B2B or not B2B: That Is No Longer a Social Media Question

Is there a place for social media in business-to-business (B2B) marketing? Up to a year or so ago, it might have been worthwhile pondering that question. Today the question is no longer whether or not. Rather it is how to best utilize social media in B2B marketing. A survey by White Horse finds 86 percent of B2B firms are using or having a presence on social media, compared to 82 percent for business-to-consumer (B2C) firms. They are not as actively engaging in social media activities, however — 45 percent of B2B firms have a basic presence (e.g., a Twitter or Facebook account,and/or a company blog) but no significant marketing activities (day-to-day engagement) on social media, compared to 26 percent of B2C firms. There is still a lack of executive buy-in among B2B firms (one in three B2B firms reports low executive interests, compared to one in eleven B2C firms). While both types of firms cite insufficient personnel to maintain social media activities as the most serious obstacle, B2B firms are several times more likely than B2C firms to prefer traditional marketing methods and to perceive social media as not relevant to their business. Being newcomers to social media, one in three B2B firms is not measuring how successful its social media efforts are, compared to one in ten B2C firms. In brief, B2B marketers are interested and have tiptoed into social media but they are not quite there yet.

The need to utilize social media is just as great for B2B firms as they are for B2C firms.

  1. In the B2B world, professional networking is everything — who you know and who they know form a web of relationships. Online social networks (OSNs) can be excellent tools for connecting with others. They are no longer heavens just for teens and college students. A majority of users on Facebook, LinkedIn and Twitter comprises of people 35 years of age or older.
    OSN users by age
    Source: “Who use Facebook, Twitter, LinkedIn and MySpace”, Paul Kiser’s Blog
  2. B2B marketing is not about lifestyle and personal interests as much as it is about helping customers to get their jobs done better. That means extending to them the B2B firm’s knowledge and expertise in the form of relevant, credible and useful content (e.g., white papers, case studies, product demo videos and webinars). Social media offer B2B marketers new opportunities to aggregate, share and co-create content with customers. Content provides the substance that attracts and engages prospective customers at various touch points. It turns simple network connections into rich social interactions that help build business relationships.
  3. B2B customers are also real people. They increasingly use social media at work and in their daily life, be that reading blogs, watching YouTube videos, staying in touch with friends on Facebook, or uploading presentations  to Slideshare.net. In that regard, the demarcation line between doing business and being a consumer, or that between B2B and B2C, is becoming harder to detect.
  4. Whether in B2B or B2C, listening to what is being talked about the firm and its brands is a must. Marketers are no longer the only one with a megaphone and in a commanding position to control their brand messages. Anyone else can blog, share with their 100+ Facebook friends or create YouTube video about their experience with the firm’s products and services. Letting negative blog posts, comments or videos spreading around without addressing their inaccuracies or customer grievances can be a costly mistake and failing to listen to customer suggestions can mean lost opportunities.

 

Once B2B marketers buy into the idea of utilizing social media, the next and more challenging question is what can B2B marketers do with specific social media tools? There are many tools and covering them all in this blog post would be impractical. Fortunately, Base One offers a relatively comprehensive drawing that depicts the B2B social media landscape. Click on it will lead you to a larger image where the details can be zoomed in and explored.

B2B Social Media Landscape

Just take a quick look at some tools.

  • Among content-centric tools, Slideshare.net is a good place for sharing presentations with information-hungry prospects whose decisions can be influenced by informative content; and do not overlook YouTube for product demo videos. Quite often, the firm may have already produced these presentations and videos; so, all it takes is to sign up with these sites and upload the content. Blogs are well-recognized as a marketing tool but not yet widely used in B2B (only 50 percent of B2B marketers have used blogs, compared to 75 percent having used LinkedIn, according to eMarketer). They are a great way to put a human voice on a cold corporate website. They can be enormously effective — 71 percent of B2B users rate blogs as “very influential” in identifying and defining needs, 74 percent in identifying potential suppliers and 75 percent in final selection of a supplier.
  • Most often overlooked is Wikipedia, which is among the five most visited websites and a main source of knowledge for many prospects. B2B marketers should create, maintain and/or contribute to entries on their firms, products or the underlying technology and business processes.
  • Among the connection-centric tools, LinkedIn — the OSN for professionals — is the most obvious and widely popular with B2B marketers (3 out of 4 having used it). Do not overlook Facebook and Twitter. “[I]f LinkedIn is your business suit and Facebook is business casual, then Twitter is your business social networking cocktail hour, the place where you go to casually and informally interact with potentially thousands of others. Whereas LinkedIn tends to be a more latent form of engagement, Twitter is (or can be) very much in real-time” (Paul Chaney, 2009). Surprisingly (or perhaps not surprisingly), B2B buyers rate Twitter and Facebook more than LinkedIn as “very influential” in identifying and defining needs (67, 60 and 51 percent, respectively), identifying potential suppliers (81, 69 and 46 percent) and finally selecting a supplier (77, 87 and 54 percent).
  • There is a bonus for using social media: they help boost search engine rankings. Such rankings are largely driven by the volume of high-quality inbound links a website receives. A key element in optimizing websites for search engines is to get more links. Engaging with users on social media sites such as Facebook and Twitter can drive in lots of links from these sites, hence can boost search engine rankings. Nearly half of B2B marketers indicate their social media activities as having positive effects on their  search engine performance (eMarketer, 09/17/2010).

Looking forward, it is anticipated that “B2B spending on social media [is] to explode” (eMarketer). Besides increased spending on paid advertising (e.g., banners) on OSNs, a sizable portion of spending will go to  toward other social media initiatives such as creating and maintaining a branded profile page, managing promotions or public relations outreach within a social network, and measuring the effect of a social network presence on brand health and sales. Quite interestingly, there is a marked difference in social media usage between B2B marketers under 30 years or so of age and those older (Base One, “Buyersphere”). As those 30s and under move up the corporate ladder in the years ahead, expect even more changes in social media usage in B2B marketing.

