Openness, network effects, and competition in social networks

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The social networking space has opened out significantly today, with two significant announcements changing the state of play and introducing a new level of competition. From the very beginning of the social networking space, with the launch of sixdegrees.com in 2000 (which gave up the ghost in January 2002), the fundamental underlying issue was whether social networks would be entirely exclusive and competitive, or whether they would in some way integrate to create a global social networking space. Today’s news suggests that finally, after many years of highly competitive play, there is the potential for more open social networking systems.

The first key news is Plaxo’s release of a new social network Pulse, due out on Monday (Robert Scoble has provided pre-release news, apparently leaked at the end of a long party). Almost everyone has been subjected to emails from Plaxo over the last few years asking them to confirm their contact details. From the birth of Plaxo, it was clear their ultimate business model was going to be something quite different, building on the extraordinary database of members and contact information they were acquiring. With the recent surge in popularity in Facebook – which means that now a far broader segment of the population is familiar with social networks – Plaxo has decided the time is right to make their move.

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Review of Future of Media Summit from Public Relations Institute of Australia

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I just found this detailed review of the Future of Media Summit 2007 written live by Sue Kirkland Smith, Lloyd Grosse and Sarah Creelman of Public Relations Institute of Australia.

It contains a detailed review of every panel session, and concludes by saying:

In conclusion the event was fantastic and really addressed a number of important issues facing the future of media. It was also great to have the experience to have the forums presented via a streamed pipeline between Sydney and Silicon Valley.

I found it interesting to hear everyone talk about advertising as the great white hope. The only mention of PR was the Edelman Trust Barometer. There was no talk about how public relations or corporate relations might create a greater offer in this space. Clearly advertising has this space in its crosshairs. So many of the presenters said that the only way forward was to use an advertising business model but juxtaposed that with the assertion that users are both numb to advertising and that advertising impairs social networks.

It really reinforced for me that PR needs to do more to develop thought leadership in this space.

Two analogies were used that are still ringing in my ears – “the right nut for the right bolt” and “filtering the noise from the signal”.

It’s well worth reading the entire post – there are many great insights and nuggets from the Summit there.

SAP Thought Leadership: Service Delivery Innovation – Creating Client Value and Enhancing Profitability

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SAP has just released a Though Leadership White Paper on Service Delivery Innovation, which I wrote with Matthew Horenkamp of SAP America. Service Delivery Innovation is an absolutely critical issue for professional firms. Firms’ ability to do this well will undoubtedly be a major factor in determining the winners and losers over the next decade. See the paper for more detail…

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SAP White Paper: Service Delivery Innovation

Click here to download the complete Thought Leadership White Paper on Service Delivery Innovation. Executive Summary and Table of Contents below.

Executive Summary

A variety of forces shape the professional services industry – from fierce competition and globalization to the modularization of business processes and technology. Clients want professional services firms to deliver cost-effective services in smaller, fixed-price contracts, but at the same time want to retain highly seasoned professionals equipped to address their most challenging industry-specific process needs.

To succeed in this environment, professional services firms must continually improve their service delivery methods to increase client value and profitability and lower costs. This involves implementing more efficient resourcing and partnering processes, creatively packaging services, and cocreating value with clients. However, for any of these endeavors to work, a firm must have a foundation that supports global processes and workflows that enhance client and supplier collaboration. For the firms that succeed, the rewards are great. They can differentiate themselves in a crowded marketplace, lock in loyal clients, use internal and external resources more profitably, and improve time to market.

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Keynote speech: Success in the global economy: The future of business in the age of networks

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I am doing a speech at the American Club in Sydney on Success in the global economy: The future of business in the age of networks this coming 12 September. Details below – click through to get the invitation and registration details. I’ll provide some of the content on this blog around the time of the speech. Hope to see you there!

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Knowledge management shifts to new ways of thinking

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The most recent issue of Image & Data Manager magazine has an article titled Knowledge management gets a social life, drawing extensively on an interview with me. Sections of the article that quote me as below:

“Organisations have been trying to find ways to make knowledge management more productive, but a lot of problems have stood in the way,” says Ross Dawson, chairman of Future Exploration Network. “But we have now moved into a new phase of emerging technologies.”

