Google’s Think Video event

Yesterday, I attended the Google/Youtube hosted event “Think Video”. It was an event primarily aimed at marketers (research seminars tend not to have goodie bags), but I found it an interesting – if not groundbreaking – session.

Below are some of the notes I scribbled down during the talks. I’ve linked or embedded the presentations, where they are available.

Quantitative overview of the market

After an introduction from Dara Nasr, Dan Cryan of Screen Digest gave the first talk with a speedy overview of the current state of the online video market, and where it is heading.

Some statistics and projections I noted include (note that I was having to write quickly to keep up with Dan, and so there may be some errors in the below)

• 90% of online views will be user-generated content in 2014 – about 2.5bn viewing hours
• In 2014, ad-supported revenues will be around £180m, transactional VOD £40m and download to own £10m.
• At this time, online TV will still only be 2% of the total TV market
• Currently, 67% of online video viewing is short form, since “work time is prime time”
• At the moment, 80% of the UK online video revenues are with the broadcasters. In the US, it is only 57% but Hulu represents the majority of the difference (Hulu looks like it is losing a lot of money at the moment, since 70% of its revenues goes to the broadcasters.

I found the most interesting part of the talk to be about distribution strategies, and whether to affiliate and syndicate or not. It would appear to be a good move, given the increases in reach that such a tactic produces. Quoting Comscore figures, Dan showed that in the US

• ABC has 4.7m monthly site users but 9.9m monthly video viewers
• Youtube has 98.2m visitors but 120m viewers
• Hulu has 8.4m visitors but 38.1m viewers

Within this distributed model, there are two main options. Hulu operates the “player as the platform” strategy, where it allows its player to be embedded on sites such as MSN and Yahoo!, enabling it to retain control over advertising sales revenue. The alternative – which Channel 4 and Five appear to be pursuing, is “content as the platform”, where they licence their content to other video sites to include in their players.

The power of social

Neil Perkin of Only Dead Fish followed this talk with his keynote on the importance of social and data in online video. The presentation can be seen below (RSS viewers may need to click through)

Some of the key points I took from the presentation were:

• Businesses should get their hands dirty – Neil has learned about the space by participating in it
• Cisco say that in 2013 90% of data will be video, while 70% of data will be created by individuals. For businesses to succeed, they need to derive value from data – of which metadata is the fastest growing category. I’m a big believer in this.
• However, businesses also need to understand social. Media brands are now less defined by the platform and more by their community (I think this is true, and we are increasingly seeing companies seeking to “own” a particular audience – whether the Guardian, Channel 4 or NME)
• Attention is no longer the only key metric – we also need to consider participation, content and interaction
• Distribution should be wide, with content scalable and portable. Slippy, not sticky
• Companies need to loosen their grip on the creation process and let the community interact in pre-production, actual production or post-production.
• Ultimately, convergence is about content flowing across channels.

Youtube’s development

The final presentation came from Bruce Daisley of Youtube, who coped admirably with technical issues that prevented his presentation being visible for the first five minutes of his talk. His presentation can be viewed via Google Documents here.

He mentioned how Youtube are looking to reinvent the experience for premium long-form content on their site. They want Youtube to be seen as a revenue opportunity by content owners, not a threat. He believes Youtube’s strengths come from 4 R’s.

• Reach – it’s not necessarily as big as TV, but it can help build audiences. He cited Britain’s Got Talent audience figures rising from 8m in episode 1 to 12m in episode 2, fuelled by SuBo fever (of course, this can’t be blamed solely on Youtube)
• Rights – he used Monty Python as an example of how content owners were licencing their material, and creating a viable business model
• Research – Youtube can be seen as a virtual research community (Bruce called it an online focus group), with different creatives compared in terms of views or ratings
• Revenue – whether through pre-rolls, in-video adverts or the front-page masthead video ad. He showed that searches for Avatar on Youtube actually peaked during the masthead campaign, and not when the film opened a few months later.These can also be integrated with Facebook, so that you can “like” an ad within Youtube.

He then quoted a range of research and statistics to highlight some of Youtube’s strengths

• Social – Two thirds of users say they’ve sent a clip onto someone else. 10% of video views are from embedded clips on social media websites
• Reach – a medium weight TV campaign of 160 GRPs aiming for 1+ cover among adults would reach 54% of the audience on TV. On Youtube it would reach 9% – 2% being incremental reach. This figure is higher among younger and more affluent audiences.
• Mobile – Although mobile and TV only represent 2% of total views, iPhone users will look at an average of 3-4 clips per day, and Android users will look at 10.
• Engagement – Ipsos have created an engagement metric across different media channels, accumulated from “around 50 metrics” (I’d be interested in hearing more about this). Of the channels shown, Youtube had the highest proportion within the high engagement band, and the least in the low (followed by BBC brands, then Channel 4, Five and ITV).

Youtube are now working with more content owners and broadcasters, with material ranging from films to the Indian Premier League. Bruce mentioned that the first company they negotiated with – the BBC – were very cautious and were arguing for removing comments, ratings and ability to embed, but gradually companies are warming to them.

He closed by talking about Youtube Bubble – a Youtube channel accumulating the best of advertising on the site. I would imagine the Evian babies dancing to Rapper’s Delight (with over 58m video views worldwide) heavily features.

Panel discussion

A Q&A session was chaired by Matt Brittin – the Managing Director of Google in the UK – who was very engaging (and puntastic). The speakers were joined by someone from Channel 4’s sales side (Ed someone, I believe) and Ben Chesters from Mediavest.

