Did you “Elf Yourself” last holiday season? OfficeMax’s seasonal marketing campaign featured a viral Web component which allowed customers to superimpose an image of their own face on an animated dancing elf. According to Internet tracking service comScore, more than 17 million people visited the Elf Yourself Web site during the 2007 holiday season. But did all of those unique visitors translate into increased sales? The answer is not really: the company’s reported total sales in Q4 2007 were down 2.6%. The economy’s slide hasn’t helped either; in 2008, OfficeMax reported that its 2008 Q4 earnings were down more than 14%.

Ava Seave, an adjunct associate professor in Finance and Economics, recently blogged about the correlation between viral marketing success and sales totals. Seave suggests that marketers examine traditional metrics to gauge the success of their campaigns. She writes:

Viral marketing can decrease acquisition costs for new customers because your current customers essentially endorse your product when they send along a game or video they think is funny or interesting, and, of course, is associated with your product.

However, the acquisition cost calculation needs to be done over time, since a viral marketing campaign almost never leads to direct sales from that game or video viewing. The right goals for a viral campaign should be a lot more old school: Does this campaign generate leads and does it help with brand recognition?

Judging a viral campaign’s success for lead generation is straight forward — count the number of the leads that close and judge the quality — i.e. total revenue — of the new customers. To count, how many leads land on the registration form and actually fill in the information, and how many abandon? What percentage of leads make a transaction? What is the cost of the lead and the cost of the order?

Compare these statistics to all your other sources, naturally. Does this campaign help with brand recognition is a harder question to pull out a quantitative answer. You can point to the number of downloads or pass-alongs as new exposures to your brand, and we assume exposure will lead to recognition. You also could look at what terms are put into search engines that lead to your site and determine if this indicates the effectiveness of the campaign.

Photo credit: Judy Baxter

Drawing on their industry background and experience, Columbia Business School’s Chazen Fellows are a group of students selected to report on events and activities relating to international business. In the most recent edition of the Chazen Web Journal, two fellows explore competitive advantage in old and new industries — energy and social networking — in Latin America.

James Walsh ’10 examines the emergence of socialism in Venezuela and its effect on the energy industry. He brings a unique perspective to this issue: before business school Walsh worked in economic and market analysis at Citigroup, researching domestic and international economic issues. After he graduates, he plans to return to his native Texas to work on energy-related matters. Exxon’s decision to pull out of Venezuela, Walsh argues, was one that put the energy company at a “disadvantage relative to its competitors, who clearly still find operating in the increasingly difficult Venezuelan market profitable.”

Walsh says the larger geopolitical risk for the United States is less volatile and concludes that a symbiosis exists that is mutually beneficial. “The U.S. needs foreign oil and will continue to purchase it from Venezuela and other not-so-friendly regimes,” he writes. “Conversely, Venezuela needs the U.S. as the closest large-scale consumer of its energy resources and as a source of institutional and operational expertise in the exploration and production industry.”

This issue also features a report on an emerging industry in Latin America: online social media. Lauren Frasca ’10 examines the battle between Orkut and Facebook for social networking dominance in Brazil. She draws on her prior experience developing television and digital content for major broadcast networks, along with her business school studies and a newfound interest in Brazil.

Frasca argues that although Orkut currently has dominance in Brazil, it would be mistaken to overlook Facebook as a major player in the near future. Indeed, Orkut once had dominance in India as well, but “recent numbers released show Orkut’s unique visitors in India falling by 800,000 within the month of August, while Facebook grew its unique visitors in India by 700,000 during the same time period. Indeed, Facebook has launched a few strategies to aggressively pursue Orkut’s user base in Brazil.” While both companies also need to focus on monetizing their businesses, Frasca concludes that the number of users is as important. “The key battle in winning the social networking war is that of developing a scalable, profitable business model.”

Read more in the March issue of the Chazen Web Journal.

Photo credit: Beatrice Murch/Flickr

What Can Online Newspapers Learn from the Airline Industry?
Brett Gordon, Assistant Professor, Marketing

When fuel costs spiked in 2008, none of the large air carriers wanted to be the first to charge for checked baggage. Few had noticed when low-cost carrier Spirit Airlines began charging for the first bag in June 2007. Nearly a year later in May 2008, American Airlines — one of the “majors” — announced that it would charge for the first bag. Before the end of summer, five of the seven largest North American carriers followed suit.

