social media | Paul Wallbank - Communications Professional

Context and the digital divide

Paul Mabray, founder of US online monitoring service Vintek, sees a digital divide developing as businesses struggle with social media big data and Facebook.

“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.

Zuckerberg meets the telcos

What do telco executives hope to learn from Facebook’s Mark Zuckerberg?

One of the fascinations of this blog is how telecommunications executives desperately fight against the idea of their service being a basic utility.

Should you scratch a tough, hardbitten telco executive; you’ll find a sensitive soul who desperately wants to be seen as a swashbuckling media tycoon or cool startup wunderkind rather than the manager of a staid old telephone company.

Once you understand the buried desired of telco executives, it’s not surprising that Facebook founder Mark Zuckerberg was invited to give the opening keynote of the 2014 Mobile World Congress.

Sadly for the Telcos it wasn’t good news as the real life tycoon and wunderkind described how Whatsapp, the startup he acquired for $16 billion last week, is going to introduce voice services in the near future.

Having seen messaging services like Whatsapp slowly strangle the telecommunications industry golden goose that was SMS, the telcos now face lucrative voice services being further eroded by these Over The Top smartphone apps.

Which leaves them with data, the lowest margin service in the telco stable.

Far from being the bravest man in Silicon Valley, Mark Zuckerberg is the telco industry’s future. Which is why the industry’s executives want to find ways to profit from developments like machine to machine (M2M) communications and media ventures.

The worry though is most of the new telco opportunities don’t appear to anywhere near as profitable as now declining or stagnant services that have been so lucrative in the past.

Which makes Ericsson’s partnership with Facebook in developing an Innovation Lab for the internet.com initiative intruiging.

The objective of Internet.com is to make the internet more accessible to more of the world, which again threatens incumbent telco models.

Transmitting data—even a text message or a simple web page—requires bandwidth, something that’s scarce in many parts of the world. Partners will invest in tools and software to improve data compression capabilities and make data networks and services run more efficiently.

Efficient, compressed data means even less revenue for the operators so it’s no wonder they’re looking at those alternate revenue streams.

No telco executive is likely to starve in the near future, but as revenues stagnate in their established markets it’s no wonder the industry’s leaders are wondering whether it’s worthwhile hitching their fortunes to Facebook’s success.

Has the social media bubble popped?

Poor LinkedIn and Twitter earnings could be marking the end of the social media bubble

Last week Facebook’s stock soared after the company reported better than expected earnings on its advertising services.

It seemed that the social media sites had finally cracked the code on how to make money out of their billions of enthusiastic users.

This week sees a different story as both Twitter and LinkedIn disappointed investors with missed revenues targets in their quarterly earnings reports.

Twitter’s blues

For Twitter the market reaction was merciless – the stock price dropped 24% – as a $500 million loss in it’s first quarter of trading on the stock market is not a good look.

In Twitter’s defense, all of that loss was due to the cost of acquisitions being booked by the company. In 2013 the social media site spent over $500 million buying out various advertising, curation and and analytics services.

The question now for Twitter is whether they can weld together a profitable platform from the collections of businesses they’ve acquired and start delivering a return to investors.

A miss for LinkedIn

LinkedIn has a similar bent towards acquisitions having announced its purchase of data analytics company Bright on the same day as its disappointing results, however the company’s undershooting expectations was because of lower than expected revenues.

‘Disappointing’ is an interesting word in the context of LinkedIn as revenues were up 47% over the previous year.

What possibly should have been more concerning for analysts than the headline revenue number are Linkedin’s soaring costs of doing business – both sales & marketing and product development costs were up 50% year on year – which cut profits by over two thirds.

The most worrying part of LinkedIn’s earnings miss is the company’s price to earnings ratio. Currently the stock trades at an eye-watering P/E of 1,000 which implies investors are expecting a lot more revenue into the business.

Over-inflated expectations

It’s hard to argue that social media stocks aren’t in a bubble with those multiples. Even Facebook trades a hefty one hundred times earnings despite its improved revenues.

Perhaps the simple fact is we’re expecting too much from social media services; they are good businesses, but maybe they’ll never be the fantastic profit machines that Apple, Google or Microsoft have been.

Buzzfeed and the cat problem

Can Buzzfeed become social media’s New York Times?

Last week, the viral news site Buzzfeed launched its Australian operation with a visit from Scott Lamb, the company’s Vice President for International operations.

As the “media company for the social age” in Scott’s words, Buzzfeed has led the way in ‘viral media’.

The viral media model revolves around audience reach, and revenue, being measured on the amount of sharing on social media services like Facebook and Twitter rather than how many people view or visit their websites.

