Chapter 8 - Companies and the "Glass House Generation"
Thanks in part to social media, the barrage of information has become significantly more concentrated: there's more information arriving faster than ever before, and the fever pitch means that people can spend less time on any given message. As a result, there is a need for brevity: information that can be consumed at a glance. A magazine article or a blog entry requires time to consume, as does a ten-minute video. In social media, the 140-character limit of Twitter posts are challenging users to truncate their messages, eliminate details, and to be concise.
(EN: My sense is that "concise" is not quite the right word: try "superficial" or "insufficient." The author digs up a few examples where he feels that a short phrase or even a single word was enough to get a message across. I contend this is unusual - and while I agree that people cannot possibly consume all the content that's coming at them, the answer is in scanning and filtering rather than trying to make everything very short so the recipient can read it all.)
Power to the People
The pace at which technology changes creates windows of opportunity for small companies and individuals can benefit. Each time a new technology emerges on the scene, there is a land-grab in which large and established companies are often too bloated to beat the smaller and more nimble firms. And in this environment, an entrepreneur can go from a garage to a multimillion-dollar company overnight.
The author concedes that there are many ideas that are doomed to failure - either because they are unsustainable, a person who has a bright idea lacks the discipline to be able to scale, or something even better comes along before they can gain acceptance in the market.
He switches a bit to how technology empowers the consumer - particularly in terms of collective bargaining. Negotiating group discounts, participating in auctions, and using services that ask vendors to accept the customer's stated price are all examples of customer empowerment in the market.
He mentions a program by which customers could choose which advertisements they see, which was believed to be a way to better target ads. But it turned out that there's a difference between liking an ad and buying a product, so the program failed. The author claims that "technology and the world weren't ready>"He mentions a program by which customers could choose which advertisements they see, which was believed to be a way to better target ads. But it turned out that there's a difference between liking an ad and buying a product, so the program failed. The author claims that "technology and the world weren't ready>
There's also mention of a program (Bing's "cashback") that offered to share advertising revenue with customers who clicked ads on their search engine. The program failed, but the author suggests "the idea is still sound."
(EN: I'm stopping here, as the author is on a tare - advocating for ideas that he likes, and unable to accept that they are not viable. There's not much value in listening to him haver.)
Ideas That Will Never Work Sometimes Already Do
A carefully guarded secret about many of the new capabilities provided by technology is that most of them are not new at all. The capability was already being served, but technology has made it a little better in some peripheral way.
Before the Internet and location-based services, people were still able to find restaurants in their vicinity. There were tourist guides, city maps, yellow pages, and other hard-copy publications that were entirely serviceable. Before there was Wikipedia, there was an encyclopedia - and a public library system.
So rather than considering what new task an invention will enable people to do, instead ask what it hopes to replace as a means to do a task that is already being done.
The search engine competition should be evidence of this: all search engines do the same thing, but some do it better than others. Google won out because it was fast, easy to use, and clean - and ironically, because it stripped away the features that many other search engines had added in because they assumed that the user wanted to do more than just find web pages.
Join Them Before They Beat You
Media giant Viacom is presented as an example of a firm who eventually realized it would need to embrace social media. Their initial strategy was simply to pretend it did not exist and hope for the best, followed by legal maneuvers to attempt to prevent anyone else from doing the same - all instead of seeking to leverage the medium and gain some benefit for themselves.
Their lawsuits failed, as the courts determined video-sharing sites such as YouTube were not responsible for user-created content and were not required to police their users - though they would be required to remove specific videos if the appropriate documentation (copyright) was provided by the owner. While it required some effort for YouTube to remove videos when demands were presented, it put far more burden on Viacom to identify files, which could be re-uploaded under a different name faster than they could do the necessary research and communication for them to be removed.
YouTube realized this was good for no-one, and proposed a solution that would place advertisements in copyrighted material and share revenue with the owners - enjoining the copyright owners to join them (and make a profit) rather than continue to fight (to everyone's detriment). Additionally, they would embed advertising that provided links for users to purchase legitimate copies of movies, music, and other digital content. This was clearly a win-win for YouTube users to view and share content and the media owners to make income.
Not all providers played along. Warner in particular pulled all its content off of YouTube during a disagreement over revenue sharing. "Time will tell if this was a poor decision," the author suggests, but he implies that content owners would benefit by playing along, as the practice of stinginess has failed repeatedly on the Internet.
