Hmm, this blog's been a bit quiet recently

So i haven't been here all that much the last few weeks. Not cos i don't have anything to write, more because there's another priority right now - her name's Sophie Wood, and she was born on 20/10/2010. So posts might be a bit thin on the ground for the next little while!

The brand commissioning editor

I wrote some stuff a few weeks ago about the big structural shifts in how people get paid for creating stuff. Quick summary is that twenty years ago if you wanted to make a living writing then you needed to seek employment with a big publisher who could monetise that content by selling ads to brands who wanted their ads to appear next to it. Or you wrote the ads themselves. Nowadays brands are becoming increasingly less bothered about buying ads, and so big publishers are struggling to invest in lots of content (this is why the Times has just laid off another batch of journalists, and why the Observer contains half as many pages as 3 years ago)

The obvious solution for people who want to make their living writing is to cut out this middle man and work directly for a brand. From a marketing perspective this is tried and tested in direct mail departments, who write direct mail copy for the finance and charity sectors. But not in the sense of making a brand culturally relevant by actually becoming part of culture the way that The Sun, Loaded, Heat or Viz did in years gone by, or that ASOS or Drowned In Sound do today. To do that a brand would need to appoint a commissioning editor for their bit of the internet - as ASOS did last week, recruiting Melissa Dick from ElleUK.com

(Slight diversion - 'their bit of the internet' is a pretty ungainly phrase, but it is important to differentiate from 'their website/their Facebook page/their YouTube channel' - if you think of these as separate then you're missing most of the point of internet publishing)

The benefits to a brand in doing this are in two places. Search and Social. So the two places that have any importance to brands who want to make a bit of the internet - as these are the two places that brand can gain new attention.
Writing and filming genuinely interesting content of cultural relevance to the brand and its audience is difficult for brands, as they have rarely thought about long form cultural content before (I realise I'm doing a disserve to customer publishers here - I've become very interested in customer publishing recently), and they don't know where to go to get it.

But as outlined above, there are lots of freelance journalists around with fewer big publisher gigs available. What was missing was the marketplace. Which is where Sabotage Times comes in. Sabotage is the brainchild of Loaded founder James Brown - and while at first glance it looks like a rich and interesting website, that is really a facade for a new media model - the website is basically a shop window for writers to sell archive material or take new commissions. Initially this has been from publishers - who are used to shopping for archive material. Increasingly it will be for brands who understand to role of cultural relevance in how they optimise and promote their internet presences.

I'd suggest that most brands ought to be thinking along the ASOS route of appointing someone to run a content strategy - someone who starts to move towards a Chief Culture Officer role - but anyone in this position will still need the resources available through market like Sabotage Times, and the way that the site and the syndication agency is structured make it easy for brands to start taking their first steps towards commissioning content.

(Full disclosure - I used to work for James a long time ago at IFG)

Exactly what it says on the tin

Y'know what i don't write about that often? Brands that 'just' make really good stuff. That's a bit hypocritical considering how many times I use throwaway lines like 'advertising is a tax on crap products', and then spend most of my time thinking about advertising. 15 years ago when Ronseal marketed their products as doing 'exactly what is says on the tin', it was just an advertising slogan - men who painted their own fences thought they saw through advertising was and it didn't have any effect on them, so here was a brand taking an anti-advertising position. Very smart, in the sense that it positioned a category leader against every other category in which advertising played a part, while tapping into what made DIY fans proud.

As a fairly cynical person, I tend to believe that most products are likely to be a bit rubbish, and I've been backed to the hilt in this belief over the years in buying trainers. Trainers fall apart in weeks rather than months, which has always led me to believe that you are paying for brand marketing, and getting an undifferentiated product. I gave up wearing them for a while after another £80 pair of shoes fell apart within a month. So when i discovered that Camper offered 2 year guarantees on their trainers, I took this as a never-ending supply of free shoes. They are still going strong 18 months later, and while the cynic in me is proud to admit he's wrong, I'm also happy to have a great example of how making good stuff is a big part of the battle of selling it. And also pleased to have several more pairs of Camper shoes.

(Full disclosure - I haven't ever worked for Camper or for any agency that works for them....)

Ikea can haz interwebs cultyure?

Cats had to get into video designed for the TV screen sooner or later didn't they? The thinking behind Ikea's 'Happy Inside' video is pretty straightforward: the brand premise is aspirational but cheap, and the trade off for cheap is the dehumanising big box trolley dash of the shopping experience. So what would make an Ikea warehouse look like a home? Cats. And cats conveniently enough also have the power to spread videos on the internet. Here's the background.

So far, so awesome. But when you see the finished TV ad, a lot of that potential awesomeness has vanished. Although cat videos are the internet's uber-meme, there is no trace of reference to them other than the animals themselves. The cats are being used outside of the rich seam of references that could be played upon in the films. Which makes it all a little bit 'glossy production no culture'.


It all seems to be taking itself a bit seriously. Now since we're talking about serious TV ads here's how to do several levels of postmodern category awareness. Baby Carrots: Eat 'Em Like Junk Food is the best ad I've seen since Old Spice - it plays every 'taking itself too seriously' trick/cliche in the book with the full knowledge that the audience know that they are tricks/cliches too, and that it is only by going to the ironic extreme that a junk food ad would go to seriously, that you can suggest re-evaluating baby carrots in a junk food wrapper. And more importantly they are fun.



