If You Think “Social” Means Viral, You’ve Got It All Wrong

This article was published as a guest post at AllThingsD, and is republished here for Digital Quarters readers.

A few weeks ago, Forbes Chief Product Officer Lewis DVorkin and I sparred at the Rebooting Media Live event in New York. With an audience of top digital and media executives, I shared the results my company is getting from social — that social users are more than 2.5 times as valuable as users from search. Lewis surprised me by saying that when it comes to behavior on the Forbes Web site, he is seeing the opposite.

What gives?

With all due respect to Lewis, who is one of the greatest innovators in media, I left realizing that there are different ideas of what “social” can mean on the Web, and that not everyone knows where the gold lies. Putting the whole picture together, there are four different models for social that, despite sharing the same name, are completely different concepts.

Social = Viral Hit

For those on the marketing and advertising side especially, the word “social” often means that you or your client are jealous of someone else’s success. Viral hits are largely based on breakthrough creative, though great distribution is an often-forgotten second factor. Who wouldn’t want to be responsible for the next Old Spice guy? Of course, these kinds of hits are easy to ask for and hard to achieve. And if you do achieve it, you’ll need another viral hit to bring your audience back again.

Verdict: Good luck!

 

Social = 1,000,000 Fans

Here, the theory goes that social means getting lots of fans, and then something magical is supposed to happen. Like the boys’ adventure with the  “South Park” underpants gnomes, it usually ends up with a lot of time and money spent, a big collection achieved, and a big question mark over “what now?” It doesn’t matter how low your cost per fan was, if the value per fan is near-zero. It’s not the size of the fan base that matters — it’s what you do with it.

Verdict: Bad strategy.

 

Social = Comments

Another concept of “social” is that it’s a medium for conversation. With programs like @ComcastCares, brands have used this approach to shape their brand images and reputations — and it has worked. On the publishing side, the Huffington Post and other publishers have succeeded in using social engagement to drive deep participation and connection among an inner circle of its audience. Hosting a conversation certainly builds a relationship. A “Like,” comment, or share from a user can all get you more exposure on the margin, but, as Lewis noted on our panel, the friends who come that way don’t stay very long and don’t come back much. They came for their friends, not for your Web site. That’s why, even though engagement strategies are great for your core audience, they won’t single-handedly drive the large, loyal audience we all crave.

Verdict: Smart, but it’s not enough.

 

Social = Lasting Relationship

A lasting relationship with an audience is the holy grail of every brand online. In fact, it has made Amazon the most valuable e-commerce company on earth, and it’s made Disney and the NFL valuable over decades. But what some haven’t realized yet is that the most valuable mode of social is in keeping these relationships connected.

Do you have any idea how valuable a “Like” is? Any seventh-grader goes all atwitter when his crush says, “I like you.” It’s permission to see someone more, get to know them better, and talk to them all the time — not just once, but every day. If you are doing it right, a “Like” or a “Follow” begins a two-way relationship: One where your audience is asking for programming from you every day, week and month; and giving you their interest data about what works and what doesn’t. With that relationship, you can choose what content you create, and when and how you share it. That relationship isn’t once-and-done — it’s ongoing.

And data from our experience shows that it translates into a million visits a week from our fan base — almost one visit for every fan, not to mention dozens more impressions right in their home page, the Facebook news feed. Done right, social can already drive more traffic than search, making a new top venue to recruit, and more importantly, retain an audience.

More and more, I talk to marketers and publishers who have hundreds of thousands or millions of fans and followers, and yet have no idea what to do with them. They haven’t realized that they have subscribers at the ready, waiting for great content and experiences — the currency of their relationship.

Nor do they understand the tremendous value of those subscribers: If you give your friends what they are after, they’ll keep coming back for more, and they’ll bring their friends. This is exactly how companies like Groupon and Zynga have reinvented their categories and created businesses worth billions of dollars in the process.

Verdict: There is nothing more powerful than a lasting relationship.

6 Lessons For the Key Players In New Media

This post was originally as a contributed piece to Fortune.  It is republished here for Digital Quarters readers.

Tech’s top firms — from Apple and Google to Amazon and Netflix — are vying to reshape media with different game plans. Here’s what they each need to know.

Digital media has the power to change the world. Actually mastering this 21st century business (and art) is unbelievably hard, however. That begs the question: The top media companies all know they need to make changes — but how do they find the right change and execute well? Let’s look at this question through the lens of six key players in the digital media revolution.