Resources

  1. B2B Marketing Goes Social: a White Horse Survey Report (2010).
  2. Base One, “B2B Social Media Landscape” and “Buyersphere: Survey of B2B Buyers’ Use of Social Media” (2010).
  3. Who use Facebook, Twitter, LinkedIn and MySpace“, Paul Kiser’s Blog, (April 1, 2010).
  4. eMarketer, “Is B2B on Board with Social?” (March 13, 2010), “B2Bs Tap Social to Boost Search” (September 17 , 2010), “B2B Spending on Social Media to Explode” (June 1, 2010).
  5. Paul Chaney (2009), The Digital Handshake: Seven Proven Strategies to Grow Your Business Using Social Media, John Wiley & Sons.

Putting Web 2.0 and Social Media in Context

Note: A presentation on this topic is available on SlideRocket — “Web 2.0 and Social Media in Context”

The selection of “You” in 2006 and Facebook co-founder Mark Zuckerberg in 2010 as TIME’s Person of the Year provides two time markers in the “Web 2.0” or “social media” era (my earlier post: “TIME’s Person of the Year, 2006 and 2010“). Earlier on, the topic of discussion was all about Web 2.0; more recently, it is mostly about social media. Do not ask for a definition of these terms – Web 2.0 or social media (an attempt to define the latter term can be found in an earlier post: “Social Media: More ‘Social’ than ‘Media’“. Neither term is easy to define. Few business professionals have time to spare on such a definition. Ask someone for examples of the tools (i.e., applications and services) closely associated with either Web 2.0 or social media and you would get very much the same answers: blogs, RSS, tweets, online social networks, and so forth. If the two terms refer to the same phenomenon, then why do we need both? But if they do not, then how do they differ?

The Forces Behind

The terms Web 2.0 and social media essentially refer to the same phenomenon: the technological, social and economic transformations associated with a new era in the evolution of the Web. Initially, these transformations caught the attention of software developers, system architects and other information technology (IT) professionals. The term Web 2.0, used widely earlier on, tried to capture the transformation of the Web and eventually the society. These transformations are quite fundamental and lie mostly underneath the surface or behind the scene. They, hence the term Web 2.0, attracted little attention beyond IT professionals and some business strategists.

Transformed by Apps

At the heart of Web 2.0 transformations is the new system architecture centering on the lightweight programming model. This model is intended on delivering interoperability for easy deployment of applications over the network, independent of operating systems and hardware devices. Lightweight applications, often taking the form of Web services, are built as reusable, self-contained, function-specific software components that can be easily selected, extended and combined into new applications known as mashups. An example is HousingMaps, which meshes Google Maps data with home listings from Craig’s List to offer users the convenience of searching for rental and for-sale properties and getting their map locations on the same website. Such applications are highly modular and hence allow complementary services and functionalities to be added easily.

Modular application architecture introduces new sets of design possibilities and thereby creates opportunities for entry by new developers, including individuals with limited technological and financial resources. It means products do not create much value on their own as stand-alone elements. Rather, they depend on complementary products and services from other producers or providers to be useful. Think of Apple and the tens of thousands of iPhone and iPad apps available on AppStore plus all the entertainment on iTunes. The value of the iPad and iPhone lie as much in these apps and content as in the hardware (“There’s an app for that”). These devices plus iTunes and AppStore function as a platform that brings together several groups from different sides of the market – app developers, content publishers and users – and facilitate their transactions. For competitors, they need not only match Apple hardware quality and features but also build a comparable ecosystem of app developers and content publishers. Look at Facebook. It was trailing behind MySpace until it decided in May 2007 to let independent software developers to build apps for Facebook (and earn a share of advertising revenues). As more such apps become available, users can do more things (e.g., sharing shopping info with friends) and hence spend more time on Facebook, making it an attractive platform for advertisers. Meanwhile, MySpace and other online social networks did not respond to Facebook in the timely fashion; when they did, they did so in a half-heartedly manner through Google’s app development platform OpenSocial. By then many app developers had joined the Facebook platform and would be reluctant to spare their limited resources on another platform. Like Apple, Facebook offers much more value as a platform, bringing together multiple sides of a market, than a standalone product or service.

Propelled by Network Effect

To any side of a market (group of market participants), the value of a platform depends of its ability to attract participants on the other side or sides. To users, the value of Apple iPhone and iPad or that of Facebook social network depends on their ability to attract more app developers and content publishers or advertisers, respectively; to developers and publishers/advertisers, that value depends on the number of users buying Apple devices or signing up for Facebook. This is known as the network effect, which creates a virtuous cycle that can drastically reshape market landscape (an earlier post: “What do Amazon, Apple, eBay,Facebook and Saleforce have in common?“).

The presence of network effect is not uniquely Web 2.0, but its magnitude is. Modular application architecture has lowers the entry barriers for complementary service providers so drastically that a visionary platform operator like Apple or Facebook can mobilize enormous pools of developer resources and quickly scale up its offerings to offer so compelling value to users. Three years after its launch, Facebook development platform has attracted 2.5 million developers offering more than 75,000 apps; 20 millions apps are installed by Facebook users every day. As more apps become available, users can do more things (e.g., sharing shopping info with friends) on Facebook, they spend more time there instead of searching on Google or going somewhere else. As users spend more time on Facebook, advertisers become attracted. As more advertisers spend their ad dollars on Facebook, more app developers become interested; as more apps become available, users spend more time on Facebook… The virtuous circle spirals upward. Facebook user population has reached 500 millions, ten folds what it was in Oct 2007.

The Public Face

While some transformational effects of the new Web era (e.g., modular application architecture) lie beneath the surface, others (e.g., the proliferation of online social networks – OSNs) are much more visible. The term “social media” captures the essence of the latter transformations .