Some disjointed points I noted down during the session were:

• Channel 4 were wary about giving specific figures in viewing across different channels, but did say that the total reach was more important than what individual channels made, since they controlled the advertising across each.
• Ben Chesters mentioned that advertisers default to BARB for cover and frequency metrics, and that an incremental reach figure would be the killer feature needed for advertisers to trust online video
• The first TV ads were like display advertising but with a voiceover. Currently, online video adverts are mainly repurposed 30 second spots. Gradually, this should change.
• Neil Perkin talked about how transmedia storytelling across platforms should be emphasised. Content shouldn’t be copied onto different platforms, but should be unique to take advantage of different strengths.
• Neil Perkin also mentioned that a big challenge for online is that it lasts forever – it is not campaign based and you can’t control who sees your spot when and how.
• Channel 4 are trialing teaser 2-3 minute clips of forthcoming comedies to gauge reaction.
• Answering a question from the audience, Dan Cryan mentioned online video was seeing a renaissance of the soap opera – particularly in the United Stated where sponsored and branded content is increasingly prevalent
• And answering a question from Nick Burcher regarding the culling of Downfall mash-ups on Youtube by the studio despite the approval of both the director and the audience, Dan Cryan said “you would have to be a brave man to bet against the anarchy of distribution”. It may not always be timely or the best quality, but people will always find a way to watch what they want.
• A final question concerned the film market online. Dan Cryan mentioned the primary barrier was the windowing of films – films make most of their money on DVD within the first 12 months. During this time, they won’t be available to view on ad-funded sites, but will gradually transfer to parallel availability on pay per view or download to own sites – though this would be more likely to be situated on a TV than a computer.

From a personal standpoint, more focus on the metrics of success would have been welcomed, but as addressed in the Q&A, this is a very thorny issue.  I would also have liked to have seen more from Youtube on how they are breaking down the distinction between TV and online and innovating in advertising formats – this Wario advert is one of my favourites – but nonetheless it was an interesting afternoon, with some useful tidbits from each of the speakers.

sk

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My name is my name

So says Marlo Stanfield. And he has a point.

Reputation means a lot. But reputation is about perception, and there are multiple perspectives in which it can be viewed.

Broadly, reputation can be thought of in four inter-related spheres

• Yourself – your personal brand
• Your organisation (this itself can have several facets, if your organisation is part of a larger conglomerate or affiliation)
• Your industry
• The wider public

Marlo is concerned with his personal reputation among people in the industry – “the game”. He isn’t so worried about the other facets.

With the prominence of polling in the upcoming general election, the research industry is contemplating its reputation among the wider public.

I don’t think it really matters.

This election is more partisan and contentious than any I recall (most likely driven by the likelihood of change, rising prominence of online media giving a voice to more people, and the novelty of the leadership debates). Pot-shots, such as those against YouGov, are inevitable. This article from Research Live shows how YouGov aren’t doing themselves any favours in their need for speed (and this is leaving aside their associations with The Sun/Murdoch/Conservative Party).

I don’t think it matters because the research industry is rarely public facing – the only publicity it really receives is through political polls and PR research.

I’ve written about the problems with PR research in the past, but there is evidently a market for it and so the method prospers. It might damage the reputation of the industry to the wider public but outside of recruitment  (of staff and respondents/participants) it isn’t really relevant.

As Marlo noted, it is industry reputation – for yourself and your organisation – that really matters.

It is similar to the advertising industry. Successful companies have a lot of brand equity through the quality and associations of their work – Wieden & Kennedy and Nike, Fallon and Cadbury, HHCL and Tango, and Crispin Porter & Bogusky and Burger King, to give but four examples.

But what proportion of the general public has heard of these companies, let alone recognises and appreciates their work? Not many. Is it a damning indictment of the strength of the marketing industry that it fails in promoting the most basic thing – itself? Not really. Companies attract talent and business through their successes and image – public perception doesn’t factor.

Ray Poynter is rightly concerned with the the ethics of market research but for me, the importance of this is in maintaining business links. There is no adequate means of policing the research industry – anyone can knock on a door and say they are doing a survey – so it is not a battle worth fighting.

Companies stand and fall by the quality of their work – or at least the perception of it within the industry. Sub-standard work that is openly criticised will only harm long-term prosperity.

Self-regulation and recognition, whether through a recognised body like the Market Research Society, or at a more ad hoc level, can achieve this through highlighting good and bad practice.The research industry needs to be more vocal in showcasing good work, and castigating poor work.

This in turn will filter to the individual level, where the talented and ambitious will compete to work for the top companies. This in turn strengthens the work, and thus the industry. It could even permeate to the public.

There is no quick fix to improve the standing of an industry, and in some cases it isn’t necessarily desirable. Rather than look to the big picture, we should focus on the more immediate challenges.

If we all concentrate on undertaking the best possible work, then a strong reputation – for ourselves, our organisation and our industry – will follow.

sk

NB: The clip of the scene with the quote is below (it is from Series 5, so beware of potential spoilers)

Customer retention shouldn’t be inferior to business development

New business development is obviously an important part of business.

But client retention is integral.

It is far more important than new business development in terms of sustainable growth, yet doesn’t always have the prominence necessary to achieve this.

In some respects, it is a false comparison since client retention is a form of business development. Sales and revenues can increase from existing customers – increasing volumes, increasing margins or benefiting from advocacy and referrals.

And this is what the core focus of a business should be – servicing and delighting its core customers.

A successful business doesn’t need the most customers in its category, but it helps to have the happiest and most loyal segment (or “tribe”, to insinuate some of Seth Godin‘s beliefs).

This shouldn’t be sacrificed for the sake of bringing in more customers.

It leads to overpromising and underdelivering, causing problems for both current and new customers. I’ve witnessed a couple of examples of each

1. Making unsustainable promises: New customers may receive incentives to convert – a discount price or an extra level of service. Sometimes this is made clear, but often it isn’t. At work we were initially happy with a new supplier, but gradually the price rose and the quality of service deteriorated. It is understandable that quality of delivery varies by employee, but companies should ensure the bare minimum is of acceptable quality. This wasn’t.

2. Misselling a service: I find this issue more prevalent when the person/department for business development is different to that for ongoing account management. The sales peoples’ bonuses are short-term and based on bringing customers i; this incentivises them to oversell and make unsustainable promises. The project team then have an impossible task to live up to. And so it proved.

The above two examples highlight the problem of churn. There will always be some level of churn but a high level of departing (unsatisfied) customers completely counteracts the work that has gone into developing new business. Eventually the opportunities dry up, and the company retreats to its core.

