Author Archives: alexvdm

Why Apple is losing the smart phone war – and Steve’s secret plan about it

Posted on October 25, 2010 | 5 Comments

(disclaimer: I have no inside information from Apple – just thought it would be a good title – skip this post if you now feel deceived, sad, or angry at me)

As you may have seen: share of Android OS is gaining ground, Apple is losing share with recent acquirers of phone:

As pointed out in an earlier post about the ‘scary iPad’, the PC and now smart phone markets is a two-sided market. Demand for services (consumers) need to meet the other side (supply of software or applications).  Those markets are really tough to crack, because they will drag you down when you are subscale (not enough demand to meet the supply or vice-versa).  Yet, once you have reached a certain ‘critical mass’, the exact opposite force will happen: the forces that were dragging you down are now moving your business up, as suppliers of apps find huge crowds and crowds can gather for almost any need. Eventually, those markets become monopolies (like Microsoft almost is with Windows) or almost (read: duopolies). This is why the iPad was built on the ‘iOs’ of the iphone: to ensure the availability of a ‘base supply’ of apps to the first buyers.

Apple’s iPhone strategy is simple. Build a vastly superior product, open up the app market with a simple monetization tool for developpers, and off you go.

There are two issues with this strategy:

  • Competition catches up eventually
  • They have one product: an iphone, positioned in the top segment of the market – not enough to maximize network effects

The evidence of the first point is clear. Type ‘Samsung Galaxy S vs iphone 4′ in Google and you will understand that the game is open. This is clearly a competitor. Among 4 friends who bought a smart phone recently (including me), 3 bought a Samsung Android and 1 an iPhone 4.  By the way, look how fast now competitors are bringing their tablets to the market. It took two years to match the iphone, and 6 months to match the iPad. Even competitors learn.

The second point is also clear. While Apple is in the lead now, it is not forever. What will happen when Android is twice the share of Apple ? Trouble. Developpers may (or not) turn their back to iOS, depending on the ‘portability costs’ of developping for both the Android and Apple. Apple should learn from history why it lost to Microsoft Windows while its Mac OS was superior.

I am puzzled why Apple is not opening up more the iOS to other manufacturers (unlikely) or at least to create iphone variants at more price points (ie including mass markets) ? Would this be weird for the ‘premium’ Apple ? Well, think about the ipod shuffles, nano, and ‘classic’.

So, I have no idea about Steve’s secret plan, but I can give him this *FREE* advice (how generous): create variants of the iPhone for any price point, skim the market to ensure you remain market leader and as such grab the network effects in your favor…while you can. Or, in a few years, Apple’s iphone will go to the museum of smart phone pionneers (might remain relevant in a niche though, just like the Mac). The biggest risk of Apple is that it is now super succesful: sky-rocketing stock price, fantastic earnings. But the nature of the market and the graph shown above should keep Steve awake at night.

I’ll make this a prediction for 2011 (predictions are fun in that if I was right I can proudly refer to them and if I’m wrong no one will really care anymore): a flurry of iphone variants landing on the market. No ?

→ 5 Comments

Posted in Consumer products, Marketing

The second coming of Relationship Marketing – why you’ll love it

Posted on October 5, 2010 | Leave a comment

This week-end it came to my mind, in a blow: relationship marketing. This has to be the future.

Well, it’s not particularly new – relationship marketing has it own Wikipedia entry. That’s part of the issue: it’s already too old to create any buzz.

But think about it – here are 3 fundamental facts underpinning this need:

  1. We know for a fact (study done by Catalina Marketing on the real behavior of 54 Millions americans) that on average, 2.5% of consumers account for 80% of a typical FMCG’s product sales. FMCG’s are for the masses ? Give me a break
  2. We know as well how critical are early adopters, and for 2 reasons: 1. The more mainstream consumers will buy innovative products/services only if the early adopters are delighted (think about how many questions you asked to those first friends who bought an Ipad). 2 Those early adopters are way more proactive  than the others – they will go to all Web media and send messages, react on forums, etc… Think how much those friends are bragging about their Ipads offline & online (we did extensive research about that – not just on the ipad –  feel free to reach out for details).
  3. A recent McKinsey article stipulates that word of mouth marketing is twice more efficient than traditional advertising. Why it is more efficient ? Your advocates are more credible than you are. They work for you for free. Their touch point is of higher quality (direct conversations). How do you get people to talk about your products ? First, by building great, different products. Second, by engaging with your customers and involve them in the advocacy process. If you are Apple, you can skip step 2. If you products are crap, fix them first.

So, in a nutshell – you have few customers that matter: the few loyal you need to cultivate, and the early adopters for your innovations. If you do activate and engage them, they will reward you and go all the way to help you. And this is true across categories, believe it or not.

And why is this important now?

