Lou Heldman on media, technology and society

by Mike DiFranza, MediaPost.com, August 27, 2009

Economic adversity creates the perfect petri dish for innovation, and in this particular case the innovation and adoption of highly targeted and new media channels. If you study historical patterns, you'll find that recessions have given rise to transformational media.

For almost 80 years, every major economic crisis to hit the U.S. has launched a nascent medium to national prominence. The Great Depression provided the catalyst for radio to evolve as a major communications medium in the 1930s. Television took its place as a national medium during the recession of the mid-1950s. Cable television moved from hotel rooms to homes during the energy crisis and subsequent recessions of the late 1970s and early 1980s. The Internet emerged from the military and academic realms into the mainstream during the 1988 recession. After the 2000 recession, online advertising growth exploded.

So what is it about a lousy economy that creates the perfect environment for the adoption of new media? The answer has more to do with human nature than economics, though there is some of that at work too. It is well understood that people are naturally adverse to change. Organizational and behavioral change only happens when the consequences of not changing exceed the risk associated with the change. So it is not surprising that when consumers are buying and profits are rolling in, corporate marketing organizations have no motive to risk market share or a failed campaign by diverting advertising budgets to emerging media. However, when a recession the magnitude of the one we are currently climbing out of hits, it becomes necessary for all organizations to reassess what is working and what is not.

John Wanamaker, founder of the nation's department-store industry, once lamented, "Half my advertising dollars work, I just don't know which half!" That level of ambiguity is no longer an option in today's new economic reality. Every CMO understands that effective and efficient engagement of consumers capable of buying their companies' product has become the top priority.

Consumer media consumption trends and technological changes accompanying the current recession portend a much larger shift in the media landscape this time around. Mobile advertising and digital place-based networks, which display content and advertising on screens in public places, are to this era what cable and radio were to years past. They are aimed at targeting consumers during the 44% of the day that consumers are actually awake and out of their homes (source: PQ Media, actively making purchase decisions.

Until recently, the public mainly consumed media in the home during predicable hours like evening prime time. Today, a significant percentage of the public gets its news, information and advertising while on the go. According to a recent Arbitron Out-of-Home Digital Video Display Study, digital place-based media reaches two-thirds (67%) of U.S. residents aged 18 or older each month. These digital place-based networks turn elevators, lobbies, airport terminals and taxis into efficient and effective communication channels for today's marketers. These networks enable advertisers to target very specific audience segments with engaging content that draws attention to their advertising message.

A poor economy, however, is only one factor setting the stage for the emergence of transformational media. The other critical element that has accompanied the post-recession adoption of new media channels is the availability of third-party audience measurement data. Organizations like the newspaper industry's Audit Bureau of Circulation and broadcast's Nielsen and Arbitron ratings provide objective credibility for circulation and viewership claims.

In digital place-based media, the industry organization OVAB (the Out of Home Video Advertising Bureau) has created guidelines for calculating audience sizes. Over the next several quarters, numerous digital place-based networks will release independent third-party research that will provide advertisers with the equivalent of the broadcast industry commercial ratings, thus setting the stage for widespread adoption of the medium.

Neither digital place-based media nor the recession started the mass media's market share erosion; audiences have been splintering for years into finer and more elusive pieces. In the 1940s, viewers would watch televisions through appliance store windows. When the masses could afford televisions, advertisers followed them into their homes. Today, consumers are on the go and advertisers must engage them out of their homes, on the road, in the air or at the office if they are to prosper in the new economic reality.

Steve Smith was a talented, innovative and sometimes controversial editor in Kansas, Oregon, Minnesota and Colorado, before falling on his sword last year in Spokane, WA. He's been blogging since then at http://www.stillanewspaperman.com

Here's an excerpt from today's post.

To mark the blog’s anniversary, I thought I’d revisit some of the issues I’ve written about in the past and maybe revise my views in a few areas.

