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Archive for June, 2009

Bad times at MySpace

June 24, 2009 Leave a comment

Hot on the heels of the news that they are to cut 30% of their US workforce, is the announcement that they will now cut two thirds of their international staff. In Adam Ostrow’s post on Mashable, MySpace blame the cuts on the company becoming too cumbersome in the current market, both in the US and overseas. It seems clear that the company cannot continue for much longer in its current form and I wonder if it may be the first ‘major’ social network to diversify away from being a one size fits all, behemoth to a more niche community.

Michael Arrington’s Techcrunch post last month, speculated that the $900m ad deal with Google will not be renewed when it expires next year, which will be a huge hit and I think we will see display ad revenue decline further this year. Lancing staff costs is probably a good move to buy some breathing space but this problem isn’t going to go away.

I remember discussing the future of social networking sites, with my colleagues, when social networks first came to prominence and we always believed that the networks would ultimately fragment into smaller more niche communities, as all other types of media have done over time. I am wondering if now isn’t the time for MySpace to look at what they are good at – Music, and focus on that.

I can’t see them regaining ground on Facebook anytime soon, that battle may be lost, but they do have a very active and loyal community based around music, which was what drove its popularity in the first place. Music lovers are about the most brand loyal group in the world (actually, I think they are second; ahead of sport but behind religion!) so there are worse target audience’s to build and sustain a community around.

Even though MySpace Music isn’t setting the world alight just yet, if they integrate the service more with the main site, it can become a major music sales window, plus they already have a vibrant music community to build upon and deals with major record labels in place. I would forget ads completely and concentrate on selling music.

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What’s in it for Barbara?

June 18, 2009 Leave a comment

There is far too much crap on TV. I am talking about the UK specifically but having recently got back from travelling around the world, I think it’s a global issue. However, Channel 4 has been running a series called “I’m running Sainsbury’s” on Tuesday nights which I have enjoyed.

Basic premise is – The economic climate has meant Sainsbury’s is involved in a customer turf war with the other major UK supermarkets as consumers tighten their belts. Sainsbury’s Chief Exec, Justin King, thinks the next big idea will come from the staff on the shop floor (good move, I like it), so asked all the staff for ideas and gave the best four a trial with a view to rolling it out across their stores.

I want to talk about episodes 2 and 3 as I think it demonstrates the difference between advertising and engagement – old marketing and branding techniques vs a new social approach.

Episode 2 – Barbara

Barbara is from Leeds. Her idea was to “take the store to the customer”. This translated to Barbara walking round the store with hot crossed buns (her target product) and harassing customers into buying them. People would be accosted in the snack isles by Barbara armed with her buns, and then ‘hard sold’ the merits of them. When that didn’t quite work, she would physically put them into the customers’ trolleys!

She easily nailed her target of selling £450 worth of hot crossed buns in a day and as a result took the plan to head office, who liked it and it will be implemented in 20 stores in the autumn.

The best moment for me was when she, having finished her presentation of the trial to the Sainsbury’s board, asked “…if this gets rolled out nationwide…the thing I want to know is…what’s in it for Barbara?” while rubbing her hands together! Gold. Apologies if the impression of Barbara is negative, it shouldn’t be, she was awesome and a very good salesman.

Episode 3 – Niall

Niall is from Enfield. His idea was to improve customer service by setting up a ‘surgery’ in the store where customers could give feedback (mostly negative) on the store as the customer service desk was always busy with refunds and exchanges. He was charged with solving 50% of the problems himself without bothering head office, over a week. Cue a stream of irate customers and a harassed Niall,  who hadn’t workout a process of dealing with the complaints (if only this process was done online). However, he was successful in his trial.

Sainsbury’s head office however,  were not as impressed as they were with Barbara. They saw the surgery as a cost (two employees were needed to help run the surgery) and something which would only be used when a store had a refurb or changed the layout. I am guessing that without sales figures or any tangible metric to measure success, Niall’s idea seemed less attractive and certainly less cost effective.

I disagree with Sainsbury’s on this and think it highlights a common problem with brands and how they operate, especially online.

On the one hand we have Barbara and the old media technique of shouting (literally – she used the store PA system) the message and interrupting the customer to get them aware of the product. Of course sales increased, people were terrified and the hard sell does work in certain environments on a short term basis. Sainsbury’s saw the numbers going up in a short space of time and assumed success. What I want to know is; how many customers will never shop in that Sainsbury’s again for fear of running into Barbara and being forced to buy baked goods against their will?

