Category: new media

Digital roadkill

Is your business the fluffy bunny sitting in the Internet’s fast lane?

Digital Roadkill first appeared in Smart Company on 10 May 2012

Just over thirteen years a group of Silicon Valley technologists wrote The Cluetrain Manifesto detailing what they saw as being the new rules of business in a connected world.

Cluetrain was mandatory reading when terms like “information superhighway” were fashionable and Yahoo! was the dominant web portal. It’s somewhat fallen out of fashion today.

Like most manifestos Cluetrain was partially unreadable and heavy on dramatics but it did lay down the principles that are now largely accepted in both the online and mainstream business worlds.

I was reminded of the Cluetrain Manifesto earlier this week at a suburban marketing event run by one of the country’s biggest media organisations. The lessons of the last thirteen years seemed to have passed by almost every business in the room.

Most of these businesses were operating they way they did in the 1990s. While some of them had a website and a couple had Facebook pages, their businesses had barely changed in the last twenty years.

These businesses are digital roadkill. Many of them have no idea what’s about to hit them as they sit paralysed wondering what the bright lights baring down on them are.

In this respect they aren’t dissimilar to the big department stores or electrical chains that are working to a model that’s ticked along nicely for decades and don’t realise how the fundamentals of the economy have shifted in the last five years.

Many of these small traders are still taking orders by fax and some of them still keep their cheque book ready to pay their suppliers bills. It’s that bad.

The idea of selling over the net is completely beyond them, only big overseas companies dodging GST do that sort of thing.

Even in the marketing field, these businesses have ignored the obvious for years with many still advertising in their local Yellow Pages and freebie community newspaper, despite barely making a sale from either in five years. But these channels worked for them once.

Few of them have up to date websites, are doing the bare minimum search engine or mobile optimisation and almost every single one hasn’t bothered to claim their local business listings.

To be fair to the little guys the host organisation was no better, this large media organisation has a good online product – they even own one of the major online local business listing services – but their sales people on the night didn’t mention it as they are too locked into selling their traditional local newspaper advertising products.

At least that company is wealthy and has other profitable arms that can prop up its dying local newspaper arms which can at least appear profitable while there are costs to be stripped from the operation.

Unlike those big media companies and retailers, the small local business doesn’t have big cash reserves or deep pocketed investors allowing them to survive for years in a declining market.

These small businesses are just going to drag their owners into poverty.

Not only have the old rules of business gone, but the value of businesses which choose to live in the past has evaporated. Few people are going to buy a business with an old, declining customer base.

“Roadkill” is an apt term for a business that probably won’t be around in two years.

Today the Cluetrain is big lumbering road train carrying ecommerce goods down the fast lane of the information superhighway with a driver that has no intention of stopping.

Make sure your business isn’t the cute fluffy rodent sitting in its path.

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Paying the piper – the cost of the internet’s walled gardens

The web’s walled gardens have a real business cost

With the web increasingly dominated by four major, and many minor, fiefdoms the cost of being part of those groups is gradually becoming clear.

As part of Facebook filings in advance of their public float they published the key agreements with their developer partners including that with games provider Zygna, technology journalist Tom Foremski has a disturbing look at Facebook’s conditions that illustrate the costs and risks.

In terms of the costs, Tom identifies Clause 2.1 of Facebook’s “Statement of Rights and Responsibilities” – shown as Annex 1 in the Developers  as probably the biggest price for all content creators;

… you grant us a non-exclusive, transferable, sub-licensable, royalty-free, worldwide license to use any IP content that you post on or in connection with Facebook (“IP License”). This IP License ends when you delete your IP content or your account unless your content has been shared with others, and they have not deleted it.

So by sharing something on Facebook, you grant Facebook the right to do what they like with what you’ve created. That’s something worth thinking about.

For anybody trying to make a living off Facebook, it’s important to consider they also retain the right to throw you off the service at any time. From clause 4.10 of the Statement Of Rights Annex;

If you select a username for your account we reserve the right to remove or reclaim it if we believe appropriate (such as when a trademark owner complains about a username that does not closely relate to a user’s actual name).

