SociaLight Media Blog

It’s prediction time.

Ever since Napster went mainstream in 1999 (wow, a whole decade ago), the music industry - both artists and record labels - have been unable to escape the vicious tailspin caused by P2P software. Not since the incandescent light bulb left wax makers in the dark has a new technology so swiftly decimated an entire industry. P2P has changed the playing field that the RIAA built by allowing users to “share” songs and software - mostly illegally - with other users, enabling them to acquire copyrighted material without paying for it.

Even with all of the lawsuits the RIAA has thrown at P2P users over the past decade, and after the millions of dollars of fines people have had to pay for illegally downloading music, P2P is still posing a huge threat to the existance of the record industry. Is there a common ground that the RIAA and its consumers can agree on? Is there a solution that will revive the record industry?

How about this? With the release of RockBand 2 and Guitar Hero 4: World Tour (there are eight total games: two RockBands, four Guitar Heros, and two Guitar Hero expansion games - 80’s Edition and Aerosmith) it’s obvious that the trend of music-inspired video games isn’t a flash in the pan; it’ll be here for a while. Even with the recent release of these two games, there are three more on the way - one is all Beatles songs, another is all Metallica, and the other is all ACDC. Why not leverage it? The systems that these games are played on have internet connections. Why not offer ALL songs owned by the record companies available online for download? At a slightly higher price per song than you could find at the iTunes Store, you could actually be playing your favorite songs. Technology has reached a point were virtually anyone (my friend’s kid-sister is 13 and has been downloading music for years) can download a song - they don’t need to buy it from a store. What they still have to buy from a store is music to play in their RockBand or Guitar Hero games (until it becomes mainstream for people to program their own songs, which may not be too far off).

Yes, some extra songs are offered online through various sources, including the online portals of the games themselves, but I’m talking about everything. Standardize it. Make the songs available for playing through my game, listening to through my console, downloadable to my computer, uploadable to my mp3 player - hell, send them to my phone as a ringtone! I’ll pay for that! If you’re offering real value to the consumer, they will pay for it. Just don’t expect your consumers, who can very easily download a single song that they like to their computer, to purchase an entire album - with two good songs and thirteen terrible ones - from you for $20. Especially in this economy.

Twitter Update

On Friday, the People Search funtion of Twitter was removed, and I can’t imagine why.  It was one of Twitter’s core tools, how else are you supposed to find people? Now, the only ways to find new people are to go through everyone who your friends are following or to do a regular search and scroll through to find the actual person’s Twitter account.

Not really sure why they would purchase Summize to enhance their in-tweet search functionality earlier this year, only to eliminate a possibly more important function of actually connecting with other people. It is a social network for pete’s sake.

And there you have it. Up until now, the most effective use of Twitter for business has been as a customer service quality control (hats tipped to Comcast, Zappos, etc.).  Here is a great example of a (huge) company listening to Twitterers’ tweets - Johnson & Johnson - about a new ad campaign and shutting it down in a matter of 48 hours.

Johnson & Johnson was attempting to build a Motrin campaign around a shared experience among women: childbearing and raising, and the pain it brings.  Apparently, J&J played the angle that women treat their young as fashion accessories, and that having a baby slung across their shoulder makes them look like an “official mom.” What’s interesting is that, without a doubt, J&J did some serious consumer research to arrive at these conclusions about women’s motives; why, then, did it encounter such swift and harsh recoil from that very market segment? Perhaps because there are things that may be true, but for which people don’t want to be glorified for.  I’m not saying that all, or even most, women feel that their children give them some clout in whatever community they belong to, but some must, or J&J wouldn’t have built an entire ad campaign around it.

What’s great about social media, and in this case Twitter, is that all of these people who felt attacked, called out, or insulted, were able to speak out, globally, and J&J listened.  Mommy Twitterers with thousands of followers were outraged and outspoken about the Motrin ads, and some even went cross-social-media and published YouTube videos (this one is called Motrin Ad Makes Moms Mad - 21k views)

This is so great; genuine conversation between Brand and Consumer. This was what my first ever post was about. Two-way communication. The ad industry is no longer about push, push, push. Consumers can talk internationally, instantaneously and companies are actually listening and acting.  Is it weird that this story makes me feel warm and fuzzy?

It’s everywhere - investors, co-workers, family, and friends yelling “Recession!” from the rooftops.  Yes, America is in a recession.  By definition a recession is two consecutive quarters of decreasing GDP, and we’ve had nine of them since World War II (not including the Great Depression).  If we’re experiencing these troubled times roughly once every six years, shouldn’t we be used to them by now? Shouldn’t we know how to handle them?  Some businesses do - those who realize that growth occurs during recessions, and, if they capitalize on that fact, they come out much better than they were at the onset.

