Business

Recruiting New Employees in a Web 2.0 World

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Facebook has overtaken MySpace and other sites to become the largest and most popular social networking choice for young and old alike. And while LinkedIn still maintains an edge over Facebook as a professional networking resource, Facebook has done a very effective job in blurring the lines between personal and professional social interaction on the web.

The latest development that proves this is the increasing popularity of company “fan” pages on Facebook. Anyone can start a fan page showcasing a company they know and love … and many employees have taken the opportunity to create pages for their own organizations. My own company, Mullin/Ashley Associates, is no exception. Currently, Facebook offers more tools for uploading interesting content such as photo galleries and video clips, along with providing a great platform for news updates, wall postings and chat.

Going further, some companies have elected to turn Facebook into their vehicle of choice to promote themselves to prospective employees. Posting videos of employees talking about their positive work experiences … including pictures of the office environment … showcasing employee events … all of this brings a company to life far more effectively than just by advertising open positions on web job boards such as Monster.com.

The beauty of using Facebook in this manner is not only that companies can make a bigger and better impression, but they can do it without having to incur any significant cost. And if it’s done particularly well, it might even result in lower costs, as fee-based recruitment ad placements can be reduced or even eliminated.

Increasingly, people are being connected through social networks, and this phenomenon will only grow in the months and years ahead. In such an environment, companies that champion “content, creativity and community” will be the winners. That goes for hiring, as well.

The Newest Wrinkle in Social Marketing: Getting Paid to Praise

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It had to happen. With the dramatic rise in the popularity and number of blogs and other social marketing sites on the web, sooner or later merchandisers would get wise to the fact that they can use them to pitch their products and services. And for just pennies on the promotional dollar.

How? By offering free merchandise or cash payments to bloggers who will then be favorably disposed to write positive reviews about new products. And with blog postings being indexed by search engines in just a few days or even a few hours, it’s an incredibly cheap way to gain positive exposure for their products and brands in cyberspace.

… Not to mention that many readers will not be wise to the authors’ tidy mercantile relationships with the companies whose products they are reviewing. This despite the efforts the Federal Trade Commission is making to update its nearly 30-year-old advertising guidelines to cover the new new-fangled techniques brought forth by the cyber revolution — tactics few could even have dreamed of just a few years ago.

How long will it be before the FTC has these new guidelines in place? Who knows? For the moment, there are no hard-and-fast rules regarding paid reviews. But there are some moves being made within the industry to provide “full disclosure” to readers. Blog entrepreneur Ted Murphy of IZEA Social Media Marketing requires his “for-hire” bloggers to insert an icon next to each product review that states: “Sponsored Post. 100% Real Opinion.”

“One hundred percent real opinion?” Does anyone seriously believe any sponsored post will be completely free of bias?

Of course, sponsored bloggers could write a negative review … and then watch as it’s the last time they ever have the opportunity to write for that supplier. Practically speaking, that’s not going to happen — and everyone knows it.

A more fundamental concern is what paid pitching is doing to the credibility of the blogosphere in general. If people find out that even one or two product reviews they read turn out to be nothing more than disguised advertising for the merchandiser, it could cripple the credibility of bloggers overall in the minds of those readers.

This whole phenomenon has the risk of turning a highly powerful consumer information resource into a caricature of itself. Those who read product reviews tend to be the more cautious – or the more suspicious – consumers among us. And so, despite providing every assurance that bloggers who are paid cash compensation or receive merchandise freebies for their posts will remain honest in their opinion … that’s not how it’s going to be received by the audience.

Advice to bloggers: If you value your credibility and your reputation, don’t accept quid pro quo compensation from companies whose products you are reviewing. Advice to consumers: As always … be careful of what you read online.

UPDATE: Two years later … and not much has changed. Here’s Honda’s latest shenanigans.

The Latest NYT Financials are Atrocious

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The latest quarterly financials have just been released by the New York Times Company … and the figures are worse than even the more pessimistic observers had forecast. Not only did the company lose nearly $75 million in the first quarter, it is also laboring under a $1.3 billion debt load. Rival newspaper The New York Post was quick to report that the Times’ cash position, net of upcoming debt maturities, is a mere $34 million.

The looming cash crunch is causing some analysts to speculate that the venerable Gray Lady is slouching towards insolvency.

