30.3.10

How to Survive Geolocation's Looming Apocalypse

Unless you've been living under a rock, you know that everyone is buzzing, blogging, tweeting, and talking about geolocation. Research firm Borrel forecasts that location-based mobile spending will hit $4 billion in 2015, an increase of nearly 12,000% from the $34 million spent in 2009. With highly anticipated location-centric announcements looming from both Facebook and Apple, the buzz over geolocation is not expected to diminish any time soon.

Leveraging location will drive the next wave of consumer marketing, but based on the current pace of services and apps going to market, we're setting ourselves up for geolocation apocalypse. In this scenario consumers gorge themselves on a plethora of location-based services and spam, gut-busting data profusion and promotional push acid-reflux. If we're not careful, the coming cataclysm could consume us with:

  • Swarms of Geolocation Services. Already in full swing, new services are appearing with an alarming frequency. Ranging from the more popular/mainstream (Foursquare, Gowalla, Twitter, Yelp, MyTown, Whrrl and Loopt) to the more obscure (PlacePop, BlockChalk, Bump, FoodSpotting and Graffiti), services are being piled high. Gauging by the more than 25 companies that made location-based announcements at SXSW, consumers will soon be choking on an overabundance of geolocation services.
  • Armies of Aimless Apps. Each service wants you to use their app, so can the marketplace sustain a massive rush of apps? Of course not. When I sit down for dinner at my favorite tapas place, how many apps can I "check-in" with before everyone else at the table starts throwing flatware at me? Most likely one, possibly two, if I snap a photo for upload when the entrees arrive. Check.in, by the team at Brightkite, is addressing this problem with their upcoming app (one checkin to rule them all). But how many apps (and features within each service) will they need to support to effectively fulfill consumer needs?
  • Drowning in a Deluge of Data. If you've seen SimpleGeo's Vicarious.ly, or the visualization video of geolocated data they collected during SXSW, you can see the potential for massive floods of personal geolocated information that may or may not be relevant to your consumers. Bing recently added Foursquare data results to their maps. Now imagine them adding results from a dozen other services, or maybe four dozen other services. As a user, I just wanted directions to the post office, now obscured by thousands of user notes, to pick up my bacon-of-the-month. Does it help to know that 600 of my closest friends also hate going to the post office?
  • Spates of Vexing Spam. Why should marketers care? Consider the consumer. An innocent trip to the mall might trigger an avalanche of promotional push notifications. You check in at Macy's, and because you just had tapas for dinner, Macy's offers you 30% off paella cookware. The Gap sees you and sends an SMS about its sale on Spanish red sleepwear, while Barnes & Noble (a few doors down and a bit confused) pushes you a coupon for Macy Gray's latest release. The consumer just turned off their phone...
  • Crime Cataclysm, Stalker Apps and Misrepresentation. With vase amounts of personal-location information being exposed, we're bound to see a rise in potentially damaging behavior. Ages ago (in 2009) a man tweeted about a family trip to Kansas City, only to return to a burgled home. What did he do? He blamed Twitter. On the flip side, I would be remiss if I didn't mention PleaseRobMe.com, a site that displayed Foursquare check-ins in real time, essentially listing "all those empty homes out there." The site is no longer active, but it caused quite a stir and fueled much debate when it launched in February of 2010. That sound you hear is consumer confidence gasping about the dangers of geolocation.

It Doesn't Have to Be That Way
This isn't the first time marketers have embraced disruptive technologies, nor will it be the last. As long as we keep one foot in the shoes of our consumers and follow some basic rules of road, you'll safely stay out of the wasteland:

  • Respect and Delight Your Consumer. Service creators, application developers and marketers alike should have undying respect for consumers and the desire to make them fall in love with their brand by providing them with something special. If you undervalue your consumer by creating less than magical apps, treat privacy with little or no consideration or abuse your knowledge of their whereabouts, consumers will turn their backs on you and won't return.
  • Embrace Open APIs. Open APIs allow marketers and app developers to build on top of existing services. Facebook and Twitter owe no small portion of their success to having created open APIs early on. Remember reading about tweeting toasters, plants, dishwashers and even beds? Twitter's open API was not only great for developers, it was phenomenal PR. Why has Gowalla lagged behind Foursquare, even though many users report preferring the Gowalla experience? Maybe because their API is currently read only.
  • Choose Wisely. As part of your strategic approach, building upon a proven favorite that will likely NOT end up in a geolocation landfill makes sense. All signs indicate that Foursquare will be around for some time, especially given it raised $1.35 million in venture capital last year. Also of note, following SXSW, Foursquare tweeted that they experienced "2.4 million checkins !& about 90,000 new users (!!!) in the past 7 days. Every week bigger than week before."

We Can Prevent Geolocationitis
Geolocation isn't going away -- in fact, it may get a significant bump if Facebook turns location on for their 450 million+ users. Stay tuned; that news is expected to unfold at the upcoming F8 developer conference on April 21. In addition, Apple's appreciation of the impact of geolocation was acknowledged with their patent application for a social-networking app (named iGroups in the patent) that would allow users to securely share data with one another using a service like MobileMe. Apple is also rumored to be rolling out iAd, a location-based advertising service that leverages technology from their recent purchase of Quattro Wireless.

We've already taken our first few leaps into the geolocation deep end, but it's not too late to refine our approach. If we work hard to respect our consumers' needs and privacy, while taking every opportunity to provide them with brand experiences brimming with value and delight, we could turn a looming apocalypse into a land of geolocation milk and honey.

Source - Advertising Age

15.3.10

SXSW - What Corporate America Thinks Of Web 2.0

Here's a top line summary of Andrew McAfee's discussion on the corporate mindset regarding the web 2.0 world.

The Corporate Mindset

The Bad
  • Risk averse
  • Enamored of the status quo
  • They’ve been burned by technology hype – we oversold in the past and now corporate culture has apprehensions. We’re dealing with a skeptical audience.
  • Unimpressed by features and novelty.
  • Recession has cut middle management and consequently everyone else is very busy.
  • Uninterested in social revolutions.
  • Hostile to auto-obsolescence – hierarchy is not obsolete.
  • ROI seeking.
  • Convinced of their own uniqueness.

