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August 22, 2006 Case No. XXXX-X This case was developed from published sources by Senior Research Assistant Dimitris P. Spiliakos under the supervision of Professor Susan Fournier. Boston University cases are developed solely for the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. © 2006 Trustees of Boston University. All rights reserved. For permission to reprint, contact the School of Management at 617-353-2673. Susan Fournier Dimitris P. Spiliakos Blogs and the Marketing Mix “In a way, blogs represent everything the Web was supposed to be: a mass medium controlled by the masses, in which getting heard depends solely on having something to say and the moxie to say it.” --Lev Grossman, Time Magazine, June 21, 2004 INTRODUCTION In September of 2003, 18 months after purchasing a first-generation Apple iPod mp3 player, Casey Neistat discovered that his player’s rechargeable battery failed to operate for longer than one hour at a time. Neistat requested a replacement battery in person at the Apple store in his native Manhattan, and subsequently by phone and mail through the Apple Care 800 phone number and the Apple Executive office, respectively. In each case Apple representatives told Neistat that the company would not replace his iPod battery and that company policy was to recommend that consumers purchase a new iPod. At that time, a new iPod retailed for approximately $400. Neistat instead bought a third-party replacement battery, though after completing the complex installation process, he found his iPod no longer worked. Casey and his older brother Van subsequently shot a short film documenting Casey’s experience with Apple and posted the video on a website they registered at http://www.ipodsdirtysecret.com. 1 While the website generated a fair number of hits from curious web surfers in its first day of existence, it was not until blogging pioneer Dan Gillmor linked to it in his widely read and influential blog “Bayosphere” 2 that the site garnered significant attention. Blog search and monitoring sites including Technorati (http://www.Technorati.com) also contributed to the Neistat website’s significant increase in hits by listing it at or near the top of their blog search results pages. According to Björn Ognibeni, a digital marketing consultant who monitored the Neistat website’s growing hit rate, less than 12 hours after first being referred to by a blog, the hits increased from an initial count of 2,000 to 15,000 (at a rate of 71 hits/minute). The hit rate further increased to 2 hits/second in the next day. Ognibeni estimates that just 48 hours after it went live, the site surpassed 100,000 hits. 3 Considerable discussion relating to the site appeared online as consumers reacted to Casey’s experience on their own blogs, forums and other sites. 1 iPod’s Dirty Secret . <http://www.ipodsdirtysecret.com/message.html> 2 Bayosphere . <http://bayosphere.com/blog/dangillmor> 3 Ognibeni, Björn. “Viral video clip featuring iPod’s dirty secret gets seen by 100,000 people in just 48 hours.” Online posting. November 26, 2003. Site-9 Weblog. <http://www.site-9.com/blog/archives/000087.html>

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Page 1: Blogs and the Marketing Mix - brandrelationships.org … · INTRODUCTION . In September of 2003, 18 months after purchasing a first-generation Apple iPod mp3 player, Casey Neistat

August 22, 2006

Case No. XXXX-X

This case was developed from published sources by Senior Research Assistant Dimitris P. Spiliakos under the supervision of Professor Susan Fournier. Boston University cases are developed solely for the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management.

© 2006 Trustees of Boston University. All rights reserved. For permission to reprint, contact the School of Management at 617-353-2673.

Susan Fournier

Dimitris P. Spiliakos

Blogs and the Marketing Mix

“In a way, blogs represent everything the Web was supposed to be: a mass medium controlled by the masses, in which getting heard depends solely on having something to say and the moxie to say it.”

--Lev Grossman, Time Magazine, June 21, 2004

INTRODUCTION

In September of 2003, 18 months after purchasing a first-generation Apple iPod mp3 player, Casey Neistat discovered that his player’s rechargeable battery failed to operate for longer than one hour at a time. Neistat requested a replacement battery in person at the Apple store in his native Manhattan, and subsequently by phone and mail through the Apple Care 800 phone number and the Apple Executive office, respectively. In each case Apple representatives told Neistat that the company would not replace his iPod battery and that company policy was to recommend that consumers purchase a new iPod. At that time, a new iPod retailed for approximately $400. Neistat instead bought a third-party replacement battery, though after completing the complex installation process, he found his iPod no longer worked. Casey and his older brother Van subsequently shot a short film documenting Casey’s experience with Apple and posted the video on a website they registered at http://www.ipodsdirtysecret.com.1

While the website generated a fair number of hits from curious web surfers in its first day of existence, it was not until blogging pioneer Dan Gillmor linked to it in his widely read and influential blog “Bayosphere”2 that the site garnered significant attention. Blog search and monitoring sites including Technorati (http://www.Technorati.com) also contributed to the Neistat website’s significant increase in hits by listing it at or near the top of their blog search results pages. According to Björn Ognibeni, a digital marketing consultant who monitored the Neistat website’s growing hit rate, less than 12 hours after first being referred to by a blog, the hits increased from an initial count of 2,000 to 15,000 (at a rate of 71 hits/minute). The hit rate further increased to 2 hits/second in the next day. Ognibeni estimates that just 48 hours after it went live, the site surpassed 100,000 hits.3 Considerable discussion relating to the site appeared online as consumers reacted to Casey’s experience on their own blogs, forums and other sites.

1 iPod’s Dirty Secret. <http://www.ipodsdirtysecret.com/message.html> 2 Bayosphere. <http://bayosphere.com/blog/dangillmor> 3 Ognibeni, Björn. “Viral video clip featuring iPod’s dirty secret gets seen by 100,000 people in just 48 hours.” Online posting. November 26, 2003. Site-9 Weblog. <http://www.site-9.com/blog/archives/000087.html>

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Much of the reaction was negative with respect to Apple. The print media eventually picked up the story and reported on the Neistat website and Apple’s iPod battery replacement policy, expanding the story’s reach and generating further negative PR for Apple. Finally, in late November, Apple introduced a battery replacement and extended warranty program for the iPod. Without explicitly stating so in his blog, Ognibeni appears to imply that the meteoric hit rate increase on the Neistat website was due in large part to blogs.

Several other cases demonstrate the virulent influence of blogs. In December 2002, during Strom Thurmond’s 100th birthday gathering, Senator Trent Lott made what appeared to be wistful comments in recalling Thurmond’s past policies supporting segregation. Although the mainstream media for the most part overlooked the story, blogs, including “talkingpointsmemo.com” featured Lott’s comments among their posts and spread the story across the internet. The pervasive blogging chatter quickly caught the attention of Washington insiders and media directors. The two weeks following Lott’s initial comments included a feature on the story on Meet The Press, an official public apology by Lott and his eventual resignation as Senate Majority Leader.4

On April 8, 2004, a video website5 appeared online featuring an actor dressed in a giant chicken suit who could obey any actionable command typed into the site by a web user. The “Subservient Chicken” site was later revealed to have been commissioned by Burger King as part of its campaign to promote the new TenderCrisp Ckicken Sandwich. The central marketing message of the campaign was that consumers could have their chicken “their way.” The webpage quickly attracted the attention of bloggers who were drawn to its interactive nature. The bloggers began linking to the site, thus spreading the site’s online reach and exposure. According to some estimates, within one week of its launch, the website had garnered one million hits.6

In August of 2005, screenwriter Josh Friedman posted a synopsis of his work doing rewrites for New Line Cinema’s feature film “Snakes on a Plane,” on his blog.7 In his post, Friedman gushed about the movie’s title and premise, and lamented that the film company was considering changing the film title to a less literal and attention-grabbing alternative. Friedman also linked to an article in which the film’s star, Samuel L. Jackson, stated he would not continue working on the movie if its title were ever changed. Friedman’s post generated intense interest in the film across the web, in some cases manifesting itself in independent “Snakes on a Plane” fan sites. Discussion devoted to the film reached such a level that New Line Cinema executives reneged on altering the film’s title; furthermore they ordered reshoots designed to increases the movie’s shock value and excitement and raise the film’s rating from PG-13 to R.8

These examples illustrate the inherent ability of blogs to both disseminate information across the internet at an exponential rate and act as a powerful and influential consumer advocate tool. The iPod battery case also raises questions as to the potential effects of blogs on such issues as brand identity, brand equity, positioning and stewardship. This note will explore these issues and others in an attempt to understand the power, utility and viability of blogs as effective corporate marketing tools. 4 Grossman, Lev. “Meet Joe Blog. ” Time Magazine Online, June 21, 2004. http://www.time.com/time/archive/preview/0,10987,650732,00.html 5 Subservient Chicken. 2004 <http://www.subservientchicken.com> 6 Anderson, Mae. “Dissecting Subservient Chicken.” AdWeek.com, March 7, 2005. http://adweek.printthis.clickability.com 7 Friedman, Josh. “Snakes on a Motherfucking Plane.” Online posting. August 17, 2005. I Find Your Lack of Faith Disturbing. <http://hucksblog.blogspot.com/2005_08_01_hucksblog_archive.html> 8 Wikipedia. “Snakes on a Plane.” <http://www.wikipedia.com>

Boston University School of Management 2

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BACKGROUND9

“Blogging is about a desire to be part of a community of like-minded individuals”

