SmartCompany: Me on Twitter’s churn and burn

I’m is quoted in this Patrick Stafford piece in SmartCompany. It’s about Twitter’s appalling churn rate of over 60%.

Some of the reasons why Twitter’s retention rate is so bad:

  1. It’s limited – 140 characters. No video / audio / rich media / expression / detail / depth – yes you can link to those things, but that’s it.
  2. It’s neither a mass broadcast mechanism nor is it targetted. Fine if you want to get a message out to a number of followers in a single moment, but terrible if you are using it for reach or for a more personal or limited conversation.
  3. It’s very easy to set up, so there’s little in terms of “purchase investment”. You register, follow a few people and if you walk away / forget, it’s not like you’ve spent hours of your time – there’s little to “lose” by abandoning it.
  4. It’s a media phenomenon. The media are going nuts over it, when the punters are far less interested. It’s like Second Life – not a day would go by when the media wouldn’t write about Second Life – it drove a spike in interest, but didn’t drive long term usage.
  5. As written in a previous post, Twitter is for old people. Young people couldn’t care less and aren’t using it in any substantial numbers. Older people either don’t have the time, or the interest, so they join up, look around and leave after a while – they don’t keep the ball rolling.
  6. It’s not customisable. I might enjoy some tweets of some people (person focussed), or some tweets by all people (topic focussed), but definitely not all tweets by all people. It needs to be customisable. Right now, whether I like it or not, I have to read the tweets of all of the people I follow on Twitter. You could argue that there are multiple plugins and applications that allow for customisation of Twitter, but the basic beginner user isn’t interested enough (or capable enough) to then look for filters and plugins. So they get bored / frustrated and stop using it.

Read the full article here: Research casts doubt over whether Twitter fad will last – Business news, business advice and information for Australian SMEs | SmartCompany.

Dominos Going to Fall

Dominos Pizza has been embarrassed by a scandal where some employees of the business made a video that showed them doing some pretty disgusting things with the food they were preparing. It is extremely damaging to the company. The videos are here – and an explanation of what they should be doing next follows.

Part 1 – The Offending Video

Part 2 – The Reponse from the US President of Dominos (why the hell is he speaking off camera? It’s completely wrong and seems completely staged).

Part 3 – What the Dominos President’s Response reminds me of (specifically at 4’15”)

What they should do:

Stop the rot – Sack the employees that have done this – and ensure that there are no other skeletons in the closet, whether known or unknown. Make sure that whatever it is that caused this issue is dealt with – and fixed.

Apologise – not from the President (who, as I mentioned earlier, is completely lame), but from employees of the company. Other people who work at Dominos – others who are in their late teens / early 20s, who are hard working, CLEAN and responsible workers. Coming from them, it will be much more genuine. Imagine being an honest, hard-working Dominos employee right now – you’d be completely ashamed and embarrassed by the actions of two fools. If I were Dominos management, I’d be giving these employees every chance to express their sorrow and regret publicly – and have them honestly vow that they would never do such a thing. Coming from them – coming from all of them, employee by employee, store by store – it would be a company wide affirmation of their true values. It would ensure that the public would feel safe ordering food from them. It would reiterate the local presence of the company, and the care and mutual benefit that each Dominos franchise has for its community / customer base. Imagine it – a YouTube channel where every Dominos employee gets to make their own personal apology and vow to their customers – customers they value, customers who pay their bills. What a powerful statement of intent and purpose that would be.

Open up – I would ensure a rapid and public demonstration of the systems that Dominos has in place. What safety, what systems, what is in place to ensure this will never happen again. Put it all online, put it out there – every step of the value chain should be transparent. Every manager should be out there, explaining at every step how clean their systems are – from hiring to suppliers to food prep to service. This will allow people to overcome the fear they now have – I don’t know what happens in Dominos kitchens – nor do I know anything about how clean the food is.

Improve – Be daring – do something that would drive openness and engagement to a whole new level, eg: webcams in every kitchen, produce a series of podcasts on pizza making, Dominos staff cooking competitions across the country – demonstrate that Dominos food isn’t just prepared by College rejects, but by people who actually care about the food that they are providing. Build trust in Dominos as a place where you’ll have food that is not only clean, but tasty – or as the President said, delicious.

