Digital Convergence

Why B2B rocks and B2C sucks?

2012-01-29T10:29:00.000-08:00

Short answer: Because B2B is (usually) customer-centric andB2C is (mostly) campaign-centric.

You’ll hardly find any B2B marketing guy uttering these words - “page views”, “time spent on site”, “campaign optimization”... Mostof the time they talk about customers, their lifetime values, and their relationshipwith brands; it’s amazing; it’s almost always about customers.

B2C on the other hand is always about campaigns, products,PRs, likes, hits, time-spent, whatever… a self-created mess that takes away thefocus from where it should really be – “on customers”.

I’m not sure why it’s this way. It doesn’t have to be. It's certainly not technology. Wealready have the tech. to manage B2C marketing the way we manage B2B marketingand even if something’s missing, how difficult is it for somebody to build a B2Cversion of Hubspot/Whatsnexx?

About Us

2011-09-20T10:04:00.000-07:00

One-Minute Guide to Direct Marketing Data Analysis

2011-09-12T08:49:00.000-07:00

Are you done solving usability problems (in the name of marketing) on your website? Feel like doing some real (customer) data analysis? Here's a list of things you can start focusing on right away. Found it in the book "Commonsense Direct & Digital Marketing"; the list is by Jon Epstein of r-cubed.

Define the ends exactly - only then talk data
Find the 20% of effort that delivers 80% of results
Never talk about the average customers
Deselect your worst customers
Contact your best customers more often
Spend more on new customers and new prospects
Ask your best enquirers and lapsers to come back
Sell when your customer is ready to buy
Keep and use your contact history with individuals
Use silent controls to prove real incremental impact
Ruthlessly keep demanding "why did they do that?"

Cohort Analysis - Big Deal!!

2011-08-08T11:39:00.000-07:00

Check out these two interesting/amusing posts: “Cohort Analysis – Measuring engagement over time” and “Measuring engagement over time”.

If I’m getting it right, “engagement” IS what happens over time, so, “measuring engagement over time” is sort of superfluous because “over time” is part of the definition of “engagement” itself. There’s no other way of measuring engagement; at least the engagement that translates into business value.

Check these snippets from the first link:

“One reason why the cohort analysis is valuable is because it helps to separate growth metrics from engagement metrics. “

“This is important because growth can easily mask engagement problems.”

“In reality, however, it may be that people stop being engaged after a couple of weeks on the service. “

Hmm…

Looks like another case of UX/WA folks discovering something that Direct/Database marketing people have known for decadesJ

If you found those posts on “cohort analysis” interesting and useful, do yourself a favour and read the bible on this topic - it’s here (Framework for Engagement & Measuring Engagement Series) and send a "thank you" note to Jim.

What’s wrong with social shopping? Part-II

2011-08-08T06:40:00.000-07:00

Part-1 is here. So, I had a first hand experience with an Indian clone of Groupon recently. Received a whopping 50% off at a new restaurant but the entire experience was like one of those end-of-season sale where you get 80% off on all items except the ones that are really worth buying!!

I’m not sure how it’s being done in other countries but I think the businesses that use Groupon-like service should understand the difference between using it as a marketing channel and/or as a sales channel. If you just want to get rid of your old/useless inventory, then maybe Groupons are not the right vehicles. I was under the impression that you’d use Groupons (as a marketing vehicle) to introduce your best stuff to people (who otherwise may not have walked into your store); with the belief that, they’d get impressed with you and will become regular/loyal customers. I bet your not making any profit when you offer 70% off, so, you do really need people to come back. Isn’t that the whole point?

Well, I don’t think that’s happening.

Media Weight & Engagement

2011-08-01T05:44:00.000-07:00

Why did nobody talk about engagement in the 70s and 80s? Agreed, the media is more participatory today and maybe people seek engagement. But is that all? I think the lack of weight in emerging digital media is an equally important reason for the increasing importance of "engagement" in marketing. The weight of non-linear media like web comes nowhere close to what TV and print had. Marketers cannot capture people’s mindshare using the old media model on digital media – most display ads don’t work; at least not for branding and awareness purposes.

I wouldn't be surprised if somebody told me that this entire idea of "engagement" was created by some smart marketer to hack the weight problem with web!! If I can’t force people to pay attention to my ads on the internet, let’s find a work-around – let’s engage themJ. let's use "engagement" to add weight to the web media, so that it can at least strive to become as effective as TV and prints were…during the ice age.

However, engagement through ads on web is probably not going to work. Jim makes an interesting point here (Online, the Web Site is the Ad) on why display ad banners on web can never be like TV or print ads; they are just navigational elements; the real ad is the destination (your website, micro-site or FB page). That’s the place where you should pay most attention. How you manage and measure the digital properties you own decides how effective your marketing/enagement is going to be…buying display ad banners is just a small piece of the bigger puzzle.

Read more about it on Jim’s blog and wikipedia:

Why Can’t Johnny Brand?

Banner Blindness

Conversion depends on “who you market to”!

2011-07-31T00:13:00.000-07:00

Here’s a typical eCommerce scenario - 100 people visit your website but only 5 of them finally convert. Now you have two marketing options:

You can spend a lot of money trying to get back people who did not convert, or
You can dig deeper, find what’s common among the 5 who converted and then go after their ilk

Also for #2, if you are really smart, you can isolate the ones who show tendencies of becoming repeat buyers and put your might behind them.

Of course you can/should do both but if your marketing budget is limited (when is it not?), strategy#2 should take precedence. If there are people who are willing (or can be easily persuaded) to do business with you without demanding that you change your product/service/website, why not pursue them first?

(I’m assuming that your website/product/service is at least decent. If you have serious problems there then no amount of consumer targeting will work (in the long run)).

For a very long time, I found it hard to believe that there could be something very intrinsic (pre-disposition) to customers that’d make them do/not do business with you. I believed if you made the right product and marketed it the right way, most of your target prospects would do business with you. Apparently, that’s not true - it’s an established fact that regardless of how good you are, many prospects will choose not do business with you. Also, most of those who do become your customers will leave you over time and your going to have to (1) find new customers and (2) try prolonging the dis-engagement of your existing customers as much as you profitably can. The marketing ROI in both of these pursuits can be drastically improved if you carefully choose who you are going to spend your marketing money on.

This is the Best Digital Marketing Strategy Framework!!

2011-07-28T05:12:00.000-07:00

[Updated later: Don't forget to download the recently released eBook based on this framework from CustomerThink website here]

I didn’t want to just put a link to this super framework on my twitter stream and lose it, so, I’m copying it here for future reference. This framework was developed by Akin Arikan a few months back with inspiration/support from Jim Sterne, Eisenberg brothers, Yuchun Lee, MindofMarketing.net and Digitas. I think it’s absolutely cool. If you’ve never struggled defining a framework for digital marketing, you’ll probably miss the nuances in the diagram below and may pass it on as another fancy McKinsey type but let me tell you that there’s no other framework (google it) that packs so much info in one place and tells you all you need to know about your digital strategy at a high level. No rocket science really...and you probably already know all of it but what you perhaps didn't know was that that's all there is to know:-).

Another important point to note here is the use of hourglass. I think hourglass is the perfect answer to broken purchase-funnel. Social/digital media has created hundreds of entry points into purchase decision journeys of customers, most of which are highly influenced by customers who have already made purchases; an extended flipped funnel is the perfect metaphor for representing this additional complexity. Two other great examples of using hourglass framework for marketing can be found on Duct Tape Marketing blog here and on Jeremiah’s post here.

Both McKinsey (see this) and Forrester Research (see this) have struggled to explain the new purchase decision journeys; I think future updates to these/similar articles will also make use of hour-glass frameworks.

End-of-social or end-of-the-beginning-of-social?

2011-07-24T07:24:00.000-07:00

[Facebook Investor Roger McNamee Explains Why Social Is Over]

I think Roger McNamee seems to be confused between what is the “end-of-the-beginning-of-social” with the “end-of-social”. Yes, we may not need any new social networks today but who said social was only about social networks? When Tim Berners-Lee, the creator of the web, was asked why he created it; he said – “The web is more a social creation than a technical one. I designed it for a social effect — to help people work together — and not as a technical toy”.

So, you see, social is the super-glue of the internet and it’s not going away!

We are simply moving to a new phase of social maturity where we may not need new social networks but we'd be spending years…maybe decades redefining all our business processes (and society and governments...pretty much everything) to make them more social (more transparent...more accountable...more fun and more human) - that's social for you.

Ironically, Roger was the guy who asked Zuckergerb not to sell FB to Google when Google offerred around a billion dollars for FB in 2006. I don't want to conjure up a conspiracy theory here but is Roger afraid of his investments in FB now that G+ is getting traction? Maybe he doesn't want too many players in social business!!

Rethinking Segmentation!!

2011-07-21T03:05:00.000-07:00

If averages are useless and site-wide KPIs thwart real issues from surfacing on executive dashboards; and if your analytics expert gets to keep his job only because once in a while he can drill down and segment your data across hundreds of dimensions to tell you what’s going on, then maybe there’s something wrong with the entire approach itself; perhaps all your KPIs should only be seen in some actionable contextual segments.

In fact Forrester research has an interesting take on what these segments should be. According to Forrester, not too many insights created from ad-hoc segmentations are translated into practical solutions because getting insights is easy (provided you have a smart analyst) but making technology/infrastructure changes to implement solutions based on the insights maybe very difficult at times.

Paying attention to adoption before implementation and considering the upstream integration of segmentation with organizational systems (CRM, campaign management etc.) to drive business objectives appears to be the key to successful segmentation strategy. For instance, if you don’t have the technology infrastructure to support behavioural targeting of certain segments, what’s the point in creating those segments? You can still continue to discover new segments as parallel activity but to drive real business results, the upstream integration should be the point where you begin.

This is precisely the reason why I like Semphonic’s 2-teir segmentation so much!!

A large US electronics retailer (one of our clients) recently told us that they have most of the data/insights they need from their web analytics tool but they still can't personalize their web experience and marketing. I don't have all the details, but I believe it has something to do with their segmentation strategy!!

Updated later: Just found that Jim Novo (unsurprisingly) has written a far more insightful and articulate piece on this topic here - Data, Analysis, Insight - it's a must read!!

Why content curation is over-rated ?

2011-07-11T12:30:00.000-07:00

I really don’t know what’s the big deal about paper.li or scoop.it or 10s of other content curation platforms! As a user, what'd you value more? paper.li (curation) or wikipedia (collaboration)?

I think content curation as in what you see in paper.li or scoop.it or even Alltop is grossly over-rated!! Where’s the value add? What I get is a list of links - sometimes relevant but mostly useless. If content curation tools were supposed to solve my information overload problems, I’d say paper.li is certainly not making the cut. Now compare this to Wikipedia (a collaborative effort), where some people actually take the responsibility of going through a number articles/literature and offer me something that’s coherent and easy to digest. That’s a real value add. Just crawling the web for keywords and getting a list of loosely connected articles in the name content curation doesn’t add any value to anyone.

People who are doing content curation are probably taking an easy route. Of course, if you can write an awesome natural language processing program that can read 100s of articles and produce a story for me, that’d be great but since we don’t have that kind of technology (yet), I’ll anyday prefer an individual blog or a wikipedia article to paper.li. Can somebody do a real-time wikipedia? You know like, take today’s paper.li/alltop and write an executive summary for me. That’d be an instant hit!!

Btw, sharing content on Twitter is different…it’s neither automated nor overwhelming (in most cases). Depending on who you follow you'd usually get very selected pieces of info to consume in easily digestable quantities.

Purchase Funnel vs. Customer Lifecycle

2011-06-18T05:07:00.000-07:00

Ok, so, I’m not the only ignorant guy around, who’s confused about purchase funnel and customer lifecycle. In a recently published Forrester report “Make the switch to customer lifecycle”, the author Steve Noble says:

“The customer life cycle provides a better explanation of modern marketing than does the traditional marketing funnel, but most marketers have not yet moved their organizations to the customer life cycle. Problems with the traditional marketing funnel are quite visible, but the model is pervasive and entrenched, which inhibits change. To manage the necessary shift, marketers should start small and ask, “Where is the customer in our marketing effort?” From this base, they can gradually shift their entire marketing plan to the customer life-cycle model. As they progress, they must guide a process that involves mobilizing the three main marketing resources: people, tools, and agencies. To maximize momentum from the start, marketers should begin with steps that have the highest chance of success and/or the greatest business impact.”

He quotes 3 examples of why/how this is happening:

Organizational structures have been built on funnel thinking - Traditional organizations have been created to allocate responsibilities to teams based on stages of the funnel. The marketing team is responsible for awareness, consideration, and preference, while purchase belongs to sales in a business-to-business (B2B) environment or retail in a business-to-consumer (B2C) one. Loyalty is the province of customer service and retention marketing teams. Within most companies, incentives and lines of reporting reflect these structures. The result? Marketers focus on issues like the volume of qualified leads they can funnel to sales, rather than the complete brand experience before, during, and after a sale.

Popular tools reinforce the traditional funnel view of the world - Within the marketing team, channel specialists use sophisticated tools like CheetahMail to track customer responses in specific channels like email marketing. Likewise, an event marketer will use salesforce.com to see which prospects who attended a seminar converted to customers but will gain no insight into other relevant behaviors such as online search. Even tools like Adobe System’s Omniture or IBM’s Coremetrics show how a large number of visitors to a website funnel down to a small number who make an online purchase, but they provide little insight into how use of the web store translates into a sale at a retail store, let alone spanning the two channels to identify loyal customers regardless of how they buy and research products. (Is anyone from the web analytics community listening to this??)

The model shapes marketing thought but discourages change - For some marketers, the old way is the only way, even if they recognize that the funnel no longer explains all interactions. Customer activities that occur outside of the funnel — like channel hopping and word of mouth — can be hard to see and easy to ignore in a funnel-driven marketing environment. The funnel is the basis of current marketing thought for so many marketers and modelers, which will persist until proof points emerge for the usefulness of the customer life cycle.

There’s a lot more relevant stuff in the report but I can’t plagiarize all of it here-:)...I don't want Forrester folks coming after me!! If you have access to Forrester reports, this is a must read.

Also see - So, how exactly do you define engagement and customer lifecycle?

3 Pillars of Digital Business!!

2011-06-16T07:58:00.000-07:00

Depending on where you are coming from, this may be so obvious to you that you’d wonder why anybody bothered writing it down; but it doesn’t hurt, does it? I think at least the notes (yellow) will be useful; notes are either sub-topics or references to what I believe are key resources for the topics.

More traditional concepts such as marketing, positioning, pricing etc. apply everywhere, so, I’ve not mentioned them here. These pillars are more specific to digital business (though any interactive B2C business can benefit from these ideas). Hope it helps!!

