New Business Models?

In a long and interesting article on the car manufacturing and dealership sector in America, Nicholas Moryl makes some telling points about the “old” industrial model car brands and the new software model of Tesla (see source link below).

He says: “The existing problems with the car manufacturer business model and end product are a reflection of the fragmented interests of the manufacturer, its parts suppliers, and its dealership network.”

He continues that this approach means that, currently, “manufacturers need to satisfy dealers first and consumers second”.

He also implies that the various parts suppliers, like the car manufacturers and assemblers themselves, are not necessarily building for quality or longevity, but rather for speedy and cost-efficient manufacture, looking just at the short-term.

The result for most car manufacturers, he says, is, “largely mediocre products that leave consumers uninspired.”

Tesla-Model-S-P90D-interior-600pxHe sees Tesla as a harbinger of new and necessary — and can we say, exciting — ways of doing business. He says Tesla is a technology company rather than an industrial company, and lauds their ability to incorporate internet update functions right into the control unit software on their vehicles.

In other words, Tesla not only sells direct to consumers but it doesn’t need a dealership/services sub-sector to perform repairs and updates.

The customer deals directly with Tesla for its high-tech products, gets support directly from Tesla, and can receive automatic software updates from Tesla.

Now that sounds a LOT like the Apple business model!

apple-store-new-graphics-600px

Source: https://medium.com/swlh/the-model-3-and-the-future-of-cars

The GAP between consumers and marketing – laid bare

Marketing Gap Tracker 2010There are a few ads and marketing campaigns that capture the attention of huge audiences – did anyone mention meerkats? But the vast majority of campaigns fall into the ‘also ran’ category. New research helps us see why.

A 2010 survey of consumers and marketers reveals what marketers believe is important. There is a wide gap in some important areas when we also look at what consumers are influenced by.

It’s no surprise that the highest ranking for consumers is given to brands they trust. Marketers are a little behind on this, but the next three metrics show consumers and marketers are fairly close.

The final three metrics, however, throw large spanners into the hopes and aspirations of marketers and designers. The consumers don’t really care! So it’s thumbs up for:

  • brand/company that’s known/trusted
  • relevant product or service
  • personal, targeted communication

But, and it’s a big BUT, there are very wide gaps in the final three metrics. When marketers rate something as twice as important and, ye goddess, 3-times or even 5-times as important, someone needs to get back to basics. Sorry, marketers and designers, but consumers are mostly looking for quality and relevance. In short, it’s thumbs down for:

  • interesting packaging
  • fun themes
  • design and appearance

Consumers are now a bit too savvy. They can see a great product or great deal, but they can also be turned off by smoke and mirrors. The final message might be:

If you’ve got a great product or service, be straight about it in your marketing.

New kids on the (rock) block

The success of Daughtry and Allison Iraheta on American Idol, not to mention Adam Lambert, is raising the profile of solid, contemporary rock music again. We rejoice at the demise of lame, wimp and near-emo indie boys and bands. We can almost see the tail-end of the swaggering but limp metrosexual mall rats that make up 90% of the studio-enhanced hip-hop and rap non-singers.

There are surprises on the crossover stars as well, from Florence + The Machine and, of course, Rihanna. Leaving aside Justin Beiber and Usher because it is way too early to know how that will develop, there is new power from an unexpected source.

Miley Cyrus, a new rock divaFrom Pop Princess to Rock Diva

Miley Cyrus has a cowboy star daddy, a rock star brother and a pop star younger sister. Since Miley toured with Trace and took part in a whole lotta head-bangin’, there has been a significant jump in the maturity of her voice, of her song lyrics, and her stage attire. Raunchy Rock Diva emerging from a Disney Pop Image has been done before – Britney Spears, Christina Aguilera – but Miley is, somehow, a more radical evolution.

Miley has lived the cotton-wool life at home and on stage since about age 4 but her family is strongly independent, holding a somewhat unique combination of Christian values and endless creative expression.

Miley says her new album Can’t Be Tamed is all about freedom and empowerment. When asked for more details, Miley said:

The new songs “are about freeing yourself from anything you think is holding you back. And I think that’s really important, especially for girls, because so many people are told, No, you can’t do something, or, You need to be this because mom and dad say that, teachers say this.” And finally, in encouraging young people to follow her example, Miley has also said, “There’s a short amount of time, when you think about it, and no day needs to go by wasted.”