Anatomy of a social media disaster

Two recent campaigns by Australian organisations have caused a debate over trust in social media campaigns.

Tourism Queensland (TQ) recently launched a campaign with a difference; instead of attracting people to the “Sunshine State” via a traditional website, TQ created a site that advertised the “Best Job in the World”. The job, The Caretaker of the Islands of the Great Barrier Reef (a brand ambassador role), was a 6 month contract paying $AUD150,000.

The earliest public response to this campaign was very positive. The social media sphere lit up with discussions about the campaign, heritage media covered the campaign, and the website itself, crashed after being overwhelmed with visitors from Australia and overseas.

A job applicant, “Tegan”, posted a video YouTube that demonstrated her passion for the job, going so far as to get a tattoo of Queensland on her shoulder. She also started a blog to demonstrate her passion, linked to a PayPal account in an effort to raise money to fund her job application. Another boost in coverage for the campaign. What followed has cast an enormous shadow over the entire campaign.

It has since been discovered by Marketing and Digital Media Blog Mumbrella that “Tegan” was in fact an employee of the advertising agency behind the campaign, and that she was asked to act “like a Big-Brother video application”.

“I thought it would be so obvious that it was fake, but I guess some people still fell for it including the lazy journalists who had nothing better to write about” said “Tegan”, also known as Cummins Nitro employee Rhiannon Craig.

Since then, another Australian campaign has been outed as a fake. It’s the story of “Heidi Clarke”, a girl who met a guy in a cafe, made some small talk and went their separate ways. He left his jacket behind, so “Heidi Clarke” created a YouTube video where she claimed “love at first sight”, and wanted to return a jacket he left at the cafe. The Australian media wanted to know – where was this man?

The “Today Show” had “Heidi Clarke” on as a guest. Smelling a fake, they asked her to look down the barrel of the camera and vow that it was genuine. She confirmed on national TV that it was. Since then, again, “Heide Clarke” has been outed as a fake, a woman hired by Naked Communications to promote a range of clothing for a major Australian retailer.

These examples of dishonest communications practices have brought to the fore the “Honesty ROI”, the code of conduct developed by the Word Of Mouth Marketing Association (WOMMA).

The “Honesty ROI” has three key pillars: Honesty of Relationship, Honesty of Opinion and Honesty of Identity.

Honesty of Relationship:
Don’t shill (get your friends to represent you)
Don’t go undercover
Comply with cultural norms and regulations

Most pertinent to these cases,

“When there exists a connection between the endorser and the seller of the advertised product which might materially affect the weight or credibility of the endorsement (i.e., the connection is not reasonably expected by the audience) such connection must be fully disclosed.”

Honesty of Opinion:
Your opinion is your opinion;
Feel free to share it, but please:
Provide facts / links / proof points
Don’t misrepresent

Honesty of Identity
Kids can play dress up and have make believe friends; we can’t
Please practice full disclosure

Again, relevance to these cases are best described by the guideline:

“Campaign organizers should monitor and enforce disclosure of identity. Manner of disclosure can be flexible, based on the context of the communication. Explicit disclosure is not required for an obviously fictional character, but would be required for an artificial identity or corporate representative that could be mistaken for an average consumer”.

The organisations behind these campaigns (and the broader Australian marketing and communications industry) cannot be lulled into the false economy of measuring column inches and hits as the ultimate measure of campaign success. As I would say in this such campaign measurement, H.I.T.S. are How Idiots Track Success.

Tourism Queensland CEO Anthony Hayes has since admitted: “The simple answer is that we messed up”. PR isn’t about column inches, it’s about authenticity, trust and believable, honest communications across integrated channels. TQ may have won the column inches battle, but they lost the trust war; that’s what counts. Now, people aren’t sure whether any element of the campaign was real, or whether it was all an elaborate hoax, whether any of the positive claims made by TQ are believable. The public had their awareness raised, and their trust shattered. I think it’s a real shame for TQ. As for the Naked Communications campaign for the undisclosed Australian retailer, there has been no upside.

