The tweet smell of success: will Twitter profits soar in 2010?

Will 2009 go down as ‘The Year Of Twitter’?

The website of this ‘micro-blogging platform’ attracts over 54 million unique visitors worldwide in an average month (according to comScore estimates) and many more use Twitter via 3rd party apps. I am writing this in the ‘Twitter Capital of the World’: London, England. Instead of sorting out the traffic or the Underground (=subway) ready for the Olympics, we’re all (OK many of us) at our PCs, Macs, Netbooks and mobile devices, tweeting madly. No longer just a platform for friends to stay connected in real time, Twitter has evolved into something much bigger. Marketers are looking at it increasingly closely as it appears to offer larger and more closely targeted audiences than other media channels. The media (mainstream, tech, and yes, even bloggers) is obsessed with Twitter. It has come from nowhere and completely appropriated the Zeitgeist. The company is valued at $1 billion (WSJ). Yet only 4 years ago Twitter didn’t even exist.

Twitter was founded by Jack Dorsey, Biz Stone, and Evan Williams in 2006 and its rise has been rapid. People using Twitter during the fires in California in October 2007 kept their followers (often friends and neighbours) informed of their location and those of the various fires as they spread. The American Red Cross has used Twitter to exchange minute-to-minute information about local disasters. During the 2008 Mumbai attacks,  eyewitnesses sent an estimated 80 tweets every 5 seconds. Twitter users on the ground helped compile a list of the dead and injured and users tweeted vital information eg. emergency phone numbers and the location of hospitals needing blood donations. CNN called this "the day that social media appeared to come of age". President Obama used Twitter in his Election campaign. In January 2009, US Airways Flight 1549 experienced ‘multiple bird strikes’ and ditched in the Hudson River. A passenger on one of the ferries that rushed to help took a picture of the downed plane as passengers were evacuating and sent it to Twitpic before any other media even arrived at the scene. The Australian Country Fire Authority used Twitter to send out regular alerts and updates during the February 2009 Victoria bushfires. The Australian Prime Minister, Kevin Rudd, used his Twitter account to tweet information on the fires, how to donate money and blood, and where to seek emergency help. This sounds like a totally new platform which is operating as a force for good (on the whole). The ex-US national security adviser Mark Pfeifle has suggested Twitter should be nominated for a Nobel Peace Prize.

Twitter’s website attracted a total of 44.5 million unique visitors worldwide in June, 2009 (comScore); at this time it was involved in sharing the news about the Iran Election protests. Twitter apparently continues to show rapid growth: The site had 54.7 million unique visitors in August, whereas it had just 4.3 million in August 2008, (WSJ- comScore).The September 2009 figure was 58.4 million. There is a suggestion that US growth is starting to stall but new Twitter features may well reverse this.

After initially attracting 'geeks' and the 'web-savvy', Twitter has become mainstream with Celebrity ‘tweeters’ eg. Ashton Kutcher, Britney Spears, TheEllenShow and Stephen Fry from the UK where Twitter has grown by an almost incredible 1,959% year on year (Nielsen). No wonder Twitter has just been voted 'Medium Of The Year' by Campaign magazine.

Counting Twitter.com website hits always understates total Twitter usage, as this neglects traffic on third party apps such as TweetDeck, which users access to monitor and publish tweets. TweetDeck alone accounts for an estimated 20% of all tweets. Twitter's audience, therefore, is certainly much larger.

Twitter has so far raised over US$150 million from venture capitalists. Yet apparently it continues to lose money.

Hang on; didn’t we learn from the 'Bubble' (AKA the first internet boom/ bust) that dodgy dotcoms who run up big debts on expensive technology platforms and on ‘buying’ loyal users crash horribly? Boo.com anyone?   We were never going to make those mistakes again, remember?

So what’s going on?

No-one is suggesting that the guys running Twitter are crazy. They have however been tantalisingly unforthcoming about their intentions. Their plan could be:

Either:

(a) Build up as many loyal users as possible then MONETISE. (see below)

OR b) sell the business to a wealthy older generation company (Apple? Facebook? Microsoft? Amazon?)  This depends on someone believing that they can monetise where the founders haven’t (yet) but there are plenty of examples of this not going to plan; just ask Google what is their payback forecast for YouTube which they bought in November 2006 for $1.65 billion in stock, or consider AOL’s $4.2billion acquisition of Netscape; then again there is Skype, bought by eBay for $2.6 billion in 2005. The auction giant struggled to monetise Skype and until recently even faced a lawsuit from its founders as it tried to spin off the business at a loss. (The founders now own 14% again which I believe I called ‘having your cake and eating it’?). However, since it’s Twitter, I’m sure a buyer could be found.

OR c) float (even though Tech company IPOs are currently out of fashion)

OR d) carry on as they are while they're having fun and still growing.

This raises an interesting question; when will Twitter stop growing? Has it already plateaued?.


Gartner’s 2009 Hype Cycle Report (see diagram) suggests that most new technologies/ tech companies reach a peak then hit “The Trough of Disillusionment”   (something we would all surely wish to avoid at any time in our life cycle!)

According to Jackie Fenn, VP, Emerging Trends at Gartner:

“Technologies at the Peak of Inflated Expectations during 2009 include cloud computing, e-books (such as from Amazon and Sony) and internet TV (for example, Hulu), while social software and microblogging sites (such as Twitter) have tipped over the peak and will soon experience disillusionment among corporate users.”  

Well, maybe.

Now let’s consider the ‘M’ word - monetisation.

By the way, I have a theory that this is one of those words that separates people who ‘get’ digital from those who just read/ hear about it in the mainstream (offline) media. If you can say ‘monetisation’ without smirking you are in the former group (and if you spell it with an ‘s’, either you’re British or Australian or someone’s been messing with the country settings on your spellcheck.)

The rumours regarding Twitter monetisation include:

• Selling advertising space on the Twitter site
  

(It's interesting to speculate what these ads might look like: online banners/ skyscrapers? Google AdWords-like text only? Or like tweets slotted between the ‘real’ ones?)

• Partnership with other site owners

Twitter recently announced that its new ‘sign-up API’ would be live on Citysearch  (the US local online guide)   This is significant because it could point the way to another monetisation strand.

• Paid-for Premium Accounts

For an indication of Twitter’s plans, let’s look East: Twitter Japan has acted like a ‘testbed’ for the company and operates differently from Twitter in other countries eg. its launch of a video-sharing service.Twitter Japan already allows ads on each page (a feature not yet allowed on the site in any other country).

It is understood to be introducing ‘a tiered payment model that will charge audiences to view tweets from premium Twitter accounts’ (Media Asia).

Kenichi Sugi (Twitter’s man in Japan), announced the changes at the Mobidec2009 conference earlier this year. He said that Twitter would be adding paid subscription options early in 2010 – which would allow business account holders to charge audiences for access to their tweets, links to external websites and images.

Users who want to pay for full access to these premium accounts’ tweets can do so via a monthly subscription model using a credit card or have their mobile network include it in their monthly bill, or buy a pre-paid top up card at convenience shops. Prices will be dependent on the figures set by the charging account holders. Twitter will take 30% (tbc) of all fees generated.

Twitter’s Biz Stone and Evan Williams have talked openly about charging businesses for the commercial use of Twitter – however the idea that users will be charged to access information from such accounts surprised many Twitter watchers. Twitter accounts which deliver real-time information – such as news and original photographs – are the most likely to be able to charge users successfully. (Just ask Rupert Murdoch about the challenges of getting users to pay for content!)

At Web 2.0 in San Francisco, in September 2009, Evan Williams stated that Twitter Mobile in countries like Japan and India – was a big focus because the reach and revenue potential are huge, especially in Japan – where internet mobile penetration levels are some of the highest in the world.

Twitter has signed a major SMS deal with India’s largest mobile operator, Bharti Airtel, enabling its customers to send tweets via SMS and is in talks with mobile network operators all over the world to allow people to post and receive tweets via text message, without the need for web access. Millions of people already post tweets via SMS, use Twitter mobile or third party apps on the go; Twitter wants deals with all the major mobile phone carriers in its target territories.

In the 1989 movie Field of Dreams, Shoeless Joe said: “ If you build it, he will come "  (often misquoted as ‘they will come’ which would be much more appropriate). When applied to websites, we know this 'ain’t necessarily so'. But Twitter has built it, and they’ve come all right - in their millions. Many of us, to varying degrees, are addicted to Twitter. It is a true game-changer. In social media, in marketing and more generally. If we suddenly had to pay for some of it, for ‘special’ attractive content, or for new, exciting, ‘premium’ features, many of us would. Sure: much of Twitter is trivia of interest only to a very few (“Hard-boiled egg for breakfast, yum!”, “Cute picture of my poodle Fifi”, “OMG started raining in Manchester- again!”) but these conversations are between real people talking to their friends, family, colleagues and acquaintances about their lives. The audiences Twitter potentially offers are very attractive to marketers; especially if they can be packaged in a way that is easy to segment, target and buy.

