Evan Williams of Twitter but up a post yesterday entitled “The evolving ecosystem”. Based on the title, one might expect readers to come away with new insights and stats into how vibrant the ecosystem is. However, as I read it only one thought kept coming to mind – how much does the Twitter ecosystem really matter?

I’ll highlight two key points on this front. The first comes from the chart provided. 78% of people that log into Twitter do so through the main site (www.twitter.com). They next layer down are mobile applications – m.twitter.com, SMS, Twitter for iPhone, and Twitter for Blackberry. Each is in the 7 – 14% range (the percentages sum to greater than 100% as some people use multiple apps). Each of these, I believe, are controlled by Twitter itself. So you don’t really see any “ecosystem partners” pop on the list until the next tier down – TwitPic, Tweet Deck, and Echofon, at 3-4% each.

That’s important, particularly for social media marketers that are trying to understand the real experience customers might be having. Since many of them are power users that might naturally adopt some of these more advanced tools (like TweetDeck), and that might be their main Twitter experience – but it’s not representative of what the vast, vast majority of users experience. In turn, most would be better served spending more time on www.twitter.com, and optimizing content for that experience.

The second is paragraph two, which really brings the whole ecosystem thing into question:

One major area of difficulty I highlighted was getting Twitter on your phone. We did iPhone user tests and confirmed that even though there was a plethora of third-party Twitter apps, people were having trouble finding and selecting one because none were called “Twitter.” This kept them from using Twitter at all. For this reason, we acquired Tweetie and turned it into Twitter for iPhone, complete with a new user sign-up experience. (emphasis added).

Think about that for a second. One of the key features of an ecosystem approach is to foster a wide variety of innovations, to suite a wide variety of customer needs. But what Twitter is saying is that even though there were a lot of options (and though they don’t say it, many of them were and are quite good), having these options actually prevented people from selecting any of them.

Now such findings shouldn’t be entirely surprising – numerous marketing studies in the past have shown that while a little choice is good, many customers become overwhelmed once there’s a lot of choice and end up not buying anything. This is roughly the equivalent.

So I ask – in a world where the vast majority of people access Twitter through the main site (and/or mobile extensions controlled by the main company), and Twitter found they had to make a single, easy option in order to get people to sign up for the mobile application on the iPhone (as they were overwhelmed by the options available), how much does the ecosystem really matter?

Or put another way, will simplicity continue to trump functionality?

As I scan articles about the impact of social media on marketing, I commonly come some variant of the statement “the customer is now in control.” But the more I research and think about this statement, the less I believe it – and the underlying message being sent to marketers – is. So today I thought I’d explain why.

My first issue is with the word now. From my perspective, the customer has always been in control – the fate of companies providing products and services in a capitalist economy is ultimately determined by what customers choose to buy. In turn, the analysis shifts towards social media somehow giving customers slightly more control than they had before – a small, but important, distinction.

The typical argument is that as customers have connected with each other through platforms like blogs, Twitter, and Facebook, the opinions they share amongst themselves have increased in importance, while the typical “broadcast marketing” approaches have decreased in effectiveness. While I do believe there is some truth to this, there is another way to look at what’s happening.

For starters, if customers only wanted to hear each other’s opinions, they could do so without engaging companies at all – either in somewhat self-organizing fashion through Facebook and Twitter, or “neutral” services like Yelp. But many, many customers are also opting to directly connect with companies – liking, following, lurking in communities, etc. – through these very same platforms. In doing so, many are effectively asking companies to engage with them.

Second, being “in control” takes time and effort. I would argue that many customers may want to “take control” in relation to certain product and service decisions, for many others they are happy to be passive recipients of messages (and offers) from their preferred brands. For example, the #2 reason given for becoming a Facebook fan (based on a survey earlier this year) was to receive coupons. And while I don’t have time to go into it here, one of the consistent findings from my research is that customers like being “broadcast” to on social media more than many people think.

