Thank Ten Customers Today

About a month ago, some of my customers got upset that they were ineligible (US sweeps rules being what they are) for a promotion I designed around an event they planned to attend.  They complained on Facebook, and I thought they had a good point.

I looked them up in our database and sent them a handwritten note and some brand swag, just thanking them for being a Facebook fans and customers.

The couple hours I spent on that was 100% worth it. One of them even posted an Instagram photo of my note on our brand page.

Every marketing manager, VP, or exec should try this.  But don't wait for a reason to apologize.

Sit down and thank 10 customers.  They'll love it.  Reflect on why you do your job, whether you really value their business,  and keep that moment close to you.  

Relatisonhips matter, and having a great relationship with every customer should be your goal.

Multichannel monetization should beat piracy

Nick Bilton writes, "Internet Pirates Will Always Win" and provokes some interesting ideas: is preventing piracy just a game of whack-a-mole?  Certainly, in the current paradigm, it can seem that way.  

I wrote to colleagues in 2007, when Razorfish was in discusions with NewCo (the nascent NBC/Fox JV that would become Hulu) that fighting the desire of content to be easily available (even if not free) was not a viable business strategy.  

Then, as now, this is a matter of ideology, because the people with the biggest ideas about content are rarely in charge of setting its price or licensing terms.  

But in the multi-channel world, with connected devices now a threatening alternative to STB-connected distribution, content players should not forget the power of an engaged audience.  They are a monetizable asset, and even if watching for a far lower prixce, creating a low-price tier with identifiable audience members can produce email opt-ins, social discussions, merchandise/DVD/other revenue, and tune-in for other programs.  

Mr. Bilton quotes Holmes Wilson, co-director of Fight for the Future, in the article:

The hit HBO show "Game of Thrones" is a quintessential example of this. The show is sometimes downloaded illegally more times each week than it is watched on cable television. But even if HBO put the shows online, the price it could charge would still pale in comparison to the money it makes through cable operators. Mr. Wilson believes that the big media companies don?t really want to solve the piracy problem. "

"If every TV show was offered at a fair price to everyone in the world, there would definitely be much less copyright infringement," he said. "But because of the monopoly power of the cable companies and content creators, they might actually make less money."

Mr. Holmes is not wrong about the exciting power dynamic in play - it certainly could be empowering to do something the "man" doesn't want you to do. Nevertheless, exercising our inner Che Guevara is neither an effective mechanism of revolution against the industry nor a stricly pleasurable experience (corrupt and low quality BitTorrrent downloads mostly waste our time, if not our money).  Wouldn't a low-price on-demand stream or download just be...easier?

It's myopic to think that adding many more low-revenue streams is going to lose money; it certainly will if the HBO/HBO Go are your only revenue source.  The MSOs and the premium TV providers have to work together to create experiences and tiers whose scope is beyond the cable system, and where even if the price is lower, the experience is better than piracy, which is, after all, a pain in the butt.  But I'm just an idealist, I know.

Teen Attention Shifts to the Behavior Networks

USA Today reports on a non-story: Teens turn from Facebook to fresher social-media sites

Drawn to niche sites such as Foursquare and Tumblr, teens appear to be expanding beyond Facebook. According to market research firm YPulse, 18% of teens prefer to "check in" on Foursquare instead of Facebook, and 10% say Pinterest is a better site for browsing.

These behavior networks have experiences rapid growth largely because they ride atop identity networks like Facebook.  These networks do not challenge the core business of Facebook, particularly because: Facebook, and its advertising platform, are everywhere.  There are glimmers of what the Facebook Sponsored Stories will be on Zynga, while playing games like Words with Friends:

How Advertisers Catch Up to Consumers in Social

Facebook and other identity and behavior networks have created new behaviors - and these behaviors have had no trouble attracting the attention of consumers.  The new behaviors have been so empowering of consumers, that as they adopt new behaviros, they have learned to tune out advertising even more effectively.  Consumers have even learned to kill ads, concepts, and brand strategies they dislike en masse.

Debra Aho Williamson, principal analyst at eMarketer in Seattle, noted that when the firm published its most recent forecast for digital advertising back in February, it projected that Facebook revenue would probably double again this year to $6 billion, a number she said is likely now out of reach.

