Facing the Future

Does the Facebook fiasco of the last week matter?  It does, because it identifies the forces and tensions that are struggling to determine control of social media and the future of virtual communities.  In one corner are the companies that structure the internet, such as Facebook, that create the technological interfaces that bring people into contact with other people, goods, services, and information.  In another corner, there are the investors, corporations, companies, and other institutions who hope that these communities will serve as markets and prospective client bases that will generate profits.  In a third corner there are the various individuals who hope to engage with other individuals, companies, and other information sources in an honest, trustworthy manner.  As the Facebook story shows, there is no simple alignment between these forces.  For a full blow-by-blow of the last week, see Julianne Pepitone’s CNN Money Blog.  The key question, however, is simple.  What is Facebook worth?  From the investor perspective, does Facebook have a clear plan for how it will monetize the personal information that users provide to it in overwhelming amounts every day?  From an individual user perspective, does this plan provide enough benefits to keep the daily download of free and valuable information flowing?

It is easy to understand why Facebook’s collection of data makes marketers salivate.  Users willingly share contextualized information about who they know, how they know those people, and what interests they share.  The majority of adults who use social media, according to a 2011 Pew Internet Survey, use it to stay in touch with current friends (67%), family (64%), and old friends (50%); the next highest reasons are sharing hobbies or interests (14%) and making new friends (9%).  Marketing 101 tells us that the way to a consumer (or client’s) heart is through his/her needs.  Propose a solution to a clearly defined problem and the sale is at least half made.  Marketing 101 also tells us that people are more likely to trust information from known sources, including people they know or organizations they trust.  Publicize a product or idea through word of mouth, and obtain stronger credibility and more lasting awareness.  The contextualized information available through Facebook is a treasure trove of information that marketers can use to sell effectively.  Just browse Inside CRM’s 100 Tools and Tips.

So why the doubt this week?  First, investors are not convinced that they will receive a return on their investment.  One question is whether Facebook has the technological infrastructure in place to literally translate ‘likes’ into sales in a structured, guaranteed manner. The technology for culling through the mass of information to identify the most lucrative correlations and act upon them in a timely fashion may not be mature enough yet.  However, there is another issue.  Will the Internet communities created through technological interfaces such as Facebook remain constrained by those technologies?  Or, will they also mature, and demand more communal control over the terms of their participation?

Sources

Editors.  The Facebook Marketing Toolbox:  100 Tools and Tips to Tap the Facebook Customer Base.  Insider CRM, Retrieved May 26, 2012 from http://www.focus.com/fyi/facebook-marketing-toolbox-100-tools-and-tips-tap-facebook/

Pepitone, J. (2012, May 23).  Facebook IPO:  What the %$#! happened?  CNNMoneyTech. Retrieved May 24, 2012 from  http://money.cnn.com/2012/05/23/technology/facebook-ipo-what-went-wrong/index.htm

Smith, A. (2011, November 15).  Why Americans Use Social Media.  Pew Internet Survey.  Retrieved May 24, 2012 from http://www.pewinternet.org/Reports/2011/Why-Americans-Use-Social-Media/Main-report.aspx

Virtual Worlds for Virtual Consumption – Or, how to enjoy a cup of coffee online

Starbucks mocha-frappuccino-blended-coffee

Where can you record a custom soundtrack, visualize a custom beverage, and twitter the results to your best friends?  Starbucks of course.

Build your drink hereRecord your track here.

McDonald's Iced Coffee

Now what does McDonald’s offer?  Tasty coffee, but hardly an interactive, engaging online experience.

 Select your flavor here.

Dunkin' Donuts Coffee

How about Dunkin’ Donuts?  You can watch people walking outside of the NYC Dunkin’ Donuts in Time Square.  Great to know that DD has a NYC store, but what does that mean to me driving to work in Tallahassee?  Two clicks in, a visitor learns that DD uses Fair Trade coffees. 