Not surprisingly, the biggest cause of the financial tailspin is plummeting ad revenues. Declines in classified advertising led the pack (down ~45% compared to the same quarter last year). National advertising fell ~22% and retail advertising declined ~25%.

What’s even more startling was the weak performance of Internet advertising. Instead of growing as had been the case up to now, those revenues actually posted a decline of ~6%. This result blows a huge hole in the notion that online advertising will take up the slack in print advertising.

What’s become abundantly clear is that newspapers have yet to adjust to a world in which they no longer have a near-monopoly on the news in a city or a region. The fact is, for years newspapers were able to bankroll large editorial and administrative staffs precisely because there were few if any other ways for local or regional advertisers to reach their audience. So they were able to charge a pretty penny for advertising space and get away with it. A lucky few cities had two competing newspapers, but many have had single-paper monopolies for years. TV and radio advertising represented alternate promo options, of course, but not in the same medium.

[For those who think that the New York Times, by virtue of its reputation as one of the United States’ leading newspapers, is less a local/regional paper than a national one, they are correct — up to a point. National print advertising represents only around 45% of the paper’s advertising revenues.]

The simple fact is that people today have far more choices online for local, regional and national news – practically all of them free. At the same time, the advertisers have more options than ever before in choosing where to advertise.

So what’s next for the New York Times Company? More staff layoffs? Unpaid furloughs? Halting pension plan contributions? Perhaps all of these … plus trying to sell off other assets like the Boston Globe or the Boston Red Sox franchise.

The all-too-likely outcome: None of this will make much difference.

Twitter: The “Next Big Thing” in Marketing Research?

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By now, it’s obvious that Twitter has become the newest darling of the social marketing world. With somewhere around ten million users today and growing exponentially (there were fewer than one million just a year ago), it’s clear that Twitter has successfully made the leap from novel curiosity to mainstream communications vehicle.

Indeed, Twitter may have worthwhile applications beyond simply the ability for people to update their status information in real time from a mobile phone, computer or online portal. In fact, Silicon Alley Insider recently ran a contest inviting readers to submit their ideas for turning Twitter into a financially viable social network.

The winning entry? An idea from Chicago communications agency Denuo recommending that Twitter charge marketers for access to opted-in users willing to field an occasional research question from brands. Twitter would also charge for dashboard access to the research analytics.

I think this idea has a good deal of merit. Instead of incurring the cost to design and deploy custom research projects, simply tap into Twitter’s existing platform and huge user base to “anonymize” the data and open it up for mining.

Of course, some people voice concern that Twitter will soon be overrun by brand-related messages and advertising. That’s actually begun to happen as certain brands “follow” twitterers ad nauseum — so much it almost constitutes a form of cyber-stalking. But by offering operating an online research panel such as this, Twitter has the potential to deliver scads of valuable, actionable data at the speed of “now.”

Like YouTube, Twitter is actually going to have to figure out a way to make some money for its investors, and soon (imagine that?). So this idea bears watching.

Another Win for the Tax Man?

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The threat of collecting sales taxes for Internet-based commerce has been rumbling in the background for years. But the latest news out of Washington may mean it’s finally coming to pass. And it’s generating its share of controversy.

A bill is expected to be introduced soon in Congress that would force Amazon, Overstock and other Internet retailers to collect sales taxes from their customers who shop online or through mail order. Co-sponsored by a Republican senator and a Democratic congressperson – which means almost certain passage – the bill would require states to inform retailers whenever there is a change in their tax code. This will have the effect of simplifying the tax collection and data reconciliation process.

State officials are understandably excited over the prospects of gaining additional sales tax revenue. And why wouldn’t they be? After all, sales tax receipts have dropped off in recent months due to a general decrease in retail activity. To them, this seems like a quick and easy way to replenish their coffers.

Plus, some brick-and-mortar retailers are surely happy about having a more level playing field. No longer will they have to compete at a disadvantage against online retailers that are saving their customers 6% or 7% sales tax on every purchase.

Of course, sales tax regulations have long been a thicket of complexity. In fact, a tidy number of sales tax collection software/service companies have sprung up over the years to help retailers make sense of it all. Not only are a myriad of different sales taxes set by individual states, but cities and other municipal entities within states can also set their own sales taxes as well.

To add even more to the potential confusion, each state has its own individual laws regarding what type of merchandise is taxable, or whether things like shipping expenses are taxable. So collecting the correct figure is often a tricky business, even for large online retailers.

