Modern Marketing - Blog by Collaborate PR & Marketing

Second Life 'Economy' Grows 65%

Second Life is still going strong and its latest 'Economy Wrap-Up' shows how sophisticated it has become: 'Here's a look at 2009 - through the lens of the US dollar value of gross earnings made by Second Life Residents during the year.   In 2009, Second Life Residents in the aggregate earned approximately US$55 million in real money, growth of 11% over 2008. This represents the sum of all US dollars transferred "out" of the Second Life economy by Second Life Residents, and into PayPal accounts, and then to bank accounts and wallets.  We call this figure "Gross Resident Earnings" and it represents the sum total of processed credits for Second Life Residents.  This works as follows: when a Resident business accumulates a Linden dollar (L$) balance through the sale of virtual items or other economic activity, they can sell their Linden dollars to other Residents on the LindeX or the Xstreet SL Exchange, creating a US dollar credit on their account.  Note that we are not including activity from third party exchanges as LindeX and XStreet SL exchange comprise greater than 90% of credits processed.   When a Resident with a US dollar balance on their account moves that balance to PayPal, we record and track that amount as a "processed credit."  Taken as a whole, "processed credits" are a reasonable proxy for Gross Resident Earnings, as they represent surplus Linden dollars gathered by a Resident business and turned into US dollars. In 2009, US$45 million of "processed credits" came from Second Life accounts and US$10 million came via Xstreet SL accounts.  Note that many Xstreet SL merchants also have significant inworld businesses, and use Xstreet SL to collect earnings from their inworld businesses as well as their Xstreet SL businesses, accounting for the fact that processed credits on Xstreet SL are greater than the volume of the Xstreet SL Marketplace and Xstreet SL Exchange.'

Rusbridger On 'Us Against Them'...

Alan Rusbridger, Editor of The Guardian : "BookArmy – though it avoids saying so – is an offshoot of Harper Collins. The two enterprises point in completely different directions. As it was explained to me, the point of BookArmy is to get as many avid book readers engaged as possible and learn as much as possible about their likes and dislikes. At some point in the future (the theory goes) publishers will no longer need to spend a fortune on marketing Max Hastings’ next book by lavishing money on Waterstones or in print. They will go to BookArmy and say, 'We know you have a database of the 80,000 people in the country who read books of military history. We’ll give you our targeted marketing spend instead.'  BookArmy is a telling illustration of two aspects of the digital world.  One is the ability of digital disrupters (in this case, even within the same company) to take one bit of a newspaper and do it with a conviction, range, depth and passion that a portmanteau print-based newspaper cannot match, especially in digital form. It is the unbundling of newspapers.  And the second is the only hope of matching the power of the these digital disrupters is to harness the same energy and technologies which they are using.'  See the rest here.  Excellent insights from a man right in the middle of the change being created by networked media.

The Rise Of Anti-Social Behaviour

At the beginning of last year, I helped put together an event at NESTA, where I detected for the first time an undercurrent of suspicion about social media and particularly social media consultants.  I remember the room recoiling at the suggestion that anyone in attendance was a social media advisor.  Perish the thought!  And again, at a bash I helped out with at the IPA, there was plenty of good discussion about social media.  However, also the same concerns.  As illustrated by this film - 'The Social Media Guru'.  Well worth a quick viewing if you haven’t already.  Since then, Business Week has advised wariness about ‘social media snake oil’, reporting that, ‘Critics complain that many of the new experts have adopted an orthodoxy that provides little flexibility for differing situations—or outcomes.  Their pronouncements follow a rigid gospel : Be transparent, engage with your customers, break down silos.’  Which has led one or two social media consultants to defend their practices as both professional and good value.  So why is this?  Is it just a case of caveat emptor applying to a new market as much as any other?  Or a natural backlash against the relentless hype of new social widgets and the rise of Facebook - the social world’s own 800-pound gorilla?  Personally, I wonder if this suspicion is because it’s not yet clear what role social media will have in the broader communications industry - particularly for brands.  At that IPA evening, the interesting part of the chit-chat, for me at least, was exactly on this issue.  Are we talking interesting new...

