Interesting New Media Stats

February 26th, 2010 by dewprocess.

This short video provides some fascinating statistics about web technologies usage. As blogger Jennifer Van Grove says, “It’s a must-watch video for anyone trying to wrap their minds around just how immersed web technologies have become in our everyday lives.”

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Plus ça Change…

February 22nd, 2010 by dewprocess.

Our resident political opinionator, Jeremy McGuire offers the following book review:

In the middle of a recession there are invariably questions about how we got into it and what we can do to get out of it.  Politically, it quickly devolves into a conflict between the market driven laissez faire economists and the interventionist Keynesian ones.  Television and radio infotainers yammer on, using their own peculiar jargon that leaves the rest of us – who are not economists – as much in the dark as we were before.

I wanted to know more, so I picked up Liaquat Ahamed’s detailed history of how the world stumbled into the Great Depression, “Lords of Finance.”  Ahamed is a twenty-year veteran of investment banking and some paragraphs have to be read over a few times, but generally it’s written for the layman.  It comes in at 508 pages, without notes, but it reads like a well-crafted novel.

The main characters – the “Lords” themselves – are Montague Norman of the Bank of England, Hjalmar Schacht of the Reischsbank in Germany, Benjamin Strong of  the N.Y. Federal Reserve Bank, and Emile Moreau of the Banque de France. all of whom were well intentioned but ultimately flawed men who were not immune from the kind of gross miscalculations and unwarranted fears that led to the financial disaster of the Great Depression.  While a great deal of information may be gleaned from their stories that is applicable to the present one must be cautious: 2010 is not 1929.

Some of the miscalculations early twentieth century central bankers made were over the conduct and financing of World War I.  No one in financial circles believed the war would outlast the various governments’ ability to pay for it. They were all on the Gold Standard, you see, and the financial resources of each country were tied to their reserves of gold.  It was hard to imagine Germany, France and Britain would be so foolish as to burden their countries with massive debt just to keep a war going.

These top-hatted and stiff-collared expert prognosticators, mired as they were in centuries-old financial traditions based on the availability of precious metals, completely overlooked the proclivity of wars (particularly wars between monarchies, empires and single-party republics) to be self-sustaining and self-fulfilling.  If wartime governments run out of money, they borrow it, mostly from foreign banks incurring massive debt.  If they don’t have enough currency, they print it, all to keep the war going toward ultimate victory, at which time all debts will be easily repaid.  Or so they thought.

The incipient catastrophes that resulted from financing the First World War in so unsustainable a fashion were exacerbated by the enmeshment of world financial interests.  In the introduction, Ahmed explains, “Because financial institutions were so interconnected, borrowing large amounts of money from one another even in the nineteenth century, difficulties in one area would transmit themselves throughout the entire system.”

Ahamed stops way short, however, of ascribing this financial entanglement to any conspiracy of central banking institutions.  In retrospect it may read like a Dan Brown novel, but conspiracies require agreement, and the central bankers in the 1920’s could agree on almost nothing.  Scrambling to force some post-war order on the economies of their respective countries, they formed alliances, made enemies, forced concessions, engaged in blackmail and all manner of intrigues eventually stumbling into Great Depression through incompetence, a too rigid loyalty to ideological principles, and misguided policy.

The biggest blunder on the road to the Great Depression was the New York Fed’s decision to lower interest rates.  It may have helped Germany’s cash-flow, but it caused massive speculation on Wall Street, as investors borrowed more and more money to purchase stocks, further inflating the bubble that burst on October 29, 1929 – “Black Tuesday.”

Ahamed writes, “Their goal is a strong economy and stable prices. This is, however, the very environment that breeds the sort of over-optimism and speculation that eventually ends up destabilizing the economy.  In the United States during the second half of the 1920s, the destabilizing force was to be the stock market.” (p.280)

We are put in mind of the economic situation in America before the current recession: Overspeculation, easy credit, artificially inflated prices, and a protracted military campaign resulting in massive “bad debt,”* much of which is held by foreign banks, principally China.

In the Depression, as well as today, the main conflict on the road to recovery was,

“Between those who believed that governments could be trusted with discretionary power to manage the economy and those who insisted that government was fallible and therefore had to be circumscribed with strict rules.” (p.230)

Traditionalists said Government should keep its hands off the economy and allow the “invisible hand” of the market to determine its course as proposed by eighteenth century economist Adam Smith.  Others, principally twentieth century economist Maynard Keynes, said the government must have control over the economy to keep market pressure from destabilizing it.

The real issue for the [Federal Reserve] governors was that many of the banks closing their doors…had sustained such large losses on their loans that they were … insolvent, [the governors] made it a principle to let them go under.  They failed to recognize that by doing so they were undermining public confidence in banks as a repository of savings and were causing the U.S. credit system to freeze up.” (p. 391)

What government aid did come was too late.  By that time, Ahamed writes, “Banks, shaken by the previous two years, instead of lending out the money, used the capital so injected to build up their own reserves.”