Watch the webcam hereLearn about the story of DD Fair Trade Certified Espresso here.

Consumables have two challenges they must negotiate as they expand into social media.  First, as consumables brands embrace web 2.0+, they need to think about the relationship between themselves and their customers in new ways.  Perhaps the simplest way to phrase the question, is how can a consumable like coffee BE relevant online?  Second, the competition is these markets is fierce.  How can a company that sells coffee in paper cups obtain a cutting edge presence without the help of the taste, smell or feel of its product?

Starbucks has crafted and recrafted a brand that creatively entices consumers into enjoying the brand, visiting the website, and viewing a coffee as a luxurious necessity of life.  The coffee experience includes fun apps, music DVDs, poetry, and stories.  Starbucks’ social media presence extends from and returns to the stores via Facebook, coupons, the grocery store, and back via twitter to their website.  In 2010, the Starbucks social media team identified 10 elements of their strategy, the core of which is to enhance communications with customers at multiple levels simultaneously assuming, however, that these communications will intersect, enhance, and echo each other (Belicove, 2010).  Integrated marketing across the spectrum of relationships is given focus, according to the team, by understanding that the reality of being relevant is keeping up with the buzz:  as Belicove writes, “If it doesn’t matter on Twitter, it doesn’t matter.” 

Not only has Starbucks weathered a downturn in its profits, it has fended off competition by McDonald’s and Dunkin’ Donuts.  Certainly an upbeat economy helps, as does a unique market position as a specialist in coffee products (Misonzhnik, 2011).  Equally important, however, is that Starbucks is a specialist in coffee culture.  Not content to merely meet competition, Starbucks pushes the boundaries of social media with information, entertainment, and new features.  Their specialization in changing with their audience allows them to beat the competition online and in the ‘real’ world. 

The key to Starbucks’ success, it seems, is that it aligns its social presence across worlds, virtual and ‘real’ and allows customers to move seamlessly from one to the other.  So, how do you enjoy a cup of coffee online?  Go to Starbucks and see for yourself.

Sources:

Belicove, M. (2010, April 1).  How Starbucks Builds Meaningful Customer Engagement via Social Media.  American Express Open Forum, Retrieved May 17, 2012 from http://www.openforum.com/idea-hub/topics/marketing/article/how-starbucks-builds-meaningful-customer-engagement-via-social-media-1

Find Your Flavor.  McDonald’s, Retrieved May 16, 2012, http://www.mcdonalds.com/content/us/en/promotions/icedcoffee.html#

Frappuccino Drink Builder.  Starbucks, Retrieved May 16, 2012, http://frappuccino.com/en-us/drink-builder

Home Page.  Dunkin’ Donuts, Retrieved May 16, 2012, http://www.dunkindonuts.com/content/dunkindonuts/en.html

Misonzhnik, E. (2011, April 27).  Starbucks Recaptures Its Position at the Head of the US Coffee Market.  RetailTraffic, Retrieved May 17, 2012, http://retailtrafficmag.com/retailing/analysis/starbucks_recaptures_lead_coffee_04272011/index.html

Remix Soundboard.  Starbucks, Retrieved May 16, 2012, http://frappuccino.com/en-us/remix

The Espresso Story.  Dunkin’ Donuts, Retrieved May 16, 2012, http://www.dunkindonuts.com/content/dunkindonuts/en/coffee/espressostory.html

Mobile Apps Reforming Society

“All kitchens are filthy, Mr. Fawlty, in fact the better the kitchen, the filthier it is. . .” Basil the Rat, Fawlty Towers

Mobile applications have changed the face of social media in a few short years.  According to a recent study, 87 percent of the world’s population (5.9 million subscribers) has a mobile device, and 20% of those users have 3G coverage (mobiThinking). The study also shows that in the U.S., 25 percent of mobile users only access the web through their mobile device.  All of this goes to show that mobile apps are having an effect on how social media spreads, and are poised to continue to have a significant effect on the future of social media.