How A Stranger Decided My Pension Plan

At the end of last year my Independent Financial Adviser rang and suggested I moved my pension plan.  Why?  Because I was now ‘eligible’ for a new scheme at a fancy-pants City stockbroker – Brewin Dolphin.  Now I sort of trust this IFA guy.  I do think he knows what he’s talking about.  But, you know, I don’t always think he’s putting my interests at the very top of his daily to-do list.  Also, I’ve had a terrible experience with pension plans. Let’s just say, ‘Equitable Life’ - and leave it at that.  So I went to see said fancy-pants brokers at their mega-offices in London’s Spitalfields and listened to the offer.  It was what I expected.  Highly credible?  Oh yes.  Largely unintelligible?  Absolutely.  What to do?  Well of course, some research.  After all, the outcome of my pension is pretty important.  If possible, I’d like to avoid the ‘food or power’ choice in the cruel winter of 2040.  Into Google went the Brewin Dolphin name.  What came back was just pages and pages of corporate information.  Mostly unhelpful verbiage such as: ‘We recognise that building a strong working relationship with you is key to providing an excellent service. This personal approach is mirrored in the way we will approach investing on your client’s behalf. Our focus is on providing investment management that is as unique as each client’s needs. We have worked for generations, providing tailored solutions that help your clients to create and preserve wealth.’  Mmmm, no real insights there.  I then typed in ‘Brewin Dolphin’ plus ‘customer review’.  And the top result that came back was this.  A review written last Summer that begins : ‘I have to write a review on Brewin Dolphin as a result of my experience with them. My overall impression of using them for over 10 years (not out of choice, will explain as I go on) is VERY BAD.’  Briefly, the review is a story of how Brewin Dolphin turned 80k into 38k over a ten year period.  And here’s the part that caught my eye: ‘It is breath taking that these bankers can steal in daylight, whereas if I went into their branch in Manchester and took each of their Rolex watches, they car keys for their high performance cars and their make grooming products, I would get arrested and locked up.’  Mmmm, interesting.  What next?  I decided that...

From Like This To Buy That

A while back I suggested that the web was NICE - New Infrastructure, Culture and Economics.  Well we’ve had a revolution in the first area with the arrival of broadband and superfast groovyware and in the second with the rise of the share-and-compare economy.  This year I think we'll see changes in the economic aspect of my NICE notion.  The problem with the desktop internet was that it didn’t come with a swipe card machine.  In the early days of e-commerce, paying online felt like handing your keys to a stranger in the street and asking him to park your car.  However, the world has changed.  Facebook delivers shopping tips from our friends, the pocket browser is becoming the norm, your phone is developing a sense of direction and we all want one-click commerce.  In short, the conditions for economic innovation look ripe.  And, of course, this year money is in short supply so commercial ventures need to be, err, commercial.  I have no idea what shape this economic change will come in.  Other than that it may appear quite strange.  For example, how do you fancy sharing your credit card purchases on Twitter?  A step too far?  Not according to Philip ‘AdBrite’ Kaplan, whose service Blippy, lets you share actual purchases with your social network.  Kaplan makes it sound like the obvious next step, not an open invitation to the world’s cyber-villains: “It’s just another way of saying, 'Here’s what I’m doing,' or 'Here’s where I am,' or 'Here’s a band that I’m really into' — obviously, because I just bought five of their albums."  Or how would you feel about letting your phone choose your lunch spot on the basis of who’s offering the best local deal?  The raft of mobile coupon start-ups aim to turn internet traffic into retail footfall.  Kerching!  Then there’s Jack ‘Twitter’ Dorsey’s Square service, which turns your phone into a credit card swipe machine, meaning anyone can retail.  Or check out mobile payment services GoPayForIt and Zong, the latter of which hopes to mobilise the FaceBook Credits service.  Both aim to make micropayments a cinch.  As ever, these Shiny New Things are only where the story begins. The end game maybe odd-sounding new virtual currencies, such as China's QQ economy, where bits can be turned into regular cash and used to buy (or steal) everyday items.  Or can even be taxed!  The share-and-compare economy is booming and traded opinion is increasingly the key to purchase decisions. The maturing of digital economics may turn this opinion data into the new ‘rivers of gold’ that the media industry so desperately seeks. Or maybe it will generate more Etsy-style traders whose business is based not on people hitting a ‘Like’ button on Facebook but a ‘Buy’ button on their smartphone.

