Facebook now has more than 200m users making it the 5th biggest nation in the world - if it were a nation. But the fact that it is not a nation shouldn’t mean that Mark zuckerberg shouldn’t be seen as a leader. Afterall, his site houses the messages, photos, events, friendships, relationships and habits of its inhabitants; and Zuckerberg controls how we interact with them. Zuckerberg has never been one to shy away from making contraflow decisions and sticking to them. However Facebook inhabitants are revolting. Is Zuck changing his leadership style?

Whereas Zuckerberg could afford to stick to his guns about decisions in 2006 when the site population was 9.3m, the current population just won’t allow it.  As such Zuckerberg addressed Facebook users yesterday declaring ‘a more open process and voice in governance… a more transparent and democratic approach to governing the facebook site’. Users were invited to vote on Proposed Documents to Govern Facebook Site - a Statement of Rights and Responsibilities. (Polls opened on April 16th and will close on the 23rd.) 

Zuckerberg’s push for openness and transparency certainly seems to hark of another speech and maybe he is taking cues from America’s new hope. Either way, he is certainly allowing Facebook users to shape the/their site more than before. And though democratic governance is certainly nothing new in websites and companies which often scream for consumer feedback, we must look at any change to Facebook’s governing approach with fresh eyes because Facebook is not like other sites.  Facebook has a population of 200m. It’s a number we are all used to hearing but let me repeat it. 200 MILLION. America has 250m. The UK, 61m. Facebook’s users spend more time on the site than they do thinking about local laws or council elections.  We’ve seen that its users can feel just as strongly about changes to its governance as they do about their own governement’s. This is what makes the site stand out apart from any other website or brand.  No other Lovemark commands the engagement with its consumers that Facebook does. And seeing as it has now achieved the critical mass it needed to win the battle for the web, its population will continue to grow and it will increasingly become the home page and starting point for people connecting to the web. Whenever has any brand or website commanded such a loyal userbase that is so heavily involved in its workings? I’m struggling to think of an equivalent.

In no way is Facebook as powerful as any government. Of course it does not provide healthcare or education and ultimately its users can delete their accounts. But as more users integrate their lives into the platform, the more they will find it difficult to leave should they wish to. Facebook’s population is beginning to determine how the site evolves yet the style of governance is still undoubtedly dictatorial. By offering complete transparency to users Zuckerberg remains free to do with the site as he wishes. However as with a populace, users will begin to feel they own the site and whilst Zuckerberg will of course continue to make Facebook a utility to help its users communicate, he is ultimately in control. The same is true for most brands and social networks however given Facebook’s size, we should take a moment to look at how Facebook’s leader is changing his governance because as social networks grow we will spend more time documenting our lives and communicating in the cloud… and Facebook is the first site that will truly have to forge a governance that no non-governmental body has ever had to before.

Spotify is about to release an API. That means Spotify is about to explode through the web, gaming, and PCs. But is it more than just “a magical version of iTunes in which you’ve already bought every song in the world“? And if so, is it brand friendly?

Yes. And yes.

Spotify has exploded onto more than a million screens since its free public launch in February and this number will soar once its free service launches in the US and the rest of the world. It’s another staggering web success story. But unlike many web successes of late, Spotify knows how to monetize its product. However it does this with a traditional adware model and as we know, the age of interruption is on its way out. The new API will give rise to a plethora of intelligent uses for Spotify. But these apps will come from smart, savvy, quick to act indie developers. There is no doubt that brands will lag behind with their own apps. But hopefully marketers and their agencies will be quicker to step up and bypass Spotify’s 20 seconds of ads for 30 minutes of music model and engineer innovative advertising models that suit the Spotify platform and consumers alike.

Brands are already partnering with Spotify. Conde Nast’s launch of Wired in the UK advertised on Spotify. And it should have. Spotify is the zeitgeist platform and Wired is the mag of the moment but shouldn’t a magazine whose tagline is The Future Edited have created a more advanced partnership with Spotify than a 30 second ad which no doubt most listeners would remove their headphones to? Perhaps something like VW’s partnership with the music player would have been more appropriate:  http://volkswagen.se/passatecofuel/. Plenty of alcohol brands sponsor music initiatives and Carling has got on board with a very simple playlist creator.  And as we see Hollywood becoming more innovative at marketing than brands, Universal is also using playlists to promote The Boat That Rocked. Nike, H&M and Ray-Ban are also developing partnerships with the platform showing that plenty of brands are partnering with Spotify. But they need to innovate.

There are several pre-API Spotify applications on the web at the moment, but I cannot find any that are owned by offline brands. The next step is for a branded app to integrate Spotify’s API and make this the must have app whether that’s on your phone, TV or PC. How about an Axe app which automatically sends playlists for lovers to serenaders’ phones to help in the mating game? Could Audi integrate the platform into their car stereos?