If that core remains

3. Alienating the core audience: Moving into new markets or new segments risks alienating the core audience, if the messages used to entice the potentials aren’t consistent with what attracts the core audience. A couple of years ago ITV1 spent a lot of money on contemporary drama to try and bring in a more upmarket audience. Unfortunately, the programmes weren’t received well by the core audience and viewing figures were dismal.

4. Offering sub-standard products or services: Reaching out to new audiences may divert resources away from maintaining the quality of a core product or its associated service. I’ve seen this with MLB.tv. I’m a casual fan living in a timezone where most games don’t start until after midnight. I’ve found the archive service perfectly fine. But the core product – live games in HD and with DTR functionality have developed several faults. Not only are the core fans being deprived of their need to support their team, but the online customer support has been completely inept. Two examples of this are (you may need to click on them to enlarge and make them readable):

When this happens, the company ends up as a doughnut – it has some mass at the edges, but no centre.

Business development might make some short-term gains, but losing sight of customer retention will only hurt in the long run. An organisation needs to ensure it delivers on the factors that causes its core to be loyal advocates – whether uniqueness, timeliness, durability or aspiration. It’s brand promise, essentially.

Customer lifetime value might be factored into business development strategies. But without adequate support across the organisation, it remains unfulfilled as core customers depart and new customers reject the offer.

Companies need to avoid turning into doughnuts. Well, the ring kind anyway. They would want to be the other type of doughnut – with all the good stuff in the centre.

The mantra that Rob Campbell gives in this short interview sums it up better than my terrible analogy*

“We treat all clients like they’re new clients – it’s the lifeblood of our survival.”

sk

Image credit: http://www.flickr.com/photos/hackett/159428076/

* I’d even rejected another analogy; one inspired by X-men. Wolverine and his adamantium skeleton is good. Penance and his empty body is bad

Recommending Reading – 4th April 2010

If you have a spare 15 minutes this weekend, you could do worse than read the following:

Jonah Lehrer looks at Costco through his Neuroscience prism. I’m not quite sure it adequately explains why people choose to pay a subscription to enter the store, but it is still interesting reading.

Two sides of a similar coin: Tom Ewing’s latest Poptimist post considers the options of a Foursquare for music, while Paul Lamere considers a Last.fm for books. The underlying point – the more metadata collected and used, the better!

Clay Shirky’s blog postings are sparse, but always incredibly valuable. This preview of his next book – on cognitive surplus – is no exception. It prompted Kevin Kelly to announce the Shirky Principle – complex solutions  can become so dedicated to the problem they are the solution to, that often they inadvertently perpetuate the problem

Diane Hessan has some provocative thoughts on the next generation of market research. As always, the solution depends on the problem, but I liked the points made.

This link in particular is a hard sell, but I wholeheartedly recommend you read why Bill Simmons has fallen back in love with Sabermetrics. Advanced baseball stats may not be to everyone’s taste, but it shows the power and beauty of numbers. For a more gentle introduction, you might want to read my review of Michael Lewis’ Moneyball, in which Simmons heavily features.

sk

The persistence of channels

Channels and stations have existed for almost as long as the platforms that host them. Andrew Jerina, writing in this post, believes that channels are a waste of money, given the nature of our on-demand world. The post was in relation to BBC 6Music, and he makes some valid points, but I wholeheartedly disagree that channels are redundant.

Channels still play a valuable role in the navigation, identification and selection of content and I strongly believe that channels will persist.

This response is largely centred on television and radio stations, but several of the points are equally valid to other media – particularly print.

The rise of on demand and the “emancipation” of content won’t destroy the need for channels. Content is integral, but it is not the only constituent of a channel. A channel’s identity is the sum of its distribution, content, branding and audience. And channels maintain several advantages that cannot be as easily or effectively replicated through other means.

These include:

Incumbency – As I stated in my prior review of the books 2.0 event, I dispute the notion that friction is friction. Behaviour is highly entrenched and difficult to change. We are path dependent people and will rarely end up with what might be considered an optimal solution. Instead, we move to a better situation to our current one, if we move at all. We are comfortable with navigating by channel surfing, and it is unlikely to ever disappear

Belonging – As the outcry of 6Music shows, people relate to channels. Certain channels are seen as “for me” – whether E4, Scuzz or Radio 3. This isn’t necessarily a unique strength to channels, but a strong channel identity can facilitate a more coherent and longer-lasting relationship than a programme or platform brand can.

Signifier – Near-unlimited choice is an overwhelming prospect. The paradox of choice means we can be paralysed with uncertainty over making the wrong decision. This is also why Sky and Virgin offer channels in bundles – it simplifies the choice. Channels (either individual or groups) offer a simple filter to act as a starting point. Rather than search individual programmes or personalities, we search through channels. Even then, people aren’t going to surf through 600 odd channels. We have repertoires. A strong, coherent channel brand – whether Discovery, 1Xtra or Disney, projects a certain image that can be more impactful and relevant than a genre label such as “drama” or a single programme strand.

Destination – Following on from that, a channel in itself is a destination. Rather than queuing up a selection and making individual choices, we can just turn on a channel and remain there. Families may spend an entire evening watching ITV1 and a workplace may keep Magic FM on for the entire day.

Halo – A channel brand may be strengthened by its content, but equally the programmes can benefit from the channel identity. X Factor may be huge, but would it be as huge if it were on another channel? Even if it were on BBC One, I suspect not. A content brand is never as big as a channel brand. Hence Channel Five being unaffected by the loss of House to Sky One, or Channel 4 not seeing a significant decline in audience for other programmes during the Shilpa Shetty/Jade Goody incident. Richard & Judy succeeded in changing terrestrial channels, but couldn’t take an audience with them to digital.

