Author Archives: Martin

1st2c CGM case-study: Nintendo Wii and The Emergence of Social Commerce

Online commercial platforms such as ebay.com and amazon.com were popular commerce channels for holiday shoppers this Christmas. While the majority of consumers used these online commercial websites a new channel of online consumer commerce began to gain traction.

CGM and Consumer-to-Consumer Commerce

Online forums/message boards were used by consumers to buy and sale items during this Christmas holiday. This new form of commerce resembled in structure to peer-to-peer networks. Peer-to-peer networks in which have gained popularity for downloading music and movie files has influenced a new trend in consumer commerce.

Consumers from across the United States communicated via online forums/message boards in order to buy and sell goods and have created a new form of online consumer commerce, consumer-to-consumer networks. Similar to the p2p networks, each consumer either buying or selling represented a node in which together formed a social network of online consumer commerce.

The Wii Catalyst in Consumer-to-Consumer Commerce

The demand for the Nintendo Wii game console soared this holiday season. Retailers both online and off line were not able to match the consumer demand for this hot holiday item. We at 1st2c discovered that the consumer-to-consumer online network empowered consumers by offering them a additional platform to purchase the Wii gaming console. Via online forums/message boards people bought and sold Wii consoles without the assistance of traditional online commerce platforms such as ebay.com, walmart.com, and amazon.com.

In addition, consumer-to-consumer online commerce were in some instances the only channel for consumers to obtain a Wii console for this Christmas holiday due to the lack of availability of main stream online commerce platforms .

CGM Discussions of Wii Social Commerce Transactions

Using 1st2c‘s deep web monitoring technology we saw that consumer discussions of this secondary market was substantial and grew as the Christmas holiday approached.

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Effects of Consumer-to-Consumer Commerce

This social commerce channel that developed increased the availability of the Wii to consumers during the holiday season. In addition, it increased the growth of secondary gaming console markets. Consumers that had the Wii game console previous to this holiday rush had the opportunity to sale via the consumer-to-consumer commerce channel and use the revenue to purchase another gaming console or software.

An example of this phenomena was observed by our research team in the consumer cell phone market. Consumers used the consumer-to-consumer channel through CGM platforms (ie forums/message boards) to sell their cell phone in order to purchase a new model via traditional retail channels. This form of commerce reduced the duration and financial barriers that consumers faced when deciding if to upgrade to a new cell phone.

The Future of Consume-to-Consumer Commerce
The emergence of consumer-to-consumer commerce via social channels (ie forums/message boards) poses some important questions regarding retail markets and marketing of consumer goods.

1. What can be learned from social commerce and adapted to retail commerce?

2. What consumer insights can be learned from social commerce?

3. How can marketing techniques adapt to the evolving social consumer generated media platforms such forums/message boards, blogs, videos and social networks?

We will continue to follow this CGM trend as it evolves in order to provide our clients with tools to maximize their marketing impact and ROI.

1st2c in a nutshell

1st2c (www.1st2c.com) is the home of online Online Strategizing Research© – the most comprehensive data-to-strategy methodology available for the networked market. Strategizing Research©’s insight and opportunity driven orientation creates a vivid picture of mindsets and behaviors of the networked marketplace and adds new dimensions to both online and offline strategies.

1st2c works with Fortune 500 companies on adding new dimensions to overall marketing strategy and on monitoring and engaging the networked market.

Ofer Friedman

Chief Research & Client Officer

1st2c

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eBay’s Social Media-Hijacking

1st2c CGM Case Study

Ebay’s seller boycott of February 2008 calls attention to the scenario of users turning your own platform against you.

Late January 2008 eBay, the iconic online auction powerhouse, announced changes in fees and policy with primarily effect on selling.

This policy change probably made good business sense for eBay that probably anticipated some seller disgruntlement.

But the Internet-empowered marketplace offers more options than just sharing of protests or mobilizing peers in purely Social Media platforms. Very quickly eBay found T-shirts with slogans like “Boycott FeeBay” or “Don’t buy eBay” put out for sale on eBay’s own platform…

Regardless of the eventual culmination of the eBay incident, it calls attention to the not-improbable scenario of users “overtaking” open networking or commerce platforms and turning them against their own operator interests. We label this situation: “Social Media-Hijacking“.

