Twitter’s failure: a failure of management or expectation?

It has just been announced (in a Tweet of course) that Twitter CEO Dick Costolo has stepped down, under pressure from investors, because of a perceived failure to either grow the user base or revenue sufficiently.

The real issue here is what is this a failure of.  Is it a failure of management to grow users and (advertising) revenues, or it is it a failure of expectation on the part of investors?  I tend to see it as the later.

Twitter has the same problem that Facebook has in that the ‘clever’ chaps on Wall Street who had to stick a number on it when it started to prospect for investment used the wrong model.  They assumed that it was a form of media and therefore took the standard, ad-funded, media valuation model and twiddled it a bit.  And because the ‘audience’ for Twitter was enormous, compared to a traditional media property, the unquestioned assumption was that Twitter must be hugely valuable – it was just a question of how hugely valuable.  But platforms like Facebook and Twitter are not forms of media, they are forms of infrastructure, which conventionally are funded by subscription rather than advertising.  The problem, of course, is that subscription is not currently seen as viable for these services and advertising, in-so-far as it works at all, doesn’t work as effectively as it does in traditional media channels.

Twitter has the additional problem in that – unlike Facebook – it has almost zero real estate on which advertising can be placed.  You sign-up to Twitter and then you drive it using Hootsuite or similar.  It is thus barely even an infrastructure, it is more like a utility i.e. the stuff that flows through the pipes rather than the pipes themselves.

Of course, all of this was apparent to the ‘clever’ chaps on Wall Street at the time – but they got swept up in the get-rich-quick euphoria surrounding the explosive adoption of social ‘media’ driven by Facebook.  You therefore have to feel rather sorry for Dick Costolo because there is probably nothing that he could have done (or that his successor can do) to generate the sort of revenues to justify the over inflated valuation.  This is a problem that also afflicts Facebook (just look at its ridiculous imbalance between share price and earnings compared to Google or Apple) it is just that this sits further below the horizon than it does for Twitter.

Ultimately, the revenue opportunity for Twitter has to be based on a fundamental recognition of what it does and what it has.  This takes us back to the issue of ‘being’ the stuff that sits in the pipes.  Twitter is basically a pure Big Data play and the focus of future management has to be on this, rather than chasing advertising.  It’s the firehose, stupid (or secondary products derived from the firehose).  However, even if this can be exploited more effectively, and this is not without problems given the increasing resistance of users to having their data sold, it is still unlikely to generate enough revenue to support a share price at anywhere near its current level.  But, it should probably be enough to generate a modest profit, partly because Twitter can shed the sales overhead associated with selling itself as a media platform to marketing directors: selling its data, or products derived from its data, is a much cheaper alternative.

 

Why I have voted Green

In any functioning democracy there will always be a conservative party i.e. a party that represents the interests of the rich and powerful.  I don’t have a problem with this.  But the reason democracy works is that it provides a space within the interests of the non-rich and powerful can also be represented and debated.  Thus we have balance.

What I do have a problem with is that democracy in this country, as well as our economy, has become unbalanced.  We don’t have a mainstream party that is representing the interests of the non-rich and powerful.  The party that was meant to be doing this (i.e the Labour Party) abandoned its patch 20 years ago.  It did this because it recognised that it is much easier to get into power with the support of the rich and powerful.  It covered the tracks of its desertion with lots of rhetoric about the end of political ideology and the importance of pragmatism over principle.  It called itself a ‘new’ Labour Party and justified its actions on account of the fact that a Labour party being in power should, in and of itself, ensure that the interests of the non-rich and powerful should be represented.  Being in power became more important than the political debate about how that power should be used and thus that debate basically died.

“They are all the same, there is no difference.”  This is the single biggest message coming back from the electorate.  And the electorate is right.  One party is telling us that it will now cost £9,000 per year to go to university.  And the party that is presenting a “radically different vision for the future of the country” is saying, “tell you what, I’ll give it to you for six grand, can’t say fairer than that Guv, now give me your vote.”

That is not an alternative, that is simply a discount.

