Modern Marketing - Blog by Collaborate PR & Marketing

The Gift Economy & Internet Karma

I thought Frances Grimble's comment about the way in which the Gift Economy has been adopted online but recently stretched beyond all recognition by mega-social nets is really insightful.  Here's a snippet : "But the Internet, and Internet-related businesses, have exploited this economy to the extent of breaking it down. E-groups consisting of hundreds or thousands of people are described as communities, but most of the members remain relative strangers, and membership is often anonymous or pseudonymous. So what happens is, a handful of people repeatedly supply the relatively higher quality of free information. Everyone else enjoys it with no sense that any return is ever required. There’s an assumption of a kind of Internet karma—no one feels obligated to return a favor because the person providing it will probably somehow, someday get some kind of return from someone else entirely. And, Internet companies where the users are providing the information/favors/freebies—Google et al—are doing their best to exploit any remaining feeling of obligation by taking the credit for what the users give away (or what they sell and parties like Google have appropriated) and transferring that obligation to their companies." Read it all here.

We All Love The Bazaar Now

Eric Raymond’s seminal essay The Cathedral & The Bazaar remains one of the most powerful analogies for the world of media and marketing today. In case you aren’t familiar with Raymond’s work, he explained how in the world of software design, for many years, engineers spent long periods locked away creating huge operating systems in institutional settings that were then wheeled out into the real world for people to admire and to obey.  However, the open source movement changed all that with online systems much more like global street bazaars allowing programmers to gather in informal networks and collaborate on technical projects in an organic manner, adding a little stitch here and a patch there, and always feeding their knowledge back into the main market, which remained forever in public ownership.  For many years Big Brands operated in exactly the manner of Raymond's Cathedrals, building towering spires that required Brand Architects and Guardians to maintain their sanctity.  However, in the shadows of these vast edifices grew global online Bazaars made up of people who found they could organise themselves around their passions, as oppose to the demographical pews ordained by the marketeers.  And gradually the flocks flocked out of the Mainstream Media Cathedrals into the hustle-and-bustle of these online markets.  However, this was just the beginning and people quickly realised that they could not only hang out in the Bazaars but could also bring their own soapboxes along in the shape of blogs.  And eventually, as these little soapboxes grew into giant social networking sites like Twitter, LinkedIn and Facebook, the Bazaar morphed into a global conversation.  One where people trashed the Big Brand Cathedrals as they pleased, or even helped build new ones, ignoring the pained grimaces of the Brand Guardians and Architects who could only see desecration wherever they looked.  However, that’s now all changed.  Big Brands have come our from behind their lecterns and are fully signed-up...

The Joy Of A Gated Community

A couple of years ago, I heard Sir Tim Berners-Lee describe the muddled state of his splendid creation in  this way : ‘If your sink is blocked for a few weeks and you remove the plug to dig out the obstruction, the offending mangled mess of soap, fish bones, human hair and other horrible gunk in which bacteria has set up home, is exactly like the World Wide Web’.  Now, for many tech-heads, geeks, tinkerers, everyone in Silicon Valley and other early-adopters it didn’t get much better than this organic mush.  And the gooey paradise remained intact for a long time.  However, for the mainstream (aka Everyone Else In The World) the web remained a mysterious, slightly sad place where only-the-lonely gathered.  But the online social revolution has blown away this view.  In part, by throwing up some gated communities, such as AppStores and Social Networks, where regular folk can talk to each other without fear of their Gucci loafers getting sullied by geek-grime.  In fact, for many, it even became rather exciting to mix with the technorati and let some of their magic coding dust rub off.  But not too much.  And certainly none of the whiffy stuff.  Personally speaking, gated communities where the comfortably-off huddle from the excrutiating ravages of real life, such as potholes and unmown lawns, always sound pretty dull to me.  However, there are times when we’d all like to withdraw into sanctuaries of expert topiary and poo-free paving, away from the open clutter of the real world.  In such harbours of tranquillity there are no worries about unsightly neighbours or anti-social viruses.  The no-nonsense management are constantly poised, ready to pulverise any shady individual who dares to disturb the peace.  For some, such walled gardens become claustrophobic as they tire of the same faces and fences.  The security guards start to look like prison screws and the disorderly streets where the everyday folk dwell begin to look enticingly vibrant.  (Not that I’ve ever spent anytime in a gated community you understand.  Although I did once spend two weeks at Centre Parcs and was very relieved to escape, er, I mean depart).  However, for many these well-ordered suburban enclaves that consist of friends, family and neighbours is exactly what’s required.  All the time.  And this is what the early-adopters, geeks and webnorati struggle to understand.  The gurus who rail against the vice-like grip of Steve Jobs brighter, lighter, whiter Appstore, or Zuckerberg’s perfectly manicured Facebook empire, overlook that most people don’t want to see what’s blocking their sinks.  And they don't mind if that hardwired convenience means the management is watching over them.  They just want to get on with their happy, gunk-free lives.

