Aside

Online Communities, How They Work (II)

This is Part II of a series of posts on online communities (that is also available in PDF form: Rubicon-web-community) originally done at Rubicon (the company I led/founded).

To return to the Introduction, Part I of this series, click here.


Overview

Working with online communities has long been touted as a great way for a company to save money in its marketing, support, sales, and even product development. But for most companies, the diversity of communities online, and the challenge of learning how to work with them, is daunting. Most companies don’t understand how online communities work, how they make a difference, and how to engage with them.

Among the companies that have tried to work with communities online, many have found that they conversation is dominated by extreme enthusiasts rather than average users, and have concluded that online community is a distraction from their real customers.
That turns out to be a very dangerous mistake.

My team recently conducted a broad and expensive indepedent survey of US web users to understand better how people in the US use the web, with a special focus on web community and its effect on consumers. Key findings of that survey, and its implications for companies, include:

It’s true, enthusiasts do dominate online conversations
Most web users are consumers of information, not creators. About 80% of the user-generated content on the web, including comments and questions, is created by less than 10% of web users, a group we refer to as the most frequent contributors (MFCs).

User reviews drive product purchases
But despite the low content creation rates, online communities have enormous influence on almost all web users. Online comments and reviews posted by the enthusiasts are second only to word of mouth as a purchase driver for all web users. Those personal reviews are far more influential than official reviews posted by a website or magazine, or information posted online by a manufacturer.

This means the old idea of “influencers” is confirmed and explained.
The most frequent contributors are the influencers, and they have a strong influence on purchase decisions because they write most of the online recommendations and reviews.

Web discussion is theatre

These findings mean online community matters enormously to companies, but not in the way that most of them expect. Online discussion is a poor way to communicate with the average customer, because average customers don’t participate. But it is a great way to communicate to them, because average customers watch and listen.

Most content and discussion sites should be viewed as performances, in which the site’s organizers interact with a relatively small number of users in order to educate, persuade, or entertain everyone else. This means it is critical that companies understand who the MFCs are, and how to take care of them, because they are the companies’ fellow actors in the online performance.

MFCs are different from the average web user. They’re more ethnically diverse; more technically skilled; more likely to be single; more likely to work in technology, entertainment, or communication companies; and more likely to be Democrats. But most of all, they are younger than typical web users. Half of the web’s most frequent contributors are under age 22.

Other insights: Leading websites, and the web’s impact on social lives
The survey also explored general use of web community, and its impact on users’ lives. Some of the most interesting insights include:

Search is the leading web category, but what comes after that?
It depends on how you ask the question. If you look at sites generating the most daily traffic, the most intensely used site categories after search are:

  • Social networking (such as Facebook and MySpace),
  • General news sites (such as CNN.com and NYTimes.com), and
  • Online banking.

If you look at breadth of visitors (in other words, which sites are eventually visited by the largest percent of web users), the leaders after search are:

  • Mapping (MapQuest and others),
  • Retail (Amazon.com and others), and
  • Reference (including Wikipedia).

Either way, community sites are in the top four web destinations.

Yahoo is the second most valued website. A good way to measure the value of a website is to ask users if they would pay a monthly fee to get access to it. By this measure, Google is the site web users value most, as expected. But Yahoo stood out as the clear number two. It was followed by three leading community-driven sites: YouTube, Wikipedia, and Facebook. The press coverage of Yahoo’s financial challenges sometimes obscures the size and loyalty of its user base.

Site valuation differs a lot by age. Among web users over 30, Google and Yahoo are still the top two, but they are followed by eBay and MapQuest.

Other key findings about site usage:

Facebook appears to be ahead of MySpace in terms of number of people who have profiles, and the value people assign to the site.
ESPN.com and CNN.com are both more valued than NYTimes.com, but all three are eclipsed by community-based Wikipedia.
The web has a big impact on social lives, but mostly for young people
Who’s #3 in social sites? Most people know that Facebook and MySpace are the leading social networking sites in the US, but the strong #3 in registrations is Classmates.com, followed distantly by LinkedIn. Those two sites have many more adult users than teens.

