Social Media Tools Don't Matter

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Here’s a question I hear from marketers all the time: “We want to launch a corporate blog, but we don’t know how to go about it. Where should we start?”

My answer is that you should start a couple of steps back from where you are. Social media tools – whether they’re blogs, online communities, instructional videos or something else - don’t solve anything unless they address a specific business need. Don’t use social media for its own sake. Use it to accomplish an objective.

Unfortunately, the temptation is difficult to resist. Lots of businesses are experimenting with social media tools these days. It’s natural to think that they know something the rest of us don’t, but the reality is that most people are still kicking tires right now. There are some very successful companies like Apple Computer that are doing nothing with social media because they don’t have to. If the tools aren’t right for your culture or your business, don’t use them.

Whatever you do, don’t start the decision process with technology. The choice of a social media tool is no more relevant to the success of a campaign than is the choice of paint to the structural integrity of a house. Many tools are flexible enough to be used for multiple purposes and some strategic goals require you to leverage many tools in concert.

Stop and consider the problem or opportunity you’re trying to address. Here are a few possible business objectives, with the best tool options listed in parentheses.

• Build customer community (blog, video, social network, private community, virtual world)
• Counter negative publicity (blog, podcast, video, customer reviews)
• Crisis management (blog, video, social network, virtual world)
• Customer conversation (blog, social network, private community, virtual world)
• Generate website traffic (blog, video, customer reviews)

Many more examples will be explored in my forthcoming book, Secrets of Social Media Marketing. It will be available this fall and you can pre-order it on Amazon right now. I also recommend reading Groundswell, the new book by Charlene Li and Josh Bernoff of Forrester Research. It has some excellent advice on how to take a disciplined approach to social media selection.

Note that blogs appear next to every bullet point listed above. That doesn’t mean blogs are a panacea. They are the easiest form of social media to implement, but far greater leverage may derive from more complex tools like customer communities. You should choose media based upon your budget, staff resources and commitment. It’s often best to start small and grow your social media footprint as you become more fluent with the tools. Blogs are a good starting point, but you may need stronger medicine after a while.

Keep in mind the importance of balancing between ease of use, simplicity of deployment and functionality. Many social media tools can be used for multiple purposes. You may be better off starting with a tool that you understand well rather than deploying a somewhat richer solution that carries a steep learning curve.

If you keep the tools secondary and work outward from the business goal, you’re far more likely to reap the rewards of your efforts.

Labels: blogging, social_media, social_media_tools

  ¶ 7:41 AM 1 Comments Links to this post

  Daily reading 03/15/2008

Is MySpace Good for Society?

A New York Times columnist asks six thought leaders a simple question: "Has social networking technology made us better or worse off as a society?" Their consensus: both.

The Inconvenient Truth About Social Media Marketing
Aaron wall offers a succinct and persuasive argument against link-baiting. We need more of this rational thinking. Link-baiting is a waste of time.

Corporate Blogging - How the Pros Do It
Scott Monty provides thorough coverage of an SXSW panel on corporate blogging. Includes some nice nuggets, such as Dell's customer relations philosophy: "they've empowered every employee to apologize."

Jeff Jarvis tells why you should reach out to the customers who say they hate you

What happens when 207 people freeze simultaneously for five minutes in Grand Central Station? Watch this...

Labels: blogging, social_media, socialbookmarking

  ¶ 8:30 AM 0 Comments Links to this post

  Don't Let Tools Distract You I was presenting a social media seminar to a public-relations agency recently when the talk turned to uses of blogs. The people in the room were excited about blogging's potential and were eager to apply the technology to new tasks.

I cautioned them that they were asking the wrong question. The issue isn’t what tool to use, but what problem to solve. Tool selection is secondary.

There's nothing unusual about their attitude. People often start by choosing tools and work backwards to solve problems. Maybe management has just issued an order to start blogging, or the tool is seen as a tactic to improve search performance or it just seems like the thing to do.

But that’s like starting with a hammer and then figuring out what to build with it. If your objective is to make a house, then you’re off to a pretty good start. But if you want to craft a pearl necklace, you've got the wrong tool for the job.

I recently consulted with a client who wanted to build a social network for a defined customer group. It was an ambitious idea, but as we talked through it, we both realized that the process of getting it through internal and regulatory approvals could take a year or more. We finally settled on a more modest idea: Launch a relevant blog, try to build customer interest quickly and then take the results to management in hopes of getting fast-track approval for the social network.

Choose tools wisely
The building blocks of social media are simply tools and they're not well-suited for every task. For example, if your objective is to alert visitors to a new category of products and provide detailed information on the specifics, a catalog page would be more effective than any interactive tool.

But it’s human nature for people to use the technologies they understand and figure out the application after the fact. Unfortunately, that can waste a lot of time and effort. E-mail is terrible for communicating between groups of more than about five recipients, yet people routinely organize massive projects with dozens of participants by e-mail. Even if the tool is poorly suited for the task, they reason, at least people know how to use it.

A better approach is to define business objectives and then search for tools that support them. For customer feedback, for example, blogs and social networks are a good choice. However, podcasts and video won’t do the trick. So if your objective is to improve customer relations, a podcast may not be a good place to start.

Technology vendors encourage the tool focus. Many of those firms are run by engineers who love to create cool new stuff. They’d much rather talk about features and functions than how to solve business problems. You need to block that tactic. Any vendor that won’t give you references to customers who are solving problems that are similar to yours is blowing smoke.

Social media tools are cool, but they’re always irrelevant if they don’t solve problems. Don’t let technology distract you.

Labels: blogging, social_media, social_media_tools

  ¶ 7:56 AM 1 Comments Links to this post

  Tech PR War Stories podcast offers new social media advice Over at the Tech PR War Stories podcast, David Strom and I have been busy interviewing some fascinating people about social media marketing. Here’s a roundup of recent activity. You can subscribe to the podcast feed on the site or by clicking here.

44: Internet Marketing Superlist Author Shares Secrets
At the end of 2007, Tamar Weinberg assembled an amazing assortment of blog entries about everything from headline writing to linkbaiting to becoming a Digg.com power user. Tamar will give you a twentysomething’s perspective on social media. If you’re trying to really understand this phenomenon, listen to what she has to say.

Four great trade show tips

Evan Schuman (TPRWS 39) of StorefrontBacktalk.com has spent a lot of time at trade shows lately and he sent us these four tips for getting the most out of media contacts.

45: The social media skeptic

Jennifer Mattern calls herself the “social media Grinch.” But that doesn’t mean she’s down on social media. It’s just that she thinks the focus on social media can distract PR people from their real work, In this interview, she outlines her cautionary advice about social media and stresses the fundamentals that PR people still need to employ.

46: How to find influencers

I’m writing a how-to book about social media marketing and one chapter is devoted to hands-on techniques for finding influencers online. It isn’t as simple as it sounds. In this episode, I talk about what I learned conducting influencer searches on behalf of a mythical Quebec resort. Step one: master advanced search.

47: Twitter magic

Many people’s first reaction to Twitter.com is that they just don’t get it. It looks like barely controlled chaos. But Twitter has inspired a passionate following. Laura Fitton is a poster child for a service that is revolutionizing the way people interact with their social networks. In this interview, she describes what’s unique about Twitter and how it can be useful even to people who don’t use it that often.

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Learn C++ programming, get Cisco certification, Oracle certification, a Network Administration degree or learn Sun or Microsoft programs online.

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Labels: blogculture, podcast, PR, social_media, social_media influence, social_networks, socialnetworks, twitter

  ¶ 3:28 PM 0 Comments Links to this post

  My Facebook foul-up Take a look at the image below. Is this the type of photo you’d want to put beside a serious business inquiry? I wouldn't. But I did.

It was an embarrassing experience, and perhaps my mistake can serve as a lesson for anyone who’s considering using social networks to transact business.

Last week was the first time I've used Facebook to direct a professional inquiry to a group of my friends. I was looking for some active Facebook users to profile in a book I’m writing, so it seemed a natural place to find them. I used a third-party application called FunWall, which is made by Slide. It looked straightforward enough: type the question, post it and then e-mail a notification to a list of your friends.

So I posted my question and send an invitation to everyone on my friends list, some 225 people. A couple of hours later, my wife sent me an instant message questioning the appropriateness of the image on my FunWall. "What image?" I said. I quickly logged on to Facebook and found my question next to the item below. There were already a couple of e-mails from friends questioning my good taste. I scrambled to delete the original message, which wasn’t all that intuitive, and to post an apology. I received a couple of more snickering responses from my associates, but have no idea how many people saw the offensive photo and thought I was serious.

As far as I can tell, the error occurred when I clicked the button to post my question, I inadvertently clicked the option just below it, which sent a postcard to accompany the question. For some unfathomable reason, the default postcard was the image below. I didn't bother to check the post after I submitted it, and would probably not have even known of my error for hours unless my wife had pointed it out.

So shame on me for not double-checking my work. And shame on Slide for making it so easy for even an experienced user to make such a dumb mistake. If there are lessons, it’s that you should beware of the new breed of third-party apps that Facebook and other sites are accepting. And use that preview feature! You don’t want your best intentions undermined by a stupid user interface.

I’ll just go crawl back in my hole now…

Labels: facebook, social_media

  ¶ 6:45 PM 2 Comments Links to this post

  Please attend my upcoming Mass TLC presentation on The New Influencers I'll deliver a presentation about the dynamics of social media and online influence on Jan. 24 in Waltham, MA. If you're in the area, please consider coming and supporting the nonprofit Massachusetts Technology Leadership Council, which is sponsoring the presentation. Mass TLC does good work promoting the growth of the technology industry in Massachusetts and throughout New England. If we've never met before, be sure to come up and say hello!

The New Influencers: A Marketer's Guide to the New Social Media
Thursday, January 24, 2008
8:00-10:00am Program
7:45am Registration

Where: Foley Hoag Emerging Enterprise Center
Bay Colony Corporate Center
1000 Winter Street, Suite 400
Waltham, MA 02451

The Mass Technology Leadership Council presents Paul Gillin, author of the book The New Influencers.

Blogging, podcasting and other social media are profoundly disrupting the mainstream media and marketing industries. Paul Gillin's The New Influencers explores these forces by identifying the influencers, their goals and their motivations. The book also offers advice for marketers at both large and small organizations on how to influence the influencers.

This presentation explores:

• Why social media are now so important in consumer decisions
• How to leverage the blogosphere to enhance your company's message
• Strategies for taking advantage of this new medium
• The need for transparency and how to make it work for your benefit
• Action items for both small and large businesses
• Whether and how your organization should use blogs, podcasts and other social media tools in your marketing strategy

Cost: Members $40.00; Non-members $80.00
Signup form: http://function.masstlc.org/programs_new/event_single.cfm?eventid=808

Labels: blogging, influence, Paul_Gillin_speaking, social_media

  ¶ 10:45 AM 0 Comments Links to this post

  Daily reading 12/19/2007

On Facebook, Scholars Link Up With Data - New York Times Annotated

Social Marketing: How Companies Are Generating Value from Customer Input - Knowledge@Wharton Annotated

This article covers several examples of successful word-of-mouth marketing efforts and offers advice on what works:

• Keep branding to a minimum
  
• Engage with customers in a way that's meaningful to their lives
  
• Be self-deprecating and funny
• Have a thick skin; you will encounter some criticism

Several examples and case studies are included.

Labels: facebook, social_media

  ¶ 8:30 AM 0 Comments Links to this post

  I make a top 100 list - at last! VirtualHosting.com has a new list of the Top 100 Social Media and Social Networking Blogs and Paul Gillin's blog is on it! I'm in the "developer" category, which seems an odd placement since my programming experience consists of one COBOL tutorial in the early 80s. But who's complaining? It's nice just to be on the list with a lot of people I respect. So thanks to VirtualHosting, "the authoritative resource online about retail virtual hosting plans." You're aces in my book! ;-)

Labels: blogging, social_media

  ¶ 2:02 PM 0 Comments Links to this post

  Daily reading 11/10/2007

Managing a Corporate Blog, Like HP's - MetzMash

Wal-Mart's Biggest Marketing Tool? Its Web Site - MediaPost, Nov. 8, 2007

Top 10 Marketing Blogs – 2007/2008

ClickZ: Defining Social Media

Labels: blogging, marketing, social_media

  ¶ 8:30 AM 0 Comments Links to this post

  Marketing segmentation through social media Howard Kaushansky of Umbria gave an enlightening talk about audience segmentation of social media influencers at Blogworld Expo this morning. He talked about two examples of what his company has done for different clients in the consumer products field.

For an apparel maker, Umbria analyzed postings to blogs and social networks to identify the following segments:

Fit Finders (39% of the population), Self Expressives (19%), Bargain Seekers (17%), Label Whores (11%) , Style Gurus (8%) and Dissenters (6%).

