I’ve been from Austin for two days now and I’ve been going over the week in my mind. Christopher and I had an absolute blast - there’s no doubt about that. The big buzz of the week was the trainwreck interview of facebook CEO, Mark Zuckerberg by BusinessWeek journalist Sarah Lacy. That was wall all anyone talked (or blogged about) for most of SXSWi. That aside, we had some really great conversations with some of the most brilliant minds in social and online media working in the space today.

While we were at SXSW we tried to give you our perspective through the daily diaries. However, now that we’re home, the real work begins. I’ve begun sifting through the hours of footage we shot with companies including Blurb, frog design, Avenue A | Razorfish, Henry Grey PR, Kyte, Socialthing!, iStockphoto, Utterz,  and Sosauce. Some share the amazing products or services they are bringing to market, while others share thought leadership on how social media is being used and where it is heading. Over the next few weeks, you’ll see the completed video interviews right here at Relevantly Speaking. The first one with Blurb Founder & CEO, Eileen Gittens, will be posted this monday morning.

Thanks Austin. It was a blast. 

Just wanted to provide a quick update on Day 3 of SXSWi. Earlier today I spoke with David Merkoski,the creative director of the SF office of frog design. David invited us over to the Austin offices where we spoke about the impact that design and the design process has on  the future of social media.

What really impressed me was that even though David had an open forum to plug his company, his focus of the conversation was all about the strategic thinking regarding products and services, and about the opportunities in the space that using a design language can reveal. His company obviously gets it. It is bright people like David, who are engaged in the design of the future of social media, whether it is integrated at a industrial design level, or in the development of a tag line for an emerging technology that continues to drive innovation in the this space. Look for this interview shortly, and for more insight into the convergent design philosophy of frog, visit the frogblog.

WOW! Day 2 at SXSW has been fantastic. We have had the opportunity to meet with quite a few new companies, and some of the old guard that have begun to re-invent themselves to stay relevant in this always-on, hyper media industry. We will be producing another daily diary later today. Upcoming is the People Power party, hosted by Moo, Etsy, Timbuk2 and Threadless. This will be a great opportunity to meet with some of the leading companies that really learned how to harness the power of the communities in order to become a distributive force in their respective industries.

We were also added to the guest list for the socialthing gathering later tonight, and received an invite code to their closed beta. For that have yet to hear about them, socialthing is a connector and a transit layer for all of your social applications and tools. In short, it connects your Facebook with your meebo, with your Flickr with your twitter. Word on the street is that they will be the breakout product of SXSWi. We will keep you posted on our experience with them.

Also on tap for this week is chats with Kyte.tv, Zappos, and a slew of other companies that understand that the value of the community based conversation, and how to really impact their revenue, product design and customer acquisition using social media tools and methods.

A while back I did an entry on demand generation and facebook’s Beacon experiment.

It got me thinking about whether you can actually generate demand. As my friend David Taber writes: 

“Excluding fads, impulse buys, snake-oil, and vice, it is virtually impossible to profitably create demand. People either need your product / service, or they don’t:  it’s a matter of making people aware they have a need, making them aware that there are solutions and you offer one, and focusing their desire on your offering.”

The idea that you can program someone to need something is far fetched at best. Quite simply: People need it or they don’t. It seems a bit lofty to think that one can actually make someone need something, short of actually creating an event that forces need. However, the problem is the same if they do wake up one morning realizing they need tires because theirs mysteriously went flat. The target with need must be found in a sea of noise.

Again, this is where search excels. You have a need, you conduct a search, you find vendors, you click, you buy. Demand fulfilled.

Creation of demand depends on so many exogenous factors that are beyond the realm of a marketer’s control. So what’s the answer to demand creation?

