Tuesday, February 22, 2011

You Have Zero Friends, Google - But One Secret Social Weapon

This post was also published in VentureBeat.

One of the charms of Google’s once and future CEO, cofounder Larry Page, is that he’s never seemed particularly worried about being liked.

But Google is very worried about knowing what you and your friends like — a domain of data that Facebook has so far dominated. And under its brash new leader, it could be gearing up for a real fight with Facebook over this priceless information about consumers’ preferences.

And Google has a secret weapon in the like battle that no one seems to be talking about.

It has been almost a year since Facebook introduced its Open Graph API in April 2010, offering websites social plugins to enable logins, let people easily “like” content on the Web, show which of your friends were on the site, what your friends recommend, and even what activities your friends have performed on the site. The login and like plugins have been enormously successful for large, popular sites like The Huffington Post, CNN and CitySearch.

However, the Internet is vast, and for the rest of the Web, it is very unlikely that your friends have had any activity at all. The average person has about 150 Facebook friends, not all of whom likely share similar interests. So when you show up at, say, a website for a new movie, the chances are infinitesimal that one of those 150 people has performed any type of activity that would register on Facebook.

As the South Park episode making fun of Facebook put it, “You have zero friends.” Even on large sites, this engagement can be irregular: Out of my thousand Facebook friends, only one has currently shared an item on CNN.com.

This gap between what your friends have liked and how you can find things that are interesting to you presents an opportunity for Google to finally inject itself into the social sphere. Google is now talking about how its new social project, reportedly called Google +1, will leverage the “interest graph,” where users can find not just what their friends like, but what people similar to them like.

Google’s new social strategy is apparently hinged upon its bargain-basement acquisition of Slide for a reported $182 million, the once-hot social-apps startup. For that price, Google got Slide founder Max Levchin, who’s reportedly leading Google’s social efforts. Slide, originally a widget for photo slideshows on MySpace, jumped on the Facebook-apps bandwagon, but its social games like SuperPoke rapidly faded as Zynga and others overtook them.

As I’ve argued before, if Google wants to buy failing companies to bootstrap its social efforts, it should acquire MySpace, as I pointed out in December. MySpace was actually an innovator in the interest graph, has almost as many uniques as Twitter, and is still a top music destination that dovetails very well with Google’s Vevo and YouTube properties.

But Google has one secret weapon in the battle for likes on the Web. And that’s Like.com.

Yes, Google owns that domain, through the acquisition of visual-search startup Like.com last year. Google launched Boutiques.com with Like’s technology, but hasn’t done anything with the Like.com site.

Could Google turn Like.com into its social supersite? Facebook is attempting to trademark the word “Like”. But since Like.com preceded Facebook’s usage by many years, any attempt to challenge Google will end up in the kind of bruising battle Page seems to relish.

Rather than the wonky, message-board inspired name of Google +1, Google should seriously consider pushing the “Like” moniker. Who cares what your sister and your college freshman year roommate like at Gap.com and CBS.com? Google, through its trove of search data, knows far more about what you will like. And it already owns the perfect website for those insights. What’s not to like?

Friday, February 18, 2011

Interactive TV Has Finally Happened - Just Not on TVs

This post was also published in VentureBeat.

Ever since Yahoo Connected TV launched at CES in 2009, there has been a steady stream of TV app platform launches, including Google TV, Samsung, Broadcom/Adobe, Boxee, Blu-ray players, MythTV, and even Microsoft Xbox. However, there haven’t been any breakout apps for Internet-connected TVs — so-called “smart TVs.”

And the dirty secret? The TV apps out there are rarely used. I know this first-hand: At Transpond, the social apps-developer I founded and sold to Webtrends last summer, we made a couple of connected-television apps for one of the major broadcast networks, and the apps had almost no traction.

So what happened? It’s pretty simple. TV apps are cumbersome and awkward to use. Using a remote control to navigate across a bunch of app features is slow and confusing. In the process, you annoy everyone else watching the TV. This is the reason that Apple is not supporting apps on the Apple TV, even though it is essentially an iPod Touch with an HDMI port instead of a touchscreen. Games are the only apps that people want to run on a big screen, and they usually want to run highly interactive, multilayer games that are well beyond the capabilities of connected televisions. In addition, delivering TV apps required implementing a ragtag assortment of quirky APIs from players ranging from Yahoo Widgets to proprietary offerings from Blu-ray manufacturers.

