How much of a company’s value is freely contributed?

Last week the New York Times had an interested editorial by David Carr on the sale of The Huffington Post to AOL that addressed (and he was by no means the only one to do so) the elephant in the room, namely the fact that much of HuffPo’s value was built by unpaid contributors who were unlikely to see a red cent of the purchase price.

While his comparison of the HuffPo situation to other sites like Tumblr that have received valuations that are reflective of their popularity isn’t 100% accurate – those sites allow you to create your own material under your own banner while Tumblr (or or whatever) merely serves as the platform – it brought to mind the fact that these days almost *all* companies see some form of value boost from the unpaid and often unsolicited contributions of their customers.

The illustration of how user-generated material can dominate a company’s search results it usually used in connection with a warning. But if what people are saying about you is positive then the effect on not just that company’s reputation but also their bottom line is likely positive as well.

So then, and this is where we round back to Carr’s column, what does the company that’s receiving that benefit owe to those who are creating the content that’s helping it out?

A simple thank you.

Again, let’s go back to Carr’s points. Tumblr certainly benefits from all those people who use it, whether it’s for Selleck Sandwich Waterfall or something more personal. But these people aren’t doing their creation under the Tumblr brand or with the intent of furthering Tumblr’s growth. Similarly those people who are writing their “Zappos customer service rocks!!” posts are expressing their enthusiasm for a brand they like.

Now for certain their are ways to reward loyal supporters, users and enthusiasts. And those sorts of efforts occasionally need to be engaged in because it’s good for business and because without these sorts of people their businesses wouldn’t be worth as much as their are thanks to their support.

Negligible impact

If you read my Voce Nation post from a couple weeks ago you’ll remember this pull quote:

In a year or so – probably more like six months – these sorts of mistakes and offenses will be largely forgotten by most people who aren’t actively looking for case studies for their upcoming books or presentations. Some customers may walk away in disgust but they’ll likely be quickly replaced by new ones and any down tick will just be a blip on a line chart.

So count me as not surprised by the news (ClickZ, 2/18/11) that Groupon didn’t take much of a hit from the kerfluffle surrounding its Super Bowl advertising. True, there wasn’t much gain either but it seems to have leveled off after losing market share to competitors *before* the game and is following overall trends in the daily deal market.

We like to hear ourselves talk sometimes, which is why the outrage over the spot was largely – not wholly but largely – confined to the world of marketing pundits.

Corporate Publishing and the Hyper-Local Bandwagon

The focus in much of the media world is on the “hyper-local” market. Media companies are looking for new and interesting ways to reach these targeted communities and advertisers, encouraged by increasingly sophisticated targeted and high CPMs, are tagging along to support their efforts. Looking beyond the obvious thought I always have when discussing hyper-local media (that being that it’s not really all that new but simply a return to what people expect after so many years of every newspaper trying to compete with The New York Times) this is also an important trend for companies who are running their own publishing programs.

While it may not be possible to roll out a whole new content selection for every geographic area, there are opportunities to customize the content for different countries and languages. There’s a lot of work that goes into this sort of program, from software functionality to crafting different content that’s going to appeal to specific markets but it’s a fantastic way for a company with an international presence to get their message in front of that global audience.

Kevin Smith Vs. Ed Burns

No, I’m not actually going to pit these two directors against each other. But I do want to present a hypothetical that’s been running through my mind regarding the two:

If Smith had, instead of making a very loud and very public statement about the state of independent film distribution and marketing by taking his upcoming film Red State out himself and “four walling” its release, had opted like Burns did with Nice Guy Johnny and simply done video-on-demand only distribution, would he have been as vilified as he was?

I have to say I think the answer would still be yes. And it’s largely because of the way these two directors, who both emerged in the mid-90’s, have managed their careers in the subsequent 16 or 17 years.