Note on Analytics strategy:

A lot of people seem to believe that analytics is only good for micro optimization. I don’t think anybody doubts the importance of starting with a good design/model and using best practices where possible but claiming that analytics only produces micro-optimization ignores the impact that digital media has brought to our lives. The micro-optimization theory was maybe true 20 years back but since the customer lifecycle in digital/interactive media is exaggerated, the same amount of analytical insights that used to produce micro-optimization can now produce macro-optimization!!

Why “Social CRM” should be called “Social CEM”?

2011-06-08T07:38:00.000-07:00

[Update (30-June-2011): There's another more insightful article written by Bob Thomson, CEO of CustomerThink, on this topic that you may want to check out - http://bit.ly/kKBlAK]

CRM essentially represents a transactional mindset. People who get CRM (a huge majority) generally have tough time getting CEM (customer experience management); it’s also one of the reasons why CEM isn’t as popular as CRM is but that doesn’t mean CEM is not as useful or as important. In fact, many studies have shown that managing/understanding customer experience is a more effective strategy for inspiring loyalty than just analysing transaction data from CRM.

In the old days, measuring experience was a challenge but things have changed now. Using social media monitoring tools or web analytics tools (e.g Tealeaf), you can measure customer experience to fairly sophisticated levels. The focus of CEM is experience (interactions), which is fundamentally different from transactions (CRM) in both how it is measured (time, volume) and how it is used (interactivity, designing experiences).

So, what has it got to do with renaming “Social CRM” to “Social CEM”? Well, social is all about interactions while CRM is about transactions, so whoever came up with the name “social CRM” probably belonged to CRM camp or perhaps didn’t have much respect for “social is interaction/experience” mindset. Both are worrying thoughts but what’s really surprising is how popular the name “Social CRM” has become and nobody seems to have questioned the mismatch; maybe smart people do see the point that CRM in “social CRM” is going be actually practiced like CEM, so why bother about the name.

But to me, it certainly looks like a fancy oxymoron. It’s almost like asking an accountant to do a marketer's job!!

-----------------------------------------------------------------------------------------------
Updated later: For my own reference, I'm copying Bob Thomson's reply to a comment I made on his blog regarding social CRM vs social CEM debate:

Bob Thompson

July 1, 2011

buzzword dynamics

Tauqueer, I enjoyed reading your post Why “Social CRM” should be called “Social CEM"? Thanks for including a link to this post, and for adding to the discussion here.

It's hard sometimes to understand what's really happening vs. the buzz generated by various industry interests.

"Social CRM" is a buzzword driven by the CRM software industry and affiliated analysts and consultants. As noted in my post, in many cases what is being called Social CRM is really a "social business" application like community software or social media monitoring. No real connection to CRM except in the buzzword.

Well, these "social" vendors have decided that, while riding the buzzword may have been a good thing to do the past couple of years, that time has past. Now they are repositioning as a CEM or Social Business solutions.

Perhaps we'll see Social CEM emerge as the next buzzword, but I doubt it. The "customer experience" industry is plenty strong without having to attach itself to the "social business" industry. But I think the social customer experience is very real and important, even though it has not been hyped.

The idea of sCEM makes as much sense as sCRM, if you take these terms to mean the integration of social business with CEM and CRM, respectively. There is value in social data and analytics, which is great input to CRM (marketing, sales, service automation). But equally important, as you noted, is the experiential value of social media.

Unfortunately, despite saying CRM includes CEM, the CRM industry has a very limited view of customer experience, thinking it is mainly how customers perceive CRM-automated processes. CEM thought leaders know that customer experience is a much broader concept where people matter too in the complete end-to-end experience.

Tauqueer

June 30, 2011

be relevant (CRM) and manage exp (CEM) to create engagement

My 2 cents:

I believe we'd all agree that "experience" is the highest level of deliverable and that products/services that are wrapped with interesting experiences easily stand around. What social has done is that it has accelerated the pace with which we are moving towards experience economy.

Consider this - If you want to sell something to people who are connected to social-web, your going to have to first engage them (see Paul Greenberg's definition of social CRM) but what's engagement? Engagement is created by experience and social media offers an extremely powerful platform to create meaningful/participatory experiences. These concepts fall outside the realm of CRM.

The R in CRM stands for the relationship that a customer maintains with a brand over his lifetime (with the brand; source - Regis McKenna & Jim Novo). To maintain and prolong R, companies use CRM analytics (RFM scores etc.) and improve their relevance to consumers (e.g: offer discounts to customers who are showing signs of dis-engagement etc.).

We still need CRM to remain relevant but we also need to be able to engage customers. Engagement comes from orchestrating experiences; and social plays an important role here.

It'd be a good idea to keep these two fields separate; if we really have the urge to club two buzzwords together - I'd say let's call it social CEM !!

If you think I made some sense here, you might want to check these too:
http://bit.ly/kdvtP7
http://bit.ly/lIe8j4
http://bit.ly/l9MFTQ

Great, so you’ll send us actionable (web/social) insights every week?

2011-06-07T08:20:00.000-07:00

Well, if you have been living under a rock, every piece of web/social analytics that we show you will look like an actionable insight. “Delivering insights” is really really contextual folks!! I’ve been seriously thinking of a new name for our “insights delivery services” (suggestions?).

Also, if by looking at a web/social analytics report, you get a feeling that you are in control of things and that no immediate actions are required – then congratulations – you’ve been doing a great job!! Of course, it doesn’t mean you don’t need analytics anymore. One part of any analytics service is similar to an insurance (that helps you avoid/deal with surprises), it’s not always meant to deliver insights; especially if you’ve been doing analytics for a while and have taken strategic actions to fix things. In fact, if after 2 years of web/social analytics, you are still seeing huge “insights” in every report, then something’s wrong somewhere. Perhaps your “insights delivery provider” is playing tricks with you; you know, like Microsoft removing 25% features before a windows release only to add them back in the next release!!

So how exactly do you define Engagement & Customer Lifecycle?

2011-06-03T06:50:00.000-07:00

I've spent days trying to understand the discussion about engagement that happened here. I’ve also read Drilling Down a couple of times but I still don’t seem to completely understand the meaning of engagement - I mean I do understand the part about realized value being different from potential value and why measuring the “likelihood of activity” is more important than measuring activity alone. I think I also see the point about “activity defines value” and “likelihood to continue defines engagement” but I know I’m missing something very basic... I do have a point to make here tho.

I think one of the reasons for this confusion is how customer lifecycle is defined in general and how Jim Novo and Regis McKenna define it. The general definition of customer lifecycle is based on AIDA and is more inclined towards new customer acquisition; it’s about how a new customer goes through various stages of a purchase funnel before he makes a purchase. But for making a second purchase (for a similar product), I doubt if the customer would have to go through the entire decision cycle all over again. In this definition, the customer lifecycle is usually about a relatively shorter period of time that customer spends in the upper purchase funnel stages for making decisions.

On the other hand, Jim Novo and Regis McKenna define customer lifecycle as a relationship of a single customer with a company over his lifetime with the company. In fact, it’s very clear from their definition of a customer itself. A customer is defined as someone who has already made a purchase from a company and the company has reasons to believe that the customer is going to make more purchases from them in future. If the company knows that the customer is not going to purchase from them again, the it's a former customer and all those who haven't yet purchased anything from the company can't even be called customers. So, precisely a customer is someone who already has a relationship with the company and the Customer Lifecyle for this customer is about what happens to him over his LifeTime with the company. It’s about measuring engagement and dis-engagement of this customer as he moves thru his lifetime with the company, which could be anywhere from 1 to 20 years or more.

You see the point? AIDA/REAN/whatever are more about purchase funnel kinda customer lifecycle (short where the focus is on Reach-Engage-Activate) whereas Relationship Marketing (Jim/Regis) definition of Customer lifecycle is about a customer’s lifecycle (long/very long where the focus is on Nurture) with a company over his lifetime. Of course loyalty/nurture part of purchase funnel models can be argued to define customers' lifecycle across their lifetimes but we know that's not how it's used!!

I think the reason behind the unhealthy focus on pre-nurture part of customer lifecycle is that - a disproportionate number of online buyers are one time buyers and even if the loyalty part of these one-time-online buyers manifests in offline channels, we haven't been able to connect the dots yet. If for instance, we could figure out that digital channels are driving huge offline loyalty, would we still use web analytics to focus on Reach-Engage-Activate or would we think about using web analytics for Nurture/Loyalty (and btw, anonymous new vs. repeat visitors stats doesn't qualify for loyalty)??

Is Dimensional Hierarchy the Key to Web Analytics?

2011-06-01T05:42:00.000-07:00

The process that a web analyst uses in developing a WA report and the process that a client manager uses while looking at a WA report are sort of diametrically opposite.

Someone looking at a WA report will probably always start with a KPI and then work downwards (using various dimensions for segmentation) to narrow down on specific items – for instance, if conversion (KPI) is decreasing, let’s look at various sources that are bringing us traffic; is there a specific persona that we are losing on? etc. etc.

On the other hand, a web analyst while developing a report will almost always start with dimensions and work upwards to KPIs – five sources are bringing us traffic and our website has items to engage them, how do we measure (or define KPIs) for assessing the level of engagement and conversion etc. etc.

This raises an important question for a web analyst – where do you begin and is there a dimensional hierarchy that you can follow? In REAN model, the starting dimension is customer lifecycle; in 2-phase segmentation by Semphonic, the starting dimension is VisitorType (closely combined with VisitType); in Avinash’s model, the dimension concept comes much later (in fact, his entire model appears to have been developed from a client manager's perspective, which is great in that aspect)

Hierarchy may not be the most important thing here but the point where you begin is really important. Starting with customer lifecycle appears to be a more customer-centric approach to me. The various stages of customer lifecycle (REAN) become the base dimension to build your entire analysis. The 2-phase segmentation on the other hand does a great job of creating key mutually-exclusive-and-collectively-exhaustive list of segments but I’m not too sure if it’s as customer-centric as REAN is. Now, if I could combine the best of both, that’d be really nice!!

Is social the most independent behavioural variable?

2011-05-21T04:30:00.000-07:00

When you want to predict how your consumers will behave in near future, you look at behavioural clues. From database marketing perspective the key behavioural variable is recency (mostly transactional recency). Transactional recency may not be the most independent variable but it does encapsulate a lot of things and gives you a powerful variable to work with. In fact, for offline channels, recency is by and large the only predictive variable available. In online channels, especially your website, many behavioural clues get lost with call-to-actions (natural structure) of your website. Though the functionalism approach from Semphonic solves this problem to some extent, there’s only so much you can do; after all, your website cannot be completely fluid. Social, on the other hand is totally fluid. So, behavioural clues obtained from social media can be immensely powerful. Perhaps they represent the most unadulterated behavioural patterns of your consumers that you can ever lay your hands on. The problem, as you’d have guessed, lies in linking these social clues back to individual transactions; and we are not there yet!! But if we continue to work with social data at an aggregate level, we are certainly leaving at lot on table!!

In any case, I think, marketers searching for independent predictive behavioral variables will find reasonably good answers in social.

Looking at Social data from database marketing perspective!

2011-05-15T01:40:00.000-07:00

Gary Angel in one of his blog posts alludes to an interesting aspect of using social data from database marketing perspective and I think it raises many intriguing questions.

First of all, if you have been following web analytics thought leadership for a while, you’d have noticed that there are 2 broad schools of thoughts in this space. On one hand you have people like Gary Angel, Jim Novo and Kevin Hillstrom et al. who come from solid database/direct marketing background and they see very insightful similarities in web analytics and database marketing analytics that others don’t. The other school of thought consists of people like Avinash Kaushik, Eric Peterson et al. who do not see much link between other fields and WA. Of course, the page and visitor level data from web analytics hasn’t traditionally lent itself to customer level data, so, those who’ve pursued WA as an entirely new field weren’t entirely wrong. Personally, after having extensively read Gary, Jim and Kevin, I think, it’d be stupid on the part of a web analyst to ignore the knowledge from established fields of direct/database marketing analytics, and more so when the technology to link visitor and customer level data is becoming a reality.

Now on to the original question:

Database marketing folks use survey research and focus group data to design their targeting strategies for various customer segments and since they have the data (demographics, psychographics etc.) for target customers, they don’t face the issue of linking attitudinal data with their targets. In digital world, however, the behavioural segments are mostly anonymous. Gary suggests that social data can bridge this gap and enrich segments that are constructed from website behaviors. However, it’s not clear to me how the website usage meta-data (functionalism) can be easily mapped with the meta-data (topic classification, influencer etc.) of social activity. Is he only talking about the social activity that begins at the website in question, so that website behaviour and social activity can be linked? But that’d just be a small part of all possible social activity data. The rest of the social data would be anonymous and liking that anonymous data with the anonymous data from website would be even more challenging. Maybe there’s more to it that I don’t understand. It certainly sounds very interesting and I’m going to do more research on it.

Measurement is the Strategy

2011-05-12T21:03:00.000-07:00

(I know that's a lame title for a blog post but being a huge fan of Marshall McLuhan, I couldn't help it...I'm always looking for "x is y" around me...if you hate this piece, you'll abhor what I'm going to write next...."marketing is the product"..."customer is the business"...eh:-)

“you can't manage what you can't measure” is a bold statement but I think it still undersells “measurement” to people. There are certain aspects of measurement (marketing measurement to be precise) that are so fundamental to your strategy that they actually decide what your strategy should be; and you can't possibly outsource this part to cheap data crunching analytics companies; but before I talk about that, consider this:

Do a Google search for contemporary marketing gurus/strategists and 9 times out of 10, you’ll end up with someone who’s actually a marketing measurement guru. Seriously, try it! I’m not kidding. And while you are at it, see if you can distinguish between a non-measurement-focus-marketing-guru and Deepak ChopraJ

Why measurement is so important for marketing today:

There are two parts to any kind of measurement (1) the act of measuring something and (2) deciding what to measure. The “act of measuring” has its own challenges like finding relevant data sources, integrating disparate data types/sources and the availability of tools for processing and visualizing data etc. etc. but these are mostly tactical things (though difficult). “deciding what to measure” on the other hand is a more strategic/fundamental problem. Internet is full of marketing-measurement discussions about “act of measuring” but not too many people are taking about “what to measure”!
“Deciding what to measure” is what forces you to really evolve/refine your strategy. In fact, it could be an acid test that’d decide whether your strategy holds water or not.
I’m gonna go out on a limb here and say if you begin by “deciding what to measure” (in the context of your business) and then jump into strategy, you’d save money and have more success.

Deliver insights or Automate insights?

2011-05-10T01:11:00.000-07:00

Those are two largely independent pursuits btw! If you want to deliver social insights by capturing social mentions from web and transforming/integrating the captured data with data from other systems, it can be done even without having a hi-fi technology infrastructure in place. In fact, we are so early in the social intelligence delivery game that justifying technology investments for "ERPing of social intelligence" is still a wishful dream; at least for those who want to use a generic off-the-shelf product in that space. We don't even have a decent social CRM product yet!! A better approach (at least for now) is to start small and then build custom technology solutions while leveraging stable off-the-shelf products from market.

