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Grab a favorite beverage if you’re going to read this one. It’s rather long…..
OK.
If you believe that conversational media (post 1, post 2) represents an important emerging category in the overall media landscape, the question must be begged: how does one pay for it? What is the central economic model for conversational media?
I have a short answer, and a very long one. The short one is this: Conversational marketing. The long one gets into how conversational marketing is simply the tip of a very large iceberg, representative of a sea change in how all businesses converse with their constituents – be they customers, partners, or employees. Yes, I’m going somewhere with all of this – my shorthand for it is “The Conversation Economy” – but for now finding a succinct definition is exceedingly notional – and frustrating. Regardless, the more smart folks I talk to in the media, marketing, and business world, the more I am convinced we are entering the age of the Conversation Economy. But to get there, we need to crack the code of conversational marketing. So that’s what I’ll focus on in this post. The next (and final) one will, I hope, tie it all together.
And because I am writing this all day today, I plan to experiment a bit with how I write for the web (I’ve referred to this as web-enhanced writing). In short, I plan to serialize this post over the day, posting it as I write it. Every hour or two or three, I’ll hit “publish” and you’ll see wherever I am in this process of Thinking Out Loud. Given the way I know I write, I’m sure that each successive post will not only be longer, but an entirely revised version of the stuff I’ve already published. I hope by the end of the day to have a decent draft finished, and perhaps, you’ll visit from time to time and toss your comments into the mix.
So onwards. (Pressing the publish button for the first time now….)
Update – this post is getting so long, I’m going to put it in the “extended entry” format. Continue reading by clicking that link below….
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Wow, that changed things. Now I feel like Mike Mulligan and his steam shovel, but early in the morning, when no one is watching. What happens if folks start watching? Heh.
So onwards, as I was saying, to some thinking out loud about conversational marketing. At FM, the company I founded 18 months ago, we talk about conversational marketing quite a bit. The reason is pretty straightforward – the sites we represent are all conversational media sites – sites that are driven by a highly engaged community of readers or users who are in conversation with the authors/creators of the site, or with the site itself, as well as with each other. Examples include ProTrade, Boing Boing, Digg, Dooce, Real Travel, and tons of others.
What I noticed when I was thinking through the initial model for FM was that while these sites were in full-throated conversation between author and audience, and audience and audience, there was no conversation between those two parties and marketers – in 2004, when I was developing the FM idea, nearly every site I thought was representative of conversational media was devoid of marketing support. Why?
Well, there were practical reasons. First, the sites were disaggregated – there was no scale. And marketers really need scale – the way marketers are currently set up, it’s far too expensive and time consuming to buy, manage, and analyze ROI on hundreds or thousands of sites for each message or campaign. That’s why most of the online money was focused on a few top players – Yahoo, Google, AOL, MSN.
Second, there was quality. Marketers like their message to be in the context of a high quality content and community. But with millions of blogs and scores of new social networking sites launching every month, which ones were the best? Marketers needed help filtering signal from noise.
And third, there was safety. Conversational marketing is just that, conversational. Big brand marketers are, as a group, not particularly thrilled with the idea that they might find themselves in an environment where folks might poke fun at them, or criticize them, or call them out. In short, they were not used to being part of the conversation. But, brands are conversations, are they not? Interesting.
Solving for the first two issues is a matter of finding a group of sites that together had scale, and together valued quality and integrity. But solving for the third issue is a trickier proposition. After a year or so of working with tons of brands and agencies on this issue, however, as well as talking to lots of other folks and watching what the leaders in this space are doing, I’m starting to
see some patterns that are deeply interesting. (Pressing publish for the second time now, and heading to yoga….)
Ah. That was nice. OK. So what are some examples of conversational marketing? Well, let’s set some context. I’ve argued for more than 15 years that all commercial publications are conversations between three core parties – the author, the audience, and the advertiser. The best of these have a robust shared grammar, a voice that all three parties understand and respect. At Wired, for example, we ran a survey asking readers the major benefits of reading the magazine. “The Ads” came up near the top. Why?
Wired had a very strong editorial voice, one that readers strongly associated with and felt passionate about. Sure, it was not for everyone, but what great voice is? It may be hard to believe, but advertisers are people too – and many of Wired’s advertisers were readers of Wired, and they also felt passionate about the markets and ideas the magazine represented. In fact, many of our advertisers not only shared Wired’s point of view and enjoyed its voice, they felt – through the products and services they created – that they were actively participating in the conversation Wired represented – they were participants in a grand conversation about the digital revolution and its impact on society.
