Digg this   

Del.icio.us 

Facebook 

Yes, the blogosphere and ‘Web 2.0’ are filled with fluff, idle chatter, and, quite frankly, a lot of crap. However, if you learn to filter the junk, as you do with your mail, e-mail, or television, the rewards can be extremely meaningful – and valuable to business.

I live on Wikipedia (and often am driven their by Google). I do a lot of research and reading and find the quality on Wikipedia to be superlative. In fact, while it has its critics, I’ve yet to encounter a credibility gap. And yet, the reliability of more traditional, scholarly sources are not always as reliable.

The single most credible survey I’ve found to date confirms what I’ve been saying for some time: Web 2.0 is still a lot of hype, and not a priority for many.

A Robert Half Technology survey of 1,400 CIOs in the U.S. found:

• 14% of organizations use blogs
• 13% use social tagging software
• 11% use wikis

Meanwhile, more traditional technologies are far more popular:

• Online training is used by 47% of the organizations
• Video conferencing is used by 34%
• Collaborative workspaces (e.g. SharePoint) is used by 24%

Now here’s the killer: 72% of CIOs have no plans to use blogs in the next 5 years; 74% no plans to use wikis (a scientifically representative telephone survey of 1400 CIOs, not a self-select, voluntary web survey).

Read my full column:  Web 2.0 not a priority for CIOs

How pervasive are social media tools (such as blogs and podcasts) becoming? Here are some of the numbers (taken from my CNW seminar series Social media (Web 2.0): are you in?):

·         There are approximately 55 million English language blogs – 45,000 new blogs created every day

·         44% of web users in the U.S. read political blogs

·         20% of Canadians say they read blogs on a regular basis

·         Three of the top 8 most trafficked sites on the Internet are social media sites that didn’t exist a couple of years ago (e.g. YouTube.com)

·         13% use RSS (real simple syndication ) for reading

·         29% of U.S. adults who own MP3 players have downloaded podcasts (The Pew Internet & American Life Project)

Listen to the complete webcast of my and Brent Holliday’s presentation Social media (Web 2.0): are you in?

Also includes a link to the Social media checklist handout and the presentation slides.

Tips for adoption

James Robertson has a number of tips for adoption:

• Create a prototype or pilot.
• Use stories to articulate (and capture) needs.
• Build on existing platforms.
• Use case studies from similar organisations.
• Be passionate about the right things.

See James’s complete list of tips for adopting enterprise 2.0.

My own tips for adopting social media tools:

• Social media is reinventing the Internet, creating a space where your audience can talk about you in a whole new way. On a regular basis, monitor the social web to see what is being said about you.
• Ensure you’re aware of which community websites (e.g. YouTube) are growing in popularity and evaluate how they might change the way people talk about your organization.
• Planning is an essential requisite for success. Develop a plan that is based on a thorough assessment and contains measurable success indicators.
• Leadership must set the tone. Your executives must be leading the dialogue and controlling the message.
• Relevant, up-to-date and valued content that supports, promotes and details your products, services and competitive advantages.
• Know the link between your website, sales and customer service. What is your website worth?
• Understand the ingredients of a good blog. Benchmark and cherry-pick from the leaders (e.g. Boing Boing, IntranetBlog.com, etc.)
• Keep pace with the trends and best practices, technological advancements and latest developments. Subscribe to newsletters from leaders such as CNET, eMarketer and Prescient Digital Media.

  Digg this         Post to del.icio.us       Post to Slashdot

The news that Google will pay at least $900 million in advertising revenue to have its search boxes and keyword-driven ads on MySpace helps to answer an important question about social networking: can companies monetize the strong traffic growth of this Web 2.0 phenomenon?

The deal means that Fox Interactive is starting to see a return on its $580 million acquisition of MySpace. Google, in turn, is expected to realise net revenue of $50 million to $200 million from its deal.

So there’s money being spent, and not just by Google. Debra Aho Williamson, Senior Analyst with eMarketer, writes in her breakdown of the deal that it will have no significant impact in 2006 because the payments do not start until 2007. eMarketer estimates that MySpace will generate $180 million in US ad revenue this year, two-thirds of total revenue in the social networking category.

“As for succeeding years, News Corp. executives stated in an Aug. 8 quarterly earnings conference call that less than 10% of the $900 million guarantee is earmarked for 2007. That leaves around $810 million to be divvied up over 2008, 2009 and the first two quarters of 2010. And that’s assuming Fox Interactive Media makes its minimum targets – both companies believe the upside will be far greater.

“eMarketer estimates that US social network ad spending will rise to nearly $1.9 billion in 2010, from $280 million in 2006. With the Google/MySpace deal, ad revenues at MySpace may top $1 billion as soon as 2010.”

