Social Media so hot, Ben & Jerry's email marketing melts

The story that Ben & Jerry’s are dropping email marketing in favour of social media hit something of a sweet spot with me. Not only do I not like trawling the ever increasing mass of emails each day but I also have a keen interest in how the Internet is evolving and a highly developed sweet tooth. The story is quite interesting as it tracks some of the trends Celent observed in our Digital Marketing in Insurance report. For many insurers email marketing and communication is the primary digital method of reaching consumers, however most insurers saw social networks and social media as becoming an increasingly important channel to market. Perhaps Ben & Jerry’s move is both a little early and a sign of things to come. This also comes at a time when rumours abound regarding yet another social network set to come from Google, possibly to be called Google Me. Indeed there are stories that disenfranchised companies working with Facebook may already be signed up to work with Google Me. A slide show published by a user experience researcher at Google offers some insights into the key issues with current social networks, how the new social network will look and the features it will offer businesses. For insurers looking at social networks as a medium to customers or looking at how they can expand their use of social networks Celent’s report on the subject may well be of interest. Addendum: Also making waves in social media is the old spice campaign on YouTube. Effective use of this style of campaign is discussed in our report but it is particularly well executed here.

Facebook Cap tweets your thoughts

A new product – as yet unnamed but dubbed ‘The Facebook Cap’ – is every social networker’s dream. Fitted with 3G, GPS, and a digital camera, the cap keeps all of your friends up-to-date with your location and pictures of what you are doing uploaded to every 3 minutes. A 16 core computer and a web of sensors built into the cap utilize the latest advances in neuroscience to determine which parts of your brain are active. With some training it can tweet what you’re thinking about as you’re thinking it! Sounds like science fiction? Actually much of the technology already exists. But perhaps even more surprising is that this type of product would likely find a sizable market. A group of social networkers Celent categorizes as “over-sharers” will jump at the chance to share even more data about themselves. They will look to consumer electronics goods to enable this. Look out for Celent’s upcoming reports on social networking and digital marketing to find out more. Happy April Fools day.

Can Google Buzz teach insurers a few lessons about social networking?

Google tends to get a lot of press simply because it’s Google, although it’s fair to say Google has got a few things wrong with some of its products – anyone remember Orkut, or all the hype around Google Wave? One thing is certain Google have got a lot right about its launch of Google Buzz. This may be particularly interesting as some insurers and financial advice web sites move to create their own social networks. Let’s examine first what Google got right and then what we can learn from where they went wrong. Firstly, and I think this is key, Google leveraged an existing network. Google Buzz is built on Google Mail. This immediately gives a population of customers. In addition this product already has many of the customer’s frequently contacted friends. This means there’s little set up involved and the network has been swiftly established. Secondly Buzz leverages existing assets and relationships. It’s linked to Flickr, YouTube, Google Reader, Google Maps and others. This means that customers can continue using existing and familiar tools and gain extra value from Buzz. Thirdly Buzz came out with a programming interface to allow third parties to start integrating. It also leveraged existing networks and APIs allow it integrate with the customers other applications very quickly. Lastly, Google have been very quick to respond not just with words but meaningful change to the product, even though it is only a week old at the time of writing. In an interview, Google have described having a War Room set up with developers and product owners listening to customers in real time, and making key decisions about whether to and how to change the product. However, Google have got two things wrong. The very public and ill-thought through impact on privacy has been the key concern. Customers could easily and accidently disclose information about who they frequently emailed and contacted – information previously private. This is of concern to cheating partners and political activists alike. Google have already done much to address this concern and what was an own goal is now being applauded as a swift response by advocates. We’ve learned today that the privacy issue has sparked some class action lawsuits in the US. The second thing that could have gone better is the programming interface – which is currently read only. I would expect a further increase in adoption once tool authors can create updates to Buzz directly and for me constitutes a huge opportunity missed. What does this mean in financial services? Some simple guidelines:
  1. Leverage existing assets – both information you have and public information. Google have asked their customers to volunteer their twitter ID. This information provides Google with an already public list of their customer’s friends. Unless you have a key unique selling point, consider leveraging existing networks rather than building your own – for example Twitter or Facebook.
  2. Link your network to support the free public feeds from Flickr, Twitter, etc.
  3. There are successful social networks that operate without a programming interface. Very few companies have offered open programming interfaces with insurance or financial data – is one such example offering read only transaction data. In other domains allowing third party developers and tools vendors to build applications for a website has sped up adoption. Limiting an API to posting updates, managing communication and friends should have the same effect.
  4. On launch, set up a War Room. Most of the feedback will arrive in the applications infancy and its survival depends on identifying the issues and opportunities, prioritising these and visibly acting on them.
  5. Finally – get the security and privacy right. The two go hand in hand. Getting it a bit wrong and fixing it quickly as Google have can earn you forgiveness, but customers will likely expect more from financial services organisations.

