Monthly Archives: January 2009

Twitter and VRM

Positive light A0

I was always intrigued by the idea of VRM: Providing customers with tools for engaging with vendors in new ways. Or as Doc Searls describes it in the Project VRM blog:

“VRM is Vendor Relationship Management. It’s how customers manage relationships with vendors. (Or with other individuals, or with organizations of any kind — such as churches or governments.)”

Basically, VRM allows people to create their personal RFP: Going on a business trip to Austin tomorrow? Send out an RFP to airlines, hotels, rental car agencies, restaurants communicating your travel dates and budget. It saves all of us a lot of aggravation because it will cut down on research times, brands won’t need to waste their money on irrelevant campaigns and a new form of partnership between buyers and sellers will be formed.

While I was preparing for the Twitter panel at OMMA Social, discussing possible business models for Twitter, I was starting to have doubts about my initial proposal:

“Charge each company in the CPC model: Each visit to a corporate Twitter site and each corporate tweet should be charged just like a click.”

Sure, we know that CPM models or contextual ads won’t really work on Twitter. They will be ignored and spell doom for Twitter since the platform would have to rely on traditional advertising to support itself. And that’s the last thing you want to do in the economic environment and the rapidly declining value of display advertising. The CPC idea was intriguing since Twitter has become my personal Google, it’s a self-regulating ecosystem that will punish brands that don’t behave and it’s an amazing opportunity for small, local businesses to connect with people: Get your message out to followers and each click outside of the Twitter Universe to a commercial message goes right into Twitter’s pocket. Mildly intriguing but not a real game changer for Twitter. At the current valuation of $250M, Twitter would have to work with hundreds of thousands of small businesses to be able to sustain this price tag. Sure, a wine shop would pay Twitter $20 for 20 clicks to their special offer. But you need a lot of wine shops to get to $250M. And here comes VRM into play. Doc Searls wrote in the ProjectVRM Blog:

“VRM is about providing customers with tools that make them both independent actors in the marketplace and better equipped to engage with vendors. Those tools are in development. We need to get some of them out there before we can even begin to have arguments about whether or not they’ll work. Fact is, they will or they won’t. But they deserve a chance before we go salting the soils in which they need to grow.”

Do we really need to build new tools? Or is Twitter almost there to be the tool to issue personal RFP’s and become the VRM hub? When you use Tweetdeck, you have basically four streams: Main Stream, Replies, Direct Messages and Groups. You could easily add another column for your personal RFP’s. Brands would gladly pay a fee to receive leads and, whoever, wins the pitch, will pay a sales fee as well. It could go like (the % is my symbol indicating a personal RFP)

%Los Angeles Hotel Rental Car Flight Leaving Austin 1/28 am Returning 1/31 pm 3 Star and up close to Beverly Hills

People would to be able to engage brands on their own terms, could take the first offer or decide to negotiate, become a real partner and not just a target. Project VRM and Twitter should involve the early-adopter crowd that’s still dominating the Twitterverse and let them participate in the product development process, helping all parties to work out the kinks. I’m not sure building new tools is the answer. We have a great tool that aches to expands its capabilities. And the time is ripe for a new way to deal with markets. Why not strike while the iron is hot?

What do you think?

Microsoft missed an opportunity

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Last week, Microsoft posted a profit for Q4 2008 and to celebrate this occasion they laid off 5,000 employees. A post-industrial reaction to an information age problem. While other companies are proposing pay cuts to share the pain and save jobs, Microsoft chose the easy and lazy way out.

Instead, they should have used this unprecedented financial crisis to transform the company:

  • Engage every employee to improve financial performance, make everybody responsible to save money and, at the same time, jobs.
  • Use all available tools (Wikis, Social Networks, etc.) to encourage conversation and an open discussion how to transform Microsoft as a company and, possibly, change the overall mission.
  • Change the focus of Microsoft from sucking up to Wall Street and start delivering superior service by empowering each employee and allow them to transform the company one social interaction at a time.
  • Communicate this new focus to the world and change Microsoft’s image from a dark, gray monolith to a lively, personable, caring company.

These are tough times. Even for companies that hoard billions of cash on the sidelines. How you deal with the crisis and adjust your brand to the new reality is the game changer. Some get it. Microsoft clearly doesn’t.