But while the social networking opportunity is being monetized, the relationship between two Web 2.0 poster children and the thoughts of an influential business professor suggest companies considering how they can participate must consider “three Cs” if they want to master the opportunity: core competence, Consumer Generated Media and controversy.

MySpace has demonstrated that it has discovered a formula for attracting and holding the attention of an extremely distractible, and highly desirable, demographic. But it has not yet developed an e-commerce platform to generate revenue from its audience’s interaction. Enter Google, which is constantly finding new applications for its Web 2.0 competence in managing complex data. Uniting the competencies of the two entities could create a new model for online transactions.

Aho Williamson points out that: “New products such as Google Local and Google Checkout are crying out for an audience and MySpace could be a convenient place to give them a big push: Local businesses could offer a seamless way for MySpace users to find their retail storefronts using Google Local, or they could simply handle online transactions with MySpace users by using Google Checkout.”

As for Consumer Generated Media (CGM), John Deighton, Harvard Business School Professor and an expert on interactive advertising, provides an interesting perspective. He was interviewed by the Harvard Business School’s Working Knowledge newsletter about the deal, and sees MySpace as “a really exciting marketing frontier.” For one reason, the utilization of CGM means that it can continuously remain linked with the needs and interests of its audience: “MySpace will evolve with its users. It relies on user content, so this is bound to happen. As member tastes grow up, so will their profiles.”

With concerns about online predators targeting MySpace users, one can’t mention social networking without noting the controversy it attracts. Deighton suggests that advertisers not be scared off by this concern, and even sees it as part of MySpace’s appeal: “It is popular precisely because it sits between safe-boring and truly frightening. I don’t think News Corp really minds MySpace’s racy image.”

There is no doubt that social networking can be monetized. But the companies that do so must have a competence in managing content in Web 2.0—in this case, harnessing collective intelligence and handling a complex database—know how to build a business model around CGM and be willing to handle the controversy that can be involved.

RELATED ITEMS

CGM: Appreciating what success looks like

If you spend any time on the Internet, you will have at least a passing interest in blogs. But if you’re responsible for communicating your corporate message and managing your advertising budget, you need to be using this social media actively. Recent statistics demonstrate that blogs are an extremely cost effective way to reach an influential audience at a fraction the cost of traditional media vehicles.

The phenomenal growth in the number of blogs has been well documented, and recently released statistics from comScore Media Metrix, demonstrates that this explosion in content has driven a corresponding increase in usage. They report that the traffic to blogs continues to grow, up 56% over the past year to 58.7 million visitors, and that represents 34% of the total Internet audience.

 As with many Internet-related trends, a younger demographic plays a key role in driving the numbers. Users between the ages of 12 and 17 are 21% more likely than average to visit blogs.

However, certain blog niches (like politics) have a median age of 45 and median income of $85,000, and a high level of C-level executives.

Effective blog advertising

The stat about blog niches was provided by Henry Copeland, president of blogads.com, in a discussion with B.L. Ochman on MarketingProfs.com. According to Copeland, the appeal of this new media has driven a 300% growth in blog advertising in the past year. He adds that, if used well, blog advertising can allow companies to establish significant brand awareness for as little as $25,000 to $75,000.

The article makes a strong case for the importance of utilizing blogs for corporate marketing, and provides a number of useful examples about how the media can be used to achieve spectacular—and cost effective—results. But it also cautions that advertisers must adopt a blog mindset it they want to succeed with blog advertising.

“With click-through rates in traditional online advertising dropping, inexpensive blog click-throughs are as high as 1%,” writes Ochman. “Advertisers are starting to appreciate the influencer constituency on blogs, where the distinct advertising value of these audiences ‘isn't their eyeballs, it’s their mouths,’ Copeland says.

“Successful blogs are edgy, have a sense of humor, and are recognized experts in a narrow niche. Blog audiences look at traditional ads, like ‘Click here, get 20% off,’ and say ‘screw this, I've seen it everywhere,’ Copeland says.

In his discussion, with Ochman, Copeland offers the following guidelines for effective blog ads:

Effective corporate blogging

Given the significance of blogs for on-line communications, every company should be incorporating them into their communications mix. Not only is a corporate blog an inexpensive way to deliver information, best practices in corporate blogging have become obvious and are easy to apply:

• Establish your credibility as an expert.
• Know your target audience, connect with them and engage them.
• Use an informal, conversational style.
• Keep your information real and relevant.
• Provide links.
• Respect your competition.

Microsoft provided a high profile example of the benefits of corporate blogging with Robert Scoble. His blog attracted millions of readers and his departure captured mainstream media attention. For instance, in its coverage of Scoble’s move to a video blogging start-up, Forbes.com wrote that: “To err is human, to blog, divine? For the last three years, one man has shown how a blog, plain-spoken and irreverent in its tone, could be a tool to significantly help soften the monopolistic bullying image of a corporate giant like Microsoft.”