In some ways, the online news industry is facing a similar problem, albeit one without as simple a solution. After months of speculation, the New York Times recently announced that it would implement a new payment system starting in January 2011. Despite a few early chargers (e.g., Wall Street Journal) the vast majority of online news is provided freely to the public. Most newspapers would like to charge, at least partially, for content, but no one wants to be the odd paper out and make the first move. In the academic parlance of game theory this is called a coordination problem, and it occurs repeatedly in countless industries. So how do firms solve this issue?

Members of the airline industry are highly sophisticated at interpreting other airlines strategies. Smaller airlines tend to look to the majors before instituting pricing changes. The large airlines recognize their role and plan accordingly. Online newspapers need to develop a similar ability if the industry is to successfully move to a dual paid/ad-supported revenue model, however, their task is harder in part because the industry is more fragmented.

What Will the Publishing Industry Do Next?
Rita McGrath, Associate Professor, Management

A new development is that the Web itself is starting to splinter. In the early days, you had one way of accessing online content — that was through a computer — and developers could optimize for a certain kind of user experience. Today, people access content in myriad ways that are not always compatible with each other or optimized. A developer or a publisher has to decide whether to hit every platform or optimize for Blackberry, iPad or some other platform. They have to ask, “What is going to be our platform of choice?”

The content business model will be less driven by the need to aggregate the most eyeballs on a common platform, and move towards a model determined by the ecosystem that can draw the most participants. For example, Apple is trying to create a vertically integrated ecosystem with its products and partners. Rival ecosystems will start to compete for business with publishers, and media companies and content providers will watch to see where people are participating.

Publishers will have to come up with ways to monetize their participation in an ecosystem. There is hope that content providers can cut themselves more lucrative deals on these coming platforms.

What Is the Right Price?
Ava Seave, Adjunct Associate Professor, Finance and Economics

It is not unreasonable for companies to charge for information on the Internet. Many try-before-you-buy and sampling schemes are being tested across all types of media. Practically speaking, before companies make decisions about pricing, they should test the proposed pricing models as much as possible before rolling it out.

When the New York Times raised its newsstand and subscription prices in May 2009, they got a good idea of the inelasticity of their consumers’ demand. The move likely emboldened the paper to announce its current scheme. With time before the debut of its pay wall in 2011, the news organization can solicit customer feedback — and handle the blowback.

Every product is different in terms of where the company should put the price. The Times can measure the frequency with which people come back to the site, so it can set the pay wall at the optimal place for maximizing revenue. It is likely that the Times will adjust its online price as needed as its experience with it evolves.

Two weeks ago, the Technology Business Group and the Green Business Club organized and led Columbia Business School's annual Silicon Valley Trip. This was the School’s 13th year heading west to explore career opportunities. We had more than 40 students on the trip and we visited 15 companies in three days. This year’s lineup was fantastic and included the following companies: Adobe, Apple, Autodesk, Bloom Energy, Blue Skye, eBay, Facebook, Google, IDEO, Khosla Ventures, Meebo, Tesla Motors, VMWare, Yahoo and Zynga.

The goal of our trip was to provide a chance for students to explore opportunities at technology and clean tech firms in the Bay Area. The company visits typically consisted of a campus tour, a talk with recruiters and either an executive speaker or a panel of employees. At many of the companies, we also had a chance to meet and speak with Columbia alumni who work there. For first-year students looking for summer internships and second-year students pursuing full-time jobs, the trip was refreshing, as it was clear that most of the companies we visited were in the process of ramping up recruitment efforts.

One interesting question that came up during our company visits, over meals, and in the car driving around the Bay Area is whether it’s better to head to a small start-up after graduation or join a larger and more established firm.

	What are your thoughts on this topic? Please leave a comment.

In our first meeting at Zynga, a fast growing gaming company, their board member, Bing Gordon from Kleiner Perkins, suggested taking risks earlier in our careers to do something new and exciting. He felt that with an MBA from Columbia, you can always fall back to a job with a large established firm if the start-up doesn’t pan out. But in a meeting later that day at Adobe, CFO Mark Garrett provided an alternative perspective: He suggested going to a large company after graduation to gain industry expertise, since start-ups would always welcome someone with industry knowledge and an MBA from a great school.