The Good
  • Aware of new tools and approaches
  • Aware of organizational dysfunctions
  • Pragmatic
  • Swayed by theory
  • Narratives – what going on, paint a picture, where we fit into it
  • Keenly aware of what their peers are going
  • They fear being left behind.

How to talk to your bosses about technology
  • Comparisons instead of demos.
  • Present theories and frameworks, not jargon.
  • Present data, case studies, and narratives. (Not Google, Amazon etc).
  • Activate peer effects
  • Anticipate concerns
  • Show that you understand their problems.
  • Don’t treat them like geeks or dopes.

14.3.10

Firestarter @ SXSW

Whoa! SXSW is bananas! If you’re unfamiliar with SXSW, it’s basically a collection of passionate people engaging on all kinds of topics from social media, to gaming, to user experience to content development….the list goes on and on and on. The SXSW tagline says it all “Tomorrow Happens Here”. Check out SXSW for more info.

The first two days have been a whirlwind. We’ve been tweeting all day and if you feel the tweets don't do the content justice we would recommend finding the respective hashtag and plugging into Twitter Search. There are also a number of people writing up recaps on the sessions. Here's a summary of Clay Shirkey's discussion on Monkeys with Internet Access: Sharing, Human Nature and Digital Data.

We're also readily available via email at firestarter@bbdo.ca. Feel free to send us a note either by email or via Twitter if you've got anything you'd like us to dig on.

11.3.10

Marketing To The Other Senses: Sound

Consider this: 83% of all the advertising communication we’re exposed to daily focuses almost exclusively on the sense of sight. So what about the rest of our senses? In the 70s, marketers we’re fixated on jingles and it paid off considering most baby boomers can hum a brand tune from their younger days. The following is a look at some of the most addictive sounds in the world, both branded and unbranded. The question is: do jingles and “sound marketing” have a role in today’s marketing landscape?

You're probably among the millions who have experienced it: driving in a car, listening to the radio, and suddenly this song comes on. It is not just any song--this was your favorite song when you were a teenager. As the first few notes strike up, you're transported back in time. Everything is so vivid, and your mind wanders to parties, first kisses and sweaty palms. It's as if time stands still and you suddenly realize that for the entire duration of the song, you haven't seen a single thing on the road.

There's no doubt about it, sound is immensely powerful. And yet 83% of all the advertising communication we're exposed to daily (bearing in mind that we will see two million TV commercials in a single lifetime) focuses, almost exclusively, on the sense of sight. That leaves just 17% for the remaining four senses. Think about how much we rely on sound. It confirms a connection when dialing or texting on cell phones and alerts us to emergencies. When the sound was removed from slot machines in Las Vegas, revenue fell by 24%. Experiments undertaken in restaurants show that when slow music (slower than the rhythm of a heartbeat) is played, we eat slower--and we eat more!

Is this just coincidence, or does sound make us buy more, want more, dream more and eat more? Any 50-year-old American can sing a whole range of television jingles from the 1970s--they are all well stored in the recesses of our brain. Yet if you were to ask the same of those who have come of age recently, you will find them stumped. Has the magic of a television tune disappeared, or has the advertising world lost sight of the fact that people do indeed have speakers at home? I decided to put these questions to the test.

Buyology Inc. and Elias Arts, a sound identity company in New York, wired up 50 volunteers and measured their galvanic, pupil, and brainwave responses to sounds using the latest neuroscience-based research methods. We learned that sound has remarkable power. This may not be surprising for many, but it was certainly surprising to realize just how many commercial brands over the past 20 years have made their way into the world's 10 most powerful and addictive sounds--beating some of the most familiar and comforting sounds of nature.


Quiz: Can You Guess The World's Most Addictive Sounds?


Forget the sound of the waves or the songs of birds, they didn't even make the top 10. But the jingle advertising a computer chip, and object which most of us have never even seen, took the prominent second spot in our brains in terms of addiction. We strongly respond to the sound of Intel! This tells us that repetition is the key, since most of us can't even sing it. What this tells us is that there's no limit to this phenomenon, because a computer chip doesn't really have a sound.

The third most powerful sound is just over 10 years old, and yet it had such a profound effect on our volunteers that as soon as they hear it, they remove their headsets and check their bags for their vibrating cell phone. When we switch our phone into silent mode, we think it cannot be heard. But the vibration has its own sound, and almost immediately the test subjects stopped whatever they were doing to attend to their phones. It's hardly surprising that the Blackberry has been dubbed a CrackBerry--even President Obama is hooked.

Psychologically speaking, this is not a happy discovery. Recent studies show that the first thing we do when we wake is check our BlackBerry. Going to the bathroom, brushing our teeth and eating breakfast takes a back seat. Increasingly people sleep beside their phones--that message that arrives at 4.00am, is now a priority! Even though the sound of a vibrating phone has taken second place to a baby's giggles, it seems that in just over a decade technology now provides the predominant sounds of daily life.

As marketers become more aware of the power of sound, it will be used to increase brand recognition in increasingly sophisticated ways. It's just a matter of time before our brains hear sizzling steaks, newly lit cigarettes and sparkling sodas, and immediately register them as Outback, Marlboro and Dr. Pepper.

THE MOST ADDICTIVE SOUNDS IN THE WORLD

Non-branded and branded sounds:
1. Baby giggle
2. Intel
3. Vibrating phone
4. ATM / cash register
5. National Geographic
6. MTV
7. T-Mobile Ringtone
8. McDonald's
9. 'Star Spangled Banner'
10. State Farm

Top 10 Branded sounds:
1. Intel
2. National Geographic
3. MTV
4. T-Mobile
5. McDonald's
7. State Farm
8. AT&T Ringtone
9. Home Depot
10 Palm Treo Ringtone

Top 10 Non-branded sounds:
1. Baby giggle
2. Vibrating phone
3. ATM / cash register
4. "Star Spangled Banner"
5. Sizzling steak
6. 'Hail to the Chief'
7. Cigarette light and inhale
8. "Wedding March"
9. "Wish Upon a Star"
10. Late Night with David Letterman Theme

Source - Fast Company

TMI

Strategists love data for the simple reason that it generates insights based on fact. Despite being a creative industry, marketers root their strategies on very objective elements. The digital era has provided marketers access to a level of information never imaginable only a few years ago. Managed well, the data can be used to unlock new sources of economic value, provide fresh insights into human behaviour and hold governments to account but what happens when there’s just too way much? The following is a look at the macro and micro changes resulting from data overload.

