A couple of news articles were posted in the past week highlighting the growing recognition that social media has strategic value and noticing that most CEOS don’t get involved in social media.
BBC News published an interview with Google executive Sebastien Marotte describing recent research into social media for business. Findings included:
81% of high-growth businesses are using social tools to assist that growth
75% of senior executives said that social tools will change business strategy
TheStrategyWeb posted an article asking if social media is going corporate. They highlighted recent research that concluded:
70% of Fortune 500 CEOs cannot be found on any form of social media
less than 10% of CEOs participating on Facebook, Twitter and co
Is that a problem?
Richard Branson is an example of a CEO who tweets a lot. And the tweeting is consistent with his reputation. He has always used media to promote what he does, whether for commercial, personal or charitable gain. Steve Jobs didn’t tweet. And was anybody surprised?
Social media can offer benefits in two ways:
Communications to try and increase business*
Communications to try not to lose business*
* Business as in whatever rocks your boat – sales, contacts, reputation, knowledge, ego…
Social media is just another channel for the conversation. Albeit faster and more visible on a global scale. Beneficial? Absolutely! But it doesn’t mean everyone in the organisation needs to be directly involved.
Better to have the right personality tweeting regardless of their seniority in the organisation. That’s the charm of social media – it cuts through hierarchies. Bemoaning the lack of CEOs tweeting is a call for the old ways of working.
Teleporting is to SL Advertising What the Channel Clicker is to TV Ads
The standard means of travel in SL is point-to-point teleportation, near-instantaneous transit from one location to another. P2P teleporting renders billboards and most other location-based advertising useless
Advertisers want to hang on to your eyeballs. In the old days of a few TV channels, it was considered an easy task – insert ads between the TV programmes. As the number of channels increased, we all became channel hoppers. Adverts start and off we click. In Second Life, the clicker is replaced with the teleport. People do a ‘beam me up Scotty’ and go direct from one destination to the other, making it hard to insert ads along the way.
But the Internet is no different. The only successful placement of ads has been discretely embedded alongside search results and web parts. The indiscrete ones are so in your face they cause an instant channel hop/teleport/link to another digital location, be it 2D web or 3D virtual world. And increasingly we hop direct via our social networks, receiving a message or shared link from someone we trust. Ads in their traditional format will struggle to succeed in this environment. It is telling that a non-advertising company (at the time) – Google – invented the current profitable form of web advertising. Advertisers did not believe a simple text box would work…
Death by Green Dots (or lack thereof)
“Every avatar in-world is represented by a green dot…Any noticeable clump of green dots attracts more dots, and as those grow, more follow– a feedback loop colloquially known as “the green dot effect”. Second Life’s most successful entrepreneurs sustain this flurry of dots by holding constant events, giveaways, and games, and even go so far to pay Residents to visit. Amazingly, corporate marketers have been slow to replicate these homegrown strategies.”
As GigaOM highlights, the challenge to advertisers here are good old fashioned network effects – dots attract dots. And where else do we see network effects? Everywhere in Web 2.0, be it MySpace, Facebook, Twitter, Bebo or any other social site. All are affected by exponential growth or complete lack of growth, there’s little in between. To sustain interest requires effort. It’s not just advertisers who are affected by this phenonemon. Journalists and other professions are also struggling to compete against newcomers often dismissed as amateurs but who offer more to their audience.
A Failure of Imagination
“To play in Second Life, corporations must first come to a humbling realization: in the context of the fantastic, their brands as they exist in the real world are boring, banal, and unimaginative”
Second Life is not the only place on the web that makes traditional brand advertising seem boring and bland. The same is true of every single site that has enabled people to have their say, contribute and be creative. Look at the videos on YouTube, compare the mash-ups being made by individuals compared to professional speeches, fan pages on Facebook versus staid corporate web sites. None of them remotely resemble traditional marketing designed for mass consumption and yet they attract viewings by the million.
Here’s a simple example. When United Airlines lost a passenger’s luggage, the passenger made a song and posted it to YouTube. It achieved 3.5 million views in 10 days. Few adverts achieve such a voluntary audience. The net effect – it wiped 10% ($180 million) off the value of United Airlines. But full marks to them, apparently United Airlines are now going to use it as part of their training.
These marketing lessons dished out to companies trying to succeed in Second Life are equally relevant to companies trying to succeed in this new Web 2.0 world that the Internet has become.
To summarise what brands need to do to in Web 2.0:
Find ways for your product or service to become part of the story. Product placement in a film trumps an advert in the coffee break. Sometimes, the ads in and around the search results are the result you were looking for. They succeed because they look part of the search results (i.e. mostly text), rather than trying to bling their way annoyingly into your now disrupted attention.
Reinvent your marketing department. Stop outsourcing work to agencies and staring at campaign statistics. Learn from individuals who have leveraged Facebook, MySpace, Twitter and others to create an incredible personal brand. Apply their lessons and understand it will take effort to achieve those network effects. (It usually involves a story…)
Be prepared to not understand what someone is proposing but let them do it anyway. Imagination and creativity are valuable commodities, don’t clip their wings so much. I would go so far as to say, if your marketing department doesn’t frighten you with their ideas, they aren’t good enough.
And having written this, I’m guessing less than 5% of companies will follow the advice. More may try but few will actually follow it to the letter. Instead they will customise the advice to make it feel safer, and most will fail because they failed to change. Here’s a simple example…
Reverse Marketing – Start with the discount and increase the price of products
In the real world, when new clothes come out they are sold on the high street at full price. Then, as the season ends or a new collection is due, the clothes go on sale at a fraction of their original price.