Empowered by UGC

One highly visible transformation of the Web is the meteoric rise of user-generated content (UGC). Behind that rise is the modular application architecture, which “shifts computing to the edge of network, and empowers individual users with relative low technological sophistication in using the web to manifest their creativity, engage in social interaction, contribute their expertise, share content, collectively build new tools, disseminate information and propaganda, and assimilate collective bargaining power” (Parameswaran and Whinston, 2007). That shift, in the form of UGC, has transformed the Web from a ‘publishing’ to a ‘participatory’ medium. In the publishing Web era, institutions (e.g., corporate establishments, website operators, marketers and publishers) provided virtually all the content on the web. Users were primarily passive consumers of such content. In the participatory web era, users can now be active creators, not just passive consumers, of content on a scale never seen before, e.g., creating Facebook profiles, building Second Life avatars, recording podcasts, and blogging about political candidates, social causes or consumption experience. They have wrested power from the few (e.g., newspaper editors, broadcasters, marketers and advertisers). In the process, they have not only changed the world but also the way the world changes. “For seizing the reins of the global media, for founding and framing the new digital democracy, for working for nothing and beating the pros at their own game”, Internet users (“You” included) were selected as TIME’s 2006 Person of the Year.

What drives the participatory Web is not simply user participation per se, but an implicit “architecture of participation”. More than just facilitating user participation, it enables user interactions and collaborations such that services improve and content get richer as more users participate (O’Reilly, 2005). As more users collaborate on a Wikipedia entry, for instance, errors and intentionally bias can be detected and corrected more rapidly. Passive participation can contribute as well. Most users, for instance, bookmark web pages and tag content on social bookmarking sites such as Delicious and Furl for personal use rather for the collective benefits. Social bookmarking still can benefit other users by functioning as a recommendation system even without explicitly providing recommendations; tagging data can be automatically aggregated into useful information, e.g., folksonomy in form of a tag cloud.

Propelled by Social Interactions

UGC is not just about content. It is also about connectivity and collaboration on a massive scale. It depends on some media (means of mass communication, e.g., blogs, wikis and tweets) to deliver, aggregate, collaborate and/or improve on the content (e.g., entertainment, viewpoints, information, ratings, bookmarks, etc.). The more users it reaches or brings in, the more powerful or useful it gets. Blog posts by themselves are “isolated” content pieces. Commenting and hyperlinking can turn these isolated posts into running conversations and passionate debates or even start a social movement. Wiki entries are not content pieces by individuals but a product of the collective intelligence and collaborative efforts of crowds. User profiles on online social networks help people find and connect with each other. Web 2.0-era media are therefore social media.

Connectivity and collaboration constitute the “social” part of social media. This social dimension distinguishes UGC (contributed by the mass) from the commercially developed content (controlled by the few) in the Web 1.0 era. It shifts the balance to power from the center (e.g., advertisers and website operators) to the edge (e.g., consumers and web users). Connectivity offers content a mechanism for wider reach, or in other words, the “multiplier” effect that makes UGC so powerful. Collaboration ensures content its richness. Content constitutes the “media” part of social media. It provides the “substance”; in its void, there is nothing to converse about, nothing to share with each other, and nothing to collaborate on. Content transforms (plain) connectivity into (rich) interactions.

Social interactions follow primarily a many-to-many pattern among interconnected users, in place of a one-to-many broadcasting pattern that was well orchestrated by institutions (e.g., companies) in the past. They entail various levels of user engagement, ranging from passive usage (e.g., tagging content or joining groups) and limited engagement (e.g., rating and voting on content or commenting on blog posts) to active contributions (e.g., writing blogs or uploading photos and videos) and deep involvement (e.g., networking with others or running online communities). Depending on the level of engagement, social interactions can support sharing, facilitate conversations, engage users and help build community. They deliver a level of “stickiness” that has been elusive to website operators, advertisers and content publishers with faith in the “content is king” mantra. Commercially developed content, lacking social interactions and hence user engagement, often fails to attract visitors and keep them coming back (an earlier post: “Is [Commercially Developed] Content King?“). Social interactions, on the other hand, engage users, nurture relationships and build brand loyalty. The resulting “customer lock-in” (or stickiness) helps the firm fortify its customer base or even expand it with “word of mouth” and viral messages, and thus allow the firm to successfully leverage the network effect.

Some Takeaways

The terms Web 2.0 and social media essentially refer to the same set of tools and transformational changes taking place in the new Web era. Web 2.0 focuses on the forces behind the scene (i.e., modular application architecture and network effect) that are of interest to system architect, application developers and IT professionals. Social media, on the other hand, represent the public face of the new Web (e.g., UGC and social interactions) that captivates marketers, advertisers and PR professionals.

Time’s Person of the Year, 2006 and 2010

It’s that time of the year when we are anxiously waiting for the announcement of Time’s Person of the Year – the individual (or organization, thing, etc.) judged by the magazine’s editors to have most influenced the world over the past 12 months.

The selection for 2010 was Mark Zuckerberg, the founder of the leading online social network Facebook. Only four years ago, “You” were selected Time’s 2006 Person of the Year. In both cases, the selection recognizes the transformational effects of what was known more widely then as Web 2.0 and more recently as social media.

“You” in 2006

At the turn of the last millennium, in the aftermath of the dotcom crash, many academic researchers were busy drawing lessons from the demise of the dotcoms, issuing calls for a return to business fundamentals, and even recasting the future of e-commerce. They apparently failed to notice that amidst the rubble of the dotcom crash, Internet-based e-commerce continues to rise at double-digit rates, as measured by online retail sales and advertising revenues (after a brief decline in the latter case). A few dotcoms (among them were Google, eBay and Amazon) had not only survived the crash but also prospered. Meanwhile, a new crop of dotcom ventures (among them were YouTube, MySpace, Orkut, Wikipedia, Hi5, and Facebook) was once again mushrooming. Many had become leading Web destinations and household names.

For some practitioners, these developments did not go unnoticed. In 2004, during a brain-storming session between O’Reilly Media and MediaLive International for a potential future conference about the Web, it was noted that the Web was still getting more important than ever despite the dotcom crash a few years earlier. The term Web 2.0 was coined to capture the essence of what seemed to be some kind of turning point for the Web. Its “2.0” designation does not imply a new version of some old software applications. Rather, it underlines a very different Web. The earlier Web (or Web 1.0, if you will) was structurally hierarchical, ruled by webmasters and offered static websites that were broadcasted and distributed mostly through hypertext links. By contrast, Web 2.0 is characterized by open communication, decentralization of authority and freedom to share and re-use content. It allows individuals to publish, collaborate and share experiences with other like-minded individuals and groups on a scale never seen before, thus bringing together the small contributions of millions of people and making them matter.


