Transcript of Andreas Weigend
Marketing 2.x: The Social Data Revolution
MBA 267, Spring 2009-B
Haas School of Business, University of California at Berkeley
Andreas Weigend (www.weigend.com)
Marketing 2.x: The Social Data Revolution
MBA 267, Spring 2009-B
Haas School of Business, University of California at Berkeley
April 9, 2009
Class 3Company: (Part 1 of 2)
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Transcript of Andreas Weigend
Marketing 2.x: The Social Data Revolution
MBA 267, Spring 2009-B
Haas School of Business, University of California at Berkeley
Andreas:
Welcome to Class 3, Marketing 2.x. Let’s start with any comments you might have on the
homework. What about Twitter?
Student:
Too much of a hassle, too interruptive. There are plenty of other mediums out there that
do most of what they’ve done.
Andreas:
Too interruptive – what do the others think?
Student:
I noticed that very few of my friends were on Twitter. It loaded all of my friends from
my email, all my friends’ email addresses. Only a few of my age group, early twenties,
are on there.
Student:
I see a total overlap of the social networks.
Andreas:
You see a total overlap.
Student:
I don’t think people have enough time. They’re competing for peoples’ time and I don’t
think people have enough time to be on more than two, but that’s stretching it.
Andreas:
I want to focus a little more on the homework you did with Twitter. I want to relate it to
what we did in the last class, where we talked about different modes of communication,
where we said that in Twitter, you don’t expect a response. You tweet to the world and
you are free to follow or to not follow somebody.
The interrupt stuff that you mentioned, I don’t quite see, because Twitter only
interrupts you to the degree you want to be interrupted. The expectation of the
other party to be listened to isn’t really there.
Student:
So why use Twitter?
Andreas:
Why use Twitter? Why use Twitter as an individual? Why use Twitter as a company?
Student:
It’s a good tool for discovering things if you know how to use it.
Andreas:
Yes, remember the example I gave you last class, of Ted Shelton wanting to get
somebody’s contact information and saying, “Can anybody introduce me to so and
so?” The next morning, he already had the answer, “Ted, how can I help you?”
Student:
Yes, that was a great example and it showed the power of it, but then those were people
who have hundreds of thousands of followers. If they had posted the same thing to their
blog, they probably would have received a response. If I post something to my Twitter
now, and I have five people following me, who are my Facebook friends as well, who
would have reacted to that? There is no new power in it.
Andreas:
But, do you understand that I was really driving towards the difference in the way
Facebook, where you have mutually confirmed friends, versus Twitter, which is
open and you are free to follow or not follow anybody; that’s a very important
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Transcript of Andreas Weigend
Marketing 2.x: The Social Data Revolution
MBA 267, Spring 2009-B
Haas School of Business, University of California at Berkeley
distinction. That’s a very different communication situation. That is why I worked on the
table in the last class, which I thought was very good work.
Student:
Twitter is a shout, it’s a chance to yell at anybody who wants to listen to you. It has
a very slow, very simple learning curve. If you type a message, anybody who wants to
hear your shout can hear it. Facebook has so many bells and whistles that get in the way
of the simplicity of Twitter.
Andreas:
One thing I would like to tell you is that in some way, we are not talking about web 2.0
or about marketing 2.0. We are really talking about people 2.0. Twitter is an
example of how people relate to each other differently than before. Facebook is an
example of people 2.0. I think that is one of the things that you really have to keep
in mind, that the way people relate to each other, the way people relate to
companies, the way companies relate to people is changing. It’s not primarily that
it’s about web 2.0 or mobile 2.0 or something like this; it’s really about people 2.0.
What about the specific questions we asked in the Twitter homework? What I’ve heard
from you now were very general statements. It didn’t point me to that you actually did
any work. It didn’t point me to that you actually looked at anything or read any of the
references. Can somebody give me some grounding that somebody actually looked at
some stuff and has some insights? What did you learn by doing the homework?
Student:
The concept of relevance, by reading the material and evaluating what I thought was
relevance on Twitter, I realized that Twitter is not a really good tool when it comes to
giving me what I want to see in the feeds.
Andreas:
Okay
Student:
What I really liked about the articles that you posted that condensed information that if I
had to look for that information in other ways, it would take me a lot of time to compile
that kind of knowledge about how people work. I like the fact that you had a reference
not to look at so we could see arguments. What I feel could be improved in terms of
the relevance, is that it’s very easy to talk about things that are relevant, but often
it’s about the use of those tools that makes the whole difference.
For example, you can say I want this and this to happen. How do you implement
that in a UI? How would that filter work? It can make the difference between day
and night. It’s kind of academic to talk about relevance filters if you don’t know
how that would concretely apply.
Andreas:
There are two things about what you said. One is that we don’t really know what the
metric of relevance is in a discovery tool. In search, relevance is relatively clear;
we talk about long clicks versus short click. If somebody actually goes there and
stays there for twenty or thirty seconds, they found something they’re interested in.
Relevance for discovery, the metrics of relevance are difficult to describe.
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Transcript of Andreas Weigend
Marketing 2.x: The Social Data Revolution
MBA 267, Spring 2009-B
Haas School of Business, University of California at Berkeley
The second thing you mentioned was UI. It’s not really the surface structure. It’s
what happens underneath, the algorithms, the box that takes all those data in the
social data revolution that you and others create, and makes sense out of those in
order to show you the relevant stuff. Don’t get hung up in the surface structure,
but think about the deep structure. The relevance function is something that sits
down there, in the deep structure.
