At the spring Digital Hollywood, I interviewed Chris Tolles, CEO of Topix, to discuss the social news site.

Chris describes how Topix takes news feeds from a vast array of news sites and uses sophisticated algorithms to process the news into locations and categories. The result is the Topix news feed. Want to find local news just put in your zip code and you get a filter which presents news relating to your area.

The really interesting part about Topix is the conversation about the news. The site only provides the title and an abstract of the article along with a link to the original story. The title and abstract kick off the conversation. The more provocative the topic, the more conversations buzzes.

This use of news topics as social objects allows you to find other people who are interested in the things that you’re interested in and other local people who are really into talking about the news.

For those of us working in the social media business, Topix also provides some interesting lessons how generate a conversation. The key is to lower the cost of participation as much as possible. Topix starts with a very simple subject and abstract. They then make is super simple to start talking. Right below the topic is a comment box. No registration required, just put in a name, your comment, and a 4 character code and then you can leave your comment.

The result is a powerful social object that makes the conversation the focus of attention.

Technorati Tags: Topix, Chris Tolles, Social News, Digital Hollywood

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Battle at Kruger - YouTube Video

The New York Times story speaks to the growing power and influence of the internet and YouTube relative to broadcast television.  But there’s also a meta-story that reinforces the challenge that traditional media companies face as they come to terms with the internet.

The print world has been forced to open up its content to the online world.  Readers who want online news content will find it, and the print ad revenue those readers used to bring with them is being replaced by smaller online ad revenues.  The only choice for newspapers has been to keep at least the online ad revenue by opening up their content and maximizing monetization, or to let their competitors take all the revenue from them.

So nytimes.com, the only way I read that paper, carries the full story online, accompanied by beautiful hires images and an unfortunately no longer functioning link to the original YouTube post.  Someone in nytimes.com’s ad sales department did a great job too, as the article is surrounded by banner ads for the National Geographic Channel episode.  Or also likely, the article and the advertising were planned together - in a world where content is free, content and advertising are increasingly one and the same. Either way, there is no doubt that those well-targeted ads are maximizing the revenue potential for this particular story.

Click on any of those banner ads and you’ll get a stark reminder that television and print are still in very different worlds.

The National Geographic Channel has a well-constructed mini-site for Caught on Safari: Battle at Kruger, featuring the next prime time airing and accompanied by a video short/promo, the full YouTube clip, photos, information about Kruger, and related stories.  But you won’t find the the hourlong episode online.  The “real” content can only be accessed through your cable or satellite feed, where Newscorp and National Geographic, who jointly run National Geographic Channel, ring the cash register.

Print, and more profoundly, music, were the first media for which the internet could deliver a competitive and over time superior audience experience at a lower distribution cost.  As described above, the only response available to most outlets has been to cannibalize themselves or be killed.  No surprise that shares in The New York Times Company (NYT), at $19.67, are down 57% over a five year period; other major papers are in the same boat.

The internet does not yet deliver a super audience experience at a lower distribution cost compared to television.  Not yet.  Most streaming, YouTube in particular, is nowhere near standard broadcast quality, let alone HD, but there are an increasing number of exceptions.  It’s still pretty expensive to stream high quality video.  Getting internet video into the living room is costly, kludgy and not ready for the mass market, but then again, I also prefer reading a physical newspaper over breakfast than catching up on the news with my laptop.

So the networks have benefited from the luxury of time and insight from print and music as they experiment with online content and monetization.  They can still keep their highest value content available through broadcast only, where most of the money is, and use online as a tool for promotion and viewer engagement, selectively releasing episodes where doing so reinforces that dynamic.  Investors aren’t betting against the networks; shares in News Corp. (NWS), at $19.35, are up 33% over their price five years ago.

In the meantime, internet video is beginning to breach the walls of the living room, and the quality / cost tradeoff of internet video distribution continues to progress along the path suggested by Moore’s law.  The networks have some more time to work out how to maximize online monetization, but they don’t have forever.  And while they have a big leg up on the newspapers and music labels in this game, it’s sobering to bear in mind that investors weren’t betting against those players either five years ago.

Technorati Tags: Battle at Kruger, National Geographic Channel, New York Times, News Corp

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I was quite skeptical that this deal wood be good for Microsoft or Yahoo, and believe the major beneficiary of it would have been Google. Neither Microsoft or Yahoo has a product that effectively competes with Google’s search and advertising products. Combining two huge computer systems or choosing between the two would have tied them up in knots for years.

Yahoo has some great potential if they can truly integrate their social assets and open them up as a new type of application platform. Perhaps the Microsoft bid was the spur that Yahoo needed to get it’s act together.

Yahoo’s shares will drop on Monday and Yahoo will be sued by shareholders who are frustrated by their inability to close a deal. It will be interesting to see if Yahoo continues to pursue the Google deal and if Microsoft emerges as competition for an AOL deal.

If Yahoo doesn’t take this chance and start delivering performance, then Microsoft or someone else will be back and buy them for much less than the $37 per share Yahoo wanted to agree to the deal.

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John: At what point did you know when Netscape was going to be big?

Marc: It ramped really fast. Released it to 100 people and then it went viral. However, it wasn’t until they founded Netscape that he felt it would be big. At the time, the cable companies were advocating interactive TV and it wasn’t clear how it would play out.

John: Are you concerned about how the big players/cable companies are approaching the web now?

Marc: It depends on who you are speaking about. Most media companies are still not prepared for the shift. Newspapers are in a free fall and still don’t know how to respond. There The telecom players are huge enablers, but they are uneasy about being positioned as commoditized future so they are looking a pricing structures to protect themselves.

