Paul Wallbank | Paul Wallbank - Communications Professional

The learning curve

We’re still on training wheels when it comes to using social media

When new technologies appear it’s interesting how people experiment and adapt to them, we’re seeing this right now as businesses grapple with social media tools like Facebook, LinkedIn and Twitter and discover where the benefits lie.

The second edition of the Social Media Benchmarking Study, a joint release by Sydney online consultants Community Engine and the research company Nielson, illustrated how things have changed over the last two years.

One of the clear conclusions from the study is how businesses are developing the ways to determine benefits of their social media activity with near halving of the number of organisations citing lack of measurable return on investment as a reason for not engaging online.

A barrier that is increasing is the perception that businesses don’t have the time or resources required for which is probably business owners and managers realising that maintaining a Facebook Page, Twitter account or blog isn’t easy.

Time is the scarcest asset for any business that gets more precious with smaller organisation. Even large corporates and government departments struggle with finding the resources necessary to run effective online presences.

One of the tragedies of social media is how it’s been identified as a marketing tool and in this survey with over half the respondents stated they are going primarily use the tools as a marketing channel rather than in customer support, recruitment, research or product development.

This is probably why the perception that social media is a time sink comes from. As purely marketing tools social media is time consuming and difficult. A challenge made greater by the fact we’re all still figuring out how to effectively connect with customers in what is a hostile place to more traditional broadcast based marketing methods.

Given social media is being used primarily as a marketing tool by business, it’s no surprise that the survey found larger corporations are the biggest users as they have the marketing budgets to allocate.

An interesting aspect with big business’ social media investment is how much it’s focused on Facebook. On one level this is understandable as a Facebook “like” is easy to set up and becomes a very simple measurement to follow, although the challenge still lies in converting a low friction click on a Like button into a useful customer or advocate.

What is surprising with corporate Australia’s adoption of Facebook is the apparent lack of understanding of the platform’s terms and conditions and the business risks involved. Again this is probably part of the collective learning curve.

Possibly because of those risks, public sector use is static. We can expect this given as social media is being pushed as a marketing tool which isn’t a priority many government agencies, are you going to skip registering your car because the motor registry doesn’t have a “like” button on their web page?

This liberation from being obsessed with marketing and sales is probably why the public sector is using social media a more creatively as collaborative and research tools where many of these services do an extremely good job.

Many businesses, particularly smaller organizations, believe social media doesn’t fit their objectives. A terrific quote from an SME accountant is “I run a business, not a chat show”.

That attitude’s fine as social media – like pretty well everything else in the business world – is a tool to be used the best way you see fit, just because some businesses don’t need a hammer but that doesn’t mean hammers aren’t useful.

Although when that tool is fairly new, as social media is, it’s probably best to have a play with it and see where if can help your business.

The Social Media Benchmarking Study is a useful survey that shows where businesses are using these tools and how effective they are finding them. It’s going to be interesting to see the field evolves as we all get to understand social media as both consumers and business owners.

The Mac malware threat

Is there a wave of viruses waiting to attack Apple Mac computers

For years we’ve heard warnings of a deluge of Mac based viruses coming as the Apple systems gained popularity. Does the Mac Defender program that’s infecting OS X systems represent a new risk for Apple computer users or is just another trick targeting unsuspecting computer users.

Recently Daring Fireball’s John Gruber called those predicting an immanent deluge of Apple Malware out in his “Wolf” post, pointing out seven years of warnings of an impending wave of Mac based security attacks which never eventuated.

Mac Defender, a Trojan Horse which pretends to keep Apple systems secure, is catching unwary Mac users. To many who’ve cried “WOLF!”, this is the first horseman of an Apple apocalypse.

Are we really about to see a wave of Mac based malware similar to that which plagued Windows users over the last 15 years? The truth is more complex than just Apple and Microsoft fanboys trading insults.

Can an Apple Mac catch viruses?

The short answer is “yes”. Every computer system has some weakness that can can be used by rogue software. Apple Macs, Linux computers and even corporate mainframes have software flaws that can catch out the unprepared user.

Given there are always flaws in software code, it’s important that a computer operating system has some protection against installing unwanted programs. Apple, and other systems, avoided the problems of the Windows world by putting more barriers in the way of rogue applications finding their way on to machines.

The “big target theory”

Windows’ susceptibility to viruses is often put down to it being the biggest target. Because over 90% of the world’s computers were running on Microsoft Windows, the theory goes, it was the obvious target while Apple, Linux and smartphone applications are too small to be worthwhile for the dedicated hacker.