So a funny thing started to happen. The advertisements started to adopt the grammar and voice of the magazine. Now, some of them were admittedly lame – cheap attempts to copy the design and buzzwords for which the magazine was (in)famous. These ads were off key, pretentious, they lacked integrity. But far more hit the right notes – the added to the conversation, they understood the mores and values of the Wired conversation, they respected the dialog, and they threw in their two cents appropriately. Hence, the ads became an important part of the benefits of reading Wired, and the survey results showed it.
Wired was a great example of marketers joining a mediated conversation in an appropriate, valuable way. Why, I wondered as I puzzled out FM, can’t that idea be extended and deepened online? After all, as the Cluetrain taught us, your ads need not simply be a declarative statement frozen in time, as it must be in television or print. Online, the conversation can continue, it can deepen, and it can take its own course.
But to have a conversation, you need to have something to say. And on conversational media sites, where the grammar and voice are so strong, you can’t open a dialog with a deafening pitch, a crass come on. You have to understand the values of the site, and you have to have something that offers value, in context, to the audience.
This is one of many places where search comes in. The brilliance of search advertising was that it was, in fact, additive to the conversation on many sites. Certainly it was additive on search sites – when you are on Google and you declare your intentions (in essence, the opening line of a conversation), the site reorganizes itself around your opening line of dialog, and the ads are, more often than not, relevant and additive to the experience.
This was less true with syndicated search ads – the examples of poor or off-key AdSense results are legion. But still and all, for many kinds of content – in particular product-driven and category-specific sites – AdSense ads were far more relevant to the conversation happening on a given site.
However, ad networks like AdSense have a weakness when it comes to rapidly changing and diverse sites. It’s hard to find just the right ad to put next to content that changes every hour or so. The ads weren’t irrelevant, but they were not relevant enough to drive a healthy enough conversation for all parties involved, particularly the publishers. Effective CPMs (a measure of how much money is made for every 1000 pageviews) hovered well below a dollar for many blogs and other forms of conversational media sites. While that was great additional income, it wasn’t going to let those sites thrive to the point of becoming real businesses where the authors could make a real living.
A good example of the kind of site I am describing is Boing Boing. (pausing, hitting publish for the third time.)
Now, the folks at Boing Boing are an amazingly diverse group of authors, between them, they edit magazines, write science fiction and other kinds of books and articles, consult for forward thinking companies, report from all points of the globe, and generally live fascinating lives. For the past decade they’ve lived them online, and Boing Boing has become one of the most linked to and most influential blogs on the web.
But in early 2004 the gang at BB came to me with a problem. (I knew them through any number of working and personal relationships). They had been posting to BB for years, tending to the site as a labor of love. Boing Boing fed them in any number of ways – it nurtured their creative side, it suckled their egos, it provided a platform for them to discuss their most treasured ideas, projects, and pet peeves. But it made them absolutely no money, and by early 2004, their hosting bill was starting to go through the roof. The month they contacted me, it had hit $500, and at the rate it was going, it’d be $1500 within another six months. Could I help, they asked? Was there a business model that allowed them to cover their costs, and maybe – insert fantasy here – maybe even let them make Boing Boing their principal source of income, freeing them up to do more Boing Boing related work?
My first response was “$500 a month?! What are you doing, posting video?!” I had no idea the size of the audience, but I couldn’t imagine any audience size would justify a $500 hosting bill. After all, my audience at Searchblog at that time was at about 50,000, and my hosting bill was something like $50 a month. No way was their audience ten times Searchblog’s size. How many folks were coming to Boing Boing each month, I asked?
The answer stunned me: 500,000.
500,000 readers? 500,000 participants in the Boing Boing conversation? Holy smokes! Wired took tens of millions of dollars to get to that size readership (admittedly, Wired’s readers paid for their subscription, making them more valuable). But still! We spent nearly $10 million to build TheStandard.com, and it barely made it to half a million readers a month – and we weren’t charging!
Clearly, something was afoot in the media business. Audiences were discovering conversational sites like Boing Boing (through search, of course!), and they liked what they had found. This begged the question: Would marketers like to join this dialog?
The folks at Boing Boing were not anti-marketing per se, but they were deeply skeptical. Would BB readers revolt at the addition of ads? Would BB be able to find ads that understood the grammar and voice of the site? Would we be able to make any money with ads if we banned punch-the-monkey creative, expandable banners, and the like that were rampant across the web at that time?