John

Marc: At the time, nobody was making money online. John Doerr believed in them. They launched three businesses – not-for profit, enterprise and advertiser supported browser. All three worked.

John: MS built what you built, what do you think about that?

Marc: MS even used the original Mosaic code to launch their browser. We didn’t know what the future business of the company would be. The enterprise software business was doing very well. The advertiser business grew quite large as well. We just knew we needed to adapt.

John: How might it have turned out differently?

Marc: the big surprise – how many things done early have lasted and done well. JavaScript is an example. At the time, it was needed. Then it went into a hiatus and had a resurgence. Cookies are another example. They came up with the idea over a weekend when they needed to figure out how to develop a persistent shopping cart. Another example is a back and forward button. At the time, they couldn’t think of anything better, now it has gone all over the place in the operating systems and into applications.

John: Talk about the cloud. What do you think about the idea of a web operating system?

Marc: I saw the browser as a half way step. The surprising thing has been the persistence of many of these things, including the browser. The browser is the access point for the audience, which creates a self-reinforcing trend to build the applications in the browser.

John: put on your industry observer hat. Talk about some of the big names. Start with Microsoft.

Marc: Wonderful company (laughing). I think they have a very important role to play. The mesh work that Ray and company are doing is great stuff. Today, there are more counterweights to MS. It seems to have splintered and fragmented.

John: What about MS buying Yahoo?

Marc: I think it will be successful if they do the deal and they could be successful separately. Other companies will still be successful. The underbrush will continue to be successful.

John: Ning raised a bunch of money – What do you mean by the coming nuclear winter?

Marc: I have no idea about what’s really going to happen. The credit markets are bursting. After the stock bubble, the money went into real estate and then into credit. While tech doesn’t have a lot to do with these industries, everything is linked together. If consumers spend less, companies cut back and tech gets hit.

John: Talk about Ning. Why is Ning not Facebook?

Marc: Ning allows people to build their own Facebook like applications. Over 250,000 networks. 1,500 networks per day….

John: How do you feel about the idea of data portability?

Marc: we are very pro data portability. They have lots of ways to get data in and out of the system. There is not a lot of demand for this yet, from either consumers or developers.

John: What about OpenSocial?

Marc: Facebook did an amazing thing opening up it’s platform for developers. It was a powerful idea. However, it was closed to Facebook. That created a need for an open standard, which led to OpenSocial.

Audience: Do you view yourselves as a platform or will you get into networks yourself?

Marc: we are a platform business. We have no intention of getting into networks ourselves.

John: How are CPMs. Are you getting your 17 cents?

Marc: Much higher than that. The networks being focused lend themselves to better advertising opportunities.

Audience: What can you say about Bill Gates?

Marc: He’s made a tremendous impact on the industry. It’s hard to see what things would be like if MS had not been able to standardize the operating system. Interesting, the mobile world is more like the PC industry before a standardized operating system. It’s holding things on mobile back.

Audience: What can we do about browser security leaks?

Marc: I can’t do anything about it. It’s just a continuous cat and mouse game that will be a continuing story to come.

Audience: what role can academia play in a conference like this and in the future?

Marc: Most of what happens in tech, is brewing in the university systems. They need to do a better job of teaching business skills to go along with the technology skills.

Here’s the video:

Technorati Tags: Marc Andreessen, Ning, Netscape, Web20Expo

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Max says that the widgets Slide makes are very engaging. They engage users in a way like Television and in some cases even more deeply. He describes how Juno the movie used Slide’s Super Poke application to do a Pregnancy Test action that 370,000 people voluntarily used the action.

Max describes how they are obsessed with collecting and analyzing data. Charlene asks about privacy. Max describes how their data analysis from the user level up. They aggregate the users into segments of like activities. However, they don’t know the user id or email because that’s not provided by the social networks that host their applications.

Charlene asks about the risks from the social network hosts. Max describes how once consumer finds something they like and actively seek it out. He uses the Adobe /MS to show how if you focus on something that is of real value, with lock in you have a protectable business.

What about application spam? Stop throwing sheep at me. Max says that this is one of the most challenging issues. The power of these networks is the ability to spread things at an incredible rate and the temptation to expand is quite strong.

He says that the spam problem breaks into to different types of problems. The first is, abusive users who spam people. That part will get handled as other abusive activity gets handled. The harder part is the genuine use by heavy users. It can be perceived as spam by light users. Max says they thing that the path ahead is giving the users control and filters to help them decide how they will participate.

What’s the secret sauce of success? Max’s first four startups failed, but the fifth did well and the Slide is the sixth. He says that one of the things he has learned is the importance of drive when hiring people. He says that the two things he watches are the number of people who embrace the applications world wide and the number of employees who will be millionaires on a IPO. He says that his one last piece of advice is from Winston Churchill – Never, never, never give up.

Here’s the video:

Technorati Tags: Max Levchin, Web20Expo, Slide

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You can find more videos of the keynote presentations at Web2Expo channel on Blip.TV

Technorati Tags: Fake Steve Jobs, Dan Lyons, Web20Expo

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Tim asks Jonathan about how he uses blogging to help run Sun.

J: Blogging as a term at some point will become achronistic. Its about communication. Why not use the internet to communicate effectively and authentically. One of the toughest parts of the job is communicating with the 33,000 employees. Why not communicate with them and everyone else at the same time.

T: Controversy part of the strategy?

J: If you talk about undifferentiated things that are expected then nobody cares. You have to take a position to have anyone care.

T: What’s the worst horror story for your PR department?

J: Most terrifying when GC started writing a blog (lol), never really terrified the PR department, but have scared the IR department at times. Required a link to safe harbor statement.

