Cross Posted at Marketonomy

I’m still deep in the self-imposed exile of stealth startup mode. But there are some fascinating market and business trends in Social Media that I’m closely tracking and happy to discuss in the abstract, especially as they start to intersect with other discussions in the public sphere.

One of the trends that I’ve been analyzing in some depth over the past few months is the dynamic of social media conversations that span traditional market boundaries–geographic, demographic and psychographic boundaries, as well as other boundaries that are not neatly defined, in part because no one has had to really classify them before. But the Internet is a vast melting pot where conversations involve people that never would have connected in the physical world. The way that influences and transforms the discussion is remarkable. And from a market standpoint, it’s game changing.

If you track the social media conversations in any of the hot consumer markets, a lot of the market driving memes emerge in the first couple of weeks. You learn quickly what kinds of questions consumers are asking, what they complain about, what they hope to see in the future. But when you follow those conversations across many different channels over a few months, some deeper trends emerge that are a clear sign of the future. I’ll give just one example now, but I’ll explore some additional examples over the next few weeks.

One of the clearest market changing trends is the globalization of market conversations. Back in the day when people talked about the Information Superhighway, the reduction of geographic boundaries was one of the most popular tropes that marketers used to signify the new world we were creating. You’d see commercials with a New York executive chatting on a cell phone with a Buddhist monk in Asia, or with a tribal leader in Africa. The exotic contrasts of business suits juxtaposed with colorful costumes made for great marketing imagery. But now that global dialog is a mundane reality, it’s less the mixing of sharply different groups of people online that is changing the market than the reduction of smaller boundaries–the blending of parallel market segments into a larger homogenized whole.

One of the most obvious and striking examples is visible in the automotive market, where hundreds of conversations take place daily on every conceivable channel of social media across the globe. If you follow these conversations for any length of time, you begin to realize just how anachronistic our current marketing landscape is today. Our markets evolved in a world where large markets like Europe, North America and Asia were entirely distinct. As an American abroad, it was somewhat surprising to see entirely different and unrecognizable Fords being sold overseas, or seeing diesel sports cars that you can’t buy in the US. In fact, the cultural and regulatory landscape that evolved in these isolated consumer megaspheres created entirely different but parallel markets. For example,both Europe and North America have evolved environmentally conscious automotive consumers, but in the US we’ve embraced hybrid vehicles while in Europe they’ve embraced clean diesels.

But social media is making these differences seem rather quaint. If you follow the dialog on blogs and forums, you’ll find Europeans talking to Americans, who are talking to Asians, who are talking to Africans, and on it goes. And they’re all asking why we have one thing and you have another, which inevitably leads to why can’t I have what you have. Europeans increasingly want hybrids, and Americans increasingly want clean diesels. Honda recently announced a diesel hybrid for the European market, and within weeks thousands of consumers in North America had signed onto a petition demanding Honda offer the same car in America.

You don’t have to be an ivory-tower marketing guru to see what will happen in the next five years. Automakers will start offering similar vehicles in what used to be sharply defined and isolated market segments, which will have enormous economic benefits for the automakers, and maybe for consumers as the cost of more standardized production and marketing falls. But the longer term future is a little less clear. While the initial impact of global social media seems to lead toward a large-scale homogenization of global consumer tastes, this is in striking contrast to the phenomena of long tail economics. There is plenty of evidence that mainstream tastes often spur a backlash against consumer conformity, and the ability for smaller consumer segments to congeal online does create demand for more highly differentiated products.

It may be that Social Media’s long-term impact is a fundamental shift of scale that defined these large and small market segments. Social media seems to be accelerating the merging of isolated global markets in megamarkets, while what we now now as micromarkets will also grow in a similar scale under the influence of global consumer conversations. In any case, it’s clear that Social Media is creating an enormous transforming influence on consumer markets, and the implications for marketing are just as significant. If you’re not actively following the conversations that are changing your market–beyond just what your customers are saying about your product–you really should be. The future is being written right before our eyes.

Cross-posted at Marketonomy.

This week on What’s Happening in Marketing, I interview Jack Jia, the CEO of Baynote. Baynote is an on-demand provider of software that analyzes customer shopping behavior online to make product recommendations to other customers. As Jia notes in his interview, Baynote doesn’t rely on what consumers say they like, but on what they actually shop for and buy online.

I found Baynote at the Web 2.0 conference last year–not in some flashy booth, but in a vendor mosh pit of small demo tables. Their value proposition was so intriguing, I sought Jack out for an interview. But don’t take my word for it, judge for yourself. As always, these videos are unpaid content, produced by MarketingRev and our friends at Miner Productions.