This “big target” theory is bunk – predators, vandals and criminals go for the weakest victims and Windows was by far the easiest target.

If we think of the different software systems as being homes on a street, most of the houses were small with well maintained fences and secure locks on their doors. They weren’t immune from being broken into, though to do so involved a degree of skill and cunning.

The biggest home on the block, the House of Microsoft, chose to have a pretty poor fence and few locks. It didn’t help that the occupants, more often than not, would gladly let anyone in and were mildly suprised when the odd uninvited visitor made off with the silverware or graffitied the garage door.

Windows computers were the easiest target on the block and this was why they were targeted. The fact they were by far the most popular systems was an added bonus for malware writers.

“Security by obscurity” is not the reason Macs attract fewer malware attacks.

Why did viruses attack Windows?

To understand why Windows is more prone to viruses we have to go back to 1998 when Microsoft were preparing for the next generation of systems to replace the aging Windows 95, 98 and ME platforms.

Microsoft based their new operating system – Windows XP – on their existing Windows NT system which had a strong security focus that allowed users to run in restricted profiles, preventing them altering key system files, this was perfect in a world where users were connecting to the World Wide Web and exposing themselves to multiple new security risks.

A problem for Microsoft was many of their consumer and office products didn’t like being denied full access to the systems they were installed on. It was possible to run Microsoft Office and other applications without full Administrator permissions – and many big organisations did – but doing so involved the resources of a skilled, full time IT department which was beyond most Windows users.

So Microsoft made the decision to sell Windows XP to the general public with Administrator access enabled for ordinary users. It meant various programs would work properly but it also gave full access to all the internal parts of Windows. Microsoft decided there were would be no secure parts on a standard, out-of-the-box Windows XP computer.

Internet Explorer blues

To compound the security problem Microsoft had decided to continue the integration of the Windows web browser, Internet Explorer, into the core functions of Windows XP – something they’d started when they’d discovered the Internet shortly after releasing Windows 95 – a policy that had already created a malware nightmare with Windows 98 and ME.

Internet Explorer itself was prone to security problems because of a programming language built into it called Active X that allowed applications to run without the user knowing. This was convenient for users and websites but basically invited virus writers and hacker into a system through the web browser.

Put a deeply flawed Internet Explorer together with most users running their computers with full Administrator rights and conditions were perfect for the tidal wave of malware that swamped the Windows world in the period of 2001 to 2004.

Faced with massive problems Microsoft steadily improved security on their consumer products, the later versions of Windows XP were substantially better than the first version with the releases of Microsoft Vista and Windows 7 seeing great improvements that reduced the virus and malware threats.

Microsoft’s bad choices reverberate today though with Windows users lumbered with layers of security to protect them from rogue applications and frequent nasties that manage to sidestep the safeguards.

Social Engineering

As Windows computers became more secure, and criminal gangs more aware of the opportunities residing on people’s desktops, the threat moved on to “social engineering” tricks that involved either posing as a financial opportunity – phishing and the notorious 419 scams – or offering “free” software, pictures and music to unsuspecting users.

Often the free download hid a program called a Trojan horse that would sneak something ontoward onto a victim’s computer, this is what the Mac Defender program is.

Trojan horses and phishing attacks don’t rely on weaknesses in a computer’s software, they rely on fooling the user. So it doesn’t matter what computer system the victim happens to be running as long as they can be fooled into doing something.

Is there a wave of Mac malware looming?

While those who’ve called WOLF! on Mac viruses in the past might be celebrating what appears to be a breakout of malware targeting the Apple Mac, the conditions that caused the boom in Windows based malware don’t exist on the OS X operating system – or on mobile platforms like Android, Blackberry or the iPhone’s iOS for that matter – so a virus boom isn’t going to happen.

On the other hand, new social engineering tricks are evolving as savvy conmen come up with new and original ideas to fool us into giving away our bank details or installing rogue application on our Macs, smartphones and social media applications.

Fighting old battles

In many ways arguments about malware attacking operating systems is the old battle. The virus fight is largely over as vendors, particularly Microsoft, and users learn secure ways to use their computers.

Today’s security battles are being fought in the cloud and on social media platforms as scammers and users come to grips with the changed security and computing environment.

