Author Archive

Yesterday was either a watershed day in user generated content or at least an important footnote. The popular user-ranked news website Digg received a “takedown” notice after an article on how to crack the HD-DVD encryption specification was displayed on their website. After receiving the notice the company’s CEO decided to remove the article and suspend the user accounts of those who attempted to repost the article. He explained his motivation to do so as being for the rule of law and not as a direct attack against the Digg user community.

The community disagreed and proceeded to en mass post numerous articles with the encryption specification which by that point had already appeared at numerous locations across the web. The result was that the users had essentially hijacked the website from having any other news appear. When faced with either deleting a significant number of its users from the system or allowing the posting of the content in violation of the “takedown” notice the founder of Digg, Kevin Rose, decided to cast his vote with his users. To the possible detriment of Digg, he has decided to fight any legal action that occurs even if it means the end of the company.

So was the action of yesterday one of democracy on the web or one of mob rule? I am not a fan of overly restrictive copyright rules, and the information was freely available on the internet at numerous locations other than Digg, but Kevin Rose had no choice. Once you cast your company as a community that is primarily run by your users you have to accept that you live by the sword and die by the sword. Perhaps the users of Digg understand that, and are willing to see Digg die what they see as a noble death fighting for what they think is right. But Digg itself had no choice in the end, in the face of a swift and powerful user run protest it could either fight for its users or cancel all their accounts.

The possible repercussions of this on unmoderated user forums, discussion boards and other community based sites may start to be felt in the coming weeks. Or maybe the Digg user community is particularly strident. But its something to note, and could go down as a seminal event in user generated content on the web and who is responsible for the ensuing content.

I have come across two great examples recently where doing good is good business. I sense this is more than just a coincidence and is really a trend that should be monitored if not co-opted by other firms. The two things I came across are uniquely well conceived online marketing plans/ideas. So before I riff on the broader implications of the do-good trend let’s take a look at each example.

The first is from Microsoft and launched last month. It’s a new marketing plan involving their Live Messenger product. You may recall it by its previous name MSN Messenger. It is a popular and mature product that is free to use and ad supported. Many of you might not have noticed the rotating banner ads at the bottom of Live Messenger, they are easy to miss, but between pay per placement and pay per click they generate a modest profit. In a brilliant marketing move Microsoft has put a spin on the term “IM” and has created the “I’M Making a Difference” campaign. The essence of the campaign is that by choosing from one of the several worthy charities such as the Boys and Girls Club, Multiple Sclerosis Society, Sierra Club, etc and inserting a corresponding symbol at the end of your display name, Microsoft creates an ad revenue share with that charity.

So at no cost to you some of the revenue Microsoft receives for showing the ads that you are ignoring is sent to the charity you have chosen. An “i’m” symbol shows up at the end of your display name that shows that you are participating in the program. It is a brilliantly simple and well executed idea and should serve to increase users brand affinity for Live Messenger, which is a perfect complement to Microsoft chairman Bill Gates’s epic charitable efforts. The halo effect for the advertisers should not be ignored, perhaps leading down the road to higher placement fees which leads to more net dollars for everyone involved. An excellent, and rare, example of making something you are already doing help others. I encourage others who use Live Messenger (over 250 million have a version of it installed) to give it a try.

I came across the other “do good” idea a few weeks ago. The company is Green Dimes, and it has been up and running for the past six months. The company has built an internet based business model around junk mail. No, not the Viagra ads you receive in Outlook, but the junk mail you receive in your mailbox at home. They state that each year the equivalent of 100 million trees are used to create the junk mail we come home to every day and promptly throw in the trash. They act as a well connected intermediary to several “Do Not Mail” lists and let you customize which junk mail you actually want to receive. In a nice marketing twist they plant a number of trees on your behalf. Even their 1 year plan plants 12 trees. They keep a running tracker on their home page of how many trees they have saved/planted and how many pounds of junk mail they have stopped from being delivered. It’s a well conceived business that is venture backed and, to use the classic marketing phrase, “makes a great gift”. Several catalog dependent companies such as Mrs. Fields cookies have noticed a growing number of opt out requests coming from Green Dimes asking for recipients to be taken off of the company’s bulk mailing list. A note to catalog marketers to think about perhaps integrating their email and snail mail preference centers into one area.

So, do two examples of businesses doing good business by doing good make a trend? Actually, there are many more examples, some of which you may know of and I have yet to come across. So, please comment away on this post if you know more good examples.

