The Rise of the Selfsumer
Emerging Trends in Business and Social Technology
by David H Jacobson
The Consumer who shopped in stores and online has been replaced by theProsumer who shops online, helps design products and enjoys targeted, personalized advertising (1). But now the new Selfsumer (2) has arrived.
Selfsumers collaborate to seek out and decide on their own purchasing preferences through social networking. They have brand and product awareness reinforced by “advertainment” rather than by commercials as we knew them until recently. The Selfsumer searches for and discovers bits and pieces of advertising of products from multiple sources.
Until now, mobile commerce has largely been wireline e-commerce, somewhat adapted to a mobile platform. With the rise of the Selfsumer and the emergence of powerful smartphones, consumers will make an experience tailored to their own lifestyle.
Advertising agencies and retailers will have to think more creatively about the development of new products, promotional content and e-commerce channels. Advertisers will have to adapt to purchasers’ new online skills and tastes enabled by search, discovery and social networking technology.
Selfsumers will assemble their own selection of possible purchases and their own, self-created advertisements, product selections and reviews. This will completely change the nature and structure of online marketing, advertising and sales, not only on the Internet, but also on TV, which is becoming more and more interactive and personalized.
The Selfsumer will use powerful, easy-to-use, adaptive software mashups tools (web applications that adaptively combine data and functionality from more than one source) to decide on the fly when to buy, what to buy, what combinations to buy, and where to buy it.
Blended results are already being provided by search engines at a rapid rate, including video, images, blog posts, and more traditional forms of information. Video is of particular importance. ComScore data from November 2008 showed that YouTube accounted for 25% of all Google searches in the US. If YouTube were a standalone site, it would be the second-largest search engine after Google, larger than Yahoo (3).
Among blog readers – who are exhibiting Selfsumer behaviour – blogs have become a more important tool for identifying new content than search engines. For frequent readers, 38% said blog links were the top tool for discovering new blog content as compared with 34% who voted for Web search. Blogs also have more impact than social networks, with frequent blog readers saying they trust relevant blog content for purchasing decisions more than content from social networking sites (4).
Personalization is also going mainstream. Google is leading the way with applications like SearchWiki and Preferred Sites, with the search engine including the user’s location, recent searches, and which datacenter his/her search is sent to when determining the top ten results for a search. There is a growing awareness of the authority of a site, determined in part by the number of links to a site and buzz about it, garnered from social networking sites.
The Semantic Web
The Semantic Web, long predicted as the holy grail of the Internet, is finally taking shape as a significant factor in online search. These technologies let computers process the meaning of web pages instead of simply downloading or serving them up blindly.
Indicative of the rising importance of the semantic web is Microsoft’s acquisition of semantic search engine Powerset in 2008, and Twine, a web organizer, based on semantic technology, launched publicly in October 2008. On its website, Twine describes itself as a “new way for you to collect online content – videos, photos, articles, web pages and products – and bring it all together by topic, so you can have it all in one place and share it with anyone you want.” Twine is “powered by semantic understanding, which means Twine gets to know you. It automatically learns about your interests and makes connections and recommendations tailored to you.” (5)
In the massive, global conversation about products, services and companies, consumers – not marketers – use online media, phone calls, emails, chats, and text messages to lead discussion about what, when, and how they buy.
The Coca-Cola Company has used the analysis of consumer conversation, in combination with traditional market research, to create and market new products for changing taste profiles. By analyzing consumer conversation, the company realized that words such as “diet” and “light” produced a markedly negative reaction among certain demographics. By understanding the nuances of words in conversations (and the behaviour that they signal), Coca-Cola was able to recognize that there was a portion of the population that would in fact want a diet beverage if it wasn’t labeled as such. Hence the birth of Coke Zero.
A great deal of investment and innovation is occurring in technologies that translate vast amounts of free-form, “unstructured” consumer conversation into metrics and indicators. The technical functionality necessary for analyzing consumer conversation is a rapidly maturing business (6). The number of US patents for customer analytics/customer-centric technology has increased sevenfold over the past nine years and 125% over the past four years. This compares to a gradual decline of 13.9% in the overall number of patents during the same period.
