Content Matters

Professional Blogs Turn to Research for Added Revenue

In recent years, the line between blogger and industry analyst has been continually narrowing. For technology professionals in particular, much of the product and industry analysis that came from IT analyst shops has largely been replaced by blogs. That's not surprising. Many IT analysts now blog and others who have left the big shops like Gartner or Forrester have started independent blogs.

What's interesting is that now, as the online advertising market has dried up, a number of professional bloggers are now turning to paid research as an additional driver of revenues.

Today GigaOM announced the launch of GigaOM Pro, a subscription-based syndicated research site, that will be available at the modest price of $79 per year. GigaOM Pro will focus on a handful of tech sectors - Green IT, Mobile, Infrastructure and Connected Consumer - and will use both internal resources (newly hired Research Director Michael Wolf, formerly of ABI) and freelance analysts.

Last year, ContentNext, publisher of PaidContent, MocoNews and ContentSutra, hired ex-Merrill Lynch analyst Lauren Rich Fine to head up a proprietary research effort. They've released a few detailed reports, most recently a social media report called Following the Money.

Earlier this month, ReadWriteWeb released their first premium report - ReadWriteWeb's Guide to Online Community Management, a combination of case studies, best practices and an online component which aggregates relevant stories on the topic.

And, it's not just technology companies. Financial blogs are exploring the same paths. Footnoted.org recently launched Footnoted Pro, a subscription-only online newsletter which provides actionable research, augmenting the basic information on the free site.

Meanwhile, StockTwits (while not a blog) has announced StockTwits Premium, an a-la-carte offering of research and tools for its active trader community.

Blogs are morphing into traditional b2b media companies, with three revenue streams: advertising, paid research and conferences. And that's going to raise the bar on the traditional analyst research firms to deliver greater value.

Twitter Quitter Issue a Canard

I'm amazed at how much hype I continue to see about the Twitter Quitters - the stat reported by Nielsen that 60% of new Twitter users are no longer using the service after 30 days.

Story after story quotes this figure and talks about how it it portends problems for Twitter.

That's a bunch of nonsense!

The high abandonment rate among new users is largely attributable to two factors:
1. The huge hype that has occurred, where millions of people who are unlikely Twitter users suddenly give it a shot.
2. The non-existent cost barrier to try Twitter as a user

First, let's look at the hype factor. The hype cycle hit its peak in April, when Oprah used Twitter and CNN and Ashton Kutcher had their contest to see who could hit 1 million followers first. These events brought literally millions of new users to the Twitter signup page, many of whom had no idea what they were signing up for. Are you a fan of Ashton Kutcher? Well, click here to help him win the contest. Do you like Oprah? Have you bought the books from her book clubs? Well, now, take a minute to sign up for this thing that she says is pretty cool.

But the demographics of many of those new users did not suggest someone who was likely to become a regular Twitter user. Just think about the people who've probably asked you about Twitter in the past 60 days.

For me, the tipping point was when my mother-in-law, a 75-year-old woman who's never used a computer (nor flown on an airplane, but that's a different story) asked about it. If she had a computer, she might have been willing to try Twitter, but there's no way she'd give it more than about three minutes.

Second is the ease in trying Twitter. It's free and doesn't require the user to download or install anything. Basically, if you're willing to register, you're now  a user.

Taken together, you have a huge audience of people who probably did not understand Twitter, but were willing to invest two minutes to register because it seemed momentarily of interest.

Now take a look at what we know about Twitter. First, the network effect is critical. Until you follow at least a few dozen people, there's not much to read, and until you have a similar number following you, conversations don't occur. So, if you signed up to follow Oprah, you might see one or two tweets per day. Not a very exciting user experience. Twitter only works when you follow a community of like-minded people. That happens when you are introduced to Twitter by friends, business peers or other communities. It doesn't happen when adoption is driven by the mass media and celebrities.

The original Nielsen study compared the Twitter retention rate with that of MySpace and Facebook, which each achieved 60% retention at a comparable level of users. But those comparisons make no sense. In the early days of Facebook, usage was spread among college students, a perfect peer community. MySpace adoption was largely among teens - again, perfect for viral growth.

To assess the real retention rate of Twitter, it would be useful to eliminate those casual users who joined Twitter to follow Oprah or Ashton or CNN but never got engaged. I'd like to see what the retention rate is for those who reach a minimum level of engagement - perhaps following ten or more users, posting at least ten tweets and, say, adding their own image to their Twitter profile. I'd guess that retention rates among users who meet those criteria are significantly higher than 40%.

Based on that, I think that the Twitter Quitter issue is largely a canard, though the overall number of Twitter users is also a bit of a mirage, since it includes a lot of these one-time users. Rather than 32 million users with a 40% retention rate, the real figures are probably closer to 25 million users and a 50% retention rate.

