Thoughts on Steve

Posted on August 25, 2011 by Morgan

Image via Wikipedia

There are a lot of words being spilled about Steve Jobs. From effusive praise, to gratitude, to speculation about why and what and how, there is a great bloodletting of emotion underway. And while I am grateful for Steve Jobs, I believe we have yet to learn the most important lessons he may have to teach us. It won’t be until we gain the benefit of time and perspective, and of Steve letting us in one way or another, to know for sure. But this is my hope.

One of the things I love to do is read biographies. Churchill, Carnegie, Hearst, Welch, Iacocca, Jordan, Roosevelt. I love reading them because, if they’re any good, they get past the veil and the persona that we perceive during their heydays to the actual person. And with enough perspective they tell a story that is far more fascinating and human than the person in their prime ever was. This is what I hope for Steve Jobs. That time will reveal him to be far more interesting and dimensional than he ever would want us to know – that it will reveal him as a man, with faults and shortcomings and idiosyncrasies that make him more, us. And, in turn, us more him.

Every generation has great men that are celebrated and lauded by society and mourned when they step out of their accustomed role. We have a tendency to reduce these men into their most visible parts, to create a caricature of them that fits with how we’ve known them for so long. It’s a lie we tell ourselves to reinforce the emotion we’ve put into believing and championing these people. And frankly, it’s boring. Far more interesting are the complete, fallible figures that are the actual men behind the personas. This is what biographies get at, and where we really can learn from these great figures.

Take any of the above men, and their story upon first retirement is rather simple and one-dimensional. Whether it’s Churchill and World War II, Carnegie and the rail roads, Hearst and a media empire, Welch’s ruthless business acumen, Jordan’s athleticism or Roosevelt’s personality and leadership, the story is simplistic and attached to who we think these men are, not who they really turned out to be. And with time, they all come back to earth, their imperfections appear and their stories become far more richer and instructive.

Welch goes from being “the last great CEO,” a hero of scorched-earth wannabes trying to imitate his practice, to a man who sacrificed his relationship with his kids, made some dubious bets on unsustainable business units and frequently let his ego get in the way, in the name of growing GE. Jordan goes from a perfect athlete to a man crushed by the loss of his father with a gambling problem. And on and on. The true man is always more interesting than the idealized persona. Just like our fictional super heroes, it is not their crime-fighting alter ego that is interesting, it’s the mortal man behind the mask that holds the intrigue. Iron Man is boring after a few battles. Tony Starck is where the real interest and opportunity to learn lies.

The same is true for all of our historical ‘super heroes’, Hearst, Carnegie, Churchill, Roosevelt, Iacocca. Those who we think are perfect are more human than we can ever realize at the time – it’s only with perspective that we learn who they really are, and when they do their greatest teaching.

And so that is my hope for Steve Jobs. That when the hubbub dies down. When the spilling of words ceases and when the benefits of time and perspective are finally on our side, that we will learn who Steve Jobs truly is and understand his life and those lessons in a way that he would never conceive or approve. That we will be able to see him as the human that he is, and take his incredible gifts with his shortcomings, and use them to learn more about ourselves. That he will teach us, like the biographies of the other greats before and those yet to come, that the persona is not the man, that in the end he is fallible, he is mortal, and he is not perfect, just like us. And yet. And yet. He is Steve Jobs. I wish him well. I look forward to learning from him for a long time.

Facebook Product Changes Aimed at Maximizing Revenue

Posted on February 16, 2011 by Morgan

Image representing Facebook as depicted in Cru...

Image via CrunchBase

Brands love being on the Facebook platform. With Facebook reaching 3 out of every 4 Internet users in the US, it’s been a great way to reach customers where they’re spending their days. And the best part? It’s free. That combination has been a powerful driver, bringing brands and marketers on to the platform, with companies forsaking their own websites, driving traffic to Facebook to gain new fans. All with the hope that this new opt-in-lite “fan” asset will be a longterm winner, creating new customers and revenues. But two recent seemingly-unrelated changes on Facebook may signify the party is almost over, and that Facebook will be coming for it’s cut of the pie for the privilege of connecting with customers on Facebook.

The first change rolled out week’s ago to much fanfare and debate. The new Sponsored Stories. The Sponsored Stories product lets brands promote organic mentions, reviews and other shared information by users of Facebook, gaining guaranteed visibility for the item that may otherwise have gone unnoticed in the river of the hidden-by-default “Most Recent” news items. Most marketers loved this idea, because trying to get your items into their much more visible “Top News” feed is an art and science that has yet to be figured out completely.

With Sponsored Stories, Facebook gave brands a way to pay to get that extra visibility that everyone wants, in a consistent and guaranteed way. It was pitched as a boon to advertisers who wanted to stand out among the noise, and already, brands like Levi’s have lined up to take advantage. It was a smart move for Facebook in terms of wooing advertisers, and an innovative way to drive revenue.

But, then, just a few days ago, Facebook changed what users see in their news feeds. Switching the default view of the feed to “Show posts from: friends and Pages you interact with the most”, hiding tons of content that could’ve previously been visible to the user under the old settings. Of course, there are some obscure controls at the bottom of the News Feed that let you customize and restore the “Show posts from: All of your friends and pages”, but really, how many users even know they can change the global settings on their news feed, let alone know that something’s been changed for them that’s materially altering their experience on the site?