Apple (AAPL): Transform the rest of our digital experience.
It may seem arrogant to give advice to the one company that has surprised everyone again and again by being light years ahead of the industry — as well as the consumer. Yet, in a new era of leadership, the most important thing for Apple will be holding on to Jobs’ core values and strength. As corporate leaders go, Jobs was always the best change agent on the planet, and he was never willing to accept the status quo. That’s why Apple is a perennial leader when it comes to devices and distribution for premium media content like music and movies.

The Apple crew must extend its golden touch to the rest of the digital media device world. It’s time to supply the living room with a first-class TV experience; and to seamlessly flow all entertainment between the mobile, iPad, TV, and desktop worlds. AirPlay, iCloud, and AppleTV aren’t all the way there yet. Apple’s next challenge is to make devices that leap forward and bring entertainment and applications wherever I am, and to know me as one person across all of these environments. To do so — and to do so well — will take a huge imagination. And, even without Jobs himself, it’s clear that if anyone can do it, it’s still Apple.

Facebook: Be everywhere the consumer is.
More than any other company on the Web — even Apple — Facebook has changed the nature of digital experiences. It’s already established itself as the dominant social operating system for consumer audiences. And yet it has the potential to go much, much farther. If you need more proof, just this month Facebook announced that it will be facilitating the spread of mobile applications, not to mention linking into them — finally bridging the gap between Web and app. It’s invading Apple iOS’ and Google Android’s territory, providing the cross-application linkages that have always unequivocally been the job of an operating system.

Increasingly, Facebook has the opportunity to wire consumers, applications, data and devices together. But for Facebook to do this, Mark Zuckerberg will need the kind of imagination that Steve Jobs had. Indeed, Zuckerberg will have to imagine a whole new ecosystem, this time one where Facebook facilitates all connectivity. He’s proven he can execute already. But can he take on a vision this big?

Google (GOOG): “What got you here won’t get you there.”
This trademark phrase from Wetpaint COO Rob Grady is particularly apt in Google’s case. Google is the undisputed king of finding answers to questions — as long as they’re being asked from desktop and laptop computers. But when it comes to applying its great search strength to mobile environments, tablet devices and communications, Google is still lost. While the Android operating system is clearly one of the winners, it doesn’t give Google the essential financial success in mobile that it has on the desktop. Google needs to reinvent itself. It needs to make a bold “burn-the-bridges” move, adopting a Reed Hastings-like philosophy that the company cannot rely on search alone. Only, in Google’s case, it’s even harder.

Here’s why: Hastings had already clearly identified the next wave’s product at Netflix (NFLX) — streaming video over the Internet — but Google has to find a new vision altogether. This is not to say that Google needs to exit the search market by any means. But, instead, it must reinvent its own search portfolio, the way Intel (INTC) reinvented the microprocessor generation after generation, always allowing its newest chip to put the last one out of business, before the competition did. Indeed, Intel’s sustained success was built, in part, on destroying what worked and replacing it with something that worked even better. Google’s new vision should surely have three components: mobile, search and social. The good news is that, thanks to Android, Google already has A+ platforms to build on the first two.

But search needs to get beyond the query box, and the mobile device can be more than a phone plus PDA. Google’s challenge — and its opportunity — is to reinvent it as a completely connected device that is woven into the fabric of daily living. It should know where I am, who I’m with, and what I’m doing — or at least have some educated guesses. It should make the next interface leap that helps us leave the thumbs behind. And, it should be a digital companion that picks up on environmental cues and helps me live my digital life. Siri has opened our imagination; but Google has amazing voice recognition, algorithmic and platform strength to accomplish these things. Now it sorely needs to understand people. That’s the most pressing — and most problematic — task for Larry Page and his team in 2012.

Amazon (AMZN): Fully bridge digital media and commerce.
If Facebook is the ultimate platform for social connectivity, it’s pretty clear that Amazon should be the ultimate platform for media and commerce. Amazon has already made amazing progress in redefining itself. It started as a bookseller, became a retailer, began representing other retailers and, most importantly, has morphed into a media and device company. And, as if that’s not enough, its Web Services power tons of other companies that make the Internet fascinating.

That said, a scattershot approach won’t help Amazon become the single defining platform that bridges digital media and commerce. Amazon has tremendous assets in its catalogue, in terms of both physical and digital goods. And it also has devices that give it a unique channel to the consumer — for the time being, at least. But to fulfill its true potential, Amazon needs to extend its platform all the way to commercial transactions, wherever they happen.

