The obligatory 3.0 post: this time with added You-nicorn
Web1.0: Brain & Eyes (=Information)
Web2.0: Brain, Eyes, Ears, Voice & Heart (=Passion)
Web3.0: Brain, Eyes, Ears, Voice, Heart, Arms & Legs (=Freedom)
Sure, getting data to talk to data is an important step but to me it is plumbing. "WOW, you've got a flying horse, that's absolutely freaking, bloody amazing, I love it!!" is the refrain I'd like to hear as I tell people what I'm working on. Not, "A-ha, look at these nicely roughly circular, sturdy iron protective elements on the feet of the horse, I bet they're useful when it lands".
Man, I wonder how much they’d be making without that pesky Internet?
The current issue of Booz Allen's Strategy & Business magazine contains some interesting data points - salutory reading for those who might think that the web has dismembered industry as we know it:
Companies are sitting on mountains of cash, much more than they need. Holdings
at NYSE- and Nasdaq-listed companies topped a record $2.7 trillion in 2005, and
they are growing at 24 percent annually. By industry, the largest cash increases
in the past decade were in media (1,700 percent), utilities (1,360 percent), and
telecommunications (1,300 percent).
Some principles for good data management
As companies around the world wake up to the new reality that the web flattens the playing field and offers more choices for people than they had before, there is realization that being customer-centric is probably a Good Thing. The next logical conclusion therefore it seems is the need to amass vast mounds of data about their customers, mine it every which way and that, in order to better understand people's behaviour. This has been fuelled by a Google paranoia, in which companies tremble if they don't have a data centre the size of Kansas tracking every possible thing that you, me, and them could, would, should, or might do sometime, yesterday or tomorrow.
My concern is that, as with the environement, the real costs of data collection and not externalized, and so business and governments have little incentive to act responsibly with this data. In addition to my suggestion that the provider is rarely compensated adequately for the potentially interesting uses of their data, the costs of storage continue to plummet, resulting in a simple equation for most managers - grab as much data as you can and hang on to it.
In Europe, data collection has been a hot-button issue for a while with more stringent safeguards on collecting and protecting user data than in the US. (I remember during my time working at Siebel an 'interesting' meeting between one of our more assertive West coast salesmen and an official from a French ministry. The concept of the CRM system that this hapless salesman was attempting to foist on the French government to better manage their citizenry was, we were told in no uncertain terms - illegal. It is against the law in France for this government department to share data on citizens with another department. Clearly, not great news for the efficiency levels and problem solving abilities of the French bureaucrats, and not great for the salesman.) Anyway, if there's money to be made, savvy business people will gravitate to the least cost option, so probably base their policies in the most amenable jurisdictions.
This to say that there should probably be some principles or code of conduct, to use a phrase du jour, for how companies manage their customer data. Kim Cameron's laws of identity seem to be the gold standard here, and are rather related, but not the same.
In conversation recently with a smart chap at one of the great British institutitions (didn't tell him I would blog it, so won't say which one), he outlined his principles about data collection that their organization uses. I noted them down rather quickly, and here is the list (a bit mangled as I'm taking a bit of translator's license here).
- Ownership: The data about the user is owned by the individual, and companies are able to borrow it and use it to provide better services for the user, while they have a relationship with that user.
- Minimum: Only collect the minimal data required to deliver certain functions: i.e. "just in time not just in case". So a vendor only needs to collect enough data to know that you have enough money to pay for the goods, and they don't need to hang on to it when you're gone.
- Modular: The service doesn't need to have an all-or-nothing approach to data for it to work -- the data can be separated and functional with different uses.
- Tradeable: Data can be used to interact with other services, if you have agreed that it can be shared with them to improve your service. Clearly, generic data such as location has multiple uses, whereas specific proprietary application data has more limited uses.
- Tangible: It is clear what impact your data has on the system, and whether it's being used to impact the service level that you're receiving.
- Extractable: You can remove all elements of your data from their system. This is something that Google is apparently doing, which I think is tremendous. Like their search engine, they are happy to send people away, not try and hang onto them if they don't want to be there.
I'd be interested to see other principles relating to good data management - this is now the time to shape people's opinions towards what is still a rather abstract issue, but which is increasingly becoming the cause for debate. And profits.
