Virtual Currency: an exciting new communications model in social media

I attended another social media seminar recently, hosted by Adknowledge. One of the most interesting developments is a new advertising model, which leverages consumers' love of online casual games. The new model of "Virtual Currency" is worlds apart from the type of "push" advertising that people find increasingly obtrusive in social networks.

The games, such as Mob Wars on Facebook and MySpace's Be A Tycoon, appeal across the spectrum of social media users, in other words they're mainstream, attracting large, valuable audiences.

Virtual Currency works through offering people rewards that enable them to have a richer experience in their favourite games. So, for example, in Mob Wars, they would acquire greater energy or weapons. It helps people do what they want, in the environment they want to do it.

Advertisers can offer virtual currency as a reward, in order to get people to do things that benefit their brands. It's like an exchange system. For example, advertisers can offer currency and in exchange, consumers would:

• trial a product
• sign up for more information
• subscribe to a service
• download an application
• take part in a survey

Thus, Virtual Currency facilitates multiple marketing tasks, including, lead generation, distribution, encouraging trial and purchase. Given that consumers are already in social networks, they'll also tell their fellow game players, generating additional "Earned" media.

I'm excited by Virtual Currency. As a way of communicating, it's in keeping with consumers' natural behaviour; it doesn't fight it or try to muscle in. And it takes brands to where the people are, in a natural and helpful way.

For more information, see the presentation below, delivered by Brett Brewer of Adknowledge:

Virtual Currency And Monetizing Social Media

View more documents from Markus von der Luehe.

Facebook Revises Terms of Service (again)

http://cruisin-mob.blogspot.com

Further to my last post, where I mentioned the difficulties Facebook has faced in monetising its offer, yesterday Facebook founder Mark Zuckerberg backed down on proposals to revise the Terms of Service, following strident protests by members.

The revised terms would have allowed the site to keep a record of users' details and updates even if they left the network, which raised privacy concerns.

Facebook continues to face the conundrum of how to offer advertisers the benefits of access to over 175 million consumers worldwide without raising the hackles of its members. Its recent foray into user polls may still be a sticking point. AT&T and CareerBuilder.com have experimented with polls on people's home pages and the service is something Zuckerberg is keen to expand.

Marketers can also use Facebook Lexicon to track the topics users are talking about (e.g. via public posts on the Wall).

I think Facebook is potentially a fantastic source of market research information. But Facebook users are characteristically militant and prone to protests when they feel advertisers, or the Facebook founder, infringe on their liberties. It is their site, after all.

The Digital Tipping Point: The Future of Branding and Social Media

I attended a conference in Sydney yesterday called The Digital Tipping Point: The Future of Branding and Social Media.


That we have reached a digital tipping point is abundantly clear. IBM has already proclaimed that there will be more change in the next 5 years than there has been in the past 50 years, thanks to digital technologies. User time spent on social media increased by 43% in 2008 compared to 2007 (Pew Internet and American Life Project). Facebook has over 220 million members worldwide. Niche interest based networks are rapidly proliferating.

The future of branding and social media, on the other hand, is less clear-cut - or at least, success is not evenly distributed. MySpace, for example, has had much more success in monetising its offer than Facebook. To some extent this is a reflection of the different uses of these sites, Facebook being about connecting with friends and MySpace about discovery and fame.

But, as a rule of thumb, social media are more successful at carrying brand messages if they were designed to do so from the offset. Otherwise, established communities tend to react against the introduction of commercial messages because it feels to users as if the space they have taken ownership of is being invaded by an uninvited third party.

A growing number of emerging sites are both consumer centric and fiercely commercial, leveraging the insight that consumers are happy to use and manipulate brands to their own ends, be it self-expression or getting support for their passions.

Venture capitalist Brian Garrett, MD of Crossout Ventures, pointed out some new players: Social Vibe, Loopd and Flipgloss. While they may not be delivering great numbers yet, in terms of consumer eyeballs, these new models show commercial promise.