We decided the best approach would be to ask the readers what they thought. We ran a survey and solicited comments. Overwhelmingly, the readers told BB to go ahead with advertising if it meant supporting and growing Boing Boing, but we got a flood of input on how to do advertising right. The input largely validated the editors’ sensibilities about advertising – if it were the right companies, with the right messaging and in the right tone, advertising on the site would work.
Three years later, it seems obvious that it’s OK to advertise on large blog sites like Boing Boing. But back then it was not at all clear. We started by dipping a toe in the water. I asked the editors to make a short list of companies they felt “fit” the BB voice. They gave me four – Apple, Google, O’Reilly Media, and Wired. I contacted all four, and offered them three month “sponsorships” of Boing Boing. Three of them agreed (Apple declined, but has come in since), and within a month, Boing Boing was not only paying its bills, it was clearing a profit that helped the editors drop some of the work they were doing “to pay the bills” and focus more on doing things that fed their Boing Boing habit.
The approach of having the authors approve the companies which advertise on their site seems obvious, but when you think about how traditional media works, it’s downright revolutionary. The lunatics were running the asylum! But it turns out, when an author approves a company to advertise on his or her site, they are, in essence, inviting the company to join that sites’ conversation. A permission has been given, a trust established. To this day, every single ad FM sells is approved by our authors before it appears on their site. And despite our initial worries that author approvals would be a hurdle to marketers – after all, they’re used to getting their way – it has, in fact, turned into an overture, a conversation starter that has led to all sorts of examples of new approaches to marketing online. So, as promised before I went on that long detour, here’s a few examples for all of us to ponder. (pressing publish for the fourth time….)
The very first example of conversational marketing has to do with a very large computer brand which I will keep anonymous, as it’s not clear they’d want me talking about them in this forum. In any case, this brand had a problem – its customers were losing confidence that the brand, which they loved, was going to remain innovative and leading edge, much less stable. The brand needed to convince the influencers of the technology world (that’d be you, and many like you who read blogs and conversational media sites) that the brand was still innovative. How to do it?
We suggested something a little risky. Why not invite your customers into a dialog about what they’d like to see in the next version of the product? You could run creative asking customers to come to a site where they could suggest cool new features, gripe a bit about things they didn’t like, and generally engage in a conversation about the brand’s products. Then, when you rev’d the product, you’d fold as many of those ideas as you could into the new version, and voila – a piece of hardware informed by the Force of Many and the Architecture of Participation!
The agency loved the idea, but the brand was not so sure. What if the dialog turned sour? What if the site became a sinkhole of trolls grousing about lord knows what? The brand was worried about the safety of such a dialog, and was not ready to take such a large leap. But it did dip its toes into the water, executing a campaign that invited readers to vote for a specific feature of future machines. It was a start – and the results were compelling. More than 200,000 people navigated a very complex marketing site so as to register their vote.
The next example I’ll give takes the idea even further. Dice is an IT jobs board. Many of you have probably seen its ads all over tech sites on the web. Dice’s agency came up with what I think is a brilliant example of conversational marketing – the Dice rant banner. Instead of simply inviting readers to another site, the Dice banner invites readers to add their conversational tidbits directly into the banner. (In the case of Dice, the opening question was “Does your tech job suck?” You can imagine the responses….).
Once you write your thoughts into the banner, those thoughts become the content of the ad. Coooool. The content initially is stored locally, but is then sent through a central server, cleaned of dirty words and sexual references (people will be people), and then redistributed through the entire media buy as a streaming content feed. This is taking the conversation to another level – the conversation becomes the marketing, the medium is the message. The response was extraordinary – the average interaction time in the banner was more than seven minutes. That’s far longer than the average amount of time most folks spend on a tech news or blog site. (The Dice banner later won an award from an industry publication.)
With Dice, marketers began experimenting with the idea of inviting potential customers into a conversation that added value to their media experience, and then folded that conversation back into its initial invitation, creating a virtuous circle of dialog that ultimately branded the company as a place that “gets” folks who have tech jobs. Now, if you’re a tech guy looking for that next job, and you interacted with the banner, where do you think you’d go to look?
The next example I’d like to talk about, one that builds and extends on Dice, is Symantec. As you probably know, Symantec is a vendor of virus protection and security software, among other things. Its marketing executives had been paying attention to the rise of blogs, and in particular to the rise of tech blogs that were clearly influential in its own markets. Many technology companies were starting their own blogs, and Symantec decided to do the same. It then executed a campaign across a number of tech blogs telling folks that the blog was, in essence, up and running.