Three out of four kids would like targeted ads on their mobile
Tomi T. A. points to an interesting recent finding.
Q Research is reported in this week's issue of New Media Age (April 19, 2007)
with a survey of 1,500 UK youth aged 11 - 20. When asked simply - do you
accept ads to your mobile, the survey found 32% willing to
accept. Then when asked - would the youth be willing to accept ads that are
about their areas of interest, this jumps to 71%. Then, when
asked if the ads offer discounts and coupons, it goes up again, to 76%. And finally - this is the eye-opener - if the youth
is asked if the ads would give them top-ups to their prepaid phone accounts, 84% say yes, such ads would be welcome...
Good news, but the real innovators in this space are not waiting for validation before they take ideas that they think are good enough to the market. I think it's time for these discussions to move from the theoretical to the practical.
Nokia Beta Labs soft launch
Today is the soft launch of our very own Beta Labs - a place to test our new applications and services. Kind of strange that we've not had a place for betas in the past, but I guess it's further evidence of our gradual move from products ("Here you go, it works ok") to services ("How we can get this to be even better?").
Just a few apps to start with, but am happy to see that they're suitably "3dpeople compatible": for example mobile codes lets you create bar codes to build that real world - digital world overlay, and sports tracker is all about getting people up and active. The main thing is that we now have a place to go to test new internet services, get feedback and start a discussion. Plenty of improvement ideas are in the pipeline, and the key one for me will be to build up a sense of community of Nokia early adopters and use them as lead innovators to help us know what we should be working on next.
S60 introduces web widgets
S60 has just launched web widgets. The Web Run-Time which allows the use of web widgets using standard web technologies - e.g. AJAX on the mobile and no separate download. This is one of the ways that the web makes more sense on the mobile than just slavishly trying to shrink the PC web interface.
Peter Kim picks up on Lester Wunderman's comments at this week's Forrester Marketing Forum:
- We used to be in the business of direct marketing – now we’re in the
business of relationship marketing. - We will eventually move on to personal marketing, which will be facilitated
by the use of data. - Four goals for direct marketing: Relevance, relationship, repurchase,
and retention.
Couldn't agree more, but how are the current marketing tools facilitating this? Email, SMS, MMS - not much of relationship there. Mobiles are of course deeply personal, are the broker of relationships, and throw off much more data (location, call history etc) than things with wires. So, an interesting question for me is "how to help companies use mobiles to improve their relationships with their customers?".
For society’s sake, don’t make those search engines too good
On a related note, I had a good chat today with someone who must be one of the most networked people in the networking business (he has over 600 recommendations on LinkedIn, and comes 21st on this list): Thomas Power. (OK, so there's another Tom with as of today 170m 'friends', but they're just kids, damnit). One of the interesting things Tomas P. said, and something he's based his career on, is that the abundance of digital communications and networking is actually paradoxically making many people lonelier. There's a real need to help people get up, out of their chair, and into the real world. That I guess is one of the messages of this blog, and happily it fits nicely into Nokia's remit too.
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From advertising to a direct dialogue with customers. Are you ready?
This note is aimed at brand owners, frustrated by the increasingly expensive and ineffectual advertising spending on traditional media and wondering how best they can get their message out. It suggests that today's disrupted media business is too frail to support the demands of brands wanting to advertise. This is no bad thing in itself because the advertising business itself is bloated, inefficient and outdated, and companies would be better off figuring out how to interact with and delight their current customers, rather than wasting money on trying to reach and influence non-customers.
Advertising heal thyself
Today’s advertising business is suffering from (at least) two major flaws. The first is the industry that the traditional media business can no longer offer an economically viable channel to allow brands to deliver their messages to a sizable captive audience. The second - bigger - challenge is that the concept of advertising is becoming less relevant in today's flat-earth world.