In Second Life, a virtual retailer lauches new clothes on sale for 48 hours (L$99, about $0.36) before raising them to full price (L$299, about $1.11) where they remain for as long as she wants to sell them. It is the reverse situation. She doesn’t actually call it a sale, rather a promotion. To get the promotion, you have to be a member of her group and will receive a notice when new clothes are available. Within seconds of a notice being issued, her shop will be so packed with avatars nobody else can teleport in. I am guessing more than 80% if not more of her sales of new items come from within that 48 hr period. Without the promotion, far fewer would bother to turn up on a regular basis and check out new items. The price is cheap enough many automatically buy regardless of whether they really want the item, knowing it is the only time it will be available at such a large discount.
Imagine if a retail shop could be bothered to do the same. Some do offer special store discounts on occasion, but usually for no more than 20%. It needs to be a better deal and a systematic approach to attract customers to buy on a regular basis. Create a Fan page on Facebook to announce promotions for new collections, with 40%* discounts during a 24 hour period when the stores are open. And make it a regular activity, not an occasional event. Good or bad for business? (* I’m guessing here the mark-up is more than 40%)
Side note: To embed the video above, I had to go find it on YouTube. The version included in the BBC article appears to be a copy that doesn’t let you embed it anywhere else. (They do include a ‘video courtesy of YouTube’ reference.) A blogger wouldn’t make it so difficult to share…
There was a great example of marketing 101 this week in the tech industry, when Michael Arrington announced the TechCrunch50 conference, coincidentally clashing with the rival DEMO conference. The news dominated Techmeme for the day and gave us all a break from the Are they? Aren’t They? mating ritual going on between Microsoft and Yahoo. It reminded me of a talk given by Virgin at Cambridge University a couple of years ago, describing their approach to PR – taking aim at rival and established incumbent British Airways:
“Picking on a very public competitor guarantees publicity. Lots of news coverage means more people get to hear about what you are doing.”
Apparently the clash in dates really is a coincidence, due to availability of conference facilities during the Fall. But imagine if TechCrunch and DEMO sat down and agreed to keep the conferences apart, one running in the Fall and one in the Spring. How many headlines would have appeared on Techmeme? I’d wager not as many as the shouting fest that took place this week.
Since setting up in business, one of the best pieces of advice I’ve been given was: “Pick a rival.” If you claim you are the only company doing what you do, people will wonder why it needs doing. There’s no better way to validate your idea than to show that others are doing it too, and then show why what you’re doing is better. Hat tip to Mr Arrington. It’s not very nice to say your competition should go away and die, but it is marketing 101.
The Gadget Show has just conducted an experiment. Two presenters were tasked with seeing how easy it is to get an audience on the Internet. One (Presenter A) was assisted by a specialist viral marketing firm. The other (Presenter B) just had a man with a camera.
Professional Approach: The marketing company produced an interactive online game and got Presenter A to produce a supporting video (that involved getting undressed). The game was seeded on various gaming and social networking sites. By the end of the experiment, it had managed over 200,000 hits.
Amateur Approach: Presenter B, after much faffing around, recorded a video of him doing The Caterpillar Dance in public, across pavements and pedestrian crossings. The video was posted up on YouTube. By the end of the experiment, it had managed over 1,000,000 hits and at one point was the 7th most viewed video on YouTube.
Like it or not, people will watch crap and share it with their mates. Marketers take note 🙂 You can read all about it here – Internet Star
Apologies, my blogging has been abysmal lately. I’m back to my usual trick of over-committing on the work front and wiping out all spare hours in the day. I remain in complete admiration of those who manage to blog continuously on a daily basis. I struggle to find time to sleep sometimes…
Plenty of people have blogged about this already, but McKinsey has published a global survey on how businesses are using Web 2.0 (free registration required to view). The element that I found most interesting was exhibit 3 (on page 3) – Popular Bets. When asked the question, ‘Is your company investing in any of the follwing Web 2.0 technologies or tools?, web services came out a clear winner (80% responding ‘using or planning to use’ and just 6% responding ‘not under consideration’). Nothing else made it over 50%. The next two were collective intelligence (48% using/planning and 26% not considering) and peer-to-peer networking (47 % using/planning and 28% not considering. For the remainder of the list, that included social networking, RSS, podcasts, blogs and wikis, more respondents answered ‘not considering’ than ‘using/planning’. And bottom of the list… mash-ups. Despite their popularity on the Internet, only 21% of those businesses surveyed responded with ‘planning/using’ and over 50% are not even considering their use.
On a separate, but somewhat related theme, there is a great article describing in detail the challenges facing the media/publishing industry – Bob Garfield’s Chaos Scenario 2.0. It’s a long post but well worth the read. An interesting comment:
“…What is certain is that the Brave New World, when it emerges, will be far better for marketers than the old one. What is nearly as certain is that many existing ad agencies and some media agencies will be left behind. And the reason they will be left behind is their stubbon notion that they can somehow smoothly transition to a digital landscape…”
Makes you wonder how many of those ad agencies agree with the views expressed by many businesses in the McKinsey report – that most Web 2.0 technologies are not yet worth consideration.
The article goes on to give an example of what the Brave New World might look like:
“…consider for a moment Nike Plus, the joint project of Nike and Apple in which the iPod becomes a tool for monitoring running pace and style. The website combines utility, community, information and, of course, online sales. It is the marketing program, the CRM engine and the store. The sole function of the TV commercial… is to drive traffic to the site.”