What do Randall Stross, Karen Webster and Aaron Strout all have in common? The same view on the prospects of “Friending” Your Toothpaste.

Would You Join a Toothpaste Community?

This post was co-authored by Bill Fanning and Aaron Strout.

A conversation I have somewhat regularly with our sales guys is the concept of whether or not a company can build an online community around a non-passion product or brand. The example that inevitably comes up is whether someone would join a community that focused on toothpaste? My guess is that 999 out of 1,000 people (dentists excepted) wouldn’t be that interested in signing up. After all, even though most of us use toothpaste two or three times a day, it’s not something we are passionate about. The same can be true around similar products such as banking, food manufacturing or feminine products.

As my colleague, Bill Fanning, likes to remind me, building a community online is not a dramatic departure from how communities are built offline. For example, Bill belongs to a group in Texas called the Guadalupe River Trout Unlimited (GRTU). As you can imagine, the community serves those who love fly fishing for trout. To that end, the GRTU sponsors a variety of events for members to congregate, stay informed on a variety of topics, share ideas and lie a little about the GIANT fish they’ve landed while no one was around to witness.

This offline community is quite successful in that is has a lot members who are highly engaged and purchase products and services from GRTU and affiliated service providers. You’ll note that in the case of GRTU, this offline community isn’t built around fishing poles, flies or tackle boxes. It’s around the concept of fly fishing which is a passion for many folks who comprise its membership base.

Similarly, successful online communities often share some of the same traits as a offline community like GRTU:

First, instead of focusing on a product (e.g tackle boxes), an engaging online community might focus on a topic that people are passionate about (e.g. fly fishing).
Second, an online community should give value to the community by educating them on topics of interest (fly tying courses, fly casting lessons etc.)
Third, good online communities often provide a variety of ways for the community to connect — either through discussion forums, ratings and reviews, blogs or even in different channels like conference calls or webinars.

That brings us back to our original question of whether or not a successful online community can be built around a non-passion brand or product. In addition to toothpaste, the three examples I gave of products that weren’t known for their ability to inspire were financial services, breakfast cereal and feminine products. Amazingly, there are examples of successful communities that have been built around each of these products:

Banking - Bank of America wisely realized that small business owners had a lot of spending power AND shared similar needs for things like accountants, tax preparation, office supplies and credit. Their online community gives these small bus owners the chance to share ideas and best practices with BofA as the “party giver.”
Food manufacturing - Rather than trying to talk about breakfast cereal, bread or frozen lima beans, General Mills has instead chosen to broaden their focus toward a healthy diet with their Eat Better America community.
Feminine products - P&G has garnered significant coverage for its clever Being Girl site. Rather than talking about periods and other feminine hygiene topics, this online space for teens and pre-teens coversa areas of interest like dating, music and makeup with only a subtle “we’re here if you need us” plug by Tampax.

Does that mean you could build an online community around toothpaste? Likely not if it just focused on a particularly brand of toothpaste. It might work if it centered around oral health. Even then, it might only interest dentists and hygienists but at the end of they day, they are an important constituent of the toothpaste companies.

Rather than ask you the traditional, “what do yout think?” question, I’m going to issue you a challenge instead. In the comments, feel free to offer up any product, service or brand and I’ll brainstorm with the Powered team to come up with a relevant online community. Are you game?

NOTE: Thanks to Peter Kim for providing examples via his excellent (and now famous) list of companies engaging in social media.

We live in the era of “Reality” shows. Have you ever counted up the number of reality shows past and present? There are so many of them that, now, there are numerous shows about reality shows. There are so many, in fact, that when my colleagues at Market Platform Dynamics and I decided to bring some fun to the webinar landscape in 2009, we had three times as many reality titles to parody as a once-a-month event needed.

On December 16, Market Platform Dynamics launched its payments “Reality Check” webinar series with “Survivor: Mobile Commerce Island”. Karen Webster and I hosted a lively discussion of the relative roles of the carriers and the financial institutions in mobile commerce between Mari Joller, Director of Strategy and Product Development for Virgin Mobile* and Lisa Stanton, CEO of Monitise Americas. Mari and Lisa agreed on a basic slow evolution of mobile commerce from online banking, alerts and SMS funds movement to eventual wide-spread use of mobile devices at the physical point of sales. And, they both felt the consumer market will demand freedom of choice; that consumers be allowed to choose their banks and their mobile carriers independently.