And that is why I am voting Green.  The Green Party is the only party which has a set of politics which genuinely represent an alternative.  Some of their policies may me a little rough around the edges, but that doesn’t matter, because what they are trying to do is clear the weeds that have grown up in the space that Labour deserted and put some balance back into democracy.

I, and I suspect the majority of people in this country, believe that the role of government and the public sector is to provide the investment, infrastructure and support that a sustainable, balanced, private sector needs to be successful.  This isn’t a left-wing or socialist idea – it is just common bloody sense.  But it is not being debated.   Access to education is no longer something limited by ability, it is limited by access to money – and this is not being debated.  We are only allowed a ‘choice’ on how much money this shall be.  The Prime Minister has described public services as state monopolies to be broken-up.  Do the majority of people in this country see the NHS as a state monopoly?  But this is not being debated.  We are only allowed a choice on how much money won’t be spent on it.

Will Hutton recent put this more succinctly when he said “the role of democracy is to ensure that capitalism delivers on its promises.”  Democracy isn’t working because capitalism isn’t delivering on its promises.

It is clear this this election will produce a result most people in this country are not happy with.  Dissatisfaction, rather than any groupings of political parties, will have achieved a majority.  But the reason for that is very simple.  It is because we haven’t been allowed to debate the things we want to debate.  We haven’t been given a choice.

Marketing technology: it is confusing but it is going to be big

This post is a marker.  It is post-it note that says “remember to watch this space and try and get your head around it because this is going to be big”.  It also is an excuse to log what I think is a very useful, if slightly mind-bending post by Scott Brinker.

My current mantra for marketing folk is that the future of brands involves getting your head around three things: the shift from the audience to the individual, the fact that community is becoming the new media, and the emergence of the world of the algorithm (i.e. Big Data).  I also continually bang-on about social media being a process, and of course, one of the things we use technology to do is management of process.

To a large extent, eveything that Scott is talking about in his post plays against these  issues.  To manage relationships with individuals at any sort of scale will require a process supported by technology.  Scott also talks about tag management – which (as I have already written about) will become the foundational process for the operation of communities.  Likewise, it is clear that the algorithm will become the tool that makes sense of the data that could be seen to live within the marketing cloud.  And, as Scott points out, Amazon is already starting to offer algorithmic products to do just that.

Scott also observes that things are currently very complicated and confused.  Or, as I flagged in my previous post, this stuff is ‘legitimately difficult’.  I definitely do no know enough about it – but from what I can see, I think I know enough to say that this is the future.  Technology is going to play a huge role in the management of the relationship between brands and consumers – because technology facilitates process, and this future relationship is going to be defined by process (behaviour identification and response) not by channel and message.

I think I can also predict that the key to really embracing this future is to shed yourself of the snakeskin of the past.  Big data is totally different to small data, to the extent that you can’t build your way to a big data future from a small data starting point or mindset.  Likewise, current marketing technology deals with stuff like CRM but the only way you will be able to deal with the new marketing technology is to free yourself from a CRM mindset (and possibly your CRM people).  If you look at this new stuff through the lens of the old stuff, you will probably fail to see or understand its potential.

Social customer service: it is ‘legitimately difficult’ (Social Media Today webinar)

Last week I tuned-in to a Social Media Today webinar about customer service.  One of the participants was Dave Evans (@evansdave) from Lithium.  He had a number of interesting charts which made clear the extent to which customers or consumers now have an expectation that brands will be able to deliver an on-line respond to their specific issues and question – especially in terms of response to Twitter questions.  No great surprises here, I wrote this about the future of customer service back in 2009, but it is good to finally see this sort of thing hitting the mainstream.

However there was one thing he said that stood out – and which I will surely drop into all of my talks and presentations.  He said this stuff is ‘legitimately difficult’.  I loved that.  Obviously he has an interest in suggesting this because if something were easy, why would you spend a lot of money with Lithium doing it?  But he is right.  The easy thing to do in social media is simply fill-up the void with industrial quantities of content.  The difficult thing to do is listen and respond to your customers.  But if a brand wants to operate in the social digital space – that is what it is going to have to do, no two ways about it (as this study from Edelman clearly demonstrates).