This case study looks at the dynamics of this incident of Social Media-Hijacking and addresses the key strategies for managing such situations.

Anatomy of a failed user mutiny
Late January 2008 eBay announced it would charge sellers 25%-50% less to list their items on the site but take a larger slice of fees on actual sell of items. At the same time eBay terminated the ability for sellers to submit negative feedback on their customers and impose 21-day holds on transactions in certain circumstances.

These policy changes drove a semi-organized group of “power sellers” who felt shortchanged over the recent changes to mobilize a popular boycott on eBay.

The “backlash” of sellers (mostly Power Sellers) looked like potential crisis in unprecedented dimensions:

  • Extensive media coverage for a call for a week of boycott (February 18-25)
  • Thousands of discussions in blogs, forums and other Social Media platforms
  • More than 60(!) different videos on YouTube with 100,000s of viewings
  • And the “hijacking” of eBay’s own trading platform to offer eBay boycott T-shirts and even a Kleenex box…

 

Examples of Boycott eBay items put on sale on eBay

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But something seems to have gone wrong for the mutineers.

The results of the protest were unclear and much disputed. Online auction trackers such as PowerSellersUnite and Medved reported that eBay’s total auction listings may have dropped as much as 13 per cent over the week. But in effect listings returned to normal levels (eBay ran a one-day discount listing promotion the week before).

 

A deep dive into Social Media surfaces additional insights that shed light on the dynamics of the eBay boycott.

ebay-graph.jpg

 

Two key observations that draw attention in Table 1:

 

  • Bloggers (typically playing a critical role in agenda setting) take only minor weight in driving of public involvement
  • Public attention nose-dives only two days after official boycott start date

 

In retrospective, Social Media seemed to have provided an efficient “early reading” of public engagement and of the reasons for the failure of this potential crisis to gain momentum.

Analysis of online consumer dialog provides further understanding of the non-materializing of the eBay crisis:

  • Boycotters announced the move ample time before it actually took place, thereby overshooting the peak of public interest and killing the element of spontaneity
  • Many sellers saw the boycott as a window of opportunity to improve their listings and sales when key competitors “left their watch”
  • Many sellers talked about “absorbing the costs” rather than transferring them to buyers, thereby denying the latter the motivation join the protest

 

Attention: Social Media-Hijacking scenario

The eBay boycott failed to snowball to a crisis situation for eBay.

However, surfacing of the reasons for that failure does improve our understanding of the determinants of grassroots mobilization in the digital marketplace.

After all, the understanding what doesn’t work provide clues to the understanding of what does work.

But the eBay boycott also draws attention to the diversity of interfaces available to users and consumers in open commerce properties like eBay, Amazon, Overstock, etc.

This incident demonstrates the fact that activist users and consumers are well aware and ready to take advantage of interaction and content generation platforms OTHER than those designated for peer-to-peer networking.

Ebay does have a very busy discussion board platform, but “enterprising” protestors attempted to “hijack” its commerce platform – a critical interface with buyer audiences.

Regardless of how successful this particular attempt was it may warrant extra attention from all social platform operators, reputation management and crisis management experts.

What will be the most effective strategy alternative to manage such situations?

1. Mine-sweeping strategy?

(Immediate removal of adverse content and blocking/banning of offenders)

2. iscrediting strategy?

(Denouncement of the unfairness and abusiveness of Social Media-Hijacking)

3. Rationalizing strategy?

(Publicizing information and possibly initiating Social Media outreach work about the reasons and benefits of the move that triggered Social “Media Hijacking”)

4. ontainment strategy?

(Tolerating such initiatives by allowing them for a limited time period)

 

5.  Ignoring strategy?

(Unlimited tolerating such initiatives)

The answer may well be a combination of strategies or even a changing combination of strategies depending on the particular situation and the dynamic of market response.