When the Sloan Digital Sky Survey started work in 2000, its telescope in New Mexico collected more data in its first few weeks than had been amassed in the entire history of astronomy. Now, a decade later, its archive contains a whopping 140 terabytes of information. A successor, the Large Synoptic Survey Telescope, due to come on stream in Chile in 2016, will acquire that quantity of data every five days.

Such astronomical amounts of information can be found closer to Earth too. Wal-Mart, a retail giant, handles more than 1m customer transactions every hour, feeding databases estimated at more than 2.5 petabytes—the equivalent of 167 times the books in America’s Library of Congress (see article for an explanation of how data are quantified). Facebook, a social-networking website, is home to 40 billion photos. And decoding the human genome involves analysing 3 billion base pairs—which took ten years the first time it was done, in 2003, but can now be achieved in one week.

All these examples tell the same story: that the world contains an unimaginably vast amount of digital information which is getting ever vaster ever more rapidly. This makes it possible to do many things that previously could not be done: spot business trends, prevent diseases, combat crime and so on. Managed well, the data can be used to unlock new sources of economic value, provide fresh insights into science and hold governments to account.

But they are also creating a host of new problems. Despite the abundance of tools to capture, process and share all this information—sensors, computers, mobile phones and the like—it already exceeds the available storage space (see chart 1). Moreover, ensuring data security and protecting privacy is becoming harder as the information multiplies and is shared ever more widely around the world.

Alex Szalay, an astrophysicist at Johns Hopkins University, notes that the proliferation of data is making them increasingly inaccessible. “How to make sense of all these data? People should be worried about how we train the next generation, not just of scientists, but people in government and industry,” he says.

“We are at a different period because of so much information,” says James Cortada of IBM, who has written a couple of dozen books on the history of information in society. Joe Hellerstein, a computer scientist at the University of California in Berkeley, calls it “the industrial revolution of data”. The effect is being felt everywhere, from business to science, from government to the arts. Scientists and computer engineers have coined a new term for the phenomenon: “big data”.

Epistemologically speaking, information is made up of a collection of data and knowledge is made up of different strands of information. But this special report uses “data” and “information” interchangeably because, as it will argue, the two are increasingly difficult to tell apart. Given enough raw data, today’s algorithms and powerful computers can reveal new insights that would previously have remained hidden.

The business of information management—helping organisations to make sense of their proliferating data—is growing by leaps and bounds. In recent years Oracle, IBM, Microsoft and SAP between them have spent more than $15 billion on buying software firms specialising in data management and analytics. This industry is estimated to be worth more than $100 billion and growing at almost 10% a year, roughly twice as fast as the software business as a whole.

Chief information officers (CIOs) have become somewhat more prominent in the executive suite, and a new kind of professional has emerged, the data scientist, who combines the skills of software programmer, statistician and storyteller/artist to extract the nuggets of gold hidden under mountains of data. Hal Varian, Google’s chief economist, predicts that the job of statistician will become the “sexiest” around. Data, he explains, are widely available; what is scarce is the ability to extract wisdom from them.

More of everything

There are many reasons for the information explosion. The most obvious one is technology. As the capabilities of digital devices soar and prices plummet, sensors and gadgets are digitising lots of information that was previously unavailable. And many more people have access to far more powerful tools. For example, there are 4.6 billion mobile-phone subscriptions worldwide (though many people have more than one, so the world’s 6.8 billion people are not quite as well supplied as these figures suggest), and 1 billion-2 billion people use the internet.

Moreover, there are now many more people who interact with information. Between 1990 and 2005 more than 1 billion people worldwide entered the middle class. As they get richer they become more literate, which fuels information growth, notes Mr Cortada. The results are showing up in politics, economics and the law as well. “Revolutions in science have often been preceded by revolutions in measurement,” says Sinan Aral, a business professor at New York University. Just as the microscope transformed biology by exposing germs, and the electron microscope changed physics, all these data are turning the social sciences upside down, he explains. Researchers are now able to understand human behaviour at the population level rather than the individual level.

The amount of digital information increases tenfold every five years. Moore’s law, which the computer industry now takes for granted, says that the processing power and storage capacity of computer chips double or their prices halve roughly every 18 months. The software programs are getting better too. Edward Felten, a computer scientist at Princeton University, reckons that the improvements in the algorithms driving computer applications have played as important a part as Moore’s law for decades.

A vast amount of that information is shared. By 2013 the amount of traffic flowing over the internet annually will reach 667 exabytes, according to Cisco, a maker of communications gear. And the quantity of data continues to grow faster than the ability of the network to carry it all.

People have long groused that they were swamped by information. Back in 1917 the manager of a Connecticut manufacturing firm complained about the effects of the telephone: “Time is lost, confusion results and money is spent.” Yet what is happening now goes way beyond incremental growth. The quantitative change has begun to make a qualitative difference.

This shift from information scarcity to surfeit has broad effects. “What we are seeing is the ability to have economies form around the data—and that to me is the big change at a societal and even macroeconomic level,” says Craig Mundie, head of research and strategy at Microsoft. Data are becoming the new raw material of business: an economic input almost on a par with capital and labour. “Every day I wake up and ask, ‘how can I flow data better, manage data better, analyse data better?” says Rollin Ford, the CIO of Wal-Mart.

Sophisticated quantitative analysis is being applied to many aspects of life, not just missile trajectories or financial hedging strategies, as in the past. For example, Farecast, a part of Microsoft’s search engine Bing, can advise customers whether to buy an airline ticket now or wait for the price to come down by examining 225 billion flight and price records. The same idea is being extended to hotel rooms, cars and similar items. Personal-finance websites and banks are aggregating their customer data to show up macroeconomic trends, which may develop into ancillary businesses in their own right. Number-crunchers have even uncovered match-fixing in Japanese sumo wrestling.

