internet | Paul Wallbank - Communications Professional

Building local brands

TripAdvisor is showing how the travel industry is adapting to the new world for brands

Last week this site looked at the idea from Colonial First State Funds Management economists James White and Stephen Halmarick that brands are doomed in a world of perfect information.

Forecasting the end of brands is a big call despite the massive changes the internet is bringing to industries. One of the things I suggested is that the concept of the brand – which was largely born out of Twentieth Century mass communications – is evolving with the social media and online world.

This view is born out by Tom Vanderbilt in an article in Outsideonline where he describes how TripAdvisor is changing the way people travel.

In Ireland Vanderbilt claims the hotel industry found TripAdvisor to be a harsh wakeup call that saw local hospitality businesses lift their game as they realised customers were now far better informed.

Across the Atlantic on Mexico’s Yucatan peninsula Vanderbilt describes how hotel owners in the town of Tulum had to realign their listings and marketing when TripAdvisor changed how they were grouped in the region. It shows how users are searching and finding accommodation.

Importantly for guests, hotel managers are using online reviews to measure how their premises are measuring up to expectations through social tools and using the results to justify capital expenses on upgrades.

This could justify White and Halmarick’s view that the major global brands such as the Marriots, Hiltons and Sheratons are in decline however it more likely shows those chains are having to raise their game to maintain their worldwide position.

What Vanderbilt, White and Halmarick indicate though is social channels are changing the way the hospitality industry works. This is an opportunity for smaller operators to build strong brands in their own niche or region.

The Internet’s Pax Americana

The US dominates the Internet but will it do so forever?

Tech journalist Kara Swisher has a twenty-five minute interview with President Obama on his relationship with the technology industry and Silicon Valley, it’s an interesting snapshot on how the United States sees its role as custodian of the internet.

In talking about European agencies’ efforts to reign in the power of companies like Google the President is dismissive; “we have owned the Internet. Our companies have created it, expanded it, perfected it, in ways they can’t compete. And oftentimes what is portrayed as high-minded positions on issues sometimes is designed to carve out their commercial interests.”

Obama is absolutely correct to say the Internet currently belongs to the United States, it was the US that developed the technologies and built the initial infrastructure for the global network in a similar way it did for the GPS system.

The internet probably won’t remain the US’s sole domain as China, Indian, Russia and other powers find control of the global communication network resting with the US isn’t in their interests and develop work arounds or rival technologies.

Just as Spain and then the English once dominated the world’s shipping and communications, it may well be the US’s dominance of the Internet is not permanent.

Google’s Microsoft problem

Google’s key revenue source is slowing, where do they go next to avoid falling into Microsoft’s trap?

The one factor that saw Microsoft become the biggest computer software company was the rise of the personal computer, similarly the decline of the PC has seen Microsoft stagnate.

One of the companies that benefited from the forces that pushed Microsoft into stagnation was Google and now it appears they could be suffering the same fate.

Yesterday Google released their quarterly results which showed the rate of growth in online advertising is slowing, which is a worry for the company as internet marketing accounts for 90% of the firm’s income.

Like Microsoft, Google has to diversify. Whether it’s the internet of things, smartphones, apps, driverless cars or something else remains to be seen but the pressure is building. Should the shift to mobile or other advertising mediums accelerate, Google could be looking at a declining market and the same problems as Microsoft.

Daily links – Chinese property developers go onto internet

Chinese internet use and smart phone manufacturers dominate today’s links along with Microsoft and Uber’s latest business changes

Today’s links have a distinctly Chinese flavour around them with a look at how the country’s smartphone manufacturers are coming to dominate their market, Tencent’s plans for global domination and how property developers are looking to the internet to save their falling sales.

Uber and Microsoft make their regular appearances to round out the links in their changes to billing and security.

Chinese property developers turn to the web

Faced with declining sales, Chinese property developers embrace – the Internet!

How Chinese smartphone makers are beginning to dominate the market

The rise of China’s smartphone makers: 10 of the top 17 smartphone manufacturers now come from China.

An interview with Tencent

Business Insider has an intriguing interview with one of the VPs of Chinese internet giant Tencent.

In his Q&A, S. Y. Lau discusses how Chinese communities are seeing their incomes rise due to the internet. One of the famous case studies of connectivity are India’s Kerala fishermen who used SMS to arbitrage their market. We may be seeing a similar story with Chinese tea farmers.

