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Archive for December, 2007

 The Power of Many: Social Connectivity Signals Changes

Tuesday, December 18th, 2007

December 17, 2007
By Brian Morrissey

NEW YORK In November, Facebook’s 23-year-old founder, Mark Zuckerberg, stood on a low stage in Manhattan and made a boast to hundreds of advertisers and agencies that caused more than a few snickers afterwards: “Once every 100 years, the way that media works fundamentally changes.”

In the subsequent weeks, Zuckerberg’s hubris was slammed, particularly when Facebook was forced to backtrack on its plan to pipe product purchases to users’ friends, a system known as Beacon. One writer, former Business 2.0 editor Josh Quittner, even went so far as to title an article, “RIP Facebook?”

Yet despite the hyperbole and inevitable backlash from once-fawning admirers, Zuckerberg’s proclamation has the ring of truth to it when looked at in the wider view. More than ever in the modern era, media and advertising are changing, as epitomized by the rush of middle-aged users to social nets like Facebook. The Internet is finally beginning to live up to its promise to change media and advertising from a one-to-many, passive proposition to a many-to-many experience premised on social connectivity. For media companies and advertisers, this could make Zuckerberg’s irrational exuberance seem not so irrational in retrospect. In fact, the fundamental changes he was referring to are already under way.

“I believe the media business has changed more in the last five years than in the 500 years before that,” Peter Horan, CEO of IAC’s media and advertising unit, told a gathering of publishing, advertiser and agency executives earlier this month.

What’s most changed is how people access information. The Internet has thus far been a search-dominated medium, using faceless algorithms to sort through masses of information for the right link. Google’s role as the starting point of the many users’ Web experience gave rise to what The Search author John Battelle calls “the database of intentions”: people express themselves directly to Google, which can then match up a limitless supply of information to satisfy any need, from a word definition to a retailer selling cashmere sweaters. That’s been a sweet business for Google, which is on pace to rack up over $15 billion in revenue for 2007.

Peer recommendation comes of age

But what comes next? Search, for all its benefits, doesn’t do a great job of helping people separate the wheat from the chaff. The top result for my search is the same as yours.

Many observers see social connections as a credible alternative to search in how we find information, consume media and make product decisions—all premised on the power of peer recommendation. “Social networking is as significant a behavioral shift as search,” says Sarah Fay, CEO of Carat, part of Aegis Group. “The way search has infiltrated our lives, social networking [has become] the fabric of our lives.”

Study after study, not to mention common sense, suggests that when friends recommend a movie, product or event, it has more weight than hearing from a commercial message. Beacon was supposed to morph this premise into an ad vehicle, only to fall flat on privacy concerns. Still, the $15 billion valuation pinned to Facebook is a direct result of the belief it will turn its 58 million-plus users into a formidable advertising opportunity. And other companies are fast at work making this a reality. Archetype Media, for instance, has begun Social Vibe, a marketplace for consumers to get sponsorships (rewards) from brands they endorse within their social networks. Izea, formerly PayPerPost, is building a similar marketplace for bloggers.

The Tay Zonday DIY media model

For months, a Minneapolis graduate student had posted quirky videos to YouTube of himself singing covers and original songs in a remarkably deep voice that didn’t seem to fit his small, youthful appearance. Zonday’s “Chocolate Rain,” first posted in April, generated a tsunami of attention, racking up more than 12 million views.

By the end of the year, Dr Pepper had approached Zonday to record a follow-up version called “Cherry Chocolate Rain” in advance of next year’s introduction of Cherry Chocolate Dr Pepper. Creative merits aside, Zonday brought something else to the table: his own network. Dr Pepper relied on Zonday’s YouTube network of 20,000 subscribers to spread the Dr Pepper video. Within two weeks, it gained more than 1.5 million views. By that time, Zonday had turned himself into a mini-media property, joining a YouTube program that will show ads on his videos and give him a cut.

While the rise of a quirky personality like Tay Zonday is undeniably amusing, the story also points to how social connections on open platforms like YouTube are feeding the process of distributed media. Take Tila Tequila. At the start of the year, she was merely a wannabe model who had an inordinate number of MySpace friends, over 1 million. She was able to parlay her social networking base into a record deal and a top-rated reality show, A Shot at Love With Tila Tequila, on MTV.