Buzzfeed’s Cat problem

For Buzzfeed attracting this traffic mean cats – people love sharing pictures of cats on the web.

While Scott likes cats as much as any of his readers, he describes the industry as facing a ‘cat problem’.

“The cat problem is that we all love cats, but they’re also a barrier to taking the internet seriously,” Scott said. “It’s true for Buzzfeed and it’s true for a lot of other websites as well.”

Cats may be both a problem and a boon for Buzzfeed but there’s more to the business with Scott describing to the Sydney audience what he saw as the four myths of online media;

Long form writing doesn’t work on the web
Paying attention to clicks leads to lowest common denominator stories
Social is merely a box you need to check
Creating sharing content is easy and trivial

There’s no doubt that item four is hard, although how much harder re-purposing stuff found on the web is compared to creating original content is open to question.

Point three is a given for Buzzfeed given its business model and there would be few media sites that weren’t concerned about how often their stories aren’t shared on social media.

Being taken seriously though weighs heavily on Buzzfeed so it was the two first points that Scott emphasised in his Sydney presentation.

Long form journalism

Scott was proud to show off BuzzRead stories like Why I Bought A House In Detroit For $500 or The Most Dangerous Sentence in US History to show the site’s credibility as a reputable, considered venue for long form journalism, just like the New York Times.

The problem for Buzzfeed’s aspirations though is the US Presidential story received 1,400 tweets and just over four thousand Facebook shares, the Detroit story gained five thousand tweets and 29,000 shares.

On the other hand, a quiz on what city should you live in received 578,000 shares and 26,000 tweets. For the record, I got London which is something I’m ambivalent about but certainly beats getting Murmansk.

That meme proved so good that Buzz Feed repeated it a week later with a what sort of job you should have quiz.

You can’t blame them for exploiting a meme, particularly one that gets half a million shares.

Scott though didn’t see the traffic mismatch between the worthy and the tabloid as being a problem; “we know we can’t equate an 8,000 world article to a quiz,” Scott said. “In terms of our business model our revenue isn’t tied to page views.”

“There is incentive for us to get as many a views for an 8,000 word article as possible.”

Riding the Facebook tiger

Regardless of the viability of 8,000 words articles, the real problem for Buzzfeed in its aspirations to become a virally shared New York Times is the site’s reliance on Facebook.

Relying on Facebook is path to disappointment, the service has shown it’s quite willing to burn partners, including advertisers, small businesses and users in the interests of its own corporate interests.

For Buzzfeed, the assumption the media site’s corporate interests will always align with Facebook’s is brave assumption.

Another problem for Buzzfeed is content, the bulk of the site’s material and what drives most sharing are posts that gather pictures from the web – primarily Facebook.

Using other people’s content lies at the core of viral sharing sites and most of Buzzfeed’s competitors shamelessly steal material from other websites, particularly Buzzfeed, in the aim to drive shares from gullible users.

Buzzfeed itself isn’t immune from that risk, with a photographer suing the site for $3.6 million over a photograph used in one of its lists.

Risks in the model

On the scale of risks to Buzzfeed not being seen as an viral version of the New York Times is quite low; the real risks are of being overtaken by a savvier competitor, falling victim to a Facebook change of policy, or simply turning out to be a transition effect in an industry that’s undergoing massive and rapid change.

The aspiration of Buzzfeed becoming a New York Times is probably irrelevant anyway, most Facebook users don’t care about long form journalism – they like cats.

In an era where the public wants animal pictures and celebrity scandals – who needs to be the New York Times?

Perhaps the cat problem isn’t a problem, but the future for media channels like Buzzfeed.

It’s tough in YouTube land

The problems for YouTube channel owners illustrates the business risks of relying on one social media service.

For owners of YouTube channels life has been tough in the last few months as Google plays with the service and its features.

The first irritant for YouTube administrators was the integration of Google Plus into the comments that now requires commenters to have an account on Google’s social platform.

Google’s reasoning for this is some transparency in YouTube’s comments will improve the services standards of conversation and there’s no doubt that YouTube comments truly are the sewer of the internet with offensive and downright deranged posters adding their obnoxious views to many clips.

Unfortunately the objective of improving YouTube’s comment stream doesn’t seem to have worked which casts the effectiveness of Google’s identity obsession into doubt, but it has had the happy – and no doubt totally unintended – effect of boosting user numbers for the struggling Google Plus service.

The latest blow for YouTubers has been Google’s copyright crackdown where the service is removing posts it claims are in breach of owners rights. Many channels, particularly game review services, are being badly hit.

Of course the Soviet attitude to customer service that Google shares with many other Silicon Valley giants doesn’t give these folk many options of getting their problems resolved.

