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ISBN 978- 0-470-88137-8 Socialnomics How Social Media Transforms the Way We Live and Do Business by Erik Qualman Learning Objectives ™ Explain the meaning of a people ‐driven economy. ™ Understand why there is a need for social media. ™ Describe the likely future relationship between search engines and social media. ™ Give an example of the value of global collaboration on information sharing. ™ Discuss how microblogging enables businesses not only to see how a brand name is perceived, but to act on this perception. ™ Understand the reasons that social media are replac ing e ‐mail. ™ Explain how young people can take control of your brand. ™ Describe socialommerce as an example of the power and influence of social media. ™ Illustrate some of the ways that businesses may turn the new “140‐ characte r world” to their advantage. ™ Summarize the main impacts of social media on job recruiting. IT’S A PEOPLE D RIVEN ECONOMY , STUPID In 1992, James Carville coined the phrase "It's the economy, stupid." 1 This simple phrase was a major driver behind why Bill Clinton became our forty‐second president. Much has happened since 1992, with the most powerful change being the ubiquitous adoption and assimilation of the Internet. The Internet has revolutionized almost every facet of our business and personal lives. This last statement ab ou t the Internet is hopefully not news to anyone reading this Hot Topic. Socialnomics | 1 What is news, however, is that today we are in the early stages of yet another far‐reaching revolution. This revolution is being driven by people and enabled by social media. That is why nearly two decades later we are taking liberty with Carville's famous quote by adjusting it to: "It 's a people ‐driven economy, stupid." Although only a slight modification of words, it's a drastic adjustment in philosophy and in how people and businesses are changing and will continue to evolve in the coming years. Barack Obama understood that it was now a people ‐ driven economy, and he rode this philo sophy and strategy all the way to the White House. He was able to leverage social media to mobilize the young and old alike, to help go from an unknown senator in 2004 to the most powerful man in the world four short years later. In his historic victory speech, he acknowledges this: I will ne ver forget who this victory truly belongs to. It belongs to you. We didn't start with much money or many endorsements. Our campaign was not hatched in the halls of Washington. It was built by working men and women who dug into what little savings they had to giv e $5, $10, and $20 to the cause. 2 Socialnomics is a massive socioeconomic shift. Yet some of the core marketing and business principals of the last few centuries will still apply, while other basic principals will become as extinct as the companies that continue to try to force them on the unwilling public. We are already seeing the economic potential of social me dia in their ability to reduce inefficient marketing and middlemen. Million ‐dollar television advertisements are no longer the king influencer of purchase intent. People referring products and services via social media tools are the new king. It is the world's largest referral program in history. There is also less need to subscribe to costl y newspapers when consumers receive more relevant and timely free content from their peers via social media. The news finds us. All of this can be done easily from the comfort of home or while on the go with mobile devices. These paradigm shifts, along with many others, are discussed in the forthcoming pages. The en d result is that everything from purchasing a baby carriage to drafting a last will and testament is easier and cheaper for the consumer and more profitable for the seller. Social media also eliminate millions of people performing the same tasks (m ultiple individual redundancy) over and over. If a new father sees via social media that 14 of his closest friends have purchased the same brand and model baby seat and they all express glowing reviews, he will not waste hours on research, as it has already been done by people he tr usts. This recaptures billions of hours that can be redistributed toward the betterment of society. Today's winners are not the result of Madison Avenue, Blueblood Political Parties, or Monopolistic Distributors. As a result of the ease and speed with which information can be distributed using social media, the winners today are great pr oducts and services—which ultimately means that people win. Companies can elect to do business as usual at their own peril. We are at the start of a newer and brighter world for consumers and businesses: the world of Socialnomics . N EED FOR SOCIAL M EDIA Why is there even a need for social media? In less than three years, social media have become the most popular activity on the Web, 3 supplanting pornography for the first time in Internet history. Even search engines weren't powerful enough to do that. 2 | Socialnomics Remember several years back when the last three to four seconds of many television commercials prompted viewers to use various AOL keywords? You don't see or hear that anymore, do you? What do you see? People are sending this traffic to social networks. A very prominent example of this is CBS, which sends a majority of its March Ma dness basketball traffic not to its own website, bu t to www.facebook.com/brackets . Why has the popularity of social media been so meteoric? This rapid ascent is due in large part to its ability to help people avoid information indigestion. At first glance, this would seem counterintuitive because social media, in the use of status updates, microblogs, social bookmarks, video sharing, photo commenting, and so on, actually produce more conten t and information. Because of this increase in information, you would think that it would cause more confusion, not less. But, when we dive deeper, we can see why this is not the case. In his groundbreaking book, The Long Tail, Chris Anderson eloquently describes the ability of the Internet within free mark et s to easily and effectively service small interest groups: The great thing about broadcast is that it can bring one show to millions of people with unmatchable efficiency. But it can't do the opposite—bring a million shows to one person each. Yet that is ex actly what th e Internet does so well. The economics of broadcast era required hit shows—big buckets—to catch huge audiences. Serving the same stream to millions of people at the same time is hugely expensive and wasteful for a distribution network optimized for point ‐to ‐point communications. Increasingly, the mass market is turning into a mass of nic h es. 4 As we have seen, this is very powerful stuff. The Long Tail is great for individualism; however, at the same time, it greatly fragments the market. Life was much simpler when we knew that all our world news would come from Time and Life magazines. Fragmentation can be a stress‐ inducing issue for people . As human be ings, we have the dichotomous psychological need to be our own individual, yet we also want to feel that we belong to and are accepted by a much larger social set. People are willing to keep open running diaries as a way to stay connected be cause their ul timate desire is to feel accepted. The younger the generation, the less concerned they are about privacy or perhaps they have less understanding of the potential negative impacts of the lack of privacy. If you can make something more relevant to me by having less privacy, well that is a sma ll price to pay. —Bill Tancer, General Manager, Global Research, Hitwise Part of this lies in a yearning to have a clear understanding of what the majority of people are doing. It was much easier to know what the majority was doing when all you had to do was tune into Casey Kasem's American Top 40 to find out the latest and greatest in music or to flip throug h Vogue magazine to qui ckly grasp every fashion trend. WHO CARES WHAT YOU ARE DOING?

Why do I care if my friend is having the most amazing peanut‐butter‐and ‐jelly sandwich? Or that someone is at her kid's dance recital? These types of questions are often posed by someone who doesn't understand social media rather than by someone who hasn't embraced social media; there is a difference. These ques t ions are usually posed by someone who is frustrated because they don't understand what social media are about. Socialnomics | 3 Heavy social media users actually don't care about every little thing happening in their friend's lives all the time. Yes, there are the exceptional few who view every post, photo, or comment. Individual users make personal choices about how they establish their settings and, more important, viewing behavior. The key with social media is that they allow you to easily stay abreast of people you want to stay connected with via casual observ ation. Someone might argue, "Well I already don't have enough time in my day, how can I possibly follow anybody else or keep those following me informed? I can't waste my time like th at!" This is a fundamental misunderstanding! One of the key maxims of this book is that wasting time on Facebook and social media actually makes you more productive. Let's look at an example with a fictitious character dubbed Sally Supermarket. We find Sally Supermarket at her favorite place and namesake. It’s Fourth of July we ekend and few of the checkout lanes are much longer than normal. It's going to be roughly a 10‐ minute wait until she reaches the cashier. During these 10 minutes she can: A. Flip through a magazine she has no interest in. B. Be rude and place a call on her cell phone. Mo st likely annoying the others in line around her and potentially the person receiving the call as well, because it's loud in the supermarket, and she might have to hang up the call at any time. C. Check on updates from her social me dia. D. Ruminate about how upset she is that she has to wait in line for 10 minutes, which she definitely doesn't have time for. Sally chooses option C, and here's what occurs: ƒ Sally's status: "Bummed that the supermarket is out of mayonnaise—I was planning to make my cold chicken curry salad for th e annual picnic tomorrow." ƒ Friend 1's status: "Excited to be boarding a plane to DC for the weekend!" ƒ Friend 2's status: "Who knew my kids would love mandarin oranges in a can?" ƒ Friend 3's status: "I'm pregnant!" ƒ Sally's daughter's status: "Excited! Go t an A on my psychology exam—off to get a Frappuccino to celebrate!" ƒ Friend 4's comment: "Sally, plain yogurt is a great substitute for mayo—use a third more curry than normal to kill the bitterness. I recommend Dannon. It's healthy too!" ƒ Friend 3's status: "Going in for first ul trasound. We've decided not to find out if the baby is a boy or a girl ahead of time." ƒ Friend 5's post: "Great video on bike decorating for the Fourth of July is found here: www.tinyurl.com/4th/." After reading the status updates from her friends on her phone, Sally still ha s about four minutes before she'll be at the front of the checkout lane, so she runs to get some plain yogurt (like her friend recommended). While checking out she sees a $10 gift card for Starbucks hanging above the magazines, which she purchases with the intent of mailing it to her daugh ter as a surprise congratulations for doing well on her exam and to let her know she's thinking about her. 4 | Socialnomics Sally will see Friend 3 tomorrow at the picnic and be able to congratulate her on her pregnancy. Staying up to