Is it just me, or is everyone talking about social media these days? At South by Southwest Interactive (SXSWi) a few years ago, everyone was talking about blogs. Very few people ever thought there would be value in blogs for companies (it even sounded dumb – how could a name like “blogs” ever take off?). I’ve learned to go with an open mind, as what’s hot there generally will filter “down from the geeks” in short order. Here’s what was hot this year:

Social Networking.

It’s not new. Facebook and MySpace have been around for several years, but I’ll tell you what is new. My late thirty-something friends are all asking me to take our “friendship” to the next level on Facebook.

Don’t get me started on the demise of actual human contact (people at SXSWi don’t talk to each other; they sit with their laptops or iPhones and chat in virtual rooms). But one thing I know – online social networking is growing, and it’s not just college kids anymore.

In the old paradigm, companies controlled the message and the experience. Now, feedback and interactivity with customers is the name of the game.

If you are a company wondering how to jump on the bandwagon, check back tomorrow for our Top Six Tips on Social Networking.

Do you remember several years ago when that AOL customer taped his conversation with an AOL rep who tried to bully him out of cancelling his account? It showed up all over the news, online and in print. What if you had seen an ad for AOL after seeing that news story? Is there anything they could have said to make you want to do business with them? Behold the power of word of mouth.

In today’s world, word of mouth is instantaneous. We don’t have to wait for the news. With the advent of tmz.com and other paparazzi sites, we can see what Britney Spears is doing at this instant, should we so desire.

A great but somewhat scary example of this happened at South by Southwest recently. The 23 year old billionaire founder of Facebook was interviewed for the keynote. You could feel the excitement in the room as we all waited to absorb what made him so successful.

The interview didn’t go well. But instead of audience members privately thinking their opinions, they instantly got online (thanks to Twitter, Meebo, etc.) and began a conversation berating the interviewer. The “horde’s” disdain was palpable. My point is that the keynote wasn’t even over when hundreds of opinions, photos, etc. were posted online.

Dell made virtual history a few years ago when it acknowledged its notebook batteries catching on fire on its corporate blog. Before this, Dell’s blog was antiseptic, filled with marketing speak. Dell's perception was changed to that of a trusted advisor when Dell publicly acknowledged the issue that everyone was talking about.

Companies can no longer control the message and they should learn to embrace it. Realize that broad conversations are happening about you, whether you choose to take part or not. Be involved in the conversation in an authentic, trustworthy way. If you don't provide it, don't be surprised when customers look elsewhere.

The growth of social networks in the past year is phenomenal. eMarketer reports that one of the major shifts in social networks is their growing appeal to affluent Internet users.

The college student is no longer the sole user of Facebook or Myspace. The percentage of affluent users who participate in social networks has more than doubled in the past year, from 27% in January 2007 to 60% in January 2008.  Developments like this will drive the future of social networks, which are predicted to become mroe selective and specialized in the future. As more specialized social networks flourish, advertisers and marketers will find even more argeted online markets for their campaigns.

Click here to read the full eMarketer article.

Continuing with yesterday's blog topic, below are the final points on the new basics of marketing.  

I read an article in Inc. magazine about the ways "nimble, entrepreneurial companies" are changing the way they spend marketing money to transform their companies. It echoed many of my beliefs about this online “era,” so I thought I’d share the high points, as well as my two cents on them.

I attended South by Southwest Interactive last week, and there was a great talk on Cognitive Seduction. It asked the provocative question:

What do you want your users to think – that your product kicks ass or that your company kicks ass?

Got your answer? Think again. You want your users to think THEY Kick Ass.

Your users have things they’ve always wanted to be really, really good at. Your job is to make them feel like they Kick Ass, by being associated with you. Nobody is passionate about something they're not good at – make them feel like experts, then they will keep re-investing themselves to continue to get better.

How does this translate to your website?

• If you have testimonials (and you should), encourage people to talk about themselves, not your product. Make readers feel that people just like them have done amazing things that they can relate to and emulate.
• Make your customers feel like the heroes (experts), so they can and want to help beginners become experts. Give people tools to woo other customers and to “sell” you. Give reasons for people to feel excited to tell their friends about you.
• Passionate users “talk differently.” Utilize “insider” jargon to make people feel like they Kick Ass. Get them addicted to you.
• Include some surprises along the way. Create mystery, anticipation, curiosity about your products. The Internet has increased the value of actual, non-virtual items, so consider ways to incorporate them.
• Relate your product to solving the issues they have – reducing stress, improving their bodies, etc.

What about gaming? Any relevance here? You bet.

• First and foremost, your game needs to make people feel they Kick Ass. Make it easy for them to immediately grasp it and feel good that they “get it.”
• Add randomness, so people feel like there is serendipity to your game, like it is “reading their minds.” This is similar to the iPod Shuffle “phenomenon” where people think their shuffle often plays the song they just had in their mind.
• Add real-life physics touches to the interactive experience. Have objects act as if they would in real life. Example: The iPhone, where the trash can wobbles after you put something in it.
• Embed “insider” references and Easter eggs that allow players to feel like they are in the know.

Notice a trend here? We'll remember this time as the era of the customer. But it won't end any time soon. Make sure every single marketing effort focuses on them in a whole new way, and it will transform your company.

One of my favorite projects was helping name and brand a New Urbanist town in North Carolina. After 50+ possible names, we settled on a simple choice that reflected the village's philosophy and purpose: Breakaway.  

Three important naming lessons we've learned over the years played a part in naming Breakaway: 

1. You must be comfortable with the shortest version of your name.
Inevitably, multiple-word names will be shortened, even Wright Strategies is often referred to by clients as simply "Wright."

2. Know why you are choosing a name, and be committed to it.
After naming Breakaway, we had to define its essence and carry through that identity in all supporting marketing materials. 

3. Is it easy to pronounce?
My passion for everything Italian heavily influenced the name of my first company, Chiave Interactive (pronounced key-AH-vay). After years of people butchering its pronunciation and spelling, I swore I would pick something easier next time.

Since 2000, researchers from the University of Southern California have tracked the percentage of Internet users who have made online purchases, as well as their online shopping fears. The percentage of online shoppers has grown steadily each year of the study; from 2003 to 2007, even after the dotcom bubble burst, the percentage grew from 43% to 67%.

USC attributes this steady increase to the dissipation of the earlier online shopping fears. Fears of unknown merchants, lack of human interaction in the buying process and website security have greatly diminished over the years, as online merchants have addressed these consumer concerns. 

Click here to read the full eMarketer article.

Today eMarketer reported that despite recent reports that media budgets may be reduced this year, there is still a positive outlook for online marketing, including email and search engine optimization tactics.

Reports show that 87% of respondents plan to increase their spending on email marketing. Email marketing was judged as the best tactic for customer retention and ranked second for customer acquisition.

Click here to read the full article.