--Steve Rubel, micropersuasion.com, February 27, 2006

A recent study indicates that conventional promotional marketing is not effective in generating discussions among consumers regarding products and services, and that only 3.4% of actual face-to-face word-of-mouth conversations are stimulated by a marketing organization’s promotional efforts.10 This statistic falls in line with recent trends suggesting consumers have been increasingly ignoring the traditional, pitch-based marketing media including TV, radio, print, direct marketing and online marketing. This negative reaction is partly due to the sheer prevalence of advertising, which has contributed to the emergence of “ad-free” products including TiVo and satellite radio. At the same time, consumer avoidance of traditional marketing media is due to a growing distrust of these media outlets. Regardless, consumers are placing greater reliance on natural, unprompted (as opposed to promotion-influenced) face-to-face conversations, or “word-of-mouth” marketing, when making purchase decisions. A Customer Disatisfaction Survey on negative shopping experiences released in March, 2006 by The Verde Group indicates that “almost half of shoppers have avoided a particular store in the past because of someone else’s negative experience,” and “negative word of mouth influences future patronage up to five times more than the person who experienced the problem first hand.”11 (see Exhibit 1 for purchase decision influencers)

The greater confidence in word-of-mouth discussions is rooted in the concept that consumers do not want “canned, neatly packaged messages; the average person wants to engage and be engaged in conversations.”12 Blogs, or web logs, provide consumers with an online word-of-mouth method of conversation on all manner of topics, including opinions on new products and services (see Exhibit 2). Since blog writers profess a level of expertise that is reinforced with great passion, authenticity and transparency (see the section on “Distinguishing Features – Non-Technical”), blogs engender a high level of trust among their readers as a source of information. Also, due to their presence online, blogs extend beyond geographic boundaries to connect consumers across the globe. New standardized software technology in the last few years has further enabled individuals to design and publish blogs. In summary, blogs are a cultural enabler for accessible and trustworthy word-of-mouth conversations.

As a result, since their inception, blogs have exploded onto the online scene, with increasing numbers of individuals and corporations publishing new blogs and reading existing ones. At the present time, it is unclear as to how large the blogosphere is. Technorati currently indexes just over 52.1 million existing blogs, and it estimates that about 75,000 new blogs are created every day and that over 50,000 blog updates occur every hour.13 In his 2005 end-of-the-year assessment of the blogosphere, Intelliseek (now Nielsen BuzzMetrics) Chief Marketing Officer Pete Blackshaw states that aside from the continued numerical 9 This section draws heavily from “Trust ‘MEdia’ Why the Average Person is Finally Getting Heard” and “Consumer Generate Media (CGM) 101”, white papers authored by Edelman and Intelliseek, respectively, and from Naked Conversations: How Blogs are Changing the Way Businesses Talk With Consumers, by Robert Scoble and Shel Israel. 10 Presentation by Walter J. Carl, at the Word of Mouth Marketing Association’s “Measuring Word of Mouth: The first conference on measurement, metrics and standards in word of mouth marketing,” Chicago, July 13, 2005, slides 3-4 11 Customer Disatisfaction Survey by The Verde Group, released on March 10, 2006, as quoted in http://www.newswire.ca/en/releases/archive/March2006/10/c0764.html 12 “Trust ‘MEdia’: Why the Average Person is Finally Getting Heard,” White Paper by Edelman and Intelliseek, Spring 2005, p. 2 13 Technorati. “About Technorati.” <http://www.technorati.com/about/>

Boston University School of Management 3

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increase in blogs, the blogging practice is expanding geographically beyond the US, Canada and the UK, primarily into Turkey and Asia. Blackshaw also observes a shift from purely textual blogs to more visually-based media called “moblogs” that feature more pictures and videos. This shift is due to the release of simpler versions of blog creation software. Other trends include an increase in both employee blogging and in the number company blogs. At the same time, company blogging policies that limit or prohibit blogging completely are becoming more common. Finally, many PR companies are ramping up their blog-monitoring practices as part of their overall service package, denoting blogging’s growing importance in that industry.14

Definition “(n) a frequently updated web site consisting of personal observations, excerpts from other sources, etc., typically run by a single person, and usually with hyperlinks to other sites; an online journal or diary."

--The Oxford English Dictionary, March 2003

Blogs are an example of a broader category known as consumer generated media (CGM). CGM encompasses a wide variety and growing number of predominantly online media vehicles created and distributed by consumers specifically for other consumers with the main purpose of “educating each other on products, brands, services, personalities and issues.”15 CGM includes but is not limited to: postings on public internet discussion boards and forums (such as chatrooms), consumer ratings web sites or forums, blogs, moblogs and individual web sites. (See Exhibit 3 for an overview of CGM. For a list of important blog-related terms, please see the Appendix at the end of this note).

Typically, blogs are created and maintained by individuals or organizations, employing easy to use and inexpensive blog-writing software. Such software options include Blogger, BlogSpot, LiveJournal/Six Apart, Typepad and WordPress. After design and creation, each blog goes live (is “published”) as its own separate web site featuring a unique URL (uniform resource locator) address. Blogs usually, but not exclusively, focus on a particular topic or theme (or in the case of a corporate blog, a particular brand or product), as chosen by the blog writer (or “blogger.”)

Distinguishing Features: Technical16

After creating a blog, individuals regularly post their thoughts, ideas, opinions, reviews, descriptions and/or experiences to the blog site. In this sense blogs have often been referred to as “digital diaries.” Individual posts appear prominently on the blog in reverse chronological order, and bloggers can choose to archive older posts. Thus upon visiting a given blog, any individual (a “blog reader”) will access the most relevant and current information first. Furthermore, each post includes its own unique link, known as a permalink. The permalink ensures that once added any post will be permanently accessible online. Going forward, blog readers can access older posts directly and indefinitely without linking to the blog front page,

14 Blackshaw, Peter. “The Pocket Guide to the 2005 Blogosphere.” December 13, 2005. As retrieved from http://www.clickz.com/experts/brand/cmo/article.php/357032115 “Consumer Generated Media (CGM) 101, ” White Paper by Pete Blackshaw and Mike Navarro, Spring 2004, p.2 16 This section elaborates on “Blogging’s Six Pillars” from Naked Conversations, p. 28

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as long as they know the permalink’s URL.17 The permalink feature is not generally available on other post-driven CGM such as forums, discussion boards and chatrooms.

One of the hallmarks of blogs is the ability of blog readers to comment on posts with their own thoughts and opinions, and of bloggers to respond to these comments. Any comments made appear below their related posts, and there is no limit to the number of comments for any particular post. Should they so desire, bloggers can delete or disable comments completely for any of their initial posts. Nevertheless, blogs essentially evolve into extensive ongoing “conversations” between the blogger and his or her readers on several topics. These conversations may include comments from multiple blog readers who are responding to the same or separate original post or to each other’s comments. Blog readers can access an entire conversation chain, including the original post and any ensuing comments, through the permalink feature. Commenting highlights a blog’s “one-to-many” communication aspect, which allows a blogger to “stay in touch with the whole world.” 18 At the same time, the whole world, or at least other bloggers and blog readers, can stay in touch with that particular blogger. The vast network formed enhances a blog’s ability to spread information quickly.

Another unique feature of blogs is that they are syndicatable. Any given blog might include a small icon or link, that when clicked, will thereafter send individuals emails alerting them that the blog has been updated with new posts. The most common method of syndication is RSS (“real simple syndication”), and the email alerts are often referred to as RSS feeds. RSS simplifies the process of checking for updated material online and keeps blog readers current with the blogs they follow. Syndication basically is a method for receiving updates on a site without going through the arduous task of repeatedly checking it for changes and/or new content.

Blogs are also linkable, in the sense that any blog can link to, or reference posts from, another blog. Blogs typically link through a trackback feature. This feature establishes a link on a referring blog back to the original blog, such that blog readers can “track back” to the original blog if they desire to read the original post. The interlinked blogs mean that a blog reader can bounce form blog to blog through a vast online network of sites that, along with blog search and monitoring sites are collectively known as the blogosphere. Features such as linkability and syndicatability are quickly making blogs the preferred medium for receiving regular updates on a substantial amount and variety of information, thus further separating blogs from other CGM.

Finally, blogs are accessible and searchable to all internet users from any internet-linked computer terminal. Blog search engine and monitoring sites allow blog readers to easily search for relevant blogs by either keyword (posting), title or URL. Most blog search engines employ a search algorithm that sorts results by the most popular or influential blogs. Various criteria determine a blog’s influence, but the two most often utilized are number of incoming links (links from other blogs or websites) and posting frequency. A higher number of links typically implies a higher level of popularity among blog readers and traditionally is the statistic most often quoted when assessing a blog’s influence. Posting frequency has become increasingly significant, due to its prominence in the Google search algorithm. From a technical standpoint, the Google search engine sorts its search results based primarily on the frequency of updated webpage content. Thus a site that has been updated more recently will rank higher on the Google search 17 Kirkpatrick, David. “Why There’s No Escaping the Blog.” Fortune Online, January 10, 2005. http://jcgi.pathfinder.com/fortune/technology/articles/0,15114,1011763,00.html. 18 Scoble, Robert, and Shel Israel. Naked Conversations: How Blogs are Changing the Way Businesses Talk With Consumers. New Jersey: John Wiley and Sons, 2006, p. 35

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results page. Consequently blogs, which are actively updated, will regularly rank higher than traditional websites, whose content remains more static. Considering Google’s status as the preferred search engine among users and the strong emphasis placed by companies on search engine optimization (SEO, alternatively search engine marketing), blogs may increasingly become an attractive and powerful alternative for corporations in maintaining an active online presence.19 (An example of a typical blog appears as Exhibit 4)

Distinguishing Features: Non-Technical From a non-technical standpoint, blogs can be further characterized by several additional important

elements. First, individuals blog with great passion, regardless of subject. Bloggers also tend to be experts in the subjects they blog about, having had extensive experience in that subject area or having meticulously researched a given subject. Liz Galle, an accomplished knitter, blogs about knitting on her “drinkerthinker” blog,20 where she often posts pictures of her completed knitting projects. In addition, most blogs tend to exude a certain online persona or attitude that is unique and that differentiates them from other blogs. Ethan Marcotte, a recognized authority on CSS computer programming, often uses his dry, self-deprecating humor to great effect on his popular blog “sidesh0w”.21 A strong combination of passion, authority and personality differentiates a blog within the blogosphere and can determine the relative readership of a blog. It follows that more passionate, authoritative and entertaining blogs attract more links and enjoy higher rankings on Google and blog-specific search engines.