Most of what we do on computers today relies upon the Internet, that we use a Mac or a Windows machine doesn’t really matter that much as the serious threats are now lurking on our Facebook and cloud computer applications. We need to stay alert regardless of the computer, or smartphone we choose.

The listening business

What a crook can teach us about paying attention to customers

Some years back a crook computer repairer did the rounds of Sydney and regional NSW. For all his sins Joe, as we’ll call him, always stood out as an example of a business that effectively listened to the customer.

Joe would advertise in local papers and you could spot his ads by the line “all our technicians are qualified computer programmers”, which is a nonsense slogan like a landscape gardener claiming all her labourers are civil engineering graduates, but it was an effective catchphrase in a market that didn’t know better.

After a while the local community would start wise up to Joe and his “computer programmers” and when the complaints and fair trading investigations mounted, he’d change his business name, move to another suburb or town and the cycle would start again.

I was reminded of Joe at the City of Sydney’s discussion on the connected consumer at the latest Lets Talk Business seminar last week and wondered how he’d survive in today’s markets where people are quick to go online and criticize.

Dealing with criticism has always been big businesses’ Achilles heel; bureaucracies have a tendency to protect themselves and when there’s managerial or team bonuses at stake there’s strong incentive to ignore the concerns of customers.

A good example of this Vodafone where the chief executive, Nigel Dews, has been open in admitting the company failed to listen to their customers as their network failed to meet the demands placed upon it.

While the network itself was buckling under the strain, the company spent millions on sponsorship and advertising effectively trying to drown the criticism under a wave of tightly controlled good news stories, promotions and competitions.

It didn’t work, just as Facebook’s PR agency Burson-Marsteller failed dismally in planting an anti-Google story, which saw the two organisations not only busted but also descend into an unseemly argument with their client while frantically deleting Facebook posts.

All of these actions – deleting social media comments, ignoring customer complaints and attempting to distract critics with pictures of pretty girls and racing cars – smack of the old way of doing business in an era where tightly controlled mass media was the only channel complaints could be heard. Those times ended with the arrival of the Internet.

At the Lets Talk Business event one of the panellists, Jody Fox of Sydney’s Shoes of Prey described how her business is engaging with customers online and discussing any concerns openly on the Facebook page, not deleting them.

This is the new reality of business, if you don’t listen and engage with upset clients or – even worse – try to control their comments on your sites, you’ll only get them angrier and they’ll go elsewhere to tell their stories.

Another striking difference between the new and old business was Jody’s point was that shoes of Prey treats customer service as a marketing expense, not a separate cost centre. In most large organisations helping paying customers is treated as an unnecessary expense that should be outsourced and minimised as much as possible.

This sort of works when you have a licensed oligopoly like telecoms or banks but fails dismally in competitive industries. Without purchasers there are no shareholder returns and eventually no executive bonuses.

Ignoring customers worked nicely in the era of mass media when it was difficult for upset clients to be heard above an expensive marketing campaign; Vodafone, Burson-Marsteller and even governments are finding it doesn’t work today.

Joe the computer technician would have understood this, if he’s still doing dodgy IT support then he’ll be watching the Facebook pages, Twitter feeds and blogs for bad news.

Somehow though I suspect he’s no longer in computer repairs though, my guess he’s making a lot more money in social media or search engine optimisation these days.

Too old to surf?

Do older customers use the web?

“For those of us aged over forty, we don’t use the web. And neither do our customers!”

An audience member threw this statement to the panel at last night’s Let’s Talk Business seminar discussing The New Consumer. One of the panel members, Adam Ferrier of Naked Communications, replied flatly; “you’re wrong”.

That business owner assumed her own likes, priorities and experience are shared by her customers. This isn’t always true, what we think is true about our clients and markets often proves not to be the case.

Just because you don’t have time to surf the web, use social media or play online games doesn’t mean your clients aren’t using these tools.

Assuming that the internet is for young folk means your business focus is on older people who don’t use the net – which is probably the fastest declining segment in our society as seniors move online.

The US based Pew Internet Survey’s Generations Online in 2010 Report reported older user were rapidly increasing their net use while in Australia the 2010 Sensis ebusiness report came to the same findings saying;

“The groups most likely to report below average usage were those aged 65 and above and retirees. For those Australians 65 years and above only 66 per cent reported accessing the internet in the past 12 months. However, usage in this age group has increased by six percentage points over the past year.” – p. 17 Sensis e-business report.