On a related point, I believe that many customers are being overwhelmed by all the brand-related conversations taking place. For example, many brands on Twitter now commonly send 30+ messages a day, responding to specific people. Many consider this to be engaging. But if you follow (say) 30 such brands, that’s over 900 messages a day – most of which will be of absolutely no interest to you. Perhaps the method will persist for many more years, but perhaps not.

Finally (at least for today), as “word of mouth” marketing has moved online, and more and more data is generated, it’s becoming ever easier for brands to monitor exactly what people are saying, thinking and feeling about various things. I personally believe that all this information points towards a world where many brands can be far more “in control” than they’ve ever been before.

Tying it all together, I’ve taken to asking what someone like Don Draper – the lead character on Mad Men – would think about the rise of social media if he was ported into 2010. Would he look at all the new tools and behaviors and say “wow, I can’t control anything here!” Or would he say “wow, I can influence, monitor and control things more than ever before!”

My sense is that it would be the latter – and many companies would be well served by taking a similar line of thinking. After all, to be in control implies having power; it is commonly said that knowledge is power; and all this information is giving companies more knowledge than ever before.

It seems that every day a new article (or blog post) comes out about how brands are using Twitter wrong. This article from yesterday delivers this message in a typical way – saying that Twitter consists “primarily of two-way conversations – marketers can be doing so much more to participate fully in this two way medium” (and the Twitter whitepaper it links to is fairly interesting). Marketers are being told to engage and converse – and to do so quite frequently.

But I have a different perspective, and believe that many brands (and companies) can succeed on Twitter without necessarily engaging in conversations, or being particularly active. Not only that, but I believe the hypothesis that customers necessarily want to be engaged in conversations with brands needs to be challenged, as I don’t think it’s true as a blanket statement.

I’ve been doing a lot of research on this recently, but today I’ll just provide a few different Twitter accounts that appear to be doing very well, in terms of followers, without engaging in conversations (or doing any of the other things most people are recommending they “should” do on Twitter).

@woot:  A quick glance at their Twitter page reveals they typically post once a day (occasionally 2 or 3 times). This post is a link to a daily deal. There is simply no conversation or two-way engagement. They have over 1.6 million followers (#90 overall, between Biz Stone and Penn Gillette), and have been listed 7,000 + times. This makes woot one of the most popular brand accounts on Twitter (out of companies that actually sell stuff).

@zappos: this account is operated by CEO Tony Hsieh, and Zappos is frequently mentioned as one of the leading companies in delivering compelling customer experiences, and engaging in social media. But if you look at his actual activity, there are few signs of conversation to be found. It’s mostly some quotes he finds interesting, a few links, and some seemingly random thoughts. He also doesn’t post that often – less than once a day. He has over 1.7 million followers (#72 overall, between inStyle and Serena Williams), and has been listed almost 10,000 times.

@mashable: Mashable is the online guide to social media. If anyone was to be using Twitter “correctly”, you think it would be them – and this account is run by Pete Cashmore, the CEO. It is popular – @mashable has over 2 million followers (#45 overall, between Pete Wentz and Mandy Moore), and has been listed almost 50,000 times. But again, just look at the activity – a continuous series of links to various articles. More active then the two examples above, yes – but conversational, absolutely not.

You might think I just cherry picked these examples, and that they are the exception to the rule. But I didn’t – there are many more examples where these came from. And as for the rule, well, I think the rule is wrong.

That social media can be used to engage in conversations is absolutely true, and many people and companies are doing that effectively. I don’t dispute that. But somewhere along the way, there seems to have been a near consensus emerge that:

a) two-way conversations is the only way to use Twitter.

b) two-way conversations is what every customer wants on Twitter.

I don’t believe it. The fact that so many people seem to be interested in so many accounts that do the exact opposite is rather telling on this front. And as more and more people engage on Twitter (and other platforms), and create more and more connections, with the potential for more and more messages, I truly believe we’re going to see more and more people realize that “conversations” isn’t what it’s all about.

