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Ok everyone, on 3. 1, 2, 3!

1. Markets are conversations.

2. Conversations happen around social objects.

3. Social objects are products or services that are remarkable.

4. Remarkable is not just something special, but something worth being remarked about.

Ok, with this in mind, last night as my house mate and I stalked people on Facebook, my shiny, tiny god was in my room and having been for a run I was feeling very lazy, so I grabbed her obelisk of a laptop and logged in.

As soon as the page loaded I was greeted with the below screen – and apologies to anyone whose privacy has been invaded, particularly those who now are forced to acknowledge they know me in real life – advising me the browser I was using was IE 6 and my Facebook experience may be compromised by this fact.

Browser help in Facebook

Now, I don’t actually log in to Facebook all that often these days, it has worn a tad thin for me. In this though I thought there was a great point to be made about the things you can and should do for the people who use your services or products. It is so easy for Facebook to know what browser I’m using and to suggest upgrades or alternatives (for the record, I use Firefox on my own machine). WHat are the other ways service just happens because people no longer need to ask, they just do?

– The cafe across the road knows I only ever drink long blacks, so they just make them, they don’t ask

My favourite wine bar knows I don’t drink sweet wines, so they don’t suggest them when I go in

My favourite record store knows the music I like, but they also know enough to suggest things outside my radar

Those three examples rely on a human remembering and caring enough to act. So if you’re in a service industry and there are things you can automate, letting the technology take care of the service so you can do the things requiring a human, what is stopping you? Oh, I just realised I left one of the most important things off my list at the top:

5. Good customer service is the most remarkable thing you can offer.

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A while back I took Facebook to task for constantly displaying ads telling me how I could meet women.

Just break up?

So I engaged in a bit of profile altering in order to see how Facebook changed the kinds of ads it displayed. Now that my profile shows I am in a relationship, Facebook has gone from showing me how I can meet women to displaying ads on leasing cars and hangover cures.

Because obviously now that I am in a relationship I have turned to hard living in an effort to self-destruct (as this is easier than actually going through a break-up). Switching to married gives me…go-karting. And an offer to complete market research surveys. Microsoft paid how much to be able to serve Facebook’s ads?

Now I’m on It’s complicated, seems to be serving me ads for a swinger’s club. Trouble in your relationship? Why not restore the trust and dedication you so sorely need by…hooking up with complete strangers.

I’m back to being single now, which feels about right. Of course the rawest example I’ve seen of Facebook’s ad serving hitting the nail on the head is this example from Charlie O’Donnell’s blog earlier this year. Fresh out of a relationship, wound still gaping wide, Facebook delivered this gem:

Hunter S. ThompsonOne of the joys of now being a columnist is having the editor of the magazine call up and berate you for over-due pieces. Picture any actor who has played a journalist (I’m thinking Clooney personally) called by his very attractive but somewhat neurotic editor who has told he has until the end of the day to get his story in or he is fired. Note how cool he plays it, how he has arranged to discuss his column over dinner with her (and probably breakfast too). Got that image in your head?

Right. My life is nothing like that.

Still, I was called today because my latest piece was over-due. I said I had nothing to say, she said not to worry, that I could write about butter and it would be interesting.

So that’s what I did. Spurred on by the recent hoopla surrounding their blocking Google’s Friend Connect, I explain why butter is a crock, why Facebook is butter, and why, for me, it starts to spell the end of this media darling.

…trying to control what people do with (their own information) is the digital equivalent of telling rain which way to fall in a thunderstorm. Facebook eschewed a bunch of good stuff to get to where it is, using ingredients that were good for a whole lot of other, better, products and services. Now they’re desperately trying to maintain hold on user data, under the daft assumption it was somehow theirs to play with in the first place.

It’s already been suggested I’m wrong on this, I’m not so sure…

Image courtesy of bezmyaso, with thanks to Flickr Storm.

I am guilty of opening far more tabs in Firefox than is perhaps advised, I just got to one opened earlier this week. The page loaded is a post from Laurel Papworth taking to task a piece penned by Douglas A. McIntyre titled “Web 2.0 is a bust“. By that, he means his ill-informed view of how it should operate.