1. I still believe the daily metro newspaper, AS WE HAVE KNOWN IT, is going, going, gone. Whenever I say this I find myself lumped with the true doomsayers who argue print is dead. That is not true. There is a future for print. The print newspaper, in its evolving form, will remain a significant, if not the most significant, revenue center for legacy media organizations. But the papers that survive will not be what they were. Ever. Because I remain in Spokane, I have viewed the changes to my former paper, The Spokesman-Review, as a child watches an aging parent. The changes are there to be seen, but daily exposure lessens the impact. But looking at The Seattle Times this last week was the same as viewing an aging parent after a long absence. The decline is breathtaking. What is left has value. Please don’t misunderstand me on that point. But it is, in many ways, a new paper built with pieces parts of the old. It looks just like the classic at first glance. But inside, it’s a shell of its former self.

2. I believe the exception to the above will take place in smaller communities where legacy newspapers will hold their position well into the future. Competition from all quarters, while intense, is less so in smaller markets. Good community newspapers still have the power of their brands and the goodwill of readers. And properly led, they can be more flexible, quicker to adopt new ideas, technologies and business plans. In the near term, I believe some of the most innovative work to come out of traditional news organizations will come from the smaller markets.

3. For all traditional news organizations, the future is a multi-platform strategy where news and information is purposed for a variety of delivery systems, some known others yet to be developed. A multi-platform organization can tap previously untapped revenue streams, reach a more substantial mass audience and, we hope, support larger newsrooms of high quality.

4. Of course, how we tap those revenue streams is the subject of great debate. I am enormously intrigued by the move to paid online content having gone back and forth in my own mind on the wisdom of that move. But even with all of the discussion to date, and notwithstanding some interesting experiments, I don’t believe the modest revenue gain currently foreseeable will offset the loss in online audience. Multi-platform news organizations can deliver a mass audience as never before. Until I am convinced the revenue to be gained is meaningful, I don’t see the wisdom in a recession-era strategy that deliberately cuts the audience. Further, despite technological advances such as AP’s passive tracking system, I don’t think it’s truly possible to firewall digital content. I have changed my mind before and can be persuaded. But I’m not there yet.

5. In any event, the “traditional” desktop computer news website is already a dying delivery platform. Maintaing a quality site is vital, of course. But R&D resources now must go to mobile platforms. The near future is all about mobility. At The Spokesman-Review, just 18 months ago, we were talking about the need to develop a sophisticated mobile platform for the first-generation IPhones. That boat sailed months ago. Just as we are starting to think about 3G we have to adapt to 4G. Our tech geeks need to be thinking now about delivery on 5G, 6G or whatever-the-hell-G we’ll see next week and next year. And at the same time we need to be developing customized platforms for the news readers we have now (the Kindle) and the news readers of the near future (the flexible flat-panel).

6. While the tech folks kill brain cells trying to see over the technology horizon, editors need to focus on the journalism basics. Regardless of platform, journalism begins with a set of core values that are as important in the digital world as the print. At the craft level, the function of journalism — telling stories — is as important as ever. Editors need to help their journalists learn how to tell those stories in ways that maximize the best attributes of each delivery platform. Consulting money, such as it is these days, would be best spent on teaching high-end storytelling rather than technology.

7. Taking best advantage of a multi-platform world would stress any news organization in even the best of times. In these difficult times, it is simply impossible. The go-it-alone era is over, at least for now. News organizations need to look for partners, in education, in business, in technology and even in competing media. Obsessing about the collapse of traditional newsrooms can be a full-time occupation. So some of us may have missed what has happened in higher education the last couple of years. Public universities, in particular, are suffering their worst financial crisis of the post-war era. Journalism schools are seeing enrollment increases — which may seem counter-intuitive — at the same time they are cutting contract and adjunct faculty and trimming programs. Why shouldn’t news organizations partner with journalism schools to take help teach future journalists while simultaneously enjoying the content well-taught and well-supervised students can provide?

8. Which leads me to my final point today. As tough as things are, the employment picture is quite bright for young journalists. It is tough finding media work for boomer-era veterans in the last years of their careers. I can personally attest to that. But there are jobs to be had if you are young, bright and flexible in your expectations. The paths open are not the paths followed by me and my peers. But they are there and demand is high. Nearly every day since I left The Spokesman, I hear from a friend or colleague who has a job to fill and from laid-off journalists looking for work. It isn’t always possible to make a match. But it is enormously satisfying to help make it happen from time to time.

 

 

By UTPAL M. DHOLAKIA And SILVIA VIANELLO

August 17, 2009, Wall Street Journal

Social Web sites that focus on products and brands have taken off in recent years. In these "brand communities," customers or would-be customers can learn more about the products, discuss problems and potential solutions—or simply communicate with others about their shared passion.

