Social Media, the Law, and the Court of Public Opinion

Which is more important? The law or public opinion?

In criminal matters, the answer is the former; but for civil matters--particularly for those of us who live in the world of brand perception and loyalty--the answer may be the latter.

Recently, Hasbro forced a game that was suspiciously similar to Scrabble off of Facebook. Scrabulous, developed by two Calcutta-based brothers, had become a bonafide hit, drawing 500,000 players a day and generating $25,000 per month of ad revenue. There was no question that Scrabulous ripped off Hasbro's Scrabble; the game was "a blatant copy of Scrabble--down to the rules, game pieces and board colors," said Adweek. So it would seem that Hasbro acted appropriately in this clear-cut case, right? Maybe yes, maybe no.

Over on Facebook the reaction has been severe, with 53,000 people joining a "Save Scrabulous" group and nearly 11,000 signing an online petition. The Scrabulous developers have offered a similar but (hopefully) non-infringing game called Wordscraper, which has about the same number of fans as (and substantially better ratings than) the official version of Scrabble now available on Facebook.

Hasbro had a perfect right to protect its copyright, but one has to wonder if there wasn't a better way. As noted by MediaPost, "it seems obvious that Scrabulous is the best thing to happen to Scrabble in decades," since many of the folks who played the online version "became so enamored of the game that they purchased the physical version."

Peter Fader, co-director of the Wharton Interactive Media Initiative, believes Hasbro's action is an "incredibly bad business decision." He notes that many companies sue "just because they think they have the right to, instead of pursuing what's in their shareholders' best interests." Fader suggests the gaming giant might have formed a partnership with the brothers or bought them out, which would have saved legal fees and yielded a flood of positive publicity. He adds, "Hasbro may have won the battle but it has surely lost the war."

Another risk in Hasbro's approach is that the company could actually lose the case. According to the Washington Post, while many lawyers think the look and feel of Scrabulous was sufficiently alike Scrabble's to justify the infringement suit, others point out that, "The idea of Scrabble -- the idea that you would get points for spelling words -- can't be copyrighted."

Even if you believe (as I do) that the bad publicity and hurt feelings of the 500,000 Scrabulous fans will blow over, this situation makes it apparent that both legal and brand reputation considerations must be weighed before unleashing the lawyers. Another more obvious example of the impact of Social Media on legal matters is the Wal-mart/Debbie Shank case.

Debbie was an employee of Wal-Mart when she suffered a horrible auto accident that left her brain damaged. According to CNN, "Shank and her husband, Jim, were awarded about $1 million in a lawsuit against the trucking company involved in the crash. After legal fees were paid, $417,000 was placed in a trust to pay for Debbie Shank's long-term care."

That's when Wal-Mart exercised the right contained in the health coverage fine print to recoup medical expenses if an employee collects damages in a lawsuit. The $230 billion organization sued the couple for $470,000. One can't help but cringe at Wal-Mart's actions when you read in the CNN article that Debbie Shank is unable to remember that her son was killed in Iraq; she often asks about him and when told her son is dead, Debbie weeps as if hearing the news for the first time.

It will come as no surprise that the reaction across blogs and forums was swift and unforgiving. The fact the company was legally correct was no match against the perceived callousness of the retailer's conduct. I'll leave the moral questions to others, but it is hard to imagine how Wal-Mart failed to foresee the risks; the company is so large, the Shanks so needy, and the sum so small that there was little upside and gargantuan risk in this approach.

Wal-Mart's deeds harmed its relations with many employees. Their Web site positions the company as a great place to work, promoting the "competitive pay and health benefits for you and your family." The company's desire to collect money from the Shanks rankled many employees, and one online petition protesting the Shank lawsuit was signed by 750 associates.

The blogosphere was, of course, brutal in its assessment of the situation. Thousands of blog posts appeared with titles such as Waiting on Wal-Mart to Do The Right Thing, Still Shop At Evil-mart Do You?, As if you needed another reason NOT to shop at WalMart, and Wal-Mart hits new low in hardheartedness.

In April, Wal-Mart caved into the pressure. In a letter to the Shanks, Executive Vice President Pat Curran said, "Occasionally, others help us step back and look at a situation in a different way. This is one of those times. We have all been moved by Ms. Shank's extraordinary situation."

It is reassuring to know Wal-Mart monitored and responded to the almost unanimous opinions of consumers. Of course, the organization might have saved considerable embarrassment, costs, and lost trust had they considered the Social Media ramifications of their actions in the first place. Brands must become cognizant that the law provides no refuge from public opinion when graceless legal actions are taken. In situations where anger and disappointment go viral, being legally right will not save brands from shame, damaged brand perception, costly PR crisis response, and reduced sales.

The growth of Social Media will increasingly require organizations to consider legal alternatives not just on their merits in law but also based on the potential reaction of millions of interconnected consumers.

Consumers in Charge: Shaming Brands with Social Media

We've already seen it many times, and it will happen many, many more times in the future. The sweep of the Internet combined with the power of Social Media is amplifying brand missteps and furnishing mass media-like reach to consumers. Situations that a couple years ago would have been small and contained today are making an impression upon thousands and even millions of customers, prospects, and investors.