date on Friend 3 means that Sally won't spend time speculating whether Friend 3 was just putting on extra weight. Sally can also avoid asking if the couple knows whether the baby will be a boy or girl because Sally already knows that they are waiting based on Friend 3's last up dated social media message. Sally knows from first ‐hand pregnancy experience how tiring answering the "Do you know if it's a boy or girl?" question can become—if only she had so cial me dia back then! On the way home, Sally's husband calls her. "Hey, honey, I'm on my way home from the supermarket—how are you?" "Struggling—Jack and I are trying to decorate his bike, but it's not looking so hot, and the crepe paper keeps tearing in the spokes." "Not sure if this will help, but Friend 5 just bookmarked a video about bike d e corating—maybe you could check it out for some ideas." This Sally Supermarket example is a little played up for the purpose of illustration, but it certainly isn't far‐fetched. This is a simple example of why social media aren’t just for teenagers with too mu ch id le time on their hands. SEARCH ENGINES AND SOCIAL MEDIA The Internet's greatest strength—rapid and cheap sharing of information—is also its greatest weakness. Search engines have and will continue to help users quickly access the one morsel of information they need out of the trillions of bytes of data. The inherent fault of search engines is that the user needs to kno w what he or she is looking for in the first place. For example, if users type in "Great Father's Day Gift" they do receive some helpful nuggets, but the results are often an overwhelming sea of confusion. And, if what you need is not on the first results page, it migh t as well not be anywhere because only roughly 5 percent of users go to the second page. With the excess of information on the Web, people require a tool to make sense of it all. Social media are that mechanism. Search engines are getting better and better at understanding our individua l search n eeds. Search engines have advanced technologically to recognize that when my 13‐ year ‐old cousin searches for "Paris Hilton" she is looking for the pseudo ‐celebrity, but that when my mother searches for "Paris Hilton," she wants a hotel room in the City of Lights. While these are nice impr ovements, if the searcher types in generic terms like "chocolate" or "shoes" the results will be relatively the same as everyone else's results. So, even though search results are getting better, you still can't type in "best rib‐eye steak in New York" and quickly get what you are looking for. The advancement in semantic search will largely depend on who wins the search engine war s. If a virtual monopoly exists (e.g., Google), the advancement in search technology could potentially be slow. Someone could argue that the core offering and search engine results have not advanced much in the past five years. Th is isn't surprising given G oogle's relative dominance of the space over that time. Can one blame Google for not changing things too radically? Why would they try to fix something that is making record profits for their shareholders? This isn't a book about search, but we touch on it be cause so cial media and search are so closely tied to each other. Socialnomics | 5 In fact, search engines are, rightfully so, viewing social media sites as competition—people are already going to wikipedia.org directly if they are on a fact ‐finding mission and starting to search within MySpace and Facebook for celebrities and other people. For the best articles on a subject, they may search Digg, Delicious, or another social bookmarking site. Consumers will soon search Facebook, hi 5, Orkut, and so on for products and services they want to research and/or purchase – “Socialommerce.” So Google's strongest competition may not be from other search engines (Yahoo!, Bing, Ask, etc.) but from social media. Google and other search e ngines are recognizing this shift, and they are trying to make their offerings more social. In January 2009, Google introduced Google SearchWiki, giving users the ability to hit buttons that either promote a search (place it higher in that individual user's rankings) or demote a search result. This is a good ad vancement. Previously if a user disagreed with the search results, there was nothing he or she could do about it. The most exciting feature, one that gives further credibility to what we discuss throughout this book, is that Google introduced the ability for users to post comments about specific search results. All searchers can see these commen ts. Google's success in the social media space (e.g., SearchWiki) will be dependent on user uptake (just like Wikipedia wouldn't be successful if only 200 people contributed). Old and new players alike are racing to win the battle of social search. FREE AND FASTER INFORMATION Tim Russert was the well‐ known anchor of the popular television show Meet the Press for 17 years. When he unexpectedly passed away in 2008, his Wikipedia page was updated before Fox News announced it. The online newspaper‐subscription model works well if you are the only one holding the information. Ho wever, it breaks down if free and faster information is available. Social media enable this "free and faster" information to exist. Online newspapers would argue that their information is more credible, that Wikipedia isn't a reliable source. While this argument may hold true for smaller niche topics, it's not likely to hold true for the more popula r topics. Ironically, major media outlets are designed to cover the big news stories, not the minor niche ones. This makes sense because these niche stories were historically reserved for the local media outlets. Our major media outlets are now competing against Wikipedia and other social collaborative sites, and those sites are stronger. As far back as December 20 05, studies were conducted showing the accuracy and viability of Wikipedia. One such study was conducted in the journal Nature and posted by CNET. For its study, Nature chose articles from both Encyclopædia Britannica and Wikipedia in a wide range of topics and se nt them to what it called "relevant" field experts for peer review. The experts then compared the competing articles side by side —one from each site on a given topic—but were not told which article came from which site. Nature collected 42 usable reviews from its field of experts. In the end, the jour nal found just eight serious errors, such as general misunderstandings of vital concepts, in the articles. Of those, four came from each site. 5 Take note that in 2005, when Wikipedia wasn't fully vetted, this study was showing that it was as accurate as Encyclopædia Britannica . One could debate (and many have) the validity of this study, but one thing that is very telling is that Britannica itself launched its own version of a Wiki (t hey need to have final approval) in 2009. Today Wikipedia has become even more accurate, not less, due to the increased size and diversity of its contributing user base and 6 | Socialnomics increase in editors. Wikipedia is bound to be more accurate for major topics—if you have 1,000 experts contributing, versus 3 to 5 experts, the social graph will win every time. However, conversely for niche products, where you have 2 to 3 contributors versus 2 to 3 encyclopedia experts, the experts w ill provide more reliabl e information. Wikipedia is successful as a result of scale and self ‐policing. As a result of the success of Jimmy Wales's Wikipedia experiment, others have started to leverage the social graph. One prime example of free and faster information is the site zillow.com. Zillow allows users and realtors to investigate the esti mate d values of various real estate properties. It aggregates various public data (most recent sale price, up ‐to ‐date selling prices of the surrounding houses in the neighborhood, asking prices, quality of schools, etc.) into an algorithm to obtain the estimated property value. To augment this third‐pa rty data, Zillow allows its user base to update vario us aspects. For example, a user can update the number of rooms or bathrooms in a particular home. If you are the homeowner and renovated it by adding a bathroom in the basement, who is a more qualified expert than you (the homeow ner) to u pdate the listing? Google Maps offers a similar wiki functionality by allowing users to move items on the maps so that they are more accurate, such as updating a store that may have gone out of business in the last few weeks. This model works well. Google establishes a baseline product offering (map of the area) and th en allows the public to help fine‐tune and grow it. This is a slightly different but just as effective model as Wikipedia. The difference is that Wikipedia doesn't produce a baseline; rather, everything is developed from scratch. Wikipedia proves the value of collaboration on a global basis. The output of many min ds results in cla rity of purpose and innovation. The lesson to be learned is that if collaboration among strangers across the Internet can result in something as useful as Wikipedia—think about how collaboration among colleagues can transform business. Many businesses are starting to us e social media collaboration tools like yammer in the workplace. B EHAVIORS IN SOCIAL M EDIA We've covered, hopefully at an entertaining and lucid level, why there is such a thirst and demand for social media, but what do social media demand from us? While millions of people have discovered the benefits of social media, some people and companies have also experienced the potential pitfalls of such mass transparency. Mo re than a few students have been kicked out of universities for collaborating on Twitter, hi5, Facebook, MySpace, and the like for assigned individual school projects. It's old news that potential employers haven't hired some people purely because of inappropriate content or associations on their MySpace or Facebook pages. So what does this all mean? Are social networks po werful enough to cause an adjustment in personal and corporate behavior on a macro ‐level? You bet your camera phone they are. Cameras document everything, and technologies like Facebook's Mobile Upload and "tagging" can disseminate a photo to your network faster than you can coun t to five. PREVENTATIVE BEHAVIOR FOR BUSINESS The great thing about technologies like microblogging (Twitter, FriendFeed, Six Apart) for businesses is that there are tools that enable you to type in your brand name like "Hershey" or "Prada" and see what millions are talking about. Good companies do this, but savvy companies take it one step further and ac t on it. Socialnomics | 7 Comcast, which has notoriously terrible customer service, did a progressive and great thing from the beginning when it came to microblogging. Comcast assigned a person to monitor conversations for any mention of the term "Comcast," and more important, they also gave that company representative the authority to respond and act. Th is first came to the public's attention when famous blogger Michael Arrington of TechCrunch had his service down for over 36 hours and was getting no help from customer service over the phone. He ranted on Twitter about how much he despised Comcast's service and his pals started reposting the story. To Arrington's surprise, he was contac ted within 20 minutes by a Comcast representative who was following rants on Twitter, and his issue was resolved by the next day. Another example of Comcast's progressiveness was posted by C. C. Chapman on the blog "Managing the Gray": I