Archives for posts with tag: instagram

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“(In the publishing business) the readers are the product, and the customers are the advertisers.” – Dave Winer

It started with Path last week, and now we learned that Facebook, Twitter, Foursquare, Instagram, Foodspotting, Yelp, and Gowalla all either upload your contacts’ phone numbers or email addresses to their servers for matching purposes.

As the post on Venturebeat states:

“Some of these applications perform this action without first requesting permission or informing you how long they plan to store this data. Foodspotting is the worst of the bunch, as it appears to transmit your data over an unencrypted HTTP connection (in plain text), making it even easier for mischievous parties to intercept.”

It’s a sign of a major problem.

Tulip Mania. Railway Mania. Poseidon Bubble. Japanese asset price bubble. Dot-com bubble. Rice bubble. Housing bubble. Bubbles after bubbles. After the housing bubble, one would think we’d have enough of bubbles for a long time to come. Think again.

The dot-com crash had nothing to do with technology. It had everything to do with the business model used to pay for the technology, which was primarily either display advertising revenue or VC money advanced with the expectations of returns based on display advertising. Display Advertising was trackable, it would be more effective online than offline. The bubble burst, crazy valuations went away and the digital ad market boomed. Ad Networks, DSP’s and exchanged drove down the value of ad impressions. CPM’s went from $100 for premier placements to $10. And impression junk was and is still anywhere. Suddenly, new businesses that relied on advertising revenue to support their model had to pivot.

Welcome to the age of user data.

Massive assumptions are now being made based on revenue generated (or soon to be generated) by personally targeted advertising drawing on user data. Facebook has a business model but their valuation is based on future realization of user data. Twitter doesn’t have a sustainable business model yet but it’s worth billions of dollars.

Often, companies don’t even know what to do with this data, they just have it because one day it will rain gold. You can’t open your computer without reading of the promises of Big Data. Your user data, goes the theory, allows ads to be specifically targeted to you. Should you buy a big bag of dog food, you will likely receive more ads for dog products, sometimes coupons. You’ll be grouped in a segment with other “dog food buyers”, your age and location will be determined, and a data model of you will be developed. A very simplistic one-dimensional model of you is living in some data warehouse and that’s why you encounter all those online ads.

The problem is not with the use of data to make decisions – the problem is with the simplistic one-dimensional use of data to make decisions. And the other problem with this assumption is that it believes in the rational consumers. Targeted advertising draws on the idea of our observed behavior presenting a coherent and realistic picture of our desires and needs.

It doesn’t.

My spending behavior in 2010 bears no relation to my spending currently or in the future – economies change, circumstances change, tastes change, opportunities change. More importantly, we are social beings, not rational beings. We are more driven by emotions and our clique than anything you can find in our brains.

As we know, targeting works on a limited scale. It does lift metrics, it improves performance. But the user data dream that one day all served ads will be relevant and lead to immediate conversion is just that: a dream. I’m not trying to minimize the opportunities at the intersection of data and human behavior, as explained in “How companies learn your secrets.” from the NY Times. I just don’t believe the way to collect and use data right now will lead to a pot of gold.

Tulips have value. Houses have value. Data has value. But the value is not as high as people tend to estimate while the user data bubble is expanding. It’s highly questionable if even a small part of these valuations can be realized. At least, I haven’t see any evidence of that, yet.

Nobody wants to hear things like that, when everybody is enjoying the user data ride. Just like nobody wanted to listen to Nouriel Roubini when he predicted the financial crisis. Nassim Taleb the “Black Swan”. Or Dave Winer the end of the data bubble. But something is wrong here, very wrong.

VCs spend billions of dollars investing in companies based on the user data model. They even tell kids to leave college early to participate in the gold rush. “You can be the next Mark Zuckerberg.”

They fund companies that need our personal data to succeed, just like the mortgage bundlers needed the junk mortgages to create fictitious AAA ratings. One day, when reality sets in and the fundamentals don’t add up anymore, the bubble will burst. A lot of money will be lost. A lot of people will be hurt.

Out of the ashes, new companies will spring up that have realistic expectations about the value of user data. And, who knows, even give us control over the data. Now, that’s valuable. Correct, Doc Searls?


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What is Instagram? A social network? An app? A community? Sure.

