I read a really interesting blog today called “The iTunes personality test”.  In it, blogger, Rob Horning, offers his thoughts on PsyBlog’s report on a recent study (Rentfrow & Gosling, 2006), which paired participants in same sex and opposite sex pairs and asked them to get to know each other over six weeks.  The result of the study indicated that music is one of the most common topics of conversation when people are getting to know each other.  According to PsyBlog article,

“In the first week on average 58% of the pairs discussed music compared to 37% of all the other categories of conversation combined. Other categories included books, movies, TV, football and clothes.“

The study went on to compare how much musical tastes can be used as an indicator of personality:

“Participants were asked to judge people’s personality solely on their top 10 list of songs. This was compared to participants results on a standard type of personality test measuring the big five personality traits: openness to experience, extraversion, agreeableness, conscientiousness and emotional stability. Overall the results showed that music preferences were reasonably accurate in conveying aspects of personality.”

With the above findings in mind, Horning writes:

“The study led me to wonder, though, if you couldn’t develop an iTunes plug in that would interpret your personality to yourself by analyzing what you are currently playing or have played most often most recently along the lines of how Pandora analyzes music and makes recommendations…It would work like a horoscope, perhaps, making oracular pronoucements about how you are feeling and what you seem to need. When iTunes inevitably becomes a social networking tool, this horoscope could link you to other people who might be especially compatible with you. If music is proxy for personality, it seems a cinch to make networked iTunes libraries into a kind of dating service.“

I think Horning’s ideas on the future of music in social media are interesting.  One of the big challenges with leveraging music in social media at the moment is the ongoing DRM debate.  However, with Steve Jobs and Bill Gates both criticizing DRM in recent statements, hopefully, one day, this will change. In particular, ending the DRM debate would give social media companies, artists, and record labels the ability to use music to make money in more innovative ways through social media.  I, for one, would love to see Horning’s ideas come to fruition and “meet” people on-line whose iPod content most closely mirrors my own.

For a while now, I’ve been meaning to read the following book, which talks about the emotion of music:

This Is Your Brain on Music: The Science of a Human Obsession

Daniel J. Levitin

The author, Daniel J. Levitin, was once a rock music producer and is now a neuroscientist at McGill University in Canada.  Based on the reviews I’ve read, it sounds like theories explored within This is Your Brain on Music may provide support for Horning’s social media ideas about music and the stickiness of popular music social media sites like Pandora.com and Lastfm.com.  Take for example, the following excerpt from Salon.com‘s review:

Levitin proposes several reasons why music might have been important to humans over the long sweep of history. Making and listening to music is a social activity, and could thus have improved cohesion among members of the species. “Music may have historically served to promote feelings of group togetherness and synchrony” in ancient societies, Levitin writes. Singing around the campfire, way back in the day, “might have been a way to stay awake, to ward off predators, and to develop social coordination and social cooperation within the group.” …

Finally there is that most important thing about music: its connection to love, or, more specifically, to arousal and mating. Unlike birds and whales, humans don’t produce musical mating calls. But as social animals, humans need strategies to attract potential mates, and music might have been an important part of the process. “As a tool for activation of specific thoughts, music is not as good as language,” Levitin writes. But “as a tool for arousing feelings and emotions, music is better than language.” If you want your potential mate to remember you, you serenade her, or at least get Peter Gabriel to do it.

In a great interview on Wired.com, Levitin talks about the power of music as a mood regulator:

Music activates the same parts of the brain and causes the same neurochemical cocktail as a lot of other pleasurable activities like orgasms or eating chocolate — or if you’re a gambler winning a bet or using drugs if you’re a drug user. Serotonin and dopamine are both involved….  Most people in Western society use music to regulate moods, whether it’s playing something peppy in the morning or something soothing at the end of a hard day, or something that will motivate them to exercise. Joni Mitchell told me that someone once said before there was Prozac, there was her.

Science is just starting to uncover just how powerful a force music is in people’s lives.  I look forward to seeing if/ how social media companies and record labels ultimately use scientific research to find ways to work together and better monetize the value they create.

ComScore and Federated Media (FM), which represents social media sites including Digg, PROTRADE, BoingBoing, and Dooce recently announced that they would be working together on a “research
and development initiative designed to provide comprehensive
measurement of conversational media such as blogs and community-driven
sites.”

