(Credit:
Billpapa.org)
Reading the business section of yesterday's New York Times, you couldn't help but notice the juxtaposition of two seemingly different companies, which, at second glance, have more in common that you might think. One is Bloomberg, the financial data juggernaut that has enough cash to aspire to become “the world’s most influential news organization.” The company has placed its bets on the acquisition of the venerable BusinessWeek, trusting that it will broaden its reach into a mainstream business audience. A few pages later, Digital Domain columnist Randall Stross reveals Apple’s pending patent application for a new advertising pop-up technology that forces users of devices and web sites to acknowledge the reception of the commercial message.
What Apple calls “enforcement routine” is basically a radical ad-based model that offers consumers to use Apple’s products and services for free or at a discount if they “watch ads they may not want to watch.” Stross writes: “Its distinctive feature is a design that doesn’t simply invite a user to pay attention to an ad--it also compels attention. The technology can freeze the device until the user clicks a button or answers a test question to demonstrate that he or she has dutifully noticed the commercial message. Because this technology would be embedded in the innermost core of the device, the ads could appear on the screen at any time, no matter what one is doing.” As Stross points out, other brands went down this path before and utterly failed, and he is stunned that Apple, if it is serious about this technology, seems to be willing to risk its reputation of consumer-friendly “cool.”
One story can be read in the context of the other: Bloomberg and Apple not only share a zealously rigid culture and a “walled garden” business model based on selling high-grade packages at a premium price; they are also both media companies. Both have strong communities driven by the Three C’s of Communities--connectivity, content, and context--and both are wondering which of these parameters they can exploit more aggressively without jeopardizing the integrity of the community that is the foundation of their business. Both Apple and Blooomberg create value by heavily relying on network effects within an ecosystem that they tightly control. Both are distributing content to raise demand for their products. And both have a strong brand to extend – and to lose.
With the acquisition of BusinessWeek, Bloomberg’s strategic trajectory is clear: Owning a proprietary technology platform (it sold 300,000 terminals to date), the company is looking for ways to reach more potential buyers (and sell premium services). Apple’s “terminals,” on the other hand, are its iTunes store and its user interfaces, and the recent patent application indicates that the company might explore the exploitation of attention generated through these properties. Bloomberg is buying attention to open up new sources of revenue, Apple might be selling it.
The two brands have one last trait in common: They are not really embracing social media, to put it mildly. Apple, as a company, does not engage, and Bloomberg even discourages its employees to engage. Apple and Bloomberg, in some ways, are the antidotes to a marketplace that – propelled by the forces of the Social Web – is becoming increasingly atomized, hyper-distributed, open, and transparent. Secrecy, compliance, top-down hierarchies, rigid communication policies, and walled gardens are characteristics that may be somewhat outdated in this era, and yet they seem to be the very cornerstones of Apple’s and Bloomberg’s success as the two firms thrive as the surprise champions of their respective categories. Both came to save ailing industries, ripe for innovation: Apple reinvented the music industry and the Smart Phone market. Bloomberg is determined to reinvent the news business. But in the long term, can Apple sustain its community of loyal users without becoming a more transparent organization? And can Bloomberg really emerge as “the world’s most influential news organization” without going social?
Forrester is about to release a new report on “Adaptive Brand Marketing: Rethinking Your Approach to Branding in the Digital Age,” in which it proposes replacing “brand managers” with “brand advocates.” Advertising Age provides a sneak peek at the ‘new 4 Ps of Marketing’ presented in the report: permission, proximity, perception, and participation. Other core elements include: “embracing an expanded role for consumer intelligence, focusing on strategic brand platforms, and empowering a federated organization."
A fervent advocate of marketing as a cross-organizational catalyst for change myself, I wholeheartedly agree with BBH Labs which believes the Forrester report points to a potentially larger opportunity for the discipline: “It’s not just the marketing organization that needs to reorient itself given the now normal digital age, but the company itself should consider how it reorients itself around its marketing organization. In most progressive companies, it is the marketing function that has most quickly and deeply engaged with the new interactive toolkit.”
This view is really becoming a groundswell, and you will be hard pressed to find anyone these days who would deny the profound change social media presents for all customer relations; the new need for openness, agility, and hyper-sociality; as well as the call for “networked” (or “federated,” as Forrester calls it) organizations. David Armano from the Dachis Group (“Social Business Design”), Francois Gossieaux (Beeline Labs), or Charlene Li and her Altimeter Group are just some of the pundits who have very succinctly articulated these themes.