And this is punch #2 of the 1-2 product punch for Facebook. Because with a new, more restrictive filter on the News Feed, plus a new vehicle for driving revenue with Sponsored Stories, Facebook is making it harder and harder for brands to get organic mentions in front of casual fans – the exact people they want to reach and engage with on Facebook. It’s a shrewd and calculating move. Cut off organic access quietly, shortly after trumpeting a new, innovative way to get more visibility. And I predict that as brands see less engagement on their organic posts, more and more are going to be considering the Sponsored Stories as the de facto way to ensure key messages hit their target audience on the site. Driving tons of new revenue to Facebook.

But how will this sit with the advertisers who have been lured into a false sense of security where now the only way to leverage Facebook is to pay whatever the going rate is? Will brands feel taken advantage of now that their organic updates are less effective and the only way to the customer is through the Facebook sales department? Or will brands just merrily pony up cash to reach more people on Facebook, counting their number of fans like chits and assuring themselves they’re building a permission-marketing asset?

What do you think? Did Facebook intentionally roll these changes out together to drive more revenue? Or is one just a case of improving user experience by reducing clutter and the other a new ad model? That’s the benevolent angle I guess – but not the one I’m betting on.

It remains to be seen; but either way, the trap has been quietly set, and Facebook is counting on reaping a ton of cash from access-starved marketers who, now addicted to connecting with their customers for free on Facebook, will pay the going rate to keep feeling the love.

Groupon’s Biggest Threats Won’t Come from the Web

Posted on January 10, 2011 by Morgan

: Image via CrunchBase

Now that Groupon has closed “Like, a Billion Dollars” it’s time for the company to get down to business. Mathew Ingram notes on GigaOm, that “now comes the hard part” for the company. And he’s right, now that you have the money it’s time to go out an execute and build a business that can provide a return on that level of investment. They’ve got competition and more and more wannabe’s are popping up with deal offers left and right. But the threat’s to be worried about won’t come from the Web companies. The threat’s to be wary of come from the yellow page directories themselves.

Ingram writes:

On top of Google presenting a competitive threat, there is also Facebook, which has experimented with Groupon-style discounts via Facebook Places, and could quite easily leverage its 600-million-user reach to compete with the company if it wanted to. And then there are competitors such as LivingSocial, the second-largest group-buying player, which recently got a $175-million investment from Amazon — another company that has the deep pockets and the reach to compete with Groupon — and Tippr, which has a white-label platform that allows merchants and website publishers to run their own Groupon offers, with Tippr handling all of the back-end and support.

And while, sure, Google and Facebook and LivingSocial pose legitimate threats from the online world, the fiercest competition is going to come from companies like AT&T YellowPages and Yellowbook. Because I believe that Groupon is going to go after the SMB business that is the lifeblood to those companies. I wrote earlier, when the $950 million news broke:

Groupon knows that without people pounding the pavement, pounding on doors and pounding the phone, they won’t reach the mass of SMBs who are 1) not actively seeking out new advertising options online and 2) are hounded by traditional SMB advertising providers like the Yellow Pages, who don’t ever let up on closing small business deals. And to put that organization in place is going to take a ton of cash. You need sales agents in each city, you need sales management, you need office space, you need call centers, you need fulfillment, billing and operations teams to handle that size of a customer base. And that takes a ton of money.

That’s where the threats and challenges will come from. Groupon is way out ahead of any of its web competitors; but now, to succeed at capturing a big chunk of the SMB market it has to go head-to-head with these massive companies that have sales teams, offices, infrastructure, relationships (oh, and experience) selling to SMBs. They’re the company that local businesses are comfortable investing with. Now, SMBs may not be happy with them, and their businesses may be dying; but they’re a force to be reckoned with and Groupon is going to have it’s work cut out for them to make their business a legitimate contender for the big chunks of SMB dollars currently being spent with YellowPages and the other directories.

So Ingram is right, “now comes the hard part,” but while they’ll need to keep an eye on their web-brethren currently in the rearview; it’s their brand-new competition that will require the most scrutiny. The directories have lost enough already—they’re going to try to leverage their head start to deploy their own deal offerings, and that’s where the battle really lies for Groupon.

Does Google Want to Send You to Content Farms?

Posted on January 9, 2011 by Morgan

Matthew Ingram writes on GigaOm that Google and Demand Media are headed for an inevitable showdown, as the search giant tries to keep its results from being overrun by the prolific content-for-profit machine. Writing on the heels of comments by Paul Kedrosky and Marco Arment on the spammy nature of Google search results, Ingram echos the sentiment that Google needs to do something to maintain the value of their search results—their cash cow—especially in the face of threats to their traffic and utility from Facebook and Bing. In a conversation on Twitter the night ~~before~~ he published his article, Ingram had a brief exchange with Chris Dixon who posited that Google actually benefits from content-farm search results because visitors who hit these pages then click away from via AdSense units, of which Google gets a share.

