Openness, personal and community action

For those folks who don’t think social networks are real life …

One of my Twitter buddies, @mspecht, has been very brave and open, sharing about his personal experience of depression that led him to take some positive action.
He set up Blue Day 2008 and asked people to participate in marking this day to help with building:
  • awareness of depression & mental illness, and
  • understanding that this can happen to any of us

Michael, good on you for taking the step of sharing your journey and thanks for asking us to participate. It is good to note that members of the Sydney tech (@STUB, Silicon Beach etc) community got together on Friday night with a Blue Day theme.

And, a final word from Michael: “One last comment. If you are suffering, even if you don’t think you have depression but are just down, reach out and talk to someone. If you are in Australia and in need of urgent help contact Beyond Blue, in other countries reach out and contact your local support groups before it is too late.”

“I must not fear. Fear is the mind-killer. Fear is the little-death that brings total obliteration. I will face my fear. I will permit it to pass over me and through me. And when it has gone past I will turn the inner eye to see its path. Where the fear has gone there will be nothing. Only I will remain.” (Frank Herbert, Dune, “Litany Against Fear”, 1965)

Credit crisis and its impact on social media?

I’ve been reading the new George Soros book, The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means.  While Soros takes his usual pessimistic view he does have some interesting insights into the causes and consequences of the current credit crisis.   Interestingly some of his ideas align with those of John Robb in seeing smaller more localised solutions and responses.

One thing to ponder in all of this is what will happen to social media.  It has undergone explosive growth in the last few years and has become integral to many people’s lives.  But we have never seen how much value people actually place on connectivity to each other via the internet or mobile phones during a time of severe economic stress. The last time we had a major recession the internet was only an infant.  

What will happen in a recession where people are losing jobs or homes?  Will they retain access to mobile phones and the internet?  How how much importance will people in difficult financial circumstances place on connectivity?  We do not know what impact this looming recession will have on the demand side of social media and digital.  One thing that is certain, changes on the demand side always impact on the supply side and this is no different for social media.

Since social media has already struggled with monetization during good economic times it will be interesting to see how we can address issues of demonstrating value (i.e. profit) in difficult economic times.

There is one sure thing, the social media industry and practitioners need a compelling narrative with good evidence about demonstrating real value to business.  Now might be time to get over the feelgood theory of social media and get with the profit theory of social media?

Risk & the Illusion of Centralized Control

A key myth of modern business is that of centralized control in general and of brands, messages and media in particular.

In the past, while it was possible for ordinary consumers to hijack brands and messages, it was too hard, time-consuming and expensive for anyone to bother. Thus companies and their marketers assumed that they were in control.

Further, because marketing in traditional media was an expensive and time consuming activity only larger organisations could afford to it. This meant that there were high barriers to market entry for many smaller competitors.

With the advent of the Internet and web 2.0 we see power shifting away from the larger companies and towards smaller competitors and consumers. Lower marketing costs and broader reach with digital marketing mean that smaller companies can now compete more effectively with their bigger rivals.

Consumers are now using web 2.0 technology together with social networks and social media platforms to answer back to the marketers. And we are all still getting used to this new world of digital connections. (UPDATE: Check out what users can achieve, e.g. with this Comcast clip on YouTube – HT: Charlene Li)

There remain a lot of unanswered questions about doing business in the digital age. Some of the questions we need to ask about digital & online and their impact on enterprises are:

  • What elements of our brand & communications should we/can we try to control?
  • What are the boundaries between personal and business activities for our staff in relation to online?
  • How do our human resources practices and polices need to evolve as a result?
  • How do the demands of the digital age align with our corporate values & practices?
  • How do we protect our intellectual property in the digital age?
  • How do we control the risks in opening up our internal systems to the Internet & do we understand those risks properly?
  • Are our people skilled and educated to deal with these kind of issues, and if not how do we fix that?
  • What new technical and operational risks are we opening up for our business with digital and online channels?

There remains a lot of thinking about enterprise risk to be done in relation to digital. Seemingly simple decisions can have significant flow on risks for finance, operations and personnel.

CMOs report reduction & shift in marketing spend to digital

According to recent research by Epsilon “Chief Marketing Officers at many of the biggest brands in the nation [USA] are seeing a major shift in the marketing landscape. Almost two-thirds (63%) of the 175 marketing executives surveyed see an increase in their spending on interactive/digital marketing while 59% report a decrease in traditional marketing spend.”

Already we are beginning to see evidence of shrinking marketing budgets due to the financial situation and the reallocation of traditional media spend to digital.

Also interesting was the adoption of new media focused mainly on social computing and blogs, especially by bigger brands. It is early days yet and marketers are still getting used to some of the newer channels available to them.  I expect to see growth in the use new media channels such as mobile and continued expansion into blogs, social networks and social media in general.  