just had an amazing ex perience in customer service from Comcast. With all the flack they have gotten over the years, I've actually been very fortunate to have a mostly good experience with them and the last 24 hours really proves that when a brand pays attention to the conversation happening out on the Web about th em and actively works to engage in that, good things can happen. Last night I made a snide remark about the lackluster quality of my HD picture on Comcast during the Celtics game. Comcast saw that and tweeted me back minutes later. This morning I got a call from their service center. Thi s afternoon someone came out. Now my HDTV rocks! THAT my friends is customer service and how it should work all the time. 6 Brands need to wake up to the fact that "new media" aren't going away, and in fact I would argue that they aren’t new anymore, but here and at the forefront. So you either wake up and pay attention or you lose business to the company that is paying attention. JetBlue also engaged in trying to kee p a pulse on its customers. When a company starts to follow you on Twitter or another microblog, it may seem a little too Big Brother ‐like, but if the company is transparent, then the consumer's concerns about too much information sharing go away. For example, this is a ty pical response from JetBlue: Sorry if we weirded you out by following you on Twitter. @JetBlue isn't a bot, it's merely me and my team keeping our ears to the ground and listening to our customers talk in open forums so we can improve our service. It's not marketing, it's tryi ng to engage on a level other than mass broadcast, something I personally believe more companies should try to do. Because corporate involvement in social media is a new and evolving discipline, I also take a specific interest in conversations revolving around our role here. I'd have messaged yo u directly if you allowed direct messages, so please also forgive me for following the link on your twitter page here to send you this note. You and Lisa are no longer being "followed" as you indicate. Again, my apologies. Morgan Johnston Corporate Communications JetBlue Airways 7 Notice what Morgan says, "It's not marketing, it's trying to engage on a level other than mass broadcast." 8 | Socialnomics Authors are constantly doing vanity searches on Twitter search to determine if people are talking about them or about their book. One author says, "I was doing a vanity search on my name within Twitter when I saw a post out of Billings, Montana, that had happened in the last two minutes and the e xchange went something like this." Author: My husband just handed me a book by Tim Ash called Landing Page Optimization. Is this any good? Tim Ash: Yes, it's a great book. Author: Aren't you the author? Tim Ash: Yes, I am. Author: Well, if I don't like this book w ill you refund my money? Tim Ash: Yes, I'm so confident that you will like the book that I will refund your money if you don't. As you read this, you may say wait, this isn't necessarily new, good companies have been responding to comments on message boards for several years now. The conce pt of responding to customer unhappi ness is certainly not new and not new on the Web. The difference with social media is the speed and ease with which this occurs as well as the sphere of influence. A post on a message board can take a company da ys to find, if th ey find it at all. This can also be a labor ‐intensive and costly process for companies to follow. The key problem, however, is that it is often very labor intensive for the user to post a complaint. To post on a message board, you generally are required to se t up an a ccount for that particular message board. Message boards are sometimes difficult to navigate to a particular topic area, and so on. In the past, millions of frustrated customers didn't bother to comment or let a company know their frustration. Now, it is so easy to disseminate information from anywhere (in particular from your mobile device) that more and more customers are doing it. With programs like Facebook Connect and Friend Connect (Google), now one can use an easy ‐to‐remember login ( F acebook or Google) no matter what site you happen to be on, whether it's cnet.com or cbssportline.com. With social media tools, you can post a comment/video in seconds directly from your laptop or most likely your mobile device. This is critical because it allows frustrated customers to instantly post th eir ex act feeling at the point of frustration. They haven't had time to ruminate, so it is unbridled. Similarly, the posts are easy for companies like JetBlue and Comcast to see. It's not laborious at all to find problems, in fact they can assign one person to help hand le most situations, which me ans they have more time to focus on the solution rather than spending time finding the problem. This brings up another point on how great companies philosophically approach critically posted content on the Web. Ineffective companies that aren't in touch with their custome r s view negative posts as a nuisance, because it takes time to figure out how to technically scrub or manipulate them by means of posting bogus "good" user comments or applying pressure to the site(s) via antitrademark infringement laws to remove the post. Effective companies and people relish critical online feedback. They use thi s information to make themselves more competitive by improving their products and services in the eyes of the consumer. These companies don't waste their time attempting to manipulate online Socialnomics | 9 systems; rather, they spend their time (like in the JetBlue Twitter example) trying to resolve the issue with the disgruntled customer and learning from it. Good companies view it as an opportunity to prove to that customer they are willing to go the extra mile for them. A good everyday analogy of constructi ve feedback is a friend who lets you know when you have an unsightly poppy seed stuck in your teeth prior to a big blind date. This friend is much more valuable to you than the politically polite and silent friend. Perhaps the biggest difference between this example and traditional mes sage boards doesn't have anything to do with the technology. It has to do with the sphere of influence of the person posting. If the fictitious Peter Poster places something on a message board, he doesn't know who he is reaching, and the reader most likely doesn't know who Peter is. With social med ia, Peter posts a status update on Facebook, LinkedIn, Twitter, etc. This status update is sent to people within his network who all (personally) know him. By knowing Peter, they can readily identify with the position Peter is coming from. If Peter complains about a Boston cream dough nut from a particular bakery, his followers may discredit it and say "That Peter is always so fickle when it comes to eating, it's rare if he likes any food item that his mother doesn't make." Conversely, if Peter complains about the poor customer response from a phone provider, a follower may say, "When it comes to eating, Peter is fickle , but he is very patient and forgiving otherwise, so if he says his phone company has poor customer service, I'm going to make certain that I steer clear of that phone company." Someone who has stayed only at five ‐star ho tels will rate a five ‐star hotel differently than a honeymooner staying at a five ‐star for the first time. —Bill Tancer, General Manager, Global Research, Hitwise One approach might be to find someone you don't know on general review sites who seems to have similar tastes; however, the next logi cal and more rewarding approach is locating a person in your social network who you know and who you are confident (via personal knowledge) has the same preferences you do. Let's perform a quick calculation based on the average number of people that a person on Twitter has following them to unders core the importance of social media. The old rule of thumb was that a person who had a bad experience would tell 6 to 10 people about it. The average person on Twitter follows 100 people. If you take that and assume that 10 percent of the people following someone will pass it along, the n you get to the number 10 (100 × 0.10 = 10). Ten people will be influenced directly. If those 10 also have 100 followers and only 5 percent pick it up, then another 50 individuals will be influenced indirectly, and so it goes on down the li ne. That's quite an impact. SOCIAL MEDIA ARE THE NEW INBOX The "killer" tool of the first part of the Internet boom was e ‐mail, and then along came e ‐ commerce, e‐care, search, music, video, and now social media. E ‐mail has held on through the years as, arguably, the king of the Internet, used by the old and the young. Ho wever, the new Inbox is shifting toward social media. "I have a sixteen ‐year‐old cousin, and she listed her favorite websites and applications and failed to mention e ‐mail, so I asked her about it. I was shocked by the incredulous look on her face and even more shocked at her response that she didn't use e ‐mail that muc h since it was too formal; she would rather use instant messenger on her phone or post comments based on 10 | Socialnomics people's activities in social networks," said Mike Peters, 37, of Detroit, Michigan. It turns out that Generations Y and Z find e ‐mail antiquated and passé, so they simply ignore it. While this is shocking to some generations, it fits within the scheme of Socialnomics. E‐mail isn't entirely going away; it just may not be the first means of digital com m unication in a Socialnomic world. Messaging is much easier to manage within social media versus e ‐mail because it acts like a real conversation among friends. "As a salesperson, I see social networks like LinkedIn and Facebook as invaluable tools. It doesn't necessarily shor ten the sales cycle, but what it does is keep the information flow more open and also allows for a much deeper relationship than e ‐mail. I've started relationships and signed contracts exclusively within social networks. It is revolutionary for sales, it's much easier than telephone calls and e ‐mail s," said Allison Bahm of Response Mine Interactive Agency. Whereas e‐mail functions in a nonfluid manner: "How are you doing?" "Fine." Open conversations within social media have an easier flow to them and replicate a normal conversation. Also, the conversational content is broken down into bite ‐size chunks and is associated into more easily recognized compartments rather than just a long and daunting slew of 45 e‐mails that you need to wa de through systematically. Kids today prefer one ‐to‐many communication; e ‐mail to them is antiquated. Bill Tancer, General Manager, Global Research, Hitwise: People are updating their status: "I'm depressed," or "I got a new job," and it is much easier to read this and stay connected than to send a seri es of e ‐ mails asking how someone is doing or what that person is up to. In a sign of the times ahead and for the first time since e ‐mail was invented, Boston College will not be giving out @bc.edu e‐mail addresses to incoming freshmen for the cla ss of 2 013. A director of Apple iTunes: At Apple, we generally hire early adopters. That being said, I was still blown away when we recently hired a 22‐year ‐old and he had literally never sent an e ‐mail. Via his iPhone he had always communicated with his friends eithe r by instant messenger, te xt, phone call, or comments within Facebook. I believe he is not alone and this is a trend we will continue to see with the next generation. BUT . . . COMMUNICATION BREAKDOWN The desire and ability to meet new people has rapidly eroded so much so that humans may fear public speaking more than death. This led comedian Jerry Seinfeld to quip, "According to surveys on what we fear . . . you are telling me that at a funeral, most people would rather be the guy in th e coffin than have to stand up and give the eu logy?" 8 Difficult and awkward subjects are much easier to deal with hiding behind instant messaging or social media comments than face‐to ‐face. And even written skills have eroded from living in a 140 ‐character world. Socialnomics | 11 A study by the nonprofit group that administers the SAT and other placement tests (National Commission on Writing at the College Board) found: ƒ 50 percent of teens surveyed say they sometimes fail to use proper capitalization and punctuation in assignments. ƒ 38 percent have carried over IM or e‐ mail shortcuts such as LO L. ƒ 25 percent of teens have used :) and other emoticons. ƒ 64 percent have used at least one of the informational elements in school. 