Communities Dominate Brands Archive

Oh – we had a community – Lessons from Nextel

A fascinating article on what Tomi blogged at at great length

may I add on the Sprint/Nextel debacle.

Nextel Communications Inc. (Nasdaq: NXTL – message board), once the poster child for high average revenue per user (ARPU) in the United States, is now a large part of the reason that Sprint Nextel Corp. (NYSE: S – message board)?s financials are in a mess. Earlier this month, when Sprint Nextel reported its earnings, the company recorded a non-cash goodwill impairment charge of $29.7 billion. This accounted for a massive write-down of the value of the Nextel unit Sprint bought.

The crux of the matter via Unstrung

Sprint made a fatal mistake. It did not realize that Nextel users loved their technology for what it allowed them to do with people with whom they wanted to communicate. Sprint thought the technology didn?t matter and believed it could push Nextel users onto its CDMA network with an inferior push-to-talk technology. But that wasn?t right. And in droves, Nextel users are moving to other operators. And they aren?t moving in ?ones.? Communities churn in groups. Once a member no longer has ?their club,? they move groups elsewhere. And once you lose a loyal community of users it is very difficult, if not impossible, to get them back.

Which is where we come in

In 2005, Tomi Ahonen and Alan Moore wrote a book entitled Communities Dominate Brands. The authors analyze the transition from ?armchair? networks to communities that are mobile and active. The communities, they wrote, “can suddenly swarm and appear by literally the thousands on a moment?s notice.?

The authors discuss that communities are the counterbalance to brand dominance in the 21st century. They purport that, ?by examining what word of mouth, when enhanced by the powerful digital echoes of mobile phone communities and other networked communications such as IM, email and blogging can do,? the authors have seen that ?communities have been an undefined or underestimated barrier to recent marketing success…

“By harnessing community power and working with them, a modern marketer can succeed in delivering remarkably positive marketing effects to the intended target audience,? they state.

In going back to our Sprint Nextel example, Sprint could have enhanced and embraced the Nextel brand for what it was intended to be. Rather, Sprint Nextel rid itself of engineers who understood iDEN; it didn?t support upgrades to networks or devices; and it angered a loyal base of customers ? and it’s now paying the price.

There is one more thing that we should consider in this super-connected world is that peer to peer flows of communication are up to 10 times greater than all other web traffic depending on the time of day. whereas I would say most brands are still in broadcast mode.

The social marketing intelligence company Xtract – have identified that 65 – 70% of purchase decisions are influenced by direct advocacy of one peer to another. What we call word of mouth.

In a networked world Marketing has finally become a conversation. On hundreds of thousands of blogs, community sites, forums, viral emails, bulletin boards, consumers relentlessly exchange views, complaints, opinions and comments about products and services, about brands, about companies, about your company

Why now? Because they finally can. These fickle, wired, empowered, opinionated and experienced consumers are getting used to ‘having it their way’, in ANY way imaginable, which includes wanting to have a direct influence on what companies develop and produce for them.

I cant remember who said that – but it still makes sense to me and perhaps to Sprint/Nextel now

The 1st Agency Summit – Sopwell House

Last night I kicked off this 3 day event with a small address about how advertising faces perhaps some of its greatest challenges to survive in the digital age.

I mentioned Esther Dyson and Bill Gates who observed

the advertising business model for traditional media those venues where advertisers still channel most of their spending will fall apart faster in the coming five years as the kind of interactive, targeted advertising that is defining the Web comes to the fore.

WPP’s results sound fantastic, but they don’t tell the full picture of the context of the curent state of the advertising industry.

Johnny Vulkan asked what Age are we in? Perhaps an age akin to the Enlightenment

He believed that brands needed to be more transparent, the communication between brands and consumers more engaging and authentic.

James Sandoval referenced Cory Doctorow who says that anyone can in fact make content and publish it the valuable thing becomes the conversation.

The important thing says James is to facilitate the quality of the conversation. A great agency said James will be the one defined by the great conversations it can create.

