How I made $8.33 with Twitter

by Charlene Li

I'm often asked if Twitter is important or not, and while I'm not a major booster, I fall on the side that it's an idea and technology to watch closely. A conversation with a colleague yesterday sparked me to write this post, which has been rattling around in my brain for a while. It shows how Twitter connects people in new ways previously not possible. 

Twitter is somewhat of a new thing for me -- I'm what is described  as a "binge twitter-er", in that I go for long periods when I don't tweet anything. I'm getting a little better, using Twitter to ask questions or to share a post or link. But I do think it's particularly interesting in that it's a unique communication tool, and I thought I'd illustrate it with this example.

I'm in the midst of a launching the Groundswell book and realized that given all of the upcoming travel, that I would really benefit from a Clear pass, which allows me to skip to the front of the security lanes. I'm lucky in that the airport closest to me, SFO, has a Clear Lanes at pretty much every security area, so I can fly through. I have to say, I am absolutely loving it.

During the sign-up process (which I did back in January), I noticed an area where I can enter a discount code. A little bit of searching turned up that I could get a referral code from someone who already had a Clear pass, and we would both get a free month of service.

But how to find someone? I figured there had to be someone I knew amongst my frequent flyer friends and colleagues who had a pass....but I didn't have the time to send out an email, nor did I want to spam everyone. That's when I decided to Twitter the following:

charleneli   Signing up for flyclear.com. Does anyone have a referral code I can use? I think you'll get 1 month free. FCFS. 04:53 PM January 16, 2008

My friend, Christopher Carfi, saw my tweet and replied with the following:

 ccarfi   @charleneli: i think @anildash uses flyclear. 04:56 PM January 16, 2008 

So still in Twitter, I sent a direct message to Anil Dash at Six Apart asking him about it. Here's his response:

anildash i *love* Clear. My referrer code is *********, and i blogged about it here: http://tinyurl.com/2fhf9r 05:12 PM January 16, 2008 

(Note: Clear members aren't allowed to broadcast/publish their discount numbers, so I removed it from Anil's reply)

Now this is important to note. The time between when I put out my first tweet and Anil's response was 19 minutes. That's pretty fast, especially considering that I most of that delay was me getting around to sending Anil the direct message in the first place.

Imagine what it would have taken for me to track down, email/spam my contacts to hunt down that code. So the benefit to me was a month of Clear's $100 service, or $8.33.

I'd love to hear how Twitter has helped you get something done -- beyond sharing links, ideas, or communicating with people in your network.

And if you're thinking about getting a Clear pass, let me (or Anil) know and we can "make" another $8.33 together!

Audio interview: social applications in a recession

by Josh Bernoff

Jennifer Jones of Marketing Voices inteviewed me for Podtech.net about social applications in a recession.  They featured this on their home page for a while.

I've embedded the Podcast here for your convenience.

The future of social networks: Social networks will be like air

by Charlene Li

On Monday, I gave the kick off speech for the Graphing Social Patterns West conference on the topic, “The Future Of Social Networks” (slides are available on SlideShare, summaries available on News.com, ReadWriteWeb, and allfacebook.) Note that this is still ongoing research, so I welcome your comments.

I set my time frame for the long term – five, even ten years out. That’s because unless we know where we want to end up, how could we ever craft a strategy to get there? For inspiration, I thought about my grade-school kids, who in ten years will be in the midst of social network engagement. I believe they (and we) will look back to 2008 and think it archaic and quaint that we had to go to a destination like Facebook or LinkedIn to “be social”.

Instead, I believe that in the future, social networks will be like air. They will be anywhere and everywhere we need and want them to be. And also, without that social context in our connected lives, we won’t really feel like we are truly living and alive, just as without sufficient air, we won’t really be able to breathe deeply.

There are four components of what I’m calling this idea of “ubiquitous social networks”: 1) Profiles; 2) Relationships; 3) Activities; and 4) Business models. These aren’t new -- I wrote about the first three in my original report on social networks back in May 2004. But in the context of ubiquitous social networks, they will develop into the following: 1) Universal identities; 2) A single social graph; 3) Social context for activities; and 4) Social influence defining marketing value. For more detail on each of these components, see the extended post (warning: it's really long!).

