Author Archives: ghotchkiss

The Swapping of the Old “Middle” for the New

First published November 8, 2012 in Mediapost’s Search Insider

For the past several columns, I’ve been talking about disintermediation. My hypothesis is that technology is driving a general disintermediation of the marketplace (well, it’s not really my hypothesis — it’s a pretty commonly held view) and is eliminating a vast “middle” infrastructure that has accounted for much of the economic activity of the past several decades. It’s a massive shift (read “disruption”) in the market that will play out over the next several years.

But every good hypothesis must stand up to challenge, and an interesting one came from a recent article in Slate, which talks about the growth of a brand new kind of “gatekeeper,” the new “bots” that crawl the Web and filter (or, in some cases, generate) content based on a preset algorithm. These bots can crawl blog posts, pinpointing spam and malicious posts so they can be removed. The sophistication is impressive, as the most advanced of these tap into the social graph to learn, in real time, the context of posts so it can make nuanced judgment calls about what is and isn’t spam.

But these bots don’t simply patrol the online frontier, they also contribute to it. They can generate automated social content based on pre-identified themes. In other words, they can become propaganda generators. So now we have a new layer of “middle” that acts both as censor and propagandist. Have we gained anything here?

The key concept here is one of control. The “middle” used to control both ends of the market. It did so because it controlled the bridge between the producers and consumers.  This was control in every sense: control of the flow of finance, control of the physical market itself, and control of communication.

With disintermediation, direct connections are being built between producers and consumers. With this comes a redefinition of control. In terms of financial control, disintermediation should (theoretically) produce a more efficient marketplace, resulting in more profit for producers and better prices for consumers. That drastically oversimplifies the pain involved in getting to a more efficient marketplace, but you get the idea.  In this case, the only loser is the middle, so there’s no real incentive for the producers or consumers to ensure its survival.

Disintermediation of the physical market essentially works itself out. If the product needs a face-to-face representative, the middle will survive. If not, then we’ll figure out how to facilitate the sale online, and you can expect to see a lot of UPS vans in your neighborhood. We consumers may mourn the loss of a “face” in some segments of our marketplace, but we’ll get over it.

When it comes to control of communication, it’s more difficult to crystal-ball what might happen in the future. This area is also where new gatekeepers are most likely to appear.

Communication between marketers and the market used to be tightly channeled and controlled by the “middle.” It also used to flow in essentially one direction – from the marketer to the market. It was always very difficult for true communication to flow the other way.

But now, content is sprouting everywhere and becomes publicly accessible through a multitude of online touch points. It could soon become overwhelming to navigate through, both for consumers and producers. In this case, arguably, the middle served a very real service to both producers and consumers. The middle could edit communication, saving us from wading through a mountain of content to get what we were looking for.  It could also ensure that the messages producers wanted to get to the market were effectively delivered. The channels were under the control of the marketplace. For this reason, both marketers and the market may be reluctant to see disintermediation when it comes to communication.

The new gatekeepers, such as those featured in the Slate article, seem to serve both ends of the market. They help consumers access higher quality information by weeding out spam and objectionable content. And they help producers exercise some degree of control over negative content generated by the marketplace. In the absence of tight control of channels, a concept that’s gone the way of the dodo, this scalable, automated gatekeeper seems to serve a purpose.

If the need is great enough on both sides of the market, we are likely to find a new “middle” emerge: an “infomediary,” to use the term coined by John Hagel, Marc Singer and Jeffrey Rayport. According to this definition of the middle, Google emerges as the biggest of the “infomediaries.”

The question is, how much control are we willing to give this new evolution of the middle? In return for hacking some semblance of sanity out of the chaos that is an unmediated information marketplace, how much are we willing to pay in return? And, where does this control (and with it, the associated power) now live?  Who owns the new gatekeepers?  And who are those gatekeepers accountable to?

Disintermediation of a New, More Connected World

First published November 1, 2012 in Mediapost’s Search Insider

On Monday, one of the byproducts of disintermediation hit me with the force of, well — a hurricane, to be exact. We are more connected globally than ever before.

