The Good, The Bad & The Ugly of Social Media

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  • Affiliate programs are perhaps the single most insidious hidden effect on the integrity of social media and all online communications. Affiliate advertising rewards bloggers, web site owners and others for driving traffic to goods and services for sale. In some cases, affiliate programs pay members when a click results in a sale. In other cases, members are paid by the click. For example, I belong to several affiliate programs like Amazon, Barnes and Noble and Borders. If you were to go directly to Amazon and do a search to find my SocialCorp book, here is the link Amazon would use: http://www.amazon.com/s/ref=nb_sb_noss?url=search-alias%3Dstripbooks&field-keywords=socialcorp&x=0&y=0 If you were to go to my blog and click the link to buy the book on Amazon, here is what you would get: http://www.amazon.com/gp/product/0321580087?tag=socialized-20 The “socialized-20” at the end indicates that the click to Amazon came from my blog. If you were to buy the book, I would get a commission. It doesn’t matter that I am the author. Here’s where it gets interesting. If you click the link, look at the book, decide not to buy it, but then, on the same visit to Amazon, you buy a Crank II BluRay DVD, custom wheels and a vacuum cleaner, I get commissions on all of those sales, since I was technically responsible for sending you to Amazon. This has nothing to do with me being the author of the book. Anyone can sign up to be an affiliate. Why is this a problem? Let ’s say I have a book review blog, reading and recommending the latest business books, and I am an Amazon affiliate. Given that I am basically being paid by Amazon to recommend books, that is, I get a commission every time someone reads my blog and then clicks over to Amazon to buy a book I’ve recommended, how can you trust my reviews? I would have a monetary incentive to give all positive reviews. And why not add espresso machines to my reviews? And infant car seats? Affiliate programs constitute hidden financial arrangements that compromise the integrity of editorial all over the web. There are a couple of other things that happen. with affiliate programs. First, people sign up for Twitter and create blogs just to publish affiliate links under false pretenses. You might see a tweet or a blog post linking to “Five Great Ways to Grow Your Business Online” but if you click the link, you end up at a Viagra or dating site. And all of that spam you’re getting? The majority is intended to generate clicks on affiliate links. I would guess that affiliate advertising is the number one source of spam, followed by identity theft and mischief making. I am not sure why people aren’t angry about affiliate advertising and the mess it makes, or why the FTC hasn’t cracked down here.
  • Corporate sponsorships of socially responsible efforts can often miss the target when connected with the wrong product. Here, Kentucky Fried Chicken is endorsing the Susan G. Komen Foundation drive to fight breast cancer with a product that is responsible for obesity and heart disease. Elizabeth Kuchinich jokes about using alcohol in a similar way, though of course someone steps up and does exactly that with a cocktail dedicated to the Susan G. Komen Foundation intended to honor women.
  • Now in Blogs, Product Placement , New York Times, June 13 Thus far, the commission has focused on marketers, Ms. Engle said, though it could also pursue individual bloggers under the law. (There is no investigation in the Absolut vodka case so far.) A promotion in January by Ann Taylor Loft — submit a blog post about the summer 2010 collection and receive a gift of up to $500 — was the first to be investigated by the commission. While no action was taken, marketers viewed the case as a shot across the bow.
  • This tweet appears to be from an individual Twitter account. It actually goes to the DISH Network home page shown in the next slide (and not a page where a user can view the so-called “astronaut commercials.”) This is either a DISH Network employee or an affiliate marketer. The shortened URL is also a problem for consumers since it masks the domainof the destination site. This undisclosed advertisement is probably in violation of FTC endorsement rules.
  • Yelp has constantly eroded its position as the hyperlocal source for user-generated reviews. The company has hired professional writers to generate reviews, but worse still is the announcement in February, 2010, that the company was the target of a class action suit for alleged extortion in a scheme where it offered to suppress poor reviews for businesses who paid a $300 monthly fee. When something is no longer what it says it is, consumers move on. These kinds of mistakes reduce brand equity, and ultimately cost the company far more real dollars than they earned from being devious.
  • Plagiarism has become hip. This young German author lifted numerous sections from another author ’s book, and was still selected as a finalist at the Leipzig Book Fair, because, as the judges acknowledged, mixing is part of Berlin’s culture. DJs do sampling and remixes, why not authors?