There’s no Social Media

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Image courtesy of Swiss Miss

Dictionaries define media as a means of mass communication. Slapping a ‘Social’ in front of ‘Media’ doesn’t make it less of a means of mass communication. That’s why these boring debates about monetizing Facebook are pointless. And this mass communication mindset leads to dead brand pages on Social Networks with no engagement opportunities. Twitter profiles as RSS feeds. Or media departments being tasked to develop ‘social media campaigns’ because media belongs in media. 

Yeah, I know, it’s the Wild West out there: Everyone claims to be a Social Media expert – Strategists, Account Planners, Media Folks, Brand Managers. And so we end up with people being euphoric about 10,000 ‘friends’ of their brand. Or Twitteratis counting down to their 7,000th follower. In reality, this all makes no sense because they apply old metrics to a new reality. It’s questionable if marketers can move away from doing something to people and convert into a mediator role: Helping others with their social interaction. 

Who knows if Facebook and Twitter ever become profitable ventures. Frankly, I couldn’t care less. There’s a lot of data to be mined, new spread sheets to be created, data centers to be kept busy. All this data mining might be very insightful and help the balance sheet of these companies. Somebody will become rich.

But what these tools really do is make us visible to the world. The richness of this experience has nothing to do with numbers. It has to do with new forms of connections and interactions. With new ways to communicate with each other. A new form of humanity. 

Calling it Social Media makes it more vulnerable to the madness of targeting, relevancy and data centers. Let’s find new words for this experience. This is too important to let the vultures take over. Again.

Fear Economy – the world’s oldest profession

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Image by Kenn Munk

Traditionally, we leave the part of the apocalyptic prophet wandering through the landscapes of urban post-modernism to homeless bible-thumpers. But since the credit crisis has taken hold of our attention, intellectuals, politicians, columnists and even friends have turned into doom prophets. Thomas Friedman wrote in an NY Times piece:

“I go into restaurants these days, look around at the tables often still crowded with young people, and I have this urge to go from table to table and say: “You don’t know me, but I have to tell you that you shouldn’t be here. You should be saving your money. You should be home eating tuna fish. This financial crisis is so far from over. We are just at the end of the beginning. Please, wrap up that steak in a doggy bag and go home.”

Noel Roubini supplies you with a daily dose of gloom on his RGE Monitor:

“The global financial pandemic that I and others had warned about is now upon us. But we are still only in the early stages of this crisis. My predictions for the coming year, unfortunately, are even more dire: The bubbles, and there were many, have only begun to burst.”

And even Dr. Hope Obama uses the doom metaphor to get Congress approval for the stimulus package. 

These stories of doom and impending catastrophe are not new. Seven chapters into the Bible we read about Noah’s flood, people in the Middle Ages believed comets would destroy the earth. And if that didn’t pan out, we always had a ghastly virus to kill us all: Bird Flu, Black Death, Flu Virus. Over the years, we’ve become more sophisticated and came up with new threats that surely will take care of the apocalypse: Third-hand smoke, over-population, global warming, global cooling, Anthrax – the list is endless.

The world’s oldest profession is not what you think; it’s the business of fear. The Attention Economy has forced us to change those doom scenarios quickly, otherwise we’ll get bored quickly and instead of moving on to the next threat, we might move forward with our lives. We’re attracted by doom scenarios: Daily life can be fairly boring and pedestrian. Regular politics are mind-numbing, just like the business world. But doom scenarios are interesting, raise your blood pressure and get us all excited. All the doom sayers have the same mindset: We have sinned, we made huge mistakes. Now is the time to pay for it. Or, if there’s a chance left, we need to change everything. The way we live. The way we do business. The way we make decisions. There’s no gray. Just black and white.

Behind these scenarios is a longing: Humans should change radically. A crisis is a normal part of the human life cycle. We can work through a crisis by making rational decisions. Catastrophes are events we can’t control. A crisis asks us to work harder. To evaluate all options, to be diligent, to deploy small changes to avoid a repeat. Catastrophes need big gestures. Saviors. And it makes the individual feel small. And helpless. That’s why people love Al Gore: He’ll save us from a catastrophe none of us can fix. Or the Dalai Lame: He’ll save my battered soul. Or Hank Paulson: He was supposed to be the savior. What happened?