Here's a recent example: A wine critic perpetrated a hoax upon Wine Spectator magazine. He created a Web site for a fake restaurant, then submitted the restaurant for the magazine's award of excellence. Despite the fact the wine list was "well-stocked with dogs" likened to "paint thinner and nail varnish," the imaginary restaurant won the award. The critic, Robin Goldstein, believes his prank proves that Wine Spectator is more interested in the award entrance fee than with maintaining minimum standards.

Goldstein posted his story to his Wine Economics blog and to the fake restaurant's blog. From there it was picked up by the Chicago Tribune and LA Times. The story has been carried further on beverage-related blogs such as Daily Blender and Scotch Talk. A Google search on the faux restaurant's name results in more than 70 news article hits from around the globe and almost 3,000 Web hits. In the last several days, dozens of Twitter users have Tweeted the news and links to thousands of followers. Wine Spectator's Wikipedia entry has already been updated with the incident, ensuring the magazine will be associated with the award embarrassment for years to come. The publicity has put Wine Spectator on the defensive; they posted a response, including accusations Goldstein isn't telling the entire story, within their online forum.

The interesting aspect of this is that Goldstein presented details of his hoax at a meeting of the American Association of Wine Economists, a group that I'm guessing doesn't even number in the thousands. Not so many years ago, Goldstein's story would've been an amusing tale passed among a small group of elite wine professionals, but today the story is being heard by hundreds of thousands. In less than two weeks and with a budget that I suspect is $0, Goldstein has reached an audience that is much greater than Wine Spectator's circulation of 350,000.

Remember the good old days when we used to be concerned that a consumer who experienced a bad customer service situation would tell 10 or 20 people? How does 1.3 million sound? The reach, power, and economy of Social Media can perhaps best be demonstrated by one of the most often repeated stories of Social Media embarrassment: the sleeping Comcast service tech. To date, the famous video shot by a disgruntled customer has been viewed almost 1.3 million times.

Just a decade ago, getting DVDs into the hands of 1.3M people would've required an investment of millions of dollars for replication, packaging, and postage (even assuming you already had a list of 1.3M addresses). But in 2007 , a "regular Joe" with no special marketing contacts or media acumen was able to get his video in front of that many people for a budget of absolutely nothing.

There was a time not long ago that brands and media partners controlled every means of mass communication; today, a guy who bathes in a Burger King sink has practically the same reach as the $3.5 billion fast food chain. Sure, Burger King has the power to blast messages across network television and reach every person who watches "Dancing With the Stars," but the advertising message doesn't hold interest, create buzz, or stick in the mind like one gross kid in a sink.

We can't be sure, but it seems likely that Wine Spectator, Burger King, and Comcast have collectively suffered financial losses that total in the hundreds of thousands of dollars in reduced sales, damaged reputation, and PR crisis management. And all it took was three people clicking "Submit" buttons.

In the future, you will hear a lot about how Social Media shifts power away from brands and towards consumers. The Wine Spectator, Burger King, and Comcast examples plainly demonstrate what this means.

Social Media Meets House Hunting

Today I stumbled across real estate site Trulia.com and found it to be an excellent example of how Social Media tactics combined with a focus on consumer needs can create a strong user experience. It applies many of the essential concepts of Social Media, including:

• Aggregating diverse content and data to create new value.
• Providing a means for sharing and collaboration.
• Providing functionality where and in the way the consumer wishes.
• Create the means for a longer-term value-based relationship.
  

Trulia of course offers the basics you would expect of a real estate site: You can search for available homes and condos, view maps, define search criteria based on property type and value, and peruse lists of properties. This is fine functionality, but what makes it a great site is that they answered the question, "How can I improve this by making it social?"

Examples of great Internet and Social Media functionality on Trulia include:

• Local News Feeds: Once you search for a property, the site automatically offers a localized RSS feed to which you can subscribe. Data includes the number of new listings in the past seven days, average listing price, median sales price, number of properties sold in the past 60 days, and the recent changes in price per square foot. This sort of data is extremely valuable for house hunters and creates ongoing engagement with the site. Click here for an example of the Local News Feed for Celebration, FL.
  
  
• Property Alerts: Site visitors can stay abreast of properties on the market in a number of ways. They can subscribe to an RSS feed of properties based on city or neighborhood (here is the RSS feed for properties available in Milwaukee's Historic Third Ward), searches can be saved for later Web recovery, and email alerts can be created so that consumers can be informed when new properties enter the market. You can even subscribe to a daily email alert on individual properties, keeping you informed when the property sells or changes price.
  
  
• Personal Notes: As you search the site, you can add personal notes to properties that only you can view. (While this isn't very Social, it is helpful for home shoppers overwhelmed by the variety of property options.)
  
  
• Trulia Voices: Visitors may ask real estate questions for others to answer. Questions may be identified by topic and location. These questions and answers are made available to site visitors as they view data about a city or neighborhood. Here is a question asked by a visitor who wants to know whether to escrow for her property taxes; two fine answers have been received thus far. Site visitors may save any question, register to be alerted when new answers are received, and easily add any question to social bookmarking sites such as del.icio.us. A cloud of common keywords provides insight as to the topics that are hottest right now.
  
  
• Create a Blog: For visitors so inclined, Trulia permits users to create their own blogs. You can write about your neighborhood or city, or you may focus on real estate topics such as Home Buying, Foreclosures, and Celebrity Homes. Here is a blog post written by a San Diego real estate professional that has received five comments to date.
  
  
• School Info and Ratings: Properties are associated with local schools and school systems; data includes parent ratings and comments aggregated from GreatSchools, plus test scores, enrollment information, and the number of students per teacher. Click here to see the data compiled about Celebration High School.
  