Again be authentic don’t be afraid to polarise.

Matt Hayes asked who shall inherit the digital Earth? I found his presentation fascinating. When asked Matt will TV ad spend become outstripped by other forms of advertising?

And Steve Vranakis believed one must have a role and a point of view as a brand, something I whole heartedly subscribe to. Again have a belief because if you don’t have a role as a brand you are redundant.

The summit is organised by imedia and here is my first post about the event

Who counts the audience?

Google is considering bringing its TV advertising service, now being tested in the US, to the British market. It would be its first entry into so-called offline advertising this side of the Atlantic.

The Google TV Ads service takes information from set-top boxes to calculate how many people are watching which ads. The platform is built on Google’s successful AdWords service, which allows advertisers to “purchase” keywords which, when searched for by Google users, will also bring up that advertiser’s advert.

The data from the Echostar trials is being compiled and put in a usable form by engineers in Google’s London office.

Sky has a long-term partnership with Google under which the latter provides the search feature on Sky.com and email for Sky broadband customers.

Sky sees the more than 3 million people who have a Sky+ personal video recorder set-top box (about a third of its users) as an obvious test bed for such technology.

Google TV Ads is one of several ways in which the company is getting involved in offline advertising. It is also working with US newspaper groups and local advertisers to help small and medium-sized firms place adverts in newspapers.

Writes the Guardian

Esther Dyson wrote in the WSJ about The Coming Ad Revolution

While the big news in the online world focuses on Google, Yahoo and Microsoft, a more profound revolution is taking place on the online social networks: The discussion about privacy is changing as users take control over their own online data. While they spread their Web presence, these users are not looking for privacy, but for recognition as individuals — whether by friends or vendors. This will eventually change the whole world of advertising.

The current online-advertising model will become less effective, even as it gets increasingly sophisticated. New players are emerging to devalue the spaces that the ad giants are currently fighting over. Companies you’ve never heard of called NebuAd ? Project Rialto ? Phorm , Frontporch and Adzilla are pitching tools to Internet service providers that will enable them to track users and show them relevant ads. This approach (called behavioral targeting and already in service by ad networks that track users through so-called tracking cookies) undercuts traditional online publishers, who employ content to lure users and to sell adjacent ads. Now, the ISPs can sell advertisers direct access to the same users.

And of course there is the Social Marketing Intelligence company ? Xtract Their output is ?refined social intelligence? that enables its clients to significantly enhance the marketing function by being able to identify the right individual and also the right audience for delivery of the right commercial message at the appropriate time.

This transforms marketing capability from being imprecise – Cost Per Thousands. Eg. We don?t really know our audience to – a precision based, predictive model that does know its audience and the individuals within that audience – Cost Per Relevant Audience.

Mobile Marketing Awards for Best Offering from a Service Provider – the winner is Blyk

JMac from Blyk tells it like no other

This is great for Blyk, and also interesting – rumours run like a virus around Blyk, ie highly contagious, but one is not sure where they come from.

For example Peggy Ann Salz of www.msearchgroove.com writes

BLYK: The ad-funded MNVO is not meeting expectations, according to reporting via Techcrunch & New Media Age. The low user numbers (30,000 reported against a target of 100,000 by September) indicate the company?s target audience of 16-24 year olds literally aren?t buying into the scheme. The SIM-free handsets that Blyk sells are pricey and a far cry from the free, subsidized handsets that youth have come to expect. What?s more, rumors abound that users are cleverly turning off the advertising messages which they are supposed to opt into in the first place. (BTW: I had a great briefing with Steven van Zanen, Acision?s VP Messaging Futures, late last week in which we discussed, among other topics, just why an ad-funded-only business model is flawed at best.

Yet she failed to mention Tomi’s excellent post Eyeballs vs Co-creating Consumers: Measuring Blyk or that the Yankee Group believes Blyk Can Transform the Communications Industry or that Blyk is part of the 7th Mass Media – twice as many mobiles in the world as TV sets – defacto its a media platform – de facto it will take commercial messaging “Flawed at best” – more like flawed analysis to me.

