Web X.0

Word of Mouth Still Trumps Ad Value in Social Media

The Facebook data just keeps pouring in. While a lot of investors probably wished they had more data on the shortcomings of Facebook’s business model before the IPO, sometimes a few people have to be sacrificed before a greater lesson is learned.

The latest data from comScore spends less time worrying about how Facebook makes money and more time on how brands are making money on Facebook. In the rush to figure out how good of an ad product Facebook has, word-of-mouth, which has traditionally been seen as the real value of social media marketing for brands, has been brushed under the rug.  Today data finally emerged on how earned media stacked up against the latest onslaught of ad products on the world’s most popular social network.

So how well does real earned media do in the days of Sponsored Stories and Promoted Posts?

It turns out that earned media, despite being harder and possibly less sexy from a technology/data perspective, continues to have a much greater impact on tangible consumer behavior than it’s newer hyper-targeted siblings.  While the analysis is a little muddled due to comScore’s reluctance to undermine clients (or one of their biggest clients, Facebook) that invest heavily in paid media, the data clearly shows that online word-of-mouth has not only a stronger immediate impact but also increasing efficacy over time.

This probably isn’t news to you if you work in the automotive or consumer electronics field, where word-of-mouth continually ranks above all paid media in factors that influence purchasing decisions.  comScore couches some of their findings by also claiming a lift for consumers exposed to paid advertising on Facebook but, given the historical data beyond Facebook, this makes a strong case for greater resource allocation into content and other shareable assets and possibly even a GM-like re-examination of ROI in relation to Facebook’s advertising.

The analysis of the data points out how most brands jump from fan collection to success measurement but points out the importance of “intermediary steps,” like fan reach, engagement and amplification. I’d go so far as to say that those steps are less intermediary and should be the primary focal starting point to any social media program.  While getting into all the reasons why fan collection, or network building, isn’t success in and of itself might be another post entirely, it is important to note that, since only about 1-2% of most Facebook fans engage in any way, the “collecting” isn’t as important as giving them something of value that can be shared.  1,000 people “Liking” your post about looking forward to the weekend doesn’t further any kind of a real brand conversation.

Unfortunately, most newer social media marketers measure success by Facebook’s media kit metrics, which will never speak directly to the benefits of organic word-of-mouth even if it is the #1 trackable activity linked to sales and deeper brand connections.  The kind of real word-of-mouth that drives these high impact brand connections is messier to measure but it can be done and should be the larger focus of any social media marketing program.  Hopefully it won’t take the rug being pulled out from under this industry for it to understand how to measure real value.

I’m going to post a follow-up to this next week that takes a closer look at the shortcomings of the People Talking About This metric since it’s closely related.

(mis)Adventures in Crowdsourcing

There are few topics more contentious among marketing creatives than crowdsourcing.  The arguments both for and against are filled with so many bad analogies and hyperbole that it’s almost impossible to discuss civilly with anyone who has been involved in creative services longer than six months.  You can only tiptoe through the banana peels so long before you slip and have to run back to an oversimplification to save your argument.

If you boil down the concept behind crowdsourcing you usually come up with something along the lines of “the knowledge of the crowd is more vast than any one person.”  It’s one of those statements that’s hard to refute yet, the more you get into the specifics of crowdsourcing in application, the less it makes sense.

Crowdsourcing, in it’s modern form, is driven by the primary desire to cut costs.  There are instances of crowdsourcing achieving things that would be difficult for a small team, like the example Don Tapscott uses in his book Wikinomics of Goldcorp tapping the crowd to help them find better places to mine for gold, but the majority of crowdsourcing is used as a seemingly viable alternative to paying more.

The issue has grown a little more complicated as simple bargain creative services, like 99 Designs, have been birthed at higher levels.  One such case is the ad agency Victors and Spoils, which found itself on last year’s Advertising Age “Agencies to Watch” list.  While there aren’t many marketable designers fighting for $200 logo projects, V&S is competing against larger agencies by crowdsourcing the concepting phase of the creative process (the projects are then handed over to a fairly traditional structure of full timers and freelancers for execution/production).  It’s not just inexperienced ad school students and computer nerds from the Ukraine submitting ideas though.  I heard first hand that there are art directors from top 10 agencies who regularly work 60+ hour weeks that are also throwing their ideas in the ring, though they generally ask to credited as anonymous.  So, in this instance, you’re getting ideas from some of the same people you need a budget of $10 million+ to even ask to take your business.