T: How should/could people use blogs?

J: View it as a way to communicate. Communicate in the way that’s most effective to you.

T: Recently bought MySQL. A billion dollars is a lot for a company that gives its product away.

J: Integration is going fantastically. MySQL is not a charity. It was making money and growing like a weed. They were in the midst of doing an IPO and we felt that there was a great synergy with what Sun does. They now get 70,000 downloads everyday so they get 70k new touch points every day that they can introduce Sun’s infrastructure to.

T. What about the network providers and cloud computing?

J: Whatever we can use to reach consumers and touch them. Increasingly the touch points will be everywhere.

T. The cloud creates the ability to create these really interesting data collections.

J: We have huge numbers of downloads and updates. We get a huge data exhaust from this that provides us with insight into what’s going on around the internet.

T. Do you view Amazon as a utility?

J. Clear pricing and substitutability are earmarks of utilities. The lack of substitutable APIs means that the don’t have the ability to move easily across providers. Users want that complete portability. If we get there, we will also get to clear pricing.

T. Talk about scientific computing. How do you see the low end and high end converging.

J. We see three pools of computing - business automation, erp, hr 90% of market. Two other segments - high computing and social infrastructure services that are both growing fast. These segments are growing really fast because the costs to do this have dropped so fast. He points to a company called Aggregate Knowledge - (an Amazon like collaborative filtering application that filters information across multiple data vendors). What he really needs is these really fast SMP machines that can handle the terabytes of data and huge computing really fast.

T. Asks about how Google is running on all these really small computers.

J. If you take a closer look, these are really high performance machines. More like what Sun sells.

T. What about virtualization?

J. We will be a leading provider of this and it will be free. We want everyting to be virtualized. We want them to be twice as efficient and that will likely result in twice as many being bought.

T. What about the power consumption?

J. We’ve already hit the problem. In Tokyo, the cost of the energy is higher than the cost of the computer. This is a problem. Still only half of the CTO’s are responsible for their energy costs.

T. How have you greened your infrastructure

J. The Niagra platforms an example of this. Went from 0 to $1billion within one year. It’s optimized for power efficiency.

T. Once the other half of those CTOs become aware of the power problem it will play into Sun’s cloud computing agenda

J. The other thing that’s interesting. When I asked the CTOs about whether they used MySQL, no one raised their hand. When I checked they had all downloaded it between 500 to 5,000 times.

T. Talk about the Black Box.

J. Moving air around is really inefficient. Power sources shift as well. We need to make it portable. The most portable thing is a shipping container. We are now in deployments of these mobile computer data centers.

T. Any last thoughts

J. The network is the computer, data is the currency. ZSF storage innovation is an important part of this. We’ve been very aggressive moving out to connect with the part of market that thinks about data. Free products and great ideas are the best way to connect with that market.

UPDATE: Here’s the video

Click To Play

Technorati Tags: Jonathan Schwartz, Sun, Web20Expo

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He says that Yahoo has been open for a long time. They have lots of open API’s. Flickr is the second largest of these.

He wants to take “open” to a whole new place. He wants to open up all the assets to developers. They want to open up the social network that is Yahoo. It sounds like they have been learning from Facebook and OpenSocial. They seem to recognize that they have the ability to be the worlds largest social platform if they can get this right.

He announced the opening of the beta for search monkey. He says that Yahoo’s open strategy is not just about opening up the search page, but opening up all the aspects of Yahoo.

They will have an application platform and a social platform. They are going to unify profiles across Yahoo go make social possible. The third element is to re-wire all the properties of Yahoo so that there is a consistent API across the different experiences.

They want to rewire the entire Yahoo experience to be social. They don’t view social as a destination. He provides an example of social being used to highlight mail in email system, highlight what’s important to friends in My Yahoo or on the sports page.

Y! OS (open strategy)

• Rewiring Yahoo
• Open Yahoo to developers like never before
• Making Yahoo more social
• Making Yahoo portable.

Search Monkey now, much more later this year. The overall process will unfold over time. Look for releases over this year and next.

UPDATE: Here’s the video of the presentation:

Technorati Tags: Yahoo, Open Strategy, Web20Expo

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You’ve seen the scantily clad cocktail waitresses in the casinos.  The sexy woman posed on the hood of a car.  We know that sex gets men’s attention.

But does sex actually sell?

A new research study by Brian Knutson of Stanford suggests the answer is yes; at least, that heterosexual men are more likely to take financial risks after being subjected to positive emotional stimuli—in the case of the study, erotic photos of a man and woman.

Why should digital marketers and publishers care?

As digital content and advertising become increasingly intertwined (here’s one of many posts on that topic), and marketers and publishers get better about measuring the effectiveness of their efforts (read more in our mini-eBook on social media performance management), we can expect the trend toward sex in advertising to be further invigorated (pun intended), at least in advertising that targets men.

And as social media becomes an increasingly effective marketing tool, we can also expect more of the digital equivalent of those cocktail waitresses.  The Stanford study alluded to the particular relevance in online gaming (gambling) businesses, and I noticed the effect firsthand when checking out XuQa.com, an online casual gaming community co-founded by Murtaza Hussain, co-founder and CEO of PeanutLabs and the subject of a recent DigitalPodcast interview.  Many of the most popular gaming rooms in XuQa are hosted by very attractive women (or at least hosts with photos of very attractive women), and the formula seems to be quite successful there.

By the way, for our female readers (my wife included) who by now are gloating over the superiority of your half of the species, beware:  Mr. Knutson is planning to test women’s responses in the future.