With companies placing greater emphasis on meaningful CSR, e.g. Kraft's "Give 6 Meals to People in Need" campaign, Social Vibe helps people get brand sponsorship in suppport of their causes. Brands, such as Colgate, provide artwork which people post to their blogs or social media profiles in support of their cause. The more views the profile gets, the more money Colgate and Social Vibe donate.

Extreme sports social network Loopd lets brands "sponsor" members - through providing branded stickers and discounts. The budding skateboarder feels like a sponsored pro, while brands get free viral marketing and an e-commerce channel.

Flipgloss is an intriguing proposition. Noticing that most glossy magazines don't migrate online very well, the developers set out to create print advertorials specifically for the online space. Instead of using small images and crowding the web page with text, Flipgloss has big muthas of images - looking just as delicious as the cover of Vogue. It then uses overlays (hover your mouse over sections of the image and contextual information appears). By clicking on these overlays, people can access information on where to buy products, or even buy directly. Flipgloss is not just a site, it's a widget which people can post to their own profiles.

It's now much easier to get your brands on to social networks, thanks to Adknowledge, which describes itself as a social applications ad network. Marketers can thereby take advantage of the thousands of applications that have already been developed, such as video applications. HBO, Neutrogena, 3 and Coldplay have already done so.

Adknowledge's President is Brett Brewer, the Co-Founder of MySpace, who knows a thing or two about social media marketing.

Oh, and he predicted that by 2015, the last major metropolitan newspaper will fall.

When it comes to CSR, listen to someone who cares

Coca-Cola Manual distribution/Flickr

In highly competitive, increasingly commoditised markets, in which consumers have become more sceptical, powerful - and caring - one of the new battlegrounds is CSR, or corporate social responsibility. CSR has become common practice by multinationals, so, for initiatives to stand out as something more than corporate flagwaving, they need some heart.

Some companies are developing a more convincing social conscience through listening to people who really care. By keeping an ear to social networks, brands can harness the passion and ideas of people outside the usual corporate box. They can access innovative, fresh thinking and help consumers rally behind a genuine cause.

When blogger Simon Berry pursued his ingenious idea of leveraging Coca-Cola's huge global distribution network to improve healthcare in developing countries, the company took note. Berry was struck by the preposterousness of the fact that people without access to basic medicine could easily get hold of a can of Coke. For many years, he lacked the tools to realise his vision for a new medical distribution model, then he spotted the potential to organise support through social networks. He created a Facebook group, which grew organically and currently has 4,473 members and counting.

As the ColaLife campaign gained traction, garnering the support of the BBC, Coca-Cola's Global Director of Stakeholder Relations, Salvatore Gabola, invited Berry to their European headquarters to discuss his idea (see Simon's blog or WorldChanging).

On 6 May, a Business Call to Action event, supported by the British government and the UN, highlighted inspirational development initiatives by big companies, including Coca-Cola, Citi Group, Diageo, Microsoft, Reuters, Simitomo and Vodafone. A major UN meeting, scheduled for 25 September, will encourage further commitment from governments, businesses and the private sector to reducing poverty in developing countries.

To support the ColaLife initiative, which would distribute rehydration salts to poor people via Coca-Cola's network, refer to the the ColaLife blog, sign up to the Facebook or Google Group, follow the action on Delicious or Twitter, or post relevant images to the flickr group.

Social Shopping: Making Online Advertising Work

A new site, Rasba, co-founded by 17-year-old Miriam Brafman, succeeds in doing what Facebook's Beacon initially tried - and failed - to achieve: the right balance between online shopping, advertising and social networking.

As I've highlighted previously, Beacon failed to have an opt-in system, so people were revealing their purchases to others without realising it. But, I believe, despite the fallout, Facebook had the right idea, executed wrongly.

Rasba not only avoids antagonising users through ensuring opt-in from the start, it makes buyers advocates of the advertising model, through leveraging social - and real - currency. They earn kudos and commission when the brands they've bought, displayed on their profile pages, are subsequently purchased by other members.

