Archive for May, 2013


Google better organizes our world –and sells us back the experience

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Google IO 2013

Above Photo:  Google showcases interconnected screens at Google IO conference in SF.

By Chris Silva (cross posted) and Jeremiah Owyang, Industry Analysts at Altimeter Group

Last year’s over hyped skydiving was replaced by down to earth by grounded product enhancements.

We’re live from the Google IO conference in SF with 6,000 developers, press, and media in San Francisco’s Moscone event center. We noticed a lot of Glass Explorer units (which surprisingly was barely mentioned in the keynote) we’ve purchased two to test, and will write up a detailed post on them after we’ve done a thorough test.

Today’s Google’s announcements were a wreck; a series of products flipping in front of you, rather than a well laid out showroom. To make sense of this patchwork set of announcements from a fragmented company, we’ve identified some top level trends:


Key Trends at Google I/O:

Products enhanced and interconnected –no major new products announced.

  • Google can coordinate across all of your screens, making multi-screen easier showing its ability to tie together all of your experiences across the Google-system.
  • Ironically, Google did not mention Google Glass. We believe this is because it was overhyped last year, failed to meet production deadlines this year.
  • Google+ had several enhancements including a new 3 column layout akin to flipboard, deeper content with flippable content cards, Hangout now extended to multiple browsers, Google+ profiles have improved sign on capability–but no adoption numbers were touted in this flailing social network.

Google is virtually replicating planet earth, but “improving” the quality.

  • Google maps is becoming a *Virtual World*. 3D experience with our uploaded photos. With virtual goggles like Occulus Rift you can walk through this virtual world, experiencing our world in just a few mouse clicks.
  • The company announced the ability to use more granular location to allow better targeting of mobile users with apps and offers, finally bringing the inherently local capabilities to mobile that we’ve been awaiting.
  • Retailers and hospitality should take note, Google maps now integrates photos of your stores from the inside. Internal decor matters to the search process.

Google knows what and who you love as we trade convenience for our data.

  • Google announced that they could identify highlights of top photos in your albums, they were able to identify important photos based on facial recognition of your family, grouping these as important. Google knows who your family is –and what’s important to your heart.
  • Google is becoming more like a media company, music streaming (Google All Access,) photo editing, magazine-ing of the G+ stream. “Google makes the world better with data.” Google+ becomes like a magazine,
  • Speech recognition across the desktop and mobile and bringing personal context to all of their services, doing things like making everyone’s view into maps personal, with their important landmarks highlighted.

What it means: An unsaid contract. Google better organizes our world –and sells us back the experience

The big takeaway is Google is trying to let consumers experience as much of your brand before they buy it, for examples a search user can experience the inside of your store, the reviews, the photos and find the fastest way there –before ever leaving their chair. As such, Google or their advertisers, may influence the purchase decision.

In mobile, It’s about the services, not the devices: While leading with mobile products last year to get people into their sandbox. In social the story focused on rich media differentiating the Google+ network and it became clear that social-first products like Hangouts and Google+ sign=in will make a broader play across more Google and non-Google products. , across data and search – whether maps or analytics – Google wants to up the ante in the tools it offers developers and, in turn, the companies and brands they empower.


The Pithy Bottom Lines:

  • For consumers, if you’ve bought into the Google ecosystem, expect the tools and products to get better but know you’re the product
  • For brands: If you want to play in Google’s sandbox, you’ll ultimately need to pay.
  • For Google Competitors: As Google has entered media, any industry is up for grabs; they may be your competitor and just not have announced it yet.

Resources: Converged Media, Integrating your Paid, Owned, and Earned

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The Convergence of Paid, Owned & Earned Media

Is Facebook paid, owned or earned? The answer is yes.

Facebook is all. They integrate advertising units along with content created by brands on their Facebook pages, and allow for consumers to share their opinions right in the comments. Sometimes, ads look like social content, and it’s hard to distinguish the difference. At Altimeter, we see this convergence only increasing, and these Venn diagrams will continue to have overlapping circles of paid, owned, and earned.

To meet this converging media types, Altimeter kicked off a research project with Rebecca Lieb (a fantastic speaker in her own right), Jessica Groopman (expert researcher), and yours truly.

We found that companies must now integrate their marketing process, strategy, and tactics so each channel leverages each other. In fact, we’ve identified a few workflows that help marketers, and their agency partners do just that. If you’ve read the report, some of this is a rehash, but I wanted to share the story in the above embedded video of how I like to articulate it while on stage.

