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The Media Transformation | Insight and commentary on the transforming content economy - Part 20

Another item in the proliferation social media tools in our daily life:  the research firm IDC points to social media as being a driving force of “cultural and process change” for business, according to its new report, The Intersection of Web 2.0, Enterprise 2.0, and Collaboration: The Social Business.

“If you look deep into the social business movement you will see that we are on the brink of a fundamental change in the way businesses interact with customers, partners, suppliers, and employees,” said Michael Fauscette, group vice president, Software Business Strategies. “Businesses today fall into three camps – the social “denyer”, the accidental socialite, and the socially aware. Regardless of where a company falls in these categories, customers expectations of technologies and the way they interact with suppliers have changed, driven greatly by the social Web.”

PaidContent digs in, with characteristic thoroughness, on the startling fact that Newsday has sold only 35 online paid sub. Interesting read with some comments from Newsday.

The Congressional Budget Office see the economy at a worst point in terms of jobs and debt, with stabilization and improvement occurring over the next two years. Brad DeLong shares the most salient charts from the Economic & Budget Outlook. (via Grasping Reality with Both Hands)

The inability to access credit continues to plague small businesses. You would think that this would be a fundamental focus of administration policy in order to protect jobs. On the other hand, consumption is down so receivables are down so the lending basis for most businesses is down. (via Econobrowser)

The apartment marketing community continues to have some of the most interesting and somewhat fact-based dialogues about the relative impact and value of different marketing channels, with a particular interest in the role of social media. Industry vet Mike Brewer is starting a series of posts that should be an interesting consolidation of the disparate topics around some observations from a MarketingSherpa research piece.

An argument that personal online reputation will become a bigger aspect of our social identity in the future. (via I’mNotActuallyaGeek)

If the situation is so dire, why are politicians acting like children, Tom Friedman asks. (via TheNewYorkTimes)

Alan Patrick summarizes and gives some perspective on the debate of whether the Venture Capital model is working as currently constituted. A useful proxy for broader equity investment classes as well. (via Broadstuff)

Has the golden age of Web 2.0 morphed into a world of walled gardens? What does it mean for your Internet strategy. Josh Bernoff gives Forrester’s perspective. Interesting relative to the “content will be free” and “free/freemium” debates. (via Groundswell)

This is an important and sobering perspective on the real estate market, shared by John Mauldin, and worth your time. It is an interview with Andy Miller of The Miller Frishman Group. (via TheBigPicture)

Paul Krugman offers a knee-jerk but firmly-held opinion of Obama’s proposal of a spending freeze. (via TheNewYorkTimes) Brad DeLong offers a lengthly analysis of Obama’s Hoover shift. (via GraspingRealitywith OpposableThumbs)

CalculatedRisk looks under the hood on the Case-Shiller numbers and see some good trending signs. (via CalculatedRisk)

Ezra Klein shares info about a jobs proposal developed by Charles Schumer and Orrin Hatch. Simple and productive. (via EzraKlein)

Olivier Blanchard looks at the hard truths of managing the marketing for a dying brand. Good read. This is the first of a series. (via TheBrandbuilder)

Two Forrester analysts lay out the blueprint for Apple to make the Tablet a breakthrough device. Interesting, but Apple probably already has a blueprint. (via PaidContent)

Great case study of how Xerox is using social media. 14 BLOGS!!! (via IgniteSocialMedia)

Forrester has introduced an important amendment to its Social Technographics approach. They have introduced a new rung on their latter, called Conversationalists. This is behavior adopted by a third of Internet users.


Josh Bernoff explains the new category:

As you can see from the graphic, we added a new rung, “Conversationalists”. Conversationalists reflects two changes. First, it includes not just Twitter members, but also people who update social network status to converse (since this activity in Facebook is actually more prevalent than tweeting). And second, we include only people who update at least weekly, since anything less than this isn’t much of a conversation.

Conversationalists intrigue me. They’re 56% female, more than any other group in the ladder. While they’re among the youngest of the groups, 70% are still 30 and up.

As I’ve written before, I think that the ladder should include a classification of “Sharers.” This behavior is broader than being in conversations; it is behavior that looks at social media tools as important distribution channels for interesting information, both original and shared. Status updates are a part of this activity.

