Social technology marketers bullish in face of recession

by Josh Bernoff

In February we published research based on our expectation that interactive marketers should continue their investments in social applications with a recession potentially coming.

Today we published the results of new research that shows that many interactive marketers actually plan increases in the face of recession. (Forrester clients will be able to see the whole report, others will see a summary when clicking on the link.) We asked this question:

Assuming the economy is in a recession in the next six months, how would you change your investment in interactive marketing overall?

Of 333 interactive marketers surveyed, 26% plan to increase their interactive marketing investments, and 46% will maintain them at current levels. (13% plan a decrease and 15% aren't sure.)

Where is that money going? Here's a chart from the report.

Social networks will get the largest number of increases, over 40% of those using it, along with user-generated content, blogs, and that old standby, email marketing. Every single form of online marketing we surveyed had at least half the marketers increasing or maintaining their investment (online display ads fared the worst; based on this sample it could see more decreases than increases.)

Note that the variation in N reflects the varying number of people familiar with or using each type of marketing. But for all the major technologies we got more than 100 responses.

Are these typical of marketers in general? Remember, the respondents are interactive marketers at large and medium-sized companies and ad agencies, so you can expect a little more optimism. But I believe these results reflect a real commitment to the power of interactive marketing over traditional advertising, which always suffers in a recession.

This is also evidence that in contrast to the bubble of 2001/2002, this housing-driven downturn hasn't spread to depress all investment in new ideas. People are recognizing that in a recession, social application investments are relatively cheap and deliver measurable results, despite their newness.

Our advice to marketers, as describe in the report, is this: measure what you do, so you can justify it when the axe comes. And build assets, not campaigns, it's a better use of your money.

Marketers reading this -- do you agree with what our panel said?

Listening with Summize and Tweetscan

by Josh Bernoff

As Twitter swells, at least in the minds of Groundswell thinkers, you have to wonder what people are saying about you.

It's easy enough to track that (in theory . . . more on that later) using tools like TweetScan and Summize. I had been using TweetScan for a while but @samlawrence kept telling me to try Summize, which has a few more features. Both are free, of course, and they work in the obvious way -- searching the entire public record of all Twitter posts and finding instances of words you request.

There are plenty of examples of companies that have connected with customers using these tools. Mashable describes how a vendor called Disqus solved a customer's problem after noticing a Tweet about it. Amy Worley monitors twittering about taxes for H&R Block. And Comcast is getting started with responding to customers in the space with @comcastcares.

But do these activities scale? What if your brand is huge? Conversation is nice and everything, but what you should you do about it? Here are some suggestions.

1. Start monitoring. It costs nothing but time. Go to Summize and type in your company's name. Or your product name. Or your name. This is hit or miss -- if you name is Fred Smith, or your company's name is Global Communications Corp, you're not going to learn much. But you'll learn more if your product is called something unusual like Kindle or GTA (those are links to Summize searches). This is especially valuable for new products, where feedback can be useful in changing features, positioning, or marketing messages. I've found it extremely interesting to watch people talking about Groundswell, for instance, which has a name sufficiently unusual that about 90% of the tweets that mention it are about the book.
2. Respond carefully. If your product is just getting started or has a tight niche audience, then it's valuable to respond to many of your customers, with an @yourtwitterhandle type reply. This can have a "voice from the sky" quality so open the conversation carefully, e.g. "Saw your tweet, hope you are enjoying our product, tweet back if you have questions." For customers having problems that you can solve, this may be a great way to turn a detractor into a fan (if you can solve the problem, of course). Why is it worth it to nurture these individuals? According to my colleague Peter Kim's report on the topic, Twitter users are more likely to be open to advertising and talk about products, magnifying the result of your efforts. When I see someone twittering positively about Groundswell, for example, I may tweet back and encourage them to write a review at Amazon.com or BN.com.
   
3. Get ideas. Above are three tweets I pulled from a Summize search on Home Depot. What a fascinating peek into people's relationship with this retailer! I can imagine a commercial based on each one (although the 4-year old with the nails is a little creepy). What ideas are your customer's contributing, for free, that could benefit your company or your marketing?
4. Don't get fooled. People who use Twitter are not typical. Based on last year's survey, this group skews young, male, affluent, and early adopters of technology -- and while Twitter has grown since then, it's certainly a mistake to think that Twitter members are typical in any way. So take their ideas, but don't imagine that they are representative.