The Associated Press is another firm that completely failed - in April 199 they panicked over people accessing their news stores via Google and demanded that Google remove all links to AP material from its news feeds. This is entirely peculiar because most companies woo search engine traffic to their sites to gain advertising revenue, but the AP seemed to pursue an agenda of control without regard to its own profits.
He suggests it is analogous to a record label demanding its music be removed from every jukebox and not even played on the radio, to "force" customers to go to a record store to buy it. But without ever having heard it, how would customers know it even existed?
Much of this is panic and raw fear - there never has been a coherent and credible justification for this behavior - evidence of the old media feeling that they can remain competitive with the new media simply by refusing to participate and force customers to deal with older channels if they want their content. The problem is, they're not the only game in town - and users will merely entertain and inform themselves from the choices that are available in their channel of choice.
Thankfully, regulators have kept largely to the sidelines and have refused to entertain the demands of old-media producers for draconian measures or an all-out ban, but have sought a reasonable solution. A quote from President Obama: "We need to update and reform our copyright and patent systems to promote civic discourse, innovation, and investment while ensuring that intellectual property owners are fairly treated."
The moral to all of this is clear: the world waits on no-one. If you resist change, you will be left behind.
The author goes on a bit of a ramble about the difficulties of video searching, as the content of a video file is opaque and does not yield to text-matching algorithms. Instead, searching video means searching ancillary content - the title, description, tags, and keywords associated to the video, rather than the content of itself, which may be insufficient and misleading.
This is difficult for advertisers because there is no certainty that the video tagged with a brand has anything to do with the brand. Or it may be about the brand, but very poor quality. Or it may even be a video that bashes the brand. Without a complete audio transcript, there is no way to search its content; and even with a transcript, it may be difficult to discern the quality and theme of the video. Given the massive amount of video being posted daily, it's too large a job for human eyes.
(EN: Google attempted to leverage the knowledge and the labor of crowds by asking users to identify keywords for images - but in spite of their attempts to make it a game-like experience, the novelty wore off quickly.)
He goes back to product placement, suggesting advertisers can sponsor videos that mention or show their product - but this is pure speculation.
The Voice of the Crowd
He also returns to the notion that companies must accept that the market owns their brand, and that they have little influence. If a product is really great, people will say good things about it. If a product is rotten, they will say bad things about it. Between the two, the market will arrive a fair and true perception of the brand.
An interesting notion is that many brands play "not to lose" rather than "to win" when it comes to public opinion. If all you do is defense, it is unlikely you will ever win, as it's a war of attrition.
The Problem of Internet Advertising
The main problem with Internet advertising is the tragedy of the commons. Because of the low cost of carpet-bombing users with advertising messages, advertisers were indiscriminate and sought to pump marketing messages out to as large an audience as possible, indifferent to whether their message was relevant to the audience. Users who took offense at the constant barrage retaliated by installing pop-up blockers, spam filters, and banner blockers to shut out all advertising.
By the late 1990s, internet advertising was so ineffective that it was not feasible to fund a service based on advertising revenues. (EN: this is about when advertising switched from a per-impression payment to a per-click or per-action revenue model, which irked publishers because they had no choice of what ads to display - they brought the same size audience to advertisers, but because the ads were not germane to the audience, few of their readers would clock the ads.)
Some improvement was made by Google's AdWords program, which placed advertisements on sites based on a presumption of relevance to the site's subject matter, which presumably would serve ads of higher value to a publisher's audience, and splitting ad revenues 50/50 with the site operators. The author avers, without evidence or support, that this was "great for small websites."
Unlike traditional advertising, online advertising is traceable. The advertiser who runs a commercial on television or in a newspaper has no idea what happens after. He is led to believe that a certain number of households or readers will consume the program or story in which his advertisement appears, hopes that some of them might notice his ad, hopes that some of those might consider his product, and hopes that some of those might actually purchase it. None of this can be traced.
When there is an online advertisement, there is a verifiable count of the number of users who see the very page that contains the ad, who clicked it, who visited his online store, and who completed a purchase. It's even possible to tell if these individuals returned to the store at a later time to make additional purchases. The only assumption that cannot be proven by metrics is the number of users who saw the ad itself - as many have "banner blindness" and may not have noticed it on the original page.
