social media – down the rabbit hole

Social Media – Down the Rabbit Hole

Rick Mans - Social Media Evangelist

The rabbit-hole went straight on like a tunnel for some way, and then dipped suddenly down, so suddenly that Alice had not a moment to think about stopping herself before she found herself falling down a very deep well.

Either the well was very deep, or she fell very slowly, for she had plenty of time as she went down to look about her and to wonder what was going to happen next. First, she tried to look down and make out what she was coming to, but it was too dark to see anything; then she looked at the sides of the well, and noticed that they were filled with cupboards and book-shelves; here and there she saw maps and pictures hung upon pegs.

http://digitalcitizen.ca/2010/03/02/alice-in-wonderland-movie-wallpapers-collection-1-1024-x-768-pixels/

Average 18% revenue growth during the crisis

Background

3. Business Adoption

1. Hype

In 2005, the term Web 2.0 took off, giving a name to a nascent product category and a marketing lift to fledgling vendors. Dense or imprecise definitions of the phenomenon also gave rise to opportunistic startups looking to ride the wave of giddy exuberance. In all, Google now turns up more than 18 million hits for “Web 2.0;” the O’Reilly- and CMP-hosted Web 2.0 Summit and Web 2.0 Expo are among the most popular tech conferences today; and, in 2007, the World Economic Forum in Davos, Switzerland, held a series of panels on the impact of Web 2.0.

Businesses have by no means sat on the sidelines these past four years. Large enterprises such as McDonald’s, Northwestern Mutual Life Insurance, Wells Fargo, and General Motors have all made heavy use of Web 2.0 technologies for customer and prospect outreach, as well as internal worker productivity and collaboration. The rest of the market is quickly catching up — 56% of North American and European enterprises consider Web 2.0 to be a priority in 2008, and adoption of major Web 2.0 technologies is expected to grow at a healthy clip as a result.

Background

In 2006 and 2007, mainstream media caught on to Web 2.0, driven in large part by major acquisitions in the space — News Corporation bought MySpace.com for $580 million in 2005, and Google bought YouTube for $1.65 billion in Google stock in late 2006. There are now almost daily articles in publications like The Wall Street Journal, The New York Times, and BusinessWeek touting the virtues of, marking the stumbling blocks for, and explaining how businesses and consumers alike should approach Web 2.0. Time Magazine even went so far as to declare “You” the Time “Person of the Year” for 2006 as a result of Web 2.0- enabled communities and collaborators.

2.M

edia

Co

vera

ge

Hype Cycle for Social Software

The world always changes

MANAGERS WERE AFRAID EXCEL WAS TO STIMULATE WORKERS TO MAKE SPORTS- OR GROCERY LISTS DURING WORK HOURS

Social tools a disruptive technology?

The World Wide Web has evolved from content oriented to interaction oriented over the past few years

Features

The Web as a Platform– Nowadays in the second

phase it can be used as a common development medium

Modularity and Open Source provides the basis for continuous improvement

Widespread participation through ease of use: people creating the content

Fast, interactive, and personalized

Network-based and community-centric

The Web guided by Common Sense– In a future phase it could

connect databases and thereby make intelligent choices for the user

Going from a Web of connected documents to a Web of connected data

Less of a catalog and more of a guide

Taking advantage of increasingly powerful computers that can quickly and completely scour the Web

Web 1.0Content oriented

Web 2.0Interaction

oriented

Web 3.0Intelligence

oriented

The Web as a series of Static pages– The World Wide Web start-up

phase focused on building the Web and making it accessible

Setup of protocols, standards and languages

Creation of Web sites, Web browsers and key portals by organizations

Internet access through Internet Service Providers

Feat

ures

Time

Features

Features

I don't believe there's an atom of meaning in it.http://digitalcitizen.ca/2010/03/02/alice-in-wonderland-movie-wallpapers-collection-1-1024-x-768-pixels/

Just don’t do versioning

Technology and social factors have converged over the past few years to create a phenomenon called social computing

TECHNOLOGY Cheap hardware and software reach the masses. Simple devices that anyone can operate.

SOCIAL CHANGE Consumers look for cost and time efficient technologies, ways to make their voices heard. Younger techno savvy generations pioneer the use of personal networks and viral communication.

Source: Forrester (2006) – Social Computing.

Another big switch

Publishing is complex and limited to few traditional media and online

merchants

Value is created by aggregating content

(portals)Easy and free publication for all

Value is generated by tools allowing to publish easily

Mai

nly

narr

ow b

and

Mai

nly

Broa

dban

d

2004 2005

Traditional media

Alternative media

Google search

Flickr

Wikipedia

netvibes

Read Read / Write

Broadband is (becoming) a right in Spain and Finland

On a Global Scale, Internet Adoption Has Been Quite Significant

100 billion Number of clicks per day 55 trillion Links on the Internet

5%Percentage of global electricity used for the Internet 90 trillion Number of

emails sent in 2009 81% Percentage of emails that were spam

200 billion Number of spam emails per day (assuming 81% are spam).1 million IM messages per second 8 terabytes Traffic per second 234 million Number of websites as of December 2009 47 million Websites added in 2009

Social Media statistics• 24 – Hours of video uploaded every

minute onto YouTube• 600k - new members on Facebook

per day• 900.000 -The number of blogs posts

put up every day• 700 million – The number of photos

uploaded per day on Facebook• 400 million – People on Facebook.• 50% – Percentage of Facebook users

that log in every day.• 500,000 – The number of active

Facebook applications.• 84% – Percent of social network sites

with more women than men.

• 1,73 billion – Internet users worldwide (September 2009).

• 18% – Increase in Internet users since the previous year.

• 126 million – The number of blogs on the Internet (as tracked by BlogPulse).

• 27.3 million – Number of tweets on Twitter per day (November, 2009)

• 57% – Percentage of Twitter’s user base located in the United States.

• 5 million – People following @britneyspears (Britney Spears, is Twitter’s most followed user).

http://www.flickr.com/photos/naturalturn/3264726560/

THE END OF THE WEB AS

WE KNOW IT

Social Media is a set of communication and collaboration technologies adopted by people in their daily lives

Social networks: Social structures of individuals who are bound together by common values, visions, ideas, friendships or interests

Social Media is:

Human interaction in a virtual world

Who are YOU?' said the Caterpillar. This was not an encouraging opening for a conversation. Alice replied rather shyly, 'I -- I hardly know, sir, just at present -- at least I know who I was when I got up this morning, but I think I must have been changed several times since then.'