9 So yes, there are downsides to not having as much face ‐to‐face interaction, and that's a challenge that generations Y and Z and beyond face because technology is an intrinsic part of their lives, but the positive aspects are plentiful. They have an understanding of their place in the global co mmunity and are more creative and collaborative. They don't mind challenging the status quo—which is much different than simply not respecting it. They expect a better work ‐life balance, are better at prioritization and multitasking. They need more guidance in management skills, project planning, and business communication. They are less likely to u nderstand boundaries, whether in answering e ‐mail from a friend during business hours or taking e‐mail from a manager at 11 PM . To them, things are just more fluid; it's not a 9 ‐to ‐5 world, it's a 24/7 world, and it's up to the individual to properly balance the hours in the day. Generation Xers and Yers think it's laughable that a company would block Facebook or YouTube during work hours—you are either g etting the job done or you are not. Workers realize that if they play during the workweek they will have to work on Saturday to complete the necessary tasks. But that is a conscious decision they make. LET THE YOUTH TAKE CONTROL OF YOUR BRAND The "Young Adults Revealed" global survey conducted by Synovate in partnership with Microsoft was designed to find out how much young adults interact and engage online with brands on a daily basis. The research included 12,603 people 18 to 24 years old from 26 countries. The survey revealed that 28 percent say they tal ked about a brand on a discussion forum, 23 percent added brand ‐related content to their IM service, and 19 percent added branded content to their homepage or favorite social sites. 10 The research concluded that young adults are more than willing to add brand content to their instant messenger services, Web homepages, and social networking sites. The researchers found the survey respondents spent an average of 2.5 hours online daily in nonwork ‐related activity. Synovate's global manager of syndicated research, Julian Rolfe indicate s, The research shows that young people are not only comfortable with the idea of branded content and branded entertainment, but also reveals they are openly willing and eager to engage online with brands. They clearly feel their opinions about brands are important, they want to associate themselves with brands th ey see as "cool" and this is why we see them uploading clips to their social networking sites and IM services. Synovate found that one in ten said they passed along viral ads and marketing clips. For brand marketers, this should be welcome news. Your consumer wants to have a relationship with you and eve n help out where they can. All it takes is honesty, transparency, listening, and reacting. Because not every company can do these well, the ones that do will win decisively. 12 | Socialnomics FUTURE POWER AND INFLUENCE OF SOCIAL M EDIA Socialommerce is upon us. What is socialommerce exactly? It is a term that encompasses the transactional, search, and marketing components of social media. Socialommerce harnesses the simple idea that people value the opinion of other people. What this truly means is that in the future we will no longer seek products and services, rather they will find us. Nielsen reports 78 percen t of pe ople trust their peers' opinions. 11 This is neither a new concept nor new to the Web (e.g., epinions.com, complaints.com, angieslist.com). What is new is that social networks make it so much easier to disseminate information. As the success of social media proves, people like disseminating information. This explains the popularity of Twitter and other microblogging tools. These tools/products en ab le users to inform their friends what they are doing every minute of the day (I'm having an ice cream cone, check out this great article, listening to keynote speaker, etc.). Microblogging's popularity was originally relegated to teens, but then it quickly gained popularity with adults and businesses. It also pla yed an impor tant role in the 2008 presidential election. Social media is creating something that I think eventually is going to be very healthy for our economy, and that is institutional brand integrity. —John Gerzema, Chief Insights Officer, Young & Rubicam The most popular feature of Facebook and LinkedIn is status upd ates. Sta tus updates enable users to continuously brag, boast, inform, and vent to everyone in their network. This simple tool allows users to easily stay connected with their network. As a result, 100 billion updates per day are processed through Facebook's News Feed servers—100 billion! Let's take a look at a couple of ex am ples of socialommerce in action. BUYING THE RIGHT BABY SEAT Steve and his wife just had their first child. With this addition, they are in the market for a lightweight, but safe, baby seat for their car. Steve doesn't know the first thing about baby seats and is dreading the hours of researching and then searching on the Internet to find the appropriate one. Steve, li ke many fathers, is also fearful that he may, despite all of his diligent research, still make a mistake. Making sure you provide the appropriate safety for your child can be stressful and at times overwhelming. The good news is that the majority of these purchase challenges, concerns and unw anted st ress will become things of the past with social media. Here's why. On a search engine if you typed "buying a baby seat" you are likely to receive a series of irrelevant search results and a bevy of sponsored ads. Not all of the search results are unrelate d . Some will prove fruitful, but it may take some time‐intensive trial and error. Yet, as socialommerce becomes more and more mainstream, when Steve performs a search on his favorite social network instead of a search engine and types this same query—"buying a baby seat"—he will discover the following: ƒ 23 of Steve' s 181 friends have purchased a baby seat in the last two years. ƒ 14 purchased the same make and model. ƒ The average price for the most popular model was $124.99 (10 of the 14 purchased online). ƒ 3 are looking to sell their used baby seats because th eir chil dren have outgrown them. Socialnomics | 13 ƒ 7 different online videos showcasing this seat have been bookmarked—tagged by people in this network. ƒ 4 different reviews and articles have been bookmarked—tagged by his network. ƒ 11 of the 14 have posted reviews on the baby seat—two of which are video reviews. Steve respects the opinions of the 14 pe ople who purchased the same seat, so he clicks to find out more, and gets the following information: We have three kids and have used this same baby seat model for all of them. My sister used Cheekie Brand's baby seat and it was clunky, awkward, and heavy. When sh e saw mine, she immediately went out and got two for her kids. I highly recommend these seats! —Gabby Fernandez Steve can now confidently purchase the baby seat without the usual research, stress, and time required if he were starting his search from scratch. Once Steve starts to use the seat, he takes on a different role within the same social me dia conversation; he is actively using the product and can provide his own insight into features and benefits that the seat provides. Steve may notice that it's too easy for his child to undo one of the seat straps. Compelled, he may point this out to his network via a quick video ex ample that may be relevant to his social network of friends. This then presents an opportunity for product improvement on which the manufacturer can act. If the manufacturer's marketing team is listening and watching, then they will be able to quickly share this with the design and production tea m and hopefully get a quick resolution/improvement for future buyers. This is not only a benefit for the manufacturer, but a benefit to society as well, because future children will be much safer based on the quick advancements. Correspondingly, just like his friends be fore him, if Steve finds features he really enjoys about the baby seat he will feel compelled to write about them, since his friends with a similar purchase decision will benefit from his experience. When I worked at EarthLink, one of the key findings we found when working on r eferral incentives was that the main reason people recommended EarthLink was not for the incentive, but that they liked being viewed as the subject matter expert within their social graph. The same holds true in social media. The popular belief that people only take the time to post something when th ey want to vent or discuss a bad experience is simply not true; at least in our experience. The majority of our over 20 million reviews and opinions we have received on TripAdvisor are positive ones. People are simply compelled to give back to a community that has given to th em. —Steve Kaufer, CEO of TripAdvisor MINIVAN OR HYBRID? Steve and his wife then eventually go on to have their third child. With this addition, his two sedans won't cut it anymore, so he's in the market for a bigger vehicle. Having vowed to himself and his friends that he'd never own a minivan, he's in the market for an SUV or a crossover vehicle. Steve is drea ding the hours of searching on the Internet to find a vehicle that suits his needs. He's dreading even more having to leave work early to visit the car dealerships to test ‐drive his selected vehicles and then begin the haggling process. Steve is also fearful that he may make a mista ke even after all of his diligent research. 