Technology Paradigm Shifts How We Work

by Eric Tsai

We are in the middle of a second major paradigm shift in IT (information technology).  This is not about simply going from web1.0 to web2.0, but something that’s going to have a major impact on how we work. I am referring to the disruptive force of “cloud computing.

I’ve been focusing on brand strategies in the technology sector for quite some time now and I’ve seen some resemblance in cloud computing hype similar to that of social media on the web.  Further investigation led me to identify some of the underlying implications and the cumulative impact of them on businesses.

605px-Cloud_computing.svg

Image courtesy of Wikipedia

Primary Characteristics

Cloud computing is basically a dynamic computing environment that’s delivered over the internet with on-demand resources that are scalable and flexible. In the old days businesses had to purchase hardware, software and then hire IT staff to manage them.  With cloud computing, you simply pay for the service on a per usage model, as known as software-as-a-service (SaaS).

Benefits: Eliminate the risk of owning and maintaining software, hardware and hiring resources. It allows business to shift from capital expense to operating expense (think of it as leasing instead of buying) typically with little to no upfront costs.

Concerns: Still in the early stage of the hype cycle, unproven ROI, and slim margins.  Market is not completely ready to accept this model, but few early adopters have incorporated cloud with existing infrastructure forming a hybrid hosting model.

Social Media is a dynamic publishing technology that’s highly accessible and scalable taking place on the internet. Traditionally, brands have mostly monologues with their customers via old media such as TV, newspaper, magazines and PR.  With social media, you have real-time dialogues (such as Twitter) that encourage interactions allowing people to connect globally to form relationships.

Benefits: Potentially an inexpensive low barrier to entry marketing vehicle compare to traditional media channel. Allow businesses to expand their reach and own their channel of media distribution. Great for customer relationship management, reputation management, and has the ability to go viral.

Concerns: Also in the early stage of the hype cycle with indirect, difficult to measure ROI.  Consumers aren’t all ready to use social media to communicate with brands, and there is a lack stickiness in user adoption (with the exception of Facebook maybe).  Brands that had success leveraging social media use it in the hybrid marketing model in conjunction with traditional media.

There are some similar characteristics with both cloud computing and social media.  Mainly both are fresh concepts that challenge the traditional mindsets. In addition, both adoptions are accelerated by the current economic downturn forcing companies to reduce financial and operational risks associated with technology (so going with cloud makes more economic sense) while evaluating new ways to market  their products and services (more cost-effective brand strategies).

Frankly I find it interesting that one of the earliest form of cloud computing is ironically the first online social media tool – email.

When I created my very first email account on MSN Hotmail back in 1995, little did I know that’s the first form of cloud computing. Since then I’ve been socializing with family and friends sending emails back and forth, reading replies like comments on a blog post, or simply write short messages in the subject line without content similar to micro-blogging.

Today, email is mostly delivered via the cloud (over the internet) and is arguably the original online social media tool.

Relevance to Businesses

Even in these cost-conscious times, the moniker “trusted advisor” or “trusted brand” still holds value as customer relationship is the top priorities for many businesses. This is why social media became an attractive tool for companies now because it’s all about servicing the customers and optimizing client engagement. End users look to experts to guide them via the decision making process of purchasing branded products and services.

As the IT landscape continues to evolve, we need to rethink how we work, how we sell, the tools we use and the processes we implement.

Nobody wins competing on price alone, even private label brands are thriving by providing excellent value-for-money propositions against premium brands.  We have entered into a new era of converged technologies where IT solutions are driven by business needs and management needs to focus on building meaningful trusted relations moving forward.

The secret is to stay relevant with IT and seek new ways to abstract value out of your business.

This is the time to strengthen your brand and focus on your brand strategy.  Review your operational status and plan for future growth is the key to success when economy starts to rebound.

The Evolution of Media Content Distribution: Circulation 1.0 to 2.0

by Eric Tsai

I often get asked on the benefits of Social Media:  “How should we leverage social media for advertising and marketing?” or “What do we need to consider when incorporating social media into our existing strategy?

There are still a lot of questions surrounding social media.

The simple way to get a grasp on it is to first understand how information flows through social media.

Visualizing The Circulation Evolution

I like to visualize information so I’ve created the following graphics to describe how content travels through the traditional media channels.

circulation1_0

As you can see in the traditional model, content gets created (by few sources) then aggregated into the circulation 1.0 channel of print, radio, television, and the web.

