Notes

Why 2.5? Because we are in transition. The old is still with us, and the new is emerging but has not yet arrived. This was also true when "Web 2.0" was coined: only later did orthodoxy emerge.

2.5 is named "Get real" because we all have to do that. The punch bowl was taken away.

3.0 is named "Main Street" because the web is maturing... for everybody.

Social Media: Closed social-network sites cannot survive in their current form, and yet they are so dominant today. So the transition to open and pervasive will be a big and messy fight... which will be great fun for journalists to cover!

Advertising: Advertisers will adopt a barbell approach: CPM for branding, and CPA for direct-revenue generation (as soon as publishers figure out how to make money selling CPA). CPC will still be dominated by Google but will become less dominant as CPA gains traction. Google will play in CPA and CPM but won't dominate as it does in CPC. Publishers will sideline CPA because nobody will be able to compete with the CPC price set by Google. Ventures that bridge the gap between publishers wanting to sell CPM and advertisers wanting to buy CPA will do well.

Revenue: Primary revenue will come from subscriptions and transactions, with advertising as one driver of those revenue lines. Today, we are in transition and in recession, so any revenue is good.

Content: UGC reduced the cost of content but created too much junk. Curation (adding human editors to automated UGC content) will be aided by semantic technologies that aim to do what humans currently do well.

Start-Up Hero: Today, it's "Nobody" because we are all in a hangover funk. In the near future, entrepreneurs really will hold the best cards; financiers will be secondary.

Funding: The "Big VC" model is broken but will carry on for ages ("Zombie VC"). Angels and small VCs are in the cat-and-bird seat today. But they need a revived public market or something other, which we'll call "private + transparent."

Prime Market: This is a century-long shift, like the one from Europe to America. Asia is not ready yet, America is in turmoil, and Europe is conservative, so this is another transitional phase.

TruCast allows companies to monitor internet buzz by analyzing blogs, social networks, consumer opinion and review sites, bulletin boards, discussion forums, newsgroups, and online news sites to determine what's being said and how engaged customers are with the company's brand. Several well-known companies currently using the TruCast system to monitor and respond to their customers include Dell, Microsoft, Panasonic, and Hormel.

Dell, who is known to be one of the more forward-thinking companies when it comes to listening and responding to their customers, uses TruCast to actively monitor posts, comments, and conversations on 40 different online topics related to the Dell brand, the details of which are revealed in this new case study which has been posted to the TruCast web site. According to the study, TruCast enabled Dell to reduce the negative sentiment about their brand by more than 50%.

TruCast 2.0

Now, with the launch of TruCast 2.0, the technology has been improved to monitor and discover even more online conversations than before. According to the company, TruCast now currently harvests and analyzes nearly 70% more data than any other competing applications. The technology they use delves into the social conversations that are taking place - reading through comments, follow-up comments, and more to determine the relevance and attitude of each item it finds.

TruCast Dashboard

More importantly, TruCast works with a business to give the right people inside the company the access to the relevant data in order to respond in a timely and appropriate fashion. And although the conversations are coming in from all over the internet, TruCast streamlines them into one central application where they can be tracked, read, and answered, which makes the workflow of brand analysis and response as simple to handle as checking your inbox for new mail.

TruCast Response Manager

If you want to learn more about how TruCast is helping companies stay on top of the ever-changing social media landscape, you can view this presentation (below) from the American Marketing Association's (AMA) Online Seminar:

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A Jupiter Research report on this subject analyzes the risks of negative buzz. The report is entitled "When Good Social Marketing Goes Bad," but it should be noted that most people use the term "social marketing" to apply to campaigns that mean to bring about social change. The Jupiter report, however, uses the term more casually to mean any marketing campaign that relies on user-generated content of a viral nature.

What they discovered was that although marketers have been quick to embrace this new trend - 35% allow for user-generated content (UGC) on their own web site and 21% have a profile on a social network - they have not been as quick to monitor and combat the negative buzz that some of their consumers will create.

In fact, only 29% of marketers using these techniques are monitoring the online discussions about their products on an ongoing basis and a shocking 17% don't monitor online discussions at all. Also, despite the availability of professional "buzz monitoring" services like Nielsen BuzzMetrics or MotiveQuest, only 8% of marketers used these services in 2007.

