Archive for the ‘Concepts’ Category
August 12, 2009
In the context of marketing and sales, the concept of ‘engagement’ carries increasing gravitas, and yet is still difficult to conceptualise through a single definition. Quantifying the blighter is harder still. The fascination with engagement stems from its potential to make-up for any shortfall in customer contact a brand may have in the areas of reach and frequency. What a brand fails to achieve in market share or regularity of contact (or feedback), the brand might compensate through share-of-mind. In the case of mobile phones, market share (unit sales) is dominated by the likes of Nokia and Samsung, with Blackberry and iPhone well behind. The put the quantity of sales into perspective, Samsung Australia sells approximately 3m units a year (second only to Nokia), compared with the 400,000 iPhones currently in operation in Australia (just under 4% of the market). Yet, in terms of digital chatter, comprising opinion, advice, questions and general consumer feedback, there is a massive discrepancy between brands, this time favouring Apple and Blackberry handsets. In short, what these brands lack in market share, they more than compensate for in terms of communities openly engaging in a dialogue, sometimes quiet passionately, about a mass-produced consumer item. The Sentiment Index graph below illustrates the scale of digital chatter between brands, with the iPhone alone having a 10-to-1 advantage against most competiting brands. By quantifying engagement in this manner, does this incentivise brand managers to do the cost-benefit of investing in an engagement strategy ahead of traditional reach and frequency filters? 
Source: Victrix Media
August 10, 2009
There is something very un-News Corp about this global steering committee to oversee, or to at least recommend, next steps towards the commercialisation of content. Where once the Sun King provided the autocratic guidance, now a coterie of editorial managers across the globe are collaborating in a workshop initiative. The company’s about-face on the preferred commercial model almost certainly started with the acquisition of the WSJ. The publication’s insistence on a pay-per-view model, and its general success as a proof-point, provided the content leviathan with some Dutch courage to publicly castigate Google and its parasitic ways. It certainly wasn’t the first shot fired in anger at the algorithm with a copyright blind-spot, but it was a particularly conspicuous comment to make. So while News Corp locks itself up behind the door marked “Special Projects, Scenario Planning”, the latest music whiz kid, Spotify, with its elegant UI and unfaltering streaming technology, makes the simple point to customers: mediocrity is free (160Kbps), while quality (320 Kbps) will cost. Likewise, it’s time for News Corp, or that other renowned first-mover, Fairfax Digital, to swallow the courage cookie, take a deep breath, and politely remind Google and every other freeloader of the same dictum. 
August 1, 2009
Recently, a rather old-fashioned word crept into our popular vocabulary - “narrative”. The thematic qualities of this term resemble a story’s ‘arc’ or the more sinister ‘sub-text’.
Whatever the moniker, this broader, almost minimalist approach to identifying what actuality matters in the ‘scheme of things’ is both a waste saver and a potential red light to crowds powered by the sheep mentality.
In the language of the dismal science, a macro-trend is just such an arc. Standing back, absorbing this vista means taking in a new perspective, and perhaps a new conclusion.
Such an approach has a habit of making the otherwise absurd, obtuse and the downright ambiguous as clear as crystal.
Take for example the synopsis that, for at the least next 50 years, Australia will never suffer a recession, a slow-down perhaps, but never two quarters of negative growth.
This brash, binary call isn’t presumptive at all. Taking your eyes off the next pothole, and back onto the horizon, you realise Asia’s middle class isn’t yet, relatively speaking, a mass market; that’s still a century into the future.
In the meantime, Australia’s minerals, agricultural produce and intellectual property will be sucked northwards like a twister in the sky, fuelling smelters, stomachs and minds.
A macro-trend of that magnitude won’t be diverted, or distracted, by a case of broker embezzlement, Chicken flu or even the next Al Qaeda suitcase bomb.
Ergo, Australia is recession-proof for the next half century.
Another macro trend relates to the long-term consequences of a networked world and the digitisation of assets, particularly intellectual property.
Social media in all its clever and hard-to-monetise guises, is its own type of macro trend. Like the ‘golden rule’ that economic growth requires the consumption of commodities, the ‘rule’ of social media is that the more people broadcast their lives, the more self-aware they become of the ‘content’ of their routines, including the experiences and memories that punctuate their days.
Put plainly, the larger and more active our digital networks become, the more we need to entertain these ‘audiences’ with worthy anecdotes and clever impressions.
Social networks are not sustained by the mundane, the average or ‘middle of the road’, they glow white hot with what we can muster that is ‘jagged and shiny’.