Here's our vision for social intelligence program:

Why Walmart bought Kosmix?

2011-04-24T16:00:00.000-07:00

What surprises me most is not that Kosmix got sold, but of all the companies in the world why did Walmart buy it? Social/web analytics companies are selling like hot cakes, with almost 2-3 acquisitions happening every couple of months in last 3 years (Twitter, Nokia, IBM are buying analytics companies in dozens) but most of these other acquisitions have been done by other technology companies (if not analytics companies). Last time I checked Walmart was supposed to be a retailer and they were hiring companies like Kosmix for work, not buying them. Does it mean social data is so important and promising for Walmart that it wants to keep of all of it in-house? (especially when there’s so much of it)? Are other large companies (with a lot of social customer data) going to follow suite (if they can afford it)?

Does it mean, web/social analytics vendors should consider allowing their clients to own their data inside their premises (or something on those lines) and not on the cloud? For most big retailers and in fact many other companies, keeping customer data + insights secret is extremely critical for maintaining a competitive advantage. Can these companies take the risk of hosting such critical data on cloud under somebody else’s control? Walmart has certainly indicated its reservations! There’s just too much at stake.

It’d be interesting to see what this acquisition entails in terms of industry trend!!

Also see - what’s up with data?

Marketing Hypermetropia Part-2

2011-04-15T02:08:00.000-07:00

[Update: I'm going to keep updating this post with links that deal with similar ideas:
1. Jeff Jarvis - New rule: Cover what you do best. Link to the rest]

It’s perfectly understandable that if a company doesn’t move in horizontal or vertical spaces surrounding its current business, then somebody else will seize that space. I’m not debating that question here. What I’m trying to do here is – see if I can come up with some creative ways of making the expansion process more fruitful (and let me restrict myself to tech companies only). Essentially, I’m trying to answer 2 questions:

Of all the tech companies that are trying to move in horizontal/vertical spaces, is there an underlying force that’s common to all of them? and,
Can I use/adapt any contemporary frameworks/theories to help me make such decisions?

These are difficult questions, to say the least and I could be entirely wrong in my assessment. Let’s see: While researching for the second question, I came across Alan’s categorization of companies and it stuck me that maybe we could use it for this purpose. Though Alan has used his categorization to explain a different context (buyer-centricity) and there’s also an element of moving-up-the-value-chain among those 4 categories (infrastructure provider -> connector -> intellectual property creator -> passion partner); nevertheless, as I’ll explain below, this categorization can be very useful for setting vertical/horizontal expansion goals for companies.

Let me start by explaining what these 4 new categories of business are:

Infrastructure provider: a business that specializes in the automation of matter or information processes and provides the infrastructure for everything else

Connector: a business that unleashes the value that comes from connecting people to people in new and different ways

Intellectual property creator: a business powered by people’s ability to create, imagine and innovate

Passion partner: someone who’s in the business of organizing, expressing and enhancing people’s feelings, emotions, goals and values.

Example cases:

Apple is a passion partner but they are also a closed door company. They thrive by surprising people with their innovative products and not by connecting with them and taking their inputs in product innovation. When Apple launched Ping (a social network), they tried to become a connector and since they lacked the culture to become a connector, they failed at it.

Amazon has become a true infrastructure provider and if we ignore Kindle for a moment, they are following this path religiously with massive investments in cloud. Amazon is not trying to be all things to all people.

Google, in my opinion is also an infrastructure provider. Google Adwords provides the infrastructure to connect long-tail advertisers with long-tail publishers and it’s exceptionally successful at it. Google search provides an infrastructure for random users to connect with random sources. Google apps provide great infrastructure for SMEs to build robust and scalable web applications. Google is not a connector in the sense that Facebook is. It’s not surprising that most of their connector (social) acquisitions are failures.

High profile consulting companies are intellectual property creator, so, when an IT services factory (essentially an infrastructure provider) tries to move to this space, they need to understand what they are doing. Applying the mass production logic doesn’t help. This is perhaps the reason why they haven’t done anything exceptionally great in the business. To be successful they’d have to first move beyond their infrastructure-mindset or maybe choose to expand where their strengths lie.

I’m not saying it’s not possible to move from one category other, but the roots of these categories go deep inside the culture of companies and knowing what they are getting into could make a lot of difference in how they pursue their expansion strategies.

To the first question, I think the underlying force here is “what else can I do with the data that I own and what can I do to own more and more data?”

What else you can do with the data that you own depends on who you are. An infrastructure provider cannot transform the data that it owns to become a connector overnight. If you are Google and you think just because half of the world’s population is on gmail, you can insert social features in gmail and you’ll become social, then maybe you are not entirely right.

Of course, Google is fighting another war with Facebook, which is that of search. Since, a significant part of Google’s revenue comes from SERP display ads, they want to own all sources of search (social or otherwise (vark.com)). However, there’s an important piece of display ad puzzle that’s missing in this debate - mobile. Where’s the real estate to display sponsored ads on mobile phones? As more and more people continue to use smart phones to access internet, the revenue from display ads (search and social both) will plunge. Also, when people use phones, they prefer using apps; so, the single source to web (whether Google or Facebook) philosophy is anyways going away. In future, Facebook is not going make too much money from display ads, they’ll probably make money from the network insights. Considering its history and strength, IMHO, I think Google should continue on infrastructure provider path, especially focusing on long-tailers rather than trying to become a connector.

Marketing Hypermetropia

2011-04-06T06:14:00.000-07:00

Have you noticed lately that everyone’s trying to get into everyone else’s business? Google is trying to become social (old story..I know), Facebook is trying to do what Foursquare and Groupon do. Microsoft is putting its might behind Bing…Apple tried to get into social networking with Ping (and failed)... digital agencies are doing technology companies’ job and technology companies are moving into management consulting space…This is what happens when companies take “marketing myopia” too seriously. Is there an answer to this madness?

Alan Mitchell in his book Right-Side up says:
"If I can buy a product by pointing my mobile phone at a bar code, then why shouldn't my telecom provider become a bank? If so, he may want to use an existing bank’s infrastructure to provide this service. The bank, however, may have different ideas. It may want to evolve towards a personal financial agent role, with the mobile phone as a key part of this one-to-one interactive service.

And why don’t credit card companies use their incredible ability to aggregate consumer information evolve to become buying clubs on a vast scale? Instead of simply paying for big ticket items with your credit cared, order the item you want and let the credit card company aggregate demand.”

So, you see there's more to come :-) I think an answer to this puzzle can be found in the categorizations of companies that Alan describes in his book. He says all types of businesses can be classified into one of the following four new categories:

1. Infrastructure provider
2. Connector
3. Intellectual property creator
4. Passion Partner

I must say it's a very creative way of categorizing companies to address the problem described above. As long as you understand which category you want to belong to, you don’t have to try to be all things to all people!!

Each of these categories deserves a detailed description to make any sense. I'll cover that in my next post!!

Social Commerce is like Drive-thru

2011-03-16T04:17:00.000-07:00

Really, if you come to think of it…isn’t social commerce very much like drive thrus….What are these eCommerce kiosks on Facebook after all? Facebook (in fact all of social media and maybe the entire web) is like your car. While you are driving, you wanna stay inside your car as much as possible…that’s why they built those drive-thrus.

I think we could come up with some interesting ideas by using this analogy. For instance, if you are taking your car to an unknown place, you’d prefer to have a GPS. I don’t think we have a GPS equivalent for social media, yet! Wouldn’t it be great if we could use a socialGPS to decide before adding somebody (known/unknown) who sends us a request on FB or LI or even to monitor our connections and see if we are in the right company?

The invention of car made our physical journey non-linear, which led business to rethink their customer acquisition strategies – people could live in far away places…so retail shop owners had to move beyond their a-retail-shop-near-every-train-station strategy. On similar lines, social media has made our information/decision journey non-linear; which btw is going have far more powerful consequences on businesses than what non-linear-physical-journey did!!

Who's Customer 2.0?

2011-03-09T04:57:00.000-08:00

Updated:

CX + UX + WA = True Customer-Centricity

2011-02-02T19:05:00.000-08:00

Customer centricity is the underlying theme that runs across Customer Experience, User Experience and Web Analytics + all other related fields. However, all of these approaches look at customer-centricity from very different perspectives.

For instance, CX and UX, two similar sounding fields actually lie at two ends of experience continuum, whereas Web Analytics, depending on what you measure, can be used to assess user engagement at tactical level (UX) or to assess customer engagement at strategic level (CX) if combined with database and multi-channel marketing principles.

Traditionally customer experience consultants and user experience consultants have worked in silos. If you don’t agree with me, take a look at Strativity group (CX) and Adaptive Path (UX). You’ll hardly find anything common between their approaches and strategies except that both strive to build engaging customer-centric experiences!!

I’m convinced that a multi-disciplinary team with CX, UX and WA experts can do wonders in creating truly customer centric business.

Imagine what would happen if the following silos were removed:

CX	UX	WA
Understand business needs of customer	Understand visitor motivations (Attitudinal)	Understand visitor actions (Behavioral)
Marketing Data	Qualitative data	Quantitative data
Business Focus	Visitor/user Focused	Data focused
Deal with small to medium scale data sets (market research)	Not trained to work with large datasets	Large data
Brand architectures, CX roadmap; business model redesign to keep customer at centre	Visitor/user personas, wireframes,	Scorecards, KPIs, web analysis
Business, marketing, finance	Sociology, psychology, design	Stats, data mining, CRM

Information Architecture for Gov2.0

2011-01-15T03:16:00.000-08:00

Besides all the other UX related things, if there’s one thing that Gov2.0 related initiatives really-truly-madly-urgently need, it’s Information Architecture. Almost all Gov2.0 related digital initiatives I’ve ever seen can benefit from Information architecture. Take for instance data.gov or data.gov.au – you don’t have to be a UX expert to see that these sites were designed by IT folks to be consumed by IT folks (even though they did not intend it to be that way).

data.gov talks about “semantic web”, “linked open data” and “xml/rdf” etc. on it’s home page – can you beat that? I dunno but if this website was created to engage regular citizens then I doubt if it’s really serving its intended purpose. The labels, the vocabulary, taxonomy… whatever, nothing seems to have been designed by keeping ordinary citizens in mind – so much for user-centered-design!! huh.

On the similar note, during a recent Social Business Summit, Karen McGrane from Bond Art + Science discussed how “UX will make or break social business”. I believe, this is an incredibly insightful observation and it’s high time we moved beyond the global gyan (5C’s and 4P’s of social business) and started doing something about creating relevant social experiences for users. This is more important for Gov2.0 initiatives because unlike other web 2.0 related things, there's no obvious incentive for people to engage with govt. agencies. Is it fun? Is it useful? Can I make a difference? Hell, I don’t event understand what they are talking on their websites…

Shouldn't we design our Gov2.0 initiatives in a way that regular citizens would actually want to use?

What’s wrong with social shopping?

2011-01-03T09:04:00.000-08:00

Two things:

They either offer discounts to people who would have bought anyways.
Or, they sell to deal-seekers, who always wait for deals before buying stuff; basically customers with permanent negative lifetime values.

Hell, as Groupon becomes more popular, even regular people are becoming deal-seekers!!

In a recent study (How effective are Groupon promotions for businesses? Sept-2010, Prof. Utpal Dholakia, Rice University), 42% businesses who used Groupon said they would not want to use such services again. That’s a big red herring. Not sure why Groupon is still valued at $ 6 billion.

It seems Groupon and other social shopping sites are adding some value to new and small businesses that are yet to establish their brands and are seeking new customers.

The study suggests three interesting ideas to make services like Groupon more useful for businesses:

Reward relational behaviours of consumers over transactional behaviours. Instead of offering $60 food for $30, offer $10 off on each of customer’s next three visits.
Instead of offering a discount on a consumer’s total bill, offer specific discounts on various items and give businesses opportunity to cross-sell.
Help businesses use unutilized capacity through promotion offers or sell unpopular items. A yoga studio can offer classes on a weekday afternoon, for example.

I think social shopping needs to learn a lot from well established database marketing principles or we’d just be making mistakes and reinventing wheels. Kevin Hillstrom and Jim Novo have some very interesting things to say about how database and multichannel marketing principles can be used in social/digital world.

Part-II is here.

Careers in Digital Media (for MBAs with Tech background)

2010-12-27T10:51:00.000-08:00

So, I was talking to a guy who’s just about to finish his MBA and is interested in making a career in digital media. He wanted to know what kinds of career opportunities are available in digital media for MBAs with tech background.

The simple answer is – way too many!! Your IT background may not have worked in your favour while you were tyring to get into a b-school (we all know how difficult it is to differentiate yourself with IT experienceJ) but here’s the good part - your IT experience is the best thing that has happened to you if you want to make a career in digital media. Of course, you are going to have to be a lot more specific and creative in your pitch.

Roughly speaking, I think there are three career paths that one can explore.

Career with agencies:

Almost all traditional Marketing/PR/Advertising agencies have opened digital shops and they need people with technology background. Look for agencies that offer digital marketing services, SEO, SEM, social etc. Trust me…it doesn’t matter how big a marketing/advertising star you are, if you don’t have hands-on tech background, you’ll have a lot of difficulty appreciating digital. I’ve talked to so many people with non-tech backgrounds and they all seem to either under-estimate or over-estimate the complexities involved with digital technology. This is where you can make a difference. Digital agencies usually ask for some agency experience but you should be able to work-around that with your marketing/consulting (if you have any) experience. The important part of you pitch here is to explain how your tech knowledge combined with MBA is a deadly combo for them. Remember to keep a few media jargons in your repertoire for the buzzword lovers; agencies are full of such people!!

Career in consulting:

Besides regular consulting companies, almost all software factories have started their consulting divisions and digital media consulting is a big part of these consultancies. The names are usually camouflaged - customer experience practice, marketing consulting, user experience design, etc... So, whenever you see words like customer, relationship, experience, social, marketing, even eCommerce and mCommerce...jump right in and clarify. Consulting companies have a thing for MBAs..your really don’t have to go overboard in selling yourself to them; just make sure they put you in right vertical.

Apparently, digital media analytics (web analytics, social media analytics, social network analysis, social CRM) is a very big deal too. For those who are interested in marketing analytics, media analytics consulting can be a great career path.

IBM interactive and Sapient interactive are two popular digital offshoots of parent technology companies. They fit in somewhere between pure digital agencies and digital tech consulting firms. Perfect places for exploring consulting and even interesting delivery roles!

Career with clients:

As part of an agency or a consulting firm, you’ll work with clients (retail, cpg, eCommerce, mobile service providers, telecom etc.) but you should know that most clients keep quite a few key in-house digital media positions. In any case they need people to liaison with digital media consultants and agencies. Clients usually always ask for some agency experience but the supply is limited, so you do have a reasonable chance even without an agency experience. This is also the place where you can play your domain-experience card. Say, you have domain experience in telecom. Now, combine that with your MBA + marketing + digital media knowledge/exp and pitch yourself as a guy who knows what telecom customers want and who also knows how digital media can be used to reach out to them. You’ll hit a home run with that one. eCommerce companies are the most knowledgeable clients of digital media agencies and consultancies and you'll get the best experience/exposure working with them.

