The Network Unbound

Evan Rifkin and Fred Krueger, TagWorld's cofounders, are serial entrepreneurs who funded it from their successes in the dotcom days. The community added 1.4 million members between November 2005 and April 2006, healthy growth for a site still in beta, but Rifkin is confident that he'll have 100 million members within a few years. "This is the beginning of social networking," he says, walking me through his personal TagWorld site over the phone. "User-generated content on the Internet will dramatically increase…. We don't think this is a coolness issue. We believe people want to live their lives online."

My (Smarter) Space

TagWorld's advantage isn't its jukebox or some widget, it's the information the site gathers.

TagWorld's real competitive advantage, however, isn't its jukebox or some other widget. It's the real-time information the site gathers. Musicians who post their music and videos online will be rewarded with demographics on exactly who is listening and where, bloggers will see exactly which other members are reading them, and advertisers, once there are some, will be able to find out similar information (within privacy guidelines, of course). That kind of supermuscular data and easy, automatic feedback makes TagWorld's platform even more potentially valuable to businesses than the current generation of social networks. "It's really the way business will be conducted going forward," says Rifkin. "Businesses can have a lot of data without putting the work into it. Let's say you are sitting on your computer listening to Bloc Party and automatically that info is posted on your Web site. You've generated content by the act of doing something for yourself. That information will automatically get pushed to me, as a marketer, and I get a list at the end of every day." In other words, when you press play on your music player, that choice could become a bit of autogenerated content, and a piece of easily aggregated and invaluable marketing information (e.g., the number of urban 19-year-old girls who downloaded the song yesterday).

The key here, however, is that networked consumers are not passive participants in the consumption process. It's easier than ever for them to ferret out unbiased, independent information about companies, products, or brands--and to post in turn their own highly biased opinions about the same. The wattage of social networking means those personal opinions can be set to music, Flash-animated, and propagated around the Web; the more interesting or entertaining or useful they are, the further they travel. The emergent power of those collective judgments shows up in a 2006 survey of "opinion leaders" by Edelman, the huge international PR firm, which found that 68% of respondents rated "a person like yourself or your peer" as the most credible spokesperson about a company. That number has tripled since 2003. What's more, 36% of respondents said that if they don't like a company, they go online to say so. And a Pew Internet & American Life Project survey released in January found that 60 million Americans consulted the Internet for help with major life decisions, including big-ticket purchases. When it comes to information, the balance of power has truly shifted to the consumer.

Vision Critical, a Vancouver-based market-research company, was built on the premise that online feedback can make or break companies. Vision Critical constructs custom online communities for large companies to get far more detailed data and better response rates than traditional market research delivers. The idea is to build relationships with "panels" of thousands of users who are folded into the decision-making process and given feedback on their feedback. One major retailer, for example, offered teenagers the chance to help choose its new spring line online. "It's only in the past year and a half that we've had companies start to embrace this," says Jason Smith, the company's senior VP of sales and marketing. "There are some statistics saying that almost 50% of market research is being done online." Vision Critical built another unbranded site, called Pet Talk, for a major company in the pet industry. "Pet owners can upload photos of pets and share stories," says Smith. "Keeping connected that way builds trust. We're connecting in a way that's not just marketing to them." When the company sends a Pet Talk survey to these thousands of members, response rates are much higher and the data much deeper, because respondents feel like a part of a community. (We'll see how long it takes Pet Talk members to find out who's behind their "community"--and how they feel about it.)