The economy of fear was always used to keep people down, to remind us that there are forces out there bigger than us. But, it seems, the doomsayers try to be bigger than us, try to tell us to change our way of living, our thinking, our whole existence. Or! They only focus on poverty, consumerism, our cheap plastic culture. Walmart! China! McDonalds! And they forget responsible entrepreneurs, improved living conditions, national parks, improved air quality/life expectancy and all these other improvements our rotten society has developed throughout times. 

We’ve been expelled from paradise a long time ago. And we won’t find our way back by proclaiming new doom scenarios every 2 minutes. We won’t be able to create a better society by believing in utopian ideals of no conflicts and a world without the possibility of a crisis. So, let’s work through this. Everything will change and nothing will change. Advertising is not dead. Advertising is changing. Media is not dead. Media is changing. It’s going to take a lot of work, dedication and passion to adjust brands, businesses and agencies to the new reality. It’s going to be ugly, glorious, amazing and disappointing. It is what it is. All it takes from all of us is smart thinking. And a lot of work.

Humans are a weird bunch. We’re not perfect. We’re not meant to be perfect. Every time we try to create a perfect world we create one thing: Hell on Earth.

We need more leaders, less followers

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Image by Mike Monteiro

“Diederich Hessling was a dreamy, delicate child, frightened of everything, and troubled with earache.” That’s how the novel ‘The Patrioteer‘ by Heinrich Mann begins (one of my personal favorites). Decades later, and we still have way too many Diederich’s in this world. They are afraid of everything but they are mostly afraid of taking a stand, developing a unique opinion  that’s not already filtered by the opinion leaders of op-ed pages, blogs and Twitter. And most of them are not only troubled by earache – their spine and brains suffers heavily.

Following opinion leaders blindly has lead to the financial crisis, a deep recession, the Iraq war – the list could be continued for pages. We should trust Greenspan, right? He knew what he was doing. We should trust Paulson’s request bailout package, correct? He should know how to fix the credit crunch. We should trust Colin Powell and his UN speech, correct? He seems so trustworthy and would never fool us, right? The culture in the US doesn’t allow for and most people are not able to tolerate a lot of ambivalence. There are just a few brave souls that publish their opposing opinions and stick to it through attacks. In the Social Marketing field, we still see strong challenges of opinion leaders throughout the discussion of the Kmart promotion but once certain opinion leaders say their piece, the majority falls in line and accepts their opinion as gospel. Frankly, I was almost shocked to see that almost nobody criticized the Panasonic coverage throughout CES . At one point, Twitter felt like QVC: people discussing the awesomeness of Panasonic, their products and all their people. (That’s my only concern with these kind of promotions: You’re spamming me with irrelevant information, tweets of people wanting to get a Sears/Kmart gift card, clogging up a very personal channel of information. You’re doing exactly what advertising has done for year, not adding value to my life.)

The Kmart promotion might be one seminal moment in the history of Social Marketing – suddenly PR excursions are okay because the opinion leaders said so. This is proof of Robert Michels’ theory of the Iron Law of Oligarchy: Democracy leads to Oligarchy. A few tell many what to do.

We’ve seen this attitude of ‘If you’re not for us, you’re against us’, played out in US politics in the last decades. We’ve seen it wreaking havoc on major financial institutions when dissenting voices were shut down very quickly. (Just watch CNBC and see how pessimistic analysts are basically shouted down immediately.) And, in the end, nobody is responsible for anything because the system failed. The model failed. Not the individual failed. Nobody is taking responsibility for anything, it was always the fault of something we fools won’t understand anyway. Sure, there will be a perp walk sometime soon (Maddoff, are you ready?) but the real issues behind the meltdown will be covered by the opinion leaders, blaming it on VAR or other acronyms most of us won’t bother to even try to understand.

Obviously, the Social/Conversational Marketing field is still in the honeymoon phase and I’m happy to see that open discussions are commonplace and democracy still reigns. In order to survive and thrive, Social Marketing needs more leaders, more thinkers, more outspoken personalities, more provocateurs. We need to be able to live with and live through ambivalence. Actually, we should cherish ambivalence as one of the most important values in our continued exploration of this new space. Dissenting opinions should be further explored and not painted over with the broad brush of majority opinion.  This little, nodding and spineless Diederich needs to be defeated. Each and every day.