Its not rocket science. Most of you know this already. You have to get your demand fulfillment game on to satisfy the demand when it occurs. You need to make sure your demand fulfillment is easily discoverable and that you have productized your offering in a way that its easy to learn about and easy to consume. Her are a few things that have proven over time to work:

1. Buy search terms that point people with a need to your product. (Use SEM, SEO and Social Media)
2. Provide simple information to give the people the data they need to make a buy decision. (build an informational area on your website about your product category that positions you as a thought leader in the space and provides the seeds of relationship building. Make sure you have a good listing of user testimonials and recommendations - these travel well in social media if leveraged properly. Also use content/product recommendation engines to stimulate site visitors to look at relevant goods — this helps people find what they are looking for in a helpful, non-intrusive way)
3. Price the product or service in a way that is competitive. (Its important to understand what a product means: Its not just the mp3 player. Its the download service, the simplicity of using the device, the integration with other tools, the cool factor and other product experience attributes). In this case, if your product requires service, you might be able to charge more than a mail order shop because you are local. If you are an instant gratification product marketer, you might be able to charge more than online stores in a retail environment)
4. Continue the dialog after the purchase to ensure you are front of mind when demand strikes again (Use email newsletters, well placed banner ads for branding if you have the budget). Also be sure to arm the customer with any follow on information they need through your service support, follow on contacts, etc. Use blogs, wikis or forums on your site to encourage the community. This will go a long way to help them make a recommendation on your behalf when others smitten by demand ask them where they fulfilled a similar demand earlier.

Having said all of this, there are instances when demand is generated over time through great marketing. I’ll use the iPod again. If you see those white headphone wires enough over time (great product marketing decisions), you will begin to ask yourself why so many other people have them. You’ll do an “ipod’ search. You’ll go to the Apple site, you’ll see from the information (well written, easy to consume words about features and benefits). You’ll realize the benefit of loading 5000 songs in your pocket and listen to anything at the click of a button. You’ll realize that the CD player in your pocket (if you can fit it) is no longer convenient. You are already at the website…why not buy now?

Now most of us don’ have Apple’s budget or cool-factor. So it takes a lot of work to get qualified leads. And the process is not a one time deal. It has to be ongoing. Again, quoting David Taber:

“…most of the marketing strategies do not depend on one-shot tactics or miracles:  the magic is a low cost, repeatable process involving:

• Valuable content that is frequently updated to attract and interest people.
• Web infrastructure to get the users (SEO, widgets, CMS, webinar archives, web analytics).
• Web infrastructure to encourage community development (wikis, blogging engines, forum engines, and web analytics).
• SFA and email blast/drip engines to stimulate conversion.
• eCommerce and recommendation engines to enable an instantaneous transition from audience to customer, and to make upsells frequent.
• Easy access to partner products and services, to make the “whole product” easier to consume.
• For the enterprise, really tight Telemarketing/Telesales to cultivate leads and encourage more serious interest.
• Logistical cleverness, particularly for product customization and returns.  Few, if any “middlemen” should be required — distributors and resellers only make sense when there’s a bulky physical good — as almost anything can be drop-shipped from your warehouse.

Until there is a true demand creation tool, well organized demand fulfillment should be front of mind.

 
Your thoughts?

I found this FaceBook data visualization tool created by Ivan Kozik called Nexus. Nexus creates a graph of your social network and finds commonalities between  your friends.Your can see and activate the tool HERE

It calculates friend similarity , and highlights links between friends who share interests and groups. While the generated image is static, browsing the connections is dynamic: clicking a friend node shows who they are friends with, as well as all commonalities with mutual friends.

Its a great tool to visualize how your friends are connected, which interests they share and the friends you have the most in common.

It’s official -  MediaTrust will be attending South by Southwest in Austin this year. Scott Parent, our VP of Social Media and I will be in the lobbies, conference halls, venues and streets capturing conversations with a large variety of attendees as to how they use social media tools to solve whatever problem they might feel they have. Some of the issues we will be exploring are how bands use communities such as MySpace to build a following, or how marketing managers use a combination of YouTube, Digg and StumbleUpon to increase brand awareness. The combinations are potentially endless and Austin presents the single most diverse audience of any festival in such a small period of time.

We would like to extend an invitation to YOU to talk with us while we are in Austin. We will be continuing our podcast series, begun at ad:tech last year in New York, and would encourage you to become part of the dialogue. I can be reached at csmith at mediatrust dot com. Stay informed as to our travel plans, interviews and experiences by adding this to your RSS reader. Scott and I will continue to bring you up-to-date on the journey over the next few weeks, and we will be adding our podcasts to this blog in a near real-time fashion.