Your generationGeneration Y, The Millenials, Digital Natives… the future generations are infinately

connected, born and raised digital, and favour values such

as connectedness / community, environmental awareness, authenticity,

freedom and friendship above all else.

What does this mean for a company

• Cut and paste Generation: Today’s youth create their own authentic style but combining different styles.• Generation Search: S=searching and sharing, E=equilibrium, A=achieving, R=rules, C=commitment, H=harmony.• My Media Generation: Today’s youth have three basic needs: community, selfexpression and personalisation; the first 'global' generation That can

customize everything to its own taste and wants. • Generation Einstein: Todays youth is smarter, stronger and more social: the first positive generation!

http://opc4.kb.nl/CHARSET=ISO-8859-1/DB=1/LNG=NE/LRSET=1/SET=1/SID=bc998edf-2/TTL=1/SHW?FRST=4



http://www.kliktheteenbeetje.nl/carl_rohde.asp

http://www.kliktheteenbeetje.nl/carl_rohde.asp

http://yhoo.client.shareholder.com/ReleaseDetail.cfm?ReleaseID=174993

http://yhoo.client.shareholder.com/ReleaseDetail.cfm?ReleaseID=174993

http://www.keesie.nl/generatieeinstein/summary.asp



Generation VGeneration Virtual is used to describe a growing online culture in

which people participate, often anonymously, through

personas in a flat, virtual environment. Generation Virtual is not

defined by age, gender, social demographics or geographic

location. It is based on demonstrated accomplishments

(merit) and an increasing preference for the use of digital

media channels to discover information, build knowledge

and share insights.

The Business Impact of Social Computing on Marketing and 'Generation Virtual‘ – Gartner ID Number: G00158087

Or in a more visual wayMultiple Online Personas

use of digital media

genderage

geography

demonstrated achievement

accomplishments

social demographic

“Twitterati”“Clouderati”

NetocracyA portmanteau of internet and aristocracy, netocracy refers to a

perceived global upper-class that bases its power on a

technological advantage and networking skills, in comparison to

what is portrayed as a bourgeoisie of a gradually diminishing

importance.

Consumers on the W

eb 2.0

But then, shall I never get any older than I am now? That'll be a comfort, one way -- never to be an old woman -- but then -- always to have lessons to learn!


Teens aren’t that Internet savvy

Social media usage has gone mainstream attracting the older age groups as well

• Social media use

Distribution of Ages of Facebook Users, Worldwide, January 2005-09

Chart Title

January 2005 January 2007 January 2009

In the US, 41% of Facebook users in March 2009 were between 25-

44 years old

0%

5%

10%

15%

20%

25%

5%

10%

15%

18 24 30 18 24 30 40 50

5%

18 24 30 40 50 65 years old

Facebook getting older, Twitter getting younger

Facebook is seeing a strong rise in activity from an older demographic…

…While Twitter appears to be exhibiting the opposing trend

Facebook Users by Age (%), US, Oct 2007 – July 2009 Unique Visitors by Age (%), US, July 2008 – July 2009

Source: Nielsen, Global Faces and Networked Places, March 2009; Comscore press releasesNote: Member Community implies Social Networking and Blogging websites

Oct 07 Jun 08 Jan 09 Jul 09

19.2% 16.6% 13.5% 10.2%

62.2%

54.0%

40.9%

26.0%

14.3%

21.2%

26.8%

26.1%

3.4%7.0%

16.6%

29.3%

8.5%

0-17 18-24 25-34 35-54 55+

Jul-0

8

Aug-

08

Sep-

08

Oct

-08

Nov-

08

Dec-

08

Jan-

09

Feb-

09

Mar

-09

Apr-

09

May

-09

Jun-

09

Jul-0

9

2% 2% 2% 2% 3% 3% 3% 3% 3% 3% 4% 5% 5%6% 6% 6% 5% 6% 7% 6% 6% 7% 6% 7% 9% 10%12% 17%

9% 8% 11% 8% 9% 10% 10% 13% 15%14% 15%

28% 20%

14% 18%19% 18% 15% 16% 15%

17%18% 17% 16%

32%31%

41% 38% 35% 38% 40% 39% 38% 34% 31% 29% 28%

19% 24% 28% 27% 26% 26% 27% 27% 26% 26% 25% 25% 25%

2-11 Years 12-17 Years 18-24 Years25-34 Years 35-54 Years 55 Years+

"Take some more tea," the March Hare said to Alice, very earnestly."I've had nothing yet,“ Alice replied in an offended tone: "so I can't take more.""You mean you can't take less," said the Hatter: "it's very easy to take more than nothing.”


The LONG TAIL of music

The decline of traditional media

• 90% of the people prefer skipping television ads

• 65% of the people believe that there is an advertising flood on TV

• 56% of the people avoid purchasing products from heavy advertisers

• Every $1 spent on advertising results in a sales return of meager 54 cents

• Only 18% of TV ads generate positive ROI for companies

Consumer media consumption habits are radically changing

US Daily and Sunday circulation (mn)

Newspaper circulation is also declining

2004 2005 2006 2007 200845.0

50.0

55.0

60.0

Total daily circulation Total Sunday circulation

% change in US ad revenue, 2007 to 2008 across media

-20

-15

-10

-5

0

MagazinesAudio NewspapersNetwork Local TV

…causing marketers to move away from traditional media

Per

cen

tag

e g

row

th in

20

08 %

Relative Change in the Primetime Viewership of Television Channels, US

Primetime television viewership of major channels is decreasing

The shift away from traditional media has diminished the effectiveness of traditional

marketing efforts

-30

2006-07

0

-20-10

1995-96 2001-02

-40-50

%

NBC FOXCBS UPNABS

The rise of social media

“In a typical week, how many hours do you spend on each of the following?”

Internet use is growing exponentially, while use of all other media is stagnant or shrinking

Time spent online will continue to increase as all other forms of media are being made available online. Subsequently, social media will follow as it is a global media distribution hub.