Going forward, as Twitter looks to become mainstream, retention rate will be critical. Twitter will be well-served if it continues to cultivate a strong ecosystem of communities. It will be these grass roots communities of interest that will fuel Twitter's growth, not mass-media driven hype.

What do you think?

Open Table Should Buy Yelp

There was much celebration yesterday at Open Table's (NASD:OPEN) successful IPO. In this market, any IPO, especially a tech IPO is cause for celebration, and Open Table shares jumped 50% to more than $31 during its first day of trading after being priced above the initial $16-18 range.

 On its merits, Open Table is not that great a story right now. Restaurants are hurting in the current economy and the company lost $1M on revenues of $56 million in 2008, before things got really bad. More than half their revenue stream comes from the flat fees which they charge restaurants, so that should be somewhat predictable, but will certainly take a hit as restaurants shut their doors. The variable revenues, based on individual bookings will be at even greater risk until the market returns.

While Open Table has strong relationships with restaurants, what would make it a much more interesting company would be to reach out to the consumer side. An Open Table acquisition of Yelp would close the loop, allowing users to search reviews, then book their reservation on one system. It could also create new markets for Open Table. Yelp is well-positioned to become a dominant player in local advertising, and Open Table could potentially serve as the intermediary between buyers and sellers in those local markets. Adding user-generated content and social media to Open Table would position it for future growth as it would be embedded into the daily activities of its core audience. Open Table is a web 1.0 survivor; Yelp brings the newness of the web 2.0 environment and business approach and a nearly obsessive focus on the user.

Of course, Open Table and Yelp have been polar opposites when it comes to their corporate culture.

Open Table has served the restaurant and not focused its efforts on the consumer, while Yelp has shown a willingness to alienate restaurants in order to preserve its customer focus. Could that philosophical divide be bridged? It's worth exploring.

At an estimated valuation of $200 million, Yelp would be worth a third of Open Table, based on its current market cap. But together, the two would be well-positioned to become dominant players in local advertising across a multitude of consumer industries.

Gotham Media Roundtable on Twitter for Business

I had a great time this morning at the Twitter for Business digital breakfast roundtable, sponsored by Gotham Media Ventures.

Below is the deck from my presentation.

There were a handful of people tweeting the session (thanks Catherine Ventura and others) - see the full stream of tweets here.

For those who attended (as well as those who couldn't make it), you can follow me @graubart and can also see how we're using Twitter for our Alacra Pulse brand @AlacraPulse. Also be sure to follow Matt Snodgrass of Lippe Taylor and, of course, Gordon Platt of Gotham Media Ventures.

Gotham Media - Twitter For Business

View more presentations from Barry Graubart.

Twitter Panel at Digital Media Breakfast

Thursday morning I will be on a Twitter for Business panel, as part of Gotham Media Ventures' Digital Media Breakfast series. The event will be held at Lippe Taylor, 235 Park Avenue South.

My co-panelist will be Matt Snodgrass, SVP Digital at Lippe Taylor. The moderator will be Gordon Platt, President of Gotham Media.

It should be a fun discussion. If you plan to attend, please @ or DM me to let me know. Hope to see you there.

Participants should use the hashtag #gothammedia.

SIIA NetGain Conference Starts Monday

Monday kicks off NetGain, the SIIA's annual west coast event. This year's conference will be held at the Palace Hotel in San Francisco.

This event brings together the three divisions of the Software and Information Industry Association - the Content, Software and Education divisions. It's NetGain for the content division, Software Summit for the software division and Ed Tech for education.

This year's schedule has some great sessions. Brewster Kahle, Kara Swisher, Chris Anderson and author Judith Estrin are the keynotes. There are panels  on cloud computing, workflow applications and a panel on social media platforms which will feature Plaxo's Joe Smarr, Clara Shih of Salesforce.com (and author of The Facebook Era), Facebook's Dave Morin and Pavan Mediratta of LexisNexis.

Alacra will be presenting our new Street Pulse application as part of the new Product Previews segment Tuesday morning. Street Pulse has also been nominated for a CODiE Award. The winners will be announced at Tuesday evening's CODiE dinner.

If you're attending NetGain, or if you just want to follow from afar, we'll be using the #netgain hashtag on Twitter.

Hope to see you there.

Help Send Deserving Kids to Camp this Summer

As the economy continues to decline, the nonprofit sector is taking a big hit. State and municipal funds have dried up, foundations are struggling with poor investment returns and many of the big individual donors are worried about keeping their jobs.

Luckily, there are lots of ways that each of us can make a small difference. Social media and micro-donations make the process even easier.