This Monday and Tuesday, three different online services I use went down because of Sandy. They all had data centers on the East Coast.

Disintermediation means centralization, which means that we will have more contact with people and businesses that spread across the globe.

The laptop I’m writing this column on (a MacBook Pro) was recently ordered from Apple. I was somewhat amazed to see the journey it took on its way to me. It left a factory in China, spent a day in Shanghai, then passed through Osaka, Japan on its way to Anchorage, Ala. From there it was on to Louisville, Ky. (ironically, the flight path probably went right over my house), then back to Seattle, Vancouver and then to my front door. If my laptop were a car, I would have refused delivery – it already had a full year’s worth of miles on it before I even got to use it.

A disintermediated world means a more globally reliant world. We depend on assembly factories in Taiyuan (China), chip factories in Yamaguchi (Japan), call centers in Pune (India), R&D labs in Hagenberg (Austria), industrial designers in Canberra (Australia) and yes, data centers in lower Manhattan. When workers brawl, tsunamis hit, labor strikes occur and tropical storms blow ashore, even though we’re thousands of miles away, we feel the impact. We no longer just rely on our neighbors, because the world is now our neighborhood.

This adds a few new wrinkles to the impacts of disintermediation, both positive and negative.

On the negative side, as we saw forcefully demonstrated this week, is the realization that our connected markets are more fragile than ever. As production becomes concentrated due to various global advantages, it is more vulnerable to single-point failures. One missing link and entire networks of co-dependent businesses go down. This lack of redundancy will probably be corrected in time, but for now, it’s what we have to live with.

But, on the positive side, our new connectedness also means we have to have interest in the well being of people that would have been out of our scope of consciousness just a mere decade ago. We care about the plight of the average worker at Foxconn, if for no other reason than it will delay the shipment of our new Mac. I exaggerate here (I hope we’re not that blasé about human rights in China) to make a point: when we have a personal stake in something, we care more. When you depend on someone for something important to you, you tend to treat them with more consideration. Thomas Friedman, in his book “The World is Flat,” called it the Dell Theory of Conflict Prevention:

“The Dell Theory stipulates: No two countries that are both part of a major global supply chain, like Dell’s, will ever fight a war against each other as long as they are both part of the same global supply chain.”

To all of you who weathered the storm, just know that you’re not alone in this. We depend on you – so, in turn, feel free to depend on us.

The Balancing of Market Information

First published October 25, 2012 in Mediapost’s Search Insider

In my three previous columns on disintermediation, I made a rather large assumption: that the market will continue to see a balancing of information available both to buyers and sellers. As this information becomes more available, the need for the “middle” will decrease.

Information Asymmetry Defined

Let’s begin by exploring the concept of information asymmetry, courtesy of George Akerlof, Michael Spence and Joseph Stiglitz.  In markets where access to information is unbalanced, bad things can happen.

If the buyer has more information than the seller, then we can have something called adverse selection. Take life and health insurance, for example. Smokers (on the average) get sick more often and die younger than non-smokers. If an insurance company has 50% of policyholders who are smokers, and 50% who aren’t, but the company is not allowed to know which is which, it has a problem with adverse selection. It will lose money on the smokers so it will increase rates across the board. The problem is that non-smokers, who don’t use insurance as much, will get angry and may cancel their policy. This will mean the “book of business” will become even less profitable, driving rates even higher.   The solution, which we all know, is simple: Ask policy applicants if they smoke. Imperfect information is thus balanced out.

If the seller has more information than the buyer, then we have a “market for lemons” (the name of Akerlof’s paper). Here,  buyers are  assuming risk in a purchase without knowingly accepting that risk, because they’re unaware of the problems that the seller knows exists. Think about buying a used car, without the benefit of an inspection, past maintenance records or any type of independent certification. All you know is what you can see by looking at the car on the lot. The seller, on the other hand, knows the exact mechanical condition of the car. This factor tends to drive down the prices of all products –even the good ones — in the market, because buyers assume quality will be suspect. The balancing of information in this case helps eliminates the lemons and has the long-term effect of improving the average quality of all products on the market.