Laurel makes a few good points in her piece, it is definitely worth checking out. It also echoes my own thoughts from back in February, where I said the following:

Ever see teenagers at a shopping centre, hanging out and not buying anything? Look for this behaviour to continue (funnily enough). Marketers looking to capture that intention are going about it in the wrong capacity. Yes, a person is a fan of the TV show Lost. Yes, you have that on DVD and you can sell it to them. No, they do not want to buy that now. They want to buy it when they want to watch it, so you had better make sure you know enough about your audience to be in the right place at the right time.

No sooner am I cracking jokes about not following Scoble than I clock an interesting breakdown of rumours swirling regarding Microsoft taking search off of Yahoo!’s hands and buying Facebook at the same time for somewhere between $15 & $20 billion. Robert is running around saying the sky will fall if this happens, I say you’ll see first an uproar and then an exodus from Facebook, the kind of thing that will make the hassles with the news feed and Beacon look like the good ol’ days.

I’ll be leading the charge.

*Update* David J Hinson hit me up on Twitter suggesting I may be over-reacting a touch. Me? Noooooo…*ahem* I seriously value the ability of the web to keep moving towards a completely open future, and my instinct says a deal between MS and Facebook would not take is closer. I have nothing against Microsoft (hi to Tom and Adam at Redmond, we miss you guys), but as Andy Grove once said, only the paranoid survive.

I read somewhere recently – I think Seth Godin said it – if you were to set out with the express purpose of creating the worst possible environment online for advertising, you would wind up with something pretty similar to Facebook. I’m not entirely convinced that’s accurate, but I’m also not entirely convinced it isn’t. While you certainly have millions of pairs of eyeballs, what you need is an intention economy:

The Intention Economy grows around buyers, not sellers. It leverages the simple fact that buyers are the first source of money, and that they come ready-made. You don’t need advertising to make them.

The Intention Economy is about markets, not marketing. You don’t need marketing to make Intention Markets.

The Intention Economy is built around truly open markets, not a collection of silos. In The Intention Economy, customers don’t have to fly from silo to silo, like a bees from flower to flower, collecting deal info (and unavoidable hype) like so much pollen. In The Intention Economy, the buyer notifies the market of the intent to buy, and sellers compete for the buyer’s purchase. Simple as that.

Thanks Doc. Let’s look at that for a second. The Intention Economy grows around buyers, not sellers. Ok, so we need buyers. Are people buyers on Facebook? Have you ever purchased anything from it? I haven’t. I’m not in a consumer mindset when I’m there, at least not one that involves me parting with my hard-earned. There’s certainly an argument to say Facebook users are consuming any time they are logged on, but I question the notion that can be monetised; I’m consuming social interactions with my friends, I’m not viewing it as a platform for purchases.

Contrast that though with businesses who are advertising, are they viewing the Facebook ecosystem as a marketplace? I don’t have hard data to back this up but I’m willing to say yes, based on moves a little-known start-up out of Redmond, Washington made last year. Marketers are seeing the numbers and frothing at the mouth to turn that in to revenue. How one does that and even IF one does that aren’t being considered at all.

The Intention Economy apparently comes ready made, it doesn’t require advertising to manufacture it. What would Facebook be without advertising? Aside of course form hundreds of millions of dollars poorer?  Probably much smaller, since it would have had no way to foot the bill for its massive growth, save for taking on more cash from VCs worried about missing the next Google. And if it was much smaller, how many fewer radars would it be on? You lose the Fast Company, Newsweek, Business Week. You are suddenly still collegiate and walled and not innovating at the pace your market capitalization (suggested or otherwise) allows you to. Facebook’s growth is built on the promise of an Intention Economy in spite of the fact all evidence points to the absence of such a thing.

Lets continue: The Intention Economy is about markets, not marketing. You don’t need marketing to make Intention Markets. This again takes us back to the core issue of how people behave when it comes to commercially consumable goods on Facebook. If I have missed the train on this I look forward to finding out, but I don’t see a dip in Amazon’s trading, I don’t hear about slumps in eBay’s number of auctions (not ones that aren’t brought about by their own ineptitude anyway). Contrast this with little known but rapidly growing Etsy, a site built around the trade of goods that are 100% hand-made. Commerce is core in its business model, coupled with a feel-good, natural vibe that is hard to come by online. I don’t want to talk about it too much, suffice to say the service is brilliant and should be visited (right after we finish here).