New Money

A couple of months ago I had the good fortune to hear Douglas Rushkoff expound his ideas about the changing nature of money and how private currencies could shift the way in which society organises its resources, loosening the grip of MegaCorps and even BigGov.  It was inspirational stuff and all very timely coming fresh on the heels of a financial meltdown driven by tricky derivatives traders and faceless ratings agencies plundering the goodwill of widows and orphans.  However, at the end of the talk Rushkoff, maybe suspecting his sober Swiss audience weren’t entirely convinced, found himself pressing that these ideas weren’t just pie-in-the-sky.  Now, while I don’t expect the world’s currency exchanges and the pound in your pocket to go anywhere soon, I was very happy to raise my hand and offer the room a few examples of where I thought Rushkoff’s private currencies were in action – albeit at a micro-level.  Firstly, I mentioned the Chinese Q coin, which is used by the 300 million users of the QQ instant messaging site to buy virtual goods.  Tencent, the owners of QQ recently revealed that 'internet value-added services,' or virtual goods, made up 78% of the company’s total revenue at the end of last year.  Enough to raise the company's international ambitions, including buying a stake in DST, the Russian company that owns a chunk of Facebook.  And Q Coins are now being accepted in exchange for ‘real’ goods on 3rd party sites, sufficiently broadly to raise the concern of the Chinese government.  I also highlighted the Second Life economy wrap-up that reads like a surreal corporate annual report, including tracking Linden Dollars and their transformation into ‘real money’ through the exchanges, LindeX or the Xstreet SL Exchange.  And, while not operating private currencies, I pointed to Etsy, Zopa and Betfair as examples of private marketplaces that are challenging the traditional corporate structures that Rushkoff believes will come under pressure.  These marketplaces range wildly in scale and nature.  Etsy is a giant P2P flea market where people sell each other about $22m of (often beautiful) homemade items, such as soaps they’ve made in their garden sheds.  Betfair is a vast £300m peer-to-peer gambling exchange.  Whereas Zopa is a P2P lending service.  All tiny in comparison to the industries in which they operate.  However, all very successful and growing like topsy.  And now we have Facebook Credits, the attempt by Mark Zuckerberg to create a currency in his world, that as it approaches 500m users is more populus than most countries.  Once again it’s all very early days.  At its outset, Facebook Credits is a way to unify...

Nothing New Under The Sun

For a long time the marketing industry closed its eyes to the impact of networked media.  And while it looked the other way, Messrs Brin & Page ate its lunch and built the largest media company in the world.  Over the last year or so, however, possibly because of the Google experience, the marketing industry has done a U-turn and the consensus is now that the world has indeed changed forever.  So which view is right?  Unsurprisingly, the reality is somewhere in between.  A thread of my client work over the last few years has been challenging the notion that the maturing web means we should forget everything we’ve ever known and start again.  Forget the idea of brands, stop using TV as a medium, assume that the customer has morphed into a new type of being, accept that complete transparency is the only choice, believe that the only workable price point is free.  Only a total reboot will do, some claim.  However, this binary view of the world overlooks that while much has changed, more has stayed the same.  Corporations are still operating in markets where consumers are looking for value and trustworthy suppliers.  People are still motivated by the same needs – keeping up with the Jones’, caring for their families, exploring the world, self-expression, ambition, fun.  It’s just that the markets they use to find satisfaction have been rewired. ‘The problems which are not changing are human problems - which remain the same,’ noted Eric Schmidt, CEO, Google last year.  Take for instance, the social net de jour - Chatroulette.  It’s a perfect example of the many new wonderful and unexpected things that are emerging as a result of open networked media and widespread broadband access.  Built by an individual, using powerful distributed technology that now sits in bedrooms all around the world, it offers a P2P-experience that undermines traditional views of private and public identity and drives new types of social interaction.  And what is this remarkable bleeding-edge innovation used for?  Letting young men check out hot girls!  Whizzy new kit, same old motivations.  However, that's not to underestimate the ingenuity and scale of the new markets that people will build when they find their needs unmet.  I was lucky enough to meet Douglas Rushkoff last week and hear him speak about his belief that...