That “customers are now in control” has become an increasingly common refrain in the marketing world. To be honest, I think I’ve used it a time or two myself. But the more that I think about, particularly in relation to social media, the less convinced I am that it’s actually true. In turn, I’ve been researching a very different hypothesis – that social media allows brands to have more control than ever before.

This hypothesis is at the centre of a webinar I’m doing in a few weeks – contact me if you’d like to check it out. It builds on one of the key research projects I’ve been working on – The incredibly shrinking marcom expense line – which looks at ways that marketers can use social media to reduce marcom expense, while at least maintaining current levels of impact. And what led me to the counter-hypothesis, in terms of control, were some fairly simple thoughts and questions.

In my mind, that customers are in control is not new – they always have been. What they choose to buy, or not buy, has been and always will be the ultimate determinant of success. What they say to each other has been of known importance for some time. So that leads to the question of which way the needle moves because of social media… which led me to jump into my time machine.

Go back in time ten years, and pretend you are a marketer. Somebody tells you that, in 2010, tools will be available that let you directly connect with a large, and growing, percentage of your customers, for free (or at a very low cost). Not only will the tools let you do that, but many customers will opt to allow you to do just that (often enthusiastically). Those that aren’t passionate enough about your brand to evangelize for you can opt to simply “like” you – in full visibility of their friends. At the same time, you can “eavesdrop” on many other conversations being had about your brand, and inject yourself when and where you see fit. Some customers will even co-create with you – sharing ideas for new products and services, or collaborating on new ones all together. And all of this will be happening on a variety of platforms where you can get a pretty accurate picture, increasingly in real-time, of what exactly is going on.

Would you have reacted to this by saying “wow, that’s giving up a lot of control?” Or would you have reacted with something more like “wow, that gives me the opportunity to control far more than I can today?”

I believe there’s elements of truth to both answers – but I personally think I would have fallen in the second camp. Social media offers an extraordinary number of opportunities to marketers, and taking advantage of them, in my mind, isn’t neccesarily synonymous with “giving up control”. And as my research gets into (and future blog posts will cover), I think a lot of brands that have “given up control” might find that many of their customers want them to take it back…

I spend a LOT of time reading about how companies are using social media to build their brands. In most cases, while the language varies widely, it tends to focus on engaging customers in conversations, within a community setting. And more often than not, a lot of attention is centered on getting customers to co-create, and turning them into evangelists (or ambassadors) for the brand.

I’m not opposed to any of this – in fact, I’ve spent a great deal of time studying customer co-creation strategies (what I typically refer to as prosumerism, as defined in Wikinomics), and think that most brands could benefit from adopting them on some level. But at the same time, I have a growing sense that this focus neglects a huge, and important, part of many brands’ customer bases – those that aren’t particularly interested in “engaging” in any meaningful way, but might still like to purchase your products or services.

While this has been a recurring theme on this blog recently, I was reminded of it again when I re-read a report Sean Moffitt wrote for my company (nGenera Insight) last year called “It takes a community – not a campaign – to raise a brand.” It’s a truly excellent piece of work from start to finish. But the chart on page 15 is what got my hamster wheel churning today. It defined nine different types of community members, ranging from “lurkers” – people who merely visit and consume content – to “ambassadors” – people who are immersed to the point they are pseudo employees. Most importantly, he included estimates of what percentage of community members fall in each group that seem about right.

According to the chart, only 40% of community members are at the level he called “socializers” – those that might post a full profile and an occasional message. Only 20% will put in so much effort as to answer a poll. Only 10% will originate content. And less than 0.5% will become true “ambassadors”.

So to me, that says somewhere between 60 and 80% of community members aren’t really “engaged” in any meaningful way – they’re more or less just visiting. That’s a pretty big number. And while I’ve heard many people talk about strategies (using various terminology) to try to increase the “engagement level”, my sense is that most of them will fail. Quite simply, many people just don’t want to connect with brands like that – or at least to all the brands they might use like that.