Trouble is, this online world is divided into haves and have-nots.

The haves are the sites where visitors like to hang out, exchanging ideas and information, chatting freely about the product or company—or about the weather, if they prefer. These Web sites have rich potential for marketing insights and for strengthening bonds between the product makers and their customers.

The have-nots, not so much. These sites tightly control what visitors can discuss—often, the product only—and offer few ways for them to interact. These communities are so drab, so uninviting, that many visitors never return after a brief first visit.

But here's the really sad part: Most of these have-not communities are run by the companies themselves. The more-successful communities are usually run by enthusiasts and customers of the brands and products.

In other words, in their efforts to set up brand communities, companies are missing out on a marketing tool with huge potential, particularly in this weak economy. At a fraction of the cost of traditional marketing programs, a well-designed brand community can be used to conduct market research with very quick turn-around; generate and test ideas for product innovations; deliver prompt and high-quality service to customers with a problem; strengthen the attachments that existing customers feel toward the brand; and increase good publicity through word-of-mouth.

For all of these reasons and more, companies need to make their online brand communities more like those created by the fans.

Here are four things companies can do to turn a tired and rigid brand community into a powerful market-research lab, early-warning system and customer-loyalty builder, all rolled into one.

1. Stop controlling everything.

Most company-run communities host discussions about products and services—and little else. Some explicitly prohibit posting personal information; others forbid comments about anything unrelated to the products.

Ford Motor Co., for instance, has a brand community, syncmyride.com, for its Sync product, a voice-activated entertainment and communication system for Ford, Lincoln and Mercury vehicles. But rules on the message board limit discussions to Sync itself: "Grandma's muffin recipe may win blue ribbons," the terms and conditions say, "but because it's not related to a SYNC topic, please don't submit it."

But allowing discussion and activities like networking and socializing leads visitors to participate in the site for emotional and social reasons. It keeps them coming back, and thus strengthens the bond between them and the company.

Part of giving up control is also giving visitors the freedom to complain and criticize the brand, or to wax lyrical about a competitor, to their heart's content.

If a company's brand community restricts discussions, unhappy customers will simply go to one of dozens (and for many brands, hundreds) of enthusiast-run communities and vent just as much. The company loses the opportunity to gain insight from customers with potentially valuable criticisms.

Allowing customers to post criticisms and complaints is a good way to spot small problems before they become big ones. The company can respond both on the forums and by taking concrete steps to correct legitimate problems such as service issues or faulty product features.

When customers are free to say whatever they want about the brand, and draw comparisons with competitors without restrictions, this freedom results in greater degrees of credibility and trust in the information found in the community. Also, when complaints are handled well, customer satisfaction and loyalty skyrocket.

Companies, like Facebook, Yahoo Inc. and eBay Inc. actively seek both positive and negative customer feedback through their own brand communities. A few years ago, eBay retracted fee increases for professional sellers on the auction site largely based on extremely angry discussions and mobilization among forum members in its community. The company also has sought feedback from its forum users on auction tools and the pricing of Paypal, its online-payment service. The company did not respond to requests for comment.

2. Welcome diversity.

Too many company-run communities seek out visitors who fit the profile of the brand or product's typical customers. This is mainly because they think of their brand communities as extensions of their long-held marketing objectives.

Nintendo of Europe, a subsidiary of Japan's Nintendo Co., restricts membership in its Italian brand community (at www.nintendo.it; click on "Club Nintendo"), and other European versions of Club Nintendo, to customers. A product code is required to join.

But limiting a community to customers only can prevent a company from discovering attractive new market segments it hasn't considered before. Nintendo could be missing out on opportunities in Italy for marketing its consoles and games to other promising consumer segments that have not yet purchased its products but are interested in doing so.

A Nintendo of Europe spokesman says the company feels it is providing a service "for an already wide community that has a common interest." Potential customers, he adds, can sign up for two newsletters without registering for Club Nintendo. The newsletters include product news and links to a variety of Nintendo content.

Another reason to welcome diversity: When a community's members are too much alike, they tend to think alike. Diversity, by contrast, encourages creativity and innovative thinking in brand communities.

