Jed Hallam

Over the next few days I’m going to publish three blog posts that are pretty much the same blog post, however, to save your eyes, I’ll break them up into three smaller posts.

The first post is my thoughts on how the social media industry has evolved and where the market may or may not lead. The second post will look at the developing social business market and the third post will look at how brands might start to actually implement this stuff. You know, the ‘how we make money out of all of this’ post.

I’ve always been interested in seeing how business and technology evolve, which has always come in handy as that’s been my job for the last three or four years. Well, about two years ago, I was talking with Tim Hoang about Everett’s Diffusion of Innovations and how you could apply this to network analysis to see how you could track messages moving through a network and how marketers could then unpick the network mechanics to understand the role of influence better. This then lead to me reading a bit more widely into adoption and growth theories and then I found life cycles.

Now, for anyone with a casual interest in business or marketing theory, life cycles will be old hat. But for me, they were a revelation.

Using life cycle graphs, you can begin to predict which services/products/industries/agencies are going to be rising (or declining) in the future – this is obviously incredibly valuable in such a fast moving industry as social media.

I then started plotting my own work (developing products and services) against Levitt’s theory of Product Life Cycles (PLC) and trying to understand at which point products and services needed an overhaul. After a weekend of further reading, I saw a reference to Steven Klepper’s work on Industry Life Cycles (ILC) and how it had been applied to various industries for more than fifty years. Things started to click a little bit more with how I could apply these models to social media  (services, agencies and the industry) and using the models to think smarter about how social media would develop as whole.

The graph below is Klepper’s Industry Life Cycle, it’s a simple graph that highlights the four key areas of an industry’s development; birth, growth, maturity and decline.

Klepper probably explains the phases better than I could;

“Three stages of evolution are distinguished. In the initial, exploratory or embryonic stage, market volume is low, uncertainty is high, the product design is primitive, and unspecialized machinery is used to manufacture the product. Many firms enter and competition based on product innovation is intense.

In the second, intermediate or growth stage, output growth is high, the design of the product begins to stabilize, product innovation declines, and the production process becomes more refined as specialized machinery is substituted for labor. Entry slows and a shakeout of producers occurs.

Stage three, the mature stage, corresponds to a mature market. Output growth slows, entry declines further, market share stabilizes, innovations are less significant, and management, marketing and manufacturing techniques become more refined.”

The idea of applying this ILC to the social media industry is a little bit on the fluffy side until you overlay the ILC analysis with Everett’s adoption curve and begin to plot out where certain brands fit within the analysis.

It’s even possible to begin matching dates to the x-axis – the ‘innovators’ period could quite comfortably be around 2000/2001 and it’s fair to say that we’re currently (in 2011) experiencing the late majority/laggards phase. Suggesting that the industry is maturing and we’re (potentially) about to hit a period Hugo Hopenhayn coined ‘The Shakeout’.

‘The Shakeout’ is a simple principle. During the growth period of the ILC many organisations join the market without differentiating factors – the market fattens up because the overall market value is on the rise, so people join to enjoy the spoils – causing an overflow of suppliers once the demand begins to mature and level out. Hopenhayn believes that this ‘The Shakeout’ hasn’t actually happened until the amount of suppliers is less than 70% of the volume at its peak. With this in mind, and given the current state of the social media industry (specifically in the UK), I’d say we’re due to lose about 30% of the suppliers over the next eighteen months or so as the market matures and levels out.

While this sounds terrifying, it’s simply market forces acting naturally. However, there is a way to break the trend of the ILC and access a new market at the bottom of a new curve.

Six months ago I was reading the Harvard Business Review and I stumbled upon an article by Tim Breene and Paul Nunes (both of Accenture) who were promoting a book they’d written calling Jumping the S-Curve. Breene and Nunes are interested in helping their clients to break the cycle of decline and ‘leap’ onto the next s-curve and by providing a methodology for innovation, they hope to help many organisations ‘buck’ the decline of the PLC. After spending a considerable amount of time looking at how Klepper had applied the PLC to the ILC, I began to try and overlay some of my thinking to Breene and Nunes’ model. The results of which are highlighted on the graph below.

Here we see three s-curves, each representing a period of around ten years. For the first curve, I’ve taken the second graph and I’ve begun to look at what and when the next curve could be. Given the last few years has seen the original innovators (Brian Solis, Jeff Dachis, David Armano etc) from curve one begin to discuss social business, it’s a fair guess to say that the next ten years is going to see social business becoming a large part of the industry. It will be the innovation that the industry needs to sustain itself.

