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Birthday greetings as a proxy for how communication is becoming more public September 23, 2008

Posted by jeremyliew in communication, email, social networks.
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Last year I noted how the “performance” aspects of social networks was moving more birthday wishes from private communication channels (e.g. email) to public ones (e.g. Facebook wall posts). This year, the trend is even more pronounced if my own experience is any indication.

The number of wall posts went up dramatically. FB private messages also went up. Email as a mode of communication fell in absolute terms, and far more as a % of communications. The chart below summarizes the differences between 2007 (blue) and 2008 (purple). (Note that the free gift and Facebook gift were both attached to FB wall posts)

The proportion of “private” birthday wishes (email, FB messages, calls, cards and in person) fell from 52% to 41%. “Public” birthday wishes increased from 47% to 59%.

Social networks have changed the dynamic – it isn’t enough to wish someone a happy birthday, but it is also important to be SEEN to wish someone a happy birthday. Equally, it is important to be SEEN to have a lot of people wish you a happy birthday too!

If you don’t “get” Facebook and Twitter, read this NY Times article September 8, 2008

Posted by jeremyliew in facebook, microblogging, social media, social networks, status, twitter.
38 comments

The NY Times is often considered the US newspaper of record, and it lives up to its reputation with an excellent article in today’s Sunday NY Times Magazine about the ambient awareness enabled by Facebook status updates, Twitter and other microblogging tools.

Even readers familiar with both popular microblogging tools and their history should read this article. High points:

Microblogging enables ambient awareness of your broad friendship group:

In essence, Facebook users didn’t think they wanted constant, up-to-the-minute updates on what other people are doing. Yet when they experienced this sort of omnipresent knowledge, they found it intriguing and addictive. Why?

Social scientists have a name for this sort of incessant online contact. They call it “ambient awareness.” It is, they say, very much like being physically near someone and picking up on his mood through the little things he does — body language, sighs, stray comments — out of the corner of your eye.

Ambient awareness comes not from any single tweet or status update, but from the aggregation of the data.

Haley discovered that he was beginning to sense the rhythms of his friends’ lives in a way he never had before. When one friend got sick with a virulent fever, he could tell by her Twitter updates when she was getting worse and the instant she finally turned the corner. He could see when friends were heading into hellish days at work or when they’d scored a big success. Even the daily catalog of sandwiches became oddly mesmerizing, a sort of metronomic click that he grew accustomed to seeing pop up in the middle of each day.

This is the paradox of ambient awareness. Each little update — each individual bit of social information — is insignificant on its own, even supremely mundane. But taken together, over time, the little snippets coalesce into a surprisingly sophisticated portrait of your friends’ and family members’ lives, like thousands of dots making a pointillist painting. This was never before possible, because in the real world, no friend would bother to call you up and detail the sandwiches she was eating. The ambient information becomes like “a type of E.S.P.,” as Haley described it to me, an invisible dimension floating over everyday life.

“It’s like I can distantly read everyone’s mind,” Haley went on to say. “I love that. I feel like I’m getting to something raw about my friends. It’s like I’ve got this heads-up display for them.” … And when they do socialize face to face, it feels oddly as if they’ve never actually been apart. They don’t need to ask, “So, what have you been up to?” because they already know. Instead, they’ll begin discussing something that one of the friends Twittered that afternoon, as if picking up a conversation in the middle.

“It’s an aggregate phenomenon,” Marc Davis, a chief scientist at Yahoo and former professor of information science at the University of California at Berkeley, told me. “No message is the single-most-important message. It’s sort of like when you’re sitting with someone and you look over and they smile at you. You’re sitting here reading the paper, and you’re doing your side-by-side thing, and you just sort of let people know you’re aware of them.” Yet it is also why it can be extremely hard to understand the phenomenon until you’ve experienced it. Merely looking at a stranger’s Twitter or Facebook feed isn’t interesting, because it seems like blather. Follow it for a day, though, and it begins to feel like a short story; follow it for a month, and it’s a novel.

Ambient awareness helps maintain “weak ties”. Sociological research has shown that a large network of weak ties is more likely to be helpful than a small network of strong ties when trying to do things like get a job, find a mate, and other socially tinged objectives

Many maintained that their circle of true intimates, their very close friends and family, had not become bigger. Constant online contact had made those ties immeasurably richer, but it hadn’t actually increased the number of them; deep relationships are still predicated on face time, and there are only so many hours in the day for that.