When Lego Group set out to develop Mindstorms NXT, the latest version of its game for building programmable robots, it enlisted help from a group of adult enthusiasts whom it found on Lugnet.com, the largest unofficial community of Lego fans. While the marketing target for Mindstorms is mainly teenage boys, the people that Lego reached out to were a group of men in their 40s and 50s who knew each other from communicating and working together on elaborate Lego projects on Lugnet.com.

The group's members, according to a Lego spokesman, contributed "incredibly valuable insights" in hardware, software, design and usability based on their own experiences. The company credits the group with helping to make Mindstorms NXT appeal both to adults and "a new, younger generation of robotics enthusiasts."

3. Give visitors ways of interacting.

Lots of company-run communities are good at putting visitors in touch with a company representative, or at helping them find solutions to problems. But many of these sites don't let visitors talk to each other. Where is the community in that?

Participants in poor company-run communities have superficial relationships, if any, with one another. Once their product-related problem is solved, they tend to leave the forum. The result: The community has to keep recruiting new members to replace those who have left, and remains anemic—often little more than a site providing customer support.

Most fan-run communities, by contrast, encourage a variety of social interactions. Visitors frequently network, flirt and joke with each other. Off-topic conversations are common, though so are rules against personal attacks, pornography and other types of offensive postings.

Some of the features that customer-run sites use to encourage interaction: the ability to chat with other members in real time; forums for discussions unrelated to the brand or product; the ability to post personal history, pictures, and videos; ways to announce and conduct online and offline social events; and reputation tools, or ratings by fellow users, that suggest the quality and quantity of a member's participation in the community.

At Oraclecommunity.net, a site for people interested in Oracle Corp.'s database and software products, members share personal stories, pictures, videos and birthdays. They can create blogs on the site, form groups around themes and build networks of designated friends. Members can also schedule meetings and events both online and in person.

Letting visitors talk and interact makes them feel that they are part of a special group, which reinforces their support of the brand and fuels resistance to rival brands. Shared rituals and traditions also arise, such as narratives of the brand's origins and history, celebrations, and unique jargon. These types of cultural underpinnings help tighten bonds between customers and company, too.

4. If you can’t be like the fan sites, at least monitor and support them.

Many companies have no systematic programs in place to monitor and support unofficial brand communities. Some are not even aware of their existence. Others are naturally ambivalent because of the presence of outspoken, demanding and fiercely independent customers in enthusiast-run communities, and their lack of control over these groups.

But systematically tracking and engaging these communities opens up a host of potential benefits for companies. Not only will marketers gain access to some of their most devoted and influential fans here, but they will also find more ideas for innovations; sharper criticisms of existing product problems, along with ideas for fixing them; and more sincere providers of customer service.

Some companies, like Microsoft Corp., have begun to engage their enthusiast-run communities. In Brazil, which is home to one of the largest independent forums for players of the Xbox game console, www.portalxbox.com.br , the company has invited forum members to events at which promotional items and advance looks at new products are featured.

A Microsoft spokesman says such events not only help the company spread news about new products but "garner feedback and input on existing and upcoming offerings."

--Dr. Dholakia is an associate professor of marketing at Rice University in Houston. Dr. Vianello is an assistant professor of marketing at SDA Bocconi School of Management, Milan, Italy. They can be reached at reports@wsj.com.

via online.wsj.com

Lou says: This is an excellent summary and update of many of the ideas found in Groundswell: Winning in a World Transformed by Social Technologies, published last year by Harvard University Press.

From MarketingCharts.com, August 13, 2009

More than six in 10 (61%) US marketing and advertising executives believe that marketing teams within organizations have greater influence on business decisions now than they did three years ago, in part because of their leading-edge use of social media, according to a survey by the Creative Group.

The number of respondents who think marketing is more influential now compares with 23% who believe marketing professionals hold less sway, the national survey found.

When advertising and marketing executives were asked if they believe the influence a company’s marketing professionals have on business decisions has increased or decreased in the last 3 years:

• 18% say it has increased significantly.
• 43% say it has increased somewhat.
• 15% report no change in influence.
• 20% say it has decreased somewhat
• 3% say it has decreased significantly.

According to Megan Slabinski, executive director of the Creative Group, a good portion of this increased influence can be credited to marketer’s early adoption and continued use of social media. Social media programs, which are often overseen by marketing and communications professionals, may increase the influence that marketing has in an organization.