From this point onwards, the macro trend we call social media takes on a new persona – a mass audience and mass market for the unique, the tangible, and the experiential that cannot be replicated by processing lines of code.
Importantly, this shift is not based on the division of wealth, where the less well off are subjected to a commoditised, homogenised existence. On the contrary, the attribute of wealth is in fact neutered by the intellectual and creative elements that increasingly dictate terms. The artisan, the scientist, the explorer – these are the new rule makers. They personify a new aesthetic, largely detached from the materialism that has characterised the ‘acquisitor age’ (Ravi Batra).
It is this aesthetic that now ignites a more authentic introspection on the part of so many more individuals; indeed, a more widespread perspective on what contributes to happiness and wellbeing.
This search for quality, uniqueness and beauty is nothing new, only the scale of the phenomenon has altered; a scale made possible by the diffusion of network technology and our desire to broadcast ourselves committing to new experiences and a re-weighting of particular values.
The trajectory of this macro trend, or social arc, is unstoppable. Being on the cusp of this mass movement, where an increasing number of individuals now put their lives, their decisions and their associations into perspective, means institutions likewise must now recast their own assumptions about consumer motivations and political relations.
May 13, 2009
Sulphur gas lays ankle deep, dressing the town square like a morbid magic show. The once distant echoes of cannon fire are now a persistent percussion movement, with undertones of service boots scrambling across broken glass and through shallow puddles. All the while, townsfolk play their games and make light of an abominable situation.
MySpace 2010 and the fight for survival.
The final Google ‘mortgage’ payment to MySpace is scheduled for June 2010; US$75m out of a US$900m deal, and the last serious money left in the forecast.
Arguably, this advertising agreement has been the only reason News Corp has persisted with propping up MySpace for so long, leaving the future of the social media behemoth in serious question post-contract. How did we get to this point? 70 million world citizens zipping to and from the mothership, yet no value creation? Actually, there’s plenty of value, its just all subjective and personal, not objective and commercial.
For all its sordid, trivial and intensely personal streams of consciousness, social media (collectively) is a much loved shanty town. Yet, it groans under the weight of rubbish, clutter and poor (and poorly designed) infrastructure. The land lords are going broke anyway, but the cash drain is accentuated by the increasing disengagement of residents.
In April 2008, for example, almost 42% of Facebook visitors also associated themselves with MySpace. In November that same year, that figure slipped to 35%. As of April 2009, just 28% of Facebook users had any association with MySpace (Source: Nielsen Online). This rapid decline in shared audiences between the two has resulted from a massive drop in the monthly MySpace audience and the rapid growth in FaceBook numbers.
In fact since April 2008, Facebook’s monthly AU audience has grown 80%, to more than 4.7m UAs, compared with a 26% decline in monthly UAs for MySpace over the same period to 1.9m. There is an indisputable trend downwards for the once Golden Child of the News Corp empire; a hard lesson which will be taught to every social media poster child - without an objective value, implicitly agreed to by end-users, social media business models have no longevity (or saviour), save for a quick buy-out devoid of due diligence.
Given the diabolical commercial nature of social media, a more interesting philosophical question in this period of bank and automotive nationalisation, would be to ask: should governments (and which governments?) step in and financially support a social media entity - arguably providing an important personal service to hundreds of millions of citizens - if it threatens to file for Chapter 11? And if bankruptcy is the result, what’s the fate of the Terrabytes of data sitting on servers in the rusting warehouses of Cleveland, Oxford and New York?
August 31, 2008
Curiously, the innovation investments made in the spaces of search and social media seem to be paralleling one another. Both areas are increasingly recognising need to emphasis quality over scale.
In other words, both platforms have matured in recent years to a point where their diffusion and ubiquity has reached a scale where their value, in terms of search results and the quality of personal networks, is arguably diminishing.
In other words, a tipping point has been reached where diminshing returns are setting in. A response to this system failure (in relative terms), is an increasing range of innovations to do with vertical search systems (or databases) and subject or audience-specific social networks have emerged. Interestingly, the one subject area which is straddling both is health - witness the beta of Google Health and Health 2.0 social networks like Patients Like Me and Organised Wisdom.
In the case of social networks, current set-ups simply do not offer the prerequisite integrity to give members confidence in crowd ‘wisdom’. Every network has ‘influencers’, but in a large scale operation like Facebook or MySpace, their influence diminishes over time for two key reasons: fewer people have confidence in their opinion (diminshing credibility), and they are seen to be less likely to resemble the average member as the network grows.