The drop in home sales wasn’t entirely unexpected, with the buyers pushing to close deals in November before they expected the tax incentive ran out. Market conditions are better than they were, but there are unanswered questions still ahead in the Spring. (via CalculatedRiskI

The financial markets reacted uncertainly to Obama’s proposal to remake the financial industry. Here’s a detailed explanation of what the reforms can mean. (via Economist’s View)

With social media moving up on the priority list, the PR/communications function has the potential to become more important and strategic within the corporation. (via SteveRubel)

MediaNews Group has been the model for tight financial management combined with solid newspapering skills. The company is restructuring its debt for more financial flexiblity, with entrepreneur Dean Singleton keeping control, reports say. (via PaidContent)

“Weak connections” can be valuable in driving your digital networking; don’t feel compelled to connect only with those people you can maintain a relationship. (via SocialMediaToday)

For publishing types, a good case study of implementing Drupal as a publishing platform and driving traffic and engagement. (via eMediaVitals)

We’ve all seen Forrester’s Technographic’s Ladder. Ed Boches suggests that a focus of your social marketing should be to attract the Creators, so that your brand will benefit from a broader content footprint. Interesting targeted strategy. (via CreativityUnbound)

The active core of Twitter is growing. Something about the service takes root. (via eMarketer)

Apartment shoppers go online at different times than home shoppers during the week. What’s that all about? (via BeingPresent)

Sometimes a confluence of unrelated inputs adjusts one’s perception of current and future circumstance. The adjustment doesn’t always have a re-orienting impact; often, it is more notable for confirming and strengthening a point of view.

At the end of last week, I shared a summary of Bloomberg headlines that seemed to capture a pirouette in the zeitgeist. The political reversal in California, an expedient populist shift on the part of the Administration, increases in the base drivers of economic growth — manufacturing and production — contrasted with a sharp decline in the value of equities driven by a flight away from financials created a sense of a great disconnect, with everyone on the public stage scrambling for survival and opportunity, despite the absence of an overriding plan for health and recovery.

During this cycle I had several informative interactions.

The first came in a note from my mother in reaction to the post I had written about the financial fragility of what the Department of Labor calls the base U.S. Consumer Unit. My mother, who lives in Rhode Island, is a pragmatic soul whose perception of the world is organized by common sense and who is frequently confounded by the absence of common sense she sees around her. Her basic message to me was that reducing the people in the United States to an average loses sight of the real crisis that is unfolding.

She writes:

Whatever you have, if it is leftover, it is a miracle. Please, take people without extra dollars seriously. It is always frightening, especially if there are children. It is not always a choice of what to eliminate if there has never been enough. Discretionary income is a euphemism. I think the Mass. vote (discounting the awful campaign she had) was about unemployment. Voters are hard to rouse on issues – not on lack of jobs. This is a country where poverty is a moral lack. It is humiliating unless you have a welfare mentality … there are many foreclosures here and many new people in the soup kitchens and food pantries.

Around the same time her e-mail crossed my in-box, a colleague called to point me to an interactive map supplied by the New York Times detailing the results of the Massachusetts election. He shares my interest in the impact of social norms and trends on the political process and was struck by the voting pattern on the map. The urban and quasi-rural parts of Massachusetts voted Democratic; the suburban middle-class voted for the Republican candidate.mass voting map.png

I grew up in East Bridgewater, MA, a town about 35 miles south of Boston that was founded in the 1600’s. It was a solid lower-middle class enclave in the 1960’s that was a classic Colonial town, rooted in conservative Democratic values, with a long tradition of military service. When I was a kid, it was a town in decline, as its two primary industries — farming and light manufacturing — were eroding. During the 1990’s, East Bridgewater enjoyed an explosion as it became a bedroom community for Boston and other employment centers around Route 128.

The results from this election? More than 70% of the people in East Bridgewater voted for Brown.

My colleague’s concern echoed my mother’s: the vote for Brown is a vote to change the center of the issues. Jobs is the core, he said. But, Brown doesn’t stand for anything, and there’s no voice in the Republican party that has a pragmatic point of view about what should be done to right the economy. The voters are going to be moved to make a change, but they don’t have anything to change into that is going to be able to make a difference.

Then, John Mauldin’s letter came. As I’ve discussed before, Mauldin’s letter is a good touchpoint. He only writes once a week, so you’re not innundated with his information flow, and he has an exceptional long-term perspective that he makes very relevant to the immediate and short-term. The net net is that because he takes time to think he makes you think.

This week the letter focused on a book that has captured his attention: This Time is Different: Eight Centuries of Financial Folly by Carmen M. Reinhart and Kenneth Rogoff.

