Of course you’ll be making resolutions for your personal life in
the new year, and it’s a given that the list will include the usual
suspects: maintain a healthy diet, achieve work-life balance,
There’s a good chance you’ll use the time for reflection offered
by the holidays to develop resolutions for your business in 2006, even
if you’re not on a calendar year. Knowing that the list will include
the obvious items—engage your employees, overachieve on customer
satisfaction, grow faster than your competition and the market—I’ll
offer six suggestions that you might not have thought about.
1. Take Web 2.0 Seriously
Now that thought leaders are touting Web 3.0, which will be driven
by bandwidth of 10 gigabits per second, one would think that we would
all fully comprehend the two to three gigabits per second world of Web
But how many companies can honestly say they fully grasp the
competencies of Web 2.0 companies
which Tim O’Reilly identifies in
his comprehensive article on the concept?
Services, not packaged software, with cost-effective
Control over unique, hard-to-recreate data sources that get richer
as more people use them.
Trusting users as co-developers.
Harnessing collective intelligence.
Leveraging the long tail through customer self-service.
Software above the level of a single device.
O’Reilly’s concept is about much more than bandwidth. Web 2.0 is a
mindset, one that embraces participation, trust and deep respect for
data. Companies that get it, like Google, Amazon and eBay, are capable
of creating exciting new business models and posting excellent
Companies that don’t get it either ignore the concept or only
incorporate it superficially into their product or project titles.
Those latter companies will start to fall further behind as the
technology accelerates and the new business models evolve.
2. Understand the MySpace Generation
There are few better examples of how Web 2.0 comes to life than
the social networking sites like MySpace, Facebook, Friendster and
Xanga that allow users to set up personal Web pages listing
biographical information and link with their friends through the
website, creating a huge personalized online community and
Other than seeing Web 2.0 in action, why should you understand
these sites and their users? Phenomenal growth is one reason. MySpace
has grown by 609% in one year, from just under 3.5 million members in
October 2004 to over 24 million this year. Another reason is the
attitudes, expectations, competencies and attention spans of the people
using these sites. Consider this description of a member of the MySpace
from a recent BusinessWeek
It’s 7 p.m. on a recent Saturday, and she has
just sweated her way through an online quiz for her advertising
management class. (The quiz was “totally out of control,” write
classmates on a school message board minutes later.) She checks a
friend's blog entry on MySpace.com to find out where a party will be
that night. Then she starts an Instant Messenger (IM) conversation
about the evening’s plans with a few pals.
At the same time, her boyfriend IMs her a retail store link to
see a new PC he just bought, and she starts chatting with him. She’s
also postering for the next Buzz-Oven concert by tacking the flier on
various friends’ MySpace profiles, and she’s updating her own blog on
Xanga.com, another social network she uses mostly to post photos. The
TV is set to TBS, which plays a steady stream of reruns like
Friends and Seinfeld—[she] has a TV in her bedroom as well as
in the living room—but she keeps the volume turned down so she can
listen to iTunes over her computer speakers. Simultaneously, she’s
chatting with dorm mate Carrie Clark, 20, who's doing pretty much the
same thing from a laptop on her bed.
Think a generation in which 87% use the Internet and intermix it
seamlessly with many other forms of media to create a social network in
which everyone simultaneously consumes and creates content will have an
impact on your business when they become your customers and employees?
What about if, because they grasp this new environment, they become
3. Do something interesting with Consumer Generated Media
Whether you relied on customer input to select a Christmas gift,
kept tabs on your daughter’s European trip by visiting her blog or had
to engage in frenzied damage control after an irate customer turned a
minor complaint about your company into a major public relations
disaster through his blog, — you’re reading about, creating and
reacting to CGM.
It’s a given that CGM is now a cornerstone in your strategic
planning, so why not push the envelope and do something really
interesting — like let your customers manage their own data.
Consider these observations, made by Ed Batista in an interview
. Batista is executive director of
AttentionTrust.org, a group which believes that both consumers as well
as marketers could benefit if individuals were able to collect, store,
manage and share their own “attention data.”
From some companies’ perspectives, they might find that a little
unsettling. They’d rather have the control. I would encourage people to
not be unsettled by that. The fact that people are going to have
control and manage their data and share it with other partners means
they’re going to be able to share it with you, too. This now means that
you have the access to the data that your customers and prospects are
generating on your competitors’ sites or on partner sites or on
entirely different sites. So, you’re going to get insight into the
behavior of these users on entirely different sites and in entirely
different spheres. It’s going to be data that you’d never be able to
The other part of the equation is that you’re going to be able
to engage people who are a lot more interested, willing and ready
prospects. The further refinement of behavioral targeting means you’re
casting a narrower net, but in this case you’re going after people who
have already demonstrated their willingness to share information with
you. The prospects may be unsettling for a marketer, but I think the
opportunities are huge for people who figure out how to enter into a
series of transactional arrangements with consumers.