A lesson in honesty, opinion and identity – hopefully just growing pains for a burgeoning Australian digital media industry, not the sign of things to come.

What ever happened to Webrings?

In the olden days of the early-mid 90s, websites on like topics were linked via webrings; links / arrows on the bottom of the page that would link you to other sites on the same issue, topic, theme or industry.

Yahoo! carved out an audience not through search or email, but through their wonderful Directory service – one of the first user generated content sites whereby you could suggest sites to be listed. At one time almost every site in the world was listed in categories according to topic / subject. Webrings became obsolete as people could visit Yahoo! and find a one-stop “link shop”.

Webrings evolved from site based to browser based – Netscape started a “What’s Related” link on their browsers in 1999, where people could use the browser to find other related sites. However “What’s Related” failed due to privacy concerns.

Search overtook directories and webrings, as people could find the single or few most informative sites based on specific topic or keyword searches. Far more focussed and efficient, but at the cost of a broad view.

The beauty of webrings, Directory services such as Yahoo! and “What’s related” (although the latter was hardly a success), was that you could access the “universe” of websites on that subject directly – without being distracted or misled by search.

Webrings aren’t dead – Blogs have adopted a form of webrings through Blogrolls – lists of links to similar or related blogs.

But what of the vast majority of sites? Have companies and web developers forgotten about the social nature of websites – and that people want to know about the company, but also about the industry (dare we suggest competitors) through links!

So, what are the new webrings? In the era of search, are they relevant? Do we need them? Is the web too big to afford webrings? Or are webmasters now being judged on time spent ON site rather than sharing time between sites?

A trusted digital travel advisor

I recently returned from a very relaxing three week holiday in Greece and Italy. The groups that provided services and tours concluded the experiences with a request for a review on or a mention on travel forums.

While much of my holiday involved lazing about the beaches of Leros, and meandering about the shops and streets of Rome, Florence and Venice, I took some amazing tours, two of which stand out:
1. A tour of the Vatican with Grant from Eden Walks. Grant is an extremely knowledgeable and very entertaining tour guide – someone who can discuss the intricacies of the Catholic Church and link it to a contemporary reference such as “Batman: The Dark Knight”. At the end of his tour, he asked us all to provide the tour with an honest “hopefully positive” review on, or any other travel forums we happened to be visiting.

2. 500 Touring Club – A wonderful day driving old Fiat 500s around the streets of Florence and the hills of Tuscany. Again, Sophie and Alex, our excellent and friendly guides suggested posting about our experiences on TripAdvisor.

The request for reviews on these sites is necessary due to them being service providers. The difference between services and any other products of course is that services are:
Simultaneously produced and consumed
Cannot be transported
Somewhat unique or different with each turn or person

As a result, TripAdvisor and other user generated travel sites are providing these small service providers the most efficient way of communicating their good reputation to people all over the world. Without a good reputation that is easily accessible, they have nothing. They can’t send their services via the post, they can’t produce more. They must rely on the experience to tell the story – and the users to communicate that story. Advertising isn’t the best option; it’s more important that they are discovered at the right time, right place, on the right channel.

The only way these businesses can build awareness and trust is via the referrals of their users. In the old days, the primary means would have been travel media – a “pray for space”, rare option. Now, it seems to be TripAdvisor – a democratised, awareness building information source where anyone can review and rank their travel experiences, and anyone can find the reviews easily.

The network effect of such sites provides their greatest strength – people seek user generated votes and reviews via TripAdvisor, then contribute themselves, thus enhancing the experience for the next person, making the content far more discoverable, and so on.

The Dinosaurs of the Recorded Music Industry Must Evolve or Perish

There was a time when music companies objected to the playing of music on the radio. Instead of seeing early radio technology as a positive opportunity for the music business, they refused stations the right to rebroadcast their recordings. It is with the same fear of the unknown that music companies are currently fighting the latest methods of distribution instead of developing new business models to utilise them.