Who are those individuals making such contributions? The answer is “You”. By creating Facebook profiles, building Second Life avatars, recording podcasts, blogging about political candidates, social causes or simply cooking recipes, connecting with one another, and/or spreading the viral messages, “You” (or more precisely, tens of millions of people like you) have wrested power from the few (e.g., newspaper editors, broadcasters, marketers and advertisers). In the process, you have not only changed the world; you have also changed the way the world changes. It did not take very long for this transformation to become well recognized. In December 2006, Time selected “You” as its Person of the Year “for seizing the reins of the global media, for founding and framing the new digital democracy, for working for nothing and beating the pros at their own game”.

Him (Mark Zuckerberg) in 2010

The proliferation of content-centric Web 2.0 tools such as blogs, podcasts, and video and video sharing sites once again brings to the forefront the notion of “Content is King”. This notion went back at least as far as 1996 when Microsoft co-founder Bill Gates wrote in an online column that “content is where I expect much of the real money will be made on the Internet”. But things did not out quite well as often touted. Content in the Web1.0 era was for the most part commercially generated content (CDC), which was too expensive to create and update frequently, and being non-engaging with consumers, also ineffective in relationship building (read my other blog post “Is [Commercially Developed] Content King?“). Content in the Web 2.0 era, by contrast, has increasingly been user-generated content (UGC), from blog posts and comments on them, entries on Wikipedia, videos on YouTube, profiles on Facebook, to virtual worlds and avatars on SecondLife. More than just content pieces, these are vehicles for users to share ideas, contribute knowledge, collaborate on projects, support common causes, build communities, or simply connect with each other. Web 2.0 tools are therefore as much about connectivity and collaboration as about content generation. They are thus social media. As media, they offer the means or instruments for delivering content of one kind or another (e.g., news, information, ads or entertainment). Being social, they help improve our ability to connect, communicate, and collaborate (read my other blog post “Social Media: More ‘Social’ than ‘Media’“).

It is the ability to connect that makes content generation more powerful and collaboration feasible. Blogs can be powerful when they are commented and hyperlinked, potentially turning themselves into running conversations and passionate debates that can mobilize the mass. Tweets can be powerful despite their 140-character limits. They can reach out to a large number of followers and keep them updated in real-time. Wikis can be powerful, as Wikipedia has amply demonstrated, thanks to their ability to harness the collective efforts and intelligence of the mass on a scale not possible until recent years. Still no social media tools to date can match the power to connect offered by online social networks (OSNs) such as Facebook. Its user population had crossed the 500 million mark in July 2010, placing it third in size behind only China and India. Half of its users log in on a daily basis. Each user has an average of 130 friends and creates 90 pieces of content a month. For “connecting more than half a billion people and mapping the social relations among them; for creating a new system of exchanging information; and for changing how we all live our lives”, Time selected Facebook founder as its 2010 Person of the Year.

Lessons from Mr. Splashy Pants

While writing by blog post “Markets are Conversations” , I found a very interesting presentation on TED. It is a story about an anti-whaling campaign which Green Peace tried to personify by having the public to name the humpback whales being tracked. Surprise!!! The most popular name was “Mr. Splashy Pants”, not exactly what Green Peace was hoping for. Still it worked in the end; the campaign successfully stopped the targeted whaling expedition. You can find out the rest of the story from the embedded video clip below.

What can we learn from Mr. Splashy Pants?

From the bottom up, not the top down. Social media is of the people, by the people and for the people. No company or institution owns it or can control it. “Mr. Splashy Pants” was not the kind of name Green Peace expected. Delay tactics to wait for more “thoughtful” cultural names to emerge did not work. “Mr. Splashy Pants” still won the naming contest by a wide margin; there was no close second place.

Level playing field. Done right, it costs little or nothing to mobilize people via the Internet. Social media empower users, making them collectively as powerful as, if not more so than, institutions.

OK to loosen up control. It is the end result, not the ability to command and control the media, that matters. Galvanizing people’s passion for the humpback whales so as to halt the targeted whaling expedition, not finding some thoughtful names (simply a means to some other end),  was the result that Green Peace was looking for. delivered that sought-after result.

Be genuine, honest and upfront. The name “Mr. Splashy Pants” won handily even if it was, from the standpoint of Green Peace, not culturally “meaningful”. Being genuine, it touched the people’s feeling at some personal level and stirred up the people’s passion for the humpback whales.

Is (User Generated) Content King Kong?

Among the three elements of the 3Cs business model, content is the one that has undergone the most profound change in recent years. The rise of social media has allowed Internet users to create and distribute content with ease. User generated content (UGC) now shares the stage with commercially developed content (CDC) that once ruled the world of Web content. Will content, or more precisely UGC, actually be king this time? If not, what will it be?

What is UGC?

UGC is also known as consumer-generated media (CGM). It refers to the materials created and uploaded to the Internet by non-media professionals, be them product reviews on Amazon, seller ratings on eBay, photos on Flickr, videos on YouTube, bookmarks on Delicious.com, or user profiles on Facebook. It has been around in one form or another since the early years of the Internet such as examples include the bulletin boards on portal websites like Yahoo and AOL and “product rating” websites in the 1990s. Over time, it has evolved to encompass blogs, wikis and media-sharing, social-networking, and virtual world sites, and has become a dominant media and one of the fastest growing forms of content on the Internet. In 2006, UGC sites attracted 69 million users in the United States alone, and in 2007 generated $1 billion in advertising revenue. By 2011, UGC sites are projected to attract 101 million users in the U.S. and earn $4.3 billion in ad revenue (IAB, 2008).

