Aaron Strout:

 I am talking today to Chairman and CMO of Technorati, the blog search engine.  Welcome, Peter.

Peter Hirshberg:      

Hello.

Aaron Strout:             

We’re gonna talk a little bit today about some of the things that Technorati does, looking at it with a lens from the “We Are Smarter,” perspective where we evaluate companies and how they’re using community and partnering with their communities to create better business values, so Peter, if possible, I’d like to start with a little bit of your background.  You were at a company called gloss.com, among others, before coming to Technorati.  Maybe you could talk a little bit about that experience, and then just who you are, and what you do at Technorati.

Peter Hirshberg:  

Gloss was created by Estee Lauder, Chanel, and Clarins to be the online retailer for prestige beauty products coming from some of the best vendors in the world, and it was the classic Web 1.0 company in the sense that it was an e-tailer, and the insight that led to it was that each of these companies realized that their individual customers were buying multiple products.  The average woman had seven different brands in her bag, and they suddenly realized that even though they all had individual online presences, there was a need to work together, which was of course one of the things the internet does, and also a sense – don’t forget that during Web 1.0 boom, the valuations of anything web so exceeded real world, physical things, that there was a sense that if they didn’t invest in this thing, history might pass them by, so it was a combination retail, and experiment, and a real opportunity for some of the most prestigious companies in the consumer packaged goods world to learn a lot about how do you interact in the world of the web and the net.

Aaron Strout:             

That’s cool, so what lessons have you been able to take from that leading the charge, really being one of the top people at Technorati?  Have you been able to apply some of those lessons to the Web 2.0 world?

Peter Hirshberg:  

Yeah, one of the things is there’s a mindset at any given point in the internet about what the medium is and what it’s used for, and I think that experience reflected that.  The web was initially brochure wear, and then it became commerce.  We all saw at that moment and we’re talking around 2000 here, that an awful lot of the whole sales of prestige beauty products really was a conversation.  In the classic way that we talk about marketing this conversation today, beauty products are actually sold behind counter literally in conversation with someone who was excited, and put it on your face, and talk to you, and one of the few product categories that actually managed to enforce quality control as conversation throughout the whole thing, and of course online we were keenly aware of the fact that you were looking at a page, or a picture, or a gift, and we had to somehow maintain that degree of prestige-ness, even though we had less control over it, and we were struggling to figure out how do we do this conversational stuff, and one of the issues that we came up against is it was very difficult back then to give up the control and let all of the customers talk to each other because from the mindset of back then, there were all the legal issues. 

What if they’d said something wrong?  Does legal have to approve every page?  How much work does it take to implement this, and so I think one of the interesting things is the world’s more sophisticated now, and that’s increasingly what people do online, and at the time, we were essentially executing it much more as a retail thing, although there were so much that – the other thing that struck me is just looking at that business, you could learn a lot about what needed to be done online.  For example, there’s a brand called Makeup Artist Cosmetics that is exactly about the hierarchy from the most famous makeup artists, to working makeup artists, to the people who worked in the store, and that whole brand was all about the relationship between everybody up and down that line, and we realized that ultimately we’d love to model that relationship online, and in fact, online was more of an information and sales channel that served a more vibrant conversation of the real world, and we also saw other third parties that actually those conversations online in the ways that the brands didn’t.  So from the perspective of today, you can look back and see so much of how you would change things in today’s world, and then today you see brands like, of all people, Dove, doing a very good job of taking a conversation, in this case, women’s self esteem, and making that a whole mantle for their brand, with their Real Beauty campaign, so the world has moved a lot in the last few years in terms of how you use this stuff in marketing and how you do it interestingly and authentically. 