14 | Socialnomics Steve performs a search on his favorite social network—he types in "buying a car." Rather than receiving a bunch of irrelevant ads for car trader sites he discovers the following: ƒ 23 of Jim's friends have purchased a car in the last year. ƒ 16 of his friends are married with two or more childr e n. ƒ 14 purchased an SUV or crossover. ƒ 9 purchased the same vehicle. Steve respects the opinions of the nine people who purchased the same vehicle, so he clicks to find out more, and gets the following information: "I test ‐drove Crossover X and Crossover Y. Crosso ver Y was the much be tter feel, and it was easier to get into the backseat. Couple that with the fact that it gets three more mph to the gallon, and it was a no ‐brainer." To further illustrate the importance of virulence today, a study conducted by online ‐market ‐ research firm Marketi ng Evolution on marketing campaigns from Adidas and video ‐game publisher Electronic Arts within MySpace found that 70 percent of the return on investment was the result of one consumer passing it onto another virally. Socialommerce is a referral program on steroids. EBOOKS Mobile devices acting as e‐book readers (Amazon Kindle, Sony eReader, Nook, Apple iPad, etc.) are wildly popular, and the fact is that online books offer many of the same advantages as digitized music, newspapers, and magazines. The New York Times is available via eReader for a monthly subscription fee that is dr astically less than the traditional paper edition. It is only a matter of time before we will see advertising and marketing efforts creep into both fiction and nonfiction materials. This is virgin territory for marketers. This is a good thing, because as the traditional channels of marketing like television, radio, and magazines dimi n ish in effectiveness, marketers need these new marketing outlets to continue to thrive. One way in which marketers, publishers, and authors will come together as it relates to e ‐books is within the content itself. How is this possible without compromising the content? On some levels, this is very simple. Let's say that within a scene of a novel the author desc rib es a hot, dusty day where the main character refreshes himself with an ice cold Coca‐Cola. Authors generally like to describe items specifically so the reader can really visualize them. That is why more often than not they use branded items in their description s —they don't write "soda," they write "Coca ‐Cola"; they don't write "listening to an MP3 player," they write "listening to an iPod"; and last but not least, they don't write "a stylish Swedish over‐the‐shoulder baby carrying device," they keep it short with "Baby Bjorn." Because of this, there is tremendo us potential for advertisers and authors alike as e‐books continue their rise in popularity. In the previous example, if there is a mention of Baby Bjorn, the company can pay to have that mention become a hyperlink within the e ‐book's digital format. The be nefits of this are th at it makes the brand term more pronounced, and if the reader is inclined, he or she can click on the term and either be given more description, branding, or an image or taken directly to babybjorn.com. Another benefit to Baby Bjorn is that the search engine spide r s will read its hyperlink, which will help Baby Bjorn come up high in the search rankings. Socialnomics | 15 W INNERS AND LOSERS IN A 140 C HARACTER W ORLD Today there are some very popular websites that reduce or make URLs tiny so that people can fit them within their social media postings, which often have character limits. These tools take a URL string of roughly 100 characters and condense it down to 15, making the URL "tiny." This is necessary in today's "soundbi te" society and is a reflection of a societal shift from the languid days of sipping lemonade on front porches to multitasking in Wi ‐fi‐ enabled Starbucks. In a world where everything becomes condensed and hyperaccelerated, who emerges as winners and losers? In this section, we will explore several case studies that shed light on what it ta kes to succeed in the world of Socialnomics. DOES ESPN HAVE ESP? Some savvy entrepreneurs at ESPN in 2008 were ahead of the curve in recognizing the different fundamentals of Socialnomics. Their success was the result of innovation and necessity. Fantasy Football's popularity was growing rapidly. In 2008, ESPN started to dedicate more of its television programming to discuss pertinent events related to Fantasy Football; but it still wasn't enou gh. Fantasy Football experts Matthew Berry and Nate Ravitz knew that the public hungered for more and approached the ABC/ESPN brass. Their plea for more Fantasy Football airtime proved successful. Although they were not granted airtime or support, they were given the green light to produce thei r own podcast, Fantasy Football Today, which quickly became one of the top ‐20 most downloaded podcasts within the Apple iTunes store. This was a great achievement, but they were still moonlighting and hadn't produced any revenue that would spark ESPN's attention for more support. This is when they embarked on two very innovative facets and, whether knowingly or not, they were engaging in So cialnomic activity. These two facets were actually making the sponsors part of the show's content and also allowing listeners to help produce some of the content as well. As a result of their rapid ascent in th e iTunes download rankings, Fantasy Football Today started to draw the attention of some savvy, big‐time marketers. Their first sponsor included the feature film Eagle Eye. This movie featured Shia LaBeouf and was produced by Steven Spielberg. Aside from covering the latest in Fantasy Football, Berry and Ravitz would often touch on pop cul ture, including commenting on the popular 1990's television show Beverly Hills 90210 as well as the New 90210. The podcast varied in length from 15 to 30 minutes depending on how much news they had to cover. The varying lengths of the podcasts are an important item to note and a reflection of how our world is changi ng. Radio and television broadcasts historically attempt to fill an allotted slot of time. That isn't the case with podcasts. If a podcast only has 16 minutes of newsworthy items to cover, then why waste the commentators' and viewers' time tryi ng to fill the slot with subpar content? The fact that Fantasy Football Today was able to secure a sponsor for the podcast wasn't innovative—this was inevitable once they began to attract a vast audience of listeners. We have seen this type of sponsorship in various podcasts. Another good example is th e technology podcast, CNET's Buzz Out Loud. Recognized as one of the most popular podcasts in 2008 13 covering Internet and Technology news, it also played up the fact that its segments were "indeterminate length." Its popularity was well deserved because the information was delivered in a concise, but humorous fashion and all angles were covered. Although they were 16 | Socialnomics successful in securing big ‐name sponsors including Best Buy, they adopted an "old paradigm" format when it came to their advertising model, and that has proven to be a failure. They played a commercial in the beginning, middle, and end of the podcast. Just like in the television world, it was not inte grated but rather interruptive; this is disruptive to the listening audience. Worse, for seven months straight Best Buy played the same exact commercial! Please keep in mind that the podcast listening audience is not made up of casual listeners. People don't simply flip through channels and land on something of interest. This pod c ast is downloaded daily, so many of their loyal listeners are the same from podcast to podcast. What a wasted opportunity for Best Buy! They could have taken advantage of the glowing personalities of the hosts (Natalie Del Conte, Tom Merrit, Jason Howell) and adjusted the messaging daily by having the hosts read or incorporate the messaging into the show as they saw appropriate. Instead, Best Buy took its terrestrial radio spot and p lopped it right in the middle of the show. THE TOM SAWYER APPROACH The “Tom Sawyer” approach is when you effectively dish out work to your customer, listener, or followers and in turn they are more than happy to do it. The name is derived from when Tom Sawyer convinced his friends that painting the fence was fun. A good example of a company eff ectively using the Tom Sawyer Approach is CNN. CNN anchor Rick Sanchez was an early adopter of harnessing the power of the social graph. Recognizing the huge potential of microblogging, Sanchez became an avid user of the leading technology of the time— Twitter. Twitter's main function allows users, in 140 characters or less, to u pda te people who are following them about what they are doing by using various interfaces (Twitter website, Twitter modules for iGoogle, Facebook, Yahoo!, etc.) Usage ranges from business, "Great article on Southwestern Airlines earnings release can be found here www.abc.com" to the inane, "Just had my fifth Starbucks Pumpkin Spi c e Venti!" In the beginning, the most popular way people updated their tweets was via their mobile phones. Sanchez decided to test out the new medium and began placing his daily activities online. Obviously some of his activities: "Briefing about Colin Powell interview tonight; just learned that he may disclose some new and interesting information about Barack Obama" are mu ch more interes ting than a friend informing you that he is hopped up on pumpkin ‐flavored Starbucks. Rick was probably pleasantly surprised when within a few weeks over 75,000 people were following what he was tweeting. He then discovered it was more important to talk less abou t himself and more about his upcoming interviews. From there, he started to leverage the Twitter platform to ask thought ‐provoking questions like: "I'm interviewing Colin Powell tonight. What would you like to know most about Iraq or Iran?" Here is a string of tweets from the 2008 Presi d ential Debate between McCain and Obama: ... if they twittered they'd know how to make the words fit right? (8:17 PM Oct 15 from Web) ... like this ... put it on joe the plumber, personalize it. way to go mccain (8:11 PM Oct 15 from Web) ... mccain plan, do you rescue everybody, even guy who paid for house he couldn't afford. even ... flippers? (8:10 PM Oct 15 from Web) ... Okay, i can't dance. my mother is so ashamed, she can. (3:05 PM Oct 15 from Web) ... many blaming palin for Mc‐palin slide in polls? is that fair? what u think? (12:43 PM Oct 15 from Web) Socialnomics | 17 ... mccain: "doesn't think i have guts to bring up bill ayers" should he? how should obama respond? this could be fun, showdown okay corral.(10:47 AM Oct 15 from Web) 14 These examples illustrate why social media are so revolutionary. Rick is able to have a relationship with 75,000 people—they feel more connected with him than they had before he started to leverage the Twitter platform. By responding to Rick's questions, they think they are helping to produce the show, which in many ways they are. BECOME A MODERN DAY PIED PIPER Rick also started following a large percentage (roughly 32,000) of the people following him. "How can he follow so many people?" you astutely ask. He isn't actually keeping tabs on their tweets unless they relate directly to his questions. (As of this writing, there were several companies trying to develop automated systems to quickly cap ture responses and glean the appropriate data to be used for quick polling.) He is following these people as a courtesy. The community etiquette at the time was that if people were following you, then you should probably follow them. (They will never know if you didn't read one of their twee ts!) If you don't re‐follow someone, then you are saying that you have something more important to say than they do, which might not be the impression you wish to convey. The next logical progression was to get them on the show. Obviously, you can't get 75,000 firemen, carpenters, tec h nerds, teachers, and the like on the show. Or can you? So Rick and his producer started asking the 75,000 followers about their thoughts on various subjects and they put it up on the general scrolling byline. This was brilliant because it added content to the show and also encouraged Ric k's 75,000 followers to watch just so that they could see if their comment made the show! In a socialnomic world, companies need to relinquish the total control they have had over the last few centuries and allow users, consumers, viewers, and so on to take their rightf ul ownership. Rick Sanchez's experiment, which turned into an overnight success, can be summed up in the following tweet from Rick's producers: … just finished editorial meeting with my group, may have great new video today. will share more shortly. like i say, it's your show. (9:31 AM Oct 21 from Web) 15 The key line in this tweet being "like i say, it's your show." Credit should go to CNN for allowing Rick to continue his microblogging. Rick didn't go through any formal training on microblogging, nor did he sit through public relations and brand courses at CNN on what could be said. Rat her, CNN let Rick and his producers run with it. Rick was representing CNN, but because of the nature of the technology, the brand chiefs and executives couldn't approve every sentence that Rick was issuing. They had to know that Rick was going to make some mistakes but that he wo uld quickly adjust and move forward. CNN learned from Rick and replicated his success across all their shows and anchors. TV REPEATS THE SAME MISTAKES AS THE MUSIC INDUSTRY During the heyday of Napster, the music industry filed lawsuit after lawsuit about these new file‐sharing technologies. While copyrights are important, energy and efforts should have been placed elsewhere. Instead of actions that disenfranchised their customer base (some of the largest numbers of downloaders and sharers were made up of music fanatics), the mu sic industry should have been rejoicing that their distribution, production, and packaging expenses became almost nonexistent! 