So get into a trademark dispute with a big corporation – and often their lawyers cast a very wide net on potential similar spellings – and your account is shut down.

There’s also the specifics of the Zynga agreement that should concern anyone investing in the games company. Right at the beginning of the agreement we see this clause;

The parties further acknowledge that Zynga is making a significant commitment to the Facebook Platform (i.e., using Facebook as the exclusive Social Platform on the Zynga Properties and granting FB certain title exclusivities to Zynga games on the Facebook Platform). In exchange for such commitment, [*] the parties have committed to set certain growth targets for monthly unique users of Covered Zynga Games.

So Zynga is closely tied into the fortunes of Facebook, we knew that on a business level but now we know just how deep and binding the agreements are.

We should be clear, all the major social media and online services have similar clauses on intellectual property and copyright infringements; there’s no shortage of businesses who’ve been caught out by eBay or Paypal and plenty of people found their Google accounts shut down by their obsession with real names.

For all businesses the message is clear – be careful before committing totally to one online platform or another. Should you end up in a dispute, or find you’ve backed the wrong service, it may be a very costly process to get your company off that platform.

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The Internet’s cold war

Should we align our businesses with the online empires?

“We’re designing exclusively for Android devices,” the software developer confided over a beer, “we don’t like the idea of giving Apple 30% of our income.”

That one business owner is making a choice that software developers, newpaper chains, school text book publishers and many other fields are going to have to make in the next year – which camp are they going to join in the Internet’s cold war.

As the web matures, we’re seeing four big empires develop – Google, Apple, Facebook and Amazon which are going to demand organisations and consumers make a choice on who they will align with.

That decision is going to be painful for a lot of business; each empire is going to take a cut in one way or another with Apple’s iStore charges being the most obvious.

For those who choose to go the non-aligned path – develop in HTML5 and other open web standards things will be rocky and sometimes tough. At least those on the open net won’t have to contend with a “business partner” whose objectives may often be different to their own.

Over time, we’ll see the winners and losers but for the moment businesses, particularly big corporations and publishers should have no doubt that the choices they make today on things as seemingly trivial things like reader comments may have serious ramifications in a few years time.

Consumers aren’t immune from this either; those purchases through iTunes, Amazon or Google are often locked to that service for a reason.

Probably the development that we should watch closest right now is Apple’s push into education publishing; those governments, universities and schools that lock into the iPad platform are making a commitment on behalf of tax payers, faculty and students that will affect all of them for many years.

For many, it might be worthwhile hedging the bets and sticking to open standards. A decision to join one or two of the big Internet empires is something that shouldn’t be made lightly.

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Book review: The Information Diet

Clay A. Johnson describes how to manage information overload

We all know a diet of fast food can cause obesity, but can consuming junk information damage our mental fitness and critical faculties?

In The Information Diet, Clay A. Johnson builds the case for being more selective in what we read, watch and listen to. In it, Clay describes how we have reached the stage of intellectual obesity, what constitutes a poor diet and suggests strategies to improve the quality of the information we consume.

The Information Diet is based upon a simple premise, that just as balanced food diet is important for physical health so too is a diverse intake of news and information necessary for a healthy understanding of the world.

Clay A. Johnson came to this view after seeing a protestor holding up a placard reading “Keep your government hands off my Medicare.” Could an unbalanced information diet cause a kind of intellectual obesity that warps otherwise intelligent peoples’ perspectives?

The analogy is well explored by Clay as he looks at how we can go about creating a form of “infoveganism” that favours selecting information that comes as close from the source as possible

Just as fast food replaces fibre and nutrients with fat, sugars and salt to appeal to our tastes, media organisations process information to appeal to our own perceived biases and beliefs.

Clay doesn’t just accuse the right wing of politics in this – he is as scathing of those who consider the DailyKos, Huffington Post or Keith Olbermann as their primary sources as those who do likewise with Fox News or Bill O’Reilly.

The rise of opinion driven media – something that pre-dates the web – has been because the industrial production of processed information is quicker and more profitable that the higher cost, slower alternatives; which is the same reason for the rise of the fast food industry.