Aaron Strout:             

Right, well I’m glad you brought that up, because the reason I met you is I saw your presentation at a recent Boston Interactive Media Association Cross-Media Forum, and you did show the Dove example, which I think is – if anyone’s has not watched it, you can go to YouTube or I’m sure you could look it up on Technorati and see the video Dove created basically to illustrate their point.  Other companies that you see – I know you mentioned – you’ve been, I think, working with Doc Searls, one of the authors of Cluetrain Manifesto.  What are some of the companies that you see in the blogosphere or using social media community that are doing a good job using it and advancing their business through their customer relations.

Peter Hirshberg:  

I think one of the purest examples is in the business to business world at Sun Microsystems.  Jonathan Schwartz, who runs Sun, understands on a very deep level that conversation, and transparency, and an open relationship with your customers is just a business strategy, and the first interesting observation is it’s not a marketing strategy, it’s a business strategy, which then marketing can go ahead and implement a whole bunch of things around.  This stuff works best when it starts as a business commitment as opposed to just marketing, because then it’s really the flavor and the ethos of the company, so for example, Jonathan blogs.  I think they let any of their employees blog and they make a very big deal about that because it allows many more relationship and touch points between that company and its customers and audience than just sales or just PR, which is the old way of doing things. 

They also, on all of their product pages, syndicate in all sorts of conversation around those products, so for example, they have unfiltered anything anyone is saying in the blogosphere through a Technorati mechanism on any product page, so if you’re looking at the Sun T1000 server, you can find anybody at Sun who blogged about it, or through the Technorati syndication, anybody in the world who wrote about that, and no marketing or advertising person filters that.  That’s pretty remarkable, because most brands are control freaks, and Jonathan’s view is the very fact that we don’t filter and are so open says that we either make great products, or we sure are prepared to stand behind them, and we’re pretty open about all this, and that’s an important statement about the company. I think that’s a great example of a company using this stuff pretty powerfully in the business to business space.  A campaign I just looked at that I thought was delightful is there’s a new Bob Dylan album coming out. 

I think it’s from Sony and the viral mechanism that just broke – I found it on Facebook, but there’s a website also – takes the same old Bob Dylan video in which he’s flipping cards with words on it and let’s anybody who’s basically mashed that up and add their own words to the video, and then spread it virally, and the reason I think it’s a great example is first of all, the very act of a major rights holder letting you take one of the most famous videos associated with that and change it according to you has a real understanding that people like to have a do it yourself relationship to media and content, and the fact that someone like Dylan, who’s letting you mash content up, is forward thinking in the way that Lucasfilm does it, and in a way that Disney has yet to learn, and the time that you spend on thinking that through and sharing it, it was very viral, it was a pretty courageous act in the intellectual property front, and actually just placing that in the Facebook environment, you could just look at the numbers and see it was taking off pretty quickly.  We have other customers that are doing things like this.  Some brands want you to talk just about their products, and have you talking about their product. 

Dove actually picked something that it was passionate about, that its customers were passionate about, which was self esteem, and they not only did it with a video, but they did it with a whole online discussion effort, and their print and outdoor campaign raised the question.  Scion, which is a car brand – it’s a Toyota brand – cares a lot about alternative culture and urban culture, and they do a ton of things that basically listen to and involve the audience.  One program they’re doing with us finds all the conversation around independent film festivals and independent films, and then boils them up to a site that’s at café.technorati.com/film, and you basically find who’s talking about independent film.  It creates awareness for film, a lot of awareness for the film bloggers that sit out there in the middle of the blogosphere and don’t get as much attention as the top 100 bloggers do, and the fact that these bloggers see traffic being driven to them from Scion creates an awareness that Scion actually cares about that space, and that’s another good example of one of the innovative things people are doing.

Aaron Strout:             

So great examples, Peter, and I guess I have a final question for you that’s in the vein of what you were just talking about, and it’s something you mentioned in a white paper or some research that you’ve done with Doc Searls of Cluetrain Manifesto, and that is that marketing, really to be effective going forward, needs to become much more conversational rather than one-way, which marketing really has traditionally always been, and you can appreciate that I think as a fellow marketer.  What companies get it?  Will they make that change?  Will they see the power of what Sun Microsystems are doing, or Scion, or Dove, and say, “I understand that I have a real opportunity here, but it’s gonna require ceding some control.  It’s gonna require naked conversations with my customers and really exposing myself and putting myself out there.” 

