What Do You Think Is Going on Here?

This is an insignia that apparently appeared inside Mark Zuckerberg’s “hoodie” during his D8 interview (SF Weekly reconstructed it). As they say in the article this symbol appears nowhere on the site or in public Facebook materials otherwise:

Here’s the clip where Kara Swisher of AllThingsD jokes about it:

It was struck by it; it seems odd. What you think? Is it playful or sinister?

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Update: An identical hoodie put up for sale on eBay by a Facebook staffer is now going for $510 (as of 11:26 Pacific time on Sunday):

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Fail: What the ‘Insider’ Debate Misses re the iPad

John Battelle’s prediction about the iPad’s all-but-certain failure was itself a #Fail:

Apple’s “iTablet” will disappoint. Sorry Apple fanboys, but the use case is missing, even if the thing is gorgeous and kicks ass for so many other reasons. Until the computing UI includes culturally integrated voice recognition and a new approach to browsing (see #4), the “iTablet” is just Newton 2.0. Of course, the Newton was just the iPhone, ten years early and without the phone bit….and the Mac was just Windows, ten years before Windows really took hold, and Next was just ….oh never mind.

Later, after the announcement of 2 million in sales, he explains why he’ll be proven right eventually:

I think my prediction was right in the short term (when the iPad was announced, nearly everyone was disappointed at what it wasn’t, see the headlines from January, above), and I was totally wrong in the medium term (the thing has sold two million plus and probably has a shot at being Time magazine’s “man of the year” for 2010). However I still believe I’ll be entirely correct in the long term, in particular if Apple doesn’t change its tune on how the iPad interacts with the web.

But Battelle’s logic misses the larger point.

The iPad’s vulnerability is not to a more “open” tablet or system but to cheaper devices that ape its functionality. Neither Battelle nor the developers and blognescenti obsessing on the “open” vs. “closed” debate that surrounds Apple really understand the consumer mindset. They’re distracted by an “insider” argument that has little relevance to consumers.

Consumers don’t think like tech insiders, bloggers or developers, they think like buyers of products. They don’t care about “Flash” per se or whether HTML5 is “ready for prime time.” They don’t care whether Apple has to approve all the apps in the app store or whether Apple is “open” or “closed.” They want devices to work and be affordable.

Steve Jobs is absolutely correct when he says that consumers care about products. Jobs says Apple is trying to make “great products.” You can be cynical or not: whatever motivations Apple has or doesn’t have for rejecting Flash, if the company makes great consumer electronics people will buy them.

While some people are clearly annoyed that some Web video doesn’t work on the iPad and iPhone, people focus on “video” not Flash itself.

The iPad is a great product — if slightly imperfect. And it has done (with some help from Kindle) what Microsoft was unable to do with its hardware partners for years: establish the “Tablet PC” as a bona fide consumer category. Now 20 tablets or more are coming into the market on the heels of the iPad’s success. All but a very few of them will use Android because it’s really the only alternative they have. Windows 7 the PC version is unlikely to find success on a tablet — except in some narrow circumstances at the higher end  (e.g., laptops or netbooks with removable tablet screens). Nokia-Intel’s MeeGo is a possibility as well.

There will be two factors — and mainly one — in terms of whether these Android-based iPad challengers will succeed or fail: do they “work” and are they affordable? Very few consumers will be making buying decisions based on Flash itself or the idea that Android lives at the center of a more “open” ecosystem.

Retrevo’s consumer survey data (which earlier incorrectly interpreted iPad demand) echo the pricing variable as probably the most important in the Android challenge to the iPad:

Are Content Farms Creating ‘Digital Serfs’?

AdAdge recently ran a piece discussing the move toward content outsourcing in traditional media, from “in-house” journalists and editors to third party “content farms” such as Demand Media and Associated Content:

Hachette is using Associated to supply some content for its Woman’s Day site. Thomson Reuters experimented with Associated for a limited period of time last year but plans to ink similar deals in the future, whether with Associated or another content provider. And Cox’s Atlanta Journal-Constitution published a handful of articles from Associated last summer; it is now running regular articles supplied by Demand Media.

Such partnerships further the ongoing shift among established news operations to capitalize on the availability of cheap content, such as USA Today’s recent deal with Demand Media, which is using its network of freelancers to supply pieces for a new Travel Tips section on USA Today’s website.