Instead, people are using their smartphones, tablets, and notebook computers for all of the much-ballyhooed interactive TV scenarios. Who’s that actress on Entourage? Let’s look it up on IMDB. What’s that song at the beginning of Gossip Girl? Let’s Shazam it. What are people saying about this episode of Glee? Let’s search Twitter for #Glee. Even the onscreen guide, the one staple interactive unit that you’d expect to run on the TV screen, is moving to your palm, with apps such as the Comcast’s Xfinity Remote iPad app that lets viewers browse TV listings and even program their DVR.

There is an entire category of TV engagement apps emerging on mobile devices. ABC and Fox have launched iPad apps that can identify what TV show you are watching, using audio soundprinting technology from Nielsen that works like Shazam but for TV shows, and offer up options to interact with the show. GetClue lets viewers “check in” to TV shows and offers a recommendation service based on people’s expressed preferences.

The only popular connected-TV apps are the ones that let you select video and audio content on demand, such as Netflix, Amazon Video on Demand, and Pandora. Even these apps are now being replaced with a new generation of mobile devices that can transmit what they are playing onto television screens. Much like using the iOS Remote app to play iTunes music on a stereo with an AirPort Express, Apple’s AirPlay will stream video from any iOS device to a TV with an Apple TV set-top installed.

It is not a huge leap to assume that Google will iterate on its failed Google TV launch and make it so that Android devices can easily stream video to TVs. Vizio already announced at CES last month that their new tablets will be able to seamlessly hand video streams over to Vizio TVs. Even Intel got in the game at CES, and launched WiDi 2.0 which will enable mobile devices and notebooks to stream full 1080p HD video to any TV with a WiDi adapter.

With flat panels relatively commoditized, TV manufacturers attempted to differentiate with connected-TV features and 3D. However, the market has moved and the real differentiation is offering interactive features in the remote control. When the core differentiator for TVs becomes the controller you hold in your hand, Apple becomes a very scary competitor — and Google looks more like a friend. TV manufacturers should seriously consider bundling Android-based controllers that can run engagement apps and transfer streams to their large screens. It’s either that, or watch their customers change the channel once and for all.

Thursday, February 17, 2011

Why Most Facebook Marketing Doesn't Work

This post was also published in ReadWriteWeb.

For almost four years, since the Facebook Platform was launched, I have been involved in delivering Facebook apps for top brands such as CBS, NBC, Lifetime, Universal Music, Visa and more. Here's what we have learned doesn't work, and more importantly, what does work.

Deep Campaigns Don't Work

First, deep campaigns don't work. Digital agencies love deep, expensive campaigns on Facebook, with tons of pages, interaction, and art. It fits in with how agencies build microsites and websites, and justifies the $100,000-plus price tag that they like to charge. Examples include lightweight games, prediction contests, treasure hunts where you include friends, and such. Unfortunately for agencies and the brands that drop a lot of cash, Facebook users decidedly don't like deep campaigns.

They do not like to spend 20 or 30 minutes on a single brand's page, unless they are consuming innovative, funny, or exclusive content. So a travel site looking for a long time spent on a page should not put up a treasure hunt on a world map where you invite your friends and can together find great prizes after exploring cities. Sounds good in a pitch meeting, but it results in abysmally numbers of active users.

Facebook users are very sophisticated, and there is no way a single campaign is going to compete on game mechanics with CityVille. If you want to build CityVille, it might work. But, even Netflix pulled their Facebook app. You're better off putting up a bunch of funny videos from around the world and leave it at that.

Lots of Apps on One Tab Don't Work

It is easy to think of a Facebook tab like a Web page, and throw a bunch of features on it - such as a poll, gifting, and some videos - all on one tab. However, most users do not show up on a Facebook tab like they do on a Web page. They are usually coming in by clicking on a page's newsfeed posting ("What kind of traveller are you? Take the quiz!"), a friend's newsfeed posting ("I'm a cranky traveller! What kind of traveller are you? Take the quiz?"), or a Facebook ad ("Find out what kind of traveller you are!").