As for sellers having multiple physical locations in addition to their online presence, depending on where those business locations are in relation to the online consumer’s place of residence can make for an even more complicated picture.

Are we having fun yet?

It’s no wonder online retailers intensely dislike playing the role of tax collector for the states. On the other hand, government officials absolutely love the idea that they can collect new funds without actually having to raise taxes.

And that’s what’s so interesting about this latest maneuver. No one is talking about an official change in tax law. Technically, online shoppers have always been required to keep their receipts and pay tax funds to their home state when filing the yearly state tax return. But be honest … do you know anyone who’s actually ever done that?

UPDATE (4/28/09): BusinessWeek is reporting that the particulars of the legislative bill are still being drafted. Of course, this isn’t the first time movement on a bill has been delayed in Congress. The magazine is also reporting that the bill’s passage is not a foregone conclusion … although opposition in this Congress appears to be lower than in previous ones. We shall see.

Is “Pay to Play” the Future of the Web?

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More than a few feathers were ruffled by Kodak’s announcement that the multiple millions of users of the company’s Kodak Gallery online photo-storage service may have their photos subject to deletion if they don’t begin paying an annual service charge ranging from $5 to $20.

Is this the beginning of a trend? Some web observers seem to think so. David Lazarus, in his recent Los Angeles Times business column, draws a parallel to automated teller machines that were introduced by the banking industry back in the late 1970s. At first, there were no service charges assessed when using ATMs. The banks wanted their customers to start using ATMs, thus helping to reduce the demand for more labor-intensive (read: expensive) teller stations.

Then, after a number of years of free service the banks began charging ATM service fees for out-of-network transactions and even some in-network ones. The idea was now that consumers had become comfortable with the technology and the “24/7/365” convenience of the machines, they would accept the fees without resistance.

“Why should the Internet be any different,” Mr. Lazarus asks?

I think the comparason isn’t totally apt. It’s true that there is a cost for Kodak or others to maintain the infrastructure (hardware and software) to provide archiving and other web-based services. But the fact is, those costs are not nearly as high as the “brick-and-mortar” expense of building an ATM system.

What’s more, the banks were in a stronger position to move en masse toward charging fees. After all, they operate under a government-issued charters. The barriers to entry – both regulatory and financial – are far more onerous than anything in cyberspace.

Anyone ever heard of Flickr?

And that’s the real challenge today. Who is going to be the first to jump into the fee-based waters? And will anyone else follow? Put it another way: will others follow the leader … only to find themselves drowning in a sea of new, free alternatives that spring up in response?

Just ask the newspaper industry how simple it is to successfully implement fee-based services on the web. There’s your answer as to how easy “pay to play” will be to implement.

No froth in the beer industry …

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Can it be possible? The Beer Institute trade association is reporting that U.S. beer sales are actually declining.

Chalk up one more piece of evidence showing that this economic downturn is a vastly different animal. In previous periods of recession, beer sales did not really suffer. Perhaps that’s because it’s been a relatively inexpensive discretionary item. If you’re feeling down about the economy or your personal finances, why not drown your sorrows in a nice cold one?

Not so this time around. The Beer Institute reports that domestic brew sales have declined 4% in the first two months of 2009 compared to the same period last year, while import beer sales are off a whopping 19%. Not only that, foreign beer sales registered a decline for the entire year of 2008 as well.

Shipments from Mexico have fallen nearly 14% so far this year compared to last, led by Corona. But Corona is still America’s top-selling foreign brew, beating Heineken by a long shot. Speaking of which … beer sales from Holland have declined by an even bigger percentage (more than 25%).

What should we make of these statistics? Are Americans now tightening their belts on absolutely everything?

Or maybe we’re doing for our health what we’re also doing for our personal savings rate. Perhaps switching to something better than brewskies – like heart-healthy red wine? We’ll have to wait for the latest statistics from the National Association of American Wineries to find out.

What is YouTube’s Business Model?

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The information is starting to trickle out. YouTube is hemorrhaging red ink. Credit Suisse estimated recently that YouTube will make approximately $240 million in advertising revenue – revenue that has come from a cavalcade of different forms of advertising, licensing and partnership deals.

Balance that income against estimated costs of over $700 million and you get a loss of more than $450 million.

What’s wrong with this picture?