18 | Socialnomics Music labels could sell direct to customers without the need to pay for packaging, shipping, compact discs, and so on. Some would argue that they didn't embrace the model because of copyright infringement, but the real reason they didn't embrace the model was that they didn't understand it. By the tim e th ey understood the implications of such a runaway hit, it was too late. Ironically, they had been giving away free promotional records since the 1950s to radio stations. The music houses understood back then that the more their record got played, the more their sales would increase. Somehow they lost sight of this sa me constru ct in the digital era. Television executives could also make the same errors as the record labels and find themselves standing on the outside looking in. Let's take a quick look at some disconcerting developments. NBC EARNS FOOLS GOLD AT OLYMPICS The 2008 Beijing Summer Olympics were the most watched games in Olympic history. The opening ceremony was the biggest television event outside the Super Bowl, reaching 34.2 million American viewers, according to Nielsen Ratings. 16 Michael Phelps' historic swimming competitions captured the nation. The recognition and use of online tools and video by NBC are commendable for that time. So, did NBC deserve a gold medal for their coverage? On the surface, using old measures, they reached the podium, but they were awarded only fool's gold. Here's why. For one of Phelps' gold medals, NBC showed the action live in every time zone except on the West Coast, which was delayed three hours. Is NBC President Dick Ebersol not aware of a thing called the Internet? NBC failed to do what others had learned long ago: beg, borrow, and mak e bett er is the way of the Web. Too many companies—in this instance, NBC—believe their problems are unique when it comes to the Web. However, plenty of other companies have already wrestled with similar issues. Back in June of the same year, ABC made the right decision by s treaming li ve on the Web the Tiger Woods and Rocco Mediate's 18‐hole playoff to decide the U.S. Open Championship. This was in addition to their television coverage. Company web servers cringed, and America's productivity declined in March Madness ‐like fashion on that Monday, June 16, but ABC and the PGA were the big winners because they captivated millions of viewers on the Web that otherwise would have been lost. Why didn't NBC do the same thing a few months later during the 2008 Summer Olympics? Most likely because... OLD METRICS ARE DECEIVING They were fooling themselves with old metrics. Sure, NBC was happy to show less popular events online, but not precious events like swimming and gymnastics. Why? Most likely, NBC and their advertisers (Adidas, Samsung, Volkswagen, McDonald's, Coca ‐Cola, etc.) were judging themselves using old metrics, and that earned them nothing but fool's gold. They're judging success on some archaic Nielsen Te l evision Rating system. They have the irrational fear that online viewership will cannibalize their normal ratings. Eyeballs are eyeballs. They would have been better served opening up their online viewership because: ƒ It's more measurable. ƒ It has a younger audience. Socialnomics | 19 ƒ Users can't TiVo through commercials. ƒ Users are willing to give you valuable demographic information like name, age, gender, and so on in return for video. ƒ It increases—not decreases—your total viewership, which means more eyes on advertisements. ALL TV WILL SOON BE VIEWED VIA THE INTERNET It's inevitable that all of our broadcasts will eventually be pushed through the Internet, through a platform like hulu™. Brand budgets that historically went to television, magazine ads, and outdoor boards are moving to digital channels for three main reasons: (1) the audience has moved there, (2) it’s more cost effective, and (3 ) it’s more trackable. What will happen? In the short term, there will be companies that are able to take advantage of this transition. Just as online travel agent sites like Priceline, Orbitz, Expedia, and Travelocity were able to take advantage of suppliers (hotels, airlines, cruise lines, rental cars) and make a slo w progression to Web bookings; aggressive conduit companies will be able to deliver what the audience wants. The same holds true for Napster, Limewire, and iTunes jumping on the opportunity made available by the ineptness of the music industry to embrace digital music. At the beginning of 2008, Jeff Zucker, the boss of NBC Univer sal, told an audience of TV executives that their biggest challenge was to ensure "that we do not end up trading analog dollars for digital pennies." 17 Zucker understood that the audience was moving online faster than advertisers were, thus leaving media companies in a position of possibly losing advertising revenue and having their inventory devalued if and when they moved online with their television content. In the fourth quarter of 2008, online advertisements in video grew 10.6 percent and went fro m 2 percent of advertising to 3 percent. 18 A good example of the use of this medium was also presented during the 2008 presidential election. Candidates don't care about distribution rights or upsetting their offline sponsors. They only care about getting the word out and making it as easy on their users (in this case, potential voters) to access and consu me the information. Through their respective websites, each party streamed high ‐definition convention coverage around the clock. This forced CNN, MSNBC, FoxNews, and the like to do the same. The major networks didn't have time to decide if they would allow the public access—they were losing their audience to these other new distribu tion channels. This type of hyper ‐competition from unexpected places is a harbinger of the future. Who could have ever guessed that our political parties would be more advanced in terms of online video than our television networks? The way in which we view broadcasts is also changing. In the political conv ention example, you had the ability to select various cameras to choose how you wanted to view the process. Specifically for the Democratic National Convention, you could have selected: (1) national broadcast angle, (2) side camera, (3) backstage, (4) camera focused on Barack Obama, (5) camera focused on Joe Biden, or (6 ) camera focused on Michelle Obama. This ties back to braggadocian and preventative behaviors. For example, if you are Michelle Obama, and you are being filmed throughout the entire convention, it’s imperative you make certain that you aren't chatting away with your mom during the Speaker of the House's presentation. The upsi de for the viewer is that it allows for a more intimate relationship with the candidates and their families because viewers can see what they are like off camera. 20 | Socialnomics NBC's Sunday Night Football was one of the first to introduce the idea of these various camera angles. They smartly viewed it as a way to capture online viewers, but also as a way to capture their regular television viewers who had laptops open for an enhanced viewing experience. NBC allowed the users to select various angles on the field as well as select came ras that were only following star players (like Tom Brady or Peyton Manning). Applying this concept to content ‐focused shows like ABC's The View could prove to be a further success. Marketers would serve up different product offerings to someone who was viewing via the camera that was hyperfocused on Eli s abeth Hasslebeck, versus the viewer who was focused on Whoopi Goldberg. SOCIAL M EDIA IMPLICATIONS ON JOB R ECRUITING Another huge shift in the way we do things, both as individuals and as businesses, is the process of job recruitment. To better understand this shift, we should review the established practice of job recruiting and job hunting. For the past 10 years, if you were attempting to recruit talent, you would pay money to post on job boards like Monste r, CareerBuilder, Hot Jobs, and so on. Or you could hire a recruiting firm or headhunter to assist in the recruitment effort. As you will read throughout this Hot Topic, middlemen are removed in most instances as a result of the social Web. In the job recruitment market, midd lemen are job boards, job fairs, classified advertisements, and head ‐ hunting firms. For the near future, these traditional recruiting avenues will remain; but their influence will be greatly reduced, and not too far down the line, they will probably vanish altogether. Social networks like Craigslist, LinkedIn, and Plaxo will ultimatel y take over the recruitment role because they provide more direct and insightful connections between the employer and potential employee.