It’s true that the proverbial corporate belt buckle needs tightening during harsh economic times, but to look immediately at cutting your advertising and marketing budget would be a big mistake.  Consider boosting efficiency, adjusting operating hours, reducing overhead, and streamlining production and operation, which are all much more beneficial for most companies than biting the hand that feeds you: your ad spending (the thing that drives all of your sales…).  In this economic climate, online ad spending is especially important because it’s so targeted and efficient, and competition is less fierce than in conventional media.

In a basic marketing class, you learn that your advertising budget gets you a piece of the pie in the consumer environment - there are many companies putting a lot of money into grabbing a hold of the customer’s attention.  During a recession, when many companies pull back their advertising, this increases your voice and the effect of your ad money; and if you increase your ad budget, it gives you an even more powerful voice.

“History also reveals that businesses that recognized the fact that growth does occur during recessions and took advantage of it, were able to make gains in their market share despite economic hard times. With media rates softening and competitors sitting tight and cutting their marketing budgets, an aggressive business can experience great strides in a recession.” -Articles in the Spokane Journal of Business

Additionally, the National Retail Federation projects that overall retail sales are expected to grow 2.2% as the holidays approach, as compared to the 12% projected for online growth.  Mr. Silverman, of Deliotte’s annual holiday survey, advises that “Retailers should be viewing [online investments] as a way to capture lost sales and prevent them from going to a competitor.  I’m not going to say the growth in online is all additive — a lot of it is shift. However, if you haven’t been investing in your online store, that shift may not go to you, it may go to a competitor.”

I’ve added a couple additional notes to Ed Clark’s basic tips for small- to medium-sized businesses during recessionary times:

1. Don’t cut your ad budget; increase it. Let your competitors cut ad spending (and their market share).
2. Shift some ad spending from conventional to online - especially approaching the holiday season.
3. Your customers are nervous about spending; adjust your marketing campaign to assuage them.
4. Develop your web presence quickly - if you sell a product online, try to offer free shipping.
5. Lower rates and ad promos from hurting conventional media companies provide great opportunity.
6. Build brand awareness by sponsoring events - this is relatively cheap and definitely effective.
7. Promote online; sponsored events (above) are extremely easy to promote online through social media.
8. Know who your loyal customers are and let them know what you have to offer.
9. Step up public relations efforts. Developing your offline presence is still just as important.
10. Don’t “cheapen” your advertising by trying to save on creative or production costs. Your customers will notice and worry about quality. This is a time to stress quality and value.

What are some steps the company you own or work for is taking during this difficult economic climate? What are some steps you are taking as a consumer?

There are virtually no ways to misuse Twitter for personal use. Anyone who doesn’t like how you’re using it can just stop “following” you - so ignore them.  However, there are a whole slew of ways to misuse Twitter for businesses, both small and large.  Setting up a Twitter account for your business and then never tweeting is one. So is only tweeting about your brand and products.

Social media is about creating conversation with your consumers; consumers won’t follow your tweets if they are simply advertisments. One of the great tips that I’ve read from Chris Brogan (a social media superstar) is to ignore the famous Twitter prompt “What are you doing?” and instead answer “What has your attention?”  This promotes the sharing of relevant information among a community of brands, customers, users, etc. and can establish your company (or you, personally) as an authority in a field. Share articles, news, funny and interesting happenings that are related to your business - people will listen! Start “following” people that are hubs (people with lots of followers) to get your messages out to the largest array of people.

Comment on others’ tweets by using the @username function, use 1-to-1 messaging feature, share “Tiny URLs” with news about your industry, initiate polls and get opinions, and use the Twitter Search to keep tabs on people’s tweets about your industry and your company.  These are some of the fundamental ways to use Twitter correctly, and when I meet with clients to discuss the art of microblogging and Twitter, they always hit the ground running!  How do you Twitter? Tell us at blog.socialightmedia.com

Good news, SociaLight Media Blog fans - we’re back from our brief hiatus and ready to crank out the posts!

A number of times in the past few years, I’ve been asked the following question in one form or another:

“We want to get involved with the social networking scene [web 2.0] - should we start our own social network revolving around our brand?”

The answer is an invariable and resounding “No.” Bad idea for a few reasons. First, your target is generally folks who are computer savvy and are already involved in at least one social network (Facebook, MySpace, YouTube, Flickr, Amazon, eBay, Yelp, LinkedIn, etc.), and adding more social networks to their mix only convolutes things. Additionally, all of those above mentioned social networks revolve around an action. For Facebook and MySpace, it’s connecting with friends. YouTube and Flickr are for sharing videos and photos, respectively. Amazon and eBay are for buying and selling things. Yelp is for reviewing services. LinkedIn is for developing your professional network. All action words. Never attempt to duplicate these social network services without a similarly simple and effective action that online consumers desire to take. Services like Ning, allow you to create your own social network, but revolve around interests - essentially a group on Facebook - without offering any real value to its members. Why re-invent the wheel?