Social media is not just about becoming famous. Within their own, much smaller networks, people are becoming media distributors via widgets, tiny Web applications that can be embedded on blogs and social-network profile pages. MySpace has long let users embed photo slide shows, video clips and other tools of self-expression into their pages. Having watched YouTube grow into a force on the back of distribution through the site, it sought earlier this year to exert more control, blocking some widget makers that included advertising. It eventually backed down. Rival Facebook opened its site to outside developers to build widgets that used social data, and now over 10,000 have been created, with the most popular spread friend to friend. By the end of the year, more than 50 percent of Web users encountered a widget monthly, according to comScore, typically through a slide show or video posted to a social network or blog.

In this regard, social networks like Facebook, MySpace and Bebo are likely to spawn millions of mini-networks where content is shared among a trusted circle. “MySpace isn’t a social network with 120 million people,” says Greg Verdino, chief strategy officer at new marketing shop Crayon. “It’s 120 million social networks. There’s a lot of focus on consumer-generated media when there’s more impact on consumer-recommended content.”

Brands have nowhere to hide

As consumers take control of the spreading of media, they invariably have a say over how brands are perceived. Old notions of planning a brand image through commercial messages are running up against consumers actively voicing their opinions to each other in venues as diverse as message boards, consumer reviews, blogs and social networks. Problems can occur when there’s a disconnect between the rosy image dreamed up by marketers and the everyday reality expressed by consumers.

The crossroads the advertising industry stands at was on full display this year in Cannes. Dove won the Film category for “Evolution,” a touching short film by WPP Group’s Ogilvy & Mather that looked at the beauty industry’s false and manipulative notions of beauty. Buoyed by the ad’s impact—”Evolution” has been viewed more than 5.5 million times on YouTube—Dove released a more pointed follow-up in October, “Onslaught,” which shows an angelic little girl deluged by the marketing industry’s messages about beauty. The video met with wide praise from critics and industry types. But then something else happened. A video response was posted to YouTube, pointing out the hypocrisy of Unilever, which owns not only Dove, but Axe—a product that peddles stereotypes of women as little more than sex objects.

Although the video response gathered only a fraction of the views that Dove’s ad did, it showed how brands can get called out on empty promises in an age when connections are paramount. Wal-Mart found that out this year, too. Eager to get involved with social media, it ran a back-to-school campaign on Facebook that fell flat after the brand page was flooded with young critics of the company’s labor practices.

Some brands have taken the criticisms to heart. Back in August 2005, Dell’s customer-service problems drew the ire of blogger Jeff Jarvis. His resulting “Dell Hell” tirade sparked similar stories of shoddy services from dozens of others. Dell responded, after initial fumbling, by forming its own blog and an outreach team to contact those posting negative experiences with its products. The company went even further last February by launching IdeaStorm, a section of its site that solicits ideas from customers and gives them a forum for feedback, positive and negative.

The lesson for brands: The days of papering over poor products with snazzy messages are faltering now that we’re connected. That means the once mundane area of customer service becomes an important definer of the brand experience, says Pete Blackshaw, CMO of Nielsen BuzzMetrics. “That’s unfamiliar terrain for anyone in the marketing business, but it’s low-hanging fruit.”

What’s a friend worth?

But in a year marked by brands’ experimentation in social media, including MySpace profile pages—what Jeremiah Owyang, an analyst with Forrester Research, describes as fishing “where the fish are”—agencies are left with a quandary: How can such voluntary interactions be measured?

It’s often noted that the Internet’s greatest strength is its measurability, but when brands move from counting clicks and site visits to connections, the system breaks down, says Troy Young, CMO of VideoEgg, a social media advertising network that embeds overlay “invitations” into a brand experience. “It’s a real challenge because true engagement cost doesn’t fit into a buyer spreadsheet,” he explains. “The whole media marketplace is priced around the cost of impressions to unengaged users.”

The solution is unclear. For now, the ad industry is left with familiar forms of measurement, mostly clicks and impressions, and what will follow is becoming an ever-important discussion.

The price of all this social connectivity is the inundation of the mundane, from Facebook updates on what groups people join to Twitter messages on what someone had for lunch. And as Beacon showed, the line between what is personal and public is blurring—and sometimes the decision is outside of our control. Yet no matter where the line is drawn, the social trend set in motion this year is likely to only continue.