Looking forward to seeing you at SXSW, and to your online interactions as well. 

Brian Morrissey adweek http://www.adweek.com/aw/content_display/news/digital/e3i55bff7bc1a68ecef566a2850d389d8f3

 http://web2.forrester.com/forr/reg/campaignlogin.jsp?lr=/Marketing/Campaign/2/1,6538,1234,00.html&RegistrationID=1-BWLU12&regmode=marketingtrial&iCampaignID=1234

Forrester Research believes today’s ad agencies are not well-structured to take on tomorrow’s marketing challenges, needing to move from making messages to establishing community connections.
 
In a new report, the research firm paints a grim view of the current state of advertising, which it believes is in “a world of hurt” because consumers are tuning out the messages the industry is predicated on producing. Instead, it believes shops need to be organized around communities, not disciplines. What it is calling “the connected agency” would not only know certain communities but also be active members of these groups. Pushing messages would give way to encouraging voluntary engagement, and ongoing conversations would replace time-based campaigns.
 
“I can’t say there’s an agency now that’s the agency of the future,” said Peter Kim, a Forrester Research analyst and co-author of the report.
 
The research firm is certainly not the first to assert that agencies haven’t kept up with changing consumer habits and technology. Accenture in November said the shift from analog to digital media is catching shops flat-footed.
 
In Forrester’s view, a simple fact is driving the need for wrenching change in how advertising agencies are structured: consumers increasingly do not trust marketing messages. Instead, they rely on advice from friends and others in their various communities to make product decisions, while using tech tools to tune out ad messages they deem irrelevant. On top of that, consumer media choice has made the notion of a “captive audience,” other than during some sporting events, a thing of the past.
 
“I don’t think agencies are going away,” Kim said. “They’re going to be the ones that help marketers to communities of mutual interest.”
 
He anticipates agencies made up of community members — moms, for instance, helping Procter & Gamble play a constructive role in communities of other mothers. 

Since marketers will continue to focus on results from their marketing, particularly as digital media makes it easier to track, advertising agencies would get geekier, Forrester believes.
 
Despite these changes, Forrester said creative and media agencies are still built around the mass model: to either produce messages or distribute them. Digital agencies have gone farther, in Forrester’s estimation, in centering their businesses around “interaction,” but it finds them lacking in the branding skills of traditional shops.
 
Clients are finding their agencies wanting. Forrester quotes one marketing exec calling agencies “a necessary evil,” rather than a strategic partner to grow his business. Another complains, “Most senior ad execs appear more comfortable with conventional channels, which they claim are ‘integrated’ because they have tacked on a Web site.”
 
“The first step [agencies] need to take is with digital integration,” Kim said, adding that the organization of agencies around specific skill sets is the root of their problems. 

Our own Affiliate Manager, Geofferson Marcy of Advaliant tells his affiliates how to earn a higher payout. Geofferson relates that the keys are:

1. Account history
2. Goal Oriented requests
3. Future Potential 
4. Campaign Competiveness
5. Relationship Status

As with any mutually-beneficial business relationship, the key is working together toward a common goal with a common set of values. If you would like to speak directly with Geofferson, he can be reached at: 647-258-3057

Comparative advantage is one of those basic economic concepts discussed in college.  Simply stated, it explains why the US is better off designing and building routers than growing bananas - even if it has an absolute advantage in producing both. The key to comparative advantage lies in figuring out the opportunity cost associated with doing one thing over another.

When I left Google to start Ooyala, my co-founders and I came face to face with this conundrum - neatly summed up by Jeff Huber from Google - “starting a company sounds sexy and exciting until you realize that only 30% of your time is spent building out your idea and the other 70% is spent on mundane tasks like plugging in cords at your data centers.”  Since our core-competence was not building out data-centers, it didn’t seem smart for us to focus our attention and time on this.