Spotify knows how to monetize itself and branded opportunites are obvious. But out there is an app that truly integrates the platform in a way that will wow consumers.  Let’s see if it comes from a brand.

Earlier today I attended a WIRED seminar moderated by David Rowan, Editor of Wired UK, with Chris Anderson (Editor in Chief of Wired and author of The Long Tail). The seminar’s title was pretty promising. Anderson covers an astonishing array of new technologies and idea in each issue of Wired. But which out of them does he feel merits the title of the Next Big Disruptive Idea?

Disruption 1: Free

With Anderson’s book, Free, hitting shelves in July, it was hardly surprising that he would mention the idea behind Free and Freeconomics. “Google was built on free”, he commented. Revenue comes from its ability to sell advertising through Adsense and Adwords. Google continues to expand its product portfolio and give it away for free (Google Docs, Mail, Maps, News, Images, Calendar and so forth) so that it can extend the reach of its network in order to bring consumers and companies closer to its key offering (search) and income source. For this reason, it can afford to compete with media companies, Microsoft and anyone else it chooses to.

Arguably Google does not even sell advertising because it is a direct ROI model. You pay for hits. Let’s call it advertising anyway. Or as Anderson calls it, “the holy grail of advertising – selling 3 words to 3,000 people who want them. Not annoying 90% of people 90% of the time”.

Maybe Google is a bit too successful for us to draw comparsions with. What about products we can relate to though? Another brand employing Freeconomics is Flickr. Anderson introduced the idea of Freemium and Versioning. Flickr provides a free service to anyone who wants it. However it also provides a professional paid-for service to the individuals and brands that demand it - a tiny minority. Hence it has 2 versions of the same product. 95% of us take the free service, and 5% of us enjoy the service so much we then upgrade to a superior service. Anderson explains that when consumers buy into a product/brand/service before money changes hands, the price becomes a lot more inelastic when those consumers decide to trade up to the superior version because you already have loyalty and satisfaction.

Product trialling is nothing new, but remarkably, premium products have rarely employed this tactic. I have noticed though that this idea has been taken up by the plethora of independent iPhone app developers. Chances are if there is a paid for app at the App Store, it has a paired down ‘Lite’ cousin lurking in the free section acting as the recruitment workhorse.

Anderson continued to talk about Free in gaming where playing is free but status, reputation and short cuts can all be bought (legally). He was also quick to point out that Free is not a coverall for a brands’ products. “Give away a free version to the majority, but sell the superior version to the minority.” Wired Online is a good example compared to the print edition. As was the introductory analogy from Free, Monty Python’s YouTube channel. The Monty Python brand gave away short form high quality clips, resulting in a resurgence of interest in the product.  Subsequently, DVD’s sales soared taking the cult series up to number three in the Amazon DVD sales chart.

Free is an encapsulation of a current idea. Plenty of products out there already employ this tactic so I’m not sure it is the next big disruptive idea. But maybe I am being picky. As per Anderson’s citing of William Gibson, “The future is here. It is just unevenly distributed”. Anderson’s publisher Random House certainly haven’t subscribed to the idea of giving any Version of his book away for free, be it MP3, eBook, paperback or hardback. But maybe that is what Anderson is trying to push onto the bigger brands. And maybe Random House will surprise us.

Disruption 2: The Grid

Anyone that read Wired 16.09 (The Future of the Electric Car) will be familiar with the broad concept of Energy Technology – adding information to electricity. Climate change, geo-politics, and economics (aka the price of oil) have all led to an ever increasing pool of money with which we can recreate energy models.

Shai Agassi’s Better Place is one such model. It is another Free idea, but this time The Grid is involved. Subscribers get their car for free and pay only for the recharging or exchanging of the batteries to run them. A sort of free to buy, pay as you go car scheme. Contrary to the popular belief that people want to own cars and make them their own, there are plenty of Daewoo & Kia owners in the UK that are testament that, for some, a car equals transportation and nothing more.  However making this paradigm shift is a bold move and not without its barriers. Cities need to install a new infrastructure over their roads – charging and exchange stations dotted around the city, close to work, close to home, in your garage and so forth. And currently the infrastructure is limited to about 500,000 cars per city. However, with enough investment and political backing Better Place can be launched globally. It is already due to start commercial sales in Denmark, Israel & Australia in 2012. By shifting away from oil dependency, and into electricity, a vast amount of information is delivered into the grid. Where to place energy and how to anticipate deficits. Energy prices could, theoretically, become more stable. Look out for more on this in the next issue of WIRED.

Anderson covered an array of other topics ranging from Obama’s independence from big business, politicians and indeed his own party, due to his ability to raise independent funds through fund raising 2.0; to the felling of the global economy at the hands of David X Li’s use of the Gaussian Copula algorithm for the mispricing of risk in collateralized debts. Though the ideas of Freeconomics and energy technology in the Grid are the ones that stick out for Anderson as the key players in our future.