“Goldilocks” size – the Goldilocks principle is where something is just right – neither too hot, nor too cold. A channel is about the right size to promote its programmes – and trailer are one of the primary ways we still find out about new shows and whether we think we will like them. Most production companies won’t have the scale to cross-promote its offerings, while the competition for space at the platform level would mean that space would be dominated by those that have the resources to pay for it

Open access – channels are additive (unless the spectrum capacity has been reached). Having access to Radio 2 won’t preclude access to Radio 4. However, this isn’t the case with platforms. With a couple of exceptions – notably Hong Kong, with its fragmented media landscape – we tend to have one platform and stick with it (e.g. Sky or Virgin). Either-Or. If platforms control content, they would be more likely to prevent it being on the other platform in order to increase their own sales (Sky Sports, for example). With channels competing across and within platforms, this isn’t the case.

This has been quite a one-sided post, and of course there are drawbacks to channels. But I strongly believe they will continue.

In future, could we create our own channels? Yes we could – our systems could be highly personalised with social or semantic programme recommendations. But, as with online consumption, this can create balkanisation (which I’ve previously written about here. It also requires an acceptance of rationality and logical choices, and an element of user input to define the parameters. Things not necessarily congruous with the lean-back medium of television or the audio wallpaper of radio.

My point of view may not resonate with the online masses, who largely seem to be of the opinion that social-powered on-demand is the way of the future. I don’t think I’m a Luddite, a conservative, or a traditionalist. But for something to become not just mainstream behaviour but standard behaviour it needs to offer a clear improvement on something. And, personally, I think channels are just fine.

sk

Image credit: http://www.flickr.com/photos/the-g-uk/3755118573/

From hardbacks to Hot Bytes

Yesterday, thanks to a prompt from Neil Perkin, I attended Olswang and Rich Futures’ event on the future of books and publishing, entitled From Hardbacks to Hot Bytes.

NB: Original blog post has been updated with slides and AV from the event

Not having much (well, any) experience in books or publishing but having done some work on digital distribution with regards to TV and video, I attended more as an interested observer rather than an active stakeholder.

And I enjoyed it, for what it was. Given the above, Clive Rich’s talk on contractual and legal concerns with the Future of Publishing held little interest for me. But Dominic Pride of The Sound Horizon and, particularly, Gerd Leonhard had some stimulating observations and provocations.

Dominic’s talk was on the near future and so a lot of his material contained things I was already familiar with, though there were some useful nuggets. Gerd took a longer term view and, despite disagreeing with several of his contentions, his points were nevertheless well made and thought-provoking.

Gerd Leonhard’s talk

Gerd’s website contains a lot of his published work and presentations, and this was no exception. The Slideshare embed is:

He started his talk by saying we should beware of toxic assumptions (or mesofacts, to refer to an article I mentioned yesterday). For instance, paid downloads are now declining in number – suggesting they aren’t the future and that people are starting to reach the saturation point where they have “enough” music.

Gerd mentioned that his broad themes are in mobile, social, transparency, real-time and connectivity. But there were a couple of specific themes underlying this presentation

1. The decline of physical

He contended that in future digital copies will be first and physical copies second. He cited Texas Instruments as currently making a third of their income from iPhone apps, and games moving from hardware to software.

In my opinion, this is certainly a trend – though the games manufacturers’ current shift in focus to peripheries (such as Natal or Move) doesn’t rule out a return to hardware in future.

However, I do contend with the notion that “friction is fiction”. It is not certain that, in the long term, all obvious trends are fulfilled. For instance, Gerd suggested that the TV industry is lucky that people still watch TV – it is only because the content is currently good and that people don’t know about internet TV. I would argue – and have done – that the nature of TV means that it will always continue to exist and be paramount in people’s viewing experience. This is because the notion of TV is adaptable – whether satellite, interactive, via a hard disc, 3D or indeed internet-enabled.

People generally like to stick with what they know, and the desire for familiarity can persist. Why else do digital cameras have the superfluous shutter sound, other than to reassure those that the photo was indeed taken?

2. The value is in more than the product

Gerd cited Starbucks as an example of a brand that successful moved from commodity to product to service to experience. Experience and relevance are the keys to future value, not the content itself.

The key to monetizing is to be immersive. The price per unit of content may decrease but content is now a service and can be passed on to a much larger audience. In order to do this, organisations need to find the new generatives (or assets) that people will pay for.

The value of a book is now distributed across

• Content
• Context
• Curation
• Social
• Interactive
• Packaging/format

This means that the role of a publisher – which will still exist due to strengths in scale, access and logistical expertise – becomes one of

• Curation
• Collation
• Culling
• Contextualising
• Connecting

Moving away from product to service feeds into the third theme

3. The importance of access

“Making it available is the key to growing your business”. Distribution was missing from the value chain above because it can be bypassed. Any person in the industry – such as Edgar J. Bronfman – who thinks that consumers can be “educated” in the best way to access material will be mistaken

A crucial requirement in this is to trust the users – they cannot be punished into purchasing something. Ubiquity must be assumed, and business models developed from there.

Ubiquity is within the cloud. Gerd made the interesting point that digital rights management is not needed in the cloud, since it effectively has in-built copy protection – we won’t share our mobile, password or profile information.

Again, I’m a little sceptical about this point as it comes back to friction. I agree that incumbents shouldn’t take their position for granted. But the key to distribution isn’t necessarily to be the best. It is to be the easiest. And that benefits the incumbent, since it has already standardised the behaviour – something that is incredibly hard to do.

This is why I think physical books will remain. I can see how all-you-can-eat subscription models with open access can work for TV/video and music/audio – diverse content is consumed in large volumes on a frequent basis. But books tend to be consumed one or two at a time, over a longer period. Indeed, many people will only read the latest bestseller on holiday over the entire year – something they can either borrow from a friend or buy from Tesco for £3.74. Why would they want to invest in digital hardware (such as an iPad) or an open-access subscription?

I suppose, to twist another of Gerd’s points, the answer is that the business model is “they pay”, rather than “I pay” of “we pay”. Books are too low frequency for paid for subscriptions, but services can be funded or subsidised by companies who gain marketing benefits. Though whether they gain enough brand equity or customer information from low-frequency readers is another matter.