Dross into gold

“Data exhaust”—the trail of clicks that internet users leave behind from which value can be extracted—is becoming a mainstay of the internet economy. One example is Google’s search engine, which is partly guided by the number of clicks on an item to help determine its relevance to a search query. If the eighth listing for a search term is the one most people go to, the algorithm puts it higher up.

As the world is becoming increasingly digital, aggregating and analysing data is likely to bring huge benefits in other fields as well. For example, Mr Mundie of Microsoft and Eric Schmidt, the boss of Google, sit on a presidential task force to reform American health care. “Early on in this process Eric and I both said: ‘Look, if you really want to transform health care, you basically build a sort of health-care economy around the data that relate to people’,” Mr Mundie explains. “You would not just think of data as the ‘exhaust’ of providing health services, but rather they become a central asset in trying to figure out how you would improve every aspect of health care. It’s a bit of an inversion.”

To be sure, digital records should make life easier for doctors, bring down costs for providers and patients and improve the quality of care. But in aggregate the data can also be mined to spot unwanted drug interactions, identify the most effective treatments and predict the onset of disease before symptoms emerge. Computers already attempt to do these things, but need to be explicitly programmed for them. In a world of big data the correlations surface almost by themselves.

Sometimes those data reveal more than was intended. For example, the city of Oakland, California, releases information on where and when arrests were made, which is put out on a private website, Oakland Crimespotting. At one point a few clicks revealed that police swept the whole of a busy street for prostitution every evening except on Wednesdays, a tactic they probably meant to keep to themselves.

But big data can have far more serious consequences than that. During the recent financial crisis it became clear that banks and rating agencies had been relying on models which, although they required a vast amount of information to be fed in, failed to reflect financial risk in the real world. This was the first crisis to be sparked by big data—and there will be more.

The way that information is managed touches all areas of life. At the turn of the 20th century new flows of information through channels such as the telegraph and telephone supported mass production. Today the availability of abundant data enables companies to cater to small niche markets anywhere in the world. Economic production used to be based in the factory, where managers pored over every machine and process to make it more efficient. Now statisticians mine the information output of the business for new ideas.

“The data-centred economy is just nascent,” admits Mr Mundie of Microsoft. “You can see the outlines of it, but the technical, infrastructural and even business-model implications are not well understood right now.” This special report will point to where it is beginning to surface.

Source - The Economist

Locating Value In Spreadable Content

This article is heavy but worth the time. There isn’t a marketer out there who doesn’t wish their brand could capitalize on the way information spreads in the digital space. Many have tried and most have failed. One of our problems is that we lack a clear understanding of how value is created and exchanged in social-driven systems. In essence, we’re playing by the wrong rules. The following is a fascinating exploration of an economy based not on money, but on the value generated through social interaction.

As promised in the twitter backchannel during Futures of Entertainment 4, my most recent C3 white paper on non-monetary social economies in spreadable media is finally going public!

Enormous thank yous to the entire C3 team for their enormous brains, and to Joshua Green for his editing-fu.

A few of you caught a preview of it at our annual C3 Partner’s Retreat in May in presentation form, and I’ll be sharing those slides as well in the near future. For the time being, I’ll be posting the executive summary here in three parts, then providing the full paper in a pdf download once I do some much needed reorganizing of this blog.

In last year’s foundational white paper If It Doesn’t Spread, it’s Dead, we argued that participatory culture and the networked information society are making more visible systems of value which are not predicated on the demands of market economies and the exchange of commodities. The digital media landscape is, instead, based on principles of collaboration, collective intelligence, and social participation. Companies looking to succeed online should find ways to engage consumers and audiences that respect their practices of community building and recognize the role consumers play in the production of value online.

Building on that work, this paper provides a deeper, more nuanced and systematic account of how value is created and exchanged in socially driven systems. To do so, it compares the ways value is created in systems that privilege social exchange and those which privilege monetary exchanges. Looking at the creation and circulation of value in monetary and non-monetary systems, this paper suggests ways we might more clearly understand how media moves across and between these systems as it spreads. Understanding the way content moves between these systems provides insight into how to develop brands online, court communities, and produce successful digital media strategies that can address both the social and monetary demands of mixed economies.

Some of the most successful and innovative new media companies and projects — YouTube, Wikipedia, Flickr, Facebook, Twitter, and even Google — rely on content and data produced through collective efforts of many networked individuals and the relationships they build with one another. Kevin Kelly of Wired Magazine, in discussing the work of Clay Shirky, identifies four categories of collective production, circulation and information gathering behavior online: sharing, cooperation, collaboration, and collectivism. As more companies move into spaces predicated upon and shaped by principles of sharing and collaboration, we are seeing the emergence of mixed economies and models. Sites like Facebook, YouTube, or Hulu, for example provide services to users at no monetary cost, and in exchange monetize attention, labor, and the data of those users through more indirect means such as advertising. These companies, however, face challenges in responding to audience practices that run counter to expectations about media use. In some cases, this may result in “diminishing the level of trust within participating parties, and perhaps even wearing away the mechanisms which insure the legitimacy of economic exchanges” (Jenkins et al. 2008).

These challenges are the result of fundamental misunderstandings between the value is created within the socially driven circulation of content by consumers and the market-driven interests of media companies and content owners. We must therefore find new ways to understand the shifting nature of meaningful and fair interactions between consumers, producers, media companies, and advertisers in the contemporary media landscape. To do so, it becomes vital to understand the nuances and principles behind how different types of social value are generated online.

Gift Economy and the Fallacy of “Free”

A striking aspect of social sharing and collective activities online is that the participants gladly contribute their labor, creative content, and time without expecting any sort of monetary payment in return. People are uploading images under Creative Commons licenses on Flickr to be shared and used by all, or contributing their expertise and time to articles on Wikipedia, or writing fanfiction and editing fan videos to be enjoyed by the community at large, free of cost.

