Ecommerce Meets Social Networks:Trusted References

A Different Approach to DrivingOn-line Referrals

George EberstadtCEO & Founder

TurnTo Networks

In the “Social” Category, Ecommerce Has Been Very Focused on Ratings and Reviews

• 63% of consumers indicate they are more likely to purchase from a site if it has product ratings and reviews. (CompUSA & iPerceptions study)

• Reviews drive 21% higher purchase satisfaction and 18% higher loyalty (Foresee Results Study, January 2007)

• At NetShops, reviewed products experienced a 26% lift in sales. (Internet Retailer, 2/08)

• 76% believe content is insufficient to complete research or purchase online “always,” “most often” or “some of the time”. When faced with incomplete information, 72% of shoppers go to a competitor or research further. (2007 Survey of Online Shoppers by the E-Tailing Group)

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Who is really most trusted?

Friends

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People like youvs.

People you like

Advice from friends is better thanadvice from strangers

It’s all about “the friend name.”

Which emails do you read?

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How do you get “the friend name” into thebuying process?

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“I spent $100m a year on television advertising. If I could have found a way to spend money on word-of-mouth that worked, I’d have moved every penny over.”

Austin LigonFounding CEO, CarMax

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Every word-of-mouth interaction has two players: a broadcaster and a receiver.

Most approaches to driving word-of-mouth focus on activating the broadcaster.

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Hey everyone, I just got a vertalizer, and

it’s the best thing ever!

How do I get my happy customers

to tell their friends?

?

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Hey everyone, I just got a vertalizer, and

it’s the best thing ever!

Why are you bothering me

with that?

Not interested.

Not again!?!?

Oh, thanks. I was looking

for something like that.

?

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Shill.

Hey everyone, I just got a vertalizer, and

it’s the best thing ever!

Why are you bothering me

with that?

Not interested.

Not again!?!?

Oh, thanks. I was looking

for something like that.

?

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Shill.

Please. No one would be that heavy-handed about it.

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Hey everyone, Joe just got a vertalizer, and

it’s the best thing ever!

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Hey everyone, Joe just got a vertalizer, and

it’s the best thing ever!

Did you just use my name to advertise your product? WTF! I didn’t say you could do that!

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Please. No one would be that heavy-handed about it.

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Facebook Beacon

Earlier this week, I bought a coffee table on Overstock.com. When I next logged into Facebook and saw this at the top of my newsfeed:

I was pretty surprised to see this, because I received no notification while I was on Overstock.com that they had the Facebook Beacon installed on the site. If they had, I would have turned it off.

So I'm joining a growing chorus of Facebook critics that Beacon has some serious problems… The biggest problem is the lack of transparency… I need to be in control and not get blindsided as I did in the example above.

Charlene Li, blog, 11/21/07

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Beacon was a Beacon… to the Rest of Us

• Users must be in control– Sharing must be permission-based– Users must have the information to make their choice

But if Beacon had made it over that hurdle, they would have hit others:

• Spam: how much info do your friends really want?• Workload: OK, I have control. But I don’t have time.

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“Activating the Broadcaster” is Not Bad,It’s Just Hard

• Too gentle, and you don’t move the needle• Too strong and you violate privacy, spam, undermine trust

But it can be done• Best strategy: have epically great, “cool” product• Alt: create an avatar for your product. e.g. cool viral videos

(Blendtec “Will it Blend”, JC Penny “Beware of the Doghouse”)• Very careful social engineering: e.g. BzzAgent ($$$!)

Businesses spent $1.3 billion on word-of-mouth marketing in 2007, and this will grow to $3.7 billion by 2011. (PQ Media)

Very hard to automate!

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A Different Approach

Instead of activating the broadcaster…

…activate the receiver.

ie get the shopper to reach out and request a recommendation from a friend.

Recommendations that were requested are:•Trusted•Welcome•And build a genuine social bond

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Why “Reach Out”?

• The beauty of UGC: there are a lot of people in the world. Some of them have already written down an opinion on everything

• The problem with UGC: On any particular topic, very few (none?) of the people who have written down their opinions are your friends

Shopper’s choice:• Existing content from strangers, or• Reach out to friends

Even if the buyer doesn’t reach out, the presence of “the friend name” transforms the interaction

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It’s Easy…

Just connect the shopper to someone…1. They are willing to reach out to (they know or

have a connection to)2. Who has relevant experience3. At just the moment the information is needed

Ok, maybe not so easy.

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How Do We Do This?

1. Contextual delivery2. Portable social graphs3. Transaction data4. Permission management

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Context is King!

It’s about “trusted references”, not “social advertising”

Deliver friends in response to purchaser intent (not interrupt-based)…

…at the point where the intent is signaled• Content consumption• Search• Shopping itself

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Search Advertising Dominates Because It Enables Response to Purchaser Intent

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Portable Social Graphs

Bring the social network into the commerce path instead of the other way around

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Permission Management

Automation with control• Can not rely on users to manually post each activity• Must be rule-based with exception handling• And keep it VERY simple

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A Model for “Trusted Reference” Delivery

Social permissions

filter

(i.e. who agrees

to sharewhat with

whom)

Raw customer data from merchant

Data

Authorized

for

With

Sharing

Friends

Merchant Site

Search

Comparison Sites

[Feed Readers]

• Shows friend experience to shopper

• Drives conversion, cross-sell• Enhances visitor experience

• Finds friend transactions across all merchants

• Drives traffic to merchant

• Pushes friend activity to news feeds

• Drives traffic to merchant

• Shows friend experience alongside product offers

• Drives traffic to merchant

Content sites• Shows friend experience

alongside product mentions• Drives traffic to merchant

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“Illuminate the Black Hole of Consideration”

Friends become attributes of products just like other characteristics. (What’s more relevant to a purchase decision, the technical characteristics of an object or who else buys/uses it?)

Applies to low-differentiation products as well as high-consideration ones

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Although customer reviews are nothing new on popular eCommerce sites like eBay and Amazon, in most cases, consumers use the critiques from people they don’t know. Now with connective technologies like Facebook Connect, Google FriendConnect, and OpenID, consumers will now be able to see reviews, experiences, and critiques from people they actually know and trust… As an example, next time I’m shopping for a laptop, not only will I see reviews from editors and consumers, I will now know which one of my friends uses an Apple computer, and what they think of it.

Jeremiah Owyang, Forrester Research

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After a devastating holiday season, retailers will eagerly seek a way to improve results other than driving demand with deeper discounts. One option they will investigate will be how to insert people and social connections into the buying process, illuminating and influencing for the first time the Black Hole Of Consideration. .. As the holiday season launches early after Labor Day, shoppers will find options to see what friends are recommending, buying and rating integrated into the shopping experience.

Charlene Li, Altimeter Group

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Thank you!

George Eberstadtgeorge@turnto.com

917-250-4545

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