Communities Dominate Brands

Group Forming Networks Stop the Great HSBC Graduate Rip-off!!!

We talk about Reeds Law, and Group Forming Network Theory, which outperfoms Sarkovs Law (the Law of the Mass Media) and Metcalfes Law (the Law of the network).

Essentially, when a group of people form around a topic, issue or goal their effect can be exponential.

So the student protest which was directed at HSBC via Facebook is a small example of that theory in practice

HSBC, the fourth biggest bank in the world, has made a dramatic u-turn in policy changes to its graduate overdrafts it announced last month, following a well-publicised student backlash on Facebook.

More than 5,000 students used the social networking site to rally against the bank's decision to charge graduates interest on overdrafts up to £1,500 which had previously been offered free for the first two years after university-life.

Led by Cambridge's NUS vice-president (Welfare) Ama Uzowuru and Wes Streeting, NUS vice president (Education), 5,090 students and graduates joined the group "Stop the Great HSBC Graduate Rip-off!!!" to discuss action against HSBC

The bank said

Like any service-oriented business we are not too big to listen to the needs of our customers.

Which in English means, we were hoping to get away with this one, but after the all the hulabaloo we were caught with our hand in the till so we had to back off. That damned Reeds Law is a real pisser.

Via Mad

There are 65,900 entries for Facebook takes on HSBC on google

Analogue vs. Digital

A recent IBM survey says

personal Internet time rivals TV time. Among consumer respondents, 19 percent stated spending six hours or more per day on personal Internet usage, versus nine percent of respondents who reported the same levels of TV viewing. 66 percent reported viewing between one to four hours of TV per day, versus 60 percent who reported the same levels of personal Internet usage.

Consumers are seeking consolidated, trustworthy content, recognition and community when it comes to mobile and Internet entertainment. Armed with PC, mobile and interactive content and tools, consumers are vying for control of attention, content and creativity. Despite natural lags among marketers, advertising revenues will follow consumers' habits.

So we arrive at a moment of profound change

To effectively respond to this power shift, IBM sees advertising agencies going beyond traditional creative roles to become brokers of consumer insights; cable companies evolving to home media portals; and broadcasters and publishers racing toward new media formats. Marketers in turn are being forced to experiment and make advertising more compelling, or risk being ignored.

And that is what Communities Dominate Brands was all about. Sadly many companies were not prepared to preadapt. But as Stephen Jay Gould and Carlota Perez point out change is one of the most stressful and demanding things an organism or organisation can do. It just depends on how much it wants to survive and has the necessary infrastructure to do so. Although sometimes it/they have no choice. The chnage to too far reaching, too quick for organisations to adapt to a new environment.

Reading Jeff Jarvis take on this, he explains

I prefer to look at the opportunities this profound disruption brings: As we already know, of course, anybody can make TV (second hat tip Steve Jobs), distribute it (YouTube et al), and market it (via the link). The problem remains that even though the costs are a fraction of the old, big stuff, you can’t support it with advertising … yet. But that will come. Witness today’s announcement that YouTube has settled on its means of delivering ads. See also this from the IBM survey: 63 percent in the U.s. said they would watch advertising before or after quality, free content (34 percent said they’d be willing to pay). Speed up, advertisers.

As for advertising agencies becoming "brokers of consumer insights": they should wish. Before, agencies and media were the gateways to the audience. Now, companies can converse directly with customers and get plenty of insights without gatekeepers. I’d rather be Facebook than an ad agency, wouldn’t you?
Cable companies becoming "home media portals" is a fancy way to say pipe. Period.
Broadcasters and publishers shouldn’t be racing to new media formats for one-way content. They should be racing to enable new kinds of relationships among communities of information.
And marketers shouldn’t just be experimenting with new forms of marketing — though they should. They should be trying new means of conversation with their customers.

So a new socio-economic ecology is born and we are its midwives, as we have said so many times driven by the 6th and 7th Mass Media, cultural and societal evolution.

Nokia goes Community: Launches Ovi social networking service

Nokia is clearly onboard with philosophies of our book and blog. Nokia has now launched its web service which they call Ovi (Finnish for "door"). It is amongst other things a music service (ie goes against Apple iTunes) but is also a picture sharing service (Flickr), gaming etc. Lets see how it plays in the market.

In some ways I think the early signs were there that Nokia was interested in this space from the multiplayer gaming they explored with the N-Gage gaming phones and their rapid entry into the blogging phenomenon with Nokia Lifeblog.