I’m looking forward to seeing the outcome of this
research, especially as the current ways of measuring traffic on blogs
and community-driven sites are lacking. Technorati,
for example, while useful in showing who links to who doesn’t account
for traffic volumes in their ranking of blogs. Similarly, Alexa shows how many hits certain blogging sites get, but in the case of Vox,
it doesn’t show which blogs get the most hits (beyond the mention of a
few blogs on the site).  By way of example, Alexa doesn’t allow me to
track the traffic my blog gets. 

As blogging as a hobby and
profession increases, bloggers want to know how many hits their blog
gets AND how many people are linking to it. In addition, it would also
be useful to see how many times a blogger’s name is mentioned in the
context of a topic but a blog link is not provided.

Today, I read an interesting article on Pocket-Lint, which summarizes a recent Harris Poll, which questioned 2,309 people back in December 2006:

Of all frequent YouTube users, two-thirds (66%) claim they are sacrificing other activities when on YouTube. Although their visits to the site are most likely to have been at the expense of visiting other websites (36%), time spent watching TV is next most likely to have taken a hit (32%). YouTube also cuts into email and other online social networking (20%), work/homework (19%), playing video games (15%), watching DVD(s) (12%) and even spending time with friends and family in person (12%).

According to the article, 3/4 of respondents would be less likely to visit YouTube.com if ads were placed in front of videos.  Interestingly though, that same group of respondents, was okay about TV network websites airing commercials during on-line showing of television shows.  Almost as many adults (41%) have watched a video on a TV network website as they have on YouTube (42%).

Pocket-Lint takes a unnecessarily negative view of what these survey results mean for Google’s monetization of YouTube, saying: “It seems like TV networks can get away with advertising more easily.” I don’t think this is necessarily true, and I take a much more positive view of the survey results than Pocket-Lint.  While additional research would be required to confirm my thoughts, I suspect that people are more willing to see ads on material that cost money for networks/studios to produce because there is a high likelihood that this content will be entertaining vs. seeing ads on material that had little production cost and may or may not actually be entertaining.

The thing with home videos on YouTube is that users have to sift through material to find the really funny/ interesting/ good stuff.  That’s part of the excitement and charm of the site, but it may also make users reluctant to accept watching ads, if they feel those ads “waste their time.”  This isn’t to say that users won’t accept ads on YouTube, but if YouTube goes, choses to implement ads, to be successful, ads will need to be both relevant to the user and offered in formats that don’t annoy users.  Another issue, which I think impacts users willingness to see commercials, is the quality of the picture.  When copyrighted content is illegally posted on YouTube, it is often not very high resolution footage, which impacts the viewing experience.  When a user watches copyrighted content on a network’s website, the footage is usually very clear and higher resolution.  I think it goes without saying that if YouTube were able to legally secure content from the content owner (e.g. movie studios/networks), resolution wouldn’t be an issue.  But, why would a Studio or Network want to “give” YouTube their content?  I’ve got a few ideas…

If YouTube users are, as the Harris Poll suggests, really sacrificing time elsewhere in order to spend time on YouTube, there should be plenty of revenue generating opportunities for Google.  First, there are the conventional options worth exploring:

• Conventional Ads –  Additional studies would likely be required to determine what type of ads could be run without causing YouTube user attrition.
  • It might not be a good idea to put ads ahead of every user-generated video on YouTube, but video ads or splash print ads may be tolerated by users in front of or behind highly ranked home movies or videos that networks and studios post (if YouTube is successful as signing licensing agreements with content owners).
  • Targeted banner ads on Youtube.com, or short video or splash ads put in front of YouTube videos that are fed through to other websites (say VOX blogs, etc.) may be more tolerated.
• Subscription services – Perhaps users who aren’t willing to see ads would be willing to pay a subscription fee to watch videos.  While those who are happy to watch ads, could do so, in lieu of paying a subscription fee.

• Free to stream X number of times – Pay to watch more than X times or to download the video to your PC, Phone, iPod, etc..

If, however, Google wants to make serious money with YouTube (without being “evil” in the process), there is plenty of room to innovate…  As I mentioned in an earlier post, YouTube recently announced that it would soon incorporate an audio engine that recognizes songs laid on top of home videos that appear on YouTube. At the end of videos, YouTube will give viewers a chance to legally purchase those songs.  This technology could be used to allow users to buy/download videos from studios/ networks as well.  However, I see  enormous possibilities to innovate and create revenue generating opportunities, which would allow Google to extend the advertising empire it started with AdWords into a whole new generation of interactive advertising.