For society, this has meant our political discourse has become flabbier as voters base decisions and opinions upon information that has had the facts and reality processed out of it in an attempt to attract eyeballs and paying advertisers.

In many ways, Clay has identified the fundamental problem facing mass media today; as the advertising driven model requires viewers’ and readers’ attention, producers and editors are forced to become more sensationalist and selective. This in turn is damaging the credibility of these outlets.

Unspoken in Clay’s book is the challenge for traditional media –their processing of information has long since stopped adding value and now strips out the useful data, at best dumbing down the news into a “he said, she said” argument and at worse deliberately distorting events to attract an audience.

While traditional media is suffering from its own “filter failure”, the new media information empires of Google, Facebook, Apple and Amazon are developing even stronger feedback loops as our own friends on social media filter the news rather than a newsroom editor or producer.

As our primary sources of information have become more filtered and processed, societal and political structures have themselves become flabby and obese. Clay describes how the skills required to be elected in such a system almost certainly exclude those best suited to lead a diverse democracy and economy.

Clay’s strategies for improving the quality of the information we consume are basic, obvious and clever. The book is a valuable look at how we can equip ourselves to deal with the flood of data we call have to deal with every day.

Probably the most important message from The Information Diet is that we need to identify our biases, challenge our beliefs and look outside the boxes we’ve chosen for ourselves. Doing that will help us deal with the opportunities of the 21st Century.

Clay A. Johnson’s The Information Diet is published by O’Reilly. A complimentary copy was provided as part of the publisher’s blogger review program.

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Successful Sources Will Not Be Paid

The free myth is biting us in many ways

The whole world wants a freebie, and many of us are giving our ideas, intellectual capital and service away to online magazines in the hope of getting a link or a little bit of publicity.

Bringing the idea undone is the unfortunate reality that web is awash with free pointless material that adds little value. Your contribution, however valuable, gets lost in the static of PR driven articles and SEO optimised fluff.

This is why Google are trying to tie social recommendations into their search results, although it’s hard to see how your cousin’s LOLCat posts are going to add any more value than the generic garbage served from services like eHow.

Yet every day there’s more callouts for  free content – desperate journalists and publishers beg for our ideas or labor in return for some ‘exposure’.

And that ‘exposure’ floats away into the ocean of noise and irrelevance filled with the rest of the ‘free’ content.

Giving stuff away for free isn’t working well anymore and for those of us who are trying to build a business around that model, we’re struggling to get found or heard in the morass.

Along with the wasted time, the danger is we start giving away our best, most valuable work in order to get attention and then we have nothing left to sell.

Consumers are waking up to this and beginning to focus about what they read online. We should too.

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What’s a Twitterer worth?

How business can put a value on social media

$2.50 per month is what Phone Dog think a Twitter follower is worth in their lawsuit against a former employee.

As nebulous and ambiguous as Phone Dog’s claim seems to be it appears some price is being created on the business value of social media users.

To date we’ve seen services like Empire Avenue, Klout and Kred try to measure social media users’ real influence on the different web platforms which in turn allows businesses to allocate some sort of value.

As social media and the web mature, we’ll see businesses spend more time understand where the value lies online.

Each platform is going to have a different value to a business. Depending on the market, one person may be worth more on Twitter than on Facebook and similarly a business may put more value on members of a specific LinkedIn group or industry forum.

What we shouldn’t confuse “value” with is how the services themselves make money. For Facebook, the value comes from the marketing opportunities presented by people sharing their lives while for LinkedIn it’s largely coming from employment related advertising and search.

Other social media platforms are finding other ways to make money and each will have a different attraction to users, businesses and advertisers. All of which will affect their perceived value.

That perceived value is the most important part of social media. If users don’t think a site adds something to their lives, then that service has no value to anyone.

It’s tempting to think that people will object to having a “value” placed on their heads as users, but most folk understand the commercial TV and radio that does pretty much the same thing.

The real question of how much people are prepared to share online will come when they understand the value of the data they are giving the social media platforms. When users start to understand this, they may ask for more service from these companies.

What a Twitter user is worth right now is probably different to what they will be worth this time next year, but there’s no doubt we’ll all have a better idea.

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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.

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