Friday, November 21, 2014

Why an Uber Decline May Be Good for the Emerging Collaborative Economy

Uber has been a poster child for the emerging sharing economy. While other collaborative economy startups like Airbnb and LendingClub have grown and garnered attention, they have yet to create the sort of impact within their verticals that Uber has in the livery business. In San Francisco, for example, Uber (with an assist from other ride-sharing startups) has already caused a 65% decline in taxicab trips and New York has seen a small but unheard of decline in the price of taxi medallions.

Given Uber's prominence in the early days of the collaborative economy, it may seem odd for me to suggest, but I believe a significant decline in Uber's business may be terrific for the long-term interests of the collective consumption movement. My reasoning is that the sharing economy is not simply about more collaborative products but more collaborative companies. Viewed through this lens, Uber simply has not earned its premiere status in this new business movement.

Uber's embarrassments have been many and frequent, such as:


All of these blunders occured before this week's embarrassing dustup over threats to dig up dirt against critical journalists and their families. Then, as if Uber's crap week needed icing on the clueless cake, the company's CEO, Travis Kalanick, compared his company's woes to those of the residents of Ferguson, MO.

Travis Kalanick (Photo Credit: Silicon Prairie News)
That Uber has a terrible corporate culture is in no doubt. Of course, what would you expect from a CEO that calls his company "Boob-er" for the way it helps him land dates. If the CEO at a traditional company said these sorts of things or presided over a fraction of Uber's PR stumbles, he or she would be shown the door immediately, but Kalanick seems to have nothing to fear, provided he keeps the billions rolling in for investors.  In fact, not only has the latest gaffe caused no apparent ruckus among investors about Kalanick's leadership, one investor--actor Ashton Kutcher--came to the executive team's defense, tweeting "What's so wrong about digging up dirt on shady journalist?"

If Uber's leaders and investors are unwilling to foster the sort of culture consumers want and expect, then perhaps it is time for consumer action. There is a small but growing trend among people deleting Uber from their smartphones. Comedian John Hodgman wrote a blog post saying "I just can't get into the car with those guys any more." Tech writer Nilofer Merchant is also deleting her Uber app. I have deleted mine, and you can too.

Yes, Uber is an astounding service, but is that really enough? Study after study validates consumers' growing desire for better companies--ones that act ethically, contribute to the community and treat both employees and customers better. This is made clear by a slew of research such as Edelman's Trust Barometer and Havas Meaningful Brands study.

We have the power to demand better leaders and companies. If we fail to act now--if we let our love of Uber's service blind us to its terrible and uncollaborative actions--that will only embolden and encourage VCs, startup leaders and others to accept aberrant leadership behaviors and build companies that respect nothing but profits. That is not the collaborative economy I want.

Some may suggest that an Uber failure would be a strike against the new sharing economy, but I believe the opposite is true. The collaborative economy is changing the world, but its progress will be hindered if we support companies that violate every tenet of the social era.

Cash may pay the bills, but trust is what drives the collaborative economy. Trust is the necessary ingredient to convert customers to new ways of consuming goods and to win the support of doubting regulators. Today, Uber's trust-killing antics are harming the entire sharing industry, raising suspicions about the kind of ethics and honesty that are driving crowd companies. At a time when Uber and other sharing economy companies should be winning hearts and minds, Uber's arrogance and mistakes are instead breeding suspicion at the Federal, state and local levels.

The best thing for the collective consumption movement would be for consumers to send a clear and unmistakable message to Uber and its peers. If enough of us act, we can shape the future of this emerging way of doing business. We can and should put the collaboration back into the collaborative economy and help Silicon Valley understand that we want more than better services; we want better companies.

Uber is not the only ride-sharing service around, and I urge you to consider exploring other options such as LyftSidecar and Curb. The next time you use a ride-sharing service, make sure it is one that has earned not just your business but your respect, as well.