With that said, establishing your firm within each of those social networks (or any network that makes sense for your brand) is a fantastic idea for developing your web presence - especially because it costs so little. And it’s also, ahem, something that SociaLight Media is rather good at.

However, in the case of Group M, creating a social network may not be such a bad idea. Well, sort of. It’s not really a social network; just posing as one. Mspace (a play on MySpace) is actually a “training program that mimics social networks to build digital skills” for their 3,600 employees. The interactive media company has many different shops with separate digital experience and talent and wanted to tie everyone together to disseminate that knowledge and experience. They positioned 10 fake people as experts, behind each of which was a real person at Group M, to give online lessons in fields including digital media processes, strategy, planning and buying, ad serving, and search and analytics, all delivered via video, audio, and games like crossword puzzles (which can be downloaded as podcasts).

Seems to be working quite well - Mspace was launched earlier this month, and at the time of the article, 500 employees had used the program. I tend to agree with John Montgomery, the COO of Group M Interaction, when he says, “this is the way we’ll be training in the future in most disciplines.”

Thoughts? Feelings? Stories? Anecdotes?  What do you think about companies misusing social networks to build brand awareness?  How do you feel about Group M’s leveraging of the social networking concept for employee training?  Inquiring minds want to know!

This week, I wanted to ask a question and open up the SociaLight Media Blog to our hordes of readers. Have you used Google’s new Internet browser, Chrome, and what do you think of it? How would you compare it to Internet Explorer 8, Firefox 3, Opera 9.5, and others?

Surfing the web today and writing this post on Chrome has been a pleasant experience. The user interface is extremely simple and minimalistic. I love the buttons in the top right; simply “Control this Page” and “Customize Chrome.” Simple as can be. I also like that the address bar, or Omnibox, highlights the URL’s domain name, so this page for example will appear as http://blog.socialightmedia.com/google-chrome-what-do-you-think on any other browser, on Chrome it will appear as http://blog.socialightmedia.com/google-chrome-what-do-you-think. Nice for truncating long URLs or simply identifying the source of information quickly.

Chrome seems fast and intuitive, however (without having played with it for long) it doesn’t seem to have as many of the features, or plug-ins, that Firefox has. I’m still poking around Chrome, so expect an update to this post, and I’m really looking forward to hearing some reader comments! Tell me what you think about Google’s brand new Internet browser, Chrome.

Here’s an article from last week’s Wall Street Journal called The Ad Changes With the Shopper In Front of It. Very cool. It’s about how some companies, including Procter & Gamble and Dunkin’ Donuts are using new technology to increase the effectiveness of their in-store advertising. DD is using digital screen ads that change based on the customer’s purchase. For example, if you stop in for breakfast and purchase a coffee and bagel, the screen at the register will remind you about their new flavor of iced tea and personal pizzas as a lunch idea. Great stuff. P&G is working with Metro Extra in Germany with radio frequency tags which causes a screen at the customer’s eye level to display an ad based on the product that was picked up off the shelf! You pick up a certain brand or type of shampoo and the ad displayed changes to a complimentary conditioner.

This shift in advertising comes at a time when television spots are almost worthless due to the amount of noise viewers have to deal with, popular technology like TiVo and On-Demand, and the fact that the results of the ad are virtually untrackable. Businesses are trying to get their ads closer to the consumer purchase, which is one of two places: in-store or online. With an in-store ad, companies can rest assured that people are seeing, and not blocking, the ads (yet) because there isn’t as much competition for the consumer’s attention as there is on television. It is also much cheaper than a television spot and more trackable with automatic promotion and coupon codes.

Online advertising and social networks are also becoming the new battlegrounds for consumer attention. Every click is trackable; companies can see exactly where their customers are coming from, where they leave, how long they stay, and what they click on. Try to do that on television, or even in-store! Additionally, for many small-medium businesses, they benefit from the small price-tag of developing an online presence and the fact that they may have very little competition in their market. What’s even more appealing about developing an online presence is that they are providing consumers with information at the exact time when consumers are LOOKING FOR IT! In-store advertising and shifting display ads may be great for impulse-buys, but when it’s a more involved purchase, people research it first. 78% of internet users say that they research a product or service online before they purchase it (Pew Internet and American Life Project). That’s where you, as a business, want to be!

I have to say, I was a little surprised by this article from BusinessWeek, Has Facebook’s Value Taken a Hit?

