Opinion leaders have always been a subject of interest for marketers who hope to build awareness and credibility for their brands. Whether it is Oprah Winfrey, the editors of Vogue, or a successful blogger, earning the recommendation of a third party with an established audience is a well-known route to building brands.
More recently, however, some marketers have been extolling the value of catching the eye of another kind of "influencer." These seemingly average consumers lack any media platforms or measured audiences of their own. Yet they are thought to act as anonymous opinion leaders who wield outsize influence in shaping the choices of friends and colleagues who turn to them for advice. The iconic example of the influencers in the crowd is the East Village hipsters who began wearing Hush Puppies in the 1990s and may have helped spark a return to popular fashion for that dormant shoe brand.
Many consumer trends do spread by word of mouth, and in a break-out trend, there may indeed be some mouths that turn more heads than others. The problem, however, comes in assuming that you can identify a trend's influencers in advance and target them for marketing. That was the warning in a speech given Friday to the Marketing Association of Columbia by Duncan Watts, principal research scientist at Yahoo! Research and director of their Human Social Dynamics group.
Watts called the pursuit of unnamed influential consumers the "Holy Grail" of modern marketing and, much like the original grail, the object of an impossible quest. Based on recent scientific research into social networks and consumer influence, Watts raised several critiques, including:
"Influencers" are hard to define. The term "influencer" is used interchangeably to describe mass media voices like Oprah, celebrity brand endorsers, and anonymous opinion leaders (three very different models of influence). Without being defined, the term becomes a catch-all for any fan of a well-liked brand.
Many different factors may give weight to an "influencer." A customer may wield influence due to their expertise in a subject, their gregarious personality, their ample network of relationships, or their social status. In different contexts and for different brands, almost anyone might become the "influencer" in a crowd.
Cognitive bias causes us to give too much weight to "influencers." We all remember how East Village hipsters started a craze for Hush Puppies; no one remembers the dozens of other fashions that hipsters adopted which never became popular with others.
Consumer influence may, in fact, spread more like a forest fire. Small fires start in wilderness every day. When one of them turns into a raging forest fire, the difference is not in the type of spark that ignited it, but in the conditions of the forest (recent drought, density of fallen timber, angle of slopes, prevailing winds). Similarly, trends that spread quickly may do so because of broad conditions within customer networks that are receptive to the trend – not because of a special type of customers who were the first to adopt.
So is all hope lost for influencing customer networks?
Not necessarily. Watts and his colleagues continue to research the rich data on social influence now becoming available thanks to technologies like Twitter.
In the meantime, he advocates that marketers pursue a strategy of launching many ideas into the marketplace at once, measuring the response in networks carefully, and being ready to respond in real-time if one of your ideas starts to catch fire. Clothing retailer Zara, for example, makes no effort to divine what will be "the" color for each upcoming clothing season. Instead, Zara starts producing products in every color it can imagine, measures what catches on in its stores, and uses its famously nimble supply chain to instantly shift gears and pump out more of that season's hit.
As the availability of real-time customer data grows, more and more businesses may be able to follow Zara's approach.
In the meantime, remember that customer advocates are a powerful driver for any brand. Just don't base your strategy on thinking you can figure out in advance who your most influential customers will be.
Traditional television outlets are under pressure as consumers look for, and now expect, great video content from the Internet. The efforts of these players to keep their consumers engaged in the online world offers general lessons for those looking to “monetize the audience, not the content,” as Fred Wilson has aptly put it.
Lisa Hsia, Senior VP, New Media & Digital at Bravo TV, discussed her efforts to build Bravo’s online presence while speaking at BRITE ’09
My job is to try to interact and engage our users before the program, during the program, after the program and always, and my job is not only to interact and engage but my job is really to monetize. ... When I was at NBC news you know it was like, “this is a higher calling.” No. This is about money.
And just how does she do this? Through “constant experimentation and trying to figure out the user.” Although it isn’t all experimentation, Lisa noted that there are constants that drive audience interaction: photos, videos and blog posts. Her experiments come through different treatments of these resources and how they promote actions, like text message polling and paid content downloads.