Having a tech background doesn’t necessarily mean your experience is going to be relevant for digital media career but it’ll certainly help you pick things up quickly. If your experience has been limited to IT delivery and consulting, you’ve probably missed out on action from digital marketing and media perspective. Consider spending some time reading digital media/marketing related literature.

If time permits, I’ll update this post later to add names of a few popular companies under each category and maybe add some interesting resources/books on digital media.

Persuasive Technology + Systems Thinking for Gov2.0

2010-12-26T12:47:00.000-08:00

Government agencies across the world are organizing data mashup contests as part of their Gov2.0 initiatives. This is great but certainly not enough. Some analysts think it’s a futile exercise. I wouldn’t go that far but I certainly believe that the true audience for Gov2.0 are regular citizens and not just the programmers and data analysts who participate in these competitions. The true value of Gov2.0 lies in energising the masses to participate in policy creation and service delivery processes.

So, what can government agencies do?

Two things:

First of all, understand what it takes to influence digital (or otherwise) behaviour of masses.
And secondly, use/design a suitable behavioural modelling tool to gain deeper understanding of the outcomes from your Gov2.0 initiative.

Alright, so what does it take to influence behaviour of masses?

First of all, do you even have a framework for modelling digital behaviour of citizens for gov2.0 related initiatives? No, so build one – build a model for exhorting regular citizens to participate in policy creation and service delivery. A good place to start is Prof. BJ Fogg’s Behavior Grid (Stanford Persuasive Technology Lab). What kind of behaviour do you want people to exhibit? You want them to do something once (click on vote button) or you want them to do something for a period of time (keep donating money till everyone’s better off) or maybe you want them to do something for the rest of their lives (quit smoking and bring down insurance premium for everyone). All of these require different approaches. Select what you want to do from behaviour grid and then design your digital Gov2.0 programs accordingly.

It’s important to do one small thing that can influence behaviour of a million people than do one exceptionally great thing that can influence behaviour of one guy.

Secondly, once you’ve decided the behaviour that you want your citizens to exhibit, you need a software model to run if-else scenarios. Where would you get such models? Regular statistical models? Sorry that won’t work. Digital behaviour is too dynamic and emergent to be modelled using your regular stats tool…when the line between cause and effect blurs…you have a chicken-and-egg problem… A combination of agent-based and systems thinking model is your best bet if you want to model the emergent nature of digital behaviour. “Systems thinking” is not new for government agencies (see http://www.thesystemsthinkingreview.co.uk/) but using it to model digital behaviour of citizens is perhaps new. If you are a Gov2.0 leader, summon your Systems thinking expert first thing tomorrow morning J

There’s also this let-go-of-control philosophy that’s being evangelised by many gov2.0 experts. No complaints. This is certainly what it should be like…after all isn’t gov2.0 all about shifting power from governments to citizens?…but this is just the beginning…we really do need governments to nurture gov2.0 initiatives for a while…once things falls in place, it’ll become a self-sustaining system…and that’s where we are headed…you really don’t have to ask govt. to let go of control. The very design of web 2.0 will take care of that!!

The Purpose of Government 2.0

2010-12-13T01:04:00.000-08:00

Apparently, there are two schools of thoughts in Government 2.0. On one hand you have Gartner analyst Andrea Di Maio and many others who believe government agencies will embrace Gov2.0 only when it’s proved beyond doubt that Gov2.0 will help them do their job more efficiently and effectively (yellow circle). On the other hand, you have many Gov2.0 evangelists such as Tim Berners-Lee (creator of internet and Gov2.0 lead for the UK), Don Tapscot (author of Wikinomics and MacroWikinomics) and Tim O’Reilly who believe government agencies should whole-heartedly support Gov2.0 initiatives because, well, it’s the right thing to do (blue circle). Of course, both sides acknowledge the importance of each other’s perspective and it’d be interesting to see what turn this debate takes in time to come. In the meantime however, we at Wipro believe that these two approaches are not orthogonal; in fact, there’s a huge overlap between the two (as we’ve tried to show in the diagram above). To appreciate how these two approaches reconcile with each other, it’s necessary to have a deeper understanding of the emergent nature of digital media, the principles of open value creation and the rise of participatory culture among citizens (brought about by web 2.0). Drawing on our decades of experience in implementing government transformation technology; shared services, cloud computing, enterprise collaboration platforms, business process optimization, change management practices and social computing consulting, we’ve developed one of the most sophisticated and evolved Government 2.0 consulting practices in the world. If you are a government agency trying to make sense of this beast called Gov2.0 or perhaps you are already involved in Gov2.0 related activities and want to identify and prioritize the most critical areas, we believe the following list of challenges and suggested approaches will come handy for you:

1. Challenge - ROI from Gov2.0 initiatives

A Balanced Scorecard approach can help government agencies see how a “right-thing-to-do” Gov2.0 initiative can transform into a “profitable-thing-to-do” project in future. In fact, government agencies that are looking at returns on only financial perspective are at a loss because financial perspective is a lagging indicator. They should seek returns on all 4 perspectives of Balanced Scorecard. Wipro’s Gov2.0 balanced scorecard is great at helping government leaders connect the dots.

2. Challenge – Sustaining Gov2.0 initiatives

Sustaining any initiative whose success depends on external participation is a huge challenge. A Gov2.0 initiative will succeed only when it can provide compelling reasons for its stake-holders to engage in conversations for longer periods of time. However, conversations don’t happen in a vacuum, they coalesce around social objects. Campaigns, data and agencies aren’t compelling enough as social objects themselves. Sustainable social objects are usually related to a passion, lifestyle or a cause. It’s critical for a government agency to first identify suitable social objects for its audience in order to build engaged community around its Gov2.0 initiative.
Pilot programs and data mash-up competitions (http://mashupaustralia.org, http://www.appsfordemocracy.org, http://data.gov.uk/apps) are right steps in this direction as they help us nurture and understand emergent nature of citizen engagement.
There are several other important Gov2.0 characteristics that are critical to the success of any Gov2.0 initiative; for instance, if you have not accounted for all of the following characteristics in your Gov2.0 initiative, you might have left room for failure:

Is it citizen-driven?
Is it employee-centric?
Have you accounted for emergent behaviour of digital media? (I.e. have you left room for improvisation? We are only beginning to understand how digital media influences people’s behaviour and it’s possible that the outcome of your Gov2.0 initiative could be very different from what you initially planned, albeit a good outcome.)
Have you planned to deal with the transformational nature of your Gov2.0 project?
Are you providing a blend of planning and nurturing?
Have you adapted your management style to deal with the outcomes of your Gov2.0 initiatives?
Are you using the principles of “Open Value Creation”? Open Value Creation is at the heart of Gov2.0 (or in fact any social media initiative that involves co-creating value with customers/citizens)?

3. Challenge – Scaling Gov2.0 initiatives

Government agencies don’t know they are going to face scalability issues – yet. Most successful web 2.0 initiatives start small, reach a tipping point and then spread like wildfire. Government agencies should procure and implement suitable and scalable technology infrastructure to ensure that their Gov2.0 initiatives are not compromised when it’s time to scale. A few key technology focus areas are:

Semantic web technology (for opening and linking government data)
Community platforms (for listening, consulting and collaborating)
Cloud computing and shared services (for cost-effective, agile and scalable infrastructure)

4. Challenge – Management and Culture changes required to deal with Gov2.0 initiatives

Leadership focus is identified as one of the key drivers of Government 2.0 in Gartner’s Open Government Maturity Model, along with value focus and technology focus. Leadership is also identified as one of the three pillars of Gov2.0 in Australian Gov2.0 Taskforce Report. It goes without saying that unless senior leadership is committed, Gov2.0 initiatives will only see limited success. The extent of changes required in management culture for Gov2.0 to succeed cannot be achieved through bottom-up approach alone. Decision makers and leaders will have to be educated and convinced about the new role of government agencies as enablers and facilitators of change rather than control centers of change.
Envisaging the big picture (see figure above) of a government agency that has fully embraced Gov2.0 is an interesting way of communicating ideas with leaders and stake-holders.

5. Challenge – Dealing with “Big Data”

Considering the huge social implications of big data, it’s critical for government agencies to plan and deal with it in a way that benefits the society and addresses its concern for privacy. Additionally, government agencies will have to understand how they can support the many innovative usages of big data. For instance, Hal Varian, Chief Economist at Google, says Google data can reveal future economic trends a week or two earlier than official government statistics. He has also made the rounds in Washington “to make the case that government agencies should use Google tools to better draw current snapshots of consumer sentiment, corporate health and social interests”. Can forward looking government agencies continue to ignore such usages of big data? The recent Wikileaks episode only vindicates the point that traditional ways of handling government data is not suitable for our time.

Acknowledgement – We have been deeply influenced by the insightful ideas shared in Australian Gov2.0 taskforce report. It has been and will continue to be a guiding force for our Gov2.0 consulting practice. Other sources that have helped us refine our thinking include MacroWikinomics (Don Tapscot), Digital Britain Report and inputs from Gartner analyst Andrea Di Maio.

Influence or Empower?

2010-12-12T11:35:00.000-08:00

Of late there’s been a lot of discussion (here, here and here) on whether social media should be used to influence customers or to empower customers. Mark those words – “should be used” – as if someone has a choice!! I think if marketers had complete control over what they could do with social media, they’d always choose “influence customers” over “empower customer”. Fortunately, they don’t have any such control. In fact, I think, the whole debate about empowering or influencing customers is sort of futile. The customers ARE already empowered by social media. Thank you very much!! I think the question you (companies/marketers) should ask yourself is – how are you going to influence “empowered customers”? Old techniques aren’t going to work. For instance,
most company websites still show exaggerated testimonials on their home page – “Big Mac is the healthiest food in the country says VP of MacroSoft” or something like that…you get the point…is that working? If I were planning to do business with you, I’d immediately google your credentials and get to the truth from social forums – takes 2 minutes. Now, if the social web tells me something that you were trying to hide on your website, I’m going to be very angry, not only because you are lying on your website but also because you underestimated my ability to get to the truth. From now onwards, I’ll not trust anything you say; every ad impression you waste on me will only strengthen my stand and if I see too many of them I’ll actually start actively participating in anti-you forums.

I guess the take-away from all of this is that brands need to be authentic…at least they need to come across as authentic...to empowered customers. For instance, if a brand shows me all kinds (+ve/-ve) of comments from it’s customers on its website, my respect and trust level for the brand will immediately go up and I might be willing to do business with it even if not every customer had something great to say about it.

WikiLeaks sets the perfect stage for Gov2.0 adoption

2010-12-08T22:00:00.000-08:00

Those who hate WikiLeaks are either:

Corrupt politicians
or Government conspirators
or Companies that have so much at stake that they cannot afford to offend governments.

For everyone else, Julian Assange is a hero.

You can read a lot about Wikileaks elsewhere. I just want to make one point here:

A lot of people seem to believe that WikiLeaks will compromise the safety of certain people/countries/agencies if allowed to do what it’s doing and so WikiLeaks is evil and should be shutdown. Here’s the problem with this argument – The idea of WikiLeaks is not to compromise the safety of people, the idea is to make govt. agencies so accountable that they never do stupid things in the first place. If we just look at what WikiLeaks can do in the short run – we’d all arrive at the wrong conclusions. In the long run, however, WikiLeaks can change the way governments work across the globe. WikiLeaks is not too different from the IMF watchdog agency “Bretton Woods Project”, it’s just one hundred times more effective and powerful. The information that government agencies are trying to hide shouldn't have been there in the first place...the lack of radical transparency / real watchdog agency is what allowed them to indulge in such conspiracies with the belief that they would be able to get away with anything...

Solution - Forward looking government agencies that do not want to be embarrassed by WikiLeaks of the future have a solution that they can look forward to – Government 2.0.

Grand Scheme of Things - My Take

2010-11-29T05:26:00.000-08:00

I know...it needs a lot more work. Have been working on it for a while....and wanted to share it here...

"Trust me — this is not your father’s federal government"

2010-11-29T04:32:00.000-08:00

Governments 2.0 is redefining the Role of Government Agencies

From transportation to education to elections to law enforcement, the digital revolution is transforming government and politics, slashing bureaucracies; improving services; producing innovative solutions to some of thorniest global problems; changing the terms of the left/right political debate; and offering ordinary people access to a degree of information and individual influence until recently accessible only to the most powerful citizens. Make no mistake, today, tectonic shifts in technology, demographics, politics and economics are driving the next evolution of democratic government — a transition from monolithic government to Government 2.0 where pluralistic, networked forms of government will become the dominant organizational model for service delivery and policy-making.

Digitally enabled networks of public, private and/or civil society participants are already delivering or performing activities once the exclusive domain of single public agencies or institutions. Governments must follow suit or risk losing power, authority and relevance in a world where citizens are increasingly empowered to act collectively.

Guiding Principles

The enabling force behind Government 2.0 is “Open value Creation” – which exhorts governments to co-innovate with everyone, especially citizens; to share resources that were previously closely guarded; to harness the power of mass collaboration; and behave not as an isolated department or jurisdiction, but as something new—a truly integrated organization. However, it’s important to understand that social tools such as blogs, wikis and social media do not automatically deliver public engagement. The conceptual models underpinning the participative web (i.e. horizontal vs. vertical; iterative vs. sequential; open vs. proprietary; multiple vs. binary) are more powerful, and of wider application, than the tools themselves.

Goldmine of Opportunities

Here's how Techcrunch describes the goldmine of opportunities in gov2.0 - "What is happening with the opening up of government data is nothing less than a silent revolution. There are literally thousands of new opportunities to improve government and to improve society—and to make a fortune while doing it. Unlike the Web 2.0 space, which is overcrowded, Gov 2.0 is uncharted territory: a new frontier to explore, grow things on, and settle on. It’s fresh soil for unlikely seedling ideas that, if they take root, could lead to very successful ventures. It’s a space where companies should claim their stake as soon as they can."

Reference:
Don Tapscott (Don - excuse me for picking up stuff from one of your articles word-by-word. I couldn't have written it any better.)
TechCrunch

Content is not King

2010-10-17T12:42:00.000-07:00

Here’s the problem with great content – I can’t find it!!

Really, the content that gets my attention is the one that’s good at gaming the system. If it can’t make its way to the top 5 search results on Google, well, I wouldn’t even know it existed. Even the links I get from my social connections are actually the ones that are somehow gaming the system.

