The Many Forms of Social Computing

Published Tuesday, June 20, 2006 by Jeremiah Owyang in his blog about web tools.

Social Computing is Changing the Face of Marketing and Advertising: What the Forrester Research Report Really Tells Us

By Kellyann Davis
June 2006

Social computing is based on creating or recreating social conventions and social contexts online through the use of software and technology. Social Computing happens because people everywhere have access to other people everywhere online, over the phone, whenever and wherever. Think Wikipedia, think teleconferencing, think satellite phones, IM, and email when you think of the Social Computing phenomena. It means we can interact with all of our personal connections/community pretty much at will, and by all accounts, data indicate that we take advantage of our new connectivity. Forrester Research predicts that this new connectivity between people will lead to consumers learning more from each other rather than through marketing channels. More than a billion people are accessing the web across the globe right now, more than half of all North Americans, a third of all Europeans, half of Australia, and more than ten percent [and growing rapidly] of Asia log on to the Internet.

Remember the dark ages? Some of us like to call them “the 80’s,” the time before we all knew what an operating system was, when cell phones looked like masonry bricks with straps on the back, when the Sony Walkman was high tech., when you had to buy the whole CD, when radio was free but they played the same ten songs over and over [sorry Depeche Mode and U2], and MTV was actually broadcasting music videos? Today, I know people who won’t leave home without their PDA, who can text message and download content while they’re driving [not recommended], who want to see reviews of every restaurant before they decide, who talk about their eBay reputation score. It shouldn’t come as any surprise that we choose our stuff in different ways today and are less vulnerable to the kind of influence corporate marketing and advertising can wield.

To really understand how fast things are changing, consider all the things you can do today that would have been difficult or impossible just a few years ago: you can query Google via text message from your phone, get a map and directions on your mobile phone, download podcasts and listen to them when it’s convenient for you, send your photos to friends and family instantly with your mobile camera/video phone and email, store gigabytes of personal e-mail online, carry your entire CD collection with you in a business card size MP3 player, and “fly” anywhere in the world from your computer on Google Earth. Most of these applications are free—and the ones coming close behind them will be even more powerful. With more and more phones carrying Global Positioning System (GPS) chips, for example, it’s likely that companies will offer a cornucopia of new location-based information services; you’ll soon be able to find an online review instantly as you drive past a restaurant, or visit a landmark and download photos and comments left by others. More than a billion people are connecting to the Internet across the globe tonight, they are talking with each other about everything and their new behavior is changing the face of marketing and advertising forever.

Social computing means that, as consumers, we don’t receive or perceive marketing and advertising like we did in the eighties. Then, we were told by mass media what food, music, cars, sodas, and clothes were the “in thing,” were high quality, solved a problem for us, etc. Now, we ask our community consisting of our friends, colleagues, family, and online acquaintances with similar interests and experience what they like or dislike about particular products or services. We can even see what others have said about something over time, and we can see how the seller responded. How can marketers and advertisers reach an audience in this new paradigm? How can products be targeted to leaders of these networks who can disseminate a positive opinion about your good or service? Does it matter? People still watch TV and listen to the radio don’t they? Why do we need to change just because a bunch of brats bought iPods? How else does social computing impact our world?



Lucky for us, Forrester Research recently published a report on Social Computing and marketing. Forrester's key conclusions in this Report emphasize that companies should:

· Discard top-down management and communication strategies
· Use employees and partners as marketers
· Incorporate communities into products and services

Why is Social Computing significant for marketers? According to Forrester, the three tenets of Social Computing make collaboration relevant to marketers. The three tenets are:

· Communities driving innovation
· Institutions facilitating experiences shaped and owned by communities
· Communities taking power from institutions

According to Forrester Research data, Marketing and Ad persons are paying attention to these changes and creating new paradigms in marketing and advertising. Note that 47 percent of marketers use or plan to use RSS feeds, 51 percent of marketers use or plan to use blogs, and almost 80 percent use or plan to use Search tools in their arsenal of marketing tactics. Even though the number of users of social networking tools is relatively small today, Forrester reports that, "as more sites attract a worldwide audience, global networks will be common." These results suggest that Social Computing is on the verge of completely reshaping the way we communicate socially and professionally. The social computing trend means that we will be communicating with peers about products, services, ideas, and each other more than ever before, and what others say will be more important than ever in these new online communities.
Forrester's findings also indicate that more and more “socially-connected” buyers are less brand-loyal, less trusting, and more independent. The change may be attributed to higher expectations among buyers of a particular brands and also because they prefer to customize products or services for their own use. Forrester also characterizes peer to peer networks as a reason for declining brand loyalty due to the exchange of information between groups of buyers. .Forrester recommends flexibility in marketing and advertising paradigms to maintain relationships with new and existing customers. Businesses and marketers will need to evolve with their changing audience of consumers by translating their current strategies into strategies that embrace Social Computing.