Here is the exchange via Storify (if you can’t see it in reader, click through):

Dixon is quick to point out that Google of course cares about the user experience; but that inadvertently they’ve created a cottage industry of spammers that they in turn benefit from. It’s an intriguing argument, at least on the surface. Demand Media’s IPO filing states that the company generates 40% of their 550 million monthly page views via Google search.

The question becomes, then, how much money are we talking about?

Turns out it’s not that much, relatively speaking. Demand Media reports that it earned 18% of its revenue from Google in 2009 (and 26% from Google in the first 6 months of 2010.) On 2009 revenues of $198.45 million that works out to $35.72 million in revenue from Google. If we take Google’s stated AdSense revenue share numbers of 68% for the publisher/32% to Google, that puts the total revenue of Google-driven revenue at $52.5 million, leaving $16.8 million for Google. (Of course this could be different depending on the actual split of the Demand Media/Google agreement; but is probably in the right neighborhood.)

For Google, who’s 2009 annual revenue was $23.65 billion, this is a rounding error. And for a company who is willing to pull out of lucrative opportunities on principle alone (China, anyone?) it seems like eliminating or reducing the small monetary benefit that Demand Media generates for them in order to save their user experience is a no-brainer. So while the idea that Google actually “wants” Demand Media to stay around to drive revenues from AdSense is intriguing, it doesn’t really add up.

Whether Google devalues the Demand Media content in their search results I don’t think will ever be explicitly known. Google has to be careful about the implications of changes to the algorithm that reek of editorial governance. (SEO’s I know quipped that the DecorMyEyes fiasco just showed that all you need to get your competitor delisted from Google was a scathing PR hatchet job.) But clearly, as the chorus of influential users voice their dissatisfaction with search results, Google will be under more pressure to deliver cleaner, more valuable content or risk losing them altogether.

If Google does (and I believe they should) make this move Demand Media is in trouble. Looking at their IPO filing, the short of it is that without Google the business doesn’t have any real growth. And rather than being a unique content-on-demand business, their a incrementally growing domain registrar.

It will be interesting to see how this plays out; but one thing is for certain. Matthew Ingram is right—a showdown likely looms, either between Google and Demand Media or Google and it’s users, and there is a lot at stake for everyone.

Will Beluga and GroupMe be this year’s big winners at SXSW?

Posted on January 6, 2011 by Morgan

The SXSW prognosticating season was officially kicked-off by TechCrunch’s MG Seigler just the other day; and I’m ready to throw my hat in the ring with my picks for this year’s darlings. Of course, there’s no real way to predict this; and entrants are likely to come out of the woodwork between now and the start of SXSWi, but recent trends point to a few promising possibilities. In my opinion, the big winners are going to be the micro-social network applications and sites. Why? Because group texting services like Beluga, GroupMe, and others will help attendees cut through the noise of the conference and connect with those closest to them.

Why do I think that inherently non-viral products will catch on at SXSW? Recent history provides the best clues. The launches of Twitter in ’07 and Foursquare in ’09 are examples of how the interactive crowd embraces products that help them make a large, overwhelming conference seem more intimate and personal. Twitter and Foursquare, at launch, allowed users to connect in new ways; ways that leverage connections weak and strong, provide real-time, high-quality information, and help cut through the noise and clamor of a crowded environment. These tools and services gave people the ability to create a personal, custom experience for themselves in a very noisy and chaotic space. And while Twitter and Foursquare are much more open than Beluga or GroupMe, my picks provide the next evolution of delivering those same important elements.

Twitter broke at SXSW in 2007 and was widely used at the festival in 2008 as attendees surfed and Tweeted the #sxsw hashtag to find the parties, venues, impromtu gatherings and panels that were most noteworthy. In ’07, people used it as not only a communication tool, but as a networking and real-time information network. A network that connected like-minded folks with one another in a way that wasn’t possible before. And the rest is history as Twitter blew-up, becoming the preferred communication tool for the digerati and, with later help from Ashton and other celebrities spread to the early-majority crowd as well.

But as Twitter blew up, it’s utility for connecting at SXSW ’08 diminished. Too much noise. Too much pollution. It’s value as an information source remained; but the #sxsw hashtag became unruly and less valuable to help ferret out the best events. It opened up a new opportunity for Foursquare to provide that high-signal, that more personal, manageable connection that Twitter delivered the year before.

Foursquare launched and provided a similar noise-filtered way to connect with friends at SXSW ’09 and again at SXSW ’10. Interactive conference attendees used the service to find out where their friends were. And the SXSW-specific rewards only helped to make using the service more fun. With the Twitter stream polluted and the quality and ease of groking it for useful information diminished, Foursquare stepped in and provided a better filter on connections and information. We had gone from Scott “Laughing Squid” Beale Tweeting about being at a bar next door, to people just watching their friends check-in to venues and forming impromtu gatherings as those check-ins reached critical mass.

