Social Computing

Brian Kardon Forrester Research November 30, 2006 Social Computing: The Impact Of Emerging Technology On Consumer Behavior And Marketing Strategy

Technology Changes Everything
Extended human life
Created near limitless educational opportunities
Facilitated the global economy
Produced wealth in excess of human norms
The democratization of technology

Does Technology Change Business? Or Marketing?
Tower Records
Travel Agents
Newspapers
Polaroid
Blockbuster – NetFlix – On Demand

An Archeological Expedition …

Coke response: "It's an entertaining phenomenon ... [but] doesn't fit with the brand personality" of Diet Coke. Mentos response: “ We were really delighted by it, largely because we felt it reflected the personality of Mentos as a brand.” Mentos sales are up 14.5% to $27.2M from the beginning of the year to Sept. 10 [source, IRI] Can attribute this growth to several things, but they have “seen significant lift.”

Dell Had A Small Problem . . . . . . with flaming notebooks Osaka, Japan June 21, 2006

Dell’s Blog Gave It A Way To Talk To Customers

Can You Guess What This Curve Is? Source: Fortune Magazine, September 4, 2006

MySpace Is A Serious Player Source: Nielsen NetRatings, August 2006

Brands Extend Their Reach In Social Networks

In Teens' Web World, MySpace Is So Last Year
Social Sites Find Fickle Audience
By Yuki Noguchi
Washington Post Staff Writer Sunday, October 29, 2006
Teen Web sensation MySpace became so big so fast, News Corp. spent $580 million last year to buy it. Then Google Inc. struck a $900 million deal, primarily to advertise with it. But now Jackie Birnbaum and her fellow English classmates at Falls Church High School say they're over MySpace.
"I think it's definitely going down -- a lot of my friends have deleted their MySpaces and are more into Facebook now," said Birnbaum, a junior who spends more time on her Facebook profile, where she messages and shares photos with other students in her network.
From the other side of the classroom, E.J. Kim chimes in that in the past three months, she's gone from slaving over her MySpace profile up to four hours a day -- decorating it, posting notes and pictures to her friends' pages -- to deleting the whole thing.

Big Issues Originate From Small Sources
August 2005: AOL settles with NY state for $1.25 and agrees to reform customer service practices.
June 13, 2006: Vincent Ferrari blogs about trying to cancel his AOL account, including an audio recording of the experience.
June 20, 2006: Apology from AOL
June 21, 2006: Story on NBC’s Today show
July 2, 2006: Story runs in the New York Times

We’re Witnessing A Consumer Revolution

What’s Going On?
Web 2.0
Social Networking
User-generated Content (UGC)
Consumer-generated Media (CGM)
Power to the People
The Wisdom of Crowds

Agenda
What is Social Computing?
What is Social Computing’s impact on your company?
How can you take advantage of Social Computing?

Definition: Social Computing
A social structure in which technology puts power in communities not institutions

Why?
Technologies are available that lower the cost for individuals to create and distribute content
There is increasing acceptance of information from ”non-authoritative” sources
PC usage > TV + radio + magazine usage
“In the future everyone will be famous for 15 people.”

Many Forms Of Social Computing Social Technology Examples Del.icio.us, flikr, digg Tagging Basecamp, wikipedia, Socialtext Wikis/Collaborative Software Podcast Alley, Odeo, Podshow Podcasts Froogle, Shopzilla, pricegrabber Comparison Shopping Sites eBay, craigslist, ubid C2C eCommerce TripAdvisor, ReviewCentre User Review Portals Google, Yahoo! MSN, AOL, Technorati Search Engines Gawker, TypePad, Weblogs.com Blogs Linux Apache Software Foundation Open Source Software NewsGater, Bloglines, MyYahoo! RSS myspace, Facebook, YouTube, LinkedIn Social Networks

The Marketer’s Five Stages Of Grief
Denial: “This is just techno geek stuff — it won’t last.”
Anger: “Who do these consumers think they are?”
Bargaining: “ If I give you some coupons, will you be happy?”
Depression: “Maybe I should have become an accountant.”
Acceptance: “I can’t stop the train, so I better get on.”

Peer-based Interactions Are Most Common … Source: NACTAS Q3 2006 Media & Marketing Online Survey Base: North American Online Consumers

Trust In Friends And Acquaintances Dominates Source: NACTAS Q3 2006 Media & Marketing Online Survey Base: North American Online Consumers

Theme Listen to, and nurture, individuals talking about your brand — even if you aren’t in control.

Our Beloved iPod …

Definition
Consumer-generated media is content created by individuals and consumed by individuals with or without sanction from institutions.