But where their sociality had truly exploded was in their “weak ties” — loose acquaintances, people they knew less well. It might be someone they met at a conference, or someone from high school who recently “friended” them on Facebook, or somebody from last year’s holiday party. In their pre-Internet lives, these sorts of acquaintances would have quickly faded from their attention. But when one of these far-flung people suddenly posts a personal note to your feed, it is essentially a reminder that they exist.

Microblogging, ambient awareness and maintaining weak ties has the sideeffect of making it impossible to move away and “reinvent yourself” as your past will always be with you.

This is the ultimate effect of the new awareness: It brings back the dynamics of small-town life, where everybody knows your business…

“It’s just like living in a village, where it’s actually hard to lie because everybody knows the truth already,” Tufekci said. “The current generation is never unconnected. They’re never losing touch with their friends. So we’re going back to a more normal place, historically. If you look at human history, the idea that you would drift through life, going from new relation to new relation, that’s very new. It’s just the 20th century.”…

“If anything, it’s identity-constraining now,” Tufekci told me. “You can’t play with your identity if your audience is always checking up on you. I had a student who posted that she was downloading some Pearl Jam, and someone wrote on her wall, ‘Oh, right, ha-ha — I know you, and you’re not into that.’ ” She laughed. “You know that old cartoon? ‘On the Internet, nobody knows you’re a dog’? On the Internet today, everybody knows you’re a dog! If you don’t want people to know you’re a dog, you’d better stay away from a keyboard.”

Again, read the whole thing.

Ad standards starting to work for online video; social media next? August 19, 2008

Posted by jeremyliew in advertising, social media, social networks, video.
3 comments

For a long time I’ve been calling for standards in social media advertising. Today if an advertiser wants to make a social media buy across multiple social sites, they will need to build different creative for each of the different social media advertising products on each of the major companies, Facebook, MySpace, Bebo, Rockyou, Slide etc.

Until recently, online video has faced the same problem. But in May the IAB approved new online video advertising standards.

Two studies have shown a positive impact from the establishment of the standards. Reports Wired:

Riddled with inconsistencies, video advertising has been a difficult marketplace to tap into. Advertisers are often forced to tailor creative for each video ad purchase, which is a big turnoff to advertisers looking to make big buys. Meanwhile, long, poorly formatted ads lead to a high rate of attrition by alienating viewers.

In May, the Interactive Advertising Bureau implemented standards to help streamline video advertising. Today, Break Media, an entertainment community for men, and Panache, a video advertising delivery-platform, released a study showing high rates of success with video ads since the standards went into effect.

Over an 11-week period, the study tested the success of the four standard formats for in-stream video advertising established by the Interactive Advertising Bureau: pre-roll, interactive pre-roll, non-overlay ads and overlay ads. Tracking advertisements for three large corporations — Honda, T-Mobile, and truTV — the study found that viewers had a high tolerance for pre-roll and overlay ads.

All of the four formats had extremely high click through rates. Completion rates for 15-second pre-roll ads were 87 percent, and 77 percent viewed videos with overlay ads for at least 15 seconds.

“Getting major advertisers major advertisers to move and turn into video advertising is going to take time,” says Panache CEO Steve Robinson. But he is enthusiastic about the new standards: “now you can just do the creative and know that it works.”

NewTeeVee notes another positive study:

Meanwhile, in a study of 100 campaigns and nearly 65 million impressions, Tremor Media measured 80 percent completion rates for both 15- and 30-second pre-roll ads. While the study’s size makes it more significant, Tremor did not look at click-through rates. Tremor said it actually saw slightly higher completion rates for 30-second ads than 15-second ones, attributing viewer willingness to watch longer ads to their placement next to high-quality content.

For Social Media to be a business we’ll need to see similar standards for social media advertising. This is why I think AOL buying Bebo is good for the industry. With AOL joining Fox as major media companies with a “dog in the fight”, hopefully we’ll move more quickly towards standards for social media advertising.

Is Social Media a business? July 29, 2008

Posted by jeremyliew in advertising, business models, social media, social networks.
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I am a fan and subscriber to the paper version of Technology Review, but was disappointed in their cover story in the current edition, where Bryant Urstadt looks at the current state of the social network sector and concludes that social networking is not a business (free registration required). The article essentially looks at CPMs in the current business (which are low), concludes that revenues are low relative to traffic, and it might all just be a fad.