All of this newfound transparency from social business networks is a godsend for employers. They no longer have to employ a large internal human resource or recruitment staff to perform this type of research, or hire an expensive headhunter. Instead, the potential workforce is already doing this for you (the employer), and th ey are doing it at much greater depths. Reviewing a résumé in the past was part art and part science; it was necessary to read between the lines on a static piece of paper to formulate whether the person deserved a screening call or interview. Now, social business networks su pply photos, videos, links showing a person's actual work, 15 to 20 snapshot references, links to blogs or articles the person may be included in, and so on. If a picture can say a thousand words, then a video résumé must be in the millions, because there is nothing more helpful than this for a recruiter. Recr uiters can qui ckly screen through potential hires in minutes versus all the guesswork associated with traditional paper résumés (paper résumés will still be a nice complement to video résumés). LinkedIn is a good place to start because it is a quiet but powerful pseudomonopoly. As of the writing of this book, LinkedIn has almo st cornered the marke t on the social business network. This will be tough to supplant because users already have their recommendations on the site. Unless there is an easy way to port these recommendations to a new business network, it would be a so mewhat un comfortable task for people to solicit their previous references to rewrite what had already been posted for a new social business network. Imagine having to call your reference and say, "Morning, Carol, this is Ted. I know I haven't spoken to you in three years, but about that nice com ment and thum bs‐up you gave me on LinkedIn about four Socialnomics | 21 years ago, I was wondering if you wouldn't mind signing up for this new job site, after you get your account, which will take six minutes. Can you then write the exact same thing you did for me previously?" That would obviously be no small order. That being said, the hope is that, as previously stated, LinkedIn also figures out how to make the Web more open by allowing you r LinkedIn data and recommendations to easily flow and follow you accordingly. For job seekers, the "always keep your résumé updated" paradigm is gone because now it doesn't even scratch the surface of th e importance of maintaining updated information, and more important, updated connections. It is essential to constantly update your career progress on social business networks as well as other social media, websites, blogs, and so on. It is also much more than simply updating your paper résumés on these sites. It behooves you to have an u pdated and professional photograph; also, a list of articles that mention you is helpful. A link to your own personal and professional website with additional information about you will put you a step ahead of the competition. Any radio or video interviews of you should be easily accessible to augment your video rés umé. Most important of all is to capture positive feedback and postings from your bosses, peers, partners, and subordinates. In the past, you really only needed one or two solid references from your supervisors. Previously, once recruiters were able to get potential hires in through the doors, the screening process was difficult at best . It was generally based on a few interviews, a possible call to a reference or two (most likely not), and then your standard background check (this step was also sometimes skipped). However, that didn't really tell employers the entire story, did it? You cou ld be a superstar adored by your boss, but a recruiter may miss the fact that you are a terrible team player, that you treat your peers and subordinates with little respect, and that as a whole, you'd be a detriment to add to an organization that already has good team chem istry. That is why as an individual it is important that you have well‐rounded feedback from various divisions and peer groups in and outside the organization. If you skew too heavily one way or another, it may quickly reveal a weakness to your potential employer. One of the most important thin gs employers look at today is the person's network itself! If the employer is hiring a bunch of new talent and brings on someone who has a polished network, then the new hire instantly becomes a recruiting asset. It was never possible before to have this ty pe of insight into someone's network. You could assume they were connected with people at their current place of work, but you could never confirm it. Bringing on someone who has 300 well‐respected professionals in her network is a tremendous asset to any company because after she is hired, the recruited qui ckly becomes the recruiter. What really makes networks like LinkedIn helpful is that it allows users to share their online Rolodexes. Shally Steckerl uses social network LinkedIn (industry leader) to more easily recruit talent for Microsoft and other online companies. Steckerl says: With my Rolodex, I had to call any on e of these thousand people and say, "Hey, Bob, I'm looking for someone that does this, or I'm looking for someone in this industry, or I'm looking for a job, who do you know? With social networking, I don't need to go to Bob directly to find out who Bob's friends are. Or Bob's friends' fri ends. So, effectively, I have a thousand contacts that could potentially lead me to 100,000, now I have 8,500 contacts that could potentially lead me to 4.5 million. 19 22 | Socialnomics Echoes Maureen Crawford ‐Hentz of global lighting company Osram Sylvania, "Social networking technology is absolutely the best thing to happen to recruiting—ever. It’s important to load your profile with the right keywords so people like me can find you easily." It’s also important within these social business networks to be co nstantly building e quity. This can be obtained by connecting two people that you have in your network to posting jobs that you are aware of, to giving your peers a thumbs ‐up and adding written recommendations next to these approval ratings. Aside from building equity that can be drawn on later, it’s imper a tive that workers proactively manage their "brand" whether they are currently in the job market or not. Employers will perform Google and YouTube searches on a potential recruit's name as well as filter through MySpace, Facebook, and hi5 networks to see what is posted out there. Employers are always looking to mi tigate risk. So, even thoug h you may have a 3.9 grade point average and a 1300 SAT score on your résumé, it is immaterial if your hi5 profile picture is of you holding a beer bong while wearing a jockstrap on your head; good luck in landing that dream job! While I hop e you aren't that stupid, you most likely have some friends who are. So it’s important to spot ‐check what is out there and aggressively ferret out potential job career landmines. Job seekers should act like a potential employer and go to the search engines to investigate what shows up when searching for their na me . Unflattering items should proactively be removed from the public eye. Part of this search includes confirmation that there aren't any egregious videos out there. Also, if job seekers share a common name with an individual who is less than scrupulous, then the job seeker needs to mak e certain th e employer knows that that person is not them, but rather someone else with the same name. This due diligence and research can take time, so even if you aren't currently in the job market, it’s imperative to keep items inside and outside of your business social networks as button ed up as possible. Thirteen Virgin Airline employees should have heeded this advice before they were let go from the U.K.‐based airline for inappropriate behavior on Facebook. The 13 employees formed a group on Facebook and thought it would be a fun joke to insinuate that there were plenty of cockroaches on the Virgin Airline's planes and that the passengers were general ly "chavas." Chava is the British equivalent to calling someone a redneck, or more specifically: Chav, Chava, Charva, or Charver is a derogatory term applied to certain young people in Great Britain. The stereotypical view of a chava is an aggressive teen or young adu lt, of working class background, who wears branded sports and casual clothing (baseball caps are also common). Often fights and engages in petty criminality and are often assumed to be unemployed or in a low paid job. 20 Obviously, the competition among airlines is fierce, so Virgin didn't hesitate to quickly fire these employees for what they deemed insubordination. The world has shifted, and whether we like it our not we are always representing who we are whether we are on the clock or not. HUNTERS BECOME THE HUNTED The good news for job seekers is that they too also have new and similar powers to check up on a potential employer, thanks in large part to social media. Within these social networks, they have review boards about various employers. And just like in the Kevin Bacon game that uses the famous Six Degrees of Separ ation concept , there is potential that a friend of a friend will have worked for a particular company if a job seeker wants to get the scoop firsthand. Also, along those lines, you can see if anyone in your social business network is interlinked to Socialnomics | 23 the person that may ultimately be your boss in the new job. The ability to check on your potential future boss's background along with what other people are saying about that person is very comforting and useful. This is also great preparation for the interview. If you know your interviewee is a member of Big Brothers and Big Sisters, you may steer the conv ersation in that direction. But, even more important, if you are selected for the job, examining the profile of the person who may become your boss will help you decide if you want to work for this person. Do you think yo u can learn from this new boss? Do you have the same theories, aspirations, and approach to work and life? Other social media tools that are popping up are companies like glassdoor.com. Glassdoor was started by Rich Barton, who was also very successful with Expedia and Zillow, both of which opened up i nformation previously not available to end users for travel and real estate. Glassdoor was started using the concept of "What would happen if someone left the unedited employee survey for the whole company on the printer and it got posted to the Web?" The site mentions what th ey do: "Glassdoor.com provides a complete, real ‐time, inside look at what it’s really like to work at a company—ratings, reviews, confidence in senior leadership, and salaries—for free." Well, it is free in terms of cash outlay, but the site does require users to share salaries of their current or past positions before they can see sala ries that others have posted. The site encourages and demands sharing for the social product to work. Networks like this give the interviewee some power, especially when it comes to salary negotiation because they can see what others in the same position are currently makin g. In the past, information on the ins and outs of companies, as well as background on potential bosses, was limited if not nonexistent. In a very short time, social media have eliminated this information deficiency. There are even some Web‐based recruitment companies sprouting up that are looking at a socialommerce mod el where instead of headhunters getting paid, they actually pay the interviewee money for the opportunity to interview—one such site is called paidinterviews.com. It will be interesting to see if this represents a wave of the future. A BETTER WORKPLACE FOR EMPLOYEES AND EMPLOYERS Generally, this makes for a better work environment for employers and employees. It also greatly increases production in companies because the wrong person is less likely to be put into the wrong job. The number of employees leaving within a year will also be reduced because new recruits will have a be tter sense of what they are getting into (job, boss, company). Also, once employees are in place, now more than ever before, it’s essential that they work well with their peers, subordinates, partners, and bosses because their ability to land their next job will depend on it. Skeletons are no longer in the closet; ra ther, they are in social business networks. HIRING THE INTERNET GENERATION Just as the one ‐way messaging strategy of advertisers is no longer viable in this new age, it no longer works for employers, either. Millennials are used to and want collaboration, but they will not necessarily acknowledge or adhere to traditional lines of authority or chains of command. Soon, many baby boomers in executive le vel positions will retire, and there will be an intense talent fight between companies. Companies can give themselves an advantage by understanding that this new talent has different attitudes, expectations, and skills than the previous generations. 