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January 2008

January 30, 2008

The Evolution of Consumer Communities = 24 Years of My Record Shopping

Here's a 10-minute journal-style entry of how I've shopped for music, roughly every six years, since I started buying albums, in relation to the social graph and different media. Here's how the media breaks down:

  • The Cassette Years (1984-1996)
  • The CD Years (1988-2008)
  • Mp3 Downloads (2002-2008)
  • Mp3 Streaming (2007-      )

1984: I ask my mom if she can purchase me cassette tapes at the local Cal-dor that I have read about in magazines like Hit Parader.

1990: My cool 30-year-old cousin Rich clues me into cool bands, and I read Tower Records' Pulse magazine to learn about new ones. Nearly all of my shopping takes place at the local Tower Records.

1996: I read about bands in CMJ Magazine and  hear about them from friends in my dorm. I buy the CDs and records at local record stores like the Exclusive Company in Madison, Wisconsin. Sometimes, I'll go on SPIN Magazine's nascent web site to check out bands.

2002: I check out bands on sites like mp3.com and in magazines like Rolling Stone and purchase CDs and records at my local Chicagoland record stores. I make my first iTunes purchase this year, noting that other users are making iMixes (playlists).

2008: I go to music stores and write down interesting album titles on my iPhone. I discuss them with friends on email, chat and Facebook. I stream the albums from Rhapsody, and pay $13/month for the service. I have not paid money for any CDs or discrete downloads in 2008, so far.

January 28, 2008

January 2008: The Month In Business Social

January has been an exciting month; I finished the first version of There Is No Secret Sauce, a tactical guide to social media, and I also had a really nice redwood fence constructed in my backyard. It took my wife and I a long time to save up enough money to build the fence, and it's got me thinking a lot about what's been happening lately in social media: a lot of lines and alliances have been drawn, but everything seems to be more interdependent than ever.

When I started writing these strategic guides last month, the idea was to focus in on a series of important developments in the last month, and give actionable strategy upon which brands can make decisions that make things happen in social media. So, here goes.

Development #1: Online Video Traffic Rises Sharply

The 12-week old writer's strike has cost the American entertainment industry somewhere between $300-600M, thus far. And it has sent quite a bit of traffic to online video sites. But no one was expecting new Neilsen study numbers to indicate 100% increases (in the 18-49 age group) to the question: "Have you used a video site yesterday?"

Why It Matters: The use of online video, while still slightly skewed towards males, is also seeing the greatest increases in less affluent and less educated groups of the population. Regular use of online video is also on the increase by women.

Business Value: Video is a critical part of the increasingly visual social media mix, and brands need to examine who their communities of customers are, and whether those communities like to use video; the answer is probably "yes".

Actionable
: If your brand has no video strategy, begin to investigate what that strategy might look like. Ask around to figure out what kinds of video content are relevant to your brand - can customers talk with customers using video on your web properties? If not, could that be a place to start?

Development #2: Social News Site Digg Changes Their Algorithm



Why It Matters
: Brands that don't have a lot of experience executing in social media may think that it's really easy to get their press releases or stories told using social-news aggregator Digg. While the site is wildly popular during the weekdays (1-1.5M unique visitors, many of whom are regulars), it's no longer going to be all that easy for marketers to "game" it by sending a sudden rush of votes at the site, unless those votes are widely distributed (by IP address, and, probably geographic location)



Business Value
: Marketers need to know what role social news sites and aggregators play in their social media strategy, and they need to be transparent in the way that they work with these sites.



Actionable
: Make sure that any story submitted by your brand to an aggregator or social news site like Digg bears enough news value or interest to influencers that it will get virtual thumbs-ups based on its own merit.



Development
#3: MySpace Stats From 10/07 Come Out


Why It Matters
: This social network, if it were a country, would rank, population-wise, somewhere between (#11), Mexico and (#10), Japan, with its 110 million members. Even though social network Facebook's current growth rate (with 60 million active users) is poised to catch up in 2009, it hasn't happened yet. If one of the groups of behaviors that your brand includes in its behavioral targeting include "searching for information about consumer products" or "searching for entertainment," this is a property that can't be ignored. Here are the key stats, from Jeremiah Owyang's excellent web strategy blog:

  • 300,000 new people sign up daily
  • 1 in 4 Americans are on the site
  • 85% are over 18
  • 14 Billion total comments on the site, 20 Billion total mail messages
  • 50 Million mails sent per day on this site - more than A-list mail services Yahoo, Hotmail or Google
  • More than 8 million bands and artists on MySpace Music

Business Value: Marketers and brands need to understand that, give or take a little bit, 25% or more of their current or prospective customers spend time in this highly conversational social network every month.

Actionable: If your brand doesn't yet have a MySpace strategy, download There Is No Secret Sauce and begin to devise one.



Development
#4: Google, Facebook and Plaxo join Data Portability, an open standards group that will allow people to move data from one system to another.


Why It Matters
: Data Portability is the standard by which a lot of social networks are going to move closer together in 2008 and 2009. It will likely allow applications to migrate in between networks, and, eventually, allow users to migrate their data between networks.