In addition, based on the success of online polls and chats that occur during broadcast re-runs of Bravo’s shows like Top Chef, Lisa went back to her advertisers and suggested the development of interactive features for their banner ads. She noted that this is a trend the advertising industry is moving towards, but by showing the audience's engagement with the shows, she helped push advertisers along.
To meet her “always” engaging the audience objective, Lisa developed affinity groups, e.g. “Bravo for foodies” and “Bravo for style,” which maintain a more constant level of interaction and permit additional opportunities for partnerships, sponsorships and advertising development.
An online audience needs additional content, so costs can be a concern, but Lisa noted that for a 7-part webisode series spun out of “Make Me a Supermodel” she spent a mere $2,000. (Note the audible gasp from the audience in the video.) This combination of online activities yields tens of millions of dollars of additional revenue to Bravo.
It is true that the reality TV shows which dominate the Bravo line-up are ideally suited to online engagement. Lisa’s efforts demonstrate, however, that by being efficient and creative you can excite your audience, and drive deeper connections that lead to additional brand or advertising revenue.
After 25 years, we still don't understand what the Internet is.
At least that is the more charitable view of the Federal Trade Commission's new regulations that will fine bloggers who endorse a product without disclosing any free samples or other compensation that they received.
The less charitable view would be that the FTC is using a minor annoyance (blogging shills) as an excuse for a vast power grab and restriction of free speech.
As the Supreme Court recognized in a landmark 1997 ruling, speech on the Internet is closer to speech in books or the public square than it is to broadcast media like radio or television.
And yet, in its new regulations, the FTC fundamentally mistakes blogging for a mass medium, like radio or television, whose publication is limited to a few large institutions broadcasting messages to a large audience. In reality, there are approximately 200 million blogs around the world (throw in 50 million Twitter accounts and the status updates of Facebook's 300 million users, and you're starting to get some real numbers here). The vast majority of blogging is not by influential platforms read by millions, but by individual bloggers publishing for a miniscule audience of friends and acquaintances.
To attempt to regulate speech (however sleazy and deceptive) on "blogs" is not at all equivalent to regulating speech on radio or television. What it is equivalent to is trying to regulate all speech printed on "paper" – newspapers, office memos, classroom handouts, post-its, and handwritten notes on your kitchen fridge.
I surely hope the FTC will quickly kill its regulation, and not force the courts to rule on the disastrous precedent it is setting.
If the FTC truly feels that bloggers flogging shampoo that they get for free is an affront that demands government action, I suggest they scrap their rules and start over with an approach based on the following:
Regulate only those who solicit undisclosed endorsements. Companies that pay endorsers would need to take steps to ensure their gifts are clearly disclosed by recipients, and to cut off the goodies to any endorsers who fail to disclose in the future. Bloggers themselves would not be regulated.
Make a distinction between giving free sample products vs. cash or additional gifts. I should be able to give out free cupcakes in front of my bakery without a disclaimer. But if I fly 50 bloggers to an all-expense weekend in Miami so I can ply them with products, I would need to request that they disclose this when talking about the products, and make a good faith effort to follow up and de-list anyone who repeatedly fails to disclose. (A minimum value for gifts requiring disclosure could also be set, say $500 per year.)
Apply the rules to every media… As the law currently stands, magazine editors are still not obligated to disclose all the free products they receive, while your mother with 12 people following her on Twitter can be fined $11,000 for posting about the same thing.
… and yes, even spoken speech. The rules should apply to those who solicit verbal endorsements as well, including "word of mouth" marketing agencies like BzzAgent. If you can't write a law that's constitutional in regulating spoken speech, then it isn't fit to regulate speech on the Internet.
Actually enforcing such a policy might seem daunting, but it would involve policing thousands of companies and marketing agencies, rather than the hundreds of millions of citizens using social media who are covered by the current law. In large part, it could be enforced by the community ratting out the most egregious violators.
How about it, FTC? Can you rewrite this to make constitutional sense under our Bill of Rights?
