Archive for January 2010

The Economist on Social Networking

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The Economist on social networking - world of connections

The Economist on social networking - world of connections

What joy. This week,  The Economist, every Capitalist’s favourite magazine, has published a special report on on social networking.

A World of Connections, provides an excellent overview of the current state of social media for those still trying to get to grips with it. You can download a free pdf of the report here. Or check out my summary of key highlights below.

Introduction: A world of connections

  1. “Online social networks are changing the way people communicate, work and play”
  2. Facebook users post over 55m updates a day. 70% of users live outside the US.
  3. Social networks are superb tools for mass communication [NB the report is a bit light on their strategic use as a driver of 1-to-1 customer-to-company communication]
  4. “the most avid online networkers are in Australia, followed by those in Britain and Italy”
  5. Social Networks have “become important vehicles for news and channels of influence”. Indeed, they “played a starring role in the online campaign strategy that helped sweep Barack Obama”
  6. To sceptics all the “talk of twittering, yammering and chattering smacks of another internet bubble in the making“. Social networks still “need to prove to the world that they are here to stay”

“This special report … will argue that social networks are more robust than their critics think … and that social-networking technologies are creating considerable benefits for the businesses that embrace them, whatever their size. Lastly, it will contend that this is just the beginning of an exciting new era of global interconnectedness that will spread ideas and innovations around the world faster than ever before.”

Facebook’s growth: Why social networks have grown so fast—and how Facebook has become so dominant

  1. How the network-effect can drive lightning fast growth on a relatively modest marketing budget.
  2. An openness to external developers helped create thousands of apps. These apps provide part of the service and additional reasons to spend time on Facebook.
  3. Social networks have been beneficiaries of a fall in the cost of data storage and have also been “able to use free, open-source software to build systems that scale quickly and easily”
  4. In a feat of technical wizardry, Facebook’s engineers “quintupled the performance of an open-source memory system called memcached, which allows frequently used data to be retrieved faster than if stored in a database.
  5. Facebook Connect is one of the firm’s most important innovations as it allows members to take their social graph wherever they go on the web.

Twitter’s transmitters: The magic of 140 characters

  1. A key difference between Facebook and Twitter comes from the nature of relationships that underlie them. “On Facebook, users can communicate directly only if one of them has agreed to be a “friend” of the other. On Twitter, people can sign up to follow any public tweets they like”
  2. The most prolific 10% of Tweeters account for 90% of all tweets
  3. Another big difference between Twitter and Facebook is in the kind of content that gets sent over their networks. Facebook allows people to exchange videos, photos and other material, whereas Twitter is part-blog, part e-mail [I disagree with this. On the surface Twitter looks like a text tool, but many tweets link to videos, photos or other media].

Social Networks making money: Profiting from friendship

  1. When it comes to turning users into profits, social networks face two issues. Firstly, users are taking part to spend time with friends, so they do not pay attention to ads. Secondly, brands are nervous about appearing alongside unregulated comments and other content.
  2. Click-through rates are low, but the amount spent on adverts is increasing despite the recession.
  3. In part this may be because Marketers recognise the value that personal recommendations can have on buying behaviour. And social networks provide an opportunity for viral marketing.
  4. During 2009, Facebook turned cash-flow positive on revenues thought to be in the region of $500m.
  5. Games, virtual gifts, premium services and search rights are becoming an important part of some social networks’ revenue streams

Social Media for Small Business: A peach of an opportunity

  1. They cover the well known Kogi BBQ social media success story and mention that according to Razorfish 44% of people follow brands on Twitter  for deals [NB the methodology used in this research was rightly brought into question by Susan Braton in a recent DishyMix podcast]
  2. Social networks can provide a great launchpad for startups thanks to their reach.
  3. This article then randomly veers off into social gaming. A subject that deserves it’s own dedicated piece. But you can’t have everything.

Internal social networks: Yammering away at the office

  1. Social networks are being used to break down internal barriers in the corporate world.
  2. Informal conversations they allow can be a catalyst for creativity and new ideas.
  3. “The networks are also a great way to capture knowledge and identify experts on different subjects within an organisation”

Recruitment in a social world: Social Contracts: the smart way to hire workers

  1. Social networks, such as Linkedin and Xing help firms cut search costs
  2. Business social networks help improve the efficiency of the labour market
  3. They have also made recruitment more transparent as recruiters go onto social networks to check up on candidates ahead of making an hire

As an aside, if you’re interested in social media for recruitment here are a few relevant posts from our sister company, FreshMinds Talent:

How to use Web2.0 for recruitment
Social Media and the forefront of the job market
How to imporve your Linkedin profile

Privacy in social media: Privacy 2.0

  1. Privacy could be the Achilles heel of social networks. Users could decide to start reducing what they are prepared to share with the world online.
  2. Social networks have been developing privacy controls that give users the ability to edit what can and cannot be seen. However these are often hidden away within sites and social networks are making blatant attempts to encourage more sharing of data not less.