Last week News Biscuit wrote a spoof article about a man who almost killed himself because of his Twitter addiction. Despite the spoof, at its core lies the incontrovertible addictive nature of Twitter.

Last year countless businesses banned Facebook access due to interminable employee distraction. Why are social networks so addictive? And why aren’t brands benefiting?

Social networks are simply another social interaction, another way to communicate and procrastinate. Some people shun them stating that their mobile phones and email are sufficient tools to lead a ‘real’ life. Some people shunned mobile phones during their advent into the mainstream 10 years ago.  But as facebook aims to hit 200 million users by the end of 2009  and Twitter is set to explode beyond 7 million by March, those shunning them are increasingly left out. At a value of $250m, brands however simply cannot afford to shun Twitter anymore. Right? 

Since I started drafting this post several days ago, Stephen Fry (@stephenfry) has discussed Twitter on national TV with Jonathon Ross (@wossy) and has seen his followership double from 60,000 to 120,000. Chris Moyles (@chrisdjmoyles) was discussing Twitter this morning tweeting alongside Philip Schoffield (@schofe) and Andi Pieters (@xxandip). Moylesy had 1000 followers at 7am today, and now has 13,000 at 6pm. Plenty of blogs are ruminating about when Twitter will go mainstream. Arguably, with this coverage, it has. 

Tweeters aren’t simply users. They are creators. As with Facebook, they actually go to the site to express themselves. This can be surprisingly addictive. James Harkin, author of Cyburbia: The Dangerous Idea That’s Changing How We Live and Who We Are,  has delved into the dark psychological effects of social networks - or what he has dubbed Cyburbia. Harkin calls this intrinsic itch “an insatiable appetite for chatter with an extended network of electronic ties“.  He goes on to mention that our time online “is less about “social networking” than about an obsessive desire to see and be seen“. 

Meanwhile the folks over at discoverio want to leverage this ‘desire’ “to help you cut through all the noise to easily identify the most important people and content you should be paying attention to”. They have released a presentation to support the power of social networks with the startling title, Discovery is the new cocaine, going so far as to cite a Wall Street Journal article that claims that the consumption of new data “triggers a chemical reaction that makes us feel good”. Despite the fact that this sounds suspiciously like a cheap infommercial, there is a resounding truth that those of us bitten by the Twitter bug do come back for a reason: some form of self validation. Indeed Discoverio’s first project is Mr Tweet, a service which tunes into your Twitter account to automatically measures the size of your Twitter… ahem…  stature. I, for example measure up like so:

Facebook’s Live Feed, Twitter, and services made to agglomerate user activity such as FriendFeed are hugely popular because the internet is providing content that we really care about: information from our friends.  Consumers (whether out of choice or addiction or simple procrastination) are returning to social networks for their daily dose. Twitter is the ultimate pull/engagement media space, so brands really cannot afford to miss out.

Right….?

Maybe. 

Maybe not.

Despite what advertisers and agencies alike might think, perhaps not every media space should be invaded with brand promises.  Like Facebook, Twitter only supplies a service which allows its users to create the content, but unlike Facebook its users often substitute its simple interface for one of a plethora of 3rd party Twitter apps such as Tweetdeck or Tweetie. A Twitter user does not even need to go to twitter.com once subscribed. This is not a flaw but rather a clever way to extend the medium into new channels such as the iPhone. But as it does render twitter.com unreliable from a hits perspective, it means that an advertiser would be required to place branding within the tweets themselves as suggested here. A terrible idea that flies against the age of engagement to the detriment of marketing and the brand. However there are plenty of examples of brands that Tweet.  Brands already use Twitter as surrogate CRM: customer service desks or feedback boards. But as Mashable’s Drapeau suggests, is this just a poor excuse for something they should do alone? Brands just do not seem to be adding much to Twitter. The exceptions are those whose attributes lie in supplying information and opinion - media brands for which Twitter acts as an additional channel.

If brands are aiming to use more traditional advertising such as the Facebook or Google model, marketers need to consider whether Twitter even needs their dollars. Twitter users’ primary complaints are around outages and reliability. This is only set to become a bigger problem without further investment as its usership explodes into the mainstream. However, revenue doesn’t need to come from advertisers and Twitter doesn’t seem to be courting brands. Twitter co-founder Evan Williams raised $22m of private capital in 2006 to start the site and could continue along this path. Given the current economic crisis, Twitter is more likely to sell the user data it owns to companies to raise revenue. The most likely course though, is that it is bought by a brand which can add it as a service, as eBay did with Skype, or as MSN did with Hotmail in ‘98. Or, just as Evans sold Blogger to Google in ‘03. The owners have already reportedly turned down a $500m offer from Facebook’s Zuckerberg. Given that as with so many other 2.0 startups Twitter was not founded with monetizing purposes but as a simple internal comms channel, and may change hands without ever making any significant revenue from advertising, perhaps Twitter is not the right place for brands to get amongst their consumers.