Dominic Pride’s talk

What different companies seek to gain from publishing was something that Dominic touched upon

• Digital retailers want volume and margin
• Consumer electronic companies want a USP
• Access partners want retention and ARPU
• Agencies and brands want advertising inventory and audience engagement

In this, revenue isn’t always the primary return. It could be access or data, for instance.

These feed into Dominic’s ecosystem, in which he argued that the previous linear model is no longer valid due to the proliferation of competition across the distribution and retail aspects. This ecosystem also helps to break out of the notion that the customer is just an end user. Instead, they can add value by recommending, sharing or reviewing. These all feed back into a service model, where value is more long-term than for a mere product.

The crux of Dominic’s talk was that e-readers shouldn’t seek to recreate the book format, since digital is not a format substitution (such as moving from LP to CD). Digital is completely different environment and so companies should look for sustained innovations that improve technologies.

A 3 C framework was proposed, whereby content, context and community help lead onto service and experience. Two potential models for this are;

The Cloud Model – where success factors are

• Accessibility
• Value in service/access content
• Optimisation for device
• Abundance of content
• Highly personalised
• Social elements

The social model – where the characteristics of reading are capitalised upon

• Personal experience – reading is formative and provides social capital
• Social – We share and talk about what we read
• Emotional – we want to share at the point of inspiration

The Slideshare for Dominic’s presentation is

There was a short panel session at the end of the morning where the speakers were asked to name the key challenges to overcome. I think they’re relevant to all industries, not just publishing

• Discoverability
• Recommendations
• Personalisation
• A quality experience

Audio and video of the event can be found on Gerd’s site here. Each of the talks lasted around 45 minutes, with around 25 minutes of questions at the end.

sk

Image credit: http://www.flickr.com/photos/shifted/3360687477/

Frontline: The Merchants of Cool

Frontline: The Merchants of Cool is a fascinating, albeit highly cynical look, into the way teenagers and children are marketed to.

Narrated by Douglas Rushkoff, it is close to ten years old, having been first broadcast in February 2001.

One of the programme’s key themes is that teen culture is fast-moving and transitory. Yet hindsight has proved this to be false.

It would seem that the more things change, the more things stay the same.

The programme was made pre 9/11, pre X Factor, pre Youtube, pre Facebook, pre Obama and pre Spotify (to name just half a dozen things that have shaped our entertainment culture in the intervening years). Yet it remains highly recognisable and relevant to teen culture today.

And so despite the assertion being wrong, it still remains required viewing for marketers, researchers and media folk – each of whom have the spotlight placed on them within the programme.

Discovering what teens want

Even back at the turn of the millennium, teens were seeing 3,000 discrete ad impressions per day, meaning that they would have been exposed to 10m of them by the age of 18.

Yet the programme asserts that surly teens are unresponsive to brands – they instead respond to what they perceive to be cool.

In order for content makers and marketers to know what kids think is cool, they need either formal research or an informal direct line to teens. The programme highlighted four methodologies used:

1. Cool Hunting – as typified by Dee Dee Gordon and Sharon Lee’s’s Look-Look. They start of by identifing teen influencers – early adopters, vocal advocates and people that regularly explore outside of their regular sphere of interest. After speaking to these people to find what they think is cool, they might recruit and train these kids up to be correspondents. They in turn go off and identify the next generation.  All information goes into a database that their clients pay a subscription fee to access.

This seems like a great business model for several reasons

• It is a relatively low-cost model of both intelligence gathering and recruitment, meaning that the company can operate on a relatively small income
• Due to the proliferation of research agencies and consultants, they will never have more than a small share of the market and so anyone that subscribes to the database stands a good chance of having a comparative advantage over rivals sourcing their information from elsewhere
• The business is perpetual. Once something is identified as cool, it has been taken away from the cool kids and so is no longer cool. Thus they need to move onto the next thing

2. Under the radar marketing – Represented by Cornerstone Promotions, this odious tactic pays kids to “smuggle messages” onto forums or even in conversations, essentially paying kids to be walking, talking billboards without disclosure.

3. Ethnographic visits – Self-explanatory (though perhaps it was less well-known in 2001), where researchers and execs go spend time in people’s homes to observe them in their natural environment

4. Screen tests – Inviting kids to test to agents for various entertainment professions. Jessica Biel was discovered in one of these tests.

From these techniques, two key role models/personality segments were discovered – one for males to aspire to and one for females

• The Mook – where arrested adolescence and crudeness are celebrated, typified by Tom Green and Jackass
• The Midriff – where your body is your best asset so flaunt it even if you don’t understand it. Britney and Christina were the key role models

Does it sound familiar? So does teen culture perpetuate across generations, or are we on an irreversible trend towards sexualised stupidity?

A critique of these research techniques – and research in general – is that they don’t understand teens as people. Instead they are just customers. After all, the industry is named marketing research and not human research.

Although this is primarily a semantic argument, I think that, broadly speaking, the programme makes a valid point and it is still something that hasn’t been properly addressed in either marketing research or brand/market planning. Something to think on.

Content and marketing trends

Without a true understanding, it means there is essentially a giant feedback loop in play. The media sells kids images of themselves to themselves, and they in turn aspire to it.

There was the example of a Sprite party on MTV. Guests were paid $50 to show up, artists that played got paid and PR, MTV got cheap, aspirational TV and record labels got their exposure and sale. Yet, while it seems to benefit everyone, it ended up being quite conspicuous marketing,  and thus a turn-off for teens.

To be new and exciting to teens, boundaries need to be broken. After all, teens are about rebellion and anti-authority. If Dawson’s Creek is primetime (don’t laugh, it did cover some pretty edgy themes at the time), specialist outlets need to up the stakes. This meant that counter-culture icons such as the Insane Clown Posse and Limp Bizkit eventually got packaged up and sold to teens

A line from the programme I liked is that ICP are “so crude and intolerable that they are essentially indigestible”.

So is this an irreversible trend to the gutter? The edges are always different to the centre, and it would appear that for anything to reach a teen mainstream it needs to be largely digestible. Despite the questionable authenticity, contemporary trends such as 3oh!3 and Look at this fucking hipster seem largely harmless, while  Jersey Shore et al keep up the trend of sexualised stupidity.

