Jun 292014

The revelation that a Facebook research team lead by Alan Kramer experimented with users’ emotional states is a disturbing story on many levels, the immediate consequence is a further erosion in the public trust of social media services.

Facebook, like many social media services, has received a lot of criticism in recent times as the company tries to make enough money to justify its $160 billion valuation.

Most of that criticism has been around the re-arranging of users’ feeds with Facebook’s algorithm deciding what information should be displayed based upon a user’s history with a liberal sprinkling of advertising thrown in.

The Kramer research though takes Facebook’s manipulation of users’ information to another level, along with raising a range of ethical issues.

One of the most concerning issues is the claim that the experiment’s subjects had given informed consent by agreeing to Facebook’s Terms of Service. This is dangerous ground.

The dangerous ground, apart from the gross overreach of customer terms of service this behaviour risks losing the market’s trust; once Facebook or other social media and cloud computing services are viewed as untrustworthy, they are doomed.

For Facebook it might be that the abuse of user trust is the biggest social experiment of all: How far can the company push the public?

We may soon find out.

Jun 102014

Today I spoke about online safety to the Australian Seniors’ Computer Clubs Association about staying safe online.

Hopefully I’ll have a copy of the presentation up tomorrow but what was notable about the morning was the concern among the audience about security and safety of cloud services.

The ASCCA membership are a computer savvy bunch – anyone who disparages older peoples’ technology nous would be quickly put in their place by these folk – but it was notable just how concerned they are about online privacy. They are not happy.

Another troubling aspect were my answers to the questions, invariably I had to fall back on the lines “only do what you’re comfortable with”  and “it all comes down to a question of trust.”

The problem with the latter line is that it’s difficult to trust many online companies, particularly when their business models relies upon trading users’ data.

Resolving this trust issue is going to be difficult and it’s hard to see how some social media platforms and online businesses can survive should users flee or governments enact stringent privacy laws.

It may well be we’re seeing another transition effect happening in the online economy.

May 242014
e-commerce giant eBay head office

One of the paradoxes of the modern tech industry is that while its leaders preach openness and collaboration, their own businesses are mysterious unaccountable black boxes.

This website has often looked at how the Silicon Valley business model leaves users and partners exposed to arbitrary enforcement of vague policies and indifferent customer service.

A good example of the black box business model is eBay’s major security breach where it appears millions of users have had their personal and banking details compromised. Instead of informing customers immediately, the company’s management hid the problem and hoped stonewalling inquiries would make the problem go away.

Lacking accountability

In the black box business model, not being accountable is the key – we see it with Amazon’s bullying of book publishers, Google’s high handed identity policies and Facebook’s puritan censorship.

Those high handed attitudes to customers’ and users’ rights is born out of arrogance; all of these company’s managements, and the corporate bureaucrats who enforce the policies, believe their hundred billion dollar businesses are untouchable.

Such arrogance might though be ill-founded as each of these businesses is less than twenty years old and, while they themselves have deeply disrupted existing industry models, there is no reason why their own market dominance and huge cash flows can’t be usurped by new technologies or challengers.

In age where trust is the greatest currency, hiding beyond a block box of algorithms and impassive customer support may not turn out to be a successful management strategy.

Apr 262014

The announcement that Vic Gundotra, the executive responsible for Google+ at the search engine giant, is leaving the company has lead to the widespread assumption that the troubled social media platform is dead.

It’s not an unreasonable assumption that Google Plus is dead; the company’s trait of corporate attention deficit disorder means the project is likely to die of neglect without a top level executive supporting it.

Should Google Plus be dying, this won’t be bad news for some of the company’s other products, the enforced integration with the social media service irritated users, –particularly on YouTube — while reducing functionality for platforms like Google Places.

Google Places, or Google Plus for Business as it was clumsily renamed as part of the integration, could be the great beneficiary of removing the distraction of the social media service with renewed focus on local search.

Regaining focus

Losing focus on local and mobile search has been the most damaging effect from the Google Plus experience and renewed efforts in those fields will take on Facebook while filling a gap in the market.

It’s also unlikely that the entire ‘identity service’ will live on with those features permeating through the company’s products.

Of course, it could be that Google Plus isn’t dead at all; we’ll have a better idea of where it’s going to go when we see the level of commitment from senior management towards the product, although the appointment of a relatively junior executive doesn’t seem to be good news for the platform.

Moving on from Google Plus is an opportunity for the company to refocus on neglected niches, it could be a good result for the company’s shareholders.

Apr 202014

Could liking a brand’s Facebook page cost you your right to sue?

The New York Times has a story on how corporations are subtly changing the wordings on websites and social media pages in an effort to make it harder for customers to challenge the business in court.

It’s quite cheeky attempting to strip people who ‘like’ a Facebook page of their rights to take action against a company, it even strikes at the heart of building an online community around a brand.

The whole point of accumulating real life followers behind a brand’s social media presence is to create a band of fans; by creating suspicion, business destroy the goodwill behind that exercise and possibly render it useless.

It will be interesting to see how Facebook react to this behaviour as intimidating users and discouraging them from liking brands is a direct threat to their business model, it’s hard to see them not changing their own terms to make this corporate behaviour a breach of their own terms of service.

For consumers though it’s a reminder that corporations, at least those who operate on twentieth-century mass market principles, aren’t really their friends.