The Future of Social Media Towards a socialised state

  1. Social connectivity could become ubiquitous
  2. Mobile adoption will fuel future growth in social networking
  3. Facebook says that mobile users of the site are almost 50% more active than regular users
  4. Geo-networking apps may be the next big thing [unsurprisingly, the Economist can't resist a fleeting mention of Foursquare, the social network tipped for big things in 2010]

Conclusion

It’s great to see social media and social networking getting reported in such depth by mainstream media. This Economist report is not exactly cutting edge when it comes to social media insight or analysis. However it does provide a great base level for the 99% of the business world who do not spend their days glued to Tweetdeck.

Even if the above is not new to you, I recommend you read the report purely for a lesson in good business writing. As ever, The Economist delivers on elegant prose that neatly and efficiently flows from point to point.

Was there anything in the report that leapt out at you?

Time spent on social networks increases 82% in 2009

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Pocket Watch
Image by Balakov via Flickr

In December 2008, global consumers spent an average of just over three hours on social networks. In December 2009, they were spending over five and a half hours on average. An increase of 82%.

According to The Nielsen Company, social network sites have grown in importance globally in 2009. Alongside blogs, they are now the most popular category online when ranked by time spent on site. The survey (which looked at the US, U.K., Australia, Brazil, Japan, Switzerland, Germany, France, Spain and Italy) shows not only that overall time on site has increased, but also that the global audience for social networking has increased.

Facebook leads the pack in terms of number of users. Of the 307 million social network users in the countries in the survey, 207 million (67%) were users of Facebook. But Twitter leads the pack in terms of growth. This is not surprising given the relatively small base that Twitter was growing from in 2009, but is still striking. In the US alone, the number of users of Twitter grew from 2.7 million to 18.1 million (579%) and time on site grew 368%.

When these figures are broken down by the countries included in the study, the US, perhaps unsurprisingly, has the largest number of social network user (142 million). They are followed by Japan (with 47 million users) and Brazil (with 31 million). The UK comes in fourth place with 29 million users of social networks. However, when you consider time on site, Australia leads the pack. There, the typical social network user spent an average of nearly seven hours on social networking sites in December 2009. The US and the UK come close behind with just over six hours.

Overall this data shows that social networking sites are becoming an ever increasingly important part of users’ web experiences. More users are using and joining such sites, and they are spending longer on them. Users now spend more time on social networking sites than on other categories of sites online. Social networking is now an established part of global consumers’ lifestyles.

What comes first for newspapers: the community or the community platform?

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Community
Image by niallkennedy via Flickr

Guest post by Ben LaMothe

At last week’s news:rewired event at City University London, there was one session dedicated to discussing the state of online local news, and where it’s headed.

Among the presenters was Sarah Hartley, local launch editor for The Guardian. The discussion veered toward launching an online community platform within newspaper web sites.

In news, a community platform is meant to offer another place where readers can interact with stories they read (preferably on the newspaper’s web site), write their own blogs, and upload varied things.

I’m a fan of them. They do offer an alternate outlet for discussion and the sharing of resources. And they do have the ability to bring a community together.

Instead, what I want to address is the “Field of Dreams” model for developing online communities. In this 1989 US film, Kevin Costner plays an Iowa corn farmer who is told to build a baseball diamond in his field because “If you build it, he will come.”

News organisations often take the approach that they know what is best for the community they serve (e.g. readers). They take their cues on where to drive content production by their circulation figures in print, and the number of unique visitors in a particular section.

When building online communities, often this approach is used. This is the build-it-and-they-will-come part of the “Field of Dreams” model. The thinking goes that a news organisation should develop online communities for every major residential community that exists within the readership area. Once the platform exists, people will flock to it and populate it with content.

This buckshot approach is not very strategic. It assumes that everyone will naturally make their way to their local community online, and all will be good.

Local people will find their community and they will use it to engage with others. But taking the longview, you will see that most of the communities you built for readers will be sparsely populated. However a handful will be doing very well, adding members regularly, and conversations ongoing.

If it were a normal web site, the “underperforming” online communities would be shut, with resources re-directed to the communities that are performing well. But since you’re running an online community for people to interact and share information, you can’t just close it because it’s not very full.

A better method would be “Field of Dreams” in reverse. Don’t build it until it’s clear why you are building an online community, and that the community itself wants it. Publish a story online asking for reader comment, or make a poll.

If it’s clear the community wants something like that to associate with their online experience of the newspaper, build it. But don’t build it for them — build it WITH them.

