Social Networking is a platform, not a business

The other evening I attended an excellent event sponsored by the WSA, entitled, "Social Networking – More Popular than ever – But how will that translate into the business world". There were 250 plus people in the audience and a quality panel of entrepreneurs as well as representatives of Microsoft and Google.

It turned out that there were several distinct topics being discussed. First, there were panelists in the process of launching new social networking site like Zoodango.com and OthersOnline.com. The questions to them revolved around how they will be able to stand out from the pack on new entrants and last long enough to succeed. Secondly, there was the line of questions around what differentiates social networking in the business environment. For example, one panelist stated that you should always use a pseudonym for privacy sake on a social network, but need to use your real name on a business network to lend credibility….

And the third topic, which was most interesting to me, was not about monetizing the companies that are building the social networks, but how to leverage the content, communication and community that takes place on these networks to promote your business objectives, regardless of what product or service you provide. This I think is the core to understanding the power of social media. With an ever increasing sense of déjà vu, I hear loads of new companies say they are going to put great content on the Web and then make money from the advertising that goes with it. While this might work for some in the short term, I do not think that social media is well-suited as an advertising medium and more importantly, those marketers who are thinking of social media purely in terms of a new channel on which to use the same advertising techniques that have given us 50 years of the 30 second TV spot are missing not only the point, but also the power of the channel.

Frankly I don't care whether a conversation happens on MySpace, LinkedIn, Facebook, Spaces or Zoodango. It's the content of the conversation that matters. Social networking is allowing us the opportunity to share our opinions, experiences and preferences with an almost limitless audience in real-time. It used to be said that an angry customer will go tell ten of their friends about a bad experience. Today, a bad customer experience can be shared with millions in less time than it took to walk to the water cooler. Consumers have greater leverage over the marketing message, the brand and ultimately the success or failure of the product or service in way unmatched in the history of marketing.

The business value of social networking and social media is to be able to influence that viral conversation so that it adds to your brand equity, not destroys it. Mentos got a 14% lift in sales because a couple of crazies decided it would be cool to video themselves stuffing Mentos into Diet Coke and watch the explosion. Once posted on YouTube, it has been seen by millions. The message is that Mentos got the sales boost, YouTube was just the platform for the message to be communicated across the network.

In the not too distant future, we will see more Google's buying up YouTubes, not because of their technology, but because of their potential to attach an audience to their platform. The platforms will end being hosted and owned by the Google's, Microsoft's and maybe the Verizon's, but the content, the communities and the value will be in the hands of those savvy marketers who understand how powerful good ideas and good customer experience can really be.

The Market hasn’t changed, just the marketing

I applaud the clear historical summary presented in "The Role of Business in a Market Community" and I agree that the role of marketing is changing as a result of social media, but where I disagree is the premise that the result is that "for the first time…customers…have the means to choose whether or not they want to support you." This choice has always been an inherent part of the marketplace, except in cases of enforced monopolies. It is one of the primary foundations of a market economy. What has changed is not the market, but the way companies are able to relate to that market.

A lot of the buzz around marketing in an age of social media is focused on an online extension of traditional personal referrals as a dynamic marketing engine. Viral and Word of Mouth marketing channels are as old as communication itself. How many of us don't reach out to our own networks of friends and family when we are looking for a dentist or a good bottle of wine. What has changed is that instead of asking two or three friends at work or at a backyard barbeque, we now have the ability to reach out to thousands and millions of "friends" through our online social networks. We rely on their ratings, rankings and testimonials just the way we historically relied on our face to face friends over the water cooler or back fence.

Throughout most of the Twentieth century, marketing has been all about interruption. It interrupts our reading the newspaper, it interrupts our drive down the expressway and most pervasively, it has interrupted our TV experience. It had to interrupt because it wasn't willing to rely solely on our limited networks of friends and families for referrals, especially when it was either introducing something new, or in more cynical circumstances promoting something with dubious value, like cigarettes or boxes of cereal enhanced sugar.