Why Google is so powerful – and so poor at results

In just a few years Google has gone from quaint to total dominance and now it’s for-geeks-only if quality information is required. That may sound strong but let us explain.

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Google now performs trillions of searches. But Google is also thousands of times more used than any other search engine. This presents huge problems. The first issue:

  • quantity not quality

This presents itself most often when you try a “simple” search. For example, a generic search for art gallery in London returns 46 million results. Now London is a thriving capital city but there are definitely not 46 million galleries there. Even trying to narrow the search by making the term explicit by enclosing in quotes – “art gallery in London” – returns 2 million results.

In contrast, using a phone directory returns an enormously more accurate result of 695 entries. This brings us to the next issue. If the information is of low quality, why is Google so successful? The answer is:

  • Google exists to make money, not provide accurate information

Other search engines in the market also exist to make money but the other 9 of the top 10, combined, only manage one third of the searches undertaken by Google. The other contenders are so far below Google that we can almost discount them. In December 2009 comScore reported the number of searches as (MM):

  • Google logoGoogle     87,809
  • Yahoo        9,444
  • Microsoft    2,403
  • Facebook   1,023

Therefore everything that Google does in the web space is enormously important. But also, the results are increasingly biased (pay per click) or irrelevant (spam and scam trickery within sites). Many estimates say the level of spam in emails is around 80 percent. Perhaps the same is true of website search results.

Those various factors mean we can now put the two main issues together:

  • Google needs huge numbers to make money, for itself and its clients

The shift in power to Google is not their fault, however. The public has been weaned off quality information by the bias and dumbing down of newspapers and TV channels. The funny thing now is those same news media companies are the ones complaining about the power of Google.

Podcasts Define Web 2.0 Music – billions of downloads each year

The figures are in and the results are inspiring. Old media, large (Murdoch) and small (regional newspapers), are moaning that the web is ruining their business. Radio stations, meanwhile, blow large trumpets about 1% gains in audience share.

Wizard Media podcast digital downloadsThe reality is that the public have been given real choices by Web 2.0 and are moving on from old media. Two quick examples:

  • Wizard Media announce digital downloads increase in one quarter from 241m to 350m
  • Trance Around The World podcast has 21 million listeners per week

Wizard were very happy with a 45% increase in downloads but also announced a very solid 41% increase in audience (5.3 million). Meanwhile, advertising impressions served by Wizard grew from 3.9 million in the second quarter of 2008 to 13.7 million in the second quarter of 2009, an increase of 251%.

Trance Around The World is the podcast from Above & Beyond, a weekly mix available through iTunes or from their own website. Their podcast sits alongside others by Armin van Buuren, Tiesto, Paul van Dyk, Paul Okenfold and hundreds other national and international trance stars.

Therefore TATW is successful in a very competitive market, while 21 million listeners would be an extraordinary achievement for most radio stations. TATW is enabled by the most significant brand of the decade – Apple. Lest you object, look at a few examples of the activity around Steve Jobs:

  • Apple iPod podcast digital downloadsApple is 45 times more profitable than Dell
  • iTunes sells more music than Walmart
  • iPhone and iPod features and quality have revolutionised mobile technology
  • Pixar is the most succesful and profitable studio of the past decade
  • Apple is 6 times more popular as a social brand than Microsoft

While Web 2.0 provided a wonderful potential, it is companies like Apple and YouTube who have defined and raised the standards so much higher than anyone else. And the biggest winners are the public – the music listeners and video viewers – who can choose exactly what they wish to download or stream. Further, the public can now enjoy what they want without the interference of the taste bias or old-media commercial ‘necessities’ of a production or advertising team.

Top Social Brands exposed – what the statistics really mean

The ongoing attempts of social media marketeers to hype themselves may be failing. The much-discussed Top 50 Social Brands is no such thing. Yes, Social Radar may have done all the right things in terms of gathering information, but the results are disastrous.

First of all, the numbers. As the chart below clearly shows, only the Top 10 have any real significance. Thereafter everything is squabbling over half percentage points. Being below No.15 and being below 16% “score” of the leader is irrelevant.