Technorati Tags: Brian Knutson, Erotic Content, Stanford University, Sex

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Creating Brand Advocates at Nike’s Jordan Brand
Emmanuel Brown, Director of Digital and Content, Nike’s Jordan Brand

Nike’s Jordan Brand has developed a couple of immersive experiences for highly engaged fans.  The experiences start with deep insight into these “superfan” needs, and build intense community engagement for these hardcore fans, but are small scale communities relative to the scope of the Jordan Brand.  Which raises the question, are these high ROI applications for engaging and activating superfans, or are they so focused on the hard core that they are failing to engage the brand’s mass market?  Read on and share your opinion…

Emmanuel began by sharing background on Nike, whose headquarters in Beaverton, Oregon is like a Disneyland for adults, and its Jordan Brand division, where Michael Jordan (MJ) still deeply interacts with the brand, the same way that he was engaged with the game of basketball.

Mentally, or digitally, cut to a stirring, inspiring Michael Jordan video (videos can be found at Nike’s site for the Jordan Brand, Jumpman23).

The Jordan Brand.  Nike approached Michael Jordan in 1984 to have a signature shoe built around him, a completely novel concept at the time.  In 1996, the Jordan Brand was born as a division within Nike.  The brand has 110 people versus the Tiger Woods Brand’s 400 people, and both brands support the same amount of revenue.  Nine out of ten people own (or have owned) Air Jordans, and the Jordan Brand is the second in the market behind Nike itself.

The Jordan Brand’s primary consumer is the core urban male 15-20 year old, highly competitive, a leader of the team.  These guys often know what the brand is doing before the news is made public.  The secondary consumer is 12-24 year old males and females, urban and suburban, not necessarily competitive.  Their consumers’ mind space includes social media, television, and the video game space.  The Jordan Brand does a lot of marketing through video games – with them, kids can see the entire line-up.  Most kids know what products they want before they get to the store.

The engagement philosophy for the brand is (1) to engage with consumers where and when they want (online!); (2) product and service together are critical to delivering a greater experience and engagement; and finally (3) the consumer decides.

The Jordan Breakfast Club.  A key platform for engagement is the Jordan Breakfast Club.  The challenge was to establish an authentic position for Jordan in the training marketplace.  Every morning, MJ and his teammates used to wake up and complete a workout regiment before he got to eat his four course breakfast.  So the Jordan Brand went after an unmet need of the target customer around training – everyone says that training is important, but no one tells kids how to train.  The Breakfast Club includes a simple peer-based assessment and a custom designed workout program that can be printed out or downloaded onto an iPod as videos for a huge number of possible workouts.  The Jordan Breakfast Club has 20,000 plus engaged users, and tens of thousands additional views on YouTube.  The Club also did a 10-city summer tour to reach thousands more at day long training camps.  The program won a 2007 Forrester Groundswell Award.

The Jordan Flight Club.  After building the Breakfast Club, the brand started getting more information about its consumers, and next started the Flight Club.  The Jordan brand has a huge “sneaker-head” following, and the Flight Club is about limited edition, one-at-a-time, high demand products for fiercely loyal customers who are willing to pay a very high price and avoid the disappointment of trying to get limited products through retail.  The brand got a lot of feedback from consumers in designing how the Breakfast Club would work.  Members of jumpman23.com got membership offers and the opportunity to invite two more friends – in others words, an “insider” offer for loyal customers only.  Demand went through the roof, with people selling their free invitations on eBay, and over 40,000 members joining in the first 45 days.

Emmanuel’s summary:  (1) create relevant experiences beyond the product, (2) service complementary needs of the consumer, (3) empower engaged consumers to be brand advocates, and (3) create and own communities where they are relevant and authentic.  The Jordan Brand’s next big challenge is to take these opportunities in the digital space and migrate them to the physical space, like the Jordan Breakfast Club tour.

Q&A Discussion

How do you share learning from the Jordan Brand throughout Nike?  We do case studies.  Things may work differently for us versus golf, and we use best practices.

The 15-20 year old market is refreshed every 5 years, so how do you target for the future, and specifically do you market to even younger (under 15) generations?  We try to communicate in a simplified format, keep MJ’s story relevant, and make great products.  We don’t market to the younger kids, but do try to emphasize success through working hard.

What do you mean that you’ve learned the hard way about ignoring customers?  We created a website where consumers could buy one-off products, and only created 6,000 units of a product that 1.6 million consumers tried to buy, crashing the site and generating hate mail.  We use sales data and forecasting to ensure that problem is not repeated going forward.  We’d rather overstock and deal with excess inventory than to have too little product and anger consumers.

For limited editions, doesn’t it help the brand to sell out so fast?  You have to appreciate the global effect of our brand.  Kids in Australia were getting their hands on US-only products; we responded to make the products available there.   We’re pushing to think more globally and satisfy demand, offering limited products in all parts of the world.

The Breakfast Club concept sounds great, but how are you measuring the true impact?  We’re not measuring the financials, but we do track the ongoing activities of the kids who sign up.  One of the Pro teams we visited adopted the philosophy as their primary means of training!

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Patrice spoke about how at the very start all the parts of the program were completely disconnected. Someone had arranged for the branded entertainment piece on the Project Runway show and as a part of that got a large online buy on the Bravo site.

The project landed in Patrice’s lap and she went to Avenue A/Razorfish and had them develop an online campaign oriented around a very detailed map of all the touch points. Once they had completed the map, they went back through the map and made sure that they incorporated selling pants into the program in a way that featured the right products.

They got 3,000 design submissions to the contest for designing a new Levi’s product. Over 2000 of the submissions complied with the rules. The campaign got 134,000 unique visitors and almost 19,000 registered users. Two-thirds of those were women in target age group of 18 to 25 years old. They had 122,000 design ratings. They also got 924 social networking/blog badges with over 30,000 views.