All of which illustrates the risks of being dependent on one social media service which the poor YouTubers are finding this the hard way.

Watching this play out, it’s hard not wonder how vulnerable services like YouTube are to disruption, while they have the network effect of being the leader it’s not hard to see how alienating the people who create the platform’s content opens up opportunities for new players.

Facebook’s advertising struggle

The next few years promise to be interesting for everyone in the social media industry, particularly Facebook’s shareholders and advertisers.

Facebook is further restricting the reach of brands on their social media platform reports industry news site Ad Age.

It’s not surprising that Facebook is doing this seeing their stock is currently trading at 120 times current earnings and sixty times estimated revenue. The income has to come from somewhere to justify those prices.

The social media service is quite blunt about it’s objectives in making brands pay more to get their message out on Facebook as Ad Age reports;

“We expect organic distribution of an individual page’s posts to gradually decline over time as we continually work to make sure people have a meaningful experience on the site.”

Facebook’s idea of a meaningful experience though might be very different from its users, who are showing their irritation with the service messing around with their news feed. It remains to be seen just how interested those posting on the site are in clicking on sponsored or promoted posts as opposed to finding updates from those they care about.

For smaller businesses, Facebook’s moves make it harder to use the service as an effective marketing or engagement platform as it means stumping up substantial amounts of money to get your messages in front of your customers and friends.

It’s going to be interesting to see how this pans out for Facebook and the social media marketing community. It may mean that social advertising is monopolised by big brands while small and local business finds other channels to get their message out.

One thing is for sure though, the idea that social media would replace the news media is beginning to look shaky as people’s feeds start to be dominated by messages they don’t want.

The next few years promise to be interesting for everyone in the social media industry, particularly Facebook’s shareholders and advertisers.

For smaller businesses, it’s clear that Facebook is no longer a cheap marketing platform.

Delighting the customer – the new business normal

Peter Coffee, Salesforce Vice President for Strategic Research discusses the new business normal where mobile services, collaboration, community and understanding your data are essential tasks for every manager.

Salesforce’s Executive Vice President of Strategic Reserach, Peter Coffee joined the Decoding The New Economy channel at last week’s Dreamforce conference to discuss the new normal — delighting the customer.

Coffee’s role at Salesforce is to help the company’s potential clients understand the new normals of business life. “It’s a lot of listening,” he says.

In describing the new normal, Coffee is in tune with Salesforce’s CEO Marc Benioff in seeing mobile services as being one of the key parts of how business will look in the near future.

“The fundamental statement is your mobile device is no longer an accessory,” says Coffee. “It’s the first thing you reach for in the morning and it’s the last thing you touch at night.”

“Fundamentally people are mobile centric so we need to rethink our operations.”

Continuing the social journey

It’s not just mobile services that are changing the way we do, social media continues to be companies’ weak points in Coffee’s opinion.

“There’s research that’s come out of places like MIT that shows traditional print and broadcast media are still valuable for creating awareness of your brand but the final step of turning someone from knowing who you are into deciding to do business with you is now made today only when a trusted network confirms it.”

“People don’t make that final step of buying from you until they’ve consulted their trusted advisors.”

“Another fundamental change that’s happened is that the connectivity of the customer is such that if you have a customer that’s unhappy with you for even five or ten minutes there’s a tweet or a Facebook post or a LinkedIn update just begging to leak out and damage your brand,” says Coffee.

“The closer you can get to instantaneous resolution to the issue, the better.”

Internet of machines

With the internet of machines, the ability to resolve customers’ problems instantaneously becomes more more achievable in Coffee’s opinion.

“Connecting devices is an extraordinary thing,” says Coffee. “It takes things that we used to think we understood and turns them inside out.”

“If you are working with connected products you can identify behaviours across the entire population of those productslong before they become gross enough to bother the customer.”

“You can proactively reach out to a customer and say ‘you probably haven’t noticed anything but we’d like to come around and do a little calibration on your device any time in the next three days at your convenience.'”

“Wow! That’s not service, that’s customer care. That’s positive brand equity creation.”

Delighting the customers

All of these mobile, social and internet of things technologies will give businesses the tools to delight their customers and Coffee sees that as the great challenge in the new business normal.

While many businesses will meet the challenges presented by mobile customers and their connected machines Coffee warns those who don’t are in for a painful time.

“If you do not have delighted customers you have no market.” States Coffee, “the way that you delight customers is by making sure every interaction with you leaves them happier than they were before.”

“Traditional silos of sales, service, support and marketing must be dissolved into one new entity which is proactive customer connection.”

“Companies that neglect to adopt it will discover they have customers who are sensitive to nothing but price,” warns Coffee.