As blogs encompass the unique identity of an individual expressing his or her intensely personal thoughts and ideas, blogs as a medium tend to be inherently authentic. This is often manifest in the unpolished language, broken syntax and grammatical and typographical errors often found in blog posts. As expressed by Lev Grossman, blogs are “human. They come to us not from some mediagenic anchorbot or an air-conditioned sound stage, but from an individual. They represent – no, they are – the voice of the little guy.”22

Furthermore, blogs are transparent, in the sense that bloggers are fairly explicit in stating their purposes for blogging. This honesty falls in line with the idea that blogs are a medium for open personal expression. The issue of transparency is almost sacred to bloggers. Therefore, if an individual is blogging for reasons other than simply to share his or her ideas and thoughts, bloggers believe there should be disclosure. Not only does this reinforce the authenticity and genuineness of the blog, but it establishes a measure of trust and credibility between blogger and blog reader. By and large bloggers have no hidden agendas or ulterior motives, and they strive to be honest when blogging. As a result, blogs have become an increasingly consulted reference for opinions and reviews on products (http://www.engadget.com, http://www.bookslut.com/blog/) experiences (http://www.arsblog.com, initially about a blogger’s year in Japan teaching English as a second language) and social or political issues (http://www.instapundit.com). Blogs are in effect an efficient and effective digital source of word-of-mouth marketing. Whereas previously a consumer might have consulted one or two trusted friends on certain issues, now this same consumer can seek the advice of the entire blogosphere. When it comes to bloggers, every one of them has an opinion. 19 Ibid., pp 28-29 20 DrinkerThinker. “DrinkerThinker.” <http://www.drinkerthinker.com> 21 Sidesh0w. <http://www.sidesh0w.com> 22 “Meet Joe Blog”

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History and Development

Pinpointing the exact date of the birth of blogs is difficult. One thing that is certain is that internet writer Jorn Barger introduced the word “web log” to the English lexicon in December 1997, when he began posting comments and links on “Robot Wisdom,” the website he maintained.23 In their comprehensive work on blogs entitled Naked Conversations, Robert Scoble and Shel Israel attribute the origin of blog fundamentals to another internet pioneer, Dan Winer. As an online editor for Wired magazine during the 1990s, Winer developed the ideas of posting in reverse chronological order and linking to other sources as a way of organizing data on a website during a massive internet project he was coordinating. Winer transferred these practices to Scipting News, a personal website he developed on which he regularly posted comments on issues that interested him. Winer then modified portions of code of the software language XML, and placed the altered code on his site. The modifications added new features to the software that allowed users to “subscribe” to his website. The subscription service provided readers with regular alerts announcing updates to Scripting News. At around the same time, Netscape was developing its own version of a syndication feature. Winer and Netscape formed a tenuous collaboration that resulted in a single syndication standard known as RSS 2.0.24 With the addition of the syndication feature, Winer’s website in essence became one of the first blogs.

Since Barger and Winer first began transforming conventional websites into the forerunners of blogs, the blogosphere has grown exponentially. In 1998 there were purportedly 23 sites existing that qualified as blogs.25 Blogs effectively became a mass medium in 1999, when several corporations began offering free blog-creation software to internet users.26 The proliferation of blogging software has continued to the present day, with companies such as the ones mentioned earlier allowing users to easily and creatively design and publish their own blogs within minutes.

As the blogosphere grew, the influence of blogs and the implications for their potential utility increased as well, and at no time was this more apparent than during 2004. Numerous examples come from the political world. During his campaign for the presidency in 2004, Howard Dean employed a blog (http://www.blogforamerica.com) to recruit new volunteers and solicit donations from the public. Dean’s blog attracted numerous passionate individuals to fight for his cause and generated record amounts of fundraising.27 Although he ultimately failed in his campaign for the presidency, Dean effectively used blogs to generate grassroots support by connecting more personally with voters.

During that same year, blogs also demonstrated an ability to act as media fact-checkers. In September of 2004 CBS news anchor Dan Rather reported on the existence of documents allegedly proving that President Bush had deliberately neglected duty while serving in the Texas Air National Guard. Shortly after the report aired, numerous political bloggers including Glenn Reynolds (http://www.instapundit.com) openly challenged the veracity of the documents and the credibility of CBS’s report on their blogs. Reynolds encouraged other bloggers and blog readers to investigate. One such blogger, who was well-

23 Wikipedia. “Jorn Barger” <http://www.wikipedia.com> – Barger’s contribution to blogs is also mentioned briefly in “Trust ‘MEdia’ Why the Average Person is Finally Getting Heard, ” by Edelman and Intelliseek 24 Naked Conversations, pp. 57-59 25 Lyons, Daniel. “Attack of the Blogs.” Forbes.com, November 14, 2005 http://www.forbes.com/forbes/2005/1114/128_print.html 26 “Meet Joe Blog” 27 “Trust ‘Media,’” p. 4

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informed on the subject of typefonts, was able to confirm the documents were fakes. CBS eventually admitted it could not guarantee the authenticity of the documents.28 Because blogs are passionate and opinionated, they are naturally conducive to challenging news reporting. Furthermore, considering their potential reach and independence of any control by newspapers, periodicals, radio and TV, blogs are becoming much bigger players in the realm of news media. In some cases, blogs not only have corrected existing news reports, they have also broken news stories. As David Kirkpatrick states, “blogs….are forcing accountability on news organizations. They’re also demanding – and sometimes getting – a much bigger say in what’s news.”29 (see Exhibit 5)

Aside from the political realm, blogs also asserted themselves from a corporate standpoint in 2004. On September 12, a user posting on a group discussion board for bicycle fans claimed that the popular Kryptonite bike lock could easily be picked with a Bic ball-point pen. Within days several blogs (including the influential consumer electronics blog “Engadget”) had posted video demonstrations of the lock-picking procedure. At its height during the episode, blog chatter relating to Kryptonite purportedly reached 1.8 million postings viewed, as estimated by Technorati. The original posts and the subsequent viewings and comments triggered a chain of events that included weak assertions by Kryptonite that the locks were still effective and promises to improve future products. Ten days after the initial posting, however, Kryptonite announced it would replace all “affected” locks free of charge. The estimated cost of the disaster, as calculated by Kryptonite’s parent company, was $10 million. This amount accounted for roughly 40% of Kryptonite’s estimated revenues for that year.30

One outcome of the development of the blogosphere is the emergence of “splogs,” or spam blogs. A splog resembles a blog in layout but not in content. In fact the purveyors of splogs typically copy and paste portions of text from existing popular blogs into their own newly published webpages. These “sploggers” usually fill the remainder of the page with buzz words relevant to the copied content, repeating these words on end and thus rendering their presumably legitimate “blogs” into online gibberish. In essence there is no original content on a splog. Given that a splog displays material from a consistently popular blog and contains multiple pertinent buzzwords, subsequent online searches for the original blog or its content will actually rank the splog ahead of the original blog on result pages and will generate more clicks on the splog’s URL. Over time sploggers sell advertising space on their splogs, utilizing their strong search engine ranking statistics to lure the highest bidders. The most effective splogs negatively impact blogs in several ways. Splogs divert readership away from the intended site and can result in a drop in the original blog’s search engine PageRank, making it harder for newer readers to find the blog. Furthermore splogs can inflict lasting damage to a blogger’s reputation due to a newly formed association with a spam blog.31

The splog phenomenon is prevalent throughout the blogosphere, with one study estimating that 56 percent of current English-language blogs are actually splogs. A separate study claims that as of December of 2005, Google’s blog site Blogger.com was hosting more than 100,000 sploggers. Moreover, as an example of the lucrative nature of splogging, one self-proclaimed splogger asserted he earned in excess of $70,000 during only three months’ work administering his multiple array of splogs.32 Several notable 28 “Why There’s No Escaping the Blog” and “Trust Media,” p. 4 29 “Trust ‘MEdia,’” p. 5 30 “Why There’s No Escaping the Blog” 31 Lee, Nicole, “How to Fight Those Surging Splogs.” Wired Magazine, October 27, 2005 <http://www.wired.com/news/culture/0,69380-0.html> 32 Rubel, Steve, quoting untitled article by Charles C. Mann appearing in the September, 2006 issue of Wired Magazine < http://www.micropersuasion.com/2006/08/splogs_threaten.html>

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blogging experts have voiced concerns over the splogging problem and have proposed solutions. In addition, splog reporting procedures exist on several blog hosting and writing sites. Blogger.com has gone as far as to install a word verification system called Captcha to its blog-writing process.33 Despite the call for more action, no comprehensive universally compatible splog “filtering” programs exist at the present time.