Now, if after clicking on one of these links a user is dropped into a Facebook Page tab with eight different things on it, they are not going to see a quiz immediately and move on. There should only be one engagement feature per tab.

Sweepstakes Don't Work

After an initial onslaught of Facebook sweepstakes promotions, marketers are learning that sweepstakes have very low conversion rates and almost no viral uptake. We're also learning that they attract unengaged users who are there for the prize rather than a relationship with the brand.

Facebook users like to click around and look at stuff, and absolutely do not like filling out forms. We have run highly promoted sweeps campaigns for major artists that included things like backstage passes and a limo ride to the show that had abysmal conversion rates. There is absolutely no incentive to make sweepstakes social.

Why would you invite more people to join a sweepstakes? It reduces your own chances. Have you ever seen a "I just entered a sweepstakes and you should to" posting on someone's wall?

One attempt to increase viral spread in sweepstakes is to offer more prizes when there are more entrants, but all that does is confuse users with conflicting agendas. There is a disincentive to invite people since it reduces your chances of winning, but if enough new people join up perhaps you can win something else... "Ah, too confusing, I'm going to watch videos instead."

Photo and Video Contests Rarely Work

A lot of brands like to do photo and video contests, but unfortunately they do not have the user base that likes to submit photos and videos. Travel and photography brands? For sure. Mobile carrier? Beverage brand? Not likely. Even clothing brands can't pull this off.

Uploading a photo or video is a big investment on the part of the user, and they do not expect to do it for the vast majority of businesses. These campaigns also require the labor to moderate the submissions. If you must run a photo or video Facebook campaign, the best way to do it is actually NOT in an app.

Instead, have users upload the photos and videos to the brand's page, and moderate them there. Then have users get their friends to Like the photos or videos. This way, the campaign leverages all of Facebook's viral channels around photos - when the user uploads the photo, when they Like the photo, when their friends like or comment on their photo submission, it is all highly likely to show up in their friends' feeds, drawing traffic. The great thing about this is that it is easy to do for free, since using all of Facebook's photo and video features are free, and users get to use the known Facebook photo and video interface, which increases conversions.

Like Blocks Rarely Work

Like blocking, where a user has to "Like" a Facebook Page in order to access a feature, typically has a 50% or more drop off rate, even when there is something there that is actually worth liking the page to get, such as exclusive content or a great coupon. Putting a Like block on basic content will almost guarantee a 100% drop off rate.

Be very, very selective about Like blocks and be sure to tell the user that it is worth it to them. A Like is the mailing list opt-in of the Facebook world, so be willing to offer up some goodness and know that most will opt not to Like.

Extended Permissions Rarely Work

A brand on Facebook should be like a casual friend or neighbor and not try to suck people into heavy levels of interaction. What do you do with a friend? Comment on their photos, like their status, vote on their outfit.
Asking the user for a laundry list of access to their profile usually results in a 30% or more drop off rate, and that is for well known brands that they trust. Do you really need to know their relationship status? Generally a brand already knows its demographic - does a youth-oriented clothing brand really need to validate that it is 16 to 25 year-old women that are engaging with the brand?

So while it sounds good to ask for extended permissions, do the math and monitor the drop off rate to ensure that it is worth it to you, otherwise the overall campaign ROI may not turn out the way you want, especially if the campaign is being graded on number of engagements.

Unbranded Apps Don't Work

It's got to look good, and be on brand. In the early days of Facebook, a brand could put up a basic presence with some turnkey apps, and users accepted that. Now that Facebook is all grown up, a brand presence needs to be on par with its website. Facebook users are savvy and will judge your brand in comparison to the best they've seen.

Dedicated Facebook Storefronts Kinda Work Right Now, But Soon Won't Work

Dedicated Facebook storefronts are the rage on Facebook right now, but they are unfortunately not integrated with an e-commerce site's existing payment and inventory systems, and are therefore a logistical nightmare. The best bet right now is to list featured products on a Facebook Page with click-thrus off of Facebook to the e-commerce site.

Now that Facebook is supporting iFrame tabs in pages, an existing e-commerce site can be skinned to fit in a 520-pixel-wide Facebook Fan Page, thereby integrating existing payment and inventory systems into the Facebook Page.