Getting to Know You…

These two forces — the need for sellers to know more about their buyers, and the need for buyers to know more about what they’re buying — are driving a tremendous amount of information-gathering and dissemination. On the seller’s side, behavioral tracking and customer screening are giving companies an intimate glimpse into our personal lives. On the buyer’s side, access to consumer reviews, third-party evaluations and buyer forums are helping us steer clear of lemons. Both are being facilitated through technology.

But how does disintermediation impact information asymmetry, or vice versa?

If we didn’t have adequate information, we needed some other safeguard against being taken advantage of. So, failing a rational answer to this particular market dilemma, we found an irrational one: We relied on gut instinct.

Relying on Relationships

If we had to place our trust in someone, it had to be someone we could look in the eye during the transaction. The middle was composed of individuals who acted as the face of the market. Because they lived in the same communities as their customers, went to the same churches, and had kids that went to the same schools, they had to respect their markets. If they didn’t, they’d be run out of town. Often, their loyalties were also in the middle, balanced somewhere between their suppliers and their customers.

In the absence of perfect information, we relied on relationships. Now, as information improves, we still want relationships, because that’s what we’ve come to expect. We want the best of both worlds.

Will Customer Service Disappear with the Elimination of the “Middle”?

First published October 18, 2012 in Mediapost’s Search Insider

In response to my original column on disintermediation, Joel Snyder worried about the impact on customer service: The worst casualty is relationships and people skills. As consumers circumvent middlemen, they become harder to deal with. As merchants become more automated, customer service people have less power and less skills (and lower pay).

Cece Forrester agreed: Disintermediation doesn’t just let consumers be rude. It also lets organizations treat their customers rudely.

So, is rudeness an inevitable byproduct of disintermediation?

Rediscovering the Balance between Personalization and Automation

Technology introduces efficiency. It streamlines the “noise” and marketplace friction that comes with human interactions. But with that “noise” comes all the warm and fuzzy aspects of being human. It’s what both Joel and Cece fear may be lost with disintermediation. I, however, have a different view.

Shifts in human behavior don’t typically happen incrementally, settling gently into the new norm. They swing like a pendulum, going too far one way, then the other, before stability is reached. Some force — in this case, new technological capabilities — triggers the change. As society moves, the force, plus momentum, moves too far in one direction, which triggers an opposing force which pushes back against the trend. Eventually, balance is reached.

A Redefinition of Relationships

In this case, the opposing force will be our need for those human factors. Disintermediation won’t kill relationships. But it will force a redefinition of relationships. The challenge here is that existing market relationships were all tied to the “Middle,” which served as the bridge between producers and consumers. Because the Middle owned the end connection with the customer, it formed the relationships that currently exist. Now, as anyone who has experienced bad customer service will tell you, some who lived in the Middle were much better at relationships than others. Joel and Cece may be guilty of looking at our current paradigm through rose-colored glasses. I have encountered plenty of rudeness even with the Middle firmly in place.

But it’s also true that producers, who suddenly find themselves directly connected with their markets, have little experience in forming and maintaining these relationships. However, the market will eventually dictate new expectations for customer service, and producers will have to meet those expectations. One disintermediator, Zappos, figured that out very early in the game.

Ironically, disintermediation will ultimately be good for relationships. Feedback loops are being shortened. Technology is improving our ability to know exactly what our customers think about us. We’re actually returning to a much more intimate marketplace, enabled through technology. Producers are quickly educating themselves on how to create and maintain good virtual relationships. They can’t eliminate customer service, because we, the market, won’t let them. It will take a bit for us to find the new normal, but I venture to say that wherever we find it, we’ll end up in a better place than we are today.

The Good Side of Disintermediation

First published October 11, 2012 in Mediapost’s Search Insider

You know you’ve found a good topic for a column when half the comments are in support of whichever side of the topic you’ve lined up on, and half are against it. Such was the case last week when I wrote about disintermediation.

