Tag: social media

The Digital Fallacy

Businesses don’t need a Chief Digital Officer, it’s one of many fallacies about the digital economy

Earlier this week Telstra held their 2013 Digital Summit in Melbourne, a curious event featuring  a bunch of US based experts to tell the locals what they should have already known about the changing business landscape.

The reversion of Australian business to a 1950s colonial cringe is worth a blog post in itself, however more interesting was the assertion that every organisation should appoint a Chief Digital Officer.

A Chief Digital Officer is an idea based on the flawed fallacy that digital technologies are unique and separate from other business functions.

The Chief Electricity Officer

Digital is simply the way business is done these days and has been since the electronic calculator appeared in the 1970s – having a Chief Digital Officer is akin to appointing a Chief Electricity Officer.

The role of a Chief Digital Officer is an idea usually pushed by social media experts and other fringe digerati that perversely undermines the very roles they are trying to promote.

By putting “digital” into its own organisational silo, the proponents of a Chief Digital Officer are actually advocating marginalising their own fields. It’s also counterproductive for a business that follows this advice.

The real challenge for those pushing digital technologies is putting the business case for their particular field and in most cases, such as social media or cloud computing, the argument for adopting them is usually compelling in some part of every organisation, but it shouldn’t be overplayed.

More than just marketing

An aspect heavily overplayed in the commentary around the Telstra Digital Summit was the role of social media with most people focusing on branding and marketing.

If you believe this is the extant of ‘digital business’, then you’re in for a nasty shock as supply chains become increasingly automated, Big Data makes companies smarter and the internet of machines accelerates the business cycle even more. Social media is only a small part of the ‘digital business’ story.

Over-stating the role of individual technologies is something that’s common when people have books or seminars to spruik – which, funny enough, is exactly what Telstra’s international speakers were doing.

It’s understandable that an author or speaker will overstate the benefits of their project, but it doesn’t mean that you should fall for the fallacies in their arguments.

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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.

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Valuing Twitter

How does Twitter compare to Facebook and Google when they were floated?

Now microblogging service Twitter has released documents ahead of a stock market float, it’s possible to start looking at the viability and stock market valuation of the company.

When Facebook’s float was first mooted in early 2011, we looked at how the social media service stacked up against Google a decade earlier. The question was ‘is Facebook worth $50 billion?’

The stockmarket answer was resounding ‘yes’ despite an initial fall that saw investors face a 50% loss in the early days of Facebook being a public company. Today the stock has a market valuation of $122 billion, with an eye popping price/earnings ratio of 122.

So how does Twitter stack up at the valuations being discussed? Quite well it appears when we put it against Google, Facebook and LinkedIn.

Company Google Facebook LinkedIn Twitter
Market Cap 288 123 27 13
P/E 25 288 901 29

For Twitter, the real challenge is making money from the service and their latest idea is marketing the service as an essential companion to watching TV.

The discussion over how Twitter makes money exposes another problem for the service in it has no obvious revenue stream which makes comparing the platform to Facebook or LinkedIn rather problematic.

Facebook has advertising while LinkedIn has premium subscriber services both of which are problematic.

Not having an obvious revenue model may not turn out to be a problem – as LinkedIn’s P/E shows – and Twitter’s founders are probably more likely than anyway to be the digital media industry’s David Sarnoff.

It may be Twitter makes its money from giving advertisers, marketers and others access to the massive stores of data the company is accumulating.

Whatever way it turns out, Twitter’s going to be the hot IPO news for the tech industry for the rest of the year. At current prices, the investors will be lining up to buy the stock.

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The truth is in the data

One of the big challenges facing all organisation is using Big Data to understand their customers better, Emma LoRusso and Digivizer are part of the new wage of businesses and entrepreneurs providing the tools to help managers make better decisions.

Emma LoRusso founder of Sydney based social analytics service Digivizer believes the truth in a company’s data will challenge many managment and marketing beliefs.

In a somewhat poorly recorded interview as part of the Decoding the New Economy YouTube channel, Emma described how analysing social media trends and tying them into an organisation’s Customer Relationship Management (CRM) platform can help improve a business’ marketing and customer satisfaction.

The Truth is in the data

“A lot of marketing in the past has not been data driven,” says Emma. “There’s still this gap between people saying ‘this is what we think’, ‘this is what we’ve always done’ and ‘this is what they’ve found’ – we’ll come behind that and say ‘let’s let the data tell the truth.'”

That data is powerful due to the context Emma believes Digivizer adds, “because we can map people to the social web based on their profiles – who are they, what they talk about, who they are engaged with and what’s important to them.”

“We let data become the truth and we push back on the hypothesis that might have been unsubstantiated previously in the organisation,” Emma says.

Fighting the average

For some organisations, this truth can be challenging. “The ones who resist it are those with a fixed position who have built a career of playing to the averages,” states Emma. “We get massive returns, say 39 to one, whereas they were getting maybe seven to one or twelve to one.”

“Again, data can be the truth in this story.”

One advantage of real time social media monitoring is marketers can now track how consumers changing lives unfold are affecting their buying habits and desires as people get married, become single, have children, move houses or just simply change tastes.

Hearing the consumer

A key part of modern marketing is letting customers know their voices have been heard, as modern consumers know they have a voice and expect companies to acknowledge what they’re saying.

Emma sees a lot of lip service has been paid in companies to the ‘single customer view’ where businesses need to know their customers better.

“I actually think it’s customers that are driving that,” says Emma. “Their expectation is ‘I’ve interacted with you a lot of times, you’re asking me to engage with you digitally and now I expect you to serve me better.'”

“Now if you plug that data into organisations you can start to offer more meaningful – the right message at the right time.”

Emma believes that makes customers happier as they now feel they’ve been heard and understood. “That’s the beauty in the data,” she says.

One of the big challenges facing all organisation is using Big Data to understand their customers better, Emma LoRusso and Digivizer are part of the new wage of businesses and entrepreneurs providing the tools to help managers make better decisions.

While there’s some risks with paying close attention to customers’ online behaviour – as we saw with the famous Target pregnant girl mailout – the benefits for businesses listening to their clients is obvious. It’s another example of how the slow to adapt businesses will be crushed in the changing economy.

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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.

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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

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Coping with Generation LuXurY

Starwood Hotel’s Phil McAveety describes how tech will help hotel understand a new generation of customers.

Speaking at the recent ADMA Global Summit in Sydney, Starwood Hotel’s Phil McAveety described Generation LuXury – the changing hospitality expectations of Gen X and Ys.

McAveety sees the new generation of travellers as being more diverse, younger, female and increasingly from emerging economies making them very different from the middle aged Caucasian male from Europe or North America which seems to be the focus of most of the hospitality industry.

The lessons from McAveety’s presentation weren’t just for hotels, much of his message applies as to almost every other business sector.

3D printing featured heavily, with McAveetry seeing the technology as delivering the personalised experiences demanded by Generation LuXurY, as an example he cited a concierge being able to create a pair of running shoes for a guest in exactly the size and style required for a guest.

Big Data played a role too with McAveety illustrating how hotel managers used to watch for important, valued guests with hidden windows letting them see who was checking into their establishment, a role that’s now carried out by Big Data and social media.

McAveety though had a warning about social media in the risks of giving away business intelligence and intellectual property to the services.

The big risk though is in technology itself – that hotels treat it as an end in itself instead of tools to deliver better experiences to guests.

“It’s not about tech,” warns McAveety. “If so, we are going to lose.”

That’s a lesson all industries need to heed, that technology is a means to the end of delivering better products to customers. Understanding what Generation LuXurY perceive as a better product is one of those uses for tech.

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