After debating this question with classmates who spent time at both start-ups and large tech firms, one thing became clear: Either route can work. You should follow that path that you feel more passionate about.

We are grateful to these companies for hosting us and we thank all of our alumni who helped with planning. We also thank the Career Management Center for arranging an insightful VC panel and for partnering with our Bay Area Alumni Relations group to cohost a fun alumni reception at the Autodesk Gallery in San Francisco.

Read more about the trip on Christian’s blog, Philtered. Photo credit Bruno Orsini ’11.

On Tuesday, Google announced it would postpone the release of two Android phones in China following last week’s fracas between the search engine giant and Beijing. According to reports from Google, its security infrastructure underwent cyber attacks and theft, and the Gmail accounts of human rights activists had been hacked. In response, the company said it may withdraw its operations from the country. But how badly does it need China?

More than it might appear. The fact that the company is continuing to negotiate with Chinese authorities suggests that it places a high value on Chinese customers, Professor Brett Gordon says.

“I think Google does need China. One day China will be an enormously large portion of the Internet,” he says, “and it’s impossible for a company like Google to ignore more than one billion potential users.”

Gordon points to the history of Internet usage in the United States, which has grown quickly since it entered mainstream usage in the mid 1990s. The adoption of new technologies moves even more quickly in developing markets, he says. China’s stats appear to prove that point: the number of Internet users in China grew more than 28 percent from 2008 to 2009 for a total of 384 million last year, making it the largest group of Internet users in the world. And that figure is poised to grow higher given the country’s population of roughly 1.3 billion people.

Currently, Google’s market share in China is about 33 percent, with China’s Baidu.com dominating the market. “To support U.S. business in China,“ Gordon says, ”you would rather that Google be there than not. There is no reason that Baidu won’t become as large or larger than Google.”

The tension between Google and Beijing also points to fault lines around regulation of the Internet is as it grows internationally. “So far the Internet has been very strongly centered in the United States. As more emerging economies continue to grow, and given their large populations, the Internet will slowly keep shifting toward the largest user base and largest revenue base,” Gordon says. “But to try and police that through an international organization is very hard to do. Companies will simply have to decide between making a political point or a profit.”

Photo credit: Josh Chin

If you have been on Facebook or Twitter in the last 24 hours, you may have seen mobile giving campaigns to aid Haiti. Red Cross and Yéle are among those organizations that have deployed viral giving models in the last 72 hours and have raised millions of dollars in individual donations.

When disaster strikes, charitable giving spikes dramatically. Professor Ray Fisman, director of the School’s Social Enterprise Program, cautions against less-than-honest schemes. Indeed, that has been a historic issue in Haiti. According to the January 13 New York Times op-ed by Tracy Kidder, there are more than 10,000 private organizations in Haiti with a “humanitarian mission” yet the country remains one of the poorest in the world. Fisman says that should not deter giving at the individual level, but rather heightens the importance of donating to well-run and professional aid organizations.

“It’s natural that at a time when an avalanche of cash is being thrown at a problem in a hurry — that’s the nature of disaster relief — opportunistic individuals will take advantage,” he says. “You can protect yourself to a large degree by donating through reputable channels.”

Fisman says a crisis like this also underscores the importance of all CSR policies, not just disaster-specific programs. In recent research on eBay’s GivingWorks program, he and his coreseachers found that following Hurricane Katrina the atmosphere of benevolence had a positive impact and nearly doubled all eBay charity-connected sales.

“At a time of great social need, consumers look very favorably on firms that show a charitable side,” he says. “We also saw this with all the good press that Walmart got for its quick and effective response to Katrina. Of course, companies should also consider helping out in relief efforts for the same reason individuals do — because it’s the right thing to do.”

Photo credit: Red Cross

Mark Cohen on retail
The luxury bubble will continue to deflate, and only those truly special brands with real brand equity will recover; value players like Walmart, Target, Kohl’s, etc., will see renewed strength. The middle market of poorly differentiated specialty and department stores that lack a clear fashion and value strategy will continue to struggle, and it is unlikely that retail sales will retrace their pre-recession levels until 2011.

Cliff Cramer on the healthcare industry
Consolidation will be a major theme in 2010 as insurers and hospitals seek additional leverage in contract negotiations and pharmaceutical companies explore transformational mergers to broaden product lines, strengthen geographic breadth (emerging markets) and manage earnings in response to major patent expirations in the near term.

