The iPad– “Thou shall have apps…

The much heralded announcement of the iPad brings with it profits (or prophets?) as well as naysayers.  Perhaps Steve Jobs should have dressed in long ropes, grew a long white beard and walked down to the stage with a view of the mountains in the background?  The scene might be further played out with the masses dancing around and worshipping the netbook, the new deity of computing.

Steve Jobs raises his two iPads and declares that he has heard the word of the almighty and has declared that these tablets are the new iReligion.  Then he declares that he alone will now lead them from their transgressions to the land of endless apps.

(Note to Mr. Jobs:  If I recall my bible studies it took Moses another 40 years to find the Promised Land)

The announcement of the iPad will cause debates, forecasts, and predictions of successes and/or doom.  One thing is clear; the iPad is Apple’s near-term answer to the netbook phenomenon .  According to eWeek, netbook sales topped 33M in 2009 and Acer predicts sales in excess of 50M in 2010.   Apple sells about 3M Macs a quarter.

The sub $300 price point of the netbook did create a new category of device.  A device that is intimately linked to the trend of cloud computing.  Netbooks are good at email and web browsing.  They are not great entertainment devices.

The iPad promises to be as good as netbooks in what they do well – email and browsing – and also be a fun personal entertainment device.  The iPad wisely brings along over 100K apps at launch from the iPhone/iTouch world.

The question that the iPad raises for me is – how many personal connected devices can one person have?

The emergence of the smart phone category (iPhone, Android, Symbian, Blackberry, Palm, Windows Mobile) has created the instant connectivity to email, web and apps.  These devices fit in your pocket , are reasonably robust, and cheap to buy.

The laptop category, as Steve Jobs pointed out in his keynote, is another version of mobile computing.  With the weight of laptops hitting 5lbs and below, and with desktop computing capability, they have become the standard for students and professionals

Netbooks have created a bridge between the two major device areas as a lightweight computing device.  Now, enter the iPad at a $499 pricepoint.  Will the iPad grow the mobile Internet market or cannibalize other sales?

My prediction is market cannibalization.

The smart phone market is secure and growing.  The basic functions of instant and multimodal communications are clear and a continued focal point of human need.

The laptop and netbook markets are likely to be the feeding ground of iPad sales.

But how and why?

The answer is personal cloud computing.  The more the consumer environment transforms from local storage and processing to cloud storage/computing with local display and data entry – the better the market environment will be for the iPad.   The Apple entry into personal cloud computing – MobileMe – has been less than compelling.  This is especially true as Google, and others,  offer many of the same capabilities for free.

The iPad equation still requires one more piece of the puzzle to reach the Promised Land.  Steve Jobs will have to climb the mountain again and come back with another divine revelation.

Clouds can make it rain, and follow you – Your Personal Cloud

Cloud computing is in the air. Wherever I turn people are talking about public clouds, private clouds, enterprise clouds. It seems that the makers of cloud technology can be the next generation of rainmakers. Truth be told, the computing concept of virtualization or even time-sharing is hardly a new one.

The natural ebb and flow of computing power and application requirements has swung to the point where most applications can share a single physical platform, thus virtualization and cloud computing. This trend coupled with a high speed connected internet enables cloud computing to become a metered utility.

All of that dark fiber and infrastructure that was placed during the dot.com boom is coming into play. But, as I said , nothing really new here.

Back in Graduate School, in a time when Carl Sagan was still gazing at the billions and billions of stars, my personal computing account was metered by compute cycle. If I designed a particular program poorly and ate up a lot of compute time, it might be time to whip out the credit cad and recharge the account. This methodology certainly made you a precise and careful program designer!

While this cloud trend is particularly relevant and profit making for companies such as Amazon, RackSpace, VMware, Microsoft, etc – what does it mean for the guy on the street?

The companion trend that will have more far reaching implications for the consumer is personal clouds. A personal cloud is a collection of your data and applications that is accessible from any device, anytime. This includes documents, photos, videos, games, TV and movies, applications and personal preferences. Everything that now sits on your semi-connected home or work PC, mp3 player or smartphone  just waiting for a hard-disk crash,  or the device to break or be lost ,will now be available in your personal cloud.

This has already started. Gmail, Hotmail, and other online mail providers store and manage your email accounts. Goggle docs can store any document type and has online versions of word processing, spread sheeting and presentation software. The majority of my TV viewing is done online. I do not even know the original air date of most of the shows that I retrieve form Hulu or the network sites.

The personal cloud has been complimented by netbooks and recently the iPad. (I will share my thoughts on the iPad in my next article).
A netbook should more accurately be called “My Cloud Viewer”.

What a netbook does well is get on the Internet and get to your stuff. The personal cloud does for the individual what enterprise cloud computing does for the corporation – it turns computing power and storage from device centric (PC, Laptop, Phone, TV) to a network utility. Display and connectivity is what will be needed in the future.

