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2007 set to be year of online customer engagement

Companies embrace Web 2.0 features to engage with their customers, while struggling with basic customer experience

London, 24 November 2006: 2007 will be a watershed year for online business with large numbers of companies planning to adopt Web 2.0 features in order to engage with their customers, according to the cScape-sponsored 2007 Customer Engagement Report published today.

The E-consultancy survey commissioned by digital agency cScape found that a majority of organisations are either using or planning to adopt user-generated content, corporate blogs, podcasting and videocasting in the next 12 months.

However, while the majority are keen to exploit new platforms and technologies, many organisations are still struggling to provide a consistent and personalised level of customer experience at a basic level across existing channels. The survey found that there are significant gaps between the aspirations of many companies to engage customers and deliver an optimal customer experience and the reality of what they are doing to meet these goals.

Almost two thirds of company respondents (64%) believe that joined-up online and offline experiences are essential for engaging with their audience, but 60% of companies are either not very advanced at mapping customer experiences and identifying touch-points (36%), or admit they have to start looking at this because they are not doing it all (24%).

Half of respondents (51%) believe that personalised experiences are essential for audience engagement, with a further 44% believing they are useful. But despite the perceived importance of personalisation, 37% of company respondents are not providing it at all.

Richard Sedley, cScape’s Customer Engagement Director, said: “There is a significant gap between the customer experience organisations are aspiring to deliver, and the reality of what they are providing in practice. It is a major challenge for organisations, especially when they are multi-channel, to ensure that they are providing a seamless experience.”

E-consultancy analyst Linus Gregoriadis said: “Today’s consumers are more likely to switch loyalties if they’re not getting the kind of service they want – whether online or offline – so businesses increasingly need to ensure that they deliver an online experience which is in keeping with their brands and with what is happening in their stores or call centres.”

‘Barriers to magnificent customer experience’
Company respondents deem the five greatest “barriers” to delivering the best possible customer experience to be:
1) Lack of resources / time (regarded as a “great barrier” by 66% of company respondents)
2) Disconnected systems & technologies (50%)
3) Lack of skills and training (38%)
4) Lack of finances (37%)
5) Lack of regular processes and / or suitable methodology (36%)

Sedley said: “Lack of boardroom buy-in and organisational culture were regarded as greater barriers by agency respondents than by company respondents. The difference was particularly noteworthy for ‘lack of boardroom buy-in’, with 49% of agency respondents believing this to be a major barrier compared to 30% of company respondents.”

Some 44% of agency respondents believe that organisational culture is a great barrier compared to 34% of company respondents.

Appetite for “Web 2.0 technologies”:
42% are planning to apply user-generated content (UGC) to their websites in the next 12 months; 23% are using it already.
35% are planning to use corporate blogs in the next 12 months; 17% are using them already.
33% are planning to use podcasting in the next 12 months; 18% using it already.
35% planning to use videocasting in the next 12 month; 17% using it already.

Sedley said: “The internet has given unprecedented power to consumers and made it more difficult for companies to dictate the communications agenda. The survey findings suggest that 2007 will be a watershed year for businesses in terms of the way they react to the world of Web 2.0 and social media. Many businesses will jump on board customer engagement strategies; those that keep their distance are likely to fall behind.”

The survey found that significant numbers of organisations have no plans to use UGC, corporate blogs, podcasting or videocasting (34%, 48%, 49% and 48% respectively).

Gregoriadis said: “The majority of businesses say they plan to embrace features such as user-generated content and blogging but a significant number of organisations will stand back from this. There is no right or wrong way forward, but companies need to make sure they have a coherent and well thought out approach in line with their brand and customer expectations.”

About the report
The cScape-sponsored Customer Engage¬ment Report is based on the findings of a survey carried out in October and November 2006.

More than 800 respondents, all internet and / or customer experience professionals, both ‘client-side’ and from agencies, completed the survey which contained questions about customer experience meas¬urement, methods of customer engagement and barriers to effective delivery.

OA here: http://www.e-consultancy.com/news-blog/362215/customer-engagement-report.html

Report URL: http://www.e-consultancy.com/publications/customer-engagement-report/

European research study demonstrates that blogging and user generated content on the web is already having an impact on business

Leading European market research group Ipsos MORI has published a survey on the business of blogs in Europe.

Ipos MORI says that Andy Warhol said in the 1960s everyone will be famous for 15 minutes. He was of course talking about TV. David Weinberger, a famous blogger, brought Andy Warhol’s assertion into the 21st Century commenting that blogging means everyone will be famous for 15 people. There has been a lot of hype about blogging in the media. This pan European research study conducted by Ipsos, in conjunction with Hotwire Communications is, they believe, the first of its kind to attempt to identify the business impact of blogging.