In view of the increasingly informed, involved, active and socially empowered nature of consumers in the networked marketplace, decision makers and specialists may benefit from readiness to Social Media-Hijacking situations by mapping of scenarios and evaluating potential actions.


1st2c in a nutshell

1st2c (www.1st2c.com) is the home of Online Strategizing Research© – the most comprehensive data-to-strategy approach in the networked market.

Online Strategizing Research© creates a vivid picture of the marketplace and its dynamics and identifies actionable insights and opportunities.

1st2c works with marketers and agencies to empower competitiveness and facilitate growth by monitoring and engaging the networked market and adding new dimensions to overall marketing strategy.

 

Ofer Friedman
Chief Research & Client Officer, 1st2c

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1st2c CGM Report: Wii Triggers Social Commerce

 

Social Media sees the development of digital consumer-to-consumer trade

Social Media is already challenging the hegemony of commercial media, but has it already begun to incubate a challenge (or an opportunity) for commercial trade?

This holiday season saw the age old phenomenon of Social Trade being energized and re-shaped by Social Media has been spotted in the game console market. The lively consumer-to-consumer trading of Nintendo Wii consoles was a vivid example for how Social Networks develop as an alternative (or a parallel) to online commercial trade channels.

The Nintendo Wii case suggests the (re)-emergence of Social-Trade-over-Social-Media as a market force to be reckoned with and managed.

 

Wii redefines consumer “must have” behavior

Nintendo Wii has already been widely celebrated as one of the mega-hits of the 2007 holiday season.

Fueled by media publications about supply shortage, thousands of desperate consumers reportedly skimmed store shelves and turned to online commercial outlets like Amazon and eBay, willing to pay even a premium price of $600 per Wii console.

(http://techland.blogs.fortune.cnn.com/2007/11/30/even-at-600-the-wii-is-a-must-have-gift-this-season/)

 

No wonder that below market surface determined consumers turned to Social Media networks not only to find the prized console but also to buy and sell one.

1st2c tracking system picked up a significant increase in volume of posts in social networks during the holiday season, offering Nintendo Wii for sale.

 

Table 1: Volume trend of posts referring to Wii for sale

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Overall number of posts on Wii (21,140) is impressive in itself. Additional terminologies used for with the same intention increase the post count even further.

The surge in offers for selling Nintendo Wii consoles started mid-November and stayed at above normal levels throughout the holiday season, with fluctuations triggered occasionally by both online and offline media publications.

The vast majority of the posts seem authentic, though it is not unreasonable to assume that some were placed by traders masquerading as consumers.

Regardless of who placed the offerings, the most important insight is about the emerging use of social networks as social trading platforms.

Nintendo Wii is just one example for the developing phenomena of Social Media platforms becoming Social Trading platforms.

 

 

Social Media also active as secondary market

 

The case on Nintendo Wii refers to new products traded via social platforms, but what about used (second hand) products?

Recent projects we have done in the mobile communication market identified a very active scene in Social Trading of used handsets.

Typically, first and second tier mobile users are offering their old handset for sale on commercial online trading platforms like Ebay. But the Social Networking platforms are already featuring the same function driven by consumers themselves.

What Social Media offers to these grass-roots traders is a highly segmented shared-interest audience and a highly trusted environment.

On the macro level, Social Media offers a very efficient market driver:

For some types of consumers it lowers the barriers of migration to next generation handsets by offsetting the costs against the resale value of their old handsets.

For other consumers it allows entry to mobile communication.

 

The threat and opportunity in Social Commerce

 

Social Commerce grows and is likely to continue to develop.

For many marketers, Social Commerce poses a threat since it bypasses commercial trading platforms with established trading and promotion infrastructure.

The more consumers shift to social commerce the less control marketers have on what is being offered, how it is being offered and the entire marketer-consumer relationship that follows.

On the other hand, Social Networks can potentially act as market catalysts. They may eliminate availability barriers (a consumer in Timbuktu can make a product available to a consumer in New York). They may accelerate purchase cycles – especially with more costly products (now it’s easier for early adopters to migrate to next generation products but selling the older product they have). They may provide more people more access to a broad variety of products. They facilitate the power of buzz.