So here’s all three components in one location: The report that started it all, videos from a keynote speech to 2,500 marketers at Marketo Summit in SF last month, and all the slides. Wishing you all best in your efforts to converge media.

And yes, turn those phones on when I speak, not off.


Above: The Converged Media Report. we’re proud it’s been viewed over 128k times.


Above: The speech, from Marketo Summit in SF. Thanks to CMO and host, Sanjay Dholakia for the intro, I start around the 7min frame.

Above: The slides form this report.

Social Business Buyers Invest in Scaling

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Spending Increase in Social Marketing on SMMS, Education.

Brands Focused on Managing Social Proliferation
For those that like to be where they money be, this data is for you. Altimeter’s research continues to survey buyers of disruptive technologies, and continues our coverage on social technologies. In our recent Q4 survey to enterprise buyers, focused on marketing business decision makers, which are global national corporations with over 1000 employees, we posed a series of questions in our survey battery. In particular, we wanted to find out where decision makers are bullish on investing and found the following trends on marketers with intent to increase spending:

  • To manage proliferation in enterprise, marketers purchase social media management systems.  Altimeter has been covering this software category since March 2010 (see all posts), and has published reports on how companies are managing social using software.  These social media management system tools, which allow brands to manage marketing, support, and employee interaction of social continue to spread throughout the enterprise (data). We’ve also seen deal size for this specific market on the increase over the past few years, some deals crossing over the six figure dollar range.  We’ve also found that companies are straddled with a number of social accounts (on average, 178 social media accounts) as social strategists struggle to avoid being constantly reactive in a role of social sanitation.
  • Insufficient tools means investments in education programs key for employee masses.  A solution requires a strategy, education, business processes, then with software to facilitate.  While most marketers realize that technology is a key method to achieving their goals, they know that education within an enterprise is required for social business success.  Marketers invest in educating various business units (departments, regions, and product groups) to ensure they properly know how to use these technologies and avoid risk.  Yet, in our previous research, we’ve seen that brands are eager to educate, they don’t put large dollars against this investment.   To help corporations solve this need, we’ve launched our own Academy offering, and are working with large brands, agencies, and consulting firms to roll-out.
  • Surprise! Marketers “volun-told” as system integrators of fragmented software.  The opposite of volunteering is being volun-told (credit: Zena Weist).  Marketers have been VolunTold that they are unwilling system integrators in the era of VC funded startups who’ve created clones serving similar use cases.  As a result, brand side marketers and their agency and consulting partners are investing in integration disparate software together to commonly share data, in order to manage a single customer journey, or obtain data on one persona or customer type.  While Oracle, Adobe, Salesforce, IBM, and others offer suites, don’t expect this trend to go away anytime soon, as the proliferation of new web tools means that brands will forever be rushing to catch up.

Summary: Companies seeking to scale social in their enterprise.
So there you have it, today’s buyers are investing their resources and time on scaling social within their organization before it spirals out of control. They’re deploying software, coupled with internal training, and then trying to glue together many pieces into one system. While I’m not going to provide insights to each one of bullets, here are a number of other trends from this data that we can discuss in the comments.

Dear Brands, Our Relationship has Changed

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Dear John

Dear Brands,I want an open relationship.

All my life, we’ve had a committed and dedicated relationship.  You told me what to buy.  I bought it and I bought it again.  But now, that’s about to change.  I don’t want to buy from you directly.  I want to rent, subscribe to, and borrow your goods.  If I end up buying your product, I want to use it with others to resell, rent to others, swap or lend.

It’s not you, it’s me.

Our world has changed, and along with it, my preferences.  From a more socially responsible mindset, economic pressures are sufficient, and technology makes it for me to find other consumers who can supply the things I need, virtually on demand.  Here’s how my behavior chains changing:

I will use AirBnb to find vacation spots, rather than stay at hotels.  I will use Uber and Lyft to get around town, rather than hire a traditional taxi.  I just put my spare car on RelayRide to rent out to others.  For my wife’s birthday, I bought her a subscription to Rent the Runway, rather than buying her a new dress.

At work, we’ve tapped into LiquidSpace to rent office space on demand.  I use Taskrabbit to hire folks at the office rather than using traditional staffing models.  We’ve bought refurbished laptops for our staff. Most of our software is already on demand.

Because of this, I’m more interested in renting, subscribing to, or borrowing products, rather than buying outright.  If I do choose to buy a product, I want to make sure it has great resale value so that I can sell it or rent it to make money.

It also means that the relationship I have with other people matters.  Now, I rent my car on RelayRide or sell my used electronics on Gazelle.  The trusted relationships I have with other customers matters as much, if not more, than my relationship with you.