Practically all social media applications (from blogs, social bookmarking sites and wikis to online social network sites) enable some form of UGC. An effective way for classifying UGC is to do so according to the motivations for users to contribute content and the level of communal involvement in doing so. The motivations can be either rational or emotional. Rational motivations may include sharing knowledge with the world (knowledge sharing) and advocating a particular stand toward an issue (advocacy). Emotional motivations may include building social connections with friends, relatives, or other Internet users (social connections) or entertainment (self-expression). Users can contribute content through individual efforts or group collaboration (Krishnamurthy and Dou, 2008). The entries on Wikipedia are collaborative efforts of tens of thousands of contributors from around the world who are motivated by a desire for knowledge sharing. User profiles on online social network sites such as Facebook are created by individual members who seek connections with friends online. Massively multiplayer online role-playing games (MMORPG) such as World of Warcraft involve a very large number of players who interact with one another within a virtual game world. They are found to prefer socializing online to offline and have very strong emotions when playing these games.

While there are many types of UGC sites, for branding purpose, marketers should pay close attention to three specific types.

  • Review sites. They are where consumers share their brand experiences in order to help others make more informed purchasing decisions, making them an important place for marketers to have a voice. Most review sites focus on a specific product/service category (e.g., CNet on consumer electronics, Edmunds.com on automotive, and TripAdvisor on tourism). They are generally well moderated and can be very brand friendly to the company that respects their culture and is willing to participate.
  • Blogs. Blogging has been around in one form or another since the mid 1990s, but it was the launch of Open Diary (the first site to provide blogging software and the first to facilitate user comments) in 1998 that turned blogging into a UGC phenomenon. Letting readers reply to blog entries, thus allowing interactions between bloggers and readers and among readers, is the hallmark of blogging and UGC in general as well. It should be noted that blogging today is no longer for users only. Among the rank of bloggers are many salaried professionals (e.g., huffingtonpost.com), marketers and corporate CEOs.
  • Media sharing sites. They tend to be specialized by content formats such as photos (e.g., Flickr, Photobucket and Smugmug), videos (e.g., Youtube, Metacafe and Dailymotion) and presentations (Slideshare.net and Scribd). The huge audience of some of these sites such as YouTube and their popular media formats, particularly videos, can get brand messages, good or bad, spread extremely far and fast.

Advertising on UGC Sites

This is still an uncharted territory. Much is yet to be experimented and learned. Below are a few more common practices. They involve placing commercial messaging in and around the content or by becoming a part of the content itself.

  • Video Ads. One common method is “pre-roll” video — a short ad that runs before the video itself. Another method is “overlay” ad, which pops up about 15 seconds into a video and only covers the bottom one fifth of the screen. The ad disappears after a few seconds if the user does not click it. If the user does select the ad, the main video will pause, and the video ad will play; once the ad has ended, the video will resume. The idea behind this method is ensure the ad does not interrupt the user’s viewing experience. Some UGC sites, including YouTube, now prefer this “overlay” method over “pre-roll”.
  • Conversation targeting. Marketers can target specific conversations that are relevant to their brands, be them on some blogs, online communities or social networks. They can then add their “voice” (e.g., product or company information, press releases, and experts’ opinions) or place their ads next to these conversations. A camera producer, for example, may try to identify widely read blogs about photography whereas a sport apparel producer may look for some online forums on physical fitness. They may utilize the service of some third-party specialists in finding not only the most relevant conversations but also the most influential.
  • Custom communities. Marketers can build custom communities that provide an online hub for brands — entertaining and engaging consumers through relevant content, interesting games, useful applets, or exciting contests. They may use off-site advertising to drive consumers to these communities, where these consumers participate and pass along interesting or valuable content to others. A variation of custom communities is dedicated channels for specific brands on content-sharing sites such as YouTube.
  • Brand profile page. Marketers can create profile pages for their products or brands on social networking sites such as Facebook. On such pages they can offer relevant and interesting content, from demonstration videos to widgets that let site members include these pages in their “friend” network or tag themselves as a “fan.”
  • Widgets. Some marketers now make available branded widgets for users to download onto their computer desktops or embed in their blogs or profile pages and through these widgets to import some form of live content. American TV network ABC, for example, offers a series of widgets around its popular primetime shows such as “Desperate Housewives”, “Grey’s Anatomy”, “Ugly Betty” and “Dancing with the Stars”. These embeddable widgets let fans add exclusive ABC.com content to their blogs, web pages and social networking sites. Each widget includes video clips, photos, news alerts and links back to ABC.com’s media player for viewing of full episodes.

Kong: a King Gone Wild

With the rise of UGC, is content fit to be king? To put it differently, is the notion of “content is king” any closer to reality in the UGC era  than it was in the CDC era? Survey data from the OPA shows Internet users spend the largest share of their time online at content sites (39.6 percent), far ahead of communication (24 percent),  community (20.6 percent) and other sites (e.g., commerce and search at 10.9 and 4.5 percent, respectively). Back in 2003 when data on community sites was not available, they spent more time at communication sites (47.3 percent) than content (33.6 percent) and other sites. Content sites are those designed primarily to provide news, information and entertainment (e.g., CNN.com, ESPN.com and MapQuest). Community sites are those combining UCG with communications in order to foster relationships between individual members and groups of members (e.g., Facebook and MySpace). Communications sites and those designed to facilitate the exchange of thoughts, messages, or information directly between individuals or groups of individuals (e.g., Yahoo! Mail and AOL Instant Messenger). Commerce sites are those designed for shopping online (e.g., Amazon and eBay). Search sites those scanning the Web to provide prioritized results based on specific criteria from user requests (e.g., Google Search and Yahoo! Search). Essentially, content-rich sites are where consumers have been spending their time at, then or now, despite the growing popularity of community/networking sites such as Facebook.

Website traffic statistics (Alexa, 2010) seem to confirm the predominance of content. Four of the top-ten sites globally are content sites (e.g., YouTube, MSN, Wikipedia and Blogger); the remainder includes four search sites, two of which (Yahoo and Baidu) are content-rich, a community and social network site (Facebook) and a communication site (Tencent QQ – a Chinese instant messaging site). For marketers it is clear that they can ignore the content element only at their own perils.

