Online Communities

“People of the Earth…..

A POWERFUL GLOBAL CONVERSATION HAS BEGUN.”The Cluetrain Manifesto: Levine, Locke, Searls & Weinberger, 2000

Agenda

• What are online communities?• Brief History of online communities• Who is doing what?• Case studies

– Product Review– Lifestyle– Brand – Customer Focus Groups– Community Centric Business– New Advertising Channel

• Characteristics of successful online communities• Web Site Traffic Strategies

– The challenge for marketers – online communities

What is an online community?

Message Board

Blog

Wiki’s

Chat Rooms

Customer ReviewsForum

Instant Messenger

Supplier Reviews

Content Management

System

Teleconferencing Technology

PeopleInformationExchanges

Online Games

VirtualMeetings

CommunitiesOf Practice

KnowledgeCommunities

Definitions of Online communities

“An online community is a messaging system, or forum, which is available to anyone, anywhere, anytime through the internet, which facilitates as ongoing conversation between a group of individuals, large or small, who have a common interest, topic or goal they wish to exchange information, opinions and knowledge on.” Julie Walker Oct 2004.

“A virtual community allows people to engage in the exchange of information, and learn from each other and about each other.” Rothaermela & Sugiyamab (2001)

“groups of people informally bound together by shared expertise and passion for a joint enterprise” Wenger & Snyder (2000)

“Communities tend to be identified on the basis of commonality or identification among their members, whether a neighbourhood, an occupation, a leisure pursuit, or a devotion to a brand.”

Brief history of online communities

2003-06 Advertising Community ChannelsEngagement Brand

MarketingCAMERA PHONES 3G, Wireless

& mobile

1973

1968

1978-79

2002-03

1998-99

1996-97

1994-95

1992-93

1986-91

1979-85

2000-01

ARPA PAPER PREDICTS EMERGENCE OF VIRTUAL COMMUNITIES

FIRST EMAIL MESSAGE STRENGTH OF WEAK TIES

BBS’s USENET NEWSGROUPS MUD’s

ONLINE SERVICES – COMPUSERVE, AOL, THE WELL, MINTEL etc

LOTUS NOTES INTERNET RELAY CHAT LISTSERV WEB CROSSING

“THE VIRTUAL COMMUNITY” COMMUNITIES ONLINE

COMMERCE COMMUNITIES – EBAY, AMAZON TEXT MESSAGING

INTRANETS HOMESTEADER’S - GEOCITIES NETGAIN SIXDEGREES

COMM OF PRACTICE CLUETRAIN MANIFESTOBLOGGER RSS

B2B COMMUNITIES – CISCO SAP GOOGLE GROUPS

LINKEDIn SOCIAL NETWORKING – FRIENDSTER, LINKEDIN SMARTMobs

concepts technologies

BBB’s –bulletin boardsMUD – Multiple User Dimensions – online strategy gamesARPA – Advanced Research Project Agency

initiativesKey

Jenny Ambrozek & Joseph Cotrel

9th Int. conference on Virtual Communities

Who is doing what?

Brand Communities• Dove• Mini• Harley Davidson

Customer Review Communities• eBay• Amazon

Customer Service Communities• Dell• Zone Alarm• Roxio Software

Online Games Communities Gamers.com Individual games

Customer Focus/Feedback Communities• Hallmark cards• Charles Swab

Personal Network Communities Linked-In Ecademy

User created Communities Ezboard

Information Communities Lonely Planet Walkingworld

Dating Communities Udate Dating Direct

Friendship Communities Friendsreunited Habbo Hotel

Lifestyle Communities iVillage (owned by NBC) Liverpool, Arsenal, Manchester United FC

Entertainment Communities•WWFBBC programmesLiving TV Big Brother

Expert Communities Time Zone Virtual Tourist

Advertising Channels• Tribal Fusion

Review Communities

• AMAZON - consumer products for sale

• EBay - buyers and sellers in the market

• TimeZone - high end luxury watches

• Zonelabs - software

Amazon – Product Review Community

Conversion Process at AmazonThe story of one Amazon customer as told in a white paper from Lithium Technologies:

In 1998, the customer went to Amazon, when he could not find the book he was looking for at Barnes and Noble. If it was on Amazon and not too expensive he would order the book. He would do this 2 or 3 times per year.