The gift economy provides a better way to frame and understand the types of exchanges that are increasingly being labeled “free” under the currently popular discourse of the “freeconomy,” or what Wired editor Chris Anderson has called “the economics of giving it away” (Anderson 2008). To understand how media spreads online, it is especially important to understand that whether paying for a good or service, or being given one with social obligations tied, both are transactions which involve the exchange of some form of value. It is not a matter of one having a cost and while the other doesn’t; Both exact a form of “cost” in return, though what is deemed a valuable and acceptable form of “payment” in each system is different. Many systems of sharing, cooperation, and collaboration online generate value through creating mutual ties and reciprocal expectations and social “payments.” Like the offer of coffee from your neighbor, these “free” content producers and laborers actually do expect a form of (social) payment in return for their work.

To do business online, we must recognize that nothing is absolutely free, only things that operate under systems of exchange in which money is not the main or immediate form of value exchanged. Value production and exchanges online involve a complex web of different transactions, through different systems of value that are codependent. Sites like Facebook and YouTube could not generate revenue, for example, if users were not using the sites to create social worth for themselves, and in the process producing the data and attention that advertisers desire. The framework of the gift economy thus gives us a way to analyze social worth as a core value. By acknowledging that what is happening is not a “giveaway” but another form of exchange operating under a different set of standards and regulations, we can begin to examine what those standards and regulations are, and how they are formed and negotiated, and how they can be most useful.

Spreadable Media Across Market and Non-market Exchanges

To truly begin to understand how media spreads, we must come to understand how it comes to move across social systems, cultural forms, technological platforms, and modes of market and non-market exchange. All things used in exchanges — be they physical goods or more ephemeral things such as services, information, or experiences — carry three basic forms of interrelated value: use-value, symbolic-value, and exchange value.

  • Use-value: An object’s use-value is most plainly the material characteristic of an object, that does not mean it isn’t subject to social or conditional regulation.
  • Symbolic-value: The second dimension of value comes from an understanding of consumer culture. Symbolic-value is what differentiates goods or services that have similar use-values. Brands, for instance, are the bearers of symbolic-value.
  • Exchange-value: Finally, exchange-value, is the translation of a good’s use-value and symbolic-value within a system of exchange. A good’s potential use-value to someone else determines the value that it can be

These then are the three key dimensions of value present in any form of exchange, whether that be one regulated by money and market logic or by social relations. It is therefore not a question of whether or not a form of exchange has value, but of the roles each dimension of value has in shaping the terms of the exchange.

The Social Dimension of Market and Non-Market Exchanges

The use-value and symbolic-value of an object is determined by its social context then translated into a monetary exchange-value. In a non-market gift exchange, it is the opposite wherein the context — the social relations — play the primary role. Rather than a question of whether something costs money or not, it is more a question of where the core value is determined, and for what ends.

There are three general distinctions that can be identified between market and non-market systems of exchange, as indicated in the table below.

Impersonal versus Socially Regulated Exchanges
Market exchanges, generally, are impersonal while non-market exchanges are socially regulated. The use of money as the primary token of value in market exchanges is precisely what makes them impersonal. The nature of the relationship between the parties involved in the exchange does not have an impact on the value of the good or service being exchanged in a market exchange. On the other hand, the value of an exchange in a non-market setting is heavily determined by the relationship between the people involved in the exchange.

Discrete versus Ongoing Transactions
Since market-exchanges are governed by asocial relations, they are also discrete in the sense that they don’t create an ongoing relationship. That is, market-exchanges are oriented towards acquiring the goods available for the cash you have; their purpose is not to make friends, or create an ongoing relationship. Non-market exchanges, on the other hand are engaged in “in order to evoke an obligation to give back a gift, which in turn will evoke a similar obligation — a never-ending chain of gifts and obligations” (Kopytoff 2006: 69). The completion of an exchange in a market-exchange situation finalizes and marks the end of the transaction. In a non-market situation, the idea is to build an ongoing social relationship rather than to simply exchange goods and obtain the “counterpart value.”

Absolute Exchanges versus Legacies of Exchange
A purchase from a vendor demands no further obligations after payment because the exchange is ?nal and the producer of the good exchanged has no further say in how it can be used. In contrast, a non-market exchange creates a legacy of exchange where even when someone has given something, they have some expectations and claims to that gift and how it is used. In a system of market exchange, the symbolic-value is part of the goods and services being exchanged. Any copy of a book purchased from Amazon has the same symbolic value as any other copy. As long as what is exchanged is identical, so then is the value because the symbolic-value and the use-value is also identical. In non-market transactions, such as gift giving, the symbolic-value is tied to the actual exchange so that identical gifts given under different circumstances have different values. A book given to you by a close friend therefore has the same use-value as any other copy, but a totally different symbolic-value that is generated by the mutual ties expressed in the exchange.

Companies that try to make money from user-generated content must recognize that their users still feel some sense of ownership over the content they create, even after they’ve agreed to hand over their data and content in exchange for use of the service. Companies that fail to recognize this run the risk of alienating their user-base and leaving people feeling exploited, rather than served.

Conclusions: Locating Value and Courting Communities

Final Principles:

  • Within market exchanges, things enter the transaction with a set value. In non-market exchanges, however, the value comes out of the transaction. So the value is actually created through. and comes out of, the context of the exchange, rather than being set before the good enters it.
  • The difference, then, between gift and commodity exchange is not that one is socially regulated while the other is economically or rationally regulated, but rather the speci?c rules and regulations that come into play. The differences are in how these regulations are deployed, and the relative role of the context and terms of the exchange itself rather than the contents of the exchange.
  • The networked and visible participatory practices online requires media producers recognize both market and non-market systems of exchange and the types of value and worth produced in order to engage audiences online.
  • When we seek to build businesses around users generated content, or when we’re trying to engage in social media campaigns, or when we see violations of IP, all activities that are now becoming common in any media brand or property. We can’t simply take pieces of different systems of value and cobble them together and hope for the best, nor can we simply take one system and place it within the architecture of another.
  • It does a potential disservice to media properties to simply apply the regulations of control from market systems onto non-market ones, such as in the case of DMCA takedown sweeps that remove content which not only fit within the boundaries of fair-use, but also stop audience activities that potentially generate more marketing value than cause damage.
  • Ultimately, the essence to being able to court a community and build an enduring relationship with your brand requires an understanding what kind of system your fans and consumers think they’re in. That is to say, in trying to create a system that can be mutually beneficial, and generate both market value and social worth, you must fully acknowledge and honor the parameters of both systems of exchange.
Source - CanaryTrap.net

Social Media Framework

The rules of brand engagement have changed. For one, evolving media platforms require us to think differently about campaign lifecycles. It’s no surprise that our strategy is now shaped by the environments of our communication. Interestingly, some of these evolving media platforms allow for a number of lifecycle variations within the same platform. Come take a look at three different conversion models within social media.

