2_Communication

[|Andreas Weigend] MBA 267, Spring 2009-B Haas School of Business, University of California at Berkeley
 * Marketing 2.x: The Social Data Revolution**

=Class 2: Communication 2.x= April 2, 2009 Audio recording and transcript: Part 1: [|mp3] [|transcript] Part 2: [|mp3] [|transcript]

=Agenda= 2:10 The Social Data Revolution (SDR, Class 1 recap) 2:15 Why do marketers care about SDR? 2:30 What are the dimensions of communication systems? (in pairs) 3:10 Why are these communication dimensions relevant for marketing? 3:20 What is value of social data for commerce? 3:30 What are the implications for marketing? 3:45 The Sociology of Twitter 3:55 Q&A

=Notes=

Introduction
This class focused on marketing communications within the context of the Social Data Revolution (SDR). To begin, we discussed the changes the SDR has brought to the traditional marketing paradigm of the "[|4Ps]". The problems of selling stuff to people remains the same. However, due to a dramatic drop in the price of communications and an increase in customers' willingness to share information, the 4Ps are being redefined:

1. Pricing Price comparison engines have made pricing information transparent - information asymmetry no longer exists and customers are empowered.

2. Product Knowledge of products has shifted from the company to the web - the **collective knowledge online is greater than what any individual company has**. In terms of market research, you can look at what the web is saying. While the SDR has created incentives that are closely aligned with consumers' incentives, it has also made market research more widely available and feasible.

3. Promotion Promotions used to have limited feedback loops - they were essential carefully crafted advertisements whose impacts were difficult to understand. The objective could be to gain people's attraction. The SDR directly connects advertising and action since there are essentially zero //direct// costs in communication. Previous second order costs (getting interrupted, annoyed) have now become the leading order.

4. Placement Situational placement is now possible: companies can deliver products and advertisements when the consumer wants it. Placement is now defined by relevance - what do you show a customer at given site at a given place in time? The 4Ps have really changed in meaning and a 5th P should be added: Platform.

5. Platform Facebook, eBay, Twitter, and Amazon are in fact communications platforms that have enabled communications about products/services to happen between customers (C2C) rather than through one directional broadcasting out from business to customers.

Why do marketers care about SDR?
[|Ted Shelton], the CEO of the Conversation Group led a group discussion based on a the presentation - "T[|he Future of Advertising in One Afternoon]" - by John Willshire, which he discovered via Twitter.

Marketers have changed how they interact with their customers; we can learn from the past to understand the progression and evolution in the customer/marketer relationship. Before the [|industrial revolution] and [|mass media], marketing was local and communications occurred face-to-face. People went to local markets and made decisions based on referrals from their local community of friends and family. During the industrial revolution, the era of mass and centralized production was mirrored by communications. Mass media emerged and communications became defined as one-way broadcasting of a single message out to many. In some ways, these were the good days - the singularity of message combated the xenophobia of small communities and companies profited from the emergence of the mass consumer. While communities were still local, there was a breakdown in the traditional community exchange of information.

While the mass production/mass media model worked for a long time, the SDR is changing this model, and in some ways, is taking us back to the future. The networks of the pre-industrial age are coming back, but without the physical limitations of geography and time. The rediscovery of the [|wealth of networks] is a fundamental shift: we can now reach anything, anyone, anywhere. The latent desire for connection has flourished. Unlike days of yore, geographically disconnected social groups can now connect. The internet/information revolution has broken down the barriers between creator and consumer. Intermediaries are disappearing as producers connect directly to consumers. (Yet, new services are emerging to help people through the jungle of offerings!) Marketers better care about SDR because consumers now can listen to each other and not to the marketers. To succeed in this paradigm, marketers will need to figure out how to move beyond broadcasting to developing communications that are relevant and valuable to consumers and their social networks. In order to be able to connect with consumers and to gain their respect and positive awareness, marketers must focus not on interrupting consumers but on delivering valuable and meaningful information etc.

As [|Kevin Kelly] has summarized it, we live in an amazing time when the world actually got connected. There is seemingly no way to "go back" so marketers must get smart on the dimensions of communication systems that have been redefined by SDR.

