, the weekend begins, and you have tickets to the biggest game your team will have in a month.
If you want more suggestions than the posted reviews, the app can run twitter. The stream consists post about people's experience in that particular stadium. So, say you want to travel with your team. You can follow the feed of that home team's stadium to see what people are saying. For information, you can always send the message via Twitter or through the Facebook Connect feature on the app.
Now, doesn't that sound more useful.
Sunday, March 14, 2010
Thursday, March 4, 2010
Google tries again in search personalization
Originally posted at Deep Tech
Thursday, February 25, 2010
Tuesday, February 16, 2010
Charlie Bit My Finger Again
This video just keeps popping up. On ViralVideoChart.com, "Charlie Bit My Finger" is the 16th most viral video of the last 24 hours and the 18th most viral video of all time. 18th is not as impressive as the first 17, but this video has a quality that others do not: repetition. Some how, Charlie and his biting baby brother continually go through a resurgence in the rate at which the video is shared. It will disappear for a while and then come back again. Unlike most of the videos ranked on the Viral Video Chart, Charlie appears through MySpace's video sharing platform and not YouTube. Even though 97% of 165,244,739 recorded views were through YouTube, where it is still consistently getting comments. Viral Video Chart describes the video in this way:
"There is some enjoyment that comes from watching a child who put his fingers in the baby's mouth scream in pain when the said baby cannibalizes the child's finger. A sadistic enjoyment maybe, but an enjoyment nonetheless. The video comes from a long line of home videos which portray cute/irritating children/animals being exploited (and in this case, bitten), for the benefit of their parents/owners YouTube view count."
Sadistic or not, it's getting results. And I just added to them.
Monday, February 1, 2010
Saturday, January 9, 2010
Web 2.0 Suicide
Monday, November 9, 2009
Biggy Bob is a great listener
Thursday, November 5, 2009
"Socialnomic"s by Erik Qualman

Saturday, October 24, 2009
Wired on Twitter
Wednesday, October 21, 2009
"Become a Bike Vigilante"
Is Google Turning Into a Social Media Company?
Perhaps Google’s stiffest competition in the immediate future is not Bing and Yahoo, but rather it’s Wikipedia, Twitter, Facebook, etc. Just as we no longer search for the news (24 of the top 25 newspapers have shown record declines in circulation) in the future we will no longer search for products and services rather they will find us via social media. Google has made billions by being the masters of the search world. As these new social media players look for potential revenue streams, monetizing search will certainly bubble to the forefront for the executives.
This will occur on two main fronts a) consumers searching for products and services b) companies searching within the millions of conversations and meta data to garner relevant and real-time customer feedback as well as potential leads and sales. One of the most powerful items about Twitter is the ability for companies to go to search.twitter.com and put in relevant brand or product terms and being able to have insight into what is being said about their product or service. This is one of the main drivers behind why Facebook has been adjusting some of their platform to be more in sync with Twitter. Facebook understands there is “gold” in these conversations.
Speaking of adjustments. Google has made advancements in their search algorithm over the years as well as adjustments to other products. However, for the past few years they haven’t been pushed hard by any major competitor and they haven’t made many MAJOR adjustments to their core business. You can’t blame them, why fix something that isn’t broken. As a result they’ve also been able to supply the world with many free tools that we use in our day-to-day lives. However, as a result, search hasn’t advanced as much as it could have if there was a more competitive environment. Also, people care more about what their friend thinks than what an algorithm does and that is where social media has a potential advantage on Google in the future. However Google is looking to close that gap as evidenced by some of their adjustments:
Google Wave: This is Google’s collaboration tool to combat Twitter and Facebook – some have dubbed it 21st Century e-mail. Computer World’s Sharon Gaudin titled in article “Google’s Wave could prove a threat to Facebook, Twitter.” This same article quotes analyst Rob Enderle, “Thus Google, with its marketing clout and good name, may have a good shot at disrupting the likes of Facebook and Twitter, “This represents a displacement threat for everybody,” Enderle said. “Everybody in this space — Twitter, Facebook and MySpace — is nervous at the moment. If they’re not nervous, then they’re missing the memo. The market hasn’t settled and when it’s not settled, then something like Wave could come in and make headway.”
My take: The biggest hurdle here is that it may be too bleeding edge for the masses. If they make it easiest enough to use for Mom & Dad to adopt than they have a home run on their hands. That is what has been one of Facebook’s biggest successes – the mass adoption by older generations.
Google SearchWiki: In Google’s words SearchWiki is a way for you to customize search by re-ranking, deleting, adding, and commenting on search results. With just a single click you can move the results you prefer to the top or add a new site. You can also write notes attached to a particular site and remove results that you don’t feel belong. My take: Too much burden placed on the user to supply relevant input that can easily be leveraged by other searches. I believe you also need a Gmail account for this to show up. Also, hardly anyone knows this exists. The beauty of a tool like Facebook Connect is that it easily resolves a problem (people don’t want to have to enter logins/personal information for various sites) with limited effort on the user’s part.
Google Hot Trends: Similar in concept to top Trending Topics on Twitter this functionality or box shows up whenever you type in a search term that is one of the top searched on items in the past few hours. “Trends is all based on a different kind of tweet. Instead of the 140 character tweet, it’s the 20 to 25 character tweet, the keyword search. And those come in much faster than tweets do. In our view, that’s the highest fidelity information for trending topics,” said RJ Pittman, director of product management for consumer search properties at Google.
My take: Yahoo had a similar, less robust concept with Yahoo Buzz several years ago. I just find it interesting that Google is perceived (whether it is true or false – I’d argue false) by the public as following Twitter (no pun intended) with this offering. Great article by Danny Sullivan can be found here
Google Sidewiki: In Google’s Words, “Google Sidewiki allows you to contribute helpful information next to any Web page. Google Sidewiki appears as a browser sidebar, where you can read and write entries along the side of the page. Instead of displaying the most recent entries first, we rank Sidewiki entries using an algorithm that promotes the most useful, high-quality entries. It takes into account feedback from you and other users, previous entries made by the same author and many other signals we developed. More information on Google Sidewiki
My take: This is a game changer. There are other companies that have been trying to tackle these “layers” on sites, but with Google now in the game it signals that Google is really getting serious about social. Websites aren’t going to like this loss of control, but it should be a big win for the user if done properly. To make it truly social it should allow the user to highlight or bring to the front specific individuals that they trust. Look for social media companies to get more search oriented and look for Google to continue to get more social.
Erik Qualman is the author of Socialnomics which has made the Amazon #1 Best Seller List. Click here to order Socialnomics.
Sunday, October 18, 2009
Listening
Monday, October 12, 2009
The Social Media Organization
I have a tendency of over simplifying things in my head. It makes life easier that way. Below is a list of what I call a social media organization and represents various job functions in the enterprise, with one or two phrases describing each. Here is a more thorough description of each of the social media roles.
- Social Media Strategist: defining strategy, little to no execution
- Community Manager: Customer facing,direct engagement with end users, face of the company
- Social Media Manager: hybrid role; and may define strategy as well as execute
- Public Relations: influencing external bloggers, blogging
- Social Media Metrics: measuring social media, both on & off domain, reporting
- Legal: ensuring FTC laws or followed, providing guidance on user generated content on corporate domain
- Privacy/Security: protection of online corporate assets, privacy law enforcement
- Customer Support: respond to customer issues on the social web
- Ad Sales: selling ad space within a social network or community
- Employees: social participation on behalf of a company, not measured and done in the free time
Depending on the size and culture of the organization many of the above job functions may be shifted around. Does this make sense? Am I over simplifying it?
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