Blog archive - October 2011
Use the blog to discuss and comment on the latest industry insights provided by our analyst experts.
This blogpost was first published in Social Media Today, October 18, 2011, http://bit.ly/qHIEmO. Two months ago, a friend of mine up in Austin had a bet: who could make it to Elite status on Yelp faster. He won, besting me with 50 reviews to my paltry 21. Yelp, the site for user reviews, mostly of restaurants, has grown exponentially. There are 63 million people who have visited the site in the last 30 days, and Yelpers have contributed over 21 million local reviews. Indeed, nowadays, a restaurant is more concerned with its reviews on Yelp than those of the local newspaper reporter. In the battle for our attention, there is also Foursquare, the leader in geotargeting or check-ins, which was founded in 2008 and counts over 10 million members and over 1 billion check-ins. Most discussions of Foursquare usually center around the site's position with respect to other check-in services, such as Gowalla and Loopt, but as all social networks vie for user's time, and location-based services are all the rage, why not compare the leader in user-generated reviews to the leader of checking in? Hands down, Yelp wins out over Foursquare. Here's why. Checking in is a one-trick pony. Moving from a nifty engagement tool to an annoyance perhaps bordering on self-promotion or cyberstalking, checking in is losing its mojo. Foursquare, while having added deals to its service, will need to provide a much more robust offering if it is to continue appealing to users -- and survive. As a testament to the low returns of checking in, Facebook abandoned its Places check-in service in August. A mobile-only experience cannot survive. The Foursquare website is just not engaging enough and offers little incentive to visit the site or the opportunity to interact with others. Foursquare's game mechanics, including its badges and mayorships, have survived and continue to enthrall, but there is simply no reason for users to spend any significant amount of time on the website. And without another endpoint, advertisers and marketing partners will have fewer eyeballs and eventually leave. Content provides engagement and long-term value. What makes Yelp so intriguing is the millions of reviews that are self-published by its members. Others can rate these reviews (Cool, Funny or Useful) or share and comment. Because the site is continually updated with fresh content, Yelp pages continually display higher in search results. This is not the case with Foursquare. The only content one can contribute to Foursquare is a few words at check-in, a tip, or a photo. Complete reviews of establishments, message boards, and offline events, as with Yelp, are nowhere to be found in the service. With Yelp, there exists proof that consumers own the brand experience, while with Foursquare, it's not as obvious. In past articles on how to improve the Foursquare experience, experts have suggested that Foursquare roll out a promotions program such that when a patron checks in to an establishment, the manager or business owner recognizes this individual with some type of acknowledgment, discount, or prize. Too little too late: While Foursquare has made three upgrades in 2011 alone, it has added too little too late. It overlaid discounts or deals with its basic check-in service, but it isn’t robust enough. There is a pages feature, in which users can follow companies, brands, and media organizations, but it seems like simply a marketing relationship without any real value delivered to the user. Over time, Yelp has added features to its site and mobile application, including the ability to check-in -- taking aim at Foursquare. The site, in efforts to join the daily deal craze, also includes coupons and specials from local merchants. As such, there is substantial overlap between the services. And the value of sites with user-generated content continues to rise. Last month Google acquired Zagat, a clear indication in the value of user-generated reviews. When using the Google Places mobile app, for example, reviews from Urban Spoon and other sources frequently display, indicating the importance of integrating user-generated reviews with location-based data. And with Google+ picking up steam, expect even more integration between Places and Zagat. However, this isn't to say that Yelp has its issues, too. Both Yelp and Foursquare still have much to prove with large national brands; deals and coupons are largely relegated to local businesses only. Both sites will need to demonstrate much more value to garner buy-in from major advertisers, as well as the media buying agencies that represent them. With its millions of content pages, mobile app, and cheeky branding, social media professionals, marketers, and investors are wondering what will be next for Yelp, but perhaps less so for Foursquare.
Steve Jobs was clearly a brilliant innovator, but what set him apart from other great technology pioneers was his ability to distribute, market, and monetize that innovation on an unprecedented scale. Though Jobs always evangelized great products as the foundation of Apple’s success, it was his inordinate ability to simplify complex ecosystems that has been paramount to the commercial success of Apple products. Simple Can be Harder than Complex “That’s been one of my mantras — focus and simplicity. Simple can be harder than complex: You have to work hard to get your thinking clean to make it simple. But it’s worth it in the end because once you get there, you can move mountains.” – Steve Jobs 1998 There is no better example of this then the App Store. In a customer's buying decision for an iPhone or an iPad, the App Store is at the front and center of the value proposition. The backend complexity of delivering an integrated storefront experience on a mobile device (from application discovery, to purchase, to delivery, to billing) is no easy task. Jobs was at the forefront of driving the vision for a simplified, seamless experience for mobile users to access premium digital content, while simultaneously creating an ecosystem where application developers could easily monetize these transactions. The success of the App Store has been astounding with over 350,000 apps available today, over 10 billion downloads, and a cumulative $2 billion sent to developers for apps sold in the App Store. Interestingly, before the introduction of the App Store, the complexity of completing a mobile transaction was often considered a greater inhibitor to the propensity to purchase then the cost of the transaction, which further strengthens the argument that much of the commercial success of the App Store can be tightly tied to the very concept of simplicity. Former Apple CEO, John Scully, once said of Jobs, “He’s a minimalist and constantly reducing things to their simplest level… He simplifies complexity.” Control the Vision, Own the Ecosystem In order for Jobs to maintain control of his vision he believed strongly in end-to-end ecosystems and, in particular, that the integrated hardware + software approach is superior to the approach of a common software platform crossing disparate hardware providers. In contrast to many of Apple’s competitors, which have focused on select pieces of the value chain (and outsourcing everything else), Jobs advocated comprehensive ownership, not simply to maximize margins but, more importantly, to maintain Apple’s high standards of quality across the full supply chain. Recent industry developments, such as Google’s acquisition of Motorola Mobility and Microsoft’s partnership with Nokia, are increasingly validating the integrated approach as the more attractive long-term model. Products Speak for Themselves, but Perception Drives Reality Jobs has often downplayed the importance of advertising and public relations in interviews but it is no secret that Jobs was the mastermind behind Apple’s marketing brilliance. John Scully has said the concept of making Apple a ‘product marketing’ company was discussed quite frequently in Apple’s early years: “We talked often about how perception leads reality and if you are going to create a reality you have to be able to create the perception… a high level of perception of expectation will sort of tease people to want to find out what the product is capable of”. Clearly, Jobs had a perspective that always started with the product, but it was his unique view of defining the ‘user experience’ that separated him from the pack. Jobs viewed the user experience as the full end-to end journey, from marketing, advertising and discovery, to user interaction with the physical product. The profound impact that Jobs has had on technology, business, and marketing has been unprecedented and unlikely to be replicated anytime soon. Jobs has been called everything from a visionary to a creative genius. He often downplayed his iconic status: “Creativity is just connecting dots. When you ask creative people how they did something, they feel a little guilty because they didn’t really do it, they just saw something. It seemed obvious to them after a while. That’s because they were able to connect experiences they’ve had and synthesize new ideas… Unfortunately, that’s a rare commodity. A lot of people haven’t had very diverse experiences. So they don’t have enough dots to connect, and they end up with very linear solutions...” –Steve Jobs So for future visionaries, some dots worth pondering: 1) Focus on Simplicity 2) Control the Vision, Own the Ecosystem; 3) Products Speak for Themselves, but Perception Drives Reality…
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