Here’s an example of segment characteristics: Fit Finders are Generation Xers looking for appropriate jeans for their changing physiques. . Low-waisted jeans aren't working for them any more, but “old person jeans” aren't appealing either. Plus-sized Fit Finders are looking for fashion-forward styles rather than shapeless designs.

Self Expressives want control. They want to distress their own jeans, design clothing reconstructed from jeans and add personal style to jeans through patches and embroiders.

Style Gurus are looking to be unique. They're looking for authenticity and real inspiration. "Some men are actually starting to become interested in wearing women's jeans because they view them as more stylish," he said. These insights emerged from online conversations.

Umbria’s analysis is entirely text-based. “We're listening in on this world, not asking them to fill out surveys or segment themselves,” he said. It’s not just what people say but the words they use. Fifteen-year-old girls speak differently than 54-year-old men.”

For another client that makes packaged food, the company analyzed women’s blogs to identify four core segments: Me Time, Weight Management, Balance and Wellness and Beauty from Within (percentages weren’t given).

They then analyzed women’s needs and interests by time of day. The company also identified common moods at each time of the day and mapped foods, packaging and promotions to these moods and activities.

For example, afternoon is "Connect Time" when women share stories and experiences to gain support, external perspective, humor and advice. During Connect Time, activities include emailing, blogging, phone calls, sharing a meal, getting beauty treatments, going out, and spending time with family.

These segments were mapped to moods and foods. For example, "Me Time" is early morning, often before families are awake. At that time, women are looking to empower themselves. "Me O'Clock" yielded these strategic insights:

• Women embrace this time as an opportunity to regain control
• Don't tell them what's right; enable them to make better decisions and express themselves
• The emotional benefit of this time is personal empowerment

Ideas for productions and promotions:

• Personalized snacks
• Calendars with times blocked out for “Me Time.”
• Market teas and other products with a stimulative effect specific to early morning personal time.

With blog monitoring, "You can listen to these people and understand what are the drivers and unmet needs."

Labels: blogging, BlogWorldExpo, marketing, segmentation, social_media

  ¶ 2:45 PM 0 Comments Links to this post

  More AMA Webinar questions answered Here are more responses to questions that time didn't permit me to answer during the AMA Marketing Seminar on Oct. 15. Each of these permalinks is tagged “AMA” so you can easily group them together. Thanks to everyone for coming and for asking such great questions. More to come!

Q: Stacie asks, “How will social media play out with healthcare vs. consumer products?”

A: Very differently. People typically want to consult with expert advisers on healthcare decisions and their relationships with those people are important. They’re much less likely to turn to anonymous sources for life-and-death matters. That said, the Internet has played and will continue to play an important role in alternative medicine, wellness and background research. Social media will have an important role in helping people diagnose problems, choose courses of treatment and seek alternatives.

In consumer products, social media is already playing a huge role in evaluation and purchase activity. The CEO of Procter & Gamble told the Association of National Advertisers last year that they have to stop trying to control the message. "Consumers are more participative and selective and the trend from push to pull is accelerating," he said. Those are strong words coming from the world’s largest consumer products company.

Q: Anne asks, ”Doesn't social networking skew younger? And, do these networks apply to B2B marketers?”

A: Yes, the most active users of social networks are unquestionably people under the age of 30. If you’re an entertainment, food or clothing company, you’re probably already using these media because that’s where your audience is.

In some markets, though, social media is making a big impact on older age groups, and particularly in b-to-b markets. The information technology market is one of the most active users of blogs and podcasts, for example, and it’s almost entirely a b-to-b business. The travel and hospitality industry is using interactive marketing to reach business people with specific interests, such as frequent travelers and corporate event planners. Professional associations like the Air Conditioning Contractors of America and the National Association of Manufacturers are blogging to promote their members. There will be more examples of this as the younger population grows up and begins to apply the tools they use at home to their business roles.

Q: Patience asks “So why did you choose to not self-publish?”

A: I believe this question is in response to a comment I made about Lulu.com and similar sites that making self-publishing of books fast and relatively inexpensive. There are advantages to working with a commercial publisher, including an established distribution network, retail store presence and a certain cachet that comes from having a publisher endorse your work. This leads to intangible business opportunities that have nothing to do with royalties. You can definitely make more money self-publishing, though. If you don’t particularly care about building a speaking or consulting business, but just want to get a message out, self-publishing gives you more control and potentially bigger profits.

Q: Brent asks, “Are there similar influencers in Europe, Asia-Pacific, and Latin America?”

A: Yes, although to different degrees. In fact, the number one language in the blogosphere is Japanese, according to Technorati’s State of the Live Web report. Korea and Japan have a much higher penetration of broadband into the home than the U.S. does, and a very active culture of bloggers and social networkers as a result. Korea’s OhMyNews.com is the largest experiment in community journalism on the Internet.

In Europe, the blogosphere is very healthy, although my evidence is purely anecdotal. I run across blogs in Danish, German, French and other languages I don’t even recognize all the time. Two of the most interesting corporate blogs are published by Benetton and Ducati motorcycles, both in Italy.

I can’t speak to Latin-America specifically. The economy is not as strong in many of those countries as in the U.S., Europe and the Pacific Rim, so broadband penetration is lower. The Technorati blog tracks blogs by language and can give you some useful statistics.

Q: Anne asks, “How do apply this to local or regional marketing? Yelp, for instance is very biased, and doesn't feel trustworthy the way that a more neutral, traditional third party does.”

A: I’m not sure I agree with your comments about Yelp. That site is simply a conduit for its members to post reviews of restaurants and entertainment spots. While such a system is always vulnerable to manipulation, the number of reviews that Yelp lists for some properties is remarkable. In general, the more reviews there are, the more reliable the average rating should be.

You should always be leery of peer-review systems in which only a few people have commented. It’s like research: you should probably through out the extremes at both ends of the scale, because those people may have an agenda.

As far as regional marketing goes, I’d just point out that some of the most active social networks are regional. Going.com, Yelp and eCrush are just three of the many networks that target people who are looking for entertainment and companionship. Also, regional interests like sports and politics are magnets for local audiences.

Labels: AMA, blogging, social_media, socialnetworks

  ¶ 8:32 AM 0 Comments Links to this post

  Your questions answered: AMA webinar follow-up I had the pleasure of being the guest speaker on and American Marketing Association webinar sponsored by Aquent early this week. We had a great audience -- more than 750 people attended -- and there were more than 20 questions that I was unable to answer because of time limitations. I'll answer each of them in a series of blog posts over the next few days. Each of these permalinks will be tagged “AMA” so you can easily group them together. Thanks to everyone for coming and for asking such great questions.

Q: [At one point, I referred to a story told by blogger Robert Scoble about a technology vendor who told him that a single link on his blog drew far more response than an article in a prominent technology magazine.] Jennifer asks, “How did the software company evaluate the influence of Scoble's blog?”

A: Simply by traffic to the page linked to by Scoble. This is one of the great benefits of social media marketing: you can easily track referring links from other sites and quickly figure out who is sending you traffic. This is standard information that all Web analytics software provides. Obviously, the people who are sending you the most traffic are the people who should get more of your attention and outreach.

Q: Lidia asks, “I would like to know your opinion related to the large influence this phenomena is having on small kids that are exposed to these new media sites like clubpenguin, etc. How will these affect their personality, their habits, etc?

A: I'm not a psychologist, and it's impossible to predict the indirect impact of the behaviors that social media sites are creating. I believe that a few changes are inevitable:

• Kids will define their relationships very differently, with geography being much less important than in the past. They are already learning to form rich and meaningful relationships with people they have never met, solely through the use of digital technology. They care little about where their friends live as long as they can communicate about topics of mutual interest. If you take this to its logical conclusion, you can see that national boundaries will become less important to relationships in the future. It seems to me that that's a good thing.
• Kids will grow up expecting to be constantly connected and to always have information at their fingertips. Call it the Wikipedia generation. This is completely different from the world of previous generations. Today’s kids will expect to be able to access whatever information they want within a few seconds, and will be frustrated and angry when it’s unavailable. This will put pressure on institutions to open up and give people access to whatever information they need to make a decision. Again, this sounds pretty good to me.
• There's a possibility the kids will grow up being less worldly and less well-rounded than generations that preceded them because of their ability to filter information they consume. I'm hoping that natural curiosity counteracts this trend, but the declining influence of mainstream media may create a generation that is more insular and less aware of world issues than previous generations.
• There's a risk of negative health consequences caused by a more sedentary lifestyle. There's no question in my mind that the current epidemic of childhood obesity is due, at least in part, to the pervasive use of video games and online entertainment instead of physical recreation. It will be up to parents, schools and government to encourage physical activity by kids who don't have as much incentive to get out and play anymore. I don't think we're seeing as much progress in this area as we need to, and it concerns me.

I'm sure there will be many other long-term effects of this new digital lifestyle, some good and some bad. I think the breaking down of cultural and geographic barriers, though, will be a very positive development.

Q: Charlayne asks, “How does a company build "blog" integrity without sounding as if they are their own advertisement? How does a company build positive brand awareness via a blog?”

A: I’ll answer the first part of that question by simply saying don't use your blog to sell. The purpose of a business blog should be to engage with customers and prospects around information that is of mutual interest. Use it to expose smart people in your company, discuss issues in the market, identify customer needs and seek feedback on your products and priorities. Don’t use it to deliver advertisements; if you do, no one will read it and you will quickly lose interest yourself.

The second question is very large and could be the subject of a book. In fact, it is the subject of several books. I’d recommend Naked Conversations by Scoble and Israel; Marketing to the Social Web by Weber; What No One Ever Tells You About Blogging and Podcasting by Demopoulos, The Corporate Blogging Book by Weil; and The New Rules of Marketing and PR by Scott. It’s impossible to summarize the advice contained in all of these volumes, so I will simply recommend that you pick any one of them and dive in.

Labels: AMA, blogging, social_media, socialnetworks

  ¶ 2:47 PM 0 Comments Links to this post

  Demo stuff that I'll use Note: Video presentations of the products mentioned below, as well as most other presentations from Demo, are available here. Blogger won't accept the embedded videos and I don't have time to mess with it.

Here are some products and services I saw at Demo that I plan to try out for my own use:

Graspr – There used to be a great site called Learn2.com that showed how to perform life tasks ranging from making a soufflé to fixing a leaky pipe in simple words and pictures. I don’t know what became of it; the URL now points to a software retailer. Graspr gives the Learn2 concept a social media twist. Members can upload how-to videos and annotate each other’s creations, sharing tips or advice on how to do something better. Members can also vote on the most useful content. This is a good way to mine the wisdom of crowds while also enabling people to connect with others who have similar interests and expertise.

Propel – This is quality-of-service (QOS) for the PC. Developer Propel Software Corp. argues that when people are frustrated with Internet performance on the desktop, the culprit is often their own PC. A PC doesn’t distinguish between a file download and a VOIP session, for example, so bandwidth-critical applications may suffer because low-priority jobs are getting an equal share of the pipe.

QOS is a discipline that assigns priorities to applications so that some packets get priority on the network over others. It’s been implemented in corporate networks for years, but Propel’s utility brings the same concept to the desktop, allowing the user to define priorities for bandwidth demand. Propel also provides a simple dashboard to monitor traffic and make sure all is well. The product should be available by the end of the year. If it works, it’s a no-brainer that I’ll use it.

Diigo – I’m an active user of the del.icio.us social bookmarking service, but I’m frustrated by its limitations. A big one is that del.icio.us only provides a few characters with which to describe the pages I bookmark. I frequently run out of space trying to write a description.

Diigo is social bookmarking for serious researchers. Users of its toolbar can highlight and annotate passages on bookmarked Web pages. People can comment on each other’s bookmarked pages and highlights. Essentially, the service creates group discussion around Web content. Anyone with the Diigo toolbar can see other users’ annotations and sites that choose to implement the Diigo protocols can provide these capabilities even to non-Diigo users.

There are other innovatives features in this release, including a function that lets you create a PowerPoint-like slide show sequence using Web pages. I’m not sure I see much utility in that, but the highlighting feature alone could be enough to make me switch from del.icio.us.

Yuuguu - screen sharing has been around since the early days of Microsoft NetMeeting, and is still a core feature of services like GoToMyPC.com. You can also download open-source screen sharing software like VNC. So the idea isn't new, but Yuuguu has implemented it in an elegantly simple way.

Yuuguu WebShare users can share their screens with others on the fly by simply clicking on names in an AOL Instant Messenger-like buddy list. The shared screen comes up in a browser window and users can easily pass control of their screen to others, with everyone seeing the results. The company pairs the service with a global audio conferencing system. It’ll make money from that and give away the software client for free.

