Virtual Worlds: What’s Working and What’s Not

Another good article in the WSJ on Tuesday 10/23 titled “Marketers Explore New Virtual Worlds” which details the frustration that some marketers are having in working with Second Life. The writer, Emily Steel does an excellent job of clearing the air about virtual worlds for marketing. Chief among the frustrations are the high costs and uncertain returns of virtual worlds like Second Life.

But digging deeper, it may just be that marketers jumped in without a plan for measuring their success and relied on traffic measures to justify their expense. That is always a recipe for disaster in marketing using interactive marketing sites like Second Life, Facebook, MySpace, and even LinkedIn. The idea that traffic will magically turn a poorly planned campaign into a success is a faulty one at best. And that’s where some marketers go wrong in looking to use virtual worlds…

It is never enough to set up a space in a virtual world (existing or creating your own) without specific calls to action that you can measure and bring back to a business objective. Just as we counsel our clients and prospects to develop success metrics prior to a launch, we would also tell anyone looking to use interactive technology to make sure they understand just what it is they want their members to do when they visit. So here is our quick list of what’s working and what is not in virtual worlds today:

What’s working:

1. Clickable offers for members visiting your area – Coupons, downloadable avatar accessories for basic information or taking a survey
2. Clever updates- Think virtual billboard tactics where your images and message change on a regular basis
3. Persona avatars to greet and discuss your product in the context of the site and member conversations (i.e. subtle references and recommendations, not hard sell)
4. One off events built up with lots of publicity – for an idea of what I mean, look only as far as CSI using Second Life in its television shows. While a coup for Second Life, the buzz for CSI was pretty good and I’m sure it drove in some additional younger viewers who didn’t previously watch.

What’s not working:

1. Build it and they will come thinking – Too many marketers fall into the Field of Dreams syndrome regarding using third party virtual worlds. Just as any interactive element used today, virtual worlds require staff or outsourced contractors to maintain the excitement, interact with users, and in general play greeter to visitors.
2. Poorly executed measurement – relying only on traffic metrics such as visits and views of your virtual property. You need to move towards ratios that measure activity of consequence for your brand and business.
3. The Jump Off the Bridge syndrome- Remember what your Dad used to say? “Just because all of your friends want to jump off the Brooklyn Bridge, do you?” Too much herd mentality out there in interactive marketing. Be original with clear expectations and ideas, don’t just do a virtual land grab because your competition is already there. What if it’s a money loser for them? Do you really want to follow?

There’s a lot of good things happening in Virtual World thinking and practices. Children’s sites like ClubPenguin, Webkins, and others are booming as safe havens for kids online. (Our 3 boys are members of both and interact with their classmates and cousins in these worlds.)

While this same excitement hasn’t taken hold in the business community (except for the gaming world), if done right a well thought out presence in a virtual world can yield great business results.

Moderation of Social Networks? MySpace’s Approach

While reading the facinating story of Orkut’s problems in Brazil, the following tidbit struck me:

“Addressing such problems can prove expensive. News Corp’s MySpace faced similar complaints (Porn and racist images on pages next to ads) in recent years. Now company executives say, each of the eight million photos uploaded to its site each day is reviewed at least once by a human being. That program costs MySpace several million dollars a year.”

Besides the cost of that contract, what really interested me was that MySpace executives are not the laissez faire group that many people believe they are…. That is a huge commitment in terms of manpower and costs. For MySpace, maybe it’s a small drop in the bucket to make sure that advertisers are kept happy and keep paying to place ads on the site.

Is it worth it to moderate the user generated content placed on your site? Looks like MySpace believes it is. After all, if it keeps the Attorneys General away from your site, that’s a good thing. And if it costs some money to make more money, that’s good too.

Disney, Microsoft, Viacom and Others Common Sense Approach to Copyright Violations

In several of our speaking engagements, we’ve heard the same question repeated:

“Following our lawyers’ interpretation of the DMCA, we don’t remove any content until the copyright holder contacts us. You say that is a weak defense against copyright lawsuits. Why?”

And our answers always come back the same:

“Do you make any money from ads or other offers on your site which are visible from the page showing the copyrighted materials uploaded by your members? If so, you may have a problem.”

