Recent Business/Management Lessons

Over the past couple of months, I’ve been collecting some ideas that are useful in pulling apart business problems. In this post, I’ll share some of them:

Oxygen Mask Situations

In the past, I’ve written about how strategy is more about saying “no” than saying “yes”, but it’s rarely easy to explain the complex of reasons that underlie strategic decisions without reviewing the entire process. Richard Jalichandra, who was a participant in the NPR Digital Think In, manages to do so elegantly in his Venture Beat post entitled, Big changes coming at Technorati ”the CEO’s perspective“. In this article, he writes:

As a start-up with limited resources, we continually have to make difficult decisions about where to focus our efforts for the best return.  Its like the oxygen mask the flight attendant tells you to put on before helping the person next to you: you can’t help anyone if you pass out first.

I think this metaphor is one of the  simplest I’ve heard for reducing a potentially complex strategic decision into a tangible and emotional experience that almost anyone can relate to.

Scale Boundaries

This topic has been written about at length, but I don’t see organizations thinking enough about where scaling boundaries will impact their business. In general, people in business are thinking about how to scale operations but they’re not necessarily focused on exploring the points are which things break due to scale. This is unfortunate because I think some of the most valuable insights come from understanding where these points are and why they’re there. For example, a certain kind of design firm might find that productivity goes up when they go from 5 to 15 people teams and then it drops off as you exceed 25. If this was the case, they might find ways of breaking projects up into parts that can be run by 10-15 person teams. Of course, you’d also want to ask how many of such teams can work together in a single location? And, what’s happening behaviorally that causing the performance barriers. Etc, etc. The point is that it’s often quickest to focus on where you know scale will break the system when trying to pull apart such problems.

Shark Teams

Different kinds of teams need different stimuli to be productive, this year I ran into Shark Teams. These teams die if they stop moving. Obviously, I’m being literal here, but as a management principle these teams get in trouble if they’re not engaged. This is not to say that they don’t take vacations, or that they always work at the same pace, but they do best with a steady stream of workflow. One could also call these “heart teams” because once they stop they’re pretty hard to get going again. And, the harder they work the more fuel they give themselves.

Management Hypocrisy

“Do unto others as you would have done onto you” doesn’t seem to apply when it comes to management, though not as one you might expect. In my experience, People expect to be managed differently than they expect to manage people below them. Namely, the expectation seems to be less. In other words, people seem to feel more responsibility for managing those below them than they feel expectation for guidance from those above them. As this is based on entirely anecdotal evidence. I’d be interested to know if other people see this.

Don’t Unmotivate People

I believe I originally came across this idea in Jim Collin’s book Good To Great, The basic idea here is that it’s not management’s job to motivate workers, rather it’s management’s job is to remove things that unmotivate them. People are inherently motivated but get unmotivated by a variety of obstacles that they find in their paths. Remove those barriers and you’ve got a big part of management done.

A Sense Of Urgency

When most people think of “stress” it conjures up some painful memories or feelings, but stress isn’t always a bad thing. Most people are not familiar with the concept of eustress but it’s the opposite of distress. That is, eustress is a positive form of stress that actually increases our performance rather than decreasing it. Deadlines can actually be eustress for some people, for example, runners tend to convert the competitive stress of a race into increased performance. It’s possible to do this at work as well. Differentiating these kinds of stress, and monitoring which is being felt, can help teams align their relative stress levels and balance each other effectively.

Ads Follow Consumers

Ad LogoSince the dawn of online display ads in 1993, advertisers have struggled to reach web surfers. In 1993, ads were served on portal websites such as Yahoo! and AOL. At that time display ads were simply digital versions of print ads and they were available to everyone who visited the page. Fortunately, today’s ads are more engaging and work harder for your attention. In this post, I’ll share how advertising has changed and where we’re headed.

