Ecommerce Meets Social Networks: Trusted References A Different Approach to Driving On-line Referrals George Eberstadt CEO & Founder TurnTo Networks

In the “Social” Category, Ecommerce Has Been Very Focused on Ratings and Reviews 63% of consumers indicate they are more likely to purchase from a site if it has product ratings and reviews. (CompUSA & iPerceptions study) Reviews drive 21% higher purchase satisfaction and 18% higher loyalty (Foresee Results Study, January 2007) At NetShops, reviewed products experienced a 26% lift in sales. (Internet Retailer, 2/08) 76% believe content is insufficient to complete research or purchase online “always,” “most often” or “some of the time”. When faced with incomplete information, 72% of shoppers go to a competitor or research further. (2007 Survey of Online Shoppers by the E-Tailing Group)

63% of consumers indicate they are more likely to purchase from a site if it has product ratings and reviews. (CompUSA & iPerceptions study)

Reviews drive 21% higher purchase satisfaction and 18% higher loyalty (Foresee Results Study, January 2007)

At NetShops, reviewed products experienced a 26% lift in sales. (Internet Retailer, 2/08)

76% believe content is insufficient to complete research or purchase online “always,” “most often” or “some of the time”. When faced with incomplete information, 72% of shoppers go to a competitor or research further. (2007 Survey of Online Shoppers by the E-Tailing Group)

Who is really most trusted? Friends

People like you vs. People you like Advice from friends is better than advice from strangers

People like you vs. People you like Advice from friends is better than advice from strangers

It’s all about “the friend name.” Which emails do you read?

It’s all about “the friend name.”

Which emails do you read?

How do you get “the friend name” into the buying process?

“ I spent $100m a year on television advertising. If I could have found a way to spend money on word-of-mouth that worked, I’d have moved every penny over.” Austin Ligon Founding CEO, CarMax

“ I spent $100m a year on television advertising. If I could have found a way to spend money on word-of-mouth that worked, I’d have moved every penny over.”

Austin Ligon

Founding CEO, CarMax

Every word-of-mouth interaction has two players: a broadcaster and a receiver. Most approaches to driving word-of-mouth focus on activating the broadcaster .

Every word-of-mouth interaction has two players: a broadcaster and a receiver.

Most approaches to driving word-of-mouth focus on activating the broadcaster .

Hey everyone, I just got a vertalizer, and it’s the best thing ever! How do I get my happy customers to tell their friends? ?

Hey everyone, I just got a vertalizer, and it’s the best thing ever! Why are you bothering me with that? Not interested. Not again!?!? Oh, thanks. I was looking for something like that. Shill. ?

Hey everyone, I just got a vertalizer, and it’s the best thing ever! Why are you bothering me with that? Not interested. Not again!?!? Oh, thanks. I was looking for something like that. Shill. ?

Please. No one would be that heavy-handed about it.

Please. No one would be that heavy-handed about it.

Hey everyone, Joe just got a vertalizer, and it’s the best thing ever!

Hey everyone, Joe just got a vertalizer, and it’s the best thing ever! Did you just use my name to advertise your product? WTF! I didn’t say you could do that!

Please. No one would be that heavy-handed about it.

Please. No one would be that heavy-handed about it.

Facebook Beacon Earlier this week, I bought a coffee table on Overstock.com . When I next logged into Facebook and saw this at the top of my newsfeed: I was pretty surprised to see this, because I received no notification while I was on Overstock.com that they had the Facebook Beacon installed on the site. If they had, I would have turned it off. So I'm joining a growing chorus of Facebook critics that Beacon has some serious problems… The biggest problem is the lack of transparency… I need to be in control and not get blindsided as I did in the example above. Charlene Li, blog, 11/21/07

Earlier this week, I bought a coffee table on Overstock.com . When I next logged into Facebook and saw this at the top of my newsfeed:

I was pretty surprised to see this, because I received no notification while I was on Overstock.com that they had the Facebook Beacon installed on the site. If they had, I would have turned it off.

So I'm joining a growing chorus of Facebook critics that Beacon has some serious problems… The biggest problem is the lack of transparency… I need to be in control and not get blindsided as I did in the example above.

Charlene Li, blog, 11/21/07

Beacon was a Beacon… to the Rest of Us Users must be in control Sharing must be permission-based Users must have the information to make their choice But if Beacon had made it over that hurdle, they would have hit others: Spam: how much info do your friends really want? Workload: OK, I have control. But I don’t have time.

Users must be in control

Sharing must be permission-based

Users must have the information to make their choice

But if Beacon had made it over that hurdle, they would have hit others:

Spam: how much info do your friends really want?

Workload: OK, I have control. But I don’t have time.

“ Activating the Broadcaster” is Not Bad, It’s Just Hard Too gentle, and you don’t move the needle Too strong and you violate privacy, spam, undermine trust But it can be done Best strategy: have epically great, “cool” product Alt: create an avatar for your product. e.g. cool viral videos (Blendtec “Will it Blend”, JC Penny “Beware of the Doghouse”) Very careful social engineering: e.g. BzzAgent ($$$!) Businesses spent $1.3 billion on word-of-mouth marketing in 2007, and this will grow to $3.7 billion by 2011. (PQ Media) Very hard to automate!

Too gentle, and you don’t move the needle

Too strong and you violate privacy, spam, undermine trust

But it can be done

Best strategy: have epically great, “cool” product

Alt: create an avatar for your product. e.g. cool viral videos (Blendtec “Will it Blend”, JC Penny “Beware of the Doghouse”)

Very careful social engineering: e.g. BzzAgent ($$$!)