This has been the year Twitter took off; perhaps next year will see the start of pay-back. The guys at Twitter are smart. Several ‘people who know’ think this is going to be a famous case history: Twitter will monetise and soon. Then we’ll all be saying we knew they’d make it all along. What is indisputable is that things are moving fast in Twitter HQ in San Francisco and there’s much more to come. Maybe 2010 will be the Year of Twitter…

(Oh and please follow me on Twitter  )

How was it for you? The joy of UX

Google is planning and currently beta testing some design/ layout changes, both on the Home page and the Search Results page to include a new left-hand navigation pane. Google is known for making such changes very rarely and when it does, for researching them very painstakingly. Which raises the question: isn't agonizing about miniscule changes in logos, column width and colours all a bit unnecessary? After all, Google has a strong brand and isn’t it the reliability of its search results that really matters?

Well, in a word, “No”. We’re talking about the User Experience (or UX) here (more specifically web usability) which is just as crucial for Google as for any other website. Indeed, arguably more so, since Google has such a massive volume of traffic. And as Google CEO Eric Schmidt has said “disloyalty is only one click away”. Bing and Yahoo! are ready to welcome anyone who has a sub-optimal experience and fancies a change of search engine. I would argue that the phenomenal success of the Google search engine owes much to how simple it is to use. (Indeed Google has had less success with more complex, less intuitive products: e.g. Google Radio and maybe Google Wave?)

Indeed Google search is not even particularly comprehensive. Michael K Bergman, an American academic and entrepreneur, published a paper on the ‘deep web’ in 2001 that is still regularly quoted. "The deep web is currently 400 to 550 times larger than the commonly defined world wide web," he wrote. "The deep web is the fastest growing category of new information on the internet …internet searches are searching only 0.03% … of the [total web] pages available."

Of course this isn’t the point. Google works. And the company pays a massive amount of attention to UX. Their team of UX experts, headed by Marissa Mayer, Vice President, Search Products & User Experience, goes to great lengths to keep the Google search experience in tune with users' changing wants and needs, including what they see on their screen and how they interact with it. I believe this has played a big part in the Google search engine's rise to dominance. Granted, most people find it gives acceptable results but most of all, it is quick and easy to use. Most searchers find what they want fast i.e. they get a good experience. Google wisely adjusts the user interface with great care and only after careful consideration.

The world-renowned UX Guru Jakob Nielsen has said “People are on the Web not to enjoy your Web design, but to get something done.” Not surprisingly, he has been strongly criticized by the design community for downplaying the importance of aesthetics, particularly in situations where the creator of the web content is seeking to persuade, influence or entertain rather than purely facilitating. Few would disagree with the argument that different factors come into play when one considers the optimum UX in browsing a particular area of an online store to find suitable gift ideas, compared with what is required at the checkout. Similarly compare an online photo gallery with an online banking site. The need, of course, is to understand the user and their requirements at the time they are using each part of the site; this is UX (web usability) research and design: a fascinating meeting of technology and human psychology.

UX has become big business and rightly so. There are now companies who specialize in 'eye tracking' to optimize website usability. To ensure a site is accessible and easy to use, they look at the site through the user’s eyes - literally. Under laboratory conditions, site owners can observe directly where the user looks for information, what elements are missed, and where the user is confused. 'Point-of-gaze' metrics combined with 'measures of mental effort' can highlight key usability areas that need attention. We can study how users click and where they look and in what sequence. Granted, we don't know exactly what they're thinking and feeling (yet) but it's a good start in our mission to deliver the best possible UX.

Site owners are continuously competing against distractions (including ads and other websites) in their attempts to engage and hold the attention of the user. The slightest irritation or unwelcome surprise can produce frustration and cause the user to click away/ leave the site. Improved web design has raised the bar compared with the ‘brochure sites’ of 10 years ago. Today’s users expect good usability. They are not, in general, fascinated and impressed by website design or Flash animation. They are demanding and impatient. Thus sites should be designed and tested for speed of loading and ease of navigation on equipment and with connection speeds typically experienced by the site’s core user group (a factor which the design and build agency, with its high-end machines, has been known to neglect!).

Given ‘Content is King’, one can commit regicide by neglecting UX considerations. Yet even in these days of widespread broadband, the user doesn’t always experience a freely flowing interaction. There are far too many sites with good content that are unnecessarily frustrating to use. And too many major companies that (re)launch websites without adequate testing. Why would they do that?

Smart companies understand the importance of UX and devote appropriate time and resources to optimizing their user’s interaction (a) with their site and (b) looking at the bigger picture (including all touchpoints) with their brand. Apple certainly knows a thing or two about Total User Experience design, as demonstrated by the attention it pays to packaging, materials and colours as key elements of product design.

I'm not sure exactly when we’ll all get to use the new Google interface. But when we do, I'm sure it will be a good experience.

Social Media: What? We can’t measure it?

In the fast-changing world of digital marketing, one has to keep up-to-date. I recently attended a digital industry trade show/ conference: I met my client as arranged, we did some business and we said goodbye. I then walked round the stands looking for anything new and interesting. The ‘usual suspects’ were in evidence. There were various ladies with lots of make-up, wearing shorts and high heels, walking round in pairs giving out bits of paper (at a digital marketing event?) and smiling with as much sincerity as they could muster. There were the ‘mobile masseuses’ accosting bemused delegates as they staggered around with carrier-bags laden with bumph. A truly horrible cup of expensive coffee, then on to mingle with the massed ‘digerati’ at the free seminars.

Interestingly, the lengths of the queues varied: notwithstanding any bias in the show attendees, I suggest this was a good barometer of which topics within digital marketing are ‘hot’ right now. The approximate pecking order (in ascending order of popularity) was:

Affiliate Marketing
eCRM
Email Marketing
Web Analytics
Paid Search
Viral
SEO
Google AdWords basics
Social Media/ Online PR

In other words, if you wanted to hear an internationally-renowned, cutting-edge Affiliate Marketing Guru explaining his/ her craft, you were welcomed with open arms by the lady scanning your badge and ushered with a friendly smile to one of the best seats, whereas for “How smart marketers tweet - 49 Twitter secrets” (or something) they were queuing round the block for an hour beforehand (and even then many delegates were turned away with a different sort of smile and the suggestion they might "watch the presentation online" instead).

Social Media is certainly ‘hot’ right now. More and more consumers and business decision makers are spending more and more time on social networks (via Desktop PC, Mac, Laptop, Netbook or mobile device). For brands, it is undoubtedly possible to use Social Media to engage people in a very powerful way. For brand owners keen to dip their toes in the water, there is plenty of advice around. However: currently only a few of the self-proclaimed Social Media ‘experts’ appear to truly understand Social Media Marketing and even some of them are bluffing. These are still early days.

Suppose we open our favourite search engine and search for: “Social Media training courses”. We get a lot of sites (and even more courses) to choose from.

Bing: 29,200,000 results
Yahoo!: 36,900,000 results
Google: 86,100,000 results

So Social Media is what everyone wants to know about currently. Let’s have a look at what we mean by it, why marketers (and others) are so interested and how brands can participate successfully.

What is (are?) Social Media?

"Social Media are distinct from industrial media, such as newspapers, television, and film." Wikipedia

(but who ever heard of 'Industrial Media'? And if it exists, can we make money out of it?)

The use of the term 'Social Media' has risen steadily over the last couple of years. From a slow start, it has gathered momentum and now suddenly it's everywhere.

Social networks like Facebook or MySpace are online ‘places’ where people with common interests or concerns come together to meet similar people, to network, express themselves and share their thoughts. Brand owners can use social networks to understand what people are saying about their brand and to start a dialogue, a conversation with current and prospective customers.

Who are the players?

-MySpace

Launched in 2003 by a group of eUniverse employees including Brad Greenspan (eUniverse's Founder, Chairman, CEO), who managed Chris DeWolfe (MySpace's starting CEO), Josh Berman, Tom Anderson (MySpace's starting president), and a team of programmers and resources provided by eUniverse. MySpace was the first true social network and grew rapidly; the parent eUniverse was acquired in July 2005 for US$580 million by Rupert Murdoch's Fox Interactive Media, part of News Corporation. Of this amount, approximately US$327 million has been attributed to the value of MySpace. MySpace became the most popular social networking site in the US in June 2006.The 100 millionth account was created on August 9, 2006. According to comScore, MySpace was overtaken internationally by main competitor Facebook in April 2008, based on monthly unique visitors.Today,  MySpace employs 1,000 employees, after laying off 30% of its workforce in June 2009.