While most mobile banking webinars have focused on form-factors and functionality, this discussion got real about the underlying bank/carrier struggle for ownership of and positioning around brand and consumer information. Mari and Lisa’s views on these central issues of marketing control were in marked contrast with each other.

Mari—The banks’ real desire is to control and own the brand. They wish for the FI to be the “face” of the applications. Marketing initiatives are bank owned and driven. This is an impediment to truly a consumer-oriented solution. POS transactions are the end game. The key questions are, 1) Do carriers share in the transaction and, if so, to what extent? 2) Do carriers own a piece of the data? and 3) Are “offers” separate from transactions or integrated? If offers are integrated into the transaction flow, to what extent do the carriers share in the spoils and in the data?

Lisa– The fight over who owns the customer. They both “own” the customer. Consumers pick their carrier and bank. They won’t have to change one to get full-functionality from the other. The ultimate question is, “How does everyone sit in the ecosystem relative to recognition (who does the consumer believe the transaction processor to be), risk and revenue?” Lisa’s leanings are for the bank to be the trustee of the data and for the bank to be considered, in the consumers’ eyes, to be the provider of the banking services and the primary holder of the financial and reputation risks. In that role, the banks should rightly reap the higher revenue reward.

At the end of the webinar, the attendees were offered that opportunity (as is the case with most competitive reality shows) to cast their vote for the “Survivor.” On the criteria of recognition, risk and reward, the fans spoke and the winner of “Survivor: Mobile Island” was the banks.

The Market Platform Dynamics Reality season will resume in a special slot at 11AM Eastern Time on Tuesday January 27th due to the Inauguration the prior Tuesday. The title of the next show will be “Extreme Makeover: Financial Services Edition.”

The series will return to its regular third Tuesday of the month timeslot (always at 11AM Eastern) in February.

*Mari Joller will be joining Nokia to help drive strategy in its Software and Services organization, January 2009.

So says an article in the NYTimes this morning which summarizes the jaundiced view that VCs now have towards anyone who comes in with a biz model that depends on online ad revenue. This realization was a long time coming. The problem with the notion that “ad revenues” solve all biz model problems is that the supply of web space is highly elastic and eyeballs appear a bit fickle. And then there’s the problem that social networking sites have found—consumers don’t always welcome, and respond to ads, just because the site is free.

All that said, some of the pessimism is just a sign of the times. The economy really sucks, ad spending is down, and it probably isn’t going to get better soon. Would you be smart to invest in a Google or even a Facebook if it came along now? Absolutely, so long as you have a long view—five or maybe 10 years depending upon how quickly things improve.

This blog post appearing on TechCrunch over the weekend is a must read for everyone who has been panicked by reading the news (which is probably 100% of the population). It makes the point that we have been making to anyone who will listen now for several months: don’t look back, look ahead, this is a time for growth, opportunity and leadership – do not retreat or surrender. We view these times as opportunities for focus or what we call the implementation of pragmatic innovation. Gone are the days when projects that deliver revenue “at some point” is good enough, the litmus test today is how much impact an initiative will have on revenue in 2009.

There is no getting around the fact that times are tough. Every single company – large and small – is cutting back on expenses. Some have had to cut thousands of jobs and those who haven’t will likely do so soon. Sure, its scary and for many of the Gen X and Y-ers an environment that they have never ever seen or experienced. But as this article points out, fear is not a catalyst to productivity. Despite these difficult times, companies still have to serve clients, sell their products and services and keep the lights on. Customers still want those services although their decisions are more cautious and take longer to make. This article warns us all that fear paralyzes and contributes to the death spiral that is all too known to businesses that serve as platforms that enable multiple customers to interact. We can observe how fear is accelerating the demise of the newspaper industry. Cutbacks on expenses that help create good content, like reporters, results in papers no one wants to read and no advertisers finds attractive. And, if we are not careful, this same sort of thinking will drive other businesses to what TechCrunch calls the DeadPool.