It’s a difficult leap, but it will act as a filter and force true innovation amongst suppliers and the potential rewards (i.e. market volume) are, in my opinion, far greater than anything that the industry has seen over the past ten years.

If you watch anything today, please make it Eli Pariser’s TED talk on ‘online filter bubbles’.

It’s excellent.

Hat tip to @AdlandSuit who tweets here and blogs here.

The Razorfish5 report was published over the weekend. The premise of the report is to highlight five areas of technology that are going to have an impact on business in the future – so on the geek-barometer, this is pretty close to the top (if you ignore the ‘flash magazine’ version they’ve put online).

The report is well worth a read (you can find a PDF here), but I thought it might be useful to quickly write up why it’s important.

Interfaces
It’s almost a cliche to talk about the meteoric rise of the iPad, but the facts are simple – the iPad shifted as many units as the iPhone, but in a third of the time. Which is incredible for a device that many people still don’t understand the purpose of. For me, the iPad is all about complementing existing experiences – I use it for reading feeds away from my laptop, talking with people on Twitter while watching TV and watching videos on a Sunday morning. It also has an incredibly intuitive interface; so much so that my four year old sister-in-law had unlocked it, opened up emails and was trying to write an email within about two minutes. She still writes with crayons. It was incredible.

The report looks at how interfaces are becoming more intuitive and more about natural human interfaces (NUI) and how we should design for screen real-estate (which great digital people have always done) and multiple platforms rather than presuming that our content will work across the board. The proliferation of devices designed for different occasions also means that it’s important for us to understand consumer behaviour and design for that (again, which should have always done) – a recipe website for a food brand could be challenging to use in the kitchen, but a kitchen app for the iPad would make total sense. But we know this, good design has always been about behaviour.

This could finally be the year of the handheld device, we’ve been saying it for long enough…

Near Field Communication
When anyone talks about Near Field Communication (NFC) everyone usually thinks about banking – walking into Starbucks, swiping your phone and paying for your coffee. It’ll be great, granted, but there’s a little bit more to NFC than most people know. The patents that Google and Apple have put forward that incorporate NFC have so far included lots of consumer data points – meaning that we’ll be able to collect an incredible amount of data and use this to sharpen our targeting.

One of the best things about NFC is that fact that five billion people already have phones – more people have a phone than a TV – so there’s immediate critical mass. This has massive implications for the developing world and could help the decentralisation of banking – I can’t really do this idea justice, but Jan Chipchase, one of the principle researchers at Nokia, talks about the impact of mobile on banking in this amazing TED talk (absolutely must-watch).

The mass of data and the way in which we’ll be able to manipulate means that we’ll be able to deliver advertising in real-time (Minority Report-style) and it can be completely reactive to the individual, the environment and the conditions.

It seems that we’re finally starting to see data converge between online and offline, and the link is mobile. Mobile bridges our two existences and forces them to become one – and as marketers we can use this data bridge to build social CRM systems, map purchasing behaviour and feed niche targeting. But obviously there’s a flip side, and with all this data there will obviously be massive privacy issues (weirdly, it’s Frankie Boyle that jokes that if we start using biometric recognition and mobile and we lose our wallets, then we’ll need new eyeballs). So we’ll have to be brave, but not too terrifying (looking at you Google Goggles).

Social analytics
One of the biggest questions for the last few years (at least in social media and CRM) has been how do we collect and manipulate this amount of ‘Big Data’ into something vaguely informative. Well the convergence of online and offline data has been paralleled by the convergence of offline and online data agencies (Salesforce.com recently bought Radian6 in a huge deal) and the ability to start mapping sales to conversations will give us the ability to 1) start to show ROI of campaigns, 2) allow us to further personalise our work and 3) we’ll be able to switch this all around and begin to create Single Brand Touchpoints. SBTs (terrible acronym) are one of the biggest challenges to brands in a social, reactive world. Where everyone in the organisation is consumer-facing, how do we ensure there’s a single brand message? Well, with social analytics we’ll be able to track brand impressions (in both senses) and begin to trace back where each impression has been created – basically reverse engineering the perception of a brand and looking at where we need to focus our attention.