Looking at it from a slightly different point of view - what exactly is a great content anyway? It’s all subjective. If I read some decent stuff and never get a chance to see something better on the same topic, I would never know that better content existed somewhere. Below are a few more points to prove that you can’t compete on the quality of your content alone:

Say, I somehow managed to bump on your great content. I liked your stuff; so, what do I do next - put it on my browser’s favourite. And guess what…I’m never ever going to go look at my bookmark again. I doubt how many people actually periodically check stuff from their bookmakrs. If I’m looking for something, I open google and search for it. I don’t go to my favourites. So, that’s it. Your great content made me bookmark you…but it can’t make me open my bookmark again. RSS feeds? You really have to be someone to make me subscribe to your feeds!

I bet the sites that get most hits are the ones that are curators. Google, in fact is the biggest curator of all (dynamic curator). The Second one is Wikipedia. Facebook and Twitter are also curators. Aren’t they? I think the reason why we tend to like curators is this – After using google for a decade, we’ve got into a habit of not trusting just one source on a topic. We always want to check a few sources from thousands of search results. Curators give us the mental satisfaction that since they are pulling data from various sources and we don't have to do that on our own.

Illogical argument – A lot of people seem to think that that content is the backbone of web and so should get the most importance. After all, what would googles and twitters of the world show if WSJ and millions of blogs don’t make their content available. That’s a ridiculous argument – consider this, the most important thing we need in life is food, so, by that logic farmers are the most important people and they should get the most money/credit/whatever; if they stop producing food, we’d all starve to death just the way google would start to death if content publishers stop sharing their content with google. If you get farmer’s logic, you’d get the content logic too. Economics guys!!

If McLuhan could see this 40 years back, why can’t we? “The medium is the message” succinctly describes where the focus should be. I don’t claim to completely grasp the meaning of that sentence when so many experts are still debating it but one thing is clear from that sentence, McLuhan did have more respect for the science of medium that the creativity of the message.

See who makes the most money – companies that own the TV channels or the companies that produce content for TVs? companies that own the mobile networks or the companies that produce content/value added services/etc. for mobiles? Companies that own the gateways to web (google/facebook/twitter) or the companies that produce contents (WSJ, Economist, Time)??

How Social Media enables Experience Economy?

2010-09-27T06:16:00.000-07:00

Apparently, there are only 3 reasons why you choose to buy a product or a service -

1. It's the cheapest

2. It's unique

3. You're sold on marketing!!

These are also the fundamental reasons that drive a company's differentiating strategy. A company can choose to:

1. Differentiate on price (Indian IT companies, Goods sold in Flea markets)

2. Differentiate on product (Apple, Tata Nano)

3. Differentiate on marketing (Pepsi, Coke, Microsoft)

For ages, companies have followed various versions of these strategies with varying degrees of success. However, during the last 2 decades, a special kind of differentiating strategy (customer experience) has been found to produce better and more sustainable returns than what other strategies produce. This interesting trend was discovered in 1998 by Joseph Pine and James Gilmore. They noticed that as goods and services became commoditized, the customer experiences that companies created, led to more sustainable differentiation. They published their seminal research in an article "Welcome to Experience Economy" in HBR and also wrote a book with the same name. Although differentiating-on-experience falls in the realm of differentiating-on-marketing, there's more to it than just marketing as discussed below.

My goal here is not to explain what “experience economy” is; rather I want to show how fundamental the roots of social media are from an "experience economy" point of view. To prove this point, let's begin by looking at an interesting example from the book "The Experience Economy" that beautifully explains this tectonic shift.

"The entire history of economic progress can be recapitulated in the four-stage evolution of the birthday cake. As a vestige of the agrarian economy, mothers made birthday cakes from scratch, mixing farm commodities (flour, sugar, butter, and eggs) that together cost mere dimes. As the goods-based industrial economy advanced, moms paid a dollar or two to Betty Crocker for premixed ingredients. Later, when the service economy took hold, busy parents ordered cakes from the bakery or grocery store, which, at $10 or $15, cost ten times as much as the packaged ingredients. Now, time-starved parents neither make the birthday cake nor even throw the party. Instead, they spend $100 or more to ”outsource” the entire event to the Discovery Zone, the Mining Company, or some other business that stages a memorable event for the kids-and often throws in the cake for free. Welcome to the emerging experience economy."

According to Pine and Gilmore, all types of experiences can be categorized into 4 realms (plotted across two dimensions). The first dimension corresponds to customer participation. The second dimension describes the connection that unites customers with the event or performance. As seen in the diagram above, the entire right-half of the 4 realms of experiences is about “active customer participation”, which is nothing but social media. The extensively researched literature on "experience economy" is filled with interesting strategies on how to stage engaging experiences using active customer participation as an important ingredient. Social Media offers unprecedented opportunities and tools for executing these "experience economy" strategies. Any company that aims to differentiate on marketing (and we know this is going to become a norm rather than exception) is left with no choice but to embrace social media. Social media strategies designed to engage users can benefit greatly by the key experience-design principles that Pine and Gilmore have identified in their research. The key principles of “experience-design” are classified under following five categories:

1. Theme the experience

2. Harmonize impressions with positive cues

3. Eliminate negative cues

4. Mix in memorabilia

5. Engage all five senses

The power of social media, however, is not limited to only those companies that are trying to differentiate on marketing. And this is precisely the reason why social is such a big deal - it has something to offer for all kinds of competitive strategies that a company can imagine:

1. Differentiating on product - Use social media for crowd-sourcing, quick/easy prototyping and testing.

2. Differentiating on price – Cut down service delivery costs by providing social platforms to users who can help themselves, Use internal social media (Enterprise2.0) to reduce transaction costs of co-ordination.

In conclusion, if we believe in Pine and Gilmore’s claim that - the next competitive battleground of business lies in staging experiences - then we must also embrace the direct conclusion that emerges from the claim - which is - social media is the most lethal weapon that companies must equip themselves with to deal with the emerging experience economy.

{Update on 27-May-2011: This is by far the most popular post on my blog and it's interesting to see that many people come here while searching for "experience economy social media". How are you making this connection? Would you mind leaving a brief comment about how you ended up here. If I find an interesting trend, maybe I'll share it with Joseph Pine. Btw, he was the first one to tweet this post for me!!}

Final word on Social media ROI

2010-08-29T13:15:00.000-07:00

Key take-away: Forrester’s recent report (16^th July 2010) on Social Media ROI, I believe, puts an end to this endless debate. If you want to refer to just one definitive source on Social Media ROI, look no further and get the report from here (if you are not a Forrester client, it’s going to cost you a fortune…see a summary of the report at the end of this post to get an overall idea!!)

Around a year back, I was looking for a challenging social media issue to complete an academic project. I reached out to many well known social media experts to get their suggestions on what people in social media industry were struggling with - to my delight, I received many suggestions such as..

Jason Falls (Founder of Social Media Explorer):

I'm keenly interested in a couple of things right now. Perhaps one of these will work for you:

- The biggest fear most companies have is talking to customers who are mad/dissatisfied/detractors in a public forum. I'd love to catalog several examples of people who have done it successfully and not so successfully and see if there are some best practices/insights we could glean from that.

- Building community is a big push with companies right now. I'd love to do a retrospective on how communities form, going back to Rome, Greece, etc., to talk about the common bonds that bring people together - geography, common need, religion, etc. - then move into modern times and see where communities of consumers (Harley Davidson riders, etc.) gravitate and why and if there are commonalities we can pull from those. This is going to be the basis of "social business" for years to come but no one has adequately plunged into the topic yet.

Erik Qualman (Author of Socialnomics)

3 options that may be interesting - you decide..I hope this helps.

- How does male vs female behavior differ in social media. Do the sites and portions of the sites they use differ?

- Has social media started to change people's offline behavior do they need to live as if there mother is watching

- How are companies measuring ROI differently than traditional market. What seems to be the formula for a successful ROI

- What types of transactions - activities are people willing to share? What do they want to keep private. Does this view differ from generation to generation?

Saurabh Gupta (Founder & CEO of Phonethics Mobile Media)

- I'm glad you picked social media measurement, I've spent some time with a few UK agencies recently and everyone is struggling.

Social media ROI looked like a hot issue and appeared a harmless topic to me then (ignorant me!!). I thought I would be able to do some original work in 5-6 weeks. Little did I know that I was choosing a roller coaster ride! I ended up spending over 100 hours investigating how people dealt with social media ROI issue. Here’s a brief summary of my report. If social media ROI is something that interests you and you want to read an in-depth report on various approaches, you may want to take a look at my 25-page report. Please drop me a line – tali62 at gmail dot com or leave a comment below and I’ll share my report with you.

Report summary - Social Media engagement can be viewed in many ways. My report contains a list of 5 popular engagement models. Depending on which model you use and to which extent client objectives are aligned with the various stages of a chosen model, a specific set of metrics can be arrived at and these metrics along with baseline data can be used to calculate social media ROI. Budget constraints and business goals may require social media programs to operate at any of the various levels of an engagement model (for e.g. in the 4C model, it could be - Content, Collaboration, Community and Collective Intelligence) where each layer has a corresponding set of metrics, which need to be measured using a mix of onsite/ offsite web analytics, network/ influence analysis and semantic/ content analysis.

The first attempt to calculate social Media ROI dates back to 2006, when Charlene Li (then a Forrester analyst and now founder of Altimeter; also author of Groundswell) built a quantitative model to calculate social Media ROI of blogging. Charlene’s approach relied on proxy marketing metrics, i.e., she focused on what would be the corresponding cost of a conventional marketing campaign to achieve the same level of reach or awareness. For example, when calculating the ROI of an executive blog, she measured value by calculating the cost of advertising, PR, SEO and word-of-mouth equivalents. This proxy approach is called AVE (Advertising Value Equivalent) and its accuracy has been questioned by experts; not many people are using this approach for calculating social media ROI’s anymore…

Social Media ROI calculation or for that matter any kind of ROI calculation often involves three types of inputs:

· 1. Quantitative metrics that can be obtained directly from the system data and log files

· 2. Qualitative metrics that are determined using surveys, questionnaires and polls

· 3. Dollar multipliers that attribute arbitrary monetary value to hard to assess items such as a blog comment or an extra contact in your social network

I think these inputs combined with the balanced scorecard approach can produce very accurate social media ROI values.

Forrester’s Balanced Scorecard approach to Social Media ROI

Executive summary: The demand has never been greater for marketers to validate and measure the benefits delivered by their increasing investment in social media. Marketers often frame this question as, “What is the ROI (return on investment) of social media?” but financial metrics are just one way of evaluating social media marketing programs. Social media marketing delivers a wide range of benefits to organizations that are beneficial in the short term and long term in ways both quantitative and qualitative. To properly value the impact of their social media marketing investments, interactive marketers must align their objectives, metrics, targets, and strategies across four perspectives — the financial perspective, the digital perspective, the brand perspective, and the risk management perspective.

A Balanced Social Media Marketing Scorecard Delivers the Entire Picture: The best way to measure the impact of social media, as with other diverse efforts in the organization, is through a wide range of metrics that are both directly and indirectly financial. In their 1996 book, The Balanced Scorecard: Translating Strategy into Action, Dr. Robert S. Kaplan and Dr. David P. Norton offered an approach for avoiding narrow ROI-based performance management and instead presented a means to capture all of the benefits of corporate initiatives. The Balanced Scorecard they prescribed monitors business impact from four perspectives: financial, customer, internal processes, and learning and growth. Because social media delivers a broad range of advantages to marketers, a similar approach is necessary to fully capture the value delivered by social media programs and tools. A balanced social media marketing scorecard will consider and monitor effects across four perspectives that balance the short term and long term and the directly financial with indirectly financial outcomes:

1. Financial. Has revenue or profit increased or costs decreased?

2. Digital. Has the company enhanced its owned and earned digital assets?

3. Brand. Have consumer attitudes about the brand improved?

4. Risk Management. Is the organization better prepared to note and respond to attacks or problems that affect reputation?

The Forrester report suggests business should follow a combination of following approaches to validate their social media efforts:

· Develop a social media marketing Balanced Scorecard as part of the POST process.

· Eliminate financial measures that are not direct and attributable.

· Do not rely on just one or two perspectives.

· Don’t use the term “ROI” unless you are referencing financial returns.

What we can expect with respect to social media marketing metrics:

· Metrics will gauge not just activity but outcome.

· Social media focus will shift from short term to long term

· Not every social media program needs ROI to deliver business benefit

What’s up with Data?

2010-08-20T09:17:00.000-07:00

“The Economist” is not “Scientific American”; People don't read Economist to find out what’s happening in web technology. So, when a magazine like “The Economist” publishes a 20-page cover story on data and how data is being used by online businesses and government agencies, you know something big is going on…

And how big is that thing?…well, let me explain.

Let’s start by looking at companies that derive intelligence out of data, that is, the analytics companies. If I just look at the acquisitions of analytics companies in past 4 years, it’s tens of billions of dollars. The important thing to note here is that the analytics companies are not being acquired by bigger analytics companies; rather companies that traditionally bought or outsourced analytics work are now acquiring these companies. Isn't that strange? I mean what about the management principles of outsourcing your non-core work. For instance, when IBM implements ERP or relational database solutions for its clients, it uses SAP and Oracle. Similarly, if IBM wants to provide marketing analytics solution to its clients, it could offer web analytics solutions from CoreMetrics and Unica, it doesn’t have to buy these companies. BUT IBM just did that. Last week IBM shelled out 480 million dollars to buy Digital Marketing Optimization company Unica. In fact, IBM would have spent over 4 billion dollars in last 2 years buying several data analytics companies (Web Analytics giant Coremetrics in June-2010, Preditive Analytics company SPSS for $1.2 billion in July-2009, Datacap, RedPill, Exceros Assets, InfoDyne, Diligent Technologies, Cognos, AptSoft…see complete list here). Why? Is Data Analytics IBM’s core business now? 4 years back when IBM sold its web analytics company SurfAid Analytics to Coremetrics, it declared that Web-Analytics was not its core business. Why this about face now?? I’ll tell you what, it’s not because IBM wants to become an analytics company. It’s because social web was not as big a deal in 2005 as it is now, it’s because behavioural targeting was not $ 4.4 billion 5 years back, it’s because IBM has realized that people on social web are creating unprecedented amount of data and its clients are demanding softwares that can produce deep insights about tetrabytes of data that we so easily create everyday. Make not mistake, data analytics is the latest competitive edge provider. And who would want other players to handle such things on their behalf. Not just that, it’s also a pre-emptive move. Now that these companies are part of IBM, IBM has smartly extended the time that it’d take data analytics to become commodity.

In Sept-2009, Adobe paid $1.8 billion to buy Omniture, a data analytics company specializing in advanced web analytics and search marketing optimization. Why? Adobe’s not an analytics company for godsake. Same reason, Adobe realized that sooner or later its Flash clients would demand the kind of data that Google and Apple have access to. Adobe didn’t have much of a choice. Neither do other big companies that produce stuff for digital media.

Suddenly Analytics companies and specially web analytics companies have become hot cakes. We’ll probably see hundreds of acquisitions in next 3-4 years.