  
• Stats and Trends: The data available about cities and neighborhoods is really quite impressive. Visitors can compare neighborhoods based on average sales price, average listing price, price per square feet, and number of sales. You can also review statistics about income, crime, age of homes, and average travel time to work. Here is a slew of data on Milwaukee and the Historic Third Ward neighborhood.
  
  
• Heat Maps: All of the data noted above can be viewed as a heat map, with colorful data overlays based on neighborhood or zip code.
  
  
• Mobile Tools: Trulia offers a very functional application for the iPhone, Java phones, and Dash Express GPS. Enter a location on the Web site and they'll text you a link to a downloadable app that comes preconfigured for your desired search. (You can always change the search once it is on your phone.) The application pulls maps and data, providing an easy way to get helpful information while on house hunting excursions. Value-added features includes quick access to Yahoo Local and Yelp data, so finding nearby businesses and accessing consumer ratings is quick and easy.
  

There are ways Trulia might have made their experience even more social, but the site is notable for the Q&A, blog, data aggregation, RSS, email, and mobile tools they offer. If you're searching for a house (or just interested in a great user-focused Web site), visit Trulia.

Becoming a Social Organization: Social Media Discovery and Adoption

In the past two days, I've tried to draw parallels between the business changes caused by the Internet in the mid 90s and the upcoming changes that will be precipitated by Social Media. We began to explore the ways in which organizations adopt change and what this means to Social Media in the coming years.

In the Security Phase, companies are shaken out of complacency and denial by a loss of control. In the 90s, it was cybersquatters and the success of startups that forced larger organizations to recognize the need for rapid change. Today it is brandjackers, viral criticisms and PR crises, and extensive customer participation in third-party sites that are making companies consider greater Social Media engagement.

Next is the Anxiety Phase, when those within organizations react with anger, stress, and confusion as the system mobilizes for change. It was in the Anxiety Phase during the dot-com era that organizations learned the Internet was more than just a tactic or marketing channel; the breadth of change that was coming throughout the organization was soon apparent.

I believe we'll see a similar recognition of Social Media's impact in the next year or two. Currently, many perceive Social Media as a tool for marketing and PR, but it will soon be evident that Social Media will effect other business processes (Human Resources, Customer Service, etc) and even long-held practices and standards (ethics, privacy, communication standards, etc.)

The last two phases of organizational change are Discovery and Adoption. Predicting the future of marketing and technology is a dicey proposition, but using dot-com-era experiences as a guide, here is what we might expect in the next several years:

Discovery Phase

Discovery is a period of chaos and exploration that can often be stressful as different ideas and strategies compete for attention and resources. This stage is more about the "how" than the "what;" less about what will be accomplished than about how objectives will be established, who will be responsible, how the organization will collaborate, where funding will be derived, and how success will be measured.

Once companies came to understand that every department and business unit would be affected by the Internet, a wide portion of the organization was drawn into the Discovery Phase. Whereas the first versions of most organizations' Web sites typically fell within a single department's purview, subsequent versions were cooperative efforts with professionals from throughout the organization contributing and managing their portion of sites and Internet strategies.

This company-wide collaboration was not without its pain. A common point of contention was the enterprise's Internet strategy--what were the objectives and who would be targeted. Within many organizations, cross-functional committees struggled and battled to gain consensus because every party came to the table with a different goal: Marketing wanted to increase awareness and consideration throughout the market; Sales wanted to move prospects closer to transactions; Customer Service wanted to decrease costs and increase the satisfaction of existing customers; Human Resources wanted to promote the company as a desirable employer to candidates; the list went on and on.

It quickly became evident that everyone was right, and this meant that a single, encompassing strategy was not attainable or appropriate. The cross-functional team shifted attention away from debating strategy and into setting standards, rules, and responsibilities. Strategies for how to best exploit the Internet for service, recruiting, sales, and marketing were left to the business units (where, it might be pointed out, that responsibility had always rested for business in the real world).

Another understanding gained in the Discovery Phase was that the organization was not equipped to plan and execute every aspect of Internet programs. No organization had the same set of skills, so each organization developed its own distinct plan for what they could do best (content development, maintenance, etc.) and what tasks were best left to specialists outside the organization (commonly things like hosting, media planning, design, etc.)

What this means for the future: I anticipate that Social Media will proceed through a very similar Discovery Phase, but the process can be shortened and an advantage gained by learning from the past. A great deal of stress, political infighting, and wasted time can be avoided by using the dot-com Discovery experience as a model.

Before your enterprise can enter the Discovery Phase, it must first reach an understanding that Social Media is not just for PR or Marketing. Just as the Internet did a decade ago, the Discovery Phase requires the participation of a wide variety of departments.

A valuable lesson for organizations grappling with the impact of Social Media is to avoid the temptation to attempt to define a single Social Media Strategy. As was learned during the Internet's Discovery Phase, the needs of the organization are too diverse to fashion a single sensible and achievable plan. Instead, focus on defining the standards, rules and procedures for independence and collaboration.

While many business units will deploy their own Social Media tactics to achieve their unique objectives, it is likely Social Media will blur the lines between business functions and demand a great degree of collaboration. For example, a community of customers may be created with a marketing objective, but it also would be a natural place for those customers to turn when they have problems or questions, creating opportunities for Customer Service to respond; those problems might then become valuable information for the product development group, which could tap the same community for feedback and ideation.