Brands have to recognise that they are increasingly operating within the community of their customers.  A community is not an audience and you can’t treat it as such by pushing messages at it.  A community is something you have to listen and respond to.  It is why social media is a behaviour identification and response challenge, whereas traditional (audience-based) marketing is a channel and message (reach and frequency) challenge.  Traditional media is a medium of distribution: social media is a medium of connection.  Traditional media is high reach but low engagement: social media is low reach but high engagement (if you do it properly).

But many brands still don’t get this.  They are pursuing brandfill strategies which, to paraphrase Dave, are ‘ illegitimately easy’.

Podcasting: what goes around comes around

I am intrigued at the extent to which podcasts are enjoying something of a resurgence in popularity because it was podcasts that first got me interested in social media all those years ago.  In the time before Facebook, Twitter and YouTube, podcasts were the first vaguely commercial looking manifestation of the thing we now call social media.  Before podcasts there were only blogs – which at the time were simply (and incorrectly) seen as online personal diaries and personal diaries are not serious or sensible things.  Podcasts, however, looked a lot like radio shows – and radio shows are (sometimes) serious and sensible things.  The claim behind podcasts was that now everyone could make a radio show – which seemed highly intriguing, and potentially highly disruptive (at least to radio shows).

But two things happened which stopped podcasts delivering on their potential.  First was the assumption that now everyone could produce a radio show – because it very soon became apparent that the people who had always produced radio shows could do a much better job of it than couples in their kitchens.  This was a classic confusion of information and distribution.  A radio show is basically a form of distribution not a form of content.  The means (and expense) of radio distribution dictate and constrain what the content of a radio show can be – as with all forms of traditional media.  What the social media revolution has done is liberate information from restrictive means of distribution.  Content doesn’t have to conform to the rules of mass media.  Radio (form of distribution) becomes audio (form of content/information).

Audio producers (podcasters) therefore didn’t need to constrain themselves with the distribution restrictions associated with being radio producres – but no-one really realised this.  Instead everyone tried to replicate (and unsuccessfuly compete with) ‘old-fashioned’ radio shows.  Continue reading

I can Get (now) Satisfaction

GSIn view of my previous post about the three key tools of social media (Sprinklr, WordPress and Get Satisfaction), you can only imagine my own sense of satisfaction – indeed smugness – to see that Sprinklr has just announced it has bought Get Satisfaction.

Clearly there are sensible people, with money, out there who think as I do – which is always a reassuring thought.

The interesting thing about Get Satisfaction is that when it first launched it was a customer, rather than a corporate, tool. It was designed to allow customers or consumers to create their own community around the brands they wanted to talk to, or report upon. It was a bit like Trip Advisor – but for any organisation. It was a community owned by the customer to which brands were then invited to join. Indeed for those brands that didn’t join there was a wonderful one-liner “No-one from company X has sponsored, endorsed or joined the conversation yet” which I thought was a great metaphor for the state of social media at the time (notice the usage of the word ‘yet’). I used this in all of my presentations  (see pictures) and I was convinced that this marked the dawn of a new era where control of corporate reputation would shift to individual customers operating within structured or semi-structured online communities.tomb

Things haven’t worked out quite like that (yet). Get Satisfaction itself shifted to become a corporate-based product, probably because it’s management decided (sensibly as it turned out) to commercialise first and then build a corporate user base rather than build a big consumer user base and then try to work-out how to commercialise it. However, I think the fact that it started out as a tool for the customer has given it an edge as a customer service tool for brands. It has a recognition that all things start with the customer (rather than the brand) coded into its DNA.

As a brand, if you use a tool like Get Satisfaction you cannot fail but become more connected, in real-time, with your customers. It’s four imperatives – ask a question, report a problem, share an idea, give praise – represent all the things that customers want to base their relationships with brands upon. Creating a customer service community may not be easy because doing it effectively means building a new process which will have tentacles that reach out much further into your business that the traditional marketing, sales and communication processes ever did. It will certainly be harder than simply pumping industrial volumes of content out into the social void. However, it is worth remembering that the easy things to do are not usually the best things to do.