Sort of like Tango - an excuse to embed my favourite 90s Tango ad

What a social network for music might look like

(Clue - not this)

This wasn't meant to be a post about Ping, Apple's pitiful attempt to launch a social platform around the huge wealth of listening data that iTunes holds on 160m people around the world. The less said about Ping the better really - i'll just point out that of the recommended artists to follow in the screengrab above, I have listened to none of them (ever). And that I last shared music recommendations with other people an hour ago, but Ping can import my social graph from none of the four networks I already use to do that (all of which have open APIs)

No, Apple sort of hijacked something much more important. It was meant to celebrate the fact that I've been using LastFM for a year (i mean using properly, rather than just having an account). And in the last year that really has been something that has meant a lot to me. Not the service itself..... well, actually partly the service itself, because being a massive geek I do get excited about being able to chart lots of different parameters of my music listening. (I swear I've never made a spreadsheet from LastFM data though, honest). No, what is more important is using that data to power the best curation and discovery engine imaginable for 'music i might like' - other people who like the same stuff.

So as it's been a year I did look at an 'end of year chart' type of thing, mainly to find out how many of the albums I'd listened to most I had discovered on LastFM. Of the top 25 albums I've listened to most over the last year, 12 of them were by artists I had never heard until they cropped up in my Neighbourhood or Recommended radio. I think that's pretty awesomeThe one thing you can't use it for is to play all this stuff to other people. I've made a playlist on Spotify with my most played tune off each album, which you can find here if you are interested. If you don't know whether you are interested then just look here to see how similar your musical tastes are to mine

Cause and Effect

One of the inherent problems with marketing things on the internet is that some bits of the process are very very easy to measure. That's not a problem for people who sell things online, as they can easily understand how many of them were sold and at what cost. The problems start to arise when the things being marketed are either sold elsewhere, and even more so if they are not intended to be bought immediately: if for instance the goal of the marketing is to change people's perception of a brand. Hence banners are still regularly measured on click through rates, even if the product they are advertising isn't for sale on the page being clicked through to. Clickthrough rate is clearly to wrong thing to measure in this instance but it is EASY to measure, so often taken as a proxy for less tangible results.

As brands become more interested in the social web, there is a real danger of making the same mistake again. As for many brands the social web currently means social networks (and for a large proportion of them social networks largely mean Facebook) the easy measurement tends to be numbers of Likes (/fans/followers/etc). Social networks are where people are spending more time, so brands want to be there. To justify being there, they need to measure something. Numbers of fans are easy to measure as brands and their agencies can plan, track and optimise their activity over time, and because Facebook has a straightforward advertising platform they don't have to think differently to how they always have done.

The problem with using these numbers as an objective is that no-one knows what value to attribute to them. You and I know that attributing a single value to them is meaningless, as every brand will be investing in community for different reasons and starting from different places, but that hasn't stopped a range of 'one number' valuations being put on Facebook fans. I'm going to ignore the Nielsen research published a few months ago, as I'm sure you have too if you have read more than a few lines into the introduction, but it's worth reading The Ad Contrarian's analysis of it. Syncapse's 'Value of a Fan' study is more interesting because unlike Nielsen it is genuinely empirical research - it starts from the premise of trying to things out find out, rather than trying to prove them. It also accepts that all brand communities are fundamentally different so any 'one number' can only be an average.

So in ambition and objectives it seems sound - and is worth a read (download from here). But then I get very confused by the methodology. This is a summary of the findings:Or alternatively have a look at the higher res image here. The study looks at money spent on a brand by fans and non-fans, and find that fans spend more money than non-fans.

Let's stop and think about this for a minute. A major research organisation actually thinks that it is worthy of our time and attention to know that if you like a brand, you will spend more money on it than someone who doesn't like it as much. Or put another way, brand marketing for the last 40 years works, but it's only now that we've got a survey of 4,000 Facebook users that it can finally be proved.

OF COURSE people who like a brand spend more money on it. That is A. not news and B. nothing to do with Facebook. Attributing that as value to Facebook fans is a basic misunderstanding of cause and effect. People liking brands has any number of CAUSES, of which what they do on Facebook is a tiny part. One EFFECT of their liking the brand is that they choose to sign up to receive more information from the brand, or to display their affection to their friends (this in turn may cause more people to interact with said brand, but that is not the subject of this study). Quite often people liking a brand is a result of great advertising - the best advertising makes people fans for no other reason than because the ads are so good, and one of the places that this is reflected is in social networks. Old Spice and Compare the Market saw their Facebook fans numbers increase as dramatically as their market share in response to great advertising. Both increases were therefore EFFECTS of great advertising. But to take one effect and infer a causual relationship with the other is plain wrong: so if instead of more bits of culture, Old Spice bought a load of 'become a fan' ads, this would not have the same impact on their market share. The implication of causal relationship made by this study is no different to saying that for instance:

When it snows, there are more road traffic accidents
When it snows, my toes get cold
Therefore by warming my toes up, we can reduce deaths on the road.