Google could power a next generation advertising platform on YouTube that works like this for consumers:

• Watch a video on YouTube
• If you’ve liked anything you’ve seen/heard about in this video, buy it now or get a discount to buy it.
  • YouTube could suggest products to purchase that appear in the video that users have just watched.  Advertisers already pay to get rappers to mention products (cars, booze, etc.) in songs, and they pay for subtle (or not so subtle) product placement in films and TV shows… I imagine these same advertisers would LOVE the opportunity to immediately capture customers by either enabling them to buy (or providing them coupons to buy) products featured in YouTube videos.
• If you like what you’ve just watched, check out these other programs X,Y,Z (this already exists on YouTube, but it could be enhanced/expanded to more closely mirror the system on NetFlix, which recognizes a users’ interests and behaviors in combination with the behavior of users with similar profiles).

TV Networks and movie studios may be more likely to allow YouTube to use their content, if significant revenue sharing opportunities are involved.  A great way to generate tons of ad revenue (without bothering the consumer) is to work with advertisers who pay for product placement within movies and TV shows, allowing them the opportunity to capture new customers who are exposed to their product placement via watching movies/shows on YouTube.  YouTube could either allow users to click-to-buy (or express interest in) products within videos (a possibility if the videos are uploaded directly by the studios/networks) OR offer viewers the opportunity to purchase any of the featured products at the end of the video.

For those of you who are wondering why networks/studios would want allow YouTube to reap the rewards of this idea, versus just implementing it themselves on their own websites, that’s a great question.  In order to make this model work, Google/YouTube would have to make a multifaceted and compelling case, which could include the following points:

• YouTube has the ability to bring new viewers to network’s/studio’s content… When a user goes to YouTube, they often go to explore/discover new content.  Whereas, users that go directly to a network’s or studio’s website go with the intent of discovering content they already know about.
• YouTube could easily maintain multiple years of content, bringing back to life ad opportunities that studios and networks thought long gone (see Reese’s Pieces example a few paragraphs below).
• Google is an advertising machine and has the ability to share revenue with studios and networks. (YouTube/Google would need to make this case strong enough by offering enough of a revenue share to discourage networks from thinking it is worthwhile to expand their own IT staff and infrastructure to implement the idea themselves.)

In addition to enticing networks and studios, YouTube could easily entice individual contributors (home video producers) to upload quality video content.  One way to do this is by maintaining a list of products and songs that have the potential to generate extra revenue sharing opportunities for uploaders.  For example, I mentioned earlier that advertisers are willing to pay rappers to mention products in their songs.  Why wouldn’t those same advertisers be willing to pay YouTubers for playing those songs on top of their home movies IF they could prove that doing so increased customers?  If viewers had the immediate opportunity to purchase the product they just heard about on YouTube after watching a video, YouTube would have the case to get ad (and commissions) revenue off of the advertiser.   To prevent gross over commercialization and “pimping” of products, YouTube could require videos to get a certain number of page views and high rankings from viewrs before agreeing to share the revenue.

Taking this a step further, if, someone were to upload a video with a rap song overlaid on the top that mentioned say “Sprite” and PepsiCo didn’t want to pay to have viewers “click-to-buy” (or print off a coupon) at the end of the video, Google could offer that opportunity up to a Sprite competitor, like “7-Up”.

A few use cases to illustrate my point…

• Watch the movie, ET, and at the end of the movie, have the option to buy Reese’s Pieces or get a manufacturer’s coupon for 10% off.
  
  

  

  E.T. – The Extra-Terrestrial (Full Screen Collector’s Edition)

• Watch Grey’s Anatomy, and at the end of the show, download songs from the soundtrack from the record labels or a Gray’s Anatomy t-shirt from ABC.
  
  

  

  Grey’s Anatomy – Season One

• Watch someone’s home movie with Snoop Dogg’s “Gin & Juice” laid over the top, and at the end of the movie, buy the song and/or download a coupon that allows you to get a 10% discount on your next Segram’s Gin purchase at BevMo. (When viewers use these coupons, there is even an opportunity for revenue sharing with YouTube, The Record label, and the person who posted the video and chose the song.

In summary, ad revenue and user enthusiasm potential is far from lost for Google and YouTube.  In fact, the world is very much Google’s oyster.  There are infinite revenue generating possibilities for Google, content owners, and advertisers, which, if executed properly, benefit the consumer.  The trick is thinking creatively and getting buy-in from both advertisers and content owners. If anyone can do it (without being “evil”), Google can.