I hope that this acquisition marks an end of the phoney-war of social media – and also an acquisition that cements Sprinklr’s position as the leader in ‘enterpise social media solutions’ (I hate that phrase but you know what I mean). I hope it marks at least the begining of the end of the phase where brands thought they could simply put a ‘social patch’ onto their traditional, audience and content based approaches and then carry on as normal. I hope this marks a growing realisation that brands have to adopt a fundamentally different approach to creating relationships with customers in the social digital space, the world of the individual rather than the world of the audience. A world where brands understand how to harness the power of connection rather than distribution. A world where (as I have said in my ebook) you are successful by not speaking to 97 per cent of your audience – just the three per cent (frequently much less) who, at any given time, want to talk to you.

Or, as I have also said, there are only ten customers critical to your business and social media can help you find them. The only catch being these are the people critical to your business right now, and in 10 minutes time it could be another ten people. I.e. these are the people who, right now, want to ask a question, report a problem, share an idea or give praise.

 

Social media: the three (wise) tools

I am often asked about which social media tools to use. My stock answer is to say “the answer is never a tool, social media is not a tool-based challenge.” I then invoke the analogy of the carpenter and the chisel, i.e. a carpenter will probably use a chisel, but having a chisel won’t make you a carpenter – carpentry, like social media, is a process-based challenge, not a tool-based challenge.

3 toolsHowever, I am prepared to make an exception in three cases. The tools I recommend are linked to the three pillars of any successful social media strategy: conversation, content (information management) and community. The reason I recommend them is that none can be misunderstood as a channel (like Twitter, Facebook and Instagram et al can) and all involve construction of a process in order to use them effectively.

Netvibes as a path to Sprinklr

The first addresses conversation (i.e. listening and responding to the things people are saying about your brand which is the only conversation brands have permission to join). The tool I initially point people to is Netvibes. Netvibes is still the only decent free tool that you can use to establish a comprehensive monitoring dashboard. When I show people a Netvibes dashboard their response is almost always “wow – I want one of those”. Hootsuite does this a bit, but Hootsuite is more set up to publish outgoing than it is to monitor incoming. However, if you are looking for an ‘enterprise solution’ – and if your organisation is of any sort of size you will need to do this – the solution is Sprinklr. Sprinklr has now swallowed so many platforms and technologies you cannot really call it a tool, but the reason I recommend it (them) is that of all the major platforms players they are the only one that fundamentally ‘gets’ the fact that social media is a process management challenge rooted in behaviour identification and response. I note they have just announced another new service, the ‘Customer Experience Cloud’. Now I am a bit sceptical about the concept of customer experiences, but this is when a generic (sometimes called consistent) customer experience is broadcast down this thing called an omni-channel. However, the Sprinklr approach seems to be more about how you manage your response to individual consumers – i.e. giving your customers the individual experience they want, rather than forcing onto them an experience the brand wants them all to have. It could also help in the important business of identifying and recruiting superfans (see point 4 in this post).

WordPress (social hub)

The second tool is WordPress. Now I know WordPress has finally become all conquering (although I can remember the days when you had to torture digital agencies to get them to use it), but the more specific usage of WordPress I recommend is the creation of a content / social hub. Without something like this a brand cannot have a real-time voice: it cannot provide answers to questions or link together its usage of any of the other tools such as YouTube or Twitter. A website can explain what you do. But a social hub can demonstrate how you are doing it. It will also help you target Google spaces (i.e. the places where people are asking the question for which your brand provides the answer).

Get Satisfaction

I really enjoy recommending the third tool  – because no-one has heard of it. This tool is Get Satisfaction. Get Satisfaction is an out-of-the-box customer service community. I believe that within a few years every single organisation will have to have one of these in place in the same way that it became expected that every organisation needed a website. In fact I think websites will basically morph into one of these anyway. Why? Well, as I highlighted in this post on Edelman’s recent Brandshare report – consumers are telling brands they want them to do eight things – and the four most important of these can easily be addressed with an online customer service community.