The emergence of these kinds of companies are driven by problems at the height of the creative pyramid.  Hiring a top creative agency that pays top dollar for their creative talent is one of the most simultaneously risky and safest things to do for brands with wallets fat enough to even be in this position.  While you could argue that the majority of most marketing initiatives ultimately fail, some of the most detrimental black holes of substantial resources come at the hands of some of the most experienced marketers with some of the best portfolios at some of the most respected agencies.  A misfire in a print ad in a local paper probably won’t sink a business but an ineffective Super Bowl spot that does nothing but create negative sentiment for the brand can do lasting damage and often results in the squandering of the only chance that brand will have at that level of media.

On the other hand, no one has ever been fired for hiring the agency that put their competitor on the map.  Sometimes it’s easier to defend a colossal waste of resources than it is to defend the decision of taking a chance on an unproven creative entity.  This mentality is what keeps the Cannes crew in business and 45-year-old creative directors in expensive jeans.

At this higher level, the argument against crowdsourcing often comes down to the idea that experienced people are professionally cheating themselves by working on spec.  They’re devaluing creative work across the board by offering their expertise for free.  A good chef wouldn’t prepare three dishes and let you choose which one you wanted to pay for so why would you offer your work for nothing but a chance at getting paid?

This argument is new to the ad world but not to the business world.  Venture capitalists have a saying that “the idea is worthless.”  Most will say “we invest in teams, not in ideas.”  History backs this up as well.  There is virtually no marketplace for ideas but companies are routinely acquired for their teams and resources.  When Facebook bought Friendfeed, they had no use for the product but needed the team to help them develop the Facebook news feed, which is now the most popular part of the most successful private site in the history of the Internet.

The argument for participating in crowdsourcing ranges from “it’s worth a shot for the prize” to a claim that getting your work produced or applied is the only real reward for a creative that isn’t just working for a buck.  As a creative, are you intellectually cheating yourself by not taking advantage of the best opportunities to have your work go into production?  Is sitting at your desk pumping out banner ads that do nothing buy contribute to your savings account morally superior to your peers that participate in briefs that otherwise would never reach their desk?

Then there’s the question of quality.  Those opposed to crowdsourcing will tell you that “you pay for what you get” and you will suffer worse quality of work if you only rely on crowdsourcing.  This seems to be more of a hunch than a fact.  In my opinion, Victor and Spoils Dish Network campaign stands up against any broadcast work from a top ten agency this year, though I have no idea who is responsible for the concept.  On the other hand, Doritos has really put their creative in the hands of huge consumer creative group and their results are routinely mundane.  I won’t even bother to start rattling off examples of expensive ad campaigns that have done nothing but hurt their brands over the past 12 months.  You win some you lose some, I guess.  There certainly isn’t a formula for creative success.

So I had to find out for myself.  Is crowdsourcing really the end of the world as we know it or a democratized process that is a natural evolution for creative services?

On to the grand experiment…

To give this things a run, I committed to allowing the designers of 99 Designs to create a logo for me to put on consulting invoices and a placeholder Web site.  Hardly a prestigious honor but the logo would at least be applied in some way.  To top it off, there would be a prize of around $200 for the chosen designer, which is less than I’ve ever paid a designer for any project.  In fairness, I would treat every submission with just as much attention and feedback as I’d give a dedicated designer and I would answer any questions that came in.  I’d basically try to treat it like a normal project with a detailed brief and everything just to see what the bottom of the crowdsourcing pyramid could produce.

This proved to be quite a task when 77 designers submitted work, but I fought through it.  Even as many of the designers were obviously ripping each other off.

I then thought I would ask friends and colleagues, most of which touch creative services professionally in some way, to help me narrow it down to eight so I could use the voting tool on 99 Designs to pick a winner.

Boy was that a mistake.

Asking my personal network to participate in a crowdsourcing experiment was met with very long email threads, especially from people that wanted to inquire about this being an experiment that would result in me never hiring them again.  While there was one or two instances of positive feedback, the rest was almost universally against the very notion of exploring this concept.  A couple people even offered to best the competition for free, which pretty much defeated the purpose.  Also, out of about 18 thoughtful responses, most of which refused to vote for a design, only one submission got two votes and it was effectively cancelled out by a specific rant against that design by one of the non-voting malcontents.