Ahamed seems to say that when a crisis looms, the injection of funds to shore up failing banks should come sooner rather than later and in sufficient quantity to capitalize the banks and allow them to begin lending.  When Adam Smith’s “invisible hand” goes arthritic, Maynard Keynes is there to take over the heavy lifting.

Amid the chorus of our own contemporary “know-nothings” who spout partisan absurdities about the government not getting involved in economic policy, or how deficit spending to get the economy out of crises is tantamount to cultural Armegeddon, Ahamed’s analysis is a voice of reason. “The Great Depression was caused by a failure of intellectual will, a lack of understanding about how the economy operated.  No one struggled harder … than Maynard Keynes.  He believed that … economists are the “trustees, not of civilization but of the possibility of civilization.” (p. 504)

That’s something even an artist like me can understand.

(*Bad debt is, according to Robert Kiyosaki, debt that does not put money in your pocket).

Jeremy Mcguire is an author/illustrator, humorist and social commentator. His weekly articles appear in a variety of publications, and are archived on the blog, Baloney & Blarney.

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Social Media Realized – Part 1

February 14th, 2010 by dewprocess.

An article on last week’s CNN website both amused me and pissed me off. The amusement came from the fact that my assertion, made last month, about the name “iPad” being a little “feminine hygiene oriented” is now borne out, by – among other signs – the word “iTampon” trending as one of the most tweeted topics for the two weeks following the release of Apple’s newest gadget. Apple has experienced a failure (however temporary one might feel it to be) in branding. That failure may have been driven by some factors that were beyond the company’s control (naming rights, etc), but it was a failure nevertheless. I imagine it will be a short lived offset, as their evangelical fan base is capable of turning water in to wine, when it comes to product adoption.

Apple’s failure was a marketing failure, and while it’s unlikely to lead to a business failure (as they experienced with the Newton, original Mac Mini, and other such ventures), it is a failure in that it missed a major opportunity. The failure was not a failure to push the right name forth, or advertise convincingly enough. These would have been promotional failures, and I would agree with Mr. Ihnatko: in those cases, the failure of a promotional campaign can be inconsequential, when the offering sells itself. However, a product only sells itself when it FULLY MEETS A PREVIOUSLY UNTAPPED NEED.

Apple may end up selling a healthy number of iPads, but I am left wondering how many more they might have sold, had they LISTENED to the consumer more than they are used to doing. Like all great designers, the company created something they “knew” was the best thing, but they based their knowledge on personal aesthetic and creative sensibilities and preferences. If Jobs, Ive, Forstall, and Schiller like it…let’s get real…if JOBS likes it, the world must like it. Thanks to the fact that Jobs has undeniably cool taste and is indeed brilliant (combined with the unquestionably genius skills of Mr. Ive and his team), the result has historically been some pretty darn exciting products…for a relatively small niche of equally specific consumers – People whose personal aesthetic and creative sensibilities and preferences matched those of Messrs Jobs and Ive, in essence.

When you’re trying to create a solution that serves a wider market, however, this doesn’t work so well. Unless competitors such as Microsoft, HP, Blackberry et al fail to deliver market-ready versions of their own prototypes, I predict Apple’s market share for this type of device will be far less than it may otherwise have been.

Now to my irritation, which is not altogether unrelated.

Andy Ihnatko, a tech columnist at the Chicago Sun-Times, is quoted in the article I mention above as saying “with the right device, marketing doesn’t really matter.”  I’m not sure what else he said, because all I heard after that was a strange wailing, that I shortly realized was my own cry of frustration at yet another unwitting misinterpretation of the role and value of marketing, within 21st century business strategy and practice.

Having worked with and within a thrilling diversity of businesses and industries, I have learned a lot about, and practiced, an equally wide array of interpretations of the function known as “Marketing”. My experiences, perhaps more than anything else, have irrevocably confirmed for me that this function, when successfully leveraged and executed, is NOT an adjunct or additional engagement, to be activated “when the need arises”. One could argue (subjectively) that Public Relations, Advertising, and Promotions fall in that category, but Marketing is no longer, nor should it ever be, seen as an initiative designed to purely drive sales.

I am now picturing a bevy of Business Unit leaders and financial officers derisively snorting in shareholder-sensitive disdain and contempt at my apparent naïveté…but humor me for a moment longer, please.

For a long time, consumer products companies, consumer electronics companies, and even service and solution providers pursued the notion of “push marketing” with an exponential level of investment.  For a longtime, their methodologies delivered equally, or at least satisfactory, returns on those investments. Make enough noise, grab enough eyeballs, repeat the mantra enough times, and you’ll make the sale. This worked in many instances, but no longer.