The Social Media Discovery Phase can be kept short and productive by avoiding squabbles over ownership and focusing instead on collaboration, guidelines, processes, responsibilities, and a consensus on what can be accomplished with existing resources and when an external partner's expertise is required.

Adoption Phase

The Adoption Phase is a consistent and ongoing effort that results in implementation, monitoring, and constant improvement. It is in this phase that actions are taken, failures are experienced, and successes are enjoyed.

During the dot-com Adoption Phase, Internet activity occurred throughout the organization. Human Resources tested different sites and methods for promoting openings and collecting applicant data; Customer Service tested a variety of available support tools and concepts such as live chat, wikis, knowledge bases, and email management applications; Public Relations created new forms of digital press kits with multimedia content; and Marketing's sandbox became exponentially larger with a dizzying array of options including ad networks, rich media ads, search engine optimization, search engine marketing, affiliate marketing, microsites, content partnerships, behavioral targeting, email marketing, CRM, viral campaigns, and site personalization.

Tactics were considered, tested, tweaked, improved, or rejected. Organizations came to realize that no single set of Internet strategies was right for every audience, every brand, or every need. A slew of best practices emerged, but every site, strategy, and campaign was as unique as the brands, objectives and audiences.

Of course, the most notable worldwide event of the Internet Adoption Phase was the dot-com crash. A speculative bubble had been created with large amounts of capital chasing a huge number of unproven and competitive strategies and businesses. In March 2000, the tech-heavy NASDAQ average briefly broke the 5,000 mark, but then the bottom fell out. Companies disappeared, venture capitalists lost huge sums of money, and many folks employed in the Internet lost their jobs. The NASDAQ fell to below 2,000 and in the eight years since has never crept above 3,000.

Of course, the crash was hardly the end of the Internet. Spending on online advertising dipped for two years before soaring to new heights; in 2007 the total revenue for online advertisers was 150% more than in 2000. Spurred by even greater consumer online participation and armed with new strategies and tools, the Internet has become indispensable to virtually every organization of any size in every industry. The Internet Adoption Phase is entering its second decade and shows no sign of weakening.

What this means for the future: The primary lesson we can draw from the dot-com Adoption experience is that Social Media won't come with an easy set of instructions, nor will it be "one size fits all." Every brand and every business unit will need to test, adjust, measure and explore to find which Social Media strategies deliver and which do not.

Will there be a Social Media bubble followed by a crash? My guess is that in the coming years enthusiasm for Social Media will grow, investments will be made in startups in search of business models, and competing tools and sites will proliferate. At some point, there is likely to be a pull back because the market won't sustain dozens (hundreds?) of different microblogs, blogging platforms, social document sites, and the like. I do not expect the investments to be as large or the decline to be as sharp, but we will eventually see a convergence with some tools merging or failing.

Social Media presents some of the most exciting business opportunities seen since the Internet went public in the mid 90s. It also presents some of the greatest challenges to brand management, public relations, and customer service in that same period.

In the early 90s, no organization was an online organization; ten years later, every organization was. Today, few companies are truly social organizations; within a decade every organization will be.

By learning from the past and concentrating on change management, companies can navigate the evolution efficiently. All it takes is creativity, leadership, collaboration, an appetite for iterative learning, and--more than anything--a healthy recognition that Social Media is giving consumers more power, influence, options, and visibility into your enterprise.

Preparing the Enterprise for Social Media Disruption

Yesterday on Experience: The Blog, we revisited the mid- to late-90s--a period remembered for the introduction and adoption of the Internet--to forecast how consumers and new tools may evolve over the next several years.

As the Internet did in the late 90s, Social Media is about to change the world in ways we can anticipate but not predict with clarity. We are entering a period of significant change when creativity, new technologies, and investment will cause a burst of innovative tools and concepts; some of these will succeed but many will evolve, merge, or simply fail. These new Social Media concepts will change consumers' relationships with and expectations of products and brands.

So, what does this mean to you and your organization? How will Social Media change your enterprise? Organizational change models combined with knowledge of how business adapted to the Internet can furnish us a sort of crystal ball in which to foresee the future:

Security Phase

The Security Phase is where organizations start prior to recognizing and accepting change. Patterns are well established; employees understand their roles; and the organization has confidence of its place in the world.

Prior to 1995, businesses were comfortable with the status quo. Larger businesses and market leaders were the most comfortable, but even smaller competitors seeking to shake up their markets were snug in their knowledge of the ways, relationships, and strategies of business.

Into this environment the Internet was introduced. The business world did not immediately gravitate toward the Internet nor did it recognize the profound change the Internet represented. Instead, those in business reacted the way people secure with their worlds do: they ignored it, denied it, and were wary of (or downright hostile to) those who were vocal about the shifts that were coming.

The Internet was derided as a "flash in the pan." Senior business execs expounded on how their consumers weren't online and never would be. Detractors took refuge in the seemingly logical argument that people were unlikely to rush out to purchase a pricey computer and pay for expensive monthly access just to "surf the Web."

The Security Phase was when nimble speculators began to grab trademarked domain names. Slow moving corporations were forced to file complaints or negotiate with so-called cybersquatters in order to regain control of their brand and corporate names. This was but one of many factors that forced organizations out of their Security phase.