Microsoft restrict warning of patches to paying customers

In a short term money grabbing exercise, Microsoft have unveiled a plan to only inform enterprise customers of upcoming security patches. My prediction is this won’t last.

Uber cuts prices

Car hiring service Uber has cut its fares in thirty US cities while guaranteeing drivers their incomes. This is probably a move to keep competitors like Lyft at bay.

When the virtual mob comes calling

Businesses have to be prepared for the online lynch mob in a time of intolerence.

In China, the human flesh search engines track down people who have offended the herd sensibility.

As Australia becomes more conservative and reactionary, the same phenomena is developing Down Under. Aussie businesses now have to be prepared for when they come to the attention of an online lynch mob.

Last weekend a South Australian dairy company, the Fleurieu Milk and Yoghurt Company, announced it would not be seeking Halal certification for its yoghurts following concerted harassment from bigots, a decision that will cost it a $50,000 contract with Emirates Airlines.

Fleurieu was not the first company to be targeted by groups of online bigots, a few weeks earlier Maleny Dairies from the Queensland Sunshine Coast announced it would not seek Halal certification for after being deluged with queries from similar groups.

For a company of any size, a wave of abuse from online hate groups is difficult to handle but for smaller businesses like rural dairy companies it’s particularly hard as there’s little training for dealing with obnoxious and ill informed virtual lynch mobs and the resulting drop in morale can affect the entire workforce.

Many managers would draw the conclusion that social media is a dangerous place that only exposes staff and the business to these vile individuals, however withdrawing totally from online channels might actually magnify the effects of being targeted as companies don’t see the internet campaigns developing.

Reacting to a hate campaign is difficult however and much of how a company deals with being the target of one comes down to the owners’ and managers’ appetite for dealing with such a crisis.

Submit to the mob

The quickest way of defusing the situation is to agree to the mob’s demands, as Maleny and Fleurieu did, which has the advantage of relieving the stress on staff and management distractions.

Submission though is not without its risks; the mob may not be happy or agreeing to their demands may upset other customers who actually spend money with the business.

This latter point is something Australia’s agricultural industry and governments should be paying attention to as Middle East nations takes over ten percent of the nation’s food exports.

Agreeing to one group’s demands may also irritate other equally other vocal groups which could actually make the problem worse. Ultimately though it comes down to what a company’s management is most comfortable doing.

Should you decide to go along with the mob, don’t equivocate. Be absolutely clear about what you are doing and why you are doing it. This is something both Fleurieu and Maleny diaries have done.

Don’t engage

If the choice is not to submit, either on principle or for commercial reasons, then it’s necessary to be prepared for continued criticism with staff and management coming under further stress. It’s important everyone is supported by the team in the face of often vile and crude behaviour.

One of the key tenants of online marketing and community management is to engage with your critics, however there is a point where trying to engage with irrational people is pointless and possibly even counterproductive.

When that point has been reached, then there is no need to reply to them and any inflammatory or provocative posts should be deleted. The saying of “don’t feed the trolls” applies.

Should commenters become too strident or silly then they should be blocked and, if they are misbehaving on a social media site, their actions reported to the service’s management. Any threats of violence should be immediately documented and a complaint made to the police.

Don’t provoke

Provoking these groups is also a mistake, descending to their level of behaviour will only encourage them and their friends along with risking alienating your own supporters. Keep things professional and straight forward.

Not being a dill yourself is something that could have heeded by one of the other businesses that found itself on the receiving end of an online lynch mob this week. Mark Clews, the proprietor of Tuk Tuk Hunter Valley, was on the receiving end of an online campaign after a snarky post about a vegetarian who visited his hamburger bar in the wine country north of Sydney.

Reading the Tuk Tuk Facebook page quickly gives one the impression Clews enjoys an online fight and he certainly got one which led to his business receiving dozens of poor reviews and at least one critic set up a Facebook page, later taken down after legal threats, highlighting the business’ poor reviews.

In a heated environment — be it vegetarianism, Halal certification or any sort of politics — it’s worthwhile business owners keeping their own personal views separate from their company’s online presence.

The moral of all three of these stories is the internet is a tough place and in today’s increasingly intolerant society one not without its risks. While every business needs to have an online presence, it’s necessary to be prepared for when the online mob appears with virtual torches at your door.