But as Alan and I say, digital communities are the future, the customer of the future is Generation C (Community Generation) and while they of course are a multi-platform digital generation, the preferred gadget of Gen-C is the mobile phone. In fact at the iMobicon conference last week, Ted Matsumoto the Sr VP of Softbank (Japanese mobile operator that took over Vodafone/J-Phone), said that of all technologies to use for communication, the mobile phone is the only indispensible technology. Indispensable. I like that..

Nokia the biggest phone maker now becomes a digital community host as well. Sounds like a smart move in my book...

Only in Korea, the virtual fashion mall

Michelle Attmore of Miss Selfridge, sent me this interesting ditty

I-Fashion!

South Korea's Shinsegae Department Store is claiming a world first by launching an advanced virtual reality fashion store to help enhance customer choice and boost apparel sales.

On the i-Fashion website, (www.iFashion.or.kr ), shoppers can create a virtual image, or avatar, by recording their personal dimensions to create an exact size and figure shape onto a smart card that can be saved for future use. Users are then able to try on any item in the virtual shop and get it custom fit.

The system, built by the Clothing Technical Centre at Konkuk University and clothing manufacturer FnC Kolon Corp with support of the Ministry of Commerce, Industry and Energy, aims to become a global leader in revolutionary online shopping services.

"We hope our technology will revolutionise the global online retail market through digital clothes," added Park Chang kyu, director of the iFashion Clothing Technology Centre at Konkuk University. "Other existing online clothing retailers worldwide are competing with brands, marketing, and design. But what we have done is create a whole new different ball game; no one in the world has this technology yet."

Jung Dong-chang, head of the ministry's textile industry team, noted: "Anyone with this card will be able to easily try on and buy clothes using mobile phones and computers," adding that people with access to the body measurements of friends and relatives could also buy gifts without fear of the wearer returning the clothes because of a bad fit.

He said such innovative sales systems could be created since South Korea has one of the most advanced and extensive IT networks in the world. Its companies can create digital catalogues, virtual mirrors, mannequins and advanced radio frequency identification (RFID) systems.

Jung also said virtual i-Fashion shops could help clothing makers move into value-added, custom clothes more effectively by receiving online orders, improving the competitiveness of clothing manufacturers.

While the shop is still in the "experimental" stage, Shinsegae Co said the service is expected to expand rapidly, while researchers will continue to advance the system with strong support from the government, the Commerce Ministry said. FnC Kolon said it will operate its own i-Fashion store starting in November.

Another thread in the story of Digital Korea

So a big virtual thank you to Michelle!

Facebook Gets Personal

Social-networking Web site Facebook Inc. is quietly working on a new advertising system that would let marketers target users with ads based on the massive amounts of information people reveal on the site about themselves.

Eventually, it hopes to refine the system to allow it to predict what products and services users might be interested in even before they have specifically mentioned an area.

says the WSJ

And

People familiar with the plan say Facebook wants to accomplish what Google Inc. did with AdWords, which lets anyone place ads next to search results by buying "keywords" online. It brought in the majority of the search engine's $10.6 billion in revenue last year.

Automated social data analytics looks something like this and Generation C is looking for a different type of commercial engagement

Facebook hopes allowing advertisers to buy customized ads online will be a less labor-intensive way to take advantage of the personal data people reveal on the site. A key part of this new plan is that Facebook would use an automated system to process transactions instead of requiring advertisers to work with a Facebook representative, people familiar with the plan say.

Its another nail in the coffin of the Belle Epoque and more on social data analytics

Book Digital Korea getting very warm reception

I am back from Seoul South Korea where I chaired and delivered the keyonte to the annual iMobicon conference. There was a lot of buzz around the book Digital Korea. We've already had book reviews (very positive) by English Language publications in Korea, the Korea IT Times and the JoongAng Daily which is distributed with the International Herald Tribune in Korea. There have been several Korean language papers already discussing the book and having stories about my co-author Jim O'Reilly and myself. And Amazon has already noticed the buzz around the book. Digital Korea is ranked currently the 17th on Amazon's list of bestselling new releases in the category of Web Marketing.

Obviously any of our readers who want to sample the book, send me a request to  tomi at tomiahonen dot com  and I'll send you an excerpt from the book.

And the conference was quite a success, I'll be writing some blogs about it and other Korean stories when I get a moment of time..