Six percentage points to 66% represents 10% growth in the over 65 age group. At that rate we’ll see the seniors reaching the 97 to 98% levels of Internet usage sometime in 2013 and the 50-64 year age group will be there next year.

Restricting your business to an 8% slice of the market – which will soon be 3% – is up to you, it may well be that is where your customers are. But it’s a big risk and one you wouldn’t want to make on some blind assumptions.

Many of us may be too old to surf the point at North Narrabeen, but we’re all using the web and older users are the fastest growing group. Rather than assuming your customers aren’t going online, it’s time to ask them what they are doing with their computers.

Skilling for the future

We can’t rely on governments to deliver the skills our businesses need

Tonight we see the first budget of the Gillard government and one of its stated priorities to get the long term unemployed, disabled and single parents back into the workforce.

This is welcome in a society where we are facing skills shortages, the effects of an aging population and a developing global race for talent that is steadily making the old model of importing immigrants to cover workforce gaps no longer viable.

For those who’ve been out of the workforce for a long period the biggest challenge is acquiring the skills they need for the modern economy, to work in most industries today means using technologies that weren’t around five or ten years ago.

Like many ideas that come out of Canberra, the scale of this task seems to be underestimated by the public servants, politicians and the media reporting their plans. Training those currently excluded from the workforce is going to take more than a visit to Centrelink.

To give these folk marketable skills is going to require rebuilding our adult education and TAFE systems that have been systemically allowed to run down by governments over the last thirty years. That in itself is a major task that neither the states nor Canberra seem to have the appetite to address.

One of the big challenges with bringing disadvantaged groups back into education is transport, the colleges and teachers are often a long way from the students who usually face a convoluted and time consuming public transport journey to get the colleges and schools.

This is where technology comes in with access to the internet and online learning tools. Developed sensibly, broadband access can create relevant community learning centres along with individual in-home training.

We should be careful though treating technology as the only solution, one of the essentials for using computers and the Internet effectively is literacy and that’s a big challenge for many of these groups and something that is going to take a lot of investment in well trained and motivated teachers.

Those education investments, along with the spending we’re committing to the National Broadband Network, need to be co-ordinated and this seems to be where the Federal and state governments really drop the ball with poorly thought out, short term schemes.

For businesses, those last thirty years of government neglecting adult education have seen us neglect training as well. We’ve thrown much of the training burden onto reluctant governments or increasingly asked workers themselves to pay for training out of their pocket then moaning when new staff don’t have the skills we need.

That indulgence is running out as we begin to face the inevitable consequences of failing to train young workers coupled with the demographic certainty of an aging workforce.

We can hope our governments can deliver on their promises but we shouldn’t wait on them, even they get it right this is a project that will take years to bear fruit, we need to be starting right now with our own businesses and staff.

Training all workers, managers and business owners is a great opportunity to build new industries and use the web to give people the skills that will make them valuable members of their community.

Our days of complacently expecting workers to have the skills we need from the day we hire them are over, if they ever existed. We have the tools to fix the problems ourselves and we need to start now.

ABC 702 Weekends: The spies in our pockets

Should we worry about our electronic devices tracking us?

You don’t have to be an FBI suspect to have your car tracked, recently the GPS manufacturer Tom-Tom admitted it sold users’ traffic data to Dutch police which was used to set speed traps and security researchers discovered Apple’s iPhone is storing location information that is used by Apple for research purposes.

On the 15 May 2011 702 Sydney program, Philip Clarke and Paul Wallbank discussed are our phones, GPS and other electronic devices tracking us and some of the things we should be aware of when using mobile phone and other GPS enabled technology.

We had a full board of callers and promised we’d get back to some of the following;

Images not showing in Internet Explorer

Kim called about her computer not showing images in Internet Explorer running on Windows Vista. This could be simply a matter of ticking the Show Pictures check box in the Advanced tab of the Internet Explorer Options settings. We explain how to do this, and how to handle further similar problems, on our IT Queries website.

Free Backup options

One of the most irritating things to lose when a computer crashes or you replace it are your email and contacts. Arthur asked about backing up this important data in Windows Hotmail Live on his Windows 7 computer.

Unlike some of the earlier versions, Windows 7 comes with its own backup program which Microsoft shows you how to use it on their website. Make sure you choose to backup your profile as this will save all your email, contacts and favorites along with your computer settings.

Once you’ve created the backup, we’d suggest using an online service like Dropbox or Box.net to keep a secure copy of these files.

