Google > Apple > Facebook?

Two articles I read recently, here at MicroPersuastion blog and here at BusinessWeek, led me to conclude as much.  In the first case, though I have hardly used their products, I think of Apple as a company with good customer service, so it was somewhat surprising to read that they might have a few things to learn from Google on the subject – particularly that Google can teach Apple about how to be transparent.  But the author, Steve, is right – his comparisons show Google believes in the marketplace of information and feedback, by which I mean they are upfront in explaining all the bugs they fix (Apple, no) and customers are able to vote for the best software technicians that helped them with their problems (Apple, no).

Likewise, the BusinessWeek article talks about the ‘marketplace’ – this time it is Facebook that has to learn from Apple.  Facebook (apparently) believes that owning (or being) a platform is the way to make money; Apple believes in the market – its App Store, while a platform of sorts, allows consumers to vote with their dollars for the best apps, meanwhile monetarily incentivizing producers of software to produce the best products by giving them a percentage of every sale (and rankings make their popularity transparent).  Is it any wonder that most Facebook apps are complete garbage?

If you can’t read the article in its entirety, at least check out the following excerpt from “What Apple knows that Facebook Doesn’t”, BusinessWeek, written by Umair Haque on 8/20/2008:

Ultimately, Apple is playing a textbook game of next-gen strategy: using markets to alter the basis of competition, topple incumbents with domino effects, and atomize the value chain. Incumbents playing by yesterday’s rules are trying to fight a limit break with a spoon.

Facebook is doing largely the opposite: clinging to yesterday’s basis of competition, signing deals with incumbents instead of toppling them, largely failing to atomize media—unless it’s for zombies, vampires, and werewolves. Too often, that’s where platform—instead of market—thinking leads.

What would it take for Facebook to stop thinking platforms, and start thinking markets? Well, simply start charging people for apps, for a start: that would amplify incentives for crappy apps to go the way of the dinosaur. If advertisers are subsidizing apps for people, Facebook’s market will always be distorted—because advertisers need consumers more than consumers need advertisers today. [emphasis added]

To finish on a tangent – is that true?  Do advertisers need consumers more than consumers need advertisers?  I guess I mean, has that actually changed – or rather, hasn’t that always been the case?  If you’re talking about 50 years ago, sure, consumers might have needed advertisers more than they do today, but that’s seems fairly obvious.  Anyway, if that is true (and I’m not completely satisfied that it is), if we need advertisers even less today than we did previously, what are advertisers (especially online advertisers) to do?  Are they, to borrow Umair’s hilarious phrasing, ‘trying to fight a limit break with a spoon?’

College Students’ Social Networking

This article from eMarketer shows that social networking usage has nearly doubled in the last two years. As a relative newcomer to social networking, it is easy to see some of the great things about it: it is easy to reconnect with old friends, share events and photos and simply stay more connected. I wonder if these college students are spending more time online (ie. twice as much) or if they are spending less time doing other things online and now mostly just social networking?  Your thoughts?

Review: Click – What Millions of People Do Online and Why it Matters, by Bill Tancer

As the full title suggests, Click is full of fascinating facts about our collective web browsing behaviour.  It poses problems for marketing managers that puzzle the mind and provides solutions that make sense only after the fact – in a way, this book is like Paco Underhill’s Why We Buy – but of course for the online marketing, rather than physical retail world.

The central tenet to Tancer’s book is that he identifies the internet search (usually google) as our new collective confidante; because we are relatively anonymous on the web, we feel free to ask (and therefore tell) google everything.  Because we feel so anonymous we get away from the problems that research from surveys cannot avoid – people don’t need to consciously report how they feel about a certain subject, it is simply an observable behaviour at a time when the participant probably feels they are not being observed in any meaningful way.  All one needs to do is reflect on all of the different search strings one has entered into google to realize the rich data that could result from everything that follows.  

Obviously, this would be somewhat meaningless on a small scale – but aggregating and anonymizing data across a large and representative swath of the US population, Hitwise (the internet data analysis company he works for) has created a powerful tool that can be used to predict and understand otherwise unobservable human behaviour – retail or otherwise.  The data is very rich – subsets and profiles can be created to drill down and unearth more relevant data to particular businesses and industries.  Chapter by chapter Tancer takes us through baffling conundrums that we are able to observe through data but which do not make sense without serious analysis.  

For example, why is January the most popular month for “prom dress” searches in the United States when the big dance isn’t until June and dresses are normally advertised by retailers in March/April/May?  Tancer’s probing questions and thought processes walk us through the strangeness of the data and ultimately illuminates the reason – certain popular teen magazines (like Teen Vogue) have pushed forward their prom issues to December – this of course was known, but not that it might change buyer behaviour to such a degree.  This recent behavioural change has created an opportunity for dress retailers to help their potential customers make a decision and get acquainted with their styles, and Tancer’s data has helped remove a market inefficiency that remained in place because of ‘conventional wisdom’, which said that if purchase is made in May and June, your marketing should start in March, not January.  

However, for all the interesting tidbits in Click, there are certain problems with Tancer’s presentation of alternate hypotheses (or lack thereof) to explain perplexing data.  This is not to say they don’t exist or that he hasn’t considered them, only that they do not always appear within the margins and so one is left to wonder whether they exist at all or if this book is simply directed at the millions of readers who are looking for an entertaining read without the diligence required to confirm what truths this book proposes.  For example, Tancer illustrates the difference in our collectively reported phobias through a large sample size survey and what google tells us about ourselves.  Of course, the difference is quite striking; Tancer assumes the survey data is misleading because we are afraid to admit, even to a voice on a telephone, that which most makes us tremble.  This is a valid point – undoubtedly, whether conscious or not, we probably will not tell anyone exactly what it is we are afraid of, especially if it might be seen as weird.  But upon inspection, the top nine fears the survey gathered (which include bugs, heights, water, public transportation and closed spaces, to name a few) the potential for availability bias seems quite rampant as well – these are things that most people see and are in contact with everyday – so what am I afraid of?  Buses, of course.  This doesn’t undermine the wealth of data he has amassed on what google is fed (where the number three fear is reportedly clowns), but intent is still unclear in many cases – am I exercising the demons of some dark fear in my soul or am I simply interested in what a fear of clowns might be like because I saw it on an episode of Seinfeld?  In any case, what the data lacks in explaining why we google what we do, it makes up for in entertainment value (fear of being touched on the neck and fear of the theory of relativity being two of my favorites).

In the end, the book is both too general and too specific to be of great use to the average online marketeer (though it is a must read for those in the prom dress industry); if there is one great lesson to learn it is to forget about your assumptions – just hire Hitwise to confirm or disconfirm whatever it is you think you might know about your customers.  There is one chapter, however, that is a must-read to all managers of Web 2.0-related sites (which, as user generated content and interaction increases across websites and market segment, will soon be just about everyone).  In Chapter 7 Tancer dispels the 80/20 Pareto rule that regularly applies to many things business, and in its place gives us (by way of Jakob Nielson – father of web usability studies) the 1-9-90 rule.  One percent of users will generate ~99% of content while nine percent generate just 1% and the remaining 90%, the so-called “lurkers,” will only consume whatever is there to be digested.  That’s some food for thought when considering how to attract and keep customers or users of your service if their participation, or maybe your reputation, is required.  Who those 1-10% are, and how to get them, is another matter.