MyQuire – Another Web 1.0 idea that many find a new life with a social media twist is project management for consumers. In the early days of the Web, several Internet businesses launched services that let consumers collaborate on everyday group projects like organizing church socials and softball leagues. The services were limited by the technology of the time, particularly the reliance on e-mail for communication and limited file-sharing. MyQuire improves on the collaborative features of the early efforts and adds standard social media tools like photo and file-sharing. The company is in stealth mode for a couple of more months, but the demo version of its service looks interesting.

LongJump - As a small-business owner, my financial management processes are embarrassingly rudimentary. At some point, I probably should make the switch to Intuit’s QuickBooks, but LongJump would argue that it can deliver all that functionality and more for a low monthly fee. The initial service combines 14 common business applications and an integration platform that developers can use to add others. Monthly fees will start at around $25.

The integration platform is very similar to Salesforce.com’s app exchange concept. While there's nothing particularly new about LongJump’s business model, its aggressive pricing and impressive feature set could make it an attractive service for small business owners.

Labels: demo07, SaaS, social_media, socialbookmarking

  ¶ 9:10 AM 2 Comments Links to this post

  Cool stuff for marketers Several services of interest to marketers are debuting here at Demo in San Diego.

The MuseStorm Content Engagement Platform is a service that simplifies the creation of widgets, those ubiquitous branded medallions that show up on blogs and social networking sites and deliver video, images and text streams. The founders claim that businesses typically spend $30,000 to create a widget (not an unrealistic figure, from what I’ve seen) and that they can reduce that process to a few minutes.

Drag and drop the content container and the relevant content into a workspace, add logos and messages/instructions and generate the final product without coding. MuseStorm provides components to e-mail a friend, download a brochure, request a follow-up, vote, comment, etc. and delivers final code that can be dropped into any html page. More importantly for marketers, the company has back-end tracking and reporting to tell marketers what’s resonating with the audience and what’s falling flat. Pricing is correlated to traffic.

UK-based Real Time Content Ltd. has one of those “why didn’t I think of that?” services. Adaptive Media Version 1.0 delivers targeted video to visitors based upon interests they specify. It’s a simple concept that must be devilishly difficult to implement.

Consider the range of videos that a car company might want to show a visitor. A 25-year-old single male might want to see the fastest sports car while a 35-year-old mom could prefer a demonstration of safety features. On most websites today, every viewer gets the same video, no matter what their interest.

Real Time Content stores a menu of videos, text messages, images and calls-to-action that can be dynamically assembled and delivered to visitors depending on information they provide. So that 35-year-old mom gets a video and text overlay talking about safety features along with an invitation to request a brochure while the single young male might get an invitation to sign up for a test drive. The company has reporting and analytics to show marketers what’s working.

Shoutlet is a tool for monitoring Web 2.0 campaigns. The service includes a platform for distributing content like video and RSS feeds to dozens of sites, a widget-building function, RSS feed creator and e-mail campaign manager. The reporting is supposed to be where to Shoutlet shines. The developer, Sway, is a marketing services agency specializing in social and viral media. It should know what kind of reports marketers want.

Sway intends to price under $10,000 a month, which would make it cheaper than the influence-tracking services offered by most of its competitors.

Labels: demo07, marketing, measurement, social_media

  ¶ 4:07 PM 1 Comments Links to this post

  Best of Demo - Day One Demo is one of the few conferences that I have consistently made an effort to cover over the years. There’s a cool factor associated with the myriad early beta and pre-beta products being shown here, but what’s more important is that Demo is a leading indicator of what’s going to be hot in the IT market in the coming year. It’s like getting a jump-start on the newest trends.

When I look back at my choices for the most interesting Demo technologies of 18 months ago, I’m struck by how few of those companies have achieved prominence. However, many of the concepts they were working on have succeeded in other forms. New platforms always create a flurry of innovation followed by a long cycle of consolidation and retrenchment. This phenomenon will play out in social media the way it happened in PCs, LANs, Internet 1.0 applications and other smaller markets in the past. That doesn’t mean this process isn’t important.

Among the interesting demos I saw today (and keep in mind that these are demos, which are only one stage removed from fairy dust):

LiveMocha – This product sits closest to the perfect intersection of cool and practical. If you’ve ever tried to learn a language by computer, you know that the process is slow and one-sided: the instructor talks and you listen or practice.

LiveMocha leverages community to make learning languages easier. Traditional courseware is wedded with feedback from native language speakers who help each other master the finer points of writing and speaking. Your feeble scribblings in Spanish can be critiqued by people who really speak the language. And a VOIP feature lets you connect in real time with native speakers while supporting you with translators and organizers. My wife tried this product this evening after I told her about it and said it really works. LiveMocha gets bonus points for that. Best of show to this point.

Baagz – I absolutely loved the demo of this service. I just hope it’s as good as the demo shows it to be. Baagz is a spinoff product of Exalead, a French search-engine company that specializes in semantic search. Semantic technology derives information about web pages that isn’t explicitly stated on those pages. A lot of people think it’s the next generation of search.

Baagz users can set up personal “bags” of information about whatever interests them. Say the topic is Paris. You create a Paris bag and then drag information from around the Internet into your Paris bag. Semantic search derives additional information about your collection of choices that makes your bag perform better on the site’s search engine. That makes it easier for others to find you based upon your interests.

Other people can access your bag and leave comments, add tags or integrate their own Web clips. Over time, you develop communities of people with like interests, and the semantic search helps hone your areas of focus. The demo of the bag space is very cool, although I suspect it requires a lot of processing power. The interface makes it a whole lot easier to collect interesting information than the snip/bookmark approach that’s commonly used today. This is a very cool concept for presenting an idea that’s intuitively useful.

CoComment – The Internet is awash in conversations, and keeping track of all the exchanges that interest you is daunting. CoComment lets you aggregate conversations from across public and even gated websites like Facebook and MySpace, so you can easily see who’s commenting, what they’re saying and when conversations are changing. This technology isn’t cool so much as it’s very practical.

YuuGuu – YuuGuu is AOL Instant Messenger for screen-sharing. If you thought there was already technology out there that let you quickly and easily share your PC screen with others, there really aren’t many. Sure, GoToMyPC and VNC have had screen-sharing for a long time, but few, if any services make it easy for large numbers of people to quickly and seamlessly share screens and manipulate each other’s applications without requiring a lot of setup and configuration.

Contact anyone on your buddy list and invite them to share your screen. The process is a few clicks.You can quickly and easily hand the baton off to others to control your screen, with everyone who’s signed on seeing the results. The product is free; the company plans to make money off of telephone conferencing services that complement it.

SceneCaster – We’ve all seen those cool 3D programs that show us what hotel rooms and restaurants look like. If you’ve ever wanted to create rooms of your own, there weren’t many options to do so. SceneCaster lets you create 3D environments and modify them with a minimum of setup and no programming. You can then share those designs with others and interactively edit and comment upon them.

I particularly like the company’s revenue model: businesses pay to have their products represented in 3D for you to drag and drop into your scenes. So if you’re designing an office, you can add chairs from Eurotech to your scene for free. The back-end would have a link to a commerce site where you could buy the sponsor’s chairs to fit the scene.

There's a corporate play here, too. The company says it has several business customers who use the 3D authoring and rendering engine to create models of products to demonstrate to customers.

Radar – I wasn’t blown away by this demo when I first saw it, but the more I thought about it, the more I liked it. We interact with many websites these days, and we learn a different interface for each one. What if the content from those websites could be aggregated into a single interface? That’s essentially what Radar has done.

The company’s software player makes it possible to view content from literally hundreds of sources in a single viewer. Radar has cut deals with a lot of the top content sites to make their stuff available through its player. Users will be able to customize these master views by importing their own RSS feeds.

Once Radar has a critical mass of content being displayed through its reader, you can imagine a lot of ways to layer value on top of that, including recommendation engines, commenting, tags and other Web 2.0 features. It’s still early-stage technology but with a lot of promise.

That’s it for this (late) night. Descriptions of more cool products coming on Wednesday.

Labels: demo07, social_media

  ¶ 12:52 AM 0 Comments Links to this post

  Q&A for PRSA

I was privileged to present a virtual seminar this week to the Public Relations Society of America. Some interesting questions came into my mailbox after the program was over, so I thought I'd answer them here.

If you're at the PRSA International Conference in October, be sure to stop by and say hello. I'll be giving a presentation on Monday, Oct. 22, as well as sharing the stage with PR legend Larry Weber.

Here are the questions and my responses:

Sarah writes:

I am interested in the standards of new media and wanted to ask you specifically about the emergence of advertising on the new media platforms. Are advertisers gaining traction on these sites? I imagine they are. So then…will the new media have a mechanism for separating edit from ads? More fundamentally, how do I trust that the blogger-citizen-writer is free from advertiser influence?

One phenomenon I discuss in my book is the emergence of a rich set of ethical standards in the blogosphere, the kind of standards that any journalistic organization would be proud of. Basically, deception is considered a high crime, and bloggers who have written for hire have been roundly flogged. There are services that pay for coverage, but as a rule, bloggers are expected to disclose these affiliations.

The question of separating ads from editorial is always a moving target, as it has been in print for many years. I believe advertisers and publishers both know that disguising advertising as editorial is bad news. Standards for how ads appear on a page are evolving, but our perceptions will evolve with them. Just as avid newspaper readers instinctively know how to tell an editorial from an advertorial, I expect the same intuitions will develop online.

Jason comments:
While Facebook is exploding beyond [its origins as a service for students], the core users still base their involvement on personal networks. The majority of my Facebook friends are former students I worked with while a PR manager in academia. Integrating these less than professional interactions with fellow PR pros and even clients makes for pins and needles monitoring.

No matter how many identities you might have, Google ruins your chances of complete separation. Unless you resort to pseudonyms for your interactions, the transparent society in which we surf will forever dangle the threat of exposure if you like to keep your person and persona separate.

Can an executive at, say, Ford, share beer jokes with college buddies on his or her MySpace page? Or manage a personal blog about erotic photography while representing Ford on the company blog?

My questions are:

1. Do you see potential pitfalls of people juggling multiple identities in the online world?
2. Where should professionals draw the line in becoming a social networking participant on a personal basis?
3. HR professionals are already Googling potential job candidates. Should your Facebook/MySpace/etc., profiles be off-limits and how can they be if the information is there and free? 4. How long will it take for the Supreme Court to have to decide what a person's online world means in terms of their employment?
4. How long will it take for the Supreme Court to have to decide what a person's online world means in terms of their employment?

Your questions imply that people should expect protection over what they say in a public forum beyond those already afforded by the Constitution. I fundamentally disagree with that. The public Internet is every bit as much a public space as Times Square, the exceptions being that one's indiscretions on the Internet may potentially be seen by many more people and may also be easily searched, copied and stored. It's no secret that the Internet is a public resource or that public websites are, well, public. I think it's foolhardy to assume that what you say on the Internet is private.

This puts a greater burden on the individual to be aware of the risks of their behavior and to be discreet. Personally, I would never say anything on a public website that I wouldn’t want published in a newspaper. But the burden is with individual, not with those who witness a person’s behavior. If you want privacy, pick up the phone, use an anonymous e-mail server or encrypt your messages. But don't expect the courts to come to your rescue. Ignorance of the law is not an excuse for breaking the law, and failing to understand the obvious risks of speaking in a public place should not be an excuse for doing something stupid.

Cindy asks:
When I returned to the office, I immediately tried to go onto Technorati and search for bloggers in the mortgage technology arena, where many of my clients are focused. I found many mentions of mortgage and technology but could not figure out if [the authors] were influential or if they focused in the industry. Is there a better way to go about finding these bloggers? I think I may be too old for this stuff.

I doubt you're too old, Cindy! It's more a matter of the search tools being different in this world. I’ll preface my response by saying that all search tools are imperfect. You should use these resources only to give you a general idea of a blogger’s influence.

When you look at the search results in Technorati, you'll notice a small green label that says "Authority." This is a ranking that Technorati uses to distinguish the popularity of bloggers. The higher that number, the more links to the bloggers site and, supposedly, the greater the person's authority. Click on the name of a blogger to see a more complete profile of that person, including his or her ranking among all the blogs that Technorati tracks.

Blogpulse is another site to look at. You can search on a term and then click the "view blog profile" link on the right to learn more about the author. Blogpulse's database is smaller than Technorati's, but it has some interesting and unique features.

Here are a couple of Google tricks. When you type a search term, look at the URLs of the sites in the results. You can often tell by the domain name whether a site is owned by an individual or a business. If a site looks interesting, type “site:sitename.com” into Google to get a list of sites that link to that one. The more links there are, the more popular the site.

You can also use the “site:” operator to find all mentions of a particular search term on a site. So typing “social media site:paulgillin.com” will return a list of all articles on paulgillin.com that mention social media. This is a good way to find out how much a blogger refers to a topic.

