Are You Taking Advantage Of Network Effects?

Marketing Lesson of The Week

► Power Of Network Effects

To understand why the social networks, Twitter and TikTok, still retain their massive followings despite attention-grabbing visibility is represented by writer Drew Austin’s comment:

“I’ve basically been using Twitter for 15 years at this point, and there’s no way to quickly replace the followers and following that you accumulate over that amount of time” … “Twitter is still the default. It’s the Schelling point — where everyone is.”

Beyond inertia, journalists have invested over a decade in building their presence on Twitter. So they won’t leave the site as long as they can still drive traffic to their stories, discuss those stories in public with their peers, and grow their audiences.

While Twitter continues to become more difficult to use since Musk took over, no real competitor has emerged. Business Professor at the University of California, Berkeley, Zsolt Katona, who studies social media, points to ‘network effects’ where value results through a connection that creates an actual link between two people.

“[Y]ou have to reach critical mass and before you do that, it’s not a super valuable service. But after you reach that, it’s very hard to beat, because it’s very hard for others to replicate”.

According to Professor Catherine Tucker of MIT’s Sloan School of Management, network effects can fail for 3 reasons:

• Network becomes too noisy and/or congested so users seek more focused communities;
• Participants become concerned about how the network protects their privacy and data. So they seek a more privacy-focused network; and
• Network becomes too mainstream, “uncool” and/or predictable so users leave for better options. (Source: NPR)

► Twitter Alternatives

To date, Twitter alternatives haven’t reached the same level of network effect. In part because no one option provides the same set of functionality with data privacy.

Current Twitter alternatives include:

• While Germany-based Mastodon has gained traction recently, the platform’s “decentralized” structure makes it complicated to navigate and use. It lacks Twitter concepts like following another account and an equivalent of quote-tweeting making basic discourse difficult.
• Post lets participants pay publishers micropayments to read specific articles without hitting a paywall. Compared to Twitter’s free option, it hasn’t gained much traction to-date. Also, Post (and T2) lack original content or distinguishing features.
• Artifact hasn’t shipped its social feed out of beta yet.

Actionable Marketing Tips

• Establish accounts and test each of the new Twitter alternatives. Early users of social media platforms often gain an advantage in building their audiences first. Also, it allows you to protect your brand names.
• Limit your time on these new platforms until they reach larger audiences.

► Twitter’s Decline As Told By The Numbers

After analyzing over 3.1 million Twitter accounts and their daily activity between October 27th and November 1st, 2022, about 877,000 accounts were deactivated and another 497,000 accounts were suspended—over twice the usual number.

Bot Sentinel’s founder, Christopher Bouzy, noted, “We have observed an uptick in people deactivating their accounts and also Twitter suspending accounts.” (Source)

Since Elon Musk took over Twitter, its projected 2023 ad revenues have declined about $2 billion to $2.98 billion from $4.74 billion worldwide in October 2022. (Source: Inside Intelligence)

Actionable Marketing Lesson

• Take care when deciding whether to remain on Twitter since it has lost a lot of user trust. Your business could be harmed by this loss of trust. At a minimum, pause your Twitter advertising.

Content Communicates

► How To Stay True To Your Content Marketing Mission: NPR Publically Leaves Twitter

Since taking ownership of Twitter, Elon Musk has questioned the legitimacy of major news organizations around the world.

After Musk labeled NPR as a “state-affiliated media,” the term Twitter uses for propaganda outlets in autocratic countries, NPR decided to stop posting on the platform. With 52 official Twitter feeds, NPR is the first major news organization to go dark on the site.

Receiving less than 1% of its $300 million annual budget from the Corporation for Public Broadcasting which is federally funded, NPR describes itself as a private, nonprofit company with editorial independence. NPR’s board is appointed without any government influence.

When asked to respond to NPR’s decision, Musk tweeted “Defund @NPR.”

NPR CEO John Lansing said:

“I would never have our content go anywhere that would risk our credibility.” …”At this point I have lost my faith in the decision-making at Twitter” … “I would need some time to understand whether Twitter can be trusted again.” (Source: NPR, April 12, 2023)

Actionable Marketing Lesson

• Stay true to your business mission or risk having their brand tarnished and its value eroded. NPR believed that Twitter’s label hurt its credibility with its audience.