Brett Gordon on marketing and technology
Intel will face continued legal pressure from the Federal Trade Commission and the New York attorney general’s office for its alleged anti-competitive practices despite the $1.25B settlement with AMD in November 2009. Online newspapers and other media outlets will test new revenue generation models in a last ditch attempt to stay afloat. Monetization strategies for online video (e.g., Hulu, YouTube) will get serious attention from firms seeking to lure back advertising dollars with more advanced technology.

Paul Ingram on management
Organizational culture will enjoy a renaissance. Firms will increasingly recognize that shared values can attract and retain employees to the company and that the common orientation of a strong culture allows coordinated responses to unforeseen and emerging challenges. In the next year and beyond, organizations with strong cultures will outperform others, and leaders will focus on building those cultures.

Wei Jiang on the economy
As much as we think that we learned from the crisis, new bubbles are already forming thanks to the easy monetary policies around the world. In particular, the weak dollar has fueled a massive rally in 2009 in a wide range of risky assets — equities, commodities and emerging markets — through carry trades. We are facing the danger of a recurring asset bust in the coming years if and when the dollar reverses.

Jonathan Knee on the media industry
The inexorable fragmentation of media will continue in 2010, Comcast’s acquisition of NBCU notwithstanding. This trend will have no impact, however, on the persistent and irrational fears of regulators, politicians and the public that the global markets for media may fall under the control of a handful of malevolent moguls at any moment.

Homepage photo credit: Bart Hiddink

“When I left Columbia, they told me I’d probably have to come back and repeat a few classes,” Warren Buffett, MS ’51, deadpanned as he took the stage with Bill Gates on Thursday as part of a community forum at Columbia Business School. More than 700 students from the Business School were in attendance at the event, which was filmed for global broadcast by CNBC.

A major theme of the 90-minute Q&A session was optimism about U.S. economic prosperity in the long-term, with a nod to future energy issues. That theme underscored Buffett’s comments about Berkshire Hathaway’s recent acquisition of Burlington Northern Santa Fe for $34 billion last week.

“The railroads are tied to the future prosperity of this country. You can’t move a railroad to China or India or anywhere else,” he said. “As the country grows, the transport of goods will grow — [people] will be moving more and more goods back and forth to each other. And you have the most environmentally friendly and the most efficient way of doing that on the railroads.”

The theme returned later in Gates’ discussion about areas he sees with the most growth potential in the United States. He said those include information technology, energy and medicine. Gates discussed the growing field of alternative energy as a driver for a long-term economic development.

“Solar-thermal, solar-electric, nuclear [energy] is going to go through some of the revival and see if it can solve some of its cost challenges. As a country, we want to make sure all of those get lots of R&D and regulatory enablement because one of them is going to give us much cheaper power,” he said. “We don’t have quite as much R&D going into those things as I’d like to see. We have quite a bit, but I think the government policies could drive for more.” He added that he foresees an energy revolution and the United States is expected to lead the way.

Buffett also discussed his value-investing strategy, saying that it had not changed in light of the financial crisis and the fundamentals were the same. “We like companies with a durable, competitive advantage,” he said. On the economy, both Buffett and Gates lauded the actions of the government and the Federal Reserve.

Both men offered advice and inspiration to students. (Marry the right person, said Buffett. Act on your self-confidence, Gates added). Buffett signaled his optimism for future MBA graduates of Columbia Business School, making a promising offer to those in the audience.

“I would pay a $100,000 dollars for 10 percent of the future earnings of any of you,” Buffett said. “If that’s true, you’re a million-dollar asset right now.”

CNBC will broadcast “Warren Buffett and Bill Gates: Keeping America Great” moderated by Becky Quick on November 12 at 9 p.m. and 12 a.m. ET . Join the conversation with other students on Facebook and on Twitter.

Photo credit: Eileen Baroso

New research from Professor Olivier Toubia featured in the current issue of Columbia Ideas at Work demonstrates the power of viral marketing. Working with Aliza Freud ’01 (EMBA), who is the founder and CEO of the social media platform SheSpeaks, Toubia examined how influencer communities can promote and track viral product buzz.