Frontline have maintained an excellent website with a full discussion of the trends and coverage of the various interviews – it can be found here. The programme is also available to watch in full – either there or on Youtube (part 1 is embedded below, for RSS readers)

The situation today

The programme does maintain a sense of middle class adult bemusement throughout, but it still makes some great points about the attempts of marketers to pass off fake authenticity, with continually more explosive and extreme angles that try to stand out in the onslaught.

Yet one thing that has exploded over the past decade is the sheer supply of media and entertainment – I’m sure these 3,000 impressions a day have been far surpassed (particularly with the rise of branded entertainment). So marketers are needing to move away from disruption to find ways of actually engaging with teens on their terms – through opt-in involvement rather than unwanted interruption.

Will this fragmentation reduce the power of the mainstream? Rather than two teen idols, is there now two dozen? I’m not so sure. Teens have always been tribal and the hierarchies of social groups within schools aren’t going to fundamentally shift as we get more technologically advanced and savvy. They may not sell as many tickets or items as they would have a decade or two ago, but Lady GaGa, UFC and the Twilight saga are just as important cultural icons for teens today as Madonna, WWE and Point Horror were for previous generations.

But rather than focus on the markets, should we shift our focus back to the audience? I think so. Researchers and planners should essentially be an ombudsman for their target markets – representing them with a clear voice to be heard and respected when designing strategies and tactics.

sk

Connected: The amazing power of social networks and how they shape our lives

“Connected: The amazing power of social networks and how they shape our lives” was the title of the talk given by Dr Nicholas Christakis at the RSA earlier. Due to rather poor time management, I didn’t make it to the event itself, but followed it online. This link should eventually have the video and downloadable audio of the event.

I’d recommend checking out the full talk, as Christakis is an engaging speaker and his theories make a lot of sense. Rather than recap the full session here, I’ll instead focus on a few areas.

The talk

The hypothesis of the talk (and book) is that social context plays an important part in our behaviour and attitudes, and our ties tend to form groups of likeminds. Things ultimately spread in networks.

In his data visualisations, he displayed his theories by using nodes to represent people, with lines acting as connectors.

The number three was a dominant theme throughout the talk.

Christakis noted that there are three theories in how things cluster.

• Induction – Person A’s behaviour directly affects Person B, who then mimics Person A
• Homophily – Person A and Person B both have the pre-existing condition independently, and group together because of this
• Confounding – Person A and Person B are proximate, and share an exposure to an external factor

The confounding theory refutes the idea of network effects. Yet for network effects to be proven, the nature of the connections need to be understood:

• Mutual friendship – where both person A and B are friends
• Ego-perceived friendship – Person A befriends person B, but Person B ignores them
• Alter-perceived friendship – Person B befriends Person A, who ignores Person B

Christakis argues that different relationships will have different effects. He notes that if we were to map our relationships, they wouldn’t form a uniform pattern like a regular lattice but instead vary across three dimensions

• The number of friends/connectors per person/node
• The interconnectedness of friends – are the nodes I am connected to also connected to one another?
• The position within the overall network – is my node in the centre or towards one of the edge?

The final three of his talk is in degrees of influence. Christakis posits that we are not only influenced by our friends but also their friends and their friends’ friends. Three degrees of influence.

He believes that we should look at the networks, rather than the individuals, when formulating policies and strategies, because properties aren’t understandable when just looking at individual components. He used the (excellent) example of carbon. When carbon atoms are linked together in one way, they form graphite. When linked in another way, they form diamond. Two very different structures, with very different properties (And the one with more connections is more valuable).

Thus, he believes we live connected lives (even though he talked about part of it being a genetic trait) because the benefits outweigh the costs. We break off bad connections, and strengthen good ones. We create networks to spread and sustain good and desirable things – things we couldn’t as individuals.

My thoughts

I enjoyed the talk immensely, and would recommend people watch/listen to the full 75 minutes. I appreciated the depth he went into when attempting to determine causation, rather than just correlation. His argument was quite persuasive and of course it has repercussions on how we would be framing our objectives.

It’s got me thinking about whether the value of people within a network differs. Christakis claimed a network could shed its bad apples – I’m not convinced since a breaking of a first order tie doesn’t necessarily break the second order tie, where influence can still pertain. If we were able to break our ties and influence our networks, then surely only good things would spread, and not things like viruses or unhappiness. But notwithstanding, are some apples “better” than others?

Whether through Berry & Keller’s Influentials, Gladwell’s Tipping Point typologies or another example, people have attempted to segment the population in attempts to harness the spread of messages. But does the number, strength and position of connections impact on the value of that person, or is a person only as valuable as his or her network?

Instead could it be analogous to Belbin’s team role functions? A balanced team needs the whole range of roles and contributions in order to be successful. Would a network comprising purely of influentials become less valuable, due to the absence of other types of people to influence?

And so when we devising sampling structures or STP strategies based on their attitudes or behaviour, should we be attempting to create a proxy of individual positioning within a relevant network in order to predict the dynamic interplay of ideas and actions? I’m not even sure if this would be possible, but it would certainly aid our predictions on whether something is sustainable or not.

sk

Fighting potential irrelevance

Disclaimer: My employer, Essential Research, has worked with several of the UK network providers in the past, and hopes to do so again in future. All opinions expressed in this blog post – and this blog in general – are my own.

The first to market isn’t always the ultimate category “winner”. There were cars before Ford and social networks before Facebook, to give just two examples. Incumbents may hold the greatest influence, but through innovations and developments of products and services their position is rarely fully secure. Eventually a change of business strategy will be required.

I’m wondering if this is what the mobile phone networks are about to undergo.

For the past decade or two, the networks have had the power in the mobile market. They controlled the distribution – through both spectrum and their walled garden approach to content and services. Hence the huge bidding war when the UK government auctioned off spectrum for 3G a decade ago.