Further reading:
HSM Interview with Amazon’s former Chief Scientist Andreas Weigend on the four P’s of marketing
Ogilvy and Acision white paper on advertising in 2020
Jones and Bonevac: "Should We Be In the Advertising Industry?"
Dave Evans: "Social Business: the New Black"
Gary Hayes little flash application shows how active the social web is. Hayes built the application based on data he pulled from a range of social media sources, which he compiled at the end of September 2009. You can download his Social Media Count here.
(Credit:
AdSoftTheWorld)
Jeff Jarvis, who’s admirably trying to prevent the news industry from becoming the next music industry, recently wrote an interesting blog post in which he heralded “hyper-distribution” as a valuable new business model for news organizations. Responding to some industry pundits who propose embracing shrinking audiences as an effective means of consolidation and audience loyalty, Jarvis argued:
“Since when did it become OK for media people to shrink their audiences? Since they gave up on the ad model, that’s when. But I am not ready to surrender to the idea that advertising, which has supported mass media since its creation, is over. Yes, ad rates are lower; welcome to competition. That’s all the more reason why publishers must attract larger audiences publics – make it up on volume – as well as more targeted and valuable communities.”
To grow audiences through hyper-distribution, Jarvis proposes that news outlets utilize readers as distributors and embrace the very hyper-fragmented forces of the social web that might pose the most existential threat to them: reverse-syndication, “embeddable paper” formats, APIs, specialization, and engagement on social networks.
These are viable concepts (and some of them are already used, i.e. by the New York Times, the Silicon Insider, and others) but, if you were to be cynical, you could also view them as belated means of catching up to a new media reality in which the traditional notion of an advertising- funded news market is no longer valid. While hyper-distribution may provide formats for the post-article era, it still clings to the idealistic assumption that the world needs professional news organizations. But what if it doesn’t? What if the student who famously told the New York Times a year ago, “If the news is that important, it will find me,” doesn’t really consider news media to be trusted sources of news anymore, no matter how good they are in deploying social distribution channels to push them to him? What, in fact, if news brands don’t really matter anymore to Gen Y – as sources of news, trusted or not?
Arguably, CNN has lost some cachet through its #CNNfail debacle during the Iranian election (and similar defining news moments that seem to have shifted the intertwined powers of authority and attention to Twitter, i.e. the Hudson River plane crash and so on), and already, individual experts manage to establish themselves as the nimbler news aggregators on Twitter, cultivating individual audiences (of followers). What if the new news brand is @name? Or newsrooms, dispersed online, that converge amateurs, professionals, and experts? Google’s Marissa Mayer has hinted at what this scenario might look like: "hyperpersonal news streams," in which stories break like (Google) “Waves” and become the publication of collaborative processes rather than finished articles – constant iterations instead of interpretations.
Hyper-distribution may indeed overestimate the demand for trusted commercial news providers. As long as NPR, BBC, and other public services provide first-hand news coverage for free, chances are that the blogo-and Twittersphere will self-aggregate and hyper-distribute news without the mediation of commercial hyper-distributors. For them, innovating their distribution formats to catch up with social media may not be enough – they may want to innovate the very meaning of news. Rather than trying to generate incremental value against over-supply, they could generate disruptive value by creating a new kind of demand – pursuing a “reconstructionist” approach and yielding the type of “value innovation” that is commonly labeled under the sticky metaphor Blue Ocean Strategy.
And yet, two of the venerable US news weeklies, Time and, recently, Newsweek, are pursuing a third way out of the industry misery. They are neither adapting to the new rules of competition in a ‘red ocean’ nor are they creating a ‘blue ocean’ – instead, they are carving out a blue ocean within the red ocean, so to speak, by increasing their publications’ exclusivity. Both are deliberately reducing circulation to create a more loyal and targeted readership, and shifting their positioning from mere news engine to high-end background reportage and political commentary; and both are diametrically opposed to Jarvis’ hyper-distribution paradigm. Newsweek, 76 years old, is determined to shrink its circulation from 2.7 million to little more than half of that. Time’s circulation, which 20 years ago was close to five million, is now at 3.4 million.
Interestingly, it is another renowned weekly that presents the exception from this trend, and boasts surging circulation and ad revenue numbers: The Economist. According to the Publishers Information Bureau, the magazine’s revenues increased last year by a whopping 25 percent, whereas Newsweek’s and Time’s dropped 27 percent and 14 percent, respectively. With its US circulation nearing 800,000, The Economist may ultimately even overtake Newsweek in the States. Given that this growth trajectory has been consistent in the past few years, what is it that makes The Economist thrive while others are drowning in red ink? Michael Hirschorn, in a recent article in The Atlantic, opines that “The real value of The Economist lies in its smart analysis of everything it deems worth knowing – and smart packaging, which may be the last truly unique attribute in the digital age.”