Scoble epitomized the practises mentioned above, winning praise for himself and his company. He was clearly an expert who connected with his tech savvy audience, wasn’t afraid to respect Microsoft’s competition—praising nemesis Google, for example—or to criticize his own company. As a result, writes Forbes, “industry watchers came to appreciate both Scoble's honesty and his inside look into the traditionally insular world of software development.”

Related items

Content in the Web 2.0 World

The latest in social networking

Blogging the intranet

There is no event that can match the World Cup for capturing the globe’s attention and stimulating national passions. This year’s tournament is also providing a valuable lesson in how the Internet, when well deployed, plays an essential role in the media mix.

Personally, I’m experiencing the tournament’s ability to bring people together from all over the world through the pool in which my old soccer teammates are participating. Many years after our last provincial championship, we’re living across Canada as well as in the U.S., Australia, Spain and  Ireland. E-mail remains one of the key Internet applications, and the organization of our pool—as well as the sharing of video clips of diving Italian strikers and photos of our children—would be impossible without it.

The World Cup also energizes the city in which I live, because Toronto has a wonderfully diverse population. Flags adorn vehicles driving through the streets, and entire neighbourhoods shut down after key wins cause impromptu celebrations. Traditional media simply can’t reflect the depth of the passion on the streets, but Consumer Generated Media (CGM) is more than up to the task. One blogger brings a commitment to watch games with national supporters in their favourite hang outs and a digicam to capture the experience of how the tournament is enjoyed in this multi-cultural city.  

Of course, the tournament would be inconceivable without television. A Global Market Insite (GMI) survey, reported by e-Marketer Daily, showed that over 95% of all global fans will follow the cup on their televisions, with the vast majority (93%) choosing to watch at home. But the Web is becoming an important complement to television.

According to figures from comScore, in April there were 5.7 million unique visitors to the official 2006 FIFA World Cup site hosted by Yahoo! and 4.2 million visited in March. Not surprisingly, the bulk of these visitors are in Europe. E-Marketer reports that Europe contributed the greatest proportion of visitors in April with 51%, or almost 3 million people. The next highest region was Asia Pacific, with 17% of the total, nearly 1 million people. Traffic from Latin America represented 12% of the total, and only 10% of the visitors came from North America, highlighting the still limited popularity of soccer in the US.

The many North Americans who are not visiting the FIFA World Cup site are not only missing out on the passion and excitement of the tournament, they are not seeing a superb example of how to present information online and engage visitors.

·        The site itself has a remarkable depth of content, including multi-media elements like video highlights. It is also very interactive, with a live match cast that provides comprehensive minute-by-minute up-dates of the games and live fan chat.

·        In addition, if you don’t have access to computer (for example, if your daughter’s gymnastics class coincides with the England-Ecuador match), the site is optimized for viewing on a mobile device. It loads quickly and presents just the information you need to see on a small screen.

While following the World Cup offers many Internet-related learning opportunities, I’ve been focused on the lessons provided by the competition and who is involved, such as:

• Don’t let your heart prevail over your head when making crucial decisions, like predicting that Ivory Coast will survive the “group of death” at the expense of Argentina.
• Expect mocking e-mails when bad decisions become known to a global audience, such as predicting that Ivory Coast will survive the “group of death” at the expense of Argentina.
• Don’t drive to Little Italy for pancetta with 15 minutes left to play in an Italian match.

If anyone doubts that content is king on the Internet, they have obviously been ignoring the rapid emergence of Consumer Generated Media (CGM). Whether a company has built its business model on content creation and dissemination, or selling deodorant, it must incorporate an understanding for CGM into its web strategy.

Not that getting it right is easy.

The New York Times reported that, after proclaiming grand plans to bring elaborately produced sitcoms, talk shows and other television-style programs to the Internet, the head of Yahoo’s Media Group, Lloyd Braun, is sharply scaling back those efforts. He said the group would shift its focus to content acquired from other media companies or submitted by users.

“I didn’t fully appreciate what success in this medium is really going to look like,” Braun a former Hollywood executive told the Times. “This is not about creating one-off hits like in my old business. That is not going to create a sustainable competitive advantage over the long term.”

His answer? CGM. “I now get excited about user-generated content the way I used to get excited about thinking about what television shows would work.”

In an article in CRM Magazine, Alexandra DeFelice provides a number of interesting case studies of major brands who are not only excited about CGM, they’re making it work.

For example, Kao, the manufacturer of Ban deodorant, created a contest asking, “What would you ban?” It generated roughly 50,000 website visitors, about 10 percent of whom entered ads they had created online. Nine semifinalists were selected and given promotional materials to try to get people to vote for their ads. Within two weeks, those nine individuals generated 150 percent more traffic than all the company’s advertising had in the previous few months.