Predicting reduced sales of sheet music and LPs, the early days of radio saw big record companies battling radio stations, until eventually, the former saw the potential in promoting music through the latter. Ironically, today we find a large proportion of cost and effort devoted to radio promotion, driving sales through traditional outlets. The companies apprehensions have now transferred to new technologies such as MP3 and AAC (or MP4 as it is colloquially known). For much the same reasons as they once feared radio. Most music companies have seen the MP3 boom as a mortal threat to their business and have acted with extraordinary vigour to stamp out peer-to-peer file sharing services such as Napster, Australian-owned KaZaA, Gnutella, Limewire and iSwipe, accusing them of encouraging piracy and copyright infringement.

Recently, EMI, Sony and Universal moved into battle mode by entering Australian universities to arrest students who had large numbers of MP3s on their servers. They now intend to spend millions on legal action against these ‘perpetrators’ of alleged piracy and ultimately intimidate other MP3 users in an attempt to stamp out the epidemic of file sharing.

However, in fact the biggest problem facing the music companies is not the spread of MP3s or file sharing, but rather, their own unwillingness to embrace and adapt their business to this revolutionary technology. Indeed, digital music sharing through peer-to-peer networks is proving to be the most efficient method of promoting and distributing music that has ever evolved.

Against a backdrop of rapid change in communications technology and the media, there has been an unmistakable trend in recent times toward a more intricate music culture. A growing number of artists are releasing music to ever smaller captive audiences. The days where a superstar performer or group – Madonna, Michael Jackson, Prince, The Beatles, The Rolling Stones – would release an album destined to dominate not just the music, but also the media and fashion of the times, appear to be over. Even the days of middleweight acts taking the market by storm and hanging around for another album have virtually disappeared. Instead, the tendency is for smaller, more specific releases from artists who are closely in touch with their fan base or subculture. As in other aspects of the emerging world market, we can see a ‘global village’ phenomenon of dispersed groups of people enjoying a product over a vast geographic and economic sphere.

Peter Chernin, News Corp COO, said at a News Corp Conference in 1998:

With big events at one end of the spectrum and niches at the other, what happens to the middle? The answer is that choice and fragmentation are killing the middle, which lacks the grabbing power of the big event or the custom tailoring of the niche. The general interest magazine – dead. The variety show – dead. The all-purpose department store – dead.

Therefore, the traditional record company may be right to feel threatened by this widely used digital technology and the virtual marketplace it has created. Until recently, the music industry was able to manipulate the buyer by placing restrictions on product licensing, aspiring toward a monopolistic control of traditional retail and distribution methods. However, this approach neglected the ability and desire of individuals to be fans, to invest time and effort into enjoying the artist. A key to the promotion of music artists is proving to lie in allowing the public the freedom to find out, to cultivate a knowledge, passion, even zealotry for their musical tastes, and ultimately even to take part in the development of the artist. The resources of rapidly consolidating record companies are stretched too thin to take advantage of such activity.

The costs of the traditional music company are too high to cater to small groups of special-interest fans. But understanding and catering to the fan is crucial to surviving in the changing music industry. The fan will actively research their musical interests, relying on peer-to-peer networks as a tool to do so. This is the same person that marketers refer to as the “80/20 rule”, 80 per cent of profits come from this 20 per cent of customers. This species of music-lover will go to great lengths to download, to explore and to discover. Fans use the Internet as a means of communication, finding outlets in newsgroups, blogs or discussion boards to talk about an act of interest to them, find similar acts and ultimately to invest money in the artist by purchasing music, merchandise, tour tickets, or other paraphernalia related to their heroes. Such fandom is not exclusive to the few major high-profile Madonnas of music, but can just as easily be oriented toward the local band down the road.

Unfortunately music companies whether by structural restraints or ignorance continue to operate as if the messages and news about their artist can be controlled through tightly held relationships with radio stations, music press and music television. In fact, the information to which a fan/investor will have access is far more detailed and varied than anything a Promotions Manager will ever have the time, resources or ability to control. Like any product manager, they are forced to move on once the priority status has passed. The fan, however, will keep ranging well beyond the borders and jurisdiction of local media outlets or a promotions plan.