The end of the "Belle Epoque"

Having just been on holiday, I was able to get my face into some books, which I had already read but its good to go back and reflect. As this is what Tomi and I wrote in 2005

If the last 10 years have caused disruption in your business, the next 10 years will cause much more so. Not driven by a controlled introduction of new technologies, but by a uncontrolled adoption of new, radical, unpredictable and even "unfair" methods by an emerging new element in consumption - the digitally empowered community. Digitalisation and the falling costline of technology has ripped through our business and social fabrics over the last 5 years, across all industries, across all countries, altering our economic and social landscapes forever. Yet what we have witnessed so far is only the beginning of a more profound, seismic shift in the very foundations of how business is conducted. We can imagine and do things which were just not possible a few years ago. Life threatening or life enhancing? This is what this book is about, the Red pill or the Blue pill? Which one are you going to take? The one thing for sure is, the structured order of our familiar industrial age has come to an end.

So Carlota Perez was on the agenda with Technological Revolutions and Financial Capital

Along with Stephen Jay Gould The Richness of Life with Modernization, Cultural Change and Democracy. The Human Development Sequence and Wikinomics by Don Tapscott

Perez talks about the patterns of technological revolutions how they impact industry, society and culture.

When the economy is shaken by a powerful set of new opportunities with the emergence of the next technological revolution, society is still strongly wedded to the old paradigm and its institutional framework. The world of computers, flexible production and the internet has a different logic and different requirements from those that facilitated the spread of the automobile, synthetic materials, mass production and the highway network. Suddenly in relation to the new technologies, the old habits and regulations become obstacles, the old services and infrastructures are found wanting, the old organisations and institutions inadequate. A new context must be created; a new 'common sense' must emerge and propogate.

And reading Gould, of course we have the concept of Punctuated Equilibrium, which is the idea that evolution is not a steady eddy type of process. The change can be sudden, dramatic and deadly.

Structural or mental inferiority did not drive the dinosaurs to extinction. They were doing well, and showing no sign of ceding domination, right until the extraterrestrial debacle unleashed a set of sudden consequences (as yet to be adequately specified, although the 'nuclear winter' scenario of a cold dark world has beem proposed for the same reasons). Some mammals weathered the storm; no dinosaurs did.

So our old familiar analogue mass media world would have survived were it not for the nuclear winter of the arrival of the 6th and the 7th Mass Media

Perez also belives that every technological cycle has a Belle Epoque, and our mass media certainly had theirs.

When your history catches up on you: the birth of the musicphone?

I'm still here in South Korea celebrating the launch of my fifth book, Digital Korea, together with its co-author Jim O'Reilly. We've done a lot of publicity from media interviews (we were just in the national business newspaper today with a long interview with picture), meeting up with various government and industry leaders, educators etc.

So today I had an extraordinary experience. It relates to a story I've been retelling for many years now at conferences and in the books. Its the story of how the mobile music industry was born, or more specifically the transition from ringing tones to real music (MP3 file downloads to musicphones). I've been saying that the music innovation was the brainchild of Sony Music in South Korea in the summer of 2003, when they tested this idea with six tracks from the (then) latest Ricky Martin CD, for a week prior to actually launching the CD. And that Sony sold 100,000 extra tracks of Ricky's music as MP3 files this way.

We have this story already in Alan and my book, Communities Dominate Brands. Now in the book Digital Korea which includes a chapter called Mobile Music, of course I retold this story, this time with more of the details.

So we then met numerous very senior business executives here in Korea. One of them was Mr Yang the CEO of Aircross, the mobile advertising subsidiary of the telecoms giant SK Telecoms group. Mr Yang is a very energetic and visionary CEO working hard to make mobile advertising a major element of the marketing mix in South Korea and over his past 3 years since he joined the company, he's turned around this 7 year old subsidiary and it is now very healthily profitable and typical of Korean IT companies, extremely innovative.

We handed Mr Yang a copy of the book Digital Korea of course and both Jim and I autographed it for him. We then hurried to our next meeting.

Later that afternoon we received a call from Mr Yang. He called to discuss the Mobile Music chapter, and the Ricky Martin MP3 story. He asked where did we get the numbers, did we interview anyone at Sony for the story. I told him that no, it was part of my standard story about mobile music, based on the reported story in public domain information, and that I had already mentioned it in my previous book.