And then we’d go round and round with each other, citing specific examples and whether they violate the act or not. The stance we’ve always taken is to be pro-active and remove it if you are making money from that page. We recommend that you remove it before someone asks because over time, you become a great target for a lawsuit.

Well, now many of the larger copyright holders are telling the world the same thing. On Thursday, October 18th a consortium including Disney, Microsoft, Fox, NBC Universal, CBS, and Viacom entered into a pact which sends a strong message to all of us who host sites that allow user generated content. In essence, this group is moving forward with clarifying the rules of engagement in the WWW war over copyrighted materials. Here is the statement from the Wall Street Journal’s article on the announcement that stands out:

” The copyright holders in the group have agreed not to pursue Internet companies for infringement claims if their sites adhere to certain principles. Those principles include eliminating copyright-infringing content uploaded by users to Web sites, and blocking any infringing material before it is publicly accessible.”

This group is promoting the idea that site owners have some responsibility to review what their users are uploading. The group is looking for firms to simply make their best efforts to remove the copyrighted material in a prompt manner. And from our view of the world, that make sense if you want to avoid getting tied up in court and spending a bucketload of money to defend your site…See our blog entry on the costs of getting served papers for this type of lawsuit.

But of course, we are biased. We help firms moderate their user generated content and firmly believe that the DMCA is so full of ambiguous wording that the best defense in this area is a good moderation strategy. Want to discuss this further? Post a comment or contact us.

The Watchers… Copyright Police

For those of you waiting for the Google/YouTube vs. Viacom et al case to settle out before pro-actively searching your site for copyright violations added by members, here’s a name to remember: BayTSP Inc.

While many of us who work in the online community industry have known about BayTSP, a great article in yesterday’s Wall Street Journal “YouTube Magic: Now You See It, Now You Don’t” gives a fabulous peak into the world of the copyright police. A couple of really interesting points in the article:

• BayTSP charges clients between $100,000 and $500,000 per month to help them protect their copyrighted materials
• Employees are paid minimal wages to do this ($11.00/hour or so)
• They don’t reveal their clients in their publicity or on their website

Doing a quick Google on BayTSP reveals that their clients include Viacom, Fox, Paramount, Columbia Pictures (Sony), and many other of the major entertainment companies.

While the article makes it appear that BayTSP is concentrating on the big major websites such as Google’s YouTube, the search shows that they go after both big and small web sites. After all, a violation is a violation. There are many posts in the communities for Peer-to-peer (file sharing) networks about members getting the cease and desist letters from BayTSP on behalf of their clients. Some of those who received the letters are only downloading or uploading music and movies to the networks. Seems that Limewire is a favorite target….

So what is the business upshot to all this? Simple. If you are going to allow users to upload content to your site whether its pictures, videos, or even news articles you need to be proactive in reviewing it and deleting it before a company like BayTSP finds it. Why? Because with the fees that they are charging, BayTSP and others are not a free moderation service. Multiple violations and letters will surely bring a lawsuit to your office. How much will it cost your organization if there is a lawsuit? Let’s take a shot at figuring it out:

1. Cost of BayTSP service over the course of a year for a media company to find violations on your site and send letters to you: $50,000/month (only a portion of the total fees to BayTSP) for a total of $600,000
2. Legal Fees: $100,000 for attorney review, paperwork costs and time, as well as filing costs
3. Lost royalties: Tricky, but figure that if you have 100 clips that violate copyrights each month and on the copyright holder’s site, those clips generate $1,000 in ad revenue (PPI) per month on the media company’s site, then you have a lost royalties amount of $1,200,000.
4. Your organization’s legal costs: Internal General Counsel – 100 hours of time at $125/hour or $12,500. Outside Legal Counsel – 100 hours of time at $300/hour or $30,000. (And this is just to respond to the initial lawsuit and answer the initial complaint, not perform discovery or file any counter suits.)