Edelman and a few other organizations in the Chicago area are supporting the Off the Street Club (OTSC), which provides inner city kids with a summer of swimming, horseback riding and cookouts at Camp Mathieu.

So, please take a minute and make a modest donation - even $5 makes a real difference. You can donate using the ChipIn widget below (see, I told you this used social media tools).

Not sure? Visit their Facebook page and watch the brief 2 minute video.

PS - for those who were at the SIIA Twitter panel on Wednesday, this program is part of the Friday $5 Twitter Challenge from Amanda Mooney, the Edelman social media maven I mentioned.

Twitter for Business - SIIA Event recap

Earlier today, I moderated an SIIA panel entitled "Why Twitter Matters".

I was lucky enough to have three great panelists, which made my job really easy:
Philip Pearlman, Director at StockTwits
Jacob Harris, Senior Software Architect, New York Times
Sarah Austin, Real Time Matrix

The event was sold out, but for those who missed it (or who care to re-live it), here's the video

View Full Screen

Supporting materials including my Introduction to Twitter deck are available here.

Developing a Twitter Strategy

While the entertainment market has suddenly found Twitter, a number of technology, information and media businesses have been using Twitter effectively for the past 12-24 months.

This Wednesday, we will be exploring some of those success stories on a panel, sponsored by the Software & Information Industry Association. Below are some initial thoughts on a few themes that we’ll be discussing. What questions would you like us to ask? Post your questions in the comments below or send them to me @graubart.

The Twitter land rush has begun. This differs somewhat from the web land grab, which was all about URLs. On Twitter, it’s not so much your Twitter handle (though there are a bunch of spoofing efforts for brands) but more about staking out a position as a key source to follow in your domain.

Meanwhile, the Twitter ecosystem is starting to emerge. One of the ways to measure the success of a platform is the ecosystem that springs up around it. Google is a great example of this. Beyond the 300,000 advertisers who participate in AdWords and the many publishers who use AdSense to allow Google to run ads on their pages, the Google ecosystem consists of SEO consulting firms, resellers of Google Appliances and the many software consulting and integration firms who focus on the Google platform.

For Twitter, the ecosystem is just beginning to emerge. There are a growing number of third party applications to enable more efficient posting to and searching of Twitter on desktops and mobile devices. Developers have built plugins, like TwitPic, which make it easier for users to share information through Twitter. At the same time, consulting firms, PR firms and ad agencies are beginning to focus on Twitter as a critical medium. And vertical market applications like StockTwits have emerged to aggregate tweets and build communities within the Twitter universe.

Before jumping in, develop a Twitter strategy. There are numerous ways in which companies are using Twitter to help them achieve their business goals. But the first step is in defining your goals. Are you looking to use Twitter to improve customer service (like @comcastcares)? Do you wish to use Twitter as a more user-friendly version of RSS, pushing out your latest content (like @msnbc_business )? Or, are you looking to drive transactions (like @delloutlet)? Before you start tweeting, think about your specific goals, then develop an appropriate Twitter strategy in support of those goals.

These are all issues that we’ll explore in further depth at the panel discussion. If you’ve not already registered, there’s still time to do so at the SIIA website.

If you can’t participate but would like to follow along via Twitter, we’ll be using the #SIIA hashtag and you can follow the discussion here.

In advance of the panel, I’ve posted some materials, along with links to related resources.

Social Media: My Place or Yours?

The number of definitions of social media typically equals the number of people in the discussion. During the past couple of years in my role chairing the SIIA's Social Media Action Committee, I've had numerous discussions with peers about "social media". And what I've found is that the lack of clear definitions leads to frustration and confusion.

In an effort to simplify that, whenever I'm now engaged in a broad discussion of social media, I start with the question "my place or yours?" In other words, are you looking to add social media capabilities (communities, user-generated content, etc) to your existing site or are you looking for ways to play on the social media platforms such as Facebook, LinkedIn or Twitter?

That one question immediately simplifies everything that follows. So, when do you look to add social media tools to your site and when do you go play on the platforms?

Think about your goals to start. Do you have an existing audience of users whom you're looking to engage? Are you trying to increase page views and time spent on your site by your existing readers? Adding social media tools to your site to enable information sharing, commenting or linking by your users can help you achieve that.

Are you looking to reach a new audience, perhaps a different demographic than you currently reach? That's where the external platforms come in. Build a Facebook widget, create a LinkedIn group or share useful information via Twitter. You'll attract new users who may otherwise not be familiar with your brand.

There are dozens of use cases for how you can help achieve your business goals through social media. But the starting point is always in defining those goals and matching them to the right sets of tools.

So, at the next industry conference, when you ask me about social media, don't be offended when I ask you "my place or yours?".