The ubiquitous social network isn’t going to happen overnight – in fact, it’s going to take five+ years to come to fruition. This is part of the continued evolution of open platforms, starting with walled garden services like Prodigy, Compuserve, and AOL that evolved into the major portal aggregators like Yahoo!, MSN, and AOL. This gave way to the “search era” where Google et. al. made all of the Internet easily accessible. Today’s social networks are a throwback to those early closed platforms, and they will be opened up by new “entrants” into the social space – namely, Yahoo!, Microsoft, Google, and AOL – who will leverage their deep, daily relationships with online audiences.

In the end, there are two essential things that have to present for this all to happen. The first is technology -- ubiquitous Internet access and the servers to enable real-time social graph access. Given the pace of technology development, I'm pretty sure this will happen. The second is much harder -- trust has to be present, between people, between social networks, marketers, and developers. This is what is going take a lot of time, effort, and patience, but the optimist in me thinks that it will come. That's because people will press for it, demanding that sites and applications adhere to a Bill of Rights for users of the Social Web.

So what is a social network, marketer, or developer to do? Here are my recommendations:

• Create linkages between services based on individually-controlled identity federation
• Compete on creating the most compelling social experience, not social graph lock-in
• Develop social applications that have meaning
• Integrate social networks into existing activities
• Design business models that reflect the value created by people’s social network

In the extended post (click on "More" below) is a more detailed explanation of how I see each of the four components of ubiquitous social networks developing.

As I mentioned above, this is ongoing research and I'm far from done. So if you have ideas, comments, criticisms, or examples, let me know via comments below or email at cli at forrester dot com.

Rethinking Net video: The Frenzy of Diggnation Fans

by Josh Bernoff

When Kevin Rose and Alex Albrecht invited me to watch their live Diggnation podcast recording in St. Louis (we were both there to connect with some of Anheuser Busch's marketing staff) here's what I imagined: a camera set up in a bar with two guys talking, and patrons walking by and wondering what was up.

Boy was I wrong. Here's what it was really like:

300 rowdy, screaming people crammed into a performance space, cheering, interrupting, and grooving on being in the same room with somebody they admire. Love. Are into. Kevin and Alex got a treatment that wouldn't have seemed unusual for Sacha Baron Cohen or Jennifer Jessica Simpson.

Who are these guys?

Kevin was an on-air personality on TechTV and created Digg, the site where people vote on the news stories they consider most worth reading. The Diggnation podcast is an outgrowth of that site, an on-air review of the stories that matter to Digg members. It's part of a lineup of shows put on by Revision3, run by Kevin's ex-TechTV crony Jim Louderback.

But what it really is, is two guys on a couch, drinking and shooting the bull with the tens of thousands of people they know care about the same things as them -- which means tech, but also other news. Among the stories Kevin and Alex highlighted this week were the new Indiana Jones trailer, the death of the HD DVD format, and . . . Castro's retirement. Yup. They think a new government in Cuba is cool. Not as cool as Indiana Jones, but close.

Flush your idea of digg's audience down the toilet. First, all they had to do was announce they were coming to Saint Louis and hordes of people people showed up. I met or heard about people who drove all the way from Kansas City (four hours) and Minneapolis (more like ten). The audience was about 25% women. And while it was dominated by 21-30 year olds, you would be hard pressed to call these folks technogeeks. These were just people who enjoyed being part of an idea -- the idea of a guy on the net saying and doing whatever he feels like.

Diggnation's sales manager told me they charge $16K for a sponsorship. Kevin and Alex talk about the sponsors on air, like Johnny Carson used to do, but with a lot more profanity (and real enthusiasm). There is no focus group. There is just a guy who knows what his audience wants -- because, after all, he has a Web site where they vote on it.

Do you think big media can really get their heads around this? Any of it? I don't think so.

Note: I'm embedding last week's podcast since this week's isn't edited yet. When it comes out I'll replace it. Now you can see what I saw (below). Profanity included.

Recession comments, day 2: good for social applications, but not for social media

by Josh Bernoff

I got a fair amount of pickup on my recession post, including articles in AdWeek and MediaPost, and mentions a bunch of blogs including Logic+Emotion, Web Strategist (my colleague Jeremiah), Micropersuasion, ZDNet, and even Techmeme. There was also this interesting post from Bernard Lunn at ReadWriteWeb, "This is not our bubble," which looks at how the recession will affect entrepreneurs and venture investments.