In the past I’ve criticized Demand and Associated Content as being fountains of crap content, much like the oil spill in the Gulf is spewing junk into the ocean. But that’s unfair; many of the writers that work for (freelance for) these organizations are former journalists or people with expertise in the areas they’re writing about.

At least some of the content being generated then will be of reasonable and maybe even high quality. The issue as the AdAge piece points out is cost; these sources are just much cheaper than headcount:

Associated pays its contributors anywhere from $5 to $30 per article, sometimes upfront — and in some cases pays a performance fee of up to $2 for every 1,000 impressions the story generates within Associated Content’s site.

The margins on these articles are quite large; but the publisher pays no health insurance or other overhead costs — Demand says it provides “access” to health insurance — so the bottom line on outsourcing is highly favorable vs. hiring staff writers and editors.

Maybe someone will come forward and claim to be making “six figures” from writing for one of these companies but I’m skeptical. What we’re seeing develop, accordingly, is a class of underpaid writer-content creators or “digital serfs” who are largely anonymous and fungible. Some people may, of course, be using content farms as a kind of SEO strategy to promote themselves or their businesses. But those savvy folks are likely in the minority.

Branded publishers know that they can’t maintain their reputations by relying primarily on this stuff but they can back-fill or round out their content online with help from Demand or Associated Content.

Perhaps these companies are simply filling a void and need created by the disruptive influence of the Internet, which won’t support ad revenues comparable to print and thus the staffing. Perhaps these are the new economics of content creation online. But the creation of a class of digital serfs is a lamentable outcome in my opinion.

FCC: 22% Not Web Users (but Have Cellphones)

The US FCC has released a report, based on a survey of more than 5,000 US consumers in November. The survey captures attitudes and self-reported behavior about Internet adoption and broadband usage. Much of the report focuses on demographics and cost as a factor in the above.

However there are other interesting findings. Here are some I’ve quickly selected (verbatim from the report):

• 78 percent of adults are Internet users, whether that means broadband, dial-up, access from home or access from someplace other than home.
• 74 percent of adults have access at home.
• 67 percent of U.S. households contain a broadband user who accesses the service at home.
• 65 percent of adults are broadband adopters. The discrepancy of two percentage points between household and individual home use is because some survey respondents are non-broadband users but live with someone who, at home, is.
• 6 percent of Americans use dial-up Internet connections as their main form of home access.
• 6 percent are Internet users but do not use it from home; they access the Internet from places such as work, the library or community centers.
• 22 percent of adults are not Internet users. They are the oldest non-adopting group, with a median age of 60, and include the highest share of Hispanics (at 20 percent). Some 84 percent have high school degrees or less and half live in households with annual incomes of $30,000 per year or less.

Of this last group of so-called non (broadband) adopters, “70 percent have a cell phone.”

Snapshot of online activities segmented by access type (click to enlarge):

Note that “local or community news” is the second most common type of activity online (according to this survey), even more than social networking.

Finding: We Now Trust Each Other Less

Global PR firm Edelman put out its annual “Trust Barometer” last week, but I’m only getting to it now. It measures trust in brands, companies, CEOs and various media, among other things. One of the other things it asks about is how much we trust our peers.

What the most recent findings show is that since 2008 trust in friends/peers has dropped from 45% to 25%. As you also can see from the graphic below, trust has dropped in TV, radio and newspapers. AdAge summarizes and discusses the findings.

Graphic: AdAge

The interesting question is whether the rise of social networking online has in any way caused this decline, because it certainly coincides with the growth of social media. Edelman CEO Richard Edelman is paraphrased in the AdAge piece, saying that “consumers have to see and hear things in five different places before they believe it.” That’s probably not literal but means consumers need confirmation/validation of some fact or idea before they’ll accept it — no single source will do.

The findings cast doubt on the efficacy of social media as a stand-alone marketing strategy (nobody ever said it was). However, the notion that somebody on Twitter or Facebook says something or recommends something and means automatic acceptance by peers is clearly wrong. Companies that are seeking to cultivate peer or viral marketing via social nets need to be mindful of this.

Isolated recommendations or reviews — even from friends — aren’t really credible. They work when there’s no other option. But we look for multiple sources of information for confirmation of a choice, to Edelman’s point. Review consensus is what we seek.

The rise of social networks and corresponding growth of affiliations, which are mostly loose now, means that advice and recommendations coming through these systems will carry limited weight. They’re suggestions and not much more. For example every day practically I get an email saying Friend X has become a “fan” of organization or company Y on Facebook. I ignore 99.999999% of these.