This week, I promised to present the positives of disintermediation. I’ll do so at the macro level, because there are market forces at work that will drive massive change at every level. But there were also some very interesting questions raised last week by readers:

  • Is disintermediation killing relationships and our ability to deal with people?
  • Are the benefits of disintermediation tied to social status, driving the haves and the have-nots even further apart?
  • Is more information good for the market, or does it just create more noise for us to wade through?
  • What will the social cost of disintermediation be?
  • What are the global implications of disintermediation?
  • In knowledge-based professional markets where experience and expertise are essential (i.e. health care) what role does disintermediation play?
  • Are we just replacing one type of “middle” with another (for example, online travel agencies for traditional travel agencies)?

Each of these questions is worthy of a column itself, so I’ll file those away for future writing over the next few weeks. But today, let’s focus on the silver lining inside the disintermediation cloud.

I’ve written about Kondratieff waves (also K waves) before. In the world of the macro-economist (who are of mixed opinion about the validity of the theory), these are massive waves of disruption (often driven by technological advances) that first deconstruct the marketplace and then rebuild it based on the new (improved?) paradigm.

The Industrial Revolution was one such wave. What that did was create a new marketplace built on scale. Bigger was better. It introduced mass manufacturing, mass markets and mass advertising. It also created the “middle,” which was an essential part of getting goods to the market. Given the scale of the new markets, it was essential to create a huge support infrastructure. Most of the wealth of the 20th century was built on the back of this particular K wave.

One of the characteristics of a K wave is that the positive benefits outweigh the negatives. After the period of destruction as the old market is torn apart, the new market scales to new heights. Technology fuels increased capabilities and opportunities. The world lurches ahead to a new possibility. We were better off (arguably) by most metrics after the Industrial Revolution than before it. We were more productive, had a higher standard of living and could do things we couldn’t do before.

Today, we’re in the middle of another K Wave disruption, and I believe this one is going to dwarf the impact of the Industrial Revolution. Of course, K waves by their nature are long-term phenomena whose impacts take decades to roll their way through society.

This particular K Wave is reversing many of the market dynamics established by the previous “Bigger is Better” one. We’ve begun to deconstruct the gargantuan support system required to service mass markets. Inevitably, there will be pain, and last week’s commentators zeroed in on many of those pain points. But there will also be growth. And the bigger the wave, the bigger the growth. In this case, the same factors I talked about last week – democratization of information, better user experiences, solving the distance problem – are all being driven by technology. As this wave continues, the market will become more efficient. Information asymmetry will be lessened (if not eliminated) and the superstructure of the “middle” will become unnecessary.

A more efficient marketplace means new opportunities. More businesses will start and grow. Previously unimagined sectors of a new economy will emerge. This new economy will be global in scope, but hyperlocal in nature. Pure ingenuity will have a chance to flourish, freed from the constraints of the need for scalability. Once we get through the stumbles inevitable in the transition period, the economy will ramp up for another bull run. But we have to get there first.

The Disintermediation of Everything

First published October 3, 2012 in Mediapost’s Search Insider

Up until five years ago, I had never used the word disintermediation. In fact, if it would have come up in casual conversation, I would have had to pick my way through its bushel of syllables to figure out exactly what it meant.

Today, I am acutely aware of the meaning. I use the word a lot. I would put it up there as one of the three or four most important trends to watch, right up there with the Database of Intentions, which I talked about last week. The truth is, if you’re a middleman and you’re not dead already, you’re living on borrowed time.

Why is the Middle suddenly such a bad place to be? A lot of people have made a lot of money in the Middle for hundreds of years. The Middle makes up a huge part of our economy, including a lot of middle-class jobs. Systematically eliminating it is going to cause a ton of grief. But the process has started, and there’s no turning back now.

Three big shifts are driving disintermediation:

The Democratization of Information

The Middle exists in part because we didn’t have access to what, in game theory, is called perfect information. Either we didn’t have access to information at all, or the information we had was not reliable or useful to us. So, in order to function in the marketplace, we needed a bridge to what information did exist.

Think of travel agents (which for the majority of us, is someone we probably haven’t spoken to for a few years). Travel agents were essential because we were walled off from the information we needed to arrange our own travel. We had no access to the latest airfares, hotel availability or room rates. If you had asked me what was the best hotel in Istanbul, I would have had no clue. We used travel agents because we had no choice.