From wants to needs

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Image by Mike Monteiro

We see a dramatic shift in consumer behavior: Pre-Lehman we wanted to have the newest gadget, wanted that flat screen, wanted the luxury car, wanted the luxury vacation, wanted anything bright and shiny. Not anymore.

This dramatic shift is reflected in the dramatic decline of auto sales, horrible retail sales, how deflation rears its ugly head and consumer credit sees the biggest fall in decade. These are the symptoms of a behavior shift that will be us for long time to come. 

Marketers love wants. Their main job over the last decades was to convert wants into needs. Based on the Abraham Maslow hierarchy of need theory, marketers mostly forgot about the basic needs of people and appealed to the need for self-actualization: This car will make you more successful. This gadget will make everybody else jealous. This product will complete you. Those times are over.

While people are struggling to deal with the new reality, they are only concerned about their basic needs: Air to breathe, Water to drink, Food to drink, Sex to procreate. Add to that the need for Safety and Security, the need for love and belonging, the need for the respect of our fellow’s and for self-respect. 

0-60 times have become irrelevant. Same is true for claims of cars as ego extensions. Instead, people buy cars to go from A-B safely, efficiently, without being disrespected by their neighbors. This changed mindset will increase the value of WOM, digital conversations and honesty in marketing. Sure, it was fun to live in a dreamworld of wants being needs, supported by flashy advertising and singing monkeys. But, the party is over.

Throw those champagne bottles and glitzy toys away and go back to the basics: Listen to the needs of people. Understand how this new reality affects them. And how it changes their thinking, outlook on life and behavior. Connect with them. Don’t try to fool them anymore. It stopped working a long time ago and it’s completely counter-productive in this environment. And, don’t get fooled: This is not a temporary shift. This shift is a permanent change. Just like your post-Depression generation didn’t jump on the materialistic bandwagon, this generation won’t believe in consumption as self-actualization anymore. 

Just like The Who said: We won’t get fooled again.

2009 – the year when everything is going to change

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Image courtesy of Maja Sten

I’m not good in predicting the future. (After all, I predicted the Los Angeles Dodgers to win the World Series in 2008. And Giuliani to be the Republican candidate.) But, I’m pretty certain about this prediction: 2009 will be remembered as the year of change.

Let’s be clear: It’s going to be rough. It’s unknown how we’ll get from here to the other side. And we don’t know how the other side will look like. What the new reality will be. Sure, we’ve heard this before: After 9/11 life was supposed to change forever. After the house of cards came tumbling down, we continued to sleepwalk through life until we ended up on this cliff. The abyss of economic, political and societal disorder. Today, a gas price of $1,80 and a Dow of 9,000 might make us feel better and lull us into thinking that the worst is over. Unfortunately, the worst is yet to come. And, the best is yet to come.

2009 is the year when social discourse, living and experimenting with new technologies, the painful realities of the global economy, new insights into our species and the breakdown of the overall consumer spending umbrella that protected us for decades will force us to change. To rethink everything we’re doing. To rework communities, cities, industries, families. And ourselves.

This year will be remembered by us as the year of change. Just like the East-Germans remember 1989 when everything changed. Or 1439 when the printing press changed the educational system, science, politics, religion. Everything. 2009 will be not the beginning of an evolution. It will be the end of an era. And the beginning of a new one. And the scary part about all this is that nobody has a road map, a compass, any guidelines.

In 2008 we began a journey. Nobody of us volunteered. But we’re all in the same boat. Destination unknown. Keep your eyes open. Listen to others. Learn from others. Trust others. Don’t follow like a sheep. Don’t get caught up in side stories. Stay focused. Keep your head high. Be open to new experiences. Don’t go to bed unless you learned 10 new things that day. Better: 100 things. Don’t be afraid. Stay hopeful. Throw all the old rules out. They don’t apply anymore. Life as we know has changed forever. Just like the explorer that set foot on new territories and encounter the unknown, we’re about to experience the same.

Here’s to 2009.