Time Spent (hours per week), US

Social communities are attracting a significant part of consumer time spent online

Base: 230,000 US Internet Users and 30,000 sites

0 5 10 15

Reading Magazines

Reading Newspapers

Listening to the Radio

Using the Internet

Watching TV

Hours per week

2004 2009

% Change(2004 to 2009)

0 %

117 %

-17 %

-6 %

Search

E-mail

Videos/Movies

Member Communities

-18%

Base: 47,496 US Adults

Source: Forrester, “The State Of Consumers And Technology: Benchmark 2009”. Nielsen: The Global Online Media Landscape, April 2009.

0

5

10

15

20

25

2003 2004 2005 2006 2007 2008 2009

Social networking websites have evolved from basic one-to-many text communication tools to highly interactive platform-agnostic services

1995-02

Bulletin BoardsBasic one-to-many text communication forums

2007-08 20092005-062004-052003-04

Profile & Content-based Social NetworksMany to many communication platforms

Microblogging based Social NetworksCommunication through status updates

Mobile Social NetworksSocial networking on the mobile platform

Pervasive Social NetworksAcross platforms such as TV and gaming consoles

Have largely remained the same

What is your business model

So What?

- The value of music has dramatically fallen. I used to pay nearly $20 for a CD with about 10 songs or about $2 per song. Now I use Spotify and pay just €4.99 per month for all music I want to stream to my ears

- Movies and TV shows cost less to watch. I used to pay Comcast about $60 per month for basic cable service. I ditched the service more than a year ago and watch TV programs through a variety of Internet based services such as Hulu.

- Newspaper and magazines are available online for free. I used to subscribe to daily newspapers and many magazines. I don’t anymore yet I get nearly the same access to those products for nearly free - just the cost of my ISP.

- Telephone communications are dramatically less expensive today thanks to services such as Skype and other VOIP based products.

Why you need other peopleBut the long tail is a decidedly mixed blessing for creators. Individual artists, producers, inventors

and makers are overlooked in the equation. The long tail does not raise the sales of creators

much, but it does add massive competition and endless downward pressure on prices. Unless

artists become a large aggregator of other artist's works, the long tail offers no path out of the

quiet doldrums of minuscule sales.

One solution is to find 1,000 True Fans. While some artists have discovered this path without

calling it that, I think it is worth trying to formalize. The gist of 1,000 True Fans can be stated

simply:

A creator, such as an artist, musician, photographer, craftsperson, performer, animator,

designer, videomaker, or author - in other words, anyone producing works of art - needs to

acquire only 1,000 True Fans to make a living.

http://www.kk.org/thetechnium/archives/2008/03/1000_true_fans.php


Your Brain Can Only Handle This Many Friends

150

IN MARKETING OR POLITICS, THE WEAK TIES ENABLE REACHING POPULATIONS AND AUDIENCES THAT ARE NOT ACCESSIBLE VIA STRONG TIES.

The Strength of Weak Ties – Mark Granovetter

1000 True Fans



I PREFER TO MAKE OTHER PEOPLE FAMOUS, AS IT SCALES BETTER.

Make it scalable

"Would you tell me, please, which way I ought to go from here?""That depends a good deal on where you want to get to," said the Cat."I don’t much care where--" said Alice."Then it doesn’t matter which way you go," said the Cat."--so long as I get SOMEWHERE," Alice added as an explanation."Oh, you’re sure to do that," said the Cat, "if you only walk long enough.“


Social Media GoalsSMILE Activities

Supporting

Meshing

Interacting

Listening

• Help customers and let customers help themselves and others• Ensure there is a platform for them where they can find you, the brand,

and other customers

• Integrate customer feedback and input in your product cycles• Create a place where customers can provide input on your product and

where they can see the result.

• Start solving real world problems• Create an environment that promotes and enables co creation• Use a platform in which you can interact with your customers

• Doing web care is a good way to get to know what is said about your products

• Give customers a platform on which they can share their thoughts.

Evangelizing• Provide customers a home base with tools so they can promote you / your

products• Create easy promotion kits that can be reused over and over again.

Match your goals with those of your (potential) customers

Enagement / Brand building

Information search

Need / Want Recognition

Evaluation

Purchase

Postpurchase

Provide context

Promote products

Trust / transactions

Satisfaction / loyalty

Use the goals in

the SMILE-model

to translate

your goals

Model inspired on: The Business Impact of Social Computing on Marketing and 'Generation Virtual‘ – Gartner ID Number: G00158087

YOU SHOULD HAVE STARTED 6 MONTHS AGO

If you want to have success with social media right now

EVERYTHING YOU DO SHOULD AT LEAST CREATE THE BEGINNING OF A RELATIONSHIP

When you are in social media

IF YOU DON’T EMBRACE THE WEB, IT SHOWS YOU DON’T CARE

If you don’t understand the web and strategic application as a marketer, PR professional or

member of the media, it shows you don’t care. There’s no way around this, if you truly cared

about your profession and craft you’d embrace what’s new and ultimately better as opposed

to rallying against it or outright ignoring the market. The web isn’t new or novel, and if you

think it is you’ve been too stuck in your ways to see the most clear trend of the last

century. Analog has no future in a connected society.

People trust peopleTeens don't hate advertising, but they rely more on friends. More

than twice as many teens as adults — 38% versus 17% — say

advertising helps them decide what to buy. That may sound

encouraging, but marketers must also take into account that, at the

same time, nearly twice as many teens as adults (47% versus 25%)

rely on recommendations from friends and family. They are also

far more likely to spread the word about products they like (67%

versus 39) Blending advertising with social marketing is absolutely

critical for marketers targeting this segment.

"You've got no right to grow here," said the Dormouse."Don't talk nonsense," said Alice more boldly: "you know you're growing too.""Yes, but I grow at a reasonable pace," said the Dormouse: "not in that ridiculous fashion."