Fixing a slow computer

Kristina asked about speeding up her computer that’s running slowly, particularly when Outlook 2003 is open. The first step is to backup your Outlook data which is saved in a PST file, just in case something goes wrong.

Next you should uninstall any programs and add ins that might be interfering with Outlook then run the Mailbox Clean Up Tool to get rid of anything you don’t need.

Having cleaned up Outlook, it’s time to run the Outlook Inbox repair tool which will fix any inconsistencies in the PST data store.

Once you’ve cleaned up Outlook, it’s time to do a general clean up of the computer that will flush out anything unnecessary on your system. Follow this with a drive check by running chkdsk which will clean up minor problems with the way your computer has saved data.

With all of these clean ups done you should have a much fast computer, if you don’t it may be time to call a computer technician.

Next 702 Sydney Weekend segment

We’ll have the date of the next 702 Weekends up on our events page in the next few days. The next Nighlife spot will be on June 16 where we’ll be discussing how to secure your data against incompetent organisations.

If you’d like to get advanced notice of radio programs and other events, subscribe to our newsletter at the right of this screen.

Making e-Business work for you masterclass

A three hour masterclass to help your business get online

A website is a business essential. You need to be where your customers can find you

The Internet is the new shopfront – our customers, suppliers, staff and anybody who wants to deal with us is checking us out on the web before they contact us.

Making e-Business work for you will show you how you can use various Internet tools to promote your business and products online to the world. The three hour masterclass will show you how to setup the web tools you need for an effective online presence.

Business owner, broadcaster, writer and specialist on the digital economy, Paul Wallbank, will guide you through the online tools and techniques which businesses owners and managers can use to improve their Internet performance and effectively extend their web reach to their key customers.

I already have a website

Even if you have website, an effective entry on these directories is essential – the local plumber, baker, lawn mowing service or hairdresser is finding their local search listings is vital to capturing customers in their neighbourhoods while larger business have to compete in crowded markets. Local listings improve the performance of your web site and can help it perform better when customers are searching online.

What will I learn?

During the workshop participants will develop a cost effective online local search presence along with gaining insights on some strategies to be the most popular search result for their neighbourhood.

At the end of the Web for Free workshop you’ll have full, effective listings in the key places your customers are looking online, we’ll have also reviewed how you can choose the keywords to make your site more relevant to those searching for your services.

Participants cover;

how the local services work with the web
the relevant local directories for Australian online markets
maximising local internet coverage
using online basic search optimisation strategies
optimising website product descriptions with keywords
adapting social media to local search and the web

All of this is explained in non-geek terms and at the end of the workshop, you have a fully functioning website and local listings. A full set of reference notes will be provided to workshop participants.

If you’re a tradesman, local shop, restaurant, cafe or any other business catering to a neighbourhood, suburb or district this is a workshop you cannot afford to miss.

Location

Mosman Professional Centre, 3 Brady Street Mosman Map

Date and Time

Thursday, 2 June 2011 from 10.00am to 1.00pm

Price

$300 per participant. The session is limited to 15 people and you’ll need to bring a wireless capable laptop computer. Book now as spots are limited.

Order now

ABC Nightlife computers: What is cloud computing?

Is cloud computing really just vapour and wind?

Our regular ABC Nightlife radio spot explained cloud computing and had a look at the Sony PlayStation Network security problems.

The tech industry loves nothing more that to baffle us with new terms and one of the biggest terms we’re hearing is cloud computing. Paul and Tony discussed what cloud computing is and what people are using it for.

Aspects covered included;

What exactly is cloud computing?
Isn’t this just another name for the old mainframe computing systems?
What are the benefits of cloud computing?
Can you really save huge amounts of money?
What are the applications you can use?

A lot of what we discussed is covered in The Connected Business post and we’ve listed some useful cloud computing tools which can be used in the home or office at Ten Business Uses for Cloud Computing.

You can listen to the program’s podcast via the Nightlife website. We promised some of the listeners that we’d get back to them on the following topics;

What is my computer downloading?

Margaret called about her prepaid broadband usage being inconsistent, some days her system downloads more than on other days.

This is probably caused by email downloads and security updates. You shouldn’t avoid the program patches, but you can overcome the email downloading problem by using a webmail service like Hotmail or Gmail.

How do I check my computer is secure?

Two callers, Peter and Katherine, were unsure about how secure their computers are and asked how can they can be sure their systems are safe to use. We’d suggest downloading MalwareBytes and follow our Removing A Trojan instructions however if that’s too complex, it might be worthwhile calling a computer technician.