So What Does Work? Promotions and Consistent, Lightweight Engagement

Make sure your fans get something in return for liking your page with promotions likes offers for fans that they can easily redeem. The more lucrative the deals offer, the more sharing with friends with happen. Fans want things like exclusive products/services, drastically discounted prices akin to Groupon type deals, and early notification and registration for upcoming events, ideally exclusive to fans. Promotions should make the fan feel like they are a brand insider, not just a standard consumer.

A big secret of Facebook marketing is that it is easy and cheap to drive promotions using ads targeted only at your fans that link to landing tabs that deliver the offer and encourage fans to share to their newsfeed.

A brand on Facebook should be like a casual friend or neighbor and not try to suck people into heavy levels of interaction. What do you do with a friend? Comment on their photos, like their status, vote on their outfit. These types of interactions take seconds, not minutes, and definitely not hours.

A brand on Facebook should offer their users regularly updated, simple to interact with engagement features. Each of the engagement apps should be fully branded, and run in a separate tab with traffic driven from wall posts, newsfeed and Facebook ad units to increase engagement. Start with a personality quiz. Then two weeks later put up a poll. Then try a trivia app. For special events, put up a gifting app for Valentine's Day, or for the holiday season, a holiday song card.

Some brands, like media properties and well-known consumer brands, get an immediate fan base for this type of lightweight engagement. For the rest, building a fan base on Facebook is no different than building a mailing list in the previous generation of the Internet. It takes consistent engagement, and builds over time.

Methods to accelerate growth include tying Facebook ad campaigns with engagement apps and driving traffic from the homepage. The apps should still be lightweight and fun, with the conversion goal of getting the user to like the brand.

The point is to regularly put up new, fresh engagement features that are easy and fun for users to interact with, that they will want to post to their wall and share with their friends. Then users will interact with your brand just like they interact with their friends on Facebook!

Tuesday, February 15, 2011

How Microsoft's Nokia Payoff Could Take Apps Global

This post was also published in VentureBeat.

The mobile operating system wars are a battle for the future of computing, not a battle for the future of phones. Former Morgan Stanley analyst and newly minted venture capitalist Mary Meeker highlighted this fact in her latest Mobile Internet Trends presentation. The key trend: Smartphones and tablets together outshipped PCs for the first time last quarter.

The good news for developers: The tumult in the mobile market may mean that they have more leverage with the creators of new platforms than they ever had with Microsoft during the era of Windows on the PC.

What escaped the legacy mobile industry is that phones are no longer phones but are in fact full-fledged computers that required full-fledged operating systems. Computer hardware and software? That happens to be Silicon Valley’s specialty. No wonder that existing players were not able to compete with the likes of Apple and Google, the duo now dominating the smartphone category with their modern mobile operating systems. Even simple feature phones — the voice-and-text-capable models that still vastly outsell smartphones — can’t escape this destiny. The smartphone of today is the feature phone of tomorrow.

Microsoft jumped late into the game last year, doing what it does best — copying and arguably improving the iOS and Android operating systems into Windows Phone 7. It is now replaying its strategy from its successful Xbox playbook of spending hundreds of millions, if not billion, to gain adoption of Windows Phone 7.

Operating system wars are battles for distribution and developers. Distribution can be bought, but developers are fickle and hard to budge. The current modus operandi for a typical mobile developer is to write an app for Apple’s iOS — the underpinnings of the iPhone and iPad — first and see how it does. If it gets some traction, next comes a quick port to Android. Once these two platforms are successful, a developer may wait for Microsoft to show up and pay up some of its market-development dollars to port to Windows Phone 7, but it had better be a lot of dough to be worth the trouble.

For example, the very popular mobile game Angry Birds is slated to ship on Windows Phone 7 in Q2 2011, long after its massive success on iOS and Android. The only thing Microsoft can do to shorten this lag is to increase Windows Phone 7 distribution.

As simple as this scenario sounds, the downside for iOS and Android developers was that international growth has been hampered. Large swaths of Europe, Asia, and Africa are dominated by Nokia handsets, and Nokia was unable to deliver a modern operating systems despite years of effort. Even though HTML5 offers a some amount of portability across devices for developers, Nokia had very limited support for HTML5 relative to the modern Web browser in iOS and Android.

