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February 17, 2006

Forrester's Social Computing report

By Charlene Li

We just published a new report, "Social Computing: How Networks Erode Institutional Power, And What To Do About It" (available to clients only, but it's getting some good distribution as I'm getting pinged about it left and right). Here's the Executive Summary:

"Easy connections brought about by cheap devices, modular content, and shared computing resources are having a profound impact on our global economy and social structure. Individuals increasingly take cues from one another rather than from institutional sources like corporations, media outlets, religions, and political bodies. To thrive in an era of Social Computing, companies must abandon top-down management and communication tactics, weave communities into their products and services, use employees and partners as marketers, and become part of a living fabric of brand loyalists."

Forrester defines social computing as "A social structure in which technology puts power in communities, not institutions." We also believe that three tenets define social computing:

1) innovation will shift from top-down to bottom-up;
2) value will shift from ownership to experience; and
3) power will shift from institutions to communities?

Now, this sounds all simplistic and theoretical, but I think there's a great deal of power in the idea of social computing. With full respect to the definition of Web 2.0, I believe that the concept of social computing is the underpinning of much of the pain that companies are feeling around new technologies like blogging and RSS. But as I often stress, it's not about the technologies but about the new relationships that users will form. Technologies will come and go, but the power built on the relationships created by social computing will endure.

To fully appreciate the value of social computing, companies have to let go of control. That means letting customers control the brand if you're a marketer, and it means enabling new enterprise tools that IT can't easily control to attract and support employees with high social computing needs. In many ways, this is the source of the great distress that I routinely hear from corporate managers.

The goal of the report is to be the foundation piece for a key area of research for Forrester. So if you've had a chance to read the report, I'd love to hear what you think of it.

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Comments

peter

You say that marketers have to let customers control the brand. That is hard - marketers ('customers are those awkward people that mess up marketing plans' - 90% of cpg products fail in 12 months) are brought up and trained to keep a stranglehold on 'brand equity', without which the brand will surely die. This ignores the basic truth - that like it or not, customers DO own the brand, and brands are nothing without them. And if there isn't a brand / product, they will invent it (mountain bikes, rap music). If by now, most companies have not understood this, what chance do they have when their customers make the next change to a collaborative reality? I believe that many are treating this as a phase, a bit like wearing baggy jeans and tight t-shirts, that their customers will grow out of once they enter the world of mortgages and work.
What we need is a good example of a respected and solid institution, whatever that might be, getting 'it' fatally wrong. Any ideas?

John

Friendly note--check the typo in the headline!

:)

Keep up the good work...

Mark Sigal

Personally, I would net a lot of this stuff out as "conversational marketing."

Companies and brands needs to develop a strategy for cultivating communications with and between their target audiences around their products and/or services.

The strategy needs to encompass both connecting the dots between like minds AND establishing meaningful contexts for rich conversations that can take the form of posts, pictures, videos, listings, events, etc.

Since branded operators can not "game" the conversational process, the best they can hope to do is provide lots of kindling wood (examples follow) and structure in the form of systems so these things can evolve within gated spaces.

To frame one example of how this might come together consider a brand like Starbucks. Today, their online model is inherently web site centric. You can get a listing of stores, product information, buy some stuff and get email notifications of this and that.

Tomorrow, its not that far of a reach to see them enabling customers to have their event calendars sync to a Starbuck's-location specific calendar so friends can plan a meet and greet when they are in same neighborhood.

Similarly customers and employees can port a subset of their online profile to the Starbucks sandbox that shows pictures, links to friends, stores frequented, Starbucks products used, etc.

Why does Starbucks do this? They know that the more "jobs" their customers can hire Starbucks for that are consistent with the brand experience they are building -- coffee break, remote office, meeting spot before going out, social hangout, etc. -- the more of a customer's mindshare and pocketbook they own, and the more loyal customers will be to the Starbucks brand.

Why do customers embrace such a model? Such an approach can enhance the stumble upon factor in terms of cultivating the social aspects of a visit to Starbucks. It can also bridge a gap between disparate friends coordinating a meetup. Plus, there are all sorts of recognition systems and incentives that can better link customer and brand.

Obviously, there is risk, there are ugly downsides of putting yourself out there for both consumer and brand, but I would argue that the cow has left the barn and the cost of not participating is far greater than the alternative.

I have written a blog on the topic called, Mega brands, online communities and 'three walled' gardens. If you are interested in such things, it can be found at:

http://thenetworkgarden.com/weblog/2005/11/mega_brands_onl.html

Also, one of my companies, Me.com (www.me.com), has built a platform called SNAPP (social networking application platform) that is explicitly targeted at the Starbucks of the world in that it is is hosted platform that enables brands and affinity group builders to create their own actively managed communities.

Cheers,

Mark

Charlene Li

John: Thanks for the heads-up on the typo in the title. NOT a good thing to mispell one's own company name!

John

Blogging isn't a job; it's an adventure.

;)

scardinale

Charlene is right in that social networks will change the structure of the "brand" and that is scary to the traditional infrastructure that have built business and revenue models around control.

What is interesting is that the brand is the CONSEQUENCE of a social experience and not the driver (i.e. the iPod is cool because people like its design, connectivity, ease of use, etc, not because Apple said it was cool). This is how it has always been no matter how much corporate marketers have tried to drive the process. Brand building is an awakening of the company's eyes vs demand creation directed at the consumer.

In the past traditional companies have worked to manage the brand when a brand experience happens, but almost in a mystical way (wow, this Diet Coke thing really tastes great, let's build a brand around that). In the near future the letting go will be accomplished by merely paying close attention to the social network, their ebbs and flows, and their collective whispers. It is much more Zen-like (be the rock, don't move the river) and I think this lack of direct control is what establishment is worried about.

Social marketing is indirect not direct and once marketers get their hands around that idea (some already have) they will easily transition to a more collaborative marketing environment.

StupidPoeticJustice

Sounds like 'An Army of Davids"

http://www.amazon.com/gp/product/1595550542/sr=8-1/qid=1141150695/ref=pd_bbs_1/002-4956079-1792068?%5Fencoding=UTF8

Makio Yamazaki

MIT Thomas Malone professor said Organization would be
changing into the adjustment and the upbringing-movement from the top-down management.
In other words, it looks like the dicision-making of bottom-up in the organization.
There would be possibilities of "the distributed organization" which is different from the conventional organization. The software tool of web 2.0 would have new business styles that would be similar to "Kaizen"(TOYOTA),I mean.

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