The classic Everett Rogers graph of product diffusion, including ideas such as innovators and early adopters, is well known even the world over, and the terms used can be found in every magazine article about new market trends. But is it right?

Rogers stated that adopters of any new innovation or idea could be categorized as innovators (2.5%), early adopters (13.5%), early majority (34%), late majority (34%) and laggards (16%), based on a bell curve. These ideas about diffusion of innovation are among the standard vocabulary of product managers and marketers. But in a Marketing Bulletin, 1995 article I was shown recently, Malcolm Wright and Don Charlett raise some big questions about the Rogers Model, stating that the Bass Model, also from the 1960s, is more accurate.

Examples they quote to show how the Bass model has given good predictions include consumer durables like televisions and clothes driers, but also more complex projects such as diffusion of cocoa-spraying chemicals among Nigerian farmers, spread of an educational innovation in the US, and purchase of photovoltaic home energy systems in South-West US.

So, what is wrong with Rogers’ model?

I had assumed like many that complex products need a little market testing by innovators and early adopters before the mass market will adopt them. However, some of the examples quoted above in support of the Bass Model instead are pretty complex. Wright and Charlett question two key assumptions:

1. That some individuals are “venturesome”, as a personality trait that is consistent and correlates with length of time in education; however, the evidence for this trait is weak.
2. That the early phase of marketing is dominated by media advertising, and word of mouth becomes important as the market begins to mature.

The Bass Model stresses the influence of interpersonal communication, including nonverbal observation, right from the start.

So why has the Rogers Model been so popular?

My guess is that it probably worked quite well when applied to buggy software that needed a period of beta testing or of being in stealth mode, but then the idea became over-generalized.

If Bass works best, what does that mean for marketers?

Before answering that question, I would pose another one. Why might it be even more important now? The key lies in network effects. Social media creates powerful network effects, so if the power of interpersonal communication was important before, it is now even more so. If the Bass Model is really more accurate, focusing on mass advertising as products are launched, or concentrating mostly on early adopters could waste valuable time and make the difference between product success or failure. The key is to realise that network effects are the best friend a marketer can have, and should be aimed for as early as possible.

People read blogs because they are interested in the thoughts, experiences and knowledge that a blogger has. The best blogs also entertain, too. But what they do not do is paid editorial advertising - that’s for the banner ads. When a blog writer gets caught accepting payment for positive product mentions, what follows is a PR disaster, all the worse because other bloggers feel that their world has been tainted.

That’s why TechCrunch quickly made a big deal of it this week when an intern of theirs got caught being rewarded with a laptop for a post: he got fired and all his posts got wiped immediately. No names were given, and reaction seems to be that TechCrunch’s responded well and maintained their credibility. A few bloggers though, traced the guy’s identity and wondered who was willing to pay him - it’s a known rule of the game that any interests must be declared. The unfortunate thing is that innocent startups had posts about them removed and may also come under suspicion of bribery, too!

If a positive blog post is worth getting, it is prominent enough to get some scrutiny too. If the writer gets paid, the truth will comes out, readers will naturally react in three ways:

1. Not to trust the writer again
2. To assume a company paying for positive mentions could not get them any other way
3. Not to trust such a company

This is something that has not really dawned on some European companies, who see blogging as a legitimate form of paid advertising - in fact, one Swiss social media marketing company, Trigami, bases its business on getting paid blogging coverage. It will eventually dawn on their customers, I think, that this is not what social media marketing really is. The fact that their business model is not big news in the blogosphere is probably simply because they are only doing it in German - if they start with English-language ones, wait for the storm! However, regardless of language, the basic rules of SMM - be open and helpful, and network for all you are worth - may mean hard work, but they are there for a reason!