Etsy doesn’t need to risk disenfranchising its user-base in order to move towards profitability; the inherent small-business nature of its offering allows it to grow organically, improve and expand as it needs to. I was at a wedding recently and a friend was talking about a marketing plan, saying “Give me$20 million and we’ll achieve “x”, $10 million and we’ll achieve “y“, but $5 million and we won’t even get off the ground.” Facebook needs to grow at its current pace in order to achieve its goals, it needs an Intention Economy to be established and fast, lest the rest of the world pick up on the fact that there currently is no profitable business there, at least not on the scale they are currently operating on. Etsy could stay its current size and be a success, and I imagine that’s quite alright with everyone involved.

The Intention Economy is built around truly open markets, not a collection of silos. In The Intention Economy, customers don’t have to fly from silo to silo, like a bees from flower to flower, collecting deal info (and unavoidable hype) like so much pollen. This one goes without saying. Facebook are making moves towards an open platform, surprisingly still sitting out in front of Google who, for the first time perhaps ever, was caught sleeping. The same way Microsoft missed the internet, Google seems to have missed the promise of social networking and what an open playing field can mean. They are of course a little more concerned with owning your phone than your MySpace page, probably because they already have all the access there they need.

Regardless, while Facebook slowly makes moves away from being a silo, they are still being very careful to make sure they remain a focal-point for your interactions. Using an Amazon Facebook application which you’ve plugged in to your Bebo page isn’t a negative for them; continuing to use Amazon as you are, or using an application that runs via someone else’s network is. If Facebook’s usage levels or visitation starts to decline or even just level off as it eventually must, look for some dramatic moves on their part, particularly if the Intention Economy is still nowhere to be seen.

Lastly, In The Intention Economy, the buyer notifies the market of the intent to buy, and sellers compete for the buyer’s purchase. Simple as that. Right now we don’t have that, we have sellers competing simply for the buyer’s attention. This seems simply ludicrous when you consider:

  • A Facebook user’s attention not up for grabs, not by sellers anyway. They are here for social interaction. Before we get into notions of what constitutes a ridiculous notion of “proper” social interaction (which people usually take to be face-to-face), the rules are different now. The key take away though is the rules aren’t just different for people under 30, people 50+ are interacting in this way too, ith plenty of them getting married. The web has enabled this sort of interaction, the song however, remains the same.
  • There is no intention to buy. Ever see teenagers at a shopping centre, hanging out and not buying anything? Look for this behaviour to continue (funnily enough). Marketers looking to capture that intention are going about it in the wrong capacity. Yes, a person is a fan of the TV show Lost. Yes, you have that on DVD and you can sell it to them. No, they do not want to buy that now. They want to buy it when they want to watch it, so you had better make sure you know enough about your audience to be in the right place at the right time (Hint: the right place is not Facebook, the right time is when they are not on Facebook).
  • Imagine for a moment that Facebook was actually a readily monetisable and viable market place; sellers would be competing purely with the rest of a user’s wall. Vampires, Texas Hold’Em Poker, travel widgets, pokes and haggis being thrown, videos playing and songs streaming from iLike. What could your product possibly offer that competes with all of that?

The ironic pat of it all though, is you cannot afford to not be a part of it, if only because if you’re not, your CEO is going to hear about it from his kids and consider that a mandate for action. Social media runs much wider, and there are opportunities inherent in it. But Facebook? Setup a free fan page and see if your audience finds you. If they do, then that’s a conversation worth having.

As we all know now, markets are conversations, and you get to fight another day.

(P.S. I would love to hear from some folk who have tried monetising FB and what their experience has been.)

I’ve spent the last couple days thinking about what Microsoft’s play for Yahoo really means for the Wide Open Spaces we call the world wide web, it having changed so quickly and constantly. And just as the dust seemed to settle around a landscape where Facebook held everyone’s attention, the most dominant software company we’ve known sweeps in for a hostile takeover on what was the shining light of Web 1.0.

I remember reading Po Bronson’s seminal Web 1.0 text Nudist on the Late Shift and being enthralled with the chapter on Yahoo!. Bronson framed it around the notion of meeting billionaires Jerry Yang and David Filo, neither of whom were yet 35, which in his eyes made the whole thing seem even more surreal. 13 years after Yahoo! was founded it finds itself mired in lay-offs, under-performing products, and perpetually treading water while everything other than Flickr fails to gain traction, and even that has been outdone by Facebook which has become the largest photo-sharing site full stop.