So do we want 6 feet of junk mail or a 29% response rate? Those are Blyk numbers whereas normally response rates on mobile are 3 – 6%

So I am bigging up Blyk – nothing in this world is perfect. No-one has ever done this before, its part of navigating the world of social networks and digital media.

So well done Blyk you can have a drink on me.

Ken Livingstone proclaims : London gets an Ad Free day : No ads anywhere at all!!!!

So I cheated and used something in the Daily Mail Headline styleee

Sao Paolo : The city that said no to advertising is however true.

They are a vivid, visual allegory (see below) for the “take down” of advertising as a all-conquering marketing medium in our lives – online and elsewhere. I like to think of them as a cautionary tale for marketers in a way – if you can’t make advertising be useful, people will take down the billboards…

What a great idea – its not that I am anti-commerce, I am anti-rubbish – and 90%+ of what advertising produces is visual and textual pollution, aimed at the wrong people, at the wrong times for the wrong reasons. A failing model that is now living on the fumes of its once potent past.

And once you have stormed the Bastille, you don?t really want to go back to your boring day job. In this instance, the day job is the consumer as an; uninformed, unconnected, passive, ignorant, non-participative, controlled individual that will happily consume what is put in front of them. It is in fact an evolving historic act of liberation. It is the death knell of the ?read only? culture, and the end of information feudalism.

But c’mon lets keep sending in the ads lets go for CPM’s: Cost per Thousands or indeed Cost Per Millions Vs. CPRA’s: Cost Per Relevant Audience….

So Lets have a crap ad free day? 90%+ of media would be empty – as a consequence traditional media would wonder where its business model angel would appear from – but we see this already in the morbid decline of ITV

The answers are I suggest in front of them, its just that they do not have the time or bandwidth – too much swimming, swimming, swimming – not enough thinking, thinking, thinking.

John Hagel writes

In the advertising world, multiple shifts are piling on top of each other and it is often hard to keep track of them, much less understand their implications. Let?s look at just some that are re-shaping the advertising world:

1). Shifts from advertising placed in digital content to ads placed in social networks and applications
2). Shifts from digital advertisements delivered through conventional PC?s to a growing array of mobile devices, with an increasing ability to target messages based on the physical location of the person
3). Shifts in the behavior of digital users in their responsiveness to advertisements online
4). Shifts in the way that companies connect with and build relationships with stakeholders (e.g., blurring boundaries between customers, partners and suppliers)
5). Shifts in the revenue models for businesses, as online businesses in particular become more and more dependent on advertising as a key revenue source (e.g., is there any Web 2.0 start-up that doesn?t blithely answer ?advertising? when asked about their revenue model?).

If that isn?t complicated enough, we also have broader macro-economic shifts like potential near-term recessionary pressures

Its a far cry from the glory days of Madison Avenue

In fact Hagel goes on to write

we may become so focused on the recent growth in online advertising that we dismiss any short-term slowdown in spending growth as a purely cyclical phenomenon. In the process, we may miss the longer-term, and ultimately far more profound, impact of the diminishing returns that online advertising is already beginning to experience.

This is particularly relevant in the Internet space. Virtually everyone seems to be zeroing in on advertising as the basic revenue model. Titanic battles among Internet gorillas, including mega-acquisitions, are at least in part motivated by a desire to occupy choke-points in the advertising value chain.

And

The basic paradox of the Internet can be framed very simply: The very platform that makes advertising both more relevant and more measurable is the same platform that longer-term will challenge and ultimately undermine the basic role of advertising in communicating with customers.

So we can think about it like this

When the economy is shaken by a powerful set of new opportunities with the emergence of the next technological revolution, society is still strongly wedded to the old paradigm and its institutional framework.

The world of computers, flexible production and the internet has a different logic and different requirements from those that facilitated the spread of the automobile, synthetic materials, mass production and the highway network.

Suddenly in relation to the new technologies, the old habits and regulations become obstacles, the old services and infrastructures are found wanting, the old organisations and institutions inadequate. A new context must be created; a new ‘common sense’ must emerge and propogate.