Dawson likes to refer to this organisational shift as Enterprise 2.0, where the tools and approaches of Web 2.0 are now captured inside the enterprise. “It’s about getting group input to create an emergent response, getting many people to create input,” says Dawson. “You can click input, tag input and rate input and as you get more input on creating outcomes, emergent results occur. Things get better the more people that use them.”

Just as Web 2.0 tools can determine what does and does not work online through the power of mass appeal; this user-generated input can also assist everday business operations. “In the enterprise you can map sales – you could for example, find out what the weather was and how It affected sales, and make it easier for anybody to bring together different data-sets,” says Dawson. “This is where it all starts to be knowledge management.”

For organisations, harnessing the capabilities of Web 2.0 could involve replacing the traditional taxonomy with a user-defined folksonomy. “A taxonomy is where people analyse and prioritise ways for classifying information,” says Dawson. “A folksonomy is built by everyone, there is no architect and no designer. It’s created by the people who actually do the work.”

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Global comparisons: Why bandwidth drives Internet participation

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One of most interesting snippets in the Future of Media Report 2007 was a chart showing the relationship between bandwidth speed and time spent online across a number of countries, in the second diagram below. The data supporting these charts was provided by Future of Media Summit Research Partner Nielsen//NetRatings, which was able to provide original and valuable insights by drawing on its global coverage.

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(Click on the images for full details in the Future of Media Report 2007)

As the first chart shows, the proportion of people with access to so-called “broadband” (in this case meaning anything other than dial-up) is consistently high across nations. However the speed of Internet access varies substantially, by a factor of almost five across the countries covered. The second chart shows an unambiguous correlation between bandwidth and time spent online, underlining the debate in Australia and other countries about the impact of low bandwidth Internet access. Demonstrably, low bandwidth Internet means people use it less, and for a narrower range of applications (there is specific data on that).

My comments in the recent Sydney Morning Herald article on why blogging is so behind in Australia have attracted significant attention. In particular, a number of people (e.g. Gavin Heaton, Mark Aufflick, Meg Tsiamis) have questioned my assertion that low bandwidth impacts blogging activity, given that blogging is a low bandwidth activity – it is after all mainly text. The reality is that people if something is easier to do, they spend more time doing it, explore further, try different things, get engaged more, and are far more likely to actively participate. If you’re a keen blogger, it makes no difference. If you are someone who may be interested in blogging, but because spending time online is not a great experience you don’t discover the power and potential of participating yourself, you’re less likely to do so. The evidence in the data above is there for anyone who doubts what appears entirely obvious to me.

Of course bandwidth is far from the only issue at stake here. I’ve written before about the challenges of building a distinct English-language blogging community that doesn’t get absorbed into the global blogosphere. Meg adds further thoughts on what’s happening and how to build a national blogging community. I do believe that as a society, some introspection is required as to why we aren’t engaging as well as we could with the transformative potential of a connected world. This is a fundamentally important issue.

Are virtual worlds an over-hyped waste of time for marketers?

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Below is a short piece I wrote for Marketing magazine on the topic of “Are virtual worlds an over-hyped waste of time for marketers?” Four other people also contributed, including executives from Sulake (creators of Habbo Hotels) and Naked Communications.

If marketers have a time horizon of 6 months or less for their employers’ success and their own careers, then virtual worlds are in many cases an over-hyped waste of time. Online spaces such as Second Life, Entropia, World of Worldcraft and many others are now a significant phenomenon. However this is just the beginning. Online interaction began on bulletin boards, then shifted to Internet browsers. The next phase will allow people to immerse themselves completely in online worlds. Eventually the experience of interacting online will be difficult to distinguish from real-world interaction, and be used extensively in our work and play.

There are three reasons why marketers would want to get involved in virtual spaces now, when they are nascent, rather than waiting until the majority of the most attractive consumers spend significant time there.

1. Lead consumers and influencers are already heavily involved in virtual worlds such as Second Life. If you want to access or learn from the most interesting, influential, exploratory people around, there is no better place to go.