Four out of ten Chinese claim to read blogs at least once a week. This is a higher percentage than is known for any Western country. Three out of ten people interviewed in China are likely to be motivated to take action after reading a blog, which is significantly higher than in Japan (18%) and South Korea (19%). Many of them prefer reviewing blogs instead of news portals. Actually, blogging only started in China in 2002 and became popular in 2004. It has now become an important part of life for Chinese internet users. There are dozens of blog service providers in the market such as Qzone, Sina Blog, Baidu Space, Blogbus and Hexun Blog, who are the top five (according to statistics from Chinalabs.com in July 2009).

Compared with the vigorous development of personal blogs (the number of blog users was 181 million by the end of June 2009), the use of corporate blogs is still in the warm-up phase in China. Only a small number of enterprises have set up their own corporate blogs.

Since there are not many cases to be learnt from, many companies have taken a wait-and-see attitude and some companies who have set up a corporate blog have adopted a more conservative approach. Take the Google China Blog (Chinese: 谷歌黑板报) for example, there is no function for leaving messages or comments for readers.

Since so many Chinese people like reading or writing blogs one could draw the quick conclusion that making a profit from writing blogs in China could be quite easy. But this is actually not the case. Take keso (the most famous IT blogger) as an example. He signed an agreement with Hexun, which is the biggest finance portal in China, to put some ads on his blog. After the expiration of the contract, keso decided to not extend the contract since he made razor-thin margins from it only. Keso is already a big shot in the Chinese blogosphere but even he can’t make a good profit from advertising, so one can imagine how difficult it is for Chinese bloggers to do so.

According to Rupert Murdoch, The Times and other newspapers in the News International stable will begin charging for access to their online portals next year. Murdoch says that he expects other publishers to follow suit. The New York Times is contemplating a similar move. But is it, as Switzerland’s Tages Anzeiger speculates, tantamount to suicide?

Murdoch seems to be saying that newspapers simply will not make money online with free content. Like nearly all the major news organizations, News International has made big losses this year. The Guardian’s management group, too, is looking at closing the Observer newspaper, the world’s first Sunday newspaper, in order to safeguard the Guardian, which has pumped a lot of money into its online venture. Part of the newspapers’ frustration also comes from their content being widely read and often quoted without payment, so they feel that charging is only a matter of justice.

The problem is whether charging is good business. Previously governments have been able to intervene to ensure some kind of rules for newspapers to compete fairly, but that’s just not going to happen on the Internet, so the only thing that matters is how many people are going to pay. Personally, I don’t see where the numbers will come from. The attraction of reading online is immediate choice. Given the choice of restricting yourself to a single paper, paying out subscriptions to lots of them, or finding free content and analysis from among the many news channels, blogs and other feeds, I think it’s not hard to see where most people will go.

Loss of influence, not just readers, is also a problem. One link here was to a Times Online report about the Guardian. Next year, like many others, I won’t be linking to The Times, not out of spite but out of consideration to readers. Paid-content publications will lose visibility online. Or people will lift lots of content and repeat it — which certainly is not the model these newspapers want.

There isn’t an easy solution to the online dilemma for newspapers, and the period of experimentation can’t last forever. The best chance for papers is to understand and leverage the Internet, and stay in the game as long as possible offering free content and services, forging links, and adding incentives, content and services for paying subscribers. In fact, that’s probably the only chance.

Twitter’s main audience is adults rather than teens - that’s been known for a while, and figures from Nielsen now confirm this. What I find interesting about this is not that Twitter should be doing more to attract teens, as some people seem to suggest, but rather that is shows what Twitter is good at. Twitter’s service has been quite a blank canvas in many ways, with people using it however they want, and a huge number of third party apps tweaking and adding features such as groups and search, to name just a couple. So to show a large adult following confirms that a very large number of people - particularly in the US and the UK - find it useful.

So why adults, mainly? A good blog post from Ben Parr at Mashable discusses some reasons behind this, and I think puts the main reasons well (and has lots of good comments). To summarise and add a little of my own point of view, it’s not primarily a venue for chatting with friends and sharing pictures, music and videos. It’s more of a broadcasting platform where celebrities, news organisations and companies try to entertain and update an audience. Like a very big, lightweight, multiple RSS service. Twitter is also very much an open community, and young people tend more to stay within communities they know. It’s also a great platform for sharing and developing knowledge rather than getting a quick overview from answers.com, wikipedia and so on. So, to put it in a nutshell, most teenagers get what they want elsewhere, and more easily.