Smith has been a lightning rod since day one, always ready with his opinion whether it’s asked for or not. He’s bounced between small-scale truly independent feeling movies and bigger pictures where he hasn’t always been able to reach what he’s aiming for. He’s also developed a reputation for being more than a little self-indulgent, especially in how he built up the “Askewniverse,” which culminated in Jay & Silent Bob Strike Back, a movie that existed only to provide him a platform for as many in-jokes as he could write. Don’t get me wrong, I’m a big Smith fan, but that’s I think the image he has.

Burns on the other hand has almost always stuck with small, intimate dramas, at least in terms of the movies he’s making himself. He’s done plenty of bigger studio pictures as an actor but with the movies he made he always stuck close to the Woody Allen model which is understandable considering Allen is one of Burns’ most obvious models and a much-stated inspiration to him.

Be nimble if not light-weight

So there’s a thought-provoking post on the Digital Connections blog from ad agency 360i that forwards the notion that brands should be using Tumblr for their corporate blog, largely because it’s easy to use and allows for easy sharing of videos, photos and other media.

I completely get what they’re going for and agree in a more limited manner that Tumblr *can* be part of a great corporate publishing strategy, as a number of media and other companies have already shown. But there are a number of issues that I have with the overall premise that need to be addressed:

First, there’s the ease of use. Sure, an installed WordPress setup is going to have a longer learning curve, but that’s because it does more. So there needs to be a cost/benefit analysis done when deciding on one platform over another, as there should be. What can one do at X price versus what the other does at Y price? I also don’t think that once someone gets the hang of a WordPress – or MovableType or whatever else – installation the perceived difficulty gets a lot lower. With a willing audience all it takes is a couple of training sessions for someone completely new to WordPress to completely get it.

Second, there’s the issue of owning the platform. When you use software that’s installed on your own hardware then you control its fate. If problems crop up it’s you and your team that is responsible for getting it fixed, you can give (hopefully) accurate estimates of when the problem will be fixed and can own the issue. Owning it all means you’re not dependent on someone else’s tech team, nor are you dependent on whatever company owns the remote software continuing to receive venture funding or eventually figuring out a business model.

Third, there’s the point that’s made about community. True, Tumblr and other platforms like it have great community-esque advantages baked in to them. But that doesn’t mean that community isn’t possible on other platforms that don’t have them as built-in feature sets. It just means a little bit more work is needed to achieve those benefits. The upside of that fact is that the community that’s built from the ground up is often stronger and more engaged than the one that comes right out of the box, which may be sizable but also may not provide much feedback or conversation.

Along these same lines I had largely the same reaction as Matt Mullenweg to a recent story that sought to ring the death knell of full-featured blogs (New York Times, 2/21/11) but then if you ask people I’ve talked to this is an opinion I’ve held for a while now. Sure it’s interesting to see how use of those full-featured blog platforms (WordPress, Blogger, MovableType, etc) has declined among young people in favor of Tumblr, Posterous and other sites as well as social networks like Twitter and Facebook.

But like Matt says, eventually they’re going to reach a point where either personally or professionally they’re looking for an experience they have more control over, both in terms of look and feel and in how they’re able to install software on their own servers and own the platform a bit more. Blogging may level off as young people use “light” blogging tools as a first step into online publishing but eventually many of them will migrate to “heavier” platforms. So there will be a consistent churn as they look for something more customizable to their needs.

This actually goes hand-in-hand with my opinion that, despite all sorts of studies showing young people are abandoning email, that they’ll eventually come back to it because there’s little reason to expect that it won’t dominate the world of business communication for years to come. So they may be using Facebook and social networks primarily now but eventually they will realize that in order to function they’ll need to get used to email and what it has to offer.

Again, I’m not shooting down the idea of using Tumblr or Posterous or another site like those as one component of a publishing strategy. But the advantages to owning the primary platform I think far outweigh those that are held by these blog-lite tools.

Meanwhile, Robert Redford had to scramble for a distribution deal

Hollywood is in love with rookie directors for big movies since they’re cheap and easy to control.