This confusion of cause and effect starts to lead marketers into dangerous territory - if one number can be applied to fans without questioning whether it means anything, then there is genuine justification in buying them - either by soft methods like 'Become a Fan' ads, or by harder ones like buying them on Ebay (no seriously - you can buy Twitter followers on Ebay. Fuck knows why. Check this pic courtesy of @sparkey).

Now there are lots of ways that Facebook is a great set of tools for marketers, but by buying into the cause & effect confusion we are in danger of missing the most important ones.

Augmented TV

Never mind that we haven't got a reliable way to get internet content onto the home's biggest screen yet (I've been banging on about an Apple TV announcement for ages...is it happening this week?) there's now an AR browser for TV - MetaMirror is effectively an app for smaller screened devices that can view TV content and overlay extra info - like recipe info in the picture, but let's face it, real time odds and click-to-buy ads would be the business model. Or imagine the Tesco API powering a cooking programme - with one click add to basket functions....

It makes sense that augmented TV will go down this route, as using two screens is far easier than using one - ask anyone who has tried to live tweet from their desktop while streaming TV on it - you end up minimising, moving and generally messing around with windows rather that watching. When Google TV launches I'd expect a Goggles-powered Android app that does the same thing running Adsense alongside the augmentations.

(link and photo courtesy of PFSK)

What have people got against Blackberry?

So one of the things when you go on holiday and don't take your blog with you is that you start to notice what random old posts are still directing traffic to it in the absence of any new fresh stuff. I looked at my site analytics at the weekend, and found a lot (well, a lot in the context of visitors here - so like 5 a day) of people had tracked down a post I wrote about 18 months ago called "How to break a Blackberry".

It wasn't really about how to break one, no. It was a pun on 'break' as in break a new band, about the pitfalls of giving a review model of a new mobile phone to Apple geek Stephen Fry, a man who in Dec 08 couldn't tweet about picking his nose without the national press eagerly reporting it. So when he predictably hated the Storm, lots of tech publishers had a ready made story.
Anyway, I wondered how people were tracking this down, and naturally they were all Google referrals, but not ones that had ever cropped up before. So I wondered if there is something specific that Blackberry had done to provoke a mass breaking. But it turns out that this has been a steady growth of traffic
story (current global exact match volume is around 140 queries per month, so not by any means huge. But then that's exact match on one long tail query).

All of this is only mildly interesting in its own right, but puts the recent advertising assault for Blackberry Messenger into context. If the people who have always had Blackberries, the folk who get them free though work, are choosing to buy a smartphone instead because it can do all the work stuff as well as all the smartphone stuff, then Blackberry would need a new market who can't afford smartphones. Hence formerly rock solid email performance becomes rock solid messenger performance.

And why the need to break Blackberries? Well they're a 'gift' from your employer. If you want the latest smartphone then you'd need to make it look like a mistake. A couple of things happened around the time that traffic spiked. Droid was announced, and Microsoft Exchange (ie work email on iPhone) improved (it was around since 08, and I don't know how it improved, as I never worked out how to do it before whatever changed late 09)

Of course, I might be reading a whole lot of stuff into a harmless set of figures and post-rationalising it a little too much, but it all sounds plausible doesn't it?

Paywalls, producers and cultural brands

Sometimes the expectation is better than the real thing. Like the World Cup if you're English (but not if you're Scottish!). Similarly the Times' paywall has descended into some rather petty pointscoring in the Guardian and a few half-baked stats on whether it will break even or not. So although I was excited about how wrong an idea it was and whether Murdoch could make something so illogical work, I still can't be bothered to get interested by it at the moment (to give the Guardian their due they did also publish a much smarter explanation of why it was at least a year too early to call it a success or a failure yet).

One thing that does really interest me at the moment though is how the Times' paywall is in part a reaction to the rise of the cultural brand, and the increasing independence of the cultural producer. These are interlinked trends, which basically break down like this:

Cultural brands
The structural change in marketing expenditure away from buying media predicted by Fred Wilson a couple of years ago is taking very visible shape at the upper end of companies like Pepsi and Unilever. Traditional brands are thinking about earning attention through a long term commitment to owning space that provide content people want,. They are also curating interesting content that isn't all about the brand, nurturing communities around the brand's interests, and supporting other communities who share those interests. In many cases the content that inspires those communities is currently being created by the same producers that brands had previously worked with - either media owners or ad producers. But it doesn't need to be - it just needs to be stuff that people want.

Independent cultural producers
As Clay Shirky and Jeff Jarvis have explained far better than I could, the established publishing industry solves problems that no longer exist. There is no requirement for an intermediary to employ journalists - two of my favourite newspaper columnists, Charlie Brooker and Stephen Fry, both have personal readerships far larger than the papers they write/wrote for. Ad agencies maintain expensive office space to house their stables of cultural producers, when many of the producers are voting with their feet and becoming freelance. Which isn't a risk when the internet guarantees them interesting briefs from around the world.

The two trends are intrinsically linked, as when brands had to pay to get their messages seen, they needed content to place them alongside. And when content producers wanted to make a living from producing content they had to find someone who could sell ads around that content
to employ them. Now of course neither of them is limited in those ways. That's one of the reasons why the Times weren't making much money on their websites.