And so Esther Dyson writes

While the big news in the online world focuses on Google, Yahoo and Microsoft, a more profound revolution is taking place on the online social networks: The discussion about privacy is changing as users take control over their own online data. While they spread their Web presence, these users are not looking for privacy, but for recognition as individuals — whether by friends or vendors. This will eventually change the whole world of advertising

And thats why communities dominate brands

C’mon – we all loved Bambi and what the F@?k has that got to do with Marc Newson?

Today my 44th Birthday – hence slightly relaxed.

One thought I would like to share which arrived whilst watching a TV programme last night about the designer Marc Newson – Marc Newson – Urban Spaceman was the role of the designer in society. As my wife said “Oh those salt and pepper pots I threw out were Marc Newson’s?” I grimaced and faked a smile.

I was initially trained as a designer by Derek Birdsall RDI , and Alan Fletcher was a constant inspiration.

Design, in its man forms has always fascinated me. Graphic, Architecture, 3-Dimensional, film, on and on.

I pondered, whilst watching the amazing solutions and objects Newson has designed and created in a quest for a better world, that why is it that even in the face of a rapidly changing world we cannot conceive, design and create what we need? TODAY.

The role of the designer, in my humble opinion is to conceive the impossible, strive for the perfect solution, and achieve it. That is why design is so closely tied to the utopian idea of modernism – rather than post-modernism.

Optimism vs. Irony

The designer wants to conceive, and make a better society. That is why the Bauhaus was so powerful. Its legacy ever-lasting in direct contrast to much of the ironic post-modern design of the 1980′s.

Perhaps I wondered that is why in the past I have felt so conflicted, as when I look at communications, marketing strategy problems or challenges etc., I think like a designer – I strive for the very best solution, whereas that is in direct conflict with how organisations and media operate, are structured and built.

It had never occurred to me before.

C’mon – we all loved Bambi and what the F@?k has that got to do with Marc Newson?

Today my 44th Birthday – hence slightly relaxed.

One thought I would like to share which arrived whilst watching a TV programme last night about the designer Marc Newson – Marc Newson – Urban Spaceman was the role of the designer in society. As my wife said “Oh those salt and pepper pots I threw out were Marc Newson’s?” I grimaced and faked a smile.

I was initially trained as a designer by Derek Birdsall RDI , and Alan Fletcher was a constant inspiration.

Design, in its man forms has always fascinated me. Graphic, Architecture, 3-Dimensional, film, on and on.

I pondered, whilst watching the amazing solutions and objects Newson has designed and created in a quest for a better world, that why is it that even in the face of a rapidly changing world we cannot conceive, design and create what we need? TODAY.

The role of the designer, in my humble opinion is to conceive the impossible, strive for the perfect solution, and achieve it. That is why design is so closely tied to the utopian idea of modernism – rather than post-modernism.

Optimism vs. Irony

The designer wants to conceive, and make a better society. That is why the Bauhaus was so powerful. Its legacy ever-lasting in direct contrast to much of the ironic post-modern design of the 1980′s.

Perhaps I wondered that is why in the past I have felt so conflicted, as when I look at communications, marketing strategy problems or challenges etc., I think like a designer – I strive for the very best solution, whereas that is in direct conflict with how organisations and media operate, are structured and built.

It had never occurred to me before.

Ketchum report: Media Myths and realities and Gary Hamel

1). the way professionals communicate is out of sync with the way consumers use media;
2). communicators need to include focusing on connecting with individuals in addition to mass media channels;
3). consumers in emerging markets are setting the pace for media use; and,
4). social networking sites lag far behind other established media channels and sites in overall usage by consumers.

Says Womma on the Ketchum report- Media Myths & Realities: A Public of One

And Gary Hamel advises corporation in his latest book that they need to think about these key issues as they embrace the digital age

1. Design flaw #1: Share of voice equals share of power. Solution? Democratize ideas. Encourage meaningful, cross-boundary conversation.