Marketing is about choices – or is it? You decide

Marketing is about choices – or is it?

I recently went through a mental exercise of trying to determine what makes great marketing companies…. well…. great.   There are the obvious, and historic , iconic brands of the last 100 years – Coke,  Ford, AT&T,  McDonalds, Bud,  Chevy.  These brands have become part of the American DNA.  They will not necessarily be the great marketing giants of the next 20 years, but like that old pair of jeans, somewhat comfortable,  but  not what you will brag to your friends about.

None of these companies excelled at consumer choice.  Coke gives you with/without caffeine and  with/without sugar .  Ford and Chevy have nearly gone out of business by trying to offer too many choices, or more correctly, dictating what the consumer should choose.  Bud gives you regular or lite.  McDonalds is about the burger.  These companies have used massive advertising to direct the consumer choice to their pre-determined, limited set of options.

The companies that are dominating consumer choices now are Google, Apple, Facebook, Your Cable/Internet Providers, and Amazon.com.   They all seemingly put choice back in the hands of the consumer.  Google presents you with literally whatever you want.   Apple provides endless apps on the first really open smartphone.  Facebook opens a world of new and past friends and lets you choose who you want to be friends with, or not.   Cable television began to break up the monopoly of the networks by providing consumers 100’s (and now 1000’s) of channels of choice, coupled with video on demand.   In this era of consumer empowerment, does brand matter?

The conclusion I came to is yes , and now more than ever.  Fundamentally, marketing is about directing a consumers choice to a specific product or service.  Google only makes money when you choose to click on a product search that was highlighted via advertising.  Apple needs you to choose their marketplace for apps.  With thousands upon thousands of apps, what will be the mechanism for consumer adoption?  The featured list of apps on the iphone is really what? It is a mechanism to show you that you have unlimited choice , but then direct your choice in a specific manner.     Facebook is a huge social marketing machine that tries to influence your choices by having your friends influence you.  Influence the Influencers, and you direct choices.

Your Cable providers can offer you 100’s of channels, and as has been seen in recent days, can take those channels away.  They do however; seem to come the closest to providing relatively influence free choices. (Their advertising for paid VOD movies aside).

Amazon provides a brilliant mix of peer reviews and product recommendations.  They are really the more direct version of Google.  Search on what you want to buy, get a couple of choices.  If you don’t like what you see, they suggest close alternatives. While their marketing value proposition is about unlimited choice, their technology is all about limiting your choice, so that you will make a choice.

So, the older model had a marketing organization pre-determining a consumer’s choice through some form of market research and then marketing the heck out of those choices.  Now, companies give the illusion of unlimited choices, monitor and track the actual choices that are made and then capitalize on those choices and utilize more subtle earns to influence those choices.

Marketing is marketing.  The techniques evolve, but the goals remain the same.  Buy my product or service and not the other guys.

A Special Thanksgiving Lesson – From Mobile Social Networking

Thanksgiving is a holiday that all Americans, regardless of culture, ethnicity, religion and politics seem to rally behind. I decided to put this notion to a test.

A couple of years ago, I decided to run a small social experiment during the Thanksgiving season. At the time I was CEO of UPOC. I invited members from several diverse groups into a special “What are you thankful for…?” – mobile chat group. The idea was to have everyone give a “shout out” of thanks. The experimental part of this mobile chat group was the source of the member groups that were invited.

These groups included: Christian Fundamentalists, Atheists, Communists, Hassidic Jews, Muslims, Anarchists, Right to Lifers, Republicans, Druids, Democrats, Red Sox Fans, Yankee Fans, Reform Jews, Blacks, Asians, Gays, Lesbians, Hispanics, Satanists, Israeli and Palestinian, Young and Old.

Yes! I even invited Red Sox fans!

I tried to get the most diverse group of individuals I could possibly imagine that had open chat profiles. In the end I invited about 5000 people and got about 500 to join.

In the week leading up to the Thanksgiving holiday, I was careful to hide the sources of the groups of the members.

Different Cultures, Religions, Ethnicity, Sexual Preferences, and Sports Affiliations. None of the differences were obvious, just the similarity of giving thanks.

Leading up to the holiday, the expressions of thanks were heart warming. Many gave thanks for Family, Friends and God. Some expressions of thanks were deeply personal including being thankful for a second chance with a loved one, being paroled from jail, having recovered from an illness, having the opportunity to see a loved one for the holiday, etc. The expressions of introspective appreciations knew no boundaries of culture. If you hid the chat handles from the messages you would have had a very difficult time identifying the group that a specific message had originated. It seems that people are really just people.

Everyone has their share of joy and “meshugas”

The second unexpected part of this experiment happened after the long Thanksgiving weekend. The expressions of thankfulness stopped and biases and bigotry emerged.

By the end of the week the word had gotten out to the participants who some of the other members of this group really were. That’s another side of social networking, its tough to keep secrets.