If this is the way music companies act about the message, the way they treat the product itself is equally outdated. The rise of parallel imports, online purchasing and more important still, MP3s, has seen the territorial jurisdiction of licenses, sub-licenses and territory based record labels becoming redundant. Earlier this year, in a move music magazine NME described as “draconian”, dinosaur-like industry bodies like the Australian Recording Industry AssociationAustralian Music Retailers Association adopted a code of practice that restricts the sale of CDs to persons under 18, based on profanity (Government communiqué on the new Code). This does nothing to deter the fan; instead it drives them to import or download the music, thus restricting the revenue to the artist.

Put simply, digital networks are displacing traditional methods of production, distribution, and retail sales, allowing the customer direct access to music. Downloading enables direct market access for any artist, record label or potential supplier. It removes the barrier of expensive overheads contained in the traditional model. The biggest of these is, of course, the middleman: the record distribution company.

The reason for the music industry’s reluctance to embrace the technology is their realisation that it represents a write off of millions of dollars invested in the traditional infrastructure of CD production, logistics, distribution and retail framework that has been the industry’s sole means of accessing the customer base. There remains a market for CDs, as they still offer a much higher quality of music (for the moment) and a tangible product that fans will buy. But the situation is rapidly changing.

It has taken Apple, with its new iTunes Music Store, to provide the first customer-friendly means of digital music delivery. An outsider to the music industry (albeit one used by a vast majority of music creators and artists), Apple has modified its popular iTunes software to include a window where people can search for, and purchase over 450,000 songs for $US0.99 each. It’s simple, one click and you’ve got the song for $US0.99. It is then possible to share any purchased song with three different computers, download it onto an iPod or burn it to CD. Seemingly this was too much to ask of record companies, who attempted to create online music sales through competing companies, Pressplay and Musicnet. Both proved cumbersome and difficult. Users paid a monthly subscription and were allowed to download a fixed number of songs which they could then access on just one computer, and only for as long they continued paying their subscription. To BMG’s credit, they dared to invest in Napster, hoping it would somehow evolve a viable user-pays model, however this never eventuated and Napster went broke.

In the end, most record companies chose to obstruct the technology rather than adopt and adapt it, bringing us to the current situation of record companies spending millions chasing individual university students. This is not to say that those record companies will necessarily be obsolete in the download world. What might the record company of the future look like? They are valuable sources of A&R (Artist and Repertoire) expertise. A&R personnel find, develop, invest in and refine the image and releases of the raw talent they have discovered in the hope that the outcome will be the creation of great content. The promotion and marketing of this same act is also extremely important in a mass-appeal market. However, the record company should not hold a monopoly on marketing and promotion. Instead, like the rest of the corporate world, each act would be outsourced to specialised marketing and promotion companies which understand the subtleties of each culture and subculture and try to “control” less and “cultivate” more. With lower overheads and better returns on acts, it opens potential for longer life cycles for the bands, and with this a further opportunity to create a true fan base at an international level.

This modular approach of providing A&R, that is continuing to invest in the image, songs and outcome of the musical product, while outsourcing marketing and promotion, would take the role of the music company away from the all-service company, to one responsible for just one or two links in the value chain. Whether by accident or design, Festival Mushroom Records has been the only major Australian record label so far to move towards this model. By enhancing its core competencies in control and development of the copyrights of particular acts, they change their focus to “the good old days” of investing in quality acts and spending time developing them.

Artists under the new model will be able to distribute and market their music within a modular and flexible market, whether purely through MP3 (where cost of sales is virtually zero, allowing for greater returns on lesser sales for a breaking act, for example, Little Birdy’s new release) or investing in production of CDs (for larger, older or deceased acts who are not catering to savvy fans, such as Elvis Presley) or, in a majority of cases, a hybrid of the two formats, MP3 and CD.

Whatever the outcome, these will prove very interesting times for the music industry. Structural problems can be disguised as competitive pressure from computer games and DVD sales or continue to be blamed on “downloads and piracy”, but some of the major players are yet to react to, or even admit to, the real problems facing the industry. While it may be a few years before we see an act independently break by selling digital music over the internet, unless the music companies find a means of focusing their role in “filtering” good acts and creatively developing great content, as opposed to limited distribution networks, it seems they will be left behind.