(Added note: It seems advisable to point out that my opinions are my own. Moreover, let me state that I want ride sharing in general and Uber in specific to succeed. But on the trajectory it is going, I fear Uber will not only undermine its own success but harm other companies in the budding peer-to-peer economy. If deleting Uber now can bring about a change in its corporate culture and force Uber to be more collaborative, trustworthy and respectful, then I will gladly reinstall the app in the future and feel as if I have helped the company succeed in the long term.)



Sunday, October 12, 2014

The Snappening Blame Game: Protect Yourself and Your Family With Awareness and Action

VentureBeat featured an article entitled, "Who’s to blame for the ‘Snappening?’ You are." While I strongly disagree with the writer's use of the word "blame," I also believe there is nothing wrong with empowering people to take as much control as possible of their privacy and reputation. Those who strive to prevent others from being victimized are too often accused of "blaming the victim," but there is nothing incompatible with assigning blame to criminals while simultaneously helping people to become more informed and protect themselves and their family.

"The Snappening" is the hack and leak of hundreds of thousands of images that people intended to be seen (and immediately deleted) using the Snapchat application. It has been reported that many of these images are of minors. This hacking crime occurred at the same time hundreds of personal photos and videos of celebrities are being leaked, an event disgustingly given the cutesy name of "The Fappening."

Both are crimes, and all blame and legal responsibility rests with the hackers and those distributing the photos. Again, just so I am absolutely clear: The hackers and those distributing users' private photos and other information are wholly to blame ethically and legally. 

That said, there are steps you and your family can take to avoid becoming victims. Saying this does not alleviate hackers from their legal accountability should your family's data be unlawfully collected. All this acknowledges is that we live in an increasingly digital, social and mobile world, and it is vital we recognize and consider the risks associated with our devices, applications, privacy settings and actions.

Telling children not to get into cars with strangers does not blame the victim when tragic situations occur, but it does prevent other children from becoming victims. In the same way, urging our children to understand the risks of their digital, social and mobile actions does not increase their fault should a dreadful crime occur, but it will prevent other children from being victimized as is happening today. Blaming victims is disgusting and wrong; empowering people to avoid becoming victims is smart and caring.

In our digital, social and mobile era, here are some things you and your children must know so that risks can be reduced:

  • Consider the applications you use: Every application you allow on your phone or permit to access your data on social networks increases risk. Who created the app? How will they use your data? Will they protect your data? These are difficult but essential questions we must ask about each and every application that we allow to access our most personal data.

    While few of us possess the technical capability or time to answer these questions specifically, we can take some simple steps: Identify and evaluate the reputation and size of the application developer; consider the access requirements; and review the ratings in the App Store, Google Play and elsewhere.

    The risk posed by third-party apps seems to have contributed to the Snappening leak. Snapchat released a statement saying "Snapchat’s servers were never breached and were not the source of these leaks. Snapchatters were victimized by their use of third-party apps to send and receive Snaps, a practice that we expressly prohibit in our Terms of Use precisely because they compromise our users’ security." In other words, once you allow a third-party application to access and use your Snapchat data, there is nothing Snapchat can do to protect your privacy, and the same is true of other social networks and mobile platforms as well.

    Facebook's Privacy Checkup--stop
    griping Facebook makes privacy
    difficult and use it, already!
    Steps you can take today: Review the applications on your and your children's phones. Do you know and trust the developer of each application?  Do the same for the applications that you and your children have allowed to access Facebook data; to do so, visit Facebook in a browser, click the lock icon on the upper right corner and do a "Privacy Checkup" to review "Your Apps." You can do the same in Twitter--click on your profile image and select "Settings" and "Apps" to revoke access to applications you do not know and trust.

    These steps are vital to protect you and your family. To use a real-world metaphor, no amount of locks on your door can keep you secure from those you freely allow to access and use your home.
     