The Limited Life of Mobile Applications

The Mobile App Prediction: Since I’m frequently asked about mobile device use in the insurance industry, I’d like to restate a prediction I’ve been making for a few years: Custom, downloadable applications for smart phones will become less important or unnecessary. Having told many people this, it’s been a bit of a tough time for my analyst ego. The rise of the Apple iPhone and its widely touted app store has brought an explosion of downloadable mobile applications. With several other devices and mobile platforms attempting to mimic Apple’s success, it looks like the importance of custom, downloadable applications for mobile phones will only be increasing. The Desktop App Evolution: Compare mobile applications to desktop computers. Before high-speed internet access was widely available in North America, most applications (both business and consumer) were installed on the computer, either via download or via disk. IT organizations at insurers spent a great deal of their time distributing and installing enterprise software on each user’s machine. As internet connections became more ubiquitous and–just as importantly–web browsers became more flexible and powerful, these installed applications were replaced by web-based interfaces. Installed desktop applications included just about all business activities but also most consumer tasks: personal banking, weather updates, stock trading, and personal e-mail, just to name a few examples. These are all activities that are primarily done through a web browser today. Some users complained that the shift from desktop application to web-based interface resulted in a loss of usability or functionality. But the appeal of a platform so easily distributable, upgradable, and maintainable was worth the tradeoff, and as Web 2.0 technologies have matured, web-based applications have surpassed many desktop equivalents in terms of ease of use. A Similar Mobile Path: It was my belief that mobile applications were following a similar path to desktop applications. Just a few years ago, businesses that required mobile use were not only designing custom applications for mobile devices, they were designing entire, single-purpose mobile devices (whether gathering paramed surveys or managing a warehouse floor). These devices became more generalized and business could focus on the applications rather than the entire physical unit. And as mobile phones became smart phones, the devices themselves became cheaper, multi-purpose platforms. The next logical step would be to generalize the distribution mechanism itself. Instead of requiring a downloaded application onto the phone, I expected this to be replaced by the mobile web. Mobile web applications will be easier to upgrade and maintain and can be the based on the same web applications used on a desktop computer (except, perhaps, with a scaled-back interface). When I first saw an iPhone browsing fully rendered web pages I thought my prediction had come true. Is my prediction wrong? Instead, the iPhone App Store explosion occurred and we entered the golden age of downloadable mobile applications. The very device that I thought was going to prove that downloadable applications were unnecessary proved the opposite. But I don’t think this means I’m wrong. I just think we need more time. Soon, mobile browsing will become more flexible and powerful, just like it did on desktop computers. Technologies like “Flash Lite” will bring interactive and usable interfaces to the phone browser. The trade-off between features and ease-of-distribution will shrink. And instead of worrying about maintaining new channels, insurers will be able to focus on their existing platforms with web-based interfaces. Some applications will always remain downloaded on the device, just like some applications remain installed on desktop computers. But–especially when companies are distributing applications to all of their employees or customers–the clear answer is a robust, functional, mobile web. I think that the few insurers who have released mobile applications have done a great job demonstrating an aggressive and modern approach to technology. But, eventually, every insurer who has invested in a web-based channel will be taking full advantage of every mobile device.