Can and should marketers try to manage Social Commerce?

They may have to.

As Social Networks acquire an increasingly critical role in the driving market behavior it becomes a question not of If but of HOW.

Isn’t it another dimension to Social Marketing, guerilla micro-marketing online buzz agents?

The right models will need to account for the new rules of engagement in the networked market (see our pervious case studies).

Interestingly (and perhaps expectedly) we have found Social Trading to sprouting with premium positioned brands. Aspirational brands in diverse markets such as apparel, cars and consumer electronics are already developing Social Commerce.

From both marketing and reputation management considerations, marketers of such brands may benefit from tracking and perhaps also from creating a model for managing online Social Commerce.

 

1st2c in a nutshell

1st2c (www.1st2c.com) is the home of online Online Strategizing Research©. It is the most comprehensive data-to-strategy methodology in the networked market.

Online Strategizing Research© creates a vivid picture of live market mindsets and behaviors and identifies actionable insights and opportunities.

1st2c works with Fortune 500 companies on adding new dimensions to overall marketing strategy and on monitoring and engaging the networked market.

 

Ofer Friedman

Chief Research & Client Officer, 1st2c 

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The Consumer Generated Music Video

 

The early 80’s introduced the music video to the masses via MTV. The music television channel was the first station to offer 24 hour-a-day music videos to the masses. The music industry embraced the music video concept and started pumping videos on a weekly basis. The successful adoption of cable TV by US consumers and the development of relatively low cost and easy to use video recording/editing equipment were the catalyst that made MTV and the music video in specific very successful.

As the popularity of the music video grew so did the cost of making them. Music videos seemed to outdo one another by increasing production costs and special effects. The growth and popularity of music video caused their budgets to increase and resemble a major motion picture operation. In addition, by 1992 directors of music videos were getting recognition and their names were being listed in the song credits.

editing-pic.jpg

photo by Rob Lee

The internet boom, in particular the growth and popularity of videos being viewed, rated, and uploaded onto internet platforms such as Youtube and Metacafe have caused a major shift in consumer viewer ship and interaction. Consumers can now choose which music videos they wish to view, rate , and write commentary about them.

In addition, consumers have become producers of music videos themselves. Todays youth have access to tools needed to create their own music video. With the help of a camcorder, computer, and some basic editing and internet knowledge anyone can produce a music video. This form of consumer generated media (CGM) has become extremely popular among todays internet savvy youth and should be taken noted by the music industry.

latop.jpg

photo by Rob Lee

Some of the top videos on Youtube were produced by consumers. A great example of a consumer generated music video can be seen below. The producer of this music video used a song by Daft Punk and their bare hands in order to create this CGM masterpiece that was viewed by 11,884,528 people on Youtube. The name of this music video is called Daft Hands and was produced by FrEckleStudios.

The music industry will not stop producing music videos in the near future. Instead the music industry should encourage this CGM movement and find ways to collaborate with it and embrace the content that the consumer is creating for the music label. The benefits of using CGM are threefold:

1. Low production costs

2. Provides consumers with positive feedback and encourages them to continue creating original content for the music label

3. CGM content is viewed by other consumers as not being tarnished by corporate agendas and has a stronger “word of mouth” effect

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photo by coey.kerr

Overal, embracing consumer generated content will assist music labels in promoting their music and increasing its reach to consumers in a effective and economical manner.

Martin Fuchs

CGM analyst/planner

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1st2c CGM Report: The Whole Foods Case-Study

The following case study was conducted in September 2007.

There’s nothing wrong in a CEO doing his best to promote his brand. It is perfectly logical for a CEO to communicate with his networked market online. It is quite smart to do so in those places where your brand and business are discussed.

The unwritten rules of consumer-marketer interaction on Internet’s social media have recently been fire-tested and there’s something to be learn out of this experience for every marketer.

For 8 years, John Mackey the visionary entrepreneur who led the Austin, Texas based natural-foods chain Whole Foods chain to meteoric success was active in Yahoo’s stock community. Using the pseudonym “rahodeb” (his wife Deborah’s name spelled backwards), Mr Mackey has been posting messages on various issues regarding his business.

