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Wednesday, November 26, 2008

"Everyone" Can't Do It For Ya: Finding Your Tribe

I'm most of the way through Seth Godin's great new book, Tribes.

It's a book about leadership, and the need for leadership at every level to achieve meaningful change in any setting.

It's also about distinguishing between a passionate group that can "go places" and achieve something together, as opposed to a loose aggregation of people who don't really care enough to matter.

Great changes can be achieved by leaders with faith in their vision, followed by a relatively small number of people who help make it happen. One of many examples Godin gives in the book is the animal shelter activist who was able to make San Francisco into a No Kill zone (typically, 70% or more of healthy animals in shelters are eventually destroyed). He went on to replicate the feat in upstate New York. In this case, many people in established agencies actively resisted the initiative, and many others in these locales simply didn't care. The ones who did care made the difference.

Thinking about this I can see many parallels in business and online community, in things I see or do every day. Take Avinash Kaushik's common-sense exhortation that "aggregate" is never the name of your website visitor. If you get bogged down in aggregate statistics, you might be overwhelmed with just how many loosely-engaged, "valueless" clickthroughs come to your website every week. Yes, but why not make an exercise out of ignoring the 80% of people who aren't connecting with you and zero in on just the 20% of those who do? Study their characteristics. Build and grow with them. (And it's easier than ever to study them. This week, using Google Analytics' custom segment features, I hand-built a segment called "engaged quintile," for the 20% of website visitors on a client's site that stayed a long time and viewed many pages. By definition, guess what the "bounce rate" was for that segment? Yes, it was 0%! It's heartening and inspiring when you look at life through that lens.)

I've also been noticing how some online communities take off, and others have much more trouble doing so. I think that's because we often wildly overestimate the importance of numbers, and underestimate the importance of engagement, as Godin says. Even in communities that are supposedly in a niche, we wind up with a mass, semi-engaged group that never takes anything and runs with it. One online community of 2,000 people (sounds like a niche, right?) spins its wheels and goes nowhere, while another of the same exact size takes off. The second one doesn't take off because 2,000 people are doing stuff. It takes off because the core leadership is making this place their main mission in life, and an outer core of maybe 20-30 enthusiasts make it their mission, too. Most everyone else joins in over time because of that passion displayed by 20-30 people. Momentum starts with leadership, and a tightness and clarity of mission that breeds passion.

The first group is doing what Godin calls sheepwalking. The second is on a real mission.

This is also why broad online content plays like Yelp take so much money to get off the ground (and why InsiderPages, Judy's Book, OurFaves, and maybe MojoPages are fighting an uphill battle, or have already run aground). They're very wide, so nothing is happening in a lot of parts of the network. Yelp managed to roll ahead despite their breadth because of the passions of Yelpers, and the relentless effort to build community offline as well as online.

But other, similar communities just have a much tougher time of it. It goes back to another Godin recommendation, from Unleashing the Ideavirus or perhaps somewhere else, to pick a hive you can dominate (read: a genuine, small, focused niche). Weak passion spread across a wide field provides little sense of mission.

TripAdvisor got lucky, and maybe fooled quite a few copycats into thinking they succeeded because they were in a "niche". Sure, travel was a "niche" in 2001. But it's actually far too wide for most aspiring community builders to attempt today.

If you talk to a venture capitalist about a user-generated content "idea", they might ask you about what major cities you plan to roll out in. I hope you expect to raise rounds B and C to the tune of $20 million or more in total, because on a shoestring ($1-2 million) budget, you can dominate maybe one or two major markets, if you throw all of your passion and resources at them. Angie's List started off in Columbus, OH, and expanded slowly. They kept in business for 17 years before some Web 2.0 guys decided to pony up that big $20 million+ to help that business "go big." But the majority of the action is in the hives Angie's List was able to dominate: perhaps six or seven midsized markets. Few large ones. Many markets remain weak, with few homeowner reviews, memberships, etc. And Angie's List is considered to be wildly successful, relative to competitors.

What if you were actually starting on a shoestring as Angie Hicks did, with less than $1 million in capital? Probably you would be best off finding passionate groups of homeowners in midsized markets, and trying to get passionate leadership growing those markets. Try doing the same in a half dozen even smaller markets, even, in metro areas of half a million people. That's sort of how Angie did it, and that's how she grew passionate followings (tribes) of homeowners in the markets she does dominate.

Eventually, building a brand in that way, national dominance is indeed possible. But for the time being, forget New York... unless you really know what you're doing.