Mauldin explains the book’s approach and the impact of its conclusions:

Reinhart and Rogoff have catalogued over 250 financial crises in 66 countries over 800 years and then analyzed them for differences and similarities. This is a VERY sobering book. It does not augur well for the developed world to blithely exit from our woes. The book gives evidence to my adamant statement that we have a lot of pain to experience because of the bad choices we have made.

Look closely at the Reinhart and Rogoff’s research and a pattern develops: economies over-leverage in order to drive expansion and the significant burden of the debt supresses future economic growth. The current U.S. economy, with $3.70 of debt to every $1 of GDP falls into that classic over-leveraged model. The only way out is through deleveraging; there are no silver bullets, the research determines.

In a classic economic model, inflation can help drive down leverage. To generate inflation, an economy needs demand to outstrip supply. But, an economy that has expanded rapidly through the use of leverage has significant execess resources — both in terms of human and physical resources — which augurs a deflationary environment. The way this works is simple: someone without a job will work for whatever they can get, reducing the potential wages for another worker.

Mauldin points to the current imbalance in supply and demand. supply & demand curve.png

Whether the supply curve is in a flat, normal, or upward sloping position depends on the extent of excess resources in the economy. Today it is obvious that the U.S. economy has plentiful excess resources, so any increase in demand will result in little price change. This will be the case until our unemployment rate of over 17% (the U6 measure) drops by a considerable amount and we begin to use our factories well above our current 68% utilization rate.

Thus, our current economic circumstances guarantee there will be no surprise inflation. Employing those who are out of work and fully utilizing our resources will be a slow process. More importantly, it will take time to get the monetary engine reignited. Banks will have to begin lending and people and companies will have to determine that prospects are good enough to take the risk for expansion and investment. It will take years for these processes to get started because of our over-indebtedness and falling asset prices.

The analysis ends with a data point that bears out my mother’s observation about the increasing personal pain she’s seeing around her.

The consequences of excessive debt are already painful at the household level. The civilian employment to population ratio, a highly important barometer of the average household’s standard of living, fell to 58.2% in December, the lowest reading in 26 years and down from a peak of 64.7% in April of 2000 (Chart 5). Thus, the standard of living has worsened as the debt to GDP ratio has marched steadily higher. With debt to GDP still rising, a further deterioration of the standard of living is inescapable.

Mauldin’s assessment of the Massachusetts vote is that voters are getting “increasingly scared.”

While they may not be sophisticated in economics, they understand intuitively that you can’t run deficits at the current levels forever. That risks killing the goose. Obama was elected with a promise of change. McCain was seen as more of the same. The recent elections (Virginia, New Jersey, Massachusetts) were pointedly saying, this is not the change we had in mind.

Three different assessments with one common conclusion: People can see that we’re facing dire straits and they don’t see anyone with resources or power stepping up with a plan that makes them feel confident.

If we were a parliamentary government, I thought, Obama would be standing for election in a blink.

We’re not, though, and so we’re left to our established political cycles to effect change. In the meantime, people worry and pundits commentate.

On Sunday, I did what most good members of the Media Elite do…read The New York Times. Two columns on the Op-Ed page bookended each other in their simplicity and urgency.

First, Tom Friedman in his column made it all about one thing: jobs. To figure out what to do, go talk to the people who are going to create jobs, Friedman says, and ask them what they need.

Obama should make the centerpiece of his presidency mobilizing a million new start-up companies that won’t just give us temporary highway jobs, but lasting good jobs that keep America on the cutting edge. The best way to counter the Tea Party movement, which is all about stopping things, is with an Innovation Movement, which is all about starting things. Without inventing more new products and services that make people more productive, healthier or entertained — that we can sell around the world — we’ll never be able to afford the health care our people need, let alone pay off our debts.

Frank Rich, in a passionate column that picked apart the popular unrest, Obama’s off-base focus and the consistent impression that the administration is captive to special interests, not to the interests of the people on the street, pointed to a signature moment in John F. Kennedy’s administration, when he faced down U.S. Steel over an unpopular anti-labor move. Where’s that moment now from Obama, Rich wondered?

Can anyone picture Obama exerting such take-no-prisoners leadership to challenge those who threaten our own economic recovery and stability at a time of deep recession and war? That we can’t is a powerful indicator of why what happened in Massachusetts will not stay in Massachusetts if this White House fails to reboot.

Which brings me back to my initial observation: Sometimes, a shift in perception strengthens a point of view.