There is an emotional component to Twitter. The people using it write in a very natural way about their lives, since they use it so frequently. Blogs, discussion forums, the wall on Facebook -- these are all slow-motion conversations. Twitter is a real-time conversation. I must admit to enjoying watching people tweeting about ordering Groundswell, getting Groundswell, reading Groundswell, and buying Groundswell for their friends and clients. Whatever your product is, you deserve that experience, too. So crank up Summize and start listening.

Data chart of the week: who do people trust?

by Josh Bernoff

For today's weekly data chart we'll look at a different kind of data for a change -- not a Social Technographics Profile but some attitudinal data that's highlighted in Groundswell. Today's question is: whom do you trust?

As you can see, 83% trust the word of a friend. But perhaps one of the more interesting points is that the number who trust consumer reviews by people they never met on a retailer's site (like eBags, the example in Groundswell) is 60%, only slightly lower than "a review by a known expert."

Why do people trust strangers?

They don't, not as individuals. But they do in groups. Strangers are assumed not to have an axe to grind. If 100 people on eBags say a laptop bag is great, then it is great. If they say it's inferior, then it is inferior. Regardless of what a so-called "expert" might say.

What does this mean for your brand?

It means that a focus on "influencers" is not enough. You never know who may be reviewing your product, or where. Influencers may touch a lot of people, but so do the masses of reviewers on Yelp, or Amazon.com, or TripAdvisor. And heaven forbid you get people talking about your brand on The Consumerist.

If most of your customers like you, the lesson is this: help them to talk. Install ratings and reviews on your site. Create a blog and let them respond. Give them online tools and energize them. And embrace the fan groups they form on social networks. Fan the flames.

What if your customers don't like you? Shutting them up is not an option. My only useful case study for this is Dell, which (1) started to seek out bloggers who were complaining and solved their problems to make them happier and (2) actually improved their customer service. That's expensive. But if you're in a cutthroat market it's required.

Frankly, I don't have a completely satisfactory answer, so I'm throwing it open to you. What should a company with a poor customer reputation do about social media? Join the discussion about it on our discussion board.

Economies of scale in the very personal groundswell

by Josh Bernoff

There’s a fundamental contradiction at the heart of groundswell strategy.

We’ve told you that it’s a big error to treat everyone in the groundswell as if they were the same. That’s why we find the beehive metaphor inappropriate. People’s contributions are as different as they are.

On the other hand, corporate development for the last 50 years, at least, has been an ongoing search for efficiency. Mass production means cranking out the same product a hundred thousand times at a high degree of quality. Advertising succeeds by giving the same message to everybody. Customer support representatives read from the same script, because the company can’t treat employees as interchangeable unless they treat customers the same way.

As a result, to many of our corporate clients, groundswell strategy seems like a step backwards. “You want us to deal with people as individuals?” they say. “We spent the last 30 years computerizing everything so we can avoid just that!” 

Here’s the secret. When you start a groundswell project, you will be treating people as individuals. But very soon, you’ll be able to get economies of scale. How? By enlisting those same customers.

For example, Dell told us (the story’s in Chapter 8 of Groundswell) that when they started their most recent support forum, 1999, they knew they’d need moderators. They pulled 30 support reps off the phones and converted them into forum moderators. Those support reps answered questions online, just as they had been on the phone.

Already, Dell was getting more efficiencies, since each answer could be read by dozens or hundreds of other people searching for it on their support forum.

Now, five years later, the support forum is many times larger than it was then. And the number of moderators is no longer 30. It’s five. And that’s because the members of the community are moderating it themselves. 

It’s the same in marketing applications. You seek out influencers – bloggers or key people in discussion forums. You connect with them, treat them as important. And they spread your messages into forums that echo and react to those messages, hundreds of times.

Cymfony monitors brand chatter. But the result isn’t just a number – it’s sentiment, together with specific posts you want to pay attention to. MotiveQuest does the same along dozens of dimensions. You don’t have to deal with individuals, but you can, if you determine there are some who deserve your attention.

So as you seek corporate scale economies in groundswell applications, remember these principles.

1. As applications grow, economies appear. Seek them out. You’ll need them to deal with a huge application.

2. Use members of the community to moderate, regulate, and manage the community. It makes them feel good, and it saves you time. This is how Wikipedia became so huge. Every discussion forum and Facebook group has people like this – recruit them and empower them. (And they nearly always work for free!)