Right and Left Wingers began to spar, Fundamentalists started to try to save the Satanists, Hassidic Jews were condescending of Reform Jews- And the Red Sox and Yankees fans – it was just too ugly to repeat…

Stripped of their diverse background identifiers, people of vastly different cultures have very similar things to be thankful about.

Once the identity veil was lifted I was thankful that everyone in the group was in cyberspace and not really in the same physical room. I removed the group a week after Thanksgiving to avoid potential bloodshed.

Maybe there is something we all can learn from this social experiment in this season of Thanksgiving.

Google clicks in for Mobile

During the past week Google made two significant splashes in the mobile arena. Their much heralded, bombing of middle America with Stealth fighters announced the landing of the “Droid” mobile device. Secondly, their acquisition of the leading U.S. mobile advertising company, Admob for $750M announced the full legitimacy of mobile advertising. When Google speaks, the rest of the industry should listen.

There was a time, not too long ago, when an entire industry seemed to get a simultaneous epiphany – that the Internet had created a legitimate “second” screen to television.  When this became “conventional wisdom”, the advertising Dollars, Euros and Yen started to shift from the “spray and pray” methods of television to the increasingly targeted methodologies of the web.

The same thought process can now be safely referred to as “conventional wisdom” for mobile.  The consumer is spending more time starring at their mobile screen, and less and less at their Web browsers, and even far less in front of the television.  With this reality, the web advertising giant is shifting more investment to the third screen  – which we should refer to as the consumers prime screen, the mobile screen.

We have transitioned from TV ad blindness (really a Pavlovian queue to go to the frig or bathroom), to web banner blindness.  We now, however, have the personal medium of the smartphone to reach consumers.

We have moved from the communal family device, the television, to a shared, yet personal device, the PC to the personal and un-shared device, the smartphone.

There will be some winners and losers in this new reality.  The winners will be companies that have invested ahead of the curve and have developed mobile and true multimodal next gen advertising vehicles.   Advertising and promotional technologies and processes that have broken with the “spray and pray” techniques of the past and capitalize on the true personal 1-1 advertising techniques, providing consumers ads that they want to view, will be the market winners.

The Android has positioned Google to be in your pocket, not figuratively, but literally.  The combined promotion with VZW and Moto, with stealth bombers creating a thinly veiled a sense of “Shock and Awe”, is a loud statement.

(Note to the Droid ad agency – Stealth bombers do not fly during the day, hence the word “stealth”)

See my other comments on the ad campaign at the end of this blog article.

VZW is a company with a great network and a lagging device lineup. Moto has raw engineering and production talent for mobile devices and has largely fallen off the radar screen in recent years.  Google, the dominant player in the present  generation of Internet advertising, is seeking to maintain and grow that position in the next generation.

So, Google is playing a pre-emptive attack strategy in mobile. VZW is playing catch-up to the iPhone.  Moto is, perhaps, playing their last “bet the company” card on Android technology.  Offense, defense and survival makes for three very motivated partners.

With the expected proliferation of Droids and other smartphones, Google’s purchase of ADMob is both stunning and obvious.   Another winner in this market shift will be, as I have written about in the past, the major social networks.

So who are the losers this past week?

On the Wireless Carrier side of the equation, Sprint and T-Mobile have to be concerned.  The gap between them and the leaders  (AT&T and VZW) is widening.   I  expect one less mobile service company in the U.S. in the next 12 months.

The emergence of Android platforms is likely the end of Palm as a mobile platform.  The Palm Pre never got the consumers attention and thus critical market share.

Too little, too late.

Palm will not be able to compete with Google and Apple in this round.  Their demise is written on the wall (in Graffiti).

RIM also has to be very concerned.  The launch of their touch screen device, the Storm was, well, stormy.   Blackberry has a strong market position and is well entrenched.  It has made significant growth in the consumer segment in recent years.  Will that growth reverse with maturing Android devices?  While Blackberry is in a much stronger position than Palm, the combined investment potential and application resources of Apple and Google will be a major challenge to RIM’s Blackberry.

All that said, RIM still commands over 20% global share in smartphones

Application developers will have to start to prioritize their porting and promotion of new applications between four major global platforms – Symbian,  Blackberry, Apple and Android.

It will be interesting to watch the global leader in the smartphone category – Nokia and their Symbian Operating System.  This platform is relatively unknown in the U.S. market, but is dominate in the rest of the world.

The next obvious question is how do these moves motivate other players in the industry to react?  Microsoft is desperately playing catch-up to Google in present generation search engines and advertising.  Their own version of a mobile operating system has made, at best, niche inroads.  Microsoft has suffered from execution issues and seems to be the biggest example of true  “innovators dilemma” in the last 20 years.

Yahoo has some mobile applications but seems to be a company unable to focus the attention necessary on any one initiative.  Perhaps some Corporate Ritalin is in order?