  • Social media gives consumers the ability to feel connected to the brands they love: directly, and in meaningful ways
  • Technology sophistication, coupled with the increased self-disclosure on the web enables better than ever targetting. This means marketers have more powerful ways to choose who they want to engage in a relationship with
  • Increased sophistication & shorter attention spans of consumers give you not other choice: with the fight for attention bigger than ever, people will give you attention if you have such a cool product (difficult) or you make them feel they are special (easier)
  • Relationship/service is increasingly the currency, as product differentiation quickly evaporates. Not convinced ? Did you know that an hotel chain reported that 70% of their customers leave because of ‘indifference by front line employee’ ?

Relationship marketing will be at a cross-roads of multiple existing fields:

  • Direct & 1:1 Marketing - identifying and going directly to consumers that really matter to you will be critical (vs building your fan page and asking your employees to ‘like’ you first then cross your fingers). Then, going with a personalized approach and making them feel special through 1:1 and dialogue techniques will be the name of the game
  • Social Media Marketing: leveraging social media for building and growing direct relationships will be more crucial than ever – direct engagement will rule. Many thanks to Brian Solis, Patrick Willemarck, J-P Declerck and a few others for showing the way. The accidental ‘Facebook fan page’ or community section in your site could then become a cornerstone of your Marketing strategy, not just something you do ‘because I had to / because it’s cool / because my management asked for our social media strategy / because it’s viral’ (pick your choice)
  • Word of Mouth marketing & PR - amplifying the voice of those customers will be a new game. In a way, this is not so different than P&G showcasing in TV ads the Mums happy about the diapers or the new detergent. What’s the social media equivalent ? It did not exist yet. This is why we launched DialogFeed, a simple tool to leverage your best testimonials from your fan page on Facebook and your Twitter @mentions (in alpha version – please signal your interest/feedback by emailing me at alexandre at dialogsolutions dot com).

In a way, this will be a simple world. Most of the 20th century marketing money was spent on the idea: ‘get attention of your socio-demo target (or more) while they do something else’ (e.g sell soap while watching soap opera) – even when you pay for it, attention is increasingly harder to get if I can click on fast forward on my DVR or check Twitter/Facebook on my smartphone while the ads are on. Tough game.

Most of the 21th century marketing money could be spent on the idea: ‘approach people that matter & delight them, then build a virtuous circle around your brand by helping them do the marketing’. Pionneers did it well (like Zappos). Marketers will love it because it’s simple, it’s measurable, it’s efficient, and you can reproduce it to any brand. But it requires new skill sets, and some risk taking (exposing your brand).

What do you think? Let me know in the comments section.

→ Leave a comment

The Coppernician revolution of companies – a story

Posted on September 15, 2010 | 6 Comments

Time to wake up for companies who did not…yet. Time to take things from a new perspective…a customer perspective. And save costs. And raise customer satisfaction. And create brand advocacy.

Impossible business case ? Here is an example.

The other day I wanted to test how Microsoft had adapted to the new reality. Shortly after I upgraded to Windows 7, I ran into issues: my PC had been crashing once or twice a day for the last month. No major reasons, pretty random. So I thought I would try to reach out to Microsoft to ask why a new, great 2010 OS should be less stable than my MS DOS 3.2 was back in 1986.

First, I was a bit shocked – when I followed the ‘support route’ for Windows in their site, this is what I got:

I thought it was a bit expensive to get basic OS instability issues solved, so went to Twitter to ask for help… I found the French speaking @MSVousAide, which is a pretty recent account. To my surprise, the replied back a couple of days afterwards (too long might say a few people)….They had posted (for me) the issue to their forum ‘MS Answers’. They replied to me asking to look for the answer ‘from their technician’.

But the biggest surprise was yet to come. Not only I had a good answer in a day (my laptop is now more stable), but who was that expert ‘Microsoft Technician’ ? Well, it was Le Claude, a French retired person, who, looking at his blog, is not solely focusing on answering questions from Microsoft.

Ok, so what does it mean ?

Microsoft did its Coppernician revolution.

During the nineties, companies rushed to get more efficiency, scale, productivity. Buzzwords were call center, automation, centralization, and the biggest word of all: ‘business process re-engineering’. In the process, they built those large, inhuman call centers, in which customers often fell lost in the menus, the queues, and the scripted responses. They closed real contact centers to move stuff to the holy phone.  They thought that the customer had to gravitate around them, not the other way around.

With social media, unfortunately for them, issues can escalate pretty quickly and become nasty. Customers have choice, power & sophistication. That ‘efficiency’ equation – and the arrogance that goes with it – is no longer a good choice. So more and more companies have decided to undertake their coppernician revolution. They will gravitate around their customers. They will hang out at the places their customers are to see if they can help. They will leverage what’s best for them in terms of channel, urgency, and the rest.