Smart packaging of course means smart branding. The Economist has successfully branded itself as the de-facto print magazine for the global elite. “The secret to The Economist’s success is not its brilliance, or its hauteur, or its typeface,” Hirschorn contends, “The writing in Time and Newsweek may be every bit as smart, as assured, as the writing in The Economist. But neither one feels like the only magazine you need to read. You may like the new Time and Newsweek. But you must – or at least, brilliant marketing has convinced you that you must – subscribe to The Economist.”
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Magazineer)
Similar value is associated with Tyler Brule’s Monocle, a “briefing on world affairs,” as the monthly describes itself, delightfully packaged and suavely combined with fashion features, frequent traveler tips, and stylish gizmos – plus, online, a truly earnest old school radio podcast. The Economist and Monocle are both examples of the power of niche positioning, as Michael Hirschorn points out: “In the digital age, razor-sharp clarity and definition are the keys to success. Knowing what and who you are, and conveying that idea to an audience, is the only way to break through to readers ADD’ed out on an infinitude of choices. General-interest is out; niche is in. The irony, as restaurateurs and club-owners and sneaker companies and Facebook and Martha Stewart know – and as The Economist demonstrates, week in and week out – is that niche is sometimes the smartest way to take over the world.”
“News doesn’t build a brand anymore,” says serial German Web entrepreneur Alexander Görlach, who is poised to fill a niche with his new online magazine The European, which will launch at the end of September. Görlach believes that “To date, online formats have been designed as extensions of print outlet. But [in Germany], there is no autonomous online news brand that focuses exclusively on commentary and opinion.” The European will give experts and authors a voice, and cherish a culture of debate without violating the principles of the web by offering text-heavy articles. “Strong opinions. Journalism for the Web. No perks,” the tagline provides cues for what to expect. For US audiences, this formula may sound familiar: When Görlach promises rich multimedia programming and a departure from conventional section structures, one can’t help think that the Huffington Post is coming to Germany. In any event, The European, targeting 25-60 year old web users who earn more than 2,500 Euro per month, is one to watch, especially with a classy title like this that indicates that the publisher seems to have a good hand with branding and a confident, somewhat ironic grasp on history: "The European" was also the name of a British weekly newspaper in the 90s, billed as “Europe’s first national newspaper,” as well as that of a privately circulated cultural and political magazine that was published in the 50s. Obviously, neither lasted long.
The main lesson to be learned from the success of The Economist and Monocle and (quite possibly) The European: Culture beats economies of scale. Hyper-distribution (and hyper-localization) might be a (controversial) option for newspapers; it is certainly not an option at all for distinct magazine titles. For them, creating artificial scarcity in a sea of abundance – the essence of branding – remains the main imperative. I’m not saying that all outlets in the high-end category – The Economist, Monocle, Vogue, Vanity Fair, the New Yorker, and others – can survive simply because of their strong brands, but they stand much better chances of maintaining loyal audiences because of it. Access to information is important, sure, and innovative distribution models are to be explored, too, but it all comes down to the power of branding, the power of your voice. Distinction saves you from extinction. What do you stand for? What do you know? What do you have to offer as a handle on the world, a firm point of view in a world that is increasingly complex and full of ambiguity?
If brand is so important, then why is BusinessWeek up for sale, a supposedly strong name? Well, maybe precisely because its brand has suffered. By pioneering a compelling, state-of-the-art web presence – one of the best among business publications – BusinessWeek may not have done itself a favor; rather, it inadvertently over-extended its brand and diluted its editorial voice. It has experimented a lot but not really carved out a new identity: Is it a business magazine, a news portal, a blog network, or a social network?
While BusinessWeek expanded into digital formats and gradually blurred the boundaries between its print and online offerings, The Economist succeeded by sticking to it guns. It was very late to the web game and in fact never really caught up to the latest trends (and fads) of online journalism. It did not embrace the principles of the “link economy” as BusinessWeek did so fervently, and if you ask anyone about The Economist, you will certainly hear that it’s a weekly print publication. That’s all. Similarly, German business monthly Brand Eins, an award-winning collection of philosophical essays and reportages on the people behind the numbers, has never really hidden its disdain for the web – and its print circulation keeps growing. Both Brand Eins and The Economist have never compromised their print brands, never open-sourced their content to anyone, and are now in the most enviable position to defy Jarvis’ calls for “hyper-distribution.”