Twitter and SecondLife serve niches. Although both Twitter and SecondLife have received enormous amounts of press coverage, and are used intensely by some people, they are dwarfed in membership by the major social sites such as Facebook, MySpace, and even LinkedIn.

Social sites are much more satisfying to teens than adults.
Although many adults have joined MySpace and Facebook, those sites are much less effective and satisfying for users over 21. Adults say they make fewer friends through social sites, and say the sites play a less important role in their social lives.
Adults and teens use their social networks differently. Most adults will approve someone as a friend on a social site only if they already know them. Many teens will approve someone as a friend as long as they have even a vague idea of who they are. This means the two groups use the friends list in different ways. To adults, the friends list confirms relationships that they already have elsewhere. To teens, the friends list is an entry point for a relationship.
Despite differences over the social sites, the web as a whole has a significant impact on the social lives of many users. For example, about 24% of web users say they have dated someone they first met online. In the 22-30 age group, that percentage rises to 37%. Many of those meetings are happening outside of dating websites, as only 9% of web users said they visit dating websites at least once a month.
Web activity is more important to Democrats than Republicans. Web users who identify with the Democratic Party were more active on community websites and said they were more likely to be influenced in their voting decisions by online information. In part this may be due to age — young people in the survey were much more active online, and were also more likely to identify with the Democratic Party.

Online communities are not created equal
Although many observers speak of web community as if it’s a single thing, in reality different types of web community have very different dynamics and user bases. Approaches that work well in one type of community may fail utterly in another. That means companies looking to found community sites, or partner with them, need to understand what kind of community they are engaging with.
Based on the research on this report and our other experience in the industry, Rubicon has developed a taxonomy of web communities that classifies them into five broad categories:

  • Proximity, where users share a geographic location (Craigslist is an example);
  • Purpose, where they share a common task (eBay, Wikipedia);
  • Passion, where they share a common interest (YouTube, Dogster);
  • Practice, where they share a common career or field of business (many online professional groups fall in this category); and
  • Providence, where they discover connections with others (Facebook).

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Web communities: 10% contributors, 70% voyeurs
The common perception of web communities is that they allow groups of people to share ideas and information, and that they allow companies to communicate directly with their customers. This is factually true, but also misleading. The vast majority of online conversation is driven by a small group of web users — less than ten percent of them. The rest of the web community sits back and watches the interactions as a mostly-passive audience that only occasionally injects a few comments.
Community experts have been aware of this phenomenon for years, calling it “participation inequality.” Jakob Nielsen wrote an influential article on the subject in 2006, describing the “90-9-1 rule” (link). It states:

  • “90% of users are lurkers (i.e., read or observe, but don’t contribute).
  • “9% of users contribute from time to time, but other priorities dominate their time.
  • “1% of users participate a lot and account for most contributions: it can seem as if they don’t have lives because they often post just minutes after whatever event they’re commenting on occurs.”

The 90-9-1 phenomenon means that an online community generally doesn’t represent the opinions and interests of the average customer; instead, it tends to reflect the views of extreme enthusiasts. This is a source of intense dismay to many online community advocates, and a huge amount of effort has gone into trying to reduce the rate of inequality. Software strategist Dennis Howlett (link) recently summarized the outcome (link):

“You can add all the social software you want but getting more than a small number to actively participate and use is a devil’s own job. I’ve got the scars to prove it from projects I’ve been running the last two years. There are precious few signs that Nielsen’s 1:9:90 participation inequality law is in any danger of being proven wrong. The people I meet squirm at the notion of ‘social anything.’”