Further, as the number of nodes in the network increases, the search to confirm an individual’s expertise in a particular subject area becomes more laborious, presenting a real barrier to the ongoing efficiency of the network as a conduit for reliable information. Enter the emergence of specialist social networks.
In the case of health, the trend is being spearheaded by primarily by patients, or at the very least, individuals affected by a particular illness, either directly or via friends and family. This commonality of experience, told through stories, opinion and advice, represents a powerful influence on individuals who feel isolated through a lack of support, or overwhelmed by a plethora of professional advice.
To breach the gap comes social media technologies and platforms operating within a far more specialist environment. As the following graph illustrates, the sources most preferred by people seeking answers on matters of health include the Internet and doctors, followed at a distance by relatives/friends/co-workers.
In this research (iCrossing, January 2008), the Internet was most nominated because it had the ability to put people in contact with individuals and/or their personal stories telling of their own experiences. It is this desire for first-hand knowledge which so completely overwhelms every other potential source of news, and for that matter, comfort.
The Health 2.0 phenomenon represents social media’s ‘higher calling’, far removed from the banalities of current systems.
August 18, 2008
Universal Music’s recent product launch of a CD compilation containing user options such as additonal tracks, interviews and band profiles really crystalised the emotion felt by some consumers vehemently opposed to record labels because of their perceived recalcitrance in dealing with the commercial realities of a digital paradigm, and those who are increasingly challenging the ‘free’ mantra as a viable business model.
Universal has been stung with criticism that the label still persists with this walled garden approach to music marketing, effectively forcing consumers to pay for a cluster of tracks, with a supposed hook of user options. Others defend the label, insisting the ‘industry’ is getting it, allbeit by small increments.
MTV adds its two cents worth to the discussion with the release of its Music Matters annual research pack, profiling music usage in several Asian markets, including Australia.
The 2008 survey (5,700 15-34 year olds in the “urban middle class”) taps into markets as diverse as Vietnam, India, China, Indonesia, Singapore and Australia.
Not surprisingly, “whats hot” includes listening to music (53%) and social networks (37%); “whats not” includes spending $ on music and watching TV (46%). For an MTV-sponsored survey, that last one has got to hurt.
Despite the overwhelming enthusiasm for music (THE killer application), MTV sees the glass being half-empty. Illegal or ripped forms of music downloads now account for more than two-thirds of activity amongst the 15 to 34 age group (aggregated across the different markets), while in the specific case of Australia (”Oz”), 45% of survey respondents didn’t pay to download music in the previous month.
One of the more unpredictable stats in the research related to mobile activity, primarily music videos via the handset. In 2007, 13% of respondents used their mobile phone to access a music video (versus 27% via the computer and 78% for TV), 12 months later, mobile access reached 38%.
In terms of online reach for music videos, 32% chose YouTube, versus 16% for MTV, 10% for MySpace, 10% for [V] and 10% for iTunes.
The bottom line: consumers cannot get enough music content. Further, this rate of consumption is only set to accelerate as mobile and the building of personal libraries encourages even higher rates of music consumption, forcing the product’s life-cycle (i.e. utility of the music track itself) to become shorter and shorter.
Despite all the looney tunes and fruit loops which dominate the music industry’s personality scene, it would be a mistake to assume the industry is too stupid or too ignorant to learn and adapt to future market conditions - even if that involves adopting a free price point for some projects. The irony is the music industry, of all industry types, could be the first to develop a sustainable commercial model that works in a paradigm where scarcity does not play the ‘invisible hand’.
August 10, 2008
Those of you who are more perceptive of systems change (others will refer to it as the Zeitgeist) will recognise the Internet’s morphing from a web of documents to a web of people, sweeping aside the traditional, but authoritative role of documentation for the emotive and subjective language of opinion and assumption. Remember, we’re all experts now!
In essence, this change is about electronic word-of-mouth (WOM) or consumer generated media (CGM) ripping holes in the delicate fabric of corporate positioning strategies. Reputations built more on spin and less on actual service and product quality are first in the firing line.
Given then how this ‘ripple effect’ is an obvious business risk, where’s the commercial will to employ analytics to quantify both the speed and direction of this consumer shock waves? Where’s the emphasis on sentiment as a precursor to consumer behaviour?
And that’s the key.
Sentiment analysis (and its poorer cousin, sentiment mining, which is done by the likes of BuzzMetrics, BlogPulse etc.) is the canary in the mine. If done well ( meaning comprehensive, robust samples, with more human interevention than software application), sentiment analysis identifies more than just frequency of expression; it determines market drivers and inhibitors to commercial and organisation growth. It’s as simple as that.