Twitter, Facebook, social networks
In Canada, one start-up company working in this area is Sysomos. Sysomos mines information from social media sites such as Twitter and Facebook and close to 30 million blogs. Findings are graphed by time, sentiment and demographics to provide a full picture of the buzz around products, brands, public figures or issues.
Co-creator Nilesh Bansal says that while other companies already monitor web conversations, they generally only track how often a brand or product is mentioned. However Sysomos can capture what is being said and by whom, as well as the associated sentiment (7).
Almost half of online adults read ratings and reviews at least once a month, and 19% post them. In 2008 compared to 2007, nearly twice as many adults read reviews.
One in three online adults now read blogs at least once a month, while 18% comment on them. Blog readers as a group grew by nearly 50% over 2007.
Social networks also took off in 2008, with 24% of those online now visiting a social network at least once a month (8).
Correspondingly, online advertising spending is forecast to grow from $23.6 billion in 2008 to $42 billion in 2013.
Online video, in particular, will see high growth, as spending in this area is forecast to grow to $4.6 billion in 2013. This represents a sevenfold increase from the $587 million spent on the same format in 2008. Experts predict that, by 2012 more than four out of five Internet users will watch online video ads, an increase of two thirds from 2008 (9).
The Persuasive Consumer
Companies are now using social influence marketing rather than direct approaches. This allows online users to provide positive social influence, by word-of-mouth marketing for a product, company or website.
In his article about the persuasive consumer, Josh Bernoff notes that nearly 50% of US adults currently online are classified as “persuaders”. He describes these as “those who tell others about products that interest them. They’re brand-motivated, open to ads, and highly active in social applications. To energize persuasive customers, marketers should listen and respond to their feedback, give them content to pass around, and appoint them as product ambassadors.” (10)
Hewlett-Packard (HP) is one of the leaders in social influence marketing. Over the past year it has undertaken several campaigns with social media elements using the company’s slogan, “The Computer is Personal Again”. Initiatives included a contest in partnership with MTV inviting participants to submit designs for a special edition HP laptop. Called “Take Action, Make Art”, the winner was rewarded with the design featured on an HP laptop. The event drew 8,500 submissions from young people across the world. Regional winners were selected by popular vote and the final winner was chosen by a panel of judges. The site drew 5 million hits (11).
Women in particular are targets for social influence marketing. An article in the New York Times describes a subset of affluent women as “marketing multipliers”. The label refers to women who spend twice as much as other affluent women on technology and fashion, and who use dramatically more online and offline word of mouth to increase purchases. The study labels the subset “powerful catalysts for purchase behaviour and brand influence.” It goes on to say, “Marketing Multipliers have different media behaviour, especially, online, and are active contributors to the virtual world, not just passive readers. They are twice as likely to post to blogs or to publish their own web pages, compared to other women . . . Marketing Multipliers are more likely to seek out in-depth information on products.” In the investment category, for example, 45% follow up on new investment products they see advertised, and 53% of Marketing Multipliers in the automotive category “follow information related to new safety features.” (12)
In his article on social influence marketing, Shiv Singh takes a different stance. He differentiates between brand advocates who focus on gathering product information and purchasing them, rather than spreading the word through social media sites and influencers who are “the people who are solicited for advice while a consumer is in the consideration phase of a purchasing decision.” Singh maintains that retailers cannot reach out to the influencers because they cannot know who they are; they vary according to the purchaser. Instead, he suggests that businesses need to be more deeply integrated within social networks in order to make it easier for consumers to solicit feedback from peers. He suggests linking to third party review sites and leveraging employees to build online communities which connect more directly with an offline shopping experience discussed online (13).