'You're F**king With The Magic'

I enjoyed this Economist review of Ken Auletta's book, 'Googled: The End of the World as We Know It'. It highlights one particularly memorable line that sums up that world view where companies choose to ignore the implications of change in their marketplace and hold on tightly to creaking business models. Unfortunately, such determination to retain the cosy 'magic' of the status quo can open the door to a disruptive player like Google or Apple.  "Sometimes it seems as if Google has never come across an industry it doesn’t want to disrupt. Best known for its hugely popular search engine, the internet giant has spread its tentacles into an ever-growing array of businesses, including advertising, telecoms and, most recently, digital-navigation software. The company’s habit of selling services cheaply or giving them away for free has endeared it to consumers. But its tactics have enraged competitors, who complain their new rival is out to destroy the economics of entire industries.  Such griping has been loudest in the worlds of publishing and entertainment. Although media companies are hooked on the money they mint via adverts that run on Google and its YouTube video-streaming business, many of them also accuse the search firm of commoditising their content and of undermining their profits by making it easy for marketers to track the effectiveness of online ad spend. 'You’re fucking with the magic,' says the boss of one big media company to Google’s founders in a memorable scene recounted at the start of Ken Auletta’s new book."

'Openness Is Fuel For New Economies'

I really liked Matt McAlister's take on the nuances in development of the semantic web, open data and Sir Tim Berner-Lee's new mission:  "The semantic web folks, including Sir Tim Berners-Lee, have been saying for years that the Internet could become significantly more compelling by cooking more intelligence into the way things link around the network.  The movement is getting some legs to it these days, but the solution doesn’t look quite like what the visionaries expected it to look like. It’s starting to look more human.  The more obvious journey toward a linked data world starts with releasing data publicly on the Internet.  Many startups have proven that opening data creates opportunity. And now the trend has turned into a movement within government in the US, the UK and many other countries.  Sir Tim Berners-Lee drove home this message at his 2009 TED talk where he got the audience to shout “Raw data now!”: “Before you make a beautiful web site, first give us the unadulterated data. You have no idea the number excuses people come up with to hang on to their data and not give it to you even though you’ve paid for it as a taxpayer.”  Openness makes you more relevant. It creates opportunity. It’s a way into people’s hearts and minds. It’s empowering. It’s not hard to do. And once it starts happening it becomes apparent that it mustn’t and often can’t stop happening.  The forward-thinking investors and politicians even understand that openness is fuel for new economies in the future...'.

The Mobile Industry’s ‘Galapagos’ & Murdoch’s Big Bet

Japan can be a kind of a glimpse into the future to see what we’ll will be doing in about five years time.  And this is certainly the case with regards to the mobile industry.  Some go as far as calling Japan, ‘the Galapagos Islands of the cell phone world.'  A reference to the Pacific islands where many unique species have developed in the benign isolated conditions.  Take for instance i-mode, the open mobile service that was launched, complete with developers’ platform, in 1999 whilst we were all scratching our heads at WAP – and a full nine years before Apple’s App Store.  Today, the service has about fifty million users who pay for a whole range of different content including games, fortune telling, ringtones, wallpapers and other virtual goods.  Initially, NTT Docomo, i-mode’s parent, didn’t believe that anyone would pay for such mobile trinkets, and that voice was their only purpose.  However, data now provides more than one third of the industry’s vast revenues.  As a result, when the iPhone arrived in Japan people didn’t quite know what to make of it.  It seemed to lack so many features that Japanese consumers were used to, including mobile TV.  However, sales have since taken off with i-mode’s creator himself, Takeshi Natsuno, summing up the product’s popularity from a Japanese perspective: 'The iPhone is not a good phone. It’s terrible, but it’s a great internet computer'.  He also believes that Steve Jobs’ baby and other smart phones will take over from his own creation due to their use of the TCP/IP global web standard.  One key aspect of i-mode, and the copycat platforms that followed, was the baked-in, easy-to-use micropayment systems that allowed people to snack on virtual goods and gifts.  All without the bother of subscription services, whilst also letting content producers easily pick up a fee for their work.  And it is this habit of paying for mobile content that has created the...