If not, just admit your mistake and kill the new rule.
Disclosure: David Rogers is the Executive Director of the Center on Global Brand Leadership at Columbia Business School. He received no cupcakes while writing this post.
BNET magazine interviewed me yesterday about Starbuck's recent launch of Starbucks Via instant coffee. The writer posed a question on many observer's minds:
HUH? Why would a company responsible for turning so many people into gourmet coffee disciples promote a down-market product that seems to be the antithesis of its brand?
The short answer is: a $20 billion worldwide market for instant coffee. Starbucks, in the midst of a year turning around its performance and stock value, is leveraging its brand in a category that should bring it easy profits by eyeing countries with large instant coffee markets like China, Russia, and the UK. (Like me, the Brits are tea lovers, and know nothing about coffee.)
Starbucks' CEO Howard Shultz claims that the company has spent 20 years developing a special "microgrind" technology to make its instant coffee taste better than all the rest. (He's so confident, they're running taste comparisons to their regular brew in select stores). It will need to taste different to sustain the luxury pricing Starbucks is introducing to the category (nearly $1 per serving).
BNET asked me what advice I would give to other brands looking to launch into a new category which is not an obvious fit for their existing brand.
There is growing evidence that a company can strengthen its brand by listening to customers and even sourcing business ideas from the crowd. But just what does such an effort look like in action?
Entrepreneur Aaron Cohen used his speaking slot at the BRITE '09 conference to conduct a live crowdsourcing experiment with the attendees. Cohen described the basic concept and unique assets behind a new company he was about to lead, AnyClip.com, and then sought out suggestions that might turn these raw materials into a breakout media brand. Here is a video of this “crowdsourcing in action.”
Cohen assumed the role of CEO shortly after BRITE, and AnyClip is now moving forward along some of the tracks discussed during the conference. AnyClip (now in beta launch) lets users find, watch and share short clips of their favorite movie scenes online, and it has alreadysecured the rights to host films from most of the major Hollywood studios. The company won rave reviews for its recent demo at the TechCrunch50 competition, walking away with the coveted Audience Award.
One of the key ideas in Cohen's crowdsourcing discussion at BRITE was to open up the company’s film clip database to the software developer community -- so that anyone can build new applications, services, and revenue streams based on AnyClip’s platform. Cohen discusses this strategy in a recent piece he wrote for The Business Insider, including the use of an “open API” (application program interface). Opening a new platform up to development by other entrepreneurs has been a critical part of the success of both Twitter and the iPhone App Store.
Open APIs are unique to technology brands. But, whatever industry you are in, there are ways to solicit ideas from your stakeholders and strengthen your brand through collaboration with your customers.
This week I attended my first Clickable Interesting Cafe event with Fred Wilson, a VC and principal of Union Square Ventures, providing the talk. What stood for me was how much Fred's discussion about the growth potential of the New York tech community was about branding, and yet he never couched it in those terms.
Fred spoke of the issue as a matter of perception: the more established
web industry players still don't see New York as one of "the" places to
build an influential start-up company. Changing these perceptions will
be about building a strong brand for this community.
He had no specific plan about what to do to show off this potential, but he's sure that "we need to get the word out."
Well, you may not have tackled the how, Fred, but you laid out some clear brand attributes of the New York web industry.
My favorite of the "factors" he discussed were:
New York can excel in building web applications
New York is a media obsessed city
International trade and business thrives in New York
New York is the world's biggest stage, and
(my absolute favorite) New York will call you on your bullshit
The event also reflects the broad way in which our
center thinks about brands--they are not just products, services, or
companies. To drive even greater successes for the New York tech community, a brand will need to be built that combines both community and place.
Chris Dixon, founder of Hunch, provided some counterpoint to Fred's talk, but also sees the potential for a boom in the New York web world (as he noted in his blog this summer). He described the need to "build a firewall" so that the great ideas and minds that form on the East don't get pulled away to grow in the West.
In the end, I think that innovative tactics to "get the word out" will eventually come, in part, from the new web communications tools that are being built by this very community.