Challenge one: the advertising industry is overly reliant on a lame and enfeebled media business
The “traditional” media industry is fragmented, broken, confused and failing to deliver on one of its major tasks - to help brands reach people. (If you don't agree with this, read Bob Garfield's Chaos Scenario before reading on.) The media machine that is pulling the advertising load is to put it bluntly, knackered. Reaching non-customers is getting harder due to a proliferation of alternative media channels and consumer-side filters. Cheap tools and the Web as a distribution platform for connecting people allows anyone to be a broadcaster (or podcaster) resulting in massive fragmentation. Reaching 80% of US TV viewers used to require placing adverts on just four shows in the 1960s, today it would take over 100. Those who are 'formerly known as consumers' employ both hardware (e.g. DVR) and software (e.g. RSS) filters to give them control. Forrester says that 92% of people skip ads on DVRs, and half of US households are expected to have them by 2010. Ironically, brands have until recently been forced into paying ever more for in "upfront" fees for broadcast slots on US TV networks, simply because there was no other place for them to put their money. No wonder P&G's Jim Stengell says, "I truly believe, and I know many of you do, that today's marketing model is broken."
Further complicating the picture is the reality of “media multitasking” – no more the whole family sitting rapt around a television set or radio – today’s audience (kids in particular) will be IM-ing and gaming at the same time as watching TV and listening to the radio or podcasts. This plays havoc with those already creaky viewer figures. The result of this is that some brands are getting desperate, and “outsourcing” their brand to celebrities of various ilks, but these can be crushingly expensive and more importantly, unpredictable and prone to embarrassing PR gaffes.
Beware the siren calls of the search engines
So if traditional media is broken, how about the new media experience? Internet advertising is growing rapidly as advertisers move their money towards where people are spending their time. UK ad spending – up 40% year on year, now accounts for 10% of total advertising spend, and is typical of the trends here. Several flagship advertisers are now massively increasingly their online spending this year and scaling back TV spend. And happily for the brands looking for simplicity, Google, Yahoo and Microsoft account for a lot of the internet traffic, and claim the vast majority (appx 80%) of online ad spending.
So surely search engine marketing provides salvation for brands fed up with the old media offerings? Well, not really for a number of reasons. First, there's a long way to go before the demographics overlap - PC penetration is not TV penetration, in particular in the key markets of China and India. Second, the model itself has flaws – industry experts suggest that click fraud can account for up to 30% of revenues. Third, bidding on competitors’ keywords is now rampant and resulting in spiralling costs (though this practice is probably one class-action suit away from being history). And fourth, just when brands had been extracting themselves from a reliance on an expensive media middleman, the emergence of search engine as intermediary will cost them dear. Overall however, is the issue that search engines are still intended to deliver advertising messages to non-customers and attract them to become customers. Here’s the second major flaw in the advertising industry's model:
Challenge two: advertising itself is an increasingly outmoded concept
The second major challenge facing the industry is that advertising itself is an increasingly outdated concept in today’s transparent and connected marketplace. Influencing prospective customers is ever harder; people are increasingly immune and sceptical to the battering of thousands of commercial messages. Typical of the ennui in the market, the ad agency WPP found that nearly a quarter of US ‘baby-boomers’ are insulted by the advertising messages that companies are sending them. The emerging Generation C reject marketing gimmicks (and can smell astroturfing a mile away). They make purchase decisions based on their trusted advisors and require transparency from the companies they deal with. People it seems, now generally prefer word of mouth to word of the Man.
Consider how Barrons defines advertising: a “paid form of a nonpersonal message communicated through the various media by industry, business firms, nonprofit organizations, or individuals.” These concepts seem outdated – advertising, we are told, should be about a bunch of things which the web is making redundant: in particular paying intermediaries a lot of money for the job that you could be doing better yourself. The new opportunities of free, personalized two-way communication delivered directly to users sounds more like blogs and community forums. As Bob Garfield points out, the head marketer at P&G puts it like this: "What we really need is a mind-set shift, a mind-set shift that will make us relevant to today's consumers, a mind-set shift from 'telling and selling' to building relationships."
Forget non-customers – turn existing customers into your new sales force
So with the advertising channel broken, and the approach itself increasingly irrelevant, where next for brands trying to get the message out about their products? At issue is the need to refocus attention from advertising to non-customers to serving current customers better. Sounds obvious? If so, why aren’t more companies doing it? Making great products, informing, interacting with and delighting their existing customers, rather than prospecting for hard to reach non-customers should be the new priorities. In an increasingly confused consumer maelstrom, advertising to people who are not your customer still serves some purposes – brand recognition, credibility (wow, that startup can afford a SuperBowl ad!?) and general feel good.