We have a grader. I don’t know if you know Steve Park. He is an MBA student here. He
will be doing the grading. I just hired him. The second thing I want to make sure you are
on board with is this little contest we have against the school on the other side of the Bay.
I set the same homework as my Stanford class. I think it will be quite exciting. Steve will
actually be working with my Stanford TAs to make sure you all get the same information
for that exciting way of basically coming up with a cause that is related to the social data
revolution, and of seeing what you can do in defining it as a brand and getting people to
join that brand or join that cause.
Student:
There was some ambiguity concerning what a cause [0:08:07.4 unclear] social data
revolution. For example, you can have a cause that is how Twitter is helping us doing
some things, or it could be a product. That is nothing to do with the social data
revolution, but use the tools of social data revolution to actually increase the awareness
of that particular cause.
Andreas:
What we have to be careful about, and I talked to Facebook legal about this; we can’t
pretend to be Coca-Cola and make an unofficial Coca-Cola page. That’s’ why I said it
has to be related to something we really are. Since this class is about Marketing 2.x or
social data revolution, it has to be something related to this.
I think we are relatively lenient when it comes to non-profits, for instance, those which are
about sharing data. I can think about health issues, for instance. It doesn’t need to be
very narrowly a social data revolution page, but it can’t be something where “We use
Twitter and now we’re selling more burgers at the street corner.”
Propose the individual ones. That is due on Sunday at 5:00. I promise I will look at each
of them. I have Steve; as I said, he’s a very smart kid. He will support you. Enrique,
who is my social media TA at Stanford, he is also willing to help you out so you get a very
good perspective. I care about you doing a good job on that problem set. I think it’s a
fun problem set.
That was the summary. The main point was what we have learned in the last class.
Communication has changed and it’s not web 2.0, marketing 2.0, but it’s really people
2.0.
Today, I’m welcoming Peter Hirschberg. Peter is a very famous guy. Like his
grandparents, for instance, when I had a company from Germany, the second largest
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Transcript of Andreas Weigend
Marketing 2.x: The Social Data Revolution
MBA 267, Spring 2009-B
Haas School of Business, University of California at Berkeley
distant retailer, it turns out his grandparents used to own the company called [0:10:08.4
Spiegel] which was a large, distant retailer like here in the United States.
Peter has done many things. He is mainly known for enterprise marketing at Apple. The
way I know him is we have the same agent. We both are represented by Monitor Talent.
They always say to me, “Andreas, if you can be a little bit more like Peter, you would be
even better.” I figured; rather than trying to be a little bit more like Peter, I’m bringing
Peter here today.
What Peter is going to talk about is not people 2.0, which we did last class, but
enterprise 2.0. How do those tools, those amazing things we learned about here,
these different communication media, how do they change the company inside?
He does this from the perspective of really having done it.
He brought me in one day a his little brother, or something like this, to BestBuy. We
looked at how BestBuy could be wikified. How could a company with 120,000 or 130,00
employees become one big wiki? That’s where I learned to appreciate what you’ve done,
not only in marketing, but also in marketing 2.x. Peter Hirschberg.
Peter:
It never occurred to us when we started our current company that we weren’t going to be
a marketing company. We thought we were starting this thing called The Conversation
Group. I had been chairman of Technorati, which was an aggregator of a lot of usergenerated content.
As the blogosphere started, we were in the middle of this and kind of became the brand
around the whole thing. The New York Times wrote an article about “What did the Shoe
Blogger say they Called Us?” no matter what the topic was because we in the know and
helped build the brand.
The thing I noticed there is we were running around selling advertising and
information. All the customers wanted to talk about was “Oh my God, everything
is changing. Could you tell us what to do?” There were really interested in strategy.
In fact, if you look at any social media company, our selves or Digg, or Federated Media,
or Blogger which is an ad network, they spent half of their time consulting and trying to
explain to brands what the heck to do with this new medium. They asked questions not
unlike what you were just asking about Twitter; how do we actually figure out how to do
something meaningful here that isn’t ridiculous.
In the course of realizing that was what they really wanted to buy from us, we decided to
start a company to solve that problem. What we quickly found is that this social
technology stuff that looks, on the face of it, like it’s a very consumery thing,
because it shows up in our lives like Facebook, Twitter, and applications that are
built for people coming up through school and stuff. Actually, it’s rapidly and
fundamentally changing the nature of how business works. These tools are really
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Transcript of Andreas Weigend
Marketing 2.x: The Social Data Revolution
MBA 267, Spring 2009-B
Haas School of Business, University of California at Berkeley
powerful and they fight top-down hierarchy very well. If your economy collapses and
you actually have to change things, interesting stuff happens.
We started doing a lot of that work for companies and I realized that if you wanted to
be marketing 2.0, you kind of had to be company 2.0. Marketing 2.0 is all about
hooking up all of your customers and networks. If your company isn’t networked
to converse and take advantage of that, you will have all these fabulously
networked customers hooking up with old-fashioned PR organizations and
marketing teams and legal people that don’t know what to do about it. That’s how
we ended up here.