Social media websites are fast overtaking traditional sites and online activities

Social media websites have penetrated the Top 10 in traffic

Take up a significant time of online use

And are forever changing the ways the world communicates

Rank 2005 2009

1 Yahoo Google

2 MSN Facebook

3 Google Yahoo

4 Ebay YouTube

5 AmazonWindows Live

6 Microsoft Wikipedia

7 MyspaceBlogger.com

8 Google UK MSN

9 AOL Baidu.com

10 Go Yahoo JP

Usage across the US, Europe, Australia and Brazil

Global online usage, 2008

0

50

100

150

200

250

300

350

Social Network Use

Email Use

+21%+31%

20092008

Users in Mn

6%14%

16%

35%

8%

22%

Shopping & Travel

Social Communication

Other

Business & Education

Communication

Entertainment & Leisure

Category did not exist 4 years ago

Top 5 Social Networking Websites Based on Unique Visitors, 2005-2010

MSN Groups

Classmates

AOL Hometown

Windows Live

MySpace

MySpace

Facebook

Classmates

AOL Hometown

Windows Live

Facebook

MySpace

Twitter

Linkedin

Classmates

2005 2007 2009

1

2

3

4

5

Facebook

Twitter

MySpace

Classmates

LinkedIn

2010?

The World is Not About Facebook

" I have an excellent idea. Let's change the subject. “ http://digitalcitizen.ca/2010/03/02/alice-in-wonderland-movie-wallpapers-collection-1-1024-x-768-pixels/

Social media ranks over traditional media channels especially in terms of consumer interaction and costs

involvedAttractiveness of Media Channel

Cost of Development

Traditional Media Social Media

Influence on Purchases

Business Development

Brand Awareness

Traditional media involves significant investments. Cost of running a social media campaign can be 10 times lower than launching a 30 second TV ad

Commentary

Traditional media offers limited opportunity to consumers to influence purchase decisions of others

Both traditional and social media are equally valuable in increasing brand awareness. However, the credibility of brand advocacy is higher for social media

Both media are equally competitive in developing business and show similar conversion rate, however, the cost of business development is very high in traditional media as compared to social media

Evolution of Marketing

Highest Lower than in the previous scenario

Lower than in the case of traditional marketingCost

Consumers can only look and listen

High; consumers connect both with companies and each other

Low; ads appear by specific searches and “clicking” may offer more info

Level of Interaction

Reach/Scope

Consumers

TV, Radio, Newspaper, magazines,

Direct Mail, etc.Company

Traditional Marketing“Pre Internet Explosion”

Consumers

Paid placement

online, paid search

listings, online classifieds,

etc.

“The World is Online”

Consumers

Social Media

“ Personalized Internet”

Wide; usually geared for the general public

Narrow; more focused on specific consumer interests

Narrower; personalized and custom tailored content

Communication

Company Company

One-way communication One-way communication Two-way communication

Illustrative Metrics

Insights

Social media challenges – ROI measurementType of Metrics

Benefits

Shortcomings

Reach

Number of hits Number of unique

visitors Number of subscribers Ad impressions

Number of people exposed to the social media activity

Easy to measure Allows comparison with

competitors as most companies reveal it

Very basic in nature, provide little information about consumers

Efficiency

Number of referral Number of comments Time spent on website Cost per click Cost per action

Consumers feeling about products and services

Cost comparisons with other online tools / channels

Lacks the long-term view on consumer attitude and behavior

Consumer

Satisfaction with brand Willingness to

recommend Frequency of visit Variation in the amount

of purchase over time

Consumer attitude and behavior towards marketing activities

Long-term view on consumer attitude and behavior

No insights about effectiveness of different media channels

Cross Channel

Return on marketing objectives

Sales impact from an initiative

Customer profitability

Effectiveness of different tools / activities

Measures synergy between different channels and effectiveness of each

No insights on consumer sentiments, need accurate financial info to build this metrics

Marketers must go beyond traffic to measure ROI and should develop a collaborative approach in line with company’s objectives

Source: The Interactive Marketing Metrics You Need: Forrester

Despite advertising being the mainstay of social networking, newer revenue models are beginning to

appear

2008 2009 2010 2011 2012 2013

1,200 1,300 1,300 1,400 1,500 1,600

502627 811

1,0051,211

1,40529%33%

38%42%

45%47%

Advertising Spend Paid SN Sites Revenue

Paid Revenues as % of Total

Advertising Spend and Paid1 Revenue, Social Networking Sites ($ Mn), US, 2008-2013 Virtual goods appear to be the most promising model of social

network monetization:

– The market for virtual goods in the US is estimated to double to over $2 bn in 2010

The virtual goods space is already witnessing significant activity:

– EA purchased Playfish, a social gaming developer for $275 Mn in Nov 2009

– Zynga, makers of popular games such as Farmville, raised over $180 Mn on an estimated revenue base of over $300 Mn

Internet advertising is showing signs of decline, forcing developers to push for paid approaches:

– Social gaming firm Crowdstar abandoned in-game ads in favor of virtual goods

Source: eMarketer, “Worldwide Social Network ad spending”, Mar 2009; Piper Jaffray, “Pay to Play: Paid Internet Services”,July 2009; Reuters, “Virtual goods give Web firms new revenue in ad slump”, Dec 2009

Note: a) Paid services include membership fees, premium features and virtual goods

Subscription based models are emerging as a viable option for niche social networks

Although paid subscribers form a minority on niche social networks such as Xing…

6.73 7.42 8.05 8.68 9.18

1.021.10

1.231.31 1.12

0.610.60

0.700.37 0.36

0.050.06

0.21 0.40 0.138.4

9.210.2 10.8 10.8

Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009

eCommerce (Jobs & Best Of fers) Advertising Other

Revenues by Segment, Euro (Mn), Xing, Q2 08 – Q2 09

…However, they contribute the bulk of the revenues through subscriptions

5,67 6,02 6,45 6,87 7,28

0,47 0,510,55

0,61 0,646,16,5

7,0 7,57.9

Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009

Free Subscribers Paid Subscriber

User Split Between Free and Paid (Mn), Xing, Q2 08 – Q2 09

Over 75% revenues of popular business-user oriented social network, LinkedIn, comes from paid products.