Cross-Posted on Marketonomy:

This is the second in the set of marketing technology videos I produced for MarketingRev. This week, I’m interviewing Matt Roche from Offermatica, one of the world’s leading optimization companies. As I posted on MarketingRev:

Offermatica is one of the world’s leading optimization companies, offering technologies that help businesses dynamically test and deliver content that resonates most with customers online. As you’ll hear from Matt there are different types of optimization strategies, from multi-variate testing to behavioral targeting and beyond,  but the goal is always the same–to listen to your customers and deliver content that’s most relevant to their interests.

This is a critical area of technology that marketers must understand, and Matt is as incisive and insightful in explaining the technology as any expert in the field. Offermatica also has a great set of resources on its site to explain optimization in more detail.

As always, big thanks to Miner Productions, and their wonderful crew for all the help and support on video production.

Cross-posted on Marketonomy

A few months ago, I started an ambitious project to video tape thought leaders in marketing technology. My good friends at Miner Productions partnered with me to shoot and produce a series of videos for MarketingRev, and we got some great material. But along the way, I got side-tracked with the SocialRep venture and the videos languished on the shelf.

One of my New Year’s resolutions was to wrap up loose ends, and this is definitely the biggest. A lot of talented people gave me a lot of time and support in putting these videos together, and the only way I can show my appreciation is by publishing their work. I’m posting the videos at their intended home on MarketingRev, but I’m also going to publish them here. First up: John Girard from Clickability, who’s been a big supporter of MarketingRev and this video series. Thanks!

I did an interview with Eric Vidal for his WebEx podcast, which is now posted up on PodTech. It’s a little strange being on the other side of the interviewer’s questions–and an eye-opening experience to find I’m not as good at crafting soundbites as I like to expect from my interview subjects. Fortunately, Eric is a good interviewer and keeps the discussion on track. We talked about trends in corporate marketing, social media and marketing technology.

This is mildly interesting. Someone posted a question on LinkedIn’s Q&A section asking people to submit their top 5 overused or overhyped buzzwords. When I checked in, 49 people had responded, which is quite high response for a LinkedIn question. Keep in mind that it wasn’t a mulitple choice, it was an open ended “give me 5 buzzwords you think are overused”.

Web 2.0: 19 votes.
Social Media: 3 votes.

That’s a huge delta. What’s even more interesting: two of the three people who cited Social Media as overused bill themselves as social media experts. Maybe that echo chamber is getting a little too loud.

Cross-posted at Marketonomy:

I had an opportunity to attend the PRSA: Media Predicts event last night, courtesy of my partners at Miner Productions, whose video interviews with the panelists I predict will be the best part of the whole carnival. We’re in the middle of that frothy season of media predictions for what earthshaking business and technology events will transform our lives in ‘08, and this event was among the frothiest. Trumpeted as event not to be missed, where media pundits from the Wall Street Journal, CNBC, Forbes and BusinessWeek would lend us their oracular insights, the evening offered up some truly stunning predictions:

Kara Swisher, BoomTown columnist from WSJ: “We’ll have a recession next year.”
Don Clark, Deputy Bureau Chief from WSJ: “Some of those Virtual World companies will disappear.”
Jim Goldman, Bureau Chief at CNBC: “Companies like Oracle and SAP will do well.”
Robert Scoble: “Apple will launch an iPhone with video.”

There you have it. That’s what nearly 400 people assembled at the Computer History Museum gathered to hear. I hate to say it, but this was the quintessential Public Relations event. More packaging than substance. Much of the panel dialog rambled around this device that a panelist is trying out (Scoble had a Kindle, Swisher hates it), who’s the most out of touch with technology (Goldman still prefers the phone to email? Gasp!), and offhand references to jetsetting and importance (Swisher mentioned at least three times that she was in the UK last week, Scoble sat on a plane with John Edwards).

All fascinating things, truly, but it felt more like an Editor Appreciation dinner brought to you lovingly by the people who have to pitch them. And so the evening ended on helpful tips from the panelists on how to pitch them so as not to annoy them. I saw more notes being taken on those words than anything else said during the night.

Okay, now that I’ve vented–I battled 2 and a half hours of bay area traffic to hear predictions–there were a couple of decent insights from the panel. The money quote was from Kara Swisher, who said “When will Yahoo! get off its sorry ass and do something.” I think the simultaneous sucking in of breath from 400 people shut down the AC. It may have been the only totally honest and unguarded statement of the evening, and spot on. There was a brief thrashing on Widget and Web 2.0 me-too companies based on ad-supported business models–and the accelerating meltdown of the ad industry, which may be accelerated by the recession. Scoble noted the ongoing insanity of having dozens of separately authenticated Web 2.0 tools and the need for some kind of integrated single sign-on, but no one’s holding their breath.