So brands are increasingly looking for content that feeds their own ecosystem - their sites, communities, networks and search results pages. And content producers are increasingly able to build a personal reputation without the need for an intermediary ('publisher' 'broadcaster' 'ad agency'). Naturally they are talking directly to each other. The paywall has two impacts on this system. Firstly, it cuts Times journalists ability to build their reputation away from Times properties - they become more reliant on their employer for distribution. Secondly, and more importantly, it allows the Times to build itself into a cultural brand in the same way that Nike, Red Bull, Mountain Dew, etc do. This sounds counter-intuitive, as newspapers have historically defined culture, but it allows the editors to step outside the historic definition of the category (to report news as accurately and speedily as possible). Although there are now an infinite number of competitors in that category, it is still where their historic competitive set focus their energies. In the same way that Red Bull creates extreme sports content not energy drink content, the Times can start to move away from a single focus. Ok, content-wise it has always done that, but it can move away from the unstated single focus of a commercial website of '[reporting news and] making sure that it generates as many page impressions as possible'. It starts to become more like the brands that it used to sell ads to.

But there is no inherent business model in content for its own sake in an economy where content is abundant and attention is scarce (that's the bit about this scheme that is illogical, as it is contrary to basica economics). Ok News Int are attempting to create scarcity, but powerful though they are, they are not as powerful as the internet. So the path that I'd expect them to take is to complete the circle back to those cultural brands who no longer need their ad space. They need to use content to sell things. In the same way as brands who sell things needed to find content producers, the content producers will need to find physical products. Like Sunday Times Wine Clubs for holidays, finance, car insurance, and all the other things that in a few years from now will used to be advertised with them.

To be fair, I'm sure they are thinking about this - it is far too early to gauge any level of success in the paywall experiment for precisely that reason: it isn't about making a profit from subscriptions, it is about creating a market.

Holidays

Wow, so I haven't really been here much over the last six weeks. Lots of this is down to putting some of the ideas I talk about here into practice, including one project that I will post about next week. But it is also down to having sat on a beach for the last 10 days or so recovering. With this being holiday season and everything it is worth keeping an eye out for the brilliant news compilations curated by Dan Calladine - most up to date version is here

Next Generation Media Quarterly - July 2010

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The Cloud, and why it is so important

Cloud futures

View more documents from Graeme Wood.

The first time I heard Kevin Kelly talk about the move from millions of computers connected BY the internet to one computer that IS the interent, in his TED video on The Next 5000 Days of the Internet, a lot of cloud/semantics/NLP/mobile ideas started to converge in my head, and the more time has passed since, the smarter I think the description is.

Microsoft know that cloud computing is a fundamental part of their future as a software, advertising, and increasingly hardware business, so when I was asked to introduce a cloud/futurology session at a Microsoft conference at our place, Kevin Kelly's views on machine intelligence seemed a suitably controversial place to start. I've posted my slides with some notes - all views and challenges appreciated!

Mary Meeker Morgan Stanley deck for June 2010

via morganstanley.com

So there is a lot of data in here, and most of it is extremely usable. For example there's quite a lot that is an update of the Oct 09 State of the Internet report that explained how smartphones differed in internet usage. Essentially Apple and Android OS had a share of mobile internet usage disproportionate to their respective marketshares. This data came from April 09, when Android v1 was on two handsets at under 1% global share, so this slide shows exactly the same trend a year on for Apple OS, but an evening-up of Android share (but of course Apple and Android both have a far greater share of the handset market now). This suggests that Android is not competing with Apple at the top of the market, but is providing a broad base of tier 2 smartphones between Apple and the traditional players. On Android devices the mobile internet experience is less good, but the app market is sufficiently well developed to make this an alternative. So share of app usage on Android is far ahead of marketshare. If you are planning mobile internet strategy this is a useful insight.

There's reams of other stuff in here too - anything that you need to explain about how the internet is changing there will be stats to back it up in this deck.

Posted via web from Graeme Wood

Negative Capability in marketing

So I was lucky enough to get to Grant McCracken's Chief Culture Officer bootcamp last week, which was a great opportunity to get under the skin of the research practice that informed the book, and to chat about it with lots of smart people. It also got me thinking about how 'culture', in the sense of the complex and slowly evolving system studied by cultural anthropologists, ties together a lot of separate strands that I've been thinking about for a while.

I've struggled with several econometric models over my career - media planners love econometric models, because they tell you line by line and TV rating by TV rating exactly what has got you to where you are today. So you can plan changes for the future based on very exact return on investment figures. As long as all the other conditions that contributed to the model remain exactly the same. And there was no inter-relation between the factors that you changed. And most importantly of all, that the big unquantifiable chunk of fat value labelled 'the long term brand effect' also remains constant. So the reason I've struggled with them is because this tells us a huge amount about a very small bit of something that we can't change.

There was a lot of discussion at Grant's event about the relationship between data, the known bit that makes up the econometric model - and culture, the unknown that can fundamentally alter the big brand chunk in the middle of the model for no reason that a statistician could predict. And it got me to thinking that if all data is by definition reactive, then maybe culture is defined by its opposition - culture is by definition proactive. This has real implications for anyone selling ideas based on gut feel in a world that is based on data (and if you are involved in doing so then I suggest you read Grant's book!), but it also starts to question why data is necessarily the right thing to do.I've written stuff on here before about the curse of demographics on the marketing world - to summarise the basic argument (inspired like many things on here by Henry Jenkins by way of Faris Yakob) demographics are by definition averages. When all media were mass demographics made sense as they meant brands minimised wastage. Media were scarce (part of why they were mass) so brand ideas in mass media were expensive, and therefore short. Brand ideas had to appeal to a wide range of people, so had to be simple. Wide ranges of people were summarised neatly by demographics.