Today, consumers are finding multiple ways to prevent that interruption. I won't go over the entire list, but we all have seen the impact of cable, TiVo and the Web on the relevance, impact and spend on traditional 30 second TV spots. Companies are being forced to strip away some of the sizzle and actually produce good bacon. And when they do, they are finding that individuals still like to do the same thing they've always done, talk about what they like and dislike and tell their friends. The only difference is that their reach can now be global and the distribution is in real time. And that is the challenge for marketers in the future, not to tell people what to think, but to let them us what to make.

Web 2.0 in 2 Minutes

I just watched a great short video that does the best job I've seen define Web 2.0. You should check it out and I'd love to hear anyone's comments.

http://www.youtube.com/watch?v=6gmP4nk0EOE

Creatives and Technologists, Oil and Water?

The last time we got together for breakfast, Don and I were talking about the place where Marketing and Technology meet. After trashing the table and each other, we came up with the question, “What if we offered our clients not only brilliant strategy and kick-ass creative, but could actually build the systems that enable this kind of technology-enabled marketing?” This week we promised to be neater, but try to tackle the thorny question of whether “creative” agency types can co-exist with “technology” types. Is it oil and water?

Today we were joined by David, a Creative Director at one of the most award winning advertising shops in the city and Karen, who teaches technology management at a nearby university. We hadn’t even had our first cup of coffee before the opinions started to fly. “The heart of a creative agency is its ability to come up with big ideas,” said David. “We’re afraid that if we align ourselves too closely with right-brained technologists, the power of the ‘big idea’ will be diluted.”

“Coming up with big ideas shouldn’t be all that different than finding technology solutions,” replied Karen. “The key is to get everyone is a room together, come up with an idea and then work through it iteratively, that’s why I like Agile methodology so much. Plus, if you find the right people in the first place, you should be able to rely on them to produce the right ideas in a fairly predictable way.”

“That’s just the problem, being creative isn’t about being predictable, it’s about, well,,, being creative,” blurted out David. “Sometimes ideas come in minutes, sometimes days. You see, we just think differently and that’s exactly why creative and technology is like oil and water. You can bring them together, but they will never mix.

Before I could jump in, Don asked, “what if we concede that creative and technology people are wired differently and that their thought processes just don’t work them same. Does that mean they can’t collaborate to achieve a single purpose?” “Exactly!” I exclaimed. We’re not talking about the chess and drama clubs in high school, we’re talking about business professionals in the service sector. Our common purpose is to help our clients reach out and communicate with their customers. Without a platform, the big idea goes nowhere and without a big idea, there’s nothing to communicate.

Most marketing clients are tired of being the manager at best and the referee at worst, when it comes to working with multiple vendors. If I think back over my roles as a marketing Director, I shudder at the amount of money I spent or the time I wasted trying to get the technology consultants and the creative agency to speak the same language. In fact, I never even cared that they spoke the same language, all I cared about was that they figured out some way to work together and provided me with what I asked for; marketing programs that not only looked good, but delivered the results I was looking for to make my business (and me personally succeed).

“So maybe it’s not oil and water, we’re talking about at all,” said Don. “It’s really oil and vinegar. Together they’re delicious, but let them sit too long and not only do they separate, but they eventually go rancid as well.” Thankfully we had all finished our breakfast before we ended on a picture of rancid salad dressing. Don was always good at creating lasting images.

Marketing and Technology - Should your agency do both?

The conversation at breakfast this morning was where do technology and marketing intersect and what does that mean for our clients. This time the group included Mary a pragmatic CEO, Joe a former IT Director turned consultant, Don the brand guy and myself, the unabashed marketing evangelist.

We tried looking at the problem from the business point of view. “The CEO is simply trying to add shareholder value, drive greater sales and profitability,” started out Mary. Then she told us the story of another CEO she had recently met at a conference. That CEO had just finished Fred Reichheld’s book, The Ultimate Question, which convinced him that customer loyalty was a magic bullet for success.