Today, we do. The travel industry was one of the pioneers in democratizing information. The result? The travel marketplace is infinitely more efficient than it was even a decade ago. The average person can now put together a six-week multi-stop vacation relatively easily.  The middle is being eliminated. In 1998, there were 32,000 travel agencies in the US. Today, through elimination and consolidation, that number is closer to 10,000. Disintermediation has cost thousands of travel agents their jobs.

The Improvement of User Interfaces

When’s the last time you spoke to a bank teller? If you’re like me, it’s probably the last time you had to do something that couldn’t either be done through online banking or at a local ATM.  99% of our banking can now be done quicker and easier because banks have invested in creating platforms and interfaces that enable us to do it ourselves.  It’s better for us as customers, and it’s much more profitable for the banks. Disintermediation in banking has created a more efficient model. Ironically, unlike travel agents, bank tellers have not lost their jobs. They’ve just changed what they do.

The Overcoming of Geography

The final factor is the problem of distance. When mass manufacturing became possible, the distance between the factory and the market started to grow. Suddenly, distribution became a major challenge. Supply chains were born, making a lot of people very rich in the process. Becoming big became essential to overcoming the problem of distance.

But technology has made physical fulfillment much more efficient. Getting a product from the factory floor to your front door is still a challenge, but our ability to move stuff is so much better than it was even a few decades ago. The result? Massive disintermediation. And this particular trend is just beginning.

So What?

Much of what we’re familiar with today is part of the Middle. Just like travel agents, video stores and bank tellers, every year something we have always taken for granted will suddenly disappear. Huge swaths of the economy will be disruptively eliminated. That’s the bad news. The good news will have to wait till next week’s column.

A Decade with the Database of Intentions

First published September 27, 2012 in Mediapost’s Search Insider

It’s been over 10 years since John Battelle first started considering what he called the “Database of intentions.” It was, and is:

The aggregate results of every search ever entered, every result list ever tendered, and every path taken as a result. It lives in many places, but three or four places in particular hold a massive amount of this data (ie MSN, Google, and Yahoo). This information represents, in aggregate form, a place holder for the intentions of humankind – a massive database of desires, needs, wants, and likes that can be discovered, supoenaed, archived, tracked, and exploited to all sorts of ends. Such a beast has never before existed in the history of culture, but is almost guaranteed to grow exponentially from this day forward. This artifact can tell us extraordinary things about who we are and what we want as a culture. And it has the potential to be abused in equally extraordinary fashion.

When Battelle considered the implications, it overwhelmed him. “Once I grokked this idea (late 2001/early 2002), my head began to hurt.” Yet, for all its promise, marketers have only marginally leveraged the Database of Intentions.

In the intervening time, the possibilities of the Database of Intention have not diminished. In fact, they have grown exponentially:

My mistake in 2003 was to assume that the entire Database of Intentions was created through our interactions with traditional web search. I no longer believe this to be true. In the past five or so years, we’ve seen “eruptions” of entirely new fields, each of which, I believe, represent equally powerful signals – oxygen flows around which massive ecosystems are already developing. In fact, the interplay of all of these signals (plus future ones) represents no less than the sum of our economic and cultural potential.

Sharing Battelle’s predilection for “Holy Sh*t” moments, a post by MediaPost’s Laurie Sullivan this Tuesday got me thinking again about Battelle’s “DBoI.” A recent study by Google and EA showed that using search data can predict 84% of video game sales.  But the data used in the prediction is only scratching the surface of what’s possible. Adam Stewart from Google hints at what might be possible, “Aside from searches, Google plans to build in game quality, TV investment, online display investment, and social buzz to create a multivariate model for future analysis.”

This is very doable stuff. All we need to create predictive models that match (and probably far exceed) the degree of accuracy already available. The data is just sitting there, waiting to be interpreted. The implications for marketing are staggering, but to Battelle’s point, let’s not be too quick to corral this simply for the use of marketers. The DBoI has implications that reach into every aspect of our society and lives. This is big — really big! If that sounds unduly ominous to you, let me give you a few reasons why you should be more worried than you are.