The case study
The research centered on OPI nail products. “They were a very traditional brand and wanted to tap into consumer insights and advocacy,” says Freud. Using the SheSpeaks online community, samples of the new nail product were mailed to 10,000 self-declared beauty enthusiasts. The same women also received coupons for future purchases. Meanwhile, OPI also placed traditional coupons and ads in magazines and newspaper inserts. The result? The viral campaign outperformed the print campaign by 1200%. “It’s not surprising,” says Freud. “There is a much deeper engagement online than flipping through a magazine.”

What does this mean for marketing?
In the past five years, brand marketing has changed dramatically with the emergence of social networking. Current research, such as the data from Toubia and Freud, is backing that up. Freud, who spent 10 years at American Express in marketing and product management, says that marketers are in the rapid evolution phase of brand strategy.

“Brand managers need to change their way of thinking,” she says. “Historically, marketing has been a one-way communication and brands tried to stifle or control conversations about the product. Today, it is very different — it’s a two-way conversation between the brand and the audience.”

“In the future, managers will care much more deeply about these opportunities and make consumer conversations integral to their marketing program,” continues Freud. “They can engage with consumers online and capture a lot more information.”

Photo credit: Will Vanlue

Today, one of TED’s offspring — an independently organized local version called TEDxEast — is taking place in New York City. Professor William Duggan, author of Strategic Intuition and co-author of The Aid Trap, written with Dean Glenn Hubbard, and Naif Al-Mutawa ’03, founder of The 99, are among the speakers at the inaugural event. Other speakers include author Suzy Welch, 10-10-10: A Life-Transforming Idea; Scott Heiferman, CEO of Meetup; and Chris Elam, artistic director of Misnomer Dance Theater. Ed Rashba ’04 and Melek Pulatkonak ’02 helped organize the event.

TEDxEast is streaming live from the City Winery in New York City from 1 to 6:30 p.m. ET on November 6. Check back soon for video clips from the event.

How is open source software a form of social enterprise? That was one of the many timely topics that surfaced at this year’s Social Enterprise Conference on October 9. A theme of technology — how it can be leveraged and developed for social endeavors — was prominent throughout the day. Dr. Craig Barrett, the retired CEO and chairman of Intel, was awarded the 2009 Botwinick Prize in Business Ethics, which was presented by the Sanford C. Bernstein & Co. Center for Leadership and Ethics, and gave the keynote address.

In a panel on “The Power of ICT in Social Enterprise,” several participants discussed the challenges of scaling microfinance and mobile banking. In another popular panel with Wikipedia’s Jimmy Wales, the encyclopedia founder addressed the question of open source software: “It solves a lot of incentive and trust problems,” he said. “It’s a powerful way of leveling the playing field and allowing for collaboration.” Wales went on to offer three tips for community design: 1) Open is not the enemy of quality, 2) You cannot have community without participation and 3) Participation can come in unexpected ways.

In his keynote address, Barrett discussed the ways in which Intel has used technology to do good, including its successful education program in 60 countries that is focused on math and science. He also named the challenges he sees for business leadership, drawing from his experience with the European Union’s anti-trust case against Intel that ended with a $1.45 billion fine against the company last May.

“The increasing role of government will put a burden on CEOs to respond to regulations in an appropriate fashion,” he said. Barrett lauded a recent Wall Street Journal op-ed by Coca-Cola CEO Muhtar Kent arguing against a proposed sugar tax as a way to tackle obesity.

Later he said, “The challenge for CEOs and business executives is to stand behind ethics in the face of governments that don’t have the same ethical background or breadth of view.”

Photo courtesy of Columbia Business School

The media industry is in dire straights — and it’s not because of the Internet. Rather the industry has made some fatal mistakes based on flawed strategies of growth and convergence. A new book, The Curse of the Mogul: What’s Wrong with the World’s Leading Media Companies written by Columbia Business School faculty members Jonathan Knee, Bruce Greenwald and Ava Seave, delves into the reasons why the industry is hitting bottom.

In the October issue of the The Atlantic Monthly, an excerpt from the book maps out the reasons behind the value destruction in media companies including “relentlessly overpriced acquisitions, ‘strategic’ investments, and contracts for content and talent.” The authors argue that drastic action is needed by the media giants to restore value. That requires “jettisoning all [the] entrenched media myths and going back to basics: understanding the key characteristics of various media segments and applying established business principles to determine the best way forward.”

So what exactly would this drastic action look like? Author Ava Seave, adjunct associate professor of finance and economics, elaborated.