Fine, but when it comes to shifting products off the shelves, getting product feedback and innovation suggestions, the relationship of business value to customer intimacy is I would propose, strongly positive, something like this:
The key here is how to meet the needs of a more engaged customer base without incurring massive costs or raising expectations. Creating and fostering an open dialogue with customers is a daunting but necessary exercise. This is one of my pet topics, and there's not enough room to expand at length here, but at a high level, I'd suggest the following elements to achieve this within a reasonable time and cost scale (presuming that you've already got a great product to get excited about):
- Make every employee an ambassador. This requires creating a mindset within the company that emphasizes openness, collaboration, speed and employee problem-ownership (presuming they're the relevant experts). It's also about installing tools such as wikis (shameless plug...) so that individuals not only feel empowered but are empowered to collaborate with others and take the initiative themseles. All the better for reacting when you...
- Engage in direct dialogue with customers. Interacting with customers directly, for example allowing them to subscribe to web-based feeds of product news and releases. The use of syndication (RSS, Atom etc) makes dialogue an asynchronous and therefore more manageable process - this is not about giving the CEO's mobile number out to every customer. Well managed, honest external blogs are useful tools for smooth information dissemination that arguably fulfills the role of what advertising used to do. An even easier way to foster dialogue is then to...
- Facilitate customer-to-customer dialogue. Forums and chat rooms are great examples here - apparently over 30% of HP Europe's customer queries are answered by the Q&A from message boards. Being a fly on the wall to these discussions is important, even if they're not on your own sites - tools such as technorati allow Dell to search for phrases such as Dell Hell on blogs and join the discussion if necessary.
These activities are now pretty much table stakes in the move from being a company that just doesn't get it to one engaged and benefitting from a richer dialogue with current customers. Of course, there will always be room for some old world advertising - somebody has to spend the expense accounts after all. But it may be a worthwhile exercise to look at your company and ask where along the scale between "advertising to non-customers" or "conversations with current customers" they're sitting, and whether they're moving in the right direction.
The final point, which takes us beyond table stakes and into the realms of the Truly Interesting, relates to the eventual primacy of the mobile rather than the PC as the way to interact with the web. I would dearly like to see a new mobile marketing paradigm that allows the mobile to be the platform to allow companies to carry out ongoing conversations with their customers. Mobile devices are the natural interfaces for receiving filtered and tailored customized subscription information from companies that interest then. Note, this is not advertising as we currently understand it; it does not involve any use of the hackneyed “30 cents off a Starbucks” cliché. And it certainly is not about unsolicited spam. It would be a foolish company that abuses extraordinarily intimate relationship that the mobile device can deliver.
No, this is marketing, or more accurately – business as usual. We used to talk about ‘Internet companies’ – but that now seems quaint, as we recognize that the Internet is embedded into every facet of a company’s operations and their customers similarly expect to use the web to carry on conversations with the company. I’m looking forward to a time when brands are able to dramatically improve the quality of service they deliver to their customers rather than wasting money on inefficient advertising campaigns, and they incidentally will use an internet-enabled mobile device as the mechanism for this.
So, in summary, the media business is in turmoil, but the future for brands is not to simply take their old advertising approach over to the Internet. Instead, the smart companies will recognize the need to shift their focus from non customers to current customers, and harness the power of the Web to deliver a personalized, direct interactive dialogue with customers, and then to start thinking about what that personalized, intimate experience would look like on the mobile platform.
Credit card info sits on your hotel key card?
One of our security guys gave me a piece of photocpied paper, anonymous apart from a note at the bottom saying: "Information courtesy of: Kent Police". It was in the first week of April, but it seems plausible enough not to be an an AFJ. If it's true, I wonder what the hotels' policy is on this?
"Ever wonder what is on your hotel magnetic key card?
Answer:
- Customer Name
- Customer Partial home address
- Hotel Room Number
- Check in date and out dates
- Customer's credit card number and expiration date!When you turn them into the front desk your personal information is there for any employee to access by simply scanning the card in the hotel scanner. An employee can take a handful of cards home, and using a scanning device, access the information onto a laptop computer, and go shopping at your expense.
Rather wasteful to destroy the cards each time - maybe the hotel desk could have a magnet that you can use to see that your card is wiped.