My conclusion is that both Microsoft and Yahoo will likely go shopping for a focused next gen advertising company.

Ad Agencies that have largely focused on managing creative production and bulk television ad buying are increasingly on the wrong side of the technology curve.  They are, however, in a good position with the depth of their industry relationships, to be a major force in the next wave of Internet/Mobile advertising,. The question is are they willing to move from their existing business models and develop the expertise in the methodologies, either in-house or through acquisition that can maintain their market positions in the value chain for the next generation.

The technology of smartphones, advertising and applications has now combined to make the next generation of consumer services and commerce a break from the past.  At least that’s what I hear from all of the “Conventional Wisdom”.

Notes on Droid Ad Campaign:

The more I thought about the Android “Stealth Fighter” ads the more I realized that that imagery was quite familiar.  I have added four additional videos for your viewing.  Theses video are the trailers for the 1953 and 2005 versions of “War of the Worlds” , the trailer for Armageddon and CNN footage of the bombing of Baghdad.

With these videos you can draw your own conclusions.  Please let me know what you think.

In my opinion, these images all have some resemblance to the Droid commercial.  In each of these cases the situation did not end well for the “entrenched” establishment.  Mass destruction was the result.  In one case a virus saved mankind.  This is hardly the message that a smartphone operating system might want to promote.    The droid-like figures eventually emerge to destroy everything in sight –they really do – you can Google it.  In the CNN footage a nation watched mesmerized by the imagery, only to learn that perhaps the wrong war was fought.

All interesting imagery for the first shot in a new generation of smartphones.

Subtle – this is not.

Verizon FIOS Execs – Please Read – It’s Not Me, It’s You

Today I made the jump, the leap, to Fios. For the record my previous home technology stack had been Vonage for voice, Comcast for Internet and TV. I have had VZW for mobile since the days they actually called it a “car phone”.

Since I was working from home today, I was able to observe the FIOS tech as he went about his business in my house. He arrived promptly at 9:00 and greeted me like the chef at a Japanese steaks house. “Okay, Mr. Spencer, you have one Triple-Play, three sets, two with, one without, HBO , Internet and Phone….correct?” Should I have ordered the soup also?

He told me that installation is an 8 hour job and that he would be in and out all day. No Problem. I went about my business, we went about is.

After a couple of hours I took a break from my work to see how Verizon guy was doing. He was busyattaching the “ONU” (Optical Networking Unit) to the side of my house. I found it interesting since during my early days at Bell Labs, in the 1980s, my department had worked on the Darwinian ancestors of the ONU. Back then the evolutionary process was first called FTTC (Fiber to the Curb), the unfortunate acronym -Far Access Remote Terminal, and lastly FTTH, Fiber to the Home. These were all technologies that were decades ahead of their time.

He then proceeded to install a battery backup for the phone service in my basement. The phones I use are all cordless and my family has 5 mobile phones. The battery back will not help my cordless phones and a blackout should not impact my mobile phones. This is a pure expense for legal air cover should the power go out and -GFB- I need to call 911. For such an advanced service, very backward thinking in 2009.

After buzzing out the phones, the Internet came up quickly and then the last pulling and tugging of cable to get the television service going. All went smoothly to that point. Just like the commercials, he sat me down and demonstrated my remote (without a cable guy glaring in from the window). Total effort was the advertised 8 hours.

As soon as he left and we started to use the service, the quirks emerged.

Firstly the Verizon set up disk only works on a Windows machine. I had to morph my Mac with a VM to fire up Vista. The setup program executed, updated and churned for 45 minutes. The only think useful that happened, through all the screens, T&C’s and other useless info, was that I got a Verizon email. One that I will never use.

I then tried to register at Verizon.Net. I tried several times and continually got a message that said “We cannot register you now”. This seemed strange. Then it hit me. Verizon has nothing that supports Mac, even Safari browser. So, I switched to Firefox and the registration worked perfectly.

Next task was to set up my personal and work email using the outgoing email server at Verizon. I prefer to use my ISPs outgoing service so that my free personal email with my own domain does not have ads on the bottom.

Everything seemed to work with just one small problem. The test emails that I sent to myself never arrived? I connected to the Verizon server just fine. The email was accepted by the server and then got lost.

This could not be a Verizon issue. After all, when I leave my house I have that nerdy guy with glasses and 300 of his friendsfollow me around to make sure my service is ok. Having served Verizon as a vendor for most of my career I appreciate that they take 99.999% reliability seriously.

I checked and double checked all the passwords, permissions etc. I stopped and thought about this and then I remembered another strange occurrence about 4 months ago.

I had just started a new job and was configuring my corporate email account on Google. Like most people (I assume), after you set up an email account you send yourself some test emails to make sure it works. I had the same problem with Google. I struggled with that one for a couple of hours. Next, I checked some bulletin boards and found out that Google mail was in the middle of a significant outage! Three hours later, without touching anything, my service was up and working.