Labels: blogging, CIO PR, social_media

  ¶ 7:53 PM 15 Comments Links to this post

  Facebook deserves marketers' attention

We’re still in the first inning of the social media game, yet the urge to pick winners is strong. Anyone who’s trying to make sense of all the activity right now is being whipsawed. A year ago, MySpace was all the rage, then YouTube took center stage last fall. Early this year, everyone was atwitter about Twitter and now Facebook is growing like kudzu to the applause of investors and the press.

While there will no doubt be other market darlings, I think Facebook is the first of these nascent communities to deserve serious attention from b-to-b marketers. If you haven't been paying much attention, you might still think of Facebook as the social network for college students. In fact, as recently as last fall, a personal still needed a “.edu” e-mail address to join.

All that changed last late year when Facebook made two critical decisions: it opened membership to anybody who wanted to join and it permitted third-party software developers to build applications specific to the Facebook platform.

The results have been astonishing. Membership has doubled since the first of the year, eclipsing 30 million in early July. What's more interesting to marketers is that the demographics of this member base are intriguing. As Rodney Rumford points out in this analysis, members over 25 years of age now account for half of Facebook traffic. That's remarkable when you consider that most of those members couldn't even get to the site 10 months ago.

An even more telling statistic is audience engagement. According to Comscore, 93% of Facebook members log on at least once a month and 60% use the site daily. Those are impressive figures for even a small community site; for one with 30 million members, they’re mind-blowing.

If you register on both MySpace and Facebook, the differences will whack you in the face. MySpace's heritage as a music site makes it feel at times like a giant virtual nosh pit. Member pages are festooned with graphics and music plays helter-skelter. In the year I've been a MySpace member, I don't think I've received a single message from someone I knew.

In contrast, when I registered for Facebook, I was flooded by invitations to become friends (social network lingo for establishing a connection) with dozens of current and past colleagues. Facebook allows you to monitor some of the activities of your friends, and it's an impressive display to watch. People I know are busily exchanging software applications to recommend books, movies, travel destination and professional web sites. The Society for New Communications Research, of which I am a member, chose Facebook as the community of choice for its professional members. And I continue to get “friends” request from actual friends almost daily.

If it keeps up this momentum, Facebook has the chance to succeed where earlier professional networks like LinkedIn didn't. While LinkedIn has some valuable professional networking features, it has the feeling of a software application more than a community. Facebook's approach to the market is proving to be more effective: it started as a community site and then added networking features. Its roots as a gathering place for college students has helped it to continue to attract the kind of members that marketers want to reach. If it continues to grow at its current rate for another year, it will reach the status among adult professionals that MySpace enjoys among teenagers: you simply have to be there.

This is not to say that Facebook is perfect. Its closed e-mail application doesn't sit well with people like me, who live in their inboxes. Some of its distinctive metaphors -- like writing graffiti on someone's wall -- can be confusing to new members. The process of creating a new group can also be somewhat cumbersome and confusing. And while its applications are impressive, Google still delivers better quality and features overall.

Nevertheless, business marketers should become familiar with Facebook. It has a chance to become the gold standard for professional networks. Even if it fumbles the opportunity, the dynamics of what's going on there are important to understand.

Update: Maggie Fox just passed along this press release from Comscore, showing Facebook traffic up 270% year-over-year, compared to MySpace's 72%. Of course, MySpace started from a much higher base and is still the leader overall by a wide margin, but Facebook is closing the gap.

Labels: marketing, social_media, socialnetworks

  ¶ 1:06 PM 4 Comments Links to this post

  Response to a skeptical review

IMedia Connection published the first less-than-positive review of The New Influencers today. It’s written by Phil Gomes, a veteran blogger who’s often cited as the first PR professional to practice the craft. In my view, Mr. Gomes’ review can be summed up as follows: New Influencers is a useful, if flawed attempt at putting into context a rapidly changing market in which decisions are frustratingly difficult to make. The book is full of good stories and makes a solid case for why corporations should pay attention to social media. However, it is marred by some factual mistakes and advice that is occasionally off-base. It's a decent early attempt at putting social media in context, but it needs to be baked more fully.

I would call the review modestly positive, although the headline, "Does ‘Guide To The New Social Media Mis-Guide?’" implies otherwise. I don't completely agree that the headline accurately represents the review, but I've written enough headlines in my time to know that it’s a judgment call and reasonable people disagree.

I have enormous respect for Phil Gomes and don't quibble with any of the flaws cited in his review. I would like to respond to a few of them, though, if only to point out sources and motivations.

Mr. Gomes notes disapprovingly that I recommended that readers vote for favorable stories about their own companies on Digg.com. He’s right that that was bad advice. Digg was still fairly new when the book was submitted to the publisher last October, and time has demonstrated that my recommendation was misguided. He has a good point.

He takes me to task for using statistics from Alexa and Technorati to validate the significance of trends and the influence of blogs. He notes accurately that Alexa relies upon a limited universe of users of its toolbar to estimate traffic statistics, which skews the results. This is true; however, the Alexa toolbar is used by millions of people, and should give a representative, if not statistically valid view of traffic performance. Alexa is open about the limitations of its approach, and I should have cited this at least in a footnote. However, in the land of the blind, a one-eyed man is king, and Alexa is the best we’ve got.

The same can be said of Technorati, whose blog popularity ranking has been both hailed and reviled. I cited Technorati rankings generously in the book, mainly because it is the measure of popularity that bloggers overwhelmingly told me they use. Blogpulse has a similar ranking, but its universe is much more limited. While Technorati has its flaws, bloggers pay attention to it and I think that has merit.

Mr. Gomes comes away with the impression that I lavished too much attention on the Technorati A-list, thereby downplaying the importance of less prominent bloggers. If this is the impression the book leaves, then I did a terrible job of making my case in Chapter 4, titled "Measures of Influence." The whole point of that chapter was to emphasize that A-list bloggers are influenced by many others, and that any campaign that focuses exclusively on the A-list is ignoring the sophisticated patterns of influence that work in the blogosphere. As noted in that chapter:

“Most A-list bloggers actually select at least half the items they choose to highlight from tips sent in by their readers, many of whom are small-time players. So the supernodes actually get their energy from satellites of much smaller influence who have their ear… [E]ven small players in the blogosphere can exert an unusually high level of influence depending on who is reading them. It is a modern version of the six-degrees-of-separation model. The blogger without much influence may actually be a link between two bloggers who have significant influence.”

He points out that I incorrectly identified Steve Rubel as head of Edelman's new-media consultancy. I stand corrected. I did send Steve an earlier version of that material for his review, but I evidently introduced errors after he had seen the early draft.

Finally, Mr. Gomes chides me for claiming that entertainment and celebrity blogs "don't generate much cross hyper-linking activity." In fact, that statement was attributed to a researcher at Nielsen BuzzMetrics in the context of a discussion about patterns of influence. While that doesn't absolve me of blame, I did not present the statement as being my own.

I offer these comments solely in the spirit of giving my perspective of these issues. In reviews of any kind, perception is reality, and Mr. Gomes’ perception of my misfires are my responsibility to correct, hopefully in a second edition. He says he’d be willing to read it :-).

Labels: NewInfluencers, social_media, social_media influence

  ¶ 2:52 PM 2 Comments Links to this post

  How to create brand advocates My article on brand advocacy published today on iMedia Connection. It's all about how to use electronic tools to engage with customers and make them your best sales representatives. I'd love to get your feedback and war stories. I'm starting work on a new book, Secrets of Social Media Marketing, and tales from the field are a key component. Don't be shy to tell me your successes. Failures are welcome, too. Names will be changed to protect the guilty.

Labels: advertising, social_media

  ¶ 3:45 PM 0 Comments Links to this post

  The Wall Street Journal reviews New Influencers Much to my delight, The Wall Street Journal this morning carried a 900-word review of my book, calling it "a persuasive case for companies' reaching out to bloggers," and recounting many of the stories and examples I used to argue for greater marketer attention to social media.

Unfortunately, you have to be a paid subscriber to read the article. We'll see what we can do about that :-)

Having tried (unsuccessfully) for years to get published in the Journal, this was an unexpected endorsement and a very gratifying one. It's good to see marketers coming around the perspective that social media can be a meaningful channel for customer connection.

Labels: marketing, NewInfluencers, social_media

  ¶ 2:11 PM 1 Comments Links to this post

  My interview on Blog Talk Radio

I’ve done lots of radio interviews over the years, and they are invariably similar: the host has maybe three to five minutes to talk and asks a question every 30 seconds or so. You can't slow down because the listener's attention will wane and will switch to another station. It’s invigorating, but also ultimately frustrating because it's so hard to say much that’s meaningful in that short a period of time.

That's why my interview this week on Blog Talk Radio was such a pleasant surprise. Just minutes before going on the air, host Wayne Hurlbert informed me that the program lasted a full hour with no commercial breaks. This is like telling someone in a Porsche that they have the entire highway to themselves. It was such a pleasure to stretch out and really talk over some of the issues with Wayne, who asked excellent questions. I don't know if anyone has the stomach to listen to me for an hour, but if you want to hear more details about what I learned about social media while writing The New Influencers, give it a listen.

Labels: blogging, podcast, social_media

  ¶ 3:27 PM 4 Comments Links to this post

  Our latest podcasts focus on social media marketing

The Tech PR War Stories podcast, episodes 15 and 16, are about the future of marketing with social media. In episode 15, we talk to Brian Solis, a PR executive who has been writing the PR 2.0 blog and who recently authored a social media manifesto that nicely pulls these technologies together.

In episode 16, our guest is Maggie Fox, founding partner of Social Media Group. The year-old firm is exclusively devoted to helping businesses use social media platforms and has had some remarkable early successes.

Both of our speakers are clued in to the potential of social media marketing, but both understand the difficulty of selling new ideas to top management. They offer advice on the benefits of embracing these new tools and how to get your clients and managers on board.

Labels: PR, social_media

  ¶ 11:22 AM 2 Comments Links to this post

  Facebook is rising, but social network users are fickle Rich Skrenta comments on the surging popularity of Facebook at the expense of LinkedIn and MySpace and asks Are network effects getting weaker? He has a great point about the fleeting success of early social networks.

A year ago, everyone was talking about MySpace. Now its star seems to be fading, perhaps as a consequence of its early success. My MySpace mailbox is full of come-ons from dating services and very little else. Meanwhile, a lot of my friends and business associates have joined Facebook in recent months and there's a surge or activity there driven by the service's expanding audience and new openness.

But who's to say that will last? As Skrenta notes, the cost of switching services is pretty low and people are inclined to run toward whichever network has shiniest new toy, at least for now. If Facebook doesn't continually out-innovate new competitors, its success could be short-lived.

Google has been remarkable in that respect, for the cost of switching search engines is zero. Yet Google got 65% of US searchs in May.

I'm currently a big fan of Facebook, but I'm not convinced it's the winner in professional social networks. It's way too early.

Labels: social_media, socialnetworks

  ¶ 7:52 AM 1 Comments Links to this post

  Tech PR War Stories Episode 11: our guest is Sam Whitmore Sam Whitmore's Media Survey is one of the most influential publications in the high-tech PR community, and David Strom and I were fortunate to have Sam himself as a guest on Tech PR War Stories this week.

We asked Sam to talk about the up-and-coming influencers in IT media and his response surprised me. He's evidently looking at media that tap into the real issues that IT pros wrestle with week-to-week more than new publishers and editors. He also had a lot to say about the ethos of the blogosphere and how PR pros should work with this new class of journalist. Bottom line: deal with it. These are the new journalists and their ethics and practices aren't all that different from the folks you've dealt with for years.

Good stuff from a thought leader who pulls no punches.

Labels: blogging, journalism, podcast, PR, social_media

  ¶ 9:14 PM 0 Comments Links to this post

  Be there for Thursday's webcast! Be sure to register for the BtoB Magazine webcast on the subject of "Reaching IT Pros through Social Media" on Thursday, May 24. I'll be in the company of Robert Scoble and and Mike Moran, IBM Distinguished Engineer and author of Search Engine Marketing, Inc.

I am seriously not worthy of being in the presence of such remarkable people, so sign up, show up and help me sound good!

Labels: Paul_Gillin_quoted, social_media

  ¶ 10:10 PM 0 Comments Links to this post

  Recommended reading If you visit the Amazon page for The New Influencers, you'll probably find that the Amazon recommendation engine pairs the book with the latest from David Meerman Scott: The New Rules of Marketing and PR. I've just finished David's book (his third) and highly recommend it.

David's premise is that marketing and PR have been forever changed by the Internet and that marketers who continue to mine traditional channels of influence are missing the boat. He argues persuasively that the new opportunity is to speak directly to customers - without going through intermediaries - and to engage them in mutually satisfying conversations that lead to long-term relationships.

This is the same basic premise of my book, only I focused exclusively on social media tools. David takes more of a macro approach, incorporating press releases, websites and fundamentals of good marketing. The last third of the book is full of useful how-to information, ranging from basics of tagging and podcasting to some excellent advice on how to write for your customers.