These “read-only” materials get pushed out on a one-to-many process requiring users to retrieve them.

Take newspaper as an example: it all starts with the editor creating the content, then it goes through a review process before it gets printed on paper, and finally delivers to you so you can start reading the content.

This is a top-down approach for content distribution with maximum control

Now let’s looks at how social media elevates the content circulation in the 2.0 model.

circulation2_0

In this model, everyone is a content producer enabling user-generated content to scale efficiently.

When you have millions of people contributing content, it creates a many-to-many race to publish and distribute information.

As a result, the content now comes to you, pulling you to consume.

In addition, the nature of web 2.0 allows content to be syndicated and shared almost instantaneously.

Finally let’s incorporate circulation 2.0 as part of the circulation 1.0 and you get the “hybrid” model:

circulation1_5

I call this circulation 1.5  because it retains the traditional media’s channel of distribution while adding web 2.0 into the mix.

The concept is to leverage the best of both worlds from 1.0 and 2.0 to gain maximum impact for brand exposure and brand awareness.

Beyond Circulation 2.0

Most brands are still on circulation 1.0 networks and many are on the path to circulation 2.0 by adding social media to their traditional media channels.

The great thing about circulation 2.0 is that everyone is pulling your content creating a natural word-of-mouth marketing that’s pervasive.

However, as the speed of these dynamic conversation becomes even more instantaneous, in the case of Twitter, the content producer have less control.

Content can get interpreted out of context and then passed along down the line just like that telephone game we all played in kindergarten.

This is why many companies are using social media primary as a service function for reputation management and customer support.

That’s exactly what Zappos, PizzaHut, Intuit, and Dell have done by leveraging Twitter for those purposes.

This creates transparency and adds authenticity to the brand which is where social media has taken us to so far. Moving forward brands must rethink the intend of their products and services and manage expectations carefully through positioning and messaging.

After the financial meltdown last year there is a lack of trust for brands and a definitive shift on perceived value.

That’s why there is such an acceleration in social media because people demand to know the truth and in many ways social media allows us to get closer to what really is happening.

When Twitter was first launched in July 2006 (happy 3 year birthday!) it was intended to be a quick update for your groups of friends.

Today it has evolved to a social networking tool to report, react, and discuss anything from news to random thoughts.

It will probably continue to evolve because of the fluidness of the platform has allow users to take the service in completely unexpected directions.

Now that’s good for innovation, they just need to figure out a business model for monetization.

The fact is traditional media still reaches far more audience than social media as I write this post. I’m sure I’ll circle back in the future as things may change in unexpected ways too.

Let me know what you think.

The Emerging Trend of Hybrid Marketing Model

by Eric Tsai

A day after my last post on how traditional media is deteriorating, Microsoft’s CEO, Steve Ballmer speaking at the Cannes Lions International Advertising Festival, argued that traditional media will not bounce back, all content consumed will be digital, we can debate if that may be in one, two, five or ten years.

In some respect the context of Ballmer’s statement is indicative of the fact that advertising revenues continue to shift to where the interaction is taking place – online.

There is definitely a shift in consumer behavior as the online experience, through social media, becomes more acceptable, accessible and affordable.

Keep in mind that social media in nature has low barrier to entry with the lack of gatekeeping process.

This is a double edge sword providing that content can be generated rapidly but the quality is dramatically reduced.

The message of social media is totally radical, pervasive, and decentralized while the content of social media focuses on the concept of crowdsourcing defined via Wikipedia as “the trend of leveraging the mass collaboration enabled by Web 2.0 technologies to achieve business goals.”

That’s what’s carrying out the new social media revolution because it’s basically an extension of our sense of voice with instant speed for community-based design.

During Jeff Pulver’s 140 Characters Conference, Chris Weingarten of Rolling Stone made a great point: Crowdsourcing kills art because crowds have terrible taste! If you let people decide then nothing truly adventurous ever gets out.

I couldn’t put it better myself.

People stop asking why information gets delivered and the quality of them.

Typically authorities have a quality assurance process in sequence and in concatenation to produce high quality, relevant content.

What we must do on the receiving side is to continue to question the legitimacy and integrity of the source.

Social media allows us to connect horizontally across each other with relative ease, but just as Jeremiah Owyang recently pointed out that human don’t scale which questions the authenticity of top social media bloggers and news blogs.