As David Berkowitz of 360i says in the AdAge article there’s a lot of “noise” out there now. Friends can be filters or they can contribute to the noise. These days, however, they mostly seem to contribute to the noise.

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Update: I should have posted that others have found something contrary. Here for example are Nielsen data (from a global survey for 25,000 people) stating that peers/friends/family (“people known”) are the most commonly trusted source followed by online reviews:

This isn’t “apples to apples” because of the phrasing of the question “some degree of trust,” but it is counter to the above. These data were collected in April, 2009. 

Beyond the framing of the question, how would you explain this discrepancy?

Why Isn’t AT&T the Buyer of Yelp?

Again, nothing has been confirmed yet but let’s assume that Google acquires Yelp. I’ve been talking to people all day about this question and the implications for both companies.

A more interesting question to consider may be: Why didn’t AT&T (owner of YellowPages.com) buy Yelp? AT&T, with its large sales force could have provided Yelp with ad sales and Yelp could have broadened the reach of AT&T online and in mobile to audiences that aren’t using yellow pages. 

Here’s what I wrote previously in my post “If I Were a Yellow Pages Publisher . . .”

So if I were AT&T I’d be buying Yelp. The sales force could sell the ads and the brand would be an enormous addition to AT&T interactive  . . . Notwithstanding the chart at the very bottom, Yelp’s traffic is already bigger than the IYPs . . .

So what kept AT&T from trying to buy Yelp? Was it:

• Lack of vision
• Lack of an entrepreneurial culture
• Too many layers of approval
• Inability to act quickly

Or have they tried and Yelp investors wanted more than they were willing to pay? What do you think?

Search & Sex for Those 18 and Under

Unlike the major search engines that make their year-end “top searches” lists family friendly, Symantec puts out what they see as the raw data. Here’s why it’s scary these days to be a parent of younger kids — especially girls:

While YouTube, Google, and Facebook showed up in the top three of both boys’ and girls’ search terms, boys’ #4 search term was “sex” while girls’ #4 was Taylor Swift. However, girls were still interested in the term “sex,” coming in at #5 on their list. Boys’ top 25 search terms were mainly comprised of social networking sites, shopping sites, adult terms, and games. Girls also showed interest in social networking sites, but their top 25 search terms focused more on music, TV, movie, and celebrity-related terms.

(emphasis added.)

Then there’s also this, about “sexting” on mobile devices (from Pew survey data): 

• 15% of cell-owning teens ages 12-17 say they have received sexually suggestive nude or nearly nude images of someone they know via text messaging on their cell phone.
• Older teens are much more likely to send and receive these images; 8% of 17-year-olds with cell phones have sent a sexually provocative image by text and 30% have received a nude or nearly nude image on their phone.

Social: Not That Hard to Figure Out

Recent comScore data points out that social media are having an increasing influence on shopping and consumer purchase behavior:

Social media (a descriptive yet still ambiguous term) is often treated like it’s a mysterious thing. It’s not. You have several major distribution points online where people are interacting — among them Facebook and Twitter. Reviews and recommendations (word of mouth) are being disseminated in many cases through these distribution points. People are getting the information and taking action accordingly. Twitter for example has become an important distribution point for deals and coupons.

People fundamentally want credible information about products (and services) — rather than ads and claims — and they want to save money. Consumers are finding this information on social media sites, among other places online. Makes sense.

Companies lag in figuring out how to utilize these tools and platforms effectively and w/o the BS/PR spin they’re used to conveying in the world. That’s the major “cultural” obstacle for them. They mostly don’t know how to operate in the world with authentic, direct communication, which is what the Internet now demands for success in social media.

But if you’re a company that just can’t overcome the caution inherent in most corporate cultures, and you don’t want to be “authentic,”  you can always offer deals and discounts on Twitter as an alternative.

Droid Is for Rad Dudes Only

A new Droid commercial goes after the iPhone as a kind of “digitally clueless princess” — a pretty but superficial device. Clearly the audience here is young men and dudes who want “rad” devices that “shred” the mobile Internet.

These TV ads seem to be trying to create an image of a tough, fast phone vs. the fluffy and impliedly weak iPhone. The commercial is borderline offensive in some respects; its subtext is not that far away from suggesting that the iPhone “is gay.”