Perhaps, the most innovative thing you can do if you’re a publisher these days is to ignore the action bias – and not innovate.
The Socialnomics-Social Media Blog has compiled a comprehensive list of stats from all kinds of sources to prove that "Social Media Is Bigger Than You Think."
"Welcome to the Social Media Revolution."
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DRCCC)
After participating in a Digital Brand Think Tank in Munich a couple of weeks ago (a lively discussion with 20 marketing executives from Audi, BMW, Google, Continental, and other top-tier brands), I must admit that I’m a bit tired of having to evangelize (or even justify) the value of brands using social media. It is astonishing to me that companies still ask for evidence when the tweet is on the wall. The event showed that there is a new Digital Divide that cuts straight through the ranks of the marketing industry--some executives get the Social Web, some don’t. No one has figured it out yet. Most would admit that they need to catch up and keep learning.
Marc Mielau, head of digital media at the BMW Group, certainly belongs to the former cohort, and at the event in Munich he shared some interesting insights into his company’s much acclaimed online strategy. BMW has long been on the leading edge of marketing innovation and has embraced social media formats early on (remember the hugely successful branded entertainment “The Hire” film series, featuring renowned directors like Wong-Kar Wai?). To me, more than the actual programs, the most remarkable thing about BMW is how the company has managed to establish a culture of marketing innovation. It is much easier to pull off a sporadic viral hit than to build and sustain a proactive and trendsetting digital marketing engine.
Management guru Peter Drucker once wrote, “The business enterprise has two--and only two--basic functions: marketing and innovation. Marketing and innovation produce results: All the rest are ‘costs.’” BMW took this axiom literally and created a “Marketing Innovation” group. Mielau described how the Bavarian carmaker concluded that an innovative brand needed truly innovative marketing and consequently put its money where its mouth is. With the Marketing Innovation department, it installed a function that was freed of any P&L pressure, given a considerable budget, and the mandate and support to experiment with various types of emerging marketing technologies and techniques--occasional failures included. Serving as a sort of marketing R&D, sounding board, incubator, and innovation catalyst, the Marketing Innovation group explores new user behavior trends on the Web and on mobile devices, while at the same time rapidly prototyping tools and campaigns to address them. While not every program has been an immediate or massive success--BMW’s engagement in Second Life, for example, was terminated, albeit in an elegant way--all activities undertaken by the group helped BMW learn by doing and enabled it to be the first mover when new formats eventually became mainstream. This has led to the high ‘social media readiness’ needed to instigate, enhance, or rebut conversations occurring in the echo chamber of BMW’s expansive and influential social graph. The key is that BMW’s short-term social media agility is based on a strong commitment to a long-term vision for its brand.
This very vision would help Vodafone these days, whose “Generation Upload” campaign in Germany has been the subject of much ridicule and scorn from the very Digital Natives it so eagerly (and maybe a little too eagerly) aimed to embrace. The company had obviously studied the social web playbook and thought it was doing all the right things: It created cross-platform social media channels for live-feedback to the campaign’s launch press conference; it put user-generated content at the center of the campaign; and it featured a prominent German blogger as the campaign’s ‘hero.’ However, it made one big mistake: It launched the campaign without backing it up with an actual product offer for the targeted “Generation Upload.” The “medium is the message” approach was simply not enough in this case. Sure, the Gen Y’ers love to converse--but they also appreciate products and rates that meet their needs. Besides that, “Generation Upload” is an unfortunate term that describes user behavior as purely mechanistic when in fact it is not so much characterized by the function of uploading but the desire to share.
And yet: “If you can’t get fired for your marketing campaign, it is not innovative,” marketing author Seth Godin once pointedly said. I’m not sure if any heads were rolling at Vodafone, hopefully not. The company deserves credit for taking a risk and jumping right into the social Web without a safety net. Ultimately, I believe, this strategy will be rewarded by the marketplace. Already, the campaign--notwithstanding all the negative comments--created a lot of buzz. And as they say, there is only one thing worse than negative PR--and that is not being talked about at all. This truism is magnified on the social web. With a long-term commitment and flawless follow-through similar to BMW’s, Vodafone might indeed have made a first step towards transforming its brand.
Marketers, beware! The New Digital Divide is very real--but you may not always know exactly which side you are on.