"Consumers have adopted social media a whole lot faster than advertisers," Williamson said. "It's taking them a lot longer to figure out how to fit social media into their plans. [TheStreet.com]

This gap in "monetization" should be viewed in the context of how all innovation takes time to conquer relevant adoption curves and settle into a business model that works for all participants.  With the pace of today's change, we have cases like Groupon, where the vectors of growth point one way, while the sustainiability of the business is highly questionable.  This phenomenon in the information sector is likely to continue as the flow of information between market participants becomes effortless.  It is even worthy of excellent satire from McSweeney's: Ponzify 

So it's not just about your 2 Million app downloads that net you some nice venture funding for "traction" in the marketplace.  Make sure you're paying attention to how your users behave, as well as how their behavior change when you add "monetization" strategies.  

Watch Facebook's Mobile ad product introductions carefully.  If the users hate the products, and find them annoying, intrusive, or unstable, that's bad for the Facebook ecosystem and engenders the kind of hatred consumers have for companies like AT&T, in which they stay with the company but hate it because they cannot easily leave.  Conversely, if the consumer ignores the ads,  and skps right through them, that's bad for advertisers, who need at least some user attention to get value out of the ads.  The holy grail for facebook is helping to identify the ads in the middle: the ads so content-like that consumers will see them as a net benefit.  

This is small thinking strategy for Facebook, at best.  Which are the two or three brands whose social engagement strategies you like as much as you do their products?  Those are the ads that will be premium inventory in your newsfeed.  The social experiences that consuemrs want, which are so attractive consumers will seek them out for their value, are the name of the game for Facebook, because these experiences will have to rent access to Facebook's identity network.  And that is where the money will be.

Don't worry about Time Spent on Facebook

Is this BI/comScore chart bad for Facebook, or is this what we would expect? BusinessInsider says the time spent is shiftting to other social networks. I am not convinced.

Look at the Facebook developer site: Build Facebook for Websites. Build For Mobile. Build Apps on Facebook. These are strategically important initiatives, all taking the Facebook platform and making the digital world more social, but also taking time and attention off of “Facebook”.

From Facebook's Developer Homepage: this is what Facebook is betting on, and consumers are flocking to it. I can't prove it with the data above, but if you're only looking at minutes on the site, that's what you'd see.

Behavior Networks like Pinterest are easy to start because the Facebook Identity layer is there for support - if Facebook were Microsoft it would probably have shut off Pinterest's access to the open graph; Facebook is a very different kind of company.

Read more: http://www.businessinsider.com/chart-of-the-day-facebooks-engagement-has-peaked-and-now-its-falling-2012-5#ixzz1vjRLWPry

Could your ISP track your Roaming via CableWiFi?

The downside of the CableWifi roaming partneship is clearly about privacy.  TheNextWeb reports that five major ISPs team up for massive Wi-Fi sharing effort across the US.

Imagine the ad targeting possibilities – with a single sign on as you roam the country, your ISP/MSO record is now going to follow you around he country.   Now with a slick landing page over wifi, or a flag on your addressable cable box, your surfing and travcel habits are now even more interesting fodder for multi-screen ad targeting.  It would be fascinating to know whether the CableWifi folks will be partnering with an offline/online cookie solution.  

According to the article:

In what will be a massive win for US cable company subscribers, five of the country’s largest cable providers have announced that they will combine to offer each other’s customers access to their own metropolitan Wi-Fi networks — the largest such project in the US to date.

The partnership will include Bright House Networks, Cablevision, Comcast, Cox and Time Warner Cable and will include access to over 50,000 Wi-Fi hotspots across the US under the CableWiFi brand.

...

In order to connect to the hotspots, subscribers simply have to look for a CableWiFi network and then connect using the same details that they use when connecting to their existing provider’s networks. Over the next couple of months, those networks will automatically connect to these networks when they are near a CableWiFi hotspot.  

Reminder: free wifi is hardly EVER free.

Facebook will know the future before you can Tweet it

What were you doing last night?  Mark Zuckerberg had a hackathon.  Oh yeah, and today his company went public.

