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Give me a reason August 27, 2009

Posted by David Gillespie in business strategy, technology.
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I find Nokia a fascinating company. Relegated to a bargain basement offering in North America, outside of that continent their phones are sought after. Perhaps not the way an iPhone is, but then Blackberry doesn’t have the cache on my island that it seems to have here in Canada either (helped in no small way by being RIM‘s backyard).

Never the less, the launch of their Netbook is an interesting move. Most curious to me is the inclusion of a SIM card slot, which reverses the trend of phones with computer-like functionality and brings us a laptop with the portability accessibility of a mobile phone. It feels gimmicky, though Nokia’s Tero Ojanpera is on the cover of this month’s Fast Company, stating:

We will quickly be the world’s biggest entertainment network.

Big words from a hardware and software company. I have no crystal ball into Nokia’s future, but I can’t imagine the plan is anything as mundane as content exclusive to Nokia proucts in some capacity. We’re moving ever faster to a ubiquitously networked world of transportable identity, one that will be less and less beholden to business models (see the music industry for reference) and more beholden to consumer habits.

The other thing I’m thinking is they’re trying to boost developer support for their Symbian platform…actually the more I think about it, the more this seems to be a play that has nothing to do with the cloud, and everything to do with the device you have in your pocket. What I can’t wrap my head around is why anyone would look at the whole sale destruction of the music industry and still exist in a world where a device and content are somehow interminably linked.

I’m all ears if someone has a different take on this.

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Opted In vs. Engaging In May 7, 2008

Posted by David Gillespie in branding, digital strategy, marketing.
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I was having a chat this morning with Simon Chen, and those readers who’ve been with me a while know I can’t say enough good things about the man – even if he doesn’t get Twitter yet. One thing we were talking about was having a large email database vs. a smaller database that was actively engaged by your offering.

I was reminded of this while reading Doc Searl’s blog just now, him talking about a piece Chris Anderson (editor at Wired) wrote on recognising a real if untraceable cost that stems from subscription cards placed in magazines:

They fall out of magazines when you pick them up, forcing you to bend over to retrieve them and find a trash can in which to throw them away. This is a real negative cost that hurts our relationship with our readers, but because we can’t measure it directly, it’s an externality and thus mispriced at zero in the economics of the magazine industry.

I find it particularly ironic blogging about this given I’ve just started writing for a magazine which, like most other publications on the planet employs just such a method for adding subscribers. The example Chris gives above is admittedly minor, but flows on to a brilliant presentation from David Armano on micro-interactions.

In his presentation David argues brands have moved from dictating perception to being the sum of their interactions. In other words, you can no longer tell people how to perceive your work, you will be judged on actions and not words.

So what’s the follow on from subscription cards being removed from magazines? Do publishers and editors really think their offering is valid enough to drag people to a news stand once a month? Do they feel the caliber of their contributors (and I’m one of them) is great enough to make that happen?

For a lesson in micro-interactions outside of a marketing space, read this article from Fast Company on the future of TV shows and the branding around them. If there’s anyone who understands micro-interactions, its these guys.

Facebook; advertising heaven or hell? February 26, 2008

Posted by David Gillespie in digital strategy, intent, marketing, web 2.0.
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I read somewhere recently – I think Seth Godin said it – if you were to set out with the express purpose of creating the worst possible environment online for advertising, you would wind up with something pretty similar to Facebook. I’m not entirely convinced that’s accurate, but I’m also not entirely convinced it isn’t. While you certainly have millions of pairs of eyeballs, what you need is an intention economy:

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.

The Intention Economy is about markets, not marketing. You don’t need marketing to make Intention Markets.

The Intention Economy is built around truly open markets, not a collection of silos. In The Intention Economy, customers don’t have to fly from silo to silo, like a bees from flower to flower, collecting deal info (and unavoidable hype) like so much pollen. In The Intention Economy, the buyer notifies the market of the intent to buy, and sellers compete for the buyer’s purchase. Simple as that.

Thanks Doc. Let’s look at that for a second. The Intention Economy grows around buyers, not sellers. Ok, so we need buyers. Are people buyers on Facebook? Have you ever purchased anything from it? I haven’t. I’m not in a consumer mindset when I’m there, at least not one that involves me parting with my hard-earned. There’s certainly an argument to say Facebook users are consuming any time they are logged on, but I question the notion that can be monetised; I’m consuming social interactions with my friends, I’m not viewing it as a platform for purchases.

Contrast that though with businesses who are advertising, are they viewing the Facebook ecosystem as a marketplace? I don’t have hard data to back this up but I’m willing to say yes, based on moves a little-known start-up out of Redmond, Washington made last year. Marketers are seeing the numbers and frothing at the mouth to turn that in to revenue. How one does that and even IF one does that aren’t being considered at all.