Driving the hybrids — VMWare and the case for hybrid cloud computing

VM Ware is pivoting its business to a mix of cloud and onsite technologies for its long term survival

A decade ago VM Ware disrupted the corporate IT world with its virtualisation software that changed the way big organisations used their servers. Today the company is facing up to the challenge of dealing with its own business being disrupted.

In the late 1990s when a big business wanted a new server it had to get someone to physically install one, VM Ware’s founders came up with the idea of ‘virtualisation’ with their software creating a virtual server that looked to the network like it was a discrete, real computer.

Naturally this was quicker and cheaper than buying and setting up a whole new server and VM Ware was an immediate success that upended the ‘big iron’ end of the computer industry.

Today VM Ware is valued at $42 billion on the stock market and is one of the IT industry’s giants.

However the virtualisation market itself is being disrupted by cloud computing. For many businesses, it’s even cheaper to pay Amazon, Microsoft or another cloud service to provide the servers for you.

So VM Ware is reinventing itself with a range of services to meet the challenge from the cloud providers. One of it’s key strategies is to provide a ‘hybrid’ cloud where customers run some IT services on their own servers and others on the cloud, the idea is this offers the best of both worlds.

This is almost the same challenge that Microsoft faces as both companies see their core business models being threatened by internet based technologies, something that VM Ware CEO Pat Gelsinger concedes.

“We think of Microsoft having a strategy much like ours, given they have on premise and in the cloud,” says Gelsinger. “We sort of agree on the shape of the market. We would say that Amazon and Google see a different shape in the market.”

Amazon and Google’s view is a ‘pure cloud’ model where companies and consumers run all their IT on web based services. In that world, purists like Xero’s Rod Drury are openly disdainful of the hybrid model believing it to be cumbersome and adding complexity to a simple business solution.

For companies like VM Ware and Microsoft their future lies upon the hybrid model being adopted by business. This is a high stakes industry battle which will define the careers of many IT workers and the shape of the businesses they work for.

Paul travelled to the VM World conference in San Francisco as a guest of VM Ware.

A big reset button on business

Business is like a petrie dish says Internet pioneer and Cluetrain Manifesto author Doc Searls about companies on the web.

“Every large company is just another color of a spore in a petrie dish.”

For the latest Decoding the New Economy video Internet Pioneer Doc Searls discusses The Respect Network, online privacy and the future of business on the web.

Doc Searls is one of the internet’s pioneers who helped write The Cluetrain Manifesto that laid out many of the ideas that underpinned the philosophies driving the early days of the internet.

Searls’ visit to Sydney was part of the rolling worldwide launch of the Respect Network, a system designed to improve internet users’ privacy through ‘personal clouds’ of information where people can choose to share data with companies and others.

A big reset button on business

In many ways The Respect Network shows how the internet has evolved since the days of the Cluetrain Manifesto, something that Searls puts in context.

“We wrote the Cluetrain Manifesto in 1999,” says Searls. “At that time Microsoft ruled the world, Apple was considered a failure – Steve Jobs had come along and they had the iMac but it was all yet to be proven – Google barely existed and Facebook didn’t exist at all.”

“On the one hand we saw the internet, we being the four authors of the Cluetrain Manifesto, and this whole new thing in the world that basically hit a big reset button on ‘business as usual'”

“It did that. I think we’re vindicated on that.”

Resetting business

“What we have now are new industrial giants; Apple became an industrial giant, Microsoft are fading away, Nokia was the number one smartphone company and they’re all but gone.”

One of the key things with today’s markets in Searls’ view is the amount of information that businesses can collect on their customers; something that ties into the original Cluetrain idea of all markets being conversations.

With the evolution of Big Data and the internet of things, Searls sees challenges for companies using old marketing methods which rely upon online tracking. Something that’s a challenge for social media services and many of the existing internet giants.

“The interesting thing is there’s a lot more intelligence that a company can get directly from their customers from things they already own than following us around on the internet.”

Breaking the silos

Searls also sees the current trend towards the internet being divided into little empires as a passing phase, “every company wants a unique offering but we need standards.”

For Searls the key thing about the current era internet is we’re only at the beginning of a time that empowers the individual, “the older I get, the earlier it seems.”