Death of Newspapers – I don’t think so … not quite yet

While I’ve said before that I think that the imminent death of traditional media, such as newspapers or free-to-air TV, is over-hyped …   

There was an interesting synopsis of Michael Gawenda’s A.N. Smith Lecture in Journalism in the Sydney Morning Herald by about “the need for a new model for newspapers in the digital age” and the butchering of “profitable newspapers”.  In this view, recent cuts to editorial staff at Fairfax are the result of “a failure of imagination and commitment, a result of a lack of experience and knowledge and love of newspapers” precipitated by a dramatic fall in advertising revenue. 

However, the simple fact is journalism has never been able to stand alone as a revenue generator – it has always been subsidised by advertising revenue.  This means that readers have rarely been willing to fork out cold hard cash to cover the real cost of creating news.

Now that there are so many other online opportunities for advertisers to reach consumers there is less need to advertise in traditional media (especially print).  Thus we are seeing a shift to digital media channels for advertising.  And, with the economic downturn, marketers will be trying to stretch their advertising dollars even further making digital a more likely choice.

Even rusted on newspaper junkies like me are starting to read the news online (except on weekends when I sit down with the SMH, Oz, FinRev and a pot of coffee).  This just reinforces the advertising revenue drop and the inevitable need to reduce costs for the print version.  Also the drive for cost reduction means we are likely to see more social media & user generated content featuring on the digital news sites, together with raw feeds unedited from news sources such as Reuters.

In Gawenda’s view newspapers “…need to build on their strengths: Forget big headlines and huge and often meaningless graphics. Instead, arresting photography, great illustrations and wonderful editorial cartoons. And stories, well-written and compelling stories, well-edited and with smart and entertaining headlines, if possible, without lousy puns.”  I suspect that this is the fond hope of someone who loves the traditional newspaper (in spite of the costs associated with creation of this content) and who remains uncomfortable with new media.

Continued erosion of traditional broadcast media channels

The old media (a.k.a. heritage media) versus new media discussion continues to rage amongst the cognoscenti but the facts are speaking for themselves.

Brian Steinberg writing in Ad Age reports that:

“Continued audience erosion, combined with the effects of the writers strike, helped drive the average cost for a 30-second commercial in prime time down 4.1% to $130,089 during the 2007-2008 season, according to an analysis performed by independent media agency TargetCast TCM. The drop marks the second consecutive seasonal decline in pricing for 30-second TV ads and represents a noticeable widening over last season’s 0.7% drop. The analysis showed prime-time ratings for the four major broadcast networks fell 13% last season. TV-ad time pricing is based on the number of viewers a network can deliver for a marketer. When ratings go down, so do prices for the ads.”

Advertising will move to where the audience is no matter what esoteric debate the professionals want to have about which media channel is better or more appropriate. The trend towards erosion in advertising value of free to air television continues. The trend towards advertising via new media channels also continues.

What is all this “social” stuff about anyway?

Everywhere you turn these days there is another “social” something or other – social media, social networking, social bookmarking, social news, social web, etc.  But what is all this “social” stuff about anyway?

I think that some people have focused on this social aspect of web 2.0 and missed out on the really radical and transformative features of the fully networked world it offers.  Tim O’Reilly talked about this recently when he said:

“Web 2.0 is ultimately about understanding the rules of business in the network era. I define Web 2.0 as the design of systems that harness network effects to get better the more people use them, or more colloquially, as “harnessing collective intelligence.” This includes explicit network-enabled collaboration, to be sure, but it should encompass every way that people connected to a network create synergistic effects.”

Yes, the one of the network effects arising from use of web 2.0 technology is social, but this is a limited view of the phenomenon. It is from “harnessing collective intelligence” that the true power of the web 2.0 revolution arises.

Further, we have yet to really harness this revolution in the workplace.  Enterprises remain largely untouched by web 2.0.  What has happened up until now is a burgeoning of consumer web 2.0 sites (a.k.a. all that “social” stuff) that has readied people to accept the revolution in their personal use of technology.

The next step is to move this revolution into the enterprise.  We’ve been talking about Enterprise 2.0 for a while now, and it is still developing.

Tough times, web 2.0 & high principles

The test of our commitment to principles is not what we do in good times.  Rather the true test of our principles comes in difficult times.  The current economic situation seems to be setting us up for such a test.

Recently I’ve been thinking about the principles of collaboration, collective intelligence and democracy that are so much entwined with my view of web 2.0 and asking how convinced I am about their contribution to value creation and profit.

There is no point in adopting these kinds of ideas in good times only to find that insufficient business value is created to sustain them in difficult times.

The process has been interesting and resulted in some case studies of business value creation and barriers to the creation of value.  I’ll share some more on this topic soon.