All his company had to do was to ask their customers one question, “How likely is it that you would recommend this company to a friend or colleague?” Of course last year he was talking all about hedgehogs and big hairy, audacious goals. But that was the wisdom of a different guru. We all grinned, been there, done that, we thought, but as we buttered our bagels and started to think about the CEO and the problems his company was facing, we tried to put ourselves in their shoes and made up an imaginary dialogue between the CEO and his management team on how to drive loyalty.

The head of sales would say, “Well maybe we could do a better job of qualifying new customers to make sure the business relationship is a good fit.” The VP of marketing would say, “We need to better communicate our brand promise both within the company as well as to our customers and partners. That will make us credible and hence drive loyalty.” And the CIO might add, “There’s some great new technologies out there that will help us both communicate and collaborate with all the stakeholders better, and my team can is up to the task .”

At this point Mary almost choked on her eggs. “That never happens in the real world. The sales guy is motivated by the volume of sales, that’s how they're incented. The marketing team are all a much of wannabe artistic types who believe they are mis-understood by the rest of the organization and the CIO is worried about delivering what they’ve already committed to, let alone volunteering to take on something new.”

Both Joe and Don disagree. Joe says today’s CIOs know that their real customers are internal and if they are to succeed they need to make sure their customers, like sales and marketing, succeed as well. Don chimes in to say that while most marketing organizations are undervalued in companies today, the way to gain respect is to demonstrate ROI and good marketers know that. That’s why they're embracing more cost effective channels like the Web and email and the really smart ones are figuring out how to use user-generated content, the meat of Web 2.0, to harness the least expensive and most effective tools, like word of mouth.

Joe shoots back and says that marketers can’t do any of that without technology. Everyone around the table nods in agreement and then it dawns on us. What if we offered our clients not only brilliant strategy and kick-ass creative, but could actually build the systems that enable this kind of technology-enabled marketing. And Mary adds, “Of course we can’t forget about being able to deliver on the reporting, metrics and analysis that guides the optimization of all three, the marketing strategy, creative execution and technology enablement.”

“But that’s not where the money is,” said Don, trying to bring us back to reality. Most marketing spend is still on traditional advertising, even Amazon.com sends out flyers in the Sunday paper.

“But don’t you remember hearing about Jim Stengle, the Global Marketing Officer from P&G, say that the traditional mass marketing model was broken, the future of marketing lay in attracting consumers, not in targeting them. And that was back in 2004,” I finally spoke up and joined the fray. “Recently, Ad Age magazine named the Mentos and Diet Coke video on YouTube, ‘The most important piece of consumer content of 2006’ and the mint in question enjoyed a 15% spike in sales, all at no cost and almost instant global reach.” By that time I was getting pretty animated and almost knocked over the last of the orange juice. “It’s not where agencies are today that counts, it’s where the market is going,” I insisted. “We’re not trying to re-create the wheel, just make it a little rounder.”

The bill came and Mary, the CEO paid it as usual. We weren’t sure we had found the answer to world peace, but at least we had a good breakfast and re-enforced our decision to make sure our agency was as rooted in technology as it was marketing. If for no other reasons, then our clients like only having to write one check.
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Hillary Clinton, A Poster Child for Web 2.0?

I was having breakfast with my friend Don the other day. He’s one of the best brand guys I know and so when he asked me what I thought of Hillary Clinton launching her presidential campaign on the Web I knew he wasn’t really thinking about politics.

Way back in 2004, it was news when Howard Dean used the internet as a form of grass roots organizing and demonstrated the ability to reach out to very large audiences and specifically to raise a lot of money in small amounts from a lot of people. Flash forward to 2007 and what was once an interesting side note is now the norm. Not only did Hillary announce on the Web, but it was on the heels of Barack Obama doing the same thing the day before.