“Anyone of us can do anything,” Searls says. “That’s the power – I’m optimistic about everything.”

Respecting the user – Drummond Reed of the Respect Network

The Respect Network’s Drummond Reed sees personal clouds as the future of online privacy

Drummond Reed, CEO of the Respect Network, is the latest guest on the Decoding the New Economy channel.

The Respect Network offers ‘private clouds’ for individuals and companies where users can choose to trust others to share information.

After over twenty years of working in the IT security industry, Drummond founded the Respect Network after becoming worried at the power social networks are having over individuals’ privacy.

Drummond explains how a network designed to be private may be the future of online services.

“The internet is only 18 years old,” says Drummond. “We want to bring it into adulthood.”

Fear in the cloud – the loss of trust in online business

Should online businesses, particularly cloud services and social media platforms, begin to worry they’ve lost the trust of the community?

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.

Building an internet we’re not ashamed of

How do we build an internet we’re not ashamed of asks developer and writer Maciej Ceglowski

Late last month writer, painter and software developer Maciej Ceglowski spoke at the design and technology conference, Beyond Tallerand in Dusseldorf.

The Internet with a Human Face is his closing keynote for the conference – let’s try to kill that kill that awful term ‘locknote’ for closing presentations – and is a wonderful overview of the unintended consequences of the internet we’re now seeing emerge.

Maciej compares the internet’s effects with that of the motor car in the Twentieth Century – the rise of the automobile totally changed society in ways our great grandparents couldn’t have expected.

Unexpected consequences

In many respects the changes were positive; the age of the motor car saw massive increases in living standards through the second half of the century. However the immediate downside of those efficient supply chains were equally massive increases in obesity rates, suburban alienation and urban sprawl.

A similar thing is happening with this wave of technological changes; as Maciej describes in our presentation, our views of how the web was going to evolve is turning out to be very different to what we expected.

One great example is in small business advertising where we expected online channels would democratise marketing. Instead the exact opposite has happened.

Maciej’s view is far broader than just the relatively trivial problem of small business advertising, particularly with the ‘Internet never forgetting’ with the concentration of the industry in one of the world’s great earthquake zones as another major risk.

Building an internet we’re not ashamed of

Ultimately, though Maciej sees the problems facing the internet industry as a design problem.

“I have no idea how to fix it. I’m hoping you’ll tell me how to fix it. But we should do something to fix it. We can try a hundred different things. You people are designers; treat it as a design problem! How do we change this industry to make it wonderful again? How do we build an Internet we’re not ashamed of?”

While being ashamed is a big call, and probably unfair in that it’s like blaming Henry Ford for 2014 childhood obesity rates in Minnesota, Maciej has flagged that there are real adverse unintended consequences to the way the internet is evolving.

All of us involved in the industry need to recognise those adverse effects and start acting to fix these problems.

Bridging the online advertising gap

Mary Meeker’s State of the Internet report reminds us that the online advertising model is yet to be found

At the Code Conference held outside Los Angeles last week, analyst Mary Meeker delivered her annual State of the Internet slideshow covering the trends and opportunities in the online world.

One of the most watched graphs is the time spent on media versus the advertising spend on that channel.

For years Meeker has shown print is receiving a higher share of advertising dollars for the amount of time consumers spend on it compared to online channels.

That implies print revenue is due for collapse and online advertising revenues will surge. Here’s the 2014 chart.

If we track this over the last five years, here’s what we see with the ‘difference’ column being the sum of print’s over-representation and online’s (mobile and web) under-spending.

Year	Print time	Print share	Online time	Online share	difference
2010	12	26	28	13	29
2011	7	25	36	23	31
2012	6	23	38	25	30
2013	5	19	45	26	35

The collapse in print’s share of consumer time, down 60% in five years, is stunning and the 2012-13 changes may indicate advertising spend may is now collapsing as marketers start to adapt to the changed marketplace.

It could be however that advertising as we know it has to change; one of the key reasons for online – particularly mobile’s – spending being under represented is because no-one is quite sure what works in the newer mediums.

Advertisers may know that consumers are moving from print channels, but at least they know what works in print. Online the experts’ guesses are still not much better than the amateurs’.

In short, we’re still watining for the digital era’s David Sarnoff. As Mary Meeker keeps reminding us, it’s a $20bn a year opportunity.