Which, given Twitter’s overall popularity, is hardly a problem. The age profile is actually an advantage for Twitter, I think. One of MySpace’s problems is that a younger audience gets older fast, and their habits change. Having an audience mostly in middle adulthood is perfect for customer retention and the service’s long-term stability. Additionally, the fact that a lot of people use the service professionally means there are opportunities for paid premium content and services.

I think what surprises many people about Twittter’s age profile is that it’s pretty new. Young people tend to be early adopters, and are well understood by developers of social media applications, who are often also young. But actually, despite its youth, Twitter is now well established, in its maturity rather than early adoption phase. Who uses a mature product depends on who needs it. In this case, the wider community. Granted, it still hasn’t settled on a long-term business model, and it’s a relatively new entrant to a relatively new set of social technologies, but it should be taken seriously, and recognized for what it is - which is now much clearer.

Not for the first time, a giant corporation is attracted by the value proposition for online marketing, but gets caught disrespecting its rules, and loses the positive impact it was looking for. According to a recent Frankfurter Allgemeine Zeitung article Vodafone is reputed to be spending up to €200 million on persuading young people (”Generation Upload”) via placards and via the Web (YouTube, Twitter, etc), to use their mobile phone as their primary Internet access device at all times of day. But they are openly paying bloggers to promote them. One of these bloggers, Sascha Lobo (pictured), has up to now opposed Vodafone’s stance of supporting government proposals about restricting internet access, and his involvement is causing a real storm.

Some of the other criticisms of the campaign in the article:

1. “Generation Upload”  consists mostly of people who’ve uploaded one or two videos in their lives. So is the market really there? At some point, probably, but via paid-for access on their mobile phone? The evidence is at best equivocal - even iPhone users predominantly use wifi access rather than mobile internet.

2.  It’s not at all clear what the value proposition is - the campaign seems to be mostly about image projection. According to Tobias Langner, Professor of Marketing at the University of Wuppertal, getting people to spend more time online is best served by making the tariff more competitive - particularly difficult if ROI means covering a massive advertising campaign.

3. How will glossy posters in train stations convince an audience defined by its adherence to the web?

The fundamental principle in online marketing is authenticity -  products and presence that inspire people to blog about you, not paying them to do so. Vodafone has not convinced yet with its offering, and is paying for blogs, both of which are likely to provoke criticism. But even criticism provides an opportunity for positive engagement. Is that opportunity taken well? This is the comment that Fritz Joussen, CEO of Vodafone Deutschland, made in response to critical blog posts:

“We’re talking about 500 blog contributions, and we make products for 40 million customers. I’m happy to talk with bloggers about our products, but not to discuss my view of the world.” (my translation). In a few weeks Vodafone may realise that they don’t want all the flak that is coming their way and follow the golden rules - listen respectfully, admit problems, be positive, engage. But I’m not betting on it yet.

Hello, everyone. My name is Jingzhi; you can also call me Alex. I come from China, I did my bachelor in Civil Engineering of Tongji University in Shanghai, and I stayed in Japan for one year, joining some exchange program in Nagoya University. I am now doing my masters in the program of Management, Technology and Economics (MTEC) in ETH of Zurich. I am very glad to join Extendance as an intern to do this summer project, where I can now put what I have learnt into practice.

I will mainly take charge of promoting the e-book to P.R. China. But first I need to translate the e-book into Chinese, and the website of the e-book as well. Because most Chinese may not wish to read an English book, even if it’s a very good one. I started my job from this Monday, and it took me two days to translate the e-book website (www.techmarketing.ch) and another one day to set up the webpage, and the Chinese website of the e-book is available now, even if it’s not perfect. I have also translated the PowerPoint excerpt of this e-book; it’s an overview of the e-book and the bios of the participants of this interview. I am just a little delayed from what I planned in starting to translate the e-book. However, I think I will catch up and finish the translation of the e-book within two weeks, at least for the first draft.