Viewing new PDF files on an old system

One of the problems with having an older computer is that newer files sometimes can’t be read by them. Rob called in to ask how he can read Adobe PDF files on his older Power PC Apple Mac.

The answer is to use Google Docs and upload the PDF into it as the service can read newer documents. If you’re using Gmail as we discuss above, then files sent with newer attachments will automatically open in the Google reader service.

The next Nightlife program will be on June 16. If you’d like to suggest topics contact us or join the conversation on the night with your on-air questions or comments by phoning 1300 800 222 within Australia or +61 2 8333 1000 from outside Australia.

The benefits of mentoring

Challenging your assumptions and leaving your comfort zone helps your business

When I was asked at the beginning of the year if I’d be a mentor on a Young Entrepreneur Program it was a tough decision, I was writing a book and launching a new business myself. As it turned out, it was a good decision as it challenged my assumptions about the economy and industry.

A striking thing about the mentoring program was the diversity of the participants, everything from olive merchants and flower shops to chiropractors and shirtmakers with a fair few web and IT people thrown in.

Notable were that half those being mentored were in the manufacturing and clothing industries, two sectors that I assumed were well and truly dead and buried in an Australian economy focused on seeking easy capital gains underpinned by mining royalties.

My assumption was wrong; many people want to make and sell things despite the odds working against Australian manufacturers. As well as a shirtmaker, the course also included fashion designers and a manufacturer of rope sandals.

The rope sandal man personified one of the most valuable business skills of an entrepreneur; don’t get stuck with assumptions. Business life is a continuing journey and if you get stuck working within the stricture of one set of assumptions, your business will at best stagnate or be hit by the forces of change that are destroying many industries built on what seemed to be rock solid assumptions.

Of course many assumptions are flawed; we can call that “The Unknown Unknown Problem”. When we start a business there are a whole set of unknown factors, some of which we know about and others which are totally unexpected.

Identifying “unknown unknowns” is probably the best benefit an adviser can bring to the mentoring relationship. The more inexperienced we are, the more likely it is that we don’t know what we don’t know. As one of the experienced mentors put it, “the longer I’m in business, the more I realise how much I don’t know.”

Another of my assumptions that was shot down during the program was the internet-savviness of younger entrepreneurs. Many of their assumptions were that net wouldn’t do much for them.

For instance the custom car parts seller believed, incorrectly, that most of his customers aren’t on the web or interested in tools like Facebook when the reality is that niche products are exactly what the web does well.

A similar belief was with the shop fitting design business, that the web is a threat to her business. The reality is the opposite, as innovating retailers need to improve their store designs to improve the physical shopping experience that presents wonderful opportunities for clever designers.

One assumption I’ve never bought into is about the work ethics of the much maligned Generation Y, believing those whining about lazy twenty somethings are just intellectually lazy and grumpy old baby boomers and Gen Xers. This was bourn out by the course as the younger entrepreneurs showed they weren’t shy of putting in the hard work required to succeed in your own business.

Demolishing assumptions about things – like the Internet’s effect on business, the work ethics of Generation-Y and the refusal of Australia’s manufacturing and clothing sectors to die – was the most valuable thing this course delivered for everyone involved.

Assumptions kill our creative thinking, the very asset we need in society like ours that’s going through massive technological change, not to mention an economy that still has many “unknown unknowns”.

Challenge your own assumptions, you might be surprised at the results.

Glittering distractions

Google and Facebook have joined the online deals battle. Will they dominate this market?

Into an already crowded group buying market, Google Offers and Facebook Deals have launched. It’s tempting to think the power of both will swamp existing players like Groupon and Living Social, but will the search engine and social media giants eventually dominate the group buying market.

There’s a number of barriers to success in the group buying industry; securing a steady supply of compelling offers, generating a community of followers, building a sales team and dealing with customer service issues are just a few. For both Facebook and Google these obstacles are not just a matter of money or scale.

The power of Google

Google’s clear strength lies with its local search functions. Google Places is an excellent fit for group buying services, a point not lost on many of the existing players who use Google Maps and the local business service to support their offers. Merchants can already use the free vouchers feature in Google Places and proactive businesses are already doing this.