I think companies need to think deeply about satisfying the needs of this huge group of customers – which is where the title of this post came from. It’s not uncommon to hear story after story about success in building a small network of ambassadors (or co-creators), but it’s rare to hear someone talk about their success in delivering value to, say, lurkers – even though they’re a much larger group. In some cases, doing the first automatically does the second, but in other cases it does not.

Yelp is a classic example of the first case. A small percentage of people  create the vast majority of reviews on the site. By doing so, they collectively create the service that all the other users enjoy. So in that case, Yelp focusing most of their efforts on engaging (and growing) this relatively small group of people makes absolutely perfect sense. Similarly, when Starbucks sources an idea from MyStarbucksIdea.com, the benefits (in terms of new products, services, etc.) should not only accrue to their more passive (from a social media perspective) customers, but also those that might not engage on the web at all.

But other cases are not so clear cut. Whether it’s a company-controlled community, Facebook Fan (or Like) page, Twitter, MySpace, or what and wherever, there’s a very realistic chance that many of the people that come there are not interested in engaging, and not interested in what the other people are saying (or doing) either. But they might want, say, a coupon. Delivering one might not sound as 2.0 as engaging them in a two-way conversation, but it might be more effective (and profitable).

In the traditional media world, this was a very frustrating group of customers – extremely hard to reach, and the cost of doing so often led to a negative ROI if you even bothered to try. But I think those dynamics are changing dramatically, as the cost of connecting with some of them trends towards zero. Not only that, but I believe that some of these customers might turn into the most profitable ones you can have – if you don’t alienate them by focusing all of your efforts on getting them to “engage.”

About a month ago I wrote a blog post entitled “social media and the incredibly shrinking marcom expense line“. The basic idea was that, thanks to (among other things) ambient intimacy, marketers can increasingly connect directly with millions of customers, for free – or at a very low cost. Because of this, questions like “what’s holding social network advertising back?” are misguided – as they take the perspective of what is spent on a given channel, rather than what the impact is.

One of my favorite stories in relation to this idea was the “if you vote, Starbucks buys you a coffee” campaign from late 2008. Not only did the company source the idea from one of their customers (BillMac) through their mystarbucksidea.com site, they provided a very early lighthouse into how powerful ambient intimacy can be. The 400,000 + people who watched the YouTube Video, 200,000 + who accepted the Facebook invite, and an estimated 26% increase in viral buzz tied to the campaign were all publicly visible, positive indicators of this.

For the last few months I’ve been speculating that if Starbucks did something similar now, the impact would be even greater. After all, amongst other things, their Facebook fan base has grown from 600,000 to well over 6 million over the last year and a half. Then on Monday, the company announced a very similar initiative to their previous one – a free coffee for anyone that brings a reusable mug to any of their cafes in on Thursday. Seems like a good chance to test my theory.

As far as I can tell, relatively little money has gone into promoting this. But a quick look at their Facebook fan page indicates the message is getting out – in about 48 hours, almost 500,000 people have responded to the Facebook invite (238,000 confirming intent to take them up on the offer, 74,000 saying maybe, and the rest declining). So that’s 1/2 a million people who have responded in a short time frame (i.e. at minimum “aware”). It seems safe to assume that there’s many more who saw it and opted not to respond. And it’s probably safe to assume at least a few of those people that became aware shared the news with their friends, who also opted not to respond directly – and of course there’s many people chatting about it on Twitter (and other places) as well.

So while I don’t know what the exact number of people that have been made aware of this offer through social media, I think that – when all is said and done – it will be comfortably in the millions. To me, that’s a pretty big deal – and is something all marketers should be paying attention to. While product giveaways have been used for ages, most companies have not only had to eat the cost of the giveaway, but spend a lot of money to tell customers they can have something for free. Now, that message can spread far and wide relatively cheaply – and who knows how far a similar offer might reach a few years from now.