I’ve always been interested in this issue of when new forms of communications media are
created, what the Devil do we do with them? I think that the history of the twentieth
century could be written, for that matter the first few years of this century, with that. If you
classically studied this stuff and Marshall McClewen is still the most interesting guy here.
How many of you ever read anything by Marshall McClewen? How many know who I
am talking about? That’s excellent, quick diversion.
He famously had this aphorism that the medium is the message. In the 1960’s he
was the go-to guru. He would be a combination of John Curry Barlow, [0:14:02.5 audio]
and anybody who is famous today. Everybody went to him because he was
understanding that in fact, television was changing the nature of the audience.
The reason he said the medium was the message is each kind of medium, because
of what it is, fundamentally changes how the audience behaves, how you use that,
and if you’re in marketing, what you do about it.
Television, by its nature, was very mass. It made big audiences; there were three
networks. We were kind of homogonous. We had homogonous news. The story
since then, this fractionalization, has been both more fractionalized, but also
everything we’ve built then has given power to consumers. People are cocreating. Everybody here co-creates, makes blogs, and feeds back. That clearly
changes the nature of things. You can no longer have this broadcast, command
and control form of marketing.
You can see this throughout the history of media. When film was invented, the
first films were shot with a presidium, like it was a stage. It took B.W. Griffin to
come up with the language of cutting and editing and figuring out what to do with
that medium.
When radio was invented, they stuck Vaudeville on it until they figured out what
radio shows looked like. TV news looked like radio until Ted Koppel started
messing with Night Line and satellites, and that medium evolved.
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Transcript of Andreas Weigend
Marketing 2.x: The Social Data Revolution
MBA 267, Spring 2009-B
Haas School of Business, University of California at Berkeley
For the longest time, everybody figured that home computers would be some
version of accounting. I remember before I went to Apple, when I was still in high
school, if you thought about what a home computer could do, the only application
you could think of would be recipes for the woman of the house. It looked like a
database. Literally, you could go back and look at literature and see this is what
people thought.
As we fast forward to today, the essential act, whether you’re an entrepreneur, or a
programmer, is trying to understand the deeper meaning of these and how not to
do stupid things with them. That is kind of what great entrepreneurs do; they keep
testing it.
Twitter is a very interesting one because you know, from this conversation before,
exactly what it is good for. I want to talk about how I think about these things. You see
interesting cases where that medium is good and that starts giving you clues.
For example, it’s amazingly good on ad hoc real time events. When the San Diego
fires happened a couple of years ago, in north county San Diego, Twitter became the
mechanism by which disaster relief was handled. A guy started twittering, “They’ve got
blankets here. The horse stables are being burned here. There is no water here.” The
US government didn’t have a mechanism to do that kind of ad hoc problem get’s
solved thing. Everybody started reading this thing and it became the mechanism.
At SxSW, which was an interactive conference last week, it turns out that Twitter was
the only way to find out which parties were good, and which lectures were good. A
lot of people were talking and needed to know, in real time, what was cool. The other
thing about Twitter is people are evolving in real time things that make it more
meaningful.
There is this hash tag when you twitter, which is a tag. You would tag the thing
“sxsw party” and then what it was. Another friend of mine, Adam [0:17:10.7 Burts], who
ran technology at Technorati, started building this thing that would actually resolve Twitter
in the topical areas, by tag. You could then see, by topical area at SxSW, what
people were talking about. It adds context and meaning to it.
It turns out to be a very interesting publicity-getting mechanism. People who blog
now regularly use Twitter as the headline mechanism to then go get attention. Someone
like IJustine, who is a video blogger will be twitting all day about what she’s making her
video piece on. She posts it so all of a sudden all these people go flying off to YouTube.
All of that inbound energy in YouTube essentially pushes it up and gives it a good chance
of being on the front page of YouTube. It’s an attention getting mechanism. It turns out
that one of the big things that changed in the media, in the old world, the brand’s job was
to gather the attention.
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Transcript of Andreas Weigend
Marketing 2.x: The Social Data Revolution
MBA 267, Spring 2009-B
Haas School of Business, University of California at Berkeley
Today, having the audience be the attention-gathering mechanism is really important.
That’s all my thoughts on Twitter. I looked at Twitter and every day I keep trying to figure
out what this really is. I’ve come up with a couple of interesting uses with brands.
We’re talking to a particular food brand because research shows that at 4:00 p.m.
every afternoon, 70% of moms don’t know what’s for dinner. This drives moms nuts.
They’re like, “At McDonalds you spend too much, not feeding the kids right,” and if you
actually follow in real time what’s on their mind about that, turn that around and
aim it at the audience, you could do a whole lot that is meaningful for the brand.
That’s an interesting use. That’s a bit of a preamble.
What I want to talk about today is this thing that in many ways I just backed into. As I
was working with brands on these various web 2.0 things, I put this together as a talk.
Here is what was interesting; I was working with BestBuy and what we saw was all
sorts of interesting things going on within the company. It was fascinating. The
rest of the people in the company didn’t quite know what was going on and they couldn’t
get enough of a head of steam behind it. That was because something good was going
on but there was also change.
The question is how do you get the senior team to understand that this is actually part of
the growth strategy. The end of the story is what looked like some weird, geeky stuff
going on, has now become the central growth strategy to double the size of the company
and to move away from what they have been.
