During the week of 2nd June, I presented my ‘Ceding Control’ presentation to over 500 Australian businessmen and businesswomen; with sell out events for the AMI in Sydney, Melbourne, and Brisbane, and in joint presentations to selected clients of leading Australian research agency Colmar Brunton.
The notes below give a small taste of the key points I was making.
The 2.0 phenomenon
There is no single, best definition of Web 2.0. The technology people tend to talk about the improved tools that make the Web work better, such as AJAX, PHP, Ruby on Rails etcetera. On the other hand, popular evangelists tend to talk about user generated content, YouTube, and social media, such as Facebook.
My view is that the shift has been from a one-way street, where editors, broadcasters, image makers, manufacturers simply fed their material to ‘their audiences’, to a two-way street, where people expect to be able to speak back, to be listened to, and to be able to contribute. This does not mean that people will always want to speak back, but some will, and most want the right to do so.
Web 2.0 in Australia
Web 2.0 is now a mainstream activity, as the Neilsen data below shows.
- 84% share photos, video links, etc
- 78% download/stream audio and video
- 77% edit or comment on content
- 69% uploading video or music
Source: Nielsen NetRatings, Australia, 2008, % of Internet Users
Alexa’s ranking of the top ten sites in Australia, as of 21 May 2008, shows that 50% are fully Web 2.0 in their nature:
- Google Australia
- Yahoo
- Windows Live
- Google
- YouTube (Web 2.0)
- Facebook (Web 2.0)
- eBay (Web 2.0)
- MySpace (Web 2.0)
- Wikipedia (Web 2.0)
- NineMSN
Even the traditional sites, such as Google, Yahoo, and NineMSN, are incorporating more 2.0 elements into their offerings, such as networks, forums, and citizen journalism.
Deluge of Ideas
Not since the early 1990s has there been such a deluge of new ideas in business. However, in the 90s the lead came from people like Peter Drucker, Tom Peters, and Michael Porter, people from the academic/business consultancy interface.
This time the ideas are coming from people in touch with the world via media roles, which makes many of their ideas more accessible, and to many of us more relevant.
This new ideas include:
- The Long Tail, Chris Anderson
- Wikinomics, Dan Tapscot
- The World is Flat, Thomas Friedman
- Herd, Mark Earls
- The Wisdom of Crowds, James Surowiecki
- A Whole New Mind, Daniel Pink
The Four Cs
Business needs to master the Four Cs. The first three of these are relatively appealing:
- Co-creation
- Crowdsourcing
- Collaboration
But they all depend on the fourth C, Ceding control. For many people and most companies, ceding control is much harder than the other three, but it is essential.
Companies who have made the Four Cs work for them, such as Lego, Threadless.com, and most notably P&G, have all learned that obtain the benefits of Co-creation, Crowdsourcing, and Collaboration they needed to cede control to customers, partners, and the suppliers of ideas.
More recently this approach has gained more general acceptance, with initiatives such as MyStarbucks.com and Dell’s IdeaStorm explicitly ceding some control to customers.
Free, Open, and Social
The three forces, underpinning many of the changes in the way 2.0 ideas are being adopted and accepted, can be summarised Free, Open, and Social.
Free is becoming an increasingly important aspect of many businesses, leading to an interest in what has been termed Freemium, and a search for new ways to monetise assets and services. Many young people already believe that music should be free at the point of use, leading to a frantic search for alternative methods of monetising music. Services like email, social networking, Wikipedia, and Google Maps, and advertising (see Craigslist in the US) are expected to be free. Most of the software that underpins the business of the Web, and increasing regular business too, is open-source and free, for example Apache and Linux.
Open standards are becoming and more and more an expected feature of business practices. One of the reasons that Facebook was so popular was that it opened its application interface to third-part developers. The money generated by these third parties stayed with them, without Facebook trying to take a cut. The days of the proprietary system are being eroded, with companies such as Apple and Microsoft looking very exposed.
Mark Earls, author of Herd, has described humans as the “super social ape”. Things like Facebook and Twitter are fads, but the move towards more and more social elements to everything we do is a trend. The key to most of the increase in social networking has been asynchronicity, people want to connect, but they want to do it at their convenience, hence the rise in texting, in wall posting, and commenting. Companies such as Geek Squad in the US have found that by empowering their workforce with a wiki and a social network they can improve performance, make work more enjoyable, and cut down on employee churn. But they have also found it challenges traditional power structure. If the best idea come from a junior employee in say Austin, then that person will soon develop more ‘authenticity’ than more senior people.
So What?
For too long brands have thought of people as customers, as if they had no role other than to buy and consume their product. Market researchers have thought of people as respondents, somebody who does not exist unless we are asking them a question, and who exists only to respond!
To leverage the power of 2.0 we need to have conversations with people. To really impact business decisions we need to report the numbers and we need to report the authentic voice of the consumer. In the past, too many surveys have asked questions that were simply not relevant to people. For example, we might be surveying customers about packaging, but perhaps they wanted to tell us about a great retail experience they have had, or about a poor product experience. We have previously assumed that we should always create the agenda, choose the questions, and prescribe the range of acceptable answers.
A few agencies have been pioneering some new options, using Forums and Blogs to have conversations with people, to find out what is important to them and to allow people to provide collaborative responses.
Why are companies turning to market research agencies to run these exercises, rather than putting them on their own website? There are several reasons, but key ones include:
- Safety, the Internet is a potentially scary place, and by using a third-party the brand is to some extent insulated from the risk.
- Running discussions is both specialised and time consuming. Many insight departments would be swamped if they started having to respond to these 24/7 conversations with customers.
- Adding insight. Market researchers have a wealth of experience in representing the voice of the consumer, this skill is highly applicable in terms of these new ways of discovering what people feel and want.