Exploring Local
Mike Dobson of TeleMapics on Local Search and All Things Geospatial

Marketing and Social Networking – Why Nokia/Navteq will turn to Social Networks

December 29th, 2008 by MDob

In our last blog we covered what the future might look like for Nokia/Navteq and speculated that Nokia would soon turn to social networking to increase its profile in the worlds of mobile local search and mobile advertising. Although our interest in is how Nokia and Navteq will make a place for themselves in the UGC arena, it is clear to use that they will leverage social networking to achieve their strategic goals for both companies.

There are some practical reasons why Nokia/Navteq might turn to a social networking approach. One reason, although not the most compelling, is their need to catch-up with TomTom/TeleAtlas and the apparent advantages that MapShare has gained for TeleAtlas in updating and in brand awareness. Next, since many uses of maps and map updating in a mobile environment will require an “unlimited” data plan, Nokia will need to find some way to reward users for providing map update information (on their own dime). A well-designed social networking site may be the best way to accomplish this objective.

A troubling issue with User Generated Content, especially in the map-updating arena, is how to incent customers to contribute meaningful correction information over long periods. We think that social networks and the benefits of social networks to users are one method than can be used to incent users over time.

Without going into all of the details on how a social networking site could support map updating, suffice it to say this type of approach could meet this need, as well as many others.

I’ve been working on an intersting project for a client and, in the process, have been updating myself on certain aspects of social networking. Let me share some interesting insights that have a bearing on our discussion –

In his book “The New Rules of Marketing & PR”, David Meerman Scott describes how marketing has been changed by the Internet (Wiley and Sons, 2007). He hypothesizes the “old rules” of marketing are ineffective in an online world (page 8). Among the old beliefs that are no longer valid, according to DMS, are these:

Marketing simply means advertising and branding – No longer true.
Advertising needs to appeal to the masses – No longer true.
Advertising is one-way: company-to-consumer – No longer true.
Advertising is exclusively about selling products – No longer true.

DSM concludes that the Web has transformed the rules of marketing and that companies must transform their marketing to make the most of the Web-enabled marketplace. If DSM is correct, then traditional marketing efforts need to be customizable to groups or individuals (the Long Tail). In addition, it is likely that viral advertising and branding may become more effective than traditional branding or advertising. Further, it seems likely that marketing will transition to online and become community based. Finally, members of the community will help decide how marketing and branding works in the community and when they will participate. (Many pundits fail to realize that the interaction on online Social Networking communities is largely asynchronous. People like them because they can communicate on their own terms and on their own schedule. The desire is to make something about themselves known, but not to have to tell everyone about this individually. It appears that this “communicating my way” may signal some problems for mobile social networks.)

Don Tapscott and Anthony Williams in their well-received “Wikinomics” (Portfolio, expanded edition 2008) direct themselves to examining what they call “crowd sourcing”, indicating that this online atmosphere of participation is creating a business revolution. When discussing their opinion on what separates the winners from the losers in online markets, their belief is that the losers publish information while winners create platforms for people to co-create their own services. They further identified the chasm between the winners and losers by stating that the losers publish Websites, while the winners launched vibrant communities. They continue, stating that the losers create walled gardens, while the winners create public squares. They conclude by indicating that the winners innovate with their customers and share data with them while the losers innovate internally and guard their data and software interfaces.

If there is any value in the philosophy espoused in “Wikinomics”, it would be that companies wanting to reach online communities need to participate in online communities, not as the founder or moderator, but simply as one of many equall participants. In other words, it is the age of the two-sided network concept, we discussed in our last blog. Nokia will need to provide an online community setting, provide the hardware, software and services, and provide some structure, but other than that, the users will control the quality and level of participation.

In his generally boring but sometimes insightful Smart Start-ups” (Wiley, 2007) David Silver repurposes some important insights from Robert Cialdini’s “The Psychology of Persuasion” (William Morrow 1993) to support his belief in the coming dominance of online community businesses. The factors that he believes are important include (preface xv):

Reciprocity – Everyone feels the need to reciprocate when given something for free (my note – Like contributing to MapShare because you are benefitting from the corrections of others).

Social Validation – We often make purchase decision when others validate our choice (my note -as often happens in online forums).

Authority – People are interested in authority figures, because they believe that the authorities may know more than they do about certain things (my note – like Navteq and TeleAtlas likely know more about what has changed in a widespread transportation network than I do – even though I may know more about my neighborhood streets.)

Consistency – once we have made a decision that has been validated by public affirmation, we rarely change our opinions (My note, this is why people continue to use the same brands and buy the same makes of cars, while ignoring others. It applies in the world on online mapping and routing, where an older age group prefers MapQuest (the online version of Rand McNally) and a younger group prefers to use Google Maps.) I suspect that Oldsters generally don’t send map corrections to Google or MapShare, but somebody sure does and it is likely a younger demographic.

So, what does all this have to do with Nokia/Navteq, User Generated Content and what the future holds for these companies?

EVERYTHING!

Although many of us like to think of ourselves as the connected generation, you have not seen connected until you see someone in high school, talking, texting and browsing while listening to their I-Pod and conducting a conversation with someone next to them. The dynamics of this group and their successors, as well as their collective views on online community participation will dramatically alter the face of the world – just as it is now dismantling the influence of television and newspapers. YouTube is the new television, blogs are the new newspapers and members of social networks seem to regard them as the new community – except that it does not need to be spatial. What is important to note here is that these online presences operate as communities not as corporations.

We think that there is so much at stake in the mobile online marketplace that Nokia will be forced to host a social network designed around a community that will support map updating and POI reporting, two things that could influence Nokia’s success as an advertising company. Finally, Nokia will look to social networks as a means of disintermediating the wireless networks from their customers. Doing so is a risky gamble and Nokia may not be prepared to take it that far, but stranger things have happened.

Next time I will discuss infoUSA and what they have been doing to change the game in their corner of the world. It is possible that they may have turned an important corner in capturing the parts of the market that have eluded them.

Finally, GeoBase, an interesting company in the map engine market, is holding their first ever Technology Summit in January. I plan to attend and will let you know more about this interesting company.

Happy New Year

Mike

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Posted in Navteq, Nokia, place based advertising, User Generated Content


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