The results of the research study demonstrate that blogging and user generated content on the internet is already having an impact on business. More than 25 million adults in Britain, France, Germany, Italy and Spain having changed their minds about a company or its products after reading comments or reviews on a blog. A third (34%) of Europeans say they have not purchased a product after reading comments on the internet from customers or other private individuals. Even more, 52%, they are more likely to buy a product or a service if they read positive comments from other consumers on the internet.

Other key findings from the research include:
- Blogs are now a near second to newspapers as the most trusted information source: A quarter (24%) of Europeans consider blogs a trusted source of information, still behind newspaper articles (30%), but ahead of television advertising (17%) and email marketing (14%).
- High spenders are most trusting of blogs: Of those who spend more than €145 (£100) online every month, the proportion of people who trust blogs rises to 30%.
- France leads European blogging: Across Europe, six out of ten (61%) internet users have heard of blogging, and one in six (17%), have read a blog. France is the most blog-savvy country in Europe, with 90% of respondents familiar with blogs. The British are the least blog-aware, with only 50% having heard the term. In Germany, 55% have heard of blogs, 58% in Italy and 51% in Spain.
- Blogs are now driving purchase decisions: More than half (52%) of Europeans polled said that they were more likely to purchase a product if they had read positive comments from private individuals on the internet.
- They also block purchases: Nearly 40 million Europeans have not bought something after reading comments posted online.

Topline Results
- The survey was carried out among a representative sample of 2,214 adults aged 15+, all of whom access the internet at home or at work.
- The survey was conducted in five European countries, with 526 interviewed in Great Britain, 440 in France, 485 in Germany, 378 in Italy and 385 in Spain.
- The survey was conducted using Ipsos MORI’s Capibus. Data are weighted.
- Interviews were conducted face-to-face, in home, in September 2006.
- An asterisk (*) indicates a percentage of less than 0.5% but greater than zero.
- Where percentages do not add up to 100, this may be due to computer rounding, multiple responses or the exclusion of ‘don’t know’ categories.

OA is here: http://www.finfacts.com/irelandbusinessnews/publish/article_10008207.shtml

Download the presentation slides here: http://www.ipsos-mori.com/polls/2006/pdf/blogging.pdf

Mobile network and device maker, Nokia, has announced a network operator solution that is designed specifically to kill peer-to-peer traffic such as Skype and other IM-style Voice solutions.

The peer-to-peer traffic control product helps mobile operators “better manage their data traffic” says Nokia as it allows them to “control the use of network resources by bandwidth hungry applications such as file sharing and Voice over IP telephony”.

The centralised solution is nothing more than a software upgrade to the company’s Flexi Intelligent Service Node (ISN) and will be commercially available during the first half of 2007.

The Nokia Flexi ISN acts as a centralised control point for data services, providing cellular network users with data connectivity.

What the upgrade does is to improve the service, subscriber, and access awareness capabilities of the network node to allow it to identify data traffic according to the type of service.

They can then treat that “traffic in a way that best optimises the use of network resources according to the operators’ business strategy,” says a Nokia statement.

In other words, please buy our data pipe, but we’ll decide what you can put down it.

“With the explosion of affordable high-speed mobile data access, operators are now being challenged to make the best possible use of their networks, especially when peer-to-peer applications increase their traffic load and compete with their own services,” says Roberto Loiola, VP, Marketing and Sales, Networks, Nokia, trying to put a good face on it.

While peer to peer applications may increase network traffic, that’s the objective of having a network isn’t it? We suspect this upgrade is less about keeping a lid on P2P traffic so it doesn’t impact on other service types and is more about giving operators a way to cripple free voice applications to sure up traditional mobile voice minutes.

Many operators fear the increased availability of affordable wireless data will assist customers to migrate their voice calls from traditional mobile voice minutes to take advantage of low cost calls using VoIP technology.

This fear is holding back the introduction of cost effective data plans.

One operator, Hutchison’s 3 Mobile is taking a different approach announcing it plans to introduce flat rate data plans on its 3G networks betting that increasing the ARPU by offering a range of data services will offset the risks to traditional voice revenues which are operating under generous capped plans already.

OA: http://www.voipnews.com.au/content/view/1338/107/

En route home from Slovenia, whilst doing a bit of Treo housekeeping on the flight I came across this old note I made, it must be from about 4 years ago….