Consumerization of technology
Companies are experiencing the “consumerization” of technology. The trend is being driven in part by the entry of “digital natives” to the workforce. Gartner analyst, Steve Prentice says “innovation is now coming from consumers and their favourite technologies. Consumers are increasingly in charge. They are driving the specifications of technology. They are driving disruption and changing the balance of power.” Apple is one company that is looking to benefit from this trend; it is taking a “skim and penetrate” strategy, in which it “skims” a group of early consumer adopters, and later hopes that these adopters will evangelize the product and help it reach broader adoption.” (14)
Social networking technology
This has also extended to social networking technology. Forrester Research found that 56% of North American and European businesses considered Web 2.0 a priority in 2008. The adoption of Web 2.0 technologies is expected to grow through 2013, from US$455 million in 2007 to US$4,646 million in 2013, with social networking accounting for nearly half of spending through the forecast period (15).
The virtual human being
Virtual man could ultimately evolve from the deployment of existing technologies that are connected in a new way. Models of the heart, organ, cell systems and musculo-skeletal architecture are already being developed by academics around the world. Such technologies can be used to simulate the physiological effects of interacting with specific drugs and identify which drugs have a bearing on the course of a disease. Some companies using virtual technology have reduced clinical trial times by 40%, and reduced the number of patients required by two thirds (16).
Collaboration in product innovation
Collaborative systems will be the core tool of innovation in businesses of all kinds. With technology facilitating and reducing the cost of collaboration, open-source innovation offers new efficiencies to companies around the world (17).
Wharton uses the term “crowdsourcing”, which it defines as open innovation allowing collaboration with partners to solve business problems. The archetype of that model is Waltham, Mass.-based InnoCentive. It matches corporate “seekers” who have science, engineering and business problems with amateur “solvers” worldwide. The “solvers” then compete for “bragging rights” and, often, token rewards, to provide the best answers to the corporate problems. “Most companies are not looking for a big innovation they can knock out of the ballpark,” Day says. Rather, they want a relatively quick fix for a specific piece of a larger puzzle.” (18)
Involving consumers in product development helps to engage the Selfsumer and increase a company’s visibility in online communities. Some recent examples include the shirt retailer Threadless, who sells merchandise online and now in a physical store in Chicago that is designed interactively with the company’s customer base. Peugeot invited people to submit car designs online, and attracted four million page views on its site. The company built a demonstration model of the winning design to exhibit at automotive marketing events, and partnered with software developers to get it included in a video game. Even business-to-business companies are starting to co-create with customers. Corporate users of SugarCRM’s customer relationship management software customize it to meet the specific needs of their customers’ industries.
Already, it is possible to search pictures and videos not only using textual “tags,” but also by direct comparisons of faces and places. Companies providing application software and services include, Idee Inc. in Canada, VideoSurf and Digitalsmiths.
Already, webcams built into laptop computers enable inexpensive video conference calls, anytime, from anywhere. It is not only tiny cameras embedded in smartphones and other hand-held devices that will be responsible for the emergence of “video in everything”. Current research at MIT’s Media Lab is developing “the sixth sense”, using a tiny wearable video camera and projector.
Unstructured information and tacit knowledge
“The tacit aspects of knowledge are those that cannot be codified, but can only be transmitted via training or gained through personal experience. Tacit knowledge has been described as “know-how” (as opposed to “know-what” [facts], “know-why” [science] and “know-who”[networking]). It involves learning and skill but not in a way that can be written down.” (19) Tacit knowledge is a further extension of what now is commonly known as “unstructured information” which refers to the following many forms; numbers, text, spreadsheets, charts, digitized hand-written notes, i.e. from smartpens, voicemails, photos, videos, web scans of “what customers say about you” in words, blogs, reviews, pictures, cartoons, videos, and collaborative artwork, design.
The current challenge facing organizations is not just to capture and mine unstructured information, but to combine it with structured data. Unstructured information is typically associated with strategic functions and tends to be captured by content management systems rather than relational databases, while structured tends to be more operational. However, there is limited communication between the two types of systems. As a result, software companies are introducing new types of software such as strategy management tools, to push information from strategy down into operations so those operations remain aligned with strategic objectives.