There was plenty of cheering from the social sphere, along with some jeering, too. But I think some people missed the point (or more likely, I wasn't clear enough about what the point was).

I say social applications and not social media for a reason. People will want to boost word of mouth in a recession. This is great news if you're selling community apps to companies. It's also good news for Facebook community applications and groups. You're a company and you want to charge up your citizen marketers about your product -- you can build your own application or climb on board an existing network and work within it.

This is not good news for plain old banner ads, or any other form of CPM-based, brand-based advertising. That includes banner ads in Facebook. Raw monetization of traffic won't be worth any more in a recession -- it will be worth less, since awareness-building will be less important.

What does this mean?

First of all, it means that Facebook, Myspace, et. al need to continue to work harder on innovative ways to create social advertising opportunities that are more creative and less intrusive than Beacon v1. Is the recession good or bad for the big social networking sites? Depends on how soon they can get those ad formats working.

Second, it means all those me-too, social-network with a twist startups who don't have a monetization plan, or whose plan is dependent on traffic=advertising, are in trouble. This is social media -- media being defined as ways to turn traffic into advertising. Not a good place to be sitting in a recession, when marketers are looking for scale and interaction and persuasion, not just impressions.

Why Social Applications Will Thrive In A Recession

by Josh Bernoff

Is a recession coming? Don't ask me -- I'm not an economist, and even the economists don't really know. But if it's anything like the last recession, advertising will plummet and experimental media will crater. (In the 2001 recession, US advertising dropped 9% and Internet advertising plummeted 27%, according to Veronis Suhler Stevenson.)

But do not panic. Things are different this time.

Here's what smart marketers should know:

• It's not a tech bubble. The last recession was caused by the dot-com bubble and the terrorist attacks. There was a lot of ignorant money out there chasing illusory opportunity, and companies had overinvested in technology. This time, the precipitating event is a housing bubble, and technology spending is not irrational.

• Awareness ads will lose effectiveness. Advertising (or as we often call it, "shouting") is mostly about generating awareness and reinforcing brands. In a recession, ordinary consumers like you and me aren't as willing to spend. Sure, we'll be aware of the product, but that doesn't make so much difference when you're worried about your future. Advertising is expensive and is a lot easier to cut than headcount. Many are predicting ad spending will hold up; I'm not so sure.

• But social applications are about consideration, not awareness. Blogs, word of mouth, social networks . . . they're about people connecting with other people. You may resist advertising if your finances are tight, but if your bud tells you that new movie is really worth seeing or that the Gap has the cutest new tops, that's more persuasive than advertising. Basically, in a recession, the consideration phase is more important than awareness -- and that's where advertising flops and social applications succeed.

• It's cheap. Social applications can be nearly free (think blogs, Ning.com, facebook pages) and even more sophisticated communities are typically $30K to $200K -- a lot cheaper than a significant sized ad campaign. After our last post, all the responses were positive. One interactive marketer from a highly cyclical company told us this:

"Budgets are tight in light of the economic conditions as you surmise, but [the budget for social applications] has not been impacted. We are still keen to move forward with our trial and have support….at this point anyway.  Interactive in general has been more protected than other comms areas and saw an increase."

• It's measurable. If your social application doesn't have a measurable output, you'd better get one. But if it does -- if it generates leads, or conversions, or buzz, or something useful -- then you can prove it's working. beinggirl.com is four times as effective as TV ads, Procter & Gamble told us. That won't get cut in a recession.

These same arguments apply to some other forms of online marketing, including search ads and email marketing. Those are going to be good investments in a recession. If you're smart, you'll position yourself now with proof your apps are working. Then when the ad dollars get tight, you'll be in good shape.

Click here to see what we wrote for our clients (we've made this piece of research free for everyone).

Also on this topic, see also David Armano's post on 10 ways digital can help you thrive in a recession. And an earlier Paul LaMonica post (CNN Money) featuring my old colleague Jim Nail.

Finally: I'm anticipating this topic might get some currency around the blogosphere and the mediasphere . . . if you want to follow the reactions, tune in to my twitter feed at twitter.com/jbernoff

How the recession will affect social applications

by Josh Bernoff

I'm just curious -- corporate social strategists: Are you getting pushback in the face of the potential recession? Are your budgets being cut? Or maybe increased?