2009 need not be the year of dread. We think it is the year to make lemonade out of the lemons handed to us by the global markets and the world economy. For every business that is tempted to sit on the sidelines and wait this one out, there will be dozens, who are ready to step in to fill the void. 2009 is the year to focus and make disciplined decisions. We at MPD are approaching the year with a renewed sense of optimism that good businesses will continue to create great value to customers. If ever there was a poster child for this, look at the acquisition of Bill Me Later by eBay – in September 2008 on the day that Lehman imploded and the market suffered just over a 500 point loss. We are inspired by the “I’ve never met a challenge I couldn’t handle” spirit of entrepreneurs in whom we see great drive and determination to succeed. We are encouraged by the spirit of established businesses, some of them a little worse for wear, who are soldiering on with programs that deliver value and bravely (but cautiously) proceeding with new initiatives that will set them apart.

We aren’t in the business of predictions, but we’ll go out on a limb this time. We predict that 2009 will foster the kind of sustainable innovation in payments, mobile and digital media that we haven’t seen in a long while. The need to focus revenue now will dampen the noise that has gotten in the way of measurable progress. We hope we’re right.

Randall Stross wrote a great piece last week describing the rush to social networks like Facebook by brands who want to make friends with their members. The net net of what he wrote is that brands who treat Facebook as simply an extension of their marketing channel, expecting members to declare their loyalty by friending brand fan pages will be (and have been) extremely disappointed. Having a fan page with a handful of friends like the 19 fans Shaw’s Supermarkets has or the mere 1,100 fans US Airways boasts (a fraction of their customer base) is probably worse than not having a presence at all. But, that has not deterred thousands of brands from trying.

His article underscores what we have observed for some time now: push as a strategy on social networks doesn’t work. Sure, it’s possible to have a fan base develop on social networking sites – just look at the millions of people who have ”friended” causes like breast cancer and autism awareness on these sites. But that is (a) the exception and (b) the result of Facebook members signing up willingly because they found the appeal compelling and relevant. Hard to imagine having that same sort of sentiment for toothpaste or shaving cream.

We think that the future of social isn’t about pushing marketing messages to people who really aren’t there to be marketed to but rather about using social as a way to develop/adapt products that adds value to the experience that people seek when visiting those networks. In fact, we think the essence of a Social SAVVY^tm strategy is first figuring out how you can enable or enhance friendship first, which will then pull thru demand for your brand. Sounds squishy, at first, doesn’t it? But step back and think about all of the efforts and massive amounts of money that have been spent trying to do it the other way and maybe you’ll be persuaded. For more on what we view as the critical elements of a Social SAVVY^tm strategy, check out the five forces of social networking.

With so many top executives and Wall Streeters having made fortunes while leading their investors and shareholders to the poor house there’s no wonder that everyone’s paying a lot of attention to corporate governance. But the recent effort by Congress to give themselves a pay raise makes me wonder whether we should use part of the grey matter going into paying executives right to paying politicians right. (By the way, giving themselves a pay raise while the rest of the economy burns is almost as boneheaded as the auto CEOs zipping to DC on their private jets.) Here’s just a quick idea. How about if we compensated the President and Congress based on the long-term performance of the economy.

We could, for example, pay them in “options” that are pegged to the S&P 500 or some other index and that vest over, let’s say, a decade or more. If that overweights economic performance maybe someone clever could develop a portfolio that is based on some combination of economic performance, maintaining the safety of the public, and overall happiness. Of course they need something to live on I guess so they would have to get loans against their future earnings.

This would do two things. It would give politicians the incentive to think really long term—beyond the next election. It would also attract people to political life who could actually make a positive difference.

Yahoo just agreed to store peoples’ search histories for only 90 days. Google had slashed its time to 9 months. And Microsoft says it will reduce theirs to 6 months if Google does too. If these search engines were using data retention as a way to compete for consumers concerned about their privacy I’d be cheering for this. This is just how competition is supposed to happen—each company offers a better deal to consumers, until the companies can’t do any better.