While the destination-oriented approach to serving ad units has not gone away completely, it has been eroded by the rise of search. Search allows people to view ads through search engine results pages. These ads offer better relevance because they are targeted based on search keywords (intent). In addition, new ad serving technologies have been developed to serve ads with greater relevance based on page content (contextual targeting) and browsing history (behavioral targeting). If you’re interested in learning more about ad targeting, read my post about how online display ads are served.

Today, companies like Sprout are finding ways to improve relevance even more through social targeting. Social targeting will become more prominent as online display advertising evolves away from traditional ad units and towards interactive brand experiences. Social targeting is currently possible within social networks and other online communities where profile data can be incorporated into the targeting schema. The big change, however, is that socially targeted brand experiences can increasingly be shared from one individual to another rather than through ad networks. For this to happen, these brand experiences must become more interactive and engaging while finding ways to deliver value. If successful, this benefits both brands and consumers because brand experiences are much more quantifiable (in terms of interaction), targetable, social, relevant, and engaging.

For example, Sprout created a campaign for Intel called Fan Plan, which is running on Facebook through Cyber Monday (November 30th, 2009). It encourages fans to share the campaign with their friends in exchange for a significant product discount.

The more friends that join Intel’s fan page, the greater the discount. Thus, it’s in all the fans’ interest to share the campaign as broadly as possible if they’re looking to purchase a laptop.

This is a good example of an in-network brand experience where profile data is accessed (friend networks) to make sharing possible. Of course, social data is also used to target interactive ad placements as well. The examples of Facebook ads shown on the right include polls, poll results, and information about friends in the viewer’s network who are fans of the Fan Plan. By combining an engaging brand experience with awareness oriented ad placements, this campaign has driven more than 3,800 news fans to join Intel’s fan page is the first two days alone.

One of the benefits of establishing fan relationships is that Intel can rely more on the viral spread of brand experiences and less on ad placements. Because Intel is starting from scratch with this campaign, they require an ad placement to get the campaign going. However, in the future they’ll be able to use their existing fans to a greater extent.

This is a re-post of an article that was originally posted on Sproutinc.com

The Social Media Eco-System For Brands

This is a repost of an article I wrote for Sprout. The wave of social media adoption is continuing to bring new brands online and as this trend unfolds the social media eco-system is changing to absorb the new participants. In this post, I’ll share a simple diagram that can help make sense of how the eco-system currently works and how it’s evolving. In the past I’ve written about how social media works its way into brands. In this post I’ll focus on those brands that have identified value in social media and are looking for ways to grow their investment. If you’re working for a brand and want to stay on the forefront of social media you’ve probably looked for a creative agency or a social media agency who can serve as a guide. It’s almost impossible to have an internal team lead this function because the landscape is changing so rapidly. Agencies have more experience, but even they struggle to keep up with the latest opportunities. At Sprout we’re seeing that traditional agencies rely on technology partners not only to help them understand what’s possible with social media but also to help them by building the campaigns. Sprout is a hybrid of a technology company and social media agency. We’re not alone in this approach. Many of our peers are also trying to combine these disciplines in order to deal with the challenges mentioned above. A differentiating factor is that Sprout began as a technology company with a solution for building engaging and social brand experiences. The rapid rate of change in the social media space has given us an advantage over creative agencies. Of course, after working with creative agencies we’ve learned a great deal about designing experiences and combine that knowledge with the detailed reporting, which our platform enables, to improve the performance of our projects. It’s important to understand how the creative/technology mix works at the agencies with whom you’re considering working. At Sprout, we use our platform to help brands power continuous conversations across the web, but we also use it to power campaigns that we develop in conjunction with agencies creative agencies. Further, we offer designers and agencies a way to subscribe to a base level of our platform through Sprout Builder. When the first wave of social media rolled in there was a greater separation between the creative agencies and the technology providers. For the next several years, we expect to see an increase in the number of integrated agencies, like Sprout, because they are better positioned to take advantage of rapidly evolving networks like Facebook. The left side of the diagram below reflects this trend:

sprout ecosystem

Today, it’s the technology platforms that serve as hubs within the eco-system, connecting brands and creative agencies with social networks and distribution partners like DoubleClick, Clearspring, and Gigya, There is also some consolidation taking place between the distributors and ad networks that will continue to drive down the cost of online advertising. Part of what will ultimately stabilize this devaluation is the integration of social content and connectivity into campaigns such that they become significantly more relevant. This is part of what we do at Sprout. Finally, if you’re interested in learning about how you can organize your internal team to work with service providers, check out Jeremiah Owyang’s post about how brand’s adopting social media should adopt a “hub and spoke” model. Think of it as an internal eco-system for brands. Thanks for reading and please post a note if you have any questions or comments!

How Online Display Ads Are Served

First off, I rarely click online display ads. That said, I am interested in finding ways to make them more relevant. In principle, I would be willing to click on ads if they exceeded a certain relevance threshold. For the mass market, there is clearly an economy for these ads such and their price is theoretically governed in part by the revenue they generate inconjuction with supply and demand. In the last couple of years inventory has dramatically increased while click-through rates have fallen which has caused prices to fall precipitously. There are many reasons for this including desensitization to ads, stale page layouts, poor creative, poor content, and more ads overall. It’s also worth mentioning that  I believe that the nature of the online ad market is not always rational and that many advertisers do not in fact generate revenue equal to their ad spend. But the purpose with this post is not to talk about how online ads are used for brand building or about irrational markets, but rather to shine a light on the different ways that ads are targeted and served to people online.

Before I jump into that, I’m also running a quick poll to get your take on how online display ads can improve.

How Online Display Ads Are Served

There are four main ways that online display advertisements are served, including context based, behavioral based, search/intent based, and social based. I’ll outline each of these below.

  • CONTEXT BASED: Contextual ads are placed based on information that the placement system gleans from the text of the website, and the keywords it contains, where the ad will be placed. Thus, the ad server  places advertisements based on what the user is viewing. Following this, if you’re on a blog site that talks about educating children, the server might return ads for educational toys for children.
  • BEHAVIORAL BASED: Behavioral targeting uses information collected on an individual’s web-browsing behavior, such as the pages they have visited or the searches they have made, to select which advertisements to display to that individual. Most platforms identify visitors by assigning a unique id cookie to each and every visitor to the site thereby allowing them to be tracked throughout their web journey. Following this, if you visit an auto-insurance website then a site that makes car seats for children, the system might serve up ads for station wagons and SUVs.
  • SEARCH / INTENT BASED: Search/Intent targeting works by serving advertisements that are related to search terms or keywords. Following this, search engines can serve up ads that relate to your search query alongside the organic search engine results.
  • SOCIAL BASED: Social based ads are based on information found in your social graph. Following this, the ad server system will serve ads based on information found within the profiles of people within your network. In order for social ads to work, the ad server has to be serving ads within the social network or they must have permission to access this information from the outside.

The four serving approaches above can be combined to serve more relevant ads to people browsing online. It’s also important to note that these approaches are about serving ads, not about the kinds of ads (i.e. text, video, interactive). I mention this because there is a larger trend in the online display ad space around making ads more interactive and engaging. As the pendulum continues to swing in this direction we’ll see more “app-vertisements”, or branded experiences that are much more engaging that traditional ad units. I’ll talk about the evolution of online display ads in another post shortly.

Personalization: MySpace vs. Facebook

This is a re-post of an article I wrote for Sprout Inc.

One of the distinguishing characteristics of MySpace, which no other social network has been able to replicate to date, is personalization. Personalizing a user profile on MySpace represents a desire that’s deeply woven into MySpace’s culture and community. This is one of the reasons that MySpace are different than Facebook users. True, there are MySpace users who have transitioned to Facebook as new features have been added to serve their needs, but personalization is a nut that Facebook has yet to fully crack. In this post, I’ll discuss why this is the case and how it’s about to change.

