Thursday, May 22, 2008

Digital Production Moving Offshore

Interesting story in today’s Wall Street Journal titled “More Digital Ads Are Produced Offshore.” I’m not certain what prompted the author, Emily Steel, to write about this phenomenon just now, as it’s been going on for years. In fact, many Web projects today are done by virtual teams with members around the world -- and that’s probably a good thing, both for those of us who make our livings off the Web and our clients.

In the early 90s I worked for a company called marchFIRST that was formed, grew to nearly 10,000 employees, and then vanished within a year. One of m1’s many mistakes, (apart from bad timing and highly questionable accounting practices) was that it tried to build a “one stop shop” in which every specialty skill set needed for interactive strategy, design or development was available in one company. That sounds great, of course, but in reality it is quite a resource juggling act. If you have highly specialized skills, you have to scour the country, or the world, to find projects that will utilize and expand your skills. Since most offices are measured on their local bottom line, they would prefer to keep you on their own projects, whether or not you are working in your specialty. And so you have a constant tug of war, with agencies pushing staff onto projects regardless of fit in order to keep them utilized, and staff members struggling to stay at the cutting edge of their profession.

Now I have my own agency. I can listen to what my client needs, judge exactly what skills would be most useful to them, and find the perfect staff for their engagement – regardless of location. Sure, it’s cheaper to hire someone in Bulgaria or Uruguay, and sometimes I staff from those countries to keep costs down. But it’s also great to be able to find the perfect person, with availability at just the right time, to meet my client’s needs. And it’s nice for people who work on the Web to be able to live anywhere and still find interesting work. I work with a great programmer who lives in Sweetwater Texas. And another one who lives in a small town in Spain. And another one in Bulgaria. You get the idea. Meanwhile, I get calls from other small agencies to help them with brand and digital strategy engagements. I offer them a far superior resource to the minimally trained 20-something "strategy" resource that most large digital firms have on staff today. In short, it’s a win/win for all, as long as you stay competitive and offer world-class service.

Tuesday, May 6, 2008

The Key Trend for 2008

I think it's clear that the key trend for 2008 is social networking. Both MySpace and Facebook are maturing as platforms, both in terms of their demographics (both are growing most rapidly among the over-35 crowd) and as viable advertising channels. So, if you've already dipped you toe in the social networking waters, good for you! Hopefully it was a good learning experience. Whether you feel your initial forays were successful or not, at least you're on the learning curve. If you're looking to get into the social networking arena, wait no longer. Social networking is bigger than you realize, and its impact is here to stay. A few statistics of interest:

  • 8 – 10% of all time spend on the Internet in North America is now spent on MySpace.
  • Both MySpace and YouTube now far exceed in monthly visitors.

Where to Focus
Your focus this year should be on widgets and communities. Frankly, traditional advertising on social networks is unlikely to provide you with a reasonable return on investment. Click-through rates for ads placed in social network environments are a fraction of the already dismal rates you would get from running banners on a traditional site. Better targeting may improve this over time. Realistically, though, the social network environment is just not optimal for selling most products.

Brand awareness is a different story. I suggest focusing your social networking energies today on building fun, engaging widgets that make your brand relevant and interesting. Widgets are still novel enough that interesting new entries gain rapid trial, at little expense for the marketer. And joining channels or groups with shared interests may provide you with the opportunity to gain market intelligence, watch trends, and push viral promotions.

The Impact of Social Networks on Your Site
As users of all ages become accustomed to common social networking features such as widgets, User Generated Content (UGC), peer reviews and more, they are starting to expect these features in other sites as well. Would you believe that the Wall Street Journal now invites you to link your subscription to your Facebook account so you can see which articles your network finds most interesting?! It's true, and a great, simple way to leverage the network effect in traditional media.

As you plan your marketing investments for 2008 and beyond, start thinking of your site in terms of distributable functionality. If an application is valuable on your site, with the limited traffic that it receives, how much more valuable would it be as a widget that your customers can share with their friends? Or put on their phones? In short, if it's worth creating, it’s worth distributing.

What You Should Do This Year
The marketplace is still very dynamic, so experimentation is the key strategy for 2008. Establish multiple small pilots, set realistic goals, measure your results, learn from your mistakes, and make plans to build on your successes in 2009. And don't overlook B2B opportunities for leveraging social networks. If you’re looking for ideas, or to refine raw ideas into a successful pilot program, we will be happy to help.