  • ShortTask , launched in late February 2009, has the potential to be an interesting service, but has, in my opinion, become one of a number of clearinghouses for third-party astroturfing schemes of somewhat questionable ethical intent. ShortTask, according to the company, is: “ based on the idea that there are still many online jobs that cannot be fully replaced by technology and require human input. ShortTask has subdivided its working into two categories — solvers and seekers. Seekers are companies or individuals who need various tasks accomplished without hiring in-house staff, while solvers are workers who can complete these jobs virtually and get paid.” In other words, if a company regularly has short tasks that cannot be done by a computer, it can post those tasks on ShortTask for Solvers to perform on a per task basis. ShortTask is very similar to Amazon ’s Mechanical Turk (which I wrote about here.) Anyone can sign up for either service. ShortTask refers to Seekers (people contracting out small tasks) and Solvers (people who perform the tasks.) Though not the point of this post, the impact of this on the American worker is clear. So many in-house salaried positions have been converted to temporary contractor positions. And with microcontracting/microsourcing, it gets worse. Not only are jobs outsourced, so are tasks. But beyond economic concerns, ShortTask (and other services) seem to facilitate behavior of questionable ethical intent. For example, some ShortTask tasks require users to post positive product reviews on Epinion, or RateItAll. The instructions for these tasks make it clear that payment will not be made unless the reviews are positive, and that when rating systems are available, products and services must be rated no lower than three or four out of a possible five. Others require a “Like” on StumbleUpon or a Digg. All of these actions use deception and misrepresentation to create a positive impression of a product, service, company or etc. The practice of having company representatives, or their agents (PR firms, for example, or in this case, Solvers), leave anonymous comments on blogs, web sites, communities, etc. to create the impression of independent consumer endorsement of products, services and companies is called astroturfing, and is a disservice to consumers, unethical, and in some cases illegal. Industry associations like the Word of Mouth Marketing Association are trying to address this trend with codes of ethics and education, but as evidenced by continuing ethical breaches by individuals and corporations alike, self-regulation is apparently not enough. The EU ’s Unfair Commercial Practices Directive bans astroturfing, The FTC is also increasingly concerned about this trend, and may crack down. What ’s happening with ShortTask (and other services) is that companies and their agents are struggling to create arms-length astroturfing schemes in which, somehow, because of the involvement of multiple third parties, companies mistakenly believe they can create amorphous arrangements that shield them from accusations of wrongdoing. ShortTask is not necessarily to blame for this. As spammers and unethical “business people” take advantage of blogs, Twitter, Facebook and other vehicles to peddle their scams, they will also do so when new media become available. ShortTask has the potential to be very useful to companies microsourcing tasks and to people looking for a modest income performing these tasks. For now, companies and consumers alike should be aware that not every bit of user-generated content is user-generated, and until more demanding standards are in place, by choice or regulation, social media is no more trustworthy than “old media,” and in some cases, less so. Note: I offered a ShortTask representative the opportunity to respond, but have not heard back. That offer remains open, and I welcome a ShortTask response either as a comment on this post or in a guest blog post.
  • July, 2007: “ The Securities and Exchange Commission has reportedly begun an informal inquiry into the Internet message board postings of Whole Foods Market. The online version of The Wall Street Journal reported late Friday that regulators will likely examine whether Web comments by Mackey during an eight-year stint of posting company-cheering entries under a pseudonym had contradicted official Whole Foods statements. The SEC also will likely look at whether Mackey selectively disclosed material corporate information in violation of securities laws, the Journal said. In a Whole Foods blog post following the disclosure by the Federal Trade Commission of Mackey’s Web writings, the CEO said he never revealed any ‘proprietary’ information about the company.” (Original source unknown, but portions from The Wall Street Journal) Mackey subsequently apologized: ''I sincerely apologize to all Whole Foods Market stakeholders for my error in judgment in anonymously participating on online financial message boards,'' Mr. Mackey said Tuesday in a statement. ''I am very sorry and I ask our stakeholders to please forgive me.'' Whole Foods Market said Tuesday that federal regulators and its own board were investigating online postings by the chief executive, who apologized for his actions. The chairman and chief executive, John P. Mackey, using the name ''Rahodeb,'' boasted about Whole Foods and attacked its rival Wild Oats Markets on Internet sites. Some of Mr. Mackey's postings from 1999 to 2006 claimed that Wild Oats was overvalued and poorly run. This year, Whole Foods announced it would buy its rival for about $565 million, but federal antitrust regulators won an injunction temporarily blocking the deal. Whole Foods said it had been contacted late Monday by staff members of the Securities and Exchange Commission. The company said it planned to cooperate with the investigation. The company also said its board formed a special committee to investigate Mr. Mackey's postings. http://query.nytimes.com/gst/fullpage.html?res=9B04E0DB1731F93BA25754C0A9619C8B63 Clearly the company ’s CFO and legal team pressured him to do so. He was not, on a personal or professional level, apologetic, instead defending his actions on the basis of First Amendment rights. Anyone who has taken (and passed) high school civics knows that the First Amendment is not absolute or universal. You can’t lie in advertising. You can’t lie if you’re sworn in in a court proceeding. And you can’t lie (in any clever way) about your position and financial interest in a company. He also claimed that it was standard Internet behavior to use a pseudonym online, but that just doesn’t apply to the CEO of a publicly held company making material statements about the company, and about a competitor, Wild Oats, that Whole Foods was in the midst of acquiring. Someone, again, probably his legal team, took away his blogging rights for close to a year, but as soon as he could blog again, he began complaining that he should have had more freedom of speech. If I was CMO of the company, John Mackey would never have been allowed to blog again, or to launch a browser. This is a case where the CEO of a brand highly respected and beloved by some consumers, lost some of its allure and I would speculate, some of its market cap.