Now I didn’t spend a ton of time with the Droid device but I did hold it and use it. It struck me as a better Android OS but I was unimpressed by the device and the design in particular (given all the hype). Overall it’s inferior to the iPhone in most respects (save the Google Navigation and multi-tasking). The Droid industrial design is also inferior to the Pre, which I own but don’t really like.

Verizon’s massive marketing campaign has driven sales of nearly a million units. But I find it fascinating that, like a political campaign (via commercials like this) Verizon is trying to define its opponent with labels and names — however false they may be.

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Update: Perhaps we should call it “the Penis Phone” . . . but these ads do seem resonating with men apparently, according to this YouGov survey:

Black Friday Now in Process

The shopping began at midnight in some cases, and at 4 am in others. There’s something crazy and even pathological about it — although I understand the attraction to the low prices.

It’s almost as if the day after Thanksgiving shopping has become something of a sport for many people, while others are desperate to save money on lots of things they probably don’t need. 

Google Scholar Gets a Law Degree

Google Scholar has introduced full-text legal opinions. According to the Google Blog:

Starting today, we’re enabling people everywhere to find and read full text legal opinions from U.S. federal and state district, appellate and supreme courts using Google Scholar. You can find these opinions by searching for cases (like Planned Parenthood v. Casey), or by topics (like desegregation) or other queries that you are interested in.

And now for the inflammatory headlines such as: Google Squeezes LexisNexis and Westlaw Hard. The aforementioned services are subscription-based and cost quite a bit for lawyers and law firms. Google Scholar is free by contrast. But no lawyer is going to rely exclusively on Google Scholar for legal research. It might even be borderline malpractice to do so.

What Google has done is make legal opinions more accessible to educators and students, interested casual readers and maybe those trying to represent themselves in court or during a lawsuit (maybe).

Most people are going to be bored to death reading legal opinions. They’re typically long, often poorly written and obscure or ambiguous in many respects. I should know I spent almost 10 years as an attorney and litigator. Still this is a great service to students and student of the law.

Few people understand how the judiciary shapes public policy or affects politics and social issues, beyond a few high profile debates like abortion. The courts play a massive role in our daily lives but it’s generally all behind the scenes. This helps interested people gain easier access to legal information and court opinions.

The End of Email? Not Likely

The WSJ offers a lengthy article today proclaiming the end of email in favor of other types of tools such as social networks and email successors such as Google Wave:

Email has had a good run as king of communications. But its reign is over.

In its place, a new generation of services is starting to take hold—services like Twitter and Facebook and countless others vying for a piece of the new world. And just as email did more than a decade ago, this shift promises to profoundly rewrite the way we communicate—in ways we can only begin to imagine.

Rather than being marginalized or eliminated I believe email is more analogous to radio, which at one time made room for movies that in turn made room for TV, and so on. I do use Twitter and Facebook to communicate in cases where once I would have used email. But the volume and frequency of email has not stopped or been supplanted by these sites. And Google Wave will need to incorporate email if it hopes to go mainstream, even though it offers much more functionality than conventional email.

Email is clearly evolving alongside these other communication platforms. IM didn’t kill email, although it’s used by younger people than email. In face IM has had to get used to Facebook.

I think we’re seeing a proliferation of tools that make online (and mobile) communication more fragmented and maybe segmented: I communicate with certain people via LinkedIn and others via Twitter or Facebook; still others with IM and yet another group with SMS. Email, however, is the lone platform that everyone is on. It is the “core” or standard communication vehicle that we all use — and likely will continue to use for some time. (There’s also the issue of attachments and other very functional uses of email.)

Someone will eventually build an integrated communications platform — having been discussed for many years — that allows one interface to receive messages from multiple inputs and is smart about the outbound methods it uses. Motorola’s “MotoBLUR” social software on its Cliq Android device points in this direction.

For now we just get more work and more information madness to enjoy. The PC and Internet were supposed to bring about the end of paper, the “paperless office.” Sure, paper has been diminished somewhat but there’s still paper everywhere. The same will be true for email.

Similarly, once upon a time, “computers” were supposed to create more leisure by enabling greater productivity. That now seems like an incredibly naive thought. The unintended consequence was, instead, the creation of cultural and institutional expectations of more productivity and more work — in the same amount of time. So much for promises.