A new survey conducted by Zogby International on behalf of the United States Congressional Internet Caucus Advisory Committee was just published, in advance of the annual State of the Net policy conference, which is due to take place on January 31st in Washington, DC. 1,200 adults were surveyed between 1/24/07 and 1/26/07, and the results are both interesting and incredibly relevant to social media.

The survey highlights changing attitudes among 18-24 year olds in comparison to their older counterparts.  For starters, the survey shows that 18-24 year olds have very different perceptions of privacy than their older counterparts.  While 91% of the survey participants felt that expectations of privacy have changed with the introduction and usage of new technologies and the Internet, 18-24 year olds do not seem as concerned with traditional “privacy” concerns:

• Only 35.6% of 18-24 year-olds feel that it is a violation of privacy for someone else to post a picture of them in a swimsuit on-line.  This is in sharp contrast to the views of the 25+ year-old crowd, 65.5% of whom felt this was a violation of privacy.
• Similarly, 19.6% of 18-24 year-olds consider their dating profile to be an invasion of their privacy versus to 54.6% of all other respondents.

The majority of 18-24 year olds felt that children should wait “much longer to use all aspects of the Internet, including email and social networking.  More than 75% of respondents felt that children should be at least 13 years old until they are allowed to have an email address.  And, of this 75%, 40.7% of them believe that children should be at least 16 or wait until adulthood to get an email address.  65.6% of survey respondents felt that access to social networking sites should be restricted until children reach the age of 16.  More interesting still, 18-24 year olds felt more strongly about this than their older counterparts.

Commenting on the survey, Tim Lordan, executive director of the Congressional Internet Caucus Advisory Committee said:

Whether health care, e-commerce or social networking, privacy is at the forefront of every major policy debate…  This survey raises questions that could significantly impact our policymaking on privacy in years to come, assuming the MySpace generation maintains their privacy views as they age.”

I find the viewpoints of the 18-24 year olds surveyed particularly interesting- especially their conservative thoughts about when children should be allowed to access the Internet.  I suspect (though can’t prove) that the conservative attitudes on this topic are the result of intense exposure to the Internet, email, and social networking sites from a young age.  18-24 year-olds are probably more aware of the dangers of the Internet than most older adults.

The Internet became accessible to the masses and deeply incorporated into formal education about 15 or 16 years ago, making the adults who are now in the 18-24 age bracket the first group of adults who may not be able to remember a time without computers or the Internet.  In the last 5 years that on-line social networking has become popular, adults that are now 18-24 years old were in the prime of their “internet education”.  By this, I mean that most of them were either in high school or college when the Internet became a ubiquitous social networking tool.  As a result, most of them had more free time than the average older adult to experiment on-line, doing things that their parents/ teachers/ guardians had no idea about.  The Internet and social networking were made an integral part of the fabric of youth culture for the first time, and like all other aspects of youth culture, adults weren’t nearly as familiar about what was going on as the kids who were experiencing it first hand.   Like most adults looking back on their childhood, I’m guessing that the now 18-24 year olds have begun to identify the youthful indiscretions/ mistakes they made on-line and can equally appreciate the opportunities and dangers of the internet more than average older adults, who haven’t experienced the Internet in the same way as those in the younger age groups.

The 18-24 year old viewpoints about age-limits for the Internet exposed in the Zogby survey combined with Tim Lordan’s comment make me wonder what will happen with the regulation of the Internet over time.  Will the US Government eventually impose an “age limit” on obtaining certain privileges on the Internet?  Will they introduce on-line identification program, in an attempt to “protect” children?  Neither of these options seems viable, given the “open” and multi-national nature of the Internet.

In my post on January 18, I talked about the need for parents to protect their children from the dangers of the internet, while at the same time promoting personal accountability and responsibility.  I continue to believe that it is important for parents to make decisions about how their kids use the Internet. I also believe that worldwide governments or an international agency comprised of industry experts and child welfare advocates should provide guidelines to parents (not unlike is done for television or movie ratings).  However, I believe that if the government tries to regulate the Internet too closely, it will turn into a bureaucratic nightmare.  In my opinion, it is impossible for anyone, besides parents to “police” the Internet for children.  Others can only help the cause. To do this, security education and features should be made freely and easily available to parents from the moment they buy a new computer or download a new browser.