The Twitter example above, highlights a rudimentary form of sentiment analysis, this time focused on the commentary swirling around recent movie releases. A more ambitious analysis would seek to develop correlations or relationships between sales performance or brand equity and the quantums associated with positive/negative sentiment.
The difficulties of using automation to conduct this type of analysis are obvious. Much of the current debate dealing with sentiment analysis is focused on how software can reduce the number of false positives without compromising on the efficiencies of scanning/spidering billions of characters in a cost-effective manner.
The alternative is a hybrid solution involving people (i.e. analysts), with the obvious drawback on volumes and expense. Nevertheless, the rules of sample methodology are equally applicable here as they are elsewhere, suggesting conclusions with high confidence levels can be reached without necessary trawling every online comment or opinion piece.
The bottom line: which is more effective when it comes to semantic orientation classification - man or machine?
Fortunately, this isn’t a battle the machines are likely to win. Quiet simply, the value of sentiment analysis is only fully optimised when context is taken into account, alongside the sentiment of opinion/comments being scrapped. In other words, the value in determining an overwhelming negative or positive sentiment is only realised when we also have insights into the beliefs, personalities, community, influence and authority of the individuals making the actual comments.
And this can’t be condensed or modelled into an algorithm - no matter how hard Google tries.
July 16, 2008
In June the En-Score for the Australian Internet hit 345.55, up from 307.12 in June 07. As a refresher, the En-Score is a measure of online engagement, whether across an entire market, a single industry or specific site. The score is a reflection of audience ‘quality’ as opposed to a pure audience metric detailing the number of people (or browsers) visiting the site. The hypothesis is that any digital channel should have a single point of reference indicating depth of engagement, not just the size of its audience.
In the context of the broader market, this score is also a fair indicator of the average household’s dedication to the Internet vis a vis other media options, particularly television. As the index moves north of 400 some very serious questions have to be asked regarding the inevitable decline of engagement with other media types. Further cross-media analysis is certainly warranted on this issue.
For digital publishers, in particular, this continued upward trend in the market’s En-Score is an important indicator that the medium is taking a larger slice of the attention economy - to the detriment of mainstream media.
Breaking down June’s aggregate figure into specific verticals, such as news, entertainment, finance, automotive, careers, real estate and multi-category commerce, illustrates very comprehensively the overwhelming domination of entertainment as a digital genre (en-score: 23.8) - more than three times the engagement associated with news (6.8) and finance (6.9), and more than twice that of e-commerce (11).
Within the entertainment category, the star performer is TabOnline (14.5), followed by nineMSN Games (9.2) and iTunes (5.7). In the music sub-set, iTunes has a slight lead over AOL Music (5.2), but a significant lead over Yahoo!7 Music (1.7) and BigPond Music (0.15).
Compared with the top entertainment sites, the news category pales in comparison and doesn’t bode well for the sector. The top performer in June was Fairfax (2.9), followed by News Digital Media (2.3), the Weather Channel (1.8) and nineMSN News (1.2). Interestingly, the En-Score for the Washington Post was 1.2, well ahead of some Australian online news services, including BigPond News (0.4) and Yahoo!7 News (0.4).
12 months earlier (June 07) the news category had an En-Score of 6.3, compared to the current figure of 6.8 - a difference of 8%. Over the same period, the medium’s En-Score rose 12.5% (from 307 to 346), suggesting that over time online news providers are loosing share in the attention economy comparable to their offline peers.
July 6, 2008
Digital advertising is a peculiarly asymmetrical place. When the effectiveness of one piece in the strategy begins to wain, another piece is devised or conceptualised. The coincidence of a decline in the online display market currently (or at least its confirmed slow-down) with the emergence of social media (and associated applications), as a panecea for this increasing budgetry void, should not be lost on anyone.
Yet in the haste to create a new poster child (mobile is next), a healthy dose of scepticism has gone MIA. This is not to say social media technologies are a convenient but ineffectual fade - far from it. This maturing of the Internet to include peer networking, open sourcing and meta-data architecture is clearly the genesis of a transformation in communications which will impact every facet of human endeavour in the long-term.
Like Grandpa Jo said about Wonka Vision: “It will change the world.”
Yet, what has been the overwhelming response of the commercial world to this obvious inflection point in world history? In short, to give itself a choice between either a CPM or CPC deal! Is this as good as it gets?
