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Focusing social platforms for community marketing August 29, 2011

Posted by David Card in Uncategorized.
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One of the things social media marketing will need if it’s going to live up to its aggressive $5 billion spending forecast is more differentiation between marketing and collaboration platforms. Companies like Jive Software, which filed for its IPO last week; Lithium, which just hired a new CEO; Mzinga; and Telligent offer social network platforms aimed at both employees and customers. But one-size-fits-all social networking platforms may not be around for much longer, because to succeed, vendors will need to start offering tools and services concentrated specifically on community marketing, distinct from enterprise collaboration or social networks.

Vendors making tools for the space broadly defined as social CRM have arrived from various origins: buzz monitoring, fan site creation, customer service and support, and enterprise social networking. Core social networking technologies and techniques (e.g., social graph relationships and information, friend and group following, real-time information feeds) are common across those. But platforms aimed at marketing to communities will need specialization. Let’s take a look at how a new startup, Napkin Labs, is attempting to differentiate the community-marketing platform that it just took out of beta.

Napkin Labs offers a low-cost web service that companies like beta partners Intuit and Sony can use as an online focus group. The founders of Napkin Labs have brand advertising agency backgrounds, and it shows — occasionally to a fault. For example, they expose perhaps a little too much agency-insider terminology to consumers who, unless they’re avid Mad Men watchers, aren’t going to know or care what a “creative brief” is. CEO Riley Gibson is correct that encouraging and rewarding customer engagement is subtly different than doing the same for employees. So Napkin Labs uses gaming mechanics like challenges and points to encourage participation and rate user influence. Its focus on applications to test product features, advertising and packaging looks smart.

But translating the art of focus group analysis into software and social networking features will be challenging. Understanding how to use feedback from rabid fans versus mainstream customers, muting the impact of blowhard commentators and applying focus group insights to mass-market ad campaigns are more consulting services than products. Napkin Labs is attempting to educate less-savvy customers with templates and blog advice rather than hiring consultants.

But there are a host of other community-marketing features besides focus group analysis that vendors will increasingly use, such as:

  • Consumer network integration. Community-marketing platforms should enable and encourage community members to spread the message beyond the community. So any gaming or rewards systems must extend into other social media, like Twitter and Facebook.
  • Member acquisition. If you’re in the fan page business — or are using social marketing tools for customer acquisition — you need to “fish where the fish are.” Most of the fish today are on Facebook. Napkin Labs has an idea that its offerings might work better as Facebook apps than as a part of a destination site; it’s probably right.
  • Community panels. Some community-marketing platform companies like House Party and CrowdTap bring along their own communities, much like traditional market research panels. There are tradeoffs to this approach — some clients want to control audience and data ownership — but those platforms enable data analysis across different customer and product types. That can lead to valuable marketing insights that might otherwise stay hidden from those clients.

Ultimately, a key role for community marketing platforms will be supporting so-called integrated marketing campaigns — that is, big, cross-media (TV, online, print) initiatives that involve things like product placement, brand sponsorships and physical-world presence. House Party and CrowdTap offer services to manage campaign logistics. That may be more like agency work and consulting than building a software platform with seductive margins and a scalable business model, but that’s what it’s going to take.

Question of the week

How else can collaboration platforms differentiate themselves from social marketing tools?
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Facebook apps need their own sites August 22, 2011

Posted by David Card in Uncategorized.
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Social games and app developers got a bit of a shock when Facebook snuck in some platform policy changes last week. Facebook rewrote some rules: forbidding cross-promotion to competitive social networks and tightening up the use of sponsorships that use virtual currency, the big revenue source for most games. What does this mean for apps and games developers trying to gain an audience and revenue stream from Facebook?

Even a minor change in how Facebook developers can communicate with their customers causes huge waves. When Facebook phased out mass gaming updates some time ago, customer acquisition costs went up 30 percent for some apps developers. Sending what Facebook might think of as spammy promotions can attract the wrath of Zuckerberg, with the terrifying potential consequence of being shut down.