The end result of better analytics should be customer-centric strategies. We’ve all been at the receiving end of a client asking for a ‘some of that Facebook’ or ‘a Twitter’, but what better analytics will allow us to do is give clients a much clearer idea of where their audience is and what they do there.

ODS
Almost every brand I’ve worked with has (to an extent) been a brand built on data. Client data helps us develop products. Reviews help us improve them. Conversation data helps shape our marketing. So the idea of ODS (Open Digital Service – it’s a Razorfish product, unsurprisingly) is interesting – open our organisational data streams (by API) and provide access to our data, and in return the community will add to our data and improve our intelligence. In it’s most basic form, APIs and the ODS allow us to crowdsource data – and it will effectively take a brand beyond it’s current audience and into the ‘world as a sample’ territory. One of the important milestones of brands opening up API streams will be the creation of industry standards. For example, if Sony Ericsson and Nokia opened up their market research data streams and shared them with one another, it’d be incredibly important for each organisation to share the same type of information, in the same way. There’s also a huge angle for ODS and the semantic web, but that’s probably best saved for another blog post.

The Cloud
Previously, the volume of information that we could deal with was limited by how much hardware we’d bought, but with the rise of cloud computing (which has been a ‘rise of’ subject now for more than ten years) the amount of data that a brand can hold is practically limitless. This has two dramatic effects on an organisation; 1) it will make the organisation more agile (think Toyota’s just-in-time strategy) meaning that if there’s a huge spike in traffic to an online store it won’t crash and 2) the cloud is a more cost-effective solution for data, so brands will save cash that they can then invest in marketing and advertising. Hopefully.

And (again), all of this combines to help a brand become more customer-centric and agile.

I’m not sure the way I’ve written this post up will make much sense, but this does all connect together quite neatly. Or at least it did when I was taking notes. So I took a photo of my notes and included them below – it might help, it might make things more confusing

London calling to the faraway towns,

Now that war is declared-and battle come down

I’m sure you’ve heard the news, I’ve left Wolfstar and moved to London to join uber-advertising agency VCCP to help launch VCCP Share.

I’ve been a part of Wolfstar since 2008 and I’ve been incredibly fortunate to launch Wolfstar Labs, work with some incredible people, help fantastic clients and create some brand-altering campaigns.

Tim, Mark, Bailey and Stuart have all been incredible mentors and in my two and a half years with the agency they’ve helped me to grow faster than I would have anywhere else. In particular, Mark helped me to understand what it is that I enjoy about the industry and where I’d like my career to go. I’ve also met some amazing friends in Amy, Mike, Clare, Anthony, Chris, Will and Sam.

I spoke with Amelia and Graham a few months ago and I was immediately excited about their plans, and now is a great time to move on. There feels like there’s a natural transition between where I started and where I’d like to be and VCCP is a huge part of that.

I’ll be joining the newly created VCCP Share as its Communities Director and I’ll be looking at how my new clients can use social media and networks to learn from and connect with their audiences in a new way. I’m ridiculously excited to be working with a brilliant new team, in a new environment and in a new city.

If you’re in London and fancy having a cheeky beer, then please drop me an email, an @ or a text. We’ll be sorting out drinks properly soon, too.

The Clash | London Calling (Live, Sep 1982) courtesy of TheOldJoey

After finally catching up with my feeds this weekend (facing a terrifying 6,000+ unread) I found this little treasure on PSFK.

It’s a video created by the amazing agency m ss ng p eces for Intel Visual Life on Michael Wolff and his three muscles for creative design. I’ve been a huge fan of Wolff since finding a profile piece on Wolff Olins a few years ago, it inspired me to buy the seminal Wally Olins book The Brand Handbook (well worth the £6) and since then I’ve tried to find everything and anything on Wolff and Olins (look here too: CreativeReview got Wolff and Olins back together a few years back for an interview).

One of the standout comments from the video below is;

“A brand is really a way of remembering what something is like, for future reference. Something you value, something you feel attracted to.”

On the surface, this comment is purely about the aesthetics of a brand, but I think Wolff is being much broader than design. In a world of increasingly visual communications (not from a design point of view, but from the point of view of being able to see communications) it’s important to realise the impact that this has on the brand – we can see the logo, the marketing materials, the advertising but now we also see the conversations going on around a brand. Krugman’s theory of Effective Frequency now has many more inputs than pre-digital evolution. Conversation is part of the fabric of the brand, and we can see it everywhere.

Watch the video, it’s fantastic.