So in the same way that the US focuses on building routers, we decided to focus on developing our video technology and found a country/company that could provide us with bananas/infrastructure. We turned to Amazon Web Services (AWS) as they provide a bundle of infrastructure and application services that are charged on a per-use basis. The Elastic Computing Cloud, Simple Storage Service, Simple Database and a myriad of other development services are all part of this offering. Amazon provides the basic building blocks required to build a sophisticated and infinitely scalable application. On the fly, we can bring up and take down computing clusters and we can store terabytes of information for pennies on the dollar.

Building on AWS gives small upstarts the same type of building and processing power that the “big guys” such as Google are able to leverage for their own development. Brainscape, a small imaging company is using AWS for image processing and analysis of the brain.  Other companies are using the services to conduct computationally expensive calculations.  The availability of these types of services will increase the size and complexity of problems that startups will be able to tackle. It will put them on equal footing with companies with significantly larger R&D budgets. Even Google recently got into the outsourced cloud computing business.

As ad:tech wraps up its final conference of 2007, Advaliant President, Jivan Manhas and MediaTrust Chief Marketing Officer, Trip Foster, share observations from the show floors at ad:tech London and ad:tech New York.

Jivan Manhas’ Observations from London:

1. ad:tech London 2007 took place at the Olympia center. The exhibit hall was large, with two floors (apparently there was a small third floor but like many others I completely missed it….ouch!). It was interesting to see a mix of companies that was quite different than those typically present at the ad:tech San Francisco and New York events.

2. The first thing that struck me was the strong presence of search marketing firms, which could likely be a reason why Google had such a large presence at the show. I saw as many as search firms as you would see affiliate networks at the U.S. shows. The search industry in Europe seems very strong, and from what many of the companies stated, it’s a rapidly growing market.

3. There was a smaller presence of affiliate networks at ad:tech London. The affiliate marketing opportunity seems quite substantial in Europe, as many of the affiliate networks that attended were European-based. Many of the European networks indicated that they were looking to get into the U.S. market. This was surprising to me since the European space is less crowded and is growing substantially while almost all the larger North America-based networks are looking to make inroads into Europe. If I was a European affiliate network, I would first solidify my company as a market leader in Europe. From there, I would partner with U.S. networks to help them get traction in my market, and vice-versa. The U.S. market is very crowded but also very attractive due to its sheer size so I guess I can’t blame them for wanting a part of it.

4. What else was hot? Co-registration, shopping comparison sites and networks of content sites looking to sell media placements. The European market is big for online gambling and casino companies, many of which also had a strong presence at the show.

Trip Foster’s Observations from New York City:

1. ad:tech New York 2007 was a significant event both in terms of content and the large number of attendees. The conference featured almost 300 exhibitors, and had an excellent turnout from investors, agencies, media companies and more. There is clearly a lot of money being thrown around in the online advertising space. While that is exciting, it certainly makes you wonder if there isn’t a bit of a bubble in the online advertising market, and how many of the companies will be around in five years… reminiscent of years 1998-1999.

2. With so many new companies entering the online advertising space, there was a consistent buzz from prospects on the issue of viability. Which of these companies will be around for the long haul and are they looking at long term interest in my company? Will these companies deliver what they promise? Are they committed? It will be interesting to do a side-by-side comparison of existing companies a year from today, to see which companies deliver on their promise.

3. As marketing budgets grow and marketers allocate more of their budgets to online advertising, accountability in the industry will skyrocket. Advertisers and agencies alike are looking to acquire customers, create brand awareness, generate sales and drive traffic. Discussions on the expo floor articulated the importance of clear metrics and being able to prove that money spent in online advertising delivers returns.

4. The buzz at the show demonstrated that this industry is actively maturing. There is a lot of clutter in the space, and it is incumbent on brands to help separate the wheat from the chaff. With all this hype, it becomes increasingly important for vendors to build a long term relationship with prospects. You build trust by performing on your word, and delivering on your promises. If you cant do that, we won’t see you at ad:tech in a few years.

One repetitive theme from both conferences is that agencies, advertisers and publishers alike are growing weary of looking at one vendor for a single solution for each need they have in their portfolio. Our conclusion is that the vendors that can deliver integrated campaigns across several different online marketing disciplines will be able to gain long term customers in the current environment.