Leveraging their existing voucher features into paid group buying services should be one of the easier tasks for Google Offers’ management. Search itself is a powerful tool for merchants offering group buying services, I might not be interested in dog washing or personal training services in my neighborhood, but if I’m online searching for a holiday a group buying offer for discount meals or car hire in Miami may well attract me.

Facebook’s power

Adding social media to group buying is a pretty powerful combination and one that many of the early services leveraged extremely well, so Facebook’s entry into group buying should worry the existing platforms. Being able to segregate deals by geography, demographics, friends and likes is another example of how powerfully Facebook’s advertising can be targeted.

Merchants who use the Facebook service can be pretty confident their ads will hit the right audience rather than being blasted across a mailing list of indifferent subscribers. Coupled with this is the use of Facebook credits. While Facebook aren’t going to make them directly redeemable for gift vouchers or cash at this stage, they still add to a compelling package Facebook can offer both advertisers and customers.

The customer service dilemma

One thing that makes a group buying service successful is the delivery of well timed, compelling deals. This means a hands-on sales and support team. Like most web2.0 businesses, both Facebook and Google aren’t particularly good at face-to-face, or phone-to-phone interactions with customers.

A challenge for both companies will be to attract management talent that can run the sales teams necessary to provide attractive daily deals while dealing with the inevitable consumer service tasks that come with selling direct to the public.

Channel conflict

Facebook and Adwords advertising have been big lead generators for the existing social media platforms and it’s going to be a challenge for both companies in managing the conflicts which will appear between their advertising and group buying platforms.

Those advertising channels are both organisations’ primary source of revenue, so these are going to take priority over other initiatives. Both services’ group buying operations may interfere with their advertising revenue by discouraging or competing with paying advertisers and this will be a major challenge for both Facebook and Google to manage.

Are we over group buying?

That effort to find compelling deals is a problem for all group buying services and we’re seeing the saturation problem with many of the providers as they struggle to find compelling daily deals in all of their markets.

Being late to the markets means both Google and Facebook are going to face exhausted buyers and merchants who been saturated by the dozens of services that have appeared in the last twelve months.How many consumers and businesses are prepared to sign up to YAGS (Yet Another Group buying Service)?

There’s also the issue that group buying might be a passing fad; many of the merchants advertising on these services are service businesses grimly hanging onto failing business models built on the late 20^th Century idea of unlimited credit driven consumer demand.

Many of their customers too are cash strapped consumers shopping around for cheaper deals – a discount haircut here, a cut-price meal there – as a way to maintain the lifestyles that are becoming unaffordable in an economy where jobs aren’t as secure, credit isn’t as easy and retirement savings looking uncertain.

As it becomes apparent to both consumers and merchants that most of the group buying services aren’t meeting their needs then the demand for these service is going to drop away.

That’s not to say group buying is a dead model, but it appears the market is overheated with way too many suppliers.

Having deep pockets may well turn out to be why Google and Facebook end up being the sole survivors from the inevitable group buying shakeout, but it doesn’t mean they’ll actually be the best players, or they’ll make any money from it.

Given how late both Facebook and Google are to this market it’s hard not to think they are repeating the mistakes of previous market incumbents in other sectors of ignoring a market until becomes a shiny trinket which every dynamic corporation should have a presence in.

In that respect it’s a bit sad that relatively young corporations like Facebook and Google are overlooking genuine innovation and using their skilled teams to build me-too products rather than finding and building new markets. Hopefully the time taken to build their group buying services won’t distract these companies from their core businesses.

Trust is the currency of the web

To succeed online, we have to be a trustworthy voice in the noise of the Internet

“On the Internet, nobody knows you’re a dog” says Peter Steiner’s famous cartoon. All of us who want to be taken seriously on the web have to prove we’re not dogs – or trolls, shills or just those who regurgitate cheap, nasty and unreliable content.

This is particularly true when you want to be a trusted news source; your audience has to be assured an article’s facts are true and the conclusions can be relied upon. That assurance is found in references to source material, the writer’s identity and the basic facts for the reader to decide how accurate the story is.

An article in the Sydney Morning Herald on Voice over IP security illustrates just how even mainstream, established media can get things wrong. This article tells us nothing; we don’t know who the writer is, it doesn’t link to source material and, unforgivably, the story leaves it to the reader to guess what the security problem was.

Because of Fairfax’s silly and inconsistent rules on external links I normally don’t link to Fairfax news articles. A good example of this silliness is illustrated in the above article where the reader has to copy and paste into a web browser the bit.ly reference to MyNetFone’s security advice which the writer has managed to sneak into the copy.