      
  • Consider the people to whom you connect:  If a stranger watched, snapped photos of or followed your family around, you would call the cops. Many people not only ignore that strangers do this online but welcome them to so, because this is what happens when you accept invitations from strangers on services such as Facebook and Foursquare.  The people with whom you connect can know where you are at every moment, see and save your family photos and know other information you may not wish shared.

    Parents, who have your children friended? Do they know them well? I will admit I am not a parent, and I understand issues of trust and privacy are sensitive ones with kids; nonetheless, the same parents who would never allow their kids to talk to strangers in the real world are often willfully ignorant of the strangers talking to and monitoring their children via social and mobile applications.

    Steps you can take today: Review your Facebook and Foursquare friends today, and do the same for your children. Do you know them well enough to give them access to your location, photos and personal communications? Many people seem to feel social pressure to accept and maintain "friend" connections on Facebook. My advice: Get over it. There's nothing wrong with rejecting or deleting a connection from someone you do not know well.  An ounce of prevention is worth a ton of cure when it comes to filtering your friend lists.

      
  • Consider your security settings: Every application and service you use permits you to set your preferred level of security and privacy. I choose to make most of my Facebook posts public, but I do so with awareness and consideration of what I post. My recommendation to most people is that they do NOT make their posts public by default, and as a rule, children should never do so.

    Nowadays, it is not simply the security settings of applications you must consider but also the settings built into your devices. Thanks to services such as iCloud, Dropbox and Google Drive, many mobile phone users automatically upload their photos and data into the cloud without even knowing. Of course, you can stop that from happening if you want, but then you may lose your photos and data in the event your phone is lost or dies. There is no simple answer to how you should set your or your children's security and privacy settings, but it is important we make informed decisions and take proactive action rather than having an unpleasant surprise later.

    Steps you can take today: First, review the security settings in your applications--who can see your data and what data can they see? As noted above, Facebook has made this much easier with its Privacy Checkup feature.

    Perhaps even more important is for you to use two-factor authentication. It is easy and only adds a smidgen of complexity. Apple has suggested that if the celebrities hacked in the Fappening had used two-factor authentication, their data would still be safe (although I find this a bit disingenuous since iCloud allowed unlimited signon attempts, permitting simple "brute force" attacks to be effective.) You can learn more about two-factor authentication on CNET, but Facebook's two-factor authentication is called "Login Approvals" (found under "Settings" and "Security") and it is easy to use.  You can also learn more about two-factor authentication available for Apple ID, Dropbox and Google.
     
     
  • Consider what you capture and share: This is, inevitably, the advice that causes people to start tossing around accusations of "blaming the victim." It seems some people mix up having the right to do something with whether it is wise to do that thing. The two are not the same.

    There is nothing wrong with suggesting people consider the risks associated with taking, storing or sharing nude selfies. Yes, you have a right to do so (if you are an adult). No, doing so does not in any way reduce others' culpability should they hack and share your nude selfies. But yes, taking nude selfies does, in fact, increase risk they could be accessed and distributed without your permission. So go ahead--strip down and snap away--just do so with knowledge it comes with risks: You can lose your phone, your iCloud account can be compromised and the people with whom you share may save and disseminate them further (even if you use Snapchat).

    Of course, the same is true of ANY data. You can legally post, share or store your social security and credit card number online. It is an insane and risky thing to do, but doing so does not alter the blame or criminal responsibility of anyone who uses that data to steal your identity. Once again, suggesting people consider the potential ramifications of their digital, social and mobile actions is not "blaming the victim" but a simple reminder that the best offense is a good defense when it comes to your personal data.

    Steps you can take today: Simply consider what you capture, store and save on your devices. Do you save your credit card numbers in Evernote? Do you have a photo of your social security card stored on your device (and backed up in the cloud)? Do you save passwords? These are somewhat obvious examples of actions that raise your risks, but there are less obvious ones:
    • He had a "family emergency,"
      posted this and lost his job
      Have you ever shared your "porn name," which includes the street on which you grew up? Have you posted your mother's maiden name as part of #TBT on Facebook or Instagram? Both are examples of information you use to recover your passwords and can be misused to gain access to your accounts and data.
       