The new world of marketing is scary to a lot of people, but that's because change is scary. In The New Rules, David Meerman Scott outlines an exciting and opportunity-filled landscape that should energize every marketer. You need to read this book.

Labels: blogging, marketing, social_media, viral_marketing

  ¶ 6:29 AM 0 Comments Links to this post

  Me 'n' Scoble on a webcast I have the pleasure of being a guest on a BtoB Magazine webcast on May 24 on the topic: Beyond the Mainstream: Reaching IT Pros Through Social Media. I'm particularly delighted that Robert Scoble will be the other guest. Scoble's an IT-pro-turned-cultural-icon and he knows this topic as well as anybody.

The webcast is free and you can sign up here. Please come listen!

Labels: Paul_Gillin_quoted, social_media

  ¶ 7:24 AM 0 Comments Links to this post

  Nantucket Conference Day Two: Craigslist's curious success formula Craigslist.org CEO Jim Buckmaster was interviewed this morning on stage. Craigslist drives a lot of Internet and media companies crazy because it cares to little about profits. Its free classified ads undercut newspapers’ most profitable business and its remarkable growth (it’s one of the top 10 most trafficked sites on the Web with a staff of just 24 people) shows no signs of slowing.

Craigslist is a true social media disruptor. It has leveraged user interactivity and self-publishing to create a service that people love. In staying focused on user needs, it has pummeled its newspaper competitors who have historically offered expensive and slow services. Craigslist’s refusal to live by the almighty buck also makes a stirring example of how a service that keeps its eye on the ball – its users – and experience spectacular success.

The following is a more-or-less verbatim transcript of what Buckmaster said.

On why Craigslist doesn't have advertising
"We’ve been told by sales people that we could bring in many millions of dollars by adding text ads but our users aren’t asking us for text ads so we don’t have them. Paid search can create a conflict of interest with site search. The better your site search is, the less need there is for paid search."

On building community
"Something we learned early on is the more we can get out of the way and let users do things for themselves, it sounds lazy but laziness is part of it. The less you have to depend on someone in an office, users are better positioned than staff to serve themselves and help each other. The other thing is following up on feedback. The site has been hammered into shape by millions of requests over 12 years. Everything you see there today is the result of user feedback."

On the site's trademark boring text interface
"You might look to a boring interface as a reassuring thing to cling to as you’re looking at some of the outlandish things you see out there. We’re open in letting people use HTML in their postings, almost to a fault. People aren’t looking for the interface to be exciting. They’re looking to it to be fast, reliable and easy to use."

On preventing inappropriate material from appearing on the site
"We’re approaching 20 million new classifieds per month. The answer (to inappropriate material) has been to let users flag something that’s inappropriate. If enough users flag it, it comes down automatically. Inappropriate ads usually come down within a few minutes. It’s not perfect, but it’s far more effective than a centralized staff could do."

On a recent lawsuit over classified ad content
"A group of attorneys in Chicago filed a suit, tried to take us to task over a small number of postings they thought ran afoul of fair housing laws. Mostly they wouldn’t strike you as inappropriate. For example, the mention of a church in an ad was said to be discriminatory to people of a particular faith. That suit was dismissed. The group was attacking the law that exonerates service providers from being responsible for the content of their sites. If there wasn’t that law, a lot of sites like MySpace couldn’t function."

On why the company isn't more focused on making money
"This is where the descriptions like 'communist' and 'anarchist' come in. It seems to make no sense to let a site be as useful as possible and pay no attention to the monetary side. But it hasn’t been tempting. We enjoy working at Craigslist. Users like it and we’re not sure what we would do with a big surplus of cash. We’d probably look at ways to give it away.

"We give away at least 1% of revenue, but we haven’t had a chorus of users suggesting that we should run ads to generate funds for charity. People have that money now and they can give it away. We’re not in a position to be an arbiter of where that money should go."

On keeping the business simple
"We’re in the top 10 companies in traffic with a staff of 24, whereas the other companies on that list have staffs of more than 1,000. Early in the Internet boom, you tried to raise a lot of VC money and invest in esoteric hardware and expensive software. That never appealed to us. We invested in open source software from the beginning. We don’t have sales and marketing. We mainly have engineers. We don’t have meetings. We’re not trying to maximize revenue. When you’re not trying to maximize revenue, it’s surprising how little staff you need."

On EBay's 25% ownership stake
"That ownership is from an early shareholder who decided to sell his stake. EBay has been helpful to us in a few areas, like consumer protection. But on a day-to-day basis, there hasn’t been a lot of interaction."

At this point, audience questions begin

Q: How about cranking it up a little bit? If you went from 24 employees to 50 you could provide better services.
A: We are planning to hire more tech staff and customer service staff. But we’re not constrained by capital now, so it’s not necessary for us to look for ways to make more money in order to hire people. We’re not looking to become a mid-sized company. We’re happy being a small company.

Q: Do you intend to do anything internationally?
A: We have sites in 50 countries. They’re in English now but we’re laying the groundwork for multi-language support. For a small company to be prepared to offer support in languages you don’t understand is a big job. We’ve taken the approach we’ve always taken, which is to listen to user requests and when there are enough user requests, you do what they ask.

Q: How do you deal with regulators’ requests for information?
A: We’re interfacing with regulators on a weekly basis. It runs the gamut from the Secret Service to local law enforcement to the FBI. We try to keep things small and simple internally and we have good external council. Hiring lawyers would be a, and while I’d like to have that, we also want to maintain a small company that people like to work at.

Q: What can companies like ours (entrepreneurial firms) learn from you?
A: We don’t have meetings. People can work from wherever they are whenever they want. The tech model is built on alpha geek principle. We’re fortunate to have some fairly brilliant technical people. The one aspect of Craigslist that’s behind the scenes is how we manage to run a rapidly growing site with page load times that are among the fastest of any company. Open source is a big part of it.

Q: Who is Craig and what’s his role today?
A: He splits his time between being a hands-on customer service rep and a variety of media-related roles. In the Bay Area, he’s become a kind of celebrity. He was on a game show, for instance.

Q: Have you ever had to fire anybody?
A: It’s been more than five years. We had a rough patch where we had to do layoffs on our small scale. At the height of the bubble, more than 90% of our revenue was coming from dot-com job listings. Those declined by about 95%. By post-9/11, virtually all of the business we had had at the height of the boom was gone. We ended up letting some folks go who seemed to be contributing the least to our performance. That’s the last time that occurred.

Q: Have you ever thought of acquisitions like Angieslist?
A: You see so many mergers and acquisitions go awry and you rarely see a case where companies are better off after a merger. Plus you spend so much time looking at legal documents, and that’s one of the things I enjoy least about the job.

Q: What are principles of someone who would make a worthy partner?
A: Probably someone who’d be 100% focused on creating goodness for the end user without being clouded by sharp business interests that would cloud that. The dynamics of the Internet industry are so powerful that companies increasingly have the luxury of choosing a business model where they don’t come in to an adverse position with their customers. That’s been difficult in the past but you can do it now.

Q: Are you worried about competition, especially internationally?
A: We don’t even look at what other companies are doing. We’re not setting out to conquer the world of achieve any particular market share. We’re just following up on what our users want us to do. We’ve got plenty of things to occupy our thoughts about how to do better by our users. That crowds our thoughts of fighting competition.

Internationally, there are a lot of companies that have copied our model years before we got there. As long as they’re providing the good things that Craigslist tries to provide, we don’t have a problem with that. We try to be there in a the background as an insurance policy in case they try to turn the screws on their customers. We’ll be there if necessary.

Q: If you rolled back the clock to 1999 or 2000, what have you learned?
A: Our lives have gotten more complicated as the site has gotten bigger. Regulatory scrutiny is something we never had to consider in the past. The fact that it’s such a large marketplace invariably draws “bad guys” like spammers and wire transfer con games. It’s very hard to keep those people at bay. Both spam and scams are easy to avoid if you use the site as it was intended.

Q: What’s on your agenda for this year?
A: Internationalization is a large project. Also a less clunky geographical dimension to searching and browsing. Each site is an island under its own. Take Massachusetts: we’ve got a separate site for Boston, a separate one for Cape Cod, a separate one for Worcester. It’d be nice if there were a little more flexibility in the geographic vector. And combating spam and scams is an arms race we’ll always be stuck with. The spammers are resourceful people, they’re technically quite competent, they’re making their living exploiting the big sites. Those are the big areas.

Q: If you were running a newspaper, what would you do? They don’t like you so much.
A: To me, a newspaper’s role is to get high-quality, accurate information in front of readers. Long before I got to Craigslist, I felt that the big newspaper chains had gotten away from that by taking on debt and focusing on how to increase their profit margins. If it was me, I’d try to get back to the principles of how do I serve the role of the Fourth Estate well and keep from falling into this ridiculous war that we’re in. I was very disappointed with how newspapers dropped the ball in avoiding our getting into this war. I love newspapers and I read lots of them, but once you get away from what you’re about, it becomes difficult. You can’t serve Wall Street while you’re also trying to assist the public. If I were to choose, I’d try to serve the public and let the money side take care of itself.

Q: What are your guiding principles?
A: We have a strong sense of laissez-faire: To each their own between consenting adults as long as you’re being legal and not taking advantage of people. And the philosophy of letting people use the site as they want. You have to comply with legalities, but beyond that, in our minds the moral side is largely subjective and users have a much richer sense of morality than we do and they’re empowered to make decisions about what should be on the site and what shouldn’t.

Q: If your users decided they liked another site better and trickled away, would that be okay?
A: If were so inept that we couldn’t provide a value proposition that users found important, yeah, I’d probably encourage them to go away.

Labels: nantucketconference, social_media

  ¶ 1:22 PM 0 Comments Links to this post

  David Weinberger's presentation available as a podcast That was fast! Dan Bricklin has already posted a podcast of David Weinberger's April 24 presentation to the Mass. Technology Leadership Council. The first 30 minutes are a fascinating prepared presentation. The next 80 minutes are a discussion that could have gone on for hours.

Thanks to Alex Howard for tipping me off to the podcast's availability.

Labels: events, podcast, social_media

  ¶ 10:07 AM 0 Comments Links to this post

  Excited to be going to Nantucket Conference I'm delighted to have the opportunity to speak at Nantucket Conference, a highly regarded - and very intimate - annual event for top technology executives in New England. I'll be on an afternoon panel next Thursday, May 3, talking about how social media is changing the practice of marketing. Then I plan to hang out and just listen to the wisdom of some of the smartest tech entrepreneurs in the country.

This is a special conference because the size of the audience is limited and the population of lawyers, accountants and consultants is kept to a minimum. It's basically an event for business owners, investors and technology wizards. It takes place this year during a mini-boom in venture capital investing. Good timing and always a great program.

BTW, I think they're accepting applications to attend for a couple of more days. You have to request and invitation on the website.

Labels: events, marketing, social_media

  ¶ 6:58 AM 0 Comments Links to this post

  David Weinberger's comments provoke thought and debate David Weinberger gave a great talk to the Massachusetts Technology Leadership Council's Social Media Cluster today. David has great insight about the dynamics of social media. In his role as a scholar, he is free from having to worry about the commercial implications of these phenomena and to focus on the social dynamics they create. His views echo mine in many ways: human beings have lived for a million years in an environment in which information was scarce. Now we're moving into an age of information abundance, and this will challenge our institutions fundamentally.

Many people, including David, refer to Wikipedia.org as an example of how much things have changed. Encyclopaedia Britannica used to market itself as the comprehensive source of human knowledge. Wikipedia makes no such claims, yet it is far more comprehensive and scalable than anything Britannica ever imagined. Yes, Wikipedia has its faults, but it is at least honest about its shortcomings, and this paradoxically makes it more credible. Ironically, the historical tendency of media and publishing institutions to build an aura of invulnerability around themselves has actually made them less accessible to the audiences. That makes their mistakes all the more glaring. Put another way, the degree to which you define yourself as infallible creates a disproportionately negative backlash when your fallibility is revealed.

This hasn't ramifications for the future of our information institutions. In the past, people and institutions could define themselves as experts because no one could conveniently challenge their expertise. But we're moving into a world in which expertise is constantly challenged. In fact, experts can maintain their status only by consistently discussing and defending their expertise. They can no longer claim to be the oracle of information on any topic because other people can access information on that same topic so easily. This means that the role of the expert evolves into more of in an aggregator, pulling together different opinions from different souces and drawing conclusions from them.

This is a dramatically different definition of expertise, and it will be uncomfortable for many people in business, politics and academia. But I agree with David that this is the way the world is going. In an atmosphere in which information is freely available to everyone, the expert can no longer claim to be the final word on anything. He or she must admit to fallibility and derive influence from the ability to assimilate many facts and arrive at the most informed conclusion

Labels: social_media, social_media influence

  ¶ 9:55 PM 1 Comments Links to this post

  My column in Ad Age Advertising Age published my opinion piece this week talking about the similarities between public relations campaigns of the past and blogger-based marketing campaigns of today.