Utilizing UGC sites for marketing communication is not without its challenges, however. UGC sites are by nature a freewheeling exchange of opinions and points of view, in which an advertiser is expected to be just another participating voice. Marketers can no longer broadcast one-way messages at their audiences in a carefully planned and controlled environment. Instead, they must now engage in conversations that are initiated, maintained, and “owned” by consumers. They need to surrender some degree of control over the brand messages. That carries a level of uncertainties and risks much higher than what most marketers are accustomed to (see my other post: “Markets Are Conversations”).

So while content may turn out to be king this time, it is likely a different sort of king: King Kong. Like the infamous ape made in Hollywood, UGC can be wild and unpredictable; meanwhile its raw strength can be overwhelming. Recall the Chevy Tahoe online video contest discussed in an earlier post (“Markets are Conversations”).  The beast can be quite destructive but controlling it is equally impractical. Ignoring the beast does not make it go away either. Perhaps with a new mindset radically different from the traditional “command and control” approach, marketers can meet King Kong (or rather UGC) face-to-face. A different ending, less tragic, this time?

References

  1. Alexa (2010) “Top Sites”, at: http://www.alexa.com/topsites (accessed July 7, 2010).
  2. Online Publishers Association (OPA) (2010) “Internet Activity Index (IAI)”, at: http://www.online-publishers.org/page.php/prmID/421 (accessed July 7, 2010).

Markets Are Conversations

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From Conversations to Monologues

In The Cluetrain Manifesto, Doc Searls and David Weinberger remind their readers that, for thousands of years, markets were conversations. These were places for exchange where buyers and sellers looked each other in the eye, met and connected. They spoke directly to each other without the filter of media, advertising and public relations. Customers talked among themselves about products and merchants, giving each other their recommendations. Words of mouth were a powerful tool of advertising.

Then came the Industrial Age and with it mass production, mass consumption and inevitably mass marketing. Ever since, market conversations have been interrupted. In their places are marketing messages that businesses push onto consumers. Marketing becomes a profession, an applied science, the engineering of desirable responses through the application of calibrated stimuli. A new metaphor, “business is war”, has taken hold. “We launch marketing campaigns based on strategies that target markets; we bombard people with messages in order to penetrate markets… Business-as-usual is in a constant state of war with the market, with the marketing department manning the front lines”. There is one big problem with this:  marketers are trying to do all the talking; but people do not ask for all these marketing messages and do their best to tune them out. All the sophisticated marketing research techniques and promotional tools have proven increasingly less effective. Marketers and consumers become disconnected from each other.

The video clip below — “The Break Up” — says it well. It is “a story of love gone wrong” — all she (the consumer) wants is genuine affection; all he (the advertiser) offers is loyalty reduction. A break-up is bound to happen.

Back to the Future

Once again the world is changing. The rise of the Internet and the proliferation of social media enabling users to create and contribute content and to network online have altered the balance of power in favor of consumers. These are not simply new channels for marketers to continue broadcasting their messages more widely and cheaply. Instead, they are new virtual spaces where people can gather around topics of interest to them, learn and talk about products, brands and their consumption experiences, and recommend directly to each other what to buy and what not.

The Cluetrain Manifesto proposes several dozens theses about the impacts of the Internet on markets and organizations. Among those is “markets are conversations”. The book was published in 1999, long before the proliferation of social media tools. Its theses were way ahead of their time. On the 10-year anniversary of the book, a 2009 video clip by Jacobsland Partners highlights some of the key theses.

Market conversations are back, but with one major difference this time: the marketspaces are highly networked. Because people are more widely connected online, their conversations can expand far and wide, spread from one forum to another easily, and get picked up by other media instantaneously. All of these can take place with or without participation from marketers.

Ignore Market Conversations at One’s Own Perils

Good, bad or ugly as these market conversations may be, their reach and impacts can be wide and serious. Ignoring them does not make them go away; and there is no realistic way of crowding them out with advertising blitz. Instead, participation in these conversations is often a smarter choice while keeping a distance and being silent can be a costly mistake. The experience of the leading computer maker Dell with Dell Hell serves as a vivid reminder of this. In June 2005, blogger Jeff Jarvis posted on his blog Buzzmachine (http://www.buzzmachine.com) his complaint, entitled Dell Hell, about the failure of Dell’s customer services to repair his laptop. It quickly attracted thousands of links, comments and emails from other aggrieved Dell customers, and became the third most linked-to post on the blogosphere in the following weeks (Gupta, 2005). At the time Dell had a “look, don’t touch” policy regarding blog commentaries in effect. So, it did not respond to this brewing negative publicity until Dell Hell received wide coverage in the mainstream media (including the New York Times, Slate, CNN, Business Week, etc.). By then, according to an analysis by Market Sentinel (2005), Dell had badly lost out to Buzzmachine and other blogs as the source of information on Dell’s customer services. Coincidentally or not, Dell’s sales growth stalled and profits fell. Eventually, Dell had to take a series of corrective actions, including the creation of a blog, known as Direct2Dell, to engage in candid conversations with its customers.

Be Authentic

Conversations occur in human voices as being from a person with authentic identity, a point of view and a passion, not a legal entity trying to deliver a message or keep them on message. They are two-way communications involving both listening and talking; they need to be authentic and transparent to gain the public trust. The goal is not to build a walled garden of content that hold consumers hostage to the marketer’s brand messages but rather to create a “public square” — a virtual meeting place where customers come back for the rich and engaging experience (Tapscott and Williams, 2006).  So, lighten up, loosen up and listen for a change. Only by presenting itself as a human face and by engaging its constituents (e.g., customers, suppliers and employees) in meaningful conversations can a company or institution have a fair chance of influencing consumer opinion. When frustrated customers launched a blog recounting the hours Jet Blue left them stranded on the tarmac during a snow storm, the carrier responded quickly, not with a traditional press release, but by posting on YouTube a video of an apology from its CEO. Its response received favorable and supportive comments and e-mails from thousands of customers (Eikelmann et al, 2007).