A protracted period of economic stress, driven by the distorted economic balance sheet, means that as a business owner I have to remain cautious. The markets that I serve aren’t going to expand. Recovery will mean stabilization. Rebounds in production will accompany that stabilization, but won’t be the harbingers of revised trend lines. Competition in every market will stay high and the participants who are most efficient in managing costs and who are oriented towards reducing their leverage will have the most flexibility in pricing. But, pricing will not be the primary determinant in market success: Service and results will be an equally important, and sometimes dominant, factor in the decisions customers make.

Business planning has to be aggressive, but cautious.

Any downturn has to be reacted to quickly and decisively.

When thinking about creating value in an enterprise, the horizon needs to be set over a long period of time, with an expectation that growth will come through a series of hard-earned transactions.

It’s inevitable that these tactics will be executed in a climate of increased taxes.  As a result, businesses will be cautious about hiring.

I’m left with an even stronger sense of what I thought before.   The best we can do is approach the challenge with confidence and determination.  Do as good a job as we can.  Focus as intently as we can on our customers and what they need to do to be successful.  Don’t try to answer the unanswerable.  And step up as a voting populace to demand that the real issues get real attention.  The voters in Massachusetts have fired one of the first salvos; now, our political and economic leaders have to respond by focusing on handling the tough issues, not just playing to win in the short term.

A basic form of web currency that gets discussed more and more frequently is Google Juice.

Say the words “Google Juice” and people are likely to nod their head knowingly. Getting Google Juice is a dark art, easy to understand and hard to execute. People hear Google Juice and they think, Page 1.

As we’ve driven our business at NCI more and more into a Web 2.0 world, the concept of Google Juice becomes the axis point for many discussions. Too often the dialogue settles into a pattern of defining Google Juice as an outcome of highly-specific tactics designed to influence Google’s behavior.

These conversations are flawed. Google Juice is an ongoing by-product of a consistent content strategy that connects with a specific audience. As my colleague Todd Dubner points out, when you try to game Google, you end up gaming yourself. But when you try to serve a market with consistent content, even with a marketing emphasis, you’ll accrue a natural level of Google Juice that will differentiate you from the market.

Last week I spent a couple of hours with our top management team taking them through a case study in Google Juice.

The subject of the study was this blog.

As regular readers know, the purpose of the blog is to provide an outlet for structured thinking and analysis about business issues that I face in my professional life. The blog is not about the company I work for. It isn’t designed to advance any brand goals. It has no commercial bent — I don’t run ads, I don’t sell consulting. It is primarily a strategy and business information workspace.

traffic sources.pngAs a result, I cover an eclectic number of topics somewhat consistently. I write about that loose focus here. I am not focusing at all on optimizing against specific topics or categories.

But I am consistent in creating content. That makes the way that my blog behaves in search engines a direct by-product of the consistency of the content that I create and its relevance to the audience that has developed around it. Dan McCarthy’s ViralHousingFix is a good study in how powerful Google Juice can be.

More than one-third of the traffic to this blog each month comes from search. Let’s see how that breaks down.

First, some basics about the blog.

It was launched on December 2008. I set it up on Blue Host and built it in WordPress. I use the Thesis theme and a number of different plugins. The five that are most relevant to the blog’s Google performance is the All-in-One SEO plug-in, the Google XML site maps plug-in, Calais’ Tagaroo semantic tag plug-in and plug-ins that integrate WordPress with Twitter and Facebook Connect.

content summary.pngdigital footprint.pngOver the past year, I’ve published 361 posts, about 1 per day. The level of engagement on the site is low: there have been 431 comments.

The site has a digital footprint of about 7000 or so individuals. I get 3000 to 5000 unique visits a month. I have 580 fans to the ViralHousingFix Facebook page, which is used a content distribution point. I have another 650 friends on my Facebook profile; I redistribute about half of the content to my personal profile. My personal Twitter account has 1230 followers; I do 7 to 10 Tweets per day. These are mostly focused on sharing content, either from the blog or from other sources that I find interesting. I’ve got another 1000 connections across various site.

Each time I publish a blog post, I distribute it across my digital footprint. I’m not an active commenter nor am I an active solicitor of links across multiple sites. Generally, I’ve focused on initiating and maintaining my digital links to my Community of Interest, a topic I’ve written a fair amount about in the last couple of months.