But the good news came, almost as a surprise to the pioneers: my god, this is not only best for the service, but we do create stronger advocates, save costs, and innovate better…Because the customers are so grateful to be ‘considered’ in terms of relationship, not just transactions – yes they will bring you back much more.

Concretely, it’s not that hard, as the case above shows:

  • Open a Twitter account, a Facebook page, and show you are there and ready to help: answer to queries
  • Get Web 2.0 forum for Q&A and get support. Yes, there are lots of people ‘armies of volunteers’ who are willing to give time and effort, often not paid, to answer customer questions
  • Don’t make people pay for the support, unless they really want to…(and no, I would not have paid for this)

And what did Microsoft get:

  • Higher customer satisfaction (My problem is solved, and I appreciated the interaction, which was quicker for me than the phone or others)
  • Lower costs (1 Twitter person who spent 3 minutes and a benevolent retired person) + the question is now searchable by people in the same situation than I am, avoiding future calls
  • Some PR & positive word of mouth (my blog)

The business case is positive – this is definitely one of the case for those managers who doubt about social media impact. But that should not be the sole reason for doing it.

The real reason is about making a point to start a Coppernician revolution around the customer. It’s a strategic move, not just a cost saving project. If you show you care, if you really engage, a solid minority of your customers will give back much more, from insights to ambassadorship and customer service. Think about it (and of course, contact me if you’d like to discuss about it, or react below).

→ 6 Comments

Posted in Digital Marketing, Marketing, Social Media

The promise of Social CRM – and one story

Posted on August 6, 2010 | Leave a comment

CRM is about Customer Relationship Management. Its promise was that, by keeping a full record of interactions with a company and every one of its customers, companies could better serve them.

It got partially realized, indeed. You don’t have to repeat the whole story when calling in for the second time a call center about your phone issue. Sales people do a better job following up the ‘Call me in the 3 months’ prospects responses, etc…

Yet, the fundamental opportunity of actually understanding and engaging better with customers & prospects is still unrealized. It’s about better knowing your customer behaviors and its needs, anticipating cross-selling opportunities, delighting him/her even more by gently coming in at the right time (not just birthday reminders, thank you), discovering potential prospects through online conversations, etc…

And now comes social CRM – will it be the magic bullet to close that gap ? The idea is now, you have a bunch of social media-based interactions your customers are having: with you (e.g. Fan pages), without you (among friends), and ‘not with you but not far’ (e.g quoting your brand on Twitter). How do you take advantage of this data+ traditional CRM  to realize the final CRM promise ?  Well, that’s the challenge of social CRM.

To see how it could get realized, a couple of thoughts. One of the latest projects I worked with at McKinsey&Company (with great experts Michael Chui & Jacques Bughin) was doing some prospective work towards 2020. A key elements to drive industry implications and lay new foundations, was to build consumer stories. One of them, built from a real case, which I wrote and take inspiration from can definitely be a social CRM one (freely adapted here).

  • Kate (teenage girl, 15) is enjoying herself in an online virtual world, visiting the best places from her favorite TV series. She visits as well a virtual shop from a teen retailer, and decides to buy a piece of virtual clothing from her favorite brand. Upon her purchase, she receives an e-coupon for a real piece of clothing (Real case: Taattu world, and Pimkie retail store)
  • So she decides to go to the real shop but as she sees the clothes she takes a picture and ask her friends first through her social network
  • Yet, as she ‘checked-in’ (via eg Foursquare) the shop recognized that she was the visitor of the online world, and other records.
  • In the meantime, friends are coming back with mixed views.

What should the retailer do ?
Possible answers:

  • The retailer knows she is a fan (segmentation) as she bought virtual goods online. She is there in the shop. Recognize her status by having someone going to her and checking for help
  • The retailer could also send extra discount if she buys NOW (?)

Here a few requirements for social CRM:

  • Using full social customer data to segment your customer base: a very active fan on Facebook is worth more than a regular customer, etc…
  • Being real-time enabled to maximize the opportunity when it happens
  • Covering all ‘modes’ of consumption for your best consumers and serving them that too: virtual goods are one examples, but there are others

What do you think & what is your sCRM consumer story ?

Alexandre

→ Leave a comment

Posted in Digital Marketing, Marketing, Social Media

Be consistent – 3 DO’s & 3 DON’T for marketers at digital age

Posted on July 2, 2010 | 2 Comments

A few days ago, I read a blog post on parenting, and the fundamental needs (and paradoxes) that children are facing.  One of them is the need for consistency.

Indeed, my 2-years old is at peak with that need. Since I have started the habit of reading bedtime stories, he is consistently (obssessively) asking for the same ‘Babar’ story. Actually, for exactly the same part of the Babar story, which is a couple of pages long. So, I have been reading him the same 2 pages almost every night for the last month.