Advertising’s Omerta Begins To Crack

A Grand Fromage from a big agency network broke the advertising omerta with me over coffee the other day.  ‘Of course, we’ve never really been able to link campaigns to sales or ROI’, he whispered.  Let me tell you, I nearly choked on my almond croissant.  It’s the unwritten law among GF advertising executives that no one mentions how random the effect of brand advertising is.  When under scrutiny from client procurement executives the Big Ad industry has ensured success by rounding the wagons and sticking to the BARB-Nielsen script, or pointing to the latest Thinkbox research.  However, just as I was getting over this blatant breach of the rules another industry GF broke the code!  Writing on his blog Steve Henry blurted out that: 'I'm getting sick of saying this, but 90% of advertising goes out there and does nothing at all. (I heard a figure the other day for what the average ROI is for marketing in this country. I can't tell you the figure because I've been sworn to secrecy for now - but it's diabolically low)'.  What’s going on?  Maybe it’s just a case of a few loose tongues.  They’ll probably disappear next week as the Farm St lawyers hand out the super-injunctions.  However, maybe, just maybe, it’s because a few brave souls have noticed that technology is slowly making the mass marketing argument impossible to maintain.  For forever and a day, any ad executive worth their salt could deliver - with feeling - some variation on: ‘Maximum reach-and-frequency is the only way to build brand awareness thus creating equity that drives sales.’  Which paved the way for vast media spends that in turn justified chunky production budgets and maybe even an exotic location or two.  However, as all media, including TV, is slowly sucked onto one IP platform or another, thereby becoming highly measurable, the black box that the marketing industry used to keep its metrics in has been exposed to the digital sunlight.  The battering ram of reach-and-frequency is being replaced by granular laser targeting.  First there was Google and its ‘database of intentions’ where only people who were searching for something were targeted with related commercial messages.  Then came the rise of applications where people could choose content to run on their social networks, iPhones, iTouches and now Droids.  More recently, we’ve had Facebook and its ‘people not pages’ approach, where advertisers can target individuals who have expressed a particular interest through their profile.  Even the impregnable metrics maze that has driven TV’s vast global revenues has begun to open up.  Social networks make it all too easy to see what people are actually watching – and what they are not.  And finally, the promise of behavioural advertising looms large, where commercial messages are targeted according to the digital data trails that people leave behind them – not thrown over the nation like a blanket.  Now these developments do of course bring their own Big Brother issues.  But that can all all wait.  The Grand Fromage of advertising are finally taking notes.  And a few are talking outside of the old school too...

'You Can’t Step Into The Same Market Twice'

David Weinberger captures the complexity of networked markets:  "Traditional markets consist of  demographic slices, i.e., “social groups” of people who have never met one another. We choose particular demographics because we think they are susceptible to the same message. Thus, traditional markets are not real things to which we send messages. Rather, messages make markets.  Now, markets are networks…networks of people who converse and interact, spread out across the Internet. For example, at any one moment there are some number of parents with sick children who are on the Net talking and posting, on blogs, discussion boards, social networking sites, Twitter, etc. etc. etc. But that networked market is substantially different in 12 hours because their kids are getting better. And of course 12 hours is an extremely long periodicity for these networked markets. They change constantly. Think of how ideas ripple through Twitter. Furthermore, not everyone in the market of parents with sick kids are in it the same way. The illnesses vary, the seriousness of the illnesses vary, the relationships vary. Think about the gay network in this regard: I’m sometimes in this network because I blog about gay marriage. But if you, as marketer, fail to recognize the complexity of the interests in this group, then you’ll be sending gay dating solicitations to people who don’t want them, including some who are in this network because they’re posting homophobic comments. Networked markets are rippling, ever-changing, hugely complex, inherently unstable, and thus thoroughly unlike traditional markets. In short: You can’t step into the same market twice."