Last year, at SXSW, one of the best parties was not a planned party at all. Brian Solis and a small group of influencers checked-in at The Driskill Hotel and within an hour the place was packed. The word was out and the party swelled. After an hour you couldn’t move. The power and faults of a service like Foursquare were evidenced in one short moment. The service worked brilliantly, connecting members of those people’s networks and letting them know where their friends were without any additional coordination or communication. On the flip side, as the message propogated and grew, the event tipped from a small gathering to an all-out free-for-all. The utility of the service fell apart. It went from an intimate gathering to a ridiculously jam packed event. And, for the rest of the conference, many of those people checked in off the grid to keep a similar scene from repeating everywhere they went.

Robert Scoble recently asked how SXSW could regain the intimacy of the conference in face of the ever-growing crowds.

Me? I want to get more of those intimate experiences we used to have. I remember when the entire Web Standards Project fit at one picnic table. I remember having a fun conversation with a small group, all huddled around Craig Newmark in the rain at a BBQ place across the street. I remember being able to get into parties without being a VIP and last year the VIPs even had to wait in line at nearly every party. Heck, I remember when Scott Beale Tweeted in 2007 that he was sitting all alone in an empty pub and I joined him and had a leisurely beer at a picnic table with him and a few other friends. Those days are seemingly gone.

Scoble doubts that we can, because there is too much opportunity cost. I think he’s wrong. I think we can with better tools. It’s not that we’re attention-deficited people who can’t decide where to go and what to do (ok, we are,); but that the tools we have have become too bloated to be effective. Twitter and Foursquare have lost their ability to create those unique, intimate moments because we’ve bent them out of shape with oversized followings and over-subscription. I believe the next wave of services that succeed at SXSW will be those that bring that intimacy back – that allow us to navigate the crowded noisy environment of SXSW and give us a better experience because of it.

Scoble starts to get at it here:

It seems weird for me to say this, but I’m tired of going to big massive parties where you collect a lot of business cards but don’t have any good conversations to show for it. I now have enough business cards. I don’t need more. I bet many of you are in the same place. In fact, this year we’ve seen companies like Pip.io and Path come along and try to serve smaller “micro” groups. Path limits you from sharing photos with more than 50 friends. I’ve come to like that constraint, somewhat. It’s just that I wish I could share with many small groups.

So, how about this as a proposal:

Kill the big parties. Instead, follow Zappos’ lead. This year they hosted a bus. It could only hold about 30 people (it had its own bar, after all). But the time I spent on that bus is still my favorite experience at SXSW. Why? Because it forced a small handful of people to sit together and talk. Even if it was just for 15 minutes it was nice to have an intimate experience with a small number of other people.

And it’s Beluga and GroupMe that can bring that intimacy and limited connection to the table – and create the passionate followings that ignite services like these to broad influencer adoption and buzz required to tip one of these services in terms of awareness and users.

Out of the two I’m picking Beluga for two reasons. First, because you connect your account with Facebook you can see which of your Facebook friends is using Beluga and automatically send them a message or add them to a group. This is going to help the viral spread of the service. Second, the ability to add friends based on email address or phone, over just phone makes the service more early-adopter friendly and allows you to add friends who you may have connected with online; but are not necessarily friends with on Facebook or whose phone number you don’t have. This will allow more loosely-connected groups to form to make dinner and other plans at SXSW and then disband just as fast. (GroupMe also has expiring groups, which are very interesting for ephemeral groups.) Other groups will persist as back-channel mobile chat rooms that will be running as its own data layer on top of the Twitter feed, Foursquare check-ins and other conference noise.

The benefits of a limited circle are most obvious when we’re in high-density network situations like SXSW. Over-subscribed friend and follower counts limit the effectiveness of the tools. When you’re in tight quarters, when you’re looking for high-quality information over the noise, when you’re looking for that quiet dinner party with your friends, more isn’t better. Better is better. Beluga and GroupMe and others can help give us a better experience. Can bring the intimacy of SXSW back and will be the darlings of this year’s conference.

Update: had my Foursquare launch years off.

Why Groupon Needs $950 Million More

Posted on December 28, 2010 by Morgan

: Image via Wikipedia

The blogosphere is abuzz over tech-darling Groupon’s proposed $950 million Series G round. Many people have asked “Why do they need all that money?” And while expansion is the obvious answer, it’s a bit more nuanced than that. Groupon knows that in order to grow at scale in the SMB market you need a big sales organization with feet-on-the-street in the markets you’re hoping to reach. If you look at the successful small business advertising providers—the one’s that own large chunks of the market—they all have large sales forces. And it’s the large sales force that has stood between many a great, local-business-focused business plans and actual success.

Groupon knows that without people pounding the pavement, pounding on doors and pounding the phone, they won’t reach the mass of SMBs who are 1) not actively seeking out new advertising options online and 2) are hounded by traditional SMB advertising providers like the Yellow Pages, who don’t ever let up on closing small business deals. And to put that organization in place is going to take a ton of cash. You need sales agents in each city, you need sales management, you need office space, you need call centers, you need fulfillment, billing and operations teams to handle that size of a customer base. And that takes a ton of money.

What Groupon is doing is something that no other tech company has done in recent memory—made a real run at securing a big chunk of the SMB market. Sure, new local-business-focused companies pop-up all the time. But most of them are either niche providers or they partner with the big existing yellow page providers to get access to their sales organization. They become a B2B channel provider leveraging the existing sales force because few can generate or raise the cash necessary to build a sales organization to go out and reach those SMBs directly.

