Dec 5, 2009

Definitions of Social Commerce: From Customers to Friends…?

Like many industries starting off, social commerce lacks a clear definition. There are many different terms that exist used to define this concept as Paul Marsden illustrates in his blog SocialCommerceToday.


Between 2005 and 2007 he collected 17 definitions and had the excellent idea of copying them all down in Wordle in order to see the many terms linked to this industry.  Here is the result:





In doing this, Paul Marsden was able to come up with his own definition (18):
“Social commerce: A subset of electronic commerce that employs collaborative social media tools to assist in online purchasing and selling”.


Definitions definitely vary depending on whether one is a retailer or a “shopper”; or whether or not the application point is an individual consumer or a friend in a social network.


By mapping these points of view on symmetrical axes we get a graph of 18 terms, now 19 including the one that I propose for SherPad, which emphasizes the word of mouth strategy, conversations between friends, and social networks.


(19)“Social Commerce rises through trusted advice in conversations and word-of-mouth among your friends and relations in social networks, blogs, and communities, helping to make shopping decisions and transactions”.




For each definition, the four most relevant key words were kept.  There is a certain tendency to see the most recent definitions show at the top, combine the issue of social networks, links between friends, and favor the “shopper’s” point of view.


However, this is not irreversible, as the definitions of IBM and Paul Marsden, which are situated in the lower part, state:


IBM: “Social commerce:  Connect and foster active participation with customers to help improve your customer experience…including ratings and reviews, blogs and micro-blogging, as well as forums and communities”.


There is a difference, or maybe even an opposition, between the definition given by Bazaarvoice, the societal leader in consumer review, and the one of Paul Dunay.

Bazaarvoice:
“Social commerce: Strategy of connecting customers to customers online and leveraging those connections for commercial purpose”.


Paul Dunay:
“Social commerce: Working with or using your social graph, which is defined as your followers or your friends, and allowing them to help you make buying decisions”.

Will social commerce continue to develop along these two different points of view or will they merge together?

Dec 1, 2009

Hey Brand Marketers, Do You Have a Good Gaming Strategy?


 Should marketers have a strategy for the social gaming market?



This is the logical question that ensues from the mania of game applications that have taken over Facebook, as well as from the explosion of the virtual goods market that from now on are also accessible on iPhone and Twitter.

Facebook application ratings





Two numbers exemplify this phenomenon:
  • The first three Facebook application creators, Zynga, Playfish, and Rock You, total 285 million active users each month.
  • The virtual goods market in the USA hits 1.2 million dollars this year.


With the iPhone, publishers will, from now on, be able to sell virtual goods using free applications.  Considering that virtual goods were not able to be advertised on iPhone before the OS 3 and then, only with purchased applications, this is a huge evolution that is taking place in the gaming and phone application market.

This market is going to continue to grow from not only application sales (at very modest prices) and advertising, but also with the sales of virtual goods in free applications.
This shows that during the next three years, there is enormous potential for growth in the virtual goods market.

As for Facebook, the huge success of social game creators has completely changed the video game market.

For example, Electronic Arts, the leader of this market, though having difficulty with its traditional segments, just bought Playfish for 400 million dollars, including Earn outs.

Now, the Social games of Zynga, Playfish, etc…. have become succesful in demand advertising platforms called advergaming and also sell virtual goods.


Thus it is necessary that the marketing strategies of brands on social networks take into consideration new factors, such as the M.A.U. rating (Monthly Active Users) of the main game applications, as well as their ranking.



              (to buy space on Mafia Wars or FarmVille, a real choice…)


They also need to pay attention to the representation of their brands on virtual goods products and their sociability, as in the example of Godiva Chocolates already alluded to in a previous blog

At the crossroads of Facebook and the iPhone, advergaming and virtual goods might soon become the sweetspot of marketing. 
This is the logical conclusion we can draw from the last annual conference of Mary Meeker, the renown technology analyst for Morgan Stanley.



Marketing directors wanting to meet the challenge of social media have their work cut out for them. 
And maybe it's also fun?
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