Typically, if we were to predict patterns in human behavior, there would be two sources of signals. One comes from an understanding of how humans act. As we speak, this is being attacked on multiple fronts. Neuroscience, behavioral economics, evolutionary psychology and a number of other disciplines are rapidly converging on a vastly improved understanding of what makes us tick. From this base understanding, we can then derive hypotheses of predicted behaviors in any number of circumstances.

This brings us to the other source of behavior signals. If we have a hypothesis, we need some way to scientifically test it. Large-scale collections of human behavioral data allow us to search for patterns and identify underlying causes, which can then serve as predictive signals for future scenarios. The Database of Intentions gives us a massive source of behavior signals that capture every dimension of societal activity. We can test our hypotheses quickly and accurately against the tableau of all online activity, looking for the underlying influences that drive behaviors.

At the intersection of these two is something of tremendous import. We can start predicting human behavior on a massive scale, with unprecedented accuracy. With each prediction, the feedback loop between qualitative prediction and quantitative verification becomes faster and more efficient. Throw a little processing power at it and we suddenly have an artificially intelligent, self-ssimproving predictive model that will tell us, with startling accuracy, what we’re likely to do in the future.

This ain’t just about selling video games, people. This is a much, much, much bigger deal.

The Tricky Intersection of Social and Search

First published September 20, 2012 in Mediapost’s Search Insider

People don’t trust search ads. At least, 64% of people don’t trust search ads.

Apparently, search is not unique. According to the same research, nobody trusts ads of any kind. That’s not really surprising, given that it’s advertising. Its entire purpose is to make us suddenly want crap we don’t need. Small wonder we don’t trust it.

But you know what we do trust? The opinions of our friends.

Nothing I should have said up to this point should come as a shock to anyone reading this column. The only thing I found mildly surprising here was that we had such a low level of trust in search ads. Typically, search advertising is better aligned with intent and less hyperbolic in nature. But, apparently, we marketers have bastardized even the purity of search to the point where it’s less trusted than TV ads (gasp!)

So, to recap, we don’t trust ads, we do trust friends. This seems to present a simple solution: combine the two so that pesky advertising can bask in the halo effect of social endorsement.  You’ve been hearing about this for many years now, including several Search Insider columns from my fellow pundits and myself.

So, given that we’ve been testing the waters for sometime, why haven’t we got this advertising/social thing locked down yet? Why are Facebook stockholders wailing over their deflated portfolios? Why are we still stumbling out of the starting gate in our efforts to marry the magic of social and search? This shouldn’t be rocket science.

In fact, it’s more complex than rocket science. It’s psychology; it’s sociology and at least a handful of other “ologies.” When we talk about combing search and social — or for that matter, any type of advertising and social — we’re talking about trying to understand what makes humans tick.

If we talk about the simplest integration of the two, where social acts as a type of reinforcing influence that is subordinate to the primary act of searching, it’s not hard to follow the train of thought. We search for something, and in the results, we see some type of social badge that indicates how our social connections feel about the options presented to us. In this case, intent is already engaged. Social just serves to grease the decision wheels, helping us differentiate between our options. This type of integration can easily be seen on Google (Plus integration) as well as vertical engines such as TripAdvisor or Yelp.

But that type of integration doesn’t really fire the imagination of marketers and get their market acquisition juices flowing. It’s just hedging your bets on a market that’s already pretty easy to identify and capture. It does nothing to open up new markets. And it’s there where things get muddy.

The problem is this niggling question of intent. Somehow, something needs to activate intent in the mind of the prospect. It’s here where we truly need to be persuaded, moving our mental mechanisms from disengaged to engaged.

To do this, you need to reverse the order of importance between the two channels. Social recommendation needs to be in the driver’s seat, hopefully engaging and moving prospects to the point where they initiate a search. And that’s a much bigger hurdle to get over. Once the order is reversed, the odds of success plummet precipitously.