Facebook says it’s not preventing games from promoting their apps that run on iOS or Android, at least. And Facebook’s promo ban is consistent with its advertising policy. But according to Google, even messages from individuals that mention competing social networks get spiked. Facebook claims the story-ranking algorithm on its news feed was only demoting less-relevant messages and indeed, CNET didn’t see the effect that Google was protesting. But clearly, it’s hard to use other social networks within Facebook, other than importing Tweets.

Using Facebook with “protection”

So what can an app developer do to get the most out of Facebook and insulate itself as much as possible from Facebook’s policy changes? Build its own site. Yes, in all likelihood, most of the activity around the app will come within Facebook, but an app can promote its own site and use a site to multiply revenue opportunities for several reasons:

  • Besided promoting its site with its app, developers can use Twitter – which may be more influential than Facebook fans – for site promotion outside and inside Facebook. At the same time, Facebook seems to take kindly to sites that use its Connect Like, sign-in and commenting functions outside Facebook. Those are proven audience builders, and while they cede some control to Facebook, they assist in two-way content syndication between the site and Facebook.
  • Given Facebook’s strict controls over its Credits, it is unlikely that an app site could bring in its own or alternative virtual currencies and integrate them with Facebook’s via some kind of currency exchange marketplace. However, an app site could offer richer advertising opportunities (branded sponsorships, video ads, coupons) on its site than it could inside its Facebook app. And a developer could provide in-app placement on its Facebook app the way, for example, that Electronic Arts’ new Sims app integrated Dunkin’ Donuts, which could complement and drive traffic to a site sponsorship.

Opportunities for new platforms?

When Facebook reversed an earlier policy and opened up user comments on company pages run by pharmaceutical companies, many were caught by surprise and chose to shut down their pages to avoid compliance and regulatory issues. Facebook risks getting a Twitter-like reputation for inconsistency in managing its platform and API usage policies, or at least being justly accused of a lack of transparency or clarity. Could this open up opportunities for competing social networking platforms?

Google just announced limited games support on Google+. Kevin Chou, the CEO of game developer Kabam, thinks Google will challenge Facebook as a game distributor and has already forced Facebook to create some new game-promotion tactics in response. But Google has yet to roll out APIs for Google+, and its developer support is thin. Google+ is only starting to add the mainstream users that play most social games.

If it doesn’t kill them, competition usually makes competitors better, and that goes for partnering with developers. For example, Google’s promising to take a smaller cut of virtual goods sales than Facebook does, at least for a while. Sure, developers with enough resources can try out Google+, and Myspace still has a large, if shrinking, audience. But for now, Facebook’s really the only game in town.

Question of the week

What other activities could an app site feature?

Building a better feed August 15, 2011

Posted by David Card in Uncategorized.
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Last week, Twitter retooled its site to offer two Facebook-like activity feed channels aimed at increasing and broadening user participation. Facebook itself did some tweaking to its feed and is reportedly evaluating a bigger overhaul, and Digg updated its news feed. Real-time feed-based user interfaces (UIs) are becoming one of the most important ways of presenting information online, and they are critical areas of competition in social networking and search.

Different companies using feeds reveal UI implementation strategies that tend to focus either on active (user “control panels”) or passive (algorithms) techniques. The winning approach will probably be a blend that leans toward passivity. Consider the following:

  • Twitter’s new tabs show activity around the user (mentions, favorites, retweets) and the user’s followed friends. Twitter wants to boost usage by mainstream users and encourage favorite-ing as a simple way to engage users who aren’t necessarily in the mood to post or reply.
  • Facebook countered Google’s new social gaming thrust by fine-tuning how players and games communicate (a ticker and less throttling of messages in the feed). Earlier it introduced a new feed “story” type that groups actions based on natural language analysis of related topics.
  • Like other enterprise social networking from SocialText, Jive Software, Salesforce.com’s Chatter and SocialCast, Yammer drives user communications via an activity stream. Its feed emphasizes “ambient consumption” of info that’s surfaced to users based on an algorithm that evaluates topic and relationship data for relevance. Platform VP David Stewart told me that tools to embed that stream in other enterprise applications that were announced in May will be available in beta later this month.
  • Venerable link-sharing site Digg introduced “Newswire” that enables users to filter and sort links appearing in real time based on things like recency, topic, format and who posted or voted on them.