What are the dimensions of communication systems?
The changes in communications systems can be examined through different dimensions, including: >>> 
 * Identity
 * Anonymous vs. known (for example, [|Seesmic uses anonymous feedback] from the web to improve its product)
 * Presence: do you need to be there in person? or is it just as good to be at a distance?
 * Reputation & Trust
 * Source: is the person who they say they are? Is there transparency? (see [|GlassDoor] and "Obama" tweets)
 * Relationship Depth
 * Private vs. public
 * Professional vs. personal
 * Do you need to have a status or certain culture to participate
 * Information
 * Capabilities
 * Structured vs. unstructured
 * Directionality - [|Symmetrical (Facebook) vs. asymmetrical (Twitter)] 
 * Order: is it ordered by relevance or chronology? (Facebook appears to be succumbing to chronological)
 * <span style="font-size: 10pt; color: rgb(0, 0, 0); font-family: Arial,Helvetica,sans-serif;">Searchability: Twitter yes, Facebook no
 * Persistence: is the message of ephemeral value (blue light special) or long lasting value?
 * <span style="font-size: 10pt; color: rgb(0, 0, 0); font-family: Arial,Helvetica,sans-serif;">Transparency
 * <span style="font-size: 10pt; color: rgb(0, 0, 0); font-family: Arial,Helvetica,sans-serif;">Monitor vs. censored
 * <span style="font-size: 10pt; color: rgb(0, 0, 0); font-family: Arial,Helvetica,sans-serif;">Distribution: open vs. closed (does your comment show up on Facebook?)
 * <span style="font-size: 10pt; color: rgb(0, 0, 0); font-family: Arial,Helvetica,sans-serif;">Exclusivity vs. access
 * <span style="font-size: 10pt; color: rgb(0, 0, 0); font-family: Arial,Helvetica,sans-serif;">Expectation of being read or not -"have you read my latest blog entry?"
 * <span style="font-size: 10pt; color: rgb(0, 0, 0); font-family: Arial,Helvetica,sans-serif;">Clarity
 * <span style="font-size: 10pt; color: rgb(0, 0, 0); font-family: Arial,Helvetica,sans-serif;">Intended meaning vs. perceived meaning
 * <span style="font-size: 10pt; color: rgb(0, 0, 0); font-family: Arial,Helvetica,sans-serif;">Intended vs. perceived meaning
 * <span style="font-size: 10pt; color: rgb(0, 0, 0); font-family: Arial,Helvetica,sans-serif;">Use of nonverbal cues
 * <span style="font-size: 10pt; color: rgb(0, 0, 0); font-family: Arial,Helvetica,sans-serif;">Self expression vs. knowledge/information sharing
 * <span style="font-size: 10pt; color: rgb(0, 0, 0); font-family: Arial,Helvetica,sans-serif;">Expectation of communication behavior
 * <span style="font-size: 10pt; color: rgb(0, 0, 0); font-family: Arial,Helvetica,sans-serif;">Message
 * Scope: is the message reaching a large or small number of people?
 * <span style="font-size: 10pt; color: rgb(0, 0, 0); font-family: Arial,Helvetica,sans-serif;">Content & Type
 * <span style="font-size: 10pt; color: rgb(0, 0, 0); font-family: Arial,Helvetica,sans-serif;">Push vs. pull
 * <span style="font-size: 10pt; color: rgb(0, 0, 0); font-family: Arial,Helvetica,sans-serif;">Recordable vs. non-recordable
 * <span style="font-size: 10pt; color: rgb(0, 0, 0); font-family: Arial,Helvetica,sans-serif;">Size of communication: love letter length vs. a 140 character tweet
 * <span style="font-size: 10pt; color: rgb(0, 0, 0); font-family: Arial,Helvetica,sans-serif;">Spontaneous vs. contemplative (planned)
 * <span style="font-size: 10pt; color: rgb(0, 0, 0); font-family: Arial,Helvetica,sans-serif;">Digital vs. physical connections
 * <span style="font-size: 10pt; color: rgb(0, 0, 0); font-family: Arial,Helvetica,sans-serif;">Ongoing vs. one time
 * <span style="font-size: 10pt; color: rgb(0, 0, 0); font-family: Arial,Helvetica,sans-serif;">Timing
 * <span style="font-size: 10pt; color: rgb(0, 0, 0); font-family: Arial,Helvetica,sans-serif;">Time scale: seconds or weeks
 * <span style="font-size: 10pt; color: rgb(0, 0, 0); font-family: Arial,Helvetica,sans-serif;">Synchronous vs. asynchronous

What is the value of social data for commerce?
A variety of new companies are emerging that derive value from social data. These companies offer services ranging from targeted advertising to fraud protection. Several examples of startups creating value from social data include:
 * [|Rapleaf:] Collects data about how people use online services and then uses this data to provide fraud prevention services to major online retailers such as Best Buy. By leveraging social data, Rapleaf's service dramatically reduces the cost of verifying a consumer's identity vs. existing services.
 * [|Unbound:] Analyzes purchase history of an individual consumer in combination with his place in a social network and uses that information to target close connections of the original consumer with relevant and timely advertisements.

One insight drawn from these examples of how social data is being used to create value is the concept that no information (even "anonymous" information) is private, as techniques exist (see [|research] by Cynthia the Dwork) that use statistical inference to attach an identity to anonymous information.

The Sociology of Twitter
People are engaging with Twitter in many different ways, and as time passes more and more valuable use cases are emerging. One use case that Ted Shelton describes is discovering people who and information which keeps him apprised of the latest news in his field. He uses [|TweetDeck] to manage who he follows in a more sophisticated way than Twitter by itself currently allows, including segmenting different people into categories and searching across the Twittersphere.

Links
Other links relevant to communications in the SDR:
 * [|It’s Time To Start Thinking Of Twitter As A Search Engine]
 * [|Marketers find Twitter a tweet recipe for success]
 * [|Introduction of SDR (VDO)]

Recommended Reading
Shoshana Zuboff - T[|he Support Economy]

Wiki Authors
Katie Swinerton Karl Rinderknecht Piradee Tatiyakavee Sumeet Verlekar