More Bad News for Behavioral Targeting

I’ve argued many times now, there’s momentum toward some sort of regulation of behavioral targeting. And now in my best “Yoda” voice: regulation is coming, prepared must you be. More support for regulation comes in the form of a new survey reported in the NY Times:

About two-thirds of Americans object to online tracking by advertisers — and that number rises once they learn the different ways marketers are following their online movements, according to a new survey from professors at the University of Pennsylvania and the University of California, Berkeley.

The professors say they believe the study, scheduled for release on Wednesday, is the first independent, nationally representative telephone survey on behavioral advertising.

Here’s what the report itself says:

• Contrary to what many marketers claim, most adult Americans (66%) do not want marketers to tailor advertisements to their interests. Moreover, when Americans are informed of three common ways that marketers gather data about people in order to tailor ads, even higher percentages—between 73% and 86%–say they would not want such advertising.
• Even when they are told that the act of following them on websites will take place anonymously, Americans’ aversion to it remains: 68% “definitely” would not allow it, and 19% would “probably” not allow it.
• A majority of Americans also does not want discounts or news fashioned specifically for them, though the percentages are smaller than the proportion rejecting ads.
• 69% of American adults feel there should be a law that gives people the right to know everything that a website knows about them.
• 92% agree there should be a law that requires “websites and advertising companies to delete all stored information about an individual, if requested to do so.”
• 63% believe advertisers should be required by law to immediately delete information about their Internet activity.
• Americans mistakenly believe that current government laws restrict companies from selling wide-ranging data about them. When asked true-false questions about companies’ rights to share and sell information about their activities online and off, respondents on average answer only 1.5 of 5 online laws and 1.7 of the 4 offline laws correctly because they falsely assume government regulations prohibit the sale of data.
• Signaling frustration over privacy issues, Americans are inclined toward strict punishment of information offenders. 70% suggest that a company should be fined more than the maximum amount suggested ($2,500) “if a company purchases or uses someone’s information illegally.”
• When asked to choose what, if anything should be a company’s single punishment beyond fines if it “uses a person’s information illegally,” 38% of Americans answer that the company should “fund efforts to help people protect privacy.” But over half of Americans adults are far tougher: 18% choose that the company should “be put out of business” and 35% select that “executives who are responsible should face jail time.”

People are saying very explicitly that they don’t want targeted (read: relevant) ads. Also, look that the punitive attitudes in the bullets at the end.

There’s a clear difference between attitudes and behavior. People don’t want to be tracked but the do respond to targeted ads and deal offers, etc.

This survey will be taken as conclusive proof of the need for regulation — conclusive. The only question will be about the burdensomeness, the disclosure requirements, etc. Search advertising will be largely unaffected (although data retention will be an issue for search engines). It’s display that will suffer as a result.

Who disagrees with me?

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Thanks Kevin Lee for pointing me to the IAB self-regulation statement. But as George Bush the first might have said, “That’s not goin’ ta do it.”

Nielsen: 19% Drive 81% of Coupon Usage

According to Nielsen, a category of consumers it calls “coupon enthusiasts” account for the lion’s share of coupon-related purchases in America:

Eighty-one percent of the units purchased using manufacturer coupons came from just 19 percent of U.S. households during the twenty-six week period ended June 27, 2009.

The most avid users, called “coupon enthusiasts,” are households that purchased 104 or more items using manufacturers’ coupons. The 10 percent of shoppers that fall into this category accounted for 62 percent of manufacturers’ coupon units. They also accounted for 16 percent of total unit sales making them a very attractive and important consumer target.

Nielsen also reports “that more and more consumers are using coupons for both food and non-food items. In Q4 2008 non-food redemptions were -3 percent. However, in the second quarter of this year redemptions for non-food items were up 46 percent. Food coupon redemptions were +21 percent in Q4 2008 and increased 27 percent in the second quarter of 2009.”

Putting aside the growth figures, the takeaway is that there’s a minority of users who are the heaviest coupon consumers — although the recession has broadened the usage of coupons.

These data refer to traditional coupons. In mobile, coupons have different demographic appeal than traditional paper coupons. And earlier this month Scarborough Research found that among the ways US consumers get coupons, newspapers remain the top source but SMS (and email) now have overtaken “Internet sites.”

Placecast Debuts “The Alert Shopper” Series

In an interesting and clever bit of marketing 1020 Placecast has launched a six-part video series of interviews with consumers about their shopping behavior, with a heavy dose of mobile. Here’s how the release characterizes it:

The Alert Shopper is an online series that is located at http://blog.placecast.net/, featuring both first-person and third-party research in conjunction with Harris Interactive on consumer shopping habits and interest around the use of mobile devices and alerts when shopping.

