Farming Analogy to startups

If you're still trying to make sense of why some start-up firms really take off, some don't make as much money as they should and some become a part of your DNA...here goes - it's all to do with farming. A practice nearly as old as humans (except hunting, sex and prostitution), farming is where the answer lies. Or so believes Varun. Nice article. 
Read Varun's article here.

Facebook faces massive discussions on privacy issues in Europe

With Facebook's IPO on its way, I would like to share some information about the ongoing discussion about the social network's privacy issues from a European perspective.

European countries like Germany and Austria are known for its very strict data protection laws. This of course is also true for any other country that belongs to the European Union. Because of these strict laws, a firm is very limited in the use of its users’ data, especially when it comes to use the data for marketing purposes. To address the growing concerns about privacy, the European Commission has implemented an additional layer of protection through its European data protection law as well as a Data Protection Commissioner (DPC). The DPC is legally responsible for privacy for all users within the European Union.

Countries that are members of the European Union have created their individual and local data protection laws, which are based on the European Union’s Data Protection Directive of 1995. The member states of the European Union have very differently implemented this set of rules, which resulted in “divergences in enforcement”.

It is important to point out that under “EU law, personal data can only be gathered legally under strict conditions, for a legitimate purpose. Furthermore, persons or organizations which collect and manage your personal information must protect it from misuse and must respect certain rights of the data owners which are guaranteed by EU law.” Thus the user has to explicitly agree to any use of his data and also has to be informed about how the data might be used.

In an effort to further strengthen the protection of personal data, the European Commission recently proposed “a major reform of the EU legal framework on the protection of personal data. The new proposals will strengthen individual rights and tackle the challenges of globalization and new technologies.” The European Commission considers the protection of personal data to be a fundamental right. Because the way a user’s data is collected, accessed and used has profoundly changed within the past few years, this comprehensive reform of the European Unions’ data protection rules of 1995, has become a necessary step. The goal is to also unify the currently very differently implemented data protection laws within the European Union to one single law. “A single law will do away with the current fragmentation and costly administrative burdens, leading to savings for businesses of around €2.3 billion a year. The initiative will help reinforce consumer confidence in online services, providing a much needed boost to growth, jobs and innovation in Europe.”

As you can imagine these laws make it more difficult for companies like Facebook to enter the European market and comply with the rules. Companies can’t just run their business the same way as they are used to within the US. Especially Facebook has recently been confronted with major privacy concerns and is under investigation by the DPC. A small group of Austrian students has recently formed an initiative called “Europe versus Facebook” and filed a total of 22 complaints (!) about the US-based company for violating the data protection laws within the European Union. The following statement from the initiative “Europe versus Facebook” shows how difficult it must be for Facebook to comply with the rules of the European Union: “In a first report the Irish DPC has listed numerous measurements Facebook has to comply with in order to improve its compliance with the Irish and European law. At the same time we think that this only brings Facebook in line with the law for maybe 10%. We are right now fighting for the other 90%.”

If the European Commission decides that Facebook is indeed violating its rules, it could become a major problem for the US-based company. The necessary changes that are currently in discussion could force Facebook to implement major changes in its technological backend that seriously could limit its functionality in one of its most important markets. It is very interesting for me that I have not read a single word about this ongoing investigation and its potential threat to Facebook in any US publication so far. The Facebook public relations team is obviously doing a great job in keeping potential investors happy, before the highly anticipated IPO takes place. I guess that Facebook will have a lot of work to do to satisfy the European Commission and in order to not be penalized like other US companies before (in 2004 Microsoft had to pay a fine of almost 800 million USD in the Microsoft antitrust case). But what are 800 million USD when you can afford to buy Instagram for one billion USD ...

Nike's new marketing mojo unleashed a digital revolution

With the UEFA European Football Championship just around the corner (it takes place from the 8th of June to the 1st of July 2012 in Poland and the Ukraine), it is very interesting to take a look at the marketing strategies of the leading brands in the sports equipment industry.

I recently read a very interesting article in FORTUNE magazine (yes, the traditional printed version) about "Nike’s new marketing mojo". The article reports about a top secret division at Nike's headquarters that has been created with one ultimate goal in mind: to engineer a revolution in marketing. And this revolution takes one of the "world's greatest marketers" that has always had a massive presence in traditional media channels like print and TV, to a new and very online focused marketing approach.

As discussed in class, companies are shifting larger stakes of their marketing budget into online marketing. In this regard it is noteworthy that Nike has cut back its spending on TV and print advertising in the U.S. by 40% in three years, even with its total marketing budget reaching a record high of 2.4 billion USD in 2011. In 2010 the company spent almost 800 million USD on nontraditional advertising (including SEM, SEO and social media), a number believed to grow in 2011.

With a series of newly introduced products – like the performance-tracking wristband called "FuelBand" –  that enhance the sports experience through collecting and providing the user with data on his workouts, the world's largest sports company (sales reached 21 billion USD in 2011) has access to a vast amount of data about its users, enabling the company to interact with its consumers through personalized websites and mobile apps more closely than ever before. The company is replacing its one size fits all traditional advertising campaigns with a "repertoire of interactive elements that let Nike communicate directly with its consumers". At recent global events like the 2010 Football World Cup the firm debuted its legendary ads not on TV but launched the films on Facebook and other websites, generating a viral effect with global impact.

The already mentioned "FuelBand" is another good example for Nike's new approach: While I have not seen any traditional commercials about the new "FuelBand" yet, Nike's efforts in the digital world made me watch this short-film that was inspired by the product's claim "Make it count". The film instantly went viral on Facebook and already has more than 5 million views on Youtube. What a great way to introduce a product and generate buzz about this new Apple-style gadget.

From my point of view, it makes a lot of sense for Nike to focus on the digital channels because it gives one of the biggest consumer brands a personal touch again. To be able to interact with a brand on a customized level will be one of the most important parts of future marketing plans.

LinkedIn ads get better targeting ability

LinkedIn is making news. Even thought they are not as large as some of the other SM platforms, LinkedIn is surely more effective. Their conversion rate is three times higher than the industry average - 2.74% versus .98%. This means, of all the traffic that came to the company website through Social Media Channels, the ones who came through LinkedIn had a better chance of getting converted into leads. Read the HubSpot article on this.



To add to this, LinkedIn is enhancing their Ad targeting capabilities. It has introduced new tools which will help the marketer choose who should the ad be served to. FB has had the ability for a while but with LinkedIn the marketer will get across to a different set of people altogether.

Target audience can be selected based on title of the job, job functions, industry, geography and many more such parameters. Another functionality, Follower Statistics, gives updates analytics on engagement, likes, shares, comments and more interestingly a demographic summary. Read more here.

Facebook Deploys Salesforce.com's Rypple Throughout the Enterprise

I think this has major implications on the HR industry and it doesn't hurt that the largest social network in the world has adopted your platform. Salesforce's new tool Rypple is an internal social performance management tool that brings the enterprise together. Could this be another blow to enterprise email? How do those of you in the HR world feel about their encroachment into providing HR solutions? Do you see this as a threat?

http://www.youtube.com/watch?v=5RaRrqSkiM0