Some considerations around innovation

Innovation! What does it really mean to be innovative for an insurer? Does innovation deal mainly with insurance products or does it concern also processes? Are there external elements or factors that contribute to facilitate innovation? According to me, innovation relates to both products and processes: Product innovation: In European life insurance for instance, as the market for asset protection and retirement planning grows, insurers are increasingly adopting an aggressive strategy of product innovation. They plan to maintain control over customer acquisition and distribution by managing the distribution lifecycle. While variable annuities may not be the shining star in the next few years, insurers remain under pressure from consumers and professional intermediaries to continue to innovate. Process innovation: One of the business frustrations has been that IT constrains business agility. Adding new products, new channels, making process changes or responding to new regulation must happen on a critical path determined by the technology assets and infrastructure. In this context process innovation can be an important source of competitive advantage for an insurer. In both cases, product or process innovation, IT is not necessarily a “must have”. IT is only an enabler that can help companies give birth to an innovation. But are there other factors to be considered that help innovations succeed or contribute to change the insurance competitive landscape? Past examples in other industries tend to prove that at least two parameters have a direct impact on innovations’ success or failure: Timing: to be visionary is very important but to implement a new idea or a concept too early can lead to bad results. Successful innovations are the ones that have an impact on a large mass of people and not only a handful of passionate thinkers. Insurers should carefully consider timing and analyse carefully the readiness of the market when thinking to initiate innovations. Dynamic view: some innovations are self-imposed through changes of market conditions. For instance as Web 2.0 technologies push people behaviour to change, insurance players have to understand that even in their own industry the Schumpeter “creative destruction” theory can apply. Blogs, chats, social networking are currently changing the way insurers interact with their customers and diminishing the importance of face-to-face meetings with agents especially in the general insurance sector. Celent’s mission is to keep an eye on how the insurance industry apprehends innovations, analyses and evaluates them as well as how insurers decide to implement them. Our goal is to help insurers identify initiatives that will help them gain competitive advantages in the long run and to do so it is important they understand what the term “innovation” really means and what factors can play a crucial role in making an innovation succeed or fail.

Web 2.0: a Weapon of Mass D…

While many people refer to Web 2.0 as a technology, Celent considers it more of an attitude. As already mentioned in one of my previous posts on this blog, Web 2.0 combines the need for more mobility, faster information flows, a higher degree of openness, and a strong reliance on collaboration and community. To do so people need to have easy-to-use tools, and the technologies nurturing this need are usually referred as Web 2.0 technologies.

There is a good example of the transformational power of Web 2.0 currently on the news headlines: the Iran post presidential elections troubles. For the Iranian government in place, Web 2.0 represents certainly a danger since it allows the mass people to be the instant messengers of what’s happening minute by minute in the capital city of Teheran. In this war of information, the Web 2.0 attitude is a strong ally for the protesters and the power in place could consider it as a weapon of mass disturbance. Outside of Iran, many people have understood the importance of the Web 2.0 attitude and the impact it can have in such a chaotic situation. Journalists firstly (just check the CNN website and you’ll understand what I mean) but more importantly politicians. What a surprise when I read that the US Government had contacted yesterday the social networking service Twitter to urge it to delay a planned upgrade that would have cut daytime service to Iranians disputing their election. In other words, these people see the Web 2.0 attitude as a weapon of mass democracy.

I am the author of a report Celent is publishing this week called “Reaping the Benefits of Web 2.0: European Insurers Strategies that Work” and I will present the main findings of my research about this topic in a webinar soon. This report and my webinar try to evaluate how the Web 2.0 attitude is currently perceived and adopted by the insurance industry. The Web 2.0 attitude cannot be neglected by insurance companies, but sometimes it seems difficult for them to determine whether it represents a transformational wave. In addition, it is still difficult for them to evaluate the value of initiatives in this area. The Web 2.0 initiatives launched by European insurers described in this report are very different in terms of the impact they might have and can generate on the organization, the level of risk involved, and their probability of transforming the insurance business. For those of you, who are interested in this topic, I invite you to read my report and/or attend my webinar and then determine whether the Web 2.0 attitude can be a weapon of mass development for insurers in the future!