One of the main themes at TEDGlobal this year was a lively debate between optimistic and pessimistic voices on the social potential (or doom) of the web. This outlook was somewhat more somber than I expected at a TED conference, perhaps – as some attendees suspected – due to the cultural differences between Long Beach and Oxford. There was definitely a palpable sense of enlightened skepticism at the conference, a distinctly European tone that serves as welcome counterweight to the Californian brand of optimism that TED is often associated with (just read this amusingly British commentary in the Times of London).
One of the most vocal and polemic representatives of this kind of socio-techno-skepticism was Internet researcher Evgeny Morozov. Arguing that the web impedes democratization, he chastised social web apostles for naively believing that the medium is the action and scoffed at the phenomenon of “slacktivism” (saving the world one click at a time through Facebook Causes). Morozov coined some catchy terms such as “iPod liberalism” and “Spinternet: (Spin + Internet) to expose what he considers a rather one-sided view of online activism and in fact a delusional assumption about the social power of global, collective voices on the web. Morozov's biting sarcasm (“There was a time when governments had to torture people to get intelligence. Now they just need to go to their Facebook pages.”) was refreshing and welcome amidst the usual choir of politics 2.0 cheerleaders, however, he failed to provide much evidence for his heretical claims. He might indeed underestimate the smartness and agility of digital natives, especially when he questioned the role of Twitter during the Iranian protests. Sure, each new technology comes with Faustian ambivalence, but even though the Twitter protesters may not have lead to any substantial change (yet), I’d argue that the worldwide attention (and sympathy) for the cause of the Iranian people was significantly enhanced through the hundreds of thousands of Twitterers who used #iranelection (especially given #CNNfail). Was this ad-hoc Twitter community a political movement? Maybe not. But it politicized and generated social power that can instigate political change. Or does Morozov really think Obama won the election because of TV commercials and townhall meetings?
Anthropologist Stefana Broadbent added some more nuances to the discussion: She drew from research she conducted and presented some interesting numbers that prove what she calls the “democratization intimacy” – the observation that most social web users communicate with a nucleus of 1-5 people and cultivate strong ties rather than adding weak ones to their networks. In other words: They aren't expanding their circle of friends but strengthening their most important relationships. And they do this at work: According to a recent Pew study, more than 50% of office workers in the US use email and messaging services for private communications. Broadbent concluded that we are witnessing a “re-appropriation of the personal sphere:” “Through their communication channels, people are breaking an imposed isolation that institutions are imposing on them.”
Jonathan Zittrain had begun the session with a general state-of-the-web analysis that was a real shock-and-awe fireworks. It says something about the unstoppable momentum of the Internet if talks like his consist mainly of screenshots of goofy web sites like “Cats that Look Like Hitler,” social phenomena like couchsurfing, and other Internet memorabilia. Apparently, the Web is much wilder than theorists can make it. Indeed, the Internet does not have a business model, as Zittrain poignantly remarked, and yes, it is a verb not a noun. Consequently, he ended his talk with a simple: “Let’s march.”
Speaking of verbs and nouns (and marching), Aza Raskin from the Mozilla Foundation wants to bring language back into the user experience in order to turn a functional task management paradigm into what he calls “you-centric computing” – putting the user in charge, making computing human(e). And yet, as rain followed sun in Oxford this week, idealism was immediately juxtaposed with a rather melancholic interlude: a short film titled “Real Human Interface,” starring a human, imprisoned in a small (in and out)box, nurtured by a constant flow of mundane communication and tasks. A sad and lonely tale of OK Computer happiness and the 21st century answer to what Alain de Botton calls the quintessential 21st century question:
“What do you do?” – Interfacing.
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Werkmann)
The demarcation line here runs between pioneer and early adopter: CPG is the latter, no doubt, and while there’s nothing really innovative about the new site, it is nonetheless still radical relative to the vast majority of corporate web sites out there. Bringing CPB’s client portfolio to life by marrying the Kantian “You are what you do” with the Twitterian “You are what they say about you,” it certainly sets a new standard for the online presentation of creative industry brands. And – the proof is in the pudding – it accomplishes the ultimate goal of any conversational site: it is the talk of the town (or at least that of Madison Avenue).
However, as I was browsing through the plethora of content on the new (beta) CPB.com, an unsettling feeling came over me. It occurred to me that the trend of conversational corporate web sites going mainstream might trigger an unexpected, inadvertent effect. With brands turning into curators of conversations about them and brand value increasingly determined by the value of aggregated content, third parties might be inspired to hijack these very brands by offering curated conversations on their behalf.