The techniques you use to influence the influencers really haven't changed all that much from the tactics that worked with mainstream media. It's just that the audience has different motivations. Once you understand how to influence these people, you can build a groundswell of favorable opinion that is impossible for the mainstream media to ignore. See examples.

Labels: mainstream_media, social_media, viral_marketing

  ¶ 9:51 PM 0 Comments Links to this post

  Come hear David Weinberger's social media insights on April 24. It's free!

Last month, I wrote from the New Communications Forum in Las Vegas about a great keynote presentation by David Weinberger. Now here's a treat: if you are in the New England area, you can hear David speak about the changes that social media are already causing in markets and institutions and all it’ll cost you is a drive to Waltham, MA.

As a co-author of Cluetrain Manifesto, David is one of the fathers of Web 2.0 and he is on the leading edge of thinking about it. His insights about why people blog, podcast and contribute to Wikipedia will amaze and delight you.

Join us on April 24 in Waltham from 4 p.m. to 6 p.m. to hear his thoughts. It's a free service of the Massachusetts Technology Leadership Council. All you have to do is write “guest of Paul Gillin” in the additional registrant’s field.

All the details are here.

Labels: blogging, social_media

  ¶ 1:06 PM 0 Comments Links to this post

  Tech PR War Stories # 3 is about loose lips, death threats and the future of print This week in Tech PR War Stories, David Strom and I talk about the Fred Vogelstein briefing memo and his Wired article. David says Google has become the new reputation management tool. IDG is transforming itself into an online company with the announcement that Infoworld will become a Web-only property. Paul asks whether print even matters in this market any more. And finally, we discuss the lessons learned from threats on Kathy Sierra’s life and how Tim O’Reilly brokered a rapproachment with Chris Locke.

Download the podcast here.

Labels: journalism, podcast, social_media

  ¶ 8:44 PM 3 Comments Links to this post

  Tech PR War Stories Episode 2 is live The second episode of Tech PR War Stories is live.

David joins us this week from a Microsoft developer’s conference. Some attendees are complaining about how Microsoft treats them, and they’re blogging openly about it. Paul and David discuss the issue of openness and the emerging PR paradigm of embracing the bad with the good. What’s important is the conversation, they agree, not controlling the message.

Thanks for all your comments. Please keep 'em coming!

Labels: PR, social_media

  ¶ 9:16 AM 0 Comments Links to this post

  An impressive meetup for The Strategy Paradox You know social media is mainstream when the big accounting firms get on the bandwagon.

This evening I attended a meetup for Michael E. Raynor, author of the new book, The Strategy Paradox. I learned of it from HeyLetsGo, a regional social network. I wanted to meet Raynor since he co-authored one of my favorite business books, The Innovator’s Dilemma and his new topic sounded like it might make interesting fodder for a blog I write on innovation.

It turned out, though, that the social-media aspect of the meetup was as interesting as the author. The event was an experiment for Deloitte. Held in a small upscale restaurant in downtown Boston, it had no guest list. Anyone who showed up was free to attend (and with open bar and a fine selection of hors d’oeuvres, it was a bounty for those who did). Promotion was through an announcement on PBWiki and news of the event spread entirely through word of mouth. Mark Doerschlag posted the notice on his MarksGuide.com, a blog devoted to professional networking, posted the notice on HeyLetsGo, which is how I learned of it. Anyone could have come: in that respect, it was quite different from the tightly controlled press events of yesteryear.

Deloitte reps delivered a short presentation highlighting the experimental nature of the event. There were no attempts to sell the company’s services. Everyone got a free copy of the book. I’d say there were about 30-40 people there.

I found the audience to be of surprisingly high quality, given the lack of restrictions on attendance. In addition to spending some quality time with the author, I spoke with several other attendees whom I had never met before. All were business professionals with a strong interest in social media and in the strategy-focused topic of the book. It happened that nearly everyone I spoke to was self-employed. Several appeared interested in the networking aspects of the event. All were bright and inquisitive and the type of people who will probably blog about the book.

I don’t know if this meetup will ultimately prove successful in promoting the book, but I was impressed with both the attendees and the discussion. I’ll certainly be looking at applying this idea to marketing my own book, which is due next month. For an event with so few restrictions, I thought it was a notable success and a testament to the power of word-of-mouth marketing.

Labels: meetup, social_media, strategy_paradox

  ¶ 10:32 PM 3 Comments Links to this post

  Wikibon is a great idea David Vellante has some ideas about revolutionizing IT market research. A former senior vice president at research firm International Data Corp., Dave's been running Barometrix, a successful startup focused on ROI measurement for several years. But here's the new idea: a couple of months ago, Barometrix spun out Wikibon, a company that's trying to apply wiki technology to market research.

The idea is to develop a rich research resource based upon contributions from knowledgeable people that are assembled and edited in a wiki. the first topic is information storage, but the goal is to apply this idea to other IT markets as well.

What makes this very Web 2.0-ish the idea of building a research product from content that is contributed for free. Research companies have always placed a premium on their ideas, and charged handsomely for it. Wikibon assumes that there are a lot of smart people out there who would be grateful just for the recognition. That is a fundamental Web 2.0: the assumption that good information doesn't have to be expensive.

Dave's competitors will no doubt hate this experiment, because they dislike anything that undermines their value proposition. But I think this is a heckuva good idea, and I'll be eager to see how it turns out.

Labels: social_media

  ¶ 10:22 AM 0 Comments Links to this post

  Author Jackie Huba on Citizen Marketers Citizen marketers: respect them, engage with them and make them your fans because they’re defining the message about your company and your products.

That was the message from Jackie Huba, co-author of Citizen Marketers and Church of the Customer Blog, who addressed the Social Media Cluster of the Massachusetts Technology Leadership Council this morning.

Jackie offered lots of examples of how individuals are influencing markets through blogs and online video. Here are my lightly edited notes from the meeting.

Who are citizen marketers? The content they create is actually branding for the companies they talk about. One reason we use this term “citizen” is that we see a link between this new media and the Bill of Rights. There’s a freedom to speak and a freedom to assemble.

Fernando Sosa and Thomas Hilditch of Chicago met at Second City because they were aspiring comedians. Their funky McNuggets video. “McDonald’s Nuggets by Fernando and Thomas” has been a viral hit. The funny thing about this was this was almost an accidental citizen marketer thing. They were going to perform one night and came up with this rap. The friends thought it was so funny that they recorded it, uploaded it and it got over 100,000 views. If you’re McDonald’s, that’s fabulous publicity.

Cell Block Tango is a homebrew video that’s had over four million views.

The MyBarackObama.com blog came out when Obama announced his presidential candidacy and 70,000 people signed up in a week. There are 2,400 self-selected groups but it was created by people, not the campaign.

Podcasting is another phenomenon that not taking off as quickly, but research is finding that heavy radio listeners are listening to traditional radio less. NPR gets over 2 million downloads a week. With podcasts, there can be comment around the content. Now people can collaborate around the content and have a discussion. You can’t do that with radio.

George Masters – in November, 2004 he was a vocational school teacher in Southern California but very interested in graphic animation tools. He created an animation about his iPod. Wired magazine picked it up and starting writing about a home-brewed iPod ad, saying it looked professional. The New York Times picked it up from there and then CNBC. It changed George’s life: he got an offer from a graphics animation firm and that’s what he does today.

Brian Finkelstein posted a video of a sleeping Comcast tech on YouTube and six days later, the Times picked it up. The Comcast tech was fired, but the big question for Comcast is why was the guy on hold for 90 minutes in the first place?. Go to Google today and type “Comcast technician” and the entire first results page is about the video.

Let the seller beware. If you have a bad product or service, the consumer has the microphone.

Mike Kaltschnee of HackingNetflix.com tried to get on Netflix’s press list and received a brush-off response, which he posted on his blog. When Netflix realized how influential he was, the company did a 180 and how treats him as it would a member of the mainstream media.

Jim Romanesco runs StarbucksGossip.com (subtitle: Monitoring American’s favorite drug dealer). He’s a Poynter institute journalist who does a lot of work at Starbucks. He’s actually scooping the media on some things. When Starbucks recently had some bad earnings, the company blamed it on new products that were increasing wait times. He posted about this and store managers began to contact him to say they had told the company eight months ago that this was going to happen.

Jackie spoke about a category of publishers she calls “the fanatics:”

SlaveToTarget.com is a blog by a 28-year-old mother all about Target. She writes about great new products and generates sales. People actually go out and buy the products that she recommends. Target ignores her. Why?

Rabid fans of the soft drink Surge launched a website called SaveSurge.org to try to rally support for a campaign to bring back Surge. They called themselves soda activists. They weren’t successful, but Coke did start to test a product called Vault. People were contacting the authors saying that Vault was a lot like Surge, so the group started VaultKicks.com to encourage Coke to go national. Coke eventually complied. Today, if you type “vault soda” in Google, nearly all of the links are to SaveSurge and VaultKicks fan sites.

There’s another category she calls “the facilitators:”

Paul Mullett runs mini2.com, a site for Cooper Mini enthusiasts. Last July, a mystery ad started running, inviting people to visit the site at midnight on a certain date. It turned out that BMW had given the site operators and a few other journalists a preview of the 2007 minis. At midnight, the site posted photos of the new mini to an enthusiastic crowd.

So who are these people?

We found that these people perceive these activities as “productive leisure.” For them, it’s a fun outlet to communicate with other people who love what they love. It’s a bridge from what they do in real life to their passion.

You might think that this is a lot of content. But there’s something we call the 1% rule: most of the content is created by only 1% of the visitors.

Microsoft’s Channel 9 is mostly created by people within Microsoft. They have 4.5 million visitors a month and only 11,000 contributors.

QuickBooks community has 100,000 monthly visitors but only 900 people who create any content.

It may be only 1%, but that 1% is very powerful.

How do you take advantage of this trend?

Reach out to your fans. Last week, TurboTax partnered with Vanilla Ice to get people to create raps about taxes. People are actually doing it!

Another successful example is Converse, which asked people to create videos about their Chucks sneakers and upload them to conversegallery.com. They got 1,800 submissions and Web traffic rose 66%. Sales doubled in the months after the videos ran.

She cites the Chevy Apprentice campaign as an example of a viral campaign that didn’t work. Environmentalists hijacked the campaign and it spread into mainstream media. GM’s problem was that they didn’t reach out to people who loved the product. They just enabled people to be nasty. Reach out to your evangelists, the people who love what you do. Try the contest.

Invite co-creation. When Shakira’s latest album didn’t sell well, her record company took one of the songs – Hips Don’t Lie - and asked people on her fan site to contribute videos of themselves dancing to the song. They got thousands of submissions and the song became a hit. Was the video the reason? Probably not, but it was a great marketing campaign to use fans to be part of what was going on.

Create communities. Discovery Channel has a little-known division called Discovery Education that targets professional educators. You can download images and video to bring a PowerPoint to life. Teachers love it and Discovery Education has 70% market penetration in schools. But awareness among teachers was low. So Discovery Channel decided to invite educators to join a program – the Discovery Education Network – that gave teachers the opportunity to come to a program to learn more about how to educate with these tools.

Discovery also launched the Discovery Educator Network where anyone could register, get a blog, join a discussion group, exchange presentations and materials. They’re attracting people who love what they’re doing.

Q&A

Any comment on Viacom’s decision to sue YouTube/Google?

These clips are the new 30-second ads. CBS is one of the top channels on YouTube. Some big media companies get it and others don’t. CBS gets it.

There seems to be a total breakdown in use and abuse of a brand. What are the implications?

There are some rules that protect consumers from using brands, such as parodies. iPodMyBaby had to change their name to iPopMyBaby. If you go to my blog, you’ll find some brands who are sending cease-and-desist letters to fans. One movie company got the bloggers to actually take down a blog. It’s a confusing time right now.

How did you write a book with your significant other?

Ben has a journalism background and I have a marketing background, so it worked great. He did a lot of the background and I interviewed a lot of the citizen marketers.

What do you do if you’re a regulated company?

A lot of this hasn’t been sorted out. I was talking to a company last week whose lawyers were very concerned about starting a blog. One side argued that the blog was a personal opinion but others were saying it was company communications. There are a lot of CEO bloggers but can’t think of any in regulated industries.

How about ROI?

A lot of it has to do with word of mouth. Fred Reichheld has done a lot of work to say what percentage of a customer base would recommend the product to others. He comes up with a score he calls the net promoter score that measures the value of loyal customers. A lot of people are doing this just because they need to learn about it. I would measure subscribers to your content, people who want to hear about you every day.

How do you get the budget?