Even mighty Google has taken this approach until now. They’re either unwilling to, or culturally unable to, commit to the SMB market with a massive sales force. Google has targeted savvy SMBs directly with AdWords solicitations; but has also worked aggressively to partner with yellow page companies to sell AdWords as part of existing yellow page bundled services, and often resold as CPM-based impressions (e.g. spend $2,500/month to get a quarter-page ad in the yellow book, a bolded listing with a photo on the site and a bucket of impressions driven by CPMs). And they’ve supported that initiative with direct mail, SEM (of course) and some print advertising as air cover to increase awareness and trial of AdWords through one channel or another.

But it was not until just last week that Google started outbound telesales direct to small business owners. That is a direct response to Groupon spurning their offer, and the realization that if they’re going to get serious about local business they can’t solve it with an algorithm. They need to put people toward the business unit to succeed.

All of this of course sheds quite a bit of light on the Groupon/Google negotiations and why the deal fell apart. I think what Groupon’s board realized (and kudos to them for this insight) is that Google—at its core—is not a sales-driven company. They don’t have the internal buy-in to be a hardcore sales organization and they’ve never committed the resources needed to make small business a booming success. They’ve tried to do it every other way except invest in a massive sales force. And I think Groupon looked at what has worked in reaching SMBs at scale and they realized it’s not arms-length. They realized that SMB advertising is still old school. It’s still knocking and dialing for dollars.

Groupon realized that what they needed is a sales-focused organization, not a technology-focused one. And tying up with Google would be a mistake, because at their core the two companies are fundamentally different in what they know about going to market. Google knows that it’s tech and better and more tech; Groupon knows that it’s how many calls can we make in a day. Groupon’s board knew it wouldn’t thrive under Google.

Additionally, Groupon knew that tying up with a dinosaur of a yellow page business was a bad idea too. The margins are non-existent, advertising dollars are shrinking and moving online, and most observers are waiting for someone to drag those pre-Internet monoliths out behind the wood shed and put a bullet in them. So the only logical step for Groupon, between their options, is to go out and build the sales organization they need that supports the tech organization that they are.

So while everyone oohs and ahhs at $950 million and will continue to talk about bubbles in the tech space; I personally think Groupon has made a very savvy decision to truly be one-of-a-kind, to be the first tech company to go hard after the SMB market—and win.

If Context Isn’t King Yet, It’s Certainly the Heir Apparent

Posted on December 15, 2010 by Morgan

Google announced at Le Web that they are working on providing search results without users needing to search. Path has limited your social graph to 50 people. Facebook is working hard on its groups, lists and messaging features. Google has tried to buy Groupon and Yelp. Amazon invested $175 million in LivingSocial. Twitter recently launched People Like You. Companies like My6Sense, Curated.by and Storify are popping up everywhere. Jason Kottke and Frank Gruber have two massively trafficked web sites, where they primarily link people to other content. What do they all have in common with one another? They all are an attempt to bring context to an ever-more crowded, noisy and cluttered world.

Context Restores Value to Connections

As the Web gets more connected and crowded, the concept of connections have diminished in inherent value, quickly become commodities. Not sure you agree? Here’s a quick test. Go to LinkedIn, find a co-worker, and ask them about one of their random LinkedIn connections. Chances are they can’t tell you where that person works or remember how they met them. Same thing on Facebook. In the race to connect many users have destroyed the value of their connections by treating them all the same (a limitation of the networks when we first joined.) And when we can’t easily distinguish one connection from another we run into all sorts of issues, from diminished connection with those we really want to stay connected with (I can’t tell you how many of my brother’s status updates I miss, replaced with a steady diet of random weak tie updates) to privacy issues (why can’t I treat my coworkers differently than my former fraternity brothers?)

Context helps to restore the value of these connections by parsing the important ones out of network. All connections are not the same, and should never be treated as such. By helping users provide context to their connections networks like Facebook are hoping to restore the utility of smaller, stronger connections that have been diminished by unwieldy, weak-tie networks that pervade social networking sites.

Facebook has been hard at work with groups. Which allows users to create smaller, intimate groups based on particular connection attributes (family, work, interests,) aka context, that creates more value and brings more utility to the network. I can now connect with and share things with my family members, like photos of my son, easily and privately within the group structure. Something I couldn’t do before very easily. By allowing me to add context to my network I’m able to get more out of it on Facebook.

Path takes a different approach on a similar dynamic. By limiting your connections to 50, they’re ensuring that your network consists of strong connections only. Strong connections create greater intimacy, privacy and add an immediate layer of context that governs how the service is used. My Path is two people right now. Me and my girlfriend. And that’s perfect for me. Because our Path is our photo diary. I don’t need to share it with the world. Path’s forced context creates a quiet, intimate space, much like the Facebook groups does. Path adds another layer of context via its primary functionality. Being almost completely app-based, Path combines the context of location and mobility with privacy and photos. Those layers of context create value for the user. Which leads us to location as an important context.