Interestingly word of mouth marketing on social media like blogs and social networks turned out to be a major driver of awareness about the campaign. Social media drove 38% of the awareness about the campaign as compared to 30% of awareness coming from TV and low single digit for everything else.

During the five weeks that the program was running, the top 5 selling products changed from traditional products to the featured products. The traditional core products had a price point of about 44 dollars and sold to an older demographic. The products featured in the campaign were Levi store exclusive, more fashion forward and had price range of 58 to 70 dollars. Literally overnight they got a different demographic and a sales lift that made a measurable impact on sales.

Once the campaign ended, the top 5 selling products switched back to the traditional top 5 selling products.

Patrice said that they had to steal themselves to the loss of control and reaction during the program. Once they had chosen a winner, they had some very negative comments from people who didn’t win. This caused some consternation about the comments and debate about what to do about the comments. Levi decided to leave the comments up and it turned out well as the community policed the problem well.

Perhaps the most important part of the program was the way the program changed the way the company worked to get the digital team working with the marketing team. The online and traditional agencies had to work together to make this work.

While the results may not seem tremendous, Patrice felt that the program was a tremendous success, due to the organizational learning and the level of engagement.

It is very interesting to see Levi’s willingness to experiment and the results of this program. Project 501 clearly provided some hands on learning and capability building for Levi. It is clear that this kind of program can drive sales. The challenge now becomes how how to scale this type of program into a more significant campaign and how to make it more than a five week program.

Technorati Tags: social marketing, case study, Levi

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She calls it an “educational GPS” and a CRM for LeapFrog.

The service, which is planned to launch this summer, focuses on 8-13 year olds.

Learning Path automatically collects data from devices and produces reports that get emailed to the parents. It allows the parent to see first hand what the kid has been doing, how engaged they are, where they are on the Learning Path and what LeapFrog product should be next.

LeapFrog is increasing its investment into the LeapFrog website. They now have an educational content advisory board and are working on building community aspects into the site. They are also working on how to mobilize the millions of moms out there who love LeapFrog. They want to increase the strength of connection between the moms and their children by giving them information about how the child’s learning is progressing.

Nancy was asked about what LeapFrog is doing about the kids graduating from LeapFrog to Nintendo and she described their new Didj product as their competitive offering. (Editors note: Seems like Nintendo and LeapFrog should merge. It would be a good fit.)

Nancy was asked about multi-player games and she said that they have a secret product called Maestro that will be a multi-player product for kids and will launch next year.

Technorati Tags: LeapFrog, Learning Path, Forrester

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In part 3 of Popping the Question: Getting to Engagement we take on the issue of how to design for engagement. Two presenters at the conference provided us with a couple of frameworks for how to design for engagement.

In the first session, Aaron Oppenheimer, from Continuum, introduced the concept of “resonance testing”. They figured out that clients were too often measuring the wrong thing at the wrong time. Aaron argues that the product that tells the story best wins. He says that what he calls resonance design defers the design decisions until we know what works. In a word, wait. Wait until you know what’s going to work.

He suggests the following process:

Find the story

• Figure out what the consumer needs to hear to make a connection

Try the story

• Model the system in different ways because the context is a large part of the emotional design

Test the story

• Find out what works

Tell the story

• Build the product

Aaron provided an example of resonance testing that was used for designing and marketing garbage disposer units. The question is why should someone spend more on the most expensive versus the cheapest one? Horsepower means nothing to consumers and warranties don’t work as customers think all the units will last for ever.

They identified two needs segments:

• quick, unobtrusive clean up;
• eats everything

They then gave potential customers pictures of designs and let them place the designs along a spectrum, where the spectrum was defined by cartoon images of people and the use case. The potential customers then placed the pictures closest to where they thought the product fit relative to the following statements: does a good job for the person who wants quick clean up, does better for the person that wants it to eat everything, does both.

They then identify what about the design signals meaning to customers? Specific attributes were identified and linked to what they mean. Size, texture, look etc all have meaning that can be used to tell different stories.

Once they understood the language of garbage disposal design attributes, they could then design products that would convey the story in the retail environment.

The same principles can be applied to just about any design process. Setting clear objectives up front, finding stories that work to convey those messages, testing the story before designing, finding the specific design elements that convey the story and then translating that into final design is a process we all can learn from.

In the second session, Ron Rogowski, a principal analyst at Forrester, spoke about how to create engaging online experiences. His focus was on how to make your site more engaging. He tells the story of his wife getting an ultrasound, they found a cyst, called a CCAM (congenital cystic adenomatoid malformation), in the babies lung during the ultrasound. The doctors gave them some information, but he quickly went to Google and searched for the term and found a special treatment center at UCSF.

The treatment center has a website with videos of doctors talking about the disease and the treatment procedures. Ron played one of the videos where the doctors speaking about fetal intervention. He says he got more out of 8 minutes on the site than he had from hours of research elsewhere.

Ron found the videos to be very engaging. The site had the three key elements of engagement built. The videos were useful, usable and desirable.

The online engagement imperative is based upon the expanded ability to do new things with your customers and differentiate from others.

Engagement is hard to define and measure. It can be very subjective. It’s hard to pinpoint exactly what was engaging about an experience. The means of engagement depend on the company and the audience.

With an engaging design, the focus is on what’s there, not on how to make sense of what’s there. There is an incentive to explore and there is a visual and operational appeal.

Functional elements of the site can be combined with branding efforts to create engaging experiences. Ron points to engaging examples that include Mini USA’s car configuration tool, Google Maps, Zillow.com. He points to Blue Nile’s build your own ring application which mimics what customers were doing with data to select rings as an engaging site. Nike is another site that’s engaging. The site allows you to set individual goals and make challenges to others.