Source: Capgemini TME Strategy Lab analysis; Company websites and annual reports

Increasing consumer need to access social networks on-the-go will drive higher adoption of social networking on the mobile

platformMobile Content Consumption Preferences, Survey

Results, US, 2009Global Mobile Social Networking Sessions

(Millions), 2008-2013E

Music Games Social Networking

Web Search

Instant Messaging

65%61%

58%

52%48%

35%

48%

43%40%

42%

12%

21%

14%12%

15%

iPhone User Smartphone User Average Mobile User

2008 2009 2010 2011 2012 2013

9881,525

2,283

3,425

5,141

7,566

North America Latin America

Asia Pacific Western Europe

Eastern Europe Africa

Middle East

CAGR 50%

Source: Capgemini TME Strategy Lab analysis; Informa,” Mobile Social Networking Forecasts”, 2009; Comsore MobilLens through Morgan Stanley, “Mobile Internet Report”, Dec 2009

Consumers are rapidly scaling up their usage of social networking on the mobile

Note: 1) % of total market refers to the number of mobile users using mobile Internet services during the three-month periods ending May -8 and May-09Source: Comscore, “Social Networks on the Move”, Sept 2009

Consumers are increasing their consumption of social networking on the mobile

Networks such as Facebook are now seeing significant traffic from their mobile users

Apps & Browsing (No Social Networking)

Social Networking

11%

4%

14%

10%

May-08 May-09Average Usage Per Day

27.5

24.0

Visits Per Day

2.3

3.3

27%

150%

Mobile Internet Audience Growth, % of Market1, UK, May 08-09

Usage per day (Mins) and Visits per day, Facebook-on PC and Mobile, UK, 2009

PC Mobile

Increased usage of social networking on the mobile platform is likely to drive mobile data traffic

In the process, they have also succeeded in weaning away users from traditional horizontal portals

Jun 06 Dec 06 Jun 07 Dec 07 Jun 08 Dec 08 Jun 09

6.2%4.6% 4.4% 4.2% 4.0% 3.9%

3.0%

5.4%

5.2%

3.8%

1.4%1.0% 0.6%

0.4%

0.8%

1.2%

1.6%

1.6%1.6%

1.5%

1.6%

0.0%

0.8%

1.4%

1.8% 2.4% 3.2%4.2%

0.1%0.2% 0.8%

2.0% 2.2%2.8%

4.4%

Share of Online Time Spent (%), Global, June 2006-June 2009

Source: Comscore through Morgan Stanley, “Economy and Internet Trends”, Oct 2009

" Sentence first -- verdict afterwards.“ http://digitalcitizen.ca/2010/03/02/alice-in-wonderland-movie-wallpapers-collection-1-1024-x-768-pixels/

Twitter 'costs British economy £1.38bn'

Twitter joke led to Terror Act arrest and airport life ban

Nathalie Blanchard

Guns don’t kill people

What guns do

Earthquake in China

3 minutes VS

3 months

Twitter 'costs British economy £1.38bn'

Talking about last night's Eastenders costs British economy £1.38bn

Eating biscuits costs British economy £1.38bn

Unjamming the photocopier costs British economy £1.38bn

" Off with her head!” http://digitalcitizen.ca/2010/03/02/alice-in-wonderland-movie-wallpapers-collection-1-1024-x-768-pixels/

Social media as killer feature for Motrin

It all began with an online ad posted Saturday (15 november 2008) on the company’s website. It was about “baby wearing” — i.e. carrying a child in a sling or a wrap, rather than pushing them in a stroller or carrying them in your arms. For some parents it is something they do simply because it works. For others it goes far deeper than that — part of a philosophy of being close to the baby whenever possible.

What happened

Wearing your baby seems to be in fashion. I mean, in theory it’s a great idea. There’s the front baby carrier, sling, schwing, wrap, pouch. And who knows what else they’ve come up with. Wear your baby on your side, your front, go hands free. Supposedly, it’s a real bonding experience. They say that babies carried close to the body tend to cry less than others. But what about me? Do moms that wear their babies cry more than those who don’t. I sure do! These things put a ton of strain on your back, your neck, your shoulders. Did I mention your back? I mean, I’ll put up with the pain because it’s a good kind of pain; it’s for my kid. Plus, it totally makes me look like an official mom. And so if I look tired and crazy, people will understand why.

The ad

By Saturday evening they were the most tweeted subject on Twitter. By Sunday there was a nine minute video on YouTube, to the tune of Danny Boy, showing screen shots of the outraged twitter posts interspersed with photos of Moms carrying babies in slings. Bloggers began calling for boycotts. Bloggers asked their readers to alert the mainstream press. By Sunday afternoon a few bloggers and tweeters had gotten the ad agency that created the ad on the phone, to find they didn’t know a lot about Twitter and didn’t seem to have a clue that there was so much anger piling up online

Developments

http://parenting.blogs.nytimes.com/2008/11/17/moms-and-motrin/


How did Motrin respond

By Sunday evening the ad was taken offline by McNeil Consumer Healthcare, the maker of Motrin.

Developments

I am the Vice President of Marketing for McNeil Consumer Healthcare. I have responsibility for the Motrin Brand, and am responding to concerns about recent advertising on our website. I am, myself, a mom of 3 daughters.We certainly did not mean to offend moms through our advertising. Instead, we had intended to demonstrate genuine sympathy and appreciation for all that parents do for their babies. We believe deeply that moms know best and we sincerely apologize for disappointing you. Please know that we take your feedback seriously and will take swift action with regard to this ad. We are in process of removing it from our website. It will take longer, unfortunately, for it to be removed from magazine print as it is currently on newstands and in distribution. -KathyKathy WidmerVP of Marketing - Pain, Pediatrics, GI, SpecialtyMcNeil Consumer Healthcare

The response


# times Motrin was mentioned

Motrin peaked on Twitter


Sony• Fake fan blog: http://www.alliwantforxmasisapsp.com/blog/

• A poorly disguised marketing effort—the URL was registered to Zipatoni (PR firm).

• After discovery Sony responds:

“Charlie” keeps posting his denials, in pseudo hip-hop speak. More than once he writes, “yo where all u hatas com from... juz cuz you aint feelin the flow of PSP dun mean its sum mad faek website or summ... youall be

trippin.”

“Busted. Nailed. Snagged. As many of you have figured out (maybe our speech was a little too funky fresh???), Peter isn’t a real hip-

hop maven and this site was actually developed by Sony. Guess we were trying to be just a little too clever. From this point forward,

we will just stick to making cool products, and use this site to give you nothing but the facts on the PSP. Sony Computer

Entertainment America.”

http://www.alliwantforxmasisapsp.com/blog/

Ketchum and FedEx

This particular Twitter posting came back to bite the agency person from Ketchum

(New York office) who made some unflattering remarks about Memphis this morning before

he presented on digital media to the worldwide communications group at FedEx (150+)

people. Not only did an employee find it, they were totally offended by it and responded to

the agency person. The kicker is that they copied the FedEx Coporate Vice President, Vice

President, Directors and all management of FedEx’s communication department AND the

chain of command at Ketchum. Mr. Andrews, the Ketchum presenter, did not take into

account that many FedExers are native Memphians and are fiercely defensive of their city

and their company.