Amazingly, Angie's recent round of investors expected some of the proceeds to be used for European expansion. Insane. If you're the size of eBay or Amazon, that makes sense. It makes no sense for a company of mid-sized American tribes like Angie's List.

Meanwhile, I'm working with a niche (very small) ecommerce site that also focuses on community. It is in only one segment of travel, evaluating a particular type of vacation. On this site, in spite of the fact that they are open about the fact that they're trying to sell you a trip, the visitors are extremely engaged. Passionate people are writing reviews. And the "engaged quintile" is spending 10-15 minutes on site, on average looking at 14-15 pages on the site (regardless of their geographic locale or other characteristics). (And did I mention that 0% bounce rate in that quintile?) I believe the reason for the surprising level of engagement with this startup is that they truly understand what a passionate niche is today, and they mean to provide true leadership to that niche. 

A niche like "travel," or "bars and restaurants" sounds like a "niche" to the uninitiated, but unless you've got bottomless pots of money, remarkable and unflinching leadership, a core of 20-30 passionate co-leaders, and a really different hook, those "niches" today are just far too broad to maintain and grow a passionate tribe.

It's interesting that we were able to reach all of these conclusions without a single mention of technology, or "feature sets," isn't it? Makes ya think. At Yelp, Angie's List, Epicurious, Craigslist, and Flickr, the technology ranges from clunky to cutting-edge. But it's always in service of the tribe and its passions.

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Posted by Andrew Goodman




Thursday, April 26, 2007

Search Engine Strategies Toronto -- Seth Godin!

We have a great keynote speaker now confirmed for SES Toronto, June 12-13 (the premier event for search engine marketing professionals) - Seth Godin. The first 600 through the door will even get a complimentary copy of Seth's new book, The Dip.

Don't miss it! This will be the fourth and undoubtedly the best yet Search Engine Strategies conference in Canada. Along with Seth's food for thought, there is a full lineup of fundamental topics (SEO Don't's, Myths and Scams; Meet the Crawlers) and cutting edge tips (Get Dugg!; Perfecting Paid Listings) on tap. There's even a track called "Let's Make Some Money," in case anyone forgets the purpose of marketing. :)

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Posted by Andrew Goodman




Monday, February 26, 2007

Seth on Contextual Ad Targeting

Seth Godin wonders whether media buyers are right to pull ads off Google's and Yahoo's contextual networks because of how loosey-goosey they are with their approach to placement -- they match ads to pages, rather than allowing the advertiser "channel control."

While it's true that Y!&Goog would benefit from better sites joining their networks, I agree with Seth that being so afraid to show your ads on "Joe Schmo's Sports site" could be doing the client a disservice.

I thought we already had this debate. In the early going, lot of us were critical of the contextual ad programs for a number of reasons - mine was simply the poor performance, fraudulent or crapulent publisher partners, etc. Others in the biz, with more of an agency bent (and most likely to cheer for Quigo, Sprinks, etc.), demanded that Google's content targeting allow more direct control of what websites ads show up on, as opposed to forcing advertisers to accept the open-ended "smart matching" concept that used semantic technology to match ads with content.

So... first Google responded with site exclusion. Then, they released a site-targeted flavor of content targeting, in a parallel program. That as a direct response to these agency-style demands. Site targeting allows you to browse a menu of sites, add them to your list, and only show your ads on them.

I monitored ads running in both flavors for several months. A funny thing happened: the old "flawed" content targeting program got better, and my approach to managing those campaigns improved. The ROI came in line with search. Meanwhile, nothing on the "site targeting" side was converting. The performance was much worse.

At a couple of conference presentations I guessed that this is in part because computers do a lot better job of matching my ads against a million potential candidate pages than I possibly can in scanning down a list of 50 so-so potential publisher targets. You settle on 20 or so of these sites, then become obsessed with spending the full budget on just those. They convert poorly, so you've overspent on this handful of websites. That's a fairly typical scenario.

In short, because of computers aiding in the matching, classic content targeting offers more efficiency, as the systems get perfected.

Seth, both the intuition and the data point towards there being nothing inherently wrong with Google's approach to matching ads with content. No, the program isn't perfect, but placing high-CPM ads on big brand sites just because I want to appear respectable isn't exactly a challenge. It's more of the same: take too much of the client's money, and waste it, and claim the blue-chippiness of that approach as a benefit.

Both approaches -- the finicky put-me-only-here approach, and the "ROI-or-else" approach -- work in the marketplace. For very different reasons. Funnily enough, Google now offers two parallel programs to suit different ad buying constituencies, and are working on rolling out multiple ad products down the road, to keep everyone happy.

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Posted by Andrew Goodman




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