I think this e-book will be worthwhile reading for Chinese companies, because they always want to learn experiences from successful companies in Europe and the US, not only the technology but also the business aspects. In this e-book, the specialists from top European ICT companies talked about their experience of online marketing and international marketing. Maybe some Chinese companies can find something useful which they can apply to themselves.

Mark and Alice

Hi everyone, my name is Mark and I’m the newest addition to the blogging team here at extendance.com. From now on, I’ll be regularly posting how we get on publishing and promoting our upcoming e-book “How to market in ICT today”, a collection of interviews with representatives of seven leading European ICT companies.

So, what’s this e-book really about? That’s what I asked myself when I first heard of the project. I’m a graduate student of business and economics at the University of Zurich, and though I’ve had a solid education in marketing theory, taking it to a hands-on level is something else. Especially when it comes to the Internet, there seem to be a huge amount of possibilities, of which some are better then others and some are no good at all.

Alice, my little puppy dog, is sitting on my lap as I write, trying to help me make a good impression with my first post here. And she’s also reminding me that it’s OK for me to get a little confused about the endless possibilities of Social Media Marketing: the blogosphere, Facebook, Xing, LinkedIn, Twitter, YouTube, or what not. Her take on it? I think it would be: you can only chase a ball for so long before it becomes pointless, and then you need to think about dinner.

So, for me, that’s what I’m getting from working for Extendance, finding out what people are really doing in marketing and actually using these tools. Putting meat on the bones, rather than just playing in the park. And that’s what this e-book does, too.

This guest post on TechCrunch  by Eric Clemons I found really thought-provoking. It is quite a long and detailed argument, pointing out step-by-step not only why advertising is failing on the Internet at present, but why it is bound to fail in the longer run. It’s well worth reading in its entirety, but I’ll just give a summary in case you’re in a hurry.

Clemons says that advertising revenues are falling in the mainstream media because people don’t really trust advertising and don’t particularly want it. For example, broadcast networks put on their advertising the same time so that viewers can’t switch channels to avoid it. Even AdWords, Google’s big revenue source, depends on misdirection, or at least the threat of it. And location-based advertising, pushing messages that you are very likely to want because of where you are, the content of your recent e-mails, where your friends go etc, he thinks will also fail because of the trust issue.

It could be argued that the decline in advertising revenues in conventional media is a natural response to the increasing diversity of information sources, and that Clemons is overstating the user’s role in it, but I think there would be a smokescreen. The real point is that users have more of a choice of ways to find out more about any service or product for themselves, which weakens the persuasiveness of advertising content hugely.

To give my own take on Clemons’s argument, the fact is that advertising clearly works best where information is restricted. Where information is free, easily available, and easy to select and compare, users can easily select between information they trust and information that they don’t. A recommendation by friends or from clearly neutral sources has an inherently higher value. So, as social platforms are more and more popular, their role in disseminating information becomes increasingly important.

We’re certainly not the only people saying that the key is to be authentic, and offer users the information they want when they want it. But Clemons’s critique of the paid advertising model makes the most cogent case for this that I have seen to date. To put it in a nutshell, there are two clear consequences, one for marketing, one for PR. In marketing, the point is to engage the prospect more directly, openly and personally, using the best tools and content you can. In PR, same thing, different target, i.e. the blogger, commentator or analyst rather than the prospect. That’s got to be good for the market, the vendor and the customer.

The predicted demise of paid-for print journalism is once again a hot topic, as speculation builds on the future of the NY Times. Pretty much all the US newspapers’ debts have now been given junk status, and the NY Times had been investing so heavily that it is now over $1bn in debt and stands to potentially default on $400m in the coming months, leading The Atlantic to speculate: Virtually all the predictions about the death of old media have assumed a comfortingly long time frame…what if The New York Times goes out of business—like, this May?