“All of the advice we give in the book should be evaluated in light of the specific media segment the company operates under. If a company has the misfortune of being a conglomerate, each individual business should be evaluated in relationship to its industry, not its ownership,” says Seave.

“For example, Martha Stewart Living Omnimedia’s businesses (stock symbol MSLO) operate in multiple arenas — each with their own characteristics. The company’s products in magazines, books, TV syndication, online content aggregation and retail licensing are all very different businesses with very little in common in cost structure and competitive environment,” she continues. “It may be flip, but we are serious when we advise that the first drastic change is that immediately (if not sooner) media companies can stop making crazy acquisitions or have wild expectation about synergy among unrelated segments.”

The six principles the authors recommend media companies live (and die) by, according to Seave:

1. Dare to dream Imagine how the industries in which you operate could operate and most effectively organize -- and try to move the industry to the ideal.

2. Keep it local, keep it focused Ignore all the conventional wisdom about global footprint, and find businesses that have either a narrow geographic territory or more likely a product niche. This will have the double whammy of increasing likelihood that scale can be achieved quickly and there is a good basis for customer captivity.

3. Efficiency is cool It may be that asking you to pay attention to revenue and cost management is like preaching abstinence-only sex education in a high school, but it is important for you to try.

4. Don’t be such a big shot Overpaying and other means of destructive competition is a communicable disease, so try to find small areas of collaboration in your industry; cooperation can be similarly contagious.

5. Watch your back Even companies that seem to have an impregnable fortress will eventually be scaled, so a constant reassessment of the strength and reinforcement of the the source of competitive advantage is called for. Increased competition with other forms of media make it even more important to cooperate with your allies and collaborators.

6. Dying with dignity is an option It’s hard to admit you’ve lost it, but rather than reinvesting in projects that have little prospect of generating an adequate return, instead, milk a declining franchise and return the proceeds to the shareholders.

Photo credit: Kent Kanouse

Join professors Jonathan Knee, Bruce Greenwald and Ava Seave as they discuss the new book on November 16. Event is hosted by Columbia Business School Office of Alumni Relations. Click here for more information about the event.

You’ve heard about companies using TweetDeck to tweet on Twitter, updating their Facebook status while feeding into FriendFeed, and building buzz to bolster conversation on their blogs. But if you don’t understand what any of this means, and consider yourself a marketer, then 1) you are not alone and 2) you need to understand what all of this is about.

Social media as a communications channel is the New Big Thing for marketers. So what do you need to do to stay ahead of the curve and make sure your social media initiatives are successful at your company? Let this article be your starting point.

1) Launch, Track, Learn, Evolve, Rebuild

Don’t skimp on reporting. Everything in the online space is trackable — so track it. Launch initiatives quickly and then use the information and results that are gathered to learn and continue to evolve your platforms. Some of my greatest insights and strategic program adjustments have come by really diving into the numbers.

As a student in the Executive MBA program I recently completed a class called Decision Models, which is focused on how to structure information to support managerial decisions. I had little exposure to these areas before, but I was able to use the classroom knowledge immediately in my job. I used the models and applied them to my results to help inform funding allocations. You might consider doing the same thing.

Powerful in its simplicity, yet worth emphasizing — in social media it is critical to launch quickly, track results, continuously learn, iteratively evolve, and periodically rebuild your entire system.

2) Leadership Support and Empowerment

The success of social media programs can be influenced by the degree of leadership support and decentralized decision-making inherent in the process. To me, leadership support means two things: 1) empowering employees and 2) encouraging new ideas by involving social media gurus.

First, empower employees. Senior leaders in most traditional companies are digital immigrants and they are still getting up to speed on these new channels, they need to have trust in the digital natives — the thinkers who have come of age in the digital era. Smart leaders will empower the digital natives to make decisions as they themselves learn the ropes. In time, it is likely that companies which support employees to deliver on new social media initiatives will be the clear winners and innovators. Take, for example, the story of P&G, which is recognized for pioneering sponsored advertising in soap operas when TV was the next big thing.

Secondly, involve social media experts. It is challenging to launch company “firsts” in social media, even if you are working with people who have a can-do attitude and are empowered to drive these initiatives forward. Employee burnout and retention can happen with social media, just as it can with any other creative endeavor. Whether as a leader or peer, continually identifying and retaining people who are skilled in social media will help serve any establishment seeking to make inroads in this space.