Just as 'gifting', 'begging' and feedback features on social networking sites facilitate social exchanges, other smart features of Rasba include wishlists and newsfeed-style updates on what their friends are buying. And brands get their own customisable storefronts within the website - it's win-win all round.

For teens, shopping is fundamentally a social event - whether it's spotting what the cool kids are wearing (nonchalantly, of course, and passing it off as your own style), consulting friends in the changing room, or via mms, or getting the verdict from the crowd on the way to a big night out. It makes absolute sense for e-commerce sites to leverage this. Teens' desire for acceptance, belonging and killer style is no less online.

Business, Meet Web 2.0

I've been toying with the idea of buying a house lately, but I'm scared. Not of spiralling interest rates, or even global economic meltdown. Though I laugh in the face of impending financial ruin, I scream, inside, at the prospect of filling out inscrutable application forms.

I came across the cartoon above by Eric Burke the other day on ExperienceCurve, which illustrates the problem. I'm spoilt with exquisitely simple, tactile design from Apple, with user-friendly apps on Facebook, with Open ID that lets me use the same ID to log on to hundreds of websites and with at-a-click search from Google (though I look forward to more contextual and visual search, as it develops). But, for the most part, when I encounter a corporate digital interface, it’s arcane, requiring me to perform bizarre rites and baffling repetitions.

Staff are equally bamboozled by their own systems. Too often, internal corporate architectures deter employees from doing their jobs effectively, burying data or making it close to impossible to conduct relevant queries. This drains morale out of the workplace, it makes training tricky and it delivers sucky customer service.

Many systems are old, entrenched and expensive to replace. But, their time is up. They've simply got to be overhauled. It's more urgent now than ever because people are getting used to the user-friendly, rapid interfaces of Web 2.0.

Various studies suggest that businesses are increasingly persuaded of the importance of social networking. A survey conducted in December 2007 by IDC reports that 50% of medium to large businesses across the Asia-Pacific region see Web 2.0 as a business opportunity, while around 8% view it as a threat.

Research skewed to the US and Europe indicates an even greater receptivity to business 2.0. Research by the Economist Intelligence Unit (EIU), covering North America (39% of sample), Europe (26%) and Asia-Pacific (26%), indicated that 79% felt Web 2.0 technologies could add to their companies' bottom lines.

But, their conviction too often lacks mettle, or direction, or any tangible output. EIU research suggests that many executives are rather hazy when it comes to the specifics of just how Web 2.0 can help business. For example, just 39% recognised 'tagging' as a way to leverage group opinions and they found it hard to spot practical applications.

Some businesses really do bite the bullet – ABC has created an island for staff in Second Life and Telstra is also present. In 2007, Westpac trialled the virtual world for staff training, The Australian IT section reported. But, such efforts do little to encourage other companies, as virtual worlds are still seen as rather extreme and pointless by many executives.

I suggest, keep it simple, reflect how staff are already using Web 2.0 in their lives and start with social networks.

New 'Social CRM' companies are helping to bridge the gap between social networking and business data, delivering relevant, usable marketing data to help, not hinder, staff. The name of the game is 'social enterprise', or 'socialprise' (or any other witty juxtaposition or combination that might grab headlines!)

Kintera combines online forms with offline data, although its website is, unfortunately, rather complex, with too many options and no succinct positioning. In other words, I gave up and moved on, rather than navigating through the site.

InsideView seems more straightforward, at least the offer is clear from the website. Its SalesView platform helps sales people access both business data and data that's publicly available online. It meshes the information together in a cohesive way, helping sales people spot opportunities and deliver better customer service.

WorkLight brings social networking to internal communications and aims to put to rest corporate security fears. Its Workbook tool is a secure overlay for Facebook, combining Facebook's look and capabilities with the controls needed in a corporate environment. Employees can use Workbook to communicate with colleagues, publish and receive company-related news, create bookmarks and share material exclusively within the organisation.