So the experiment was cut short with the only real conclusion to be drawn being that the majority of my respected friends and colleagues despise the concept of crowdsourcing creative on almost every level.  Some to the point where they could barely articulate it apart from knowing in their hearts that it’s wrong.

My personal experience wasn’t quite as one-sided.  I found the people that submitted  designs to be just as easy to work with as designers who are being paid $125 or more an hour, although their work wasn’t nearly as consistently good as the people I use directly for client work.  Although I wasn’t really paying out of pocket, I still thought that the work was at least deserving of what was being paid.  The market for this level of service is probably as flawed as the system itself since a much higher quality of work could be achieved by going to a site like Behance and finding a good designer who charges a fair rate, which would probably only barely double the cost.  If you can’t pay $500 for a platform for your visual identity, I probably wouldn’t classify you as a business.

However, my larger conclusion about crowdsourcing as a concept was quite different.  I don’t, in fact, find anything fundamentally wrong with crowdsourcing except when the primary motivation is driving costs down, which does, most certainly, drive quality down as well.  You do still, in theory, get what you pay for up to perhaps the boutique agency level and then you start paying a premium to keep the larger machine running.  I realize that, in a sense, I do a lot of crowdsourcing as a consultant when I “bounce” projects off different people to both gauge their interest, initial impressions and their costs.  It may be to a much smaller and more filtered group due to my previous experience with them but it’s far from the blind faith that a brand puts in a large agency that is constantly churning industry talent.

The rise of crowdsourcing can be attributed to two primary factors: good people being out of work and a slow realization that traditional creative hubs aren’t delivering value consistently.  An economic comeback will be a huge blow to companies that are hanging their hat on crowdsourcing but an overall evolution of the management and thinking of top creative employers is possibly the only thing that will sink it.  Until then, it’s you against the crowd and you’re probably right if you think it’s an unfair fight.


UX Strategy from a Restaurateur

Union Square CafeThis Sunday I found myself watching the Wall Street Journal Report (after a thrilling Jets victory over the Denver Broncos) and was interested to see an interview with Danny Meyer, a restaurateur that I had always admired when I lived in New York.  Having lost a little money on a restaurant venture, I’m not terribly keen to get into that business again.  However, I always find it interesting to hear from people who have succeeded and there aren’t very many that have been more successful than Meyer.  While he’s primarily known for his high-end establishments, like the Union Square Cafe, he also owns more casual spots, like the Shake Shack and Blue Smoke (all of which I’ve eaten at and have enjoyed).  Surprisingly, Meyer said that the more casual spots, like Shake Shack, have done better than the more high-end restaurants during the economic downturn of the past years.  While this had a lot to do with price, it wasn’t the only factor in the success of the more economical restaurants.

Meyer has a new book out called “Setting the Table: The Transforming Power of Hospitality in Business,” which looks at hospitality less as a business and more of a way of doing business.  You see, Meyer attributes the success of the more casual restaurants to not only being competitively priced but also the way that they treat their patrons compared to others in their category.  He believes so strongly in this that he has created a new consultancy that aims to help companies that are the best at what they do put more of a focus on hospitality with their customers.

Ok, but what does this have to do with online marketing and the Web?

UX often gets labeled as a technical discipline.  Most UX focuses on how a technology or device is perceived, learned or used and is measured by successful conversions or some sort of shift in sentiment following the interaction.  On a retail site, this is usually determined by how easy it is for someone to buy something and how secure they felt during the process.

What Danny Meyer seems to be suggesting is that we need to raise the bar.  When someone first comes to your site, do they feel welcomed or are they immediately thrust into the sales cycle?  I think you’re seeing a little more of this gaining steam on blogs and affiliate sites when you see the referring link detectors welcome you from wherever you came from and offer you something that can serve as a good introduction to their content (“I see this is your first visit from Google…”).  Some sites, like Angie’s List, have this built into their CRM and will ping you if you haven’t logged into your account in a long time to see if something is wrong.  Others offer content/interface customization for registered users to help streamline the experience for them.  Most of these tactics are focused on improving user experience but it’s hard to classify most of them as genuinely hospitable.