The broader trend I see is that, increasingly, customers want to see, or will want to see, everyday companies doing their part to be good citizens. Particularly for the younger generation of consumers, this may become a requirement to prove your brand’s credibility. Old line businesses such as with British Petroleum’s “Beyond Petroleum” campaign and Charlotte-based NUCOR Steel’s “It’s our nature” website stories have been well done. However, those two firms have much to prove as far as whether their intentions lead to credible actions. So keep an eye out on your competitors, they may be more green or charitable than you. Whether they are or not, it may well be time for you to take the initiative to position your brand as a leader in this area. And you might enjoy the monetary benefits while you help everyone else enjoy the more tangible benefits of your efforts.

Last week the top internet retailers in the country convened at eTail 2007 to learn what their peers are doing, listen to vendor’s pitches of new products and services, and to commiserate about the state of their industry. In my post from the conference last week I had commented on the recent lack of innovation in online shopping. Over the last three years merchants have moved progressively towards what has become a fairly homogenous online user experience that caters to the same mode of browsing and transacting as each other’s websites. Imitation may be a form of flattery, but if form follows function, then in the case of online shopping, banality follows form.

Online shopping has in reality been reduced to online transacting. Seek this one thing, find that one thing, maybe compare prices, then check out. 1 + 1 = 1.1 = something less than the whole. The building of desire? The premise that shopping should be engaging? Maybe at next year’s eTail. Or the year after that. Or never. Maybe it’s time to accept the fact that this is the business of ONLINE shopping, and not online SHOPPING. Maybe it’s about the medium and not the act?

That’s what it seems like today. The onerous burdens of the internet retailer to streamline technology and operations, to market the site in search engines, to keep their heads above the latest calendar-driven buying surge have driven innovation to the back of the “to-do queue”. Innovation – isn’t that the job of the next technology vendor? A slightly faster search tool, a multivariate test platform, a 0.05% improvement guaranteed or your money back technology elixir. All fine and well. But what if the industry could look out further than this month’s results? What if they could rise above the day to day grind? What is missing? I say at a high level it’s a sense of fun.

Fun? Yes, Fun! Not laugh out loud entertainment, at least not for most types of products. But how about at least a sense of discovery, of desire, of something a level above the pablum of the competition? If there are three basic pillars of online retailing, they would be operational efficiency, marketing efficiency, and conversions. A few retailers have achieved an operational advantage over their competitors via technology, fulfillment processes, and scale. Some have achieved an advantage of driving qualified traffic to their websites through search engines and affiliates. But who has led in conversions? Ask most industry experts and they will point to conversion ratios in order to rate the winners. Click to Product to Cart to Checkout. Mission accomplished in their book. They will pepper that user with some email campaigns, a discount here and there and wait for them to come back. Maybe they will type in the URL this time and save the retailer $1.50 charge from Google.

But what if shoppers came to your site because they really wanted to? What if they experienced something unique, engaging, even dare we say it: fun? There are several ways to express this concept in different terms. What if shopping online was more social, more collaborative, more educational, more engaging? What if ONLINE shopping became online SHOPPING. Or what if someone threw caution, and e.e. cummings, to the wind and capitalized both words, “ONLINE SHOPPING”, and created something worth seeing, doing, and doing again?

I think something is coming to help make online shopping fun. It just isn’t coming from retailers. It’s coming from outsiders like social networks where products can be promoted by buyers’ peers. Its coming from magazine publishers who are going to attack with a vengence. They will not bog themselves down with operational concerns, they will not seek to compete in the traditional online marketing channels as internet retailers, they already have traffic, and they will build more through word of mouth and the nework affect. The good ones will get stronger and more powerful at a very quick pace. These sites will not hold inventory, they will not plow money into google keywords, they will send their qualified, engaged traffic to the online shopping sites, for a fee. Their margins will be in the mid double digits rather than the high single digits of transactional websites.

So when People Magazine realizes that their InStyle website should not look like this but should look like this then users will flock to the site. The magazine will be useful online. It’s already engaging to users offline. Conde Nast is beginning to get it and they have a bevy of content to expand this vision. Scripps gets it and has a powerful stable of multimedia content plays to bring to bear.