But this looks to be changing, as penetration of internet-enabled handsets that access the world wide web – both on a 3G network and on Wifi – shift the focus. While the debate over open access (symbolised by Google) and closed access (symbolised by Apple) continues, it appears that the shift in focus is to the detriment of the networks but the benefits of the operating system, and thus the handset.

This article – on the news that O2 and Orange are joining an open platform for applications – says that ‘The mobile phone networks fear that at the moment they are in danger of becoming little more than “dumb pipes in the air”‘

I’m sure they have methods to standardise the services across different screen sizes, resolutions, handsets and operating systems but it will be interesting to see whether it can compete with the OS based offerings of Apple, BlackBerry, Google and Nokia.

Do this mean mobile networks will go the way of ISPs? Viable businesses, but not wielding the level of power that AOL et al were hoping to achieve.

It is possible, but not inevitable. The main issue for networks is that when they work, they are invisible. We only notice when they fail, and most people will only contact network customer care when they want to complain (sales calls/contract renewals excepted). No matter how good (or otherwise) this service is, it is still ultimately dealing with negative issues.

A handset and operating system should also “just work”, but its visibility means we can also be delighted – whether through eye-catching menus or a satisfying tactility to the buttons or touch screen.

This visibility also means the handset is more closely associated with the service. Networks are still defined by the coverage and quality of voice communication above all else.

The networks risk becoming a utility, where price and quality are the only defining features.

The need to diversify is apparent, but I don’t think this should be in applications.

Aside from the handset/OS competition, there is a huge question-mark over the long-term viability of the applications market. Should HTML5 launch and grow, the balance of power may once again shift – this time from the operating system to the software or service provider. To the consumer, the delivery mechanism is largely irrelevant – they just want the best possible service in the most convenient format.

I’m also sceptical about exclusive content deals. Orange have successfully done this in France, but it raised anti-competitive issues and, ultimately, I think audience scale will mean openness will win out (I also think this is true with handsets trying to get content exclusivity).

Instead, I think partnerships – across a range of industries – are the answer. Mobile networks already have a significant presence in certain areas – such as O2 with live music and Orange with film – and these can be extended. There are also plenty of opportunities to provide complementary services – O2 moving into finance seems like a logical step, for instance.

Like gambling, one of the hardest things in business (so I’ve been told) is knowing when to call it quits. The era of networks dominating the monetisation of content and internet-based services looks like it is drawing to close. Yet there are many potential new revenue streams to develop. Whether picking the right strategy requires the luck of the gambler or not, time will tell.

sk

Image credit: Me

Can social media become a mass media?

My short answer is “Yes, if it continues to evolve”.

But there are numerous challenges to overcome within this evolution process.

SIDENOTE: Throughout this blog, I’ll be referring to social media in the singular. I know that technically media denotes plurality, but, to me at least, phrases such as “social media aren’t mass” sounds weird. Well, weirder than “social media isn’t mass” anyway.

Isn’t social media mass already?

I may have already lost a few readers by this point, who refuse to believe my basic premise that social media isn’t mass.

And they will have numbers to back up their spluttering, incredulous rage:

• The Economist report on social networking quotes Comscore data from October 2009 to note that there were over 800m social network users worldwide that month
• Facebook alone claims to have more than 400m users, with 50% logging in on an average day
• Over 23m of these are based in the UK. In the 2001 census, there were 62m people in the UK in total.
• Facebook accounts for around 45% of all time spent within browsers on the mobile internet.

These numbers sound big. They are big. But they aren’t mass.

This is where semantics get involved.

Firstly, for social media I’m referring to platforms or websites whose primary aim is to connect people and facilitate communication – such as social networks, blogs and forums. I’m not considering websites with social widgets or functionality added – such as the comments section on a newspaper website.

Secondly, I believe there is a big difference between a popular media and a mass media. The definition used on Wikipedia is “a section of the media specifically designed to reach a large audience”.

From that definition, and from my general perceptions, I infer that for media to be mass it requires inclusiveness.

And despite the large numbers, social media is not inclusive.

The Diffusion of Innovations

I reference Everett Rogers’ Diffusion of Innovations model in a previous post on the iPad. I will go into it in a bit more detail here.

Rogers posited that, within the population, there are five types of person, each with a different relationship with and attitude towards new innovations. The five types progress along a time series

• The innovator will try something for the sake of it being new
• The early adopter will try something before most people, but only when he or she is confident that it will be worth it
• The early majority (or mainstream) come into the frame when they see a new innovation is gaining in popularity and thus must be worth adopting
• The late majority see a new innovation has proved itself to be worthwhile, and thus they try it
• The laggards are resistant to new technologies, but will try something when there is little or no alternative

Rogers estimated the proportions in the population to be as laid out in the diagram below:

At Essential Research, we have measured to the population in order to calibrate and weight our data for the Essential Eye, our ongoing exploration of digital media usage and attitudes. Our figures are:

• Innovators – 6%
• Early adopters – 11%
• Early majority – 26%
• Late majority – 32%
• Laggards – 25%

If Facebook has 23m UK users in a population of 62m people, that would place it firmly into the early majority stage of diffusion.

Leaving aside my doubts that this figure constitutes 23m unique individuals within the UK, and that as marketers or researchers we are usually (but not always) confining ourselves to adults, I believe social media take-up will shortly plateau unless some big changes are made

Why majority take-up isn’t inevitable

Few, if any, innovations ever reach 100% penetration. There will always be rejectors that go out of their way to avoid certain technologies.

Digital media has the additional hurdle of scepticism among a minority – whether cost, fear of privacy, shame over incomprehension or a belief that they can live their lives quite happily without the internet, thank you, there are a significant minority that never have, and perhaps never will, use the internet.

Anyway, I digress. The main point to note is that early adopters are DIFFERENT to late adopters.

How are they different? They tend to be

• Younger
• Higher social class, and more educated
• More disposable income
• Greater interest/proximity to science and technology
• Greater opinion leadership
• More social

This may seem obvious, but it is vitally important to reflect upon.

The demographic differences aren’t such a huge deal since people age and earn more over time, and it means the user base will always skew to the more commercially attractive audiences. Essential Research Brandheld data bears this out – 64% of all users of social networks via a mobile are aged 16-34 and three quarters are on a contract phone.