3) Form Progressive Partnerships

At its heart, social media is about people and relationships. You can say this applies for anything in marketing, but I believe it is especially true for social media.

In the beginning, the process is about finding and retaining the right employees who are resilient, can work within internal processes, and who are also willing to challenge the ideas when appropriate. However, quickly, this evolves to fostering the right external partnerships. At OPEN Forum, we are fortunate to partner with big brands, small brands, and individuals’ brands. We partner with major online publications like Mashable, experts like Guy Kawasaki, and sponsors like FedEx, along with some of the best and brightest small business owners out there — our customers. (Also, on a personal note about relationships, it’s especially nice to work with another Columbia Business School grad, Julie Hansen ’03 (EMBA) of The Business Insider.)

Through listening and remaining open to opportunities with our partners, we’re able to exchange value organically, in a way that creates efficiencies and opportunities for all. As an example, we frequently meet with small business owners to find what is working for them and what they need (including my own personal experience consulting for SweetRiot, one of our small business retail customers). We help drive their business growth by offering advice, and they come to better understand the value of our products and services so they use them more — it’s a win-win situation. Do this authentically and consistently and you will win. I will leave you with a final thought — whether you are a digital immigrant or digital native, it’s imperative that marketers realize that social media is the business strategy — not just a part of the business strategy. So, keep this in mind as you start to get social and you will be truly successful. If you have any questions, feel free to tweet me at @brianlenhart.

Photo credit: Mike Paradise

The Federal Communications Commission, the agency charged with the task of creating a national broadband plan under the Obama Administration, asked the Columbia Institute for Tele-Information (CITI) to serve as an outside expert and provide analytic review for the program’s deployment last week.

The push to expand broadband coverage in the U.S. has raised a host of questions over ownership, content, speed and other economic issues. Backers of net-neutrality have expressed concern that telecom companies receiving broadband grants will have too much power over how and what information is transmitted. Part of CITI’s task is to provide a capital assessment of companies with future plans to deploy broadband networks, as well as their historical track record doing so. The FCC will make its official recommendations in February 2010.

“Too often, the debates over Internet policy have been driven by narrow agendas, with facts used selectively as ammunition rather than enlightenment,” says Professor Eli Noam, the director of CITI. “By focusing on data analysis of investment plans and deployment figures of upgraded broadband infrastructure, especially in this century — CITI looks forward to helping the FCC to change the past culture and develop a National Broadband Plan grounded in facts.”

Globally, broadband infrastructure reached a new frontier this week. On Monday, a new underseas fiber-optic cable providing faster connections to eastern and southern Africa opened.

Photo credit: Craig Rodway

Why do we love our iPhones so? Of course the reasons for the gadget’s immense popularity are many, but consider this: the device’s interface — complete with colorful pictures and icons — may activate the part of our brain associated with emotional processing, and that, in turn, may lead to greater consumer preference for the best-selling phone.

In a new study published in the Journal of Consumer Research, Professor Leonard Lee, with his colleagues Dan Ariely at Duke University and On Amir at the University of California San Diego, found that decisions made with emotional processing, such as a gut decision, rather than cognitive processing (analyzing the pros and cons) tend to be more consistent. And consistency is, after all, what we humans really crave. Indeed, there is long-standing evidence in social psychology that we aim for consistency across all our beliefs and attitudes.

“How happy or satisfied we are by our preferences is driven by consistency to some extent,” says Lee. “When we use emotional processing to make decisions, we can actually be more satisfied with our choices.”

Lee found that certain attributes elicit more emotion-based decisions. For example, a color photo of an object rather than black and white text describing its features provokes more emotional, and thus more consistent, decisions in people. He also found, in another study, that some products might naturally elicit more emotional processing than others.

“Even if the product is essentially utilitarian and elicits more cognitive processing, we can put a more emotional layer on it so we can better elicit emotional processing,” says Lee.

For marketers and product designers, the implications are manifest — the big, shiny red button will outperform that wonky features list when it comes to giving consumers a choice that they will feel satisfied with.

“For many consumer products, it makes sense for marketers to use as many affective cues or emotional cues to elicit consumers’ emotional processing rather than just listing all the features of a product, which might induce greater cognitive processing,” says Lee.

Photo credit: David Pham