24 | Socialnomics Some people paint members of this under‐30 generation as spoiled or lazy. That is far from the truth. They are just different, and in a lot of positive ways. Work and life balance is much more important to them than their parents, and they desire positions that are able to conform to their lifestyle (e.g., wor k from home or at odd hours). Company beliefs and values need to align with those of employees. A company mission of simply making as much money as possible turns many of this generation off. Companies need to contribute to the greater good of society, to be part of the social comm unity and causes. Ironically, though, if another firm offers Millennials more money or a better opportunity, they will go. There is less loyalty; on average, a person will have 14 different jobs by the time they are 40 years old. Members of this generation have seen that companies in gen e ral aren't loyal to their employees, so why should they in turn be loyal to their employers? They desire to stay at the same company and grow, but they understand this probably isn't going to be a reality. They've also seen that companies may only have a strong robust lifespan of 10 to 20 years (e.g ., Lycos, Prodigy, Atari, Enron, Circuit City). Fun at work isn't a "nice ‐to ‐ have," it’s a "need ‐ to ‐have." Employers need to throw away the old human resources playbook that consisted of hire, train, manage, and retain. This generation wants collaboration in all aspects of their lives, in part because of the soci al media tools they grew up with and are accustomed to, but especially because work is where they spend the most time. Showing up at a college campus for a career fair isn't going to get the job done, because it’s a whole new world. Online sites now hold 110 million jobs and 20 million unique résumés. Traditional advertising to attract young talent is as good as burning money. As a company, you need to use everything in your arsenal—blogs, podcasts, social media sites, and so on. However, your current staff memb ers are your best recruiters because they are the ones with the networks and referral power. Just as marketing will be more focused on referral programs, the same holds true for recruiting. RETAINING TALENT By using social media tools during the recruitment process, companies have a better chance of maintaining talent because it’s more likely to help put the right person in the right position. However, an employer's work is just beginning when it hires someone. Generation Y people desire constant feedback, and they also evaluate the company fr om day one. They will not wait around in hopes that things will get better or things will change. There is too much opportunity for them to go to a competitor or even for them to start their own businesses. Employers are best off exposing new hires to vari ous departm ents, leaders, and projects. Often the best thing that managers can do is simply "get out of the way" because the young talent may be vastly more talented in certain areas (great hire!). So, instead of traditional management and micromanagement, bosses may be more focused on fostering an environment for success. Just as empl oyees shouldn't burn bridges, employers shouldn't either. When an employee leaves, it can be bittersweet. But it’s important to focus on the "sweet" versus the "bitter" because today, talent may "boomerang" back once they see it’s not so great out there. It's imperative that employers not take a smug "we told you so attitud e," but rather, take pride in knowing that they must be doing something right if this talent is coming back. Often within social networks, people stay engaged with their previous company through specific groups. That's why Yahoo! Alumni and Microsoft Alumni groups on Facebook have 2,300 and 1,600 Socialnomics | 25 members respectively. In a study done in Canada of 18‐ to 34‐year ‐olds, it showed that the average person held five full ‐time jobs by age 27. Rehiring saves money. Harvard Business Review indicated it costs roughly half as much to rehire and that person is also 40 percent more efficient in their first 90 days 21—which intuitively makes sense. Plus, they are also less likely to leave again. The key is for companies to embrace this change in the workforce and to learn as much from Generation Y as they learn from your company. SOCIALNOMICS SUMMARY It's all about the economy, stupid. No, it's all about a people ‐driven economy. If anything, I hope that you have learned this from reading this book. Whether you are a businessperson or a high school student, social media transform the way you live and do business. As an individual you need to live your li fe as if your mother is watching, because she probably is. Individuals leading "cleaner lives" are a good thing for society. But is it beneficial for the individual? If we can no longer have split personalities ( Work William versus Weekend Warrior William ) providing necessary stress relief, will more and more indi viduals experience nervous breakdowns? On the other hand, when individuals constantly update their status and micro ‐ blogs, this allows them to take real‐time inventory of their lives. It also allows us to be connected with the ones we love like never before. Because of this, there may be no looking ba ck on a wasted youth. Social media are not a waste of time; they actually make people more productive. We no longer look for the news or things of interest—they find us. If one is updating one's status or micro ‐blogs with "watching reruns of Saved by the Bell ," that certai nly isn't quite as cool as "learning how to kayak white‐ water rapids." Reality TV has been replaced by reality social media—it's all about my friends and my own reality. And that is what social media do—they reward first ‐class behavior and punish improper behavior (what happ ens in Vegas stays on YouTube). Time will tell if our newly transparent world cuts down on crime, infidelity, and so on. And it's not just criminals and unfaithful spouses who can't hide; inferior companies and products can no longer hide behind massive marketing budgets. The days of shouting and imposing your message on th e masses are gone. Successful companies in social media will function more like entertainment companies, publishers, or party planners than as traditional advertisers. The 30‐second commercial is being replaced by the 30‐second review, tweet, post, status update, and so on. Not all great viral marketing ideas need to originate in the marke ting department—businesses need to be comfortable with consumers taking ownership of their brands. The marketers' job has changed from creating and pushing messages to one that requires listening, engaging, and reacting to potential and current customer needs. And it's not just marketing that changes; busin ess models need to shift. Simply digitizing old business models doesn't work; businesses need to fully transform to properly address the impact and demands of social media. But who is the winner in this new socialnomic world? The customers and best products win— which, as a society, we have been trying to achieve since th e industrial revolution. Social media enable this utopia ‐like state. Good companies view negative feedback as an 26 | Socialnomics opportunity that they can act on and adjust their products or services accordingly; bad companies view it as a nuisance or something they need to put an effort toward hiding. Social media are helping enable a truly connected Web. This results in tremendous time savings for individuals. It eliminates millions and millions of peop le perfor ming the same tasks—multiple individual redundancies. Now only a few people need to research/test the best vacation spot or baby seat. Others in your network can leverage your experiences and learning, creating the world's largest referral program. People care more about what their friends and peers think is the best Italia n restaurant in Manhattan than what Google thinks. That is why it is no surprise that Google shows an interest toward social media technologies like Facebook and Twitter. Google understands that its future competition isn't other search engines, but rather it’s social media. We need to look no fur ther tha n Barack Obama's historic Democratic primary and U.S. presidential victories to understand the true power of social media. This is a whole new world that is best for individuals and businesses alike to embrace before they are squashed by it. Making multiple mistakes within social media is far better than sitting back and doing nothing at all. This is the world of socialnomics. DISCUSSION QUESTIONS 1. Describe three ways in which social media have affected traditional business models. 2. Discuss the positive ways that young people can take control of your brand. 3. Describe how social media have changed the job search game. 4. What is the “Tom Sawyer Approach,” and how can it benefit your product or service? 5. What are so me key strategies for deali ng with feedback from customers through social media channels? 6. Why are the old metrics of viewership (reach and impact), such as the Nielsen Television Rating system, deceiving? Notes 1James Carville, "It's the economy, stupid." Wikipedia, accessed April 23, 2009, http://en.wikipedia.org/wiki/It%27s_the_economy,_stupid. 2Barack Obama, Election Night Speech, Chicago, November 4, 2008. 3Hitwise, June, 2008. 4Chris Anderson, The Long Tail (New York: Hyperion, 2006), Chapter 2. 5Jim Giles, "Internet Encyclopaedias Go Head to Head," Nature, December 15, 2005. 6C. C. Chapman, "Managing the Gray," May 23, 2008, www.managingthegray.com/2008/05/23/comcast ‐wins‐with‐twitter/. 7"JetBlue Engages in Real Conversation on Twitter," Socialized, March 17, 2008, http://www.socializedpr.com/jetblue ‐engages ‐in‐real‐conversation ‐on‐twitter/. Socialnomics | 27 8Jerry Seinfeld, http://www.wittcom.com/fear_of_public_ speaking.htm. 9Anick Jesdanun, "OMG! :(It Ain't Write," AP–New York Post, National Commission on Writing at the College Board, April 27, 2008, http://www.nypost.com/seven/ 04252008/news/nationalnews/omg_it_aint_write_108037 .htm?CMP =EMC ‐ email_edition&DATE =04252008 10"Young Adults Eager to Engage with Brands Online, Global Research from Microsoft and Synovate Reveals," November 11, 2008, http://www.synovate.com/ news/article/2008/11/young‐adults ‐eager‐to‐engage‐with ‐brands‐ online ‐global ‐research‐from ‐microsoft‐and‐synovate ‐reveals.html. 11"Nielsen Online Global Consumer Survey," Nielsen, April 2007. 12Hitwise, June, 2008. 13Hitwise, June, 2008. 14Twitter Postings, October 15, 2008. 15Twitter Postings, October 21, 2008. 16"News from the Olympics," Nascar Licensedathletics.com, September 3, 2008, http://nascar.licensedathletics.com/news.php. 17"Not Ye Old Banners," The Economist, November 27, 2008, http://www.economist.com/business/PrinterFriendly.cfm? story_id =12684861. 18"Online Ad Spending Grows 10%; Video Ads Strong (Just Not at Google)," Marketing Pilgrim , March 31, 2009, http://www.marketingpilgrim.com/2009/03/online ‐ad‐spending ‐grows‐20‐ video ‐ads‐strong‐just ‐not‐at ‐google.html 19NPR Radio, Weekend Edition Saturday, November 22, http://www.npr.org/templates/archive s/rundown_archive_hub.php?date=11‐22‐10082006 20Wikipedia, s.v. “chava,” http:en.wikipedia.org/wiki/Chav (accessed 11/25/2008) 21Harvard Business Review 28 | Socialnomics