I wondered. Could I be that unlucky? Could Verizon be having an email problem the exact moment I tried to use my new Verizon service? I checked the Verizon user self-help bulletin boards and…..Bingo!….. Verizon was experienceing hour plus delays in email delivery due to server outages.

I put email aside and next tried to tackle voicemail. There was nowhere on a Verizon support site or any piece of paper or booklet that I got from Verizon that instructed me on what to do to set up voicemail. I know that Verizon has some portal somewhere to listen to voicemails online and send yourself alerts, but they certainly like to keep it a secret.

Since I’m not exactly new to the telephony world, I just dialed my own number and walked through the VM set-up. But, I still wanted to find this portal. I figured it was accessible through Verizon.com – a logical guess. I had previously registered on Verizon.net and thought that user name and password would allow me into Verizon.Com. no such luck. I tried to register at verizon.com (with a non-Apple browser, of course!) and still no luck.

Now its time to call Verizon. I have to say one of the reasons I left Comcast was because their customer service was , well, sucky. Verizon, with my nerd friend and his army of techs clearly have their act together, right? Wrong….

I called customer support, waited 10 minutes with really bad music, and spoke to a lovely lady with a heavy Indian accent. I explained that I was trying to find the Verizon voice mail online portal. I am not sure exactly which word she did not understand, but I guess it was everything after the word “Verizon”. I gave here my address and phone number twice and she said, “Oh my, you have fiber optic voice service!” Bursting with geek pride I said, “Yes I do!”. I figured I must now be in line for some very special VIP treatment.

Her next words were, “I can’t help you , I will transfer you to Fios” , The line went silent and then I was put on hold with music for another 10 minutes. At this point another guy answered the phone, asked me for all the same information and gave me the same line – “I can’t help you, I will transfer you” click, ring, music, another 10 minutes.

The third person I spoke to understood what I was looking to achieve. He also told me that he could not help me but said the “e-desk” is the place for “you”. Frustrated and wanting to have a little fun; when he asked me if there was anything else he could help me with , I said yes. “The Verizon email? Does it always take an hour to deliver an email? Is that standard?” He launched into the tech support speech that I call “you are a dumb person with technology and let me tell you why….” He went on about how Verizon can’t be held responsible for the whole Internet and that was obviously the problem. After he finished reading from the prepared speech on his PC (obviously not a Mac) . I asked him , “If that’s the case, why did my email stall in a Verizon server for 67 minutes?” I gave him the server name and the IP address. I am not sure what I gained by that, so to that Verizon CS guy…..sorry.

He then connected me the e-desk. Finally some satisfaction? I got a recording that the e-desk ‘s hours of service had ended two hours ago. Click, disconnect. Oy.

Hey Verizon, I could have gotten this treatment from Comcast!

Epilogue:
In this change over of home technologies I had to cancel Vonage and Comcast. This is almost as frustrating as my Verizon help desk run around.

First Comcast:

After working my way through the automated phone system I finally got to they “cancel service” option. I nice upbeat guy answered and I told him I was cancelling my TV and Internet Service. He told me he was “Shocked” to hear that. That I was such a good customer. (paid my bills?). Then he starts to launch into the “Save this customer “script. These scripts can last 15 minutes. Once he launched into all of the new special offers and services that Comcast could bring me, I asked him to stop, jump to the last page of the script where you give me my cancellation confirmation number. He was “deeply saddened”, and asked Why would I leave?
I told him “Its not you, It’s me” and I promised to still be friends.

Next breakup call was Vonage. The guy on Vonage was “amazed” that I was a Vonage user for 5 years. I was one their longest tenured customers, practically a celebrity. I also asked him to skip the next 10 pages of script and just give me my cancellation confirmation number. He decided to read the next 10 pages anyway.

I also told Vonage , “Its not you, it’s me”, and my new BFFL Verizon. He could not believe I would leave Vonage. I even asked him if he wanted me to put Mike, the Verizon tech on the phone? Now, that’s a good Verizon commercial in the making.

So – To Comcast and Vonage – Bye, Loved it while it lasted, but we grew apart and you are not a match for Fiber.

And to Verizon, Please get your CS act together. Just because you provide the same services as cable companies does not mean you have to provide the same customer service experience! It takes your tech 8 hours to install your service, you need me to stick around for awhile to re-coup those kind of costs.

Is Facebook a Culture?

This afternoon I had an interesting debate with several colleagues about the roles and differences of brand and culture.

Can a product or service create a culture of customers?

Choose Wisely!

While creating its own culture is the holy grail of a brand manager, it is rarely if ever achieved. A well executed brand will have consumers associating positive qualities about the product or service. The brand will elicit emotional reactions and creat a self-branded consumer image through these positive traits.

For example the Mercedes brand denotes luxury, class, status, sophistication and wealth. Mercedes has invested heavily to create their brand. Their customers feed off this image. If you own a Mercedes you are …..fill in the blank. This is, however, an example of good branding, not a culture.