I still love you, but in a different way.

If you want to be in a relationship with me, recognize that it’s not going to be exclusive.  What happens between us has changed.  I need you to change, as I want to rent, borrow, subscribe, co-op, and swap, rather than buy.

Ergo: I just want access to your offerings.  I don’t need to own then.

Sincerely,

Untitled

Jeremiah Owyang
Speaker, Writer, Business Owner, Consumer

PS: To learn more, you can read the rest of my thinking on how brands can leverage this movement, called the Collaborative Economy.

Image credit used with creative commons, by MyEye.

The Three Market Drivers: Causes for the Collaborative Economy

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Temple of Poi 2009 Fire Dancing Expo
Above Image: Fire Dancers metaphorically ignite movement in Union Square, the center of SF commerce.

Your customers are trading products and goods –rather than buying them from you!  Do you want to know why?  We’re conducting research in a pragmatic method to find out why.  Then we will publish what companies should do to respond.  Below is a preview of the upcoming report.

 [Consumers don’t need to continually buy from companies as they are sharing, renting and lending goods & services among themselves]

I’m knee deep in interviews for the upcoming report on this topic, the Collaborative Economy, which will answer how corporations can be part of this sharing movement and not be left behind.  In my previous post, I made the case that this is the next phase of Social Business.  I have probed 200 startups from the sharing movement and have compiled a list of brands that are already participating, like Barclays, Toyota, BMW, and Wal-Mart.

 

[This rising behavior is being caused by three major trends: social, economic, and technology drivers]



Three Market Forces Drive the Collaborative Economy
Analysis of Three Market Drivers: The Causes for the Collaborative Economy
In the research interviews, books, and content I’ve digested, I’ve found some patterns relative to the causes of the movement.  I don’t expect this to be a comprehensive list, and I request your additions in the comment section of this post. 

1) Social Drivers

Social Drivers

Root Cause

Example

Population Density While also listed in Economic Drivers, denser population enables sharing to happen with less friction. Zipcar took off in urban San Francisco, where owning a car is impractical.  Zipcar’s scattered storage lots give customers quick access to wheels, often walking distance.
Mindset of Sustainability Greening, Cleaning, and Sustainability have been hot topics for years.  This bolsters the need for economic conservation and long term thinking. Many of the startups we interviewed explained that this is about re-use or preservation of resources, rather than buying new products.
Lifestyle Trend among Youth In Shareable Magazine’s book, Share or Die, Neal Gorenflo writes that this sharing mindset is common among college students who have limited resources. For resource-strapped students, Chegg enables students to trade textbooks, rather than buy at high margin bookstores.  Social networking is part of their inherent behavior.
Altruistic Mindset In some cases, gifting or paying it forward are common in this movement.  See list of gifting startups. A recent UCLA poll found that over 75 percent of incoming freshman believe it is “essential or very important” to help others in difficulty, the highest figure in 36 years.
Independent Lifestyle We heard from Molly Turner at AirBnb that many renters of homes found this service empowering. Their own homes were revenue generators for their independent lifestyle. Similarly, TaskRabbit advertises that their rabbits are: “College students, recent retirees, stay-at-home moms, young professionals,” enabling those who may not seek a full-time position.  


2) Economic Drivers

Economic Drivers

Root Cause

Example

Increase in World Population China and India have population growth rates at 17% and 30%, respectively. America is at 22%. See Wikipedia. When I was born in the ‘70s, the world population was in about 4 billion; today it’s 7.1 billion.  It is estimated to be close to 9 billion by the time I am 75 years old (data here).
Strained Resources The interviews revealed a general sentiment that natural resources are finite and the cost to retrieve them is far greater than the potential return in revenue.  Those with less money are more inclined trade, and to activate their inventory for revenue by sharing. Recycling programs are evident everywhere, even in the sales offices and break rooms there are recycled plates, utensils and paper
Economic Disparities Where there is a divide fixed between haves and have-nots, these sharing systems naturally seek to shift resources. For example, we saw a boost in Bitcoin value as Cyprus was under severe economic strain.
Excess or Idle Inventory One of the root causes of this movement an abundance of idle resources sitting by the wayside that can be shared and often monetized. Rachel Botsman discusses in her iconic TED speech that the average usage of an electric drill is a mere 12 minutes per year.
Inaccessible Luxury Those who can’t afford something, can now rent it.  One successful Gen X banker told me that, “Access is more important than ownership” Why buy a $100,000 Lincoln Town Car, when you can rent an Uber for 30 minutes, saving money and headaches?
Influx of VC Funding Venture capitalists have already put billions into this market of fresh new startups.  Our research shows that there has been over $2 billion of funding across 200 startups. Category leader, Uber, has received nearly $50m of funding and AirBnb has received a whopping $120m. 