And now media are no longer scarce, and so are free and niche. Brand ideas need to be rich and rewarding, and demographics undermine this. Someone at the event talked about the concept of the brand as "a bundle of conflicting but complementary ideas", which is not a new concept - it is at the heart of Negative Capability, Keats' belief that the best ideas come from an understanding that not everything can or should be resolved.

I mean Negative Capability, that is when man is capable of being in uncertainties, Mysteries, doubts without any irritable reaching after fact & reason
John Keats, 1817

The richness and depth of human nature is defined by difference, not similarity. In the Morality plays popular up to Elizabethan times, characters were stripped of all individuality and distinguishing characteristics in order not to distract the audience from the simplicity of the moral. The radical depth of Elizabethan dramatists like Shakespeare turned this on its head - unearthing deep emotional truths about humanity in the relationships between rich complex characters.

In an culture increasingly defined by the mass personal there is a huge hurdle for marketing departments to overcome in moving from being the home of sweeping industrial scale generalisation to the conduit through which businesses become human, with all the complexity and conflict that that entails. The move from big/simple/single to niche/many/rich is a big first step - not replacing big/simple/single, but understanding that it is only a step to get to niche/many/rich. Because I'd suggest that that's where the fat unquantifiable value is, and the one big idea I've taken out of the seminar is not to always 'reach after fact and reason', but to explore the tension in 'conflicting and complementary'.

Converse/Anomaly Domaination case study

I wish I wrote more stuff on here about advertising that I really like...... so the Converse case study below makes me really happy. Using real time insights to power lots of little culturally relevant productions. Using the obvious (paid search ads) to make something new (spelling bee live competitions). Sheer genius. Most people reading this probably know who Anomaly are and what they stand for, but if you work in the UK you might not have seen too much stuff that they have done (yet!).

Converse Domaination from Ross Martin on Vimeo.

(HT @dafdent)

Technology is a means not an end (slideshare deck)

Social ideas

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Technology isn’t changing consumer behaviour, it is just amplifying different bits of it: technology changes, people don’t. We are still super-social creatures (that’s how we developed language, learned to hunt, out competed rival species) – our evolution has favoured sociability over most other traits, so we still gain most self-esteem from interaction with other people (in the same way as we have evolved to prefer sweet foods, as sugar is the purest form of energy in a food-scarce world.

So we form tribes around shared interests, we change behaviour by copying others, & we rely on other opinions to guide our own. All that has changed is that none of this used to be the domain of mass media. Once the cost of producing media fall away to zero as has happened in the last 15 years, those shared interests and other opinions are no longer limited by geography – they are instant, global and free – and so virtually infinite

This is important for understanding media, as it means that there social networks are not just a trend away from content-centric sites, they are a natural evolution into something that is intrinsically more interesting to human beings – each other. Facebook differs from any media property of the 20th century because people don’t go there first and foremost to consume content – they go there because their friends are there. The fact that content is involved is just something to talk about. Content that spreads through networks does so because of how it connects people, not because of any aesthetic value intrinsic to it as content. Example: if someone tells you a funny joke, you are much more likely to remember who told you the joke than the joke itself – jokes are a form of social currency, where the actual content is less important than the values it conveys on the person who told the joke. If it was funny, you think of them as funny. The subconscious decision-making process that goes on when sending something on to friends is ‘what does this say about me – does it make me look witty, attractive, intelligent?’

So that doesn't help brands think about technology, but I think that it is far more important to think about what is actually changing and how it affects human behaviour. That means we can develop comms products that inspire people to participate, becuase they are grounded in human behaviour. And the technology used is a means, rather than an end.

(No planners were injured in the making of this deck, although several were heavily borrowed from:

Mark Earls
David Cushman
Gareth Kay
Katy Lindemann
Faris Yakob
and probably some more - apologies if I've missed people
If you like my spin on it, then go and check out more of their stuff

Some surprising outdoor advertising

I wrote about Mflow last week as it launched in public beta, with a few thousand participants. It is a great concept (which I'm intending to buy some music from soon... will report back) but I was really surprised to see what looked like an ad for them at Oxford Circus - it seems to be such a spreadable product (or will be once you can bring your social graph in) that this is far too early for mass media advertising. Well, if you can't currently import your social graph then surely this is a complete waste of money? Iron out the tech stuff while it is in beta, then scale?
and on the subject of spreadable ideas relying on advertising, the same train contained this slightly desperate plea to use one of the original idea viruses... Hotmail. MSFT are actually investing in paid media that promotes.... a spam filter. How are the mighty fallen

The end of web destinations - Facebook Open Graph slideshare deck

It doesn't seem too much of an overstatement to suggest that Facebook's Open Graph protocols have created a new OS for the internet: one that is based more on how people interact with each other than on how they relate to entertainment content. There are obviously huge issues around several of the announcements from f8 last week, centering on three subjects