I was trying to come up with ideas for how security features could be made more easily available to parents.  The US government could help with this, mandating that all OEMs offer a specific level of security features with the sale of each computer.  They could also ensure that anytime a new browser is downloaded that owners have the option of installing the same level of security features.  So, when parents buy a computer or download a new browser, they are prompted to assign a password to each of their children and set up certain privileges/ levels of privacy – i.e.:

• Kevin – Age 8 – Password= DogCat22. Only able to access X,Y, Z website, and parental notification and activity logging is on. No email access allowed.
• Jenny- Age 13- Password= Hocus24Pocus. Able to access any website that is considered “safe” by the installed kid-safe screening software, but parental notification and activity logging is on.  Email access allowed to/from the following addresses: X, Y, Z (or to/from anyone at A,B,C domain – e.g. a child’s school) or between X-Y time on Z date when parent will be with child helping research.
• Peter – Age 16 – Password= 276BasketballFootball. Able to access any website, but parental notification is on.  Open email access to all addresses but parental notification will notify parents of who child is emailing. Not allowed to download a new browser.
• Amy – Age 18 – Password= Seven8Six.  Open access. No parental screening. Not allowed to download a new browser.

I’m sure the ACLU would disagree, but with a system like this, kids would actually have to talk to their parents about what they’re up to on-line and vice versa.  Similarly, parents would have the ultimate control on what their kids are allowed to do on-line and the ability to change these settings as/when appropriate (and preferably via their mobile phone from the road or their PC from work).  I’d much prefer to see a system like this than an overly legislated set of laws, that like the driving/drinking/smoking ages seem arbitrary and discourage personal responsibility.

The World Economic Forum’s annual meeting in Davos Switzerland took place between January 25-29th.  Today, I discovered some great footage from that meeting on YouTube, which dovetails nicely into my blog from Friday, in which I made several predictions for mobile in 2008. In the video, Chad Hurley, Co-Founder of YouTube, talks about some of the exciting things that lay ahead for YouTube:

Yesterday, inCode Telecom Group Inc. announced its “Top 10 Global Wireless Predictions for 2007”.  Topping the list as the number one trend for wireless operators in 1007 is Social Networking:

“Social Networking Gets Mobilized. Mobility is added to existing Internet business models, services and behaviors, driving traffic for wireless operators. Teens and twenties accustomed to constant connectivity and habit-forming Web sites, such as MySpace and Facebook, lead a wave of membership in mobile social networks. Location social networking including friend and event finder services gain popularity, even in the professional and over-50 segments. Google, Yahoo and Skype are more compelling for users than wireless brands, which are hard-pressed to compete. As customer appetites for social data and video services spike, wireless operators offer more “all you can eat” pricing for high-end data packages. Social networking applications initially are preloaded on many mobile devices sold and later become downloadable.”

On the handset side, inCode predicts that in 2007, “Multi-Function Devices [will] Become Cheaper and More Versatile”.  This includes the introduction of video-capable devices to the masses.  They also predict that location-based services (LBS) and GPS will become mainstream.  According to the article:

“GPS is the location technology of choice for the wireless industry. Handset manufacturers continue to push GPS-enabled handsets as the technology evolves from popular in-car satellite navigation systems like TomTom to a broadly accepted feature in wireless phones. With Nokia having launched its first GPS-enabled handsets in early 2007 and bandwidth available to support new multimedia services, location-based service providers build critical mass. Since there are 10 to 20 times more mobile phones sold than any other consumer electronics device, wireless is a huge driver for GPS adoption. That’s great for users and handset vendors, but the benefit to operators isn’t clear.”

Another of inCode’s predictions is that “Mobile Advertising Breaks Loose:”

“Major brands shift from basic SMS marketing to more sophisticated multimedia advertising. RBC Capital Markets expects mobile marketing revenues to balloon from $45 million in 2005 to $1.5 billion by 2010. With the technological ability to target and measure the effectiveness of mobile advertising, brands are more strategic in their approach. Operators under increasing price pressure set limits on current handset subsidization. Brands take up the slack, subsidize handsets and services for target demographics and take direct ownership of marketing channels. Rich 3G content and video services and accuracy advancements in GPS-based location services deliver further value to brands targeting existing and potential customers in innovative ways.”