Here are just a few of the hurdles that have to be cleared:

Trust – Whichever channel is chosen to deliver the social recommendation, it has to be received with trust. This factor can be affected by how the recommendation is presented, the social proof that accompanies it, the aesthetic value of the interface, and the recipient’s attitude towards the channel itself. There is no lack of nuanced detail to consider here.

Alignment of Interest – When the recommendation is delivered, it must be of interest to the recipient. This relies on an accurate assessment of context and intent. Whatever the targeting channel, there has to be a pretty good chance of delivering the right message at the right time.

Social Modality – So, let’s assume you’ve figured out how to get the first two things right – you are using a trusted channel and you’ve done a good job of targeting. You’re not home free yet. Here’s the thing – we don’t act the same way all the time. We adapt our behaviors to fit the social circumstances we are currently in. There are predetermined modes of behavior that we conform to. It’s why we act one way with our coworkers and another way with our children. It’s why it’s okay to tip a waiter in a restaurant, but not okay to tip your mother-in-law after Sunday dinner. This modality is carried over from the real world to the virtual world of social networks. And it’s very difficult to determine what mode a prospect may be in. But it can make all the difference in the success of a socially targeted advertising message.

The Fight for Attention – This is the big one. Even if you do everything else right, your odds for successfully capturing the attention of a prospect and holding it for long enough to generate actual consideration of your product are not nearly as good as you might hope. You’d probably do better at a Vegas craps table. It all depends on what the incumbent’s intent is. What brought her to the online destination where you managed to intercept her? How critical is it that she finish what she’s currently doing? How engaged is she in the task at hand?

With the first example of search/social integration (search first, social second), the odds for success are pretty high, because intent has already been established. You’re just using social endorsement to expedite a process that’s already in motion.

But in the second example (social first, search second), we’re talking about an entirely different ball game. You have to derail the incumbent intent and replace it with a new one. Think of it as the difference between pushing a car downhill that’s already started to roll, and pushing the same car from a standing start up the hill.

No wonder we’re having some difficulty getting things rolling.

A Benchmark in Time

First published September 13, 2012 in Mediapost’s Search Insider

That’s the news from Lake Wobegon, where all the women are strong, all the men are good-looking, and all the children are above average. — Garrison Keillor

How good are you? How intelligent, how talented, how kind, how patient? You can give me your opinion, but just like the citizens of Lake Wobegon, you’ll be making those judgments in a vacuum unless you compare yourself to others. Hence the importance of benchmarking.

The term benchmarking started with shoemakers, who asked their customers to put their feet on a bench where they were marked to serve as a pattern for cutting leather. But of course, feet are absolute things. They are a certain size and that’s all there is to it. Benchmarking has since been adapted to a more qualitative context.

For example, let’s take digital marketing maturity. How does one measure how good a company is at connecting with customers online? We all have our opinions, and I suspect, just like those little Wobegonians, most of us think we’re above average. But, of course, we all can’t be above average, so somebody is fudging the truth somewhere.

I have found that when we work with a client, benchmarking is an area of great political sensitivity, depending on your audience. Managers appreciate competitive insight and are a lot less upset when you tell them they have an ugly baby (or, at least, a baby of below-average attractiveness) than the practitioners who are on the front lines. I personally love benchmarking, as it serves to get a team on the same page. False complacency vaporizes in the face of real evidence that a competitor is repeatedly kicking your tushie all over the block.  It grounds a team in a more objective view of the marketplace and takes decision-making out of the vacuum.

But before going on a benchmarking bonanza, here are some things to consider:

Weighting is Important

It’s pretty easy to assign a score to something. But it’s more difficult to understand that some things are more important than others. For example, I can measure the social maturity of a marketer based on Facebook likes, the frequency of Twitter activity, the number of stars they have on Yelp or the completeness of their Linked In Profile, but these things are not equal in importance. Not only are they not equal, but the relative importance of each social activity will change from industry to industry and market to market. If I’m marketing a hotel, TripAdvisor reviews can make or break me, but I don’t care as much about my number of LinkedIn connections. If I’m marketing a movie or a new TV show, Facebook “Likes” might actually be a measure that has some value. Before you start assigning scores, you need a pretty accurate way to weight them for importance.