Web analytics guru, Eric T Peterson says future CMOs and Marketing heads will be required to have deep knowledge of web analytics. Isn’t that right? I mean if marketing champions are supposed to be great at knowing what customers want, doesn’t it make sense that their understanding of digital customers will directly depend on their understanding of web analytics, considering that more and more customers are turning digital,.)

The Government 2.0 initiatives going on across the globe is further expediting the pace at which data is becoming important. Tim Berners Lee is leading the Open Linked Data initiative that aims to transform the entire web (of documents) into a linked web of data (semantic web). He also led the gov2.0 taskforce for the UK govt that has made a significant amount of government data freely available on internet for people to consume. We are a long way from semantic web vision but when that happens, I believe a data analytics company will replace googles and facebooks to become the biggest web-tech company of the world!!

Trivia – Economist also published a cover story on Semantic Web earlier this year, so, maybe that’s another big thing coming our way!!

Why Behavioural Targeting is such a Big Deal?

2010-08-16T12:58:00.000-07:00

If you want to run ads for your products on online or offline media, you’re going to have to take care of 2 things:

Reach – You can focus on increasing the reach of your ads. This is a time tested concept; if you have the money to reach out to a very large crowd, you’ll always find some people who’d be interested in purchasing your products – TV does it very well. The only problem is - your ad spend may not be optimized. Along with people who’ll buy your stuff, you are also wasting your marketing budget on a very large number of people who have no intention of doing business with you.

Frequency – Focusing on increasing the frequency of your ads is quite intuitive. After all, if you keep repeating your adds hundreds of time, some people will eventually buy your stuff just to see what the heck it is that you can't stop bugging them with. There are various theories about how frequency capping can achieve optimum result. For a long time, advertisers believed that showing an ad 3 times was the most optimum thing to do. This theory was disputed in 2003 by Atlas (now part of Microsoft), which claimed that even though the ROAS (return on ad spend) was optimum with 3 ad impressions, following such a “frequency capping” strategy could severely compromise on reach. The new optimum number is 10 as per Atlas. Needless to say, betting on frequency is not the most optimum way of spending your marketing dollars.

Alright, now consider this – what if someone told you that neither reach nor frequency is as important as “knowing the recent behaviour of your potential customers” – that is – if you could somehow find out what people are looking for exactly when they are looking for those things, you could narrow down your reach to a highly targeted group and your ad frequency could actually be reduced to 1 – these guys are already at a stage in their purchase funnel when just one impression could convert them into actual buyers – capture the right buyers at the right time and you can save a fortune on reach and frequency – This is precisely what behavioural targeting helps you achieve. BT is not only extremely efficient, it’s also ridiculously cheap. No wonder it’s one of the hottest contemporary trends in digital media. eMarketer estimates that the BT market will grow to 4.4 billion dollars by 2012 (see figure on right).

Ever wondered why you don't see too many contextual ads anymore; they are being replaced by behaviourally targeted ads. Check it out for yourself – go to zappos.com, ad a few items to your shopping cart and then abandon your browser. Now open your favourite golf blog - you won’t see a contextual ad selling you golf clubs, rather you’d see an ad from Zappos – that’s BT. Zappos knows your recent intent and it’s re-targeting/re-marketing/re-engaging you. One of the Zappos customers puts it this way – “I’ve started to actually think I never really have to go back to Zappos to buy the shorts — no need, they’re following me.”

Why did Google Wave fail?

2010-08-05T21:42:00.001-07:00

{On 4th August 2010, Google officially declared Google Wave to be dead. Here's my take on why I believe Google wave failed?}

A simple no-nonsense answer to that question can be found on Page#194 of Clay Shirky’s book Cognitive Surplus:

“Projects that will work only if they grow large generally won’t grow large;

A veritable natural law in social media is that to get to a system that is large and good, it is far better to start with a system that is small and good and work on making it bigger than to start with a system that is large and mediocre and working on making it better.”

Unlike other Google products such as Gmail, Reader, Maps, Scholar etc., Wave’s success really depended on a very large number of people using it. As Clay Shirky describes above, such a high reliance on network externality pretty much fixed Wave’s fate even before it was launched in May last year. Comparing Wave to Google Reader, it’s easy to see that the success of Reader didn’t depend on too many people using it. As long as enough blogs provided RSS feeds and Google reader had decent user interface, there was no way it could have failed. With a social tool like Wave, things are different!!

Another important factor for success of a social platform is the existence of a social object that would connect people in new ways. Google wave tried to connect people who were already connected, which was fine, as long as it could provide a new social object to sustain the new connections. Unfortunately, Wave didn’t bring any such object to the table. Jyri Engeström, the founder of Jaiku, approaches any social software design from an object-centered sociology perspective (excuse me for the jargon but that’s how Jyri, who’s credited with the idea of bringing social-object theory to social networks, describes it). According to this theory, a successful social platform clearly defines the users’ relationship with the platform’s social object and if a majority of users are not able to decode this relationship, the platform is likely to fail.

Template [ Social Platform : Users {relationship} Social Object ]

Following are some of the successful platforms that have compelling “user-social object” relationships:

LinkedIn : Users {exchange} professional information and opportunities

Flickr: Users {share} photos

YouTube: Users {share, broadcast} videos

Delicious: Users {save, share} bookmarks

Google wave fails the test miserably. [Google Wave: Users {share, collaborate on} everything??]

Maybe the idea behind Wave was to give users the option of deciding their own social objects - it’s like creating a social network which is the mother of all social networks – don’t use mySpace for music, YouTube for videos or Flickr for photos, just get on to Wave and build on whatever social object you like – big deal!! Well, if that was the plan, then I must say it was sort of much ahead of its time (how do you even explain that to people? EasierToUnderstandThanWave.com!!) but above all it was poorly executed.

We know Google sucks at social but failing a high profile product like Google wave, I think, will haunt Google’s social ambitions for a looong time. This reminds me of a subway style map of Google’s acquisitions - it was published on fastcompany a few months back – check out the red path – all of Google’s social acquisitions are on this path. You’ll see that Google has messed up almost all of these acquisitions; wether it’s Jaiku or Pyra Labs(orkut), they are all flops now. Too bad!!

Google may try to buy Foursquare and Twitter to remain in the social game. However, if Foursquare and Twitter suffer the fate of jaiku and orkut in the hands of Google, I think the investors at Google may issue a memo banning Google from making any future social adventures J

Clash of the Titans

2010-07-28T08:20:00.000-07:00

Chris Anderson says “free is the future of business” and supports Stewart Brand’s famous declaration "information wants to be free". He also writes a book on it – Free: The future of radical price.
· Argument: A decade and a half into the great online experiment, the last debates over free versus pay online are ending. In 2007 The New York Times went free; this year, so will much of The Wall Street Journal… - http://bit.ly/3wPxef

Nicholas Carr says "information wants to be free my ass" (check this and this on Nick’s blog Rough Type)

· Argument: Gizmodo reports that monthly information subscriptions and fees can easily run to $500 or more nowadays. A lot of people today probably spend more on information than they spend on food.

Malcolm Gladwell supports Nick...says Chris Anderson is Wrong

· Malcolm Gladwell to Chris Anderson: No “Free” Lunch - http://bit.ly/QBlYn
· Gladwell dismisses Anderson as a “technological utopian” - http://bit.ly/115qjD

Seth Godin says "Malcolm Gladwell is wrong" about Chris Anderson

· Malcolm is wrong - http://bit.ly/ioi3r

Nick Carr says “Internet is bad for us” and “Google is making us stupid”. Writes a book on it - The Shallows: What the Internet Is Doing to Our Brains

· Argument - When the Net absorbs a medium, that medium is recreated in the Net's image. It injects the medium's content with hyperlinks, blinking ads, and other digital gewgaws, and it surrounds the content with the content of other media it has absorbed. A new e-mail message, for instance, may announce its arrival as we're glancing over the latest headlines at a newspaper's site. The result is to scatter our attention and diffuse our concentration

Clay Shirky says Nick is wrong

· Abundance is good for us - http://bit.ly/1kgYhf.
· Problem is filter failure not info overload

Tyler Cowen (marginalrevolution.com) says what Nick calls “disjoint bits of distracting information” are actually “small cultural bits that are building blocks for seeing and understanding some larger trends and narratives. Our growing preference for small cultural bits enhances our understanding of the beauty of the broader human story, even though not every part of the outside world looks so pretty… http://bit.ly/aX8Y9Q

· Argument - It’s no accident that most of the great scientific and technological innovation over the last millennium has taken place in crowded, distracting urban centers. The printed page itself encouraged those manifold connections, by allowing ideas to be stored and shared and circulated more efficiently. One can make the case that the Enlightenment depended more on the exchange of ideas than it did on solitary, deep-focus reading.

4 online business ideas to die for !!

2010-07-25T12:56:00.000-07:00

The pace at which new online business models are being invented is mind-boggling. Around 6 months back, I stumbled upon a blog post by Doc Searls (co-author of Cluetrain Manifesto), in which he talks about a new trend called “Intention economy” and the next thing I get to know is someone has already launched a start-up (Readbeacon) based on the idea…such is the pace. While Doc Searls is leading an initiative called VRM (Vendor Relationship Management) at Harvard Law School to research and explore future possibilities of this emerging trend, the folks at RedBeacon are already experimenting with the idea in real life. Same is the case with many other ideas. For instance, semantic web is generally looked upon as an idea which is much ahead of its time (see this and this to know how people have played it down); but the truth is there are already over 2 dozen very successful start-ups that have made millions based on the idea.

There are hundreds or probably thousands of crazy? people sitting behind their PCs (literally 24/7) religiously following thought leaders like Tim Berners Lee and Clay Shirky. The moment these people hear something interesting or promising, the next thing you know is, they have already launched a startup with the idea. Reminds me of an Alice in the wonderland saying –"Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!". These new generation entrepreneurs are certainly living up to the saying. There’s one more thing that’s common among some of these people though – it’s their pedigree. Look at the owners of two of the following killer start-ups - one is the grandson of Peter Drucker and the other one is the son of comSource founder!

Alright, so, let’s see what these killer online ideas are:

Milo.com (Find it local, Get it now)

According to Milo, e-commerce currently accounts for only 5% of US retail sales and 87% of shoppers do research online before making offline purchases. Milo also found out that “research online buy offline” is estimated to be a $1 trillion market by 2011, which means online research will impact 40% of total US retail sales by 2011. What an amazing business opportunity!! And what an exciting time to start a company like Milo to cash this opportunity. So, what does Milo do? Well, Milo.com enables shoppers to research products online and buy local. It tracks the real-time availability and prices of more than two million products at over 50,000 stores across the U.S. By combining the detailed product information and user reviews available online with the immediate and tangible benefits of shopping in local stores, Milo.com provides the best of both worlds and makes it easy for shoppers to research the best products, find the right prices and check where products are available near them.

Trivia – Milo.com’s founder is Jack Abraham, son of comScore founder Magid Abraham. Jack helped his father write code for websites before he was old enough to shave!!

RedBeacon (Whatever you need. Done.)

Redbeacon is based on an idea called VRM (Intention economy), a term that was first coined by Doc Searls in an article for Linux Journal - "The Intention Economy grows around buyers, not sellers. It leverages the simple fact that buyers are the first source of money, and that they come ready-made. You don't need advertising to make them." (Remember Priceline??). Doc Searls says Readbeacon is more like a fourth party of VRM ecosystem. (btw, the four party system article on VRM blog is a must read). To know more about what Doc Searls has to say on Redbeacon, see this link.

So what does Redbeacon do? Well, Users go to Redbeacon and search for real world service providers (housekeepers, plumbers, handyman, personal trainers, etc.). The service sends you firm quotes from local service providers, based on price and other factors, such as previous reviews and expertise with the specific job you want done. You can book an appointment online, and Redbeacon takes a 10% fee from the service provider. RedBeacon also employees natural language processing so it can figure out exactly what you’re looking for (for example, “Cupcake maker” would search for any bakers in the area).

Techcrunch describes the business opportunity behind Redbeacon as – “The web is loaded with sites offering listings and reviews for local services, with mainstays like Yelp and Craigslist leading the pack. But when it comes to actually executing a transaction with one of these service providers — establishing details like establishing a price and timing — most people still turn to their phone books to call the service.” This is exactly the need that Redbeacon fulfils.

Evri (Search less. Understand more.)

Evri is described as one of the most promising Semantic Web company. In 2008, Nova Spivack (semantic web enthusiast who also happens to be a grandson of Peter Drucker), launched a semantic web start-up called Twine, which was described as an “artificially intelligent personal web assistant”. Twine was acquired by Evri in March this year and was renamed as Evri.

So what does Evri/Twine do? Well, Evri tries to replace the need for search engines by suggesting that users explore how entities are connected to each other. You really have to try it once to see how powerful it is. Trust me, you’ll actually start hating Google search once you get a hang of what semantic search can do and Evri is supposedly the best semantic search engine. Also, if futuristic web ideas get you high, you must subscribe to Nova’s blog “Minding the Planet”.

Redbox (Find a movie, find a Redbox)

Redbox is described as the next revolutionary step in DVD rental (and who knows maybe it’s a prelude to what’s coming next in retail in general). It is an American company that specializes in the vending of rental of DVDs via self-service/interactive kiosks. If you come to think about it, it was an idea waiting to be discovered. Why do you need a large store like blockbuster to rent a DVD and why would people wait for 2-3 days to get a movie from netflix (the desire to watch a movie is quite impulsive, see research here). Redbox solves both these problems in one shot. Amazing!!. Customers can also reserve DVDs online, made possible by real-time inventory updates on the company's website. Check this post by Dave Taylor, in which he talks about Redbox and explores some interesting futuristic ideas about Redbox producing self-destructing DVDs, so that users wouldn’t have to bother returning DVDs.

Links:

· VRM : http://blogs.law.harvard.edu/vrm/2009/04/12/vrm-and-the-four-party-system/

· John Hagel - http://edgeperspectives.typepad.com/edge_perspectives/2006/03/doc_searls_and_.html

· The Father of All Business Models - http://blogs.law.harvard.edu/doc/2010/01/06/the-father-of-all-business-models/

The answer lies in the Power Law :-)

2010-07-20T10:16:00.000-07:00

As a kid I was always too tall for my age and had difficulty explaining this monstrosity to people (as if I was responsible for it!!), that is, until the knowledge of Normal Distribution came to my rescue. Every tangible thing around us follows normal distribution, well almost everything…and if something doesn’t, there’s a theory that says, the distribution of those distributions will follow normal distribution. So, you see, Normal Distribution is like God’s law - you cannot defy it. Once, you get this point, it’s so easy to use it in arguments. For instance, if you are blessed with less than average height, you could say something like this – well you know what, there are way too many people with average height and there are quite a few monsters like yours truly… and since normal distribution cannot be defied, some people had to be short to prevent the world from God’s wrath, so here I’m. If you are a stats genius, you’ll quickly see the fallacy in the logic, but I can tell you that it works most-of-the-time (because normal distribution prevents too many people from becoming stats geniusJ).