“Many marketers are interacting directly with customers and clients through Twitter, Facebook and other social media, which gives them immediate, firsthand knowledge of how the firm’s products and services are perceived and can be improved upon,” Slabinski said.

About the study: The survey was conducted by an independent research firm and is based on 250 telephone interviews - 125 with advertising executives randomly selected from the nation’s 2,000 largest advertising agencies and 125 with senior marketing executives randomly selected from the nation’s 2,000 largest companies.

Lou says: I'm not convinced that most senior executives outside of marketing have come to terms with the growing influence of social networks on consumer behavior. They may understand the need to "try" Facebook or Twitter, but not yet fully recognize the historic shift underway. Those companies moving rapidly to integrate legacy media and emerging networks will emerge the winners.

Late last night, news broke that Facebook was working on a “Lite” version and had (perhaps accidentally) invited a number of people to try it out. In its own words, Facebook Lite is a “faster, simpler version of Facebook ().”

While it’s still unclear exactly what the intended purpose of Facebook Lite might be – an even more direct competitor to Twitter () or simply a Facebook that works better on slow connections – one thing is clear: Facebook needed a diet and Lite appears to be exactly that.

Facebook Has Become Complex

Once lauded for its simplicity, Facebook has evolved into an incredibly complex site. Many users still don’t understand the difference between Pages and Profiles (a difference that’s going to become increasingly blurred), or between Pages and Groups.

There are literally hundreds if not thousands of different privacy options which Facebook is now trying to streamline. And what was once a network just for college students now includes networks for high schools, companies, and, regional networks, though those are about to get killed off.

But Not Necessarily for the Better

And despite all of this feature bloat, many users still actually miss things that have been taken away or moved to the “Highlights” area of the homepage, like birthdays and events. In fact, another rumor we recently reported on suggests that Facebook is set to soon “undo” its Twitter-like homepage.

Could the social network be setting up to try and cater to two worlds: one that wants a focus on public facing status updates, and one that wants the information you used to get in the news feed, like new friends of friends and changes in relationship status? Perhaps that’s what Facebook Lite is all about.

One Size Doesn’t Fit All?

The biggest thing Facebook has going for it right now is that everyone is on it. Although admittedly I now spend more time on Twitter, I still often check Facebook because so many of my friends use it. But that’s the exact same boat MySpace () was in a couple years ago: the social network you checked because a big part of your social network was still on there.

However, at the moment, there are no signs that Facebook is slowing down, and overall, it’s currently the Web’s biggest time sink for users. All of this tinkering certainly makes it seems like they aren’t resting on their laurels, but where exactly it’s leading to is incredibly unclear at the moment.

But Facebook Lite – whatever it is – seems like an important part of keeping at least a certain segment of users happy. With a site whose population would make it one of the biggest countries in the world, offering more than one way to experience it might not be such a bad idea.

Lou says: Strip out the annoying quiz results and personal photos and Facebook becomes Twitter.

Despite continuing concerns about measuring ROI and effectiveness, two-thirds of marketers have used social media in 2009 and half have used viral videos, making these two formats the fastest-growing tactics in marketing,  according to a survey from the Association of National Advertisers (ANA), BtoB Magazine and ‘mktg’.

The 66% who used social media this year represents a a increase over 2007 survey results, which revealed that only 20% of marketers were using social media and 25% were employing viral videos two years ago.
Among marketers using social networking, the top sites being used:

• Facebook (74%)
• YouTube (65%)
• Twitter (63%)
• LinkedIn (60%)

Budget Allocation for New Media
In order to properly fund these new media formats, the study found that 55% of respondents have shifted funds from their traditional media budget, while 48% shifted funds from other marketing communications budgets.  More than one-forth of marketers (26%) created an incremental budget.