Who's Talking Trash?

The Jupiter report was also able to build a profile of the typical creator of negative user-generated content. This person is usually a heavy user of social networks, predominantly male (60% are male) and into technology (40% are influential in this area and 23% are considered "early adopters"). They are also a potential valuable audience for marketers as 49% tend to act as brand advocates - which means they tend to be vocal influencers who spread the word online.

How to Fight the Negative Buzz

Before trying to combat the negative buzz, the first thought needs to be whether or not it's worth the effort. Often, marketers will attempt to offer these negative UGC creators special treatment or invite them to be beta testers in order to keep the feedback private and productive. However, these tactics are not always practical and they don't always work, either.

A marketer must be aware of how far and fast their company will go to fix a legitimate complaint and also how likely the complainer is to adjust their response. Keeping in mind that research shows that only 12% of online adults think UGC like those posted on social networks or message boards is "trustworthy," going to great lengths to quiet the naysayers is not always worth the effort.

Of course, sometimes it is worth the effort, which is why the most important thing for a marketer to determine is whether or not the negative content is created by someone who just wants to take a cheap shot at the company, or whether it actually offers genuine insight into a product or service's failure. If so, then addressing those persons that created the negative UGC makes sense. Then, it can actually be helpful to engage those people openly in the public forum to show the company is listening to valid complaints and responding. That is a difficult choice to make for a company, as it only takes one loud negative voice to affect an influence on the larger group of the company's customers. However, when done well, this type of response can be a benefit to all.

Conclusion

Lately we've seen a lot of companies attempting to combat negative online buzz in new ways - Comcast has been monitoring blogs and social networks for mentions of their company, Digg is now holding online townhalls, and many other companies are offering customer service via Twitter. We've also seen the potential volatile situation that can occur when one disgruntled customer's voice can attract the attention of the whole crowd, as in the situation with Ariel Waldman's complaint against Twitter. Even she admits on her blog that she never meant "...to bring a mob with pitchforks to Twitter’s door," yet that is the power of even one complaint.

An old adage in advertising and marketing is that "a satisfied customer will, on average, tell five people, but a dissatisfied customer will tell everyone they know." For a company to be successful, especially now when the tools for communication are being intentionally placed in the customers' hands, it is more important than ever to know how to analyze, monitor, and respond to negative online buzz.

The high hopes vendors like Kyte have had for User Generated video are crashing on the rocks of underwhelming consumer response and the market is shifting to a more traditional commercial media model. Will consumers come around in the future? Kyte says yes, I'm not so sure.

Simply put, large numbers of non-professional users have not started producing video content outside of YouTube and other vendors are now shifting towards publishers looking to make money. For the immediate time at least, user generated video will probably remain centralized by in-house services from major social networks (YouTube, MySpace, Facebook) because that's where the audiences and ease of use are. The forthcoming YouTube Live will continue this trend.

More high-end feature sets and publishing experiences will be in demand almost exclusively by big media companies and a small group of aspiring professional video broadcasters. One of the premium features Kyte is announcing today is premium Facebook applications, something also offered by competitor SplashCast. Kyte has worked out an interesting solution to updating Facebook app splash pages, but that's just one of many problems publishers face on Facebook. Meanwhile it's advertising that is going to make big media partnerships pay off for companies like Kyte and the places where the viewers are, MySpace and to some degree Facebook, still drastically limit the visibility of 3rd party delivered ads.

It's a tough place for small video services to be in, but there's enough money flying around that someone will have to figure it out someday. Everyone else will then follow but white label video publishing ala Kyte Premium will become commoditized once that happens.

Today's funding announcement includes new investments from Disney's Venture Arm SteamBoatVC and Nordic telecom giant TeliaSonera. These two put in a relatively modest $6 million more on top of previous money from other investors. The total Kyte funding now stands at $23.5 million. The company's planned expansion internationally will probably burn through that pretty quickly, making a rapid solution to the advertising question an imperative. User generated content is not nearly as easy to monetize as big brand content, something Kyte confirmed to me today was their experience as well.

Kyte's New Technology

The new Kyte video player is substantially less ugly than the old one and publishers now have the option to publish through premium branded players and stand-alone Facebook video applications. Kyte is also rolling out e-commerce capabilities in the premium players.