I am not a psychologist and will not dwell over that need.  Let’s say somehow this particular story of Arthur, the cousin of Babar, needing a doctor after falling from a scaffolding is striking an internal chord, and let him fight and dominate his fear of falling (from e.g. the stairs).   The consistency of repeating that experience is boosting his sense of security and dominance of his fear.

As we grow, this need for consistency is certainly less visible, but still there. We still trend to pick up the same seat on a table, go to the same places, repeat similar behaviors.

And importantly, as a person, consistency towards others is key to build trust. What is it made of ? Not by staying in the same job or even profession, or coming across with the sames messages. For me, it’s just a few traits that create inconsistency about individuals:

  • When you can’t match what people say with their behaviors.
  • When you have doubts about their values.
  • When you get signals they are lying or not teling the entire truth
  • …(am I missing something ?)

So, for us, it’s pretty easy to be consistent: do what you say, ensure you have good values and you respect them always, tell the truth.

And for marketers ?  What’s a ‘consistent brand’ ? A  few do’s  & dont’ for marketers:

  • DON’T 1: don’t rebrand a brand unless it’s life & death circumstances. Many people still go to ‘Eurodisney’ while they changed name to Disneyland Paris 15 years ago.  Our brain is wired around names & concept. Changing a fundamental name like a familiar brand name is like trying to rewire a whole house. It breaks familiar consistency around that brand. Even if a brand is damaged, time and marketing is usually enough to repair it.
  • DON’T 2: don’t take consistency superficially. Many people think consistency is around strong guidelines and messaging. This is only a part of the truth. Brands live in people’s mind, through exposure but as well discussions with friends. The focus of the consistency is to understand how those exposures and conversations are consistent. And creating positive ‘social currency’ (ie propension to recommend a brand) is worth more than respecting visual guidelines. As such, alternative techniques such as Word of mouth marketing and dialogue with consumers are vital to help.
  • DON’T 3:  don’t think you control it. Building on the above, consistency is not the sole proprietary of the marketing. Customer service is vital, but so are you main clients/fans, and other stakeholders in touch of your customers. This is why so many leading companies are making sure that their values and missions are fully aligned along the whole value chain. Johnson&Johnson shows its ‘credo’ about its life-saving missions on every wall of every room, and Ben&Jerry is ensuring its ‘sustainability’ focus resonates across all departments.

And of course, a few ‘Do’s:

  • DO 1: make explicit what needs to be consistent vs not. This is the hard part. Think about the people analogy above – when do people look phony ?  So, those are the minimal 3 do’s and only things that really requires consistency.  Align messages and behaviors/product offering. Ensure the company carries strong, credible values. Never lie to consumers. Beyond that, the brand image is around its personality, which as well requires some consistency…But at the same time, you need to refresh and rejuvenate it, so the challenge of every marketer is to strike that balance.
  • DO 2:  Think about your customers as your partners. Consistency is a matter of perception. By taking your consumers/Customers are partners, you will continuously tap into their feedback to ensure you remain as such – consistent
  • DO 3: consequence of the DON’T 3 – you don’t control it but you can instigate it. Conduct a corporate review of alignment and consistency of the values across the company, and make sure that the nice words are reflected in reality. If not, chances are that the image you will reflect on the market will not be consistent.

Consistency will not increase your sales by 20%, but it will ensure lasting success. Creating a campaign and a peak in sales is not hard. Ensuring that a campaign is followed by sustainable success is hard. This is where consistency plays in. In a world of oversolicitation and increasing consumer distrust towards brand, it is more key than ever.

Let’s keep consistent.

Liked this blog ? Follow me on Twitter: @alexvdm

→ 2 Comments

Posted in Digital Marketing, Marketing

Facebook’s revolution: re-inventing marketing (think before you click on ‘Like’)

Posted on May 31, 2010 | 2 Comments

On a recent post, I drew an historical comparison to show how Facebook’s new features, opening up its ‘likes’ and other functionality to the entire Web, could spawn a new era of the Web. My interpretation is that this is a first step into a new sea of opportunities to help people read/discover information, transact (shop), while connecting with friends (the RTC Web like Read-Transact-Connect). While many of those features were previously set apart, Facebook made an interesting attempt to put them together. The most visible is certainly the ability, through the ‘Like’ button, to create ‘social commerce’ experiences, as summarized in a blog by Jeremiah.  In a nutshell, it’s the ability for a site (online but coming soon offline) to customize your shopping experience based on social elements, such as what your friends like. Of course, the game remains open whether it’s Facebook or others that will ride this growth phase

What Jeremiah Owyang and I forgot to mention came to me on my Facebook newsfeed a few days ago:

I indeed tested the ‘Like’ button on the Levi’s store, on the 501 a few weeks ago (so outside of Facebook). It somehow gave the right to Levi’s to send me a message on my Newsfeed, just like when you ‘Like’ other pages.  As a consumer, I felt slightly puzzled. So, all those ‘Like’ buttons that I innocently click on the Web will give their owner a write access to my newsfeed ?