We’re seeing a lot of companies not budgeting for this. That’s one reason we see so much interest in contests; the money comes from the promotions budget. A lot of companies are discovering that the value of the campaigns is traffic to their websites.

What’s the next big thing?

I have no idea! How do you predict the next YouTube? All I can say is that the next big thing will relate to participation.

Labels: consumer_generated_media, social_media, viral_marketing

  ¶ 10:29 AM 2 Comments Links to this post

  Why most viral video is stupid Bulldog Reporter's Daily Dog has an exceptionally thoughtful and well-informed article on the viral video craze that lambastes marketers for trying to add in viral buzz after a campaign has already been created. Author Andrew Foote's point is that anything that doesn't look genuine will be savaged by the community - and rightly so. He cites some excellent examples. If you're a marketer trying to get a handle on the viral phenomenon, read it.

Labels: social_media, video, viral_marketing

  ¶ 5:57 AM 1 Comments Links to this post

  South by Southwest lessons learned

Click To Play

Labels: social_media, sxsw

  ¶ 5:31 AM 0 Comments Links to this post

  Dan Rather underwhelms I didn’t expect much out of Dan Rather’s appearance at South by Southwest and so wasn’t very disappointed that it didn’t deliver. It was a missed opportunity, though. There was the chance to question Rather about all sorts of things that the audience cared about, including the relevance of mainstream media in market with millions of voices, the low public perception of the media in general, the future of citizen journalism and the relationship between social and new media.

Instead, the moderator, Jane Hamsher of FireDogLake, opened the one-hour session with a question about Rather’s confrontation with Richard Nixon more than 30 years ago. That was an event that I suspect scarcely 10% of the audience even remembers, much less cares about, and it got the session off to a bad start. The rest of the hour proceeded through a short series of relatively tame questions about the state of journalism, along with rambling answers by the newsman (this may not be the moderator’s fault; sometimes interview subjects put restrictions on topics they’ll address). Rather had some good messages for journalists, but they weren’t his audience. The issues that I believe the audience really cares about weren’t even raised until a brief Q&A.

The highlight was Rather’s pointed criticism of what he called “access journalism,” or a style of reporting that trades off aggressive reporting for access to inside sources. Journalists too often protect their sources in order to become part of the inner circle, he said, and political and business figures willingly exploit this weakness. He blamed this trend, in part, on the decline of media competition as media ownership consolidates and the increasing distance between news operations and their parent companies.

“Very often the source is using the reporter and the reporter is using the source, but when the source begins to believe that the reporter can be part of the team, that’s when things get dangerous,” he said.

Rather said that journalism needs a “spine transplant,” a return to its role as an independent advocacy for truth and disclosure. The role of the journalist is as a watchdog, he said. A watchdog barks when it suspects danger but doesn’t lie down or attack. It’s a warning system that keeps those in power on their toes.

“Do we still believe that the documents of government belong to the people and not the people in power?” he asked. “The president is not a descendant of the Sun God. This person is elected by the people and part of what [journalists are] expected to do is check on them.”

Rather’s message was a welcome call for a return to the values of Edward R. Murrow, whose name he invoked twice. But I think the audience was interested in hearing more about social media. Rather’s own knowledge deficit in that area - he didn’t mention YouTube or podcasts once and appeared awkward using "Google" as a verb - was painfully evident. As someone whose CBS career was arguably brought down by bloggers in the Rathergate incident, you’d think he would have more to say. But the question about Rathergate, like so many others, never came up.

Labels: journalism, mainstream_media, social_media, sxsw

  ¶ 4:36 PM 0 Comments Links to this post

  Reflections on Day 1 of SXSW

Click To Play

Labels: blogging, social_media, sxsw

  ¶ 10:56 PM 0 Comments Links to this post

  Why there'll be no social media bubble South by Southwest is my seventh social media conference in about a year (the others were Syndicate, Gnomedex, BlogHer, Podcast Academy and New Communications Forums in Boston and Las Vegas) and I’m again impressed with one thing: the lack of interest in financial rewards or profit motives on the part of the participants.

That fact was driven home to me again this evening, in a panel session called “Production Companies 2.0: Taking Online Video to the Next Level,” which featured some of the early winners in video blogging. In contrast to the industry panels of a decade ago, which were all about creating huge new brands and reaping rich rewards for the founders, this session focused on issues of artistic control, voice, independence and freedom from the pressure of commercial interests.

Ryanne Hodson of RyanIsHungry.com spoke about the importance of not signing away control over content to investors, while Andrew Baron of Rocketboom boasted about new features on his site that enhance social networking features and make it more useful to viewers. “The vast majority of our discussions about Rocketboom are about how to make it better for the audience,” he said.

Where money was discussed, it was always in the context of how video bloggers could manage to make a living from their craft. Rock-star blogger Robert Scoble actually drew oohs and ahs from the audience for mentioning that he had signed a sponsorship deal for his video blog totaling $300,000. A decade ago, such a small amount would have prompted snickers.

As a veteran of forward-looking industry conferences going back more than 20 years, I find this spirit remarkable – and refreshing. Ten years ago, the tony Internet industry confabs attracted swarms of bankers and venture capitalists looking for the next billion-dollar company. Entrepreneurs who played the game successfully at the time were rewarded with billion-dollar payouts. In contrast, Jason Calacanis, arguably the most successful social media entrepreneur to date, sold out to AOL for $25 million. That’s nothing to sniff at, but it’s a far cry from the payouts awarded to the founders of Yahoo, Lycos and Broadcast.com.

Last September, I wrote a column in BtoB magazine (the original doesn’t appear t be online since BtoB revamped its website) arguing against the probability of a social media bubble. “Bubbles need air supply in the form of venture capital and inflated expectations for investors. They also need a payoff. Almost none exists in this market,” I wrote at the time. I still hold firm to that position. Perhaps the big money is still waiting on the sidelines for a viable business model to emerge, but I think they’ll be waiting a very long time. The Internet bubble of the late 90s was driven by investors’ misguided assumptions that the Internet was a channel for big media and big brands to emerge.

In fact, the opposite is true. Social media is fulfilling the Internet’s promise to make it possible for millions of small communities to form around very specific areas of interest. People now have the tools to share and comment upon information that’s compelling to very small groups – and to do it at almost no cost. Political super-blogger Glenn Reynolds calls this phenomenon An Army of Davids and the terminology is apt. The Internet is all about specificity, not generality. It just took us a decade to realize that.

Labels: social_media, sxsw, video

  ¶ 10:06 PM 0 Comments Links to this post

  More Tagging Insights An interesting panel on tagging explored some of the applications and the social and commercial implications of tagging as these tools mature.

One angle that interested me is that groups develop their own syntax for tags and the characteristics of those tag lists are different as a result. One panelist pointed out that “social.network,” “social_network” and “socialnetwork” have different meanings on different sites and in different communities because the groups who agree on these syntaxes are using them to tag different kinds of content. On del.icio.us, people tagging “design” are referring to visual design while on Magnolia they’re referring to software design. Same tag, different groups, different meanings.

I was also interested in some interesting applications of tagging to more traditional collecting. Some libraries are making it possible for their visitor to tag books in their collections. This makes it possible for libraries to build super-catalogs that are much richer than traditional card catalogs. Some museum curators are finding that visitors to their collections have very different descriptions of what’s in them than the curators themselves. Tagging enables them to unlock that consensus of critical opinion.

One panelist pointed out that tagging serves a hierarchy of needs and as you advance in the hierarchy, it becomes more important to tune in to the syntax that others are using. At its most basic level, tagging is a way to save information. As you move into community applications, it’s important to understand and adapt to standards used by others. It’s also important to become more thorough in tag selection so that you help refine content descriptions for others.

Tags can affect traffic to your own content. One panelist noted that his sister’s photos tagged “voyeur” get more traffic than any other photos, clearly because they appeal to a base human instinct.

They’re also a way to find out what groups are thinking. Look at these tags for an album by Kevin Federline. Does this tell you something about this artist? Incidentally, Amazon has moved into tagging in a big way as a means to help customers find products that interest them. In this application, Amazon is relying on other customers to recommend products through their tags, without the intervention of professional editors or retail professionals.

Labels: social_media, sxsw, tagging

  ¶ 5:45 PM 0 Comments Links to this post

  Weinberger NCF keynote: users take back power Popular blogger and Cluetrain Manifesto co-author David Weinberger gave an enlightening and funny keynote presentation to the New Communications Forum in Las Vegas this morning. Here are my notes:

For the last 100 years, broadcast has dominated our communications and our democracy. Broadcast is now being put in its place. Many-to-many communications will become more important than broadcast.

It’s not about the content. We’re able to get past broadcast because we’re able to escape reality. Broadcast works because it’s constrained by the limitations of reality.

You can’t be in two places at the time, so everything has to have its own place. It’s a terrible limitation that the digital world escapes.

In mainstream media, there’s a limited amount of space. So only a few things get to appear and only a few people get to right. It’s the same order of information for everyone. Take away those constraints and now everybody can talk. We decide what’s interesting to us.

The authority system is changing. This goes back to the basic assumptions of our culture. The base assumption is that the larger the project, the more control you need. If you want to build something big, you need managers and managers to manage the managers.

The Web is the largest collection of human intellect we’ve ever built. It’s also the most usable and reliable. The Web is a permission-free zone.

Most of our institutions are built around the urge to control. But now the walls are down. A business isn’t the best sort of information about its products. You want to find other users. If you want to know how it is to drive a Mini Cooper in Boston in the winter, you’re not going to get the best information from the Mini Cooper website.

Broadcast gives the same message to everybody to drive down the cost of marketing. The only issue with this is that there’s no market for messages. Nobody likes being messaged. So we’re engaged in war with our customers, trying to make them listen to something they don’t want to hear.

Whole notion of markets has been affected by the notion of messages. Actual markets consist of customers and they’re talking all the time. We do it in discussion sites, mailing lists and consumer rating sites.

What is more boring than classified ads? They’re boring. But on Craigslist, we talk about what we’re posting in classified ads. And we do it through tags. We are so social that we even make bookmarks into a social activity.

Marketing, business and media are all about fake, phony voices. Conversations are open and honest.

What weblogs aren’t. They’re not about cats. They’re not about people in their pajamas writing about cats. They’re about things that we care about.

Encyclopedia Britannica has 65,000 important topics. Wikipedia has 1.5 million topics, including the deep-fried Mars bar and the heavy metal umlaut. Britannica is constrained by the physical because 65,000 topics fill 32 volumes.

Blogs aren’t journalism. They’re blank pieces of paper. The fact that they’ve been judged in the context of journalism is because the media can’t get past itself.

Journalists define their value in terms of their judgment. That has passed into the hands of readers. Since people first began exchanging news articles by e-mail, judgment passed into the hands of users. That’s our front page, what we recommend to each other. The Web is a recommendation engine and it has been since the beginning. A good example of how this plays out is Digg.

This week, USAToday introduced a bunch of conversational components, including Digg-like recommendations. But there’s only a thumbs-up, not a thumbs-down. This misses a key characteristic of readers, which is we want revenge. USAToday also introduced bloggers on its site. This is a titanic change, also links to things outside of USAToday.

We’ve been telling businesses for a couple of decades that information is important and businesses want to control important things. It turns out that NOT controlling the information actually makes it better.

Blogs aren’t professional. They are written sub-optimally. You don’t have time to ponder and polish. We give them pre-emptive forgiveness. There is an acknowledgement of human fallibility, the very thing that marketing messages don’t have. Marketing messages are perfect and we hate that. Humans are fallible. They make us human in ways that marketers won’t permit.

Bloggers with just a few people linking to them are little knots of community. Every blogroll link is a little act of selflessness. The Web was built out of these little acts of generosity.

Home page of NY Times: Every link on the home page links back to the New York Times, except those that link to ads. This is narcissism.

Blogs aren’t simple: Good marketing is supposed to be boiling things down to a few memorable words. But ideas aren’t simple. A Bush position paper 2,500 words long generated more than 2,500 links from bloggers. We take things that appear simple and make them complex. We’ve been living under this regime of broadcast simplicity. We’ve been spoken to as morons for years but we don’t speak to each other that way.

Blogs aren’t content – Content is really important, but it’s not just the content. If you go into a store and take a shopping cart and take all the clothing that fits you and nothing else and put it in a pile, they’ll throw you out. That’s because they own the organization. But if you put up a website where people can’t find what they want, they’ll throw you out. People want to own the organization.

You shouldn’t believe what you read in Wikipedia. That doesn’t mean it isn’t credible. If you read an article on something you know about, you’ll probably find errors. You look at how heavily it’s been edited. Look at the discussion pages, which have amazing learned discussions. What makes Wikipedia credible is that it puts up notices about articles that are suspect. There are more than 100 warnings available and you can create your own.