Be Careful Whom You’re Benchmarking Against

If you ask any marketer who their primary competitors are, they’ll be able to give you three or four names off the top of their head. That’s the obvious competition. But if we’re benchmarking digital effectiveness, it’s the non-obvious competition you have to worry about. That’s why we generally include at least one “aspirational” candidate in our benchmarking studies. These candidates set the bar higher and are often outside the traditional competitive set. While it may be gratifying to know you’re ahead of your primary competitors, that will be small comfort if a disruptive competitor (think Amazon in the industrial supply category) suddenly changes the game and blows up your entire market model by resetting your customer’s expectations. Good benchmarking practices should spot those potential hazards before they become critical.

Keep Objective

If qualitative assessments are part of your benchmarking (and there’s nothing wrong with that), make sure your assessments aren’t colored by internal biases. Having your own people do benchmarking can sometimes give you a skewed view of your market.  It might be worthwhile to find an external partner to help with benchmarking, who can ensure objectivity when it comes to evaluation and scoring.

And finally, remember that everybody is above average in something…

The Berkowitz Guide to Creating Content that Matters

First published September 6, 2012 in Mediapost’s Search Insider

I made it! I got through the summer without writing too many “filler” columns triggered by the realization it was already Wednesday and my editor was expecting something in her inbox by end of day. There were no summer vacation columns, no “10 things I learned about [fill in blank],” and with the exception of one column about the joy of digging holes, no lame reminiscing about the zillion years I’ve spent doing this. Sometimes I even managed to write about search.

Of course, now that we’re safely past Labor Day, all that comes to a crashing halt. Because, yet again, it’s Wednesday (as of the time I’m writing) and, yet again, the well is dry.  So, it was sad yet somehow consoling that I read the final column of David Berkowitz, the one MediaPost writer I know who has actually logged more columns (400) than I (383 as of this one). David recapped what’s he’s learned from writing a little over 300,000 words, squeezed out every week over the past eight years. As David so astutely says, “I know not every post is amazing, but I still put in the time. It takes just as long to write an average column as it does to write a great one.”

I would urge you to take the time to read David’s column. I’ve been talking a lot lately about the importance of content creation. In the new information economy, content is currency. We all have to start thinking like publishers. And that means that many of us will have to create content. David’s lessons are valuable ones.

One of the thing’s I’ve most admired about David is his ability to write both from his heart and his head. He has a keen intellect, but he’s also a good and decent person, and both qualities shine through in his writing. Being genuine is an often-overlooked gift.

Whatever forms your content takes, make sure you’re creating it for the right reasons. Speak because you have something to say, not just to fill a room (or blog post) with noise. I especially liked David’s Lesson #2: “Big ideas matter, even if they don’t spread.” The columns I’m most proud of are often the ones that got the fewest retweets or comments.

Long ago, when I started writing and speaking, I had to come to terms with the fact that I will seldom go “viral.” I don’t seem to have a flair for creating memes.

But after watching other speakers who are more “meme”-worthy get swarmed after a presentation while I stood quietly to the side, I began to notice a pattern. Often, someone would come up and say, “Thank you so much for what you talked about. It was a different angle and it gave me something to think about.” I decided then and there that it was these individuals I was writing and presenting for. There may be only a handful of them in the room, or reading my column on any given week, but if I can pass along something that causes them to adjust their perspective and see something that was previously undiscovered, it’s been worth it. Retweets are not always the best measure of importance.

Writing should never be a “to-do” task. Yes, the weekly rhythm of this column can frankly be a pain in the butt some days when my to-do list overflows —  but that feeling always goes away when I start writing. As David said, “Each column is a learning experience, starting with a thesis, or a hypothesis, or a half-decent idea for the middle of a nonexistent story.”

Yes, writing is a learning experience, forcing you to put some semblance on structure to half-formed thoughts, but it’s also a chance each week to learn a little bit more about yourself. I like to think of writing as sharing little shards of your soul. You put yourself out there in a way that few others do.

At least, you do if you write as well as Mr. Berkowitz does.