Unfortunately, I suspect most consumers care more about how good the search results are they get on a day to day basis than the possibility that someone will release their silly or sordid search histories. Google insists that it needs the data just for that reason and it is hard to see that they’d be storing it just for the heck of it. And Microsoft and Yahoo apparently thought so too.

My guess is that what we are seeing is, these search engine companies pandering to the press and to the regulators. If I’m right, the quality of search results will suffer—and the search engines won’t even have the ability to engage in research and look for innovations that require long search histories. I’m not exonerating Google and its smaller siblings in this. They should have made it known to its searchers that they were storing their results for a very long time and told them what they were going to do with them and perhaps even have given consumers the ability to opt out of having their data stored.

But, after being transparent about what they are doing, consumers should vote with their clicks—use the search engine that gives them the right balance of privacy and search quality. Instead, my fear is that search engines are going to engage in a contest to tacitly agree to fix the length of data retention to get the regulators off their backs. In the end, that will be bad for consumers.

It’s finally happened! Mainstream journalists covering the payments space have woken up and smelt the coffee—contactless is sputtering along in the US. Rather than another rah rah article on how everyone’s swiping—when in fact hardly anyone is—John Stewart has an excellent balanced article in Digital Transactions.

Here’s a summary but you should read the article: Contactless is a minute portion of payment transactions, few merchants take it, most merchants don’t see the business case for it but would love to install terminals if the card networks subsidized them. Consumers might eventually be able to pay by waving but that day is many years away. And today, they are confused or uninterested.

What Stewart doesn’t really touch on is whether there’s a sound business case behind the current contactless strategies adopted by the card networks. I’m not so sure. The problem is that the card networks are making a long-term bet on a particular technology. It might payoff in a decade. Or in this age of rapid technological innovation something better may come along that will make all the investment in point-of-sale equipment look kind of silly. One thing is for sure—the uptake of contactless by merchants and cardholders has gone more slowly than many anticipated.

Tired of sifting through the same old presentations, articles and online demos for nuggets of information? We are too, that’s why we’re launching our own webinar series entitled, MPD LIVE!: A Reality Webinar that features high level executives throughout various industries discussing topics as broad reaching as mobile, payments, banking, social media and the convergence of them all.

For our first webinar, December 16th, the Banking Tribe and the Telecom Tribe will battle for the Immunity Idol. Lisa Stanton, CEO, Monitise will represent the banking tribe and Mari Joller, Strategy and Business Development, Virgin Mobile will represent the carrier tribe. Both will vie for the mobile commerce immunity idol. Join us on December 16th at 11AM EST to see who will navigate the maze to transaction and data revenue, who will be sent to Exile Island, and who will be voted off the bottom line at the Tribal Council. To register, please email abigail.adams@marketplatforms.com.

The last several months have underscored what we already knew, the business world is unscripted and our discussions will be too. We plan to have some fun with our “reality” theme but the advice and insights that we will share for how to focus on short term results couldn’t be more serious.

The webinar format is pretty simple: you give us 45 minutes and we’ll give you a 5×5 – that’s 5 slides and 5 take-aways. MPD’s Karen Webster and Scott Peterson will host and assemble a panel of always interesting and sometimes even provocative panelists who will preside over these live, free executive conversations.

We hope to see you at Tribal Council!

Survivor: Mobile Commerce Island
Tuesday, December 16, 2008
11:00 am – 11:45 am EST

To register, please email abigail.adams@marketplatforms.com.

Irwin Steltzer has a great op ed in today’s Financial Times that cautions—as I did in my recent blog post—against throwing money at dying companies and industries. The dinosaurs like the American automobile companies aren’t going to create jobs and perk up the economy going forward. Innovation and with it jobs will come from new ventures with new ideas.

The FT had another worrisome article—about a third of UK small businesses are thinking of closing down. I wouldn’t be surprised if a significant portion of American ones were too. It is hard to justify throwing billions at the three stooges who flew their corporate jets to DC to beg for money when hard working small businesses people who create a lot of jobs too can’t get a loan.