    • Do you share when you and your family are traveling and announce to the world that your home is empty and unguarded?
       
    • Do you complain about your coworkers on social networks, an action that can cause you to (at worst) lose your job or (at best) lose relationships and reputation?
       
    • Do you "like" your bank, revealing to others where your financial accounts are maintained?
       
    • Do you use the same password on every site so that a single hack opens up all of your accounts and data to hackers? (And when is the last time you changed your passwords?)
       
    • Do you ever call in sick when you are not and then publicly share your leisure activities? (That's another good way to lose your job.)
       
    • Do you capture and disseminate (even privately) pictures of you and friends doing things that others (such as potential employers, significant others or family members) might judge?
       
    • Do you often use profanity or poor grammar in your Facebook or Twitter posts? Recruiters react negatively to profanity (65%), grammar and punctuation errors (61%) and references of alcohol use (47%).

Educating and empowering others to make smart decisions is not "blaming the victim" but an act of caring. We must always blame the perpetrators who hack and share our personal information, but empowering people to protect their data and privacy is simply the smart thing to do.

Tuesday, October 7, 2014

Stop Social Media Marketing

Today, I gave a keynote address at the PR + Social Media Summit in my hometown of Milwaukee. My presentation was entitled "Stop Social Media Marketing (Unless)," and I have embedded the deck at the end of this blog post.

I predict that many CMOs will diminish their support for social media, content and earned media marketing in the next year or two, and when they do, careers will be adversely impacted. If your career relies on Marketing Department support for content or social media marketing, now is the time to take stock of the trends and consider some actions to protect your career. It is possible that you work for the right sort of company for which social media is well aligned for Marketing Department expectations---that's the "Unless" part of the title--but, as you will see, I believe this is the exception and not the rule.

What is (and is not) Social Media Marketing?

Before we explore where social media marketing works and where it does not, let's first be clear that the definition of "social media marketing" does not include paid media on social networks. Go ahead and invest in advertising on Facebook and Twitter, just do not call it "social." The most popular forms of advertising on Facebook today are retargeting and custom audiences, neither of which are remotely social, and less than one in six ad dollars use social data.

I suggest a better definition of Social Media Marketing is this: Content authored or encouraged by the brand and shared by Word of Mouth that creates earned media and delivers on Marketing objectives. This definition excludes a couple of things, such as advertising (which is not social) and consumer content not coaxed by a marketing program (which is not marketing). It also excludes social media programs that fail to deliver on key marketing metrics, and therein is the problem for most brands.

The Earned Media Venn Diagram

A simple Venn diagram explains what works and what does not in Social Media Marketing. The first circle includes what your brand can say to move consumers closer. This does not mean retweets and likes--the fool's gold of social media marketing--but rather changes in consumer attitude or behavior such as greater awareness, consideration and purchase intent.

The second circle in the Venn diagram is what consumers want to hear from your brand. For years, we have acted as if consumers crave branded content, but the data on this clear; a 2014 Kentico study found that 68% of US consumers “mostly” or “always” ignore brand posts on every social network. The situation is much worse for some categories than others--a 2014 Scratch/Viacom study found that 71% of Millennials would rather go to the dentist than listen to what their banks are saying! If people would rather get a cavity filled than listen to your brand, it's a good bet your content and social media marketing faces a profound uphill challenge.



Where Social Media Marketing Works

Some brands have an overlap between these two circles of the Earned Media Venn Diagram; most do not. There are three types of companies that have this "magic intersection" between content that helps the brand and that consumers want:
  • Brands in select verticals:  Some categories have built-in consumer interest. For example, sports brands can easily post content that drives engagement and also increases demand for team attire and products. TV shows and movies have an easy time offering content fans will share that also increases ratings and box office receipts. Style brands are another example--in the same way that women eagerly purchase the September issue of Vogue with its 631(!) pages of ads, so too will style-conscious women pay attention to and share the latest pins and posts from their favorite fashion brands. Brands in select verticals enjoy a magic intersection between the content consumers want and the content that drives consideration and sales.
      