But I also think that a good old fashioned idea and tactic is in order here: the formation of a "New York Tech Industry Association." The networking is already there (in places like NY Tech Meetup), and leading players like Fred and Chris are in place, maybe it's time to bring all of this together within a more organized structure.
(For more of Fred's "factors" you can watch his presentation from the Web 2.0 Expo).
You may have seen the recent advertisement by General Motors (that's our car company, fellow taxpayers).
In it, GM's new CEO Ed Whitacre tells viewers that he was skeptical when he came on to run the company, but he's become convinced that GM has the quality products to compete with all comers. To prove his conviction, Whitacre is offering a 60 day guarantee to return any newly purchased GM vehicle for your full money back. "May the best car win."
I had the pleasure of doing a live radio interview yesterday on the subject with Richard Piet on WKZO in Michigan, the great state where I went to college. You can hear our 11 minute conversation here.
I told Richard that I think there have been 3 really big ideas in automotive marketing in the U.S. within the last year – three times that companies really thought outside the box, and put their neck out, if you will.
The biggest marketing idea, of course, was Cash for Clunkers. The fact that the company behind it was the U.S. Treasury is a slight distinction at this point. Cash for Clunkers was a big marketing idea, and it came with a high price tag, but it worked. With consumer confidence still abysmal, the program got customers to come out and buy brand new cars, spurring a huge uptick in sales.
The second idea was Hyundai's announcement last fall that they would forgive car payments for new car buyers who lost their job after purchase. It was a bold move perfectly suited to the psychology of customers at that moment, when the bottom had just dropped out of the economy and no one who had a job felt sure how long they would hold it.
I think GM's money back guarantee is probably just as bold an idea. There's probably no way to know exactly how many buyers will return a vehicle. (I am sure GM's finance folks are quaking in their loafers somewhere.) I doubt it will deliver as immediate an impact on sales as these other two ideas. But where it could make a difference is in the perception of GM's brand.
An unconditional money back guarantee is kind of an old fashioned idea nowadays. It's the kind of thing you expect from an old New England company like L.L. Bean. Or a family business. The kind of folks who really stand by their products and earn your trust.
If Whitacre's gamble can get Americans to trust GM again… AND if his products fulfill that trust for those who buy them… it could make a real difference in the reputation of the GM brand. And after emerging from bankruptcy and ridicule, that's probably where this embattled company needs help the most.
I want to highlight a good article posted last week by one our BRITE ‘09 attendees, Abby Strunk, the Director of Marketing and Communications for BBYO, Inc., a non-profit Jewish youth organization. (We are glad you found value in the conference, Abby).
In describing her marketing efforts at BBYO, Abby writes about the trends she heard this year while attending BRITE ’09 and other business and marketing conferences. A common message formed around the idea that a brand's success will rely, more and more, on inspiring its audience to become “evangelists” for the brand.
What is striking is the realization she came to from listening to various marketing gurus and the efforts of major brands (with their major marketing budgets).
Participating in the conferences referenced earlier is an interesting experience. I have the thrill of Interacting with experts like marketing powerhouses Seth Godin (author of The Purple Cow and Tribes) and Jeff Jarvis (author of What Would Google Do?) and big brands like McDonald’s and American Express with multi-million dollar advertising budgets. While intimidating, I couldn’t help but to feel that we were the lucky ones. We – a Jewish non-profit – had something that some of the world’s best known brands were desperately trying to obtain. We actually have a community of people who have a deep passion and affinity for our “product” – an audience that is willing to take decisive action on behalf of the brand because they want to. The evangelism is authentic.
Stories and case studies from big brands tend to dominate the media, so it is refreshing to see Abby remind us that organizations and brands of all sizes need to adapt to the changes being created by our digital culture. And that, in fact, these changes can be encouraging to smaller players since the closer connections they and their stakeholders have with each other may bring them proportionally greater benefits.
Be brave enough to relinquish control of your brand. Put control in the hands of your community. They will reward you by moving your mission forward.