"Door: Why it's simply impassible! Alice: Why, don't you mean impossible? Door: No, I do mean impassible. (chuckles) Nothing's impossible!"


Facebook increased traffic to Animoto 120xN

umbe

r of E

C2 In

stan

ces

4/12/2008

Launch of Facebook modification.

Amazon EC2 easily scaled up and down to handle additional

traffic

Peak of 5000 instances

4/14/2008 4/15/2008 4/16/2008 4/18/2008 4/19/2008 4/20/20084/17/20084/13/2008

Steady state of ~40 instances

AND HAVE A 400% INCREASE IN ROISpend your budget on different media

Being girl

Procter & Gamble's Being Girl community is an online community targeted at young girls. P&G was able to use this community to market feminine hygiene products in a subtle way to an audience that doesn't want to talk about them. What's very interesting to note is that P&G found community building to be four times more effective than traditional advertising.

1.73 BILLION INTERNET USERSGet to your audience

ALMOST 25% OF THE INTERNET USERS HAVE A FACEBOOK ACCOUNT

Facebook could be interesting

"But I don't want to go among mad people," Alice remarked."Oh, you can't help that," said the Cat: "we're all mad here. I'm mad. You're mad.""How do you know I'm mad?" said Alice."You must be," said the Cat, "or you wouldn't have come here.“


IT’S BIG BUSINESS ON FACEBOOKCurling

639.552 FANS?

Monetization

Ernst & Young can reach out to more than 35000 potential new hires and recruiters on Facebook within minutes.

Facebook as an Intranet

Identity? Facebook Connect!It’s the social graph that counts!

Build your platform on a platform

Farm with your friends

"Now, I give you fair warning," shouted the Queen, stamping on the ground as she spoke; "either you or your head must be off, and that in about half no time! Take your choice!"


H&M

• Rumors about H&M is throwing away unused and unsold clothes

• 1299 respond to these rumors (negatively!)

• 400 people ‘Liked’ the respons of H&M

• H&M reply was effective to prevent a disaster

The White Rabbit put on his spectacles. "Where shall I begin, please your Majesty?" he asked."Begin at the beginning," the King said gravely, "and go on till you come to the end: then stop.“


IT STARTS WITH A RELATIONSHIPNetwork effects

Ford

• 100 Fiestas• 37% of Generation Y• 25% marketing spend

on social media• No Government loan

Dell

In June PC firm Dell revealed it had made a total of $3m from activity on the micro blogging service. Of that $2m was made directly and another $1m was accounted for when traffic to Dell.com was factored in.

The $3m included both 2007 and 2008 when there was minimal Twitter activity, but the 2009 figure ($6.5m) shows real growth that has come during the year the number of people using Twitter within the Dell organisation has increased to somewhere between 100-200.

Some of the strongest growth Dell is seeing is coming from emerging markets. It highlighted Brazil as one area it was doing particularly well.

Dell's operation in Brazil via its @DellnoBrasil Twitter account has generated $800,000 in eight months of activity.

Recession case• 99 cents• Got coverage on Geardiary,

Gizmodo, Engadget, TechCrunch, CNET, Mashable and many more big blogs

• Result:– Broke site traffic record by five

times– All time revenue record– Facebook and Twitter traffic

skyrocketed– In four days 7000 cases

Blendtec

BlendTec increased its sales by 20% by running the often humorous "Will it Blend" Videos on YouTube, blending everything from an iPhone to a sneaker.

Alice: I'm sorry I interrupted your birthday party.March Hare: Why my dear child this is not a birthday party.Mad Hatter: Heavens no. This is an unbirthday party!Alice: Unbirthday? I'm sorry, but I don't quite understand.March Hare: It's very simple. Now, thirty days has Septem -No. wait... An unbirthday, if you have a birthday, then you - [laughs] She doesn't know what an unbirthday is!Mad Hatter: You see, you have 1 birthday a year, how silly, but you have 364 UNBIRTHDAYS each year. Today's our unbirthday.Alice: Why, I believe it's my unbirthday too!Mad Hatter: What a small world!!


MAKE IT AN UNBIRTHDAY EVERY DAY FOR YOUR CUSTOMERS

So How Can Businesses Use Social Media? To Increase Revenue!

Through a rich internet application, BMW offers an extended form of customization for the Mini’s roof

Nike and Apple mashup addresses the community of runners

Lego allows customers to design their own LEGO pieces

Enter new markets Increase customer satisfaction Increase Marketing Effectiveness

Through A Rich Internet Application, BMW Offers An Extended Form of Customization for the Mini’s Roof

• Name: Rich internet application, realized with Macromedia Flash /

Shockwave, integrated into the Mini website www.mini.com

Technology

• Offering customers to design the roof of their Mini themselves enabledBMW to underline the brand image of individualism and uniqueness for the Mini brand• Mini sales have gone up towards the end of 2007, which hints towards good market reception of the current marketing strategy, including the website• The customer input generated (some designs are exhibited in an online gallery after being selected by BMW, but all designs submitted could be saved) could be used to screen for market trends• Impact on the value chain:

Marketing & sales, specifically branding

Impact

Firm infrastructure

Human resource management

Technology development

Procurement

Inbound logistics

Operations Outbound logistics

Marketing and sales

Services

Su

pp

ort

M. Porter’s Value chain

Primary activities

• The roof customization application went online in June 2007

• Actual printing of the roof foil is only available in Italy as of December 2007 for 400 EUR, roll-out in Germany and the rest of Europe is planned

• In the US , the “Mini custom paintjob” application is available.