It talks about how “dozens” (according to this guy) of Facebook employees, including Zuckerberg himself and departing vice-president Matt Cohler, have been selling off some of their common shares - and their prices haven’t been implying the $15 billion price-tag originally set by Microsoft’s 2007 purchase of 1.6% of the company. More like $5 billion. The article also mentions that once Facebook employees got wind of Zuckerberg and Cohler’s stock partings, there was some general dissension. Zuckerberg then sent out a company statement saying that the would allow employees to sell stock as a “onetime program to enable employees to realize some liquidity.” Read into that as much as you want.

So not good news from the Facebook front, however what really surprised me were some of the comments below the article. Here’s one:

May Aug 14, 2008 12:40 PM GMT “Not surprised Facebook is falling flat on its face! The ads don’t make sense. I haven’t clicked a single one, despite spending countless hours on facebook. Any mention of charging users a fee causes an uproar and many would abandon their page for somewhere free like myspace. How exactly do they expect to make any money? Who in their right mind would buy these shares right now?”

Heck, I’m buying some when they go public! Facebook IS the social network powerhouse! MySpace is dead; there’s too much spam. MySpace counts “active” members as someone who has logged in once in the past YEAR! I log into my Facebook account probably between 5 and ten times a DAY. It seems like people aren’t using MySpace anymore/nearly as often as they used to or it’s just a spam haven now. Or both.

This one actually made me laugh:

Midwest Aug 14, 2008 2:09 AM GMT “Potential advertising revenue is the only possible reason for Facebook’s $15 billion valuation. What other reason could there be? There’s no monthly user fee or membership charge so the only reason for the hype is ad $. But guess what? Nobody looks at the ads and the click through rate is laughable. Advertisers might as well take their money and throw it on a fire. At least they can use the heat to grill some dogs on. Advertising on the web is a joke but it remains viable only because it’s so cheap. Hey advertisers, save your money and buy some print, radio or tv spots. Get some real results for your spend.“

Yes, Facebook is having some problems with monetizing their technology and user-base, however to simply say that advertisers should pack it up, quit online advertising, “take their money and throw it on a fire”?? Talk about absurd! Yes, banner ads aren’t the solution. We KNOW that. They never have been! I can count on one hand the number of times I’ve clicked a banner ad - the only times were are for a store that was already on my to-do list. Good job, Facebook, for correctly targeting my interests and providing me with a reminder. However, this minuscule traffic isn’t going to cut it - I agree. The money is in the built in advertising, I think. Here’s a great article from Tech Crunch (back in 2007) called MySpace v. Facebook “It’s Not a Decision, It’s an IQ Test.” The money is in the widgets & applications, like Where I’ve Been, and social ads, where “advertisers provide the text, and Facebook pairs it with a relevant social action that your friend has taken. Social Ads mean advertisements become more interesting and more tailored to you and your friends” (from Facebook). This is relevant stuff in my newsfeed that I’m bound to take notice of, at least I think so. What do you think?

Here’s an article for the business owner. A couple weeks ago, The New York Times posted this article, To Save Gas, Shoppers Stay Home and Click. It features a number of huge companies and has a great chart comparing Gap’s first quarter sales in stores and online.

A great example of outside influences of consumer behavior - the poor economy, the exorbitant price of gas. Consumers are shopping much more online this year rather than going to the gas pump then hitting the mall. What does that mean for businesses, large and small? The online customer experience is now more important than ever - from the ease of finding your website, to being able to see your products and services, to reading reviews of those products and services written by real people, to being able to swiftly make a purchase, or to receiving more information from you. Online customers need the same service treatment that they receive in-store. Your website has to exude your business - I like Anthropologie’s site, for example. Gives you a sense of their brick-and-mortar store, and is extremely simple; I can make a purchase in only four clicks from their homepage.

But back to the article - gas prices and online shoppers are causing a lot of big companies to take notice. Target, Macy’s, Bloomingdale’s, and half a dozen other huge companies are offering limited-time free shipping online; both embracing the surge of online buyers and attempting to cushion the blow that the in-store sales have received.

These online customers aren’t just the computer-savvy either.

“I’m a computer illiterate person,” said one of the people interviewed in the article. “But I’m becoming much more literate as a result of gas prices.” Virtually everyone industry’s customers are opting to stay at home, research your product online, and make purchases from home. These customers need to be able to find you quickly and easily, or they’ll simply look elsewhere online for the product or service. The hard times of the economy and the high gas prices coupled with the ease of the internet and shopping online are making this environment extremely competitive.

Online sales are expected to surpass $200 billion this year, the article states, and all industries are taking note.

“To encourage the trend, retailers are investing in online operations and experimenting with new marketing techniques. Even retailers that are scaling back in their physical stores are expanding or enhancing online operations, which are by and large the fastest growing parts of their company. The shopping Web sites themselves are becoming speedier, easier to navigate and filled with more products.”

I’m really looking forward to this year because of all of this. More and more, people are beginning to see how important their business’s online image is, and as a web-ophile, that makes me smile. Read the article and tell me what you think!