For marketer, this means much more. First, it shows how quickly (some) marketers are figuring out those new tools. But beyond, it made me think that even though the promises of the ‘like’ button seemed simple (virality and traffic), its implications are far-reaching on almost any marketing technique.

Fundamentally, through those ‘like’ buttons and other features in the social web, many old marketing techniques can now be re-invented:

  • Permission-based, direct marketing…on an object-level. Maybe you like a certain book, not so much the author nor the genre and would like to get update about this book only. Or only about Levi’s 501.
  • Merged online/offline experiences. Imagine you would receive a handheld device at a given store (eg apparel), with the ability to scan and ‘like’ any bar codes. You could connect back online and look back at what you liked, share comments with friends. But you could as well get that information from the store. See as well insightful post from John Battele.
  • ‘Like search’ engine advertising’. As mentioned previously in my blog, the holy grail is to combine social elements and algorithmic to create a yet unseen search tool (think Facebook and Bing combination). Yet, a pure ‘Like search’ can be of high interest: you search among the ‘likes’ of your friends to find out stuff they like, before purchasing. What is the paid equivalent of the ‘Search Engine advertising’?  I bet, a sponsored ‘like’ by someone famous or influent could do the trick.
  • Like-based price promotion. That’s just the example of Levi’s above. Not very creative, but frankly that is not what price promotion is about.
  • Like-based display advertising. Not yet for the real world (this would really be the ‘Minority report’), but coming soon to a Faceook near you. Facebook team quote (imaginary): ‘Thank you Levi’s for experimenting social commerce with us. But now Diesel made us an attractive offer so all people who clicked on a ‘Like’ button on your site will be served Diesel ads forever. That’s business, sorry’.

This last example is showing the inherent risks for marketers to have a single company like Facebook managing this experience, and the need for an open standard alternative. Not to mention the risks on privacy faced by individuals.

The potential of a social Web, combined possibly with offline experiences, is simply huge, and we should certainly congratulate Facebook for showing the way…yet remain careful not too simply give it the keys of your company by becoming ‘Facebook-centric’.

Expect to see waves of disruption and consolidation for industries and companies to slow to adapt.

Bookmark and Share

→ 2 Comments

Posted in Digital Marketing, Marketing, Social Media

The Bloomberg TV syndrom and the ‘Ignore’ button

Posted on May 17, 2010 | 2 Comments

During my MBA (at IESE in Barcelona), we used to have that cool Professor (whose name I forgot) with lots of interesting analogies. Sometimes I wish I still have my own private MBA Professor, but that’s another story.

Something he said still resonates. To put it in context: it’s 2003 and Facebook was not founded, even less Twitter. He said something like: ‘Look at the traders watching Bloomberg TV.  Bloomberg split the TV in multiple windows, each fighting for our attention. The trader is quickly scanning across all of them, keeping his attention no more than 5 seconds on each. With the Internet and all the stuff competing for our attention, we are all becoming like traders watching Bloomberg TV’.

Watch me if you can

6 years down the road, with Facebook, Twitter, LinkedIn adding to emails, meetings, events, you name it, it seems his prophecy seemed right. Diagnostic ? A global ‘ADD’ (Attention Deficit Disorder) is spreading like some nasty flu into our lives.

Now, what are the good news ? In their infinite wisdom, social media and Internet companies in general have found a solution: the ‘Ignore’ button. Basically, since gurus at the top of those companies do realize we are sick, they found a way to help us live with it. Cure it ? That would deter the addict. As you know, 50% of Facebook users check in at least once a day. Don’t we like it too, dear advertisers ? In a world of over-solicitation, ‘Ignore’ is the new ‘No, thanks’.

So, here is the solution:

Where is the 'Reply' button ?

While it definitely helps cutting short meaningless conversations, the ‘Ignore’ button is setting a new approach to politeness standards. Maybe the person at the end of the Facebook request, email, LinkedIn or whatever media was expecting an answer, and took some precious time just for you ? (Facebook case: no indeed, and ignore is the right approach, fine)

Hum…There might something a bit wrong with all this. Somehow, a serie of streams have taken our lifes by storm, or are threatening to do so. Acid test – what would your grand-ma (or mother) say if she would be watching you for an entire day ?

Maybe it’s time to rethink how we approach our stream, really ignore what should be ignored. Maybe it’s the stream that needs to be ignored some time, not specific messages. For instance, last Friday, as most people took off following the official day off on Thursday, I took the time to sit down and think, draw boxes, pause. How useful !