Privacy (Marshall Kirkpatrick on ReadWriteWeb)
Advertising value (The Ad Contrarian on Facebook's Nielsen partnership)
(and linked to that...)
Whether Facebook can match the attention that they are gathering with a similar level of profit (Henry Blodget in Business Insider)

All three are well worth a read if you are interested in Open Graph. And if you work with brands and the internet, you are interested in Open Graph aren't you? Personally I think that Facebook has created a product with incredible potential, that will increase its revenue (although not yet up to Google level; they need another killer app for that, which i think they'll find next year) and make people's experience on the internet better. Privacy is increasingly something people are willing to trade for better. Ethically I think we're getting a bit hysterical about things, mainly because Facebook have a slightly dubious record in privacy isues, but also because they are starting to close in on Google, who are genuinely ethical in a way that few bigh corporations can be. Let's face it, they are a business who have improved what they do in order to be more profitable.

Facebook Open Graph

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Anyway, I've been thinking a bit about how Open Graph changes things. To be honest, the stuff in the deck was all possible with Facebook Connect if it was used in full, but very few brands were doing that. I'm not a developer so I don't know how difficult it was to implement, but by all accounts Open Graph is a whole lot easier. I'm going to follow this up once there are more distributed nodes in the graph (ie more people liking more content and more sites implementing personalised social features) and look more at the content side of the protocol.

For now this is all about how the APIs are starting to become an alternative to the web destinations of old. In order to take full advantage of all the combined benefits of the networks available to a brand, we need to start thinking about whether people have a temporary high interest in the brand, or a permanent loose interest. Then about how we move them around according to their needs and attention. And if we are going to require them to move around, how we are going to inspire them to participate. Ironically considering Facebook's change in terminology, we need to think about how we make them a fan (in the real sense of the word- not just saying they like something on a social network).

It's very early days for Open Graph, so I'd really welcome your thoughts on this deck in the comments or on Twitter

ITV, Facebook Connect and the social election

As previously mentioned, I don't know a whole lot about politics, so after writing rather to much about it in the last couple of weeks I was far more interested in how ITV covered the first leaders' debate.

The Facebook Connect commenting box was a great idea when CNN ran it for the Obama inauguration in Jan 09, but Twitter has become a lot more important since then. While there was a steady stream of live conversation from the 'everyone' feed, everyone I know who was joining in live was doing it on Twitter. Obviously that's not the same for everyone, but surely there should be both options?

Twitter sentiment analysis sort of got hidden behind the video player, which was a shame as the volume of tweets (estimated at 2000 per minute according to a comment on Question Time) meant that sheer scale should have ironed out the imperfections in automatic sentiment analysis and averaged out a realistic result.

So live opinion results that were running live at the bottom of the screen were actually from pop-up surveys on the player page - not really taking into account the amount of discussion that was taking place away from the ITV site. Judging from the dramatic fluctuation in results I'd guess sample sizes were low (although there were several sets of results in rotation the 'Who do you think has won this debate' showed Nick Clegg winning with anywhere from 43% - 81% of the vote over a rotation)



These debates are a huge opportunity for the broadcasters to aggregate and analyse the conversations taking place around their sites, and to showcase their own use of social tools to add value to their programming. If I can stay awake through the next couple then I'd like to see how the other stations fare in comparison to ITV.

And my verdict on the debate? To nick a line from @wearenorth, 'Worst. Kraftwerk. Gig. Ever."

Twitter Promoted Tweets. Not Twitter Advertising

So Twitter has finally released the first signs of a business model into the wild. Twitter is (still) a guarantee of colum inches, so there has been a lot written about it in the last few days, and from what I can see quite a lot of it misses the point, because it talks about Twitter advertising.

(image courtesy of The Tech Update)

Now there are always going to be a few purist, extremist and nostalgic folk who object to Twitter having a business model. As a huge fan of the service I for one will ignore and unfollow them as I want Twitter to survive and flourish as a commercial entity. However, from what I can see of how Promoted Tweets will work they are named for a reason. If you think of them as advertising you will miss a lot of the point.

Much of the challenge for brands in the realtime web is about ensuring that the positive floats above the negative. Hence disciplines like Search Engine Relationship Management, which pushes positive news above negative in the SERP by leveraging the power of the brand's website to link to the positive. In the Twitter environment this hasn't been possible, so brands will tend to post more than they probably should do in order to appear top of stream as often as possible. What Promoted Tweets allows us to do (subject to resonance) is hold that position at the top of the stream (well, initially at the top of the search results stream). So far, so much like Google. But the key difference is WHAT brands are promoting. Surely the tweets that a brand will gain most from promoting are those that it hasn't written? The positive opinions of regular customers. Thinking about how to write copy for Twitter ads seems to miss the point that, according to Dick Costolo, 'Promoted tweets are not ads'. To me that means exactly that - they are tweets that the brand has chose to promote. Essentially retweets, but only of content that is likely to engage people, and therefore remain at the top of results through resonance algorithms.

Where the promoted/advertised line starts to blur is when Promoted Tweets move from the search page into the stream. Because what Costollo also says is that 'promoted tweets are just tweets'. Now up till now all the income that Twitter has received is from Google and Microsoft, to incorporate the full stream into real time search results - Google having changed their algorithm to incorporate realtime data. So as real time is promoted up the Google results page, and promoted tweets are just tweets, will they also be hovering at the top of the data that Google are buying?