A couple of weeks ago Media post published an article called “what’s holding back social network advertising?” In it were what appeared to be some rather jarring statistics – notably that not only do social network ad revenues fall significantly lower than their search and display counterparts, but they are actually forecast to grow much slower as well. Based on this, the article questions whether 2010 is really going to be the year of social media in terms of online advertising – as all the glowing press coverage would indicate.

Why this interested me so much was that it plays directly into one of my main research areas right now – what I’ve been calling the incredibly shrinking marcom expense line. My argument is that when people look at advertising online, they take a spend-centric point of view. Basically if $X is spent on (say) display advertising, $Y is spent on social media, and Y is significantly less than X, than something must be holding it back.

I take a different perspective, based on one two very simple, inter-related observations. One, the value of advertising – from a marketer’s perspective – should be based on the impact it has on customers, not (rather perversely) on how much it costs to reach them. Two, marketers can increasingly connect with their customers for free through the leading social media platforms.

Think about it for a second. If you take the spend-centric view point, placing an ad on Facebook (that costs the company money) is seen as a positive indicator for social network advertising; getting several hundred thousand fans to attend an event (for free) is not. Assuming you can post an ad on Twitter (for a fee) soon, that will be seen as a positive indicator; sending a tweet to hundreds of thousands of fans (for free) is not. And if you extend the same logic out to YouTube, placing a text ad (for a fee) on someone else’s video is seen as positive; having millions of people watch your company’s commercial (for free) is not.

That seems ass backwards to me. Again, looking at it from a marketer’s perspective, the ability to connect directly with customers, for free (or extremely cheaply), is a good thing. Opportunities abound to do just that, each one capitalizing on what I consider to be the most important thing about social media platforms – that they enable ambient intimacy. While I could go into great detail on this, the ability to “friend” and “follow” (among other things) has simply shattered Dunbar’s number.

As noted, one of our key research projects at nGenera Insight – and my personal favorite – is digging deeply into the opportunities surrounding the incredibly shrinking marcom expense line. Some of them stem from using Twitter and Facebook effectively; others link to building effective brand communities – particularly those where prosumers get actively engaged; still others center on emerging new platforms like Yelp. I believe that marketers who successfully take advantage of all the opportunities here will find they can use social media strategies to achieve two, often competing goals – driving long-term growth, and proving short-term ROI.

The details can get complicated, but the underlying story remains deceptively simple. Sometimes, doing for free what you once had to pay for can be priceless. Feel free to contact me – in the comments, @denisbhancock, denisbhancock (at) gmail.com – if you have any thoughts on this (or would like to hear more about it).

As part of my ongoing research, I’ve been paying close attention to developments around Twitter’s “list” feature (launched in October) – “A great way to organize the people you follow and discover new and interesting accounts.” Yesterday I stumbled upon an interesting finding (that has me scratching my ahead a bit) in relation to follower vs. list counts as a measure of popularity.

One would think that there would be a very high correlation between the two – if a lot of people follow you, you are likely to make a lot of lists. While I haven’t actually run a regression to prove that, as I’ve looked around it generally seems like a fairly safe assumption. But there’s one interesting anomaly I’ve found recently – @Marvel vs. @Agent_M.

@Marvel is “the official Twitter for Marvel Comics, Movies, Games and More.” Agent_M is the “editor for Marvel.com. Writer, blogger, loves tacos, tattoos, comics…” I’ve been watching these two accounts with interest for some time, because the former has about 43 thousand followers, and the latter has about 1.4 million. This would seem to say something important about relative popularity, and it’s interesting when the editor is more widely followed than the content.

But the “list” count tells a slightly different story. @Marvel has been added to 1,467 lists, while @Agent_M has been added to 1,234. So even though Agent_M has 0ver 30 times more followers, his account has been added to fewer lists. Divide lists Marvel is on by total followers you get 3.4%; for Agent_M you get 0.1%. ; Why is that? And what does it mean?