It’s no shock that Nokia failed to implement a modern smartphone operating system. Its attempt to leapfrog its Symbian legacy was Meego, a joint venture with Intel. Predictably, it created bloated, non-usable software in an effort reminiscent of Taligent, which was IBM, Apple, and Motorola’s efforts in the 1990s to create an operating system that could compete with Microsoft Windows NT and NextStep.

Here’s a newsflash to big technology company executives: if one team can’t build a viable operating system, putting them together with other teams that also couldn’t build a viable operating system and having them report to multiple entities is not going to solve the problem. I’m sure it makes a lot of sense in strategy meetings and everyone feels good about joining forces, but the end result is very predicable to any engineer.

In an ironic twist of fate, HP/Compaq, Microsoft’s staunchest ally, acquired Palm last year and last week shipped a slate of new phones and tablets based on the Palm operating system and ARM processors. Nokia was indeed a “burning platform,” and the last remaining fire truck was Palm. Nokia did not move aggressively enough against a leaderless HP to snap up the last remaining chess piece in the smartphone wars. HP is not likely to succeed as it has always relied on Microsoft for its developer community and is building its own hardware in an attempt to replicate Apple's distribution, but without Apple's economies of scale.

Life would be simpler for developers if Nokia had adopted Android, making the mobile-OS market a two-horse race, but Microsoft intervened. Last week, Nokia folded its hand and opted to use Microsoft Windows Phone 7 as its primary smartphone platform in exchange for large payments in cash and in kind from Microsoft. Microsoft is attempting to guarantee distribution for its new mobile operating system, and is betting that once it locks down distribution, it will be able to attract its legions of developers to Windows Phone 7. The hurdle for Nokia is that it has now effectively been reduced to a commodity hardware vendor in the smartphone market, and it must focus on improving its clunky handsets and funky touchscreens to compete with stunning Windows Phone 7 devices from the likes of HTC and Samsung.

The big question is whether the promise of worldwide promotion with Nokia will push developers to support Windows Phone 7 in addition to iOS and Android. Microsoft Windows programmers are cheap and widely available to do porting work, and Microsoft will still spend a lot in market development dollars to convince developers to port their software, much like they did for the Xbox. This is a strategy that might take a while to bear fruit, but Microsoft is playing for the long haul. It must save its Windows franchise from becoming eclipsed by a wave of mobile devices, and will keep spending as much money as it takes to secure a position in the next wave of computing. With Microsoft’s dollars and Nokia’s global reach, there’s now a third way to cash in on the global apps gold rush.

Monday, February 07, 2011

Ariana Huffington is Right, and Rupert Murdoch is Wrong

This post was also published in VentureBeat.

In the past week, we saw two moguls splash out big money on online content. News Corp. CEO Rupert Murdoch revealed he’d invested $30 million so far in developing The Daily, a subscription-only magazine for the iPad. And AOL CEO Tim Armstrong plunked down $315 million for Arianna Huffington’s Huffington Post.

What a contrast on the day of the Super Bowl: Murdoch (pictured left) took out a big-bucks television ad for The Daily during the football game (admittedly on his own Fox network, so he probably gave himself a discount). Meanwhile, Huffington (pictured right) and Armstrong got priceless free publicity as news of their deal roiled the Internet.

Could you ask for a better example of the difference in mindset between old media and new media? Take the top-down, orchestrated launch of The Daily. The reality didn’t match the fanfare: Short of must-read articles and clumsily walled off from search traffic and social media, The Daily — essentially a glossy magazine produced on a daily schedule — is the wrong product for the media future.

The reality is that people are not reading magazines because they are magazines, not because they are on paper. What people are reading is online media, whether you call it a blog, a website, or “content.” You are Robert Murdoch’s problem, since you are reading this right now online, and not tomorrow in the Wall Street Journal — another Murdoch property — or in “The Daily” on your iPad.

Clearly old media does not get this blog thing, and as the saying goes, in the land of the blind, the one-eyed man is king. While a lot of folks have counted AOL out, under CEO Tim Armstrong’s leadership AOL is becoming the top new media destination. The Huffington Post acquisition comes on the heels of its acquisition of the popular technology blog TechCrunch, and adds to a vast stable of popular sites ranging from BloggingStocks to PopEater.