3. Use technology where possible. Visible Technologies finds the influencers in your market. Salesforce.com’s idea software lets you turn your customers into an innovation engine. Vendors are springing up all over to solve these problems – paying them is cheaper than hiring people.

4. Don’t avoid the exceptions, seek them out. You’ll learn more from them than from the “masses” – they’re the creative ones. They can make the most trouble, or generate the most positive energy, depending on how you treat them.

This is just a start, but you get the idea. Feel free to add your own scale principles in the comments.

Yahoo! Open throws down the gauntlet for the open social graph

by Charlene Li

Yahoo! unveiled Yahoo! Open at O'Reilly's Web 2.0 Expo today. In a nutshell, Yahoo! is doing the following:

1. Rewiring Yahoo!. They are making it possible to create applications that can be shown throughout all of Yahoo!. That means search, mail, front page -- everything.

2. Open Yahoo! to developers like never before. Third party developers will be able to write applications that appear throughout Yahoo!. That's right -- you can write a mashup that integrates Yelp reviews into search results that appear anywhere -- on search results or even the home page.

3. Making Yahoo! more social. Yahoo! has over 10 billion connections lodged inside its various services -- think about all of the relationships expressed in address books, Messenger buddy lists, and most importantly, Yahoo! Mail flow. You'll be able to have your social graph appear throughout Yahoo! as a results (more on what this will look like below).

For me, this is a significant step forward in the next phase of social networks and the social Web. I wrote about this last month in a post about the future of social networks, where social networks will be like air. It makes no sense that your social connections be locked up in a social network -- when I receive a message within Facebook, there's no way to forward to it my work colleagues, friends, and family who are not on Facebook. And that significantly reduces the effectiveness and value of Facebook to me.

Yahoo! is clear that they are NOT creating another social network. Yahoo! CTO Ari Balogh said in his Web 2.0 Expo speech, "This is about making Yahoo! social in every dimension. Social is not a destination -- it's a dimension and it will infuse all aspects of a consumer's experience on the Web."

I couldn't agree more. Yahoo! is the foundation for hundreds of millions of users every month (Ari said that 500 million people worldwide use Yahoo! each month). But the real potential of this is that the social experiences that a person has on Yahoo! will be ported to other sites. In March, Yahoo! announced that it would support OpenSocial, meaning that applications developed for and on Yahoo! will be portable to other OpenSocial sites like Google and MySpace.

The potential here is that what will become portable is more than just the applications, but also the social graph of each Yahoo! member. There are still plenty of details to be worked out, in particular, control over each person's social graph. But in my discussions with Yahoo!, I'm confident that they will take the appropriate measures to ensure that each person has full control over how their activities and relationships are mapped, expressed, and revealed.

Ari didn't discuss specific timing, but I suspect that we'll see parts of Yahoo! Open rolling out over the next few months. I'm especially interested in seeing how Mail integration rolls out, especially the prospect of being able to implicitly map out my relationships. That's because I don't use Yahoo! Mail -- I use Gmail. Will Yahoo! enable me to reach into Gmail with its APIs and map out the relationships? I believe that they will -- after all, it behooves Yahoo! to bring me back into the Yahoo! network, even if I still keep my feet firmly planted in Gmail. 

The question inevitably arises -- is this a "Hail Mary pass" on the part of Yahoo! to fend off Microsoft? I think not. To Yahoo!'s credit, they have been focused -- as much as a company can be under the circumstances -- on executing on a strategy initiative that started last year. Regardless of how the Microsoft/Yahoo! dance turns out, Yahoo! will be setting a precedent for other portals and social networks to follow.

So it will be interesting to see how quickly the other players -- like Google, Microsoft, MySpace, and Facebook -- answer the challenge that Yahoo! has set down. I don't think it's a matter of if, but rather, a question of when.

I'd like to hear your thoughts about what a completely open, "social-ized" Yahoo! means to you. What experiences would you want? What concerns do you have?

Meet Charlene and Josh at Web 2.0 Expo

By Charlene Li

Josh and I will be at the Web 2.0 Expo this week, with the hope of meeting as many of you as possible! Below is our general schedule, and in between sessions we'll be roaming the halls and show floor. You can track our whereabouts via our Twitter feeds (Charlene and Josh's feeds, respectively).

And if you have a copy of the book, we'll be happy to sign it (it will be on sale on the Expo floor).