I have looked back over my presentations and noticed that I first started talking about Get Satisfaction at a conference in Budapest in 2008. I keep waiting for it to become ‘big’ and remain disappointed, in fact appalled, at the extent to which so few ‘social media experts’ have latched onto it – but I think this just reflects the extent to which we all still see social media as a distribution challenge, not a connection challenge. Community is all about connection, in fact I think community will become the new media. Wherever we look we see relationships between brands and consumers being disrupted by the intervention of communities (Trip Advisor, Airbnb, Wikipedia – even Google itself). Brands need to understand how to operate within these new community spaces, but also how to create a community space for their brand. People would much rather talk to a brand within its own community space, rather than have a brand invade their own spaces in networks such as Facebook. Facebook (as it is spending advertising dollars saying) is for friendship – and you will never be friends with a brand.

We are starting to see what communities such as Yammer, Jive or Lithium can do in creating more efficient relationships between people within your business. Get Satisfaction can do the same for creating more efficient relationships with your consumers or customers. Better still, if you create an online customer service community, the process you will have to build around it will force you to become more effective in the way in which you operate the rest of your social media strategy. This community will become the hub which defines the rest of your activity.

So – let us kill of the age of brandfill (content) and bring on the age of community.

A political rant about stories, poppy seeds and lettuce

(N.B. This post is not about social media.  It is a political rant, but after last night’s initial election 2015 TV (non) debate, I just had to get it out of the system).

So – the campaign has started. As an electorate we now have the opportunity to see exactly what is on offer. There may be cock-ups, controversy, confrontation and commentary ahead, but there will be no ‘new’ policies. I put new in inverted commas since this pre-supposes the existence of some identifiable policies (as distinct from just initiatives) to start with.

So how do we all feel? Are we energised? Are we enthused about the debates to come? Do we sense that we are living in a vigourous democracy that thrives on the exchange of ideas? Do we even feel, as did the people of Scotland in their independence referendum, that there are clear choices presented to us?

Well, I will tell you how I feel. Continue reading

Hiding in plain sight: the ISC report on GCHQ surveillance

Yesterday the UK Parliament’s Intelligence and Security Committee published its report into the security services.  The thrust of this investigation was to look at the whole issue of the bulk interception of data – an issue dragged into the limelight by Edward Snowden – and determine whether this constitutes mass surveillance. (See this post for more detail on the difference, or not, between bulk interception of data and mass surveillance).

What the report has really done is both flush out some important issues, but then allow these to remain hidden in plain sight, because the Committee has failed to grasp the implications of what they have uncovered.

The BBC summarises the key point thus: (The Committee) said the Government Communications Headquarters (GCHQ) agency requires access to internet traffic through “bulk interception” primarily in order to uncover threats by finding “patterns and associations, in order to generate initial leads”, which the report described as an “essential first step.”

And here is what is hiding in plain sight.  The acknowledgment that GCHQ is using bulk data to “find patterns and associations in order to generate initial leads.”  What is wrong with that, you might say?  Here is what is wrong with that.   This means that information gained by swallowing (intercepting) large chunks of humanity’s collective digital activity is being used to predict the possibility that each and everyone of us (not just those whose data might have been swallowed) is a … fill in the gap (potential terrorist, criminal, undesirable).  We all now wear a badge, or can have such a badge put upon us, which labels us with this probability.  Now it may well be that only those of us that have a badge with a high probability then go on to become ‘initial leads’ (whose emails will then be read).  But we all still wear the badge and we can all go on to become an initial lead at some point in the future, dependant on what specific area of investigation an algorithm is charged with investigating.

Algorithmic surveillance is not about reading emails, as the Committee (and many privacy campaigners) seem to believe.   This is an old fashioned ‘needles in haystacks’ view of surveillance.  Algorithmic surveillance is not about looking for needles in haystacks, it is about using data from the hay in order to predict where the needles are going to be.  In this world the hay becomes the asset.  Just because GCHQ is not ‘reading’ all our emails doesn’t legitimise the bulk interception of data or provide assurance that a form of mass surveillance is not happening.  As I said in the previous post: until we understand what algorithmic surveillance really means, until this is made transparent, society is not in a position to give its consent to this activity.