  • The Good, The Bad & The Ugly of Social Media

    1. 1. the good, the bad, & the ugly Universidade Católica Portuguesa Formação Avançada em Media Sociais April 24, 2012 Joel PostmanCopyright 2012 – 2013, Joel Postman & Socialized PR
    2. 2. who is selling what to whom?Copyright 2012 – 2013, Joel Postman & Socialized PR
    3. 3. kenneth cole 3 february, 2011Copyright 2012 – 2013, Joel Postman & Socialized PR
    4. 4. groupon super bowl screwup • Super Bowl videos mocked non-profits, causes • Consumers reacted badly • Ads pulled quickly, Groupon apologizesCopyright 2012 – 2013, Joel Postman & Socialized PR
    5. 5. groupon super bowl reboundCopyright 2012 – 2013, Joel Postman & Socialized PR
    6. 6. chicken in a pink bucket “Selling chicken in a pink bucket to raise money for breast cancer research is like selling pink cigarettes to benefit lung cancer or selling pink bottles of liquor to support Alcoholics Anonymous.” Elizabeth Kucinich in a letter to Nancy Brinker, founder and CEO of Susan G. Komen for the Cure. “To capture the respect for life and dedication the Susan G. Komen Foundation demonstrates in its fight “To capture the respect for life and dedication the Susan G. Komen Foundation demonstrates in its fight against breast cancer, TravelsinTaste.com asked its resident award-winning mixology expert, Emilio Tiburcio against breast cancer, TravelsinTaste.com asked its resident award-winning mixology expert, Emilio Tiburcio of Fusion Mixology Bar at the Palazzo Resort Hotel Casino to create a sexy, seductive, feminine cocktail of Fusion Mixology Bar at the Palazzo Resort Hotel Casino to create a sexy, seductive, feminine cocktail indicative of life and survival.” indicative of life and survival.”Copyright 2012 – 2013, Joel Postman & Socialized PR
    7. 7. “deleted” tweetsCopyright 2012 – 2013, Joel Postman & Socialized PR
    8. 8. will blog for booze “I thought of my post as a piece of writing, and they sent me a bottle of vodka.” Louise Crawford, Absolut BloggerCopyright 2012 – 2013, Joel Postman & Socialized PR
    9. 9. Copyright 2012 – 2013, Joel Postman & Socialized PR
    10. 10. Copyright 2012 – 2013, Joel Postman & Socialized PR
    11. 11. chipping away at trust and brand equityCopyright 2012 – 2013, Joel Postman & Socialized PR
    12. 12. Plagiarism becomes hip • 17-year-old’s debut novel is finalist for $20,000 prize at Leipzig Book Fair • Numerous sections and an entire page lifted from another book • Judges were aware of all this before making their selection • It’s “OK” because mixing is part of Berlin’s culture© 2010 Joel Postman & Socialized& Socialized PR Copyright 2012 – 2013, Joel Postman
    13. 13. Outsourced astroturfingCopyright 2012 – 2013, Joel Postman & Socialized PR © 2010 Joel Postman & Socialized
    14. 14. Eroding consumer trust • Confessed to leaving anonymous comments in Yahoo finance forums in alleged attempt to devalue Wild Oats; investigated by SEC and FTC • No posts between July 2007 and May 2008 • “I could participate in the community as just another unknown participant on equal terms with every other participant.” (explaining anonymous postings) • Weak “apologies” invoking first amendment rights John Mackey - CEO of Whole Foods© 2010 Joel Postman & Socialized& Socialized PR Copyright 2012 – 2013, Joel Postman
    15. 15. joel.postman@gmail.com @jpostman facebook.com/postmanCopyright 2012 – 2013, Joel Postman & Socialized PR

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