  • Brands with purpose:  Consumers may have little interest in what banks have to say, but that does not stop USAA from delivering great engagement and inbound traffic with its posts. This is because USAA has created a brand with a purpose that resonates with its audience. Another example is Chipotle, which has outperformed other brands in the restaurant industry by promoting its commitment to more locally- and organically-sourced ingredients. (Just last quarter, Chipotle delivered a same-store sales increase of 17% in a vertical where almost no brands are able to achieve half that.)
      
  • Brands with better products and services:  Of course, there is always the old-fashioned way of encouraging attention from consumers: Be better than the competition! Apple has no official company profile on either Facebook or Twitter, yet it still beats Samsung when it comes to building buzz. Both companies had product unveilings in early September (Samsung for the new Note and Apple for the iPhone 6), yet despite the fact Samsung has 2,350% more fans, followers and subscribers on Facebook, Twitter and YouTube, Apple still delivered far more Word of Mouth about their event and product. Apple does not need social profiles and content to drive WOM; it just needs to continue producing interesting, innovative products that get fans talking.
      
When brands have nothing to say: Example
of a brand exploiting a personal tragedy
to build its own brand engagement. 
Some companies can publish content that consumers want and delivers on marketing goals, but most brands simply do not have that same opportunity--they have no "magic intersection." This does not stop them from trying, of course, which is why so many brands stumble with unwelcome, heavy-handed, embarrassing, brand-damaging posts on Facebook and Twitter

We entered the social media era suggesting that brands with something to say could use social media to say it; instead, we today have brands with little to say that nonetheless post 4.3 times per day because some consultant told them this was a best practice. Desperate for attention and relevance, these companies continue to invest in content that is delivering neither the scale marketers need nor the content consumers want.

Ironically, even for the best companies, earned media may wither and die in the coming years. In just six months, organic reach on Facebook was halved, and many expect that zero organic reach will soon be the rule on the social network that collects 57% of all social visits. The organic reach game has gotten so tough that Coca-Cola, one of the strongest brands in the world, only earns engagement with 1 in 100,000 of its fans on Facebook. The situation on Twitter is no better; a recent Forrester report notes that the average engagement rate with brand posts on Twitter is just 0.03%--75% less than banner ad clickthough rates today!

Earned media could soon be a thing of the past. What happens to your social media marketing strategies if the content you create and post reaches no one?

A sketch made by Jennifer Torres during my presentation
at the PR + Social Media Summit. 

Social Media Marketing's Inability to Deliver Trust, Acquisition or Purchase Conversions

If the prospect of organic reach crumbling to nothing is not enough to worry about, social media marketing has a variety of other problems that marketers have been ignoring: 


If social media is so poorly equipped to deliver trust, traffic, acquisition and purchases--and is facing declining organic reach--why are marketers increasing their investment in the channel? These are, after all, the metrics that most marketers care about. In a 2013 study by Ascend2, both B2B and B2C marketers reported their top three most common performance metrics are website traffic, quantity of sales leads and conversions--goals against which social media does not deliver. Meanwhile, fewer than half of B2B and B2C marketers measure customer retention, awareness or reputation, which are metrics that align well to social media strategy.

But if social media is poorly matched to Marketing Department objectives, it remains a powerful opportunity for others in the enterprise who do not need to rely on reach and scale to deliver on their goals.  For example, The PR/Corporate Communications function can be successful if it uses social media to create relationships with a few dozen influencers, both traditional ones (journalists) and the new variety (bloggers). Product Development does not need to collaborate with tens of thousands of customers but can work collaboratively to develop new products and services with much smaller subsets of customers and vendors. And Customer Care can achieve success by answering the questions and complaints of a few hundred people in social channels. (Compare that to the average marketing campaign, which would be considered a dismal failure if it only engaged a few hundred people.)
  