One idea is to do that every month. Spend half day with yourself at work, and nothing else. Spend the other half day with your team, and nothing else. No media, cell phone. Turn off Bloomberg TV. Other ideas?

Bookmark and Share

→ 2 Comments

Posted in Other

How Facebook is creating the 4th wave of Web growth, and why…do you LIKE it?

Posted on April 28, 2010 | 6 Comments

Facebook recently announced, at its f8 developer conference, the launch of its ‘open graph’ API and new features for Web publishers. While most geeks are aware, excited and/or scared at this, here is a simple summary for everyone else. The geeks can jump to the next paragraph.

Fundamentally, the idea is to  ‘open up’ the viral toolbox that exists within Facebook to outside Web sites:

  • You could ‘like’ someone’s post ? Now you will be able to ‘Like’ almost anything on the Web, from a Jean’s on Levi’s store to a News article, or even a consumer review on Amazon
  • You could see which friends were using such application, member of which group you were browsing at, etc… ? Now web sites will be able to personalize your experience based on what you friends like too: showing relevant items in e-commerce, news, etc…
  • You liked to see fan /friends activities ? You can now see it on another site

As a note, many of those social tools won’t even require you to sign in to the Web site. As long as you are logged in into Facebook, Facebook will be able to display the relevant content (without passing your details to the site).

Those announcements have created huge reactions across the Web, from enthusiastic to really scared. So, let me jump on the bandwagon and share a couple of thoughts.

Let’s start with the positive. As I put in the title, I believe that this announcement is creating what I call a 4th wave of Web development and growth. Don’t look at those waves on Wikipedia, I am just putting this together myself as a personal perspective. Interestingly enough, most of those waves lasted about 6 years:

  • The first wave of Internet development is due to the invention of the World Wide Web, to which a Belgian contributed (Robert Caillau), in 1989. I still remember using a ‘World Wide Web home page’ by the W3C back in 1994 – at that time, most of the key links to navigate through the Web still held on a page. It span the world of ‘Read’ web and enabled people to discover wealth of information and content. This itselfs created the need for powerful search engines like Alta vista then Google
  • The second wave was born with eBay and Amazon.com, both founded in 1995, so 6 years later. It created a whole new way for people to use the Internet, what I would call the ‘Transact’ web with the rise of ecommerce
  • The third wave took a bit more time (dot.com bubble burst explains it). I date it to 2004, the year Facebook was founded. While ‘social’ Web initiatives had appeared before that, Facebook got to become the fastest growing and largest consumer service ever. I call it the ‘Connect’ Web as it enabled to discover and share stuff with people you were connected with in a much easier way. It is best known as Web 2.0 or Social Web.
  • The fourth wave is potentially now, or another 6 years later. You will notice that, while all those waves enriched the whole web, they remained relatively independent of each other. Now Facebook is trying to put it all together, to create the ‘Read + Transact + Connect’ (RTC) web. The glue that some people had in mind but none had the scale to impose, nor the ability to create immediate ‘win-win’ between them and publishers (you get more viral effect through sharing, we get more data). Facebook has it.

With the RTC Web, you will be able to move seamlessly across read experience from global and friend news, shop along with friends and see what they like, get personalized recommendations based on your history of ‘like’ and the one of your friends, comment a sport event online while it’s happening, with your friends, etc… In a nutshell, everything is integrated in a seamless experience, to maximize the value of your friend’s recommendation and connectivity, optimize your shopping, and discover new information and experience based on both algorithmic and social power.

Too big for Facebook ? As further evidence that this looks like the ambition of Facebook, let’s ponder on the fact that Facebook, on top of the above mentioned features, is going to push web site developer to include ‘semantic’ data into their page. So Facebook will ‘understand’ that someone who pushes the ‘like’ button does it on a book vs a news items, and will be able to derive much more intelligence from that knowledge (ie ‘And did you read that book too ?’).

It sounds great…or scary. Beyond the usual concerns around the privacy implications, one can be scared that the control of the data about your ‘likes’ are with one company: Facebook. This must be too much power. No doubt. It will either a big success or a major push back, but I would opt for the first choice.