Another factor that scared many enterprises out of their comfort zone was when competitors began to succeed, if not in terms of actual online sales, at least in terms of PR, stock performance, and reputation. A point was reached when even the most stubborn of executives and systems had to face the fact their company needed to embrace the Internet.

What this means for the future: With respect to Social Media, business is coming to the end of the Security Phase. The avoidance and denial of Web 2.0 has not been as severe as the reaction to the Internet in the mid 90s, but that doesn't mean companies have been quick to embrace Social Media. A visit to brand and corporate sites shows that the majority of organizations continue to live in a Web 1.0 world. For every My Starbucks Idea or Scott Common Sense Community you'll find dozens of sites where "contact us" is the most collaborative feature on the site.

As happened with the cybersquatters 12 years ago, the thing that may shake many companies out of their complacency is when their brands begin to get co-opted within third-party Social Media sites. For example, while still very small, a site that is worth watching is GetSatisfaction, where consumers are gathering to complain, share information, and collaborate on product and service issues, with or without the participation of the brands. Another example is the recent brandjacking of Exxon Mobil by a Twitter user (and possible Exxon Mobile employee).

Occurrences like these will pressure organizations to recognize that Social Media is more than product ratings, blogger relationships, and other tactics they control. Its greater implication is in the way Social Media gives a voice to consumers and thus shifts a degree of power and control away from brands.

Every organization must eventually leave the Security phase. Those that delay their engagement in social networks and other Social Media sites run the risk their absence will harm brand perception, create opportunities for competitors, and leave a vacuum into which employees or others may step to speak on your behalf.

Anxiety Phase

Once people become aware that their assumptions are incorrect and that change is necessary, they become anxious. Organizations responded to Internet anxiety in different ways back in the late 90s.

One reaction to the Internet Anxiety phase was to treat the Internet as a tactic. For example, organizations posted their customer service phone numbers on their sites and ignored that the Internet was profoundly changing consumer expectations with respect to communication channels, speed of response, access to information, and most importantly the ability to immediately manage one's own needs . Many organizations believed that established customer service processes would continue to be sufficient in the age of the Internet, but they quickly came to realize that more profound changes would be required--ones that demanded new tools, new skills, new investments, new processes, and new structures to meet consumers' increased expectations.

Another way organizations dealt with Internet Anxiety was to assume that new online tools and concepts would be controlled by brand owners and implemented in whatever timeframe was preferred by the business. It didn't take long for these organizations to learn they did not have the luxury of either control or time; swift actions were required to deal with the seemingly instantaneous changes in the competitive landscape, consumers' shifting expectations and loyalty, investors' new views about business valuation, and the actions of distribution partners.

Not all organizations reacted to the Anxiety phase with denial and arrogance; some people and organizations were energized, embracing the changes in profound ways. Jeff Bezos saw the future (or at least enough of the future) to launch a new kind of book company that exploited the rapid changes in business and technology. It wasn't long before Amazon, started in a garage in 1994, was grabbing huge chunks of business from larger, older companies that were still struggling to get past their Anxiety phase. Today, Bezos' wealth is estimated at $8.2 billion; the combined market caps of Borders Group and Barnes & Noble is less than $2 billion.

What this means for the future: The coming years will create winners and losers out of established companies as Social Media changes the business landscape. How your organization embraces these changes will either move it into a better competitive position with greater brand loyalty and profitability or will allow competitors to chip away at your organization's market share, reputation, and margins.

There will be a natural inclination to assume that Social Media is merely a set of tactics that can be used to whatever extent and speed the organization wishes. This a dangerous trap because Social Media is, in fact, full of tactics: Offering service through Twitter is a tactic; creating a branded Facebook profile is a tactic; launching a blog is a tactic.

But while it is necessary for organizations to survey and choose their tactics, reducing Social Media to a menu of tactics is missing the forest for the trees. Just like the Internet did a decade ago, Social Media isn't just a series of new technologies and tools but is a disruptive change in the model that will require deep and broad changes within organization.

Another way organizations will deal with Social Media Anxiety in the next few years will be to assume that the organization controls the Social Media relationship between the brand and the consumer. This mentality will lead to a great deal of focus about what brands should do within their own Web sites, and much time and energy will go into considering product ratings, forums, comments, moderation, registration, functionality, the permissibility of criticisms, and response responsibilities.

While organizations debate and plan, Social Media will be growing by leaps and bounds away from brands' walled gardens, and soon enterprises will be struggling to keep up. Already, YouTube videos are forcing reactive crisis management; consumers are engaging in their own forums to seek assistance, offer tips, and share gripes; employees are trading ratings of their CEOs and information about salary levels; companies are losing control over brand management to fans and detractors using Social Media megaphones; and some employees are taking PR and customer service into their own hands. The Social Media train is leaving the station with or without your organization on board.

Organizations that will best succeed over the next several years will get past their anxiety and quickly come to understand that Social Media will change everything--procedures, processes, ethics, structure, employment, internal and external relationships, control, collaboration, service, product, consumer choices, the media landscape, marketing, and brand management.

Tomorrow on Experience: The Blog we'll finish our three-part series on how Social Media will change the enterprise in the coming years. Having considered the first two phases of organizational change management--Security and Anxiety--we'll explore the last two phases--Discovery and Adoption. Businesses that can navigate the tricky journey out of Security and through Anxiety are halfway to recreating themselves as social organizations that build trust, consideration, usage, and loyalty with the newly empowered consumer.