Rubicon’s survey confirm the idea behind the “1-9-90″ rule, but not its specific details. The 1-9-90 rule says that 90% of web users are completely silent lurkers. In our research, a majority of web users said they sometimes contribute something, even if it’s just an occasional comment. The truly silent lurkers are only 9% of the web population. So the ratio we found is more like 10-70-20. But the vast majority of content still comes from a small percentage of the population:

How web users participate in online community.gif
How web users participate in online community. About 80% of content is produced by 9% of users, the Most Frequent Contributors. About 65% of web users are passive readers who contribute content only occasionally. They account for only about 20% of content, depending on the medium. Another 9% of web users are pure lurkers, never contributing any content. And about 17% are community abstainers; they believe they never visit any community-related site on the web. (Think of AOL users who use the Internet only to read e-mail.)
Another interesting finding in our research is that the rate of participation varies according to the type of content. Some people are contributors in one type of content but lurkers in another:

Online community participation rates.gif
Rates of participation, by content type
About 70% of web users have shared at least one photo online, but less than 5% do it daily. By contrast, only about 30% have ever had a weblog.
These differing rates of participation are similar to what Forrester Research has found in its surveys of US consumers, as documented in the book Groundswell by Charlene Li and Josh Bernoff. Forrester reports that rates of participation in community sites have been rising over time, which may explain why our findings don’t match the research reported by Nielsen (link).
But even with rising participation rates, the activities of the most frequent contributors drive online content. To understand why, think through the cumulative effect of someone who posts frequently. Someone posting a comment once a day will produce seven times more comments than someone posting once a week, and 30 times more comments than someone posting once a month. The most active participants end up dominating online conversations. The chart below shows roughly what percent of total content is contributed by people in each frequency category:

Percent of total activity created.gif
Percent of total activity created by each contribution group
The people who post daily produce most of the activity, and everyone posting less than several times a week is almost completely drowned out.
Netting it all out, about 10% of web users generate the vast majority of all user-created content. The rest of us are more or less voyeurs. Here’s what the top 10% contribute, according to the study:

Percent of total activity created by top 10 precent.gif
Percent of total activity created by top 10% of web users
Websites that host communities see this phenomenon in their own usage statistics. Exact participation rates vary from site to site, but the concentration of frequent contributors is almost universal across both enterprise and consumer web conversations. For example:

  • SAP’s Community Network is a leading enterprise-oriented discussion site, with over one million registered members and more than 700,000 unique visitors a month. About 100,000 members have ever contributed any content, and just 4,600 members are classified by the company as highly active contributors.
  • Cruiser Customizing is a consumer review and discussion website dedicated to motorcycle enthusiasts. It has 180,000 registered members, but 10% of them contribute 83% of the content.

Online community managers sometimes worry that they need to increase the rate of participation, but in fact the 10/80 ratio or something like it seems to be a natural outcome of the way people interact with the web, at least at this point in the web’s development.
User comments online drive purchase decisions
The web, and web communities in particular, has a big impact on the behavior of consumers in the US. But that impact is not uniform. In some parts of our lives the web is very influential, while in other areas it has only a small role. The survey attempted to map out where the web is having the most impact. Our most important finding was about the role of the web in product purchasing.
Online reviews are second to word of mouth in influencing purchase decisions
Word of mouth (personal advice from a friend) is still the #1 driver of purchase decisions. Among web users (who are about 75% of the US population), content on the web has moved into second place, ahead of printed reviews and advice from salespeople. But not all web content is created equal. Reviews and comments posted by actual users are more influential than third-party reviews or information posted by manufacturers:

Influence of various sources of information.gif
Influence of various sources of information on purchasing
There really are “influencers,” and they really do matter
In the last year there has been a debate in marketing circles about the existence and significance of “influencers,” a small group of people who drive purchases by others. The Rubicon survey documented how the influencer process actually works: The MFCs write most of the online reviews and comments, and other web users rely heavily on those comments when making purchasing decisions. Online comments are the new word of mouth, and MFCs do the most commenting.

Web influence varies by product or service category

The influence of the web varies tremendously, according to what category of product or service the consumer is looking for. Decisions on consumer products, vacations, and movies are all heavily influenced by online information. On the other hand, many services decisions — such as choosing a doctor, an auto mechanic, or a politician to vote for — are influenced much more weakly by online information.