Wednesday, April 23rd

9:40am-10:20am, Conference Session, "Creating A Coherent Social Strategy For Business", Room 2022.

Both of us will be presenting key frameworks from the "Groundswell" book, as well as how technology and business people can and need to work together to create a strategy. You technically need a Conference Pass to see the session, but O'Reilly is including our session as part of Web2Open, meaning that if you have that pass (which is FREE) you can attend our session. When you register on site, use the code Websf08opw to get the Web2Open pass.

10:40am-12:00pm, Web2Open Discussion

This is an open discussion forum following our conference session. We'll facilitate discussions around strategies, tactics, and metrics used by companies -- and turn to the people who are active practitioners to join the conversation. Note that you'll need the Web2Open pass to attend this session as well.

4:30pm-5:00pm: Keynote: "A Conversation With Max Levchin"

Charlene will be running the kickoff Q&A session with Max Levchin, CEO of Slide. If you have any burning questions you'd like to see her ask Max, please add them to the comments or email them to cli at forrester dot com.

9pm onwards: Meet up at Restaurant Lulu, 816 Folsom @ 4th Street

Come meet us for no-host drinks at the bar of this great restaurant.

Thursday, April 24th and Friday, April 25th

Josh will be around Thursday morning before heading back to Boston.

I will be doing some real-time research on two topics: widget marketing and the future of social networks. If you have anything to add to these two research areas, please let me know. Two sessions I'm looking forward to are "Open Platforms" with David Recordan from Six Apart, and "Widgets Grow Up" with Alex Bard (Goowy Media), Tariq Krim (NetVibes), and Hooman Radfar (Clearspring).

Hope to see and meet many of you later this week!

Notes from inside the groundswell

by Josh Bernoff

As we continue to promote Groundswell ahead of this week's formal launch at the Web 2.0 Expo, an amazing thing is happening.

We really do feel like we're becoming part of a conversation.

The simplest way to see this is to do a Tweetscan of "groundswell." You get a few extraneous tweets, but in general you'll see what people are saying -- and in general they're exciting to be finding the book, buying the book, and reading the book. (Except for Shannon Whitely who put it down for a second and somebody swiped it.)

I'll highlight a few bits here from the blogosphere. First of all, several bloggers have taken us up on our offer to interview the authors. From Guy Kawasaki's interview with me:

Question: Many experts cite Dell Hell, Comcast rep sleeping, etc. as cataclysmic occurrences, but Dell Hell didn't cause Dell's issues, and Dell is substantially back. Comcast is still around, and it gives me 25 megabit Internet access in my house.

Answer: Dell Hell was actually a wakeup call -- Dell is substantially back in part because it has learned to listen better to its customers. They should thank Jeff Jarvis for waking them up. As for Comcast, it's paying millions to run commercials about how Comcastic it is, but if you go to YouTube and search Comcast the first result is the sleeping technician. In part, those commercials are paying to undo that YouTube video.

From Lee Odden's interview with Charlene:

Question: Clever and nimble companies that have successfully leveraged the internet and marketing online have become formidable alternatives to larger, legacy competitors. It would seem that those companies that can best adapt to and engage social technologies like blogging, reviews, social networking and media will gain even more of an advantage. What advice do you have for companies with a “wait and see” perspective?

Answer: Don’t wait too long! Some companies think that they can wait until the technology is “proven” or when it becomes “safer” to engage. They want ample “proof” that these technologies work and that there is a proven ROI associated with these efforts. I think it’s a cop out, a way to dismiss these technologies as experimental and early, rather than taking a closer, deeper look to understand the power they bring Adapting these new technologies is really, really hard work, so any company that does have a “wait and see” attitude is going to behind the curve in another year or two.

We'd love to do more of these! You ask very good questions.

Our reviews have been overwhelmingly, embarrassingly positive, including five 5-star reviews on Amazon. (If you've ready the book and you like it, write us a review!) Our simple advice to get good reviews: write a good book, then encourage people who read it to review it. To Larry Weber, who wrote in his review that we were late to the party, I'd respond that we seem to be in time to help an awful lot of people who are calling us from companies all over the place.

We keep a running feed on reviews from the blogosphere. Here are a few of my favorites (I've tried to pick the most interesting, not just the nice stuff they said). Bloggers -- if I haven't included yours, we noticed you, just don't have room for everybody. And if you've read the book but haven't written a review, there is certainly room for opinions!