MySpace would appear to be in decline, possibly terminal.

-Bebo

Bebo, allegedly an acronym for "Blog early, blog often" is a social networking website, founded in January 2005. It is popular in many countries including Ireland, Canada, the United States, the UK, New Zealand and Australia. A Polish version was launched recently and there are plans for French, German and other versions. Founded by husband and wife Michael and Xochi Birch, Bebo had a major relaunch in July 2005 . It was bought by AOL in March 2008 for $850m (£417m). This now looks like a lot of money as Facebook and other networks continue to take users from Bebo….

-YouTube

YouTube is a video sharing website on which users can upload and share videos. Three former PayPal employees created YouTube in February 2005. In November 2006, YouTube, LLC was bought by Google Inc. for $1.65 billion, and is now operated as a subsidiary of Google. The company is based in San Bruno, California, and uses Adobe Flash Video technology to display a wide variety of user-generated video content, including movie clips, TV clips, and music videos, as well as amateur content such as video blogging and short original videos. Most of the content on YouTube has been uploaded by individuals, although media corporations including CBS and the BBC, offer some of their content via the site, as part of the YouTube partnership program.There are also 'official' brand-owned channels, where TV commercials and brand-related films can be viewed.

-Facebook

If MySpace has lost its 'Mojo', Facebook has grabbed it.

Mark Zuckerberg founded Facebook in 2004 with his Harvard University college roommates and fellow computer science students Eduardo Saverin, Dustin Moskovitz and Chris Hughes.Facebook recently claimed 250million active users (out of 300million registered users) with over 120million of these visiting the site at least once per day.The free-access social network lets people connect with their friends, post photos and videos, share links, plan events and learn more about the people they meet. Although Facebook started as purely a ‘social’ network, for brands, there are now opportunities to recruit and talk to users (='fans').These pages can be public and therefore 'crawlable'.

Facebook dominates Social Media (especially in the US and UK) and it continues to grow. Facebook accounts for 74% of all time spent by UK users on social networks (Nielsen, November 2009); this time itself is up 83% on 2008. It offers brands a chance to recruit fans via Facebook Pages, and also Facebook Advertising, where you can choose to pay per click (CPC) or impression (CPM).

Facebook's US monthly unique visitors grew from 92.2m in August 2009 to 95.5m unique visitors in September 2009. (comScore).

-LinkedIn

LinkedIn is a social network for professionals launched in May 2003. Users create a profile summarizing their professional achievements. They can then connect with former co-workers and professional contacts, adding them to their LinkedIn network. Through LinkedIn, users can search for jobs, find new business opportunities, and network to further their careers. As of October 2009, it had over than 50 million registered users in more than 200 countries.

-Flickr

Flickr is an image and video hosting website, web services suite, and online community platform. Launched in February 2004 and acquired by Yahoo! in March 2005, In addition to being a popular website for users to share personal photographs, the service is widely used by bloggers as a photo repository. In April 2008, Flickr began to allow paid subscribers to upload videos, On March 2, 2009, Flickr added the ability to upload and view HD videos, and began allowing free users to upload normal-resolution video. As of October 2009 it claims to host more than 4 billion images.

and of course

-Twitter

Twitter is the Social Media sensation of the moment. In the UK, it has grown by an unbelievable 1,959% year on year (Nielsen). It has entered the mainstream with Celebrity ‘tweeters’ including:

Ashton Kutcher (3,945,588 followers)
Britney Spears (3,725,547 followers)
TheEllenShow (3,687,260 followers)
and
Stephen Fry (970,368 followers)

Twitter is, strictly speaking, not a social media network but a micro-blogging platform that enables its users to send and read messages (or ‘tweets’); text-based posts of up to 140 characters displayed on the author's profile page and delivered to the author's subscribers (= followers). Users can send and receive tweets via the Twitter website, Short Message Service (SMS) or external applications. The 140 character limit on message length was initially set for compatibility with SMS messaging, and has brought to the web the kind of shorthand notation and slang commonly used in SMS messages. The 140 character limit has also spurred the usage of URL shortening services such as tinyurl, bit.ly and tr.im, and content hosting services, such as Twitpic and NotePub to accommodate multimedia content and text longer than 140 characters.

Twitter, founded by Jack Dorsey, Biz Stone, and Evan Williams in 2006 has gained massive popularity worldwide. Twitter’s website attracted a total of 44.5 million unique visitors worldwide in June, 2009 (comScore); at this time it was involved in sharing the news about the Iran Election protests.

It is sometimes described as the "SMS of the Internet” since the use of Twitter's application programming interface (API) for sending and receiving short text messages by other applications often eclipses the direct use of Twitter.

“What we have to do is deliver to people the best and freshest most relevant information possible. We think of Twitter as it's not a social network, but it's an information network. It tells people what they care about as it is happening in the world.” Evan Williams

Twitter is ranked as one of the 50 most popular websites worldwide by Alexa's web traffic analysis. Estimates of the number of daily users vary: Twitter does not release data on the number of active accounts.

RJMetrics has suggested:
-Twitter's user growth has plateaued
-Over 14% of users don't have a single follower, and over 75% of users have 10 or fewer followers.
-38% of users have never sent a single tweet, and over 75% of users have sent fewer than 10 tweets.
-1 in 4 registered users tweets in any given month.

Twitter received 20.9m unique visits from US users in September (ComScore) but this number should be treated with caution as the report only measures traffic pulled in by the main URL, twitter.com, neglecting traffic on third party apps such as TweetDeck, which users access to monitor and publish tweets. TweetDeck alone accounts for an estimated 20% of all tweets. Twitter's audience, therefore, is certainly much larger. In total, Twitter has raised over US$57 million from venture capitalists. It is currently unclear how and when the company plans to monetize the service.

Social networking sites sometimes unexpectedly cross borders: pioneering U.S. site Friendster, for instance, has faded dramatically at home but has found new and growing markets in Asia, while Google's Orkut is the top network in Brazil. Many of Facebook's biggest rivals around the world are local homegrown sites. With 200 million registered users, China's Qzone claims to be the world's largest social networking site, while VKontakte is far and away the No. 1 in Russia.

-VKontakte

vkontakte.ru is a social network for Russian-speakers. It looks surprisingly like Facebook! VKontakte (Russian: Вконтакте), internationally branded VK, is the most popular social network in Russia, Ukraine and Belarus. As of November, 2009, the network has more than 48 million users and averages over 1.5 billion daily pageviews and 9.5m visitors per day and is the leading site in Europe. As of March 19, 2009, VKontakte was ranked 28 in Alexa's global Top 500 sites. In English "V Kontakte" is literally translated as "In Contact" or "In Touch". Major Russian companies routinely send job offers via VKontakte. Most of the site's users are university and high school students. However, as the site's popularity increases, the demographic is getting older.

-Friendster

Started in San Francisco in 2002 but now draws 90% of its traffic from Asia. It has 105 million users. The top 10 countries accessing Friendster, according to Alexa, (2009) are the Philippines, Indonesia, Malaysia, South Korea, the United States, Singapore, China, Japan, Saudi Arabia and India.

-Orkut

Another free-access social networking service owned and operated by Google.. The website is named after its creator, Google employee Orkut Büyükkökten. Although Orkut is less popular in the United States than Facebook and MySpace, it is one of the most visited websites in India and Brazil. In fact, as of May 2009, 49.83% of Orkut's users are from Brazil, followed by India with 17.51%. Originally hosted in California, in August 2008 Google announced that Orkut would be fully managed and operated in Brazil, by Google Brazil, in the city of Belo Horizonte. This was decided due to the large Brazilian user base.

-Habbo

… is a hybrid social network and virtual world for teenagers; it combines elements of Second Life and Facebook. Some suggest the avatar-based interaction, networking in a space that feels real, using a ‘self’ that you can customize, points the way to the social networks of the future.