Blog Contrarians “Web logs are the prized platform of an online lynch mob spouting liberty but spewing lies, libel and invective.”

--Daniel Lyons, Forbes.com, November 14, 2005

Despite the investigative and warning ability of blogs, not everyone is convinced that their purpose is purely noble. In fact, in his article titled, “Attack of the Blogs,” Daniel Lyons claims blogs are “the ultimate vehicle for brand-bashing, personal attacks, political extremism and smear campaigns.” To support his assertion, Lyons discusses the experience of Gregory Halpern and his publicly-held company, Circle Group Holdings (CGH). Among other ventures, in early 2004 CGH was developing a fat-substitute called Z-Trim that was being tested by Nestle as a potential product ingredient. News of Nestle’s interest in Z-Trim resulted in CGH’s stock increasing by over 325%. Halpern’s 35% stake in the company grew in value to $90 million. Subsequently, a blogger identifying himself as Nick Tracy of London began posting about Halpern and CGH on his blog, “our-street.com.” Tracy’s posts, which were factually shaky, called Halpern “deceitful” and a “pathological liar” and stated Halpern had deceived CGH’s investors. Soon thereafter similar allegations were posted on Yahoo. Halpern fought to reveal the poster’s identity without success. Tracy’s online assault and the uproar it created caused several nervous investors to contact CGH for answers, with Halpern trying in vain to reassure them their interests in CGH were secure. Eventually Nick Tracy was revealed to be Timothy Miles, a former stockbroker from Oregon who was facing charges by the SEC for allegedly participating in illegal stock trading practices, had connections to a number of companies of questionable repute, and claimed to be an ordained minister. Upon discovering Tracy’s true identity, Halpern mounted an aggressive campaign over the following year to both clear CGH’s name and stop Miles from continuing his attack. Despite these efforts, which included suing for defamation, CGH stock dropped over 88% off its previous high, and Halpern’s stake in the company shrunk by $75 million. In addition, during that time Nestle discontinued its testing of Z-Trim.34

The Halpern example raises several important points. First, defending false claims originating on blogs can be extremely difficult. It is often hard to correctly identify one’s attackers, as illustrated above. This problem aside, because blogs are such a virulent medium, the spread of allegations online occurs so fast that controlling or containing attacks becomes virtually impossible. Furthermore, strategies for countering claims, such as lawsuits, often do little to mitigate the damage caused and instead can lead to additional online harassment. These problems are compounded by the fact that blogs are protected under First Amendment rights, while the internet servers and writing software providers that allow blogs to exist are sheltered by the Communications Decency Act of 1996. Therefore, legally compelling a blog host to remove potentially scurrilous content or reveal the identity of blog “attackers” is hard to achieve.

33 “How to Fight Those Surging Splogs” 34 “Attack of the Blogs”

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Secondly, Lyons states blogs are emerging as a weapon used by corporations to criticize if not outright assail competitors regarding their products and executives. This is sometimes accomplished through independent, third party anonymous blogs, and may explain the emphasis bloggers place on disclosure and honesty when creating and maintaining a blog. Yet another negative effect of potentially false blog attacks is that the “smear campaign” remains prominently displayed online for extended periods of time. This is due primarily to Google and other search engines listing the offending blogs at the top of search results relating to a company or individual, even above the related corporate or personal websites. Users will read the top links first, and this gives blog attack “victims” even less of a chance of adequately defending themselves. In the end, the potential for brand erosion and damage in the minds of blog readers and consumers is high, and reconstructing an individual, corporate or product reputation is an arduous process. As of the end of 2005, Halpern was still engaged in prosecuting Miles, who subsequently moved abroad and started a new “watchdog” blog site called scamspotting.com.35

Robert Scoble and Shel Israel assert that blogs have limitations beyond being a potential weapon for slander. In elaborating, Scoble and Israel revisit the 2004 election campaign of Howard Dean. The authors of Naked Conversations state that for all the good that the Blog For America did for Dean and his volunteer mobilization and fundraising efforts, the blogging effort “never managed to cross the traditional chasm between early enthusiasts and mainstream voters who generally had not yet turned to blogs for information and conversation. While [Dean’s supporters] thought blogging was amplifying their voices, they were in fact merely talking to each other.”36 Scoble and Isreal call this effect a blogging “echo chamber.” The Dean campaign brings up the importance of realizing that although passionate and effective in disseminating information, the blogosphere is a small percentage of the entire internet user group, so blogging efforts can do only so much.

Measurement To fully capitalize on the potential of blogs, corporations will require powerful tracking, monitoring and measurement analysis tools, and not surprisingly, such tools exist. Perhaps the most well-known blog-monitoring service is Technorati, a free blog indexing and monitoring site. Although Technorati does not offer a wide array of analytical tools, it features one of the largest searchable databases of blogs and provides relevance statistics such as the current Top 100 Blogs (by number of incoming links).37 Technorati is a widely used blog monitoring online reference, and its tracking statistics are frequently quoted in expressing a given blog’s influence. Nielsen BuzzMetrics is one of the largest blog-monitoring sites, offering powerful blog analytics relating to statistics such as blog buzz over time and blogger profiling.38 Umbria is another established blog watcher that utilizes proprietary “natural language processing” algorithms in analyzing blog postings on the basis of wording and tone to determine blogger demographics.39

Measuring blog data can provide a number of insights. Nielsen BuzzMetrics prepared a report on the recent Winter Olympic Games in Turin, in which it analyzed “blog buzz” before and during the actual games. According to the report, blog conversations spiked upwards just before the opening ceremony, but 35 Ibid. 36 Naked Conversations, p. 38 37 Techonrati. “Popular Blogs.” <http://www.technorati.com/pop/blogs/> 38 Nielsen BuzzMetrics. “Index.” <http://nielsenbuzzmetrics.com/index.asp> 39 Umbria. “Home.” <http://www.umbrialistens.com/home>

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fell dramatically immediately following the event, returning to the low levels exhibited several weeks before the Games began. TV ratings for the games followed a similar pattern, with NBC experiencing weak Nielsen scores overall following the start of the games. In a separate example of CGM monitoring, Hewlett Packard discovered that consumers with broken computers do not enjoy leaving their PCs at stores and instead prefer to have technicians make house calls. HP is now offering home repairs on PCs. In referring to online CGM tracking, HP business strategy manager Rickey Ono states, “We drill into the individual comments and it helps justify our expenditure on in-home repair.”40

Despite the availability of various types of complex analyses, the most common statistical measurement with respect to blogs is influence or popularity. As mentioned earlier, the metrics that determine influence include frequency of update (as in the Google search algorithm), number of incoming links or “referrals,” and category “tags.” Technorati offers blog searchers the opportunity to tag blogs they often read with the category designation of “favorite,” and subsequently will rank blogs by the number of “favorite” tags they have received from blog readers. (Please see Exhibit 6 for an overview of blog-monitoring companies and services. See the section “Blog Uses” for additional examples on how blog data informs business decisions)

Describing the blogosphere: The Who, Why and What of Blogs A survey by the Pew Internet & American Life Project41 in 2004 states that between 2% and 7% of

adult internet users have created a blog. Only 11% have read blogs created by others, and of those, about a third posted comments. Teenagers show the highest propensity to publish blogs. One media study describes bloggers as “more gadget-oriented,” revealing a higher percentage of use among bloggers of such items as cell phones, digital cameras and laptops. The same study shows that individuals blog for a number of reasons, though the highest percentage response was “to get my opinions heard,” among other answers.42 As alluded to earlier, blog subjects include but are not limited to personal hobbies and experiences, news and political blogs, entertainment, lifestyle, and business and marketing blogs.

Within the blogosphere, bloggers could be classified into several “tiers” based on influence and popularity. At the top of this “hierarchy” are those blogs that routinely make the “top blog” lists on blog monitoring sites, based on incoming links, hits and updating frequency. Below this level are a number of blogs that do not rank as high statistically as the top tier blogs, but are nonetheless respected sites within their given subject focus. Finally, the “third tier” of blogs could be described as the remainder of the blogosphere, essentially the average blogger whose voice is far from as influential as those in the top two tiers. It follows that the third tier is by a wide margin the largest of the three. (Please see Exhibits 7A-E for demographic, attitudinal and content preferences of typical bloggers and a list of influential bloggers).

40 Levingston, Steve. “Blog Buzz Helps Companies Catch Trends in the Making.” washingtonpost.com, March 3, 2006. <http://www.washingtonpost.com/wp-dyn/content/2006/03/02/ 41 Pew Internet & American Life Project. “Reports: Online Activites and Pursuits.” http://www.pewinternet.org/PPF/r/113/report_display.asp 42 2005 Intelliseek Consumer-Generated Media Study (August 2005)

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BLOG USES43

“There’s nothing more valid than third-party validation and that’s what bloggers do.”

--Information Week, January 13, 2006

Marketers can utilize blogs to inform several key aspects of their businesses (see Exhibit 8). The Kryptonite incident highlights a blog’s ability to act as an early-warning system for companies with respect to issues like product quality and failure, as reflected in negative consumer reaction online. Specifically, by utilizing any of the blog monitoring and analysis services mentioned earlier, marketers can track consumer quality perceptions on blogs on an ongoing basis and quickly respond to potentially damaging issues. Blog data may in fact inform the design of specific company frameworks and actionable procedures for improving future crisis management.