I have been thinking about valuation of Facebook all week, and i think whatever the offering price is, it's wrong, and the GM announcement just made things worse by focusing on revenue in the Millions.  The valuation should not be  based on revenue.

Instead we are looking at the premiere testing ground for defining social expereiences and ad products across multiple channels based on the behavior and reactions of real users.  The future is clearly coming, where recommendations and votes of confidence from friends will be louder than advertising.  With the end of broadcast, and even the end of web portals,  attention is a strategic asset.  And Facebook has a boatload of attention, because we are addicted to news about other people.  

This need to gossip, and the need to share, is a basic human need- It's Brain Candy, according to Harvard researchers.

To be cute about my hypothesis:  Facebook will know the future, ship an awesome product and move on,  before you can Tweet it. 

Facebook is in a dominant market position to be able to take the attention people spend on the platform, across devices and all over the social web, to find out what works before any of their competitors, and with enough scale to stay ahead.  As long as they do not piss off users (the product being sold to advertisers) then the business is incredibly valuable.  I don't really know how to value it, but you must imagine some of these platforms competing with each other, and almost no one can compete with Facebook in this regard. 

It comparatively easy to build a behavior network to scale, but people are growing tired of joining new identity networks - they already have Facebook, or Linkedin, or Google,  and it is so easy to get traction by just riding over the top of that; consumers will begin to expect it.  Such a strategic advantage is incredibly valuable, and suggests that Facebook might even have a business when many of these other platforms just get boring.  Facebook will be the social layer people use - and that could echo for a decade or more.

Facebook keeps saying they are not trying to be a great company, they are trying to make a great product, and while the effects are similar the emphasis contained therein produces really remarkable results.  So don't worry about getting the valuation right, because they are going to ship a lot of code before anyone figures out the generational shift in behavior and advertising we're in, but I think Facebook might be the company that gets there first.

Facebook stock closed barely above the offer price - find me someone at Facebook who really cares about that, instead of shipping  a great product.  Their strategy? Culture as strategy.  Facebook tries to get people to enjoy but not flaunt their wealth and these norms suggest that inside Facebook is brewing...the next Facebook.

Path, Twitter, LinkedIn and Foursquare: Can there be more than one identity network

iden·ti·ty. noun \ī-ˈden-tə-tē, ə-, -ˈde-nə-\:  the distinguishing character or personality of an individual -Merriam-webster.com

I suggested in my previous post about identity networks that Behavior Networks have certain properties.

But what about Identity networks?

Identity networks are primarily networks of connections, not content.  Even though content rides on top, identity (friends, co-workers, classmates, teammates etc) is defined by connections between users are the primary organizing principle.

Behavior networks don't need to or even really care to store your data of this variety.  To some degree, this is about the maturity of the network itself.  Path is well-funded, and doesn't necessarily need to generate revenue - it is focusing on creating a product people love.  It is also riding the tide of people who think identity networks are too powerful.

This property of identity networks is quite interesting.  Who is the customer, from Facebook's perspective? Depending on your point of view, the customer is the one who pays (the advertiser) or the user (the person who registers an account for their identity).  What if those two groups do not want the same thing?  So identity networks are constantly seeking to grow revenue without alienating users, who produce the inventory for sale to advertisers.

The inventory is connections, and content, and the trackable data within the network, and we are now at the point where users have more control, but also less power in this equation.  They have more discrete levels of control over their information, but less aggregate power: their information remains on the site.  The business of Facebook marketing seeks endlessly to grab data from users, turn it into inventory and find willing bidders for that inventory.

LinkedIn is Facebook's strongest rival identity network.  LinkedIn has added many more content behaviors than I really thought possible, but it has proven its staying power and has  a commanding advantage in terns of data that is increasingly an opportunity for display advertising and the emerging corporate pages that employees are now connecting to. What remains under-leveraged is the extension of LinkedIn's identity network into the physical and corporate IT environments. I'll do a separate post about some strategic opportunities along those lines for LinkedIn.