As previously discussed on these pages, the context of most social media platforms experiencing high levels of activity and recency is one of High Context, where networks of individuals discuss, debate and share information of a personal and private nature. There is simply no room for advertising and its ROI considerations, no matter how sophisticated the targeting.
This is not to say there is no allowance for commercial entities to engage a market via social media architecture. In fact, if done with consideration of its High Context pedigree, a commercial social media channel can have some extraordinarily positive implications for the brand.
Faced with an option to design and build a customer-centric social network, or at the very least, pay good money to participate in a more broadly designed social paltform (like Facebook), the organisation must recognise the very investment in technology which empowers customers to ‘collaborate’ is already an implicit act of brand reinforcement.
In other words, the organisation is now in the game but should play in the backroom, mindful that being subtle in a High Context environment will be always be recognised by participants; there is simply no need to force the issue.
The challenge, however, is to avoid building short-term ROI templates around these social media investments, where next quarter’s sales figures have a higher priority than longer-term customer retention issues. If this can’t be avoided, then the advice is simple: avoid social media altogether as a marketing mechanism.
If, however, the organisation is prepared to commit to social media architecture as part of a broader CRM and Customer Experience Management (CEM) strategy, then consider the following points as a guide to building the required dynamic:
- Can the platform be designed around the particular needs of customers as opposed to a list of wants?
- Recognise that a customer base fragmented by geography, socio-demographics, technology and even psychology will enrich the platform, and hence provide greater value back to customers. Fragmentation/segmentation like this is a strength;
- Always provide the option of anonymity without penalising the user through a lesser experience. The architecture’s priority is to encourage collaboration between customers, not to probe into a customer’s identity;
- Insist on transparency with regards to issues and opinions expressed by constituents. The more diversity of opinion, the higher the incidence of collaboration;
- Encourage storytelling around experiences before encouraging customers to open their wallets;
- Be prepared to intervene in issues by way of professional advice; never let matters go unresolved.
If these points suggest the organisation is expected to make a commitment to understand a customer’s lifestyle and their own networks, then that is indeed the right conclusion. If, however, the resident CMO is scared of the ‘C’ word, then for the sake of not wasting everyone’s time, the CMO should also drop “social media” from their lexicon as well.
July 1, 2008
The virtue of simplex thinking is to explain or interpret complex and disparate data through the use of simple, elegant metaphors and models. Hence the development of the Engagement Scale, or En-Scale for short.
The purpose is to define and compare web sites and services using a single number which reflects the site engagement of a typical user. The scale is based on a simple algorithm which weights session times, frequency as well as pages per session. The source for this analysis is Nielsen’s Netview data, which has been denegrated in the past for its lack of representativeness.
The En-Scale doesn’t rely on audience figures, instead it focuses on site engagement metrics recorded by the sample. In effect, En-Scale recognises the panelists as a type of useability group, though in the case of NetView the sample is significantly larger than any other comparable resource.
Further, the sample is genuinely ‘objective’ in terms of how they navigate and engage with the site. That is, the panelists are not conscious of themselves as research ’subjects’ and adjusting their behaviour accordingly.
This is the first time (to VM’s knowledge) that Australian digital publishers have been compared to each other based on a an objective performance ratio. In the case of En-Scale, the higher the number, the higher the engagement or visitor association.
As the above example illustrates, over a 12-month period (from May 07 to May 08) some publishers have improved their position, including Fairfax, Google and YouTube, while others have experienced a signficant decline in their En-Scale, most notiably Yahoo!7, eBay and Fox Interactive. It’s clear from the above data cut that applications (search, IM, bidding engines etc.) have an immediate impact on a site’s En-Scale.
For this reason, it is preferable to compare scores within a particular subject vertical, like news and information, than it is to compare a set of very disparate sites.
Moving forward, En-Scale will be deployed each month, enabling a month-by-month account of changing scores, following a remit to better understand the relationship between the changes in a site’s En-Scale and its audience share. For example, could En-Scale act as an early warning mechanism of comparable changes in audience numbers? VM will explore the issue further.
En-Scale should also be applied to specific demographics as well. Case in point: eBay.
The online auction site has an En-Scale of 10.98 (May 08) which is very high. However, breaking that down into age segments reveals that for the 12 to 7 age group the En-Scale is 3.6, while for people older than 35, the score is 14.1 which is close to a market high.
For the record, the site with the highest En-Score in May 08 was Facebook on 14.7, followed by Electronic Arts on 12.3 and Stardoll on 11.18. eBay was fourth on 10.98.