Context Drives Local Discovery and Commerce

The rush to local buying sites like Groupon, LivingSocial, BuyWithMe and others heralds the arrival of the local context layer being successfully applied to the Web. Yelp was the early pioneer, building social elements onto the local context layer on the Web. Google, Amazon and countless other Web companies are dying to crack the local commerce nut. And now, by applying the local layer to the social web it seems like we’ve reached a tipping point of moving local commerce online. Google gets the importance of connecting social context to local context. That’s why they were happy to shell out $6 billion for Groupon. Amazon gets it too, which is why they invested $175 million in a company with only ~10% of all group buying web traffic.

The local and social context layers drive commerce because it finally connects where we live with what we do and who we know on the Web. And the results are staggering and this connectivity is only beginning. And it’s not just group buying, it’s what every location based service, like Foursquare and Gowalla are trying to solve in their own way too.

These context layers added to online commerce drive confidence and intimacy. It makes the universe of possibilities smaller, more relevant and easier to act on. The context is the key to local web commerce.

Context Drives Content Discovery

Information overload is old news. I’m not even going to rehash the problem; but suffice to say words like “curation” don’t get worn out in information-poor environments. We are swimming in a sea of content. The majority of content, even more so than connections, has become commoditized to a point of uselessness. The advent of publishing technologies has helped content explode, but the tools to deal with this over-abundance are now just starting to get traction. Whether it’s My6Sense which learns what is interesting to you based on your past consumption, or a tool like Storify which lets human editors pull out and arrange Tweets into coherent conversations and storylines, they are trying to serve a massive need for context applied to our content.

Twitter is also trying to up the value of your Tweet stream by pointing to people who are like you, that may up the signal in a stream that is hard to cobble together one connection at a time. I can tell you from experience that it’s hard to craft an inbound Tweet stream of value at any scale. This is a big problem that Twitter needs to solve to help grow the service and make it relevant for less sophisticated users who don’t have the expertise, time or inclination to curate a group of people they follow that gives them the best experience they can get on the network. Twitter is trying to bring context to who you follow and what your Tweet stream looks like in response.

It’s not just machines and services either that are applying context to the content white noise. The ability to curate content, to create and apply an interesting and consistent context filter, is becoming more valuable than the content creation itself. People like Jason Kottke, the folks at Brain Picker and Boing Boing (among others,) are known, and valued, more for their ability to filter, surface and bring context to the endless firehose of content than of their ability to create it. They are the new editors of the Web. While mainstream print and network news have lost relevance these new editors are picking up the reigns of their offline counterparts, and providing much needed guidance to an audience that struggles just to keep up with the torrent of content, good, bad, farmed and malicious.

In a world where we find our own news, we are now in desperate search for our own editors. The software, companies and people who can create context for us that was lost when we ditched network TV for the blogosphere and statusphere are the ones that are creating new value for us on the Web. We’ll see more software like My6Sense, more context-driven M&A like Google and Amazon, and more Jason Kottke’s and Frank Gruber’s as we look for better ways to apply important context to the content that continues to come, like a never-ending avalanche down the hill. It will be these people, software and companies that will thrive and that will win in the next wave of the Web. Because more than great content we need great editors. Content’s days as King are numbered. Context is the new heir apparent, and the overthrow couldn’t happen soon enough.

Marketing’s New Frontier: The Facebook Stream

Posted on December 8, 2010 by Morgan

: Image via CrunchBase

I first heard the idea of Stream Marketing in this AdAge article, where the author explored how brands were marketing with Facebook status updates. The article looked at Oreo and other big brands who had figured out that the mundane updates were the ones that got the most engagement. And, by virtue of the Facebook social graph, also the most exposure and attention for the brand on the social network. Stream marketing is the practice of optimizing your outgoing status updates to get the most engagement (and therefore reach) with each one. It’s about being intentional in the stream, and cultivating your brand persona with well timed, and executed updates. As a social marketer, it’s imperative that you go beyond the network-presence level of social marketing, and get down into the front lines, update by update, to maximize the brand’s presence in the stream.

Stream marketing is the next frontier of online marketing. Many people and companies talk about using social marketing; but how many are actively thinking, planning and optimizing their stream marketing? It’s a huge, open field with few boundaries and rules for the road; and lots of debate about what is, and isn’t good marketing in the stream. But what does it really look like? Let’s look at that AdAge article:

As it turns out, many people in social networks don’t want to talk about your product, they just want to talk. We’ve long known that inserting brands into social-media channels requires a conversational touch, but many are surprised by just how conversational. There’s increasing evidence that the most-effective kinds of marketing communications on these websites are simple, random, even banal statements or questions driven by the calendar or the whim of a writer that may not have anything to do with the brand in question.

What are you doing this weekend? What is your ideal vacation? What’s your favorite movie or book? On Veteran’s Day, BlackBerry posted a simple holiday-related message that received nearly 8,000 likes and more than 500 comments, many of which consisted of veterans thanking the brand and posting their PINs, allowing others to contact them via BlackBerry messenger. Reaction to that update far outpaced other recent ones concerned with products or tips.