However, the attitudinal differences could be a major barrier to social media uptake.

Later adopters advocate things to a lesser degree and are less social. They have smaller friendship groups and are less likely to want to meet new people.

The network effects become less powerful. Latecomers see less benefit. Their investment into the software will bear less reward.

And this is assuming that later adopters can be sold on the idea to begin with. This is not guaranteed.

The mainstream prioritise different benefits

The proposition that convinced the earlier users to adopt social networks will probably not work for the latecomers.

Earlier adopters saw their friends on the site. They saw the software made it easier to keep track of their large and disparate friendship groups. They got to grips with the technology quickly, and found it easy to adapt as the social networks change to accommodate a larger user base.

Yet even in the early majority, we are witnessing problems with adoption. Examples include loud protests over redesigns to Facebook or people getting confused by a simple error within Google’s algorithm.

Two things need to fundamentally change in order convince the mainstream to trial, let alone permanently adopt, social media.

1. A return to simplicity: Feature creep is a well document problem with iterated software. The earlier adopters – the more vocal power users – may appreciate greater customisation but it raises the barriers to entry for newcomers. The longer they leave it, the harder it is for them to figure out how to use these services. And the greater the chance they abandon them. Apple may have beautifully designed products, but the simple and intuitive interface is the most important part of the design. The core social media service should be simple, with additional functionality optional for those comfortable – the Firefox model, if you will. A quick fix would be for Facebook to offer its lite version as a default.
2. A realignment in promotion of benefits: Mainstream and late adopters are less inclined to experiment. The benefits to using social networks need to be immediately obvious and tangible. A benefit either gives you something – entertainment or information – or lets you save something – time, money or effort. The more averse to new technology someone is, the harder these benefits are to communicate. Currently, there is plenty of room for platforms, developers and marketers to improve in this area

How social networks can become more attractive

Conventional wisdom might say that the less affluent among us have more time on their hands. 8 hour shifts, no ski-ing holidays in Chamonix etc. They have the social surplus that Clay Shirky talks about. And we’re not expecting them to create a new Wikipedia, just to engage in the social media space.

But, given the current platform, not gonna happen. They will be more likely to stick to their gin and television.

What do people gain from social media that they cannot get elsewhere? Why should they divert their time from their favourite TV shows, or from housework or other chores, in order to “join the conversation”?

Where are the tangible benefits?

Well, they may already be there. They just need to be communicated

• Facebook and Twitter are building on the fact that they are increasingly responsible for traffic directed to major news sites. Conversely, despite being unfashionable, the portals are still popular. This is primarily because they offer a single place to get all desired information. If Facebook or another social network desire to become a portal, they need to contain, or at least link to, all relevant information for that person in a similar manner to the portals
• Even if people aren’t social themselves, they may still like to read or hear the opinions of others on topics or areas that interest them. A comparison could be made to radio phone-ins, but with a criteria of entry based on interest rather than geography
• Vouchering schemes are highly discriminatory, but cost/cost saving is eye-catching. People will gravitate towards the discounts
• I really like Doc Searls’ idea of Vendor Relationship Management, where potential customers recruit providers instead of companies advertising to potential consumers. This clearly represents an easier route to deciding upon a major purchase, and is far preferable to disruptive advertising or poor performing display advertising.

The final point brings us on to the business model.

The challenges for a successful business

It is one thing to succeed in bringing in an audience. It is another thing to successfully run that business. To my mind, there are three major challenges to overcome before this space can be fully monetized

1. Competition – in this instance, competition can be a bad thing. Maintaining a presence on a social network requires a major investment of time and effort. People are reticent to needlessly duplicate this. I believe that the low distribution barriers and start-up costs in the digital space mean that there should be no concerns over monopoly activity. Google, Amazon and eBay have all succeeded in this position to date, and there is no reason why Facebook cannot . I see no issue with them maintaining that (sound business strategy permitting, which is where Myspace fell down), with specialist networks operating in its orbit. If I am right, Google Buzz will swiftly fail
2. Evolution without natural selection – I have quite a large problem with Google Buzz. Dumping a new social network on a group of people without it evolving from innovators downwards is a recipe for rejection. Without any proven benefits among even a minority of users, there is no reason for the average user to adopt it. It could be argued that the average Gmail user is savvier than those of competitor services, but there are as yet no clear benefits to using it. I’ve personally removed it from my Gmail, and it will remain turned off until these benefits become apparent. Throughout the evolution of social networks, there will always be the tension between placating the current users while reaching out to the sceptics. This requires a careful balancing act between keeping pace with the ambitions and needs of the power users, and the more conservative use of the later adopters
3. The commercial model – there are many potential routes to take – basic display/interruptive advertising, VRM, subscription or integration with search to give just four examples – but the commercial model for ensuring the success of the social media space is still unclear. There may be a growing number of social media agencies in the space, but until they offer real, workable proposals for a) monetizing the current user base and b) attracting a mass audience, the prospects for mainstream success remain limited. It is therefore in their interests to do this, otherwise they will remain a niche proposition at threat from integrated campaigns from digital agencies, not to mention full service agencies.

Conclusion

Will social media become mass? Ultimately, I think so.But not in its current guise.

Social media is currently geared towards the technologically savvy. This is fine. But if the platform wishes to mature, then it is necessary to change.

The focus needs to move away from the exploration of something new towards the benefits people receive. This is achieved through highlighting the gains – information and entertainment – and the savings – in time, effort and money. Running alongside this is the need to identify and promote a sustainable commercial model – not an easy task.

Yet, to revisit Rogers’ model, an individual needs to trial something before they can fully adopt it. While social networks are free to join, the registration page still represents a barrier. Keeping most of the functionality behind the log-in is analogous to a paywall. It is hidden away. It is exclusive to users.

This isn’t a trait of a mass media. Social media needs to evolve further before it can be considered one.

sk

Image credit: http://www.flickr.com/photos/ejpphoto/2633923684/