Words of Working Wisdom
- treat it like its your own business
- set goals for each day
- achieve something of note each day
- don’t let fear of mistakes cause inaction; take action to make progress, mistakes will soon reveal themselves and can be dealt with
- make constant progress

Its Thursday evening and I’m just about to leave the office for the week. Tomorrow I board a little plane for Slovenia to celebrate the forthcoming joyous marriage of my friend Ewan Seaford to his lovely fiancee Debs.

Look out Slovenia here we come, a bunch of 30-somethings far from home.

Big problem with the snow: there isn’t any!!! The temp is forecast to be about 10 degrees above zero and raining. That means we’ll probably be rafting and paintballing… in the rain… at 10 degrees…hmm, doesn’t sound too attractive.

The evening entertainments schedule includes at least two strip clubs and lap dancing clubs. Now, if I was 10 or 15 years younger that’d be my idea of heaven. But I’m older and wiser now, and I’ve done as much of that sort of stuff as I could ever wish for. Still, it’ll be some lighthearted entertainment with the boys. If it wasn’t for the fact that they’re a great bunch of guys I think I’d rather be at home.

Roshi, I’ll be home soon, I love you honey, look after the boys.

Dotcom mania returns: Big media versus cyber surfers

There’s no doubt about it, the big media companies are in a spin. They are under threat from a growing band of small, fleet-footed upstarts who are creating websites of user-generated content.

The problem with these sites for Big Media is that they are proving such terrific social networking platforms that they are attracting young people in their millions and are quickly becoming their preferred media option above the traditional formats of newspapers and TV.

Needless to say, the likes of News International, Trinity Mirror, Emap, Daily Mail and Pearson, along with the large media agencies such as WPP, are struggling to work out how best to react to this phenomenon. They are facing a market where their audience of the future is drifting away in their droves.

Evidence of the seriousness of the situation was the move by the mighty Rupert Murdoch to purchase social networking site MySpace last year for $580m. At the time this was regarded as a pretty full price but in recent months it has been called the deal-of-the-century by some media industry professionals.

This is because, compared with the recent $1.65bn that Google splashed out for the video sharing website YouTube, it may well be a steal. Whatever the potential of such sites you cannot escape the fact that these are ludicrously high prices to pay for businesses that have yet to generate any meaningful revenues.

Big media versus cyber surfers: Broadband internet taking TV and print audience

It might not be too off-the-mark to suggest that these social networking sites are as insanely valued as any of the dotcom stocks that roamed the virtual planet of the late 1990s. We have entered another period of internet land grab where the biggest pockets initially prevail, but also run the risk of paying a high price for their actions. Witness yesterday’s hot website, old pals get together, Friends Reunited. Bought last year by ITV for £120m, now it is falling fast in consumers’ affections, according to a recent YouGov Brand Index poll.

Murdoch famously missed most of the boat on the dotcom boom-and-bust luckily avoiding pumping too much of his cash into helping further inflate the bubble.
But this time he is pretty gung-ho about investing in internet businesses.

And so he might because it is a sensible countermeasure to put in place as the media industry is undergoing a seismic shift with consumers moving from the print and TV channels and onto online platforms. Research from Credit Suisse found that households with internet access watched four to five hours less TV a week than those without, and for 12-to-24-year-olds the internet is now the dominant entertainment source.

But let’s not forget that a marriage between old and new media can end in tears as we have seen all too clearly before. Remember the Time Warner purchase of AOL – what a disaster that was. And then there were the internet purchases by German-based media giant Bertelsmann by its Chief Executive Thomas Middelhoff who had designs on creating a world leader in new media. This time around the company prefers to cautiously develop its own social networking site rather than splash out on a costly bolt-on acquisition.

What we are really questioning about these moves by Big Media today is that they are paying too high a price for social networking and user-generated-content businesses when there are scant traditional metrics available to calculate their true worth.

Big media versus cyber surfers: Youth market tough to crack

Yes, we admit that they do draw in millions of youngsters who are spending increasing amounts of their time on such sites – sharing stories, videos and music with their new like-minded “friends”.

And we also admit that this young demographic has become ever-more important to advertisers in recent times as Big Media doesn’t want to run the risk of entirely losing their links with this audience who are choosing to shun traditional media channels. But in all this frenzied activity there seems to have been a few points missed. For one thing, while these sites attract many millions of young people, there is very little cash spent when they get there. This is because one of the most appealing aspects of these sites is that they effectively represent free entertainment. This makes the prospect of monetising them all the more difficult for their Big Media owners.