Update: Since posting this piece, General Mills has backed down on its policy but the point still remains that unfair and over legalistic terms and conditions threaten social media platforms.

Apr 102014
A small business closing due to rent increase

Facebook’s latest changes to its layout creates more problems for small business using social media as the real estate available on its site for eyeballs gets smaller.

The social media giant has been catching criticism recently for changes to its algorithm that make it harder for businesses to be seen online.

In the hospitality industry, discontent was articulated by the Eat 24 website which closed its Facebook Page down after finding the problems too hard.

With the changes to the online advertising feed, it makes it even harder for small business to be seen on the platform as reduced space means higher prices for the space that remains available.

It’s hard to see small businesses getting much traction with the changes when they’re up against big brands with large budgets.

On the other hand for the big brands, the importance of proper targeting becomes even greater as wasting

A challenge for small business

The big problem now for small business is where do you advertise where the customers are?

A decade or so ago, this was a no-brainer – the local service or retail business advertised in the local newspaper or Yellow Pages. Customers went there and, despite their chronic inefficiencies, they worked.

Now with Facebook’s changes, it’s harder for customers to follow small business and this is a particular problem for hospitality where updates are hard.

The failure of Google

Google should have owned this market with Google Places however the service has been neglected as the company folded the business listing service into the Plus social media platform.

Today it’s hard to see where small business is going to achieve organic reach – unpaid appearances in social media and search – or paid reach as the competition with deep pocketed big brands is fierce.

Services like Yelp! were for a while a possible alternative but increasingly the deals they are stitching up deals with companies like Yahoo! and Australia’s Sensis are marginalising small business.

So the online world is getting harder for small business to get their message out onto online channels.

For the moment that’s a problem although it’s an interesting opportunity for an entrepreneur – possibly even a media company – to exploit.

Apr 022014

“This is the most difficult time in history to be a wine maker, declares Paul Mabray, Chief Strategy Office and founder of Vintank.

“Never has the wine industry been as competitive as it is today.”

Update: The Wine Communicators of Australia, who sponsored Mabray’s visit, have posted Paul’s presentation that covers this post’s theme in more detail.

Mabray’s business monitors social media for wineries and collects information on wine enthusiasts. Since Vintank’s founding in 2008 the service has collected information on over thirteen million people and their tastes in wine.

Rewriting the rule book

Social media, or social Customer Relationship Management (sCRM), is what Mabray sees as being part of the future of the wine industry that’s evolving from a model developed in the 1970s which started to break down with the financial crisis of 2009.

“In the old days there was a playbook originating with Robert Mondavi in the 1970s which is create amazing wine, you get amazing reviews and you go find wholesalers who bring this wine to the market.”

“As a result of the global proliferation of brands the increase of awareness and consumption patterns where people like wine more, those playbooks didn’t work in 2009 when the crisis started.”

With the old marketing playbook not working, wineries had to find other methods to connect to their markets and social media has become one of the key channels.

Now the challenge in the wine industry, like all sectors, is dealing with the massive amount of data coming in though social media and other channels.

The cacophony of data

“If you rewind to when social media came out, everyone had these stream based things and the noise factor was so heavy,” says Mabray.

“For small businesses this creates an ‘analysis to paralysis’ where they’d rather not do anything.”

Mabray sees paralysis as a problem for all organisations, particularly for big brands who are being overwhelmed by data.

“The cacophony of data at a brand level is just too much,” he says.

“It’s as noisy as all get go and I think the transition is to break Big Data down into small bite size pieces for businesses to digest is the future, it shouldn’t be the businesses problem, it should be the software companies’.”

A growing digital divide

Mabray sees a divide developing between the producers who are embracing technology and those who aren’t, “the efficiencies attributed to technology are obvious whether they’re using CRM, business intelligence or other components.”

“The people who are doing this are recognising the growth and saying ‘hey, this stuff actually works! If I feed the horse it runs.”

While Mabray is focused on digital media and the wine industry, similar factors are work in other industries and technology sectors; whether it’s data collected by farm sensors to posts on Instagram or Facebook.

Facebook blues

Mabray is less than impressed with Facebook and sees businesses concentrating on the social media service as making a mistake.

“I think that every social media platform that’s been developed had such a strong emphasis on consumer to consumer interaction that they’ve left the business behind, despite thinking that business will pay the bills.”

“As a result almost every single business application that’s come from these social media companies has met with hiccups. That’s because it wasn’t part of the original plan.”

Facebook in particular is problematic in his view, “it’s like setting up a kiosk in the supermall of the world.”

The business anger towards Facebook’s recent changes is due to the effort companies have put into the platform, Mabray believes; “everyone’s angry about Facebook because we put so much into getting the data there.”

“We said ‘go meet us on Facebook’, we spent money collecting the items and manufacturing the content to attract people and now we have to spend money to get the attention of the people we attracted to the service in the first place.”

Despite the downsides of social media Mabray sees customer support as one of the key areas the services. “It’s easy to do in 140 characters.”

Context is king

“Everything come back to context. There’s this phrase that ‘content is king’,” Mabray says. “Context is king.”

“Anyone can produce content. It’s a bull market for free content. We have content pollution – there’s so much junk to wade through.

Mabray’s advice to business is to listen to the market: “Customers are in control more than they have ever been in human history: Google flattens the world and social media amplifies it.”

For wineries, like most other industries, the opportunity is to deal with that flat, amplified world.