The key here is the conversational element. Being able to create a dialog around your brand or product is what drives the spread of your brand through Facebook’s social graph. Facebook’s algorithm, called EdgeRank, uses the number of comments, likes and shares of an item to determine what bubbles up to the user’s Top News feed – the default view of the News Feed for most of Facebook’s 500+ million members. Items with many comments and likes get seen by more people, driving the virtuous cycle of the viral spread of the message to your fans’ friends, and so on. Without any engagement those status updates just fly by, in a river of noise, unnoticed.

Facebook knows that brands and marketers are paying attention to their stream marketing efforts, and have started adding some rudimentary, yet valuable, stats underneath status updates visible only to the page administrators. Now with each status update you can see the number of impressions received by the status update as well as the percent feedback received for each of these posts. Now marketers can start to really see what is connecting with their fan base, and not just throw stuff against the wall to see what sticks.

The impressions number is important because it’s representative of the number of how effective that message was at propagating through the social graph of users. Getting content into that Top News feed is the best way to reach people on the network, and so the number of impressions can be used as a proxy for how effective that update was at achieving that goal. The feedback is a critical number for obvious reasons. The higher the feedback, the more engaged the users are with the brand around that update. You get all sorts of benefits from that. You have more awareness, you can drive action that’s tied to a KPI, you may get more affinity/loyalty, and you also get the Edge Rank boost as mentioned above, driving that status update into the Top News feeds of your fans’ friends and creating the opportunity to gain new fans, and build greater awareness with people not already connected to the brand on Facebook.

The status data from Facebook isn’t real time, but it is fast enough to let you make some smart decisions very quickly. For example, looking at a recent client’s feed, we realized that their fan base was very engaged around Mad Lib-type, fill-in-the-blank status updates. In fact, they were performing at 4-to-1 compared to other updates. So we made a recommendation to mix more of those types of updates into the stream. The result has been more engagement around more status items, which is exactly the goal. Of course, we also cautioned them not to overdo it, as you don’t want to exhaust a fun outlet for fans; but it was a way that they could shift their stream marketing ever so slightly to get better results.

Stream marketing requires a mix of planning and thought combined with the ability to rapidly respond and shift based on what’s working and what isn’t, all while keeping with the brand voice and persona. With such a fast-moving environment it’s easy to get off brand in a hurry, so it’s important that the people managing your stream understand the brand voice to the core and have a working playbook of ideas, themes and do’s/don’ts that keep them on brand in this fast-paced environment.

It is the evolution of marketing from editorial calendars to playbooks. Let me use a football analogy here. In most football games, a team has its first 15 or so plays scripted. That is, right out the gate, no matter what, they’re going to run 15 plays and see what happens. These are based on their best research and planning, and allow them to test their theories about the opponent, etc. This is very much like a standard editorial calendar. Here are the items we’re going to go to market with, because based on what we know we think they’ll get the best response. But after those 15 plays are done, it’s time to go to the playbook adn call plays based on the response of the opponent.

The same is true in stream marketing. You can start with a strategy and an approach, and you can even stick to it at the start; but then you need to start adjusting and responding to what is and isn’t working if you’re going to have success connecting with fans on Facebook. And much like a football team, marketers, copywriters and community managers can call a play, but whoever is driving the feed activity is the Quarterback, and they need to be able to audible into other plays and strategies based on how their fans respond. From the AdAge article:

“When you have ad agencies or copywriters writing your Facebook copy, it ends up being promotional in nature and if you’re not inspiring feedback no one’s going to care,” said Sarah Hofstetter, senior VP-emerging media and brand strategy at 360i. “You can only talk about your product so much. Balance that with you’re not trying to be their best friend, you’re trying to achieve some marketing objective.”

So how can you be effective at stream marketing? Here are a few tips:

Create a strategy and approach to stream marketing that fits with your brand and brand voice
Create a rules of engagement document that outlines what is an isn’t on brand for status updates
Set a soft editorial calendar for the first handful of status updates to learn what does and doesn’t resonate with your audience
Create engagement opportunities by asking questions and using fill in the blank statements
Use the stream insights provided by Facebook under each item to see what works and what doesn’t work, and refine accordingly
Create a playbook of ideas for conversation starters and status updates that your community manager can go to at any time to engage the fan base
As with any online marketing effort: test, learn, refine, test, learn, refine, repeat ad infinitum.

By effectively marketing in stream you can “inspire feedback” driving the virtuous cycle of extended reach across the network, leading to better results and greater return for your Facebook investment.

Google Should Learn from Blekko and Open Up

Posted on December 2, 2010 by Morgan

: Image via CrunchBase

The New York Times recently highlighted how one insidious online retailer was able to use the power of negative reviews to drive his site to the top of Google and drive his business revenues at the same time. The piece brought to light a flaw in Google’s valuable algorithm; and drew a response from Google, who announced that they had made changes to keep this type of thing from happening again. The problem is, of course, Google can’t say what they changed in the algorithm or how they went about solving the problem. And they can’t because, like the Coca Cola recipe, their algorithm is secret and worth billions of dollars a year in revenues. Google’s secrecy will continue to leave it open to attacks of this kind and the negative press associated with them; and that secrecy is bad for business. That’s why Google should take a page from Blekko and open up about it’s algorithm.