Jokes apart, here’s the thing. We have been led to believe that Normal distribution is the best way to describe all sorts of common phenomenon that happens around us. It appeals to our common sense. Isn’t bell-curve the most intuitive thing in the world? Even a 10-year old can understand it. In fact, Mirowski says – “Linear thinking is engrained in our mentality. Scientific and mathematical models are based on the concepts of equilibrium and linearity. Economics, for instance, is almost theistic in its assumption that economic phenomena trend toward equilibrium.” We have been trained to look for averages and variances (the two criteria for describing any ND…What’s the average age of Indian cricket team?, average attendance record of students in a class, average height of Dutch people etc.) Imagine a world where averages didn’t have any meaning, where knowing variances did not add anything to your knowledge. That’s the world we are heading towards. More on this later!!

When we view the world using Normal distributions lens, we run the risk of ignoring important future trends as unimportant outliers in the data set. These future trends will only appear outside of the Bell curve until it is too late to take any action. (Nassim Nicholas Taleb has written two books – Fooled by Randomness and The Black Swan to discuss this very issue. His words seem almost prophetic in the backdrop of recent global economic meltdown, an extreme event). There’s a growing realization among statisticians and business strategists that ND doesn’t reflect the true nature of our new world. In fact, people who are still using normal distribution to explain contemporary business models are quickly losing ground. Check this blog post by John Hagel (the author of Net Worth, Net Gain and more recently The Power of Pull) for an in-depth analysis of Gaussian world (Normal Distribution) v/s Paretian World (Power Law) debate. John says – “We’re shifting from a Gaussian world to a Paretian world, with profound implications for business” and then goes on to explain how Guassian (ND) distribution fails to model the workings of post-modern world. It’s an extremely interesting read and I cannot recommend it any more strongly. John talks about two conditions under which a Gaussian system can morph into a Paretian system – when tension increases and cost of connections decreases. The increasing usage of digital media and particularly social networks has brought down the barriers for meeting these two criteria. In fact, business models in digital media cannot be satisfactorily understood if one doesn’t understand the Power Law. If you had been using ND to assess the nature of digital world, you probably arrived at wrong conclusions. The virtual world is not governed by the “real-world” normal distribution (you see, we don’t call it virtual world for nothing!!).

So, what is Power Law?

Power law distribution is just one of many probability distributions, but it is considered a valuable tool to assess uncertainty issues that normal distribution cannot handle when they occur at a certain probability. Pareto distributions have long and fat tails with potentially infinite variance, unstable means, and unstable confidence intervals. Such distributions often go by the names of power laws, Zipf distributions, Pareto distributions (80/20 principle) or the long tail. It is a common observation that virtually everything measurable on the Internet — site popularity, site traffic, ad revenues, tag frequencies on del.icio.us, open source downloads by title, Web sites chosen to be digg‘ed, Google search terms — follows such power laws or curves. The fundamental difference between normal distribution and Pareto distribution lies in assumptions about the correlation among events. In a normal distribution events are assumed to be independent whereas in Pareto distribution, events are interdependent. In social networks, a disproportionate number of events are interdependent – and so Gaussian distribution cannot be applied to explain the workings of social networks.

Implications of Power law:

§ In understanding social networks (source – Clay Shirky): The average is meaningless in power law distribution. Assuming that social network is held together by its average members leads us to underestimate seriously the likelihood of sharing a link with someone we meet. In fact, social networks are held together not by the bulk of people with hundreds of connections but by the few people with tens of thousands. It is the presence of these highly connected people that forms the backbone of the social networks. When you list the participants in a Small World network in rank order by number of connections, the resulting graph approximates a power law distribution: a few people account for a wildly disproportionate amount of the overall connectivity. Malcolm Gladwell, in his book “The Tipping Point”, calls these people Connectors.

§ Implication for managers: This from a paper by Bill McKelvey (check refrences) – “Given that the world in which organizations live is frequently Paretian, what types of changes in thinking and practices are required of managers to successfully interact and prosper in a Paretian world? How to transform the new understanding of scalability and scalefree theories in tools useful to anticipate and govern the transformation of small initiating events into extreme events, either to favourably shape the emergence of new business market and/or organizational structures or to avoid their potentially lethal consequences? Ignoring emergent properties allows the radical simplification of reality. This assumption and the consequent methodology and methods have permeated entire disciplines within management and business studies, from decision-making to marketing, from logistic and supply chain management to strategy.”

§ Implications for Web analytics: “In a world where most bloggers get below average traffic, audience size can't be the only metric for success. This is the reason why most web analytics software now come with advanced segmentation features that can be used to segment long tail traffic. Avinash Kaushik says that the long tail provides an average of seven times the data of short tail metrics. For any blog post, the small number of residual daily visits and subscriptions eventually match or surpass the initial surge of visits and subscriptions when the article is first written and posted. This is called the long-tail of ROI and it cannot be ignored anymore.

Looking at world with Pareto’s lens is difficult. Think about it – if 90% of data points fall below average, what’s the point in knowing averages and variances. However, if you don’t look for averages and variances, what will you look for? The answer is you’ll look for outliers in the fat-tail. You’ll place sophisticated filters to capture the early sings of an extreme event from fat-tail. That’s where you’ll find Facebook, Twitter, sings of global economic recession…all kinds of extreme events.

Once you understand Power Law, you also understand why every brand should not create its own community. A, because making a community popular is not in your hands (there are way too many choices for people) and B, not every organization can sustain a community, in fact organizations are not capable of sustaining communities, communities are built around social-objects, not brands. Power law is precisely the reason why brands are (and should) go to places where people already are. You cannot plan to move from the fat-tail to the head; you can only try and watch for signs. A better and more reliable alternative is attaching oneself to someone who’s already in the head. That’s the reason why having your company’s home page on Facebook makes so much sense. Facebook is not a planned success, how and why it moved from fat-tail to head is a mystery. Since, you cannot control such extreme events, the best you can do is look for them and make use of them.

Going back to the height distribution example. I think it’d be an interesting sci-fi story to see how a planet would look like in which heights of people followed power law. Probably a topic for another post!!

Links:

§ http://www.shirky.com/writings/powerlaw_weblog.html

§ http://en.wikipedia.org/wiki/Coase_theorem

Can social networks replace email?

2010-07-04T12:52:00.000-07:00

Here’s an updated and expanded version of my previous post for Joka Strategist.

Can social networks replace email?

There’s a lot of debate going on about how and when social networks will replace emails. On one hand, the proponents of the idea claim that we should look at teenagers (who are shunning emails in favour of social networks) to see what future has in store for us, whereas on the other hand, the staunch supporters of email services refuse to believe that something as important as emails could be replaced with something else. Apparently, the odds seem to be in favour of social networks taking over a very large share of email services. However, the reasons put forward by many evangelists of the idea are diluted by subtle sales pitches and tend to miss the bigger picture. For instance, Sheryl Sandberg, the COO of Facebook, says that what teenagers do today becomes norm for the rest of us tomorrow. This is not entirely true and Sheryl was severely criticized for making such a far-fetched contention based on unwarranted assumptions.

Interestingly, a simple answer to the debate can be found in the history of social networks. Clay Shirky in his prophetic book "Here Comes Everybody" mentions that the origin of the entire social computing phenomenon can be traced back to the day when email services started including a seemingly insignificant feature called "Reply All". In fact, all social computing can be crudely viewed as a super "Reply All" feature on your email account. And since, email is the genesis of social computing, it's probably logical to expect that better and more evolved email services (social networks) will eventually replace traditional email services.

Widespread usage of social web has created a new breed of customers; they are demanding radical levels of transparency in both private and public sector firms. It’s easy to see that traditional email services were never designed for such levels of openness and thus, will slowly but inevitably give way to open social networks. More and more private firms are engaging customers on open social channels, not only for creating buzz but also for customer services. Companies are realizing that delivering customer services on an open channel creates radical levels of accountability among employees and enhances trust among customers. Public sector agencies are not too far behind either. For instance, government agencies in the US (as mandated by open and transparent government directive) have already started open communications with citizens; a large chunk of government communications (G2G, G2C and C2C) that traditionally happened on emails is being ported to open social networks.

Over the years, many market research firms and independent analysts have published reports that provide ample evidence to prove that social networks are indeed replacing emails. For instance, Gartner's social software prediction for this year says - "By 2014, social networking services will replace e-mail as the primary vehicle for interpersonal communications for 20 percent of business users." - http://bit.ly/alpH2e

The adoption of social media tools in company intranets have been shown to decrease email and telephone communications by a sizable extent, as much as 30% or more. This suggests that social tools offer real benefits that can’t be achieved by telephone and email communication. In fact, our habitual usage of email for collaboration could be quite a hindrance to our productivity. As organizations learn to use social tools for collaborative pursuits, the usage of emails for such purposes is bound to take a back seat.

According to a study done in 2005, almost half of Web-using teenagers prefer to chat with friends via instant messaging rather than e-mail. Another research by Morgan Stanley and comSource found that the number of social networking users surpassed email users in September 2009 whereas overall social networking usage surpassed email usage way back in November 2007; Facebook has replaced email as the most popular way to stay in touch with friends online.

Unsurprisingly, college students rarely use email and when they do it’s to communicate with teachers, parents and others who may be less connected to them in social networks. It’s pretty clear that we are slowly starving email, demoting it to a shorter and short list of appropriate uses. Eventually, it will fall off the edge, like fax is now that we can scan and send attachments more easily than using dedicated fax machines.

Lastly, going back to the “Reply All” analogy; if something is good enough to be shared with several people by clicking "Reply All" button; it's probably good enough to be shared with a larger audience as well. Using emails to share such things is tantamount to burying them and rendering them useless for future. Perhaps the right place for such things is a wiki or a blog where they can be preserved as organizational social capital.

Besides the obvious reasons such as simplicity and utility, the unprecedented success of email can be largely attributed to its open, decentralized and interoperable standard. Social networks could be considered as a viable alternative to email only if their evolution follows a similar path of open, standard and interoperable standard.

In conclusion, it’d be foolish to believe that email services will cease to exist any time soon; they are extremely useful for asynchronous, private one-to-one interactions. However, with radical levels of transparency being demanded by people and the imperative to store social capital for posterity, the usage of email as a key communication channel will certainly be questioned in time to come.

References:

· Gartner’s Five Social Software Predictions for 2010 and Beyond - http://bit.ly/alpH2e

· The Death of E-Mail (Slate Magazine) - http://bit.ly/lC5ye

· Email Sharing’s Not Dead Yet (Mashable) - http://bit.ly/1Fi75d

· The End Of Email - Celebrating The Imminent Death (SocialMediaToday) - http://bit.ly/dbHVtE

Can Government 2.0 Solve Prisoner's Dilemma?

2010-06-12T04:33:00.000-07:00

To get an introduction to Prisoner's dilemma and game theory, see this and this.

Governments have always thrived on information arbitrage - and unsurprisingly poor citizens have suffered. The reason why the US and many other countries invested billions of dollars to develop nuclear bombs was this - they didn't have a solution to Prisoner's dilemma. In fact, I wouldn't be too wrong if I said almost all wars in the history were fought because we never had a solution to Prisoner's Dilemma. Facing an unknown adversary; governments, kings and generals did exactly what game theory suggests in such scenarios - Defect.

In simple words - If you can't be sure about what the other guy can do to you, you are better off amassing all kinds of weapons....just in case". And since the other guy is as smart as you are, he's probably going to do the same...leading to a vicious circle of arms race and all that; the end result - everyone's a loser.

However, things are going to change now. Increasing usage of social media in government (gov2.0) will radically alter the way government agencies function. It may take a few years but it's inevitable; there's no going back now. The memorandum of transparency and open government signed by the US president last year is a strong evidence of their intentions and it's a prelude to what's going to happen across the globe. Almost all developed countries have already started working on using social media in government agencies. When gov2.0 is fully implemented, citizens would be able to track how their tax money is being spent by government. They'd have real time access to all public sector information. They'd have a role to play in policy creations. The three pillars of gov2.0 are transparency, participation and collaboration; when gov2.0 is fully functional, information arbitrage will cease to exist in government dictionaries.

Cynics will claim that it's a Utopian vision and web2.0, gov2.0, democracy 2.0 or what have you...are all fads...but they are NOT... and there are signs all over the place... if you only have the time and patience to observe. For instance, Prof. BJ Fogg, who heads the Persuassive Technology Lab at Standford University, talks about world peace using Social Media. Besides running a hugely popular course called "Psychology of Facebook" he also runs an interesting Peace innovation program at Stanford University. Even though the idea of world peace is a lofty one, it's actually based on solid theory and I firmly believe that it's possible. Government 2.0 is perhaps one strong step in this direction.

Real-time Market Hypothesis - how real-time phenomenon will kill online retailing as we know it today!!

2010-05-20T09:09:00.000-07:00

What do you think are the real reasons behind the success of online retailing?

I mean why would people willingly agree to wait for a week to get their favourite book from Amazon and Rediff when they can buy it today from a bookstore. Agreed, it works out slightly cheaper and you don't have to take the pain of driving down to your neighborhood book store. But is that all... that makes you purchase things online?...I doubt it...I think our ability to delay gratification plays a much more important role here than what we have been giving it credit for. If you are in your late 20s or early 30s, you have spent quite a bit of time in pre-internet era and may not even realize that you are practicing "delayed gratification"; it's part of your personality, deeply ingrained in your brain by your parents; but if you belong to gen-Y, you probably can't imagine a life without instant messaging, twitter, digg etc. You'd refuse to believe that just a few years back people had to wait for weeks to receive their snail mails and no...it didn't make them kill themselves!! The truth is - for gen-Y, the real-time phenomenon is just a logical extension to their email and social networks and soon there'll be more number of gen-Y in this world than baby boomers.

On a social networking website, do you ever bother checking your friends old status messages..I doubt if you do...you just care 'bout their current messages...that's what matters...a recent research revealed that the probability of a tweet getting retweeted drops dramatically after just 10 seconds from the time when a message is tweeted. What does it tell us about people, perhaps that they just care about the tweets they get in real-time...

Now you might be wondering what has all of it got to do with the "real-time killing online retailing" - well first of all please excuse me for posting a half-baked idea but I guess that's what web2.0 is all about - making mistakes and learning from them - "quickly" - ok - here's the thing...if you are hit by real time bug...you live in the moment...here...now...you want to know things exactly when they happen...not after 5 hours..that's why you follow Ashton Kutcher and Shashi Tharoor on Twitter and not wait for next day's newspaper....now extrapolate that to buying things...a person with real-time mindset will want her things exactly when she wants it or whatever comes closest...amazon or for that matter any other online retailer cannot cater to this emerging need with their existing business models. I'm talking about physical things here...books and music can be transferred digitally...When this real-time need becomes dominant...and trust me we are not too far from it...online retailing as we know it...will slowly give way to a new business model...I don't know what'd that be but I believe brick and click retailers might be able to adapt themselves with much more ease than the pure plays. Perhaps a new business model "click+brick+kiosk" will become popular.