Social Media: 2008 to 2011

Think back to 1995. Many people were just hearing about this thing called the "Information Superhighway," and companies were trying to figure out if and why they needed a Web site. Back then, the biggest question being asked was "How can my organization use the Internet?", but very quickly organizations discovered the Internet wasn't just a new marketing tactic or communications channel but instead was a game-changing revolution that would alter every aspect of business.

What followed in the late 90s was the dot-com era, a period filled with confusion, fear, and opportunity. Organizations tested many different Web tactics, both outside the organization (Web sites, email service, banner ads, microsites, etc.) and inside (intranets, partner extranets, Internet-enabled applications), but the impact of the Internet was far greater than the sum of those tactics; the Internet changed everything, and organizations struggled to adapt to those changes.

Social Media will bring the same sorts of changes to the business environment, and those who do not learn from history are doomed to repeat it. In the coming years, Social Media will follow a similar path and see the same type of rapid expansion and eventual convergence as in the dot-com era of '95 to '00. Here's what that earlier period tells us about what we can expect and how we can prepare for the changes to come:

How Social Media will change Consumers and their Expectations

In 1995, the Internet was dismissed by serious business people as a playground for kids and geeks. (Hear any echoes in Social Media discussions today?) This assessment wasn't necessarily wrong; it was just short sighted. In the years that followed, it became evident that Internet usage was rapidly cutting across age, gender, race and (almost) every other demographic category. (Today, the digital divide between rich and poor has narrowed but persists.)

More important than recognizing that virtually everyone was going to be online was the realization Internet users were not homogeneous. While everyone used search engines and email, other online habits--such as listening to podcasts, buying online, and reading news--varied considerably. This meant organizations couldn't rely on a single online strategy to reach a uniform audience but needed to bring just as much segmentation, consumer understanding, and strategic thinking to servicing and marketing online as offline.

Finally, a last realization that has driven successful Internet strategies is that consumers' use of the Internet is constantly in flux. For decades, business had come to rely on a fairly static environment--TV, radio, newspaper, and phone penetration, usage, and habits changed very slowly. But on the Internet, consumer habits have continued to evolve year by year. For example, the percentage of seniors online almost tripled between 2000 and 2006 and the number of people who watched video on their mobile devices increased 34% in just eight months last year. Today we understand that staying abreast of consumer habits and preferences on the Internet is a constant requirement for business success.

What this means for the future: Consumers will not all adopt Social Media in the same way, nor will their Social Media habits stay consistent. The onus will be on each business to understand the expectations and interactions of their particular audiences with respect to Social Media.

As a starting point, Forrester has identified six different types of Social Media profiles: Creators, Critics, Collectors, Joiners, Spectators, and Inactives. The percentage of people who fall into each of these categories is quite varied today and will evolve rapidly. Every brand will have its own unique mix of Social Media profiles, and this mix will shift considerably before settling into any sort of consistent pattern years from now.

While these categories help to give some structure to our understanding of consumers' interactions with social media, they are still too broad to help drive the strategic insights that separate success from disappointment. There will be no substitute for companies constantly monitoring and assessing their unique audiences' expectations, needs, and participation in Social Media.

How our understanding of the Social Media environment will evolve

In 1995, some foresaw the impact the Internet would have, but no one could predict precisely what would work, under what conditions, in what timeframe, for which consumers, and for which brands. What resulted was a period of trial and error, spurred in part by the explosion of new tools and models that competed for attention and dollars.

For a while, it was impossible to separate the winners from the losers; high-profile Web businesses like Pets.com and eToys.com struck fear into the hearts of established retailers, but these e-tailers quickly failed. Meanwhile, new businesses like eBay, AOL, Google, and Amazon came out of nowhere to amass amazing market capitalizations that dwarfed long-established Fortune 500 companies. And online tools, concepts, and languages came and went even more quickly: VRML, CueCat, ColdFusion, Applets, VBScript, link farms, adware, free ad-supported Internet access, PointCast, SVG, Beanz Internet currency, push channels, and RealNames all threatened to change the Internet or alter the way brands market online but are now in the dustbin of Internet failures.

In the end, the tools mattered, but strategy mattered more. Our understanding of just how complex and specific strategy needed to be changed during the dot-com era: In the early years, some treated the Internet as if it had a single checklist ("Web site: Check; Banners: Check; Search Engine Submission: Check..."), but as the Internet matured, we realized that while there were some best practices, every brand's and enterprise's use of the Internet would need to be more different than alike. In short, online strategies are no less nuanced, varied, and unique as those in the real world.

What this means: Buckle up. We can expect to see the rapid development (and disappearance) of new tools and concepts over the next few years. Today Twitter is on top of the microcontent heap, but tomorrow it may be identi.ca or Plurk--or perhaps standalone microblogging won't end up being sustainable to a large audience. In the Social Network world, consumers have already shifted from Friendster to MySpace to Facebook, and all three sites continue to seek new tools (and business models) to draw and keep users.

The explosion of social concepts will continue with multiple tools and sites competing to solve a wide array of overlapping needs--social documents, crowdsourcing, video sharing and editing, geolocation, customer service networks, wikis, social bookmarks, product ratings, lifestreams, and social concepts we can't even yet imagine. It will be a dizzying and confusing time as organizations track, assess, test, implement and reject different Social Media sites, tools and approaches.