One example of a brand that delivers on this idea is American Express.  While most credit cards are modeled after financial services companies, American Express very clearly positions itself as a hospitality company that offers a credit service.  Being an Amex cardholder is more about getting access to special deals, concierge services and free gifts than it is about comparing your interest rate, which is an area where the company isn’t particularly competitive.  The result is a fairly distinguished brand in a crowded space that enjoys rather high sentiment scores from its most valuable stakeholders.

I’d like to see more Web brands act like American Express and Danny Meyer’s restaurants.  How valuable is a registered user to your business?  Is there an opportunity to immediately give them something of value that shows nothing except your appreciation of their visit?  I think as brands begin to offer more personalized experiences you will see more hospitable behavior not too far behind.  Whether this is a function of CRM or UX is up for debate but I think it is an important element that is missing from most Web services, which sounds like an opportunity to me.

Further Evidence That Nothing is Viral

trafficThe research refuting the grand myth of viral marketing continues to pile up.

The latest is an analysis from TubeMogul that shows the real sources of traffic to so-called “viral videos.”  As anyone who has actually looked a referring traffic on a socially distributed video can tell you, it is blogs that drive the most traffic by an overwhelming majority.  To quote the data, it’s about 80% of the traffic for a mere 35,528,837 videos surveyed.

This isn’t the result of a chain letter, these are highly influential blogs driving traffic to content.  Not forwarded emails or IMs.  Not even social networks.  In fact, the data on how important social networks are to this kind of content is equally revealing:

In total, search engines provided 11.18% of all video referrals; social networks provided 3.66%. Following close behind were social bookmarking aggregation sites, with 3.19; then video search engines (0.63%) and email/IM sites (0.05%).

These all powerful social networking sites barely beat out social bookmarking aggregation, which the vast majority of Internet users are still completely unaware of.  Equally interesting is the small sliver of people that are driven to “viral videos” in the way most people think of “viral” distribution, email and IM.  0.05%.  That is so low that it’s statistically irrelevant.

I know we will continue to hear about viral marketing for years to come but I hope that, over time, professional marketers and public relations practitioners will begin to change the way they talk about this kind of marketing to focus more on the influencer networks that actually drive brand building results in this space.

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Buzz Off, and Please Make It Viral

beeThere are a lot of terms in this new world of marketing that I really hate.  I’ve written before about how I believe that nothing is really “viral.”  I work in an industry where I get calls out of the blue asking me how much it would cost for us to do a viral video for brand X.  Or how can we stop the “blog chatter” around some bad news (this is usually involving a blog with millions of readers).  Or how do we generate some early “buzz” around an announcement that no one really cares about.

Ben McConnell tackled the issue of word-of-mouth vs buzz quite adeptly in a recent blog post.  He defined “word-of-mouth” as follows:

Word of mouth is a byproduct of a remarkable culture. It’s how companies like 37 Signals, Discovery Education, and The Container Store grow and flourish. Their companies are organized around a well-defined purpose and strong values, which may not be for everyone, but they’re important enough to a significant group of people.

Subsequently, he describes “buzz” quite differently:

Buzz is the result of word-of-mouth marketing. Its results are typically short-term. Gimmicks are common, and examples abound.

I would take it one step further.

Word-of-mouth is an actual marketing behavior, like executing a call to action.  It’s a marketing conversion that can be measured.

Buzz is the perception of word-of-mouth activity.  You can manufacture buzz, much like McConnell shows in his post, but it doesn’t have to be real.  While buzz can be the result of widespread word-of-mouth activity, it can also be created in a void by PR and advertising.  How often does a film having “Oscar buzz” actually result in an Oscar?  There’s often no delivering on the buzz promise, which is a pretty good sign that it’s been manufactured.

It will be a good day for all marketers when terms like “viral” and “buzz” are put to bed and we can finally focus on measurable behaviors that actually support quality brand values.

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How Coraline Redefines Influencer Engagement

97815_coraline1Coraline may be a movie about a young girl trying to escape a parallel universe but the marketing behind the film is something potentially even more compelling.