Paul travelled to Dreamforce in San Francisco as a guest of Salesforce.

Building business communities

Businesses have the opportunity to build global brands and dominate their industries with the online tools we have available.

Industrial designers and engineers are probably the last thing most of us think of when discussing online communities.

Last week two very different events illustrated just how successful businesses benefit from building communities around their products and services.

Over lunch at a nice restaurant overlooking Sydney Harbour Dassault Systemes launched their their latest Solidworks 3D design software where they described the two million members of their global user community as being key competitive advantage in the industrial design market.

In the business sector, having that ecosystem of users is the key success as shown by businesses ranging from AutoCAD to Photoshop. Almost every industry has some software package that dominates the sector because ‘everyone uses it’.

Building social media communities

At the other end of the scale earlier in the day PayPal Australia launched their latest Driving Business Online campaign showcasing online commerce tools for the small to medium business sector.

One of the companies they profiled was Brisbane fashion company Black Milk Clothing, a Brisbane based business that has grown from a startup to employing 150 staff in four years entirely through its 560,000 strong Facebook community and 655,000 Instagram followers.

While there’s risks with relying on social media platforms as a primary marketing channel, Black Milk is a good example of what a retail business can do with building an online community.

Older examples

None of this is really new, Apple are probably the best example of a tech community with millions of adoring fans prepared to queue around the block for the latest iPhone.

Microsoft’s continued profitability despite being in a declining market comes from its army of developers, system admins and IT support services who are deeply committed to the company’s products.

At it’s most basic, every business needs a core of dedicated customers, committed staff and enthusiastic evangelists — with today’s tools companies like Black Milk are able to build a global brand.

Not every business can build a global brand out of their communities of enthusiastic customers and dedicated employees but the goodwill in those groups are quite possibly the biggest asset any organisation has.

With today’s online collaborative tools and social media services there’s no excuse for a business not be nurturing and growing their communities.

Privacy’s still beating heart and the social media challenge

The changing habits of younger web surfers are challenging the assumptions underlying social media services.

“I’m not a very public person,” twenty-two year old Walter Woodman tells the New Yorker in How A Relationship Dies on Facebook.

One of the assumptions of the social media industry is that digital natives, those born after 1990, have little if any expectations of privacy. The New Yorker story challenges that idea.

Much of the New Yorker’s background is taken from the Pew Centre’s May 2013 report Teens, Social Media and Privacy which interviewed 802 US teens and their parents to identify young adults’ attitudes towards privacy.

As the Pew Centre’s Mary Madden wrote in a follow up post to that report, US teenagers aren’t about to about to abandon Facebook yet but they are concerned about privacy and the work involved in managing an online persona.

While some of our teen focus group participants reported positive feelings about their use of Facebook, many spoke negatively about an increasing adult presence, the high stakes of managing self-presentation on the site, the burden of negative social interactions (“drama”), or feeling overwhelmed by friends who share too much.

This suggests a far more mature, and complex, understanding of privacy by teenagers than many of the social media boosters assumed when declaring that privacy is irrelevant in the Facebook era.

Like their parents, teenagers and young adults know there are consequences for sharing too much online which challenges the social media platforms that have built their businesses around users spilling everything about themselves into the big data pot.

It turns out digital natives are just as conscious of the risks as their parents, although how they handle it may manifest in different ways, and the assumptions of many social media businesses aren’t quite as robust as they appeared not so long ago.

Bringing social networking to life

One startup project shows how different technologies are coming together to change our business world.

One of the highlights of the 2013 Australian Microsoft TechEd was a startup panel featuring local startups CoOpRating, Project Tripod and Nubis.

All three startups are interesting projects and Nubis in particular illustrated how various internet and smartphone technologies which are coming together.

Nubis is an Augmented Reality platform that projects social media onto the viewer of a smartphone’s camera. By pointing the camera at someone, the idea is a user can bring up details about a person.

“We’re bringing social networking to life,” says founder Uzi Bar-On.

As part of their Alphega project, Nubis has teamed with Glass Up, an Italian startup attempting to create a Google Glass competitor, the aim is to create a wearable computer that feeds social media information to the wearer.

While it’s not clear what the benefits will be of that – or whether Glass Up, Nubis or Alphega will be successful – the project is interesting as it brings together Augmented Reality, geolocation, wearable technologies and social media.

Over the next few years we’ll be seeing more products like Alphega tying together different technologies and using the Internet of Everything to talk to each other.

It’s these sort of projects that will show us how our businesses and lives are going to change over the next decade as smart people figure out the ways to mash together these technologies.

Paul travelled to Microsoft TechEd 2013 courtesy of Microsoft Australia