We'll come to appreciate (as we did with the Internet) that Social Media is not monolithic; it is not a single set of tools or strategies that every organization can simply plug and play. Best practices are still evolving, but soon it will be understood there are no simple checklists. Brands and organizations will share some similarities in the way Social Media is adopted, but there will be important and strategic differences that reflect and help to create points of differentiation.

Much like in the era before the Internet matured and tools converged, companies that stay abreast of the rapid changes and embrace small risks will gain competitive advantage, evolving their tactics and programs as Social Media evolves. Those that sit on the sideline and wait for it to get sorted out will quickly find themselves at a competitive disadvantage.

Every relationship consists of three components: The two parties and the environment in which the relationship develops and is maintained. We've thus far explored two of these three components--your customers and the Social Media environment--but what about you? With rapid changes coming to consumers and the Social Media world, how will your enterprise change?

How your organization will adapt and react to Social Media is the most important question of all. Tomorrow on Experience: The Blog, we'll explore how you can prepare for the uncertainty to come and how your enterprise can manage the changes rather than allowing them to manage you.

The Social Product - How Social Media Can Enhance the Product Experience

Yesterday we discussed how Web 2.0 concepts can be conceived by taking an immediate need or opportunity and asking, "How can I improve this by making it social?" I know it sounds deceptively simple, but answering this question forces you to consider Social Media from a limited and helpful perspective:

• Instead of trying to understand the wide and ever-changing breadth of Social Media tactics and tools, you focus on how a particular need or opportunity can be enhanced by engaging people;
• Rather than consider technology or tools, you start with ideas based on sharing and community; and
• Instead of imagining how or if a Social Media program fits your brand or need, you instead start with a need and consider how Social Media can furnish benefits to both you and your audience.

This question isn't only pertinent to marketing and communication efforts but also to the product itself. Of course, there are the obvious benefits to involving your customers in the product development process--doing so is an excellent way to gain insight into their needs and wants--but I want to explore how Social Media can become an inseparable and important part of the product experience.

For example, watching video online didn't start social; consumers visited a site that offered clips, watched them, and perhaps sent a link to friends. That was the online video-viewing experience until Google and others asked, "How can I improve my online video site by making it social?" Now, it's hard to imagine enjoying online video without the social aspects--the comments, video responses, ratings, view counts, and ability to embed movie files have become inseparable from the very idea of online video.

Maybe Web video seems like too easy a target for socializing a product, so here's an offline example: Check out Facecard, a new debit card that merges the financial aspects of a debit card with the social tactics of Facebook. Facecard allows cardholders to create a profile that identifies their favorite retailers, and those brands can provide "prewards"--cash available to spend only at the particular retailer--to acknowledge, thank, and encourage visits. Also, the card and web interface are designed to make it easy for consumers to transfer cash to each other.

The lines between service, support, marketing and product get grayer when Social Media is merged with the product, and this is a positive thing for the consumer's product experience. Here are some ideas for how other sorts products may be made more social:

Launching a new car? "How can I improve this by making it social?"

If the vehicle is focused on the youth modder market, promote meet-up events where people can share their modifications or create a place online where consumers upload photos of their customizations. Offer an online design tool where consumers can plan their modifications and share their virtual creations in order to receive feedback. Give enthusiasts an online place to share tips or brag about their modifications.

Or, if the auto is a hybrid, create a community where people can upload their mileage and gallons per fill, thus creating a history of their fuel efficiency and a means to compare their gas mileage to others. Want to make this easy? Give consumers a small cell phone application to upload their data, or better yet furnish consumers the ability to allow their cars to upload the data using EV-DO access. Then encourage these green-minded consumers to post widgets to their sites that brag to others about their efficiency, cost savings, and mileage.

Launching new B2B software? "How can I improve this by making it social?"

Allow consumers to support each other with an online Q&A forum. Perhaps users could give permission to allow the software to anonymously report information the community can use for benchmarking, such as the amount of time spent, money saved, or transactions completed. Maybe the software's boot-up screen could pull and display data or helpful posts from other users of the software. Perhaps every screen within the application could contain a field for entering questions or tips that are automatically posted and shared with others in the community. Or maybe users could participate in IM-like functionality that allows them to instantaneously connect with other users for tips, assistance, and ideas.

Launching a line of pens or pencils for artists? "How can I improve this by making it social?"

Allow consumers to post their artwork to a community site. Permit visitors to vote on the artwork, and prize the winner with the top-rated artwork each month. Encourage purchasers to share videos that reveal techniques and tips. Create a widget so that the best artwork can be displayed on sites throughout the Internet, and if an artist wishes to sell their artwork, people can purchase or express an interest right from the widget.

The goal of making products more social isn't just to sell more but to increase engagement, add value for both consumer and brand, improve loyalty, spark Word of Mouth, and encourage reuse and repurchase. These benefits--and the social product features that create them--aren't short term in nature. In many cases, consumers may come to rely on and expect the Social Media plus-ups as much as any physical product feature, so care must be taken to plan and manage expectations.

The idea of making products more social is certainly new and untested, but as Social Media changes consumer expectations, brands will be tested to use Social Media for more than just marketing. If we can avoid focusing on Social Media just as a marketing strategy and instead think of it as an experience strategy, possibilities are endless.