Percent of web users who say.gif
Percent of web users who say they are heavily influenced by online information when making a decision on various products and services
The differences in web influence may be because people don’t feel comfortable using web information for some decisions, or because there isn’t yet an established online source for information in that category.
Given the attention that both political parties have put on online campaigning in 2008, it is interesting that most web users say online information is not a heavy influence on their voting decisions.
Young people more influenced by online information
In general, younger people were more likely to be influenced by online information. For movies in particular, more than 60% of young people said they were strongly influenced by online information, compared to less than 40% of web users over 40.

Percent of each age group strongly influenced.gif
Percent of each age group strongly influenced by online information

Use of the web for product support varies by age

Once web users choose a product, the web also plays a big role in helping them use it. When web users have technical problems with a product, their most common response is to check the manual. After that, though, the web takes on a prominent role. It is neck and neck with asking a friend, and ahead of calling the manufacturer or asking a dealer. There are also some interesting differences by age. Older users are more likely to look on a manufacturer’s website for information, while younger ones are more likely to go straight to a search engine:

Web users most common responses to technical problems.gif
Web users’ most common responses to a technical problem
Companies looking to reduce their support costs should be aware that many web users will look online before making a call. If the companies ensure that good support information is available online, and that it’s well indexedby search engines, they can head off many technical support calls and probably increase customer satisfaction as well. It’s also a very good idea to make sure the manual is well written.
What it means to companies: Online discussion is theatre
Combine the information on how MFCs drive online community content, with the influence of that content on purchases, and you reach a very important conclusion:

Web discussion is a performance in which a small group of people interact with each other, and with companies, for the benefit, education, and amusement of everyone else.

This has huge implications to companies running, and looking to interact with, online communities. Even though you can’t get most of your customers to interact with you online, they watch what you do with the MFCs, and they judge you based on it. Far from being an irrelevant bunch of fanatics, the MFCs are proxies for, and advisers to, your entire customer base.

Know your fellow actors.
The MFCs are your fellow performers in the theatre of online community. They need to be cared for and catered to carefully, but without making the passive audience members feel unwelcome or discriminated against.
Who are the Most Frequent Contributors?
We classified as MFCs the people who post at least one type of content (a comment or a video or a review, etc) more than once a day. The people who do that are 9% of the total web-using population in the survey, and they are not typical web users.
First, and most important, the MFCs are a lot younger than the average web user:

MFCs by age.gif
Percent of each age group who are MFCs, compared to all web users in the survey

Half of all MFCs are age 21 or younger. Some 22% of young people fit into the MFC category, whereas only 5% of people over 22 do. If it sometimes feels like people online behave like children, that may be because many of the noisy ones are.
The MFCs are more sophisticated technically than other web users:

MFC tech sophistication.gif
Self-reported technical sophistication of MFCs, compared to all users in survey
The MFCs are also more ethnically diverse than average web users:

MFC ethnicity.gif
Race or ethnic identity of MFCs compared to all web users in survey

The MFCs much more aggressive users of social, file sharing, and discussion-related websites. In contrast, their usage of general news, sports, and online banking is little different from the average web user:

MFC site visits.gif
Percent of each group who visit a site category every day
Some other notable characteristics of the MFCs:

  • Because they’re young, they are more likely to be single than other web users.
  • 61% of them are male.
  • 40% of them are students. Again, that is no surprise given the age profile.
  • Among those with jobs, the MFCs are more likely than other web users to work in the technology, arts, entertainment, and communications industries.
  • They are more likely than other web users to be Democrats. This appears to be tied to age.

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Different types of community require very different strategies
The survey showed that different types of online communities have very different user bases and rates of usage. Although many observers speak of web community as if it’s a single thing, in reality there is incredible diversity between communities. Approaches that work well in one type of community may fail utterly in another. That means companies looking to found community sites, or partner with them, need to understand what kind of community they are engaging with.
Every community is unique, but they can be grouped into five broad categories, based on the motivations of the people who participate in them. The five major types of communities are:

  • Proximity, where users share a geographic location (Craigslist is an example);
  • Purpose, where they share a common task (eBay, Wikipedia);
  • Passion, where they share a common interest (YouTube, Dogster);
  • Practice, where they share a common career or field of business (many online professional groups fall in this category); and
  • Providence, where they discover connections with others (Facebook).