On a combined basis, you might be looking at an amount of $1,900,000 plus before damages for a single copyright holder (media company). Perhaps you’ll be able to settle for $1,000,000 and enter into an consent agreement to remove copyrighted materials on your own in the future. But what of the other media companies that learn of your violations? Because you know that your members are not going to only put Comedy Central clips on your site, they are also going to use copyrighted songs for their own videos, news clips from CNN and others, as well as photos and articles from major newspapers. Over time, the failure to manage and moderate these contributions gets very expensive…

Put these costs against the costs of hiring a moderation firm to pro-actively remove copyrighted material in advance of anyone reporting it to you through a cease and desist letter and it really shows the risk/reward of not being proactive is off the charts.

Good moderation can range from $60,000 for small sites to over $1,000,000 for large sites annually. When you put the costs of moderation against the possible costs of a lawsuit (and the corresponding negative publicity for your brand and your career), what would you choose?

Do you want to learn more about this topic? Contact us. With over seven years in moderating user generated content for large organizations, we are well versed in protecting your company from these types of issues while providing an excellent online experience for your site’s customers, members, and visitors. Impact Interactions can review all the user generated content placed on your site by members, whether it’s blog entries, comments, message board posts, photos, or videos.

Online Community Expert Dan Bruhn Joins Impact Interactions

Dramatic growth in High Tech clients focusing upon user generated content on web sites has increased the need for experienced executives who can bring strong real world business processes to manage the submitted content. To help our clients in this sector, Dan Bruhn has joined the Impact Interactions team as our Senior Consultant for High Technology engagements. A graduate of Bradley University, Dan brings over seven years experience in online communities, marketing, technical support, and analytics to our client engagements.

Prior to joining Impact Interactions, Dan worked with Cisco Systems’ award winning Networking Professionals Community (NetPro). In his role with Impact Interactions, Dan will continue to lead all engagements within Cisco, including the ongoing moderation engagement for NetPro. Additionally, Dan will provide best practices for Impact Interactions’ business-to-business clients pursuing online community-based interactive strategies.

“Dan provides our clients with an additional level of online community expertise. He and I worked together in the early days of NetPro at Cisco and his experience in using online communities to drive measurable results is significant,” states Impact Interactions president Mike Rowland. “With the addition of Dan, Impact Interactions continues to build the strongest database of best practices in the online community world for our clients. His deep knowledge of technical support, marketing, and partner communities brings tremendous expertise to Impact Interactions which in turn will help our clients succeed.”

For additional information regarding online moderation or user generated content strategies, please contact us at ImpactInteractions.com.

Online Community: Just what is a copyright violation? Viacom vs. Google

In case you missed it, there is a great explanation of the two views of the world of online copyright being fought over right now by Viacom and Google. At the All Things Digital Conference held a couple of weeks ago, Viacom CEO Philippe Dauman gave his outline of what is covered and not covered under the Digital Millennium Copyright Act (DMCA) regarding copyright and how he views Google’s YouTube violations of that Act. Giving equal time, there is also an interview with Chad Hurley and Steven Chen, the founders of Google’s YouTube.

Summing it up, Viacom believes that YouTube is violating the DMCA because YouTube is a media company that has knowledge of the copyright violations. The DMCA is written to protect companies involved in the building blocks of the internet such as routing, ISPs, etc. not media companies such as Google and YouTube. Mr. Dauman also states that his company, Viacom was spending large sums of money on a team that was manually going through YouTube (and probably other sites as well) looking for Viacom content which was posted/uploaded to the site by users in violation of the copyright. Those costs in addition to the money that YouTube was making on the ads shown on the site are real money that is coming out of the revenue stream of Viacom.

Google and YouTube on the other hand argue that the DMCA applies to them and that they complied with the law because when notified by copyright holders, they removed the copyrighted materials. Eric Schmidt goes so far as to state that the dispute is about “whether there is a shared responsibility around the take down provision or not.”

The folks at Google understand and clearly state that this is about money… but they want to make the money at someone else’s expense. The DMCA is going to be tested here and hopefully through case law, clarified as to exactly what constitutes a hosted site allowed to store copyrighted materials and what is a media site. Common sense would say that if a site is making money from unlicensed copyrighted content, they should have to pay for it or remove it themselves. In our opinion, it does not make sense to allow sites and companies to earn revenue on copyrighted content for which they don’t own or license the right to show.