Blogs can also be used as an effective tool for reputation management. As noted in the Gregory Halpern/CGH example above, monitoring blog data allows marketers to scan for subjects that may negatively affect corporate reputation. In addition, companies can keep track of what key company stakeholders are saying online. Finally, marketers may potentially use blogs for reputation enhancement purposes by forming relationships with bloggers who favorably characterize a company in their posts; an alternative is to attempt to recruit influential bloggers to “endorse” a company or its products in their blogs (see the section below on Blog Recruiting and Sponsorships).

By working as a valuable source of customer feedback, blogs can further help marketers obtain a clearer understanding of their customers. Steve Rubel, an influential blogger and PR industry veteran, states that blogs allow one to “see what the most vocal customers have to say about you and your competitors – and they’re saying it without necessarily knowing you’re watching them.”44 For instance, by tracking blog posts and comments corporations can identify marketplace trends. Online posts in blogs and other CGM informed ConAgra Foods Inc., a large food producer, that the popularity of the low-carb diet was waning. The company took advantage of the presumed shift in consumer preference to promote its Healthy Choice brand of foods that features various soup, entree and meat offerings. Specifically, marketers can utilize blog data to distinguish between bona fide trends and temporary crazes through analysis that separates discussion items by the number of times they were mentioned, who mentioned them and where they were mentioned online. Blog monitoring companies can also measure idea “importance” and relevance by analyzing the tone of posts and comments.45

Blog data can also bolster marketing research efforts such as market segmentation. For instance, the advertising agency WPP Group LLC utilized Umbria’s natural language processing to help narrow down the target audience for a new cell phone promotion, based solely on monitoring the speech patterns and conversation themes in blogs relating to cell phones. By gaining a clearer understanding of what consumers were saying online, WPP was able to craft a marketing message that spoke directly to those consumer needs.46

43 The structure of this section draws from “Blog Analysis and Your Business,” a presentation by Intelliseek in 2003, slide 2 44 “Blog Buzz Helps Companies Catch Trends in the Making” 45 Ibid. 46 Bulkeley, William M. “Marketers Scan Blogs For Brand Insights.” Wall Street Journal Online, June 23, 2005 <http://online.wsj.com/public/article/SB111948406207267049-_s5eff_5SbJX3B_RdxwYLvU3s6c_20050723.html>

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Finally, if used effectively, blogs can be a viable platform for new product launches. In 1999 Blake Ross, a young web designer, joined the development team of the Mozilla Group, a group of programmers who maintained Netscape’s web browsing system. In 2002 Ross developed a browser for Mozilla, eventually named Firefox, that was considered less complicated and more secure than both Netscape’s browser and Microsoft’s Internet Explorer. Throughout his design process, Ross wrote about his experience on his blog named SpreadFirefox. In late 2004 Ross released Firefox 1.0, the first version of the free, open-source web browser, on his blog. Ross promoted Firefox on his blog through a number of periodic “community marketing campaigns” that targeted specific groups of individuals such as college students. Devoted readers of Ross’s blog spread the word on Firefox, resulting in intense interest in the product and generating millions of downloads. By April, 2005, the blog had triggered a daily download rate that reached 200,000. Just six months after its initial launch, Firefox had garnered 50 million downloads and purportedly its download rate was still increasing. Aside from Ross’s online marketing campaigns, no additional promotional efforts were employed to launch the Firefox browser.47

BLOGGING PRACTICES AND STRATEGIES

“[The goal] is to engage the public regarding our products and services. The blog has become an important, unfiltered voice. Now we have . . . a direct line of communication. [The blog] has become indispensable.”

--Bob Lutz, Vice Chairman, General Motors Corporation, 2006

Employee Blogging Perhaps no corporation and its executives have generated as much distrust among consumers and felt its negative effects as Microsoft. At the height of anti-company sentiment, Microsoft’s reputation for eliminating competition through coldblooded acquisitions, aggressively defying government antitrust litigation and pervasively forcing consumers to use its Internet Explorer product through its Windows operating system was widespread. One consumer even propagated Microsoft’s negative image through an “Evil Empire Blog.”48

The emergence of employee blogging at Microsoft resulted in a considerable improvement in the company’s reputation and in transforming consumer perception of the company. Joshua Allen, an XML team program manager at Microsoft, became the company’s first blogger when he started his “Better Living Through Software” blog49 in 2000. In his words, Allen “wanted to say that I am a Microsoft person and you can talk with me.” Allen’s hope was that other employees would begin blogging so that “we’d show that we were real people and not the Borg.” Within a month of his first postings, internal Microsoft emails began demanding Allen’s termination, and such emails would continue to appear on a regular basis. Allen was never fired, and over time several other Microsoft employees followed Allen’s lead in blogging. The blogosphere began to notice. Influential bloggers like Dan Winer began to link to Allen’s blog and

47 Naked Conversations, pp. 36-38 and “The Firefox Explosion,” by Josh McHugh, Wired Magazine online, Issue 13.02, February 2005 <http://www.wired.com/wired/archive/13.02/firefox.html> 48 Naked Conversations, p. 10 49 Better Living Through Software. <http://www.netcrucible.com/blog/default.aspx>

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encourage other Microsoft employees to blog. In 2000 alone, Winer directed traffic to Allen’s blog on five different occasions. Not only did Winer’s referrals drive traffic to Allen’s blog, but as additional employees responded to Winer’s call to blog from within Microsoft, a distinct company persona began to emerge online, comprised of different ideas, thoughts and personalities.50

Robert Scoble, another Microsoft employee, magnified this effect both through his own blog51 and through the text and video blog he helped create at the company called “Channel 9”. On Scobleizer, his personal blog, Scoble posted candidly about his work at Microsoft, going as far as to offer his personal opinions on company products that he felt were flawed or lacking and stating his reasons. Channel 9 combined daily posts on all things Microsoft with videos of employees speaking about their jobs and their lives working at the Redmond, Washington software company. The employee blogs attracted thousands of hits and links, with other bloggers routinely acknowledging that Microsoft was making an effort to listen to consumers. Microsoft chairman Bill Gates publicly recognized the effect of employee blogs in an interview with Scoble, stating, “You are letting people have a sense of the people here. You’re building a connection. People feel more a part of this. Maybe they’ll tell us how we can better improve our products.” Employee blogging exploded at Mircrosoft: there were over 1,500 employees actively blogging at Microsoft as of March, 2005.52

Other corporations have joined the employee blogging trend, including Sun Microsystems, IBM, Apple and Google, and the blogging practice has expanded into the upper executive ranks as well. Bob Lutz, Vice Chairman of General Motors, regularly posts on his blog, “Fast Lane” (http://www.fastlane.gmblogs.com). Lutz originally began his blog with a post on the Saturn car model just before a large Detroit auto show. Lutz’s posting and his subsequent responses to comments made by blog readers generated a noticeable response in the blogosphere. Blog readers were impressed that an executive of Lutz’s high rank blogged in the first place, and were delighted to engage in conversations with him via comments and responses.53

Company Blogs Although employee blogging is currently the most prevalent method of “corporate” blogging,

corporations may choose to exert a greater measure of control over blogging content by creating and maintaining a company blog. Company blogs can exist in conjunction with, or instead of, employee blogs. Microsoft’s Channel 9 blog is an example of a company blog that coexists with thousands of employee blogs.

In October of 2004, a 22-year old blogger named “Kid Halloween” who routinely wrote about going to see heavy metal bands posted links to three videos on his blog featuring Mazda3 cars. The blogger claimed a friend recorded the videos off a public-access TV channel. The videos showed the Mazda3 performing impressive stunts such as break-dancing and driving off ramps. Considering the “expensively-produced look” of the videos, other bloggers linking to the site questioned the authenticity of Kid Halloween, his site, and the source of the videos. The online discussion turned to mass public outcry when it was later revealed that the videos and the blog were plants by Mazda. Mazda’s aim was to promote the Mazda3 in a subtle

50 Naked Conversations, pp. 11-12 51 Scobleizer. <http://www.scobleizer.com> 52 Naked Conversations., pp. 11-18 53 Ibid., pp. 44-45

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manner that consumers might accept and find genuinely impressive, though after being confronted with the string of negative reaction in the blogosphere, the company soon terminated the blog. As Steve Hayden of the advertising firm Ogilvy & Mather states, “If you lie on a blog, you are biting the karmic weenie. The negative reaction will be so great that, whatever your intention was, it will be overwhelmed and crushed like a bug.”54

In February of 2006 Nike launched a blog55 specifically relating to basketball and maintained by the team of Nike designers that oversees the company’s sneaker division. Although a solid attempt at focusing on a narrow topic and targeting a passionate audience, the blog does not include any “social features” such as comments or trackbacks.56 In this sense the Nike site is more similar to an online bulletin board than a full-fledged blog.

Some companies are eschewing corporate websites completely, in favor of blogs. Both Union Square Ventures, a venture capital firm, and Hill Holiday, an advertising agency, have gone “blog only” (see http://www.unionsquareventures.com/ and http://www.hhcc.com/, respectively). As Steve Rubel states, “There are some companies where the people are the sole assets. The best way to showcase them is to have them get out there and be part of the conversation. Blogs do a killer job.”57 (see Exhibit 9 for examples of company blogs).