This activity generates a lot of link activity: Google identified more than 2300 links coming into ViralHousingFix. A disproportionate percentage of those links come from a couple of blogs, like The Kelsey Group blog and WineZag, that update their content frequently and that list ViralHousingFix in their blog rolls.

google keywords.pnggoogle webmaster query rank.pngThe sum of this activity is that ViralHousingFix has a high visibility in some intuitive Google searches that help consistently drive traffic to the site. As Google has indexed the site, it has identified a handful of keywords that help it direct search results. These are show in the chart to the right.

“Media” and “social” are the two primary terms, an accurate reflection of one topic I write about frequently.

The next chart shows the 14 top search queries that drove users to ViralHousingFix in December. (Again, these figures are from Google’s Webmaster tools.)

The table shows the percentage of unique visitors from search to the site that were driven by the term. For instance, 14% of unique users from searches to the site typed in “viral housing fix.” The third column the text of the query and the last column shows where on the search page the ViralHousingFix link showed up.

For instance, 11% of visitors from search in December typed in the words “current state of the economy.” The results that were served up had a ViralHousingFix post in the 6th position on the search page.

This is the essence of Google Juice. When someone searches to learn about State Farm’s social media program, they see ViralHousingFix in the second position. Type in the words “Comscore rental” and you’ll see a post from this blog at number 4. Search for results around “multi-platform marketing” and you’ll see this blog at number 1.

The impact of this becomes more tangible when you look at specific search results. Here are examples of six searches that drove traffic to ViralHousingFix last week.

The first is a query about GDP.

america's gdp shift - Google Search.png

The second is a query about State Farm. My post from last April is the third result on the page.

statefarm facebook - Google Search.png

The third is a query about the current state of the economy. Google served up a post from October.

current state of the economy - Google Search.png

The fourth is a query about social media case studies in real estate.

social media case studies real estate - Google Search.png

The fifth is a query about print advertising leads.

print advertising leads - Google Search.png

The last is a query about Print or Web advertising in real estate. I find this one interesting. This question is a galvanizing topic in real estate, and one about which we have a very strong point of view at NCI. Search for this on Google and four results come up that are highly relevant to the question: a realtor who advocates cutting back print, a question and answer sequence on Google Answers, and a post from ViralHousingFix speaking to the impact print advertising has on web traffic.

The fact that this post, which is not specific to the real estate industry, shows up so high in the results speaks to the power of the Google Juice that this blog has developed. Google associates a high level of relevance and credibility to the blog around real estate, marketing, advertising, media and marketing. The confluence of these categories of relevance, combined with the incidence of words in my post that are consistent with the search terms, brings the ViralHousingFix post high up in the sequence.

print or web real estate advertising - Google Search.png

The cumulative impact of this Google Juice is that ViralHousingFix has a degree of brand authority that makes its reach much larger than its actual traffic. The table below shows the Compete traffic results for over the past year. Contrast that audience of a few thousand with the visibility of ViralHousingFix in relatively general searches online for information about the economy, marketing, social media and advertising.


This is the tangible impact of a social media marketing program. When I speak to groups around the country, I use this example to help them understand how developing a smart content program, and creating a consistent distribution network, will give them increased engagement with their Community of Interest and increased relevance within Google. Over time, they will be rewarded with more visibility on Google.

The difference in a marketing program is that the topics are designed to be more consistent with your business goals. We talked about this during the management workshop. The single most effective way to generate increased visibility and Google Juice is to find out what people are asking about that is relevant to your business goals.

The quickest way to do that is to begin typing a search into Google. I demonstrated this for the management team.

We sell advertising services in The Real Estate Book. We maintain a brand-specific blog at We know that there are some basic topics that we want to cover: The continued value of print advertising integrated with internet advertising to real estate agents who want to have a visible footprint in their market; the importance of advertising even in a down market; and the ways that real estate agents can take advantage of social media to build their business.

Screen shot 2010-01-14 at 5.24.23 PM.jpgIf we wanted to improve our ability to intersect with people who are searching for information about real estate advertising, we would begin to share our point of view about the most popular searches. What are great real estate advertising slogans? What are new real estate advertising ideas? What are some key tips to successful real estate advertising?

There is nuance required. If we were to slavishly write about these topics, we would lose the relevance that we’ve established with our current audience, our Community of Interest. But, using Google can help focus what is on the mind of the broader audience and help a brand drive a content strategy that gives it even more Google Juice.

Looking over the search logs made me aware of one thing: I owe the people who are coming to this blog an update on State Farm’s social media strategy. It’s been too long since I’ve looked at it and the post that is served up in search is stale.