I was very nervous, here was a CEO level Korean manager asking very unnerving questions. Did I have my stats wrong on this, one of my favourite stories? Mr Yang then explained that he was most pleased to have read that story in our brand new book, because in his previous job, Mr Yang had in fact been the Sony executive who initiated that very service, and had gone through all the pains of negotiating with the Sony management on approvals for this bold (and many thought risky) move into totally uncharted waters.

Mr Yang had actually launched the Ricky Martin MP3 download service for Sony four years ago. It was obviously even back then a big success in the Korean market, but almost totally unknown outside of Korea. And now these two Western authors had told his story in very glowing terms as a major strategic innovation to all of the music industry, and Mr Yang had the autographed copy of the book saying so...

He was supremely pleased with this totally unanticipated discovery in this brand new book he was now reading (perhaps it also says something for the book that a CEO is captivated enough to be reading the book during office hours and calling us before the day had ended, ha-ha).

I was now relieved. I did ask him that did I get the facts right in the book. He laughed and said - quoting the very exact same numbers right off the top of his head - as he no doubt has memorized these numbers years ago - yes, 100,000 downloads in six days. We had it just right.

But this kind of experience doesn't happen every day, every month, every year, not even for an author - every book. But it is an enormously uplifting experience. I had never interviewed a Korean Sony executive on the story because simply I never knew one to interview. I only collected the original story from news sources in June 2003 and then retold that story countless times. Now Mr Yang confirmed the facts.

Its been that kind of trip here in Seoul. We've had wonderful reception absolutely everywhere. I did my keynote today at the annual iMobicon conference. My topic was the customer of the future. Again throughout the day meetings, press interviews and government and industry senior representatives, to the warmest of Korean hospitality. I don't want to ever leave this country....

Censorship and online communities: Wikipedia monitored - and edited - by CIA

I have to mention this story. Ohmy News the citizen newspaper in South Korea reported on 17 August that Wikipedia is being edited by the CIA (yes, the Central Intelligence Agency). Not only that, but the CIA is also reported to have developed a software application that not only monitors what edits are done in Wikipedia but also by whom.

Yes, I do admit it is of interest to a "central" government agency specializing on "intelligence" to monitor major information (or intelligence) sources, yes, even more in these times of global terrorism and even more so in an information age (where information technology can very easily be converted to a military tool) but it does make me quite queezy thinking that the CIA is actively altering Wikipedia pages to suit its own agenda (some would say propaganda and even misinformation). Check out the full story at Ohmy News. And for those who doubt the factual correctness of Ohmy News or validity of a citizen newspaper, the independent Korean annual survey of all news outlets in Korea ranks Ohmy News the 6th most trusted news source in Korea. It is very credible and reliable.

On a side note (Ahonen always searching for the positive spin or the silver lining?) - I think this is quite an endorsement on the power of Wikipedia. When we wrote our book Communities Dominate Brands, few outside of bloggers and techie nerds had heard of Wikipedia but today its very much a mainstream source for factual information quoted in countless sources daily. Today Wikipedia is so influential the CIA has built its own customized Wikipedia tracking software and has its staff make dozens of changs to Wikipedia entries... Amazing... 

iPhone, LG Prada; now Armani joins fashion phones with Samsung

Tidbits from my time-travel into the digital future that already exists here in Seoul...

So the iPhone is the sexy cool must-have gadget for Americans. Europeans are rather split by the device, some say they gotta have it, others are quite luke-warm to it. But as I suggested back in January when it was announced, now I have confirmation from many Korean friends and contacts, that the iPhone is totally not overwhelming the local industry. Several have pointed out that the iPhone is mostly a copy or clone of the award-winning LG Prada phone (which won the industrial design award already last year well before the iPhone was even announced)

With that, we met up today with our friend Matthew Weigand of the Korea IT Times (a brilliant monthly magazine on whats happening in IT industry in Korea. If you like our book Digital Korea, this magazine is the "must-read" follow-up which literally covers all the same topic matters from broadband internet and 3G mobile telecoms to virtual reality, robotics, telematics etc, just like our book.

Matthew gave us his latest issue of the printed magazine and in it there is a fascinating story that Samsung will be introducing soon an Armani phone, based on the remarkably positive success of the 600 Euro/900 USD LG Prada phone. Fashion and phone industry convergence, yes, you heard it here before at Communities Dominate. It is rolling along. Now Armani, when do we see phones by Brioni, Canali, Hugo Boss..