My table companion, John Hamilton from Miner, noted a key between-the-lines insight for the evening. The one thread that ran mostly under the surface the whole evening, but kept reappearing as a subtext, was the importance of video. Sure there was a brief discussion about the trend toward broadband video on mobile devices, but it was the frequent references to video as asides in other discussions–and people video blogging parts of the discussion with their phones–that had more predictive weight than any pronouncements from the panel.

If you want to catch the video, and other discussions of the event, check out the PRSA site.

Update: Louis Gray has a much more upbeat assessment of the evening than me. He’s both a better reporter and editor than I am, but his spin is also a little too kind, I think.

Jeremiah Owyang has a fantastic post on his blog that you should read and then print and post on your office wall. It is an easy to understand framework for applying social media strategy and tactics throughout the product lifecycle, and provides specific examples at every stage of the lifecycle for how business teams should engage with their customers. It’s not worth your time to read my analysis of the framework, I think it speaks for itself. There’s a lot that could be added–particularly a view from the customer relationship lifecycle–but I can’t tell you how gratifying it is to see a blogger generate this kind of intellectual capital. Kudos Jeremiah. Bring us more.

(I’ll be cross-posting this at Marketonomy as soon as Typepad can find the time to get back to me about my account being down.)

I’ve been watching the furor over the RapLeaf controversy for the past couple of days, really struggling over whether or not to weigh in. If you’ve already been following the controversy, drop down to the next subhead, “The RapLeaf Problem” and I’ll cut to the chase. If you haven’t heard about this yet, RapLeaf is a company that offers an online reputation system, similar to the system on eBay in which buyers and sellers can rate their transactions with each other and thereby establish a commercial reputation. The difference with RapLeaf is that it’s independent of any social network. It works by using an email address as the index for aggregating information available on the web attached to that address—what social networks that email address is attached to, blog posts, Amazon wish lists—a whole host of information that creates a pretty compelling profile of the owner of that email address. You might be surprised to plug your email address into RapLeaf and find much of your online life laid bare.

RapLeaf claims to have 50 million email addresses around which it has developed substantial profiles. If you’ve never heard of RapLeaf, it’s one of three venture-backed startups that all in some way tap into RapLeaf’s IP. The other companies include UpScoop which encourages users to search their friend’s activities by entering their email addresses, and TrustFuse, which sells profile data gathered by the other two companies to 3rd party marketers. ZDNet published an article about these three companies, criticizing the sale of profile data and calling into question how RapLeaf builds its profiles. Apparently it takes more than just trawling search engines, and can entail burrowing or masquerading on major social networks and other commercial sites to leverage those system’s internal search tools to flesh out profiles. The social networks in question, like FaceBook, MySpace and LinkedIn, all deny any business partnership that exposes user data to RapLeaf.

“Rapleaf’s Hoffman said that the company finds profiles through the e-mail search at certain sites, including MySpace, LinkedIn, Facebook and Amazon. MySpace, for example, lets visitors find a profile by e-mail address or first and last name. But for other sites, Rapleaf employs a “secret sauce,” according to Hoffman. It’s not always easy either. Hoffman said the company hasn’t figured out how to crack into accessing members on Digg, for example, even though it would like to.”

The controversy really blew up this weekend after some bloggers noticed emails coming from RapLeaf notifying them that someone had searched their email address, and inviting them to return to RapLeaf’s site to “take control” of their profile, which by the way, requires registration and the divulging of more profile data. A few bloggers cried foul, some charging RapLeaf with heinous spamming, Scoble claiming that RapLeaf was selling email addresses to marketers. Pandemonium ensued, and RapLeaf found itself living a WalMart. But RapLeaf is smarter than WalMart and its PR firm Edelman. Much smarter.

RapLeaf followed the crisis management playbook from PR 2.0, Social Media Edition. The CEO wrote a long and involved apology on the RapLeaf Web site, opened it up to comments, and provided links on their post to all the bloggers frothing over the scandal. Radical transparency excellently played.

But something isn’t right here. And let me disclose why I’m struggling over weighing in. First, I know a few investors in RapLeaf that probably won’t be too happy over my spouting off. I don’t know Auren Hoffman, the CEO of RapLeaf, but we’ve met a couple times. Secondly, I’ve certainly had my own business transactions that people could criticize, and I’m not eager to start throwing stones. But there’s something at the core of this issue that I think needs a lot of open discussion and debate.

The RapLeaf Problem
What concerns me about the RapLeaf story is not the selling of email addresses and the scary threat of more spam. Judi Sohn effectively extinguished that flaming chorus . My concern also isn’t solely centered on what Sohn properly criticizes—the mass accumulation and sale of personal profile data to marketers. My concern is over something I haven’t seen anyone address, and which Auren, in his apology for all apparent transgressions, doesn’t address at all. Something that I think effectively demonstrates that Auren is a hell of a lot smarter than many of the people flapping their arms and hyperventilating about this whole debacle.