Time To Spread The Love (Not Blow Your Wad)

With the mind-boggling degree of innovation occurring in digital technology and networked media, it’s very easy to forget that, in commercial terms, we are still only talking about markets. And markets are still just made up of people.  The other commercial task that hasn’t changed is the need to deploy resources to work within the marketplace to realise specific aims effectively.  Such as building sales and keeping shareholders content.  What is changing, as every marketeer worth his Cluetrain now knows, is the nature of that marketplace.  However, these changes are still yet to be fully reflected in the marketing industry because the most important cog of the business - media finance - continues to lag the trends driving networked markets.  Big marketing shekels remain driven by two words – reach and frequency.  An approach akin to asking as many people as possible out on a date until one or more of them falls for the smooth new chat-up line.  And this view of the world is all about size.  Bigger.  Louder.  Harder.  The problem is that in the new marketplace this approach doesn't build relationships - it wrecks them.  Of course, awareness is absolutely vital for any brand, particularly a new one.  And there’s always going to be a need to get out the big guns out and fire away at the marketplace to remind the world that a brand still means business.  But consumers (aka people) are fed up with brands only offering them a one-night stand, time after time.  Just think about the financial services industry where enticing offers are sprayed around, only for the love to be slowly withdrawn once the deal is done.  The bank’s rate of interest gets lower and lower until it just fizzles away and the corporate desire for new accounts on the bedpost grows.  Which leaves consumers more cynical and determined to stay footloose.  Or to become ‘rate tarts’ as they are tellingly known by the industry.  For brands to break this Tiger Woods lifestyle, they have to change not only their ways but also, crucially, their means.  And that means a very serious redistribution of their cash.  For if a corporate or brand is only in town occasionally for a night out on the campaigning tiles its long-term reputation suffers.  These days consumers see reliable brands as being there for them 24x7 - when they need the help and support.  And how can a brand do that if it spends its marketing wad on the first night?  It’s not easy changing long-standing behaviour.  But unless brands spread their love, attention and cash throughout the year, and are able to hold some back to respond to people's demands, no one will believe their clever words and lovely promises.  In the world of marketing and brands, the size of your wad still counts.  But in marketplaces driven by networked media, people are more interested than ever before in how you use it.

Second Life 'Economy' Grows 65%

Second Life is still going strong and its latest 'Economy Wrap-Up' shows how sophisticated it has become: 'Here's a look at 2009 - through the lens of the US dollar value of gross earnings made by Second Life Residents during the year.   In 2009, Second Life Residents in the aggregate earned approximately US$55 million in real money, growth of 11% over 2008. This represents the sum of all US dollars transferred "out" of the Second Life economy by Second Life Residents, and into PayPal accounts, and then to bank accounts and wallets.  We call this figure "Gross Resident Earnings" and it represents the sum total of processed credits for Second Life Residents.  This works as follows: when a Resident business accumulates a Linden dollar (L$) balance through the sale of virtual items or other economic activity, they can sell their Linden dollars to other Residents on the LindeX or the Xstreet SL Exchange, creating a US dollar credit on their account.  Note that we are not including activity from third party exchanges as LindeX and XStreet SL exchange comprise greater than 90% of credits processed.   When a Resident with a US dollar balance on their account moves that balance to PayPal, we record and track that amount as a "processed credit."  Taken as a whole, "processed credits" are a reasonable proxy for Gross Resident Earnings, as they represent surplus Linden dollars gathered by a Resident business and turned into US dollars. In 2009, US$45 million of "processed credits" came from Second Life accounts and US$10 million came via Xstreet SL accounts.  Note that many Xstreet SL merchants also have significant inworld businesses, and use Xstreet SL to collect earnings from their inworld businesses as well as their Xstreet SL businesses, accounting for the fact that processed credits on Xstreet SL are greater than the volume of the Xstreet SL Marketplace and Xstreet SL Exchange.'

Rusbridger On 'Us Against Them'...