Actually, Instagram is a site built around a social object that connects people with shared interests. In Instagram’s case, it’s the opportunity for people to shoot mediocre pictures and make them look beautiful. On music sites like Spotify or Turntable.fm it’s a song or an artist. On GetGlue, it’s a TV show or a movie.

Facebook has such a huge audience because it allows people to connect over various social objects: Pictures, shared passions, music, video, books – almost anything that defines you as a human being.

Products can be social objects: iPhone, your new car, interesting clothing, a bracelet, the wedding ring.

What are social objects?

Social objects are the reason why people socialize. We’re social animals but we need to find a common ground to communicate with each other. That common ground is the social object.

Let’s say you’re at a party, you are shy and feel completely lost. You are not going to approach a stranger with “I really love Wilco’s new album and I’m reading Jonathan Franzen’s latest book. So fascinating.” The other person will call 911 and hope you’ll end up in a mental institution. In the good old smoking days, your first conversation revolved around the brand of cigarettes both of you are smoking. (Remember the days when you sat in a smoky bar, your social object “cigarette box with logo” right in front of you communicating to the world some part of your personality?) Now, we are focusing on phones, drinks or tattoos. Some social object that connects me with you.

Your product needs to be a social object. Or pack it in.

No worries, I’m not going to talk about Apple, Zappos, Ferrari or some other amazing brands.

No, let’s talk about German turkey sausages.

If you ever come to Los Angeles, don’t bother with Hollywood or the beaches. Head out to Alpine Village, a pathetic replica of a German village. Go to the market and buy packs and packs of turkey sausage. The best sausage you’ll ever eat. 200 calories less than a beef sausage. Perfectly spiced. Highly recommended to put the sausage on the BBQ, the fat will just disappear and will leave you with the perfect sausage. Add red cabbage, dumplings and a beer. Heaven.

I’m geeking out on turkey sausage.

The sausage is a social object. I’ve talked to many people for hours about that sausage. Just like you might have talked hours about wine, an airline experience,  Yankees, amazing service, your barefoot running shoes – whatever. We all are geeking out on objects: I’ve overheard discussions about laundry detergent, toilet paper and shoe laces. Everything can be a social object.

If you feel your product can’t be a social object, drop me a line. I guarantee you it is already. (If it’s not, we’ll look together for a new job for you.)

Stop creating messages. Start creating social objects.

We’ve heard it all before: the Internet changed everything, the customer is in control, it’s about connections, engagement, blah blah blah.

Here’s the one fundamental change: Advertising used to be about creating messages. Advertising in the 21st century is about creating social objects.

Why?

Because social objects are the building stones of the Internet. Not Facebook. Not Twitter. These platforms only exist because people want to have conversations about social objects. In the best-case scenario, they’re woven into your product/service.

Some have to work harder and develop social objects surrounding the product/service. That’s where most brands get it wrong: They’re trying to have conversations with people about their product. Yawn.

Your job is to develop a social object people want to talk about. Once they start talking, get out of the way.

The Internet is like Peter Pan. It never grows up. The biggest companies are toddlers or even babies: Just a few years old. Maybe we should give them some time and space to grow up? And stop to project our future onto them?

Fantastic speech by Marcus Brown.

Please watch the full presentation. It’s worth every second.

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When you travel around the world, you learn to understand how difficult the math of human interactions is. Personal space in Europe is different than in Dubai. Or India. What we consider staring in the Western culture is normal in other cultures.

Social norms were developed over thousands of years. The Social Web had barely a decade.

We encounter people that make us feel uncomfortable, annoy us, get us all riled up. Brands that use the Social Web as another push channel, develop sites that drive us nuts, spam us and don’t get how you should act on the Social Web.

Are there any rules? Sure there are. The rules were made by all of us. We created our own social norms on the Social Web. When I post an Instagram of my breakfast, it’s okay for me if you do the same. If I find over-sharing annoying, any over-sharing in my community will set me off. We interact and engage with people who have comparable social norms than we have.

That’s why we feel so uncomfortable at certain parties while everybody else has a great time. Or at a new job because we don’t understand the internal, social norms yet.

People congregate, they develop weak ties than become a community. That’s when norms become important and are formed. We like people who are like us. We don’t really care about diversity. We live in a global world, the United States is a diverse nation when considered as whole. But your block is a relatively homogeneous community.

As a marketer, when you have problems attracting the right people online, evaluate if you’re acting the way they do. You need to understand their social norms and act accordingly. That’s the difference between being an annoyance or a welcome addition to the community.