Many of the clients I've been consulting for have interesting notions about social media. One common idea is that social media is an ongoing effort and doesn't conform to normal lifecycle rules.

The Social Media Lifecycle Framework

I would agree that social media initiatives are different than many other campaign models, but I do think most initiatives deliver a higher ROI when the following lifecycle framework is considered & followed.


Conversion Funnel

http://thejordanrules.com/IMG/SM_Lifecycle_2.png

Monologue: A broadcast form of communication that works well for creating initial awareness. Before broadcasting your message, be sure to craft your message by listening to what people are already saying about you.

Conversion A: Converts users who have simply heard of you, to users who want to have a conversation with you.

http://thejordanrules.com/IMG/SM_Lifecycle_4.png

Conversation: A participatory form of communication that works well after you've created a community. Not everyone in you're community will feel comfortable engaging in conversations, which means your community needs to be large enough to support multiple levels of participation.

Conversion B: Converts users who are participating in conversations, to those who will take your message & use it to influence others.

http://thejordanrules.com/IMG/SM_Lifecycle_3.png

Influence: An extended form of conversation that works well when influential community members believe your message. Influential communication is effective at achieving perfect conversion.

Perfect Conversion

Conversion C: Fulfilment of the end objective. This is where the user is converted to customer.

Advocacy: Customer advocacy may occur if users expectations have consistently been met or exceeded. This refers to the entire customer experience; not just through social media. At this stage, customer advocacy can occur at any time.

Amplification Funnel

http://thejordanrules.com/IMG/SM_Lifecycle_5.png

Customer Service/ Support: A system that ensures customers are satisfied with their purchase.

Conversion D: Converts users who are satisfied, to users who are engaged with your comity & are actively seeking further engagement.

http://thejordanrules.com/IMG/SM_Lifecycle_6.png

Community Engagement: A system that allows users to interact & share information about being your customer. (i.e. A Burger King campaign connecting personal trainers with Burger King customers. This type of campaign could be used to connect frequent customers with the resources necessary to 'burn-off' their favourite Burger King meals.)

Conversion E: Converts engaged community members to participants within the conversion funnel of a product extension.

http://thejordanrules.com/IMG/SM_Lifecycle_7.png

Extensions: This can be considered the beginning of a new conversion funnel or the end of the current amplification funnel. This is where customers learn about something else you sell. (i.e. A digital agency that also offers search strategy.)

You can now begin the life cycle again.

Source - The Jordan Rules


Campaigns or Platforms?

One of the greatest challenges for marketers today is balancing older marketing strategies with the realities of our current communication landscape. On one hand, we know that shouting our brand proposition from the mountaintops just doesn’t cut it anymore. Having said that, traditional campaigns are still a critical aspect to any marketing plan. On the other hand, we realize the importance of bringing our brand propositions to life in ways that create tangible value to consumers, yet these tactics tend to impact a smaller group of people. Decisions. Decisions.

There’s been a lot of debate in recent weeks about whether marketers should be focusing on campaigns or platforms online. If I had to pick, I’d pick platforms. However, the good news is it’s not a zero sum scenario.

The benefits of platforms — scalable growth vs one-off activity, basis for long-term relationships, and depth of interaction and connection with the brand to name a few — mean that they open up massive opportunity for long-term marketing success.

However for platforms to reach their potential, they can still use the galvanizing force of campaigns to build awareness and activate the community. What changes is the campaign model. The nature of the platforms offer up amazing possibilities for activating the platforms themselves while still communicating brand values through the nature of that activation.

Here’s three examples of that approach in action:

Example #1 - Nike+ Men vs Women

From a marketer’s perspective, the most famous brand platform on the web is still Nike+. So it’s a very good place to start when talking about campaigns vs platforms.

The platform is obviously central to Nike+. Nikeplus.com lives at the heart of the product, providing the statistical richness, community connection, personal goals and group challenges that have made it such a compelling example of what the future of marketing might look like.

However, Nike+ “Men vs Women” is a great example of how campaigns and platforms are not exclusive, but rather complementary.

Men vs Women was an actual challenge on the Nike+ community, but one made larger than life by an integrated campaign including OLM, print, outdoor and even an athlete-laden TVC featuring the likes of Roger Federer and Fernando Torres.

With Men vs Women, Nike was able to excite and engage their existing platform community, while elevating and hero community features and real activity into their product and brand communications.

The platform lives at the heart, but the campaign activates it.

Example #2 - McDonalds McWorld x Star Wars

In 2008 McDonald’s launched their McWorld virtual world.

Your experience with virtual worlds may be the boom and bust of Second Life, but virtual worlds are absolutely massive with kids today. And McDonald’s saw a real opportunity to build not just a HappyMeal.com microsite, but a true platform.

Although anyone can join HappyMeal.com and play in the virtual world, McDonald’s smartly tied it’s offline marketing to it’s online platform. For every new Happy Meal promotion, a code is provided along with the physical toy that traditionally comes with the Happy Meal. These codes unlock special items or areas in the Virtual World.

For example, when McDonald’s launched their Clone Wars Happy Meal toys, those toys then unlocked a Star Wars section in the Virtual World, with Jedi quests and exclusive Jedi characters.

This integration with their offline campaigns helps keep the platform fresh with topical content, as well as helps drive membership in the platform itself.

Example #3 - Skittles “Mob the Rainbow”

The first two examples are of brands activating around their own platforms. This time let’s use an example of a brand using a 3rd party platform for campaign activation.