This phenomena known as “Sock Puppeting” exploded early June following an FTC anti-trust lawsuit alleging that Mr Mackey has been posting controversial company information, trashing competition and touting management.

Social media fails to show “CGM autopilot” effect

Such sensation-charged story, with an official “seal of seriousness”, was sure material for a major online consumer backlash and potential consumer antagonism crisis for the Whole Foods brand.

This was an exemplary case study for 1st2c, the forerunner of Online Strategizing Research©, to examine the DNA of an online consumer-driven crisis situation.

A day-by-day monitoring of online consumer resonance indicates that the stereotypical perception of social media as facilitating and encouraging consumer to mobilize against “misbehaving” marketers is too simplistic.

wholefoods-pic.jpg

Story breaking on July 12, 2007 did trigger a huge surge in consumer talk about both John Mackey and Whole Foods. However, as 1st2c tracking report shows, not only did consumer talk return to previous levels from the very next day but also talk on Mackey behaved differently than talk on Whole Foods. That following surge in talk correlated with media coverage to the issue and to Mackey’s apology posted (this time) on Whole Food’s corporate blog on July 17.

Interestingly, blogs were more aggressive and attempting to mobilize mass action than social mind-sharing platforms (like forums and message boards).

Case study takeaways

Analyzing the nature of consumer response 1st2c analysts highlighted these insights:

1. CEO controversiality does not necessarily rub off on the brand If consumers do not perceive the CEO’s “misbehavior” as compromising their health or interests in an immediate and critical way they are likely to judge his or her practices with limited collateral implications on the brand.

2. John Mackey “behaves” as a brand in terms of consumer attention Many of the surges in talk about Mackey correlate with surges of talk about Whole Foods, sometimes in similar volumes. We have noticed such phenomena looking at consumer brands (mostly consumer goods) and see it as indicative of the significant impact these CEOs do or can have on brand equity, both on the negative and positive side.

3. Blogs represent a different audience and play a different role than social networks Blogs are not the mirror of the market! In many cases they are less so than social networks (Forums, message boards, etc.). The active (vs one shot) blogs tend to represent a more maven, activist and influence-oriented audience while social networks tend to represent the “involved masses”.

1st2c will continue to monitor the market and provide consumers and decision makers with better understanding on the dynamics and the rules and tools of engagement in the networked market©.

Engaging the networked market

1st2c was established in late 2004 as a full service Consumer Media research and strategy powerhouse by internet and brand strategy veterans with extensive international experience. 1st2c is a forerunner of the Online Strategizing Research©. This strategic planning driven research provides vivid market pictures, in-depth understanding of market dynamics and seamless transfer of insights and opportunities to actionables. 1st2c employs well-tested and proprietary technologies and covers both one-to-many and many-to-many platforms.

 

Ofer Friedman
Chief Research and Client Officer
1st2c

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A Viral Marketing Video Demonstration

Viral marketing has become a mainstream concept. Yet most articles and videos I encounter on a daily basis do not explain it in basic terms. The following video I have attached below provides a simple and to the point demonstration of what is viral marketing and how it uses consumer advocates to spread the WOM (word of mouth) of a product among consumers. I found it on youtube and it was done by VM-People a viral marketing firm based in Germany.

enjoy

Martin Fuchs

CGM analyst/planner

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Consumer Generated Media Is Influencing Advertisement Creative

Consumer generated media is influencing advertisement creative. In the video attached below AOL used three famous viral video characters to promote their news section; news.aol.com. The “don’t taze me bro” student, the crying “leave her alone” Britney fan, and Ms. Teen South Carolina star in this video. All three of these characters became famous by appearing on a video that was distributed online and viewed by millions previous to staring on this commercial.

In todays viral video world anyone can become a star. CGM is not only providing a voice for consumers, it is turning consumers into the new media icons of advertisement creative .

Nice job AOL…… I will definitely take a peek at your news section

Martin Fuchs

CGM analyst/planner

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