Then a funny thing happened. The blog was written in a strong, intelligent voice. It was keyed to the industry it served, and folks started to notice. Then a funny thing happened. Symantec posted an entry titled “Mac OS X: Viruses and Security” which said, in 
But the company didn’t stop there. Realizing it had been invited to join the conversation across the tech blogosphere, Symantec worked with the team at FM to create a new kind of advertising unit, one that pulled an RSS feed directly from the Symantec blog. The conversation that Symantec was having on its site was now projected out into its marketing campaign, reaching millions more readers.
Then we started noticing the performance numbers. Typical banner ads have a click through rate that declines over time. Those who might click on the ad do so early in the ad’s run, and by the end of a campaign readers grow weary of the creative, and no longer engage. But since Symantec’s creative kept changing as new posts were added to the site, the clickthroughs remained consistently higher over time. Interesting!
I’ve got one more example to write, then I’ll pull back with some broader thoughts. (pressing publish for the fifth time…)
OK, so the last example is Cisco. Yes, these are all technology marketers, but I’ve found tech companies often lead all marketers in terms of breaking new ground, and FM is working with Nike, Absolut, and many others on versions of these examples.
Back in the Fall Cisco was preparing to roll out a major branding campaign around the tagline of “The Human Network.” But before spending tons of dough on national television and print extolling the virtues of the admittedly “empty vessel” that was the human network as a brand, Cisco decided to first see if it might invite some technology leaders into a conversation about just what the human network meant, as a concept. Working with ten noted tech bloggers (yes, me too), Cisco and FM created a site where each author penned his own definition of the term. Cisco weighed in as well, and even posted its version to Wikia, the commercial cousin to Wikipedia. Sure, Cisco would have loved to have its version posted to Wikipedia, but that would have been corporate spam, and that’s not cool. Wikia was the best place to go.
Then Cisco made ad units that were particular to each author’s sites, encouraging readers to go to the page of definitions and vote for their favorite. Tons of folks voted (Newsvine’s Mike Davidson won), and the site and its related pages became something of a “brand beacon” for the human network idea. In short, the site was a conversation about what the term means, and that conversation became the context for filling up the “brand vessel” that was “the human network.”
Cisco then rolled out its major media campaign, which you may have seen on TV. And a funny thing happened. Two, in fact. Say you were watching PGA golf and you saw the Cisco ad. You wonder to yourself, what’s this human network thing all about, anyway? So what do you do?
Of course, you go to Google, and you type in “the human network” or somesuch. And up pops Cisco’s conversational media site. At least, that was what happened in the first month or so. But after a while, something else happened. Someone entered the term as a Wikipedia entry, and it was accepted for publication. In short, the term now means something, because Cisco engaged both authors and audiences in a dialog about its marketing’s meaning. (More on this at Chas Edwards’s site, which if you troll around, has a wealth of insights on this topic. Chas is one of my partners at FM…).
Whew. That took a lot out of me, writing up all that. And yes, it’s totally personal, and therefore anecdotal and inconclusive. But I sense that all these examples are not flukes, something is really afoot here. Marketers are realizing that while it’s fine to advertise in traditional ways (Hey! This movie is about to open! Hey! Check out the cool new car/product, etc.), it’s now an option to begin a dialog with the folks who you hope are noticing your ads. In fact, it might even be a great experience for all involved. Brands might hear criticisms that are valid, and have the chance, through conversations with customers, to address those critiques. Customers have the chance to give their input on new versions of products, ask questions, learn more – in other words, have a dialog.
And in the end, isn’t having a dialog with your customers what business, and brands, are supposed to be about?
I’ve been writing for nearly 6 hours now, and as I’ve said in other long posts, anyone who’s still with me deserves a medal (at 4100 words this may be my longest). Me, I’m going to have a bourbon and welcome in the weekend. I’ve got so much more to say about this – in particular, how the idea of conversational media informs what I think might be the next framework for the search user interface – but for now, I think I’ll sign off. Thanks for reading, and toss me a few comment bones if you care to. I could use the input, and welcome the conversation….
PS – Yes, this is leading somewhere. As a tidbit for those hardcore readers who have made it this far, “The Conversation Economy” is the working title of my next book…..(pressing publish for the sixth time….)