And here’s why. Let’s start with the original article from the New York Times:

It’s all part of a sales strategy, he said. Online chatter about DecorMyEyes, even furious online chatter, pushed the site higher in Google search results, which led to greater sales. He closed with a sardonic expression of gratitude: “I never had the amount of traffic I have now since my 1st complaint. I am in heaven.”

That would sound like schoolyard taunting but for this fact: The post is two years old. Between then and now, hundreds of additional tirades have been tacked to Get Satisfaction, ComplaintsBoard.com, ConsumerAffairs.com and sites like them.

Not only has this heap of grievances failed to deter DecorMyEyes, but as Ms. Rodriguez’s all-too-cursory Google search demonstrated, the company can show up in the most coveted place on the Internet’s most powerful site.

The article states that links from sites like Get Satisfaction, even those in negative reviews are driving the site higher in the Google rank. The article makes the argument that inbound links that his site was getting from negative reviews was actually helping his search ranking; and potential customers who took his high rank as a mark of credibility fell into his scam. But then Get Satisfaction jumped in with a response basically saying that Get Satisfaction was wrongly implicated because of the company’s use of “nofollow” tags which prevent valuable link juice being passed from posts in their support forum:

But the article is unintentionally misleading. The story implies that links on Get Satisfaction positively accrue to the benefit of a company, even if they’re negative. Like any online community that cares to combat spammers, we code our user-submitted links so that Google ignores them for the purposes of calculating page rank (specifically, we attach “rel=nofollow” to anchor tags). Somebody trying to gin up their Page Rank by encouraging complaints on Get Satisfaction would be sorely disappointed.

Which makes sense to people familiar with the web, and absolves Get Satisfaction of unwillingly helping this crook, but could be easily missed by a reporter on a salacious story who doesn’t know which facts to check.

So, today Google comes out with the following statement about the fiasco on their blog:

We were horrified to read about Ms. Rodriguez’s dreadful experience. Even though our initial analysis pointed to this being an edge case and not a widespread problem in our search results, we immediately convened a team that looked carefully at the issue. That team developed an initial algorithmic solution, implemented it, and the solution is already live. I am here to tell you that being bad is, and hopefully will always be, bad for business in Google’s search results.

…

We can’t say for sure that no one will ever find a loophole in our ranking algorithms in the future. We know that people will keep trying: attempts to game Google’s ranking, like the ones mentioned in the article, go on 24 hours a day, every single day. That’s why we cannot reveal the details of our solution—the underlying signals, data sources, and how we combined them to improve our rankings—beyond what we’ve already said. We can say with reasonable confidence that being bad to customers is bad for business on Google. And we will continue to work hard towards a better search.

And while Google is (rightfully) getting praised for their responsiveness, I can’t help but think that this entire fiasco and misleading story would’ve been diffused before it even got started if Google was more like Blekko. If you aren’t familiar with the new search engine, you should invest some time to checking it out. They have some innovative features, most notably slash tags, but they also do something novel in the search space – they put their search recipe out for the world to see. You, me, everyone can see the how, what and why that goes into each and every listing on their site. Danny Sullivan does a nice overview of Blekko in his piece on Search Engine Land, worth a full read:

There’s much, much more that you can drill down into, enough for a separate article in the future. Using the “Visualize URLs” feature, you can even compare four different sites to each other

Blekko had considered if it should refine its reporting to make it a paid service for SEOs but decided instead to stick with what it shows as a way of being more transparent about how it works behind the scenes.

“Our primary purpose is to be open in how it works,” said Skrenta. “It might be the case that in the future, we’ll provide an API for people who want to build tools further on our data.”

This openness is not only refreshing, but provides users a clear view of how the search engine thinks. It renders the stories like the ones in the Times moot. By looking at a domain in Blekko you can clearly see what factors go into the ranking, you can see the inbound links and the ranks of those links, you can get a very clear picture of what elements Blekko is using to rank domains.

In fact, if you searched the domain in question at Blekko you’d see that there are no Get Satisfaction links being used to rank the site (because of the “no follow” tags,) and that Polyvore was the largest inbound link contributor used in ranking the site in Blekko. If Google was open like Blekko the reporter or fact checker could’ve easily clicked on the seo tag for the entry and received a much clearer picture of the math that went into the ranking, rather than relying on the business owner’s word for it and incorrectly implicating sites like Get Satisfaction.

The web would be a better place with more openness in search. Black hat SEO would be less likely, people could get a better understanding of why sites were ranked where they were, and there would be more trust in the rankings themselves, because search companies can stand on their algorithm, point to the data used and let the community have a conversation about it, rather than simply saying “We’re not evil. Trust us.”

And this is what Google can learn from Blekko. It’s not the slashtags (although cool) that’s the killer feature of the engine, it’s the openness. And Google should work towards a day when they can point to the data in response to inquiries about their search, rather than say “don’t worry, we’ve got your best interests in mind,” and expect that to be the end of the conversation.

Blekko has published a “web search bill or rights” that clearly outlines how they think about web search and includes things like “search shall be open,” and “ranking data shall not be kept secret.” I hope that one day soon, Google will provide its users and customers the visibility and access that will make search more open, transparent, understandable and safer for everyone.

P Morgan Brown

A work in progress