► NPR Reaches Out To Audience Via Email

When its story about Twitter was published on its site, NPR President John Lansing sent an email to their audience. It made 4 key points:

• NPR will NOT place its information on uncredible platforms. Context remains key to their mission of editorial quality and independence.
• NPR continues to support the millions of people who depend on them for true, factual information. Credibility matters to retain its audience and trust.
• NPR used the opportunity to ask for donations to support their independent journalism. Similar to what ProPublica did earlier this month, this request underscores that NPR is audience supported across platforms.
• NPR spotlighted other non-Twitter options where people could find their news.

Here’s what the email looked like:

Actionable Content Marketing Tips

• Communicate with each segment of your audience when there’s major news that may have an impact on them. This includes your prospects, customers, employees, stockholders and local community.
• Maximize the power of each emailing you send. Don’t just send promotions and information about your company. Communicate with your audience on a regular basis.

► PBS Also Publicly Leaves Twitter

Following NPR’s decision to quit Twitter, the Public Broadcasting Service (aka: PBS) followed suit and stopped using the social media platform due to its decision to label them a “government-funded media.”

According to a PBS spokesperson:

“PBS’s editorial independence is central to our work, and will never change. We will continue to produce trustworthy content that features unbiased reporting and holds governments and institutions to account.“

While PBS receives some government funding, most of its funding comes from the public and philanthropic organizations. So only a “small portion” of its funding comes from government-affiliated entities. (Source: USA Today)

AI / Voice Notes

► Even More AI News

Since building state-of-the-art AI systems requires large amounts of data, computer power and money, industry crested 32 significant industry-produced machine learning models in 2022.

Across the board, large language models (LLM) and multimodal models continue to increase in size and cost (Source: Stanford University 2023):

• Released in 2019, GPT-2 is considered the first LLM. Its 1.5 billion parameters cost about $50,000 to train:
• Launched in 2022, Google’s PaLM contains 540 billion parameters, costing about $8 million. Compared to GPT-2, PaLM is roughly 360 times bigger and cost 160 times more.

The top 5 types of significant AI machine learning (ML) systems released in 2022.

• Language,
• Multimodal,
• Drawing,
• Vision, and
• Speech.

The total number of AI-related GitHub projects including source code, documentation, configuration files, and images, increased from 1,536 in 2011 to 347,934 in 2022. (Note: GitHub is the source for open-sourced code.)

Actionable AI Marketing Tip

• When testing new AI tools, skip the lower annual subscription price. Instead, pay the full amount and use the tool for a month to determine whether it meets your specific needs. (Hat tip: Paul Roetzer)

Marketing Reads

► Marketing Artificial Intelligence: AI, Marketing and the Future of Business by Paul Roetzer with Mike Kaput

► AI For Marketers: An Introduction and Primer, 2nd Edition by Christopher S. Penn

Since I will be at the Conversational AI Conference in Chattanooga next week, here are a few of AMG’s most popular posts on voice.

• 10 Voice Marketing Take-Aways

• Voice Marketing ABC: How To Achieve Business Success

• How Voice Marketing Works: The Inside Scoop You Need To Succeed

Plan Ahead: Mark Your Calendar

► Project Voice 2023 – April 24 – 28 in Chattanooga, TN

The number 1 event for Conversational AI / Voice tech in America

► Creator Economy Expo – May
1-3 in Cleveland, OH

If you run a content-first business this is the event to attend!
Use the code AMG100 to get $100 off any pass. I’ll be there along with Jesse Cole (Savannah Bananas), Joe Pulizzi, and other inspiring creators.

► CX Connect– June 13–15, Online via Zoom

CX Connect will feature three days of thought-provoking presentations from the leading experts in customer experience.

► The Conversation Design Conference – July 24th – 25th in London, UK
bringing together the leading thinkers and doers in Conversation Design

Organized by VUX World.

► Marketing AI Conference – July 26 – 28 in Cleveland, OH

Register now with the promo code: RAIMOND100  for $100 off of the purchase price.

► Voice and AI – September 5th to 7th in Washington, DC

► Content Marketing World 2023 – September 26 – 28 in Washington, DC

► MarketingProfs B2B Forum – October 4 – 6 in Boston, MA

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Heidi

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