Fanning, Cohen And Now Kan

One of the remarkable, recurring themes of our times is how an individual can take an idea onto the web and, often through the power of naïve enthusiasm, accidentally force a billion-dollar media industry to rethink everything it does - whoops!.  This, of course, is what happened when Shawn Fanning unleashed his college dorm project – Napster - onto the world.  Devastating the music business wasn’t Fanning's goal.  He just wanted to help his friends find their favourite tracks more easily.  But the Big Labels never recovered and even though Napster wasn’t the only P2P service offering music downloads, Fanning became the unfortunate public enemy number one of the powerful RIAA and its crazed legal battles.  Then came Bram Cohen, the creator of BitTorrent, a P2P protocol that allowed people to share large software files online more easily, by breaking them up across networks of participants’ computers then making them easy to find and reassemble.  Rather than relying on one machine to sit at the centre of a network and do all of the hard work.  Such was the success of Cohen’s brainchild that at one point BitTorrent was thought to account for one third of all internet traffic.  The result was the disembowelment of the movie industry’s distribution model and the eternal wrath of the MPAA.  However, like Fanning, profits didn’t seem to be Cohen’s motivating factor.  The only visible source of income from the BitTorrent project has been the T-shirts he has sold to its fans, emblazoned with the slogan, ‘Give And Ye Shall Receive’.  And now we have Justin Kan, creator of Justin.tv.  Kan’s original experiment in 2007 involved wiring himself up to a mobile camcorder that streamed live onto the web.  His motivation was to let people create their own ‘livestreams’, with the undercurrent ideal that CCTV shouldn’t be available only to the authorities.  However, Justin.tv has quickly developed into a service that allows anyone to create a live TV channel.  Today the site attracts more than 41 million visitors per month and has 428,000 'channels'.  Some of which are dull feeds of people sitting at their desk working, others are vibrant niche channels of hobbyists.  However, a few are feeds of live sports events that individuals are uploading from their paid subscription services, complete with community tools such as chat.  Sound familiar?  The difference may be that Shawn Fanning and Bram Cohen were the pioneers who taught the legal profession that the world has actually changed.  And Kan’s service is already joining a burgeoning, web TV ecosystem.  For instance, Fanning financed his project with the help of his uncle while Cohen had no commercial aspirations at all.  However, Kan’s project is supported by Silicon Valley’s respected technologist Paul Graham and his fund Y-Combinator.  The fly-in-the-p2p-ointment is that live events, particularly sports, are meant to be one of the last bastions of broadcast TV’s superiority.  So it seems unlikely the industry will just sit on the sidelines.  However, the trend of passionate individuals unknowingly wreaking havoc on global industries continues.  And Justin Kan looks like he might just be the next innovator to keep media executives' heads spinning.

Marketing Is No Longer A Game

The $500bn global marketing industry is driven by metrics.  TVRs, GRs, OTS, TGI, ABC, BARB, CPC, CPA, PI, CPM, frequency, benchmarking, response, reach, hits – the range of measurement systems has exploded as the complexity of marketing continues to increase.  Which has led to a gaming mentality among some parts of the industry, where almost any activity can be shown to be successful.  If it looks like a campaign isn’t working it doesn’t mean it’s ineffective.  It means you're standing in the wrong spot.  However, in the share-and-compare world of personal media, social networks and communities, it’s simply not possible to game the system.  If you’ve created a Facebook page, or an online forum, or an all singing-and-dancing app fest with mobile bells and whistles simply begging to be API’d and distributed around the widget world, no level of metric analysis will demonstrate success if no one joins in the fun.  Any figures you try and flaunt to justify the activity will be drowned out by the sound of silence as the wind whistles through your Twitter feed, swinging the doors on the hinges of your silent social experience.  No level of metrics will disguise the fact that No One Is In There.  And should you try and lay a little Astroturf or sock up a few puppets, you are likely to discover that your conversational marketing takes on all the allure of a bowl of plastic fruit.  Now whether this is of any significance depends upon your viewpoint of where the marketing world is headed.  I chaired a little social gathering down at the IPA a couple of weeks ago where Mark Earls put the case for a connected, networked world being a sea change for every part of the communications industry.  While others declared social to be a welcome new ingredient to the already murky marketing soup – but no more than that.  Just DM and WOM for a new era.  So if you’re with the Herdmeister then the fact that the game is up...