Internal Blogs Blogs can also be effectively used internally at corporations as a “knowledge management tool.” At

Google, employees use the company’s blog writing tool Blogger to blog to each other. Internal blogging can be utilized for project coordination, planning and execution, where teams of employees can keep each other appraised of their progress with respect to project tasks and deadlines. In addition internal blogging can take on a social bent, where employees announce social events or search for tickets to concerts or sports events on the company’s internal blog network. Thus internal blogs are valuable both as an efficient means of sharing information and in building company community and boosting morale. One of the most important outcomes of internal blogging is its legal implications regarding patents. Marissa Mayer of Google states that since internal blogs can chronicle the conversations between idea generators in companies, “you can now show in blogs where this idea happened,” because blogs are in essence “a written-down, backed-up, permanent time-stamped version of the scientist’s notebook.” Aside from Google, companies like Sun Microsystems and DaimlerChrysler have created internal company “master” blogs for employees to use to communicate amongst themselves. To protect from divulging company trade secrets online, some of these companies have installed the internal blogs behind company firewalls, while others require employee log-ins to access internal blogs.58

54 “Why There’s No Escaping the Blog” 55 Blog.Nikebasketball.com <http://blog.nikebasketball.com> 56 Rubel, Steve. “Nike Basketball Launches a Blog.” Online posting. February 28, 2006 <http://www.micropersuasion.com/2006/02/nike_basketball.html> 57 Rubel, Steve. “Another Company Goes Blog Only.” Online posting. March 22, 2006. <http://www.micropersuasion.com/2006/03/another_company.html> 58 “Talking From the Inside Out: The Rise of Employee Bloggers,” White Paper by Edelman and Intelliseek, Fall 2005, p. 9

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Competetive Intelligence Corporations are taking advantage of the proliferation in employee blogging to enhance their

competitive intelligence efforts. Gurdeep Dhillon, a Boston University MS-MBA, tracked competitor blogs in 2005 as a summer intern for a large business-to-business ERP software design company. While working in the Competitive Marketing Intelligence (CMI) Division of the company’s Global Marketing department, Dhillon was responsible for monitoring any publicly available resources referencing the corporation’s competitors, including websites, RSS feeds, blogs and online articles. Dhillon would subsequently analyze the data he gathered to generate scenario forecasts on competitors. Finally he would summarize his insights and provide recommendations to his supervisor on a monthly basis. Through Google’s blog search engine, Dhillon identified and monitored several employee blogs of one specific major competitor of his company. Dhillon estimates that 90% of the employee blogs he read were personal and included a good amount of organizational detail, such as announcements of promotions within the competitor’s ranks. Dhillon claimed that this information was helpful in providing insight regarding the competitor’s economic health and structural strength, which he would then relay in his report.

Dhillon also mentioned that blogging can be used to defend direct attacks by competitors. During Dhillon’s internship, his company was engaged in intense competition with another leading provider of ERP software. According to Dhillon, many of his company’s own employee bloggers were engaged in refuting criticism and attacks that appeared in ads sponsored by the competitor against Dhillon’s company. In summarizing his thoughts on blogs, Dhillon states that because employee bloggers are so candid and forthcoming about their work experience, they provide more valuable insight into competitors than other potential company research tools.59

Blog Recruiting and Sponsorships Certain corporations are supplementing their blogging efforts by attempting to recruit influential

bloggers as company evangelists. Companies scour the blogosphere for independent bloggers who might join their cause. Ideal candidates are highly knowledgeable regarding an industry, corporation or product, post frequently on these subjects and enjoy high rankings on sites such as Technorati. In essence, corporations are seeking “thought leaders” in the blogosphere who might influence blog readers by spreading positive reviews of products or services. Recruiting bloggers can be difficult due to the inherent distrust bloggers have for corporations. In addition, because bloggers are often highly individualistic, they might endorse a product, but only because of unprompted personal experience, rather than because a company offered them a free trial. Enticing bloggers to endorse a product through compensation (such as payment for “adspace” on the blog) can also be complex. Many bloggers take blog sponsorship very seriously, often posting detailed blog endorsement “policies” on their blogs (see Exhibit 10).

Corporations recruit bloggers in several ways. Amazon.com offers bloggers the opportunity to join its affiliate program, through which any sales profit generated for books through word-of-mouth on a blog will be split between Amazon and the blogger.60 Other alliances with bloggers occur accidentally. Mike Kaltschee maintains a fan blog called “Hacking Netflix”61 devoted to praising the mail-order DVD company. When Netflix rejected Kaltschee’s request for company info and an interview in 2004, the

59 Spiliakos, Dimitris. Interview with Gurdeep Dhillon. February 27, 2006, Boston University Graduate School of Management 60 Naked Conversations, p. 41 61 Hacking Netflix.com. “Netflix News & Info <http://www.hackingnetflix.com/>

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blogger posted his experience on his blog, and Netflix endured a consistent stream of criticism through the blogosphere for its behavior. Since their initial clash, Netflix has enlisted Kaltschee as a type of company “insider,” regularly giving him exclusive information on Netflix activities, which he then posts on his blog. According to Kaltschee, he does not receive any compensation from Netflix for his posts.62

The ethical implications inherent in recruiting bloggers became evident in March of 2006, when retail giant Wal-Mart came under attack for its recruiting practices. As part of a PR campaign designed to improve Wal-Mart’s deteriorating public image, several influential bloggers were promised they would receive exclusive “news nuggets” about the company before the information hit the main street media. Specifically, bloggers received emails written by a Wal-Mart employee discussing positive job application statistics for a new store in Illinois and criticism for new state legislation forcing Wal-Mart to spend more on employee healthcare. The blogger recruits subsequently posted the information on their blogs, often cutting and pasting sections of the emails directly to their sites and failing to disclose that the information was coming directly from Wal-Mart. One blogger even offered up ad space on his blog to companies because he felt the inside news scoop would generate higher traffic to his site. Once the true source of the information was revealed to be Wal-Mart itself, the PR campaign backfired, with anti-Wal-Mart sentiment in the blogosphere and in general intensifying.63

Corporate Blogging Policy The candid nature of blogs has resulted in several companies attempting to control their employee

blogging efforts through policies or guidelines. Creating such company guidelines is difficult considering that blogging content is protected by free speech law. In addition companies struggle with how encompassing any blogging guidelines will be, for employees who blog may be doing so on private blogs after work hours. Yet some corporations still feel that explicit policies and guidelines are necessary to protect proprietary operational or financial information and the company’s overall reputation. Consequently a wide range of company guidelines exist. For instance, Apple Computer prohibits employees from commenting on anything relating to Apple on their blogs or on any Mac-related websites or forums. On the other hand, Sun Microsystems imposes few restraints on employee blogging other than to expect that employees blog “responsibly.” Other corporations require employees to include a disclosure on their blogs that states that all content on the blog is the blogger’s personal opinion and does not reflect the opinions or policies of his or her employer. Most blogging policies or guidelines state that bloggers are responsible for their own content, that employees are prohibited from posting proprietary company information, that any media requests originating from a blog posting should be screened by company PR departments, and that blogging should be done on personal time unless the blog is company-sanctioned. As of 2005, only 30% of corporations had company blogging guidelines. Without clear guidelines, employee blogging can be relegated to a grey area of employee conduct and result in termination. In fact the act of being fired for employee blogging has become known as “getting dooced,” named for former Yahoo employee Heather Armstrong, who was terminated for comments made on her blog, “Dooce” (http://www.dooce.com).64

62 Baker, Stephen, and Heather Green. “Blogs Will Change Your Business.” Business Week Online, May 2, 2005 <http://www.businessweek.com/magazine/content/05_18/b3931001.htm 63 Barbaro, Michael, “Wal-Mart Enlists Bloggers in P.R. Campaign.” The New York Times Online, March 7, 2006 <http://www.nytimes.com/2006/03/07/technology/07blog.html?ei.html> 64 Naked Conversations, pp. 11-15

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Although the internet is constantly evolving and other types of CGM such as podcasts are also becoming popular, the blogosphere continues to grow as more individuals turn to blogs to passionately express their thoughts and opinions. The ability of blogs to closely connect corporations and consumers through an ongoing personal conversation that reveals consumer needs and desires underscores the potential of blogs to be an effective element of any corporation’s marketing mix. Thus if marketers are to harness the full power and potential of blogs going forward, they must consider the following central questions on an ongoing basis:

• Why is a blogging strategy appropriate for a corporation or brand? How will the corporation or brand benefit from blogging?

• Should the corporation utilize a company blog, and if so, should this blog be used in addition to, or instead of, a corporate website? Regardless, how “interactive” should the blog be (comment-enabled)? Who will be responsible for maintaining the blog? A blogging department? A blogging “officer”? How should the blog be aligned with the brand’s core attributes and the company’s future plans for the brand?

• Should the corporation utilize employee bloggers? In addition to a company blog or instead of it? Should high-ranking executive officers blog? What kind of blogging policy, if any, should the company employ (how restrictive should this policy be)?

• Should the corporation recruit third party bloggers, and if so how? Should any “endorsement” agreement include compensation? How much disclosure should the relationship entail on the part of the blogger?

• Should the corporation utilize an internal blog? Once again in addition to, or instead of any of the above?

