The growth of the recommendation economy

Seth Godin wrote about the the attention economy. But it seems to me that we are also seeing the evolution of an online social recommendation economy.

When we all lived in villages there was a strong recommendation economy, and it was fuelled by the fact that everyone knew each other and their reputation. Word of mouth drove choices about which business to patronise and which individuals with whom to socialize. Reputation was everything, and it was protected fiercely on olden days.

With the shift of population to large cities we became disconnected from the hyperlocal reputation economy. But with the digital revolution and the growth of social networking platforms we are seeing a return to the reputation economy for both individuals and businesses.

There is also a growing recommendation economy developing via social media and social networks. This growing recommendation economy is no longer volitional. Instead you are a participant even if you never signed up (refer to my previous post on Klout for some examples).

We are now seeing the growth of explicit social recommendation networks. However, a number of other social networks serve to provide insight into the influence of individuals or brands but these recommendation networks aim to aggregate and rank user’s influence.

Some of the players in this space include:

These networks are all aimed at measuring online influence, and this need is largely driven by marketing needs. As traditional media continues to fragment marketers are seeking to identify those influencers who can help them to connect with audiences.

As Mashable summarised back in 2009, mostly these platforms use metrics to assess influence:

Incoming Traffic – Pageviews, Incoming traffic from search engines, rss subscribers
Incoming Links – Primarily manual links such as blogrolls, in-post deep links
Reader Engagement – Internal searches, time on site
Recommendations – Retweets, share stats
Connections – Number of mutual connections, number of mutual connections on multiple sites
Track Record – Age of domain, number of blog posts, length of engagement
Engagement – How often and long a person has engaged with a service online”

Source: HOW TO Measure Online Influence, Micah Baldwin, 2009

This means that everything we do online is potentially subject to analysis of this nature. And, even if we are participating in ‘private’ social networks, there is the chance that our activity can also be subject to this kind of analysis.

Even if we do not choose to participate in the recommendation economy it is happening, just like it used to happen to everyone in a village.

Along with all of this we are seeing the development of recommendation markets, where people connect and exchange information about the quality of information, connections, work, etc of people or businesses within their networks. Increasingly this kind of recommendation network is driving job search, new business, business connections, and innovation.

This means we need to work out how to benefit from this new environment.

WHAT TO DO

Probably the best advice about managing one’s reputation comes from Maslow via Wayne Dwyer:

“Self-actualized people are independent of the good opinion of others.”

And he goes on cite Dr Seuss:

“Be what you are and say what you feel, because those who will mind don’t matter and those who matter don’t mind.”

From my point of view the only practical response is to keep doing your thing, whatever that might be. To analyse results and take feedback from reliable sources.

But, as I know from experience, if you try to please everyone then everyone ends up unhappy (I’m sure Oscar Wilde said something along those lines too).

Above all we need to accept that we now dwell in a panopticon, and like the villagers of old, we are always under observation in the digital world. This new reality has implications for our comportment online. It means that we need to monitor responses to our activity and adjust our own responses to the current situation.

It also means that even those who do not choose to play in the online arena are playing (whether they like it or not). Reputations are no longer a private matter, instead we live in a digital global village where our reputations are common currency and we rise or fall on the recommendations of others.

This new environment means that we need to remain vigilant, stay connected, and build up social capital to enable us to survive when things do not go well. Just like in a village it is the quality of our relationships that will make life easier.

READING

Some other interesting analyses of this phenomenon include:

Friction, hypereconomics, and social intercourse

Friction is one of the more important concepts in the world. Many things are either made possible or impeded by friction.

Strike a match and the friction creates a flame. Yet that same kind of friction stops other things from flowing smoothly.

Perhaps the best description of the challenges that arise from friction is from the well known military strategist, Clausewitz:

“Everything is very simple in War, but the simplest thing is difficult. These difficulties accumulate and produce a friction which no man can imagine exactly who has not seen War . . . in War, through the influence of an infinity of petty circumstances, which cannot properly be described on paper, things disappoint us, and we fall short of the mark.”

From: Clausewitz, On War, Book I, Ch. VII

Recently Mark Pesce asked “What happens after we’re all connected?“, and he came up with the answer: “hypereconomics”.

Economics, fuelled by hyperconnectivity and enabled by the removal of friction in processes between people, equals hypereconomics.

And it is this removal of friction in processes, enabled by the internet and mobile technology, that creates the next frontier of opportunities for business.

The combination of mobile accessible applications and peer-to-peer social networks offers an astonishing array of new business opportunities.

In the Arab Spring and Occupy movements we have already begun to see the social and political shifts that are enabled when citizens can communicate and organize effectively through use of mobile technology coupled with social media.

The impact of these political and social movements will necessarily flow on to economic structures. This will create a gap for development of new business models based on removing friction and leveraging peer-to-peer capabilities offered by mobile devices.

Also people are getting used to helping themselves and each other, and the technology is enabling them to act collectively without a great deal of effort. This is the big shift.

We can now collaborate and act collectively even though separated geographically. No longer do we need to meet face-to-face to act. Collective action is enabled and made more efficient with mobile technology in so many hands. And it even facilitates better face-to-face meetings and action (viz. Occupy and the Arab Spring).

I am expecting to see a lot of disintermediation – shifts in the supply chain that that remove some existing intermediary players.

One of the first areas I expect to see this in is new mobile and online peer-to-peer payment models. Another area is aggregation of service providers and potential customers. Up until now aggregating those types of services required large capital investment, but now it just needs a peer-to-peer smart phone application.