I know we build communities and we talk to people, and one of the first concerns they have is, “Well, what if someone says something bad about me,” and we say, “Well, they’re already saying something bad about you.  Do you want to participate in the conversation or do you want to let them continue to say it and not be part of that,” so any thoughts on that?

Peter Hirshberg:  

Well, I think this is almost the conversation of our era.  Marketing as we know it is something that was built or created around the early 1900’s with the invention of mass media, and suddenly conversation or communication went from being personal to mass, and anyway, marketing and mass media was the end of the industrial era, so there’s been a century of people learning a way of doing things, and now it’s a matter of not only learning new ways of doing things that I’m learning, but also wanting the proof where the advertising and marketing world is driven by measurement, and whenever you go and try sell someone something new, they wanna know what is the measurement show, and how do we know there’s an ROI on this, and so you see the change coming at various points, or more interesting, within any given company, there are some people who get it and some people who don’t, and even if you look at the agency world, you’ll find that in many ways some of the most conservative people are the youngest.  Media buyers, all of whom tend to be the younger people in the agency world, have learned a particular way of buying media.  Getting them to look at the stuff differently is very difficult, so there’s a big education function that I think is needed now, and I find when I go out and talk, agencies love having good examples to go show their brands about this stuff. 

People love referring to the Sun example, the Dove example, the Scion example, or any of the other.  If you go to technorati.com/weblog, and look that white paper under a post that I did, we have a bunch there, but what impresses me is the degree to which lots of people are struggling with this.  The other interesting thing is there’s this common belief that somehow if I give up control it will be bad.  In fact, if you actually look at the evidence, it seems to be if someone says something bad and you just don’t respond or get involved in the conversation, you’ll get in trouble, but actually if you’re involved in the conversation, it’s much more manageable.  Crises tend to spin out of control when you ignore them. 

Famously, people cite Kryptonite.  In fact, Kryptonite Locks, when they were picked by someone with a pen, and the blogosphere pointed all this out, and it hurt their sales, as I understand it, Kryptonite, that was actually an aberration, and by not jumping in and talking about it, they hurt themselves, so a lot of times – and Sun will point out that if someone has a question, if they just jump in and clarify something, frequently the crisis is headed off.  Some of the most egregious examples of what happens if you give up control is actually what happens is you don’t jump into the conversation because you think the only people you’re supposed to talk to is the mainstream media.  By the time a blog storm reaches the mainstream media, it’s too late.  You can actually control it by being human early on by just discussing what’s going on. 

The other thing that people are freaked about is in many ways, some of the first marketing attempts in the blogosphere were inauthentic, like people made fake blogs, or they didn’t identify who they really were, or they tried to invent some persona, and they got outed, and people look at the fact that some of these marketers were outed as proof as the seemingly vitriolic nature of the blogosphere.  Well, the answer is if you act like a jerk, people will point that out.  If you act not like a jerk, you’ll get along, so I think an awful lot of this is if you actually just behave civilly, it’s actually tough to get in trouble, unless you make a really bad product, or have lousy customer service, and they’ll point that out.  You should fix those things.

Aaron Strout:             

Right.  Well Peter, this has been wonderful.  I really appreciate you taking a little bit of your busy schedule to talk with us today. 

Peter Hirshberg:  

Thank you very much.  This was terrific.

Aaron Strout:             

We appreciate you listening into this series of the “We Show” podcasts.  To find other podcasts like this, you can check out wearesmarter.org, (Music) mzinga.com, and also iTunes under “We Are Smarter.”  Thanks so much for joining us.  We look forward to seeing you next week. 

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