Skittles is one of the biggest brands on the web, with over 3.6 million fans. With their Mob the Rainbow social campaign, they’ve come with up an innovative way of harnessing those fans into a campaign force, social media Flash mob style.

The idea is their “mob” of fans are given fun and wacky tasks to compete together. And in doing so, Skittles is not only going to engage their fans with their brand, but create lots of opportunities for that activity to end up in their fans Activity Feeds or even drive word of mouth, helping build brand affinity and their fan base further.

A new model of platform-centric campaigns

The above examples show how we can still do campaigns online, but by centering around these platforms, we can at once both express and fulfill a value proposition. e.g. if you get Nike+ you can participate in fun challenges to help you get fit. If you play in McWorld, buying a Star Wars Happy Meal unlocks exclusive Jedi action just for you.

In the offline / broadcast world, advertising can only express a value proposition and it’s often quite illusory and intangible (use this body spray, get a beautiful girl…not). In the online world, we can create these platforms and communities, and use campaigns to activate them and provide real value (get fit, play exclusive games).

The benefit of these campaigns is they are not just driving brand awareness, they are activating their existing platform communities and providing new value to them, as well as driving further membership, creating long-term value for the brand.

We start to then move away from building bespoke campaign experiences every time, which require constant traffic driving for no long-term benefit:

Campaign > Microsite model


To campaigns that feed and build equity in a platform, helping grow a long-term user-base while activating and providing value to the existing audience:

Campaign > Platform model


In this respect we can often end up with the platform living at the core of the marketing effort, with brand and activation layers surrounding it, but refreshing over time.

This is obviously a simplification, there are lots of scenarios where microsites or one-off destination support will still be the right choice for a campaign, or where we aren’t looking to activate around brand platforms.

But as a way of looking past using digital media as simply another broadcast channel to support a brand messaging campaign, and towards using the unique interactive properties of the web to engage and provide value to customers and brand fans over a long-term period, this is a type of campaign and marketing model I think we will start seeing a lot more of in the coming years.

Source - Supercollider

2.3.10

A Marketer's Guide To Behavioural Economics

Long before behavioral economics had a name, marketers were using it. Understanding exactly how small changes to the details of an offer can influence the way people react to it is crucial to unlocking significant value—often at very low cost. Yet despite marketing’s inadvertent leadership in using principles of behavioral economics, few companies use them in a systematic way. This article, we highlight four practical techniques that should be part of every marketer’s tool kit.

Long before behavioral economics had a name, marketers were using it. “Three for the price of two” offers and extended-payment layaway plans became widespread because they worked—not because marketers had run scientific studies showing that people prefer a supposedly free incentive to an equivalent price discount or that people often behave irrationally when thinking about future consequences. Yet despite marketing’s inadvertent leadership in using principles of behavioral economics, few companies use them in a systematic way. In this article, we highlight four practical techniques that should be part of every marketer’s tool kit.

1. Make A Product's Cost Less Painful

In almost every purchasing decision, consumers have the option to do nothing: they can always save their money for another day. That’s why the marketer’s task is not just to beat competitors but also to persuade shoppers to part with their money in the first place. According to economic principle, the pain of payment should be identical for every dollar we spend. In marketing practice, however, many factors influence the way consumers value a dollar and how much pain they feel upon spending it.

Retailers know that allowing consumers to delay payment can dramatically increase their willingness to buy. One reason delayed payments work is perfectly logical: the time value of money makes future payments less costly than immediate ones. But there is a second, less rational basis for this phenomenon. Payments, like all losses, are viscerally unpleasant. But emotions experienced in the present—now—are especially important. Even small delays in payment can soften the immediate sting of parting with your money and remove an important barrier to purchase.

Another way to minimize the pain of payment is to understand the ways “mental accounting” affects decision making. Consumers use different mental accounts for money they obtain from different sources rather than treating every dollar they own equally, as economists believe they do, or should. Commonly observed mental accounts include windfall gains, pocket money, income, and savings. Windfall gains and pocket money are usually the easiest for consumers to spend. Income is less easy to relinquish, and savings the most difficult of all.

Technology creates new frontiers for harnessing mental accounting to benefit both consumers and marketers. A credit card marketer, for instance, could offer a Web-based or mobile-device application that gives consumers real-time feedback on spending against predefined budget and revenue categories—green, say, for below budget, red for above budget, and so on. The budget-conscious consumer is likely to find value in such accounts (although they are not strictly rational) and to concentrate spending on a card that makes use of them. This would not only increase the issuer’s interchange fees and financing income but also improve the issuer’s view of its customers’ overall financial situation. Finally, of course, such an application would make a genuine contribution to these consumers’ desire to live within their means.

2. Harness The Power Of A Default Option

The evidence is overwhelming that presenting one option as a default increases the chance it will be chosen. Defaults—what you get if you don’t actively make a choice—work partly by instilling a perception of ownership before any purchase takes place, because the pleasure we derive from gains is less intense than the pain from equivalent losses. When we’re “given” something by default, it becomes more valued than it would have been otherwise—and we are more loath to part with it.

Savvy marketers can harness these principles. An Italian telecom company, for example, increased the acceptance rate of an offer made to customers when they called to cancel their service. Originally, a script informed them that they would receive 100 free calls if they kept their plan. The script was reworded to say, “We have already credited your account with 100 calls—how could you use those?” Many customers did not want to give up free talk time they felt they already owned.

Defaults work best when decision makers are too indifferent, confused, or conflicted to consider their options. That principle is particularly relevant in a world that’s increasingly awash with choices—a default eliminates the need to make a decision. The default, however, must also be a good choice for most people. Attempting to mislead customers will ultimately backfire by breeding distrust.