They are seeking to engineer revenue from them in a way that avoids rocking the boat and pushing them too much towards being a corporate entity. If this were to happen then we would undoubtedly see a migration of many of their users to the numerous other sites that are springing up and are deemed to be of a more cutting-edge and less corporate bent.

It is therefore a mighty fine line that Big Media treads in trying to extract cash out of these people who are not only difficult to find, but when they are found then they are very reluctant recipients of advertising. They are therefore a particularly expensive group to access.

OA by Glynn Davis: http://www.dailyreckoning.co.uk/article/221120063.html

Amazon’s new direction: Point, click, make a product to sell to the world

SAN FRANCISCO — Before long, “user-generated content” won’t refer only to media, but to just about anything: user-generated jeans, user-generated sports cars, user-generated breakfast meats.

This is because setting up a company that designs, makes and globally sells physical products could become almost as easy as starting a blog — and the repercussions would be earthshaking.
That’s the future Amazon.com CEO Jeff Bezos hopes to set in motion with the company’s new direction. If you tease out Bezos’ plan, you get to a point where a high school cheerleader sitting at home with a laptop could theoretically harness computing power, design capabilities, manufacturing and distribution from around the world, and make and market a cute little pink hot rod that would compete against General Motors.

Just what GM’s board wants to hear about now, huh?

“You’re going to be able to have virtual start-ups, virtual entrepreneurship,” says Marc Benioff, CEO of Salesforce.com, which is betting on a vision similar to Amazon’s. “It will be the next wave.”

A couple of weeks ago, at the Web 2.0 Summit in San Francisco, Bezos unveiled his strategy and talked with me about it. In the near term, the whole thing seems pretty complicated and nerdy. Amazon will offer services with names such as Elastic Compute Cloud (renting out computing capacity), Simple Storage Service (renting data storage) and Mechanical Turk (I’m still not sure what that is!).

“I haven’t figured out a way to explain this very well yet,” Bezos told me with his trademark big grin. “I was hoping you would.”

If you put the pieces together, Amazon is essentially renting everything it does to anyone who wants it, from big corporations to some guy in a yurt in Mongolia. Well, as long as the yurt has high-speed Internet.

You can rent space on Amazon’s computers to run a business, or rent out its transaction capabilities to sell things and collect money, or rent pieces of its warehouses and distribution system to store and ship items — or all of the above.

So, with almost no start-up costs, anyone anywhere could become a retailer. It’s not just contracting with Amazon to sell your stuff, the way Target does. It’s leasing pieces of Amazon to create something totally unrelated to Amazon.

“We can take all the things that used to be fixed costs and let people pay by the drink,” Bezos says. “It’s letting people create a business by remote control.”

To an extent, this is already possible in industries such as Web services and media, which are made up entirely of data and code.

Start-up Splice (splicemusic.com), for instance, is made up of a few friends who hired a team in Barcelona to write code on the cheap, then leased computing power from a data center that could be in Saskatoon or Sicily, for all they know.

Beyond that, the hot talk in tech is creating “platforms” that entrepreneurs can use to quickly and cheaply build whole companies — the way PlayStation is a platform for video games, or Windows is a platform for software applications. That’s what Salesforce is trying to do. So are Microsoft and others.

What’s new about Amazon is the leap to physical products. This might be one of those evolutionary milestones, like when the first fish crawled up on land, or Jimi Hendrix discovered feedback on his electric guitar and altered the path of rock music. (Those being events of equivalent importance.)

Amazon’s platform will be the first to include physical distribution. “You could notify us to expect inventory from you, tell us when to pick it (from warehouse shelves), and we’ll send it to any address,” Bezos says. “We’ve spent 12 years getting good at these things, so why should somebody else have to start from scratch?”

Bezos’ idea cracks open an intriguing can of worms. Why shouldn’t an established manufacturer do the same, leasing out factory space and industrial design teams and its expertise the same way? Sure, there are limitations. Factories aren’t as flexible as warehouses or data centers, which can handle business from just about any industry. So a manufacturer’s markets would be narrower.

Still, if executives at Hormel Foods thought about their business the way Bezos thinks about Amazon, Hormel could create a meat platform. If I have a great idea for a new kind of sausage, I could use Hormel to make it, store it and ship it, while I sold it from a website. I could create a sausage company and never step foot in a rendering plant.

Maybe this trend would not be such bad news for GM. It has excess capacity and nearly 100 years of manufacturing expertise. If it created a carmaking platform, GM could enable the creation of dozens of new niche-market car companies, all using GM to make and distribute their designs.