Top Concerns About New Media
Despite the growing use of social networks and viral videos, marketers do not think they are using these media in the most effective ways and are still struggling with measurement and media-mix allocation issues. The top concerns for marketers when considering newer media platforms are the inability to prove ROI (45%) and worries about not having metrics to properly allocate the mix of traditional and digital media (43%).
On the other hand, the most effective of the newer media platforms are those which marketers have been doing for longer periods of time and those for which more measurable results are available:

• Search engine marketing (SEM) (65%)
• Own website (59%)
• Search engine optimization (SEO) (55%)
• E-mail marketing (45%)

B2B vs. B2C Marketers

The study results also reveal that B2B and B2C marketers differ in how they use new media platforms. Some of the ways:

• While mobile is used by 32 percent of overall marketers, it is three times more likely to be used by B2C versus B2B marketers (52% vs. 18%).
• LinkedIn rates first among B2B marketers while Facebook is top among B2C.
• Twitter is used more by B2B marketers (70%) than B2C marketers (46%).
• B2C marketers see much more effectiveness from SEM (76%) than B2B (48%).
• Webinars are a much more effective platform for B2B marketers (48%) versus B2C (6%).

Plans for Next Year

In the next year, blogs are the new media format at the top of the list for all marketers not using them (34%), followed by mobile (28%) and social media (23%). Viral video and podcasts are also of high interest for many B2B marketers who are not using them.

Despite the interest in blogs, mobile and social media, however, the newer media platforms that will get the most spending in 2009 are still the ones that are more established:

• Own website (26%)
• Search engine marketing (19%)
• Online ads, including banners, etc. (17%)

“As more media platforms become available, it is imperative that all marketers continue to assess their capabilities and select the platforms that are best suited to help them meet their brand’s goals and objectives,” said Bob Liodice, president and CEO of the ANA. “With this proliferation of media, marketers must work harder, survey the entire landscape available to them and create their brand’s most optimal media mix.”

About the survey: In June, 2009 the ANA, in partnership with BtoB Magazine and ‘mktg’, conducted the online survey, “Harnessing the Power of Newer Media Platforms for More Effective Marketing.” In total, 172 client-side marketers responded to the survey. These results are being compared with the same survey that was fielded in 2007. Full results were shared at the ANA/BtoB “B-to-B Marketing in the New World Conference” August 4-5 in Chicago.

Man oh man, the blogosphere is having a field day with the latest Twitter takedown by DDoS attacks. Twitter wasn’t the only service affected either (Google, Facebook, FriendFeed, Youtube, Livejournal, and Blogger). If your panties have been in a wad over the downtime of these services, here are a few tips on what you can do to avoid the panic and stay out of it:

Tip #1: Move Those Connections

This is something you should’ve done a long time ago. The sooner you do it, the easier it will be to continue to do as your connections grow. Add them into Gmail (or whatever email service you’re using), or move them to another service outside of the hyped networks. Back up those important connections and start saving email addresses, asking for them, and moving messages behind the limelight into your inbox. Just get them off of these services.

Tip #2: Find Another Community To Join

If you come to Twitter only for the conversations, find out where other conversations are taking place that are related to the things you want to talk about. In fact, during such downtimes take a leap of faith and  find out more on topics that you have no clue about but have always been fascinated with learning more about. Expand your reach.

Tip #3: Blog! Yeah, Blog!

Yeah, you still have one of those to maintain. How about adding some posts so you can get that guilt out of your system. And don’t blog about Twitter being down!

Tip #4: Get Off The Computer

This happens to be my favorite, but if these services go down, either switch to work mode or get the hell off your computer and go read that book you’ve been putting off for weeks now, or finish writing the one you’re working on. Do what you finally have a moment to do.

Tip #5 / Conclusion: Get A Life

In the end, if you’re backing up your contacts (see tip #1), then services crashing won’t be the huge apocalypse everyone is making them out to be, at least not for you. I stayed off of Twitter for the better part of yesterday, got a ton of email done, meetings out the way, and even had time to do some spiritual studying. I didn’t miss Twitter one bit (I know, it’s hard to believe, but it’s true).

You have no obligations to fulfill, only goals and dreams. So quit your whining and stop making these services your life. It seems if these attacks and downtimes don’t happen, you’d never go anywhere else or learn about something different. Get your head out of the echo chamber and into new territory. Be the leader I know I you are.

Better yet, check out: 5 Steps To Take To Prepare For A Post Twitter World. It’ll do you some good, I promise.

Lou says: I was off the grid last week, sitting in meeting rooms in Boston at the Association for Education in Journalism and Mass Communication.
I was failing in my attempts to check Twitter, but assumed it was bad reception in the hotel.
Though this was posted last week, you'll find the advice from Corvida Raven is still valid and wise.