I have to admit to being biased about social media, but I think that the author’s lack of knowledge in this area (he typically writes for Rolling Stone and Harper’s) really shows. As examples of how poorly social networking sites are doing he proffers four pieces of evidence:

1. MySpace will fall $100m short of its revenue predictions this year. This means that it will only do $650m in revenue and only grow revenue by 100% according to Goldman Sachs.

2. Facebook will only do $50m in EBITDA this year.

3. Ning won’t tell him their revenue

4. CPMs for social media sites are lower than that of Technology Review

Maybe I’m a glass half full kind of guy, but I’d call the first two pieces of evidence pretty promising! The third is hardly surprising as very few private companies want their revenues to be publicly disclosed. And the fourth is a completely specious argument; I’m sure that the Technology Review’s website’s traffic is tiny and that its ads are bundled with that of the print publication, so any sort of comparison is meaningless.

That being said, MySpace and Facebook are far and away the two most successful social media sites at monetizing so far. It is fair to say that click through rates and CPMs are low relative to other forms of online media. The author thinks that targeting is the answer to raise CPMs. I think that is part of the answer, but I don’t think it is the whole answer. It is certainly the answer for social media apps like Flixster (a Lightspeed portfolio company) and Dogster, both of which offer a very targeted audience to endemic advertisers. In these cases, CPMs are not in the sub $1 range, but are comparable to other internet media sites with similarly targeted traffic, often in the single digit or low double digit range.

For the social games category of apps, likely the answer is free to play games with virtual goods models. This is the direction that the rest of the gaming industry appears to be moving towards, and social games are a subset of that trend.

For the vast majority of broad reach social media sites though, I think that the answer lies in a new ad standard for social media. The thing that differentiates social media sites from other forms of online media is not just user generated content, it is also that users are willing to affiliate themselves with brands. This takes many forms, from friending Scion on Myspace to putting a Natasha Bedingfield style on your Rockyou photo slideshow, to buying one of your Top Friends a Vitamin Water. These willing user affiliations/endorsements of brands are clearly valuable to marketers of those brands. Right now though, these deals are being negotiated on a one off basis; they look more like business development deals than selling ads off of a rate card. It will take a while for the social media industry to establish standards for selling this incredibly valuable inventory to brands, but I suspect that this will happen over the next 12-36 months.

There is an interesting parallel to search advertising here. In 2000, search inventory was monetized like every other form of online inventory, through banner ads. It wasn’t until Overture, and later Google, adopted the text ad-CPC standard that the distinctive thing about search inventory, user intent, was appropriately monetized. This created a new category of advertising that is now larger than banner advertising. Although some might disagree, I believe that a similar opportunity will eventually be unlocked by social media once the right ad unit standards emerge

In the interim though, targeting and scale go a long way. As Myspace has shown, $650m here, $650m there, and pretty soon, you’re talking about real money!

Getting player culture right is important to MMOGs and social media sites May 20, 2008

Posted by jeremyliew in culture, game design, game mechanics, games, games 2.0, mmorpg, social media, social networks.
2 comments

Massively has a summary of the panel discussion from ION last week that gave a five year forecast for MMOs. Lots of interesting predictions from the panel, but the quote that really struck me was:

The number one reason people leave games are basically f*ckwads. While this comment generated laughter from the audience, it also made them all nod in agreement. Erik Bethke points out that if players were given the right social structure and tools, then they might be able to clean up the f*ckwads themselves. Scott Jennings offers the epiphany that, “We really are in the feudal ages with MMOs.” Which is very much true. I’m of the opinion that both methodologies are going to see use and that they both have their place.

Crass, but this is very true. Too many of Bartle’s “Killer” player type can really destroy a game’s community.

Player behavior is undoubtedly influenced by game mechanics. But it can also be heavily influenced by the dominant culture that new players encounter when they first enter the game. New players take their cues from the environment that they first see, and from the reactions that their behavior elicits from the rest of the community.

I am reminded of one of Lightspeed‘s portfolio companies, Stylehive. Stylehive is a social shopping website where users use a social bookmarking tool to contribute interesting clothing, jewelry, shoes or furniture into the site. Think of it as a user generated Lucky Magazine. They could contribute anything that they want into the Hive – news stories, pictures of exotic travel destinations, even porn. But they don’t. The reason is culture. New users of Stylehive quickly learn the norms – what behavior is applauded and what behavior is ignored.