Back to the present: in September 2009 The top 10 UK Social Media sites measured by unique users (Nielsen) were:

1)   Facebook (22.81m)
2)   YouTube (16.25m)
3)   Wikipedia (14.20m)
4)   Blogger (7.71m)
5)   Yahoo Answers (7.28m)
6)   Twitter (4.43m)
7)   MySpace (4.16m)
8)   TripAdvisor (3.70m)
9)   BBC Communities (3.17m)
10) Bebo (3.15m)

-Blogs (=’web-logs’)

Notice that Blogger features in the list above. This is Google’s Blog platform; competitors include Wordpress, TypePad and Live Journal. Blogs are one of many internet-driven phenomena. Today, pretty much anyone can be an author and their own publisher (yes, even me!). The only ‘barriers to entry’ are basically access to a computer and an internet connection…

Technorati lists an astounding 112 million blogs in the world today, and adds, “there are over 175,000 new blogs every day. Bloggers update their blogs regularly to the tune of over 1.6 million posts per day, or over 18 updates a second.” With such overwhelming numbers, clearly it is necessary to prioritize blogs in terms of their level of influence; (how many of your target audience actually read them, how many comment, interact etc) in order to assess their importance in Social Media terms and to determine which should be monitored and how closely. Truly influential bloggers merit individual contact (and account management) if at all possible, they should be cultivated, fed exclusives and generally kept ‘on-side’ (although many, like the best journalists, cannot be ‘bought’!)

What are key issues?

There are various heated debates currently going on in marketing circles about Social Media. Of course everything is changing all the time. The networks are adding new features, revamping their user interfaces, forming partnership with content owners, mobile handset manufacturers, network operators. Major structural changes are anticipated, e.g. Google moving further into Social Media, Twitter further developing real time search, and/ or selling (to Google? Facebook? Apple?), MySpace and Facebook forming an alliance etc. etc.

1) Who should be responsible for managing Social Media engagement?

This is a current and very lively debate. Part of the problem here is one of definition. All marketing disciplines and channels are interconnected: Social Media touches both online PR and SEO. Press releases can and should be keyword optimized (so that search engines can find them once they’re published on various sites); Social Media mentions (e.g. in a tweet, Facebook post or blog post) can drive site traffic and conversions, as do Pay Per Click (PPC), Online Display and offline advertising. Since SM is a high-profile growth area, lots of people want a piece of it:

a) In Brand Owner companies
There is no real consensus as to which department/s should be responsible for Social media. Candidates include:
Marketing
Corporate Communications
Customer Services
IT

?The reality is that Social Media touches all these departments, since a disgruntled customer ‘venting’ on Twitter might have a customer services issue, but could be tweeting angrily to his/ her followers which could be undoing the efforts of the Marketing and Corporate Comms people. Equally the new TV campaign might cause a ‘spike’ in brand mentions on Facebook, cut-downs tributes and parodies on YouTube and extra hits on the website.

In these pioneering days, corporations, governments and not-for-profits are coping with this issue in a variety of ways. I would personally recommend that one individual should be made responsible as the Social Media ‘Czar’, with the full support of senior management and a mandate to work across departments to ensure a ‘joined-up’ SM strategy. Good luck to this person; exciting job however!

b) Agencies
What does a ‘Social Media agency’ look like? What skill-set do they require? PR agencies certainly have a plausible claim to be the best qualified, in an online extension of their traditional role as builders and defenders of their clients’ reputations, so long as they truly ‘get’ digital. Many PR agencies have successfully reinvented themselves for the digital age. And It’s not just about pitching stories to journalists via tweets rather than Press Releases. Crisis management has long been a PR agency specialist service, and a swarm of negative tweets can these days be the first indicator of a gathering storm, as can an irreverent video appearing on YouTube. SEO agencies would appear to have a lesser claim; after all, 'traditional' SEO (organic search) is about helping Google, Bing et al to find your site, not proactively engaging consumers and participating in conversations. Difficulties arise when you consider that SEO can include activity designed to generate inbound links; a process to which Social Media can certainly contribute. Full service digital agencies, having already grabbed design and build, online display, SEO and paid search (PPC), now see Social Media (web-based and mobile) as their next growth opportunity. And of course all the 'traditional' ad agencies are now into digital(!).

For what it’s worth, I believe Social Media should be managed by a brand owner client in-house with the help and support (where needed) of an external Social Media agency. This agency might be ‘pure’ Social Media or a more integrated Digital Agency offering a blend of Paid Search, SEO and Social Media. It could be one of those PR agencies who have fully embraced digital, so that they now genuinely offer ‘online reputation management’. It could even be a traditional above-the-line ad agency who have finally caught up with digital and now have the right people in-house, including Social Media experts. Anyway: however they label themselves, they’d better understand Social Media and keep on top of it as it changes, as it inevitably will.

2) Resourcing

However Social Media Marketing is to be managed, it is crucially important to allocate sufficient resource; internal or external. Indeed this is the main cost of Social Media marketing: the sheer 'person-hours' required to listen and participate effectively. It is also important to make it 100% clear how much authority the individuals involved actually have: i.e. can they make up ‘policy’ on the hoof? What must be referred ‘up the line’? And all the while recognizing that these platforms are inherently spontaneous/ immediate so that delays in replying while appropriate clearance/ sign-off is obtained don’t play particularly well.

To highlight the difficulties which brand owners face in deciding in how to empower front-line social media staff while at the same time retaining appropriate control, here are some notable Social Media PR disasters:

Domino’s Pizza (‘disgusting people’)

Ketchum/FedEx how not to use Twitter

British Furniture Retailer Habitat had some over-zealous employees manning its Twitter Account 

Dell had some problems with Social Media but ultimately made the necessary changes and is now a success story


3) How do you monitor conversations?

You can’t engage with your audiences until you know where your brand is being discussed and what people are saying about it. You need to know how to listen effectively. After all this is in effect ‘free’ market intelligence about your customers and prospects. You need to be aware of changes of ‘online sentiment’ as expressed in Social Networks (public pages only), ‘The Blogosphere’ and in Online News Media. Keeping on top of all this can be a big job. For a big, high interest global brand, there may be many millions of mentions to monitor; the requirement is for Social Media Monitoring tools which can provide a user interface or ‘Dashboard’ to enable the brand owner (or their agency) to make sense of it all for so that useful, actionable insights can be drawn from this vast mass of data. Fortunately several excellent ‘Buzz Monitoring’ tools exist: Brandwatch (which I would recommend), Spectrum and Radian6 are appropriate at enterprise level, whereas for SMEs and individuals, there are various free tools (e.g. Google Alerts, Twitter Search and Addictomatic. As Social Media itself grows, the monitoring industry is expected to continue to expand.

4) Metrics/ measurement

This is currently a massive area of debate and indeed concern. It is important to recognize that the ‘jury is still out’ as to exactly how to demonstrate ROI on Social Media. There can be no doubt that lots of positive mentions of a brand in Social Media must be driving traffic to the website (ie helping with SEO) which must be leading to an increase in sales; all this is good. The challenge is actually to quantify the value of all this positive buzz and to compare with the time and money spent to generate it, i.e. to measure Return On Investment (ROI).

“More research is needed to establish a tangible link between how many people are talking positively about brands versus the expected uplift in sales” - Econsultancy.

In a brand-owning company, the MD is likely to remark: “But you can measure everything online can’t you?” Well yes and no. We can certainly measure online behaviour (clicks, user journey, even eye-tracking on a given web page) but we can’t (yet) fully measure sentiment; how warm and/ or engaged people are really feeling towards the brand. Remember also that there are privacy issues; eg Facebook (unlike Twitter) is a closed community; only friends can monitor each other's updates and conversations. You can get excellent metrics on mentions in Blogs, Facebook (public pages), Twitter, hits on your videos on YouTube, Google/Bing/Twitter searches on your various branded keywords, generation of inbound website links etc but monitoring awareness and attitude shift, and turning this data into accurate ROI numbers is a challenge that hasn’t yet been fully met.

We need to recognize that Social Media marketing is still in its infancy. Let us remember that traditional advertisers have been struggling with this issue for more than 50 years. As Ad Agency Planning Directors have been saying since the days of the ‘Mad Men’  just because you can’t completely measure an increase in name awareness, or customer engagement or positive reputation with 100% accuracy, that doesn’t mean the activity was a waste of time and money. Note that no-one talks about ‘monetizing’ TV ad spend, although the metrics have never been 100% robust. Indeed certain traditional advertising research techniques can usefully be employed to measure the ‘awareness/ attitude shift effect’ of much Social Media activity.

Facebook and AC Nielsen have announced 'Brand Lift'  to demonstate the effect of Facebook advertising (including use of pre- and post- user surveys). Measurement Camp has been set up to develop open-source Social Media metrics. Unsurprising, we don't yet have a common currency to measure Social Media ‘engagement’. Expect big changes in this area in the coming months.

Who’s getting Social Media Marketing right?

As we have seen, the first step is diligent and intelligent monitoring of the social media ‘buzz’ around your brand which is continuously taking place on social networking and micro-blogging sites like Twitter and Facebook. The next challenge is to participate in these conversations, in order to gain positive exposure for your brand, product, or service, without ‘selling’ too hard.

