In May of this year, Representatives Edward Markley (D-MA) and Joe Barton (R-TX) introduced bipartisan legislation that would amend the long-standing Children’s Online Privacy Protection Act of 1998 (COPPA). This was followed shortly by Sen. John D. Rockefeller’s (D-WV) presentation of the Do Not Track Online Act of 2011. These “Do Not Track” pieces of legislation mark a ramp up in Congress’s efforts to strengthen privacy protection on the web, particularly as it influences young children. The impact for a myriad of social networks (Facebook) and search platforms (Google) could be significant, particularly as these companies seek to monetize the information they gather from users.

Consumer Reports announced in May that close to 7.5 million children aged 12 or younger are on Facebook. This is in direct confrontation with COPPA, which effectively prevents social networks from signing up kids and Facebook’s own policy that members be at least 13 years old to open an account. The potential benefits of Facebook accessing young members are huge – they may be more inclined to stick with the platform over time given early adoption; be more open to sharing information, as they have been conditioned to do so at an early age; and ads can be further personalized as you share and “like” more sites and products via the site. Much of this translates into more revenue for Facebook and further dominance as the premier social network.

Many parents who let their kids set-up Facebook accounts or other online profiles actively monitor their use. I have several teen and pre-teen cousins on Facebook and their parents are often their “friends” on the site and frequently check-in and limit their usage. While this is a good check, it still cannot fully protect against virus infections, identity theft and online bullying. Facebook has also taken important steps to protect young users of its site. It has actively engaged in measures to report bullying and is a partner in the Amber alert system. Still, these measures do not address the root of privacy issues that are concerning many parents and now Congress.

The Do Not Track Kids bill extends COPPA in several interesting ways. Most significantly, advertisers would be prohibited from targeting kids online. Data collection would also be limited and an “eraser button” would be created that would allow young users to eliminate damaging information online. Companies would have to explain up front the type of information they are collecting from young users and parental consent would have to be gathered in advance of this data collection.

As the 2012 election year approaches, it will be worth watching the progress of these bills through Congress, as well as the efforts of Facebook and other companies to influence the path of the legislation. Millions of advertising dollars are at stake, as well as the safety and privacy of countless young children.

When Jane Smith walks into her neighborhood boutique to buy a sweater, how does the shop capture the information about her purchase?  In traditional customer relationship management (CRM), Jane’s sweater purchase is recorded at checkout into a database along with her credit card information.  To link up Jane’s information to an email address, the store associate will often ask Jane for her email.  With the advent of the smart phone and as adoption of check-in services like foursquare and Facebook becomes more and more mainstream, there is significant opportunity for retailers to take advantage of the changing behavior of its customers.

 This year, foursquare launched a “Merchant Dashboard,” allowing businesses to access data and analytics about the type of customers checking in.  This tool allows merchants to see how many people are checking in, when they check in, gender breakdowns, new vs. repeat check-ins, and broadcasts to social networks.  This represents a huge step for merchants in thinking about how to drive traffic into its physical stores.  While group-buying sites like Groupon and LivingSocial have proven successful in driving traffic and increasing awareness for retailers, there is debate as to how representative the users of such sites are in terms of the customer profile for that retailer. Check-in services seem to be less distortive and present a more robust way for retailers to segment out their customer base based on behavior.  As check-ins become more mainstream, the potential for targeted segmentation is huge:

-       Loyalty: Ability to create robust customer loyalty programs based on frequency of patronage.  Able to micro-segment and offer individualized rewards at a much cheaper cost than traditional loyalty programs

-       Brand Awareness: Sharing of check-ins on social media sites like Twitter or Facebook is invaluable – ability to reach a more targeted audience via a medium (your friends/word-of-mouth) that is arguably more powerful than traditional advertising

-       Promotion Driving Traffic: Ability to promote as needed to drive traffic on an individual level – no need to dilute the brand by promoting to entire customer base

 While this is a great first step, what is lacking still is a way to tie check-ins with actual purchase behavior.  If purchase behavior integration can be achieved, retailers would have the ability to further deepen their segmentation.  The other main challenge will be how to get large national or international brands to adopt the same platform, since customers are likely to use only one platform for all their check-ins.  