On the other, we have Niall with the new, social media approach of listening, talking and engaging the customers. These were people who were willing to take the time to actually come and vent their anger and frustration – these are the people that matter, these are the people brands should really give a shit about. When he solved an old lady’s “you can’t buy donuts individually” issue and then called her to give her the news, she was “over the moon” and “couldn’t believe the service”. I am betting she will always shop at Sainsbury’s for the rest of her life. What is the ROI of that?

Brands (and loads are already doing this so its not an original concept!) need to use the social media sites now available to them to be better at customer service. They need to create advocates of their brand, and in today’s online world that is done by interacting and putting the human touch back into service. The best example I can find is Zappos – http://blogs.zappos.com/blogs/inside-zappos/2009/06/03/todds-blogzappos-live-chat – have a read; it’s genius.

People like dealing with people.  I don’t think that will ever change and the social media sites have made this type of relationship possible on a regular basis in real time. If brands do it right, it will take care of marketing, research, PR, and branding all in one.

The caveat to this is it requires a fundamental shift in how companies operate internally, how they budget for this new activity and how they measure it. It is also a long term game, not a short term, campaign driven one. The metrics have yet to be established to measure it effectively and the potential banana skins are everywhere…but they are crazy if they don’t jump on board as soon as possible.

The week the web overtook ‘old’ media?

June 17, 2009 1 comment

iran The last few days have been historic in  Iran. It has been amazing to watch, and  more amazing is the fact we have been  able to watch! I think we have witnessed  not only a major point in history for Iran  as a nation, but also a watershed moment  for the web vs traditional media.

As soon as protesters started taking to the  streets after Thursday’s election results,  the media channels were quickly stifled. Foreign journalists were sent packing and the state run media channels went into propaganda mode. Ten years ago, that would have been that in terms of information flow. However, in the last few days we have seen a generation of people who have grown up with the web, use it for exactly what I think it was invented for – communication and interaction with the rest of the world. Using Twitter, Facebook, Flickr and various blogs, some via proxy IP’s as the government tried in vain to stem the flow of information, the people of Iran with the help of Iranian exiles have let the rest of the world, and the traditional media, see what is actually happening in Tehran.

The youth of Iran, which make up 60% of the population, will for the rest of their lives see the web, and the websites and tools they have used over the last few days,  as their way to communicate and source information to and from the outside world. Having had state controlled media for so long, I would be very surprised if they ever see TV, Radio or press as their primary source of information in the future. They will rely on the collective wisdom of real people exchanging information on the web.

There have been many articles and an uprising on Twitter, criticising the traditional media’s coverage and Brian Solis writes an excellent post on Techcrunch http://www.techcrunch.com/2009/06/17/is-twitter-the-cnn-of-the-new-media-generation/ , reporting on the 140 Characters Conference (#140conf) in New York. I think Ann Curry’s comment is particularly telling, “…we have to look at whether or not mainstream media is covering the world fast enough and the answer is no.” She then concluded, “Should we be? Yes. But, right now, we can’t keep pace.”

Traditional media will not be dying out anytime soon, which is a good thing but the gauntlet has certainly been thrown down for speed of delivery of breaking news. We still need to filter out the unwanted noise and the bullshit which inevitably finds its way into any online conversation and many have been quick to question how much we should rely on social media as a ‘trusted source of information’ and to an extent I agree. I think the difference here is that the posts on the social media sites are being used by the traditional media. So, I am guessing the professional journalists and broadcasters have done their usual checks and deemed the content worthy.

The social web has democratized information meaning traditional media channels are not the only gate keepers to trusted content anymore.

Hopefully future posts will be more business, brand, PR, marketing, research, future of social media-esque and I think all of the issues above can be related to businesses and how they need to operate in the online world. The balance of power in a marketing and branding sense is shifting (and quickly) from the company to the consumer. It is no use shouting at or interrupting customers with traditional advertising and marketing techniques as future consumers will see right through all the bullshit…and then tell their mates about it! Brands need to be more human in their approach.

Listening to the conversations of customers, talking in the correct way to those that want to talk and energizing the ones who really give a shit will create so much more value.