It additionally allows for design of the whole body of the car, but is

declared to only be for entertainment use, the designs cannot be

bought and actually put on a car

Implementation

• The extended customization through an online application thrives to

make the online experience for Mini customers as interesting and

different from other brands as possible

• By keeping the roof customization option linked to Mini and not

offering it to other brands of the BMW group, brand differentiation is

deepened

Strategic Fit

Nike wanted to create an immediately resonant experience for a broad target market, from marathoners to fitness joggers

Nike+ was born as a multi-channel, multi-sensory marriage of Nike and Apple technologies

Nike+ provides a robust platform of virtual racing, progress tracking, motivational goals and stories, global community comparison tools

BACKGROUND

SOLUTION

1

2

3

HEAR YOU RUN…

SEE YOU RUN…

CONNECT AND CHALLENGE

Sensor in the shoe helps the runner hear through the iPod, the details about pace, time, distance and calories burned

On docking and synchronizing the iPod, Nike+ software loads the workout statistics to their website where the user will be able to track his/her workout progress

Run data can be used to track progress, set goals, motivate runners. win rewards and challenge pals or all Nike+ users

Widgets for setting challenges, goals…

Blog facility for Nike+ users

Link to purchase Nike+ kit and other Nike gear

CUSTOMER CENTRICITY THROUGH BETTER INTERACTION USING WEB 2.0

Nike+ is a unique way to engage with and promote higher levels of brand identity amongst Nike users

Delivers increased value to Nike users through a unique way of collaborating

Engages current and prospective Nike users with uninterrupted and targeted advertising

20% reduction in ad budgets as Nike is moving towards developing its own media network through such technological endeavors

BENEFITS

I

I

II

II

IIIIII

Nike.com

III

Source: MRD Lab Analysis. Nike+ website. ‘Nike does business 3.0’ Phill Butler, 2007.

Nike+ and Apple Working Together to Improve the Experience of Runners

Lego Factory Involving Customers in the Design Process

• Lego had traditionally been surrounded by a highly active constellation of Lego User Groups - fan communities comprising of both adult and young members

• These groups maintained large online presence; operated independently of the company; exchanged and showed creative toy designs and models amongst themselves

• Lego needed to move out of closed proprietary mode and adapt a participative strategy for customer interaction, which would utilize existing user creativity in product design

BACKGROUND

• Lego launched the Lego Factory (http://factory.lego.com) – an online model of engagement for potential and existing Lego users, which allows users to design, share and buy their own customized LEGO models

SOLUTION

• Through the Lego Factory, the company has taken a step further in the evolution of user involvement, building strong brand relationship

• The initiative has created high levels of awareness and interest with the consumers

• The initiative has put Lego a step ahead of competition by moving out of closed proprietary content mode and involving fresh ideas from consumers and community for New Product Development

BENEFITS

THE LEGO FACTORY WEBSITE

- Users interested in custom-designing their own Lego models have to download and install the ‘Lego Digital Designer’ –

- In the designer, the user can drag and drop to create a virtual toy design

- Once the user has created a design, he can upload the same to the online gallery

- Lego approves all designs before they are added to the online gallery, to filter out models for appropriateness for all age groups

- Designer users can then order the bricks needed to make their model, and also customize their own box for the model

- Other users on the site can buy uploaded designs in the gallery, and will receive both the bricks for the model as well as the building instructions

Source: MRD Lab Analysis. Capgemini, “ECR Europe Conference: Future Consumer Presentation”, May 2008. coBrandit.com, “Lego Co-creation Presentation by Mark Hansen: Video”, September 2006. Crowdsourcingdirectory.com, “Co-Creation in Lego Factory”, September 2007. European Centre for the Experience Economy, “Lego’s participative army marches on”, April 2008.

http://factory.lego.com/

Businesses can Also use Social Media to Reduce Costs

A large multination postal group piloted wikis and social networking over its Corporate Intranet to enhance internal collaboration and improve productivity

Boeing used co-creation to reduce development time of new airplane models

Facilitate more effective collaborationReduce email

A large international postal group piloted wikis and social networking over its Corporate Intranet to enhance internal collaboration and improve

productivity

The company corporate intranet serves as an important information platform connecting thousands of employees globally

The Company initiated a corporate intranet improvement project with the aim to:

Personalize the intranet:- Provide customized information based on a user’s affiliation

to a business unit- Provide options to personalise users’ information

environment to better suit their needs Provide faster and easier access to the intranet Increase usage of the intranet

BACKGROUND

Easier access to the intranet with more effective search capabilities has resulted in improved productivity and reduced time

Greater sharing/reuse of intellectual capital and increasing collaboration will enable better and faster business results

Using standardized approach has resulted in reduced operation, maintenance and development cost

BENEFITS

The new portal will be based on the following set paradigms:

- Single vendor strategy

- Open industry standards

- Modular architecture

The portal is expected to have advance features such as:

- RSS Feeds : integration of any content in any context

- Personalized news : subscription, alerts: Filter information flows according to business needs

- WorkSpace (sharing): share documents and knowledge

- Forum: to discuss topics globally, or locally (based on restricted groups or as part of your Intranet-Portal / article)

- Wiki: to enable editing and modification of articles with reduced workflow

- Networking / About Me / My Profile: To enable find colleagues with common profiles, projects and interests

To ease access, the Corporate Intranet will be using Single Sign-On mechanism

SOLUTION

A Capgemini Case

http://images.google.com/imgres?imgurl=http://www.theregister.co.uk/2004/05/13/capgemini_cbe_logo.gif&imgrefurl=http://www.theregister.co.uk/2004/05/13/logowatch_capgemini/&h=96&w=95&sz=6&hl=en&start=5&um=1&tbnid=5RnXRey2XGSDjM:&tbnh=81&tbnw=80&prev=/images?q=capgemini+logo&um=1&hl=en&rlz=1T4GFRC_enUS213US213&sa=N

http://images.google.com/imgres?imgurl=http://www.theregister.co.uk/2004/05/13/capgemini_cbe_logo.gif&imgrefurl=http://www.theregister.co.uk/2004/05/13/logowatch_capgemini/&h=96&w=95&sz=6&hl=en&start=5&um=1&tbnid=5RnXRey2XGSDjM:&tbnh=81&tbnw=80&prev=/images?q=capgemini+logo&um=1&hl=en&rlz=1T4GFRC_enUS213US213&sa=N

• Name: Dassault Product Lifecycle Management suite

• TechnoVision Technology Cluster: Process on the Fly

• The Dassault PLM suite consists of a number of software packages:

Catia (3D CAD design), Delmia (Manufacturing simulation), Enovia

(Product Data Management)

Technology

• Boeing expects PLM to reduce development costs by up to 20%

• With the 787, Boeing is able for the first time to outsource over 70% of

the aircraft’s components while still retaining control over the process

- dozens of suppliers could be integrated from the beginning of the

design phase

• The time schedule for the 787 development will be met almost on time in

2009

• The PLM system prevented costly mistakes early on and allowedfor necessary adaptions

• Impact on the value chain lies within technology developmentand operations

Impact

• 2002: Decision to work with the Dessault PLM suite is made.