Of course, there is also the argument that advertising in traditional media builds brand awareness - that a person was willing to click a banner ad because they are familiar with the brand name from advertising in other media. This becomes highly speculative, but there is some research to suggest that exposure to a brand in traditional media does more to make the brand credible than exposure online, where advertising is so cheap that anyone can buy a banner.
Clearly, advertisers cannot transpose the old mass-media model of advertising to the internet - it simply does not work. While advertising formats such as banners and display advertising remain the delivery mechanism, the strategy by which they are delivered must change. In social media, sites are able to serve advertising based on a wealth of information about a specific user: their demographic and psychographic profiles, hobbies and interests, etc. And this can be done with laser precision.
(EN: I notice that the author's language is that they "are able" and things "can be done." The problem is that is not always so - while some advertisers target their messages, others still sloppily broadcast it about, and when there is no targeted advertising, site operators fill the gaps with unused inventory, which is still highly irrelevant. What's been found is that this practice teaches users to ignore advertising. It used to be that users ignored only banner-shaped graphics, but they are now ignoring text and graphics that appear in the right column of a layout because "that's where Facebook puts ads." So the tragedy of the commons is merely repeating itself.)
Paid Search Relevancy Dilemma
Companies pay a great deal to be listed in search results when users seek specific phrases, but the author notes they do very poorly at writing a compelling ad. For example, searching for "Chicago hotel" on Google brings up a dozen ads that say the same things - "cheap hotel" and "best rates" figure into the copy. As a result, none of these results stand out. He suggests that more compelling copy such as "Botique 5-Star Hotel Next to Wrigley Building, $89 normally $299" would produce a greater return for the advertiser.
(EN: While his example is a bit exaggerated, it is essentially correct - run that same Google search now, and most of the ads have uninspired and uninspiring copy. However, this is a common issue in pay-per-click advertising because advertisers pay only for clicks, so there is no cost for polluting sites with lame or irrelevant advertising in hopes someone will click. It's still not effective, but so long as it's no costing them money, many advertisers don't put much effort into it.)
He suggests that the lack of dynamic content in search engine advertisements is an issue because the text is manually entered - it cannot presently query your database to get the actual price - and if your prices change often, which is common in the travel industry, it takes a lot of effort to constantly update your content. He also gripes a bit about how search engine marketing is incompatible with third-party optimization tools that would automatically track the most effective keywords for an advertisement and adjust on the fly.
(EN: I don't know if this says anything except "I am lazy" about a marketer - and my take is that it may actually be a benefit to the consumers and advertisers alike for it to require a little effort. Automated tools are candy to spammers who want to plaster ads everywhere without a care to whether they are relevant, and users then learn to ignore advertising - which harms everyone. Requiring a little extra effort may not make every marketer think about investing his time wisely and planning his marketing to be effective and relevant, but automating stupidity would certainly poison the well for everyone.)
He also complains that search engine marketing is very shallow in its perception - you associate an advertisement to specific keywords only, and have no access to a given user's social media profile data or browsing history. (EN: This appears to be changing - if not for search engines, then for publishers, as I have lately noticed more and more ads for sites I have visited. Though it's not genius yet, because I often see ads for the very items I have recently purchased, so the logic seems to know only that I viewed the item page.)
The author mentions the growing use of mobile and the popularity of location-based services that enable people to retrieve data about things in their vicinity, or broadcast their present location to friends. He describes the capabilities (to check in, leave notes, etc.) without providing much insight.
He mentions the popularity of Mobile in the third world, suggesting that mobile is "replacing" other means of internet access. (EN: This is inaccurate because there was nothing to replace - many poor countries do not have a land-line infrastructure and mobile is the only way to get access - so while the usage seems astounding, many misrepresent this as being a matter of preference when it is merely necessity.)
He then presents some outdated statistics about the US market, along with predictions that seem laughably overestimated now, with the bold claim that "mobile is where the world is heading." (EN: Aside of the third-world countries where mobile is the only option, this is not happening, and even the evangelists are having to admit that mobile is "the second screen" used for simple tasks when roaming. There's a lot of potential there, but far less than the hype suggests.)
Walled Gardens and Empty Playgrounds
The author (righty) derides companies that have attempted to build their own social networks and video sharing sites rather than leverage the ones that exist. It is rare for such an effort to succeed, as it requires there to already be a community of rabid loyalists who wish to withdraw to a private community to interact only with one another.