Excerpt from Top 50 Social Brands

Excerpt from Top 50 Social Brands

The next issue concerns the Top 3 – they are enablers. The product or service of Twitter is not social media – only 4% of tweets are retweets, therefore tweets are an online soapbox. Tweets are a public version of a text message – 96% are ephemeral and inconsequential.

Google is also not social media. Google gathers information about web content, whatever and wherever. There is no social structure or filtering and therefore no social media benefit. Providing a list of 33,900,000 results of a search for “social media” is meaningless.

Facebook is an extensive federation of private clubs, each discussing their own introspective interests. Millions of people have joined Facebook, but millions of people have also joined large denomination churches. To say one is social media and the other not is to reveal the fallacy behind the way statistics are being filtered.

Excerpt from Virtue 100 Top Social Brands

Excerpt from Virtue 100 Top Social Brands

There are some very interesting and relevant results in the surveys, however. And they’re all from the same supplier:

  • iPhone
  • Mac
  • Apple
  • iTunes
  • iPod

For any one brand to receive multiple entries in the Top 10 lists of social media from a variety of sources is of enormous importance. Apple have dominated every sector of business they enter in terms of quality. They have consistently been the Rolls Royce of computer companies, but iTunes revolutionised digital music and went on to become the leading retailer.

The iPhone revolutionised mobile phones, bringing the Macintosh quality, ease of use and market-leading features to set levels well above those previously achieved. Similarly the iPod set new standards of quality and profitability for portable digital music players.

BUT and this really is a big BUT, which other brands appear on both lists in the Top 15?

None? So we’ve said a score below 16% of the leader is irrelevant. We’ve said the Top 3 of the Social Radar list are not “true” social brands, which seems to be supported by Virtue who say: “The Vitrue 100 is measuring companies that are using social technology, not those who are the technology.”

We would argue that YouTube should be included in the Virtue results as it provides actual product and its service is public and definitely one of the best examples of social media.

In short, then, there are only two TOP social brands – Apple and YouTube. Let’s see what 2010 and the rest of the twenty-tens reveal.

Why Twitter desperately needs YouTube and blogs – Social Media 2009 part 3

Although there have been some excellent and powerful examples of the communication benefits of the Twitter platform, most usage is casual (“just got home”, “just saw … in a shop window”). Therefore most usage on Twitter is little different to a status update on MySpace of Facebook.

There are also significant tweets that relate to information other than updates for family, friends or acquired followers. Sometimes that content becomes a trending topic, especially if tweets include hashtags. Even in those cases, however, Twitter is not the important part of the communication:

  • tweets are signposts
  • YouTube or blogs are the main destination
  • TwitPic or TweetPhoto (etc) are service stops
  • tweets are enhanced SMS messages

Twitter has many good points, however, and can be seen as a platform that provides options for:

  • replacing multiple one-to-one phone communication
  • replacing multiple SMS texts
  • an alternative to email (DM etc)
  • allowing status updates to be fully public

The last point is why Facebook has changed its privacy options. Once Google started to include Twitter content into search results, techies and CEOs on every other platform rushed to get on the “public trending” bandwagon.

As part 1 of this series showed, Google is in decline. However, search and trend are still big business and so big money. But as imeem and MySpace have found out in 2009, finances can go into decline once the Google dollars dry up.

If Twitter and/or MySpace and/or Google are to stop their decline or even recover, they need something solid. As web users have shown, they want content. In the past they were happy with the haphazard results of a search engine. But today’s web users will abandon one platform and try another, all within the space of 12 months.

Conclusion: crafted content is essential for success.

YouTube, BlogSpot, Twitter statistics for 2009

YouTube, BlogSpot, Twitter statistics for 2009

In other words, the way YouTube and blogs wrap content within context is the most likely model to succeed into the new decade. Magazines and newspapers were great at content delivery a few decades ago. The only ones making good money today tend to be in particular niche markets (finance, technology, entertainment, fashion, music, lifestyle, etc).

So called “general interest” newspapers and magazines with their social or political bias are in decline. We would rather gather our news from a selection of RSS feeds. Those feeds may come from established newspapers or magazines but will be balanced with feeds from special-interest blogs or a variety of world sources.

Social Media 2009 Executive Summary
The main sources of quality content in the next decade will come from WordPress, BlogSpot and YouTube, plus the new services that develop from those platforms and their ilk.