Similar to Google’s profiting from original content on the backs of original publishers, brand-specific aggregators could benefit from being parasites of original brands’ social universe. In other words, what if Skittles faced unexpected competition from a third-party site that provided a much more comprehensive and easier-to-access curation of Skittles conversations than Skittles.com itself? Or if McDonalds suddenly saw itself confronted with a site aggregating blogs, videos, news, and tweets, all about but not by McDonalds? Think of this as the logical extension of the company profiles that already exist on LinkedIn and XING, which aggregate individual member data into a fairly transparent view of companies, including employee information and recent news. Indeed, third-party brand curators might realize that brands live in the ‘social commons,’ and that whoever builds the right aggregation mechanism and establishes the most popular channels to reach a mass audience will “own” the branded conversation on the web.
This scenario will hardly be a conflict that brands can legally solve, and it may therefore present a troubling blind spot in the social media ecosystem. Sure, brands can claim their corporate URLs and even their Facebook profiles (not always their Twitter feeds, as you can see exemplified by http:/twitter.com/ted – “I got it first, I win.”). Aggregators, however, operate in social web’s no man’s land, in indisputable territory.
Brand value, extremely volatile anyway, would then become completely unmanageable for the original brand owner. The very transcendence that is emblematic of powerful brands, may become their curse: brand loyalty is not so much loyalty towards a certain company; rather it is – as the name implies – loyalty towards a brand, wherever it lives and however it appears, both of which not limited to the confines of the official representation on the brand owner’s properties. It is the conundrum of successful brand builders that the bigger their brand becomes, the more likely their risk that they lose it to the social commons. Skittles and CPB have recognized that the main threat for their brands is not coming from competitors at the center of their industry but from outliers at the fringes –and they have preempted it, at least so far. My advice for all the others, the late adopters: Take action quickly and launch your own branded aggregation portals before third parties beat you to the punch!
While third-parties might try to benefit from curating branded conversations, Twitter produces the reverse trend as well: brands acting as parasites of existing third-party conversations. UK furniture retailer Habitat had to apologize for referencing the popular hashtag #iranelection in its Twitter feeds. (Over)-eager to drive eyeballs to its feed, it had committed the ultimate sin of social brands: it had stolen a collective currency that no one brand could possibly own.
Another scenario is brands initiating Twitter conversations that are essentially solipsistic. Web-site building company Moonfruit conducted a campiagn offering10 free MacBook Pros as prizes randomly awarded to Twitterers who would use the hashtag #moonfruit. The result: #moonfruit became a trending topic, attracting 400 tweets a minute, more than 10,000 times per hour, and 200,000 per day. Moonfruit’s Twitter followers rose to 23,000, and according to a Moonfruit spokesperson, visits to its site were up 600% on day two of the campaign. Some bemoan it as a "tragedy of the commons" or caution that "unless the Twitterverse wises up, we'll end up getting deluged with hashtag spam." I'm not so worried. The different responses to Habitat's and Moonfruit's campaign show that the Twitterverse can self-regulate attention-hijacking attempts and tell the cool from the not-so-cool. Let Twitter do what Twitter can do. All is fair in the conversation wars.
Several blog posts this week, combined, pinpoint what are arguably the two most influential trajectories for the impact of communication technologies on business these days: from real-time web to real-time business, and from social media to social business design.
Let’s start with the former. Referring to Salesforce.com founder and CEO Marc Benioff and his presentation at the Structure 09 conference in San Francisco last week, DigitalBeat claims that the real-time web is not only shaping the future of all computing but also that of business overall: “In business it’s real-time or it’s no time.” It goes on by quoting Benioff: “Customers (…) expect everything to happen right away— if they update their data, they expect those changes to appear immediately, not an hour or two in the future. (…) Any concept of batch or delay in development or execution, I think, will not be tolerated by customers anymore. (…) Even in development, customers are demanding now that they want to be able to build in that sandbox and deploy immediately, instantly, no delay.”