It would be nice to congratulate the writer on this little bit of subterfuge but the article doesn’t have a byline, the credit at the bottom simply says “Livewire” which probably refers to the long defunct IT section of The Age, the Sydney Morning Herald’s sister publication.

That the article also refers to Bleeding Edge, a long running Age technology column by Charles Wright which was discontinued some time in early 2006 and which Charles later tried to morph Bleeding Edge into an independent blog. It’s not good enough that we have to guess who the writer is.

Having a semi-anonymous writer, no byline and no links to supporting information might be all forgivable if the article actually told us what the problem had been with the phone account; did the evil Hong Based criminal mastermind hack the providers’ network, was it a security lapse on the writer’s network or had the user’s password been weak and compromised?

I suspect it’s the latter, but like most things about this article the reader is forced to guess. If the reader doesn’t have some level of computer expertise they’d be totally lost.

For organisations like Fairfax, the publishers of The Age and Sydney Morning Herald, the challenge in a society where the traditional newspaper model is rapidly dying is to build their online brand so they can bring advertisers across to it.

The only way they will succeed in this difficult task is to be trusted as a source of reliable information, and right now poor editing coupled with silly policies such as the one on linking out to other trusted sites are damaging readers’ trust in their brand.

Rather than sacking editors, publishers should be preserving them and making their online content more trustworthy than the bulk of the web with its dozens of content farms and millions of inconsistent blogs (like this one).

It’s only by having high standards that today’s media empires will survive the changes the Internet has bought, going cheap and losing the trust and respect of the audience is not an option.

How safe is your net connection?

It pays to be careful on the web when travelling.

Reports last week that foreign “hackers” had intercepted emails between Australian government officials and miners raised the issue of email security, just how private are our online messages?

When the media uses the word “hacking” it’s always worth taking a step back and finding out the facts. Often a security breach is the result of a simple setup mistake or the information and passwords have walked out the building with a disaffected, lovestruck or just plain dumb employee.

That’s not to say hackers aren’t a risk organisations should to be conscious of, it’s just that often the security risks are more mundane than we would expect. A good example is the simple matter of logging onto a wireless or hotel network.

We assume when we log into our networks that the data is secure though often the user names and passwords are exchanged in “clear text”, which anyone with access to the network can view your passwords with the use of a “packet sniffer” that reads each bundle of information sent across the internet.

Poor security isn’t just a feature of unprepared computer users, every year the world’s leading hackers and security experts gather at that Las Vegas DEFCON conference which since 2001 has featured the Wall of Sheep, an embarrassing display of user information captured off the convention’s network.

This is a surprisingly common security problem made more frequent with the rise of unencrypted wireless networks which can be sniffed by anyone who can be bothered logging on, this is a common problem when you’re connecting onto free wireless networks at the local coffee shop or fast food restaurant.

The answer to all of this is to use Secure Socket Layer encryption, which creates a secure link between your computer, mobile phone or iPad and the servers. For email use, your system administrator can set this up or if you use the popular web mail services it’s a matter of ticking the box.

A similar service works when you’re browsing the web, on visiting a secure site the address should start with https instead of the usual http, the “s” on the former stands for “secure”. A padlock symbol will also appear – in the bottom left hand corner of Firefox or beside the site address at the top of both Chrome and later versions of Internet Explorer.

Before logging onto any secure service, including social media platforms, both the https address and the padlock symbol should appear before you enter passwords or sensitive information like credit card or banking details.

Sadly, the secure websites are not always foolproof as sometimes the site will use a secure connection for your password details then once you’ve logged in, return to an unsecured version. This is how the Filesheep program that was released last year works by sniffing cookies and other stored information from unsecured websites.

It’s surprising how many tourists and backpackers get caught out while doing online banking, checking their email or using social media while on the road.

Without logging into a network securely, then logging out when finished and making sure their details haven’t been saved, it’s quite common to see travellers getting their details stolen.

Assuming you’re safe because the network belongs to a high priced hotel or resort doesn’t always work either; a few years ago passengers on a major cruise liner had their bank accounts compromised when one of the crew was stealing data passing through the ship’s Internet cafe.

You don’t need to be a mining executive in China or Julian Assange to fall prey to the Internet snoops, whole industries and criminal organisations are built around using your data so it’s a good idea to be making sure your information is secure while taking a little bit of caution and using some judgement before logging onto a network.