This prediction, is already starting to come true, with MVNOs like Virgin Mobile USA and Amp’d Mobile planning to offer discounts to customers for viewing advertisements on their mobile phones.  Cingular Wireless, Verizon Wireless and Sprint Nextel have also said they’re going to test the concept of mobile advertising.  And, according to CNET, mobile advertising services company, Millennial Media, which was founded by Paul Palmieri, a former Verizon executive recently received $6.3 million in Series A funding.

inCode is on the money with their predictions for 2007.  Tying together the above predictions for 2007 and thinking about the future, I predict that in 2008, mobile operators will further realize the power of social media – extending beyond simply social networking to all forms of social media.  If all goes as I predict, in 2008, Mobile Operators, MVNOs, OEMs, and ISVs will harness the power of social networking, GPS (LBS), and multi-function handsets and incorporate the power of social media, adding applications and web-based services to handsets that add value to consumers.  Services/ applications like Helio’s Buddy Beacon, Dodgeball, etc. will increase.  I predict that large mobile operators and OEMs will begin to pre-load devices with social networking-focused applications that incorporate GPS.  I also believe that mobile advertising will increase and that the value of GPS to mobile operators will be realized in the ability to either charge for LBS social networking services and/or offer interactive mobile advertising via these LBS-enabled social networking applications.

Collaborative and community-based entertainment like YouTube on the go will evolve and continue to be popular.  I also expect that sites that monetize video footage (of, say, news events) that users take on their mobile phones will become increasingly popular….Think sites like: ScoopLive.com, Scoopt.com, and SpyMedia.com.

Search Engine Optimization (SEO) and Social Media Optimisation (SMO) will also play a big role in mobile social networking AND mobile advertising in 2008.  Though, I expect to see real advances in and popularization of this area happening towards the end of the year and into 2009, once mobile GPS and mobile advertising are better established.  I see this happening in several ways:

• When users search for friends, that mobile advertising will be well integrated so that suitable meeting locations and activities will be suggested (e.g. restaurants, coffee shops, stuff to do, sites to see, etc.)
• Based upon users mobile searches, social networking behavior, and text written in the emails they send via mobile phones, mobile LBS and mobile ads will generate new advertising content.

These are my initial thoughts for 2008, and all of them are predicated on inCode’s predictions for 2008 coming true.  If you’ve got any additional predictions for 2008 and beyond, post a comment!

According to a new survey, published by The University of Massachusetts Dartmouth, “the hype” around social media “is real.”  In November and December or 2006, U Mass Dartmouth’s Center for Marketing Research, under the direction of blogging researchers Eric Mattson and Nora Ganim Barnes, completed a telephone survey of “Inc. 500” list to find out if and how they’re using social media.  The “Inc. 500,” published every September by Inc. Magazine, is a list of the fastest-growing private companies in the United States.  According to the executive summary, existing research shows that 8% of Fortune 500 companies have a public blog, and the U Mass team set out to find out whether the use of social media was the same in companies that were “selected by growth rate rather than revenue.” What they found was encouraging.  Fast growing companies are utilizing social media at much higher rates than earlier research indicates for Fortune 500 companies.  In the executive summary, the researchers write:

“As one of, if not the, first studies of social media adoption with statistical significance, this research proves conclusively that social media is coming to the business world and sooner than many anticipated.”

The full results of the study will be published throughout 2007 in a variety of journals.  Keep your eyes peeled for an article in The Journal of New Communications Research coming this March. The researchers from U Mass have promised to send me a link the the article soon as it is available. When they do, I’ll post it in this blog. In the meantime, the executive summary is well worth a read.

Included in the summary are several interesting graphs. The highlights include:

• When asked how important social media was to a company’s business/ marketing strategy, most respondents felt that it was important:
  • 26%= Very important
  • 40%= Somewhat important
• When asked what type of social media companies used, responses were as follows:
  • 33%= Message/Bulletin Boards
  • 27%= Social Networking
  • 24%= Online Video
  • 19%= Blogging
  • 17%= Wikis
  • 11%= Podcasting

I can’t help but wonder: Did social media help propel the responding companies into the Inc. 500, or is it just coincidence?  Then again, I’m still wondering, “Which came first, the chicken or the egg?”