EA SPORTS Uses Social Media to Turn a Complaint Into a Marketing Opportunity

We've seen this a dozen times already: A consumer uses a YouTube video to complain about a service or product, and soon thousands or even millions of people are watching it. Comcast had its sleeping tech, Taco Bell its rats, and Burger King its sink-bathing employee. While this approach obviously isn't available in every situation (nor is responding to every complaint a smart or even possible approach), EA SPORTS has shown how Social Media can turn a consumer's concern into a terrific marketing opportunity.

A consumer posted a YouTube video demonstrating a "glitch" in the game "Tiger Woods PGA TOUR 08." It seems a setting in the game permits the virtual Tiger to make a "Jesus shot"--he walks on water, chips the ball off the surface, and puts it in the cup. The consumer is less complaining (since he clearly loves the game) than he is using YouTube to point out a game issue.

Certainly no one was going to avoid purchasing the game because of this one video, but EA SPORTS posted a response. Their motivation had nothing to do with proving the consumer incorrect or defending the game but instead promoted the game with an excellent, entertaining viral video.

Who knows--maybe EA SPORTS was behind the initial "consumer" video and this entire YouTube dialog is nothing but a carefully orchestrated viral campaign. While this sort of manipulation can often backfire on a brand, in this case I don't think their consumer base would care; the tone is lighthearted and the response video so funny and so perfectly suited to both Tiger's and the game's brands that it wouldn't matter whether or not Levinator25 is a real consumer.

Both videos are below. Enjoy this terrific example of how a brand can leverage Social Media for an unexpected brand-driving engagement with consumers. (Thanks to Patrick for sharing this.)

One Question that Sparks Social Media Ideation

I've suggested that organizations need to avoid the quest for a single broad "Social Media Strategy." What most enterprises need isn't one cohesive "Big S" Strategy for Social Media but instead dozens of tiny "Little S" social media strategies. Social Media is too diverse and the needs of different departments and business units are too distinct to make a single, overarching Strategy meaningful.

The key for large enterprises to effectively use Social Media isn't to control or unify it but to create the means for structure, independence, collaboration, and shared learnings. If your organization has laid the groundwork to prevent problems and avoid duplicate efforts, then the best way for enterprises to leverage Social Media is to give those within the organization the freedom and permission to use it, test it, and learn from it. Where do the ideas come from? Simply look at your upcoming campaigns or communication plans and ask, "How can I improve this by making it social?"

Here's a recent example: MyDeco.com is a site where you can design your own room from scratch or upload a photo of an existing room in order to change its style. If the site had done nothing else but furnish the tools that permit users to express and explore their own sense of interior design, the site would've been a great resource for consumers. Only they didn't stop there; they asked, "How can I improve this by making it social?" Voila, MyDeco.com permits consumers to save and share their virtual rooms, vote on existing designs, ask for and provide tips, and participate in a community with designers. (For a mere £19,559.66, the top-rated Natural Spiritual Bedroom can be yours!)

Taking an existing need, idea, or effort and developing ideas that make it social doesn't have to be rocket science. (The rocket science comes later when you consider measurement, functionality, promotion, and the like.) For example, let's say that you're about to launch an online sweepstakes. Online sweeps have become maddeningly routine: A form, a rules page, a thank you page, and a database from which a name is selected at the end of a predetermined period.

So, how can you improve a stale online sweepstakes by making it social? How about giving additional entries to people who succeed in inviting others to register? Or, how about a group prize that is won by a set of people rather than an individual? Or, let registrants vote on what the prize should be, then give them the code to add a widget to their blogs or social media profiles where the updated voting results can be displayed.

We're just getting started--let's raise the bar of our creativity. "Send to a Friend" functions which give consumers the chance to email one person at a time are fine, but let's put "Send to a Friend" on steroids with Twitter. Allow consumers to enter their Twitter username and password to broadcast the sweepstakes to their dozens or hundreds of Twitter followers. Reward them for doing so--additional entries or perhaps an entry into an alternate sweeps--and turn your visitors into traffic-driving marketers.

Here's another Social Sweepstakes idea: Give registrants an option to create their own prize pack from a list of possible prizes, then provide the means to post this dream package as a graphic widget on their sites. Others who see this prize pack could register to win that package with a single click or could create their own package. And when someone clicks through from a widget and registers, the person who posted the widget could earn another entry.

Here's yet another idea: Create an instant-win sweepstakes offered through a widget that consumers place on their own sites. Web surfers could enter their email addresses into the widget and click to see if they've won. When someone wins as a result of a widget posted by an individual, both parties could be prized.

I'll bet there are dozens of other ways we can use Social Media to breathe life into a boring sweepstakes. How about allowing consumers to photograph what they want to win (up to a given value) and post their desired prize to a particular Flickr account? Or, challenge them to earn a prize by posting a video on YouTube demonstrating why they deserve to win? Or allow consumers to upload a photo of themselves so they can see their face in the car or on the boat they could win, and then encourage them to share the image via email or on their site?

Not all of these ideas would be right for every brand, but this goes to show how any problem might be solved or opportunity enhanced by asking, "How can I improve this by making it social?" Let's explore others...

Creating a new casual game for your online visitors? "How can I improve this by making it social?"

Don't leave them playing by themselves--that's so Web 1.0! Game makers have long known people will engage more in their games if they allow players to save scores, but we can improve upon this with social media. Several years ago Fullhouse produced a very simple online bowling game for Miller Brewing, now MillerCoors. It could have been a pleasant but forgettable time waster, but at the end of the game, consumers could challenge friends to beat their scores via email. Better yet--sinc