The play revolves around three things; search, email, and advertsing.

Search
Microsoft have long been the distant cousin in this space. Google dominate the landscape; Yahoo! hold a distant but solid second place. Indeed it can be argued they are the only ones who’ve been able to hold some ground against the relentless force that is AdWords. Microsoft have failed to offer up a compelling alternative to Google, and the end result is an increasing loss of market share in search while Yahoo! bail water out faster than the guy next to them. With the need to compete for second place out of the way, both companies can down-size, hone in on strengths, and be confident that nobody else has the market share to make a play for #2. What they do need to worry about is people moving away from a Yahoo! service who had arrived there in the first place because of a distaste for Microsoft.

Email (your inbox)
Mark Zuckerberg (Facebook founder and CEO) has spent more time than I care to acknowledge talking about the social graph. Simply put, it is a map of the relationships you have with people. Facebook is supposed to represent that, but Google have already pointed out that the social graph is already well represented by email; what you send and what you receive paint a far more accurate picture of your online interactions than a site coined so loosely as a “social network”; email doesn’t rely on the walled garden mentality, and as such maps a more realistic path for social interactions. If one age old rule of marketing is that the most compelling campaigns are formed around trusted sources, then having a solid understanding of who an individual’s sources are is key.

Microsoft & Yahoo! will have a combined online mail share of somewhere between 4 and 5 hundred million users (depending on whose numbers you use and how you skew the data). The sheer quantity of data available and what they can learn about their users is staggering; the task there though is turning it into something meaningful. Both companies have proud traditions of innovation that have somehow been lost along the way; finding that spirit again is key to taking the fight to Google and Facebook.

Interestingly, the key differentiator between Google’s Gmail and the others is Google fails to offer a paid-for premium service and instead is ad-supported based on key words in the messages you send and receive. You would think a competitor to this product would have to be in the works at at least one of the companies; hopefully these products would be finished and rolled out before any moves were made towards a single super service.

Advertising & the future of online
There have been nervous mutterings recently around Google’s advertising intentions. In September last year they hired Andy Berndt who was President of Olgilvy & Mather in New York, and two weeks ago announced the Publicis Group had been brought on to assist with their creative. While this is a coup for Publicis, people don’t seem to understand that Google have been the dominant force in online advertising ever since the introduction of AdWords; they have been in advertising for years, the traditional media folk just didn’t pick up on it because it didn’t look like the advertising they were used to.

Google’s presence coupled with its now approved purchase of Double Click means it wields an influence not seen since the months before Microsoft began being probed for anti-competitive tactics. People are still so worried about a giant in Redmond that Google was able to quietly go about its business and snap up anything and everything that made its search offering stronger.

Last year Microsoft finally caught up in a public way, purchasing a series of companies to kick-start its advertising play. Yahoo! had also been on a spending spree and now a single entity gets the fruits of those labours. This page shows a period of two years over which acquisitions were made leading up to mid-2007; all the serious plays are around advertising and search, regardless of company. Steve Ballmer would have been fuming that they didn’t land Double Click, the move for aQuantive was a no brainer after that.

If and when this deal goes through, Microsoft will own a handful of also-rans, but in addition to Yahoo!’s mail offering they will also have del.icio.us and Flickr, two of the most prominent and popular Web 2.0 sites. Facebook still lurks out in the ether, its next move known only to a handful of its executives. If anyone stands to gain from this, I think it is them – they can operate in exactly the same fashion that allowed Gogle to become quietly dominant. This move puts the spotlight on someone else, it allows Zuckerberg to spend some time thinking about where he wants the business to go and to focus on executing that vision rather than putting on the media darling suit that doesn’t quite fit.

Google have recently reached a point where they can do whatever they please, when Microsoft reached that spot it rapidly became the least interesting kid on the block. Google need to show they are hungry, that they have the fire and the stamina to win. 2008 is going to be a phenomenal year for online, and that is without even touching the launch of Android, Google’s mobile platform, the 700MHz spectrum bid, or Open Social, its vision for a completely open socially-networked web. Once Microsoft hammer this deal out, it makes for two massive fish in a (thankfully) endless pond. That’s just the kind of environment the Facebooks of the world need, one where they can hide away and get back to what made them great in the first place.