Is the use of twitter, IM, and Wikipedia during a meeting… a) An aid to enrich the conversation? b) Better than just doodling on paper? c) Likely to prevent you from engaging fully? d) Rude?
I read two fascinating posts this week on the impact of continuous partial attention in our lives. I highly suggest both, however you answered the question above.
In "The Myth of MultiTasking", Adam Singer gives a passionate and thoughtful argument that slipping into a habit of constant digital multi-tasking can stymie creativity, deep thinking, and quality work.
"Twitter, email, phone calls, instant messages, web browsing – they are all distractions and ultimately collateral tasks… Unfortunately focusing is a lost art, especially in my generation [Gen Y]… We grew up working on projects and studying while browsing the web, eating dinner, and talking with our peers. I only learned self-discipline later in life, but I had to unlearn the habits I acquired growing up multitasking"
Adam doesn’t address the potential benefits of multi-tasking for some kinds of work, or stages of the creative process. But he makes an eloquent plea for the value of an intent focus, undistracted by urgencies of the moment, to the kind of work that for many of us "leads to productivity, fulfillment and ultimately happiness." As someone engaged in writing a book, I share his need for long blocks of uninterrupted time.
In "I Want My Cyborg Life," danah boyd offers a revealing counterpoint. She relates a story of being rebuked for her use of her laptop in the audience at an academic conference in Italy (on Modernity 2.0, of all things). Boyd details how her use of Twitter, blogging, and Wikipedia during presentations enriches her understanding and participation:
"During the talk, I had looked up six different concepts he had introduced (thank you Wikipedia), scanned two of the speakers' papers to try to grok what on earth he was talking about, and used Babelfish to translate the Italian conversations taking place on Twitter and FriendFeed in attempt to understand what was being said. Of course, I had also looked up half the people in the room (including the condescending man next to me) and posted a tweet of my own."
Boyd, and others in her comments, describe using the mobile web in the classroom, in museum galleries, and at dinner parties, to expand on and enliven their daily experiences. But, as reported in recent MSM articles, there are many others who are offended when a Blackberry or iPhone is enlisted during a meeting.
What's the difference between the two camps? Theories in boyd's discussants include: sex (men can't multitask), culture (Italians don't get it), and age (some people are dinosaurs).
My guess is none of these.
I have a strong feeling that whether continuous partial attention is a boon for us (like for boyd), or a lodestone (like for Singer), will depend to a fair degree on our neurology.
I was not surprised to read in her follow up comments that boyd is ADHD.
"Just because I might appear to look like I'm paying attention to one thread does not mean that I actually am. I learned to perform attention in high school. But, as an adult, I'm more interested in learning than in performing… [As a lecturer] I find it really disconcerting when people are actually looking at me."
As someone with attention issues in my family, I immediately recognized her experience. And as a parent, I echo her question to teachers:
"How can we embrace those who learn best when they have an outlet for their questions and thoughts?"
Social norms of whether public digital multi-tasking is appropriate will be shaped by culture, and these norms will be in flux over the next 10 years.
But as they shift, we should keep in mind that what works for one person does not work for everyone else. Some of us will work very well with a split screen in our mind, but others will thrive best when they unplug for solitude.
I recently spoke with Sally Herships, for an article on the radio program Marketplace heard yesterday on public radio stations, about a new advertising platform for the Xbox.
Like me, it turned out that Sally has never purchased a television. As I've blogged previously, the age of viewers who watch a traditional TV broadcast has now passed 50 years old.
Instead, networked customers are consuming content over the Internet and other digital platforms like iPods or gaming consoles, and avoiding ads in the process. What's an advertiser, used to reaching customers on television, supposed to do?
Enter Microsoft with its Xbox console. In the new live multi-player game "1 vs. 100," advertisements can be inserted that users can't skip. They can also reach extremely targeted audiences, thanks to information that the Xbox collects on them, including gender, location and age. Advertising on games like "1 vs. 100" may not replace the huge reach of television ads, but it could offer a new model for reaching niche audiences in our changing media landscape.
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