Business Value
: It came as somewhat of an unexpected surprise when Facebook joined the group, as Google's OpenSocial initiative's initial aim was to "out open" Facebook. Data Portability may be of high value to consumers, and as you design applications or social media initiatives, going forward, keep it in your field of vision.



Actionable
: Make quarterly check-ins on Data Portability's wikipedia page to stay abreast of what companies and languages are involved.

January 25, 2008

There Is No Secret Sauce

Well, after five months of research and writing, my eBook, There Is No Secret Sauce, is complete. I'm posting 100 copies to see who wants to read it. Once those run out, then I'll put it up again. A big thanks to Melanie Solis at LaunchSquad for helping me copy-edit. Now, to put on "Long Time" by Boston and crack open a cold one.

You can download it here.

Secretsauce2_2

January 17, 2008

Three Reasons Content Companies Need To Embrace Social Media

[Ed's note: What follows is a superb guest post from John Potter, VP of Technology at CNET Networks Business.]

As the World Wide Web is transformed into what Tim Berners-Lee has called the Giant Global Graph, companies whose primary business is producing content need to adjust. If you're working inside a content company, and you're a user of social networking sites, or social media sites like Digg, then you probably already know this. Chances are, though, you'll need to sell this up the chain within the company. To help you, I've put together some of the best arguments for embracing these changes.

The primary reason for embracing social media is that you need to be where your audience is. I mean this both literally and figuratively. In the literal sense, you need to promote your content on the social media and networking sites that users are spending their time on. One of the most common objections to putting effort into doing this is that your current audience doesn't use these sites: "our users don't even know what Digg is." On the surface, this is a hard objection to overcome, because obviously a company tends to focus their efforts on their existing users. In reality, it' a trivial objection, because it is incredibly short-sighted. Even if there is not a lot of audience overlap now, chances are the demographics of users of social media match well with those of your existing users.

Right now, I guarantee you there are large numbers of users on social networks and media sites, who would love your content, but who will probably never hear of your web site unless you reach out to them. Your need to reach these users is even higher if your existing audience demographics don't match those of the social networks. In the 1990s, people in the newspaper industry used to joke that "our audience is dying every day," because young people weren't reading papers, and the elderly people who did were steadily disappearing. It was a joke, because, at the time, their business was still relatively healthy.

It's not a joke anymore: the newspaper business is imploding. Similarly, by rejecting new methods of distribution, the record companies put themselves on the same path of decline. If you work for a web content company, you need to make sure the same thing doesn't happen to you. To do that, you need to be where your future audience is already, and social media and networking sites are where they are. Moreover, even if you ignore this large potential audience, you can be sure your advertisers won't. Advertising spending is quickly shifting from TV and print magazines to the web. Where it goes on the web depends where the audience is. Increasingly, your advertisers will be asking how they can use you to reach the users of social networking and media sites. In the figurative sense, the idea of being where your audience is means you need to provide your users with a site that has all the interactivity that they have come to expect. Today, users are not willing to just passively consume your content. They expect to not only be able to comment on your content, but to rate it, to share it, embed it on their own blogs and social network profiles, and to receive credit if they link to it through trackbacks. If you don't provide these tools, your users will gravitate to other sites that do provide them.

A second reason reason for embracing social media is that you expand the reach of your existing community. Whether you publicly acknowledge it or not, your site already has a community of users. At a minimum, that community is shaped by the content you produce. However, if you allow comments, you have already taken the further step of letting your users interact with each other. As your users interact, they build a community, and individual users build a reputation within that community. The more tools you provide for users to interact with your site, the stronger this community will become. Adding the ability to rate content, to submit your content to social media sites, or to embed your content on blogs or MySpace profiles will increase a user's identification with your site. That's important, because in many ways, social media is about the users' branding of themselves, and you want your brand to be part of the individual user's brand.

One of the largest sources of advice or information that people turn to is their peers. So, if someone sees that a friend is participating on your site, they are more likely to do so themselves.  If you then expand your community's reach onto social networks, you provide your most active users with an additional way to leverage the reputation they have built through their contributions to your site. That makes their contributions more valuable to them, and encourages them to continue to participate. By providing a convenient way for users to show their affiliation with your site on social networking sites, or submit them to social media sites, you give your users another way to evangelize your brand. Even if you never gain any direct traffic through this (and you will), you increase your brand recognition. This makes it more likely that users who encounter your site on Google, or other search engines, will recognize you and click through. 

Lastly, by embracing social media, you will more quickly optimize your content production.  Web properties learn what's popular, and hone their programming, based on their knowledge of what people are consuming and talking about. Traditionally, you can only measure site activity by page views and on-site comments. Now, social media provides you with many more tools to assess how you are doing. By seeing who is linking to your content, who is rating that content, and how often that content is being submitted to social media sites, you can more quickly assess how you are doing. The more open you are, the speedier your programming optimization will be.

In conclusion, it can help to think of social media as the new blogs. Not that social media are the same, but it's instructive to look at the fear publishers had about blogging a few years ago, and how far they have come. As time has gone by, content companies have come to embrace the openness that characterizes blogs. Publishers have to be brave enough to take the next step and embrace social media. The internet is about connections between people and content, and content providers have to recognize that and leverage it by opening up their sites to those connections.

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