Let’s consider what’s a stake for them. For me (personal  interpretation), it stands in 6 letters: SEARCH. Here a 5 reasons why:

  1. By opening the ‘toolbox’, Facebook will actually lose some advertising revenue, since the need to maintain traditional ‘fan pages’ within Facebook will decrease, and traffic will/may go down. The older play of ‘drive traffic to Facebook’ does not apply so much anymore. There must be a bigger game at stake
  2. Clearly, the traditional banner advertising is nice but decreasing in yield and amount. Click-rate have decreased over the last years and will continue to do so. The Web is plagued with overcapacity. Yet, so far this has been the main driver of Facebook revenue
  3. Search still takes the lion’s share. The main difference is that when you see a banner, even if well targeted based on your geo, socio-demo and the likes, your are potentially less interested because you are doing something else, like checking your friends news. In search, when you see an ad, you are actually searching something related. Click-rates are higher and the value of the click is higher too, because the chances are higher that you are a prospect vs just curious. Search is very attractive and Google has a license to print money at this point
  4. Facebook and Microsoft are partners, and Bing can only win with a truly differentiating proposition against Google. Combining ‘social search’ (what your friends have looked at and like) and algorithmic search (like Google) seems like a killer idea
  5. A route to achieve search dominance is to become you Web browser’s default home page. With the wealth of ‘likes’ by friends on news and others, Facebook has a good shot at it. Look at this Facebook attempt for a first version

In a way, this would not be bad neither as it would stimulate competition in the search business. Of course, traditional advertising on Facebook would fare better since it would improve ad targeting and open other revenue streams, but I fundamentally think that they are after another holy grail.

Whatever happens, both on the Web and for Facebook, we face exciting times ahead. The Web is still in its infancy and interesting developments will come – let’s watch this space.

Ok, all nice and great, but do you LIKE it ?

→ 6 Comments

Posted in Social Media

4 myths and 3 plagues of social marketing

Posted on April 19, 2010 | Leave a comment

I had the opportunity to engage a conversation with some marketers around breakfast the other day (see marketingbreakfast.be for those in Belgium who are interested about the next ones).

As a first breakfast, we wanted to axe a few myths and plagues on social marketing, which is, after all, a very recent type of marketing.

First, what is social marketing ?  In essence, all activities brands conduct on the Web with a social dimension: sharing, conversations, through existing social networks or own channel.
What’s so attractive? Well, you heard about ‘joining the conversation’…Social marketing will help you grow your business through more engaged consumers, more active ambassadors .

To kick start the discussion, we thought it would make sense to explore the 4 myths and the 3 plagues of the arena.

The 4 myths:

4 myths are being spread out in the marketing community – we wanted to kill them one by one:

- Myth 1: we have too many customers to do this kind of things. As some of you may have heard, we sometimes refer to a study made by Catalina Marketing in the US, tracking the real shopping behavior of 54 millions americans. The results ? On average, 80% of the volume of a typical brand is made by 2.5% of shoppers. In Belgium, this would mean 100 000 shoppers. The concept of a ‘mass product’ is dead for FMCG

-Myth 2: Consumers do not care about online conversations. Our study with ANT Research in October 2009 showed that, while a minority indeed will conduct conversations, other are very interested to see it. If they see the brand listens and respond, they declare that it would strongly enhance their perception of the brand

- Myth 3: If consumers start talking to us, we would be overwhelmed. While a silent majority is looking for brands to react, only a minority, typically between 5 to 20% (for most engaged brands) will actually want to interact. Net, we found that in Belgium, over a couple of months, a brand could expect between 500 and 2000 interactions. No need to hire an army.

- Myth 4: There is no ROI.  The US has furiously embraced social media over the last years. There is ample evidence that a customer self-support forum is providing large impact in terms of cost savings (large Q&A base, support by other consumers), and conversational marketing has been largely used to boost sales and take advantage of the viral and amplifying effect of Twitter and Facebook. Last, we found a high correlation between early adopters and influencers through our studies. Chances are high that people who do care interacting with your brands are as well very active on social networks and in ‘live’ events about your brand. Chances are high that they will be the first to adopt your new products, the early adopters that are so critical to turn a new product into a success. Don’t miss them.

Convinced ? Hold on a bit more. With those that made the jump, we found as well unfortunate habits already, what we call the “3 plagues” of social media:

3 plagues

- Plague 1: Too simple: Use social media as another ‘push’ channel. Many brands just copy/paste their newsfeed to Facebook, Netlog, Twitter…Wrong. Each channel has its specificities, and most should be used to engage consumers in a dialogue. For instance, Jetblue, the US airlines, is using Twitter mostly to respond to enquiries from customers, and tailor its messages. Razwar, an ecommerce challenger in Belgium proposing shaving solutions at a fair price, is filtering messages about ’shaving’ on Twitter and sending funny replies to followers, sending them to its web sites.

- Plague 2: Too aggressive: Campaign-based thinking. Social marketing does not fit really well into ‘campaign-based thinking’, which is the usual rythm of companies and agencies. You are not at war, but wanting to engage with consumers, one by one. Because it takes time to plan, prepare for it, and gain results. Those can be substantial, but will take some time. You need to build the right audience for you step by step, and invest a little, every day.

-Plague 3. Too passive: ROI vs  ROI. There is a lot of talk about ‘Return on Investment’. What is often forgotten is the importance of ‘Risk of Inertia’. Your competitors will put their acts together. Consumers will get upset not to find you or your inertia – their sophistication and expectations have skyrocketed over the last years. As Steve Ballmer, CEO of Microsoft put it in a speech made in Belgium: ‘for the first time in history, marketers are trailing the consumers’. Don’t let them trail you further and put a sense of urgency into it.