Businesses spent $1.3 billion on word-of-mouth marketing in 2007, and this will grow to $3.7 billion by 2011. (PQ Media)

Very hard to automate!

A Different Approach Instead of activating the broadcaster… … activate the receiver . ie get the shopper to reach out and request a recommendation from a friend. Recommendations that were requested are: Trusted Welcome And build a genuine social bond

Instead of activating the broadcaster…

… activate the receiver .

ie get the shopper to reach out and request a recommendation from a friend.

Recommendations that were requested are:

Trusted

Welcome

And build a genuine social bond

Why “Reach Out”? The beauty of UGC: there are a lot of people in the world. Some of them have already written down an opinion on everything The problem with UGC: On any particular topic, very few (none?) of the people who have written down their opinions are your friends Shopper’s choice: Existing content from strangers, or Reach out to friends Even if the buyer doesn’t reach out, the presence of “the friend name” transforms the interaction

The beauty of UGC: there are a lot of people in the world. Some of them have already written down an opinion on everything

The problem with UGC: On any particular topic, very few (none?) of the people who have written down their opinions are your friends

Shopper’s choice:

Existing content from strangers, or

Reach out to friends

Even if the buyer doesn’t reach out, the presence of “the friend name” transforms the interaction

It’s Easy… Just connect the shopper to someone… They are willing to reach out to (they know or have a connection to) Who has relevant experience At just the moment the information is needed Ok, maybe not so easy.

Just connect the shopper to someone…

They are willing to reach out to (they know or have a connection to)

Who has relevant experience

At just the moment the information is needed

Ok, maybe not so easy.

How Do We Do This? Contextual delivery Portable social graphs Transaction data Permission management

Contextual delivery

Portable social graphs

Transaction data

Permission management

Context is King! It’s about “trusted references”, not “social advertising” Deliver friends in response to purchaser intent (not interrupt-based)… … at the point where the intent is signaled Content consumption Search Shopping itself

It’s about “trusted references”, not “social advertising”

Deliver friends in response to purchaser intent (not interrupt-based)…

… at the point where the intent is signaled

Content consumption

Search

Shopping itself

Search Advertising Dominates Because It Enables Response to Purchaser Intent

Portable Social Graphs Bring the social network into the commerce path instead of the other way around

Bring the social network into the commerce path instead of the other way around

Permission Management Automation with control Can not rely on users to manually post each activity Must be rule-based with exception handling And keep it VERY simple

Automation with control

Can not rely on users to manually post each activity

Must be rule-based with exception handling

And keep it VERY simple

A Model for “Trusted Reference” Delivery Social permissions filter (i.e. who agrees to share what with whom) Raw customer data from merchant Data Authorized for With Sharing Friends Merchant Site Search Comparison Sites [Feed Readers] Shows friend experience to shopper Drives conversion, cross-sell Enhances visitor experience Finds friend transactions across all merchants Drives traffic to merchant Pushes friend activity to news feeds Drives traffic to merchant Shows friend experience alongside product offers Drives traffic to merchant Content sites Shows friend experience alongside product mentions Drives traffic to merchant

Shows friend experience to shopper

Drives conversion, cross-sell

Enhances visitor experience

Finds friend transactions across all merchants

Drives traffic to merchant

Pushes friend activity to news feeds

Drives traffic to merchant

Shows friend experience alongside product offers

Drives traffic to merchant

Shows friend experience alongside product mentions

Drives traffic to merchant

“ Illuminate the Black Hole of Consideration” Friends become attributes of products just like other characteristics. (What’s more relevant to a purchase decision, the technical characteristics of an object or who else buys/uses it?) Applies to low-differentiation products as well as high-consideration ones

Friends become attributes of products just like other characteristics. (What’s more relevant to a purchase decision, the technical characteristics of an object or who else buys/uses it?)

Applies to low-differentiation products as well as high-consideration ones

Although customer reviews are nothing new on popular eCommerce sites like eBay and Amazon, in most cases, consumers use the critiques from people they don’t know. Now with connective technologies like Facebook Connect, Google FriendConnect, and OpenID, consumers will now be able to see reviews, experiences, and critiques from people they actually know and trust… As an example, next time I’m shopping for a laptop, not only will I see reviews from editors and consumers, I will now know which one of my friends uses an Apple computer, and what they think of it. Jeremiah Owyang, Forrester Research

Although customer reviews are nothing new on popular eCommerce sites like eBay and Amazon, in most cases, consumers use the critiques from people they don’t know. Now with connective technologies like Facebook Connect, Google FriendConnect, and OpenID, consumers will now be able to see reviews, experiences, and critiques from people they actually know and trust… As an example, next time I’m shopping for a laptop, not only will I see reviews from editors and consumers, I will now know which one of my friends uses an Apple computer, and what they think of it.

Jeremiah Owyang, Forrester Research

After a devastating holiday season, retailers will eagerly seek a way to improve results other than driving demand with deeper discounts. One option they will investigate will be how to insert people and social connections into the buying process, illuminating and influencing for the first time the Black Hole Of Consideration. .. As the holiday season launches early after Labor Day, shoppers will find options to see what friends are recommending, buying and rating integrated into the shopping experience. Charlene Li, Altimeter Group

After a devastating holiday season, retailers will eagerly seek a way to improve results other than driving demand with deeper discounts. One option they will investigate will be how to insert people and social connections into the buying process, illuminating and influencing for the first time the Black Hole Of Consideration. .. As the holiday season launches early after Labor Day, shoppers will find options to see what friends are recommending, buying and rating integrated into the shopping experience.

Charlene Li, Altimeter Group

Thank you! George Eberstadt [email_address] 917-250-4545

Thank you!

George Eberstadt

[email_address]

917-250-4545