• How should the company track/monitor/measure the blogosphere? On its own, through a blogging department? Should the company expend capital on a specific blog-tracking company? Should competitor benchmarking be included in tracking the blogosphere? Regardless, how much weight should be placed on blog tracking results, and how might these results guide company decisions with respect to the brand?

• What contingency plans (including type of medium used and period of response), if any, should the corporation have in place to respond to positive/negative blog buzz?

• What ethical implications arise out of blogging, how do these relate to the use of blogs, and should any ethical discussion be included in company blogging policies?

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EXHIBIT 1. Survey Results of Consumer Influences on Purchasing Decisions

Source: “Talking From the Inside Out: The Rise of Employee Bloggers,” by Edelman and Intelliseek, Fall, 2005, p. 6

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EXHIBIT 2. Word of Mouth Topics of Conversation

Source: Word of Mouth Marketing Association presentation “Measuring Word of Mouth” given July 13, 2005 by Walter J. Carl

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EXHIBIT 3. An Overview of CGM

Source: Intelliseek Presentation “Consumer Generated Media Backgrounder,” 2003 slide 6

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EXHIBIT 4. A Typical Blog

1)

2) 4)

3)

5)

6)

1) Blog Title: Appears here at the top of the page in a title banner. Readers access a blog on the internet using a unique

URL, which in this case is http://www.sidesh0w.com 2) Menu bar. Some blogs include this feature, which can direct readers to other sections relating to the blogger’s (the blog

writer) interests. Blogs have evolved beyond simple text to include pictures and video. This menu offers background on the blogger as well as contact information

3) The post. A distinguishing feature of blogs, the post. Posts take up the majority of space on a blog and appear in reverse chronological order. They feature a title and a short summary of the post’s text. Clicking on the title will reveal the entire post. Posts are usually date-stamped and feature a permalink, through which readers can permanently access the post. Bloggers also allow readers to comment on the post, and links to the comments appear in this area as well. If the blogger responds to any of the comments, readers can also access an entire conversation thread, which encompasses the entire conversation, from the initial post to the latest comment or response.

4) Archives. Most blogs allow readers to search the blog for past posts, based on content, title or keyword. 5) Most blogs link to other blogs that the blogger reads, either by listing the other blog title or the titles of posts. Bloggers

often include another section below this in which list statistics including the number of blogs linking to them, and/or the names of blogs linking to their blog. Also note the ability to syndicate this blog using one of two available RSS versions

6) Blogs are easily created and “published” (placed online) using a hosting server and software (a template that allows bloggers to design the layout of their blog as they wish). This blog was created and published using the popular application WordPress.

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EXHIBIT 5. A Comparison of Blogs to Conventional Print Media

Source: Intelliseek Presentation “Impact of Blogs,” 2003, slide 5

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EXHIBIT 6. Blog Monitoring and Analysis Companies

Nielsen BuzzMetrics—http://www.nielsenbuzzmetrics.com/index.asp Umbria— http://www.umbrialistens.com/home Factiva— http://www.factiva.com/index.asp Motive Quest— http://www.motivequest.com Technorati— http://www.technorati.com

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EXHIBIT 7A. Typical Blogger Profile as of Spring 2005

Source: “Trust ‘MEdia’: How Real People Are Finally Being Heard,” by Edelman and Intelliseek, Spring 2005, p. 6

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EXHIBIT 7B. Blog Behavior by Segment

Source: Intelliseek Presentation “The Key Headlines,” 2004, slide 3

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EXHIBIT 7C. Blogger and Non-Blogger Technology Use

Source: Intelliseek Presentation, “Core Segments: Bloggers,” 2004, slide 2

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EXHIBIT 7D. Bloggers vs. Non-Bloggers

Source: Intelliseek Presentation, “Core Segments: Bloggers,” 2004, slides 3 and 6

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EXHIBIT 7E. Blogging Subject Categories and Their Respective Influential Bloggers

BLOGGING SUBJECT AREA

NAME/ORGANIZATION/TOPIC BLOG URL*

Personal Online Journals or Diaries

Dan Gillmor (Founder, Center for Citizen Media) Dave Winer (Fellow, Berkman Center for Internet & Society, Harvard Law School) Doc Searls (Senior Editor, The Linux Journal) Heather B. Armstrong (web designer)

bayosphere.com/blog/dangillmor www.scripting.com doc.weblogs.com www.dooce.com

News and Political Blogs

Glenn Reynolds (Professor of Law, University of Tennessee) Markos Moulitsas Zúniga (Attorney, San Francisco) Arianna Huffington (Nationally syndicated columnist)

www.instapundit.com www.dailykos.com www.huffingtonpost.com

Professional & Organizational Blogs

The Web Standards Project (standardization of internet technologies)

www.webstandards.org

Entertainment Ain’t It Cool News (Harry Knowles, film critic)

www.aintitcool.com

Special Interest Web Design (L. Jeffrey Zeldman, editor) Book Reviews (Jessa Crispin, editor)

www.alistapart.com www.bookslut.com

Opinion/Editorial Social/Political Commentary (various contributors)

www.thoughtmechanics.com

Employee/Work-Related Blogs

Robert Scoble (Microsoft) Robert Lutz (GM)

www.scobleizer.com www.fastlane.gmblogs.com

Consumer Goods Gizmodo (“The Gadget Weblog”) Engadget (Weblogs, Inc.)

www.gizmodo.com www.engadget.com

*”These blogs could be classified as “tier one” bloggers Notable* Marketing Blogs TITLE SUBJECT/ORGANIZATION Micropersuasion (www.micropersuasion.com) PR Industry (Steve Rubel) Seth Godin (sethgodin.typepad.com) General marketing Womblog (www.womma.org/womblog.htm) Word of Mouth Marketing Marketing Sherpa (www.marketingsherpa.com)

B2B, B2C, General Marketing

eMarketer (www.emarketer.com) eMarketing *This list drew from a 2006 report from Onalytica entitled “Who are the most influential authorities on business blogging?”

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EXHIBIT 8. Blogs and the Product Life Cycle

Source: Intelliseek Presentation, “Profiles in Blogging,” 2003, slide 7

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EXHIBIT 9. Company Blog Examples

Source: Intelliseek Presentation, “We Want a Blog . . . Now!” 2003, Slide 3

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EXHIBIT 10. Example of a Blog Endorsement “Policy”

Blork Blog Endorsements Policy

The blork blog occasionally endorses businesses, products, and creative endeavors (books, films, etc.). Unless stated otherwise, the endorsement is given without reward or other consideration.

"Stated otherwise" means that if I am paid in money, goods, or services for an endorsement, I will say so, in no uncertain terms, and I will say so within the context of the endorsement (which is to say, not just in the fine print).

This does not apply in cases where I may have endorsed a product or service in the past, and at a later date was rewarded for a further endorsement. This is simply because I do not think it necessary to go back and edit previous posts under those circumstances.

That said, I hereby pledge that in the writing of the Blork Blog I will neither solicit endorsements, nor accept rewarded endorsements for products and services that do not deserve my endorsement based on their merit. In other words, if I endorse a product or service, it is because I believe in my endorsement whether or not I was rewarded.

Blork Blog Sponsorship Policy

The Blork Blog may occasionally accept sponsorships (a person or organization who pays me to put a link or logo on the Blork Blog). Sponsorships will be indicated in a sidebar listing under the heading "Sponsors." If the sponsorship reference appears in the body of the blog (in the form of an image, a link, or a body of text) it will be clearly indicated as being a sponsorship.

I hearby pledge that I will not accept sponsorships from people, companies, or organizations for whom I have a fundamental disagreement. In other words, if I accept a sponsorship, it is for a person, company, or organization that I feel good about.

Note that Google ads on the blork blog are chosen by a Google algorithm, which is beyond my control and interest. Google ads are exempt from this policy. Also note that books listed in "Blork's Bookshelf" are ones that I really have read, or expect to read soon.

Finally, I pledge that I will not change the tone or content of any post in exchange for a rewarded endorsement or a paid sponsorship.

These policies are not binding. (How could they be?) Rather, the purpose of posting them here is simply to let readers know where I stand on the issue.

From: http://www.blork.org/blog/policy-sponsors-endorsements.html

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Appendix

GLOSSARY OF BLOG-RELATED TERMS (compiled primarily from wikipedia.com)

Aggregator: or news aggregator, is a type of software that retrieves syndicated Web content that is supplied in the form of a web feed (RSS, Atom and other XML formats), and that are published by weblogs, podcasts, vlogs, and mainstream mass media websites Blog: a website in which items are posted on a regular basis and displayed in reverse chronological order. The term blog is a shortened form of weblog or web log. Authoring a blog, maintaining a blog or adding an article to an existing blog is called "blogging". Individual articles on a blog are called "blog posts," "posts" or "entries". A person who posts these entries is called a "blogger". A blog comprises text, hypertext, images, and links (to other web pages and to video, audio and other files). Blogs use a conversational style of documentation. Often blogs focus on a particular "area of interest", such as Washington, D.C.'s political goings-on. Some blogs discuss personal experiences. Blogs can be hosted by dedicated blog hosting services, or they can be run using blog software on regular web hosting services. In the early 21st Century, blogging has quickly emerged as a popular and important means of communication, affecting public opinion and mass media around the world.

Chat Room: an online forum where people can chat online (talk by broadcasting messages to people on the same forum in real time). Sometimes these venues are moderated either by limiting who is allowed to speak (not common), or by having moderation volunteers patrol the venue watching for disruptive or otherwise undesirable behavior.