These are the companies that help build desire, that help create buzz, that engage their customers through their multiple channels of content. While online retailers are homogenizing their shopping experiences the here-to-fore dormant giants that help build desire, and the new age social networks that have created communities that spread desire are preparing to close in and take the high ground. The high ground of traffic and lead generation. And retail shops will pay, a lot, for that traffic and for those leads, and thereby label themselves as low margin impediments to purchases rather than the high ground of creating desire and providing true value.

It might take a couple of years for this to play out. But I see this as something that will play out. And major retailers with a sense of initiative (and budgets) have a tight window to decide on whether they will invest in content, features and partnerships to bring the “fun” back to shopping. Or resign themselves to being transaction vehicles with an ongoing operational focus.

I am attending the eTail 2007 conference this week. The first session of the day just wrapped and as I take a chance to go to the Starbucks in the lobby and hop online I have a chance to see the battle weary but happy faces of the ecommerce merchants around me. It’s Valentine’s day and for several of these merchants its the first chance to rest after the back to back to back holiday build up from Thanksgiving, to Christmas through today. Talking this morning with Mrs. Fields Cookies I see first hand the work that ecommerce merchants put in to fulfill their customers requests. Their busiest days were over this past weekend, both Friday and Monday in particular. Last minute shopping has always been popular, toss in shipping constraints and the fact most people shop on workdays from the office computer and an internet retailer can generally map out their busy days in advance. The cookie impresarios at Mrs. Fields mentioned that they see their peak volume generally between 11am and 2pm. The times around lunch makes the cookie hearts grow fonder it seems. Valentines day represents their second busiest time of year and today they can finally sit back and see how their cookies translated into dough.

As per the conference itself: The kickoff speech to this year’s conference was particularly relevent. I say that partly because it was a great presentation and partly because it echoed a recent post in our blog. Chris Anderson, the Editor in Chief of Wired Magazine explained that niches are the new mainstream and that retailers needed to adjust. I couldn’t agree more. Richer and more engaging content presented in new and compelling formats is vital for ecommerce merchants who want to seperate from the pack and get results. Stephanie Acker-Moy from Hewlett Packard followed that speech up with one about using content development to enhance the brand experience. By blending rich content and feeds together to present customers with fresh and compelling content a retailer, or any website for that matter, can stay relevent while also being able manage the new level of content effectively.

One overriding subtheme to this event, echoed in several conversations I had with other merchants is that the operational requirements of ecommerce are still overwhelming. There is the feeling that the day to day issues of updating content, dealing with logistical issues, taxes, returns, inventory, merchandising etc has sapped a lot of the creativity and joy from the long time ecommerce vendors. This has perhaps been the reason that ecommerce sites have mostly evolved to look the same, with little innovation the past few years. Its lulls like these – where innovation gets curtailed to deal with operational issues – that present opportunities and rewards to those who do something different. I think the ecommerce space has been in their current innovation lull for too long. I have some sense of where things are going next. For that you will have to wait for my eTail wrapup post but I would like to hear your thoughts on whether there has been a lull in innovation in ecommerce and what will shake things up in the coming year.

This past weekend’s SoCon07 event was a big success, with 100 people attending the Friday night dinner session and well over 200 people attending Saturday’s conference -held at Kennesaw State University. The Friday night dinner session consisted of table discussions moderated by some of Atlanta’s leading internet thought leaders, such as Jeff Haynie, Sanjay Parekh, Leonard Witt, and others. I had the pleasure of joining them as a table moderator for the discussion on “Building Online Communities”. It was a spirited discussion, not just on popular online communities such as MySpace and Facebook, but also what can be done in a closed environment such as within churches and businesses. There was an interesting social networking application that was created right here in Atlanta called Yaplet, that has some very interesting use cases in online shopping as well as general information sites. It creates a new niche in contextual chat that I think has some legs. Many thanks to Christina and Matthew Might for bringing their thoughts to bear on the discussion, as well as all the other attendees for taking the time to share their expertise and interests.

The Saturday event was kicked off by Leonard Witt and Sherry Heyl, and was then headlined by Chris Klaus whose past efforts in internet security helped put Atlanta technology companies on the map. Chris is now heading Kaneva which is doing some innovative work in creating a platform for virtual worlds. Like the “unconference” it was dubbed, discussions ranged from the esoteric to the mainstream. The main takeway for me from the event was that Atlanta’s internet economy is broad in terms of interests, and deep in talent. Many thanks to the people both in front of and behind the scenes who helped make this weekend a success.