Ron highlights Panasonic’s site that allows you check out how a TV will look in your own room by uploading pictures of your living room and then dragging a picture of different TVs onto the picture.

Discovery Channel’s EarthLive is another site with an engaging experience. They use a movable globe as a navigation tool for users to find content.

Humana One’s Plan Pointer application to help guide people to health plans based upon only questions. The application is useful, easy to use and provides a rich UI for the user.

The New York Times pop-art quiz as creating engaging experiences around their stories.

NetShop’s built an application Shop Together. It allows two people to shop together. One person can see what the other person is looking at. They can look at the same page and chat about the page.

Jeep has lots of content about off road driving and a Jeep community.

History.com has an interactive universe application that explains the planets.

How to create and measure these engaging experiences?

Ron’s framework of useful, usable and desirable is the guide for making engaging experiences.

Tools of engagement

• Useful: Design personas to uncover latent user needs through ethnographic research.
• Usable: Embrace a user centered design process that follows known usability practices and test for flaws.
• Desirable: Brand personas to allow your brand to shine through.

Ron’s Recommendations

• Uncover latent needs through ethnographic research
• Define interaction paradigms consistent with brand
• Engage agencies early in the process
• Conduct user and brand reviews before (and after) going live

Links to the rest of this series:

• Popping the Question: Getting to Engagement, Part 1
• Popping the Question: Getting to Engagement, Part 2

See more about the Forrester Marketing event at Digital Podcast and at Jeremiah Owyang’s blog.

Technorati Tags: design, engagement, marketing, Forrester

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A cross section of podcasters, agencies, device manufacturers and others interested in monetizing downloadable media have developed the proposed standards.

Why do we need standards for downloadable media?

• Lots of podcasts, lots of sponsors, lots of options and confusion
• Like IAB display ad unit guidelines for podcasts
• Allow sponsors to create 1 advertisement for multiple podcasts

The panel believed that the standards should be

• Simple
• Inclusive
• Acceptable

The group is proposing three types of ad standards: Insertions, Content Participation, and Collaterals

Insertions (as provided by advertisers)

• Definition: pre-recorded file provided by sponsor
• Time up to :10, ;15, :30, or :60 seconds
• Location: Pre-roll, post roll mid roll
• Frequency: Variable or time period
• Audio: 128k stereo/64k mono mp3, Sample Rate: 44.1 khz
• Video: H.264 MP$, Aspect 4×3 or 16×9 SD and HD

Content participation

• Definition: When an advertiser’s message is included as part of the audio or video podcast content.
• Time: Variable from :1 second to full episode
• Location: Pre-roll; mid-roll; post-roll; or integrated within one or a series of episodes
• Frequency: Variable by number of episodes per month; variable by number of insertions per user per month; or fixed per channel/feed per month.

Collaterals
All the other real estate that a podcaster has that may be included as part of an advertising or sponsorship package, or as separate items a lá carte.
Examples

• Show notes on podcast website
• ID3 tags in podcast episode file
• Album Art Cards
• Link and banner in enhanced audio podcasts
• Overlays, underlays in video podcasts
• Web banners, buttons, text links, hyperlinks (using IAB standards)
• Email sponsorships
• Press Releases
• Product sales (CDs, DVDs, merchandise)
• Signage/Outdoor (for retail)
• Brochures, flyers

The second area that the ADM focused on is developing a set of proposed measurement guidelines for audience traffic.

The Association of Downloadable Media is recommending compliance with one of two proposed methods to determine true download measurement. These two methods are Native Server Measurement or Third Party Measurement.

In order to comply with these guidelines, publishers would clearly state their download measurement methodologies to interested buyers. Buyers seeking to work with ADM-compliant publishers would be entitled to request and receive these download methodologies. The goal is to achieve high levels of confidence around the metrics for both parties.

Third Party Measurement (TPM)
A Third Party server is the intermediary between the Native Server and another Third Party Server. Third Party Measurement refers to the files measuring the initial download requests as received by a third party server to be delivered to the requester. Because the Third Party server is a constant, it may uniformly measure download statistics across multiple hosting services.

Data logged by third party servers include request information about the media being downloaded. Each request contains the following data that may be utilized for analysis.

• IP Address - Unique Internet address of the user consuming the media file.
• Time Stamp - Time at which the request was made for the media file.
• Request - The request specifies the media file requested and provides the method at which the request should be handled.
• HTTP Status Code - A technical code defined by the HTTP protocol that determines the status of the request.
• Referrer - Location where the request came from.
• User Agent - A unique value that identifies the service or application making the request. e.g. web browser such as Internet Explorer, podcatching agent such as iTunes, a web bot such as Google.
• Byte Range - This is the range of start and end bytes requested by the media consumer.

Native Server Measurement (NSM)
The Native Server is the actual end point where the media is hosted. Native Server
Measurement refers to the log files derived from the Native Server. It may include
the amount of data that was transferred in each log entry, and therefore may provide information to derive more than simple download statistics.

Data logged by native servers include request information about the media being downloaded as well as the amount of bytes transferred during the download transaction. All the data listed above (available to third party servers) applies to Native Servers. In addition, the following data may be utilized for analysis.

• Bytes Served - This is the amount of bytes that have been transferred to the media consumer in a given request. Depending on the type of request made, the bytes served may be less than or equal to the size of media file.

The data contained in either native or third party server log files does not necessarily mean that the data is analyzed. The method of analysis used varies.