Beyond digital goods, Amazon should be working on digital currency and customer management; an acquisition of Square would be a tremendous accelerator here, and it would ultimately help Jeff Bezos and his team power transactions wherever in the world they take place. What Facebook is to our social transactions, Amazon should be to our commercial ones — an OS for commerce. Indeed, Amazon has the opportunity to provide OpenTable-like services, for all commerce, not just for the restaurant industry. It’s already got the goods and the customer relationships. <ow it just needs the focus on the bigger opportunity.

Yahoo (YHOO): Decide what the brand really stands for.
On one hand, Yahoo is the most impressive all-digital media company there is. It has tremendous access to a huge audience of consumers, a broad product portfolio, an unrivaled heritage as a first-generation superstar and a unique reach into Asia. And yet, it’s also the most disappointing digital media company in the marketplace, so much so that its brand increasingly stands for nothing in particular to most of its audience.

Of late, attention has been focused on Yahoo from a financial point of view. But whoever eventually buys the company must look beyond integration, splitting and cost cutting. Instead, the acquirer will have to figure out what to do with Yahoo’s core. And it all comes down to one key question: What can Yahoo provide to its audience to earn their attention every day?

To date, the hook has been email. Yahoo Mail is responsible for about 75% of Yahoo’s media traffic. But Yahoo Mail isn’t growing. In the last year, it shrank slightly (<1 %), according to data from comScore. So, for Yahoo, the choices are to innovate in communication to leapfrog Gmail, Skype, and the lot; or else to do the hard work and start figuring out again what Yahoo really stands for. The company has great roots. It has a natural brand for serendipitous discovery, for fun and interesting news to make your day. The bottom line is that Yahoo should be able to execute on both the options listed above, hopefully without waiting for the financial dust to settle.

Washington Post (WPO): Re-inventing media’s most ravaged category.
If we had to name the most ravaged sector of media, it would certainly have to be newspapers. Don Graham recently said the industry is “collapsing.” But, he’s not just watching it happen; he’s actively and energetically intervening. I’ve been incredibly impressed by the way Graham and his team are up for re-inventing the category, especially as I’ve talked to other organizations that are nearly paralyzed. Instead, WaPo is applying the greatest growth trend of the Internet — social media — to its business. With its inordinately valuable and trusted brand at stake in the Washington Post, the risks are clearly high. Rather than acting out of fear, Don and his Chief Digital Officer, Vijay Ravindran, are taking aggressive advantage of opportunities to engage, grow and retain their core audience. At the same time, they’re downshifting to the younger audience that just isn’t buying newspapers. The Washington Post Social Reader is the flagship example, and it’s a bold move to jump ahead of the consumer and create a new experience for people that they didn’t know they needed, all on the social Web. [Full disclosure: My company Wetpaint works with the Post.]

We will see other awesome and amazing talents emerge in digital media over the next decade. These greats-in-the-making will help build on the staggering changes that technological change has wrought.

SOS – The Social Operating System

Facebook F8 has made clear that the digital world is now powered by social operating systems.  It’s all changed.  The below post was previously published at paidContent, and is republished here for DigitalQuarters readers.

SOS – The Social Operating System

How the Social Web Has Rewired the Digital World From the Ground Up

In the wake of Facebook’s F8 mega-event, with its parade of product, feature, and platform announcements, I’m struck by the recent major inflection that has social networking penetrating more and more completely into our digital lives.

Indeed, social networking has moved from something that’s a destination activity, to something that is ever-present throughout every digital experience.  And, no doubt, Facebook will continue this rapid progression.

My awareness that social networks have seriously and profoundly journeyed into our lives began with the startling statistics that I published in June:  the searchable Web is shrinking (by 9% in consumers’ monthly time spent over a recent one year period); while the social Web is growing (with a matching 69% increase in time spent on Facebook specifically).

But the change has since intensified, as Facebook’s share of consumer attention has increased even further, and as Web sites the world over race to recruit Facebook “fans” and “likes.”

In addition, the trendline has also become increasingly clear and sharply etched in recent months with the LinkedIn IPO; and with the Google+ Project, as even mighty Google vies for relevance as a social fabric that helps weave our world together.

Putting it all together, I’m seeing a restructuring of the stack: a new layering of how media is created, distributed, and experienced, different from the first generation of the Internet.