Dell, Starbucks, AmericanAirlines, BMW Mini, Lenovo and Amazon (among others) are all using Social Media to spot and fix problems, getting on to complaints early, moving fast to turn detractors into advocates, joining conversations, providing information and product news and in some cases to actually sell.

And also, interestingly, politicians and governments. On Twitter, we find:

@DowningStreet,
“The official twitter channel for the UK Prime Minister's Office”
489,030 Following
1,548,053 Followers
on 2,094 Lists

@whitehouse
“Official WH twitter account. Comments and messages received through official WH pages are subject to the PRA and may be archived”
72 Following
1,428,305 Followers
on 6,095 lists

@barackobama
Location Washington, DC
Bio: 44th President of the United States”
750,808 following
2,617,634 followers
on 18,068 lists

and last but not least, 

@treatyoflisbon (European Union)
“Charter of Fundamental Rights to become law, protecting dignity, freedoms, equality, solidarity, citizens’ rights, and justice”
0 Following
211 Followers
on 7 Lists

Barack Obama’s presidential election campaign has been paraded as a classic digital marketing case history. My view is that he inspired a lot of people to give money, and a lot of people to work very hard on his behalf; he was smart enough to include Social Media and other digital marketing alongside all the traditional fundraising and vote-winning techniques. Scott Goodstein was the Campaign Social Media mastermind and has given interesting interviews/ speeches about his role in the campaign which employed MySpace, Facebook and YouTube. (If the election were today, then no doubt Twitter would feature more prominently). President (then Senator) Obama announced the choice of Joe Biden as his running mate simultaneously by text, email and on Twitter.

Indeed politicians and governments all over the world are getting wise to the need to engage with their electorate, their citizens, via Social Media and the many advantages this can bring. Social networks are not only for making friends…

“Last year YouTube received 11 million unique users from the UK and more than 35 million Britons visited a blog. People are using digital channels to talk to each other and to the Government. The Downing Street Twitter account is followed by more than 1.2 million people, more than the official White House Twitter and considerably more than the daily circulation on most national newspapers. It is vital that the Government understands the medium and uses it properly. If people want to engage with us online, we should be capable of engaging with them online.”

(UK Cabinet Office, September 2009)

What about the future?

Social Media will be interconnected. Today, online social interaction is imperfect and disjointed because consumers have separate identities in each social network they are part of. In the near future, technologies that enable a portable identity will empower consumers to carry their identities with them, transforming marketing, CRM, and advertising. We are just seeing the beginning of this transformation, in which the Web will evolve step by step from separate social sites (‘walled gardens’) into a cross-channel shared social experience. Consumers will rely on their peers as they make online decisions, whether or not brands choose to be part of this. Socially connected consumers will form cohesive communities and shift power away from brands and their CRM systems; this will result in like-minded communities who will define the next generation of products. Forrester has spoken about the emergence of Social Relationship Management or SRM. Marketers will need to target these communities rather than individuals.

The future of Social Media is also mobile. This is natural and inevitable; people want to stay in touch; most of all when they are on the move between: home, work, school/ college, sports event, bar, friend’s house. The iPhone has changed the rules, the other smartphones have further empowered the consumer; all phones are getting more powerful and Social Media on mobiles will continue to grow. All the major social networks are working closely with mobile manufacturers and network operators.

Today brands are the sum of all conversations about them; the brand owners cannot fully control these conversations but they can influence them. It is essential to establish where these discussions are happening, to access these platforms, to listen, to understand and only then engage by joining the most relevant conversations where value can be added. That is social media marketing and as we have seen it is far from easy to do well and it’s changing continuously.

This is the time to get involved. Don’t wait. Tell senior management to trust you. You’re the visionary who's taking the time to read this post. Sure, we can’t currently measure the ROI for everything we’re doing in Social Media. But that doesn't mean we should stay away. On the contrary, strong and forward-thinking brands are already actively involved: listening, engaging, trying things, learning. These lessons will be valuable. Many are already paying back. It doesn’t need to be expensive (remember much of it is ‘free’ media), and it’s certain to be (part of) the future. These conversations about brands are going on NOW, whether the brand owners are participating (or even aware) or not.

As Social Media guru Larry Weber says: “It's time you joined the conversation.”

Apple: turning 'cool' into dollars

Apple is not the biggest maker of computers in the US. In figures just released by IDC, Apple Macintosh (Mac) sales grew 11.8% in the 3rd quarter of 2009, as Apple took a 9.4% U.S. market share, maintaining its position as the fourth-largest U.S. PC manufacturer. Apple sold an estimated 1.64 million Macs in the US over that period, up 11.8 percent from 1.47 million in the same period a year ago. Although it’s not the biggest, Apple may well be the coolest. And remember Apple also invented the iPod, iTunes and the iPhone.

This post is about Apple; the first 33 years. Many would describe Apple as currently the "coolest tech brand on the planet". To understand this achievement we must of course consider the contribution of Steven P “Steve” Jobs; co-founder, CEO, charismatic leader, presenter and front-man; a key part of the Apple brand for most, but not all, of this period. Such is the strength of his personality and his powers of persuasion that he has been described as being endowed with a “reality distortion field”. In a land that famously values salesmanship (and to be fair, all around the world) he has many fanatical fans. A recent leave of absence, while he had a liver transplant, following his earlier pancreatic cancer, sent the Apple Inc share price plummeting. Now he's back. A survey by Junior Achievement, an organization that educates students on matters related to future employment, found that the Apple boss is the most admired entrepreneur among teenagers.

With Jobs at the helm, its range of desirable gadgets and its (in recent years) booming stock price, Apple has accumulated an army of passionate supporters among both consumers and investors. Most would agree it has earned the epithet ‘cool’.

What makes a brand cool? Well it helps if it looks good. And works reliably. And consistently spending millions on clever, creative advertising also has an effect. Of course there are no guarantees. As my old Maths teacher might have said, these are ‘necessary but not sufficient conditions’ for coolness…People have to deem your brand to be cool and it’s important not to appear to be trying too hard. Andrew Keller, co-executive Creative Director of Miami Ad agency Crispin Porter + Bogusky recently said : “to try to be cool is not to be cool.” He should know - he’s recently had a hand in creative work for Mini, Virgin Atlantic, VW, Burger King and, most recently, err… Microsoft.

CoolBrands is an annual initiative to identify the UK's ‘coolest brands’. The list has been compiled by Superbrands annually since 2001; the 2009 results were recently published. The survey seeks the opinion of independent experts and thousands of consumers. They claim the coolest brands of 2009/10 are:

1.iPhone
2.Aston Martin
3.Apple
4.iPod
5.Nintendo
6.YouTube
7.Blackberry
8.Google
9.Bang & Olufsen
10.Playstation

Notice Apple has 3 out of the top 4 'cool' brands.

Now let’s look instead at the 2009 Interbrand annual survey of the world’s most valuable brands...This is the list of the ‘best’ global brands based on estimated financial value. It looks a little different. Tech brands again feature but not in the same order:

1.   Coca-Cola
2.   IBM
3.   Microsoft
4.   GE
5.   Nokia
6.   McDonald's
7.   Google
8.   Toyota
9.   Intel
10. Disney
11. HP
12. Mercedes-Benz
13. Gillette
14. Cisco
15. BMW
16. YSL
17. Marlboro
18. Honda
19. Samsung
20. Apple

Notice that in this list, Apple just makes it into the top 20, well behind the (these days) rather less ‘cool’ IBM (No. 2) and Microsoft (No. 3). Several other tech brands feature above Apple.

Clearly, ‘cool’ is not just another word for ‘profitable’ or ‘successful’.

So what exactly is this thing called ‘cool’?

Dr. Carl C.Rohde (‘worldwide reputed trend watcher’), claims that what makes something cool is its ability to impart "confidence on a physical and psychological level".

Rohde has identified 'seven themes of cool empowerment' to categorize cool objects and cool people:

• Wellness -- Chai lattes, yoga classes and charitable activities ... anything that makes you feel healthy and happy as an individual and a member of society.

• Masculinity for confused males -- Fashion, sports-related products, grooming materials ... any product that can help men overcome their confusion about how to be a domesticated partner while still being a virile man.

• Femininity for women on the rise -- Any image or product that acknowledges a woman's femininity while recognizing that she's also claiming her place as a power player in society.

• Celebrities -- Anyone with a story to tell while still being extraordinary in a way. Examples: Nicole Kidman's tale of divorce, 50 Cent's hard-knocks life, Susan Boyle .
  

• Cool personalization – In any form, be it a service, a brand or something done on an individual level to make a person feel unique by "putting their own imprint" on objects.