Chat systems come in a variety of flavors ranging from text only messaging systems to fully immersive 3D environments. By far the most common form in recent times is instant messaging (ICQ, AIM, MSN, Jabber, etc). Some would argue that these are not truly chat rooms as they are characterized by being one on one conversations with people in a users "buddy list". However as the popular media has confused the issue, this brief description is included here. Recently these systems have started to incorporate the ability to chat with multiple people simultaneously, but these are still conversations restricted to the users budylist, not a cocktail/block party style venue as true chat rooms are.

Chat-rooms are often confused (especially by the popular media) with discussion groups, which are similar but do not take place in real time and are usually run over the World Wide Web.

At the next level are the 2D visual chat rooms. These are characterized by using a graphic representation of the user (avatar) that can be moved about a graphic background of the "room". These environments are capable of incorporating elements such as games and

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educational material most often developed by individual site owners, who in general are simply more advanced users of the systems. Some visual chat rooms also incorporate audio and video communications, so that users may actually see and hear each other. This is particularly popular with those keeping in touch with far-flung family members.

Finally, there are the 3D chat rooms. These are similar to the 2D variety except that they utilize 3D graphics. This allows a user a more realistic interaction with the environment. The most popular environments allow users to create or "build" their own spaces. However, some find these types of environments cumbersome to use and actually an impediment to chatting.

Comment: a text response to a blog post or other comments to the blog by a third party reader of the post. Along with the initial post, comments create an online conversation that can be permanently accessed via a trackback feature or through the blog archives. Internet Forum: a facility on the World Wide Web for holding discussions, or the web application software used to provide the facility. Web-based forums, which date from around 1995, perform a similar function as the dial-up bulletin boards and Internet newsgroups that were numerous in the 1980s and 1990s. A sense of virtual community often develops around forums that have regular users. Technology, computer games, and politics are popular areas for forum themes, but there are forums for a huge number of different topics [1]. Internet forums are also commonly referred to as web forums, message boards, discussion boards, discussion forums, discussion groups, bulletin boards (but see also dial-up bulletin boards), fora (proper latin plural) or simply forums. Link rot: the process by which links on a website gradually become irrelevant or broken as time goes on, because websites that they link to disappear, change their content or redirect to new locations. The phrase also describes the effects of failing to update webpages so that they become out-of-date, containing information that is old and useless, and that clutters up search engine results. This process most frequently occurs in personal homepages and is prevalent in free webhosts such as GeoCities, where there is no financial incentive to fix link rot.

Metadata: (Greek: meta- + Latin: data "information"), literally "data about data", are information that describe another set of data. A common example is a library catalog card, which contains data about the contents and location of a book: They are data about the data in the book referred to by the card. Other common contents of metadata include the source or author of the described dataset, how it should be accessed, and its limitations. Another important type of data about data is the link or relationship between data. Some metadata schemes attempt to embrace this concept, such as the Dublin Core element link.

Metadata have become important on the World Wide Web because of the need to find useful information from the mass of information available. Manually-created metadata

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add value because it ensures consistency. If one webpage about a topic contains a word or phrase, then all webpages about that topic should contain that same word. It also ensures variety, so that if one topic has two names, each of these names will be used. For example, an article about Sports Utility Vehicles would also be given the metadata keywords ‘4 wheel drives’, ‘4WDs’ and ‘four wheel drives’, as this is how they are known in some countries.

Newsletter: a regularly distributed publication generally about one main topic that is of interest to its subscribers. Many newsletters are published by clubs and or business, especially companies, to provide information of interest to its members or employees. Some newsletters are created as a money-making venture and sold directly to subscribers. Other newsletters can be distributed by family members as a cheaper, more personal substitute for greeting cards. These often focus on specific topic of a timely nature such as politics (usually of a partisan slant) or business or investing advice.

Many popular websites and businesses have online newsletters, known as eNewsletters, which are sent to their subscribers electronically, usually via email. Their purpose is to inform readers of updates to the site and/or provide information relating to the site's topic. Newsletters are also a factor in building and maintaining a relationship with the subscribers by reminding them of the site, urging them to return.

Permalink: (a portmanteau made by contracting the phrase "permanent link") is a type of URL designed to refer to a specific information item (often a news story or blog item) and to remain unchanged permanently, or at least for a lengthy period of time to prevent link rot.

Post: a date-stamped blog entry containing a title, text (or a summary of the text linking to the full text), permalink and trackback features. Usually appears in reverse-chronological order on the blog. RSS: a family of web feed formats, specified in XML and used for Web syndication. RSS is used by (among other things) news websites, weblogs and podcasting. The abbreviation is variously used to refer to the following standards:

• Rich Site Summary (RSS 0.91) • RDF Site Summary (RSS 0.9 and 1.0) • Really Simple Syndication (RSS 2.0)

Web feeds provide web content or summaries of web content together with links to the full versions of the content, and other metadata. RSS in particular, delivers this information as an XML file called an RSS feed, webfeed, RSS stream, or RSS channel. In addition to facilitating syndication, web feeds allow a website's frequent readers to track updates on the site using an aggregator.

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Trackback: a mechanism for the communication between blogs: if a blogger writes a new entry commenting on or referring to an entry found at another blog, and both blogging tools support the TrackBack protocol, then the commenting blogger can notify the other blog with a "TrackBack ping"; the receiving blog will typically display summaries of and links to all the commenting entries below the original entry. This allows for conversations spanning several blogs that readers can easily follow. Blogging software that supports the TrackBack protocol displays a "TrackBack URL" along with every entry. This URL is used by the commenting blogger, whose software will send XML-formatted information about the new entry to this URL. Some blogging tools are able to discover these TrackBack URLs automatically, others require the commenting blogger to enter them manually. The TrackBack specification is due to Six Apart which first implemented it in its Movable Type blogging software in 2002. It has since been implemented in most other blogging tools. Six Apart started a working group in February 2006 to improve the Trackback protocol and have it potentially approved as an internet standard by the IETF. Some individuals or companies have abused the TrackBack feature to insert spam links on some blogs. This is similar to comment spam but avoids some of the safeguards designed to stop the latter practice. As a result, TrackBack spam filters similar to those implemented against comment spam now exist in many weblog publishing systems. URL: A Uniform Resource Locator (URL or, less formally, Web address) is a sequence of characters conforming to a standardized format, used for referring to resources (such as documents and images on the Internet) by their location. The term is typically pronounced as a spelled-out initialism; however some people pronounce it earl or "ural" as in the "Ural Mountains". The URL was a fundamental innovation in the history of the Internet. It was first created by Tim Berners-Lee in 1991 to allow document authors to establish hyperlinks on the World Wide Web. Since 1994, in Internet standards, the URL concept has been subsumed into that of the more general Uniform Resource Identifier (URI), but URL is still a widely used term. Although never mentioned as such in any standard, the initialism URL is believed by some to mean Universal Resource Locator. This interpretation may be due to the fact that even though the U in URL has always stood for Uniform, the U in URI stood for Universal prior to the publication of RFC 2396.

User’s Group: (also users group or user group) is a type of club focused on the use of a particular technology, usually (but not always) computer-related.

Users' groups began to proliferate with the microcomputer revolution of the late 1970s and early 1980s as hobbyists united to help each other with programming and configuration and use of hardware and software. Especially prior to the emergence of the World Wide Web, obtaining technical assistance with computers was often onerous, while computer clubs would gladly provide free technical support.

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A users' group may provide its members (and sometimes the general public as well) with one or more of the following services: periodic meetings, public lectures, a newsletter, a library of media or tools, a software archive, an online presence such as a dial-up BBS or Internet website, swap meets, technical support, social events.

Web Feed: a document (often XML-based) which contains content items, often summaries of stories or weblog posts with web links to longer versions. Weblogs and news websites are common sources for web feeds, but feeds are also used to deliver structured information ranging from weather data to "top ten" lists of hit tunes. The two main web feed formats are RSS (which is older and far more widely used) and Atom (a newer format that has just completed the IETF standardization process.) The terms "publishing a feed" and syndication are used to describe making available a feed for an information source, such as a blog. Like syndicated print newspaper features or broadcast programs, web feed contents may be shared and republished by other web sites. (For that reason, one popular definition of RSS is Really Simple Syndication.) More often, feeds are subscribed to directly by users with aggregators or feed readers, which combine the contents of multiple web feeds for display on a single screen or series of screens. Depending on the aggregator, subscription is done by manually entering the URL of a feed, by clicking a feed: link in a web browser or by various other methods. Web feeds are designed to be machine readable, so there is no requirement that they be destined only for human readers. For example, business partners could use web feeds to exchange sales data or other information without any human intervention. Web feeds are most commonly found in various RSS formats or the standardized Atom formatWeb syndication: a form of syndication in which a section of a website is made available for other sites to use. This could be simply by licensing the content so other people can use it, but more commonly web syndication refers to making Web feeds available from a site so other people can display an updating list of content from it (for example one's latest forum postings, etc.). This originated with news and blog sites but is increasingly used to syndicate any information. Although the format could be anything transported over HTTP, such as HTML or JavaScript, it is more commonly XML. The prevalence of web syndication is also of note to online marketers, since web surfers are becoming increasingly weary of providing personal information for marketing materials (such as signing up for a newsletter) and expect the ability to subscribe to a feed alternatively. The two main families of web syndication formats are RSS and Atom.

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