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Visiting the Valley: Trending Topics

A few weeks ago I had the opportunity to spend a day out in Silicon Valley, the land of digital start-ups just outside of San Francisco. A friend of mine who works for a major global manufacturer is a “marketer in residence” at one of the largest VC firms. He invited me up for a day to visit a handful of this VC’s seedlings and a few other friendly investors. It was only a day, but thanks to smart scheduling and the proximity of so many start-ups, I was able to get an outstanding firsthand view of the ideas and people that make this a hotbed of innovation. During the next two weeks I will share my takeaways here.

One of the things I found interesting about my day of meetings in Silicon Valley was how the same questions and opportunities are on the minds of so many people. Likely because of the interconnected nature of relationships and critical mass of talent here, innovation topics that spread throughout the world seem to gestate here first. In no particular order, below are some of the discussion topics that arose during my visit. If you’re not talking about them today, you probably will be tomorrow.

Rewarding Engagement

One of the companies I met with was going through a “pivot”–which in the start-up business means that your original idea that got funding didn’t work, and you are trying to shift to a new, usually related idea instead of just giving up and giving the money back. This company was toying with an idea around the concept of “rewarding engagement.”  The most common example of this is when new mobile software developers attempt to increase their download and install base by offering some kind of virtual incentive. Companies such as Groupon and Zynga Poker have offered up Tap Tracks song credits or Farmville Bucks, for example.

Some might argue that rewarding engagement is a variation on Marketing with Meaning. After all, the consumer gets something of value, the software company gets a bigger user base, and the media company gets paid only when these two are successfully paired up. However, I have many doubts. The problem is that incentivized downloads are meaningful for the consumer, but not really related to strong brand marketing. They encourage people to download something not for a brand-related benefit, but in order to get something in what is often a completely different product or service.

Apple agrees that this is not meaningful, but for a different reason. Just a few weeks ago the company began cutting off apps that were using this practice, claiming it is a violation of its terms of service. Apple does not like the fact that “buying downloads” like this can send apps to the top of its Top Downloads list overnight. Apple knows that people expect this list to be the very-best-quality games and utilities, rather than the ones that gave away the most virtual cash.

I think it’s pretty obvious that these kinds of incentivized downloads are not going to earn the kinds of frequent users that app developers want. Looks like gaming the Apple app store is the only, now impossible, goal of this gimmick. I’d look for this trend to fade quickly.

Influencer Rankings

We had an opportunity to swing by the bustling office of Klout, a company that is rapidly becoming a killer app for influencer marketing. The guys at Klout say they are “an analytics company that happens to run campaigns for marketers and their agencies.”  For those who don’t know, Klout offers a score or ranking of people based on their social media profile. Although the tool has a lot of opportunities for improvement, I love the fact that it can be used today by brands that want to, say, pick the top 100 people to invite to an event or prioritize the high-ranking people who call the telephone complaint line. I was mildly proud to learn that my own Klout score of “51″ puts me in the top 20% of all profiles. Such a scoring system also means that people will work even harder to boost their scores and influence.

Although the company did not start off as an engine for marketers’ use, it is coming around to this opportunity quickly. I got to see a big brand that is using Klout to invite the top influencers in a specific topic to join an invite-only club, brands are starting to use it to see who their most important Facebook “Likes” are, and a major job search company is starting to add the score to people’s profiles. A new Klout.com is on the way, which promises further improvements and will include more than just your Twitter feed in calculating influence.

Building Dependencies

One well-known and respected investor we met with spent some time sharing his team’s formula for picking winners in this noisy environment. He specifically mentioned that his partners look for new businesses that “build dependencies” among their customers. This means creating a company that becomes so necessary and ingrained with how customers operate that it keeps their business for the long haul and keeps competitors out.

Omniture is a great example of a company that does this, by locking businesses into a system for measuring their digital customer engagement. The more you use Omniture, the more tightly it is linked to your way of working. And the fixed costs of implementing the tool dissuade companies from bringing in another way of measuring results. Dunnhumby does this by creating a tool that retailers and their suppliers can use to understand purchase habits and provide personalized offers. Salesforce.com takes this to the next level by not only creating its own killer apps, but by allowing its platform to be used by thousands of third-party application developers.

Companion Viewing

Content is on the minds of start-ups, marketers, and investors. Many are coming to see that content–not channel delivery or advertising interruption–is king. Nothing is more valuable than an aggregated audience that is voluntarily giving you its increasingly valuable time. And speaking of content, television continues to be a media vehicle for content that dominates all others. It combines sight/sound/motion, mass delivery, and an established ecosystem. And television is only getting better for consumers, thanks to greater on-demand options and bigger/better sets.

While some believe that television will be substituted with new screens such as laptops, smartphones, and tablets, some early consumer research suggests that new screens are additive to the television viewing experience. According to a recent Nielsen/Yahoo! study, 86% of U.S. mobile Internet users watch TV with mobile devices in hand. Of that group, 40% use devices for social networking, and 33% use apps. The concept of “companion viewing” suggests that television content creators–and marketers as well–should consider using these additional laptop/mobile/tablet interfaces to add value to the experience. If you are like me, you might find yourself keeping an iPad close to you on the couch while watching a program. During commercial breaks or when I want to look something up related to the show’s content, I increasingly hit the TiVo pause button and pull up Google to satisfy my need for information.

To date, only a handful of television programs are taking advantage of this trend. The History Channel lets you pull up Tweets of fellow viewers during shows such as Top Gear, and Top Chef Masters lets you rate the players’ dishes for yourself. Some new televisions are coming with interactive features built in, but I believe it will always be easier to use a separate screen/device to interact. If programs truly integrated smartphones and tablets for companion viewing, we might see live stats and replays-on-demand during sporting events, or a moving map with vacation suggestions during a travel show.

At the end of the day, not all of these are truly “new” ideas spun from the epicenter of digital innovation, but they might give you a jump-start on what’s coming next–before the annual “What’s Hot for 2012″ lists start propagating.

One Response to “Visiting the Valley: Trending Topics”

  1. Tony B says:

    Sounds like a very exciting trip, Bob! Let me know if you ever need wingman next time you are in the valley :)

    Couple quick comments, some of which you’ll see in this week’s Social Media Supplement:

    1) Rewarding Engagement – Facebook is trying to get into this game and hoping to capitalize on its ability to target very specific audiences. Users will be able to earn FB Credits for watching ads.

    2) Klout/influencer ratings are an interesting model that I think if they can get right would pay off. We’ve seen the needle move in several instances when target/engage the right advocates with strong followings. On the flip side, you may recall an article from March that shows that while influencer rankings are useful, they are still far from perfect. I believe the example given was how Beyonce got a 50 on Klout without ever sending a tweet! Bottom line, this score is a useful metric to see the power individuals have when talking about your brand or finding people to target/engage with, but am eager to see the new Klout.com’s rating improvements and where they will take it next.

    3) Companion Viewing – I think we’ll see more and more companies/TV shows test the waters with in-show engagement online and through mobile. Yahoo recently picked up IntoNow, which allows you to check-into shows. As you stated, voting/polls are already pretty prevalent… I look forward to seeing how else we can tie interactions together across all of our screens (TV,Mobile,Tablet,Laptop,etc.).

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