The consumer of today belongs to a complex society of social networks. In some cases these networks are consciously inhabited, while in others the consumer participates subconsciously, simply by dint of their purchasing habits or behaviors exhibited, when in possession of, or proximity to, the value offerings in question. To clarify my point, permit me to borrow from the Forrester research ladder metaphor, created four years ago, when social networking was still very much in its mainstreaming infancy.

Since 2006, Facebook has grown its user base by over  5000% (from under 8 million to over 400 million active users). YouTube has experienced a more than 3000% increase in content uploads since 2006. UGC (User Generated Content) and CDP (Consumer  Driven Productization) are not fads. They are inescapable trends, and they are largely inured to the promotional efforts of “old school” advertising agencies and product marketing groups. Taking some of this data as a baseline, I can only *begin* to imagine how Forrester’s 2006 findings have changed in the intervening 4 year period…

In 2006, a full 48% of online consumers over the age of 21 were already actively involved in social networking activities. Consider the above growth curves of Facebook, YouTube et al, what can we imagine is the percentage of adults engaged in social networking today?..

Companies are still able to drive sales in to niche constituencies, simply by investing enough energy and money in the artificial creation of the “illusion of need”. This pseudo-holographic need is only experienced as long as the investment required to uphold that illusion is maintained. If brands truly want to CONNECT with larger market segments, and establish the type of brand recognition and long-term loyalty of which contemporary ad execs can only dream fondly, they need to grasp the concepts of social networking, crowd sourcing, and “Trust” or “Relationship” marketing.

I will delve into these at a later date. For now, however, I would like to offer up a taste of the power of crowd sourcing, and ask you to think how you might consider changing the way you develop and bring to market your next product/solution/service/self…

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4 Tech Trends You Must Understand to be an Effective Marketer

February 5th, 2010 by dewprocess.

Web Marketing strategist Elyssa Pallai shares her “Top 4” projections here for web marketing in 2010:

The days of SEO as the primary traffic driver to your website are over. Don’t get us wrong, organic search engine optimization isn’t about to disappear as a key traffic driver. And thankfully, Google AdWords is still going strong. However, recent technology trends enable a brave new world of marketing. Ignore them at your peril.

Take real-time, for instance. The next generation of search, aggregation, notification and findability services are being developed using real-time technologies that enable users and machines to receive real-time updates. In a recent post, Robert Scoble said he would be better off curating news than actually attending the Apple launch! What? If you aren’t thinking about how real time, along with social networks, mobile and location-based services fits in your marketing plan, you’re missing an opportunity.

Google’s Great, But Facebook Rocks

In a recent post, ReadWriteWeb’s Marshall Kirkpatrick asked “Why is Google afraid of Facebook?” The answer is because social networking sites have become a key link in the search and information sharing value chain. You would have to be hiding out in a dark hole not to understand social media and the effect it has had on marketing the past couple of years – but surpass search? Oh, right, now I get it: These sites are an important information source for everyone. Importantly, friends’ recommendations are key.

Mobile is Better

Google’s VP of product development recently stated that, “with all the capabilities these phones that are coming out have – like GPS, cameras – we think there is the potential to actually make this mobile Web better than the PC Web.” That is a profound statement for marketing managers. A mobile phone experience better than the web? If you haven’t bought yourself a smart phone like iPhone or Android, we suggest you go out and grab one. Mobile applications are proliferating like rabbits. What would be better than to be first to market and offer your customers an exceptional product experience while on the go.

Perfect product placement

Location-based services mean the ability to market right outside your front door is happening now. Frederic Lardinois reported in June 2009 that 1 in 3 smart phone owners use location based services. Take this simple example. You’re in Vail, you just finished 8 hours on the mountain and now you’re looking for the perfect apres ski location. You’re walking down the Mall, you take your iPhone out of your pocket and ta-da! Buy one-get-one-free margaritas at Las Margaritas. You’re standing right outside. Perfect product placement. And now you can talk about the restaurant and broadcast it immediately to all your friends.

If you aren’t listening to the conversation, you better start. There are numerous listening applications available to get you started in your pursuit to join the conversation and get a handle on positive as well as negative feedback on your product or brand. A simple saved search in Twitter can go along way.

All these trends have a profound impact on how we market to our website guests at ReadWriteWeb. Not only do we have to understand search engine optimization, but the opportunities offered by social media marketing, the new capabilities and possibilities offered by mobile, geolocation, augmented reality and real-time notification and information sharing. One seems to becoming just as important as the next.

If you don’t understand these technology trends as a marketer, you better get out while the getting is good. Enabled by technology, 2010 is already a watershed year for new ways to reach your customers.

Elyssa Pallai is the Marketing and Experience Manager at ReadWriteWeb. Elyssa has been working on the web since 1997 in the USA, UK and New Zealand. This, and her other articles, can be found here.

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