When I showed up, I looked around and said, “You need a story. All this interesting stuff
is going on but it just looks like so much technical weird stuff from Silicon Valley, or
wherever. It needs to fit inside of a story that your people can believe in and the story
needs to say this is this thing going on and you’re the world leader of it, and the world can
learn from you.”
My pitch to them was literally that I gave a presentation on the history of corporate
storytelling. I think I called it the History of Bullshit. It was just how is it that companies
use narratives to tell stories to move markets? I talked about things that went on at
world’s fairs and a lot of the stuff from the 1960’s, but then I said, “You fit right in that
tradition.”
In this case, I called it “For Modern Times to Open Times: Why the Company’s Wiki
Might be the Most Significant Web 2.0 Revolution of All”.
[0:20:28.3 - 0:21:08.6 audio malfunction]
… consumers and they were … Apple … generation. Anyone who has kind of grown up
with the ability to create content, because there is a whole generation of kids that are
connected, empowered, and using tools that even the … bureaucrat couldn’t have
created a decade ago.
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Transcript of Andreas Weigend
Marketing 2.x: The Social Data Revolution
MBA 267, Spring 2009-B
Haas School of Business, University of California at Berkeley
[0:21:31.1 0:21:33.7 audio malfunction]
… go ahead and say it. The interesting question is what happens when that generation
goes to work and … the legacy of big business and the corporation. It has to be a set up
for conflict and for humor, and anything but fiction.
One of the most eloquent guys on this, that I ran into with BestBuy…
Andreas:
That’s actually for [0:21:52.5 unclear] here. We are talking about you as a fish in the
water, and it’s not our water. It’s difficult for the fish to talk about the water. I want to
know how good would you describe the water you are in, which Peter and I can only …
about.
[0:22:09.0 - 0:22:17.2 audio malfunction]
Peter:
Those are good questions. One is when you want to organize something, you want to …
[0:22:21.4 - 0:22:34.6 audio malfunction]
… you’re putting up stuff on Flickr or you’re blogging…
[0:22:39.3 - 0:23:25.6 audio malfunction]
Student:
… paper memos, people who send paper memos back and forth, the internal mail they
had. It’s so incredible, who it can change so much in thirty years.
Andreas:
One thing I want to do is I will put up a little Google survey, a Google forum. I will
put up a couple of questions on this. One of them, since this is about social data
and the example you just gave, it’s really if you didn’t have any energy constraints,
any monitor constraints, what would you do with social data?
The other one will be what is the most powerful incentive for you to actually
participate to share data? I will send out a link on Monday or so, and ask for five minutes
of your time. I will ask you so I can understand a little bit better about the water you’re in.
The company water – I think we can … we work for companies where stuff still gets
“Please fax this back,” and on the other hand, people only ask for Google… before
anything else. Are there any other opinions about?
[0:24:39.3 - 0:24:43.7 audio malfunction]
… but also for the broader launch.
Who here has a blog? One, two, three, four, five, six, that’s less than 20%.
Peter:
Who uses Facebook? How many of you write stuff on walls? It’s just this version of that.
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Transcript of Andreas Weigend
Marketing 2.x: The Social Data Revolution
MBA 267, Spring 2009-B
Haas School of Business, University of California at Berkeley
Andreas:
Yes, I know.
Peter:
It’s slightly different but it’s just these media move quickly.
Andreas:
What we are talking about here is we want your help, from your perspective as MBA
students at a good school, in telling us what you think we are out of sync and maybe we
can help you a little bit where we know stuff.
Peter:
There is an interesting book on this. It’s called The Net Generation Grown Up, by Don
Tapscott. He’s the same guy who wrote Wikinomics. His company did some research.
In companies, when people get out of school to join, the manager’s office thinks
these kids are impetuous, in a hurry, and they don’t want to sit down, and they
don’t want you to come work with them.
The flip side is generally from the perspective of people coming in, “Why are there
so many meetings? How come we’re planning so much and we can’t do stuff, and
why do you spend so much time on development?” This is a little bit of your
experience.
The collaborative technologies that kind of got mastered socially, like people
twittering and texting and such, when you throw that into the enterprise, they
actually do speed things up. Simply wikis – wikis are pretty good.
I think there is a general thesis that the group going to work today is actually far
more effective and less expensive, gets more done more quickly than the previous
generations. The big threat – in fact, when I talked to Brad Anderson who is
President of BestBuy, he said, “Our senior people get this and the kid coming in
gets it, but this is murder on middle management. Middle management is all about
moving information up and down an organization and organizing stuff, a lot of which you
can dispense with and share this stuff quickly.” That’s where this stuff is going.
To get a flavor for that, there is this guy named Robert Stevens. He started Geek Squad.
How many of you have heard of Geek Squad? That’s the services part of BestBuy.
Robert is a …. He kind of gets it and he rubs a lot of people there because he gets it.
This is what Robert said.
[Video/Robert]
The big problem with companies is that size doesn’t seem to become such an asset
anymore. It mainly feels like a liability. The bigger the company, the slower the progress.