Trust In Peers Trashes Ads Recommendations from friends/family Ads on mobile phones Web banner ads Search engine ads Branded Web sites Ads in magazines Ads on radio Ads on TV Ads in newspapers Requested email updates Consumer opinions posted online 0% 20% 40% 60% 80% 100% “ I trust:”

The Cable Guy

Agenda

What Is The Economic Value Of Social Computing?
Lower Product Development Costs
Lower Marketing Costs
Higher Margins – derived from a
community’s intrinsic value
Lower research costs
Higher sales…or fewer lost sales

Moving From Top-Down To Bottom-Up Innovation Traditional Innovation Customer-Driven Innovation Customers Executives Source of Inspiration Deep observation of customer needs Existing assets, products and positioning Key Drivers Spontaneous Structured Customer Involvement Invite customer in Go out to customers Corporate Posture Search, e-mail, blogs, comments Surveys, focus groups story boards Tools

Current TV Viewer Creates Ad For Sony

eBay Taps Community Knowledge With Wikis

Executive Blog: Boeing’s Vice President Of Marketing, Randy Baseler “ I hope it [the blog] will help solve one of my biggest frustrations — not being able to talk with everyone as often as I like about what’s going on in our industry and our company.”

Even Better Boeing Blog — 777 Flight Test Journal

Burpee Uses RSS To Build A Daily Relationship Adding reviews increased the CTR by 43% November sales increased by 4X

Agenda

Marketers Should Understand The Participation Pyramid Creators Critics Couch potatoes Collectors The participation pyramid

Age Is A Major Driver Base: North American online consumers Source: Forrester’s 2006 NACTAS Benchmark Survey potatoes Couch Collectors Critics Creators 3% 4% 5% 6% 9% Listen to podcasts 7% 12% 18% 25% 32% Watch Internet video 5% 7% 9% 14% 27% Read blogs 9% 12% 13% 22% 29% Use photo-sharing sites 2% 4% 6% 12% 37% Use social networking sites 1% 1% 2% 3% 4% Use RSS 6% 10% 12% 16% 17% Visit ratings sites 7% 10% 14% 21% 32% Visit discussion boards/chat rooms 3% 6% 7% 12% 22% Publish Web page 0% 1% 2% 4% 15% Publish blog Seniors (62+) Older Boomer (51-61) Younger Boomers (41-50) Gen X (27-40) Gen Y (18-26) Do monthly

How Can Companies Leverage Social Computing? Type Impact Action Observe
Customers are influenced by media they view that is not created by your company.
Couch potatoes Engage
People reach out to other members of the community through posts, comments, etc.
Collectors Contribute
People take the initiative to create and share media with others (sometimes about brands).
Critics Lead
Some individuals become an alternative trusted source (brand) for your customers.
Creators

Brands Will Continue To Be Highly Exposed
Customers will learn about your brand from individuals outside your influence.
Creative individuals will create media that will contribute to the shaping of your brand.
Popular individuals can become the definitive authority on your brand to some customers.

Getting Started
Decide how involved you will be with Social Computing
Map out what relationships you want to build
Listen to what is being said to find unmet needs
Participate in the conversations

Four Tactics To Navigate The Social Computing Phenomenon
Monitoring
Look to brand monitoring firms like Nielsen BuzzMetrics or Cymfony to collect and analyze data.
Maintain a quasi-team focused on locating and tracking blogs and other media about your brand.
Use simple tactics such as Google Alerts or other automated search notifications to track activity.

Participating
Identify the most highly used destinations of Social Computing for your brand — then join in and become a member.
Don’t hide your relationship to the brand — be open about who you are and why you’re there.
Listen to what people have to say, respond, and be honest with your commitments.
Consider sponsoring or advertising on the site as a show of support.
Be a content provider, not a marketer/advertiser.

Enabling
Evaluate your audience and products/services to determine whether enabling is the right move.
Look to vendors that provide platforms for accepting consumer-generated content
Open your mind to what you normally would allow or disallow — and don’t be overly controlling.
Don’t let the community die out — continue to participate and empower active individuals.

Leveraging
Consider selecting one or two popular individuals commenting on your brand to contribute to your marketing efforts.
Reward participation, even if they say things you don’t like — let them know you’re listening.
Continuously analyze what people are saying and respond with appropriate product and service changes — and thank them for the advice.

Summary
Social Computing is here to stay. Accept it.
Focus on the relationships, not the technologies
Get started using the tools – and start small
Monitor
Participate
Enable
Leverage
Embrace a culture of generosity in your Social Computing efforts

Best Practices In Social Computing
Be ready to act on feedback
Relationships can be messy — be prepared to make mistakes
Use existing marketing metrics to gauge your success
It’s a new mindset, so give yourself time
Develop a “culture of generosity”

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Social Computing

by Marco Derksen on Feb 25, 2007

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Social Computing — Presentation Transcript