The Intention Economy apparently comes ready made, it doesn’t require advertising to manufacture it. What would Facebook be without advertising? Aside of course form hundreds of millions of dollars poorer?  Probably much smaller, since it would have had no way to foot the bill for its massive growth, save for taking on more cash from VCs worried about missing the next Google. And if it was much smaller, how many fewer radars would it be on? You lose the Fast Company, Newsweek, Business Week. You are suddenly still collegiate and walled and not innovating at the pace your market capitalization (suggested or otherwise) allows you to. Facebook’s growth is built on the promise of an Intention Economy in spite of the fact all evidence points to the absence of such a thing.

Lets continue: The Intention Economy is about markets, not marketing. You don’t need marketing to make Intention Markets. This again takes us back to the core issue of how people behave when it comes to commercially consumable goods on Facebook. If I have missed the train on this I look forward to finding out, but I don’t see a dip in Amazon’s trading, I don’t hear about slumps in eBay’s number of auctions (not ones that aren’t brought about by their own ineptitude anyway). Contrast this with little known but rapidly growing Etsy, a site built around the trade of goods that are 100% hand-made. Commerce is core in its business model, coupled with a feel-good, natural vibe that is hard to come by online. I don’t want to talk about it too much, suffice to say the service is brilliant and should be visited (right after we finish here).

Etsy doesn’t need to risk disenfranchising its user-base in order to move towards profitability; the inherent small-business nature of its offering allows it to grow organically, improve and expand as it needs to. I was at a wedding recently and a friend was talking about a marketing plan, saying “Give me$20 million and we’ll achieve “x”, $10 million and we’ll achieve “y“, but $5 million and we won’t even get off the ground.” Facebook needs to grow at its current pace in order to achieve its goals, it needs an Intention Economy to be established and fast, lest the rest of the world pick up on the fact that there currently is no profitable business there, at least not on the scale they are currently operating on. Etsy could stay its current size and be a success, and I imagine that’s quite alright with everyone involved.

The Intention Economy is built around truly open markets, not a collection of silos. In The Intention Economy, customers don’t have to fly from silo to silo, like a bees from flower to flower, collecting deal info (and unavoidable hype) like so much pollen. This one goes without saying. Facebook are making moves towards an open platform, surprisingly still sitting out in front of Google who, for the first time perhaps ever, was caught sleeping. The same way Microsoft missed the internet, Google seems to have missed the promise of social networking and what an open playing field can mean. They are of course a little more concerned with owning your phone than your MySpace page, probably because they already have all the access there they need.

Regardless, while Facebook slowly makes moves away from being a silo, they are still being very careful to make sure they remain a focal-point for your interactions. Using an Amazon Facebook application which you’ve plugged in to your Bebo page isn’t a negative for them; continuing to use Amazon as you are, or using an application that runs via someone else’s network is. If Facebook’s usage levels or visitation starts to decline or even just level off as it eventually must, look for some dramatic moves on their part, particularly if the Intention Economy is still nowhere to be seen.

Lastly, In The Intention Economy, the buyer notifies the market of the intent to buy, and sellers compete for the buyer’s purchase. Simple as that. Right now we don’t have that, we have sellers competing simply for the buyer’s attention. This seems simply ludicrous when you consider:

  • A Facebook user’s attention not up for grabs, not by sellers anyway. They are here for social interaction. Before we get into notions of what constitutes a ridiculous notion of “proper” social interaction (which people usually take to be face-to-face), the rules are different now. The key take away though is the rules aren’t just different for people under 30, people 50+ are interacting in this way too, ith plenty of them getting married. The web has enabled this sort of interaction, the song however, remains the same.
  • There is no intention to buy. Ever see teenagers at a shopping centre, hanging out and not buying anything? Look for this behaviour to continue (funnily enough). Marketers looking to capture that intention are going about it in the wrong capacity. Yes, a person is a fan of the TV show Lost. Yes, you have that on DVD and you can sell it to them. No, they do not want to buy that now. They want to buy it when they want to watch it, so you had better make sure you know enough about your audience to be in the right place at the right time (Hint: the right place is not Facebook, the right time is when they are not on Facebook).
  • Imagine for a moment that Facebook was actually a readily monetisable and viable market place; sellers would be competing purely with the rest of a user’s wall. Vampires, Texas Hold’Em Poker, travel widgets, pokes and haggis being thrown, videos playing and songs streaming from iLike. What could your product possibly offer that competes with all of that?

The ironic pat of it all though, is you cannot afford to not be a part of it, if only because if you’re not, your CEO is going to hear about it from his kids and consider that a mandate for action. Social media runs much wider, and there are opportunities inherent in it. But Facebook? Setup a free fan page and see if your audience finds you. If they do, then that’s a conversation worth having.

As we all know now, markets are conversations, and you get to fight another day.

(P.S. I would love to hear from some folk who have tried monetising FB and what their experience has been.)