Add your comments here or email me at jbernoff (at) forrester.com -- I'd love to hear from you.

Forrester videos on social technologies from Consumer Forum 2007

by Charlene Li

The video highlights from our Consumer Forum 2007 are now available. Josh and I were keynotes and we spoke in details about some of the key highlights from our book. Below is a summary of the keynote speakers and speech topics. In particular, I highly recommend the speeches by Christie Hefner and Henry Jenkins.

***Note that you need to use Internet Explorer to use the navigation and see the slides.***

• Charlene Li — Vice President, Principal Analyst:  Your Customers Are Revolting ;-)
• Josh Bernoff — Vice President, Principal Analyst:  Business Strategies For Success In The Groundswell
• Christie Hefner — Chairman and CEO, Playboy Enterprises & Brian Haven — Senior Analyst:  Social Networking And User-Generated Content In Today’s Media Environment
• Christina Norman  — President, MTV Networks:  MTV — Defining The Next Generation
• Robert J. Bach — President, Entertainment & Devices Division, Microsoft:  Connected Entertainment: Delivering New Ways To Bringing People Together
• Richard Edelman — President and CEO, Edelman:  Corporate Image In The Age Of Social Technologies
• Jeremy Allaire — Founder and CEO, Brightcove, Ze Frank — Founder, ZeFrank.com, Philip J. Kaplan — Founder and President, Products, AdBrite, & Shar VanBoskirk — Principal Analyst: Three People Who Are Changing The Face Of Media
• Henry Jenkins — Co-Director, MIT Comparative Media Studies, MIT & Josh Bernoff — Vice President, Principal Analyst: Why The Convergence Culture Matters To You

• Charlene Li — Vice President, Principal Analyst:  Your Customers Are Revolting ;-)
• Josh Bernoff — Vice President, Principal Analyst:  Business Strategies For Success In The Groundswell
• Christie Hefner — Chairman and CEO, Playboy Enterprises & Brian Haven — Senior Analyst:  Social Networking And User-Generated Content In Today’s Media Environment
• Christina Norman  — President, MTV Networks:  MTV — Defining The Next Generation
• Robert J. Bach — President, Entertainment & Devices Division, Microsoft:  Connected Entertainment: Delivering New Ways To Bringing People Together
• Richard Edelman — President and CEO, Edelman:  Corporate Image In The Age Of Social Technologies
• Jeremy Allaire — Founder and CEO, Brightcove, Ze Frank — Founder, ZeFrank.com, Philip J. Kaplan — Founder and President, Products, AdBrite, & Shar VanBoskirk — Principal Analyst: Three People Who Are Changing The Face Of Media
• Henry Jenkins — Co-Director, MIT Comparative Media Studies, MIT & Josh Bernoff — Vice President, Principal Analyst: Why The Convergence Culture Matters To You

MySpace and Facebook launch new Advertising products, why Hyper Targeting, Social Ads and rise of the “Fan-Sumer” matter to brands

By Jeremiah Owyang, insight from Charlene Li and Shar VanBoskirk.  This is also being cross-posted on the Jeremiah's Web Strategist Blog and the  Forrester Marketing Blog. 

Executive Summary
Both Facebook and MySpace have launched profile and network targeted advertising and marketing products. As they both use member interests and the communities which they are part of, trust continues to become key in adoption as information is passed along the network. The sheer size of MySpace’s member base, as well as the thriving local business membership will lead to success. Facebook, which brings a unique solution evolves advertisements to endorsements and encourages members to subscribe to a brand in what we are calling “Fan-Sumers” (an evolution of the consumer). As consumers share their affinities, brands can advertise using trusted social relationships.

---

Data: Highest trust comes from friends or acquaintances

(Left Graph: Consumers trust their friends and acquaintances far more than any other sources –Report: Leveraging User-Generated Content, 2007)

Trust is and will continue to be one of the most important attributes in the decision making process. 

Communities form online, trust develops
How we get information continues to evolve as communities form online organized by individuals with similar interests. Just like in real life, we identify our interests, and are often influenced by opinions and experiences of trusted peers in our communities. For many, social networking sites embody these relationships and influence how trusted decisions are made.