Your local cable access station cannot let you sign up for free air time and then show an episode of the Colbert Report you recorded at home, why should the internet be any different? As companies such as Apple and Microsoft work to bring television to the web and help define the industry, sites allowing video uploads should be held to the same standards as local cable access television stations. The principles are the same. It will be very interesting to see how the courts rule. Of course, given the money involved, there will most likely be a deal announced in the next couple of months between Viacom and Google so the law will not be examined as it should.

In terms of the uncertainty right now over the DMCA and online user generated content, we advise our clients to scan their site and remove blatant copyrighted materials uploaded as they find them. For example, message board posts that contain images from Warner Brothers or Disney cartoons are edited. Videos and photos from television shows or movies are edited or removed. When community managers make a “best effort” to remove copyrighted materials, the firm has a defense against the inevitable lawsuit. With copyright confusion, the best defense is a good offense.

Want to learn more about protecting your company and keeping your members happy? Contact us, we’d be happy to discuss the successful best practices we’ve developed in this area.

Online Communities: Will Online Anonymity Survive?

• Member A attacks Member B
• Member C, D, E, F & G join in the attack on Member B
• Blogger Z and Y post entries which repeat the attacks on Member B

1. According to court documents, a user on the site named “STANFORDtroll” began a thread in 2005 seeking to warn Yale students about one of the women in the suit, entitled “Stupid Bitch to Enter Yale Law.” Another threatened to rape and sodomize her, the documents said.
2. Some posts made false claims about her academic record and urged users to warn law firms, or accused her of bribing Yale officials to gain admission and of forming a lesbian relationship with a Yale administrator, the court papers said.

• The two, who say they suffered substantial “psychological and economic injury,” also sued a former manager of the site because he refused to remove disparaging messages. The manager had cited free-speech protections.

Planning for Incivility – Why your online community needs moderators

We’ve seen an upswing in blog posts and articles related to the growing issue of incivility on the internet and in online communities. The most recent article from PC World’s John Dvorak sums it up nicely:

“Nastiness is an earmark of many bloggers, podcasters, and members of the herd; a few insane people; and those who feel that being an out-and-out mean and profane presence on the Internet is cool or funny. The level of nastiness that floats around the Net in various forms, forums, and Web sites is incredible.”

We think that this is not so incredible, but is just the way the world is right now. When you look at other media such as television what do you see? Nastiness. Whether it’s political (Bill O’Reilly, Keith Olbermann), social (Jerry Springer, The View with Rosie O’Donnell), or even legal (Judge Judy) the overwhelming tone is nasty. Why? Because it attracts people to engage with the show. And the internet is the same. Nastiness gives visitors a reason to engage.

Because of this nastiness, some folks like Tim O’Reilly have called for a Bloggers’ Code of Conduct. Okay, that would help the folks that actually blog perhaps. But what it really is, is a set of very good moderation tips for online communities as a whole.

We know from our experience that there are always going to be members who are visiting only to disrupt, argue, and complain. Most of these members only come to attack those who have differing opinions. They do it with strong language and abusive comments. They also are the first members to bring up “Freedom of Speech” and my “Constitutional Rights” as soon as a moderator steps in. When their commentaries and attacks are edited or deleted they attack the moderator and host organization rather than looking inward. Then they enlist their online friends to continue the attack on your organization. You will never please these people.

So you had better have a plan for how you deal with them. And that means having professionally trained moderators ready to deal with this situation. Moderation is a thankless job. Your moderators will never keep everyone happy. But they need to be consistent and strong willed while being able to communicate clearly to all members.

But what about the members themselves reporting violations and problem members? It is a myth that is far from reality. From our experience, here is why:

• Many members don’t like to rat each other out. It’s not their problem, it’s yours.
• One side of the fight will report the other repeatedly (and vice versa) over every comment they perceive as a slight or violation. That means that the same comment will be reported multiple times by a group while ignoring other violations because it becomes a game.
• The average site visitor doesn’t care about violations.
• Most people do not understand copyright law or the fair use provisions. (Just ask YouTube)
• Actual violations will always be under-reported versus actual violations which need to be removed.