It’s the rise of what I’ve come to view as the “social operating system (Social OS).”  And I think it changes everything for media and other companies online.

The New Way News Travels

Unlike the analog world, where content and distribution companies have largely fixed channels (licensed spectrum; contracted cable distribution; stable subscription bases; theater outlets; and other distribution power), digital content isn’t channelized.  It’s itemized.

That means digital content has to earn an audience – item by item.  The first generation of digital media publishers turned to search engine optimization to solve that, with an endless and constantly escalating set of editorial and technical tricks to bait search algorithms to rank them highly.  This became de rigeur for every digital publisher; even as it spawned an arms race to find an audience.

But now that social is ubiquitous, the nature of distribution changes for media companies.  And now, instead of having to reinvent the distribution wheel every day for every page, publishers can rely on a system far more powerful than the search engine to sort, select, and rank content.  That system is part human, and part technology – but it is 100% social.

The Social OS sits at the boundary between content and the people who consume it.  It provides a layer of functionality that lets Web companies focus on their unique content and the experiences that they offer – while earning distribution, not via channels, but via people.  And, in the process, they earn, not a mechanistic relationship with an algorithm, but a real relationship with their audience.

None of this was possible until very recently.

The Internet was too immature: both in terms of technology, and audience. Indeed, it’s only since this decade started that we’ve had the social network and mobile technology in combination with literally billions of users online; this mix lets people connect to each other, and allows content to flow effortlessly from one consumer to the next.

And it’s this combination of technology (networks like Facebook and Twitter); content (with providers like Apple, NetFlix, and YouTube, not to mention the hundreds of blogs and media companies); and, most significantly, real people online to spread all that goodness, which makes the Social OS work.

The New Common Medium For Transmission

That’s why each Social OS is defined, first and foremost, by who’s on it, and what the connections mean.  But beyond that, each social operating system can make identity, personal information and interests, relationships, and other data and actions available to applications.  And third, and most importantly, is the role of the Social OS as distributor.  Because Social OS’s have transformed the primary navigational coordinates of the Web from document-to-document links to person-to-person, the Social OS becomes the medium for propagation.

As recently as a few years ago, large media companies saw some parts of this wave coming, and they thought the answer was for each of them to build their own proprietary social network.  But relationships between people aren’t proprietary to media; rather, they are the conduits through which all media travels.

And that puts in perspective what Mark Zuckerberg recently said, about how media is the next big application for his Facebook Social OS:

“Some of the earliest examples we’ve seen are with games.  It just leads to massive disruption.  And I think, over the next 2, 3 years, we’re going to start to see that in more and more industries, and the next ones I would expect are going to be media-type industries.”

Or, as we say at my company, Wetpaint, we are becoming the Zynga of publishing, leveraging social operating systems like Facebook, Twitter, and YouTube to build a powerful media business on top of them.

Reinventing the Media Industry For a Social World

The rise of the social operating system has two implications for old (and even some new) media companies, who are mostly still trying to figure out what to do with all this.  If the idea isn’t to be a social network, then how do they use Social OS’s to make their business more successful?

Social maven Jonah Peretti, co-founder of Huffington Post and CEO of BuzzFeed, points out that different social networks specialize in different content:  Facebook users share “what you want your friends to think you like … content you can wear as a badge of honor,” while Twitter is a platform for topic curators and wholesalers in the information trade, and LinkedIn has a strictly professional domain.

For its part, YouTube has its own character: with most consumption anonymous, it’s largely an open public repository, and much of the networking that forwards YouTube videos from person to person happens via email, Facebook, and other networks.

And, as Google gets into the fray with its Google+ Project, presumably it is meant to specialize in closed groups, when full public exposure isn’t in order. If it works, it will likely find its best traction in topics like health & wellness, parenting, or certain hobbies.

For media companies, the key is knowing which Social OS’s to bet on; and then tuning content, packaging and distribution for them.

For celebrity entertainment and gossip at Wetpaint, we know Facebook is a natural match for mass consumer promotion.  On the other hand, for industry analysis, like my blog posts, I’m not surprised that Facebook is relatively unimportant:  for most of my readers, my posts wouldn’t fit in among family photos and Farmville accomplishments.  Twitter and LinkedIn do far better for heady topics like the future of media.

High Stakes:  The Future of an Industry

The last decade of audience fragmentation and content de-bundling on the Internet has ravaged media, particularly in a world characterized by fierce competition for the love of Google’s robots.