I’ve talked a lot in this blog about how companies are using social media to capture new customers and engage existing customers.  Today, Advertising Age wrote a fascinating article on the success of Canadian toy manufacturer, Ganz, who has used social media and the Internet to spark massive sales of its Webkinz stuffed animals.  I’ve got mixed feelings about Webkinz marketing model and success. On the one hand, I admire the Ganz creativity. On the other hand, I question whether Webkinz takes marketing to children one step too far.  Before I explain this paradox in more detail, here’s some background…

Webkinz, which launched last year, are proving exceptionally popular among American children aged 6-11.  The success of Webkinz is so impressive that Advertising Age refers to them as “Beanie Babies on steroids”.  By November 2005, Ganz had sold one million Webkinz, without doing any formal advertising.  Ganz reports that this number was pushed “significantly higher” during the holiday season.  Instead of advertising, Ganz made Webkinz successful  by engaging a strong network of sales reps and retailers as well as innovative PR and social media strategies.  Bloggers and YouTubers started talking about Webkinz en-masse, which attracted the attention of the media and resulted in publicity on “Good Morning America,” “Regis & Kelly” and “Rachael Ray.” Social media combined with the power of traditional press accelerated the sales of Webkinz.

Webkinz word of mouth success via social media is in great part to do with its web-savvy product strategy.  Each Webkinz stuffed animal comes with a printed tag, with a secret code and the address of what Advertising Age refers to a “safe” social-media enabled website for kids.  Once registered, kids can dress and feed their avatar Webkinz by earning “KinzCash” by playing games and winning quizzes.  Kids can also engage their avatars with other Webkinz avatars by inviting them to be friends and sending messages from a pre-selected list of options (Advertising Age uses the example “You are” and “very nice”.).  So, in effect, the Webkinz site becomes a mini MySpace for very young kids, without the threat of sexual predators. Imagine the success of Cabbage Patch Kids in the 1980s, and add to the “adoption process” the power of the internet and talking cartoons, and it’s not hard to see why kids can’t get enough of Webkinz.

The concerning part of Webkinz and similar products is the way that they engage with and solicit information from children.  When a child goes to the Webkinz site s/he is greeted by vivid cartoon images and written instructions.  When the child clicks on the text “My First Adoption,” a cartoon named “Ms. Birdy” appears welcoming the child to the “Adoption Center.” Ms. Birdy asks the child to read and complete the end user license agreement (EULA).  Webkinz’s EULA is a typical legal masterpiece.  It contains text that is well beyond the reading comprehension level of a 6-11 years old, and yet, without suggesting that the child ask for parental assistance, “Ms. Birdy” asks the child to read and agree to the terms contained within the EULA.  Included in the terms is a paragraph, which says that any feedback provided to Danz on the site will become the intellectual property of Danz. I understand why Danz has this clause in the EULA, but I don’t feel that it is appropriate to expect that a child can read or understand a legal document intended for adults. I take issue with any website that expects a minor-aged child to click through and agree to a legal agreement without parental involvement – especially one that claims ownership of any intellectual property that the child submits in the form of feedback for the site.

After the child clicks “I agree” to the EULA (which they couldn’t possibly understand), Ms. Birdy speaks, telling the child that if s/he is under 9 years old, her/his parents should help her/him with registration.  The site then asks the child to submit personal information into the website: first name, date of birth, country of residence, and state. Although, it is not considered personally identifiable, this information does not appear to be transmitted securely, which is concerning to anyone illegally watching a family’s internet activity or a child predator stalking kids at the local library.

The child is then asked to create a username and password and submit the secret code on the tag of their Webkinz animal.  This code allows the child to play in “Webkinz World” for one year from the “date of adoption,” with the option to renew after that year for a fee.  All of this, is, of course, explained in the EULA, which is too complex for a child to understand.

While I am excited to see social media being used as an effective marketing tool, and I am pleased that DANZ complies with the Children’s Online Privacy Act (COPA), the Webkinz registration issues I mentioned highlight a larger issue of concern.  Companies are marketing to children, soliciting information from them on-line, and asking them to read legal agreements, which are beyond their level of comprehension.  It is difficult for parents to watch out for their kids in situations like this.  If a kid thinks it is okay to input their information onto, say, the Webkinz’s site without parental permission, what is to say that same child won’t think it is just as okay to give that information to a stranger via another website?  Nothing, unless their parents are involved.

One of the things that should be of growing concern to social media enthusiasts and child advocates alike is that there is currently no safe way to identify whether someone is a minor on-line.  Having a “second life” full of social media and networking on-line is becoming more and more common. In so many ways, anonymity is an accepted part of the Internet. This may hurt kids.  By this I mean, in real life, a child can’t go into a 7/11 to purchase porn, cigarettes, or booze, without showing appropriate age identification.  However, on-line, there is no such thing as an age identification. The Internet is largely anonymous.  As a result, there is no way to protect kids from seeing or interacting with inappropriate material, as there is in the non-anonymous “first life” – unless that material costs money and requires a credit card to purchase. A scary thought.