3. Don't Overwhelm Consumers With Choice

When a default option isn’t possible, marketers must be wary of generating “choice overload,” which makes consumers less likely to purchase. In a classic field experiment, some grocery store shoppers were offered the chance to taste a selection of 24 jams, while others were offered only 6. The greater variety drew more shoppers to sample the jams, but few made a purchase. By contrast, although fewer consumers stopped to taste the 6 jams on offer, sales from this group were more than five times higher.1

Large in-store assortments work against marketers in at least two ways. First, these choices make consumers work harder to find their preferred option, a potential barrier to purchase. Second, large assortments increase the likelihood that each choice will become imbued with a “negative halo”—a heightened awareness that every option requires you to forgo desirable features available in some other product. Reducing the number of options makes people likelier not only to reach a decision but also to feel more satisfied with their choice.

4. Position Your Preferred Option Carefully

Economists assume that everything has a price: your willingness to pay may be higher than mine, but each of us has a maximum price we’d be willing to pay. How marketers position a product, though, can change the equation. Consider the experience of the jewelry store owner whose consignment of turquoise jewelry wasn’t selling. Displaying it more prominently didn’t achieve anything, nor did increased efforts by her sales staff. Exasperated, she gave her sales manager instructions to mark the lot down “x½” and departed on a buying trip. On her return, she found that the manager misread the note and had mistakenly doubled the price of the items—and sold the lot.2 In this case, shoppers almost certainly didn’t base their purchases on an absolute maximum price. Instead, they made inferences from the price about the jewelry’s quality, which generated a context-specific willingness to pay.

The power of this kind of relative positioning explains why marketers sometimes benefit from offering a few clearly inferior options. Even if they don’t sell, they may increase sales of slightly better products the store really wants to move. Similarly, many restaurants find that the second-most-expensive bottle of wine is very popular—and so is the second-cheapest. Customers who buy the former feel they are getting something special but not going over the top. Those who buy the latter feel they are getting a bargain but not being cheap. Sony found the same thing with headphones: consumers buy them at a given price if there is a more expensive option—but not if they are the most expensive option on offer.

Another way to position choices relates not to the products a company offers but to the way it displays them. Our research suggests, for instance, that ice cream shoppers in grocery stores look at the brand first, flavor second, and price last. Organizing supermarket aisles according to way consumers prefer to buy specific products makes customers both happier and less likely to base their purchase decisions on price—allowing retailers to sell higher-priced, higher-margin products. (This explains why aisles are rarely organized by price.) For thermostats, by contrast, people generally start with price, then function, and finally brand. The merchandise layout should therefore be quite different.

Marketers have long been aware that irrationality helps shape consumer behavior. Behavioral economics can make that irrationality more predictable. Understanding exactly how small changes to the details of an offer can influence the way people react to it is crucial to unlocking significant value—often at very low cost.

Source - McKinsey Quarterly

1.3.10

Back To Basics

There’s no love for the new and flashy here. Although we share a lot of content about emerging communication vehicles we also like to include critical commentary. The following article argues that marketers shouldn’t waste their time with strategies fixated on "creating conversations". Instead of relying on the unproven benefits of social media, marketers need to get back to their roots.

Before you move some of your surviving budget into a spiffy new social-media campaign and give up control of your brand to "the conversation," consider that you might be replacing your old-fashioned, excruciatingly commercial marketing with newfangled irrelevant nonsense.

At least that's what I get from the Edelman 2010 Trust Barometer, which found that only 25% of people it polled see friends and peers as credible sources of consumer and business information (that's a decline of nearly 50% since 2008). Folks also think less of their peers as credible spokespeople. Should these findings cause worry for the almost four out of five companies planning to take TV ad money and put it into social?

I hate to go all Wilford Brimley on it, but hell, yes.

I know all too many CMOs who find criticizing the social-media lobby something like debating the dialectic with avowed Marxists -- you're never right when the very premise of your existence is wrong, and it gets old being told that your visceral concerns are a result of your failure to perceive class struggle or to tweet enough. Nobody with responsibility for a bottom line has ever felt comfortable with social media as a replacement for traditional advertising. Arguing that consumers "buy more" if you "sell less" just smacks of another five-year economic plan for the glorious motherland. Notwithstanding the allure of cost savings and glib convenience that consumers will sell things to themselves, there's not much goodwill built up for the stuff inside most corporate-marketing departments.

It's altogether possible that people didn't initially rush to social media because they found their peers so compellingly helpful, but rather that they ran away from commercial speech because advertising had proven to be so irritatingly useless. Conversational media could never be anything more than secondary, anecdotal research on products and services, along with partially reliable color commentary, but that's an accomplishment when compared to the predictably inane or dishonest content we usually put into ads. Want proof? Contrast a random chat-room conversation about a product with the last assortment of Super Bowl spots.

Maybe consumers found the anonymous crowd simply less bad than branded communications? This is my theory, anyway, and not a conclusion of the Edelman study, although when the research also says that "traditional authorities and experts" have regained consumer trust, it suggests to me a broader, perhaps maturational trend is under way.

Even the best game of telephone requires that somebody start it off by saying something, and it's up to CMOs to make sure that brands do so by contributing content that is credible, authentic and useful (and not just some emotional or associated brand attribute). We can still be wildly creative, but the crowd can't invent truth ... it is only a litmus test and connector. And the ultimate truth of brands is that we promote them so people will buy them -- not just think fondly -- so maybe the purpose of commercial speech needs to get back to giving them reasons to do so?

If we renewed our commitment to selling based on credibility, authenticity and utility, maybe people would trust what we tell them, respect our corporate reputations, and give us their purchasing loyalty. Maybe if we stopped thinking we can give up responsibility for why they should buy, and start acting like David Ogilvy and sell to them once again, they'd find comfort relying on our communications as well as the subsequent iterations through the social echo chamber. This might unleash the ultimate promise of social and empower people to know, discuss and change the way businesses function, not just blather on about marketing blather.

Without it, I suspect that trust in the recommendations of the anonymous crowd will continue to decline, because its conclusions will be no less clueless than those of the individual consumers who contribute to it. It's no accomplishment to detach conversation from the reasons why brands would spend money to talk to people, and more conversation about less content will never qualify as believable or trustworthy. I think the Edelman research reveals that consumers are figuring this out.

It really doesn't matter how successful we are at getting people to click, forward or otherwise waste their time with even the most brilliant social-media campaign or tactic. Engaging with branding is no substitute for engagement with brands.

Source - AdAge