By the way, what I associate most about Mercedes is a significantly different Brand image.

Mercedes Branding?

Culture is anthropological. It is a collection of societal norms, behaviors, customs, beliefs and values. Culture requires human contact, communication and structure.

Cultures exist at many different levels. Nations, religions, regions, teams, and companies all have cultures. Any collection of humans that interact on a regular basis will develop a culture. Successful companies understand the importance of corporate culture and attempt to manage the culture to support their product/service creation and delivery process. Conservative companies such as utilities or financial institutions will have a conservative culture to match their conservative brand. Standard offices, boring office art, formal business attire, strict hierarchy and low risk taking would be a typical culture for these brands.

Emerging data service companies in Silicon Alley will likely be more progressive. Open office plans in a remodeled loft building, funky furniture, relaxed (but always stylish) office wear, and more ad-hoc communications would be the culture to support a more avant-garde Web product. Culture supports brand. Brand does not create external culture.

 

Companies that produce products have cultures, what they produce has a brand.

There is a hybrid concept put forth by marketing consultants called “Brand Culture”. My view is that this is pandering to brand managers who want their brand to become a culture. It also pads the wallets of those pandering consultants. Good market branding on their part!

Brands can however tap into cultural trends and capitalize and what exists in different cultural groups. Brands can even strengthen and reinforce cultural values.
Sometimes this connection between a brand and it cultural constituents is planned and intentional and sometimes it just happens. Axe body products have created products that tap into the young teen boys culture. This is a culture desperately wanting acceptance from the recently discovered females. capitalizes on their culture, their values, their fears and desires and created a brand image that with one quick spritz of their product, woman would fall at their feet. This sounds almost too ridiculous to be taken seriously.  Yet, from personal experience with a relative recently in that demographic, I can definitely say that the brand tapped into this culture as they doused themselves in Axe on a daily basis. Of course after several years of using the product and not having it deliver on its brand promise, the fantasy and the use vanishes.

Brands do not create culture.  Brands can capitalize on existing cultural trends and can even enhance pre-existing cultures.

Source:www.gaywheels.com

An unintentional example of a brand tapping into a culture is Subaru. In the 1990’s Subaru realized that their cars were very popular with Lesbians. Their brand had tapped into a culture without a targeted plan to do so. To Subaru’s credit they realized their strength in this segment and have attempted to enhance their brand as being gay-friendly. Subaru was a major corporate sponsor for the Showtime series, “The L word”.

This discussion leads to the title of this blog and one of this afternoon’s debate points. Is Facebook a culture? Do people who use Facebook form a culture?

My answer is no. Facebook is a reflection of the There are many diverse cultures that exist in our world. If you use Facebook try this exercise. List all of the cultures that you belong to outside of Facebook. My list would include: My immediate family, my extended family, my local friends, my life long friends, business associates, my religion, high school friends, college friends, etc. Each of these groups has a somewhat unique culture that is further encompassed by a New York Culture and an American culture. We live in many different cultural environments with some dominating others depending on any particular situation.

Do you have your list?

Log into Facebook and compare your Facebook network to your existing cultural groups. How many total strangers have you really met on Facebook that are outside of your pre-existing cultural groups? Do you associate Facebook membership at the same level as your religion? Your nationality? Your family?

Facebook is a service that is branded with qualities of worldwide reach, connections, communications, simplicity, etc. It may serve to connect existing cultures, strengthen and extend others, but a culture onto itself? Nope.

If you can think of a product or service that has manufactured and maintained an external culture that would stand shoulder to shoulder with any anthological culture, please post them in the comments of this blog.

Biggest Patent Goof in History?

The history of the original Bell Telephone patent for the telephone is thick with claims, lawsuits and races to the patent office. In the midst of all this, the information giant of the late 19th century had a perishable opportunity to become the information leader for another century. They blew it!

This has to be one of the biggest examples of “Innovators dilemma” in history.

Facing competing patents and an incomplete invention, in 1877, Bell and his supporters offered to sell the Patent for the telephone to Western Union for $100,000. The offer was refused.
In 1876, Alexander Graham Bell and his financial backer, Gardiner G. Hubbard, offered Bell’s brand new patent (No. 174,465) to the Telegraph Company – the ancestor of Western Union. The President of the Telegraph Company, Chauncey M. DePew, appointed a committee to investigate the offer. The committee report has often been quoted. It reads in part:
“The Telephone purports to transmit the speaking voice over telegraph wires. We found that the voice is very weak and indistinct, and grows even weaker when long wires are used between the transmitter and receiver. Technically, we do not see that this device will be ever capable of sending recognizable speech over a distance of several miles.
“Messer Hubbard and Bell want to install one of their “telephone devices” in every city. The idea is idiotic on the face of it. Furthermore, why would any person want to use this ungainly and impractical device when he can send a messenger to the telegraph office and have a clear written message sent to any large city in the United States?
“The electricians of our company have developed all the significant improvements in the telegraph art to date, and we see no reason why a group of outsiders, with extravagant and impractical ideas, should be entertained, when they have not the slightest idea of the true problems involved. Mr. G.G. Hubbard’s fanciful predictions, while they sound rosy, are based on wild-eyed imagination and lack of understanding of the technical and economic facts of the situation, and a posture of ignoring the obvious limitations of his device, which is hardly more than a toy… .
“In view of these facts, we feel that Mr. G.G. Hubbard’s request for $100,000 of the sale of this patent is utterly unreasonable, since this device is inherently of no use to us. We do not recommend its purchase”