Analysis Techniques and Factors

Both types of measurement include analysis techniques, in order to calculate download measurement. These analytic techniques are used to determine the validity of actual downloads (versus duplicated or aborted download attempts)

There are a number of factors used in any given technique to analyze log files.

• IP Address - The IP address may be used to determine if the request is unique or a duplicate. It may also be used to determine geographical information of the media consumer.
• Time Stamp - The date and time may be used to determine if the request should be counted.
• HTTP Status Code - The appropriate HTTP status code is examined to determine if the request should be counted.
• Bytes Served - The value may be used to determine if the media was completely downloaded. (Note: This information is only available from native server log files.)
• Referrer - The origin of the download may be used to determine if the request should be counted. e.g. media that is auto played upon loading a web page may be removed or reported.
• User Agent - The identifier of the application or service consuming the media may be analyzed to determine if the request is unique.
• Byte Range - The range of bytes requested in a given request may be used to determine what portion of the media is requested. When analyzed across multiple requests, the information may provide an accurate assessment to determine if the media was completely downloaded.

The ADM does not require a specific combination of factors or techniques, instead requires that you use analysis that’s appropriate to the business at hand in a way that provides high confidence data and you can explain the process used to create the data. It is left to any company following these guidelines to create techniques that fit their situation. However, it is strongly recommended to include the IP Address in analysis.

These types of measurements can be provided by services like Wizzard Media or PodTrac. UPDATE: ADM members RawVoice and Volomedia are also providing this kind of measurement service.

The proposed standards are open for public review and comment through May 16, 2008. Send to comments and feed back to info@downloadablemedia.org.

Once ratified will be reviewed bi-annually by ADM.

Technorati Tags: downloadable media, ADM, Association for Downloadable Media, Advertising, Standards

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Realizing Your Return on Empathy (ROE)

Steve Kerho, VP Analytics, Organic
Mark Kingdon, CEO, Organic
Creating effective online (and offline) marketing solutions starts with a deep, emotional understanding of your customer segments and their needs - in other words, “empathy” for your customer “personas”. This empathy serves as a critical guide in designing online and other touchpoints, and the personas also support breaking down how you measure and respond to online performance.

Mark led off the sessions with the observation that as marketers, we have a lot of data about customers, but we need to get beyond the data to “touch” our customers.

He then solicited audience feedback on the importance of understanding customers in marketing through a uniquely engaging technique. When we sat down in the conference room, a pad and a branded pen were keeping each of our seats warm. The pens were laser pointers, and Mark gave us a brief tutorial on turning them on and aiming them without blinding our neighbors.

Mark walked us through a series of slides filled with questions and multiple choice “answer” targets; the volume of laser points bouncing around each target quickly illuminated audience response. The survey responses told us that collectively, we thought it important to find an edge in our marketing and to develop and understand customer personas to refine marketing approaches, but that we had a way to go in implementing these techniques.

Organic believes that getting to personas is so fundamental to their work that each year they send staff down to Vegas for “persona work”. The group breaks down into seven teams that are each assigned one of seven sins. Each team is tasked with observing people indulging in their target sin, and then developing a campaign for that persona. The exercise is all about getting to empathy, getting everyone on the same song sheet around what’s driving the consumer, their behavior and their needs.

Organic sees four steps in order to take advantage of empathy:

(1) Know your consumers well enough to develop detailed personas,
(2) Design web experiences around those personas,
(3) Tailor all media and touchpoints to these personas, and
(4) Know and optimize against “Return on Empathy”.

To get to step 4, marketing needs to secure management commitment to overcoming the challenges of siloed organizations, to develop a process for optimizing efforts, and to connect campaign objectives to metrics.

Why go through all this effort? Because empathy pays off, as Steve demonstrated with three case studies:

Jeep Patriot. The business objectives were to create familiarity and purchase intent for this all new vehicle in a crowded segment, targeting younger, internet saavy buyers. The solution was a very interactive online experience, where they shot 40 or so minute-long video segments for about the cost of a traditional 30 second spot. These segments comprise an interactive film, which viewers could enter and then steer their experience and outcome. Consumers were introduced to the story starting with a TV broadcast spot, then rich online ads, targeted emails, and theatrical trailers. In total their was about an hour of content, and the vehicle and its features appear in every scene. Their campaign had great results – Jeep more than doubled its target for unique visitors, with 80% of them new to the Jeep brand, enjoying an average viewing time of 5 minutes with 40% of visitors staying for over 10 minutes.

Bank of America’s No Fee Mortgage Plus product. The business objectives were to create familiarity, awareness and sell-through. They identified one persona familiar with the mortgage process, and another unfamiliar with it, and customized the site experience accordingly after three very simple multiple choice pre-qualifying questions.

Coach. The business objective was to increase the sales of bags online. The empathy process highlighted a key “persona” issue around women’s discomfort buying bags unless they are sure that they fit. The solution was to create an online bag “sizer” that drove a substantial increase in sales and reduction in returns.

After the case studies, Steve walked us through an example of metrics supporting “ROE” on site design. The example showed how the measures were built up, and demonstrated the differential impact on return against identified personas versus non-personas.

The session was running late so there wasn’t much time to discuss the ROI calculations, below.  Deeper reflection reveals a number of interesting questions, for example, why calculate ROI based on revenue rather than contribution margin, why only amortize the redesign over one quarter, and whether the redesign impacted other drivers of value such as new customer acquisition and retention rates.  You might choose a different set of assumptions for your business, but in any case, the persona-level analysis of differential site performance provides an important basis for objectively evaluating ROI.

The bottom line: executed well, empathy pays.