The presence of these warnings saying that this article isn’t perfect makes Wikipedia more credible. It’s more interested in informing us that speaking as the voice of God. It’s more interested in having us come to informed beliefs. You’ll never see these notices in the NY Times, Britannica or marketing materials.

The attempt to be infallible drives out credibility and makes us look like assholes.

Peer-to-peer is about us making the communication world ours again. Wikipedia is for us. It’s ours. It cares first and foremost about us. Craigslist is ours. People fall in love and get married on Craigslist.

YouTube is ours. It enables us to organize content the way that we want to, the way no TV channel ever could. It feels like ours. It exists for us.

Google feels like ours. That simple home page feels personal. If marketers saw that home page, they’d want to throw all kinds of ads around it.

Labels: blogging, newcommforum, social_media, tagging

  ¶ 3:08 PM 0 Comments Links to this post

  Social Media is real in the Inc. 500 Two researchers at the University of Massachusetts has just published an interesting study documenting that small business is far along the learning curve in awareness and usage of social media.

In their summary report, The Hype is Real: Social Media Invades the Inc. 500 Eric Mattson and Nora Ganim Barnes report that 42% of the Inc. 500 companies they interviewed claim to be "very familiar" with tools like social networks, blogs and podcasts. A third of the companies use message boards and one in five blogs.

Perhaps the biggest news is that 26% of the small businesses say social media is "very important" to their business/marketing strategy. With less than 5% of the Fortune 500 blogging, you can assume that small businesses are way out front in this area.

Updates and analysis to the survey of 121 members of the Inc. 500 list will be published as the year goes along.

Labels: research social_media, social_media

  ¶ 10:09 AM 0 Comments Links to this post

  The new journalism The near-total collapse of the American newspaper industry as we know it is inevitable. Anything newspapers could have done to stop it should have been done years ago (Slate recently wrote that newspapers saw this coming 30 years ago). All the social, demographic and economic trends are lined up against the industry. Over the next decade, there will be agonizing rounds of layoffs, consolidation and bankruptcies. It will be painful to watch, but it will be a necessary process for the industry to reinvent itself.

What emerges from the rubble of the newspaper industry will be a fresh, vibrant and very different kind of journalism. It will make a lot of traditionalists uncomfortable. It will force us to re-examine our assumptions about everything from readership to libel law. But it will ultimately be an evolution of the profession into something that is richer, more inclusive and much more dynamic than anything we have ever known.

Print newspapers are modeled on assumptions that were defined by physical constraints but which are outmoded and irrelevant online. Basically, information is scarce and publishing is archival. In most metropolitan areas, the newspaper has been the principal or only source of news for many years. This required editors and publishers to take a very serious view of everything they set into type. Layout, headline selection, story lengths, story placement and design were critical considerations in a space-constrained world. The importance of a story was reflected by its location in the paper or on a page, the weight of the headline and the number of column inches dedicated to it.

Once a story was in print, it was permanent. This necessitated an almost obsessive attention to detail and fact-checking. All facts had to be assembled before the story was written. Often, multiple editors were assigned to review and challenge information in the article. If information wasn’t verified, it wasn’t published.

Structure was critical. Because stories were cut from the bottom, newspapers invented the “inverted pyramid” style of writing, in which more important information was placed higher in the story. Good information was omitted because there wasn’t enough space.

Of course, all that is irrelevant online, and the new journalism will be based on an entirely different set of assumptions. Any report may be quickly and easily updated and corrected. Search engine results and referral links are the principal drivers of readership. Layout is almost irrelevant to a web site. Blogs have no hierarchy at all. Stories can be as long for a short as they need to be, or can even be composed of many links to other content. Stories may appear in many places at once and even in many forms, depending on how they are tagged. Readers are able to comment upon and contribute to articles. Graphics, audio and video illustrations are easily linked to text. If something is wrong, you can always go back and correct it.

In short, the online world challenges nearly every assumption of conventional newspapering. It will dictate a very different approach to journalism.

For one thing, the craft of journalism will evolve to include far more aggregation and organization that has in the past. Editors will assemble their reports from a vast library of resources located across the Internet. Some information will come from paid staff writers, others from freelancers and still more from reports and opinions published by independent third parties and even competitors. Editors will still have a critical role, but their value will increasingly be in assembling and organizing information for readers who don’t have the time to sort through the vast Web.

The craft of reporting will become faster and more iterative. Rumor, speculation and incomplete information will be published far more readily, on the assumption that errors can be corrected. Stories will, in essence, be built in real time and in full public view. Reporters will file copy directly to the Web, often without a review by an editor. Readers will be a central part of the process, correcting and comment upon articles as they are taking shape. Reporting will become, in effect, a community process.

This new model will be very disruptive and very controversial. The idea that a news organization would publish information it did not know to be true flies in the face of all of our expectations. The concept of actively involving readers - who have no formal relationship with the news organization - in the reporting process will be too much for some editors to accept. There will be hand-wringing over fears of libel suits and other litigation. It is going to be an unholy brawl.

But this is where journalism will go, and it is happening now, every day, on blogs and community media sites across the world. There authors knowingly publish information that is unverified and unreliable. They do so with the expectation that their readers will set them straight and that the truth will be arrived at through a process of publishing and correction. More than half a million blog posts are logged every day, yere there has not been a single successful libel suit resulting from any of them. Libel law, after all, is based on the expectation of archival permanence. Nothing is permanent Online.

New models are already being tested at community-journalism sites like Backfence, iBrattleboro.com, Northwest Voice and Korea’s OhMyNews.com. The Washington Post recently reported on a Gannett experiment to reinvent news journalism in Fort Myers, Fla. More will follow. Many more.

Journalism will become much more local. As the cost of publishing falls to near zero and citizens become more comfortable with the tools of publishing, thousands of mini “newspapers” will form around different geographies and topics. Aggregation sites will emerge to sift through and organize the reports and conversations going on in these small communities. Many of these sites will involve human editors who understand the needs of their audience and monitor online activity on their behalf.

This will be nothing less than a complete rebirth of journalism around the concept that information is plentiful and cheap. Instead of 1,500 print newspapers, there will be perhaps five to ten national “super-papers” and many thousands of regional and special interest community news sites. The process of getting there will be wrenching and controversial, but the new model will create a more dynamic and diverse information landscape than we have ever known. It will be incredibly exciting. I hope to be around for the ride.

Labels: journalism, mainstream_media, social_media

  ¶ 8:19 AM 2 Comments Links to this post

  The vastly superior economics of Web 2.0 publishing

Having talked about the inefficiencies of the existing newspaper model, let’s look at the economics of what’s emerging in the Web 2.0 world.

A recent story in Business 2.0 magazine revealed the income of some popular bloggers. Read this article if you want to understand the emerging economics of blogosphere. They are vastly more efficient than conventional media. Michael Arrington is pulling in $60,000 a month writing TechCrunch. BoingBoing.net is on target to gross more than $1 million. Fark.com founder Drew Curtis says he’s on track to soon log sales of $600,000 to $800,000 per month.

“Blogs today benefit from what might be termed uneconomies of scale,” the Business 2.0 article says. “They are so cheap to create and operate that a lone blogger or a small team can, with the ever-expanding reach of the Internet, amass vast audiences and generate levels of profit on a per-employee basis that traditional media companies can only fantasize about.”

Take the Fark.com example. The site generates 40 million page views a month with a staff of one full-time person and two contractors. Its only real operating costs are bandwidth charges. It produces almost no original content and has no capital costs. Members contribute their own content, so no editors are needed. The site almost runs itself. Yet this could approach $10 million in revenue before long.

Craigslist.org is another example. This is the fifth most popular site on the Internet, with global reach and an estimated four billion page views a month. It is absolutely killing the newspaper classified ad business. I read one estimate that Craigslist had cost San Francisco newspapers $70 million in revenue in just one year. The entire staff is 23 people.

There are plenty of other examples. BoingBoing.net is maintained by five contributors, all of whom work on it part-time. Google Blogoscoped, which is the best independent source of information about Google, is run by one person in his spare time. It’s averaging four million page views a month. Gizmodo grew to become one of the top five blogs on the Internet with only a single contributor. Digg.com, which is barely two years old, is already among the top 25 sites on the Web. Its traffic outstrips all the largest media sites. It has a staff of 15.

None of these sites is making piles of money yet, but I think that’s only a matter of time. Companies like John Battelle’s Federated Media and Nick Denton’s Gawker Media are figuring out the business side. And it’s not like these blogs have to make a lot of money to keep going. Adrants generates over $100,000 a year in advertising and that’s plenty to keep Steve Hall plugging away at his one-man operation. He’s getting paid to do something he’s passionate about.

How do these sites generate so much traffic at such low cost? They outsource everything.

• Editorial content is outsourced to an army of individual enthusiasts and bloggers who find interesting information on the Web and feed it to the site operators. Editorial expenses, which account for about a third of the operating costs of a daily newspaper, are practically zero.

• Circulation is outsourced to Google and links from other sites. In fact, there really is no concept of circulation in social media because there’s no way to “own” the reader. This is a very different model from conventional publishing, which relies heavily on subscriber lists to validate advertising rates. The Web approach is much less controllable but also much cheaper.

• Production is outsourced to Typepad, Blogger or any number of other hosted services at minimal cost. There’s no need for designers because everything is templated. Some sites practically run themselves. Bandwidth costs can be steep for popular properties, but that’s true for newspaper websites as well.

• Sales is outsourced to Google Adwords, Federated Media or other sales agents. This may change in time, but for now, most Web 2.0 companies can’t be bothered with a captive sales force.

Marketing and promotion aren’t even done. In the new Web, your marketing is your content. People either link to you or they don’t. This creates a lot of pressure on the site operators to be fresh and innovative, but that’s not a bad thing, really.

This is a new media model. Its economics are vastly more efficient than mainstream media’s. In the next post, I’ll look ahead to what I think will happen next.

Labels: mainstream_media, social_media

  ¶ 7:03 PM 0 Comments Links to this post

  The New Journalism

It would be pointless to continue to post headlines about the looming financial disaster in the newspaper industry, so I’d like to focus instead on what will emerge from the rubble of that industry’s inevitable collapse. Over the next few blog posts, I’d like to sketch out a model of a new kind of journalism that is being formed in Web 2.0. I believe it will come to replace much of journalism as we now know it, and may form the basis for a rebirth of newspapers.

First, some background and assumptions. The business model of metropolitan daily newspapers is badly broken and can’t be fixed. The model was developed over 150 years ago to support a delivery method that is becoming irrelevant. Huge staffs of people were needed to create content, turn it into type, print it on paper and distribute it on a timely basis. It was very expensive, but it was necessary because there was no alternative way to deliver information on a daily basis.

Large editorial staffs were needed to create proprietary content. A few alternative sources of content were available, such as news wires, but there was almost nothing at the local level. In any case, running wire copy didn’t differentiate a newspaper from its competition, so staffs of salaried reporters were needed to turn up original news. At some newspapers, these staffs can run to several hundred people.

Newspapers had to maintain large circulation operations and massive subscriber lists in order to justify their ad rates. Circulation is expensive. While renewal rates for daily papers have always been high, it’s costly to acquire new subscribers through advertising and direct mail. In my experience working for a paid newsweekly, the cost of circulation didn’t come close to matching the small revenue it generated. Circulation revenue at newspapers has also been falling in recent years due to price cuts and competition, further squeezing margins.

Capital costs inherent in buildings, presses, paper, ink and people to run all those machines were astronomical. Labor unions added to those costs. In some cases, the unions have succeeded in preserving jobs that were automated out of existence years ago. People go to work and literally have nothing to do.

Add it all up and a metropolitan daily newspaper must employ several hundred people to produce the product. Newspaper advertising is very expensive because of the large fixed costs. The Chicago Tribune, for example, charges $755 per column inch in the daily paper ($1,135 on Sunday). That business works as long as advertisers are willing to pay for it and for many years they have. That’s because newspapers were one of the most effective means for businesses to reach consumers in certain geographies.

Because newspapers are so capital- and labor-intensive, their revenue-per-employee is relatively low. The New York Times Co., for example, generates about $280,000 per employee. The Journal-Register Co. generates a much more modest $105,000 per employee.

The upside, though, is that newspaper model has traditionally been profitable and predictable. Once a newspaper achieved dominance in its market, it was practically unassailable. As consolidation reduced the total number of daily newspapers (there are about 1,750 in the U.S. today), competitive pressure eased and the winning papers were able to drive their ad rates higher. Until the mid-1990s, this was a pretty nice state of affairs. Even the Internet didn’t put much pressure on newspapers, at least during its first decade.

That is all about to come to an end. As I’ll argue in future posts, the business model of metropolitan daily newspapers is poised for a collapse that will be stunning in its speed and scope. The cause is Web 2.0. In the next installment, we’ll look at some of the economics of that emerging business.

Labels: mainstream_media, social_media, Web_2.0

  ¶ 9:09 AM 5 Comments Links to this post