The price for not being authentic can be high. In September 2006, Working Families for Wal-Mart, an organization founded by the public relations firm Edelman, sponsored a couple for their trip by a recreational vehicle (RV) from Las Vegas to Georgia. The couple maintained a blog named Wal-Marting Across America where they wrote about the lives and stories they encountered on their journey, including the many employees who reportedly expressed their love of working for this giant retailer. The couple was real and they already had, prior to the sponsorship, a favorable view of Wal-Mart particularly for its policy of letting RVers park for free at its parking lots. However, the failure to disclose the sponsorship raised suspicion about the authenticity of this blog and led eventually to its exposure as a “flog” (or a fake blog) and plenty of uproars in the blogosphere (Gogoi, 2006). Subsequently, the president and CEO of Edelman had to apologize publicly for its failure to be transparent about the identity of the two bloggers (Siebert, 2006).

Have Thick Skin

Joining a conversation takes much more than simply adding social media to the marketing communication tool set. It also means embracing a new management mindset — ceding control in order to build relationships (Li, 2004). This can be a challenging and risky move for marketers who accustomed to controlling their messages through one-way broadcasting media. The publicity surrounding GM/Apprentice advertising campaign underscores the potential risk of ceding such control. In 2006, GM launched a promotional web site in partnership with NBC’s “The Apprentice” to offer consumers a chance to create their own advertisements for the Chevy Tahoe SUV (sport-utility vehicle). Environmental activists, consumer safety advocates and many anti-SUV consumers quickly seized on the opportunity to create many advertisements that slammed on the Tahoe for its adverse impacts. These videos quickly found their way onto YouTube. GM management was slow to respond to these negative advertisements at first but later decided to face these head-on, trying to clarify the facts (e.g., pointing out that the Tahoe outperformed other competing SUVs on fuel economy, safety ratings and engine emission) and to put a positive spin on the whole campaign. Writing on GM FastLane blog, Chevrolet General Manager claimed GM management had expected this sort of campaign would not come without risks but “adopted a position of openness and transparency, and decided that we would welcome the debate… In our opinion, this has been one of the most creative and successful promotions we have done. And we invite you back to the final ‘Board Room’ as we select the winning entry.” (Peper, 2006).

Loosen up Control or Lose Control

While the risk of ceding control on marketing messages is real, the ability to control such messages has been sharply reduced, if not totally eliminated, by the rise of social media anyway. In the age of user-generated content (UGC), there is little that marketers can do to prevent or stop consumer from posting and spreading messages, negative or otherwise, about their brands. By embracing social media, instead of rejecting or ignoring them, marketers can at least become part of the conversations and be better placed to shape consumer perceptions. Not all was lost for GM in the GM/Apprentice campaign, according to Charlene Li of Forrester Research (2006). “By losing control over the brand experience, Chevy actually brought more people into it — witness the debate over the campaign itself. The environmental and SUV fuel economy debate has always existed outside of the Chevy experience, but by bringing it into chevyapprentice.com, Chevy has harnessed it into a promotional benefit”. The key lesson is “…in the social computing arena, you [marketers] have got to have thick skin and be ready to engage in the messy world of your customer’s opinions. Marketers that have the guts to turn over their brand to the public will in the end win over their customers.”

Social Media: More “Social” than “Media”

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Social media has become an important marketing tool. It is difficult nowadays to discuss about marketing and advertising without discussing about social media. Much has been written about social media in the trade press and more recently also in academic journals. Few efforts have been made to define or clarify what social media is, however. More are needed. Definitions and classifications are an essential step in studying any emerging field.

Among those defining social media, a majority focuses on its user-generated content (UGC) dimension. Below are some examples.

This form of media ‘‘describes a variety of new sources of online information that are created, initiated, circulated and used by consumers intent on educating each other about products, brands, services, personalities, and issues’’ (Blackshaw & Nazzaro, 2004, p. 2).

“Social Media is a group of Internet-based applications that build on the ideological and technological foundations of Web 2.0, and that allow the creation and exchange of User Generated Content” (Kaplan and Haenlein, 2010) .

“Social media describes online resources that people use to share ‘content’: video, photos, images, text, ideas, insight, humour, opinion, gossip, news — the list goes on” (Drury, 2008).

Some Are More “Media-like” Than Others

While being different, the definitions above all focus on the content element. This focus is apparently rooted in the traditional understanding of the term “media”. Its singular form, “medium”, refers to an “intervening agency, means, or instrument” and was first applied to newspapers to denote a means of communication. Over the years, the term “media” has been used more commonly as a singular noun that refers collectively to the means of mass communication. In that sense, it is closely associated with the delivery of content of one kind or another, be it news, ads, information or entertainment.

There are a few popular tools and applications that are widely considered as social media although for them content generation is only peripheral. One such tool is online social networks (OSNs) such as LinkedIn and Facebook the primary focus of which is on connecting users with “friends”. The scope of social media therefore needs to be broadened beyond the content dimension, which underlies the term media in the traditional sense. Dan Hollings (2008) offers a very interesting definition of social media by stringing together examples of social media tools and sites, in a creative way “like you’ve never seen before!”

“Learning to Digg, Backflip, or Furl might sound less than Delicious, until you Ask for a spoonful of RawSugar and a quick Wink from Mister Wong, the Frappr, who’s taken a StumbleUpon a Flock of Magnolia after a Spurl last night at the LinkaGoGo, and suddenly your site becomes Mashable on the Newsvine, where, as fast as you can say Blinklist, all the world will Digg by iPhone your Facebook on MySpace before you quickly Squidoo over to YouTube for 43 Things you must Flickr with before you’re forced to Reddit again, plus get Linkedin while praying to the Gods of Twitter that one day you’ll “get” what the Technorati all this social media stuff means.”

This is not exactly a definition because it lacks a precise statement of what the term social media means. But its use of a large number of social media, quite diverse in their focus, successfully highlights that social media tools are not necessarily media in the traditional sense. Some are content-centric (e.g., blogs), some are not (e.g., OSNs) although they all produce some forms of user-generated content (UGC).