Customers Rock: I agree with Charlene and Josh - the most important part of engaging in the groundswell is setting objectives.  There are too many companies out there trying to “do social media” just because their competitors are doing it.  Groundswell will help your company take the right perspective and set the right priorities.

FaceReviews: This might prove an eye opening read for people that think social technologies are a fad. It will be an eye opening whack on the side of the head moment for many people that think that these social technologies will not/ can not impact their business.

Whatsnextblog: If you read this blog with any regularity, you know I don't gush. Rant yes, gush no. But I'm gushing about Groundswell. Order it now, today. Get out your magic marker and your sticky notes, and go sit in a corner and read this book. [OK, that's just flat-out praise, but how could resist.]

Marketing & Strategy Innovation Blog: Over and over, Li and Bernoff emphasize the need, when using these technologies, to listen, and not to shout. To be transparent, and to be authentic. Whether this is possible with traditional companies, in which desiring to control the message is deeply ingrained, remains to be seen.

Inside the Marketer's Studio: Forrester Research's Charlene Li and Josh Bernoff is the best book on social media I've ever read, and it may be the best book ever written on the subject. . . . Is the book perfect? Not quite. My biggest complaint is that it doesn't dive deep enough into what goes wrong and how some campaigns could have been better.  [We tired hard to get more of those failures into the book, but people really don't want to talk about them!]

Finally, for those of you that are more audio-visually oriented, here's a podcast interview with Charlene from Nick O'Neill of Social Times and a video of both of us, at Forrester's Marketing Forum, with Rodney Rumford.

Data chart of the week: car brands

By Josh Bernoff

Today we release our fourth data chart.

Our surveys cover hundreds of brands including retailers, computers, cars, and financial services companies. This allows our analysis to go far beyond what you can learn from demographics, like the profiles from our profile tool. For example, we recently published an analysis of 13 car brands and their owners. Below is a subset of four interesting brands. (You can see the full analysis if you’re a Forrester client or you buy the report; otherwise the link above will show you only the abstract.)

In every market we examine, patterns emerge. Some brands have intensely engaged customers – those brands are missing the boat if they don’t get started with social applications rapidly. Others have slower moving customers – they can affort to wait. And even among those with high engagement, the type of social participation varies.

In this case, we see that Pontiac owners have very few Inactives and the most Joiners of the four brands. With 30% Joiners (social network participants), it’s imperative that Pontiac connect with its owners where they’re already connecting with others. In fact, Pontiac started a college scholarship “Game Changing Performance” campaign on Facebook.

Honda has the most Critics, at 29%, but Honda hasn’t yet created a blog for them to react to, even though Technorati shows over 300 blog posts linking to the Honda site. The top Honda blogs are on automotive.com and motortrend.com, plus one maintained by a fan.

Jeep has the most Creators, at 22%. Sure enough, YouTube shows almost 40,000 Jeep videos and there are hundreds of Jeep blogs. I hope that Jeep is monitoring this activity through a service like Cymfony; it’s an important source of feedback and insight.

Of the 13 brands that had enough customers to allow us to do a profile, Mercury had the most Inactives. In my opinion, brands with a profile like Mercury’s shouldn’t put aside much budget for social applications, aside from maybe some basic monitoring or a private community from a company like Communispace. What would you do if you were a brand manager at Mercury?

Plug: this post is sponsored by our Technographics team. They want to hear from you if you're interested in data like this about your brand.

Try our discussion forum

by Josh Bernoff

In Groundswell we promised to invite you to join the discussion.

Our discussion forum is now up and running. We'd love your participation. We're kicking this off as a place where businesspeople can help solve each others' problems in creating, implementing, managing, and promoting social applications.

We've added some topics to start things off -- if you'd like to see more, comment there or on this post.

Survey: Your feedback wanted for our Groundswell Blog

by Charlene Li

In an effort to listen to our readers and to improve this blog, we've created a survey to get feedback on this blog, as well as several other Forrester blogs (Forrester's Marketing Blog, Web Strategy by Jeremiah Owyang, and Being Peter Kim).

We'd like to get your honest feedback with the survey, and it will take a few minutes of your time. We'll publish the results here, so that you can learn about your fellow readers and also connect via comments.

The feedback will be invaluable to us -- confirming what we think we're doing right and identifying areas where we need to improve.

Please take the Groundswell Blog Survey - we need your feedback!

Thanks!