Mobile apps carry the social media revolution into the ‘real’ world.  For example, consumers engage in new forms of immediate market research thanks to apps such as the Amazon app and Amazon price check app.  In April 2012, Best Buy’s CEO Brian Dunn left the corporation after a career with the company beginning as a “blue shirt” thanks to criticism that he was ineffective in meeting the challenges posed by online retailers such as Amazon.  In particular, the criticism leveraged by the industry and aired by a Dateline NBC segment, was that Best Buy had become Amazon’s showroom (Skariachan).  However, the challenge posed by Amazon is not limited to high end electronics.  Amazon offers everything from Kleenex to diamond rings, all of which can be price checked in a moment using the Amazon price check app.  Simply scan the bar code and find the best price for the item.  Shoppers have been empowered by mobile apps to think beyond getting an item to finding it for the best price.  As brand loyalty takes a second seat to personal benefit, the market economy shifts to favor the buyer not the seller.

The potential for shifting power relationships through social media has not go unnoticed by the United States Department of Labor.  Mobile apps and instant comparison information offered the perfect forum for social activism.  In 2011, the DOL announced a mobile app contest called the DOL Occupational Employment Statistics App Challenge.  Prizes were to go to application designers who could use DOL data sources (or other online data sources) to make users more aware of the information collected by the DOL and could use that information to make long-term decisions related to education, career, or more immediate decisions, such as where to spend money.

The winners were announced in October 2011.  First and second place went to mobile apps that provide essentially the same information.  They use geocoding to identify the restaurants, stores and hotels that have health, OSHA or Department of Labor code violations, allowing consumers to choose establishments that have chosen to operate safely and fairly.  Eat Shop Sleep is available to both iPad and Android platforms, while  iCitizen Labor Report is available only from the iPod App store.  Consumers can let companies know that they feel committed to fair labor practices, safe working environments, and compliance with food safety laws by looking up a local business and instantly retrieving an easy to use rating that lets the consumer know how compliant that business establishment is.  Being socially conscious and active has never been so easy.

These apps hint at the future value of the merging of information and portable technology to all of us. Economic awareness is part and parcel of the social media world.  As Clay Shirky points out, this is truly a revolutionary moment.  For the first time in history, people have both the technological and social mandate to control what is said in a public forum (Shirky).  They are allowing information that is relevant to be accessed easily and immediately to allow for decision-making that benefits the user.  Mobile apps do more than make old information relevant, they have the power to reshape habits and democratize the ‘real’ social marketplace just as the virtual marketplace has already started changing.

Sources:

Amazon price check app.  Application for Android, available at http://www.amazon.com/Amazon-com-Price-Check/dp/B005QTZSRA/ref=sr_1_4?s=mobile-apps&ie=UTF8&qid=1336843804&sr=1-4

Eat Shop Sleep.  Application for Android, available at https://play.google.com/store/apps/details?id=com.rgm.eatshopsleep

iCITIZEN LABOR REPORT.  Application for Apple iPod, available at http://mobilepublic.org/MobilePublic/iCitizen.html

Occupational Employment Statistics Challenge.  Retrieved May 9, 2012 from http://employment.challenge.gov/

OPA News Release.  (2011, October 27).  US Department of Labor Announces Winners of Online and Mobile Development Contests.  United States Department of Labor.  Retrieved May 10, 2012 from http://www.dol.gov/opa/media/press/opa/OPA20111568.htm

mobiThinking. (2012, February).  Global mobile statistics 2012.  Retrieved April 24, 2012 from http://mobithinking.com/mobile-marketing-tools/latest-mobile-stats

Shirky, C.  (2009, June).  How Social Media Can Make History.  TED, Retrieved April 2, 2012, from http://www.ted.com/talks/clay_shirky_how_cellphones_twitter_facebook_can_ make_history.html

