Month: April 2009

Last week I had the pleasure of meeting up with Elias Bizannes of the DataPortability.org project a few times.

One day he asked me: Why portability ?

This was my answer:

Data portability is a trick, and a really good one at that. It’s not the be-all/end-all solution some make it out to be; while it offers some groups important advantages, to others it is more than threatening to their business concerns. What makes the concept of portability incredibly interesting, and brilliant in some ways, is the necessary balance of all concerned parties to actually pull it off. At it’s core, portability is far less about the concepts of portability and than it is about the democratization and commodification of Social Networks.

Portability is presented as a good thing for users, which it undoubtedly is on the surface. But- and this is a huge “but”… there is the an all important sell-in to the networks — they who actually have to implement ways to users to port in and port out. This offering to networks is complicated, because while porting ‘in’ makes sense, porting ‘out’ is an entirely different matter — and one that may be detrimental to a business. More importantly, while open standards and ‘libraries’ may be free, there are real and serious costs with implementing portability:
– engineering and coding costs : using architects, developers and network engineers to integrate these libraries and APIs
– administrative costs : making sure portability works within current legal contracts, creating new contracts, etc

Small / Niche networks look towards portability as an amazing opportunity — with a few clicks they can import thousands of new users, and for small sites integration can be a matter of hours. Under this premise, it makes sense for smaller groups to abide by the democratic principles of portability, and allow for information to port-out as freely as it ports in. There is no real downside

For Medium networks, or Large networks that have lost their prime , portability is a chance to streamline customer retention methods. By keeping profiles up to date, these networks can seem more lively to new users ( i.e. no more messages that read “Last updated in 2004″ ) — and they offer existing users the ability to browse the same unified & standardized data in a comfortable environment.

The concept of unifying & standardizing data resonates very well with me — I first tried to convince people this would happen in 2006, and in 2009 it has finally started to catch on. It’s really amazing seeing this happen. Before the advent of social networking, networks competed with one another based on their userbase — people migrated from network to network because of who was on it, a mixture of critical mass and critical usage; popularity of online networking, portability and network integration efforts have completely shifted that. Users and content are now the same no matter where you go – and this is increasing at a faster rate. Networks now compete as a layer of user experience and user interface for this data.

For network operators this can — and should — be liberating. The emancipation of users allows networks to stop wasting resources on antagonistic retention methods that lock people into their network… freeing internal resources that can be spent on product improvements, making it easier and better for users to share , connect and interact with others.

Simplest put, networks should focus on making products that consumers WANT to use, not products that consumers dislike or despise yet are locked into using for some reason. Whether they’re pushing for portability or not, virtually every social network or other consumer website is doing this right now, and its sad.

The allure of portability to large networks is an entirely different story. On the surface, portability offers little or no advantage to large networks. As sheppards and herders of massive userbases, networks rightfully fear openness as a way to lose the attention of their users. In deliberate steps, and under carefully controlled conditions, large networks have begun to test the waters… dictating how people can use their network off-site through platforming and ‘connecting’, and offering incredibly limiting export options.

Pundits like to use the term ‘opening the gates’ or ‘tearing down the walls’. I liken this form of tempered portability to ‘testing the waters’ and ‘opening a window’. Large networks are not embracing portability, they’re trying to simulate it on their terms , in ways that best leverage their brand identity and commercial offerings to retain consumer loyalty.

I personally think this is great — but it shouldn’t be called portability or ‘opening up’; this is simply a relaxed posturing.

What I dislike are the grand PR and marketing initiatives around large-scale ‘portability’ efforts. The large firms are all stuck in a cyclical pattern where one group ‘opens up’ a bit more than the last, forcing another group to try and outdo the last. This behavior of metered and restrained openness, and the creation and advocating of new ‘open’ standards that primarily drive the creator’s brand instead of users… this isn’t portability, this is sportability.

Portability and the true Open isn’t about half-assed , ill-conceived standards and initiatives that were designed to create PR buzz and just be open-enough to seem like a viable option. Portability is about getting stuff done with the right product, and putting the user front and foremost. We’re unfortunately left with a market-driven approach, where the large networks are in competition to release the least open standards they can, while still outdoing their competition.

While all of this is happening ‘on the surface’, there is a seedy underbelly to all this. Large networks realized an opportunity that they have all been looking towards and investing in — one which may not be so user friendly. Increased portability and inter-connectedness mean an opportunity for better consumer profiling — one that translates to higher better audience measurements and targeting, offering the chance for significant improvements in advertising performance. Portability offers networks a diamond in the rough. I had spent several years through FindMeOn developing audience profiling/targeting concepts, and quantifying the market opportunity and potential effects — they are huge. This should be rather unsurprising — you may have noticed that the largest proponents of portability efforts over the past few months are subsidiaries or sister companies to some of the world’s largest advertising networks and inventories.

As a quick primer: Social Networks make their money (if ever) either through subscription or advertising models; most are forced into ad-supported models because consumers just won’t pay. Ad supported models are at an odd moment in history right now: users have become so accustomed to ads, that they tune them out completely — dropping CPMs sharply. The transactional model of ‘do a task, watch an ad, repeat’ was overused to much, that it became ‘ask do a task, ignore an ad, do the first phase, ignore another ad, do another phase, ignore another ad’; no matter what networks do, the previous over-advertising has made a generation of users wholly oblivious to advertising — sp some social networks can only get 5-10¢ to show 1k ads of remnant inventory, while others can charge $3 to show the same amount of targeted ads. While that might look like a decent improvement, online advertising elsewhere is doing far better. Behavioral networks can often charge $10 CPM if they hit a user on a content site, and niche sites or strongly branded properties where ads are purchased as a mixture of direct and endemic advertising can generate $40 or more per CPM.

Social networks are left at an odd crossroads today: once a network grows to millions of users, the brand simply isn’t focused enough to be to offer reputable or effective endemic advertising; nor is the property likely to be niche enough to command premium CPMs for placement next to highly relevant content. Networks are unfortunately left with behavioral advertising – which should (and would) be doing better right now, if it weren’t for the overexposure/fatigue that users feel. However, portability efforts offer networks the chance to greatly improve behavioral advertising relevance.

So to summize my answer to the original question posed by Elias…”why portability ?”

> 1. If you’re a small or medium network, you’re going to pick up users.
> 2. If you’re a larger network, having your standard/platform adopted can result in market domination
> 3. If you’re a larger network, you have the potential to improve advertising revenue

Perhaps more than a decade in online business and advertising have left me a bit jaded, but I see little that is particularly grand or noble in these efforts. We’re not talking about curing cancer… we’re talking about making it easier to share photos, comment on things, and improving advertising. For industry professionals like myself , these are really exciting times — but let’s do each other a favor and tone down the idealism a bit and admit to / talk about the factors that are really driving all this. Maybe then we can start taking some real strides, instead of all these tiny little baby steps.