What is unique about the Huffington Post is that it is that is has massive scale — 40 million monthly uniques — and is segmented across numerous verticals such as news, style, business, media, and even divorce. These high-traffic verticals will bring tremendous scale to AOL’s advertising sales, as an ad unit can now be bought for The Huffington Post’s style and living sections, as well as, say, PopEater. All of a sudden, PopEater ad units are worth a lot more since they are part of an AOL-Huffington Post “lifestyle” ad package. In addition, the Huffington Post brings a well known brand under the AOL umbrella that, love it or hate it, actually means something.

The other thing a combined AOL-Huffington Post has going for it is talent. After having not run into AOL people in almost a decade, over the past few six months I find myself interacting again and again with smart, talented folks at AOL. At Transpond, the social marketing company we sold to Webtrends, my current employer, we did social media campaigns for AOL properties last summer. At the AOL campus in Dulles, I ran into an old friend who just moved there from Silicon Valley to run a division. After launching PostPost, a social newspaper that is a side project of mine, I got a call from a smart guy who just started running AOL News to talk about how social feeds are affecting news. Why are all these people going to AOL all of a sudden?

One name: Tim Armstrong. Armstrong, Google’s former head of sales, joined AOL as its CEO and put in place the verticalized content strategy. Armstrong is based in New York and knows the media industry well, and is attracting very strong talent in advertising product development as well as content.

For example, AOL’s Project Devil real-time ad units are very compelling to advertisers, equaled only by WidgetBox’s specialized ad units. It recently acquired Pictela which makes it easy for advertisers to syndicate content through ads. These guys are on fire.

Contrast Murdoch’s pick as editor of The Daily: Jesse Angelo. If you’re outside of the New York media bubble, you’re probably asking yourself: Who? Though young, he’s a News Corp. lifer, steeped in the print world and his company’s peculiar rituals of catering to its quirky, newspaper-loving CEO.

Compare that to Armstrong’s hiring-through-acquisition of Arianna Huffington, a global media brand and a mogul who can now go head-to-head with Murdoch himself.

And Murdoch’s iPad efforts? Well, AOL is launching with Editions, an iPad magazine which will automatically pick the best of all AOL’s content for you. Now add all of the Huffington Post’s output to that, and you’ve got the real tablet newspaper. This is in stark contrast to the The Daily magazine, a paid app for subscribers only.

The editorially curated content of The Daily and its ilk on the iPad will lose in a competition to blogs just like their Web analogs already do. AOL can feed all of its interesting content with personalization into its Editions iPad app and come out on top. For that matter, the Huffington Post has over 40 million uniques, is updated constantly, and already comes in an iPad-friendly mobile format. Which iPad “magazine” do you think the next generation of readers will flock to? The Huffington Post, now a familiar online brand, for free, or the as-yet-unknown Daily for $40 a year?

AOL has a ton of upside. It is currently valued at $2.3 billion, and $1 billion of the valuation is arguably based on its legacy dialup business. So its content business, in Huffington’s hands, is really only currently worth $1.3 billion. Wall Street is tough when a company sheds legacy revenue as it builds new revenue streams, or as Henry Blodget so eloquently put it, “crapped the bed for two quaerters in a row.”

But Wall Street should also respect comparables. Even though it declined, AOL’s quarterly ad revenue is $331 million. Demand Media recently went public and is valued at $1.6 billion on quarterly revenues of $65 million, so roughly the same valuation for a fifth of the revenue. There is no question that AOL has far better content than Demand’s content farms, which pay freelancers low rates for basic how-tos and other easily churned-out content. With the addition the Huffington Post, AOL will attract more large, premium advertisers.

What next? Let’s assume that AOL can’t or won’t buy the likes of Gawker Media or the Drudge Report. (Huffington has built a bigger and more “civil” — read: “advertiser-friendly” — version of both of those websites.) Given Armstrong and Huffington’s emphasis on reaching women online, logical targets include Sugar Inc. and Glam Media.

But even without bulking up further and just building atop the Huffington Post, AOL could be the tech company turnaround story of the 2010s, on par with IBM in the 1990s and Apple in the 2000s. Watching them crush the failing efforts of old-media brands to adapt to the world of iPad will just be the cherry on top.

Maybe Murdoch should have taken Huffington up on the chance to blog for her.