The idea challenges many preconceptions about marketing, privacy
and competition, but those companies that, in Batista’s words, “figure
out how to enter into a series of transactional arrangements with
consumers” have been the ones that achieved quantum breakthroughs in
business performance. Challenging your organization on how to fully
leverage CGM is a great way to look for these break-out opportunities
with your customers.
4. Fully integrate online advertising into your marketing mix
2005 marked the turning point when advertisers switched from
testing to investing in online advertising. While still a small part of
the overall spend with approximately five percent of U.S. advertising
dollars spent online, it has grown rapidly from two percent two years
ago. Jupiter Research estimates the U.S. online advertising market will
grow 28 percent over last year, to $11.9 billion in 2005 to $13.6
billion in 2006 and $15.1 billion in 2007.
You don’t have to be a major advertiser to participate in this
growth. In fact, because consumer adoption of the web has been faster
than the use of the media by most advertisers, smaller companies may
have an opportunity to implement online faster than larger players and
steal eyeballs by doing so.
Fully incorporating online advertising into your marketing mix
requires an understanding for how the new media requires different
thinking about your activities.
Consider how you must reevaluate Direct Marketing, an essential
component in your advertising mix. Paul Epstein, writing in
, points out that, traditionally, successful
direct marketing campaigns were built by focusing attention on
audience, offer and creative in the following percentages:
40 percent audience
40 percent offer
20 percent creative
In addition, classic Direct Marketing is a “what” medium, not a
“why” medium. If you mail 1,000 pieces and 100 people respond, you know
what happened—a 10 percent response rate—but you don’t know
The traditional approach didn’t need to factor in technology,
which causes Epstein to propose a new four-way split:
25 percent audience
25 percent offer
25 percent creative
25 percent technology
In addition, he argues that the online model is turning DM into a
“why” medium. “Measuring real time response results in a better
awareness of what works and what doesn’t, enabling more fluid brand
strategies. In short, technology can help make creative more
accountable than ever: if it isn't performing at a high level, you can
easily replace it with more compelling creative that will capture more
Direct Marketing has always been regarded as the most measurable
of the advertising vehicles. Epstein points out that the strength of
online media is that it provides real time data that savvy marketers
can utilize to constantly recalibrate their campaigns. When technology
makes even the most measurable vehicle more measurable, you had better
be using it, learning from it and applying the lessons rapidly if you
want to keep pace in 2006.
5. Learn from Google
You see their search bar every day and constant media references
ensures that you know their share price rose from US$85 to +US$400 in
15 months, making them larger than Time Warner, Cisco, eBay and Amazon
combined. So you can’t ignore them, but can you learn from them?
recently offered an assessment of the business arenas in which Google
threatens established players. The list is so vast that it would be
tempting to assume only few companies can derive lessons from Google’s
But consider what has taken Google from a small search engine to a
behemoth threatening virtually every major tech company. It started
with a simple, clear and ambitious strategic goal: to organize the
world’s information. It then hired bright people with a relentless
drive to understand technology and constantly sought innovations that
would help it achieve its goal.
Think you can learn from that?
6. Innovate and execute
The success of MySpace and Google demonstrates what happens when
creative business people have an innovative idea and then execute
In an article published in the Harvard Business School newsletter,
Vijay Govindarajan and Chris Trimble, the authors of
10 Rules for Strategic Innovators,
strategic innovation is your best route to growth, and the hardest to
execute. Buying growth through acquisition rarely delivers long-term
benefits and “as companies age and industries mature, growth within
established markets comes only at the expense of other entrenched
competitors, and it is never easy to buy market share. Therefore,
strategic innovation soon becomes the most attractive option.
Developing this competence is critical. Companies that successfully
execute strategic innovation can deliver breakthrough growth and
generate entirely new life-cycle curves.”
The vast amount of knowledge contained on the web and the
multitude of lessons it provides about the players who have mastered it
should mean that we can easily manage our business online. But, as
Govindarajan and Trimble point out, while many companies will be drawn
by the appeal of strategic innovation enabled by the web, few will have
the combination of knowledge, focus and resolve to truly benefit from
In other words, thinking it’s possible to win on the web without a
deep understanding of its implications and an enterprise-wide
commitment to learn and apply the lessons it provides is like believing
you can lose weight without diet or exercise.
Prescient Digital Media is a
veteran web and intranet consulting firm with 10+ years of rich history.
We provide strategic Internet and intranet
consulting, planning and communications services to many Fortune 500 and
big brand clients, as well as small and medium-sized leaders.