The Web 2.0 Attitude

More than technology, Web 2.0 is an attitude. A short Q&A session helps us understand what Web 2.0 means:


“Everywhere”: Getting access to social networks or being able to communicate from anywhere in the world have become an important aspect of today’s communication. The Web 2.0 attitude requires low restriction in terms of communication capabilities. In terms of technology, portable electronic goods such as mobile phones, portable media players and extra-light laptops are the tools of mobility.


“Immediately”: Impatience is one of the key elements of the Web 2.0 attitude. People need information more quickly but they also want to share it more rapidly. In terms of technology, systems allowing instant communication like chats, Instant Messaging (IM), Really Simply Syndication (RSS) and to a certain extend SMS and Voice over IP (VoIP) are the drivers of spontaneousness.


“Everything (or whatever)”: People have an increasing need to share all kinds of information with others. This propension for openess sometimes includes also very private information. In terms of technology, the need for more transparency is supported by the increasing number of social networks and communities as well as blogs on the internet.

To whom?

“Everybody (or I don’t care)”: There is a social focus in the Web 2.0. attitude. People like sharing information and opinion but they require collaborative actions in order to feel part of a community. In terms of technology, platform allowing free change of information content such as Wikis and blogs or other types of collaborative online sites emphasize collaboration.


“The easyiest way”: Web 2.0 has a specific focus on usability and any kind of technologies enabling or easing interactivity improve usability. In this context, AJAX, Flash, Flex, Tagging or Mashup represent key enablers for improved usability.

The Web 2.0 attitude is a real challenge not only in business but in our day-to-day personal life. Insurers have already launched interesting initiatives in that domain but it seems that some of them fail to capture their real strategic impacts. I am currently reviewing a few Web 2.0 projects implemented by European insurers and I am planning to describe them in a report to be published by Celent in Q2 this year. Web 2.0 interests European insurers but some of them have failed to make their initiatives pay-back. Reviewing successes and failures will certainly help insurers better understand where is the real value of Web 2.0.

The Web 2.0. attitude and the insurance industry

When discussing with most of my friends about my job and the insurance industry, I am often told that insurance is not interesting or is one of the least innovative sectors among the financial services industry. Of course, I don’t agree with them and sometimes I have to argue fiercely to demonstrate that their perception is exaggerated. Web 2.0. and its related-technologies are good examples where some insurance companies have already launched interesting initiatives. Based on contacts I have established so far, I have decided to work on a research, whose objectives are to provide some examples of Web 2.0. initiatives launched by insurers and to understand how the sector perceives and evaluates the value of Web 2.0. initiatives in the long-run. While the first objective seems to be relatively easy to achieve, I expect some difficulties with the second one.

In a report published last year called “Capturing the Strategic Value of IT: A Review of IT Investment Evaluation Methods”, I have tried to analyze how insurers can prioritize IT investments and better evaluate the strategic impacts these types of investments can have on their business. Some projects related to social networking launched by insurers are typically the kind of investments, where the question of value is of highest relevance. Of course, entering the blogosphere or a presence in Second Life contribute to launching a signal of modernity and dynamism to potential clients. But do these initiatives really generate new sales or can the new perceived image of an insurer following such initiatives indirectly trigger more referrals? How do insurers evaluate the results of these projects and what factors and criterias are particularly important to them when deciding to adopt the Web 2.0. attitude? Even though insurers’ Web 2.0. initiatives give me some interesting stories to tell to my friends when they tease me about my job and the insurance industry, they do not answer the most important question: what value can they bring to insurers? You will therefore understand that I am very excited and curious to hear what CIOs, marketing managers or other people responsible for such projects within insurance organizations will tell me when I will raise this question! My expectations are high and I hope I will be able to provide interesting findings to my future readers.