I’m not saying the Hormel or GM examples are likely to happen, but some company will do something along those lines. It’s not that far afield from today’s contract manufacturers in Asia, which make batches of cellphones or toys or shoes on demand. Except Amazon’s concept suggests a new level of sophistication and ease-of-use. Point, click and make a product to sell to the world.

The repercussions if that happens? Well, look at what’s going on in the media. The Internet created a platform for user-generated content. Now, blogs, videos, music, animation and websites from individuals and small companies constantly challenge traditional media companies. YouTube got bought by Google for $1.7 billion. TV networks are rushing to put content on the Web. Newspapers have lost readers to blogs.

Media are only a fragment of global industry. Imagine that same scenario plowing though one consumer sector after another: food, clothing, cosmetics, sporting goods, musical instruments and so on. It could be a wonderful, vibrant, scary chaos.
I’m just saying: Keep your eyes open for Maney Sausage

OA: http://www.usatoday.com/tech/columnist/kevinmaney/2006-11-21-amazon-user-generated-products_x.htm

Bloggers and US internet providers cannot be liable for posting defamatory comments written by third parties, the California Supreme Court has ruled.

It followed the case of San Diego woman sued after posting allegedly libellous comments online about two doctors. Some of the internet’s biggest names including Google, eBay and Amazon have supported a woman in a US legal battle that may save them from libel cases. The judges said the ruling would protect freedom of expression.

‘Disturbing implications’
Overturning a decision by the San Francisco appeal court, the court ruled that people claiming they were defamed online could now only seek damages from the original author of the comments - and not the website which re-posted it. The court ruled that that Internet Service Providers were protected by US Federal law that said providers of chat rooms or news groups are not considered the publishers of information furnished by others.

“The prospect of blanket immunity for those who intentionally redistribute defamatory statements on the Internet has disturbing implications,” said Associate Justice Carol A. Corrigan.

“Nevertheless … statutory immunity serves to protect online freedom of expression and to encourage self-regulation, as Congress intended.”

The lawsuit involved a health activist who posted someone else’s letter on her web site. The subject of the letter sued the activist - as well as the author - for libel. Internet service providers have long argued that, like telephone companies, they were “common carriers” who could not be subject to libel laws.

OA: http://news.bbc.co.uk/1/hi/business/6167930.stm

ITV says the offer undervalues the firmITV has rejected a merger proposal from the cable firm NTL, and has given details of what NTL was offering. ITV said there was little strategic logic for it to combine with NTL, which offered 105p in cash, and new NTL shares worth 17p, for each ITV share.

The television firm’s board said it “was clear that the proposed offer materially undervalues ITV”. Satellite broadcaster BSkyB shocked the financial world on Friday by buying a 17.9% stake in ITV for £940m.

Careful scrutiny
The NTL proposal, made on 9 November, had been conditional on due diligence, on approval of the ITV Pension Scheme Trustees, and on regulatory clearance. The board of ITV met on Monday to consider the proposal, which had been “thoroughly analysed” by its advisers.
It said that after detailed and careful consideration it had unanimously decided to reject the merger.

An ITV statement said: “The board believes that whereas there is obvious appeal to NTL in gaining control of ITV’s substantial and successful business, from ITV’s perspective there is little, if any, strategic logic for ITV to combine with NTL.”

Regulatory call
After BSkyB’s purchase of shares, NTL’s largest shareholder, Sir Richard Branson, called on the Office of Fair Trading to intervene and force BSkyB to sell its stake saying it was a “blatant attempt to distort competition”. Mr Branson attacked the power of Mr Murdoch, the owner of BSkyB, and urged the government to “stand up” to the media tycoon.

He said Mr Murdoch’s media empire meant he had the power to choose the country’s Prime Minister and the extent of his ownership meant “we have got rid of democracy in this country”.
Virgin also vowed to take the issue up with broadcasting regulator Ofcom at its weekly meeting, arguing that Sky’s links to ITV would limit competition and viewer choice. Sir Richard became a 10.5% shareholder in NTL when he sold Virgin Mobile to the firm earlier this year and NTL plans to change its name to Virgin Media early next year.

But BSkyB said it had done nothing wrong. Current UK media ownership rules mean the satellite broadcaster is prevented from controlling more than 20% in ITV. ITV is the UK’s largest commercial broadcaster offering free-to-air services. But it has been under pressure after being hit by falling ratings and declining advertising revenue. It is also without a chief executive. Earlier in the year, other private equity groups were reported to be preparing a bid for ITV..

OA: http://news.bbc.co.uk/1/hi/business/6169052.stm