The best approach: Balance user control with algorithms

Mathew Ingram doubts that Digg’s new features will be enough to help it regain the audience it lost to Reddit and others when it did a poorly received redesign last summer. He’s probably right, but Digg’s latest moves illustrate that adding controls and filters to a feed is mostly for power users. Making mainstream users take active control of information presentation is extremely challenging, usually resulting in adoption in the 5 percent (Facebook Lists) to 20 percent (Yahoo customization) range.

It’s “easier” — from an adoption if not technology perspective — to rely on passive personalization via algorithms that analyze feed content and promote it by guessing it will be relevant to users. That’s what Facebook does with its social graph–powered EdgeRank, and that’s what Yammer is doing, although Yammer doesn’t do any natural language interpretation. Rather, Yammer incorporates user curation by encouraging topic tagging. If Twitter gets users to choose favorite tweets more often, it will have more curated data to power potential feed sorting and prioritizing schemes it might develop.

Meanwhile, advertisers and app developers seek to reach audiences within the feed, where most user attention is directed. Sites that accommodate that desire gracefully aren’t merely caving in to marketing pressure; they’re enabling social media communications that many users will find valuable. But they have to enforce relevance by monitoring user reactions and weighting their algorithms appropriately to avoid crossing the line into spam.

Companies using feed-based interfaces need to strive for a balance between algorithms — which can produce odd results — and user controls that may require too much work from the masses, like lots of tagging or advanced search pages. Simple actions like a Like or +1 button will likely be more popular and are the easy entrée into curation. And the data they produce can, in turn, be funneled back into a relevance algorithm.

Question of the week

How else can competitors differentiate their feeds?

The social-media advertising ecosystem is shaping up August 8, 2011

Posted by David Card in Uncategorized.
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A recent batch of product and funding announcements (Webtrends and Nielsen, CrowdTap and Hearsay Social, respectively) points to a real trend: The infrastructure and business ecosystem for social-media advertising is developing rapidly. That’s good news for marketers and online publishers — and even for Facebook competitors — as a robust ad infrastructure is critical for growing the market beyond the $3 billion forecast for U.S. spending in 2011. The tools and systems rolling out will help the 800-pound Facebook, of course. But they will also be valuable to smaller social-media companies and even traditional media, and they will generate revenue for tools, data and agency services.

A year ago, I wrote that the winning strategies belonged to whichever companies could help big-brand marketers reach large numbers of their target customers, integrate social marketing with traditional media and measure campaign performance. Now the social-media ecosystem is adding resources around social marketing management and advertising measurement, two pillars of those strategies. For example:

Getting “social” on company pages

Today most social-media advertising comprises boring display units on inexpensive social-network pages. It’s not particularly “social.” But marketers use it to drive audiences to company pages that feature interactive conversations, video and coupons, and that can access Facebook’s feed to build recurring use through fan-friending. Last week Foursquare added self-service tools for its own company pages, while Google is still figuring out its approach for Google+.

Facebook uses its EdgeRank algorithm to filter its feed for user relevance. That can limit the company messages delivered, fiendishly encouraging ad buying to remind fans to visit. Reportedly, Facebook may be reconsidering that strategy, but regardless, tools and services that coordinate page and ad management will be the winners. The companies I mentioned are among the early leaders, along with companies like Efficient Frontier, iCrossing and Buddy Media. And last week, Facebook announced that it was opening up its advertising API that had previously been limited to a handful of partners. That means there will soon be more management, analytics and services companies able to leverage Facebook data.

Measuring social advertising

Social advertising tools and services will need to integrate data from multiple sources for campaign analysis and optimization. Gnip, which licenses and resells Twitter’s “firehose” data, says that two-thirds of its customers are social media agencies. But to work successfully, tools also need offline consumer and enterprise information (ExperianAcxiom) and third-party online-traffic analysis from the likes of comScore and Nielsen.

As noted, those two both have new social measurement services that feature the TV-advertising concept of gross rating points, or GRPs. GRPs are arguably a simpler measurement than online metrics that track unique individuals and interactions, and advertisers use them to measure their efficiency in buying TV time. While an online GRP might seem like a step backward, it is necessary to make big brands spend more of their overall advertising budgets on social media. They need to be able to compare online-advertising efficiencies and effectiveness with traditional media. Integrating a GRP with measurement techniques that gauge audience engagement — something brand advertisers will pay a premium for — will grow overall online spending.