Let's call this hypothesis - "Real-time Market Hypothesis (RMH)". huh!.. [ I'll think about a fancy definition on the lines of EMH and put it here some other time...]... I do understand that.. it sounds a little strange (stupid?) for anyone to take it seriously, so, allow me to substantiate my claim with some evidence...solid evidence!!..if you have the time...take a look at the following emerging trends...by the time you finish reading this list, I'm sure you'll agree with me that a new real-time retail model is just waiting to be discovered...thanks to the increasing popularity of real-time phenomenon...

1. Why milo.com is one of the most popular websites in the US (these guys get 1 million new users every month) - Milo's mission is to track every product on every shelf of every store in real-time. Milo.com is building a bridge between online and in-store commerce that empowers the consumer to access the best of both shopping worlds—all in one place.

2. Kindle and iPad - Look at the soaring sales figure of these two gadgets. Besides other reasons, it's also about equipping oneself to get things in real-time.

3. Why netflix and blocbuster are losing out to movie rental kiosks? You know who's the shining star in the movie rental business. It's neither netflix (pure play online retailer), nor blockbuster (offline+online retailer); it's an upstart company called Redbox that runs movie-rental kiosks. Redbox caters to the real-time need. When you need a movie at 2 am in the morning, you can drive to the nearest kiosk and get it (in real-time!!). You neither have to wait till next morning (to get it from blockbuster) nor wait for 2-3 days (to get it from netflix). You are the real-time guy...so go get it from the redbox kiosk. Now you see the point I'm trying to drive here :-)... Check this link to see how blockbuster was warned about this potential trend well in advance but they refused to pay heed.

4. Twitter study - 90% of retweets happen with-in 10 seconds of tweet and that too between 1 pm and 3 pm in the afternoon. Even if your tweet is most retweetable thing in the world and you send it late in the night, not many people are going to see next morning...because people have strated living in real time...if you want their attention...you got to catch them in real time...there are so many things happening..who has the time to take a break and see what you tweeted 10 hours back..10 hours is like life time..

5. Nowism - In Novmenber 2009, trendwatching.com identified and published a report on a new mega trend they call "Nowism". According trendwatching.com, a lust for instant gratification is being satisfied by a host of novel, important (offline and online) real-time products, services and experiences. Consumers are also feverishly contributing to the real-time content avalanche that’s building as we speak. As a result, they expect brands and companies to have no choice but to finally mirror and join the ‘now’, in all its splendid chaos, realness and excitement.

Links:
http://crossthebreeze.com/2010/01/27/nowism-realtime/

http://www.urbandictionary.com/define.php?term=Nowism

Why the Long Tail is Overrated!!

2010-04-15T10:23:00.000-07:00

Chris Anderson's claim: "Internet has empowered consumers to find and afford products more closely tailored to their individual tastes, and so they will migrate away from homogenized hits. The wise company, therefore, will stop relying on blockbusters and focus on the profits to be made from the long tail—niche offerings that cannot profitably be provided through brick-and-mortar channels."

Why this is not entirely true: Soon after the book "The Long Tail" was published, HBS marketing professor Anita Elberse published an article in HBR questioning the validity of this theory. The long tail theory is quite intuitive but interestingly the ideas refuting the theory are even more intuitive! huh!!

When Prof. Elberse took a deeper look at the customer-transactions data of various online retailers, she found an interesting pattern among people who are actually responsible for the growing volume of business in the so called long-tail. - First of all, a disproportionately large share of the audience for popular products consists of relatively light consumers, whereas a disproportionately large share of the audience for obscure products consists of relatively heavy consumers; and secondly, consumers of obscure products generally appreciate them less than they do popular products. - This finding is in stark contrast with what long-tail theory claims!

Isn't that common sense - There are generally only two kinds of customers: those who buy a lot and those who buy a little. Those who buy a little (light consumers) flock to the popular stuff and those who buy a lot (heavy consumers), too, like what's popular, but they're more willing to try obscure fare. So, if you believed in the long-tail theory and started a niche retail store believing that niche buyers will flock to your store, you'd be wrong. People who buy niche stuff are generally heavy buyers and if there's a retail store that keeps popular and niche stuff both, they'd probably buy their niche merchandise from that store while buying the popular stuff!!

The HBR article by prof. Elberse is a must read for anyone who's running or planning to start an online business.

Links:
Should you invest in the long tail - HBR - Prof. Anita Elberse
The Wrong Tail - Slate Magazine - Tim Wu

Digital Media Industry Consolidation in Asia

2010-03-15T05:37:00.000-07:00

Major international advertising agencies such as Publicis, WPP, Omnicorp, etc. have acquired many smaller fishes in Asia and more specifically in India and China during last 4 years. Following is a chronological list of M&A that has happened in India and other parts of Asia since 2006. I presented this report to a guest faculty in my school (who's also the CEO of a very popular international ad agency) and he found it quite insightful!

From a Mint article published in early 2007:
Some of the recent international heads, who have unveiled their digital objectives in national and international interviews, include WPP’s Global Strategy Director Mark Read; Havas CEO Fernando Rodes Vila; Publicis Worldwide COO Robert Pinder; Aegis Media Asia CEO Richard Halmarick; IPG’s Steve Gatfield (CEO, Lowe Worldwide); and Omnicom Vice Chairman Michael Birkin.

Publicis
2006:

In June, Publicis bought French agency Business Interactif for $182 million before acquiring China’s largest independent ad agency, Communication Central Group (CDG), a month later. Then in September the group bought Parisian mobile ad operator Phonevalley
In December, Publicis bought ad network Digitas for $1.3 billion and, expanding Digitas’ Boston-based Modem subsidiary, is setting about growing the Publicis Modem digital imprint internationally.
Publicis paid a premium of 23.5 per cent over the stock market price to win a bidding war for Digitas and establish a global rival to the likes of WPP’s Ogilvy Interactive and Aegis Group’s Isobar

2007:

September-07 – Publicis continues to snap up digital agencies to bolster its online activity, this time buying Paris-based interactive house Wcube for an undisclosed sum.
Publicis Groupe acquires a majority stake of Capital Advertising, the most important independent agency in the Indian capital Delhi, and one of the key independent advertising agencies in India.
Publicis Worldwide COO Richard Pinder visited India several times in 2007 to meet potential candidates for acquiring in the digital space.

2008:

International digital marketing company Digitas, owned by global advertising major Publicis Groupe, is ready to enter the Indian market in partnership with Solutions, a domestic marketing agency. The new entity will be called Solutions Digitas. Publicis has a 60 per cent stake in Solutions.

Announcing its India foray, Digitas Global CEO Alan Rutherford said this was the right time to enter the country as digital marketing in India was poised for a big growth."India has a strong advertising and marketing culture, it is strong on creative talent. The market is growing fast here and open to new ideas," he said. Digital marketing was not just online marketing, he explained and added that mobile marketing would also boom in India as in China.

26/03/08 Digitas launches Solutions | Digitas in India and Singapore

31/01/08 Acquisition of Act Now in the USA

07/02/08 Publicis Groupe acquires La Vie est Belle

22/05/08 Publicis groupe acquires Emporioasia, leading digital agency in china

19/06/08 Publicis Groupe in Strategic Joint Venture in China - Launches Saatchi & Saatchi Energy Source Integrated Interactive Solutions

25/06/08 Publicis Groupe Launches VivaKi - A New Growth Engine for the New Media and Digital Environment

25/06/08 Publicis groupe and Yahoo! Unveil broad technology initiatives to drive greater advertiser effectiveness and consumer engagement online and on-the-go

22/07/08 Publicis Groupe Acquires Portfolio - Leading South Korean Full Service Digital Marketing Agency

06/08/08 Publicis Groupe to Acquire Performics Search Marketing Business

03/09/08 Publicis Groupe Acquires PBJS, leading Interactive Marketing and Events Agency

10/09/08 Publicis groupe completes acquisition of performics search marketing business

2009:

2009-09-29 - Publicis sets digital and BRIC countries as its priorities. It expects 25 percent of its revenue to come from digital activities and another 25 percent from BRIC countries, including Brazil, Russia, India and China by 2010
June 2009 - In an interview, Publicis CEO talks about the network’s performance, its business priorities in India and merger and acquisition (M&A) strategy:

What are your business priorities globally and in India?
Three things I’m trying to do globally:

Ensuring that we are clearly positioned and seen as the company providing contagious ideas that change the conversation. I believe the role of our business is to provide much more than TV commercials for clients. It’s to provide an idea that people want to talk about and share with each other. I want our creative profile to rise substantially. We are already among the top 10 of the Gunn Report in our 83-year history and now I want to be in the top five in the next three years.
The second is digital. I want 30% of my global revenues to be in digital by 2012. I’m already at 15%. When I took over the job we were a little under 7%. In India, I think, we can grow at a faster pace but we’re starting at a lower base of about 5%.
The third is, the world we are in has seen a huge rupture with the past and I want the new generation of clients and talent to look at us and say “wow, you’re leading the way”.

What is your M&A strategy globally and in India?

We have in Red Lion an interesting design company, that we’re looking at creating a global brand consultancy design business. The group sees organic growth, stealing of market share from competitors, as a way out of the current crisis—not acquisition. But if we have opportunities to acquire in fast growing geographies, or fast growing industries, such as digital, then we will. The fact that India has both makes it quite exciting.

WPP

2007

Chief Executive Officer Martin Sorrell made 37 acquisitions in 2007 including digital agency Quasar Media of India and U.S. company Schematic.

2008

WPP chief executive said: “The reason we grow in China, the reason we have 9,000 in China and a 15% market share, and 50% market share in India and 6,000 people there is that our clients are growing there.
WPP is well ahead of its competitors in cracking Asia; the firm identified 1,200 potential acquisitions in China. Miles Young, chairman of Ogilvy & Mather Asia Pacific, says WPP cherry-picked 18 acquisitions in greater China (includes Taiwan) these last four years, and Sorrell himself visited the country seven times in 2007.
Martin Sorrell, the CEO of global advertising and communications conglomerate WPP Group Plc., wants his empire in India to grow even larger than it is. WPP controls the majority stake in the Indian arms of several large agencies including Ogilvy and Mather and JWT.

What is the group’s priority in India? -

Growth in digital media. The WPP Group’s revenues from India total $350 million. Our current market share is 50%.

Other acquisitions: In the first four months of 2009, the Group made acquisitions or increased equity interests in advertising and media investment management in Italy, Portugal and South Africa; in information, insight & consultancy in the United Kingdom; in public relations and public affairs in Poland; in direct, internet and interactive in France and Hong Kong; in digital in the United States and in healthcare in France.

2009

The growth for the advertising industry will come from the new markets in Asia and Latin America, said Sir Martin Sorrell, CEO, WPP. In 2009 about 40 per cent of India revenue for the group came from new media while 60 per cent from mainstream advertising. Worldwide the ratio is the reverse.
With revenues of $400 million (worldwide group revenues $13 billion) and 8,500 employed in the country, he says India is a growth market and expects revenues to grow 3-5 per cent this year.
India, according to Sir Martin, scores high on new media and consumer insights, which are the emerging trends in the media and communications industry. Currently, clients spend 12-13 per cent of their budgets on online media, while users spend 20 per cent of their time online. So, the Internet is still under-used, he says.

Local Indian Marketing/PR Agencies have also done several strategic M&A:

Future Group – Kishore Bayani’s firm

Apr-09 – Future Group acquires a 60% controlling stake in creative boutique Dhar & Hoon. Dhar & Hoon has also been a takeover target with several global agencies like Publicis and Euro RSCG having initiated talks with the agency.

Lintas Media Group has five functional collaborations, including one in the digital space where it has a non-equity collaboration with Pinstorm, an independent digital company with offices in Asia and Silicon Valley. This venture will undertake creative and media digital work for brands. It can tap Pinstorm’s proprietary technologies from search engine marketing (SEM) to blog management.
Clickstreamers India Pvt. Ltd, a digital media agency, is a 51:49 joint venture between Dentsu India and a local digital firm, Connecturf India Pvt. Ltd. It offers the entire gamut of digital services, including social media optimization.

TEDx 2010 events in India

2010-03-12T03:21:00.000-08:00

TEDxCaclutta is being hosted at IIM Calcutta Auditorium!!

TEDxAhmedabad - 6/26/2010
TEDxASB – 4/21/2010
TEDxBangalore - 3/13/2010
TEDxCalcutta - 3/21/2010
TEDxChanakya - 6/20/2010
TEDxChennai - 10/10/2010
TEDxCochin – TBD
TEDxDelhi- TBD
TEDxFoothillsofAravalli - 4/3/2010
TEDxHyderabad - TBD
TEDxIITKGP - 3/20/2010
TEDxIITRoorkee – 3/27/2010
TEDxIndore - 4/11/2010
TEDxISB – TBD
TEDxJodhpur - 5/16/2010
TEDxKarnataka – TBD
TEDxKids@Riverside - 11/14/2010
TEDxKonkan - TBD
TEDxKundapur - 5/8/2010
TEDxMumbai – 4/3/2010
TEDxNirmaU - 3/25/2010
TEDxNSIT - 3/31/2010
TEDxPatna - 12/12/2010
TEDxPilani - 3/13/2010
TEDxPondicherry - 8/14/2010
TEDxPSNACET – 12/2/2010
TEDxPune - 10/10/10
TEDxVIT - 3/27/2010
TEDxYouth@Bangelore – TBD

source - http://wikisharma.blogspot.com/2010/03/ted-x-squared.html

A lost business idea

2010-02-12T11:06:00.001-08:00

A lost business idea:

Found this interesting quote on eMarketer blog -

“Naturally occurring conversations will be utilized in product innovation and design, and companies will create incentives for people's attention and engagement while repurposing and analyzing content and engagement in new ways that will deliver valuable input.”

—Ravit Lichtenberg, founder and chief strategist, Ustrategy.com, in an article in ReadWriteWeb.com, December 11, 2009

It reminds me of a business plan that Surjendu (my classmate at IIMC) and I wrote in October last year. Our business plan was based on 3 ideas:

- capturing "naturally occurring conversation" using mobile platform

- incentivsing users to engage in conversations

- sharing business intelligence with companies who'd then use the info for product innovation/modification etc.

As it happens with most visionary ideas (huh!), ours was rejected by the business plan competition panel. I'm sure the panelists wouldn't have dared rejecting our idea if we had included this quote from a "founder and chief strategist". Too bad!!

Social Media Stats

2010-02-12T10:59:00.000-08:00

Interesting stats about Social Media from eMarketer.

- Rate of growth of online social networking spending is more in countries outside US even though US accounts for the largest share total expenditure.

- A large number of marketers continue to use social media for brand-building even though the social channels are as useful for sales, customer service, IT and research.