In addition, WorkLight provides a range of applications that allow staff to perform tasks like filling out purchase orders, or vacation requests, in familiar environments, either on their desktops, or through interfaces like Netvibes, or iGoogle's personalised homepage, which more people are now using in everyday life.

Not only social networks, but online applications and open source, collaborative techniques can now easily be applied in business.

Too many corporate Firewalls are still raining fire and brimstone down upon digital 'invaders' like Facebook, which, they believe, threaten productivity. More than half of the companies surveyed by IDC said they do not allow employees to access typical Web 2.0 services from work – the like of social networks, Internet video and virtual worlds - because they view such services as a waste of the employee’s and the company’s time. (Yet half said they saw Web 2.0 as a business opportunity.)

But, companies would do well to balance the odd wasted minute against the potential gains of embracing the social Web in enterprise.

So, throw down the ramparts and send a virtual hug to the digital world. Or just poke it. But take a look at what's out there. What you don't know can hurt you.

Hack your iPhone with Steve's blessing

Facebook started the trend for encouraging third party applications, opening up its platform to outside developers last year. The site went ballistic with a flurry of user-friendly apps from Scrabulous to Vampires making Facebook the place to be. Google knew a good idea when it saw one and developed the OpenSocial system, allowing people to develop common APIs across multiple social networks. Now Apple has joined the party, legitimising iPhone hacks with its new iPhone Development Center for webapps.

Apple is maintaining a greater degree of control, inviting developers to submit their applications for consideration. Only those approved will get listed in the iPhone webapps library. So far, some applications that have made the cut include the drawing programme iDoodle, Alternative Channel TV, the game Gumball Bingo and a handy Tip Calculator for when you and your mates are totally incapable of figuring out the bill, let alone the tip.

Apple is also using digital signatures that can be traced to developers. The company admits that this means the system is not "totally open". Even so, the new SDK is good news for geeks everywhere. I wonder if existing apps like the pocketguitar will make the list? Then again, who cares, as long as there's a burgeoning universe of cool apps out there on some website, official or not.



Shinya Kasatani's pocketguitar

If you build it, will they come?

The Rise of Branded Social Utilities

Marketers can't assume that consumers will flock to their microsites, however lovingly crafted and entertaining they may be. Why? Because people have other places to go, people to see. They're on Facebook, or Bebo if they're in the UK, or perhaps Orkut, in Brazil.

Some brands are realising that they need to go where the punters are and - provide something they'd actually use! Branded social applications are springing up online, albeit rather tentatively. Their success varies according to their usefulness, flexibility, entertainment value and relevance.

Forbes created a handy stock tracker application for Facebook - but made the mistake of forcing users to leave the social network for the Forbes site, prompting criticism from online reviewers.

adidas, sponsor of Major League Soccer in the US, has been more successful with its music widget, which helps fans do what they love doing - participate in and celebrate the soccer seasone. The application enables soccer fans to elect team songs, create audio messages and add them to their MySpace page.

Coca-Cola's new widget www.cokebubbles.com for Joost Internet TV lets online viewers chat about programmes. Of course, you used to be able to come to school/work and talk about last night's essential viewing, but now that every niche interest is indulged online, no one wants to talk to me about Afterworld, or Quarterlife (a web series by the guys behind thirtysomething, now showing on MySpace TV). At least I can find people who watch Heroes.



If you're a branded widgets virgin, you can learn a lot from already successful social utilities. Check out Adonomics for the top Facebook applications. They tend to fall into the following categories:

- action-based communication (poke, pinch, hug - do it on Facebook if you haven't already!) e.g. SuperPoke!
- discover/share content e.g. iLike film network
- gifting and begging e.g. Free Gifts
- self-expression e.g. Graffiti
- causes e.g. Causes
- trivia, lookalikes, fun e.g. Compare People, Quizzes, Food Fight

But bear in mind that what works on Facebook might not work on a more serious, or career-oriented network. Throwing virtual sushi at potential employers doesn't always wash.