Social Computing requires a new Marketing Tool Kit with New Channels, Technology and Metrics to replace the old Marketing Tool Kit of Channels, Tactics, and Metrics. Figure 9, from the Forrester Report, featured below, illustrates the contrast between the two Marketing Tool Kits: [image]

Forrester suggests that businesses move from the top-down traditional approach to the bottom-up customer-driven innovation approach by ceding control and by offering communities a platform through these strategies:

· Use customers as the source of inspiration
· Observe customer needs in-depth as key drivers
· Encourage spontaneous customer involvement
· Implement a controlled chaos process
· Assess customer's explicit and latent needs

Companies can create this bottom-up approach by inviting the customer to use social computing tools such as communities of practice, intranets, search, email, blogs, and smart point of sale. Forrester says that this will result in customer driven content, sometimes created by the customer at POS and in peer to peer networks where people buzz about products, suggest changes, and truly drive innovation. "Increased adoption of online forums -- such as eService suites and Emotive Networks -- shows that consumers are also eager to share their expertise of products and services with each other," says Forrester. Forrester views Social Computing as a continual learning process where marketers and strategists are advised to talk less and listen more when engaging in the following activities:

· Become part of the community by offering customers the opportunity to express themselves and communicate with peers
· Use peer relations to raise loyalty and stickiness by keeping in constant touch with consumers and immediately responding to changes in their preferences
· Avoid an exploitation-only approach to foster positive consumer opinion
· Focus on Social Computing as a strategic asset of value not on its risks
· Employ flexible corporate oversight and use it as a recruiting differentiator
· Track younger employees and Social Computing needs and tools in the workplace
· Provide the tools to facilitate successful Social Computing

"Marketers have to listen to the buzz online and tap into new distribution channels for their products to track positive and negative feedback about their brands in real time," says Chris Charron, vice president and research director of Forrester Research.
Social Computing impacts business whether companies choose to adopt Social Computing or not because users give communications a new context. Micro Persuasion's Steve Rubel says that, "the change or die mantra is the anthem of the internet age, like it or not."
Marketers, advertisers and strategists need to be prepared for this new paradigm. They should learn as much as they can about available technology, become early adopters and users of that technology, and remain very flexible in this new paradigm. Marketers, advertisers and strategists should prepare to:

· Communicate the impacts of Social Computing to the worldwide audience of users-- buyers and sellers
· Research, monitor, and report findings in Social Computing
· Search for solutions to the risks and problems associated with Social Computing
· Facilitate successful communications and buy/sell interactions within the Social Computing setting
· Act ethically and responsibly within the Social Computing environment

According to Forrester, the industries most affected by Social Computing include media, retail, telecom, high-tech, finance, travel, consumer packaged goods (CPG), healthcare and automotive. "Gradually, Social Computing will impact almost every role, at every kind of company, in all parts of the world," reports Forrester. Bottom line, get ready for the impacts of social computing in all aspects of your daily personal and professional life.

A Few Words about Podcasting; Why It's Time to Consider Getting on board

By: Kellyann Davis
CEO, BlackSand Research


In case you've been asleep for the past year, or think that this new fangled iPod is a fad, I have two words for you, WAKE UP! Podcasting is about to become a staple marketing tool because it's cheap to do, virtually free to publish, and it's reaching more and more of your target audience every day. To find out just how easy podcasting is, check out my friend Tee Morris' book "Podcasting for Dummies" and learn how to podcast with nothing more than the equipment you already have and a few lines of XML.

Podcasting is really a misnomer, you don't need an iPod to enjoy a podcast. In fact, you don't need anything more than a computer, or any MP3 player. iTunes is free and they carry a good percentage of podcasts currently available. People can download a podcast from iTunes [an application they can download also for free], or directly from your website quickly and easily.