And finally, there is the new tool, performance management software, which pulls data from operations, translates it into financial impact, and makes it visible to management in decision-making dashboards. Together these new tools create a two-way connection between strategy and operations. Jonathan Bechter recently said, “Unstructured data is in its infancy when it comes to business intelligence; if we can overlay unstructured data on the structured data, that’s where the big win is.” (20)
1. 2009 Report on Emerging Canadian Software Companies: A CEO Perspective. PricewaterhouseCoopers LLP, May 2009.
2. PricewaterhouseCoopers defined concept.
3. ComScore: YouTube Now 25% of All Google Searches, TechCrunch, December 18, 2008.
4. Blog Influence on Consumer Purchases Eclipses Social Networks: BuzzLogic Study Reveals the Evolution of Blog Reader Behaviour; Monthly Readership Spiked 300 % Since 2004, PR Newswire, October 28, 2008.
5. Twine (2009). About us. Retrieved April 9, 2009 from http://twine.com/.
6. How consumer conversation will transform business, PricewaterhouseCoopers, January 2008.
7. Nicole Baute, Tracking web chatter to uncover trends; Sysomos mines data on brands, personalities from social media site, The Toronto Star. 31 January 2009, GT01, via Factiva.
8. Josh Bernoff, The Growth of Social Technology Adoption. Forrester Research, Inc., October 20, 2008.
9. 7 Marketers Eye Online Video for 2009, eMarketer, January 9, 2009.
10. Josh Bernoff, Persuasive Consumers Are Socially Connected, Forrester Research, Inc., February 17, 2009.
11. Shiv Singh, HP becoming a truly social brand. Going Social Now, October 22, 2008
12. Affluent Women Dramatically “Multiply” Major Purchases with Word-of-Mouth, New York Times, October 22, 2008. Retrieved April 9, 2009 from http://www.marketingcharts.com/interactive/affluent-women-dramatically-multiply-major-purchases-with-word-of-mouth-6484/?camp=newsletter&src=mc&type=textlink.
13. Shiv Singh, Social Influence Marketing: Understanding those Peer Influences, Going Social Now, May 2, 2008.
14. Gadgets at Work: The Blurring Boundary between Consumer and Corporate Technologies, Knowledge@Wharton, April 16,2008.
15. G. Oliver Young, “Global Enterprise Web 2.0 Market Forecast: 2007 to 2013,” Forrester Research, Inc., April 21, 2008.
16. Pharma 2020: Virtual R&D, which path will you take? PricewaterhouseCoopers LLP, August 2008.
17. Navigating the era of the empowered consumer, PricewaterhouseCoopers, 2008.
18. Why an Economic Crisis Could Be the Right Time for Companies to Engage in ‘Disruptive Innovation’, Knowledge@Wharton, November 12, 2008.
19. Wikipedia (2009), Tacit knowledge. Retrieved May 19, 2009 from http://en.wikipedia.org/wiki/Tacit_knowing.
20. Jonathan Becher of SAP Business Objects in Technology Forecast. PricewaterhouseCoopers LLP, Winter 2009.
David Jacobson (FIEEE) is Director – Emerging Technologies in the Advisory Services practice of PricewaterhouseCoopers LLP, working in the Toronto office. He is the Canadian member of the PwC international technology network which includes the PwC Global Technology Centre resources in California, USA, the UK and Europe. He is a contributing editor of PwC Technology Forecasts and an advisor to the Global Technology Centre. He is a Fellow of the US-based Institute of Electrical and Electronics Engineers (IEEE) and has been a Fellow of the British Institution of Engineering and Technology (IET) and a Chartered Engineer (UK). He is on the editorial boards of the emerging technologies journal IEEE Spectrum and the Canadian journal Telemanagement. He has served as a board member of the Canadian Photonics Consortium. He holds PhD and BSc (With Distinction) degrees in electrical engineering, has been a professor at Harvard University and is an Honorary Professor of the University of the Witwatersrand.