• Technology -- Mobile phones, high-tech outdoor gear, gadgets ... things that help you navigate your life better. (see where this is going yet?)

• Cool branding -- Products that make consumers believe that their lives are better for using them. Examples: Nokia, Puma and yes, iPhone.

Let’s take a look at how Apple got where it is today.

It started out as a rather quirky Silicon Valley tech firm but has risen to its greatest heights in the years since Steve Jobs returned as CEO and took it to places beyond the desktop. Apple Computer was founded in 1976 by Steve Jobs and Steve Wozniak. It was one of a number of tech firms - including Atari, Radio Shack and Texas Instruments – who sought to transform the digital computer into a home appliance. Alone of that first personal computing generation, Apple and the charismatic Steve Jobs have consistently found a way to ‘touch the Zeitgeist’.

In 1979, Jobs made a now legendary visit to Xerox’s Palo Alto Research Center, where he viewed a prototype personal computer - the Alto. This inspired a range of ideas about computer design and graphical user interface (GUI) which led Apple to develop two families of computers, the Lisa and the Macintosh. Steve Jobs aimed to make Apple’s products “insanely great,” and he was convinced that they could create ‘personal computing’ and so change the world.

Although the Lisa failed commercially, the Macintosh succeeded, reshaping the computer industry over the next decade. The Apple Macintosh (complete with an impressive 128K of memory and price tag of $2,495 ) was introduced on January 24 1984; it was the first commercially successful personal computer to feature a mouse and a graphical user interface (GUI) rather than a command-line interface. It is hard for us to understand today what a breakthrough this was. The ‘Mac’ rapidly became the industry standard for typesetting and design (try asking a creative e.g. an advertising Art Director to use a Windows PC).

In 1985, before Mac had really taken off, Steve Jobs, was forced out of the company by his appointed chief executive, John Sculley, whom he had poached from Pepsi. Apple struggled in the late 80s and early 90s as Microsoft's Windows operating system became the desktop computing standard. Things really began to unravel when Apple placed a large bet on the arrival of the hand-held computing market. When Apple’s Newton failed commercially, Sculley was himself forced out in 1993.

In 1997, Apple’s current era dawned as Steve Jobs returned after more than a decade away. At that time, many analysts gave him little chance of resurrecting the company, which had largely been written off by the computer industry and analysts (Michael S. Dell, who had by this time built his own PC empire, was even quoted as suggesting that Apple’s smartest move would be to “shut it down and give the money back to the shareholders.”) Starting with the title of Interim Chief Executive, however, Jobs systematically rebuilt the company’s Macintosh franchise by adding an operating system he had developed while ‘in exile’. And then there were the new products…

In 2001, Jobs introduced the iPod music player, to an unsuspecting world. offering '1,000 songs in your pocket'.  And the size of a deck of cards. (thanks to its 5 GB ‘ultra slim’ hard-drive). This was a stunning proposition at the time and it set the company on its current course as a major player in consumer electronics.

Other iPods followed the ‘Classic’ (Mini, Nano, Touch, Shuffle). Apple has sold over 220,000,000 iPods worldwide. There is no competitor in sight. The iTunes Music Store, created to enable users to fill the device with audio and video content, has made Apple an important force in the music industry.

Then, in 2007 Apple did it again as Steve Jobs introduced the iPhone, a convergence of entertainment, computing and communications that has stirred up the entire telecoms industry. To be fair, the Apple TV set-top box has had less impact, but it signals the firm’s continuing interest in the living room.

For now at least, Apple appears to have a comfortable lead in the simmering smartphone battle. Since 2007 it has sold more than 37 million iPhones and iPod Touches, and these devices have become its most profitable product category.

On June 8, 2009, Apple offered its devoted fans a new version of the iPhone, the iPhone 3G S. This third model iPhone looks physically identical to the last version but includes internal hardware and software improvements. Among the changes, the iPhone 3G S has a three-megapixel camera which also records video, an internal digital compass and voice-control features that let owners use spoken commands to make calls and play music.

Advertising has always been a key component of the ‘coolness’ of the Apple brand and its sub-brands. Under Steve Jobs, Apple has consistently launched ‘game-changing’ products with ad campaigns to match.

Jobs and the LA agency TBWA\Chiat\Day go back almost right to the beginning. In fact it is rumoured that every Wednesday, Lee Clow, the creative director of TBWA\Chiat\Day, travels from Los Angeles to Cupertino, Calif., for his weekly meeting with Steve Jobs . They started doing this years ago and have created ads that are both stylish and indeed ‘cool’. In the early 1980s, Clow helped to create Apple’s ‘game changing’ '1984' television commercial introducing the Macintosh. The ad’s simple message was that buyers of the new machine would be striking against the ‘evil’ IBM, portrayed as Apple’s Orwellian foe. Jobs allegedly struggled to persuade Apple’s board to run the ad, which was directed by Ridley Scott (who had released Blade Runner the previous year without box office success!). Lee Clow was similarly adamant when his boss, the late Jay Chiat, tried to shelve it. The ad was unveiled during a time-out in the 3rd quarter of Super Bowl XVIII.

More recently, in a battle reminiscent of Coke Vs. Pepsi, Avis Vs. Hertz or American Express Vs. Visa, Apple took on Microsoft head-on. The 'Get A Mac' campaign ('Mac Vs. PC'), again by TBWA\Chiat\Day Los Angeles, depicted PC users as sad, unattractive nerds, compared with the ‘cool’ (but interestingly never cruel) Mac. Jobs and Clow have substituted Microsoft for IBM as the ‘Evil Empire’ in these Mac ads. And there were even several tailored to the UK sense of humour.

In 2008 arch-rivals Microsoft, to the surprise of many, appointed uber-cool Miami ad agency Crispin Porter + Bogusky and hit back with their own campaign: 'I'm a PC'. The series first appeared in September, 2008. They followed up with ‘cute’ Kylie and ‘laptop hunters’.

However many commentators, techies and consumers felt that Microsoft was unconvincingly trying to prove it had a sense of humour; clever, ‘cool’ ads just didn't suit it. Apple already owned ‘cool’. So: bad luck CP+B!

Right from the launch in 2001, the iPod was an adman’s dream: a product with a genuine competitive advantage which was beautiful, simple and, well, ‘cool’. TBWA\Chiat\Day didn't disappoint: the advertising fitted it perfectly.

Also check out:

iPod Classic commercial
iPod walkie-talkie man
iPod technologic
iTunes now for Windows

The original iPhone was introduced in the US on June 29, 2007 followed by 3G and 3G S versions .

With  this product, Jobs and his agency seem to have concluded that the device is so beautiful and pleasing to use that it is sufficient just to demonstrate it close up in order for it to sell. So far 21 million people appear to agree.

So what makes Apple so cool? In my opinion four things:

Original ideas - not stolen (or ‘borrowed’)
Good product design/ packaging
User interfaces which are well thought-through and easy to use
Control of hardware manufacturing

Well-designed products are a pleasure to use and enhance the user’s life. Apple makes products that both work well and look good. At a price most (OK not all) can afford.

Apple has always been rooted in Design. Indeed Jobs famously accused Microsoft of ‘having no taste’ (i.e. of being clumsy unattractive nerds as opposed to Apple’s 'Designer chic geeks').

But can Apple remain cool? Over recent years, Apple has created sky-high and possibly unrealistic expectations from enthusiasts and analysts. It has set the bar high. Apple's strategy – epitomized in the iPhone -- has come to depend on a steady stream of hit devices that are viewed by consumers as being so far ahead of the competition that they are worth paying extra for. (Note that Macs have always been more expensive than PCs). How long can this go on? The reality is: not everyone loves Apple .The company has been satirized and criticised for high prices, for tying iPod users into iTunes and even for being ‘elitist design snobs’. In many of its markets, the competition is now catching up and it will be fascinating to see whether Apple can continue to innovate so effectively and thus keep on selling units and increasing its stock price. After all it’s not cool to be a loser; as Jobs himself has said, ‘real artists ship’. We can’t wait to see what Steve has up the sleeve of that black mock turtle-neck next time he gets up on stage to the rapturous applause of the assembled Apple Worshippers.

But whatever the future holds, no-one can deny Apple’s success over the last 33 years. They have made technology stylish. Apple products are admired for their form as well as their function. The combination has enriched many lives. As a result they have made a lot of money.

As the Man says (frequently): "Pretty cool, huh?"