The value of a network increases exponentially with the number of people (nodes) and the number of connections between them, but as users become aware of the power dynamic in which they stand, value is being drained out of the network.  This is first reputational damage done by privacy scandals and the like, and subsequently by users who defect to behavior networks or leave the social world altogether.  this is why Facebook runs aggressive re-engagement campaigns for users who have not logged in regularly.  

Path is somewhere between a behavior and identity network, and seems chastened by the address book privacy scandal from just a few months ago.  In fact, if you go back to the launch of Path's app "With" which had a very simple photo sharing mechanic for sharing who you are With, Path lets us know they are in the business of building networks:

as we continue our quest to build new types of networks which maintain their quality over time, we have been fascinated by the idea of an interaction network. Or, as we enjoy calling it, the With Graph.

Interaction networks, or behavior networks, can be discrete products, to test features and bring a feature set clearly into focus before adding it into a product.  It's clear that this ethos is infused within Path, as many have discovered.  Check out Path's About web page - which I have labeled below; the lesson: don't build when you can get all of the functionality without woorying about the infrastructure?

 

These are just some of the issues that companies struggle with.  Do we build our own networks, or extend others?  Do we have the ability to trust business partners to host our content, and critical utilities, when they are focused, precise, but not under our control?  One of the side effects of a services-oriented world, in which marketing services are delivered by a multitude of vendors and in-house solutions, is that identity and  behavior networks can be easily adopted into the marketing ecosystem - will it be you, or your competitor who gets there first?

Foursquare has a better shot at being a location-enabling platform, and it is doing a great job of expanding the behaviors - from check-in to discovery - that can be built with the network.  It could become a centralized clearinghouse of your place in physical space, enabled with your permissions and enriching digital interactions.  Foursquare's connections are transmit location information, which has different sensitivities, and it's been harder for other social networks to effectively create location-sensitive content filters.  The rich opportunity for serving deals and enriching merchant relationships arising from actual, physical visits and commerce.   Perhaps Foursquare could a platform for retail commerce, featuring payments and offering retailer CRM opportunities..but it will have to become a stronger Identity network in order to do so.

I will address ways to profit from this tension between behavior networks and identity networks, and how to effectively leverage behavior networks, in a future post.

BEWARE: Foursquare Friend Request Phishing Scam

I just received the below, purporting to be a friend approval from a name i din't recognize.  It's a phising scam, hoping you all try not to open.  Not sure if the sender knew my foursquare account was attched to a specific email address, but they had me going, for sure.  If anyone wants the full headers, I will happily share.

Don't let your SEO strategy get away from you

My dad sent me a link to a story on the SF BUsiness times site, and after logging in and seeing the story, I found myself wandering.  I saw side by side ads for Verizon and AT&T careers, and I was curious about how these ads were related to the destination content.  My, was I surprised.  The sites both linked to the homepage of the respective career pages.  I'll show AT&T and then Verizon's.  Both companies are so large, and nationwide employers, it is interesting that they approach things so differently.

With AT&T, I felt welcomed by a gallery of faces of actual humans, and there's enough happening on the site that everyone from recruiters, to college students, to experienced professionals should be able to find what they are looking for.  You have to hand it to the company for using the .jobs TLD (the site is http://att.jobs) yet the branding feels spot on for what I expect to see from the other touchpoints I regularly use as a customer.

By contrast, I found Verizon's careers site mystifying, wit so many links to so many things, and so many groupings.  

Remember, no matter how much your site's success depends on organic search, and regarless of the desperation of your target audience to "convert" (whether a job application, tshirt purchase, or other action)  someone will actually, eventually, with human eyes, look at your site.  

I'm seeing more and more the paradox of organic search and the site design below, which seems to put everything but the kitchen sink as a text link on the homepage.  This won't last forever, and the increasedinfluence  of social content and participation on link relevance will hopefully limit the impact of these usability-killing visual mazes.

UPDATE: In fairness to Verizon, it seems like the page I landed on wasn't the home page.  The home page, below, shows off more of the corporate identity that I saw on AT&T's page.  I'll stick to the point about the SEO contrast, but I also think the landing page choice for Verizon was not the best.  Choosing the right campaign landing page is a question for another day.  