The opposite is supposed to be true. The whole idea that we all band together, and a
large goal of conglomerates was that
[0:27:29.0 - 0:27:30.5 audio malfunction]
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Transcript of Andreas Weigend
Marketing 2.x: The Social Data Revolution
MBA 267, Spring 2009-B
Haas School of Business, University of California at Berkeley
… fact is, most individuals go home every night, and along with Wikipedia and
Facebook, they’re using more powerful collaborative technologies than they’re
using at work. It should be the opposite.
Peter:
Isn’t that cool? In about five years, the level of technology that we all use at home
had climbed past what they provide at enterprise at work. It’s getting to the point that
people just hate the systems at work. Creating really interesting problems like people
twittering who they are and … organizations. Organizations try to lock down Facebook,
but there is actually a trick… network at work and people you want to work with out there.
What’s interesting is you would expect that from a geek. Then I talked to … corporate
community… You think what she has to say is, “We’re going to write memos and tell
people things.” Here is what Jennifer … said.
[Video/Jennifer]
The communications in my profession will look very, very different, very soon. We are
coming from a role of being the ones who owned the messages and delivered
those to our employees to an organization and moving to a role where we are just
facilitators. We are facilitating a conversation or encouraging or enabling and
we’re all going to have to learn some new skills.
Peter:
[0:28:55.5 audio] realize… from top down, which is a very big change in how people
look at where ideas ought to come from. It’s quite opposite from how earlier
centuries looked at it.
Andreas:
Who of you have actually worked in a company before coming to school? All of you have
your rich set of experiences. I also spent two years working in a company…. Peter
laughs at me… My question is really that conflict that you have, between knowing how to
get shit done in your own life, with your friends, text message them or whatever, versus
having to follow procedures and having people approve stuff that you don’t see any
purpose of being approved; how do you see technology play in that world? We are
talking about company 2.0. How do you think technology – and the second question is
do you think there is a link between the internal thinking, how the company works, and
what it can do for the outside world in terms of externalizing it with marketing?
First, if we have some experiences about companies empower you to do stuff, how
personal technology interacts with…
Peter:
Another way of thinking about that is distinguishing between things that just
happened and groups of people getting together and stuff happens, versus what’s
it like when things go through planning and cycles and approvals and the more
traditional decision-making process.
Student:
Could you repeat the question?
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Transcript of Andreas Weigend
Marketing 2.x: The Social Data Revolution
MBA 267, Spring 2009-B
Haas School of Business, University of California at Berkeley
Andreas:
New technology that you grew up with where you can think about doing a wiki with
the people you’re working with at the company, where you can take your
company’s secrets and put them up on Google Docs because you want to get shit
done versus companies, like five years ago, epoxied the USB of people’s laptops
to make sure they don’t introduce any viruses, or companies that don’t allow for
Facebook because they don’t want to have that precious time people have at work
sitting in comfortable chairs and using it. That is a new kind of stuff, Google Docs
or Facebook communication – just hitting up that friend and asking whether they
can help you out, versus these are the ways we do things.
Student:
I would say that I work with [0:31:36.8 unclear]. They were … using … we used
Facebook. They didn’t do those until a couple of years after ICQ and all these chat
systems went in. They did introduce that and they are … using …. I think there is risk
involved with so much information sharing and that’s why these corporations stopped the
pace of technologies. But, they do adopt them as they learn more about them.
Andreas:
What do others think? Ron
Ron:
I was … because… the organizations are starting to use IM as a way of inter-office
communications. Obviously, that also allows you to potentially communicate with
your friends outside, which obviously causes some potential liability for the
companies.
Then the other thing I saw was they started getting … solution… allows you to do
collaborations but it ends up being a larger overhead because they end up hiring all these
IT people to build all these SharePoint collaboration projects, none of which really ends
up being used.
It just ends up being this additional overhead for the company to create an IT department
for the CIO.
Student:
… they tried to introduce a lot of those tools. There is a wiki system, a blog system, and
something very similar to Twitter now, but it’s all internal. One thing they said is they
can’t … out because clients wouldn’t accept it. With wikis, they say they have to block it
out for just the project team because we wouldn’t want teams of the competitors …. The
biggest problem with the tools is that because they have to host them internally, which
means they have to install them, they have one or two daily updates, and they are so far
behind. The idea is good, the tools were pretty good two years ago but they’re just not
where they should be right now. If you want to edit the page of the wiki, you have to write
your own HTML. It’s not that, …
Andreas:
Which is why I use public stuff for everything. Ning, we use for the network, wikispaces,
and stuff like this. Haas is a little bit behind on ….
Another couple of points and we’ll go back to the video.
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Transcript of Andreas Weigend
Marketing 2.x: The Social Data Revolution
MBA 267, Spring 2009-B
Haas School of Business, University of California at Berkeley
Student:
I was at … prior to school, and during the … stuff in the sense of we had online pricing
tools that you could access from anywhere. We had internal and external blogs that were
for either the employees to bubble up ideas or for our consumer base to bubble up ideas.
We integrated it very closely with our marketing department.
The last two years.
Andreas:
Ideastorm
Student:
Yeah, Ideastorm, and direct to Dell.
Peter:
One of the interesting points here is that the changes often come about because
there is some crucible. Dell was an example of that. Dell’s relationship to bloggers;
they had this crisis two years ago. Bloggers started saying how the product sucked. Dell
had a policy that if you want to come talk to us, you’ll come to our site and tell us. If
you’re just out there talking, Dell was a two year old and wouldn’t hear about it.