It’s not the emails. It’s not the profiles. It’s the tantalizing invitation to put your friend’s email addresses into a system to check on their activities or weigh in on their reputation, and in the process update a massive database of the Real social network—the universal web of social connections linked through online identities that transcends any one application. You can have some fun with the paranoid conspiracy potential here—I mean, being able to cross-reference social network links with profiles and queries would be the dream of any mercenary marketer, not to mention any tin pot police state. Hell, AT&T and Verizon have seats at some powerful backroom tables based on the consumer information they have at hand. But even without going into dark ruminations about intent, the simple fact is that RapLeaf is encouraging users to expose trusted information in a way that is purely designed to be exploited for a profit without being transparent about how that profit is made. At minimum, putting in a friend’s email address exposes them to being profiled, packaged up and sold to some faceless third party, including their social associations. And it’s artfully designed to be viral—how else did a small startup gain 50 million email addresses?

What troubles me in this whole debacle is not that it’s sinister, though it is a little dark for my tastes. It’s playing on a number of levels to draw users into a process that seems fundamentally at odds with the social media trend—and ironically, or perhaps cynically, with RapLeaf’s own brand. Both are based on a significant measure of transparency and trust—on leveraging the power of the internet to make more meaningful connections with new people, new friends and new ideas. Having a way to measure reputations in this brave new world is certainly critical. But damn, I don’t want to learn the company behind the reputation software is gathering and selling much more than I thought I was sharing. Such an attitude toward consumers seems right in line with the exploitive trends in business and marketing that social media is trying so hard to overthrow. And quite frankly, it’s not very helpful for marketers either. Instead of finding a proxy like RapLeaf to build dubious profiles of consumers for more efficient targeting, marketers should be focused on, you know, like, actually building meaningful ties with their customer communities. But hey, missing the whole meaning of the biggest trend in a generation goes a long way in explaining why the average life expectancy for a CMO these days is 18 months. It’s natural selection in action.

In some ways this whole kabuki routine is really kind of amazing when you stop to think about it. For all the power and promise of social media, its Trojan Horse could turn out to be a reputation management system. It’s nearly poetic.

Cross-posted at Marketonomy.

Arun Rajagopal has a great series unfolding on his blog that he’s calling The Social Media Challenge, in which he’s trawling the Internet to parse the meaning and practice of social media with a beginner’s mind. It’s a good roundup of ideas and theories with a lot of good links.

Arun sent me a link and we started a conversation, and I want to bring that conversation into a broader dialog because he touches on a lot of important issues. The one that sparked my interest today was a link he sent to Gavin Heaton’s blog, and a discussion about what marketers need to do to run effective campaigns in the age of social media. It’s a good post. Gavin obviously has a strong grasp for connecting lofty concepts with tactical marketing execution.

But in all this discussion about how marketers need to be effective, there’s an element that often seems missing.

Marketers are striving to understand social media in terms of the tactics and the technology. They’re trying new things, mashing them up with old things, and trying to figure out “what works”. This is all good, however it misses one fundamental point about social media. Its popularity stems from the power people have to easily connect and share ideas based on their interest and passion. It’s relevant to marketing not because of the great opportunity it presents for marketers to more effectively reach consumers. That’s a marketing-centric view of the world, and it isn’t marketers who put this juggernaut into motion. It’s relevant to marketing in large part because it demonstrates how disconnected marketers have come from consumers, and gives rise to the very real prospect that marketers can be dis-intermediated from much of the purchase decision.

In the context of commerce, people are connecting online because they can get much better information from their peers than they can from marketers. As tactically effective as marketers might become at joining those conversations, they won’t be materially effective if they’re joining communities to put the same crap over on consumers they have with Advertising and Direct Response for the past century. It’s the age-old metric driven mentality that led marketers to believe that gaining 1.5% conversion rates was a great success, while dumping the remaining 98.5% over the transom. I don’t know what it will take for marketers to understand that consumers want value, not conversion tactics, and social media gives them a choice.

I often hear social media pundits talk about the importance of “listening” as part of true engagement. It’s true. But we’re not talking about going through the motions of listening. We’re talking about hearing and understanding what your customer communities have to say. I think all of the points that Gavin makes in his post are spot on, but they have an underlying pre-requisite. Before you can carry out any of those tactics successfully, you have to be a member of your community, not a mole. You have to have a real interest and passion that connects you with people in your customer community–not just an interest and passion for converting them into dollars. People have a remarkable capacity to see through marketing. They’ve had a lifetime of practice.