Behavior Networks and Identity Networks

Instagram's acquisition by Facebook illustrates how the tension between identity networks, and behavior networks will play out in the marketplace, and how it may not benefit users directly.  This divide pits sites like Pinterest and Instagram vs. Facebook, Twitter, Path, and others.

Identity networks, like Facebook and Linkedin, focus on You and managing connections to pieces of identity, and while you may have have wide-ranging conversations within such networks around content, which are key to communicating your identity, the profile remains the anchor point to an identity you care about. Facebook deserves credit for making this idea popular and easy to understand - forcing Google and Microsoft to change in many ways.  

Facebook's Connect and Open Graph initiatives show how crucial the concept of identity is to the Facebook model- the advertising Facebook sees in the future isn't customized by cookie pools, it's customized based on the open graph. It's not limited to Less and less of the meaning that users derive from being Facebook users will come from using Facebook.com and more and more will come from experiences enabled by the Facebook Platform. Facebook, as it extends the platform, is admitting that it cannot innovate fast enough at the edge to keep every user fully engaged - what they want is to have that user identified and authenticated, pulling their behavior into the Facebook ecosystem.

Thus, the edge of the platform, powered by identity, is where new user behaviors will emerge. These emergent groups of connections, I call Behavior Networks. They have several important properties.

1. Leverage an identity network to authenticate users - e.g. social sign in
2. An intentionally narrow feature set, the novelty of which self-selects new users.
3. User to user value exchange is based on behaviors - e.g. who you are on Pinterest is DEFINED by what you pin.
4. Nonlinear growth in user base enabled by the Identity Network.
5. Scale is the enemy of behavior networks, because they represent the end of novelty (2).

Behavior networks remain rooted in one style of behaving, and are key to a very specific context or action.  Instagram and Pinterest are in this category.  While relying to varying degrees on your identity (on Facebook, Twitter, etc)  your identity on these sites defines your behavior - if you never publish anything, you don't exist. No matter how many instgram photos you take, that's all the network says about you.

Test yourself, when was the last time you deleted an Instagram photo?  When was the last time you deleted a Facebook post?  I've done many of those things on Facebook, but I never worry about Instgram.

The real-time web is perfect for behavior networks.  All that matters is what you are doing- your behavior is your only identity but it doesn't live forever.

For these reasons, these behavior networks represent a challenge for marketers. Extending engagement beyond the behavior network - site traffic, conversions and so on - will be used to prove that the marketer's participation had some value. And this will require functionality a behavior network operator will be loathe to construct. All ROI metrics will come down to this: did the users engage further? Did they pin stuff and their friends bought it? The ROI analysis will require a channel linked to identity.  So as marketers we face the dilemma of proving the value of engagement beyond behavior networks, and these are uncertain times indeed.

My next two posts on this topic will deal with:

1. Path, Twitter, LinkedIn and Foursquare: Can there be more than one identity network
2. How will the tension chnage the practice of marketing?

WSJ vs. NYT: The Reality Distortion Field

Side by side, the headlines from today's WSJ and Today's NYT.  Doesn't get any clearer that these two papers are picking the facts they want...in everything.  

 

Snubbing the Media — Strategy or Revenge?

Much of this post was orginally a comment on "Snubbing the Media — Strategy or Revenge?" at Bulldog reporter.  I'm working on a larger post about what a universe run by Apple would look like.

The manufacture of the gadgets that have become part of our lives, and made Apple a hugely profitable company in the meantime, has transformed Apple's operations into a lightning rod for outrage over worker conditions.  Listeners to This American Life were let in on the sad story even before the Times article was released. 

What was damning about the NYT story was that it went further in context and further in exploring corruption.  In context, it was better able to show the matrix of conditions costs and imperatives that are involved with being an apple supplier and a worker at such a supplier.  But in corruption, the NYT was able to get former Apple employees to discuss the company's internal perspective on the problem, without being official mouthpieces.  Culpability seemed to be at the heart of these admissions.  What are we to say about that? Apple ruthlessly prevents outside access to its inner deliberations, and in some ways this culture of secrecy is good business practice, but in others, it allows sensational news items to define the company's story.