If you want to dramatically increase the quality of dialogue?and decisions?in your company, you have to think boldly. What if your company encouraged people to write critical in-house blogs (and allowed them to do it anonymously if they so wished)? What if it tracked the number of responses each blog posting generated (its ?authority index?) and then required senior executives to respond to those that garnered the most feedback? What if it appointed an employee jury to award a monthly prize for the best blog posting?as a way of rewarding the most thoughtful, amusing, or courageous contributors?

2. Design flaw #2: Creative apartheid. Make innovation everyone?s job.

Make no mistake, your company is filled with video bloggers, mixers, hackers, mashers, tuners, and podcasters. Like everyone else with a computer, they have been using Photoshop, TypePad, GarageBand, Final Cut Express, ProTools, VideoStudio, Home Designer Pro, and thousands of other creativity-boosting applications to give vent to their artistic urges. The question is what is your company doing to help all of these ingenious people become fully empowered business innovators? Has your company given every employee access to a comprehensive suite of business innovation tools?

3. Design flaw #3: Under-informed decisions. Use opinion markets to gather the wisdom of the in-house crowd.

4. Design flaw #4: A monopsony for new ideas. Set up in-house angel decision-makers who can invest in the ventures of intrapreneurs.

A new breed of online peer-to-peer banks, such as Zopa and Prospect, are helping lenders and borrowers to find each other and do business without the overhead of, well, bankers. These social markets provide a model for how your company might create more funding options for employees eager to experiment with new ideas.

5. Design flaw #5: Persistent misalignment between power and competence. Fluid authority.

Via Internet Timeblog

As Hamel wrote in his last book the future of commerce will be in the leaps of the human imagination.

We are rapidly moving to a world where everyone can be connected and by 2015 five billion people will be connected via a mobile device – that is a 100 fold increase in networked traffic. Networks Economic, Cultural and Media are becoming the nervous system of society believes Manuel Castells

This suggests that our world of media and communications is evolving from the straight road of an industrial era to the more complex and networked world that mimics nature. Our new media world isn’t about content and distribution. It is about people, connections and social networks.

If we accept that as a truth then that truth changes what we make, how we make it and how in fact we market and communicate with our customers. It requires a new logic

This is the wealth of networks. Just look at Googles Open Social project of the shape of things to come.

Have a read of When push comes to pull. The new economy & culture of networking technology

Chess: A mass niche community of interest

Even if you just checkmated your new friend in India or took your Russian opponent’s rook, new chess Web sites like Chess.com are encouraging niche social networking. CNET News.com’s Kara Tsuboi sat down with the site’s founder to find out what has attracted more than 100,000 members in less than a year.

Via CNet.com Video: Social networking through online chess

Tough Love from Jeff Jarvis

The other day, when I noted that the hedge fund breathing down the necks of the NY Times Company board and management had acquired as much stock as the Sulzberger family, I said that strategic change in the company is inevitable and I asked you what you?d do with the business.

and not for the faint hearted

So I would make the most radical restructuring of a newspaper anywhere in the world and use that as a laboratory for the Times itself and for other newspapers (see how new Tribune Company boss Sam Zell is using his smaller papers as ? petri dishes ?).

I?d follow Dave Morgan?s advice and cut the newspaper company into four: production, distribution, advertising, and content. I?d sell the first two (getting rid of huge amounts of staff and shutdown obligation) and free up the advertising company to sell any local media, starting with a collaborative, distributed hyperlocal network the Globe must start to complete with the local papers that ring the city and strangle the Globe (papers the previous owners should have bought but didn?t).

This sales effort has to work in radically different ways, setting up high-volume automated systems that members of the network itself can sell into. The old structure of well-lunched sales people who didn?t really sell but just handled lists of inherited clients won?t work anymore; Google is about to eat their lunch locally.

We have written quite a bit about news media here too. The word I think is speed. Which means speed of change. I like the petri dish idea.

No-one has all the answers – but an informed approach to experimentation makes sense to me.

Via Buzz Machine