(EN: This is also true of stigmatized communities who want to interact with one another outside the view of the general public. This is particularly valuable in instances such as marketing to people with embarrassing medical problems or who wish to network with other users of products that many find objectionable. But for most products for which users feel no shame, it's not necessary to separate them into a secret society that is disconnected from the rest of the world.)
He suggests that they stop repeating the cliche that "if you build it they will come" and instead adopt the attitude that you should "fish where the fish are." Create a community of Facebook rather than building a private community. Share your videos on YouTube rather than creating a private video site. Allow reservations to be booked through Open Table rather than building your own site-specific reservation system.
(EN: There is likely a line to be drawn, particularly when a third-party site "owns" part of your service experience. The site may be a flash-in-the-pan users may quickly abandon. It may not be very secure or reliable. It may not have functionality you need. It may not deliver a desirable brand experience. I sense that the decision should be approached with greater discernment than the author suggests - not everyone should shut down their web site and just sell their wares on eBay.)
He refers back to the idiotic portal-mania of the mind 1990s, where every company seemed to think that its home page would become the user's home page and that they needed to offer everything under the sun to users - including local weather, sports scores, stock quotes, etc. - in addition to their own services. This notion made consultants a lot of cash and performed very poorly for the businesses that paid millions in an attempt to become a portal for the entire Internet.
The author suggests that one of his techniques as a consultant is to ask clients to put together a list of the features and functions they want - then compare those to the features and functions of various existing services - and very often, they find a good match for an existing site or service that they can leverage, rather than building their own walled garden and having to attract an audience of their own.
A Truly Interconnected Web?
The author speaks to the lack of interconnectivity among Web services. While the notion of "mash-ups" was much touted during the heyday of "Web 2.0" around the turn of the century, the notion is not mentioned much anymore, and many sites seek to become destinations unto themselves rather than to provide services that can be combined and integrated with others.
His take seems to be that things should be interconnected, and that AOL should have shown the folly of attempting to build a wall around your content and services. For a service to be successful, it must work "better and faster with everyone else."
(EN: I would substitute "popular" for "successful" because the two are not the same - anything that people can get for free is going to be popular, but how are you going to be successful or even sustainable without revenue to cover the costs of providing that service? It's a very difficult issue, which hasn't been solved. Even the firms that seem to be viable are subsidizing many free services with revenue from other sources or other customers in hopes they will eventually work it out.)
"Imagine the ability to have only one login," the author suggests - services such as Facebook Connect and Open ID provide value to site operators by maintaining their user databases, and getting value in return by making their service attractive to more and more people. This approaches the previous notion of interconnected services, in which site operators pool user data rather than attempting to hoard it to themselves.
The benefit to the user is ease of use - particularly when their personal information is available from a central database, they will not need to type the same data into each site they visit.
You Don't Find a Job, It Finds You
Recruitment and job-hunting reflect two perspectives on the same problem: people have difficulty finding a job for which they are qualified, and companies have difficulty finding qualified people for the work they need to be done. Taking recruiting digital, from the classified ads to the Internet, was a first step and remains largely primitive - it's still a matter of tossing out the "bait" and seeing who turns up, hoping someone among them is qualified.
While employers have traditionally been passive and rather lackadaisical about recruiting, professional recruiters (headhunters) have been more active - they work the social networks and compile databases with skills, and when a company needs talent they often can find qualified candidates and, if necessary, lure them away from their current employers. This is valuable because the best people are not often looking for work - work finds them.
The author boldly predicts that traditional recruiting avenues "will probably vanish altogether" and instead recruiters and employers will hunt for candidates in professional communities such as LinkedIn - which the author feels has become so well-established and gathered enough steam that it's likely they will have a "pseudo-monopoly" on the professional community.
As an added bonus, the social web validates clients with "social proof." The people with whom a prospect is connected validate his experience and sometimes provide endorsements. Examples of his actual work may be available online.
He mocks some of the current practices by firms who build their own recruitment databases - indicating that they are asking people to type into their system the exact same information that is already available on LinkedIn. A person will need to be pretty desperate for a job to jump through such hoops, which means that the strongest talent will likely pass.
(EN: He does go on for a while, in speculative fanboy fashion, but doesn't have anything original to say, so there are no further notes. The rest of the chapter is not particularly different - there's some stereotyping of the millennial generation and a few case-studies of random incidents that are superficially related to the topic.)