2. By being active in Second Life, you demonstrate to your clients that you understand the leading edge of where society and marketing are going. (Of course if you don’t understand that this is the case, then don’t bother.)

3. By exploring and engaging in virtual worlds, including trying out marketing campaigns, you will discover – and in fact create – the best ways to get results in this booming new domain.

If you don’t believe that virtual worlds will be a significant part of how people interact and engage in the future, stick to what you know and don’t waste your time. If you recognise the potential then get involved now, forge a path in this new space, and leave the others behind.

Engaging people rather than advertising in virtual worlds

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I’ve had several media appearances lately on marketing and advertising in virtual worlds, including writing a short piece in Marketing magazine on “Are virtual worlds an over-hyped waste of time for marketers?”, and a recent interview on an ABC TV program. The ABC TV segment was largely about billboard advertising, so I showed the TV crew billboards in Second Life, Habbo Hotels and Coke Studios for them to film for the program and to go along with my interview. The thrust of the TV segment was that you can’t escape advertising, even in Second Life. Another person they interviewed on the show said that it could backfire to advertise in virtual worlds, since people want to escape to somewhere different. However I think people implicitly understand that something they get for free has to be paid for somehow. As I’ve written before, some people will choose to pay to avoid advertisements. The TV crew managed to find a real-world version of a Telstra billboard I showed them in Second Life. While Telstra BigPond Managing Director Justin Milne gave the party line in his interview on the TV program, I doubt he was happy that I was wearing a free T-shirt with advertising from Deutsche Telekom as I guided the TV crew around Second Life.

However I’m hardly a major proponent of advertising in virtual worlds, and I think the TV program was starting from a misguided premise. Given that advertising – in the sense of annoying people with messages – is getting less useful wherever it’s done, it’s hardly any better in a virtual world. Marketing, in the broadest sense, is a completely different matter. It is far easier to engage people in meaningful ways in an interactive space. You can create experiences that people respond to, learn from their responses, change what you do in real and virtual worlds, and build both brand and relationships over time. That is just part of the power of being involved in virtual worlds.

Why less blogging is a matter for national concern

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A feature article by Graeme Philipson titled The Lost Art of Blogging in the Sydney Morning Herald last Tuesday covered some of the analysis I released before the Future of Media Summit, comparing Australian blogging behaviors compared to the rest of the world.

The article quotes me as follows:

“Of the top 25,000 blogs globally, around 9000 are in English”, says Mr Dawson. Of those, only 75 originate in Australia. But there are 420 million native English speakers in the world. “With Australia’s population of 21 million, we comprise 5 per cent of English speakers. But with 75 blogs out of 9000, we comprise less than 1 per cent of English blogs. We are underrepresented by a factor of six or so.”

…

“I think one key reason is lack of bandwidth in Australia, and of its high cost. Australian internet connections are slower than they are in the rest of the world, and Australia is almost unique in capping usage at quite low levels.”

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Future of Media: Panel discussion on emerging business models

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A quick review of the first cross-continental panel at the Future of Media Summit 2007, which was on Emerging Business Models, featured Keith Teare, CEO of edgeio, Anne-Marie Roussel, Director – Stategic and Emerging Business for Microsoft, Chris Gilbey, CEO of Vquence, and Rob Antulov, CEO of 3eep. A few reflections on the discussion (from memory, so please excuse misquotations :-) ):

One of the themes of the discussion was whether business models are changing. Rob said that after much consideration, he’d decided that there were no new business models: the three that continued to exist were 1) customers paying directly for your content; 2) a third party paying to be associated with or incorporating your content; 3) third parties paying to distribute your content. Keith in particular disagreed, noting the new approaches possible through social media. Edgeio’s business model itself suggests new possibilities for intermediating value. Chris, a doyen of the music industry, said that it is moving to a point at which it is no longer possible to monetize music directly. Consumers are no longer prepared to pay for music, so advertising or other indirect revenue models are becoming essential. Anne-Marie talked about the web as a basis for social entertainment. People are primarily influenced by their peers in buying entertainment, and it is now possible for people to buy from or through their peers. Keith used the phrase“selling content through peer relationships,” noting that edgeio will shortly release tools for monetizing sales of content through third-parties.

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