Six Strategic Resolutions for 2006

Six strategies to help your site be healthy, balanced and fit.
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, exercise.

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 2.0.

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 scalability.
  • 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 growth.

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 network.

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 Generation from a recent BusinessWeek article:

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 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, 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 your boss?

3. Do something interesting with Consumer Generated Media (CGM)

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 with Behavioral Insider. Batista is executive director of, 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 access before.
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 iMedia Connection, 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 why.

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 eyeballs.”

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?

Wired 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 ambitions:
  • Video
  • Classifieds
  • Telecom
  • Operating Systems
  • Print
  • Productivity programs
  • Ecommerce
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 relentlessly.

In an article published in the Harvard Business School newsletter, Vijay Govindarajan and Chris Trimble, the authors of 10 Rules for Strategic Innovators, discuss why 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 it.


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.