3) Technology Drivers

Technology Drivers

Root Cause

Example

Social Networking Technologies These technologies provide three key features:

  • Social profiles and reputations tracking,
  • Social graphics that enable people to connect
  • Transfer of information, in this case, need for resources or supply of them
AirBnb in itself is a social network.  They have seller profiles, and renters have their own reputation with verified IDs.  The goods traded are locations.
Mobile Technologies Access to people or other resources requires “portability” for a majority of these services, so mobile platforms and devices for transfer of information become necessary. Many of these startups are mobile-driven.  For example, Lyft has a thin website and suggests that users download mobile apps for this transportation site
Payment Systems In the end, this is a marketplace of goods and services.  Systems and platforms are required to broach the transactions that may use traditional ecommerce or new bartering methods TaskRabbit asks me to use my credit card, while other systems like Bittorrent are fueled by Bitcoins.


What it means: This is a long term movement, not a passing fad

So there you have it.  I see three categories and at least thirteen distinct drivers for the Collaborative Economy.  Like social was to us in 2007, this is a broader movement that impacts many aspects of society and, therefore, business.  If these market drivers are long-term (often social and economic ones are), then it means that this movement is likely to persist and to potentially increase in velocity.  If you thought social business was disruptive, this next trend will impact us at a much deeper level.


Related Resource:
I’m not an expert on this topic, so instead, I’m interviewing those who are.  Here are some of those who I interviewed for the upcoming report (full sources to be cited in report).  I highly recommend following them to learn more about the impacts of this movement.

Business Articles on this Trend:
For many, this movement requires blessings from trade papers before gaining the ears of executives. Here are a couple of articles I’ve found helpful:

 

Image Source: David Yu, creative commons license.

Altimeter Research: Social Business Spreads Across The Enterprise

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Screen Shot 2013-05-07 at 5.16.55 PM
Altimeter Data Above: Social spreads further to the edges in Hub and Spoke, and Distributes to Multiple Hub and Spoke, aka “Dandelion”

Social Business Evolution Spreads In Corporations
Altimeter’s most recent social business buyers survey of global national corporations with over 1000 employees has yielded interesting results. One data set that we’ve carefully watched over the years, and perhaps I’m most known for, is how companies organize their internal structure for social business. Over a year ago, we conducted this same study, to glean where the market is; we’re back with additional benchmarking data, and you can read the full report of Social Business Evolution (embedded below) This most recent data resonates the trends that we’re hearing and seeing in many of our brand side clients, here’s my take:

  • Decentralized gains no growth. Companies in this model are afflicted with unchecked proliferation and will have to eventually undergo considerable investments to clean up mis-managed or worse, un-managed efforts.  This unscalable model leaves companies fragmented in an uncoordinated method.   We predict this structure will eventually dissipate as companies must formalize their programs.
  • Centralized remains stagnant, holds at under one third.  This model, in which a single business unit (often corp comms) manages the program on behest the corporation is a short term fix.  While many regulated companies can easily make the business case for a single group, it cannot scale –and this group will eventually become overwhelmed with requests from business units.
  • Hub and Spoke loses 6 points, yet still dominant.  This popular model, in the previous year, sinks 6 points.  Why this drop?  Companies are seeing that social is spreading beyond a coordinated team (often referred to as a center of excellence) to a broad set of business units including regional, departmental, and product lines.   Despite the dip, this continues to be the dominant model most corporations are in now.
  • Dandelion model shows growth.  In this model, decision making and management for social spreads to various business units –beyond the centralized team.  This sign of maturity often means there’s coordination in the center, but freedom for local groups to manage within guidelines.  We expect this model to continue to rise year over year.
  • Holistic remains elusive. This very challenging formation, where a majority of all employees use social for business in a safe and consistent manner continues to remain miniscule. Why?  This requires a cultural mindset of trust from leaders, and a workforce that is trained and ready to accept social into every fabric of employee and customer relationships.  Don’t expect this model to grow anytime soon.

While I’ve your attention, I wanted to share that I’ll be hosting a webinar on Social Business Readiness, and share how we’ve helped many companies get ready internally, such as this project on Social Readiness roadmaps, (here’s a screenshot), I’d love to help your corporation get situated in a scalable model for social business. On a related note, Altimeter Group continues to hire, we’re seeking a COO and Senior Consultant as we continue to grow.