The tech company we love to hate

Remember that company from the last century whom many consider to be the inventors of personal computing? Older than Google, and even older than Apple (just). To jog your memory, here are some of their products:Windows, Word, Excel, PowerPoint, Outlook, Office, Explorer, MSN (bit of a give-away there), Encarta, Live Messenger, Xbox 360, Age of Empires, Halo, Zune (OK maybe you haven’t heard of that one), Bing. Most of us grew up with some of these (sub)brands.

Founded in 1975, Microsoft (for it is they) has created four $billionaires and some 12,000 $millionaires from Microsoft employees. Today Microsoft employs some 95,000 people worldwide, of whom 56,000 are based in the USA. For the fiscal year ended June 30, 2009, Microsoft reported revenue of $58.44 billion, a 3% decline from the prior year. Operating income, net income and diluted earnings per share for the year were $20.36 billion, $14.57 billion and $1.62, which represented declines of 9%, 18% and 13% respectively. In January this year, Microsoft announced plans to cut 5,000 jobs by the middle of next year. These cuts are now well underway. CEO Steve Ballmer hasn’t ruled out more. We are living in extraordinary times.

Always controversial, Microsoft seems to have acquired a serious image problem in recent years. Compared with Google and especially Apple, it’s just not regarded as ‘cool’. Some have even suggested that Microsoft will turn out to have been “a 20th Century company” and that it is now being forced to pass the baton on (to Google/ Apple/ Dell presumably?). Ballmer is said to have ‘bet the ranch’ on Windows 7 (which launches next month) being a big success.

Microsoft has consistently attracted much criticism. In particular Microsoft, and William Henry “Bill” Gates III, as its very visible (and until June 2008 very hands-on) leader, have been accused of choking competition by bundling its products; especially Internet Explorer shipped with Windows PCs as a pre-emptive strike against Netscape (anyone remember them?). As for desktop applications, Word ‘killed’ Novell’s WordPerfect and Excel ‘saw off’ Lotus 1-2-3. Many have questioned Microsoft’s bullish tactics which have leveraged the dominance of Windows as ‘the’ PC Operating System. Indeed Microsoft has contested several lawsuits and paid heavy fines for ‘anti-competitive’ practices especially in Europe.

Steve Jobs

A world without Microsoft?

Damaging legacy of I.E.6

Steve Ballmer is the larger-than-life successor to Bill Gates; he certainly loves his company but he’s facing an uncertain future.

Here is the viewpoint of a tech-savvy friend:
“Ever since IBM first agreed to ship Microsoft software with their PCs, Microsoft has been charging us for providing an operating system for our computers. The frequent complaints of bloat, backwards-incompatibility and bug-ridden releases (infuriating for PC owners) are frankly justified. If you have been saddled with Vista on a newly-bought computer, it is reasonable to feel defrauded if you have to pay at least $120 to buy what is in effect a bugfix in Windows 7 - just as the poor saps who bought Windows 95 had to pay to get a usable system in Windows 98 a few years ago.”

Strong stuff. And this far from being an isolated case of an informed anti-Microsoft opinion. Vista has been widely criticised (especially when it first came out) by IT professionals and users for being released before it was ready; many claimed it was inferior to Windows XP which preceded it. People won’t forget these bad experiences. The web age is increasingly offering us more choices about technology. So what does the future hold for the nerds from Redmond, WA?

If you want to find true innovation at the moment, and a rapidly growing market, look at netbooks and nettops. These are small, inexpensive, low-power consumption desktop computers designed for basic tasks such as surfing the Internet, accessing web-based applications document processing, and audio/video playback. Originally the netbook market was dominated by Linux. When it emerges, Chrome OS (operating system) will be a big player, although it is in early development at the moment. Also operating in the Cloud will be other players including Jolly Cloud and Ubuntu. Microsoft has established a foothold by offering Microsoft XP as a very low price, but it will be interesting to see if they can compete as the netbook market grows.

Internet Explorer is, in any case, only available for Windows, and so if the operating system of choice is not Windows in this, the fastest growing area of the hardware market, that could have big implications for the future. Currently, IE is at the top of the heap, chiefly (as critics say), because it has for years been bundled in with other products including the various Windows operating systems. Firefox has gained ground in second place.

You work quite differently with a netbook than with a full laptop, and you may not need Windows if all you are doing is email and surfing. The crossovers are also beginning to be interesting... even for a full size laptop, manufacturers are starting to experiment with hardware with low power consumption to get some of the benefits of a netbook.

Currently, cloud computing comes with a price: you give up control over your assets by putting them in the cloud; if a piece of the cloud goes down and it happens to contain your data, it’s bad news. Cloud computing as a concept is itself still under development... there's a lot of work to be done to put regulation, privacy and protection in place. The interesting question is, what is Microsoft going to do in that market? Their corporate style has been very bottom-line driven, and seen by many as aggressive and protectionist. How will they fare when users have a free choice between their products and the competition?

Microsoft is still struggling to adjust to the web, and the choices that it gives people. Bing 2.0 is rumoured for release in the next couple of weeks, but it is still bumping along in third place with less than 10% market share, far behind Google. Google is successful because it works, not because they have monopolised search or hypnotised web surfers; users simply see no reason to go elsewhere. Microsoft haven't made something that really catches on as a choice in the web sphere...yet. People mainly get their products by default when they buy hardware. Yes, there is Linux for geeks with a technical bent and the additional cost of Apple for those with deep pockets, but basically, if you're buying a PC it is still a ‘no-choice’ choice of one OS...currently.

Even before Google’s Chrome OS hits, it is possible to see the potential impact of consumer choice on the market. And more and more power is being handed to the people: the introduction of Google Wave allows individuals to participate in the Cloud without handing over control of their assets to a third party. Wave will merge IM, email, document editing and Twitter functionalities, while giving you control of your data and who is allowed to access it. Instead of subscribing to Flickr or Picasa you will allow them access to your data stream, and control where you store backups, who gets access to your stuff, and where.

The future isn't going to be about bigger, better hardware, it will be about convenient/ appropriate hardware for a specific situation and having an OS which can morph into a lot of things so it can do specific jobs very well, whether on your phone, netbook or nettop.

Google has moved into the mobile phone market with Android, a Linux variant for mobile devices. Geeks are very excited about Android, which is Linux, open-source and has great apps. The word is that Netbook makers are already preparing versions running Android, even though it wasn't intended for netbooks. Who knows what will happen when Google releases their product actually intended for those pieces of hardware?

Most innovations in Microsoft come from the purely technical side of things... and they are not very exciting. The .NET framework has gained some traction on the server side of things. They have been steadily improving their server products. Microsoft certainly excels in creating developer communities and developer tools... they offer a fully integrated suite of tools for .NET programming. (The JAVA world is a lot more fragmented). BUT: these initiatives are hardly likely to set the average consumer on fire; the user’s opinion of Microsoft won’t be improved by having to purchase Windows 7 to replace the much criticised Windows Vista.

There is already an open-sourced alternative to Office in Open Office, which is a useable alternative, and must be considered a real threat to the upcoming Office 2010. Open-sourced alternatives to most graphics programs are already available (e.g. Paint.net, Blender and Gimp). In many fields open-sourced software is no longer the territory of the geek and nerd, but a viable alternative to expensive proprietary software. The world is changing.

Whether or not Microsoft deserves all its negative publicity, it will increasingly be operating in a world in which computer users (and IT managers) are in a position to make genuine choices, in which open-sourcing and crowd-sourcing create viable alternatives to each of those previously dominant Microsoft products. Bluntly, it needs to adapt or face decline and ultimately extinction.

It will be interesting to see what 'Microsoft 2.0' looks like…

Online display: SORRY TO INTERRUPT!

“I find those ads on the internet really annoying; I never look at them.”

Anon. (OK it was one of my teenage daughters)

As you may be aware, those strips at the bottom or up the side of your web page are called banners and ‘skyscrapers’. Increasingly, you can ‘mouse over’ them to expand them and/or click to play a video. All (tell me if you know an exception) will take you through to a landing page on another website, generally owned by the advertiser. You will also have encountered films that play before the video you wanted to see (AKA pre-roll) and ads that pop-up and block the page just when you’re trying to read the content. (AKA the work of Satan). Collectively these ads
are called online display as a convenient term to distinguish them from paid search ads (e.g. Google AdWords). The term was borrowed from ‘display’ press ads; they’re the ones that aren’t the classifieds (small ads).

There is a lot of talk currently about ‘persistent’ online advertising. Two online ad networks, VideoEgg and Meebo, have recently started offering persistent ad formats . Unlike standard banner ads (which users can zoom by as they scroll down the page or move on to the next), these units stay on the screen, occupying a border at the top or bottom.

The idea is that the basic principles of TV advertising work online: show an ad to someone for long enough and it is likely to penetrate their consciousness. Sounds irritating though, huh?