Alan Rusbridger, Editor of The Guardian : "BookArmy – though it avoids saying so – is an offshoot of Harper Collins. The two enterprises point in completely different directions. As it was explained to me, the point of BookArmy is to get as many avid book readers engaged as possible and learn as much as possible about their likes and dislikes. At some point in the future (the theory goes) publishers will no longer need to spend a fortune on marketing Max Hastings’ next book by lavishing money on Waterstones or in print. They will go to BookArmy and say, 'We know you have a database of the 80,000 people in the country who read books of military history. We’ll give you our targeted marketing spend instead.'  BookArmy is a telling illustration of two aspects of the digital world.  One is the ability of digital disrupters (in this case, even within the same company) to take one bit of a newspaper and do it with a conviction, range, depth and passion that a portmanteau print-based newspaper cannot match, especially in digital form. It is the unbundling of newspapers.  And the second is the only hope of matching the power of the these digital disrupters is to harness the same energy and technologies which they are using.'  See the rest here.  Excellent insights from a man right in the middle of the change being created by networked media.

The Rise Of Anti-Social Behaviour

At the beginning of last year, I helped put together an event at NESTA, where I detected for the first time an undercurrent of suspicion about social media and particularly social media consultants.  I remember the room recoiling at the suggestion that anyone in attendance was a social media advisor.  Perish the thought!  And again, at a bash I helped out with at the IPA, there was plenty of good discussion about social media.  However, also the same concerns.  As illustrated by this film - 'The Social Media Guru'.  Well worth a quick viewing if you haven’t already.  Since then, Business Week has advised wariness about ‘social media snake oil’, reporting that, ‘Critics complain that many of the new experts have adopted an orthodoxy that provides little flexibility for differing situations—or outcomes.  Their pronouncements follow a rigid gospel : Be transparent, engage with your customers, break down silos.’  Which has led one or two social media consultants to defend their practices as both professional and good value.  So why is this?  Is it just a case of caveat emptor applying to a new market as much as any other?  Or a natural backlash against the relentless hype of new social widgets and the rise of Facebook - the social world’s own 800-pound gorilla?  Personally, I wonder if this suspicion is because it’s not yet clear what role social media will have in the broader communications industry - particularly for brands.  At that IPA evening, the interesting part of the chit-chat, for me at least, was exactly on this issue.  Are we talking interesting new...

From Like This To Buy That

A while back I suggested that the web was NICE - New Infrastructure, Culture and Economics.  Well we’ve had a revolution in the first area with the arrival of broadband and superfast groovyware and in the second with the rise of the share-and-compare economy.  This year I think we'll see changes in the economic aspect of my NICE notion.  The problem with the desktop internet was that it didn’t come with a swipe card machine.  In the early days of e-commerce, paying online felt like handing your keys to a stranger in the street and asking him to park your car.  However, the world has changed.  Facebook delivers shopping tips from our friends, the pocket browser is becoming the norm, your phone is developing a sense of direction and we all want one-click commerce.  In short, the conditions for economic innovation look ripe.  And, of course, this year money is in short supply so commercial ventures need to be, err, commercial.  I have no idea what shape this economic change will come in.  Other than that it may appear quite strange.  For example, how do you fancy sharing your credit card purchases on Twitter?  A step too far?  Not according to Philip ‘AdBrite’ Kaplan, whose service Blippy, lets you share actual purchases with your social network.  Kaplan makes it sound like the obvious next step, not an open invitation to the world’s cyber-villains: “It’s just another way of saying, 'Here’s what I’m doing,' or 'Here’s where I am,' or 'Here’s a band that I’m really into' — obviously, because I just bought five of their albums."  Or how would you feel about letting your phone choose your lunch spot on the basis of who’s offering the best local deal?  The raft of mobile coupon start-ups aim to turn internet traffic into retail footfall.  Kerching!  Then there’s Jack ‘Twitter’ Dorsey’s Square service, which turns your phone into a credit card swipe machine, meaning anyone can retail.  Or check out mobile payment services GoPayForIt and Zong, the latter of which hopes to mobilise the FaceBook Credits service.  Both aim to make micropayments a cinch.  As ever, these Shiny New Things are only where the story begins. The end game maybe odd-sounding new virtual currencies, such as China's QQ economy, where bits can be turned into regular cash and used to buy (or steal) everyday items.  Or can even be taxed!  The share-and-compare economy is booming and traded opinion is increasingly the key to purchase decisions. The maturing of digital economics may turn this opinion data into the new ‘rivers of gold’ that the media industry so desperately seeks. Or maybe it will generate more Etsy-style traders whose business is based not on people hitting a ‘Like’ button on Facebook but a ‘Buy’ button on their smartphone.