Finally, it just created such bad will that they split and said… build a base of customers.
Now they have become one of the more advanced companies because they kind of got
it. You see this over and over again; the last election cycle, bloggers uncovered
inaccuracy in CBS news and got the President of CBS news thrown out. Andrew
Hayward, who is now one of the biggest activists in the country; he listened to that.
How many of you have been in companies where there have been official ways of
doing things and you want to get them done so you simply used publically
available tools or put together a little team and did it under the radar just to get
something done. If you wanted to get it done, the official, organized way was too
slow.
Student:
…internal agencies… go somewhere else. Send a fax with all this stuff… signatures, and
if you want to get it done just go to….
Peter:
These are all different versions of the amount of overhead and sludge that was in the
legacy of how companies were built. It turns out that …
[0:36:22.2 - 0:36:41.2 audio malfunction]
… built these big, vertical companies where they did all these functions and all these
advert stats and stuff like that.
Then the moment showed up to produce those transaction costs, like you do them on the
net very quickly. It instantly exposed why much of it was … on companies was silly.
Student:
What we’re taking for granted, and I don’t think it’s really improving yet, is that …
programming is that … are clickable to everything and the price is good. It’s greatest
means of communication, you can’t convince everybody’s company, say SAP or … and
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Transcript of Andreas Weigend
Marketing 2.x: The Social Data Revolution
MBA 267, Spring 2009-B
Haas School of Business, University of California at Berkeley
they can build enterprise level software with a little openness that these tools pursue. It
might be a good … it might be an open source version of and NRP application that forces
them out of the shell, but even to this day, MySQl people are struggling to really get into
big enterprise level deals. There is still a
[0:37:43.7 - 0:37:48.9 audio malfunction]
… versus real stuff. Most of the middle managers …
Andreas:
I mentioned Shoshana Zuboff in the last class, with her book [0:37:59.9 unclear]
and what we hear you say, what I hear you saying is yes, there are strong forces
like middle managers who don’t want to be made obsolete, who actually come up
with the arguments why it’s important to do things the old way and they get all the
….
I think in the bigger picture, economists will actually win here. If some companies do it
this way and some other companies do it the other way, time will tell who will survive.
Peter:
You can also look at how these things have acted. The most critical enterprise acts
change lat. When we see… people used them off the grid and eventually they became
official desktops. Then, eventually that then became the server technology throughout
the mainframe, but that took about fifteen years. There were a lot of humorous moments
in there. People would deny the possibility of these things.
I was at Apple and we were all trying … cool things to have. We were also counter
cultural, but it was really interesting to watch who much people were like, let’s just… and
that’s how people relate to …
Peter:
What’s interesting is a lot of people talk about … the last five years, it was only five years
ago that bloggers went to a political convention. If you’ve actually been to a political
convention in 2004, … they don’t belong here. Today, it turns out you can’t edit a
newspaper without … with your audience. [0:39:48.9 Sulzberger,] who runs the New
York Times, told me, “My job is to curate this thing with our audience”… CBS news got
thrown out, CBS news was accused of a scandal… some of the CBS things that said
bloggers were just a bunch of guys in their pajamas, whereas the Wall Street Journal
said, “CBS stonewalled a guy who was in pajamas….” The following year…brands were
like oh no, our customers are talking about us. The Dell example is a really great one.
The reaction was not, “Isn’t this wonderful; our customers are talking. There is an
interest we can work with,” because marketers aren’t like that. “We better shut
them up before they destroy us. Let us kill off the conversation ….” This was the
mentality of forward PR Communications, at the possibility that their customers
might have something to say.
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Transcript of Andreas Weigend
Marketing 2.x: The Social Data Revolution
MBA 267, Spring 2009-B
Haas School of Business, University of California at Berkeley
The following year, people got a bit more enlightened, as some of those first
campaigns came up, to use the energy. The Dove Real Beauty campaign flawlessly
repositioned a beauty product away from … position was “There is something wrong with
you, ma’am, we’ll fix it.” The Real Beauty Campaign was “You’re fabulous, your curves
are fabulous,” and then come online and talk about it. Dove used that audience energy.
They were one of the first to do that.
Audience:
Actually, here is one position you can take and say, “Is that really the case?” or is Dove
just replacing skinny young girls by not so skinny older women. It’s just as … just as
selective of who… go back to the previous item – where is the audience participation?
Peter:
It’s on this page here. I skipped over it but I’m happy to include it. This is the
conversation page where people were actually replying on. This is what it actually looks
like on the report. I was running all the online activities for Estee Lauder, around 2001 or
2002. Everyone had the Internet and everyone had email. Social media was just getting
invented that year. We knew that our women were talking. We also knew that brands
like Mac Cosmetics … for conversation. The whole conversation behind that brand is
there are famous makeup artists, there are makeup artists working in the stores, and
there are you. You, like that brand because you kind of fancy yourself as a makeup
artist. It’s conversation. You should all be talking together.
We could not bring the company together to even talk to each other, even though the
women went to the phone in corporate communications and … email, we were scared if
we let the customers talk to each other, we would lose control, or someone would
say, “My face melted,” and we’d all end up in court.