An excellent post in Slate points out one major cause of the problem. Newspapers, contrary to popular belief, migrated to the web early and put a lot of resources there. However, they just didn’t quite get its values: From the beginning, newspapers sought to invent the Web in their own image by repurposing the copy, values, and temperament found in their ink-and-paper editions.

A number of newspaper apologists have examined ways of holding back the tide, lamely suggesting curbs or taxes on blogging, but while blogs increase the pressure on journalists to get it right, they don’t undermine journalism and can actually help. Interestingly, in a recent Harvard University Nieman Report on journalists’ experience of blogging, blogging journalists felt they worked more quickly, breaking stories on their blogs before following up online and in print or broadcast. They also write shorter, more tightly edited pieces, not just for blogs but also for print and broadcast.

Many journalists are highly skilled at producing valuable, attractive and accurate news that is highly valued. The problem is not the medium, but the news organizations. In their present form they have to be big, complex businesses. In print, people can’t switch and browse - they buy the paper and need to find coverage of all their interests in it. The business problem is doing this at a profit. John Batelle comments on the inefficiency of newspapers, for example: When I wrote for the LA Times, I often wrote two stories a day. Is the Chronicle pumping out 800 stories a day? Is it breaking all sorts of amazing stories and being a leader in the community with those 400 journalists? Hell no!

And supporting this level of infrastructure is expensive. A lot of advertising revenue has departed for good, and the next couple of years are not going to be kind. Online costs are obviously lower, but the tiny revenue per online user simply can’t support print newspapers in their existing form. And without the resources of their print version, newspapers cannot maintain their web versions properly either! According to GigaOm, who comment that there are 8,400 followers of this topic on Twitter, The destruction of the old business model for news is clear, certain, even inevitable. The model replacing it is fragmented, innovative and frustratingly incomplete.

Eric Schmidt, Google CEO, talked to Fortune magazine to the effect that the news organizations are essential but he wouldn’t buy one even though they could easily afford to because of the lack of a coherent business model. And if it can’t be funded because of these business problems, then that’s a real loss in terms of voices and diversity. And I don’t think bloggers make up the difference. The historic model of investigative journalists in any industry is something that is very fundamental. So the question is, what can you do about this? And a fair statement is, we’re still looking for the right answer.

One possibility is subscription or donation for stories of genuine public interest, as reported by Business Week, on a startup doing just that. So far, Spot.Us has raised nearly $6,000 and published four stories, which have covered locally oriented environmental issues, political campaigns, and energy. But this is a bit of a filler for local news.

The bigger answer is collaboration. If, to be profitable, newspapers need a streamlined online offering, they also need a streamlined print offering that maintains comprehensive, quality coverage. No newspaper can be the best at everything, but they all know someone else who is, so they need to use in-house resources for what is unique and crucial to them and collaboration with others for the rest.

To give an example, for non-business and non-tech news I am fond of The Guardian Online, because it is pretty web-savvy and carries a lot of insight pieces that I enjoy. But the breadth of minute-to-minute coverage is not as good as the BBC’s, and it is not a great news portal, so I use the BBC (unfair competition because of the state subsidy, but the demands of neutrality also sometimes limit their ability to delve into depth) as my first news site and RSS feeds to various others. What I’d like is a portal for the best breaking news worldwide and specialist coverage, plus insight pieces and good UK news. Ideally with widgets so I can customize.

To give one example, I like to follow Test Cricket. If you ask most cricket fans they will tell you that Cricinfo is the site. If The Guardian were to embed a few pages from CricInfo (just to give an example), I’d definitely be a more frequent user. I’d be quite happy have a lot of their content like this and for them to focus on what they are in the top division for. And not only for online news: The point is that the print version could use the same model. There is every reason for The Guardian to have its political reporters and correspondents for home and, to some extent, foreign affairs. But newspaper journalism can’t be the best way to report all of it - science, technology, sports, fashion, literature, you name it. But newspapers are potentially a great way to distribute it, and this could be the key to their survival. I hope so.