When Mark Zuckerberg recently spoke at a Facebook event in Seattle, he said:

“The last 5 years have been about connecting all these people. The next 5 years are going to be about all the crazy things you can do now that these people are connected, and I think it’s going to be cool.”

In a world powered by social operating systems, the prize is that, when we execute well, we get to be hooked into people’s lives.  Media companies can earn constant places in consumers’ newsfeeds, along with a button asking them to consider sharing their experience every time they see us. I think that’s going to be cool.

 

 

 

Top 10 Reasons The Apple iPad Will Put Amazon’s Kindle Out of Business

This article originally appeared as a guest post on Techcrunch

1) The multi-functional capability. Buy a Kindle and you get… a reader. Another dedicated device to carry. Buy an iPad, and you get a whole new companion that can do pretty much anything. Games, movies, browsing, documents, and more—all in one. And zillions of iPhone apps. It’s sooooo much more than a reader, it’s a whole-life device.

2) The screen. Full color, multi-touch screen, gestures, and more. It’s a pleasure to look at it – and we all can rely on Steve Jobs’ aesthetics to know that it’s a pleasure to hold as well.

3) The compatibility. iPad supports ePub out of the box, overcoming publishers’ resistance to having to support a proprietary format such as Kindle’s; and creating compatibility with books sold through a leading standard format through any channel. (Something tells me Amazon will be making an announcement about ePub support real soon…)

4) The iBooks store. Apple has captured the magic of shopping. Once again, whereas Amazon does great with the functional needs of buying a book, Apple goes beyond to create an experience.

5) The experience. The Kindle provides a good functional experience for readers—in a very Bezosian way, it meets all our needs. But Apple’s creation goes beyond, to make the experience fun and cool.  You can swipe through pages on an iPad.  On the Kindle, you have to dutifully click a button.

6) The economics. Publishers have been deeply concerned about price erosion with Amazon’s $9.99 pricing—and have been up in arms over Amazon’s 70% revenue share take. Though Amazon has reversed the revenue share (to match Apple’s reported offer at 30%), it would require publishers to cut prices and offer deep discounts. Considering the threat the publishing industry is under, the last thing that publishers want in a time of transition is to have their revenues crammed down further by Jeff Bezos.

7) The apps. In a digital age, a book is (finally!) becoming more than just words on a page. But the Kindle has been slow to recognize this. With the iPad, out of the gate publishers can create whole experiences. Want to create something unique in the market to draw consumers? Publishers can go beyond e-books, and create an app using one of the world’s most popular SDK platforms.

8) The marketplace. Apple’s iBook and App Store marketplaces will instantly be a must-attend venue for publishers. The anticipated sales of the iPad will mean exposure to so many more consumers than Kindle; and Apple already has 125 million consumer store accounts with 12 billion products already downloaded. Amazon won’t even release the number of Kindles sold, because the number of consumers buying its device pales next to Apple’s reach.

9) The price. For $10 more than a Kindle DX, consumers get an incredible ebook reader, and so much more: a device that they can use for, well, pretty much anything. The options, consumer experience, and flexibility for that $10 are a no-brainer.

10) The Apple factor (a.k.a. “sexy”). Let’s face it, Apple is a brand people want to be affiliated with. It has a cool factor. Even those of us who are smart enough to know better still fall in love with Apple products, and carry them with pride. Amazon just doesn’t have that. As Jason Kottke says, “the iPad makes the Kindle look like it’s from the 1980’s”.

Apple has upped the game for Amazon.  Jeff Bezos and his team better start a clean sheet of design if they want Kindle to catch up again and play as a leader with consumers.

It’s clear that Amazon is already scared: witness their recent moves in the last few days running up to Apple’s announcement. Just this month, they’ve announced an app frameworkand a new royalty structure to be more attractive to publishers – and both moves are clearly defensive catch-up plays to respond to the threat of the iPad. Amazon is even trying to win love by giving away free Kindles to their best customers.

But the best plan for Amazon isn’t to try to buy customers or try to match Apple’s approach. Rather, they’ll need to re-think their consumer experience from  start to finish. They’ve done a great job so far of digitizing books, but now if they want to compete with Steve Jobs’ inventiveness, they’ll have to step up to be a must-have device in consumers’ digital lives.  Of course, they can also just surrender and continue to sell books through their existing iPhone app, which should be compatible with the iPad like all the other apps in the App Store.