Tasked with promoting what is being called by many a “small movie,” the film’s ad agency, Wieden + Kennedy, came up with a very unique way to engage with influencers in the animation industry, who are most likely the ones to inspire the most sustained conversations about a film like this.

The agency produced briefcases that themselves became storytelling mechanisms for the film (Ad Rants offers a couple good examples here).  Each box was different and sent to a different blogger or esteemed member of the animation community.  Some people posted pictures and some posted videos of the unboxing but very few people ignored them.

While ad agencies are generally the poster children for transparency gaffs and ham-fisted mailings, W+K added an element to the film that appeals to the nature of the kind of stakeholders they want to reach.  The campaign itself is worth following and there are people this morning that are searching the Web to find out what was in the other boxes and who recieved them.  When you read about the unboxing on different blogs, you generally find out more about the film and the creativity that went into it.  It opens up a level of stakeholder engagement that never would have been achieved with an email and a YouTube video.

Far too often, influencer outreach becomes an extension of traditional media relations and never gets beyond the “smile and dial” mindset.  It’s great to see companies like W+K get involved and (hopefully) begin to raise the bar.

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A Whopper of a Facebook Campaign

app_3_33988778285_984Today a colleague posed an interesting question to me.  She asked “are there any brands you can think of that have done a good job with Facebook?”  I genuinely want to be helpful in these situations but absolutely nothing came to mind that I would be willing to defend in a presentation.  Yes, Facebook is a valuable media property with some pretty intriguing demographics for a lot of different brands but have I ever seen a brand interaction on Facebook that I actually thought was valuable?  Nope.

That’s when I remembered a little buzz I heard about a Burger King promotion called Whopper Sacrifice.  The concept is simple, if you delete ten of your friends you can get a coupon for a free Whopper.

Here is how Burger King describes it:

What would you do for a free WHOPPER®? Would you insult an elected official? Would you do a naked handstand? Would you go so far as to turn your back on friendship? Install WHOPPER® Sacrifice on your Facebook profile and we’ll reward you with a free flame-broiled WHOPPER® Sandwich when you sacrifice 10 of your friends.

It’s meant to make people think about what the value of a Whopper is to them.

There is a lot I like about this campaign:

  • The tone of it is right in line with the rest of the creative that BK is pushing out right now
  • The fact that a lot of people are participating reinforces that a Whopper has value to this demographic
  • BK takes advantage of the discrepancy between the real value and perceived value of the word “friends”…you wouldn’t stop talking to real friends for a hamburger but Facebook allows BK to make this claim with a degree of validity
  • The company is relinquishing some control and letting their stakeholders police “the Wall,” which is resulting in as many people defending the brand than there are people criticizing it

I haven’t eaten at Burger King more than two or three times in the past ten years but, aside from the health concerns, I know I do like Whoppers.  I’m a tough conversion for this campaign but it has made me think about the call to action.  Are there ten fringe friends of mine on Facebook that I wouldn’t mind deleting for a coupon for what is essentially a free lunch?   Maybe some people from third grade that I’m not really friends with.  I’m not going to do it by Burger King is making me think about it, which is a win by itself.

This raises another question about the value of “friends” on social networks but that is a topic for another blog post.  I’m going to lunch.

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Greatest Internet Phenomenon of 2008: Data Portability

data-portabilityI know I made this into a series last year but I think I’ll keep it simple and just stick to one prevailing concept since 2009 is already nipping at our heals.

Now I know that there were plenty of negative phenomenons that happened this year, which all probably had much more severe impacts than data portability, but I think the fluidity of personal data is really the one area of online media that experienced the most important shifts in 2008.

As we all know, this all started much earlier with RSS and related technologies but, to stretch a comparison, Chuck Berry’s groundbreaking guitar work doesn’t make Are You Experienced? any less of a game changer in the grand scheme of rock and roll.  What 2008 really did for me was deliver on the promise of Web 2.0.  I now have control over my media in ways that quite simply weren’t possible in 2007.  It’s not just news media either, I’m now able to manage almost all categories of media in the way that best suits my personal taste and lifestyle.