Many communities cross boundaries. For example, MySpace is a community of providence. But many MySpace users are very focused on music, making it a community of passion as well.

Communities of providence have the largest and youngest audience today
More than 25% of web users visit communities of providence daily. This is not at all surprising, given the popularity of Facebook and MySpace.

Percent of community types.gif
Percent of web users visiting the various community sites daily
Looking at community members by age, practice has the oldest users, peaking in the 31-40 age band. That makes sense, since communities of practice are often driven by shared professions, and you have to be established in your career before you need them. Communities of providence had the youngest users, driven by the social communities.

Community types by age band.gif
Percent of each age band who are daily visitors to the various community types

Users of the different communities value websites differently

The providence users valued Facebook and MySpace highly, as would be expected. Passion users had a special affection for YouTube, while proximity users showed huge enthusiasm about Craigslist. Purpose users favored eBay, and practice users gave an especially low value to MySpace and Facebook while giving a good value to CNN.

Community types willing to pay $2.gif
Percent of daily community visitors willing to pay $2 a month for access to selected websites
Proximity users are more likely to create multiple profiles
For reasons we don’t understand, heavy users of proximity communities were a lot more likely to create multiple identifies online.

Proximity users multiple profiles.gif
Percent of daily community visitors who create multiple identities

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Implications for companies

Know how the web plays in your industry. For companies, the single most important implication of this survey is that you have to understand the role of the web in your particular industry. How much do customers in your industry rely on web information? If the rate is low, that probably means the right online marketplace hasn’t yet been created for your industry (most of the categories where people reported low web influences were ones in which it’s currently hard to gather online information comparing offerings).
This may be an opportunity for you — the company that creates the best marketplace in a category usually gets the lead. Just ask Amazon.com.

Take care of the MFCs. Even if the web’s influence in your industry is relatively low, you’ll still have a lot of customers making decisions based on the user comments they see online. Most of those comments will be generated by a small percentage of users, who you can identify and court. Since the people posting comments online are also the most enthusiastic web users, you can use your website to reach out to them and make sure their needs are met.
When we say web communities are theatre, we mean that literally — you need to partner with the performers (the MFCs) and make sure the show looks good. The difference from theatre is that you can’t pay the actors; you have to win them over through love, enthusiasm, and fairness.

Know what type of community you’re dealing with.
Most companies are dealing with online communities in one or more ways. Some have communities of users online, others are trying to market through online communities. And some are trying to build communities of their own. In all cases, you need to understand what type of community you’re dealing with. A community of passion works very differently from a community of practice; if you treat one like the other, you may actually alienate people.

If you’re creating an online community
You need to know all of the above, plus you must understand the type of user traffic you’re looking to generate.

There are three categories of very successful sites:

  • Sites that get a lot of daily use from large numbers of people (search and social sites are good examples)
  • Sites that get occasional use from large numbers of people (reference, shopping, etc)
  • Sites that get intense usage from small numbers of people but are ignored by everyone else.

You have to know which category your site is in, and optimize the community design for that.

That’s the end of Part II, how online communities work. To return to intro/overview, go here. Part III looks at the leading web destinations and why they matter. Click here to read it. to Download the full PDF so you can read offline, get it here: Rubicon-web-community.
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(Note: I co-authored this with my team, while I was CEO of Rubicon.)

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One Response:

  1. matt lawton. November 6, 2008 at 5:25 pm  |  

    Great analysis – thanks. The intresting thing for me will be to see whether the young MFCs reduce their activity levels as they grow older (more demands on their time) or whether the distribution curve broadens out and the community activity ratios continue to spread more evenly. A more active web experience would seem to benefit everyone.

    Reply

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