“As consumers are inundated by ads, marketers will need to stand out by finding better ways to reach them. Simply put, companies must develop methods that are interesting and compelling to consumers,” writes DeFelice.

She also offers seven tips for fostering creativity:

1. Stay grounded, but consider alternatives. Alternate channels are a complement to other forms of marketing and rarely can be used as a standalone effort.

7. Think strategically. Don’t get caught up in cool ideas. Choose alternate channels that make sense based on your strategy.

RELATED ITEMS

Six Strategic Resolutions for 2006

Complete Prescient’s CMS Study and Win

AOL’s success not failure

New research reports that consumers are 50 percent more likely to be influenced by word-of-mouth recommendations from peers than by radio/TV ads. Growing confidence in consumer-generated-media (CGM) creates a strong impetus for marketers to influence this new media, and a recent survey from Bain & Company provides an excellent suggestion about how to start: keep your customers happy.

The “2005 Consumer-Generated Media (CGM) and Engagement Study” a new study of consumer behavior by Intelliseek Inc., contains interesting findings on the interaction between old and new media and the behaviour of Internet-savvy consumers:

·        “Active ad skippers” are 25 percent more likely to create and respond to Internet message boards, forums and blogs.

·        Word-of-mouth behavior among “familiars” trumps all forms of advertising and is more trusted than news or “expert commentary.”

·        Consumers are on track to post close to 2 billion comments on the Internet by the end of 2005.

While it’s critical for marketers to ramp up their knowledge of the blogosophere and develop strategies for managing their brand in this space, they can’t take ignore the source of the positive or negative comments that will be posted: the customer experience.

The Bain & Company survey indicates companies need to be more honest with themselves about their performance in this area. In a survey of 362 firms, the consulting company found that 80 percent believed they delivered a superior experience to their customers. But when they asked customers about their own perceptions, they found that they rated only 8 percent of companies as truly delivering a superior experience.

Bain went on to determine what criteria put the top performers into the elite eight percent, finding that they take a broad view of the customer experience and pursue three imperatives simultaneously:

1. They design the right offers and experiences for the right customers.
2. They deliver these propositions by focusing the entire company on them with an emphasis on cross-functional collaboration.
3. They develop their capabilities to please customers again and again—by such means as revamping the planning process, training people in how to create new customer propositions, and establishing direct accountability for the customer experience.

A new report from Nielsen/NetRatings adds to the quantifiable impact of blogging, in this case the ancilliary benefits generated by blogs. The organization reports that traffic to image hosting Web sites has skyrocketed due to the massive rise in blogging activity this year.

• As a category, image hosting sites have grown 406 percent to more than 14.7 million unique users since January 2005, accounting for nearly 10 percent of active U.S. Internet users.
• In July 2005, 20 percent of active Web users, or 29.3 million people, accessed blogging or blog-related Web sites, growing 31 percent since the beginning of the year.

While no business people (especially ones who derive revenue from digital images) would ignore these stats, they might question the applicability to business strategy when they learn that female teens between the ages of 12 to 17 years indexed the highest out of the age groups broken down by gender.

There’s an easy explanation for this demographic trend—social circles have moved on-line, web journals provide a great means for getting to know someone and teenage girls like to meet people—but companies that look beyond those demographic fine points will see the inherent power of the Internet as a social media and refine their Internet strategy appropriately.

The same social impulse that draws teenage girls to blogs sparks the mass collaboration that is capturing business interest and rewarding companies that learn to harness its power.

In a comprehensive article on the topic, Business Week, provides a number of statistics on how on-line collaboration impacts various industries, including:

• Telecom: More than 41 million people use Skype software to share processing power and bandwidth, allowing them to call each other for free over the Internet. Partly as a result, combined 2005 revenues of AT&T and MCI are expected to fall by $7.4 billion, or 15%.
• Media: Reversing the traditional broadcast model, more than 53 million Americans have contributed material to the Net, such as product reviews and blog postings. At least 10 million blogs, some drawing more visitors than mainstream news sites, are now read by 32 million Americans.
• Advertising: Search engine Google instantly polls millions of people and businesses whose Web sites link to each other, producing an entirely new ad venue that grossed $3.2 billion last year, up 118%. That compares with an 8% increase in TV ad spending and 5% in newspapers and magazines.

Mass collaboration challenges numerous business principles, notably the command-and-control structure instituted by most corporations. Not surprisingly, then, the early winners have been upstarts rather than established businesses.

Nonetheless, companies like Hewlett-Packard and Proctor & Gamble have tapped into the power of mass collaboration, learned to manage the social impulses of their customers and employees and generated solid business results through their efforts.

It’s a trend that all organizations will need to watch. Just like  teenage girls are discovering that image-intensive web journals are a great way to meet people, organizations that harness the power of mass collaboration are becoming very popular in their own social scene.