There is a new piece of research by comScore/OPA into the efficiency of online display. At the risk of over-simplification, it concludes that online advertising often contributes to purchases in an way that is rarely tracked by web analytics (often fixated on the ‘last click’). In other words, Search often gets all the credit for online clicks and sales, while online display operates at an awareness level above the ‘purchase funnel’...This is surely what image (‘above the line’) advertising has always done.

Creative isn’t the only way to get attention and engagement for online display ads; the ad format can play a vital role; if the ad does something astonishing (or even just different), it can be impossible to ignore. Broadband connections, rich media and online video have certainly made online display advertising more dynamic. To see just a few of the formats available today, check these out: (suggest you use Internet Explorer with the pop-up blocker turned off, or alternatively skip them).

Snickers

Walk The Line

Ice Age

Hyundai


Today’s digital agencies can offer a bewildering range of online display ad formats including: Expandable Banners, Polite Banners, Sidekick Ads, Homepage Takeovers, Floating Ads, Full Screen Video, Synchronized Ads In Stream, Pre Roll, Page Peel Back (page curl), VideoStrip Minisite Ads +++.

However there’s a fine line between engaging and infuriating; online advertising has just as much power to annoy the audience as outbound telephone marketing (or indeed aggressive door-to-door canvassing). What looks new and cool to the creatives/techies/suits/client (no favourites here!) can rapidly become irritating to the time (and patience) poor consumer.

So are online display ads basically just press ads on a screen? OR Is this an example of a totally new marketing channel (perhaps with more in common with traditional direct response ads where the coupon or phone response was all-important)? This is quite an important question, because if it’s the former, to create effective online ads we just do what the press ad people have always done. i.e. we should draw on the received wisdom of the Age of Press Ads, before what Rory Sutherland, Executive Creative Director of OgilvyOne London, calls the TV Age (presumably roughly 1960-1995) temporarily(?) distracted marketers. If not, we conclude that online display is something new and different so that new lessons must be learned and new wisdom accumulated.

A key question is: should online display advertising be ‘interruptive’ or based on gaining the user’s ‘permission’? It is an inescapable truth that any Advertising must achieve cut-through, ignore this, and our online ads become wallpaper. (Which would be bad; after all, do you remember what your desktop background looks like?).

“You can't save souls in an empty church," said David Ogilvy .

"And you can't bore people into buying your product."

Indeed not; today more than ever, you need to engage them. To grab their attention, sure, but then to reward them by providing interest, amusement, entertainment or promise of gain/reward. In this respect, online advertisers face exactly the same challenges as Ogilvy and his ‘Mad Men’.

It used to be simple. In the old ‘Press Age’ days, the idea was to find a consumer reading a magazine say, which indicated they fell into your target audience. Then, just when they were enjoying it, you hit them with your ad. You distracted them from the editorial, gripped their attention and froze their hand before they turned the page. The picture attracts them, the headline flags them down and then the (long) copy completes the sell. (except they then need to go to a retailer or mail a coupon to close the loop!). When it arrived in the late ‘40s (US) and ‘50s (UK), TV advertising operated in pretty much the same way. The TV ‘commercials’ ambushed viewers who had tuned in to watch their favourite programme. The target housewife was just taking a few minutes off from her chores, to sit down with a cup of coffee, having made and served the kids tea (supper) when she sat in front of the TV and saw:


Fairy Liquid

Heinz

The viewer wasn’t looking for these ads, but generally speaking she was charmed by them, happy to watch; she felt good about herself, her family and of course the brand. (and she imagined her hands were very soft and her kids well nourished). This was the interruptive format at its 1960s peak (helped undoubtedly by the paucity of TV channels and the lack of a remote control). And so things continued in Adland, right through the ‘70s, ‘80s and even after the invention of the world wide web around 1989…

Then in 1999, Seth Godin, in his book Permission Marketing: turning strangers into friends, and friends into customers introduced a new view of marketing: the emergence of the internet had broken the old model and marketers needed to change their approach. The new way is to cut a deal with the ad-savvy consumer; they know what’s going on and they value their time, so you must, in effect, reward them for their attention- you are bribing them to engage with your ad. If you get it right, they will share their good brand experience with their friends/family/colleagues (via Facebook, MySpace or Twitter) and act as unpaid brand ambassadors for you. If you get it wrong they will also share and you deserve everything (bad) you get, so the theory goes. Godin argues that marketers should obtain permission at each stage in the purchasing process and that this is a more efficient use of resources because communications are only sent to people who have specifically requested them. Indeed, UK marketers must abide by the Data Protection Act 1998 and the Privacy and Electronic Communications Regulations 2003 , but companies who espouse permission marketing generally go further than the letter of the law in seeking the customer’s agreement for each stage of their sales/ Customer Relationship management (CRM) process.

However, distinguished British Creative Director Steve Harrison, author of How To Do Better Creative Work eloquently expresses an alternative point of view.

While acknowledging the transforming effect digital has had on the world of marketing, Harrison disagrees with Godin on 'permission'; he argues that in today’s cluttered online world ads need, more than ever, to cut through; advertisers need to create intelligent, relevant, surprising messages that stop the consumer in their tracks and engage them, just as Ogilvy sought to do. He suggests that Godin’s dogma of Permission has been accepted without question, resulting in mediocrity; and specifically in bland, unconfident (especially online) advertising which is largely devoid of big ideas; the danger being that a) the ads don’t work and b) the brand itself acquires these same ‘boring’ characteristics. As 21st century marketers, he argues, we’re fixated with the idea of getting permission to do anything; this is the enemy of great creative work; after all, the great admen including Ogilvy, Bill Bernbach and Raymond Rubicam never asked permission; they believed in their clients’ products and offered them with confidence to the mass market, employing powerful ‘big ideas’ based on single-minded ‘unique selling propositions’ (USPs). Harrison argues that interruptive techniques, far from being and outmoded and irrelevant, are as vitally important to today’s digital advertising as they have always been to offline communications.

So what are we to make of all this? I believe the point is that online display advertising should be ‘interruptive’ as opposed to being boring. It should have the confidence of a successful market trader who knows his product is good but also that not everyone will buy from him every time. He sets out his stall, positions himself somewhere prominent so he’s visible but not blocking the road, and offers to engage with the consumer; if they decline he smiles and looks forward to next time. Some online consumers will be on a mission; paying their credit card, checking their Facebook or booking a holiday. They won’t expand our banner. They won’t click. In the same way, consumers are often too busy to notice our poster or press ads; that comes with the territory. Online ads are still ads; inertia is the enemy, the challenge to be overcome by the skills of the Creative guys. You can’t (ever) win 'em all.

Web advertisers (like website designers) must at all times think about the user experience. So: be interruptive in creative, but not in format. Ads that pop-up and/or take over the page, forcing the user to search for a close button while they are involuntarily subjected to your message, i.e. interrupting the web user’s journey AGAINST THEIR WILL, will turn people off, be blocked by the user via their browser, will increasingly not be accepted by publishers and are just plain stupid - i.e. bad advertising. However, if our ad is attractive, sucking the user in with magnetic force (i.e. the promise of value), but not intrusive then it will succeed.

Today’s consumer undoubtedly expects respect from brands; they will engage, but only on their terms. I’m with Seth on that one. The technology has advanced to make new formats viable; some are desirable improvements. Expandable (streaming video) banners are a smart innovation; those consumers who want to engage can do so while the others are not disturbed (or indeed interrupted!). TV ads were a 'killer app' because they offered moving colour images and sound (the closest thing to the salesman selling face-to-face). How much better if the consumers can choose to engage with the brand by playing the film at a time to suit them (and not when it doesn’t). They don’t have to ‘switch our ad off’; they can simply decline to engage.

The great advantage of online advertising is that you can hedge your bets. Online ads can be ‘double-duty advertising’, as Chris Barraclough, the irrepressible Founder and Creative Partner of Barraclough Edwards Chamberlain, calls it, i.e. your awareness ad can also be a direct response ad.

But don’t be too ambitious. When your banner is a small part of a large and busy web page, you can’t afford to be too clever; attempts to intrigue may well be ignored. At the very least you must pass the ‘glance test’; your corporate logo, colour and (space permitting) advertising strapline should be 100% on-brand. Allow for slow connections, old computers and small screens. You can’t guarantee that your ad’s creative will attract every reader/ user but do your best; some consumers will click, some of these will buy; others will choose not to and if they only take out some awareness then that’s still helping the brand. In fact it’s working just like good old (awareness) advertising. So please read those Analytics reports with care.

I hope the ads on this Blog engaged you. Without interrupting you…