How about a few examples:

  • Like many people, I have multiple bank accounts, loans and credit cards.  They all have separate Web sites and passwords with drastically different interfaces and user experiences.  I now use Mint to access all that information in one place and see things about spending habits and budgeting that weren’t possible a year ago.
  • I’ll just say it: I hate Facebook.  Unfortunately, it’s a social (and professional) necessity.  Add that to the fact that you can’t really delete your profile and I was forced to find a way to deal with the endless pings and pokes of this social network of the year.  Luckily, Digsby came along and gave me a multi-platform IM program that allowed me to maintain Facebook without having to wade through the endless noise on their site.  Supposedly a Mac client is on the way soon.
  • My digital entertainment has made it to my living room.  I now stream NetFlix through my Xbox and often rent movies through my AppleTV.  I also control my music going to my AppleTV (basement) and AirportXpress (living room) with my iPhone rather effortlessly.  I fly a lot as well and keep a season of whatever show I’m watching ready to go on my iPhone at all times.  This has increased the money I spend on iTunes, which I find to be an honest value considering the convenience.
  • Google Reader is my newspaper.   Sure this is just RSS but I now have all my favorite sites organized into categories like Friends, Design, PR, Music and I just click from section to section like you would with a newspaper.  According to my Google Reader stats, I read between 100-200 articles a day and I don’t feel like it’s an intrusion at all.  I also never feel like I’m falling behind in the news since it’s so easy to catch up.
  • I blog in a few different places, for very different reasons.  Of course I blog here mostly about things related to my work.  I also Tweet (mostly work related) and Tumbl (definitely not work related).  Through those three channels people can pretty much choose how much they want to hear from me.  I’m also on Last.FM, LinkedIn, Yammer and a few other social networks if people really want to stalk me.  That said, I don’t post my photos online because I choose not to but my friends and colleagues of varying levels of Web sophistication can all follow me without any problems.
  • It’s unfortunately in enternal closed beta but I manage all my work related phone activity with Google’s Grand Central.  I have a New York based virtual number and I can manage my voicemails and missed calls much like I can manage mail with Gmail.  I decide what phones will ring and how calls will be handled and my contacts only have a single number to dial.
  • I consistently work between three computers; a speedy new iMac, an older Powerbook and an HP/Compaq (client) laptop.  I also work across the country from most of my team so sharing a drive over VPN is incredibly slow.  Now I use DropBox to create shared folders that sync up automatically on all my computers so I never have to worry about not being able to access a file on one of them.  I’ve tried a bunch of different things but this is by far the easiest and doesn’t change the way I work with files at all.
  • I’ve used notes programs for a long time and used to be tied to my various Palm Pilots, iPaqs and various PDAs specifically for this simple function.  Evernote is like a dream come true.  It works on all my computers and my iPhone, allowing me to take any kind of note, anywhere and have access to it just about anywhere.  I use it for certain kinds of account information, random ideas, recipes and just about anything else you can imagine.  All notes can be tagged and organized any way you want.

Ok, I realize most people aren’t like me.  That’s ok.  Maybe Facebook is all the social technology you need in your life.  No problem.  The reason why 2008 was significant to me is how all this information just came together so seamlessly, which is what I really think Web 2.0 was supposed to be rather than a bunch of AJAX and RSS feeds.  While much of the debate about data portability has centered around being able to move your social network profiles to another network, I think some of the real benefits of having control over your data and how you consume media has made giant strides this year.

I’m always curious to hear how other people have been affected by these kinds of technologies over the past year.  Any predictions for 2009??

(Image courtesy of Social Ecommerce)

MicroPR, MegaIdea

Not much to say here except that you should score another win for Brian Solis for his MicroPR idea (credit is also extended to Stowe Boyd and Christopher Peri).  The idea behind MicroPR is that a Twitter account is setup to enable all interested stakeholders – PR, journalists, analysts and bloggers – to communicate through a simple non-interruptive channel empowered by Twitter.

From a more high-minded standpoint, this is, as Solis says, a way to “compete against the amplifying volume and frequency of information” in our evolving world of PR.  Where this differs from a system like HARO is that there is no filter or gate keeper, only social technology powering the machine.  Time will tell if this will be subject to spamming and if there really needs to be a filter beyond the limited policing that the creators of this idea have in mind but it’s certianly worth a shot.

I think I may wait until tomorrow and query the MicroPR community to get suggestions for panelists for my SXSW panel.  I’ll be interested to see the difference in quality between that tweet and my general tweet sent out a couple weeks ago.

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