And the wide open spaces just got a little wider…

Saturday night, after watching No Country For Old Men (great movie, very heavy though), my band of reprobates and I descended on Jimmy Watson’s to down a few bottles of Dry & Dry (dry vermouth, dry ginger ale). One of the crew is a good mate from England who spent many years working in traditional media, think newspapers, Sky TV, etc.

We got into a debate around the future of advertising and entertainment (because on Saturday night we clearly had nothing better to do…), using The Sopranos as a case study. My friend is not old, but older than I, and definitely from a different school thought. He does currently work in marketing though and has lectured at universities on journalism – he is by no means an idiot. With this in mind I was astounded by how little he grasped of the web 2.0 world, convinced that changes in consumer behaviour only came about because traditional advertising and media companies decided to alter the lay of the land.

I initially thought he was taking the piss, but upon further exploration he was deadly serious. His argument centred around a rather bizarre core, stating that if advertisers and media companies didn’t remain in control, then productions such as The Sopranos would simply cease to exist because of a lack of advertising dollars. My point that a market for quality entertainment would forever exist, citing everything from Homer’s Odyssey to Quarterlife seemed to fall on deaf ears; sure levels of production quality are bound to vary from project to project, but people don’t tune in for the lighting, they tune in for compelling characters and stories they see something of themselves in.

My friend’s issues ran deeper than the quality of story-telling though. Once of his fundamental concerns was, essentially, “Who will pay the salaries of the people who book the ads if nobody comes and books the ads?” I told him nobody, because we don’t need the ads, and that seemed to trigger a small nuclear explosion inside his head. In the mind of my educated and intelligent friend, it was inconceivable that ad-centric business models in traditional media would not survive ad infinitum. More than that, he couldn’t conceive of people who weren’t part of these establishments being the ones that changed everything, even though he himself uses things like MySpace and Facebook.

It reminded me of a moment I had a month or so ago on a tram going to work. I was reading RSS feeds on my BlackBerry, everyone else was reading a newspaper; I was the odd one out, but somehow had not removed my head from my ass recently enough for this to come as anything other than a surprise. It is so easy to get lost in the Brave New World of Web2.0 and forget that Facebook is still pretty novel for most, that the things we spend so much time discussing are not even blips on the horizon of the general public.

In the end, I opted to change the subject. After all, it was Saturday night, and my choices were to persist with my ad-hoc oral essay entitled “Everything you know is wrong”, or I could order another round.

Better make it two then…

N.B. For a thought-provoking look at how consumption of media is changing, check out this post on Fred Wilson’s blog.

*Update* The inimitable Bob Lefsetz hits the nail on the head.

Came across a great post on Facebook applications and why they do or do not succeed. Rodney Rumford uses a recent campaign by Sony to draw attention to mistakes that are easily avoidable. The shameless plug for his own company is a bit much, but if I were in his shoes I would probably do the same!

Rule Number One: Brands Need To Understand the Facebook Ecosystem & Why Applications Are Successful.

It’s short and well worth the read.

I was quoted over at Chris Wilson’s Fresh Peel in response to a question he asked: what companies really listened in 2007? Facebook cropped up a few times, and while it can be argued they were forced to listen, the outcry against Beacon paled in comparison to the dissent that rose up against the news feed when it was first introduced. Back then Facebook hadn’t become the media darling it is now, and cries of injustice on a still-emerging social networking site were treated with the same gravitas that gets associated with stories about property being stolen in virtual worlds. Were it still operating in that same void, personally I think it would have gotten far less attention and been able to go about it’s business. Whether or not that is a good thing is up for (continued) discussion, personally if advertising can be distilled down only to things I am actually interested in, then maybe it simply becomes information, and that is fine by me.

There’s more to this though. Online strategies are increasingly being formed not around what is right, but what is least wrong. The idea itself is nothing new and gets discussed exhaustively in Nassim Nicholas Taleb’s The Black Swan (shameless plug: I’m part way through and thoroughly enjoying it). It’s something I encounter in my day job too; the fact of the matter is if you’re working in this space you are almost always trying new things. Can I say for certain that “Idea X” is right? No, but I can tell you it is less wrong than “Idea Y”.

My thoughts here are well and truly still forming, but the beauty of this medium is you’re allowed to share them before they become concrete, in the hope they become something better. At the risk of going out on a limb, I’m going to say for certain that that is right.