Some of my marketing colleagues argue that it's too soon for podcasting, it's just not something they have ever used, and they think their clients haven't even heard of "podcasting." While it's true those who are podcasting now are at the front off the curve, it's catching on, and many manufacturers are beginning to take advantage of the technology. Specialized Bicycles, Disney, Kellogg's, McDonald's, Reed Business Information Services, and the National Association of Manufacturers are podcasting right now. If you are a little guy, like I am, this presentsd a rare opportunity to be the first off the starting line on this very innovative marketing tool.

Before you say, yes, but it's just too time consuming for me take this into consideration and few members of my target audience listen to podcasts. For today, that's certainly true, despite high interest in podcasts [25 percent of online users] only 1 percent of Americans who are online report downloading a podcast in the past 12 months, but times are changing quickly. The paradigm of radio is changing under your feet. Consider that every new car comes with an MP3 player built into the [satellite] radio and Forrester Research forecasts that 34.5 million people will be consuming podcasts by 2010.

Just like digital video recording, podcasting allows consumers to listen when they have time. I listen to the NAM podcast on my computer at work, and I listen to Bob Roll podcast for specialized bikes while I ride my bike. I can choose when to listen and program my own radio with podcasts from sources like NPR, Reed Business Information, the NAM, and even McDonalds. Right now I find out about specials, events, and deals on my podcasts and I get valuable information when I want it, where I want it. And I don't even have an MP3 enabled car radio, that's next. Excuse me while I go listen to the Toyota podcast to find the best deal on a new FJ with that mp3 enabled radio.

What Does it Mean when Manufacturing Loses jobs while Output Increases?

By: Kellyann Davis
CEO
BlackSand Research

The Bureau of Labor Statistics reported this morning that the Manufacturing industry lost 14,000 jobs in May after gaining 19,000 in April. Hit hardest among the Manufacturing sectors was motor vehicles, followed closely by transportation equipment, and computers and electronic components. The retail industry was hit even harder losing 27,000 jobs from its' more than 15 million job payroll. The winner...again...was the Health Care industry where 22,000 jobs were created.

The news about manufacturing jobs is bad, but other data such as Industrial Output, Productivity, and Capacity Utilization tells a different story about the Manufacturing industry's performance. Output rose 5.5 percent in the first quarter of 2006 along with the decrease in employment in Manufacturing resulted in a 5 percent increase in productivity and a 2.4 percent increase in capacity utilization.

So what do all these numbers mean? Is it just a terrible time to be a production worker? Think of the situation this way, over the past year, manufacturing output per hour increased by 8 percent while output increased 5 percent. There's your employment loss in the equation, looks like the lucky production workers that kept their jobs really put out in April. And the manufacturing companies did fairly well.

Manufacturing is producing and exporting more goods than ever with fewer employees. Since 2001 more than 3 million manufacturing jobs have been lost to the American economy. Some of that employment loss came from contraction of industries in the U.S. like Steel, Furniture, and Textiles, some came from the redefinition of manufacturing when the Bureau of Labor Statistics transitioned from SIC to NAICS industry designations, some came from increased human productivity, some from better automation, lean manufacturing methods, and IT systems, some came from offshoring jobs, and some came from outsourcing jobs. The point is, it's a multivariate equation that comes with an upside for companies and for consumers albeit a downside for the American manufacturing worker; more and more efficient production for a growing array of markets, lower labor costs per unit, and lower prices. If you are in business, it's time to think about getting into new markets, find new customers, and keep production costs down any way you can.

For manufacturing workers, beware, the global marketplace does put you at a disadvantage due to global competition for your job. That said, American manufacturing jobs will always be around, after all, Americans consume a quarter of all the goods produced on the planet and we only make up 4 percent of the population. That means we have the best market to sell into in the world and it makes sense to produce, or at the very least assemble the big items in the market you are selling into, just ask Toyota. And, despite some protest, Americans like to shop at Walmart where many of the smaller goods produced offshore are sold for the lowest price available. Additionally, high skill manufacturing jobs will materialize [forgive the pun] in sectors like Biotech and Alternative Energy. Much research and development will continue, especially as the government increases funding for basic research, the kind that industry doesn't invest in due to very high risk and typically low ROI. Like the companies they work for, American manufacturing workers need to stay in school for life to compete in the global marketplace.