I was really interested to hear what this mish mash of industry insiders would churn up for the conversation but apart from the odd mandatory SMS joke on screen, I spent a lot of time listening to talk about the privacy of data, the inevitable arrival of spam app’s and identity theft paranoia.

Is it paranoia though? I hope so.

Do I care? Not really.

But our compare/facilitator Tony Fish did - he’s been a victim of identity theft twice in the last year. (Click here for his mum’s maiden name and make it a hat-trick). Tony claimed that given the regulation that Google is not offering for 3rd party applications, Android OS phone owners could end up with spam apps or trojan horses. Meanwhile iPhone users would be safe as houses.

Remarkably, this remained the topic of conversation for a large part of the talk showing that it really was an element that industry insiders feared or care about. From a consumer point of view, I just don’t see this being a concern. I don’t have rogue apps on my PC because I exercise caution in opening unknown emails - even when they offer me free pr0n. I cannot see that it would be any different on my phone. But perhaps that is because I have not had my identity stolen yet. From an advertisers point of view, avoiding Apple’s SDK gateway restrictions and making mobile platforms even more open source will affect any brands that are  keen to get a mobile presence. For one thing, it will be easier to get on to a mobile platform. But on the flip side, we are probably about to see a lot of noise generated from smaller developers and daytime TV brands. If there is one time to get involved in mobile, it is now - before the mobile app market becomes overloaded with price comparison apps, ambulance chasers (and viruses).

Came across this wonderful quote from Eric Hoffer the other day while investigating the origins of play for a client brief:

“the pattern of unfinishedness should be the most pronounced in the authomous individual…the retention of youthful characteristics in adult life endows man with a perpetual playfulness so fruitful of insights and illuminations.” (Hoffer, 1952, p. 153)

“Insights and illuminations” sounds to me like the very essence of blogging and from what I know about some my favourite posts, it’s actually their unfinishedness both in writing style and end-point that invites the most conversation from others. I myself often fall foul of attempting to write a blog post with a clear conclusion in sight, planning it like I would a mini essay or work document, but in doing so I completely miss the point of blogging: to fuel and be part of an ongoing and unfinished conversation.  Most importantly I fail to capture the playfulness and joy of blogging. From here on in (maybe this post doesn’t count) I promise to blog playfully and unfinis…

- Jonathan Macdonald points us to the Kodak’s new brand utility site Ski Guide 

- iPhone Gloves over at Mashable

- Jerimiah posts about the Air Force’s approach to responding to blog posts

- Guys over at Hyper Happen talk about the BBC’s rebood project

- Another one from Mashable about the future of Augmented Reality

Enjoy!

The economist have released this presentation about managing a client’s temptation to slash their marketing and advertising budgets in times of recession. This sort of response is not unusual for these unsettling times and as an argument it makes a lot of sense. But I’ve been thinking, not necessaily how we can persuade clients to maintain budget levels, but why clients feel they can make the cuts in the first place. They know the arguments better than anyone, they probably agree with the thinking, but yet they still cut them. Why?

My intuitive response is: because ‘marketing’ is not a part of the business that consumers need and the business model does not DIRECTLY rely upon it to deliver the promised service or good.  

So how to recession proof your marketing? The obvious response is to create marketing that is as much a part of the business as the product or the manufacturing process; to make the marketing, not just something the consumers want, but something they need in their lives. I can’t imagine the first thing Nike would consider cutting at the moment would be their spend on Nike Plus, when millions of potential customers use and need it in their life. The same could probably not be said about their traditional media budget. 

Many believe marketing is already heading down the utility/useful path anyway, but it sometimes takes unsettling events to unearth the reality of situation and potentially kick-start the widespread acceptance of a new path or order. Thoughts?

One of the most ambitious is Project Splitwheel, the world’s first project to design and build a new performance car through an online community. In partnership with Caterham the community will discuss and vote on all the key decisions that will shape the design and the build of the vehicle. 

At the other end of the spectrum is Perkins’ 14 a new horror movie scheduled for release this month; Perkins’ 14 was created at Massify.com (an online collaboration site for film makers) and is the first ever fan-created film. Members of Massify began by submitting film ideas after which the community voted on their favourite, once Perkins 14 was selected the community then set about making the film, discussing and voting on every step of the process, including selecting the cast from video auditions submitted to the site to selecting the final move poster design. 

It will be really interesting to see how these projects pan out, there’s a great deal of scepticism surrounding anything like this, but I don’t think it will be long before we see more traditional brands pushing the community/brand relationship even further in 2009.