In 2000, he started to read the customer reviews – which he found useful and found that their were other reviews for household items, kitchen gadgets, tools etc. At this time, his transaction value increased to $100 to $200 and he made purchases several times per year.

In 2001, he started to post his own reviews and had 15 to 20 on the site.

Now, his buying behaviour has changed and Amazon is his first port of call.

EBay – buyers and sellers

EBay utilise customer and supplier reviews, in a peer to peer reputation based community where both buyers and sellers can be rated by those whom they have either bought from, or sold to.

As both buyers and sellers develop their reputation within the community the more likely they are to trade and remain loyal to the EBay exchange – moving to another platform will mean they have to either build up their reputation or operate within an environment which does not benefit from this form of trust building system.

This system is not full proof and has been manipulated in the past, but it does create a valuable guide for the community and a reward for loyalty to and participation in the community.

TimeZone

DescriptionTimeZone is a an online community which is made up of a number of forums (message boards) and is aimed at watch enthusiast and collectors.

The forums are separated into three main sections:

• Watch – general watch industry conversation • Brands – individual high end brands• Community – other complimentary topics including travel and lifestyle.

In 2001, an academic study by Rothaermela & Sugiyamab found that TimeZone members were loyal and were likely to purchase between 2 and 10 watches per annum.

Zonelabs – Customer Support Community(1)

Zonelabs are a software vendor who develop and sell Firewall solutions. They have a free downloadable product which is there entry level solution for home users and has limited functionality.

In 2002, over 60million copies of their free software had been downloaded and it was financially impossible to support all these users via a traditional help desk. They implemented an online support community, where users could help each other. Zonelabs did provide some technical support resource to the online community to supplement the community’s knowledge.

Currently there are 13 topics within the Zonelabs support community – one of which is an off-topic board where non product specific conversations take place.

There are no statistics for Zonelabs as it is a subsidiary of Check Point technologies.

Zonelabs – Customer Support Community(2)

Benefits of a Customer Support Community

• Peer to peer product recommendations can accelerate the purchase cycle – When searching online for info about a product or service if there are a number of vendors and one or two

of them have customer communities then it is likely a prospective customer will go to the community as a first port of call to find out more about the product/service increasing their likelihood to buy.

• Users are product/application experts and can provide peer to peer support, research shows that there are financial benefits to an organisation in implementing this type of community:

– A BCG study in 2000 showed that 20% of customer queries could be answered by the user base and a US online community supplier believes that with the growth in familiarity with “self-help” solutions that this figure could be as high as 40%.

– Research has estimated the cost of telephone support calls to range from $33 to $200 and email support to range from $2.50 to $19.

– Estimates for peer to peer support costs range from $0.75 to $2 a significant reduction in costs.

• Indirect Customer acquisition– Prospective customers may be directed to a customer support community by an exiting customer, a

search engine or generic online community and ask an open question about a product or service and will may get both positive and negative feed back enabling them to make a more informed decision about a purchase.

Lifestyle

• Virtual Tourist

• Ezboard

• Ivillage

Virtual Tourist – Lifestylefrom community to business

Description : VT started life as an online community where backpackers and gap year travellers to could exchange travel tips and review locations.

Today, VT is a full online travel service offering flights, hotels, car hire, meeting points, events and travel guides created by their members for their members.

Statistics :• Online in 1998• Free membership • Today - over 600,000 members from over 220 countries • Ability to create your own travel web page & online journal• 1,263,772 Reviews 2,210,708 Photos • Revenue from travel product sales• Revenue from advertising – global, regional and local.

From VT’s Advertisers section:“A recent survey of VirtualTourist users, finds that over 99% will research travel online. Over 83% will actually book travel online. Our users are actively planning, researching and booking travel online.

They are interested in getting valid,

relevant information to help

them make decisions. “

Ezboard – Lifestyles the largest English speaking community host

AudienceEzboard's members are young and economically strong. Forty percent of Ezboard household heads are between 18 and 35, and half between 35 and 54. More than 50% of our members are women and over 90% of our users are on Ezboard sites for more than an hour a week.