“Once someone starts to use social networks,” Fay says, “they rarely go back.”

 Sales ‘Driven by Reviews’

Saturday, December 15th, 2007


Sales ‘driven by reviews’

14 December 2007


Consumer reviews are driving web sales, according to new research.

A report from eMarketer claims that word-of-mouth advertising – always an important tool for marketers – is especially influential now the internet has made view-sharing so easy.

Social networking websites, blogs and videos mean that user-generated content is proliferating on the web, with recommendations from other consumers increasingly forming the basis of purchase decisions.

Research from eMarketer found that 17 per cent of adults use social networking websites in order to participate with their favourite brands – although most do so to gain a sense of community.

The Wispa campaign is said in the report to be one example of the influence that can be exerted by consumer-generated campaigns.

“From brands’ point of view, consumer word-of-mouth is extremely valuable,” the report states.

It emerged this week that Facebook is opening its development architecture to third-party developers, with Bebo the first rival website to take advantage of the new offering.

 Store Sites Gain In Customer Respect Index

Tuesday, December 11th, 2007
BRICK-AND-MORTAR RETAILERS–ONCE THE LAGGARDS IN online sales–are winning more and more respect from consumers, according to the latest ranking of the Customer Respect Group, an Ipswich, Mass.-based company that evaluates Web site performance. While came in with the highest score–a 7.4 out of 10 ranking–Lowe’s came in second, Kmart No. 4, and Sears No. 5, and retailers dominated the Top 25. “That’s something we wouldn’t have seen even two years ago,” says Terry Golesworthy, president of Customer Respect Group. “These companies were often at the bottom of the list.”

Overall, the index hit 6.1 on a 10-point scale, a slight improvement from 2006. The biggest change in the last year, he says, is that more and more Web sites are using real-time customer service tools such as pop-up windows and click-to-call features, “which lets sites help customers with what they’re doing right now.” Previously, many of the large Web sites offered consumers only a chance to e-mail questions–”a process that usually takes 24 hours and often results in an abandoned shopping cart,” he says.

“And features like ’store pick-up’ are great because they remove one more level of discomfort–now a consumer can be confident that a Web purchase will be here in time for Christmas because he can pick it up himself,” he says. “That’s another way to respect the customer, to say: ‘We’re tying to find as many ways as possible to make you comfortable shopping at this site’.”

But there is still a glaring gap between the way consumers experience a brand online and in-store, and consumers continue to be distrustful of the differences they see in price, benefits and services.

“On Black Friday, we saw a lot of frustrated consumers, because there were in-store deals that were better than what they could find online. And the same was true on Cyber Monday–consumers read about great prices on the Web, but then couldn’t find them in stores. And as more consumers do online research before shopping, the more of a problem that disconnect becomes,” he says.

Another shift, he says, is that while retailers tend to invest the most in making Web sites easier for consumers to use, banking and insurance companies are also making progress–but still have a way to go to win customer trust. “There is a big gap between people who will research a mortgage or insurance rates on the Web, and then actually buy it. Because these sites have found that so many customers will research rates and then disappear, they’ve become more innovative in adding click-to-call pop-ups to their sites, as well,” he says.

Finally, he says the most trusted sites are those that are going out of their way to reassure people’s privacy concerns. “Right now, people are very concerned about identity theft, and they don’t want to get tons of junk e-mails from other companies,” Golesworthy says. “The sites that are doing well in this index are those that are making a big point of explaining to customers that their privacy will be respected, and that their data won’t be sold to other companies.”

Sarah Mahoney can be reached at


Friday, December 7th, 2007

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 Study: America Suffering Customer-Service Meltdown

Wednesday, December 5th, 2007
PSST, MARKETERS. MORE THAN HALF your customers hate you.

Well, that may be a little strong, but according to an upcoming report, about 62% of Americans say companies “don’t care much” about their needs. That’s a big increase from 52% in 2004, says Lexi Hutto, senior consultant for Yankelovich in Chapel Hill, N.C. And 67% say marketers care more about selling existing products than really helping the customer, an increase from 58% in 2004.

Part of the issue “is that consumers are more demanding,” says Hutto, who worked on the survey, called “Consumers in Control: Customer Service in the Age of Consumer Empowerment.” “They are becoming more and more adept at using a variety of tools–the Internet and blogs, for example. They really feel that they have the skills to get what they want, and to some extent, they feel they have marketers over a barrel.”