Skariachan, D.  (2012, April 10).  Best Buy CEO out as more shoppers move online.  Reuters, Retrieved May 9, 2012 from http://www.pottsmerc.com/article/20120410/FINANCE01/120419953/1004/best-buy-ceo-out-as-more-shoppers-move-online

I Read the News Today, Oh Boy

How do you get your news? Google or Yahoo? RSS Feeds? Twitter? Among the industries most changed by social media, according to “social media guru” Brian Solis, are financial services, music and news reporting (Heath, M.) The one that I have been following with the most interest is news reporting – not necessarily because I am all that interested in the news industry – but because as a regular listener to NPR, reader of internet news, and regular reader of my local paper (Gannett’s Tallahassee Democrat) the change has impacted the way I get the news.

I have followed the fate of my local paper with some curiosity. Over my last 10 years of readership, I have noticed significant changes. The Monday edition is so thin that it would not cover the bottom of a bird cage (if people still use newspaper for that). Since 2008, the Real Estate section has gotten thinner and thinner. First, of course, it was because no one could sell a house and so the desire to spend money marketing it no sense. Subsequently, the real estate industry has moved online. Clearinghouses such as Realtor.com, Zillow, and Trulia, along with Craigslist and websites that feature detailed tours of homes have taken the place of the photo and specs listings we used to browse on Saturday morning. Midweek print advertising has also taken a hit. Thursday’s paper used to carry thick, glossy ads from the national retailers in town. Those ads have been replaced with weekly emails to opt-in consumers. No more Old Navy ads in our paper.

Tallahassee.comAnd yet, despite these changes, the paper has actually expanded coverage of local events and news. The Tallahassee Democrat appears to be an interesting case study in what is working these days for newspapers. Its website began charging for access to premium content in 2010, but has been able to remain the largest news website in its market, including both charging and free websites (Kulicke). Local politics, crime, sports, and events make up the bulk of the paper, which is exactly what I need, because I can read the NYT, WSJ, USA Today, AP, Reuters, and watch the BBC news feed all on demand. What becomes more complicated is weeding through the Leon County Schools website to figure out what the newest standardized testing change means to me and my elementary-aged children.

Tallahassee’s local paper has fantastic reporters that offer real value to the community by focusing on the information and issues that cannot be gleaned easily from the mainstream, national and international news media. When local news stations began to focus on making news relevant to the local market, the news tended to be edited versions of national news that included a few lines about how a local person was at the event (Tallahassean witnesses Tsunami – story of a local couple on vacation who happened to see a few waves).

Local reporting has matured to the point of being able to understand that providing value to a community is covering the community. This niche reporting is the result of two social media trends. First, the lower cost model of communication through social media outlets creates an expectation of information that is of great relevance to more specialized groups of people. Second, the technology behind social media means that markets are segmented less by geographic location, and more by interest. Local papers can take advantage of both of these trends.

The Tallahassee Democrat offers blogs, twitter feeds, online commentary on stories, breaking news alerts, and is available on mobile devices, tablets, and probably Google’s rumored web-enabled eye glasses (Henn). But as with everything in social media, the innovation is not the technology itself, but the application of the technology. Local papers have a lot to gain from the instant communication of national and international news via social media – they have an audience again.

Sources:
Heath, M. (2011, October 24). Three Industries Forever Changed by Social Media. Invest Forward, Retrieved May 2, 2012 from http://blog.currensee.com/2011/10/three-industries-forever-changed-by-social-media/.
Henn, S. (2012, February 24). Google’s Goggles: Is the Future Right Before Our Eyes? NPR – All Tech Considered, Retrieved May 4, 2012, from http://www.npr.org/blogs/alltechconsidered/2012/02/24/147364732/googles-goggles-is-the-future-right-before-our-eyes
Kulicke, H. (2012, February 9). Case Study: Newspaper Thriving in Tallahassee. Editor & Publisher, Retrieved May 5, 2012, from http://www.editorandpublisher.com/TopStories/Article/Case-Study–Newspaper-Thriving-in-Tallahassee