Revenue modelProfitable since Q2 2004, Ezboard's revenue model relies on a mix of subscription and advertising.

DescriptionThe largest online community network site on the planet, Ezboard connects people like you with other people who share your interests and passions. Whether you want to participate in online conversations or run your own discussion board, Ezboard's hosted Web platform makes it easy for you to get up and running in just a few minutes.

iVillage

Brand Communities

• Dove

• Others

Dove – Campaign for Real Beauty

www.campaignforrealbeauty.com

• is an interactive community which is promoted as a haven where women from all over the world can discuss and break the pre-set definitions of "real" beauty.

• lists events, activities and has message boards where women share their views on themselves, beauty, body-image and self-esteem.

• Is a global, interactive campaign, with web-user response from 21 countries and growing.

• The Dove campaign was very successful primarily because it asked the question “what is real beauty” and challenged the current perception of beauty and followed through, giving the audience an opportunity and platform to voice their opinions, becoming part of a global conversation with their peers around the globe about a subject which raises opinions irrespective of your country of origin, level of education, religion or political bias.

Other branded communities…..

Customer Focus Communities

Customer focus groups are invitation only and are used by organisations in their product or service innovation areas of their business. These communities have been successfully used by organisations like:

iVillage – female consumer community which attracts 3.5m visitors per month, surveys carried out around consumer products

Starwood Hotels and resorts – who changed the layout, usability and content of their web site based on feedback from their customers

Charles Schwab – used the small more intimate communities to engage with their customers who felt that their ideas and suggestions were being closely listened to and scrutinised and therefore were more willing participants as they felt valued and involved in the development of the organisations services.

Hallmark Cards - who have been using this type of focus group for a number of years to sanity check the sentiments of their cards and to generate new gift ideas for consideration.

The benefits of a private community

Reduced risk in new product development Segment target audience for new product development/innovationIdentifying the right participant will increase the validity of the information obtainedCreation of an “engaged” group of customers who feel more aligned to your organisation

As with all communities there success is determined by the management of the community and must be created with a clear objective in mind.

Communities standalone businesses

Case Study - Habbo Hotel

Description : Habbo hotel is developed and managed by Sulake, an interactive entertainment company specializing in developing, publishing and distributing multiplayer online communities and games.

Community Statistics

2000 Founded by Finnish advertising company

2005 35m registered users

Turnover US$18m

16 countries – localised language and tone

5.4 million unique visitors per month

Target audience – 12 to 18

Male Female split – almost 50-50

Community Attributes

Member safety number ONE priority

Moderated 24/7 x 365

All activity logged and monitored 2/7 x 365

Parental Reporting available

Customisable Avatars

Look and feel in line with target audience

Community leaders who provide advice to the members on topics like drug abuse, sex, teenage relationships etc

Habbo Hotel – Case Study (2)

Community Attributes to attract & engage youth(16-25) culture (research by US org.

Habbo Hotel

Age 12 to 18

Attract and Engage with

Information which is updated frequently Yes

A visually appealing and easy to navigate user interface Yes

A system which enables them to do multiple tasks quickly Yes

Develop & Maintain their Loyalty through

Communication in their own language and tone Yes

“funny” or humorous interactions Yes

Facilitating self expression Yes

Giving them a voice, listening to them and acting on their views Yes

Help them to help themselves Yes

Making them feel like “insiders” Yes

Learn who the influencers are and how they influence the group by

Facilitating their ability to converse with each other Yes

Understand how they filter info and what they will or will not forward on ?

Understanding that incentives are expected but do not motivate ?

Connect them to a “brand” Yes

Research carried out by a US company has identified a number of characteristics which are required by the youth (16 to 25) segment.

The table to the left identifies these characteristics and shows that the majority of these are present in the Habbo hotel online community which is aimed at the 12 to 18 market segment.

In addition to these characteristics online trust and security is very important. Habbo hotel address this through 24/7 moderation and the creation of “audit trails” for all activity on the site. Safety of the members is the primary concern of Habbo Hotel.