What this meant was we so stayed in our little hive that this woman in New York started a
site called “Makeup Alley”. It was a frank conversation amongst women who love ...
cosmetics products. It was the only place you could go to find out what was different.
We would release a promotion in the morning, and it would be like the Nielsen’s, they …
to find out if we were any good. If you wanted to know, who were the women in New
York that would really love Chanel products, because Lauder was launching one. We
didn’t know; we had no CRM that knew; this other lady knew. We had strategically not
heard them.
When Dove shows up and does all this online stuff, they’re talking directly to their
customers and Lauder is still like, “We don’t know who our customers are if she went to
Bloomingdales.”
Andreas:
This is important and what I wanted to get across. I don’t want you to go home
and say the … marketing 2.0…. It’s not because of the ads they show. It’s
because of what’s happening in the background, what’s happening underneath.
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Transcript of Andreas Weigend
Marketing 2.x: The Social Data Revolution
MBA 267, Spring 2009-B
Haas School of Business, University of California at Berkeley
Peter:
The [0:43:30.9 unclear] that made the ad talks about how advertising itself is going to be
the big idea for the big ideal. There are a couple of ideas here. The first is that campaign
had a different … collaborative idea which was instead of making it look wrong, we’ll just
celebrate that they’re right. That’s a traditional thing.
The execution of it, both social and economically was new. Economically because
they didn’t buy any TV for the campaign. The money went to outdoor and the
money went to online. Also, the evolution for the commercial that they built for
this, they had a commercial that won first prize on [0:44:06.9 unclear]; they never
aired it on television. It got millions of hits on YouTube because it was cool, they
don’t have it here, but it’s the one where this woman sits … all these people who have
this fancy beauty stuff … all made up… stretching her neck or something like that and it
shows how people are….
The point is, that had huge distribution because it was actually reaching …. They just
had architected something differently. I think the most interesting point about this is
they were letting their customers carry some of the weight. This is an early one, but
the point of this slide was merely to say that one year after brands were basically trying to
whack their customers, somebody figured out what to do.
Two years ago, we thought this social network like Facebook, which seemed to be a
youth phenomenon not relevant to the rest of the world… this is a list of every ….
Perhaps the most interesting effect is we’ve gone through from the press, to marketing
like – not like the … is. When you throw this stuff against the enterprises… when the
cost of executing things in enterprise stink and we actually have to reinvent stuff pretty
quickly. What’s interesting about that … is 130,000…. That would be an interesting ….
If you could see where this starts… the conditions are perfect to observe it first, and then
it will go elsewhere.
One of the first things you see is this activity is murky. It bubbles up from the
bottom. … start, this is kind of like evolution is, I believe…. Interesting happens
and then it bubbles up … the idea succeeds. It was not top-down stuff. It wasn’t
like the head guy saying it; he just didn’t kill it off.
One of the first places this started actually was in marketing. It was when a couple
of advertising men decided it would be smart to listen to the market. They wanted
to listen to the market because they were trying to build better advertising for
HDTV. They knew customers had a lot of problems with satellite and HD.
The figured, “Let’s go ask our employees.” The old way of asking your employees was
you take a clip board and you say, “Tell me everything… when you buy an HDTV….”
The new way is they said, “Let’s build a social network, which we’ll call BlueShirtNation.
All of our employees will talk and we will have them please tell us what the experience
their customers are having.”
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Transcript of Andreas Weigend
Marketing 2.x: The Social Data Revolution
MBA 267, Spring 2009-B
Haas School of Business, University of California at Berkeley
When they built up a social network they learned that the employees said, “Thanks
for the social network. We have a lot to talk about. Now we’d love you to earn the
right for us to talk to you about your marketing problem because we’re not sure
that… every day.” They actually control… by someone else.
On the other hand, employees use this to not just connect to each other, but to
solve very interesting problems. I want to go into that. Here is Steve [0:46:56.1
unclear] and Gary Nolan, on what happened when they built this enterprise tool and then
let their employees have it. They noticed something that brands notice about their
customers.
[Video/ Steve and Gary]
They were in charge. The users tended to own what the future of the site looked like,
and the philosophy behind it. If we didn’t live up to the terms of that contract, we weren’t
going to have any conversations.
Corporate IT wasn’t involved. It was outside. It was the skunk works, or whatever
you want to call it. We didn’t get to come in with a mandate saying, “Here is the
tool we’re going to build and you’re going to use it and this is how you’re going to
use it,” it was very market driven, I suppose. Tell us how to build this so you’ll
come to our site.
Peter:
Isn’t that lovely? Because it wasn’t coercively … emergent success thing there. One of
the … about this stuff in enterprise is … collaborate in enterprise; it has to be a killer
app. It has to be a really good reason to do the whole thing. The killer apps in
Facebook includes… people and quite literally the power of Facebook. There was a killer
app of instant messaging because you wanted to keep in touch with someone.
When you throw something at enterprise, you actually need to have a problem to
solve or else you’re just throwing technology at something.
Here is one of … problems that came up. The corporate HR… [0:48:30.0 audio] and this
is what BestBuy people look like. How does corporate communications tell … ?
Andreas:
You … in the world where you were forced to make some choice about your 401K. We
have all seen a large list of doubts. What is an innovative way of helping each other on
that? Would you do a wiki or how would you do that if you were in charge of HR at a
large company that was trying ….? Would you organize information sessions, where HR
comes and tells you about the choices? Would you make a company corporate inside
the firewall page where they can click to the information, send you back the results?