MFlow - incentivised music discovery

Whinging about the music industry..... so I said that I'd stop that and concentrate on the positives. Before I do though the Guardian have gone into a bit more detail on exactly what artists get paid by Spotify, which is important, because Spotify wouldn't be streaming music if the record companies weren't getting paid, so somewhere along the line there's a lot of money not going the way of artists.

anyway, positives....
So MFlow is a social music discovery site. And a social music trading site. But one that the record industry approves of. As you can see from the screengrab it looks a lot like Spotify. Essentially the way it works is that you follow people if you share their taste, and they 'flow' tunes to you to listen to. And you can reflow stuff on to your followers. Or of course create your own flows. This all sounds very Twitterly familiar, but the smart stuff is in the trading bit. MFlow is all built into an interface similar to iTunes that allows one click purchase. 20% of the purchase price is passed on to whoever recommended the tune to you. Likewise you make 20% of the price of anything that your followers buy based on your recommendation. The follower/following dynamic is a little bit hit and miss so far, as you can't import your social graph from anywhere else so you have to do a bit of digging. MFlow is still in private beta though, and Facebook, Twitter and LastFM import functionality are coming soon.

I think this is a very smart system for a few reasons. Firstly rather than penalising fans for being fans, it makes discovery and payment part of one process - sharing music is incentivised. Secondly there is a weird thrill to see your first payment come through - it might only be £0.20 per song, but that is essentially someone handing over hard cash to YOU for YOUR great taste. And thirdly it socialises what what (bizarrely) a very solitary pastime. Music itself (creation of, listening to, talking about, organising life around) is extremely social, but the actual physical act of buying it (or downloading it, or borrowing your mate's hard drive full of it, or whatever) is highly solitary since the demise of the music shop. Services like Spotify (lowering the barriers to access to music) and LastFM (the best social discovery system that has been invented to date) get you only as far as hearing music, not buying it. MFlow makes buying music social.

I'd love to know how the payments are structured on the other side though - are musicians going to see any of the potential revenue? Or is their work only going to be licensed in future keep the unnovation-hungry record companies alive for another year?

I think Mflow launches next week some time, but if you want to try it before give me a shout

Ideas that can be advertised

I've written about moving from advertising ideas to ideas that can be advertised a fair bit recently, but Gareth Kay sums up exactly what that means and why it is important in this 5 minute call to arms for the communications industry. There are some great quotes, drawing on Andrew Ehrenberg and Mark Earls:

We should be Bower Birds not peacock tails

Ideas that do... that do things with and for people, not at and to them

Ideas that aren't advertising ideas, but ideas that can be advertised

We think we have to change minds in order to change behaviour, when in fact the opposite is true..

Anyway... you should watch it

(HT to Jon Howard)

Record Companies, Bands and the concept of value

(Image used with thanks)
I've never really believed that telling people not to do things was a good way to stop them doing them. The War On Drugs for example has been pretty comprehensively won. By drugs. We are not a logical economically minded species, so changing how we behave changes how we think, not vice versa. And the simplest and most effective way to change how people behave is to make it worth their while - to give them something of value in return.

The idea of enforced behaviour change is in the news at the moment as the Digital Economy Bill has among its aims the toughening of copyright law online. In fact, this is seen as such a significant issue for the British economy that the government is willing to sacrifice on our behalf such seemingly useful things as Wifi (which will be too great a risk for any business to operate), fast broadband (which ISPs will be disincentivised from investing in as their focus will be on steaming open our digital mail), and internet access as a human right (as anyone who doesn't have a decent understanding of home network security can be disconnected from the internet in punishment for what their children or neighbours do). The opposition agrees that although there are parts of the bill that are even worse, they will let the copyright law stand because of its importance to the UK creative industry.

So let's ignore for a minute the fact that large parts of the UK creative industry, particularly those involved with music, don't agree, and have a look at the value transaction in a music purchase.

Record companies developed their business model through the scarcity of resources required to create and market recorded music: recording studios, musicians, pressing plants, distribution, access to radio stations to promote. These scarcities have changed beyond recognition since 1999. With a few $$s investment in software, any computer made in the last 5 years is a fully equipped recording studio (no extra software needed if it’s a Mac). No music now needs to be recorded onto anything. Myspace and a bit of talent can break a band far better than any radio promotion (not hyperbole – the Arctic Monkeys are the fastest selling week 1 debut in history). The scarcity problems that the record industry fixed no longer exist. Clay Shirky talks about this disappearance of scarcity problems in answer to Murdoch's claim that "Web users will have to pay for what they watch and use" by pointing out that this is only half of the equation:

“Web users will have to pay for what they watch and use, or else we will have to stop making content in the costly and complex way we have grown accustomed to making it. And we don’t know how to do that.”