Sure, you may say, customers always want it faster and cheaper, that’s not news. But the implications Benioff talks about are more profound and affect the way organizations operate and adapt their business models to the new and ever-changing demands of immediacy. Some examples: Zara, the Spanish clothing chain, uses customer feedback to develop new clothes, in near real-time. TCHO, the San Francisco-based chocolatier, relies on continuous flavor development and customer feedback to drive constantly evolving versions of its dark chocolate, with variations emerging as often as every 36 hours. Status updates, embedded news feeds, and Twitter apps have injected some “real-time-ism” into professional online social networks such as LinkedIn and XING, converting them from address books to conversational circles, from networking forums to collaboration platforms. Zappos, the online retailer, successfully combines real-time customer service on Twitter with near-real-time delivery – having established a powerful, dynamic brand before letting its customers decide what business it was actually in. And Skittles, the candy brand, ingeniously replaced its corporate homepage with the 'Interweb,' a collage of real-time social web conversations not by but about Skittles – essentially recreating itself as the first ever real-time brand. All these models show that the news industry’s big conundrum applies to every other business, too: It used to be that there’s nothing more boring that yesterday’s newspaper. Now there’s nothing more boring than today’s. When you relaunch your business model, product, brand identity, web site – it’s already too late. Real-time beats planning to the punch.
Real-time businesses therefore must get rid of long-term strategy plans, product road maps, goals and objectives, and all the other superfluous documents that distract organizations from focusing on their true mission – the here and now. Most of these documents are inward anyway and can be easily replaced with one strong and permanent mission statement (which, if your company culture is intact, does not even need to be verbalized).
Real-time business is inherently social – there is no real-time without social. The more businesses open up their organizations and invite external voices into their inner sanctum, the more real-time they will become. Getting social will help companies gather customer intelligence in real-time and use it to move faster. In the future, real-time businesses may deliver before their customers even articulate their needs. And they will provide immediate value without immediate return, in other words they will over-deliver – free for now but with a material or immaterial return later. What is the inadvertent business model for media might be a fulcrum for companies that manage to achieve a brand premium through customer participation as a part of real-time product development: “building a plane in the air,” together with their customers.
"The process is the product,” as Trendwatching writes in its latest report, in which it also claims that the real-time the web is breeding a new quest for longevity or “Foreverism”: “the new popularity of technology that allows consumers to find, follow, interact and collaborate forever with anyone & anything.” It’s not as paradoxical as it may sound. Living real-time means living in the ongoing – forever. If everything happens in real-time, nothing is ever final and always in permanent beta. Conversely, if everything lasts forever on the Google web (your emails, networks, conversations) and your digital presence is only as good as your latest search results and Twitter updates, you better utter some digital impressions NOW.
And yet, what’s required is a shift in thinking and ultimately a new organizational model that goes beyond feeding the social media beast on the real-time web: “If the big picture is business transformation, it's going to take more than a few tweets to get there,” David Armano writes in his post on ‘social business design,’ and argues that ““Social Businesses are those which are designed from top to bottom as a reflection of the world we all live in online today. A business where everyone is connected and able to contribute but also where the right tools are available to them to do all of this with business intent from the beginning.”
For centuries, organizations have considered it their task to conquer chaos and manage people, now they have to embrace the sudden chaos instigated by unmanageable throngs of instantly and elegantly self-organized individuals. Whether that will lead to the end of organizations remains to be seen; it will definitely lead to the end of organizations as we know them.
I'm still processing the many great insights from the next09 conference in Hamburg, Germany, one of Europe's leading digital-creative-marketing forums. This year's theme was "Share Economy," and the 1,300 attendees consisted of European VCs and angel investors, Web 2.0 entrepreneurs, media, creative agencies, and executives from German corporations (from BMW and Deutsche Bank to Deutsche Telekom).
Jeff Jarvis: "The Great Restructuring"
The first day, the keynote day, was a little disappointing, maybe because expectations were so high. Jeff Jarvis warmed up the crowd with his trademark "What Would Google Do?" PowerPoint deck. While a terrific thinker and speaker, for some reason he and the audience did not really click although he presented a lot of thought-provoking content. The rather stiff response may be attributed to the fact that the attendees were either too familiar with what they heard or felt slightly overwhelmed. Or maybe they were indeed excited--but too German to show it…
Umair Haque, who followed Jarvis, faced an even tougher, albeit partly self-inflicted challenge: explaining the new paradigm of "Constructive Capitalism" in 45 minutes. That's like asking Marx to walk you through his Communist Manifesto in Twitter. It didn't help, certainly, that Haque used the much gushed-about Prezi presentation software; all the zooming in and out was dizzying and, if anything, exposed the lack of stringency in his outline.