This is very true in a sense that because we don’t scale, we’re only able to consume limited amount of information combine with short attention span, it’s a race to absorb as much as possible in a short period of time.

This propelled the publishers to publish rapidly; furthermore the increasing competition has put a sense of urgency pressure to compete for the same audience.

Ultimately the brand that can scale and remains relatively authentic perception-wise will be the ones to profit the most.

Hypercomptition To Hybrid Marketing

Hybrid Marketing

There is no sustained competitive advantage anymore according to Richard D’Aveni, professor of business strategy at the Amos Tuck School at Dartmouth College. He argues that advantage is continually created, eroded, destroyed and recreated through strategic maneuvering.

I found this particularly interesting because that’s what’s going on with the traditional media landscape.

Traditional media rules and orders can’t be applied perfectly under the new regime of communication (social media) and thus formations of authorities are under attack from these new forms of expression.

Simply put, it’s not a technological argument but the outcome from social and cultural conditions.

Think how content is produced, reproduced, distributed and consumed – more people are adjusting to the “new way of doing things” abandoning the old ones which leads to the permanent shift in behavior.

However, marketer should not disregard traditional media altogether, but combine traditional media with social media to form an integrated strategy or the “hybrid marketing” model.

In the hybrid marketing model, it’s about drawing a business model that works within the ecosystem of your brand.

The key is to have a fluid approach in creating a meaningful dialog with your market. Instead of focusing on what marketing tactics to use strategize on aligning your brand strategy with your business goals and view social media as one of the arsenal to choose from.

I believe this is a more practical approach and allows for integrated efforts for companies with branding 1.0 infrastructure to transition into branding 1.5 strategies because there is no point in applying branding 2.0 strategies if the infrastructure is not ready for it.

The idea is that the marketing strategy will streamline with the resources creating the desire outcomes that are measurable. Brands must consider the costs associate with deployment, control, and management to sustain such strategy.

There is a place for the shrinking traditional media. It will continue to evolve based on how we act and react to technology.

However, it won’t be technology that drives the outcome of the new media, but the cultural value of intellectual property and how it gets produced and consumed.

What’s your marketing strategy?

Perhaps you’re already utilizing hybrid marketing in your business model, share your thoughts here.

3 Ways to Capitalize on the Destruction of Traditional Media and Embrace Social Media

by Eric Tsai

If you’re part of the social media movement, you’re witnessing the annihilation of traditional media.

From newspapers to cable TV, everything is converging onto the internet resulting in a more accessible, cost-effective and integrated media.

Let’s look at some statistics courtesy of Sillicon Alley Insider:

Newspaper

saichart060209-print-ad-sales

– “Print ad sales fell 30% year-over-year in Q1, led by a 42% year-over-year drop in classified ad sales.

saichart061109-craigslist-newspaper

– “Newspaper classified revenues peaked above $16 billion in 2005, only to plummet to an estimated $5 billion or so in 2009.

Cable TV

chart-cable-tv

– “A Bernstein survey says 35% of Web video watchers might dump their cable TV provider in favor of online video within 5 years.

Internet

pew-broadband-chart-apr-09-new

– “Some 63% of adult Americans had broadband Internet at home in April, up from 55% last May, according to the Pew Internet & American Life project.

wireless-only-households

– “By the end of 2008, 20% of U.S. households had unplugged their landline phones and gone exclusively wireless, say surveys by the U.S. National Center for Health Statistics. That’s a huge increase from early 2005, when only about 7% of U.S. households were wireless-only.

The Bigger Picture

Although the current recession has contributed to the decline of newspaper subscriptions and the increase in people viewing online videos; the truth of the matter is we’re no longer accessing or consuming information the same way.

This translates to a less effective advertising channel for brands and the bulk of the advertising dollars will be spent where consumers are spending their time – the web.

Furthermore, the convergence of technology has weakened the foundation of traditional media authorities especially those that didn’t have an immediate online strategy.

Even those with web1.0 strategy, the rapid expansion into web2.0 has left some without a social media strategy.

One thing is clear – internet will continue to grow as the cost of broadband continues to drop.

This means more people will have faster internet and faster internet takes us a step closer to the real-time web.

What does this mean to you?

It means instant access to data across the web with a massive coordination effort from social media.

Mass Amateurisation of Brands through Social Media

The rise of social media tools such as Facebook, MySpace, YouTube, Twitter, LinkedIn, Digg, and many other social networking sites has accelerated the spread of simplified media technologies, making it easy for anyone to access, participate, and share information.