MMO Game designers and social media sites should think about how to expose new users/players to the sort of model behavior that they want users to emulate, and how to build feedback loops into the system so that users can self police undesirable behavior.

Hi5 platform stats May 16, 2008

Posted by jeremyliew in facebook, hi5, platforms, social networks.
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Hi5 launched its developer platform at the end of March, opening up access to its 80m+ registered users. It is a top 20 traffic site globally, although not as popular in the US.

Unlike other platforms, Hi5 does not publish a ranked application directory, so it has been hard to get real data on how quickly apps have penetrated the user base. Because Hi5 launched with viral channels open, penetration has been as fast as Facebook’s platform launch in the first 45 days, if not faster. Inside Facebook reports on some stats as to just how quick penetration has been – stats I have not seen elsewhere:

Hi5 Platform Totals

* 617 applications
* 1 million total daily installs
* 14 apps have been installed on more than 1 million profiles
* 6.5 million total daily canvas page views
* 9 apps with more than 10 million total canvas page views so far

Amongst Active Users

* 3.7 apps on average
* 52% have at least one app
* Max apps installed by any one user is 23

Hi5’s user base is primarily international, and anecdotal evidence from Facebook developers suggests that international users are more willing to install apps than US users. This may have influenced Hi5’s fast start out of the gate, despite repeated instability in their platform. (Facebook’s platform was equally unstable at launch, and still suffers outages from time to time).

While it may prove to be harder to monetize the Hi5 international user base through advertising in the short term, we may well see alternative monetization models emerge. Note slide 48 in Ben Joffe’s excellent comparison of social network business models between the US and Asia.

Would love to hear any data from readers on how their apps have performed on Hi5.

Speaking at Interplay Conference about games and social networks on May 22nd May 8, 2008

Posted by jeremyliew in conferences, games, games 2.0, gaming, social games, social gaming, social networks.
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Reader of this blog will know that I have a high degree of interest in Social Games. There are a couple of social gaming conferences coming up in the next couple of months.

The first is Interplay which is being held on May 22nd at the Kabuki Hotel in San Francisco. It specifically is focused on games being played on social networks. Some of the topics that the conference plans to address include:

How will the companies in this space turn their momentum into sustainable business models?
How will the social network platforms react if and when they do?
The virtual economies represent large opportunities, but how does one exploit them, and what role can advertising play?

I’ll be speaking at the conference so hope to meet some readers there. Click here for a 25% discount to attend Interplay.

The second is the Social Gaming Summit which Lightspeed is sponsoring and that I am helping to organize with Charles Hudson and David Sachs. It isn’t until June 13th, so I’ll post more about that next week.

We’re excited to invest in Serious Business/Friends For Sale! April 26, 2008

Posted by jeremyliew in social games, social gaming, social media, social networks, VC, Venture Capital.
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8 comments

Today we announced a $4m investment in Serious Business. Their social game, Friends For Sale, has become a top ten app on Facebook since it launched in November. I am very excited about working with Siqi and Alex and the rest of the team.

While there are a lot of games on the social network platforms now, many have game mechanics that have been ported from another medium. I think Siqi and Alex have developed the first game dynamic that is native to social networks. As I’ve mentioned before, social games differ from merely multiplayer games in that social context has an impact on the game play and enjoyment. I believe that the Serious Business team has a deep understanding of how to create these social games, and we’ll see more such games coming from them in the future.

Venturebeat has a good description of the first game:

Here’s how it works. You join Friends For Sale and receive a starter war chest of several thousand dollars of the company’s virtual currency, as well as a valuation of how much you’re worth. Then you see a list of all your Facebook friends who have added the application, along with their selling price, and you can start buying them up. Price is determined like in any market, by bidders — so if you’re competing against others to buy a particular friend, you’ll have to keep raising your bid in order to maintain ownership.

When you sell a friend, you get to keep half the profit. The other half goes to the person getting bought. You can also make money by doing things like inviting more friends to the application. You earn $2,000 for every four hours that you’re logged in, and $1,000 for every friend you invite. And when somebody buys you, your value increases.