6,000 workstations get upgraded to the same software, incurring 120m USD

cost

• 2004: Dreamliner program is approved, development and

manufacturing planning go into the next phase

• 2006: “Virtual Takeoff” of the 787 – design and manufacturing

planning phase is complete

Implementation

• Implementation of Dassault’s PLM system enables the secure execution

of Boeing’s outsourcing strategy, as all processes are linked on a stable

platform and errors in design, manufacturing planning and processes can

be spotted early on

• The PLM execution gave Boeing a significant time advantage over

Airbus, who experienced huge drawbacks from software incompatibilities

that led to wrong development of subsystems

Strategic Fit

Firm infrastructure

Human resource management

Technology development

Procurement

Inbound logistics

Operations Outbound logistics

Marketing and sales

Services

Su

pp

ort

M. Porter’s Value chain

Primary activities

Project Lifecycle Management has proven to be a critical success factor for the 787 Dreamliner development

What Else Can Businesses Do? Use Social Media to Speed Up Time to Market

Through ‘crowdsourcing’, Threadless and Look Zippy are facilitating higher interaction levels amongst consumers in designing T-shirts

Proctor & Gamble now generates 35% procent of new product features through crowdsourcing

Collaboratively develop and launch new products & services Use co-creation for faster and more effective R&D

Through ‘crowdsourcing’, Threadless and Look Zippy are facilitating higher interaction levels amongst consumers in

designing T-shirts

SEE YOU RUN…

‘Crowdsourcing’ provides retailers with innovative co-creation tools in order to:

– generate new designs

– evaluate submitted designs

– sell products via affiliate marketing systems

THREADLESS: A community-based tee shirt company with an on-going, open-call for design submissions, most voted designs are produced

LOOK ZIPPY: An open design competition captures the distributed creativity of users, selects the best designs, and secures binding orders for production

BACKGROUNDSOLUTION

Crowdsourcing enables retailers with a cost effective multi-channel offering, apart from the conventional stores

Facilitates early customer commitment thus reducing new product development risk

Offers ‘exclusivity’ phenomenon to customers as only the ordered few number of tee shirts in a span of two weeks are produced

Eliminates waste and ensures low inventory as production begins once the order is placed

BENEFITS

Get Idea Ready…

Users ideate and create their designs in high resolution formats

Submit Idea…

Users copy their designs in submission templates and fill out ‘submission forms’

1 2

Community Rates and Comments on Idea…

3

Over a fixed period of time, community comments and rates the idea through voting

Winning designs of all sizes and ranges are produced and listed on the website for users to purchase

Winning designs are open for orders for a fixed time period, only binding orders are produced

4 4

Source: MRD Lab Analysis. Threadless website. Look Zippy website. “Collective Customer Commitment and Crowdsourcing: How Look-Zippy is bringing the Threadless model to the next level”, 2006.

P&G’s connect + develop Program facilitated Greater Innovation

• As P&G grew to a $70 billion enterprise, the global innovation model it devised in the 1980s was yielding shrinking success rates

• Their R&D productivity had leveled off, and innovation success rate had stagnated at about 35%, whereas innovation costs were climbing faster than top-line

• While P&G owned a 7500+ strong R&D team, it realized that viable product innovation was increasingly being done externally at small and midsize entrepreneurial companies

BACKGROUND

• More than 35% of P&G’s new products have elements that originated from outside P&G, up from about 15% in 2000

• R&D productivity increased by nearly 60%• R&D investment as a percentage of sales is down from 4.8%

in 2000 to 3.4% in 2006• P&G’s average two-month cycle of generating physical

prototypes and testing them with consumers has reduced to around 24 to 48 hours

BENEFITS

• P&G launched the ‘Connect + Develop’ initiative, tapping into a global innovation network comprising of a host of sources, right from independent innovators to virtual innovator networks such as InnoCentive

• Having a clear sense of consumers' needs, the company identifies promising ideas throughout this network and applies its own R&D, manufacturing, marketing, and purchasing capabilities to them to enhance the rate of innovation

SOLUTION

P&G’s Global Innovation Network

P&G CONNECT + DEVELOP

P&G identifies top 10 customer needs

P&G converts them into ‘science problems and sends into the

network

P&G’s 7500+ R&D team work on solutions suggested and with

internal communities

INNOVATIONS In Areas Of Packaging, Design, Marketing Models, Research Methods, Engineering, Technology, Etc

Source: MRD Lab Analysis. Harvard Business School, Working Knowledge, “P&G's New Innovation Model”. Leveraging Ideas for Organizational innovation Blog, Dr. Kevin Desouza, “ Connect & Develop Innovations the P&G Way”. P&G, “P&G Connect & Develop – Brochure”.

So she sat on, with closed eyes, and half believed herself in Wonderland, though she knew she had but to open them again, and all would change to dull reality--the grass would be only rustling in the wind, and the pool rippling to the waving of the reeds--the rattling teacups would change to tinkling sheep-bells, and the Queen's shrill cries to the voice of the shepherd boy--and the sneeze of the baby, the shriek of the Gryphon, and all thy other queer noises, would change (she knew) to the confused clamour of the busy farm-yard--while the lowing of the cattle in the distance would take the place of the Mock Turtle's heavy sobs.

Lastly, she pictured to herself how this same little sister of hers would, in the after-time, be herself a grown woman; and how she would keep, through all her riper years, the simple and loving heart of her childhood: and how she would gather about her other little children, and make their eyes bright and eager with many a strange tale, perhaps even with the dream of Wonderland of long ago: and how she would feel with all their simple sorrows, and find a pleasure in all their simple joys, remembering her own child-life, and the happy summer days.


Alice laughed. “There's no use trying,” she said “one can't believe impossible things.”“I daresay you haven't had much practice,” said the Queen. “When I was your age, I always did it for half-an-hour a day. Why, sometimes I've believed as many as six impossible things before breakfast.”


Rick Mans

[email protected]+31 6 512 10 144

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