I have a few ideas (that basically amount to pure speculation), but there’s one other wrinkle I’d like to throw in here from my previous research. Regular readers have heard me talk about the Twitter brand engagement matrix before (see here, here, here, here, and here). The basic idea is to differentiate between brand and personality centric accounts, and broadcasting vs. conversational strategies, by using a 2 by 2 matrix. It looks like this (with a few examples thrown in):

The general message (as each of the examples represents) is you can have success from each of the quadrants. In this case, @Agent_M is squarely in the personality / conversational quadrant (upper right). @Marvel is squarely in brand /broadcast quadrant (lower left). Two diametrically opposed approaches, with two very different results.

So in this case, the personality / conversational approach has proven far more effective at attracting followers – a sign of popularity. But the brand / broadcast approach has proven far more effective (on a relative basis) at making it onto lists – a different sign of popularity. So why? Is it a different type of person that follows the different type of accounts? Does it indicate that a higher proportion of @Marvel’s followers are actually interested – and perhaps a significant chunk of Agent_M’s aren’t paying attention? What exactly is it about the type of content @Marvel posts that makes it more likely to crack lists?

Can’t claim to have the answer (at least not yet ). But I think there are some interesting questions here that I will be paying attention to…

I was just reading about the Trouble at Twitter – how U.S. visitors were down 8% in October – on Tech Crunch. The CEO mentions that they’re hoping a “slew” (currently a couple) of new features will help revive growth on the site – such as the retweet button, lists, and geolocation features. It very well might – but it got me thinking about a peculiar competitive position they are in.

For most of the last year, Twitter has done very little innovation directly. But thanks to their open API, that doesn’t mean innovation hasn’t been happening – all kinds of new tools and applications have been constantly emerging. My question is centered around how they’re going to manage this ecosystem, as the company itself starts innovating more. There are more and more data points emerging that indicate, to me, that the line between partners and competitors is blurring.

Coming at it from one side, TechCrunch highlighted in September how StockTwits is growing up and away from Twitter, as they develop their own desktop app. To quote the article, “Yes, StockTwits is slowly breaking away from the service that inspired its name.” What should the company do if StockTwits, slowly but surely, starts to compete with them directly? On the other side, Lists are a step towards Twitter helping users sift through information directly – something TweetDeck already does (in a different, and more advanced, way). If Twitter continues to innovate on this front, what are the competitive implications?

It’s a question I constantly struggle with in our research – and it seems particularly relevant when a company is facing slowing growth (or a decline) in users, before they’ve found a business model. Could the ecosystem implode on itself? Or will they find a way to keep working with each other? What do you do if a current “partner” looks like a future competitor – and what implications does it have for prospective partners / the innovation cycle?

A couple of months ago, buried deep within a post about the Memphis Grizzlies’ prosumer experiment, I made reference to how the experience of “Snakes on a Plane” using an innovative social media marketing experiment, and then failing to put butts in the seats, was being misread. In short, people seemed to jump to the conclusion that social media marketing didn’t work for movies – people might talk about it, but they don’t pay to see it. I proposed that it’s possible the movie was just bad, and you can’t blame social media for people not wanting to see it. I then tied this back to what the Grizzlies are doing, saying “remember to distinguish between whether the approach was wrong, or the underlying product was just too messed up to use it effectively.”

I now, finally, have a good example to back up the assertion. The success of the movie “Paranormal Activity” is all over the news. It is a low budget film, that’s used a slow (and staggered) release, driven by input from potential fans, to roll it out in select theatres (160 so far). Last weekend they averaged $49,379 per theatre – about four times as much as Couples Retreat (which, in fairness, was released in 3,000 theatres). You can read all about it doing a search like this, but the basic idea is that people got behind, word of mouth did it’s job, and it was a great, low-cost marketing move.

But the key lesson to me is simple. Social media allows messages to go viral – but you can’t really control the message that is sent around. So if the movie isn’t good, social media isn’t going to help you much. If it is, a lot of good things can happen. And as this trend continues, what’s really going to matter is not how you market yourself – but whether you can indeed come up with a better mousetrap.