Student:
If I were the head of HR, I would choose someone to work, saying these are for typical
profiles for 401K selection that employees choose… find a way to let any employee see
what others are choosing.
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Transcript of Andreas Weigend
Marketing 2.x: The Social Data Revolution
MBA 267, Spring 2009-B
Haas School of Business, University of California at Berkeley
Andreas:
Okay, that’s one but the key problem is that you need to get the attention of the … as you
are going to be in that … trying to sell that HDTV. Your interest is … many directions; the
customer wants your help and that flyer you got from HR that says this is where you can
go to see what other people are doing. How can you get the engagement of people?
Student:
You’re saying you need to get them engaged and interested. I would question that if
you go to enroll as many as possible, just enroll them and have them….
Andreas:
Okay, power of the informed. That is something that … of the United States….
Metadata to actually change the … yes, that has happened.
Student”:
I … viral market… someone said if you found a dollar today, figure out how many years
until you retire; in sixty years, that dollar would be worth forty dollars. It’s kind of a little
game, trying to … each dollar and see what happens. If it’s good enough for a game,
people will pass it around to others.
Peter:
What’s interesting is, if you kind of reverse engineer all this, two things come out. One is
they’re all about as attention getting…. These … [0:51:17.5 audio] Games and game
theory are usually underappreciated in all this stuff. We play games first….
What they ended up doing is they decided on how they could video…. I’ll let Gary
explain to you what happened.
[Video/Gary]
We wanted to have a video contest… around the 401K. We want to increase …. Gary
and I looked at each other and said, “Okay, we’ll help you but good luck.” Enrollment
percentage of employees was around 18% to start with. After the contest, it went up to
about 47%. That’s about 40,000 employees that signed a 401K who hadn’t before,
because I would argue the employees had a talk about the 401K, in their voice, and
in their way and they connected with others.
I’ll show you a clip of the lead video… Brad Anderson showed this to his Board of
Directors. I think all guys … this is the thing that changed the outlook of HR.
[Video]
[0:52:40.7 audio] … first 3% contribution they make out of your paycheck. They make ..
$.50 on the dollar for every 2% afterwards. Don’t you get it? … in the face! [music]
Peter:
One of the reasons I think this succeeded, and if we recall the numbers, it went
from 18% to 47%. They actually took their audience seriously. They actually turned
their employees from spectators of … and actually gave them a … and said you have to
write a video. By the way… whoever gets a prize….
In any group of five or six people, just like you when you go off in a team of business to
solve problems, someone is better at writing stuff, someone is better at videos, someone
is better at…. They all assembled and someone figured out and explained that when you
turn your audience into producers, a lot more work, and attention gets done and then this
stuff rolls and it got spread.
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Transcript of Andreas Weigend
Marketing 2.x: The Social Data Revolution
MBA 267, Spring 2009-B
Haas School of Business, University of California at Berkeley
Here’s another really interesting one and it comes up as an enterprise…. They have
something called the Online Forum there. You go to BestBuy, there is a person on the
floor who checks prices,… or checks availability. They had two different systems that
were difficult to use and they didn’t have access to the Internet. They decided they’d
better fix it.
Normally you’d hire a guy to teach us all. How many of you work for consulting
organizations ….? Let me just cheat and get to the punch line of this story. The idea
consultant was the … turns out were a bunch of BestBuy employees who normally were
selling DVD players and TVs on the floor of BestBuy all over the country, who came in
and wrote the system. Here is Scott McIntyre, who I talked to, who explained what
happened. I had to ask about this four times to get convinced that “You mean the IT
production system that ended up on the floor was written by BestBuy field employees
who just came in for two weeks, to hack, and then went home.” This didn’t generally fit
my model of how stuff was supposed to get done.
[Video/Scott]
We actually got a request for an estimate on how much this was going to cost. The
thing was, it was going to end up costing us $6.5 million. The company that was
going to build it for us said, “We could probably have a proven concept out to a test
district, which is about ten stores, in about eight months to a year.” We got six
employees up to the corporate office, paid for their travel, paid for their hotel, and
ended up spending about $250,000 and six weeks later we have proof of concept
out to that test district.
Peter:
Most of the money was spent on hotels and pizza. The kids were so young they couldn’t
rent cars. They were just happy to come out and do it. When the system went live – this
would be the numbers here. It was $250 thousand, as opposed to what the initial system
wanted, and it was in a fraction of the time.
When the system was built, the IT department tried to call up the ISP that hosted this
thing and it came up and said, “Don’t launch that.” They were so scared. They didn’t
want to launch officially because something bad would happen. I think unofficially it was
if that went live, it would raise an awful lot of questions about the….. Fortunately, the
contract was written between the training departments that did this. The ISP went live.
There was one support request in two years. They now recovered an entire … which as
it turns out, a bunch of people who know a lot about computer science and networking
actually work at BestBuy because it’s a good summer job. They are doing systems and
… it just bubbled up from the bottom.
I’m going to move on because the video clip that I have tells that story but I think we kind
of covered that story. Do you want to do a break now?
Andrea:
We can; quick break and be only … and we’ll be back at 3:20 for the second part.
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