Q&A Discussion

You mentioned that the Jeep example exceeded traffic goals, but how does one go about establishing those goals? You end up in the forecasting business, and need to use historical performance offline and online as the baseline that you are trying to meet or exceed, for example CPM through traditional media (even though may be lower engagement, more eyeballs) You can also look at search traffic and value as another baseline for the value of the consumers you bring in.

How difficult is it to sell-in the work of building personas to clients? Actually, doing so in increasingly easy, and we have had some clients asking only for personas, not the follow-on work.

What is the role of customers in participating in site design? Customers are an increasingly important part of the process. In fact, we are working with a client now to involve customers in their core product development process.

How are you developing personas beyond traditional observations? We have deliberately selected low-tech workshops versus high tech means to develop personas, which surprises many because so much of what we do is high tech. That approach may evolve over time.

Does all this work to actually increase sales? Our clients have realized a high correlation between engagement, purchase intent, and buying behavior.

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The book is about why brands need to have a personality, how to avoid being faceless and finding a way to add more authenticity into marketing.

Rohit describes to us how he came to write the book and what he wanted to accomplish. He describes what he means by personality and provides some concrete, actionable suggestions for how to use his ideas in your marketing work.

He argues that personality must be unique, authentic and talkable. We explore what he means by talkable and in the process he reveals a secret about the book that readers will want to know. To hear the secret you will have to listen to the podcast. Pay attention around the half-way point to hear the details.

Rohit also goes into detail about how he is using the ideas in his book to market the book. The ideas he shares are valuable for everyone with something to market. If you’re a CEO who wants to make your marketing more effective, a marketing manager who wants to make a difference, a blogger/podcaster who wants to grow your audience then the ideas and suggestions Rohit makes are worth paying attention too.

Remember be unique, be authentic, be talkable.

You can find out more about Rohit at Influential Marketing Blog and at the book’s web site at PersonalityNotIncluded.com.

You can buy the book at Amazon (affiliate link).

Technorati Tags: Rohit Bhargava, Personality Not Included

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Kobe Bryant recently released a video of himself jumping over a speeding car, or at least appearing to jump over a speeding car. While the video is likely some special effect, the stunt is incredibly stupid and irresponsible. He starts the video by showing off his new Nike’s which makes me believe that this is part of some kind of ad campaign.

The video has been shown on numerous news shows this morning and will undoubtedly get sent around until everyone has seen it.

The problem will come when the first stupid person decides to try it themselves to show off. The first broken neck, paralyzed or dead kid will make Kobe and Nike look incredibly irresponsible. I would not be surprised if they get sued and it becomes a big mess.

While I don’t want to sound like the grumpy parent that I am, I can’t help but point out that this is stupid and irresponsible behavior and the perhaps the dark side of social media marketing. Kobe has a huge following despite his problems off the court. Kobe’s jersey is the number one most popular jersey in the US and even in China. Kids who don’t know any better and adults who are stupid enough to try to emulate their heroes are going to see if they can do this too.

While a pair of Nike’s costs $130 bucks, a kid’s life priceless. Nike and Kobe should start thinking now about how they get themselves out of that mess. It’s coming soon.

Technorati Tags: Kobe Bryant, Nike, social responsibility, social media marketing

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Digital Podcast joined Forrester for its 2008 Marketing Forum, which focused heavily on the challenge of customer engagement in a digital media world. We’ll be writing about the conference over the next two weeks. Our first series of articles, like the conference, is focused on the topic of engagement. This article covers the first two presentations of the conference.

Setting the Stage
Harley Manning, Vice President, Research Director, Forrester

Harley introduces the conference’s theme by emphasizing that the imperative for marketing success going forward is customer engagement, and previews three case studies on the subject.

Traditional channels are shrinking – the 30 second spot is declining in reach and importance – yet the new channels, like YouTube, hold risk for marketers. The challenge and opportunity is to engage with customers and in return they’ll engage with your brand.

Harley shared three quick case studies of engagement:

Jordan’s Furniture: Is it a furniture store or an amusement park? Complete with a trapeze school, water display, café, IMAX theatre, and the backing of Berkshire Hathaway, Jordan’s engaged customers stroll past “finished room” furniture displays to get to lots of the good stuff. Along the way, they seem to buy a lot of furniture

Nike Running website: Articles, splashy photos, and aspirational content motivated Harley to drop a wad of cash on Nike’s best running shoes, begin running again after a lengthy hiatus, and then drop more cash on Nike apparel. Is Harley buying shoes or buying into a lifestyle?

LeapFrog: Toys that engage Harley’s son’s brain while he’s too busy having fun to notice that he is learning too. No wonder these toys sell like hotcakes.

Engagement: A New Approach To Understanding Your Customers
Brian Haven, Senior Analyst, Forrester

Two brands, two superfans, two very different reactions – one shove, and one embrace. If you want your fans to keep loving your brand, try hugging them back!

The Ikea Superfan

Brian starts by sharing a story of true engagement, and how gazing into the eyes of superfan love be hard for some corporations. Jen is an Ikea superfan from Ohio, and she singlehandedly started a movement to bring Ikea to her corner of Ohio. She started a website, scouted retail locations, and worked tirelessly to drum up support for Ikea to move in. How did Ikea management react? They warned her to stop using their trademark, were concerned when her Google rank approached that of the brand, and after actually building a store in her neck of the woods, Ikea didn’t even respond to her job application. While Ikea is a great brand that does many things right, they could have handled this superfan in a more enlightened manner.

What can we learn from Jen’s story? The traditional marketing funnel and message control is a thing of the past. Consumers can now chase down a spaghetti maze of paths to your brand, and marketers risk drowning in a sea of metrics – too often we don’t know which matter, what to do with them, and even if we did, how to track them technologically