Go through product iterations, do user testing, find out what people like and what they don’t. Determine which communities in your readership area would likely benefit most from an online community for their area, and which are the most likely to have higher levels of engagement.

Having a more strategic approach to developing online communities within a newspaper also helps in the community management process. It means there are fewer communities to focus on, which means the manager can provide a better experience for those who are in the communities that were developed.

Instead of jumping on the bandwagon of developing online communities and going all-in by developing dozens of them, newspapers should see it as a business decision by asking themselves this: What is the most value for the money, time and energy that will go into developing and maintaining these communities?

Once you have that answer, you’re better prepared to develop an online community that will better serve your readers’ interests and needs, and ensure the newspaper isn’t wasting its resources.

Social Media Case Study: LEGO CLICK

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Walk Into The Light
Image by Kaptain Kobold via Flickr

LEGO is a brand that many people are very passionate about, a brand people love and we’ve written before about how they use segmentation to engage their consumer base from children to enthusiasts in an innovative way. Now they have continued their innovative approaches to engagement and embraced social media. In a big way.

They have launched LEGO CLICK, an online community that brings together innovators, designers, artists and creative thinkers to develop new ideas related to toys. The site is designed to bring together ideas in written form, images and videos. They want to capture and catalogue ‘lightbulb moments’, ideas that are relevant to toys and to the market LEGO serves.

Unlike other ideas communities, LEGO CLICK does not (at least not yet) allow users to rank and rate the ideas. It merely allows you to suggest your idea or to share ideas that you see and like or are interested in. What makes this site particularly interesting, though, is its use of Twitter, Facebook and Flickr as a way of generating content for the site and promoting participation.

The LEGO CLICK community is a great example of the hub-and-spoke model of social media engagement. Users can contribute their ideas by tweeting with the hashtag #legoclick. They can contribute images by tagging their Flickr contributions with the same tag. And they can suggest ideas by video by tagging on YouTube in the same manner.

This is an interesting use of social networks to drive content to a community. In parts it is not dissimilar to the California Governor’s use of Twitter to harvest ideas for MyIdea4CA in 2009. It relies on contributions from users of other social networks and then brings them together in a single hub where different types of content from different sources meet.

What will be interesting to watch as this site develops is the amount, and the relevance of content that is created and added to LEGO CLICK. Currently there is a lot of content being dragged into the site that is discursive about the concept rather than the kind of ideas that the site is designed to harvest. It is getting a fair bit of content that is more like this particular blog post than an idea of lightbulb moment. This is one of the real problems with using tagging and a feed from other social networks to populate any site, but an online community in particular. You could end up with a lot of irrelevant content.

One of the things that MyIdea4CA did, and that it will be interesting to look for as LEGO CLICK develops, is to use rating and even commenting in the community as a way of sorting and prioritising ideas. The most popular or interesting ideas are likely to get the most votes or comments. And so these will rise to the top on the site, leaving the less relevant comment much further down.

But even without this kind of feature, LEGO CLICK is an interesting site and itself an innovative use of social media. Really driving the hub-and-spoke engagement model. Now we just need to watch to see what happens.

Read more of our Social Media Case Studies

Why the retweet is a powerful engagement tool

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Message in a bottle
Image by Kraftwerck via Flickr

Last week Facebook announced that it is rolling out what is, effectively, its own version of the retweet. The new ‘via’ feature allows users to repost another user’s shared items. As with the retweet, it is a way of further sharing content you find and find interesting, and of expressing your interest in the content in the first place.

The retweet, and now Facebook’s via feature, are very powerful tools in these social networks. In any online community or social network, some people are more active than others. In fact, in a natural online community we would expect that out of every 100 users, only one will originate new content. Another nine will add to or expand on this content. And 90 users will just read and learn from this content. They are unlikely to publicly create or add to a conversation themselves, but they are critical to the success of the the online community - without them, the others wouldn’t start or add to conversations.

When we’re managing online communities at FreshNetworks, we work hard to provide these 90 out of every 100 people something to do and a way to express their opinion, without having to start or add to an actual discussion. It’s about finding other ways for them to express their opinion, perhaps by rating or voting for content, organising their favourites or voting in polls. You can engage more people by offering ways for them to express their opinion without actually having to express it publicly in their own words. More often than not just finding a way for them to align themselves with others’ words is enough. Indeed it is often the best approach.

This is where the retweet, and now the via feature in Facebook, really come to the fore. They are a very simple way for all people to say “I agree with this” or “I want you to see this too” without actually having to articulate their own opinion from scratch, or start their own discussion. They provide a real utility to the bulk of users of the social media tools, allowing them to express an opinion and add to discussions and debates, even if they would not typically be the kind of person to initiate or add to a discussion themselves. They are a great tool for engaging the 90 out of every 100 users who do not want to be a primary content creator.