“You can attract youth through clever design, but you retain them through commitment to genuine and persistent “listening” to their needs.”

Case Study - Habbo Hotel(3)

The success of Habbo Hotel has not escaped product marketers notice and in Q1 2004, PepsiCo decided to launch “Mountain Dew” in Finland through a combined on and offline campaign.

The Campaign – had a number of components

Online•A virtual mountain dew room was created within Habbo hotel

•The room contained mountain dew branded furniture

•Mountain Dew branded clothing was available for the avatars •The virtual swimming pool was filled with Mountain Dew•Members were encouraged to “virtually” taste the drink •Members could purchase furniture and clothing for their avatars

Offline•The online purchases were only possibly through the use of a specific SMS number which was located in the lid of the mountain dew bottles on the supermarket shelves resulting in an offline purchase.

The result was Mountain Dew became the 2nd most popular soft drink within 3 months. A similar launch took place in Singapore shortly afterwards.

Vodafone are one of the vendors who enable members to use their phones to purchase “credits” for use within habbo hotel – this may be a relationship to look at developing in the mobile market.

New Advertising Channel

Tribal FusionTribal Fusion have launched a new online advertising channel.

Tribal Fusion build or partner with interest focused online communities enabling them to target online advertising campaigns to a segmented audience with a specific demographic. For example:

• Households with income over $75k p.a.• Consumers between the ages of 34 & 54• Have spent >$1k online in last 6 months• Regularly take part in a winter sport

Through the use of online technology Tribal Fusion can also provide audience statistics:

• 687,000 unique visitors per month• 15,7 million monthly impressions

This level of analysis of the user base, the topic of the community and the knowledge about the level of activity within these communities will enable Tribal Fusion and companies like them to be able to offer routes to a more highly targeted audience and should in turn increase the return on advertising spend.

Web Site Traffic Strategies

Traffic Strategies

EMAILSearch EngineOptimisation

SMS/Text

WEB SITE

Word ofMouth

ViralOnline

Circular

Multiple

Iterations

From

One instance

CONTENT must be: COMMUNITY must be:

ONE WAY – ONE TIME

Circular

Multiple

Iterations

From

One instance

Informative

Valuable

Interesting

Relevant

Engaging

Educational

Entertaining

Enhancing a lifestyle

Word of Mouth & Viral Strategies need..

• Positive User Experience

• Engaging user model – mix relevant, valuable content with peer group community

• Easy to use web sites

• Clear value proposition

Communities differentiate when they are…

• created with a clear objective in mind

• targeted at an identified customer segment

• relevant to target segment

• delivering value

• recognition driven, rewarding members through community status levels

• viewed as containing valuable, relevant and interesting information

• places where members are encouraged to participate & share knowledge

• attractive to topic experts

• well managed by a dedicated team

• committed to ensuring their content is updated regularly

• moderated by professionals

• available 24/7

• responsive, easy to use and navigate around

• complimentary to an organisations core business

Communities differentiate when they are…

Community & Traffic Strategies

EmailSEOSMS

WEBSITE

VISITORS

PositiveUser

Experience

EngageWith Peers

GainKnowledge

Word ofMouth& Viral

Member Get Member

1. Web Site Value Proposition is introduced through Email, SEO and SMS campaignsLifestyle enhancing online tool kit Valuable & relevant content Active & engaging community of peers

2. Member get member strategiesMember referral programsWord of Mouth

Viral campaigns

Content Community Advocacy

The Challenge for Marketers..Online Communities

• Moving from “interruptive” to “ENGAGEMENT” orientated marketing programs

• Setting clear objectives for an online community?

• Identifying a target audience

• Identifying a “credible” value proposition which can be delivered through the online community

• Engage with a small sample of the target audience to develop the offering

• Be prepared to think outside the box – identifying and addressing unmet needs will have a bigger impact on a customer than obvious ones.

• Identify an experienced partner to create, host, manage and maintain the first “online Community” for your organisation – this will keep your start up costs down and enable you to focus on what you are good at – understanding your business, your customers and their needs.

Client A

Q&A

Discussion