---

MySpace: Brands have a home and can hyper-target ads
The already active MySpace platform is leveraging their already active member profile pages, encouraging the many small and medium businesses to setup a online storefront and providing tools to make it easy to self-serve advertisements to their customers. It’s easy to make the case that demand and inventory are present.

[Brands can now self-serve a targeted marketing and advertising campaign within the already thriving MySpace community]

Webmaster not needed: MySpace profile for businesses
Small businesses can continue to build their online profile on MySpace (many of them already have), but now, because of their familiarity with self-marketing (restaurant, nightclub, and other local businesses and their customers) on Myspace.

Self-service ads remove middle man
When friction is removed, efficiency is created. With MySpace’s “Self-Service” ad network small businesese can target ads across a variety of affinities (over 300) and deploy ads on users’ profile pages. These ads, which should (by theory) be relevant and contextual to a user who has self-populated their profile page will have these ads displayed.

Advertising balance required in already busy MySpace
With marketers already with a strong presence in MySpace this could continue to erode away at early adopter “cool kids” from embracing MySpace. But as cycles have shown, where communities form, marketers follow.

User experience continues to be free-form
These ads, which will conform to IAB advertising standards (sizes) will give advertisers the freedom to create the ads in the style accustomed to the network. Yes, expect more blinking text.

To watch: OpenSocial
As OpenSocial starts to be deployed across MySpace and other partners, expect profile ads to be tied to widgets and vice versa; a fabric of links. I’ve already outlined How to explain OpenSocial to your executives.

Inaccurate user profiles could result in mis-targeting of ads
We know that many members do not make their profiles accurate which could yield inconsistencies in how and where ads are displayed. While MySpace has assured they’re accounting for rogue outliers, expect some inefficiencies in advertisements.

Our Call: Sheer mass will yield success
We think this to be a win for MySpace, given their great reach, there are millions of users with active profiles, and there’s also plenty of inventory as many small and local businesses that are present will be comfortable deploying ads where their community already exists.

---

Facebook: Rise of the Fan-Sumer
Going beyond just profile matching of advertisements, Facebook allows consumers to self-identify with brands and becoming fans. In turn, brands can use these “Fan-Sumers” as endorsers to their own trusted networks, resulting in trusted word-of-mouth. Brands can also self-manage their own campaigns, and there’s some unique opportunities for eCommerce widgets or applications to be part of this formula.

[Using Facebook, consumers will publicly endorse brands, resulting in the birth of the “Fan-Sumer”, causing efficient word-of-mouth marketing in their trusted network]

There are three major components to today’s announcement, they include the following:

1) Facebook Pages: Brands get their own profile
For the first time, businesses will legitimately be able to setup profile pages, much like MySpace’s business profiles feature. Next, Facebook members will add these brands as ‘fans’ (much like friends) and this will produce a connection between the parties. Members will self-identify with brands in what we are calling “Fan-Sumers”. Furthermore, this service, called “Beacon” gives third parties the ability to share information on the newsfeed and provides lots of unique opportunities. Sponsored groups will start to evolve into this new form brand profile as this system gets adopted.

2) SocialAds: Endorsements at the friend level lead to eCommerce
Once a member has indicated they are a fan of a brand, that brand can choose to purchase SocialAds (from Facebook Sales or via a self-service platform). A unique endorsement of a product or brand will now appear on that individuals news feed or banner or skyscraper ads. Advertisers can purchase social ads target by profile demographics and profiles, as well as by activities done in Facebook. Payment is an auction-based system available to marketers via both CPM and CPC pricing.

3) Use “Insight” for control and flexibility
This self-service dashboard called Insight gives the marketer detailed knowledge how their advertising campaign is working on Facebook. It’s expected that advertisers will have flexibility, control over the type of ads they deploy, in what quantity, and the demographics they want to target.

A likely scenario:
Shauna, who enjoys Revlon products, indicates she’s a fan of the brand and becomes a Fan-Sumer. Marketers at Revlon can then purchase SocialAds, which will then display on Shauna’s newsfeed or on ads on her profile. If Shauna purchases Revlon makeup from Amazon, her newsfeed could indicate an eCommerce links recommending it to her 100 trusted friends, resulting in further sales.