Western Union quickly regretted this decision and hired Thomas Edison to invent and patent devices to gain control of telephony. These patent efforts must have made money for lawyers, but in the end Bell prevailed.

William Vanderbilt – the son of Commodore Vanderbilt, controlled Western Union. They made their fortune from the railroads The telegraph’s biggest use was as a mechanism to enable better train scheduling, and secondarily as a general communications device.

William Vanderbilt sold Western Union to fellow railroad tycoon, Jay Gould, in 1880 for $10,000,000. The Great-Great-Grandson of Jay Gould founded Upoc Networks in 1999 and served as CEO through 2004. Entrepreneurial genes must run in that family.

In 2004, I joined Upoc as CTO and was appointed CEO in 2006.

Dada S.P.A, an Italian based company, acquired Upoc. To the best of my knowledge Dada has no connection with railroads, but is a world leader in provider mobile media to cell phones, a distant relative to the original Bell Patent.

Twitter : Getting New Management?

The rumor mill of possible suitors for Twitter blogs, buzzes and Tweets with different theories. The largest speculation, at least in terms of media attention, has Twitter pairing up with either Google or Apple. While these reports are officially unsubstantiated – they did get me to think about what Twitter would be like under new management, and what the significance would be for Internet Services.

The Internet has re-invented itself several times in its brief history. From a government funded cold war project, to an academic research vehicle, to a closed consumer oriented portal (AOL, Prodigy, Compuserve) product, to the World Wide Web (often referred to as Web 1.0), to an interactive, interrelated, multi-device user content environment of today (aka Web 2.0). Each of these transitions has left many companies in the dust; with some companies merely surviving the transitions and a small select group thriving through the changes. Web brands and services such as Amazon, Google, E-bay, Apple (iPhone, iTunes) are examples of those that have thus far thrived through transitions.

It’s the next transition that is presently underway that makes the Twitter rumors particularly interesting.

Web 2.0 was initially defined in terms of user-generated content. In a rough sense the social media giants of today would be in that category. The way I define Web 3.0 is the total social integration of the Internet. Facebook, MySpace, and a collection of second tier players, plus the media darling, Twitter, are leading this social integration. Web 3.0 is all about Social media.

While both Google and Apple have benefited from social media, they are not in themselves social media leaders. An acquisition of Twitter for either company would thrust them into a major Web 3.0 position.

Lets look at this from the viewpoint of “Fear” and “Greed”.
Fear is motivated by losing something you have. Greed is the motivation of obtaining something you want.

Which company needs Twitter more?

The answer to this question is neither.

Google could continue being Google, and benefit from the eventual ad placements and paid search on Twitter, just as it has in the general web. The strategic question for Google is can they continue to have unfettered access to ad inventory without owning the social networks? Do they have to be a social networking giant also?

The Facebook/Google dustups on ad placements and “connect” services must have sent alarm bells ringing in Mountain View.

Google went after the mobile industry with its on mobile device platform, why not social media with its own network? Since Google is the undisputed heavyweight champion in internet advertising, it is the motivation of “fear”, of losing what they have, that would drive them to a Twitter acquisition.

Apple, like Google, can derive benefits from Twitter without an acquisition. There are various methods to Tweet your iTunes selection(s) directly on Twitter. Twitter has many iPhone applications and is likely a driver (albeit modest) for iPhone sales.

Apple may have the most loyal clientele of any modern tech company. They have, however, not yet significantly leveraged this large, loyal, and generally satisfied customer base into a Web 3.0 style social network. Apple has tons of trade magazines and web sites on the virtues of Apple products, the product pipeline, self-help, and troubleshooting. The natural leveraging of this existing community into a social network must be on the strategic whiteboards at Apple HQ.

I do not think that it would be fear that would motivate Apple to acquire Twitter, but “greed”. Apple has ridden the waves of portable computing, rich media, digital music, handheld devices, smart phones, web services and the need for great user experiences across everything, to ever increasing prominence and success. Extending these competencies into the next wave of social networking is natural.

Would an acquisition of Twitter thrust Apple into social networking leadership? Or would it be a distraction from their core strengths of devices, software, digital content, and UI design?