Take OSNs. Their raison d’être is to enable people to connect with each other. On OSN sites such as Facebook, personal profiles enable users to project an identity and to connect with others. On OSN sites such as 43things.com, users list a number of  goals and hopes (e.g., “lose 12 pounds”, “travel to Greece”, and “be more confident”) that enables them to get connected with other users whose goals are constructed with similar words or ideas. User profiles, goals and hopes are a form of UGC; they are key to users’ ability to connect with each other but they are not the raison d’être for these OSN sites.

Take wikis. Like blogs, their outputs are essentially content. However, whereas blog posts contain the unedited, opinionated voice of one person, wiki pages embody the collective efforts of multiple users and reflect a generally agreed-upon view. It is the ability to facilitate group collaboration and to harness the collective intelligence that distinguishes wiki pages from blog posts.

Or take social search, ratings and evaluation sites. While their focus is on content, their added value is in harnessing the collective intelligence of users for content discovery. StumbleUpon, for example, enables users to “stumble upon” content pages found and recommended by friends or like-minded users. Digg lets users vote up or down on news stories, thus letting most “Dugg” stories rising to the top (appearing on the front page).

Essentially, social media encompasses a wide range of tools. Some tools such as wikis can be characterized as collaboration-centric, others like blogs as content-centric and still others like OSNs as connection-centric. In the traditional sense of media as a means of conveying content, some social media tools are therefore much more “media-like” than others. Regardless, they “help accelerate and improve our ability to connect, communicate, and collaborate” (Morecroft et al, 2009). In such roles, they all are social.

All Are Social

Social media taps into our basic human instincts to converse, connect and co-create. Blogs are maintained mostly by individual users. Through comments from other users and hyperlinks to/from other blogs, they can turn into running conversations or even passionate debates. The blogosphere – the universe of all blogs and their interconnections – has therefore been likened to the world’s biggest coffeehouse (Tapscott, 2006).  Like a coffeehouse, the blogosphere can be full of noise – so many voices expressing many opinions. Thankfully, social ratings and recommendations on such sites as Technorati, and content syndication act as a filtering system that let users easily find the content relevant to their interests. Even bookmarking can be a social act rather than an “isolated” act by individual users. Users can store their bookmarks online at sites such as Delicious.com and Furl.net for convenient access from any computers connected to the Internet. They can make these bookmarks accessible to the public. In so doing they can add to, and benefit from, the collective intelligence of all users even though they bookmark primarily for their personal use rather than for the collective benefit of all (Golder and Huberman, 2006).

Consumer Empowerment

The rise of social media has altered the balance of power between institutions and individual users, and between marketers and consumers. The ease with which consumers can generate and distribute content through such media as blogs, podcasts, and photo and video sharing means that marketers are no longer the only ones doing the talking while consumers doing the listening — passive recipients of carefully managed marketing messages. Consumers now can initiate and maintain conversations among themselves about the brands and their consumption experience with or without marketers’ participation or even awareness. They can also collaborate with one another to create new knowledge, provide customer-to-customer supports, filter information and assist others with search. They can also easily connect with one another and through social networks to share information, spread viral messages, or get organize from the ground up. In brief, social media is all about empowerment through user content generation, mass collaboration and social networking.

Employee Empowerment

Empowerment should not be limited to the consumer side. In an environment where a derogatory YouTube video or an angry tweet can derail a marketing campaign or damage brand reputation, companies must be pro-active, not just reactive to or worse passive about such a possibility. They may want to empower resourceful employees to enter into dialogues with customers, using social media tools, so as to spot problems and help the latter find solutions, but to do so within a safe framework. This means aligning the actions of these highly empowered and resourceful operatives (HEROes) with corporate strategy and in compliance with security, legal and other corporate policies. In return, the HEROes need support from management and the IT department. Management must communicate their openness to innovations by employees and willingness to accept failures. As for the IT department, it is traditionally far removed from customers and typically lacks the budget and staff for “on-the-fly” projects. Supporting seemingly chaotic HERO-type projects often means that the IT department may need to go against its culture of keeping technology locked down and under tight control (Bernoff and Chadler, 2010).

Social Media Defined

New media tools continue to pop up; some will catch on and spread widely (e.g., Twitter). The media landscape is likely to shift continually. Meanwhile empowerment is what differentiates social media from the traditional media. A definition of the term social media should therefore center on the “social” dimension (i.e., user empowerment) rather than the “media” dimension (i.e., content generation and delivery).

“Social media are network-based tools and applications that empower individual users (e.g., consumers and employees) by enabling them to create and distribute content with ease, collaborate and connect with each other in a suitable fashion of their own choosing (as opposed to managerial dictate) so as, in marketing context, to enrich the consumption experience, build relationships and strengthen brand loyalty”.

In a future post, I will offer a classification of social media tools.

Notes

  1. Bernoff, J. and Chadler, T. (2010) “Empowered”, Harvard Business Review, 88(07), 95-101.
  2. Blackshaw, P. and Nazzaro, M. (2004). “Consumer-Generated Media (CGM) 101: Word-of-mouth in the age of the Web fortified consumer”, at http://www.nielsenbuzzmetrics.com/whitepapers (accessed: December 11, 2008).
  3. Drury, G. (2008) “Opinion piece: Social media: Should marketers engage and how can it be done effectively?” Journal of Direct, Data and Digital Marketing Practice, 9(3), 274-277.
  4. Hollings, D. (2008) “Social Media defined –Like You’ve Never seen Before!” (August 11), at: http://danhollings.posterous.com/social-media-defined-like-youv.
  5. Kaplan, A.M. and Haenlein, M. (2010) “Users of the world, unite! The challenges and opportunities of Social Media”, Business Horizon, 53(1), 59-68.
  6. Morecroft, A.L., Marr, J.A. and Kassotakis, M.E. (2009), Social Media at Work: How Networking Tools Propel Organizational Performance, Jossey-Bass Publication.