In the record industry things are slightly different: most people know how to stop creating in the costly and complex ways of the past, but they still want to charge the same amount of money for the product. Which, like the newpaper industry is freely available elsewhere. But while we are left with a near perfect distribution model, there is still a healthy supply and demand. It's just that the intermediaries, the industrial organisations who previously matched supply with demand, are no longer necessary. Supply and demand in recorded music still have two important discriminators: on the side of the vendor, talent to produce music better than the alternatives, and on the side of the purchaser, convenience to consume that music in the way they want.
(Image by Flickr user Mick Yates - used with thanks)
Talent has always been a scarcity: in fact that is why recorded music was developed - because it was more convenient than using actual musicians. That is a compromise, as having actual musicians play for you is a better experience. But the convenience makes it a worthwhile compromise. However as the creation and distribution of recorded music has become next to frictionless, more people are exposed to more music and demand grows for the scarce experience of live music (witness the growth of festivals - pre-Napster the UK had 2 or 3 major festivals each summer: now we have 2 or 3 major ones each weekend of summer). Now this is crucial in the search for music value, as the musicians who are distributing the most recorded music will be in highest demand for the extremely scarce/valuable live music market. So recorded music is essentially advertising the bit that makes money for performers (with the potential to charge for it if it adds to convenience).

Convenience means portability between devices, and it means always available, and crucially it means participatory and recombinant. Those same computers that record music for free also remix it. So that's another element of value: status ("I created this").
Of course, what that all means is that DRM is the antithesis of value in recorded music. Well let's face it, we knew that anyway, but it is worth bearing in mind as music moves to the cloud (convenient). As Techcrunch pointed out this week, many online music retailers are embedding personal identification in the file so that there is the potential to block cloud uploads of anything that was not purchased online (ripped CDs for instance).

So obviously free music downloads harm record companies, and record companies don't want to be harmed. But no-one cares about the intermediary so much of the BPI PR focuses on the artists themselves. This is all based on the premise that if record labels aren't making as much money then that is bad for the industry. The Guardian have been tracking this closely, and this article lists a range of companies profiting from music even while album sales are falling. While they include Spotify, We7, Nokia, Shazam and Apple, they also miss the more obvious ones: Live Nation, Ticketmaster and O2. What all these have in common is that they are not traditional players in the music market. What they don't all have in common is passing their profits on to musicians. Spotify is useful case study: aside from the slick interface the real stroke of genius that allowed Spotify to scale quickly was to avoid the endless legal wranglings with record labels over payments (at least in Europe - they are still bogged down in the US). This allowed them to quickly access most of the music that you might want to play on the service. And they accomplished this by making sure that those payments went to the record labels rather than the artists, by effectively paying in Spotify stock. This is a cap table for Spotify (from this piece on Techcrunch, which also investigates what price the labels paid for their stock)

Shareholders in Spotify on 10/7 2009
Bolag Andel
Rosello (Lorentzon) 28,6%Instructus (Ek) 23,3%
Northzone Ventures 11,9%
Enzymix Systems (F. Hagnö) 5,8%
Sony BMG 5,8%
Universal Music 4,8%
Warner Music 3,8%
Wellington IV Tech 3,8%
Creandum II LP 3,5%Swiftic (Strigéus) 2,6%
Creandum II KB 2,4%
EMI 1,9%
Merlin 1,0%
SBH Capital (B. Hagnö) 0,8%

Helienne Lindwall in The Guardian suggests that the labels paid roughly 1/1000th of the price that other investors in the service paid. This would certainly have made negotiations on the price per stream simple - they would be kept artificially low to minimise the amount that had to be paid out to artists. Spotify has been removed from the Guardian's Fair Trade Music Business list
So there are grey areas even in the proposed saviours of the traditional music business. And 'value' is very different for fans and artists than it is for the intermediaries. And back to my original point, why won't artificial scarcity (of the kind supported by the Digital Economy Bill) work? Well, apart from it being counter to the way the internet works? The internet (in its earliest guise as ARPANET) was developed as a peer to peer system. One of its early benefits was the potential to maintain government communications in the event of a nuclear attack on the USA. This is because P2P systems route around blockages (an inexact analogy might be to say that they treat blockages as wounds, which they are able to heal). Although consumer access is nowadays based on a server/client relationship mediated by ISPs, the internet remains a global P2P system.

Other than that it won't work because telling people to change their behaviour doesn't work. It's currently not working in France, where total free downloading is up by 3% since the introduction of strict HADOPI laws last year(chart from Arstechnica, stats from M@rsouin, CREM, Universite de Rennes).

and because potential of the internet combined with the creativity of musicians and developers means that there is plenty of value for anyone who has good ideas and talent. So after this little rant I'm going to quit whinging about the record industry, and celebrate great marketing ideas from those creative folks.

Electioneering and the Digital Economy Bill

I don't know a huge amount about economics, politics, etc. Most of what goes on in Parliament passes me by, and I have tended to expect that it is well looked after by people who do know plenty about these things. After having watched parts of the Digital Economy Bill debate this afternoon I now know this to be wrong. So when the debate was about the internet, something that I do know lots about, MPs from all parties seemed utterly confused and ended up supporting a piece of legislation so flawed that it will mean the end of Britain's place as a cultural innovator. Essentially it is a digital economy bill in the same way as the fire brigade is a fire brigade - it is named after what it prevents.

So this has made me question what other legislation there might also be that MPs are actually completely ignorant about. I don't know, as I only know about the internet. But seeing as there is an election coming up, I think we should find out, as I'm currently voting for the bloke in the picture

(hopefully anyone reading this has also been, and will continue to be, campaigning against the Digital Economy Bill, but anyone that isn't aware of it try JP Rangaswami's explanation as an introduction)