[The traditional marketing funnel as we know it is distorted; endorsements are now passed from trusted customers to prospects, not direct from the brands themselves]

Implications for Facebook:

Members have more control over ads
Facebook users can opt to turn off social ads, and friends of that user can ‘dial down’ endorsements they see using preferences. We believe that Facebook is attempting to respect the rights of users by giving control to members to ‘opt-in’ to become a Fan-Sumer.

Quest for Fans will cause brands to beg
Since social ads only work if a member has indicated they are a fan, brands will be working to earn and buy fans to accept them as members. Expect a lot of noise to be generated from this activity as brands run campaigns to encourage members to add them as fans through discussion boards, banner ads, and special offers.

Hard to qualify a “business”
Facebook is limiting these features to ‘real’ businesses and organizations. Expect an entire team to be crawling and dealing with this qualifying the issue. As recent member accounts have been disabled from Facebook, expect businesses and organizations to encounter same issues.

Limited ad supply to raise prices
Because Facebook members will see only two social ads per day, we expect the supply of ads to be in scarce supply and thus raising prices and not matching the value. This could shift ad buying to large brands who have experience buying and managing search and direct response ads.

Our Call: Brand affinity leads to community endorsements and more trusted marketing.
We see this as a win for Facebook, this highly targeted system isn’t just about web advertising but about brand affinity and hooks into what’s really important, trusted endorsements from people in a network. This truly is the next generation of advertising. Facebook tells us that the worst case it will be 2 times click through rate over the performance of (existing is 4-26%)

---

Next Steps For Brands

Experiment: Because of the control and flexibility, we recommend to brands that are currently on either of these social networks to experiment and test.

Learn how to efficiently manage your campaigns. There’s clearly a trend towards self-service, which provides efficiencies for both businesses and the platforms.

To know: Marketing has changed, advertising is no longer a sole-solution. Marketers must also learn how to be part of communities, engage with them, and be part of the conversation.

To know: Marketing is now distributed, brands must embrace communities where they currently exist, rather than solely driving them to their corporate website.

[While traditional search advertisers like Google and Yahoo match by keyword, My Space and Facebook match on something far more powerful: people and their relationships]

This digest not only explains what is happening, but why it matters to you. If this was helpful, please pass it on. Love to hear your thoughts, please leave a comment, even if you don’t agree.

What does Google really want for YouTube?

by Josh Bernoff

The San Jose Mercury News, among others, is reporting that Google's YouTube will begin checking content for copyrights, specifically in a test with Disney and Time Warner's content. They finally admitted they are using Audible Magic's clever system for checking copyrighted music, which the Merc reported earlier but Google wouldn't confirm.

Now Google is asking copyright holders to send them copies of videos to check against. Mark Cuban, ever the copyright defender and YouTube attacker, cried foul at that one.

Now I'll tell you what's really happening here (in my analyst's opinion).

Google will indeed start "fingerprinting" and indexing any video copyright holders send it. It will even get around to using this to block video content that it can identify that way, just as it is promising. This blocking will be poor at first -- it's hard to recognize video content -- but it will get better over time. (It won't stop the Viacom suit, though.)

In the meantime, Google will start to assemble an (internal) collection of copyrighted video. No, they won't steal it or publish it. But as they develop algorithms for identifying video by machine, they can use this collection as a test. Does our algorithm correctly identify the last episode of "The Sopranos," the "Daily Show" from last Tuesday, the evening news from WMUR Manchester for April 1, 2007? Can we really tell when Cameron Diaz was the guest on the Tonight Show using our face recognition algorithm? And so on.

There are hundreds of thousands of hours of professional video produced every day all around the world. This adds up to way more than the 10 million or so music tracks Audible Magic is collecting -- by orders of magnitude. Audible Magic has a great asset -- all the music labels send it all their music for indexing. If Google gets its way, all those video producers will pipe their video into Google, with descriptions, every day. Every movie and all the DVD extras. Every TV show. Every commercial. Every baseball game and cricket match. Every music video. Everything. And that, my friends, is a pretty good repository to test your video search on.

This is just what Google needs to make a video search that doesn't suck. And since everybody's else's video search sucks, that will be an incredible edge for Google.

Tags: YouTube, copyrights, Viacom, Google, Audible Magic, video search, bernoff, Forrester Research, Groundswell

Add to del.icio.us