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Loyalty before clicks and other delusions from a time before Social Sharing

Rupert Murdoch has asserted that page impressions generated via search engines provide little value to advertisers versus impressions generated by loyal followers of his web properties. Crikey, I wonder how he feels about the Frictionless Sharing?.

Of course Rupert Murdoch would love to drive loyalty by forcing every customer to set his homepage as their homepage, but he can’t, users are empowered to choose where to go next so it seems oddly quixotic of the world’s most seasoned newsman to assert such an ideological view, or, is so much at stake for News that he was willing to assert a patently ridiculous position in the hope of turning the tide back toward walled gardens? Maybe he’d seen the iPad by that point and he wished the entire web would look that way!

Obvious history: Jerry and David’s Guide to the World Wide Web helped drive the democratisation of the web by providing links to sites they thought were interesting, over time the service became Yahoo! Web Search as the web became to large to provide a suitable list and they switched to an anonymous algorithm for scale, today’s Google is just an evolution of that algorithm. Publishers soon realised the algorithm could be manipulated and invested significant sums in Search Engine Optimisation to surface pages from deep within their content portals. Although doing so effectively drove users away from Home Pages in favour or Web Search Navigation – so look how empowering web search worked out for publishers in the long run! In the online equivalent of scissors paper stone, Search beats Publisher every time. <<UPDATE>> Just spotted a good article from the very smart Mark Cuban , albeit it was written long before I wrote this!

But now even Search may be losing it’s place as the primary navigation tool of the technoratti in favour of social sharing, (which is really a scale version of Jerry and David’s list but with your contacts providing the recommendations in place of two nerdy kids from the Valley). And Search can’t compete as a recommendations engine when compared with recommendations from your like-minded friends.

Social Sharing is here, savvy publishers and those with most to gain have already adopted Sharing and are actively driving a new recommend / consume habit cycle amongst users. Publishers who resist adding a Share box like the one below to each article page may well grow advertiser yields in the short term by offering a deeper understanding of their loyal audience, but they may also be missing the point. Social sharing should be embraced, as should Search for that matter, as well as any odds and sods miscellaneous user that comes to their site for any random reason. Content providers should be focused on making relevant experiences visible through intuitive navigation to drive social referrals and page impressions per user, reducing their dependency on both Search SEO and the existing Home Page and instead creating a customised home page for each user as they land in an article page they clearly care about. For yield they should invest in advertiser platforms that provide audience insights and behavioural targeting, easily making up the revenue gap left by flirting with a less committed audience.  

With the democratisation of the web came the growth of the Long Tail. Search brought accessibility to the Tail where the smartest SEO was driven by those with the most to gain, Social Share on the other hand is a meritocracy at work brining opportunity to publishers large and small. Although only to those who embrace it of course!

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Should the power of Social require any reinforcement, check out the following vid summary from Socialnomics’ Erik Qualman

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Groupon Rocks – updated

The internet is full of adjacency; in the past five years only Twitter has felt like a disruptive innovation. Facebook is an evolution of a ten year old notion of social broadcast, even internet TV which is still struggling to gain momentum has been around the traps for a lifetime… Groupon is very new, and very disruptive.

The premise of Groupon is that small businesses offer deals to the Groupon audience, the businesses trade a substantial discount against a minimum number of of orders, the offer is “tipped” once enough Groupon members have signed up. The Groupon team get to decide which offer is published in each city as well as adding some colourful narrative to entice the purchasers.

Since launching Groupon has encountered many imitators, but their first mover advantage has meant grabbing scale across tens of US cities, immediate profitability (forecasting $100 EBIT by the end of the CY) and a resulting valuation or $1.2bn. Expect that number to grow as the launch cities grows. Can’t wait for it to hit Sydney.

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In the past month since posting this note I’ve become aware of a healthy stream of Group Buying sites, I’ve listed some below:

http://www.ourdeal.com.au

http://www.ouffer.com

http://spreets.com.au/

http://www.offerme.com.au/

http://www.crowdmass.com.au/

http://catchoftheday.com.au/

http://www.jumponit.com

http://scoopon.com.au

An article in Mumbrella suggested that the market opportunity for Group Buying had now been satisfied, I disagree.

In the US Groupon stole such a convincing march on its competitors that it grabbed a large chunk of market share and mindshare before a strong competitor emerged – no leader has emerged here in Australia. Given how fragmented the Group Buying market now is and how intense the competition is (read low margins) there is a real opportunity for a well backed leader to emerge in Oz, a space also exists for a Group Offers aggregation website supported by a large publisher.

It’s also only a matter of time before one of the existing large transactional audience businesses such as ebay or Facebook add Group Offers to their buying platforms (about time Facebook made good use of Facebook Marketplace!).

So good luck to the startups listed here – regardless of what happens next, the clock is ticking, I’d say you have 6 months.

its not about the hardware

Apple have helped changed the conversation, now the rest need to catch up, again.

It’s ironic that Apple have commoditised consumer electronics whilst appearing to do exactly the opposite. During the peak of iPad hype a few weeks back @nickhodge commented that the hardware was not important, that it was all about the aps..  He’s right of course, but I’d go further, it’s about seamless experiences, and how tightly Apple controls those experiences.

Apple is an exceptional manufacturer of Consumer Electronics. They’ve been consistently out-designing every other PC manufacturer for 25 years. They changed the game in ‘98 with the iMAC’s simple coloured plastics and again in ‘01 with the iPOD’s white earbuds.

The iPOD was pivotal, and a key turning point for Apple’s strategy for two main reasons, firstly it became mass market, where Mac had previously occupied a niche category, and secondly it was tied to a service, something considered as incidental by most at launch.

Manufacturers tried in vain to compete with Apple’s player with more storage space, better battery life and improved sound quality, but consumers didn’t care, the iPOD sucked in all three. The white earbuds made the player must-have, but the seismic shift in MP3 players was driven more deeply by the iPOD’s packaging, the industrial design and its seamless integration with iTunes. Apple dominate the space with 80% share of Mobile Music players. 

In 2007 the iPhone landed with the Apstore as the killer service. Again, Apple had changed the conversation, but this time in the rapidly growing Smartphone category. Clearly I’m not a fan of the hardware, and not just because of the MSFT coolaid I’ve consumed over the years. Regardless, Apple now dominate this category with 40% share.

This month the iPAD launches and the service story moves forward again. Newspapers, Magazines and Books are added to Music, Movies and Aps. Like the iPOD and iPhone the device is seriously flawed of course, however just like those devices Apple has changed the conversation, Mobile computing is no longer about the hardware, industrial design is just hygiene, service is key.