Video industry watchers will also want to know about live streaming. Kyte now says it will include live broadcast streaming from both mobile phones and webcams by the end of this month. The functionality is in private beta now but will be limited to the same Nokia phones that Qik is available on now.

Kyte offers good technology, but users interested in it shouldn't expect to receive substantial support and innovation in your favor. User generated video is just not taking of for small players the way it was expected to. Today's announcement extends the trend we discussed earlier this week, video is becoming more international and more commercial than was believed to be the case initially.

FSB expects the results of the boycott will be clearer later in the week, especially after the listing fee changes take effect tomorrow. "If [eBay's listings total] falls below 12 million we've made a pretty good impact," eBay PowerSeller Nancy Baughman told Fortune Small Business. "I'm hoping that it goes down below 10 million. If that happens, we will have made a huge impact."

What eBay sellers are trying to do is not new. We saw a similar user revolt take place at Digg last May. That brouhaha was the result of users responding to what they felt was censorship by the social news site over the release of the AACS encrypition key. In the end, after users effectively took over the site, Digg caved and the users got what they wanted.

Unlike a traditional product boycott, when the users are integral in creating the product being boycotted, the results are felt more acutely. If you boycott a certain type of candy bar, for example, the candy bar will still exist on store shelves for others to buy and the company can throw additional marketing muscle behind it to offset the boycott. If, however, you get enough people to boycott the creation of content on a site that relies on users for content, then the site is effected for everyone. The candy bar is no longer on the shelves because the boycott leaves the shelves empty.

While it seems unlikely that what happened at Digg will happen at eBay -- which has a much larger and more mainstream (and thus less tightly connected) user base and would require a much bigger movement than on Digg to effectively damage the site -- both instances illustrate how much power users have when sites rely on user generated content.

When MTV pulls the plug on the channel next week, it plans to keep the Flux web community alive, reports the Guardian. MTV has plans to "integrate the user-generated content concept into its MTV-branded music channels," writes the paper's Mark Sweney.

Some of MTV's other channels will host a show, tentatively titled "Flux Me I'm Famous" (which was the name of another show that aired on Flux), in which hosts would discuss the latest celebrity news and gossip being talked about on the Flux message boards. Further, Flux users will have the opportunity to vote on and influence playlists on MTV's flagship music channels.

Flux had an average audience of just under just under 70,000 viewers (though MTV says it reached a height of 90,000 for some shows). New Media Age notes that user generated content is hot in the UK right now, with BBC Three and E4 both recently relaunching to put added emphasis on UGC and social networking.

According to Wikipedia (a site Stern specifically cites as an example of UGC), user generated content "refers to various kinds of media content, publicly available, that are produced by end-users." Wikipedia lists discussion boards as a type of UGC site (it even lists Digg as an example of a user generated content web site). Digg's comments act in very much the same way as a discussion board -- encouraging people to comment on news stories, videos, and images (very often leading to more comments than are made on the original source article).

Stern's objection to Digg being a user generated content site seems to focus around the word "content" -- as Stern argues, much of the submitted content is unorginal. But the comments on Digg, no matter how useless some might find them, are original media content provided by the users for publication on Digg -- which is enough to fit the Wikipedia definition, at least (and this is why we might say the comments section on any media site are an example of user generated content). In some cases, Digg provides utility for users to respond to content that doesn't allow commenting at the original source (i.e., many mainstream news articles). These responses qualify as user generated content in my opinion.

But even if you agree with Stern that Digg is light on user generated content (and there is certainly a case to be made there), there is no denying that Digg is a user generated site. Digg has very little -- if any -- editorial oversight, and the content on the site is dictated by users. As the HD DVD crack episode last May showed us, Digg may not have much control over its users do with the site's content at all.

That said, while I think it is fine to call Digg a user generated content site, I see Stern's point. When you say "user generated content" you think of YouTube or Wikipedia before you think of Digg -- i.e., the sites that immediately come to mind are those where there is a major creative element to the content being contributed by users. But if Digg isn't a user generated content site, it is certainly a user something site. So how about this: user managed content site. (You can even drop the word "content" if you'd like.)

What do you think? Is Digg a user generated content site? Let us know in the comments below.