All of this action in social advertising is healthy: Its business ecosystem is too immature to demand much consolidation or pick winners easily. A year ago, I thought big players like Yahoo and traditional media companies could garner social ad dollars due to their advertiser relationships, multichannel experience and ad-friendly content. But they’ve done little, and the social ad ecosystem will aid Facebook and smaller social players just as much.

Question of the week

What is needed to grow social media advertising beyond $3 billion?

Why Microsoft can’t give up on search August 1, 2011

Posted by David Card in Uncategorized.
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Last week, a Reuters Breakingviews piece that was picked up by the New York Times generated controversy and counter-commentary over Microsoft’s struggling efforts in search. Breakingviews suggested that Microsoft abandon its money-losing search business and sell the Bing search engine to Facebook. This is a bad idea, even though Microsoft’s online business, mostly due to search, suffered a fiscal-year operating loss of $2.6 billion. Microsoft hasn’t cracked the code on how to make Bing a winner, though it has made incremental improvements in areas like user interface and social integration. But Microsoft has to keep at it, because it needs search for several reasons: 1) to defend its core platforms, 2) to compete with its biggest rival, Google, and 3) to solidify its ad business and open emerging revenue streams.

Defending the franchise

The foundation of Microsoft’s success has been the Windows platform: an operating system with APIs that powered an ecosystem and locked in developers, and that owned end users via its user interface familiarity. But search is the main navigation UI for the web, and it is playing an increasing role in desktop, application and local information navigation. Search can also set UI standards, and it threatens to wean users off their Windows dependency as cloud computing proliferates. Microsoft’s classic product strategy — integration — is one way that it can use Bing to hold off Google’s search UI incursions on Microsoft’s position in establishing cloud and enterprise APIs and services.

Competing with Google

Search is Google’s cash cow, and Google is Microsoft’s chief head-to-head competitor in a number of markets and in API platforms. Google’s massive profitability in search funds its efforts in applications, mobile platforms and online media (YouTube).

And what each company learns from search informs its efforts in machine learning, natural language development, personalization and e-commerce. Operating under the strategy that the best defense is a good offense, anything Microsoft can do to eat into Google’s search profitability forces Google into those other already-competitive markets.

Search marketers need a viable competitor to keep Google honest. Back in 2008, when Microsoft’s hostile $47.5 billion takeover offer for Yahoo threatened to consolidate search engine competition from three players to two, a Jupiter Research survey of advertisers and publishers showed that the majority of clients were worried about search advertising price increases. Think how much worse that could be if there were only one search engine. Realistically, Microsoft is one of the few companies that can afford the investment necessary in search.

Microsoft and advertising

Search is the biggest segment of online advertising, and it could be profitable for Microsoft if it can achieve scale. Microsoft believes that 10 to 15 percentage points more of market share would produce the necessary liquidity in its advertising marketplace, meaning better conversion rates and thus higher pricing (without gouging advertisers, because those results would convert better). If Microsoft were bigger in search, it could offer more accurate tools for advertisers trying to connect the dots across search and display advertising, producing more-valuable brand advertising analysis as well as targeting.

Contrary to what Henry Blodget thinks, Microsoft needs an ad business: It is likely that advertising will be a key source of cloud-based software revenues, especially for small businesses. After all, most consumer web businesses and cloud services get their money from a combination of fees and ads. Microsoft could create a marketplace of B2B services where search ads are one of the “currencies” buyers and sellers use. Another place where Bing could gain a toehold via integration is in mobile search, which may well pay off before mobile brand advertising, if Apple’s mobile ad network struggles are any indicator.

Finally, Facebook has plenty on its plate without trying to take on Google directly in search. It’s far more likely that Facebook hopes to continue to partner with Microsoft in search and advertising with social integration, while it concentrates on creating more valuable — and pricier — display ad inventory and sponsorships. In fact, the Microsoft-Facebook partnership’s continuing on its current course might just be Redmond’s best chance to gain search share.

Question of the week

Why should or shouldn’t Microsoft abandon search?