So now Apple is using its main currency, (thirst for details about the company), to attempt to control the story and diver the narrative away from the labor issue.  It's an authoritarian move, and we shouldn't expect Apple to change that approach overnight any more than it can change Foxconn's practices overnight; in many ways that approach might continue to work.  

Apple isn't just freezing out the NYT: it is freezing the citizens of the world and the community of its users from being stakeholders in Apple's governance.  

As the goods we purchase transition to digital rather than physical, the tangible devices and experiences we do purchase become increasingly important expressions of their lose their tangibly, the opportunity we have to participate in the industrial decisions surrounding their production is real and a true test of the world's appetite for respecting craftsmanship, effort, sacrifice, and pride.  Will it become harder to exploit citizens of other low-wage countries, or easier?  That much is up to us.

How to Get More From Your Brand's Facebook Data

I was pleased to be quoted in the Ad Age "Relationship Issue" about how brands are increasingly using enhanced strategies to cull insights and marketing intelligence from Facebook Data.  The article about marketers use of Facebook data appeared in the same issue as my colleague Gregg Hamilton who commented  very real possibility of consumers owning shares in brands.

Building an application, as I noted in the hypothetical example of an airline, is one way to go, and as long as the value is there for the consumer, the financial investment is probably sound.  But strong consumer insights are key to making sure this is about value delivered to the consumer, not just meeting your marketing goals.

Burritos, and Guacamole, and Bikram- O MY!

Foursquare has a new video on their logged out Homepage which I have embedded below (HT AboutFoursquare). The video promises that you can find great burrito places to enjoy with friends, and  "Don't forget to work off that burrito by doing an hour of bikram yoga next door."

Challenge: think of something more gross than eating a big guac-filled burrito and then doing bikram yoga.  I did a little research on the subject and even Hot Yoga of Delaware specifically recommends against:

we recommend that you do not eat a big burrito right before class. In fact, you’ll probably be better off with no large meals for 2-3 hours prior to practice.

Here's the video:

Are there, perhaps, other recommendations that would be better?  How about a great boot camp class in the park and a post-workout smoothie? 

Hi! I want to learn more about foursquare! from foursquare on Vimeo.

A great wide warzone full of nuclear brothers?

Watched Things to Do in Denver When You're Dead a 1995 classic, and was particulalry struck by this quote (which is more or less humourous in context) and its relevance to technology. By the year 2000...I don't know.\

Rather than a racially-polarized warzone, Urban america has had a more commerically driven fate, with a transformation that made it hip to live in Bushwick or in an industrial building converted to condos.  in the last few years, with the impact of wireless communications and the destruction/revival of cities like Detroit, or the reinvestment in Downtown LA that has gentrified parts the "innner city"- all these cities represent technology consumption enabled by population density, rather than a warzone devoid of it.

Baby Sinister: The fact of the matter is by the year 2000 every city will be black. Thanks to the fax, the modem, conference call, federal-f**king express, the beast will be able to conduct his business from his home in the white suburb leaving the city a great wide warzone full of nuclear brothers.

Rooster: That's what I'm saying man, the fax, modem, FTD...

Baby Sinister: What the f**k you talking about, FTD? Rooster: You got to have flowers in the warzone, Baby.

Apple Finances Start-up Costs to Manufactire the Future

Nice wrap up on SAI, from a Quora post about how apple uses its massive cash resources:

When new component technologies (touchscreens, chips, LED displays) first come out, they are very expensive to produce, and building a factory that can produce them in mass quantities is even more expensive. Oftentimes, the upfront capital expenditure can be so huge and the margins are small enough (and shrink over time as the component is rapidly commoditized) that the companies who would build these factories cannot raise sufficient investment capital to cover the costs.

...

Apple is not just crushing its rivals through superiority in design, Steve Jobs's deep experience in hardware mass production (early Apple, NeXT) has been brought to bear in creating an unrivaled exclusive supply chain of advanced technology literally years ahead of anyone else on the planet. If it feels like new Apple products appear futuristic, it is because Apple really is sending back technology from the future.

Reminds me of the Clarke's Third Law:

Any sufficiently advanced technology is indistinguishable from magic. -[Wikipedia]