Social Media Marketing on a Collision Course with C-Suite Expectations

For now, CMOs seem to have confidence in social media, but I believe this will change in the next year or two. Social media and content marketing is on a collision course with the C suite.

Recent research by the Fournaise Marketing Group, which was conducted with 1200 CEOs and CMOs, found that 80% of CEOs claim they have lost trust in their marketers. One of the reasons is that "74% of CEOs think Marketers focus too much on the latest marketing trends such as social media – but can rarely demonstrate how these trends will help them generate more business for the company."

This criticism is, sadly, entirely fair. In just-released data from the 2014 CMO Survey, derived from 351 top US marketers, a mere 15% of CMOs say they have proven the impact of social media quantitatively. Another 40% "have a good qualitative sense of the impact, but not a quantitative impact" and a whopping 45% have "not been able to show the impact yet." Despite this, CMOs expect to increase social media marketing spending 128% in the next five years. 

If you wonder why the tenure of CMOs is so short compared to the rest of the C-suite, the answer is right there. Less than one in six CMOs know if their social media investments are paying off, yet they still intend to rapidly double that investment!

I predict that increase will not happen. The falling organic reach, low acquisition, microscopic purchase conversion and inability to measure quantitative success will come crashing headlong into the growing pressure on the Marketing Department to demonstrate results. When this collision occurs, will you be the one holding the social media marketing bag? If your career depends on the success of social media or content marketing, now is the time to consider the data, trends and future.

How to Protect Your Social Media Marketing Career

For those in the social media marketing profession, I believe the time has come for a candid assessment. Protect your career by asking three questions:
  • Does your brand have a "magic intersection"? Are you in one of those categories--such as entertainment, sports and style--that has built-in consumer demand for branded content? Or has your company won high levels of loyalty and advocacy with its sense of purpose or by producing products and services that are leaps and bounds better than your competitors? If so, then social media marketing can be an effective channel for the Marketing Department, but if not, then ask...
     
  • Does your firm evaluate its Marketing spend based on reputation and loyalty? When marketing leaders furnish updates, do they lead with Net Promoter Score and measures of repurchase and reputation? Or do they lead with sales, conversions, acquisition and traffic data?  If the former, then social is well aligned to what the organization most cares about, but if it is the latter, then ask one last question....
      
  • Can you control the paid media budget for social? If you can control the ad budget and are really held more accountable for delivering paid media than earned media, then your job is secure (provided you are doing it well). If, however, the ad budget is controlled elsewhere and your job is dedicated solely to content and earned media, I would suggest you have career challenges ahead. It may time to consider one of three options:
    • Redirect: If your social media scorecard is full of non-marketing metrics such as likes, retweets and number of fans, then the time has come for you to lead a change. Do not wait until Marketing leadership begins to question how those useless social metrics tie to Marketing objectives; take the lead and start that conversation today. You may be able to change the conversation and redirect expectations toward the sorts of metrics on which social can realistically deliver.
        
    • Detour: It may be time to consider social media opportunities outside of the Marketing Department. While social may not deliver on typical marketing goals, it certainly aligns well to the needs and expectations of Public Relations, Customer Care, Product Development, Sales and others parts of the organization.
       
    • Exit: Or perhaps it is time to exit social media altogether and consider other career paths where your experience in customer-centricity and innovation can be of great value. In recent years, I have seen social media professionals successfully shift into new careers in Customer Experience, mobile and customer care, for example.

Of course, if your career is in social media marketing, you could choose the fourth option and bury your head into the sand. I hope you will not, because the data is consistent, the trends are in place and the questions about social media marketing effectiveness are only going to rise.

Below is my deck. I welcome your feedback, questions and challenges.