Social media in particular is leading the way on what web commentator Clay Shirky called “the mass-amateurisation of everything.

It is now possible for individuals to choose from a wide variety of communication arsenals outside of the mainstream commercial system to reach the mass audience.

As a result of this ubiquity of social media, individually created media content that originated on the internet has started to infect mass media.

This not only challenges the traditional media authorities, but it also created dynamic conversations across the globe.

Take the latest Iran incident as an example, Twitter was the fastest medium to report what had happened as it was happening before any other traditional media could get to it.

It enabled people all over the world to rapidly react to this piece of news and participate in support and interact with the people in Iran.

Take social bookmark sites like Digg, and Delicious for example, users are encouraged to “vote” for the top content they want to appear for maximum exposure.

These services aggregates content across the web to determine what content is popular making it easy to filter for individuals.

It’s like real-time TV/radio rating and you can simply choose from a list of categories within your interest.

In addition, there is now an element of choice and coordination to establish a new content authority.

You no longer have limitations on what’s available from newspaper or what’s on TV; you have millions of content to choose from or you can create your own.

This applies to blogs as well because you only have so much time to consume information, reading from one source means not reading from another.

As a result, blogs are taking readers away from authority sites and turning them into loyal subscribers.

If you’re reading this post, either you’re a new reader or a regular subscriber to my RSS or newsletter.

3 Ways to Capitalize on Social Media

In many ways, social media is still at the “technology trigger” aspect of the hype cycle. If you can capitalize on it, you will benefit by capitalizing on the destruction of traditional media.

Here are 3 ways to capitalize on this opportunity:

1. Expose your personality – Social media is a one-to-many interaction medium, it’s the perfect platform to personify your brand and build a fan base.

Demonstrate your expertise is important but showing your personality can be the difference between choosing to engage with you versus others. This will ultimately convert visitors to fans, transform viewers to participants.

Give your audience a reason to engage by revealing your emotions and even political stance will help you to stand out, be a person not a company and have fun.

Remember, it’s impossible to be liked by everyone and you won’t be anyway, the key is to create synergy with those that like you in order to foster trust.

A great example is the CEO of Zappos who updates his every move via Twitter with what he does and how he interacts with his employees, creating a personable, likeable, transparent identity that everyone can relate to.

2. Drive engagement and visibility – One of the disadvantages of traditional media is the limitation of engagement opportunities.

This is different in social media. You can create your own opportunity to be “high touch” with your audience by sending update notifications, creating a poll, asking to join your group, conducting an offline event, or promoting a cause.

Combine engagement with marketing through conversation will reduce resistance to you brand’s message.

As a result, your fans will become your best evangelists. However, there is a fine line between a prolifically active brand and an annoy spammer.

The key is to become a good listener and allow conversations to come to you before reacting swiftly.

If you do it right, you will succeed in coordinating a massive word-of-mouth campaign, a sharing frenzy across all social media platform that increases your brand loyalty.

Get it wrong, you will need to put out the fire with reputation management strategies.

I recommend having different social media accounts to provide a focused-orientated engagement strategy.

Dell is the best example for this as the company has more than 30 Twitter accounts that they use to communicate to very specific audiences.

Ford also got more than 7 Twitter channels to handle customer service and reputation management.

3. Leverage multimedia and mobile platforms – As I’ve mentioned before, all media has converged onto the internet so why not use all of them to maximize the experience.

You can easily create your own podcast now, load it up to iTune or deliver it in mp3 format.

For images, you can use Yahoo’s Flickr, Google’s Picasa, or Twitpic to share it on Twitter.

By far the most powerful multimedia content is the use of videos through YouTube or Viemo.

Although still limited by network and bandwidth, there are a few “live” video streaming social media tool that’s making headways specifically UStream.tv, Blip.tv and Justin.tv.

Not only do people respond different via a variety of media formats enabling a broader reach, there is an increasing demand for location-based interaction as well.

Thanks for iPhone and BlackBerry, mobile web content delivery is now an important consideration of a brand’s social media marketing strategy.

The cost of mobile broadband will continue to drop enabling mobile rich-media content to be produced and distributed anywhere.

The exciting part about mobile content is the ability to target location based users then engages them with relevant content.

Are you capitalizing on the rapid growth of Social Media?

Or do you still believe in traditional media?