Advertising Age magazine has just reported that YouTube is now selling advertising against 9% of its video views. That’s up from 6% a year ago. But those figures are still paltry. And it’s really no surprise since so much of YouTube’s content is user-generated, devoid of any significant interest and thus not really “monetizable” for advertising purposes.

No one – not even parent company Google, with a market capitalization of over $100 billion – is going to put up with such a scenario forever. The question is whether YouTube will ever be able to generate enough ad revenue to offset the huge bandwidth and storage costs associated with managing a humongous repository of video material. It’s a question that, even if Google’s own senior management doesn’t ask, the company’s shareholders should.

Paid subscriptions, anyone?

Now, before we get too breathless about the mobile media revolution …

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For those of us in the communications field or otherwise on the bleeding edge of communications, it may come as something of a surprise to learn that the rest of the world isn’t all that engaged with (or even interested in) many of the communications techniques and gadgets that so absorb us.

To underscore this point, a study published recently by the Pew Internet & American Life Project reports that only about one-third of the adult U.S. population finds mobile Internet communications to be particularly interesting or attractive to them. And, horror of horrors, the remaining two-thirds aren’t being pulled by mobility further into the digital world.

The Pew study categorizes information and communication technology users into different sub-groups that have been given catchy descriptive names. Five of them, labeled “digital collaborators,” “media movers,” “roving nodes,” “ambivalent networkers” and “mobile newbies” collectively make up just over one third of the population. The study combines these groups together as people who are “motivated by mobility.”

On the other hand, a clear majority of people fall into a second segment dubbed the “stationary media majority.” Sub-groups within this segment include “desktop veterans,” “drifting surfers,” the “information encumbered,” the “tech indifferent,” and those who are just simply “off the network.”

While it may be tempting to assume that the ranks of the “motivated by media” segment will continue to grow at the same rapid pace (or even faster) going forward, the Pew study throws cold water on such a notion. Indeed, it finds that the “stationary media majority” segment, far from becoming more comfortable or accepting of cell phones and other mobile devices, is actually displaying increasingly more negative attitudes about them.

Maybe it’s an understandable reaction to the relentless press of new technology for people to push back like this. And we’ve seen it before – back in the 1970s and ’80s with the high-tech/high-touch phenomenon when desktop computers were being introduced in a big way into the office environment.

People do come around eventually, of course. But it takes longer than many would expect. And it’s really too bad when some early adopters respond with impatience and exasperation. Instead, why not just chill and give the rest of the world a chance to catch up?

Even better, let them do it on their own terms and at their own pace.

Conference Centers to the Fore

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What a difference a few months make. “Way back” in 2008, high-end resort properties in exotic locations were doing a healthy business hosting corporate events. Large corporations have long been a core resort customer segment that has delivered volume business year after year – major contributors to the bottom line even as resorts have also attracted their share of weddings and other smaller events.

The economic meltdown has now brought hugely negative publicity to corporate events held at resorts, the result of news reports that federal government bailout money has gone to pay for them. These events have been described by politicians and the press as “outrageous,” “excessive,” “junkets” and “boondoggles” – places where well-heeled business types get to wine and dine and cavort in the sun on the taxpayer’s dollar.

Even the AFL-CIO union hasn’t been immune to the criticism, coming under fire for holding its annual convention at the exclusive Fontainbleau Hilton resort property in Miami Beach.

While one can certainly fault these companies and organizations for being politically tone-deaf, the fact is that business does get carried out at these events. Even in today’s electronic age, it is still important to organize face-to-face get-togethers on a regular basis.

Enter the Conference Center. This corner of the hospitality industry, long relegated to backwater status, has consistently labored under the image of being far less impressive and exciting than the resort segment. Now, sensing an opening, conference centers are making their move. They’re promoting themselves as a preferred location for serious business events – far away from tourist attractions or white sand beaches, extreme recreation or other distractions (the ubiquitous golf being the exception).

Properties like the Marriott Aspen Wye Conference Center in Maryland and the Wyndham Princeton Forrestal Conference Center in New Jersey are stepping up promotion, as is the International Association of Conference Centers. The basic message is that conference center properties are the places where productive meetings take place, free of distractions. “Serious-minded meetings are in … posh or over-the-top venues are out” is the order of the day.

Plus, right now it just sounds a lot better from a PR standpoint if you can report that your corporate event is being held in a location five miles from Trenton, New Jersey.