For instance, if they feel the quality of service they get in a store isn’t good enough, 71% say they’ll walk out–”even if the store has exactly what they are looking for. And 86% say that when they get bad service, they speak up,” she says.

But consumers also say most customer service is pretty lousy. About 39% of those in the poll say the level of service has declined in the last five years, 18% say it has improved, and 43% say it’s about the same. Even more telling is that more than ever, consumers feel they know more about the product in question–whether it’s a digital camera or an allegedly organic peach–than the hapless “associate” trying to sell it to them. Hutto says 31% of people agreed with the statement “I often know more about the products and services being sold than the people who are selling me those products and services at retail locations”–an increase from 27% in 2006.

So what do all these ticked-off customers, peeved at what they perceive as incompetent customer service policies, do when they stalk off into the sunset? Some certainly shop online, Hutto says, “and most blame the company–71% say a bad experience at one store makes them damn the whole chain. But mostly, they go out and complain and tell friends and relatives what they think about the company.”

But what consumers hate most of all is the way most businesses try to “help”: When using automated phone trees, for instance, 92% say they have tried to circumvent an automated phone tree to find a real person, futilely jabbing at the zero and pound sign. “And 58%, when prompted, say ‘agent’ or ‘representative’,” says Hutto.

“That means the majority of people don’t like using these things.” These “loophole” behaviors are further evidence that consumers feel themselves in an increasingly adversarial role with marketers and that they need to outwit the company in order to get the information they want.

Overwhelmingly, what they want is a person with an excellent command of English. About eight in 10 consumers feel it is important to have the ability to talk to a live company representative-27% say they would even be willing to pay for the privilege. “And, quantifying consumer resistance to the trend of off-shoring corporate call centers to India and China, nearly three quarters (71%) say having customer-service representatives based in the U.S. is important, with 25% willing to pay more for this,” Yankelovich says.

Yankelovich suggests that companies customize customer service, since the canned scripts so many companies use also turn consumers off.

Among the companies earning high scores for a customer service process that lets customers find a warm body fast are Hertz, Commerce Bank, Dillard’s, Land’s End, LL Bean, Comfort Inn, Day’s Inn, Hyatt and Walt Disney World.

“And Netflix took an unusual step for a Web-based company in July 2007,” Yankelovich says. “It eliminated e-mail-based customer-service inquiries. Now all questions, complaints and suggestions go to the Oregon call center, which is open 24 hours a day.” challenges companies to take the customer service “Pledge” this holiday shopping season

Tuesday, December 4th, 2007

Leading website for customer service reviews invites business to demonstrate commitment to consumers and put up or shut up

New York, NY, December 4, 2007 – a leading online customer service review site today announced the launch of “The Pledge Challenge” for companies that want to differentiate themselves this competitive and budget constrained Holiday season. The “Pledge” allows participating companies to demonstrate to online cyber shoppers and offline consumers that they care about Customer Service and satisfaction as much as the bottom line.

The Measuredup “Pledge” is a free downloadable customer service statement and logo that companies can download for free from the website and post on their own websites so that consumers know that management, the company and brand are committed to trying to meet the consumers customer service needs.

The site founded by Marc Karasu is designed to address the customer service void growing in the wake of technology’s fast pace forward. The rise in Internet shopping, automated voice systems, outsourced—and off shored—customer service departments and other technology-driven trends have served mainly to distance customers from companies rather than bring them closer together. And while the Internet has helped customers become more informed in their purchasing decisions, it hasn’t given consumers an avenue for holding businesses accountable for their customer service. addresses and resolves this void in a way that is both fun and empowering to consumers and valuable to companies who can use this information to improve and to create a conversation with consumers.

Through the site, users can rate businesses or services on a 5-point scale in many categories from the expected to the unusual.

Measuredup gives new meaning to the phrase “The Customer is always right.”

About is a leading Customer Service review networking site where consumers rate and review their customer service and brand experiences in a public forum. The site’s founder, frustrated by an increase in incompetent, rude and outright abusive treatment by businesses both large and small, sought to develop a platform where consumers could share their experiences, vent or praise as appropriate and, ultimately, effect change.

For interviews, quotes or discussion please call the founder and President of, Marc Karasu. Contact info available here and on the site at

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