If you are an existing economic or financial intermediary it’s time to start planning for this new reality. If you don’t then the dispersed peer-to-peer linked mob might just eat your lunch.

Is ‘social’ the right term to use for everything online?

There is a tendency to put the word social in front of many other words to day to describe some new use of technology. I remain uncomfortable with the way we have plonked the word ‘social’ in front of so many other things, for example; networking, media, computing, business, etc.

One reason for this discomfort is that everything that human beings do is social in some way. But that discomfort about the term aside we’ve got to call it something and that will do for the time being.

Going back to the origins of the word social we can see it comes from the Latin socius and meant companion or partner. That makes it an ideal word to use about collaborative acts or practices.

The trouble is that adding social in front of everything begins to devalue its descriptive utility. Instead it seems to become yet another piece of jargon as voiced by the shallow spruikers of the latest thing.  Using it in front of everything makes it into a joke.

I’m interested in how we keep things real. I think people need clear and simple communication. Meaningless jargon is not how we keep things real.

It makes me wonder though, is it the quality of the communicator and the truths that they speak that wipes away the feeling of jargon? Does it really all come down to trust?

It’s not content that matters, it’s the stories

When I checked on a major search engine the other day there were 247,000,000 results for the term “content is king”. Many people have said it to me over the past few years, and I admit to having said it myself on occasion. It seems that Bill Gates was saying it way back in 1996 (thanks to Craig Bailey for tracking it down)

But I’ve been thinking about this saying a bit lately. In particular I’ve been pondering what really matters online. This question arose because I’ve been doing research in recent times and the sheer amount of dross on the internet is truly remarkable.

It is clear that people on the internet are so busy creating, stealing, replicating and sharing content that many of us are too busy to tell stories. This includes those upon whom we have relied to tell our stories as a society, that is, the professional writers who are employed by newspapers and magazines.

Compelling narratives help to bring ideas to life and call us to action. And it is these that we are willing to invest our time and money to hear.

Many of our traditional newspapers are losing the art of sharing those compelling narratives, instead opting for cutting and pasting AP, AAP or Reuters news feeds. Thus they are losing their ability to tell stories in the rush to create content rather than stories.

It means that we end up with sites like Huffington Post that are finely calibrated search engine optimised content repositories. And, while there is a need and place for these kind of online publishers, it also means that we are at risk of losing the stories that do not fit into the immediacy of the search engine optimised advertising revenue generating model.

Once stories in newspapers (in the days when we had newspapers of record) and magazines were subsidised by the so-called ‘rivers of gold’ from advertising. Nothing has appeared to replace those rivers of gold to enable the continued production of stories on the previous scale (as opposed to the growing practice of regurgitating paid news feeds).

If the *business model (and cross-subsidization) that made it possible to create stories is broken then it is up to the amateurs to tell our stories. Bloggers have already begun to fill this gap, and have incurred the wrath of the establishment writers from the mainstream media organisations as a result.

Rearguard sniping and condescension from the ‘professional’ writers towards the ‘amateurs’ is amusing given the likelihood that most writers of stories will be unpaid by organisations in the not to distant future. Instead the few remaining paid jobs will be for analysts to populate the search engine optimised advertising driven sites. And that is only likely until they can find a machine to undertake that somewhat mechanical task.

It’s going to be interesting to see where our stories go in this brave new world.

* The only exception I can see to this is organisations that are either government funded or which have independent funding like The Guardian. The big risk for government funded organisations is that increasing economic constraints are likely to constrain their operations in turn.

99.5% of self-proclaimed social media experts or gurus are clowns according to @garyvee

This kind of stuff is why I love Gary Vaynerchuk! As he correctly identifies, we have people who are clueless about business and about technology hyping that which they do not understand. He also correctly identifies the looming social media bubble:

”99.5 percent of the people that walk around and say they are a social media expert or guru are clowns,”

he says, continuing with

“we are going to live through a devastating social media bubble.”

Source: Techcrunch

 

Social Media – the US Army gets it

Most organisations are grappling with the digital revolution and its democratization of communication. The US Army is no different.

However, they have met the organisational challenges of social media head on and have become an acknowledged leader in practice. They along with other parts of the US military – such as the US Air Force – have invested resources in adopting, using and benefiting from this digital revolution.

It is interesting that so many civilian organisations are still ignoring the potential benefits of the digital revolution while government and military adopt it so readily.

The US Army has updated their Social Media Handbook for 2011 and it’s available on slideshare as well as embedded below.

It’s worth a read no matter what stage of adoption your organisation is at – it gives some good ideas about how to communicate with people about how an organisation can use social media.

Army Social Media Handbook 2011

#c3t the Command & Control of Twitter – On a Socially Constructed Twitter & Applications of the Philosophy of Data

Here is the full text version of the paper co-authored with Brian Ballsun-Stanton and presented at the 5th ICCIT: 2010 International Conference on Computer Sciences and Convergence Information Technology.

#c3t the Command & Control of Twitter – On a Socially Constructed Twitter & Applications of the Philosophy …

#c3t An Agreeable Swarm: Twitter, the Democratization of Media & Non-localized Proximity

My co-author, Brian Ballsun-Stanton, presented this at the 5th ICCIT: 2010 International Conference on Computer Sciences and Convergence Information Technology in Seoul earlier today:

You can view a full text pdf version of this paper here
#c3t #ICCIT_10