So, this was a selection of the most burning ones we felt – any other you have encountered ? Feel free to react.

The rest of the conversation was around enriching examples of how the best brands engage consumers around the web.  That will be a focus of the next blog.

→ Leave a comment

Posted in Digital Marketing, Other

Is email dying?

Posted on March 31, 2010 | 2 Comments

The question is raised in consumer and corporate circles. Marketing email click rates are falling, consumers have a wealth of other options to communicate with their friends. The big social networks have they own ‘inbox/emailing’ solutions (Facebook, Linkedin, etc…). Let’s look at this.

The early signs of a crisis often start with the young generations changing habits. What do they do so differently ? They use the Internet more than they watch TV (in Europe). They are addicted to Facebook and MSN Live – they prefer status sharing and chat.  Some use Twitter a lot. Or SMS. What would you need email for ? Ok, sometimes you want to be sure about who’s reading or keep it practical, so you send something with the old fashioned tool.

The other signs are to be seen with the falling click rate of email marketing actions. As the number of personal emails has decreased, the amount of email marketing largely increased. Every time you shop through a different store, sign up for a service, etc… you get into a list. With a tenure of 7 or 8 years of Internet usage, your inbox starts looking like a commercial folder.  No wonder that emails get less opened, and less clicked on. And I am not even talking about click-to-buy conversion rates.

Last, there is spam, which is plaguing the application even further. It now accounts for over 80% of total email traffic. What a waste of energy & time for everyone. It is one of the reason why Facebook is promoting its own email service – there is just no spam into it.

Funnily enough, corporate emails are still growing. Companies are so much in love with emails that I receive complaints from corporate managers receiving 400-500 emails a day. Slightly too much. But guess what ? The number of hours in a day is unlike your disk storage: it’s limited. So people have built their strategy to cope with it: ignore, filter, delete, read randomly and hope (not effective).

In both the consumer and corporate situations, you end up with a problem: email does no longer fulfill its promises, to connect with people, boost productivity and foster collaboration. It seems that it somehow was extremely useful at some point but not anymore.

It’s a pity because email is the first application of the Internet. First, historically, as smtp (the simple mail transfer protocol and de facto global Internet standard) was invented before http – which helps you browsing -  in 1971 according to Wikipedia. And it is still relevant in terms of volume: email still takes a top share of total traffic, albeit most of it is spam. And more fundamentally, it does fulfill a role or having a central hub, not owned by a single company, to reach virtually anyone, read and react to what people sent to you.

But really, it needs to be re-invented. So, who is there to invent email 2.0 ?

Well, I don’t know what email 2.0 is (I would be rich), but for me it would need to have some of those characteristics:

  • Be social : for each email, it would be good to know how many of friends/followers/colleagues opened it, read it and liked it, and see their comments
  • Be tailored: it would be tailored to my needs and preference. Example: it would automatically separate the marketing stuff vs the rest.
  • Be multi-sites: it would integrate what matters to me on all my sites (Facebook, LinkedIn, ecommerce site, etc…) and grab the information I need, summarize it, and deliver it at the time I want it (e.g. daily end of the day)
  • Be multi-forms: for instance, endless discussions could get promoted into a wiki or discussion boards, only followed by relevant people, in a click
  • Be smart: based on my reading and classification habit, it would automatically add signature of emails into contact book, find out priority emails, suggest me what to read next (eg. client mails vs rest), clearly show where I am in cc vs to (or even better: group all ‘cc:’ emails I receive and put a summary somewhere), etc…
  • Be productivity-driven: for instance, it could force me (or propose me) to act on one of the 4 D’ for each email I read: Do, Delete, Delay, Delegate.
  • Be educational: it would help me target relevant audience and only that, to avoid unintentional spamming

A lot of this is probably available on the market, or possible using existing tools (eg. filtering), made by techies for other techies. But I am waiting for the company that can do all of it in a very simple and intuitive way, and maybe an underlying standard to support it. Future entrepreneurs, please share a dime with the author when you do your IPO.

In the meantime, for marketers? Get some help from email marketing specialists, to ensure you target the right audience with smart messages at an appropriate pace.  Tailor your messages.  Ask for permission.  Make your content relevant by making it directly useful (e.g. tips and trick on a topic). Make your emailing social, by enabling a two-ways dialogue with your consumers in a Web 2.0 community, not just a simple push. This significantly boost emailing opening and click-rate, as shown by a survey in the US.

What would you like email 2.0 to be like ?  What do you suggest we do before it’s there ?

→ 2 Comments

Posted in Digital Marketing