If you’re a blogger, aspiring journalist, or market researcher listen up.  Mashable is paying its users to write “Top 10” review posts between 600 and 1300 words, talking about web-based products in a particular category. Click here to learn how it works.  This seems like an interesting (and inexpensive) way for Mashable to generate new content, and a good way for aspiring reviewers to build a portfolio and make a few bucks in the process.  If your top 10 ends up on Mashable, post a comment with a link to the review on this blog.

I’ll be interested to see if this idea takes off with other sites.  If you know of any sites that are offering similar offers, add a comment. If you’re a non-VOXer, feel free to email me, and I’ll post your comment manually.

Thanks to technology and the Internet, the world is becoming increasingly transparent and accessible.  Social media is playing an important role in this transformation.  So far, most people seem to be responding to the power of social media favorably, and they’re using the power of social media for good.  However, there is a risk that the pendulum could shift in the other direction over time.  Below are the “5 Deadly Sins” of social media – pitfalls that proponents of social media should watch out for and proactively advocate against:

• Market saturation: There is a proliferation of social networking sites available – lots of sites are competing for users time.  Marketers are creating new social networking sites in record numbers to promote their products, and the number of traditional social networking sites (MySpace, YouTube, Bebo, Gather, WAYN, CyWorld, etc.) are also growing.  Users often use different for the same purpose but to meet different people.  If the market becomes overly fragmented, it may become less useful and more burdensome to user.  I hope that a natural market consolidation will happen eventually, but in the meantime, the industry runs the risk of users “burning out” from having to juggle too many different websites, on-line “friends”, different profile inputting tools, and passwords.
• Exploitation of social media at the expense of others: Social media makes it easier than ever to share information on-line.  While, the power of information sharing is good, it can also be dangerous in the wrong hands, enabling: fraud, misrepresentation of identity, identity theft, sexual exploitation, and unethical sharing of corporate or government secrets.  I just read an interesting article on the security risk that social media presents to corporations.  The same is true for governments and individuals.  The “Star Wars Kid” and Paris Hilton were two of the first people to learn a thing or two about that.
• Eradication of privacy: This one is closely linked to the bullet point above on exploitation, but I felt it deserved its own section because it goes beyond exploitation because what is considered private to one person, isn’t necessarily considered private to another.  The Washingtonienne case is a good example of this.  Another example is that anyone can get an aerial photograph of your house at Google Maps or go to Zillow to find out what your house is worth.  Add location based social media services and mobile phones into the mix, and tracking people’s location becomes easy via services like Helio’s Buddy Beacon and Dodgeball.  While these are great services and they offer opt-in privacy, it’s scary to think what could happen if either service were hacked.  Alternatively, imagine the damage that would result if someone’s location information got into the wrong hands or was commandeered by a “friend” turned stalker.
• Opportunistic litigation: Lawsuits like those filed earlier this week against News Corp. pose a strong threat to the health of social media.  If cases like these succeed, the rulings will send a dangerous message to the public: “You’re not responsible for your own safety or the safety of your children.  Someone else is.”  Unjustified lawsuits also stifle technical innovation and have the potential to strangle social media with excessive amounts of red tape.
• Opaque Marketing: Marketers are becoming more sophisticated about the ways that they use social media to their advantage.  It is already difficult to avoid pop-ups and other advertisements on-line.  And, with some social media sites, it difficult to tell what is advertising versus what is genuine, unbiased opinion.  Take, for example, bloggers who get paid by companies to evangelize products (I don’t, but a lot do).  Advertising on social media sites isn’t nearly as transparent as it should be, and social media runs the risk of being tarnished by overzealous marketers.

1/22/07 UPDATE: Thanks everyone for your insightful comments.  I just read a great article by Mark Zielinski, a UK-based security engineer.  The article talks about the threat that social media poses to corporate security.  In the article, Mark talks about how employees use their work computers to check their social networking pages and that this poses a threat to corporate networks.  Unsurprisingly, employees checking social media sites rather than doing work probably, has an impact on productivity – even more so than personal email. With these two points in mind, I’d like to add “Bringing Down the Corporation” as the 6th deadly sin of Social Media.