Our experience shows that for every legitimate violation reported by members, our moderation teams edit or remove an additional four comments which violate the community’s terms of service. We believe that allowing a community to self report issues will eventually kill the community as the groups start slugging it out, providing a strong disincentive to new visitors to join. Eventually, the fighters will tire and leave your site resulting in a dead community which will not help your organization’s goals.

If you have questions about moderation, best practices in working with disruptive members, or setting up processes and guidelines for your online community, contact us. We’re happy to answer your questions.

Are we doomed to repeat the mistakes of Community’s past?

Reading the media’s accounts of online community becoming an important component of marketing, I am struck by the fact that many of the people being quoted think that online community is something new and exciting to offer customers and site visitors.

Take P&G’s latest foray into communities with its interactive agency ZiZo Group for example:

“Capessa.com is an innovative example of how companies are strategically innovating with digital media,” adds Roger Fishman, founder and president of The ZiZo Group. “Developing sustainable digital business models provides new ways to listen to, learn from and engage with online communities and is key for long term brand-building.”

Um, Roger this is not new in any sense of the word…

And from CSO’s blog post, Gartner’s comments:

Peter Sondergaard, global head of research for Gartner, told CEOs at Cebit on Wednesday that blogs and online communities like MySpace may have started in the consumer realm, but they’ll have a big impact on businesses in the coming years.

Peter, where have you been?

Yes, online communities should be part of the mix of any organization that wants and desires to get closer to their customers/members/prospects. But thinking this is something new is silly.

It reminds me of several comments made during the initial BlogOn 2004 meeting in Berkeley where most of the bloggers presenting spoke of how blogs were going to revolutionize the world, change how people interact with each other, and dominate how organizations delivered content to everyone. These comments were usually followed up with discussions about the lack of a business model that worked or a discussion on whether advertising on blogs would be enough to cover a salary plus expenses. What these folks never even contemplated was that all these discussions had taken place before. They assumed that because they had found something new, it was new. They misunderstood the power of a new tool with the power of community. The knowledge of the past work in online communities was irrelevant to them because blogs were new.

The same thing is starting to happen again as the online community world grows. Too many people who are covering this industry believe that it’s new, shiny, and exciting without ever researching what has already happened. When I see companies like SAP, HP, and others labeled as old world or as traditional companies I cringe. Companies like these (and I’d add Cisco and Microsoft as well), have embedded the idea of online community so deeply into their organizations that there is true enterprise knowledge being gained.

For every MySpace there is a GeoCities. For every Capessa there is an iVillage. There is knowledge and experience to be mined in order to avoid stepping on the landmines that await new online communities. Whether it will ever be tapped into is another question.

(Cross posted to the FUTURE OF COMMUNITY blog) Want to gain that experience and learn how to avoid the common pitfalls of launching and operating an online community? Contact us for a free consultation.

Is MySpace now a verb like Google?

There are some very interesting changes happening in the online community world… An article in PCWorld today calls out the new Salesforce.com MySpace-like offering for business. In the article titled “Salesforce.com Readies MySpace for Business,” China Martens has some very, very interesting quotes:

“We looked at the customer portal concept to see how we could reinvent it,” said Kendall Collins, senior vice president of product marketing at Salesforce.com. “We see the portal more as a space, not a window, in terms of what you can do with it and how you can fill it.”

“Our vision for AppSpace is broader,” Collins said. “It’s going to include wikis and blogs.” Salesforce.com is also hearing from users that they’d be keen to see payment widgets included, he added.

Salesforce.com’s move with AppSpace follows Microsoft Corp.’s announcement last week at its Convergence show of its take on MySpace. The software giant is creating a series of online communities for users of its Dynamics ERP (enterprise resource planning) and CRM applications, starting with a site for finance professionals to exchange best practices. So far, Microsoft hasn’t positioned the communities as a place to share applications.

It appears that we are on the cusp of hearing MySpace used as not only the name of a web site and company but as a verb as in “We wanted to MySpace our site to meet our users’ expectations.” Next it will be marketing’s turn to claim “We MySpaced our competition…”

Wait for it….