What’s the point of owning a friend, besides making virtual money on their eventual sale? Well, you can buy them gifts, or you can use them to “poke” other friends.

So really, this game is a mask for deeper social intentions. Let’s say you’re a high school student and you want to show a classmate that you have a romantic interest them — buy them and give them a gift on Friends For Sale. Or lets say you want to attract the interest of a prominent entrepreneur and angel investor like early Googler Georges Harik. Buy him, if you can afford it: He’s my most expensive Facebook friend, worth more than half a million dollars in the app’s virtual currency (pictured, above; thankfully, he’s already an investor in VentureBeat).

Other coverage is in Techcrunch, and Inside Facebook.

Special events in MMOG and virtual worlds drive usage March 26, 2008

Posted by jeremyliew in facebook, game design, social games, social gaming, social media, social networks, virtual worlds.
3 comments

There are a couple of nice wrap-up articles on the Easter themed special events in MMOGs and Virtual worlds that took place over the weekend.

Massively surveys MMOG events in World of Warcraft, Lineage 2, Final Fantasty XI, Lord of the Rings Online and Second Life, noting:

Seasonal events are often the most popular in-game events in many of today’s MMOs. But each game’s designers have to find a way to slip these real world celebrations into the lore and mechanics of their persistent worlds.


Izzy Neis covers Easter events in kids online worlds
, including Club Penguin, Buildabearville, Moshi Monsters and Nicktropolis. She says:

Perhaps I’m just picky, but I honestly think you cannot have a healthy, uber-strong sense of citizenship in your youth-based virtual worlds WITHOUT acknowledging real world excitement. I am consistently impressed by the thriving movement of the community in Club Penguin– they’re very good about giving their users the tools to play, instead of dictating to the users the play. Kids are actually forming their own civilization under the eyes of the moderators & site runners

My friends at Gaia tell me that they see a massive bump in usage during their theme events. As an example, last years invasion of vampires into Gaia on Halloween brought the site down several times during the event.

I think this idea of creating special events around real world events is incredibly powerful. It introduces the shared social context that the players and users of the MMOG/Virtual world which helps shape and condition responses to events. Facebook gifting spikes around the holidays for exactly the same reason; users import conventions and context from the real world.

I’m interested to hear anecdotes and specific data that readers can share about the success of tying in world events to real world events.

Games as a hit driven business March 17, 2008

Posted by jeremyliew in business models, facebook, games, games 2.0, social games, social gaming, social networks.
10 comments

The games business has always been hit driven, and the move online hasn’t changed that. World of Warcraft alone commands 62% market share of all MMOGs. In the casual games business, the top 20 games constitute 75% of total industry revenue. As more games have launched onto Facebook, we still see a hit driven business. There is an order of magnitude change in the number of daily actives in just the top 25 games on Facebook:

Game, Daily Actives (‘000s)
Scrabulous, 697
Friends for Sale, 672
Texas Holdem Poker, 581
Compare people, 393
Lil Green Patch, 338
Speed Racing, 260
(fluff)Friends, 240
MindJolt, 189
Vampires, 156
PetrolHead, 144
Who Has The Biggest Brain, 135
Scramble, 126
Jetman, 121
My Heroes Ability, 96
Mesmo TV, 93
Have You Ever???, 86
Zombies, 85
Blackjack, 83
WereWolves, 79
Slayers, 77
Parking Wars, 68
Scratch and Win, 67
Fight Club, 64
Hotties For Sale, 59
WarBook, 56

The graph below makes this point even more dramatically, showing a strong power law distribution for the 2190 games on Facebook:

Facebook Games by Active Users

Game 100 has 6,000 daily actives, game 500 has 150 daily actives, game 1000 has 23, game 1500 has 6 and games 2000 and up have no daily actives at all.

In an environment with as long a tail as this, companies need to take a portfolio approach to their games. Zynga has taken the approach to cross promoting their new games on launch, to good effect:

Zynga Games

Although Zynga’s games also show a power law distribution as well, all but one of their games has made it to the top 100 in daily actives.

Social Games Network has built its portfolio through a combination of cross promotion and acquisition.

SGN Games

Their power curve is not as pronounced because they have bought some successful games to fill out their portfolio.

The difference between SGN and Zynga is really one hit game, Texas Holdem Poker.

Social games companies that learn how to repeatably create and launch hit games will become very valuable.

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