So what’s new about Hillary’s announcement and what does it have to do with the practice of Marketing? Every candidate I can think of has an exploratory committee Web site where you can donate money, sign up to “join the team” or see selected press coverage of the “candidate”. What is new is that someone as mainstream as Hillary chose to use the Web as a vehicle to “begin a conversation”… engage in “chat…dialogue” and “visit every living room”. She is hosting live online video chats every day this week and has set up sites on YouTube, MySpace, Facebook and most of the other major social networking sites. I would argue that she has become the poster child for the Web 2.0 version of 1 to 1 marketing.

Every marketer worth their salt is trying to figure out how to jump on the YouTube/MySpace bandwagon and take it from a way for teens to connect, to a new marketing channel that is both engaging and measureable, driving sales at a favorable ROI, and in other words, a way to co-opt and monetize user generated content.

Intentionally or not, I think the Hillary For President committee has shown us a way. They have built a Web experience, including recorded and live video, that brings life to what would otherwise be a two dimensional product, or I mean candidate. They have centered the communication about the candidate, or I mean product, on the Web.

I laughed when I heard all the media pundits on TV and in print, all point the reader/listener to go to hillaryclinton.com, or even votehillary.com to listen to her announcement. In one weekend, she got more push to her Web sites than the most successful SEO, SEM and PPC marketing campaigns could ever hope to generate, and all for free. So maybe Hillary’s not the poster child for Web 2.0, maybe she’s really the poster child for viral marketing as a channel. Or given the number of email addresses she’s collected on the site, maybe she’s the poster child for lead generation.

Well how does this relate to the rest of us who are trying to brand and market something that won’t get coverage on the nightly news whether it’s good or bad? Hillary’s campaign demonstrates the value of placing your Web site clearly as the center or the hub of all your marketing activities. The Web site affords the best opportunity to present branded content, segmented per audience (through either self-identification or profiles) and engage in user directed dialogue, affording the real opportunity to build affinity and drive sales, and ultimately become what Fred Reichheld calls “promoters… who generate good profits and true, sustainable growth”.

Of course the value of your Web site is tied directly to two key factors, the quality of your users’ online experience and the quality and quantity of your efforts to drive people, and the right people, to your Web site in the first place.

In Hillary’s case, the online experience at hillaryclinton.com is centered on watching the video announcement of her formation of an exploratory committee to run for President. Her speech, while it is certainly one way and not interactive, humanizes the online experience. You don’t feel that you have been pitched a lot of Web copy ads, slogans or overt calls to action. Her talk is personal, inviting dialogue and chat and the call to action is simply to join the conversation by coming back to the site and participating in future live online video chats. Outside the hero graphic of the video feed, there are clear simple calls to action, “Join Team Hillary” and links to featured (and of course editorially selected) clips offering more opportunities to make Hillary the candidate, more human and personal.

But, even the best site will not be successful unless as much effort is placed on generating traffic, and the right traffic to the site. Again looking at the hillaryclinton.com site as an example, we see how good product placement, aarrg I keep forgetting I’m talking about a candidate, not a product, can generate a strong viral message that plays in formats a varied as the CBS Nightly News, Fox News and was in the top ten search terms on Technorati, the top aggregator of the blogosphere. Follow this up with more traditional marketing channels that all include the url, hillaryclinton.com and you get the point.

Anyway, let’s not make this too long. My point is that the Web has reached its transformative stage in both society at large and marketing as a discipline. It’s up to all of us as marketing professionals to understand how to use a medium that while we can influence we do not control, the consumer does. And the best way to be successful is to first produce a Web site that really does offer meaningful content, that consumers will want to visit and that it does so in a user-centered design that makes the overall experience friendly, engaging and easy to use, something we can all attest that many sites do not and secondly to spend as much time thinking about how to drive the most relevant traffic to your site using all your marketing channels, both online and traditional.
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