With all of the hype surrounding emerging mobile content and mobile advertising, Placecast sought out to talk to America’s consumer, face-to-face and captured quite a bit of insightful feedback on what people want and don’t want.

Over the next few months, the Alert Shopper blog will feature unique insights into the mobile usage patterns of today’s American consumers, quantitative survey research from Harris Interactive as well as a broad range of retail shopping trends.

As the blub above says, there will also be data on consumer attitudes and behavior from Harris.

Here’s the first installment:

Burning Man, the iPhone and Technology

The Burning Man festival has always been associated with geeks and technology — or for the last decade at least. But it’s with some ambivalence that I read Brady Forest’s post last week “Burning Man Gets an API.” Brady says:

The annual tech-art festival in the Nevada desert, starts on Sunday. Normally the attendees leave their phones and laptop behind, but this year that may not be the case. As I ride from Seattle to Black Rock City, NV I am getting SMS from friends on the playa. In anticipation of wifi and possible data connections Foursquare has rolled out Black Rock City as a city (@sfslim is already the Mayor of The Man). If AT&T’s service doesn’t work then attendees may be able to take advantage of OpenBTS’s local SMS project. Most of the attendees aren’t there, but the tech is already making its presence known.

On one level: “cool”  . . .

But Burning Man (which I’ve been to only once a few years ago) is also about getting away from the mundane — pretty far away (as you know if you’ve been). While having SMS connectivity is potentially very helpful to people trying to meet or find each other on “the playa” (as the denizens call the expanse of desert there)  the creeping integration of familiar tools and Internet technology into the experience threatens to take away some of the “otherworldliness” of the event.

I think it’s fine to distribute information via the Internet from Burning Man in the “off season,” but posting Facebook updates or tweeting from the playa — “whoa, cool car”; “just saw another naked middle-aged guy” — seems to trivialize it in my mind. Technology dominates our lives and there should be places where it doesn’t encroach or have center stage.

For those who haven’t been to Burning Man but are curious — go. It’s one of the most interesting experiences I’ve had and very hard to describe in the abstract.

Twitter Can’t Stem the Fallout This Time

Whole Foods was built on the back of left-leaning consumers who not only liked the experience of shopping at the over-priced (but very posh) stores but also their community mindedness and seemingly progressive policies.

Whole Foods’ brand took a bit of a hit last year when CEO John Mackey was “outed” in early 2008 for more than 1,000 anonymous postings on Yahoo! Finance message boards that promoted Whole Foods and Mackey himself and “trashed” competitors or those who criticized his company. (See this post for more background on that scandal.)

But the brand is now really under pressure in the wake of a WSJ editorial that opposed the Obama health care initiative. Among other things in the piece, Mackey said:

While we clearly need health-care reform, the last thing our country needs is a massive new health-care entitlement that will create hundreds of billions of dollars of new unfunded deficits and move us much closer to a government takeover of our health-care system.

In response to these positions, which emerged as a shock to many Whole Foods shoppers, a Facebook boycott has formed and the Whole Foods brand had taken a fairly substantial hit this time.  Now Whole Foods investors are calling for Mackey’s removal:

The CtW Investment Group called on the Whole Foods Market board to remove CEO John Mackey as Chairman and to begin the process of naming a new CEO in a letter to Whole Foods’ lead independent director, Dr. John Elstrott, yesterday afternoon. Citing the risk to Whole Foods’ brand reputation caused by Mr. Mackey’s editorial opposing President Obama’s proposed healthcare reform, CtW urged the board to take immediate action to prevent continued damage in the face of a quickly-growing boycott by Whole Foods’ progressive customer base . . .

Events of the past week establish yet again that John Mackey’s lack of personal discipline makes him a liability for Whole Foods Market, Inc. Despite past indications that the board needed to exercise independent oversight of Mr. Mackey and supervise his external communications closely – most notably his postings on the Yahoo! Finance bulletin board, which led to an SEC inquiry – you and your fellow directors failed to take meaningful action to prevent Mr. Mackey’s uncompensated brand and reputational risk to our Company.

Certainly Mackey is entitled to his political opinion but given his controversial history and the clientele Whole Foods caters to, the fallout now happening was somewhat predictable. It’s either arrogance, naivete or pure stupidity on Mackey’s part to have not had some foresight bout this. Now his company is paying in diminished brand equity and potential lost sales.