There is another company that could be motivated by both fear and greed.

Microsoft

Microsoft has been playing catch-up to Google and Yahoo in paid search for a decade. They were late to the game for Web 1.0 and have been eclipsed in all of the major Web 2.0 services. They are an example of a company that has survived transitions in Internet services, but have not thrived. They leveraged their virtual monopoly in desktop operating systems to a dominant browser position (regardless of how the courts ruled). The browser position gave MSN and Microsoft search products critical web traffic.

Five years ago the market share of IE was 93%, it is now 65%. Both of these numbers are staggering high for any tech product. Despite, the dominance of their browser, Microsoft is a third rung player in search and ad revenue. This browser advantage, completely leveraged from their operating system position, is eroding at an accelerating rate. This market loss has to create a fear motivation within Microsoft.
While I believe that Microsoft managers are breed for greed, they suffer from Innovators Dilemma. They are so large and so dominate, that truly new ventures, new innovation is difficult when compared to protecting the core. But the greed is still present. It is for this reason that I expect a Microsoft play for Twitter. An acquisition that would thrust Microsoft ahead of Google and Apple in Web 3.0 social media Internet.

Give Me Liberty AND Give Me Death?

Give me Liberty and give me Death?

This past Sunday, as I enjoyed a bagel with a schmear, I caught up on the news of the week. I read the New York Times and the local Newark Star Ledger. It is no secret that the newspaper industry is in a real (not virtual) death spiral due to its continual loss of advertising revenue. The fact that some of these same papers have some of the most trafficked web and mobile sites has done little to stem this river of red ink from the nations presses.

The demise of the our nation’s traditional print media is all the more ironic since much of the thoughtful, original news reporting that the Internet so eagerly scoops up is created by the same companies that the Internet and digital media are destroying.

With this as our backdrop, I want to point out a significant problem with advertising, whether it’s printed in the Sunday Newspapers or published on the Web.

The problem is proper targeting. Getting your ad to the right audience, at the right time and in the right context.

Exhibit A:

Below are photos of the front page and page two of the Newark Star Ledger for Sunday April 26, 2009. The lead story is the ever-increasing Swine Flu epidemic that originated in Mexico. The page one story continues on page two with a large picture of Mexican Nuns wearing surgical masks. The second story on page two concerns the spread of the Mexican Swine Flu to New York.

The most prominent ad on this same page is………

Liberty Travel to Mexico.

Clearly, someone at the Star Ledger was going for context sensitive advertising and matched the words Mexico in the feature story to Mexican vacation travel. How effective do you think a Mexican travel ad is these days? How much damage was done to the Liberty Travel Agency by having its Mexican Travel advertisement associated with perhaps the worse Flu pandemic since 1918?

Whether this was a machine driven algorithm or a soon to be fired intern who determined the ad placement, an improperly targeted ad can be more than just a waste of valuable marketing dollars, it can actually injure a company’s reputation.

Exhibit B:
Since I did not want to unfairly single out the newspaper industry, I also searched the Internet with terms such as “Mexico Flu”, “Mexico Travel: and “New York Flu”

The first set of interesting results I got were on the website “How Stuff Works?”

The snapshots I show below are very interesting groupings for included Google AdWords advertisements. In both cases, a travel ad is intermingled with ads touting the flu breakout and flu prevention. How impactful will those travel ads be? While not quite as egregious as the Liberty Travel example, it is clear that the Google Adwords targeting algorithm does not exercise the important trait of common sense.

 

Exhibit C:
My next example comes from the New York Daily News website. Here we go again!
There are several stories highlighting the danger of traveling, especially by air. The Swine Flu epidemic is spreading worldwide and what are the major ads on this page?

Delta Airlines and worldwide travel.

Not only is this a waste of advertising budget, it is socially irresponsible.

In all three cases negative editorial content is supported by ads for companies, which are completely out of sync with that content. Touting travel in general, and especially travel to Mexico, in the midst of several stories demonstrating the severity of an epidemic in Mexico is ludicrous.

Exhibit D:
In case you thought I would not include the paper of “All the News that is fit to Print”, I also searched the New York Times website for articles on Mexico. The result of that search is shown below:

Once again we have travel ads to Mexico. I was actually wondering if there could be legal liability for promoting travel to a destination with a public health crisis and a deadly virus?

For advertising to be effective, and have a substantial ROI , AND not be destructive to a company’s image, the ad must be precisely targeted to the target audience.

This is true regardless of advertising medium.  Print, Web, Mobile – the same rules apply.

Advertise to your precise audience with a product they are presently interested in purchasing.

This is very simple. For the three cases I mentioned above, take out the travel ads and place ads for hand sanitizers, surgical masks and health services.

The key is getting the right ad to the right person, in the right context and at the right time. You do all of this and you have an Ad that should have a nice ROI.

If you don’t target your ad correctly who is the Swine?