Fortunately, Haque had an opportunity to correct this first impression and reiterate some of his thoughts on a panel with Jarvis a day later, which turned out to be a much more suitable format for his ideas on the transformation of capitalism. He also took the occasion to rebut the attacks of Andrew Keen ("The Cult of the Amateur"), who, on the opening day, had chastised Haque (and all the other thinkers he considers to be under the dark influence of Silicon Valley) for propagating rampant free market liberalism and a dangerous new radical individualism in the guise of the social, consumer-empowered share economy that the conference was celebrating. Keen poignantly remarked that Twitter was getting us back into the 18th century, rather than liberating us from institutional hierarchies. He said it would reinforce an old power structure and an all too human division of roles, between those who follow and those followed.
Andrew Keen: "Digital Vertigo"
Jeff Jarvis & Umair Haque: "When Money Talks"
Keen accused Haque et al of naivete and insisted that Google and the other Web juggernauts were not "leveling the playing field" through link love (by sharing the scarcest resource on the web: attention), as Haque had claimed, but were rather using it to expand their pursuit of world dominance. In Keen's eyes, Google's openness is nothing but a suave mechanism to foment a monopoly in the attention markets. In the same vein, a party pooper in the audience asked Jarvis: "If free sharing is the future of business, why doesn't Google share its page rank algorithm?" Jarvis' response wasn't all too convincing, "concerns over malicious abuse of the data." So much for radical transparency and trust as overriding principles in the share economy.
To Google's (and Jarvis') defense, one could counter with Haque's sharp line: "When we're all hyper-connected, the cost of evil goes up." True. Moreover, Google does provide real value as it has created a win-win-win business model (advertisers, consumers, Google) that is vastly different from the toxic chunk Haque bemoaned in the nonsustainable and ultimately value-free products that toppled capitalism as we knew it: the Hummer, fast food, derivatives, and so on. And yet, if advertising is the admission that you have a mediocre product, and that it is in fact an expression of "failure," as Jarvis put it, then it is hard to reconcile this view with the fact that advertising remains the main revenue stream in the very Google economy from which Jarvis wants us all to learn.
Despite the flaws in Jarvis' and Haque's thinking, however, I am eager to defend them. It's easy to deconstruct constructive visions of the future as ill-informed descriptions of present realities but it is a much bigger task to actually come up with a positive vision. Keen, the rebel with a good cause, does nothing but throwing a bomb, which he readily admits, but he falls short of offering an alternative to the frameworks Jarvis and Haque and others provide in response to the fundamental crisis of capitalism.
Google wouldn't care about any of this intellectual arm-wrestling all that much. It is fully consumed with doing what it does best: firing out beta-products and services, successfully failing by failing rapidly. One mistake that it made, however, may arguably have lasting implications. It didn't buy Twitter. And so the question, it seems, is no longer "What would Google do?" but "What will Twitter do?" Does Twitter mark the beginning of the end of the Google economy?
Jyri Engeström, who sold Twitter-competitor Jaiku to Google and is now a Google employee, might have a clue. On a panel with social media guru Chris Messina he offered some good insights on microblogging trends on the Web and defended the new Google Profiles ("you have to opt in"). Messina seconded him and brought up another interesting point that established the context for upcoming business models in the Twitter economy: the "glocalization" of Twitter. He described how Twitter is failing to extend the real-time conversation to the whole world, simply because of time zone differences: one part of the world is always sleeping when you're tweeting. The instant social Web conversation is therefore asynchronous, after all, and it is an interesting thought experiment to envision services that bridge the time zone gap and deliver tweets when the recipients can actually receive them (keeping them on the top of the feed), almost like an echo across time zones. What if the real value of real-time was the delivery of tweets when it really mattered?
The whole time dimension of Twitter is uncharted but valuable territory, and there are other add-ins, integrators, and localization services that will emerge in this vibrant new ecosystem. The conversation on the social Web is as rich as the human communication (if not richer), and it is just beginning to fully emerge.
What everyone agreed on at next09 is that the next big frontier on the Web (and in the Twitter economy) is how businesses talk to their customers. We are witnessing an irrevocable convergence of players. Conversational services such as Twitter and Yammer are moving into the social networking space and are acquiring the credentials of social networks and collaboration tools, while traditional social networking sites such as XING, LinkedIn, or Facebook are embedding conversational features to catch up with the irresistible pull of real-time communication.
For both groups, and, in fact, for all other companies, Umair Haque's advice is golden: Take one of the big ideals (democracy, peace, transparency, equality, and so on) and apply it to an ailing industry that is in need of transformation or at least some serious disruption: health care, finance, news, energy, government--you name it. Combine that with the principles of the Twitter economy--transparency, instantification, collaboration, and free sharing--and you have a winner.