Social Media and Corporate Culture

I’m going to throw out several incomplete thoughts — that’s the beauty of a blog — on social media and corporate culture. There have been tons of studies and articles about the C Suite embracing social media, yet fearing their brands being tarnished by it. But the cultural force of social media now is so great that eventually all brands will have some sort of compulsory involvement. Those that willingly use it with sincerity will succeed; those that grudgingly use it because they “have to” will not.

Here’s the grandiose thesis: at the bottom of the resistance to social media is a resistance to democracy itself. Social media are “bottom up” largely — though there are “influencers” that may drive certain memes or conversations. But for years companies have been “de-skilling” the customer service function, outsourcing it overseas and using reps as gatekeepers rather than true problem solvers. By contrast, we see examples of companies now on Twitter (e.g., jetBlue, Comcast) that are doing well with genuine efforts to resolve customer problems and complaints. This is what I mean by “sincere.” You can smell it a mile away.

The US corporation, at least among the largest, is a top-down operation that typically seeks to maintain relatively tight control over the rank and file, although that’s increasingly difficult these days. While I realize that I’m crudely generalizing, this “top-down culture” is what you might call antithetical to the culture of social media. In my mind then, the (non-perfunctory) use of social media implies a culture shift within organizations that pushes some degree of authority and control down to the lower levels and front lines. It also implies more transparency and “openness.”

Some companies are doing this and will continue to do this, and will accordingly profit (literally and figuratively) from the use of these social tools. Others cannot and will not loosen up and so will not be able to make effective use of social media.

I apologize for the undeveloped nature of these thoughts but I wanted to simply get them out because I’ve been thinking about these issues but haven’t had a chance to write anything.

But do you agree with what I’m saying: to make effective use of social media tools companies need to change their cultures? What do you think?

Seb’s Interview with RHDi’s Sean Greene

Sorry . . . it’s not my interview. It’s Sebastien Provencher’s. He talked to Sean Greene, recently named head of RHD Interactive. Here are some interesting bits:

SG: Interestingly enough, I’m viewed as the Internet guy within RHD but I’m viewed as the print guy in Santa Monica. This gives me a unique understanding of print & online but also a strong knowledge of Yellow Pages sales. This allows me to put in perspective the need of both consumers and advertisers.

He says RHD has 500K advertisers.

He adds that he wants to do a better job with social media:

SP: what do you think of social media as an opportunity?

SG: We’ve been looking at it but I’m disappointed we’re not further along. For example, Work.com is all about consumer generated content and could be a great entry into social media. Next phase: how do we integrate social media in our big opportunities.

He also says that he’s (now) bullish on mobile.

Me: RHD has some great URLs and properties in Business.com and Work.com. It needs to do more experimentation on the consumer side (that’s a cultural challenge in RHD overall). My guess is that on that front (experimentation) it lags AT&T and Idearc. Justin Sanger (formerly of LocalLaunch) might disagree. 🙂

Much of what Greene seems to be talking about in the interview, if one reads between the lines, is cultural: educating people and enabling them to see the other’s perspective.

I keep hearing that the YP industry is going to verticalize increasingly. RHD has spoken in the past about this too. We’ll see how/whether this happens. It’s also the case that some natural acquisitions that should be happening in the local space aren’t because of the financial condition of the YP and newspaper industries right now.

Local News Briefs: Google TV, Twitter Suit & More

Here are some items I don’t have time to blog about in more detail:

• Google gets into “addressable TV” with Visible World partnership. The concept here is that different versions of ad creative can target different audiences.
• More than 1K newspapers are now signed on to the fair syndication consortium, which seeks to collect ad revenues driven by member content from unauthorized uses.
• NT Times begins local display ad push on blog sites (platform AdReady)
• Digital Envoy until Digital Element brings zip level targeting to IP lookups.
• Different newspaper culture in the UK enables British tabloids to retain scoops and remain relevant.
• Brand Affinity Technologies matches celebs and athletes with media properties and advertisers in local markets (BAT in deal with Freedom Communications)
• Weather Channel partners with Frommers to beef up local/travel-related content.
• Haines Publishing launches new IYP site using Innovectra platform
• Chicago renter hit with libel suit for Tweeting that her landlord was OK with mold.
• Local.com hires a new CTO from Martha Stewart