Personalization: MySpace vs. Facebook

Remember when MySpace was growing like Facebook is now? You’ll probably recall a profile page, for a friend or a band, that had a crazy background, flashing icons, music playing, and an overall chaotic user experience. While painful, especially when looking for a particular bit of information on the page, that chaos meant something important to the person who created it. However, to say it was like listening to jazz for the first time would be generous, because the chaos emerged from a lack of html standards on the site (i.e. users were free to use html poorly).

The structured experience on Facebook was very much a reaction to MySpace’s looseness. The drag and drop modular components offer some of the same features but lock into a page grid that resists personalization. No setting colors, backgrounds, embedding videos, music players, etc. That said, the standardization and rigidity have made the information on Facebook pages easy to find while supporting a consistent user experience.

When Facebook created the Static Facebook Markup Langauage (FBML) application a couple years ago, they acknowledged the limitations of their rigid structure and created a way for Facebook fan page administrators to personalize fan pages . Overnight it was possible to customize fan pages like MySpace profile pages, but users still needed to code using FBML. Combined with the fact that Facebook users were acclimated to the site’s rigidity, they didn’t exactly jump on the opportunity. And, it didn’t help that Facebook buried the application on their site.

Come Together Right Now

Different user experiences attracted different communities. The MySpace community has always been focused on entertainment and the Facebook community started on college campuses where socializing and networking were primary drivers. As the communities have grown and aged, however, feature sets have expanded and led to increasing diversity in each community and thus overlap between them.

As this has been unfolding, MySpace has been jockeying to protect their position as the leading community for entertainment, which is manifest in their strategic acquisition of iLike back in August. This was a key purchase because iLike’s Facebook music application was the first to gain real traction in the network. As such, it was a direct threat to MySpace’s ability to serve one of it’s core community segments, bands. A year earlier TechCrunch wrote about how music may be the single biggest factor keeping MySpace competitive. Apparently MySpace agrees, but acquiring iLike won’t stop the larger trend towards personalization because with personalization comes entertainment.

What’s Next

The one remaining barrier that’s stopping Facebook and MySpace users from creating personalized fan pages is FBML. The key to overcoming this barrier is a visual authoring tool that allows users to create rich, interactive, and engaging pages without writing a line of code. This is where visual authoring tools like Sprout Builder come in.

Visual authoring tools remove the technology barrier to personalization. Their drag and drop user interfaces are intuitive which makes them to learn, especially for designers or creatives who are already familiar with tools like Adobe’s Photoshop or Illustrator. While easy to use, these tools are surprisingly powerful, incorporating rss feeds, music players, slide shows, twitter feeds, etc. In fact, developers are switching to visual authoring tools because they are easier to use and much faster.

All Together Now

Because visual authoring tools export a .swf file (a Flash file), what you create can be embedded on any webpage. This means you can post a personalized Facebook fan page simply by copying and pasting the embed code into the Static FBML application (and soon, you’ll probably be able to post to Facebook with just a click). Plus, you can allow your fans to grab the embed code and share your creation on their profiles or fan pages as well. Another bonus of working with Sprout Builder is that no matter where or how many times your creation gets embedded, all the copies can be updated at once from inside the tool. In other words, you could embed your creation on your Facebook fan page AND your MySpace profile, allowing you to update them in both places at the same time and with one tool. While there are other services out there that can update your content across a variety of networks, such as Ping.fm, they won’t let you customize your entire personalized look and feel.

Sprout Builder also resolves the music/entertainment problem for Facebook because it allows bands to build personalized fan pages with music playlists, slideshows, videos and more. Hopefully, visual authoring tools will help bands reach out to their fan communities whether they are on MySpace, Facebook, or elsewhere. And for MySpace and Facebook, competing on something other than personalization should benefit all users.

Facebook & MySpace Demos

If you’re interested in learning how to place your Sprout Builder creation on your Fanpage, check out this demo video:

And if you’d like to get your creation on your MySpace profile, check out this demo:

Photo credit: thesharath