With over 800 million active users, Facebook has become a household name across the globe but will it become a one-stop shopping portal for users, replacing popular sites Amazon, iTunes, and Seamless web?

Facebook first entered the online commerce space in February of 2007 with the launch of their virtual gift shop. Users loaded up on Facebook credits and purchased virtual gifts such as images of balloons and teddy bears to be posted on other user’s walls, typically for $1.00 each , with the opportunity to add a personalized message to each gift. Facebook gifts gained traction and generated $40 million dollars in sales in 2008. While this may appear to be a successful product, Facebook decided to shut down their virtual gift site in 2010 to focus on other priorities.

Since then, Facebook has pursued other commerce avenues – such as Payvment or the ability to purchase items from store’s Facebook pages. None of these, however, have taken off.

“Why is this?” one may ask. Well, Facebook doesn’t make shopping any easier, it simply provides another click-through step in the process of online shopping. Because of this, there has been virtually no traction of users shopping on Facebook for things other than virtual goods.

<>Facebook’s core asset is its open graph – the map of connections that Facebook users create with friends and online content. Facebook has started sharing this data with outside applications – letting other vendors track Facebook users’ activity or leverage an individual’s social network. This has further delayed Facebook’s entry into e-commerce as it provides even less incentive for users to shop through Facebook rather than directly with stores.

On October 19, 2011, Facebook entered into a digital payment partnership with eBay which will allow third party developers to incorporate Facebook’s open graph when building applications on eBay’s X.commerce platform. This formalized channel which allows all application developers to leverage Facebook’s key asset is further evidence that Facebook is not prioritizing driving users to purchase items through Facebook’s interface.

I believe that Facebook has begun to steer away from online commerce because they recognize that their primary purpose is to be a social outlet for users. It is a great source of brand building for merchants — a way to share information, provide exclusive offers and access, and increase awareness but has not served as a strong driver of traffic for online commerce. While Facebook has launched a few half-hearted efforts at increasing e-commerce on their site, I think it will be a longtime before we see any real traction on this front.

You have a distinct online identity. An identity built through your interactions with Facebook, Twitter, Google, LinkedIn, and others. This identity knows more about you than your parents do. Your parents know a few of your friends, Facebook knows them all. Your parents know your girlfriend, Google knows everything about her. Your parents might know you went to Vegas last weekend, but Twitter knows everything you did while you were there. (Thank your friends for uploading those pictures…) Your parents know what companies you’ve worked for, LinkedIn knows every colleague you interacted with while in these roles. This might be a little scary to some, but the brave see the potential in this electronic identity to open up a world completely personalized to their needs.

In today’s world, this identity lives entirely online. You open your computer and upload status updates, pictures, and information about yourself to share with friends. When the computer closes or the smartphone is turned off, you leave this identity behind and head into the physical world. But what if this personal identity could be extended into the physical world as well? Let’s think about what a day would look like in this futuristic new world.

Your morning starts with your alarm clock (synced with your Google Calendar) waking you up an hour before your first appointment. As you stumble into the bathroom to take your morning shower, a sequence of events is triggered. First, your coffee pot checks the time of your last Facebook activity from the night before and realizes you only got four hours of sleep. It automatically starts brewing a double dose of dark roast to get you through a rough day. At the same time, a touch screen monitor in the shower loads your schedule, email, and a list of important items due today while simultaneously setting the water temperature to your personal preference of 112 degrees. As you get through your shower, the thermostat, aware that you like the bathroom a toasty 80 degrees when you exit the shower, raises the temperature. Your car, realizing you’ve got to be at work in an hour, begins checking the traffic and construction reports on your route to work. It notices a detour in your route and sends you an email, which you get in the shower, warning you to leave early. As you exit the shower, your closet’s built in weather center checks the weather and learns it is supposed to be a chilly forty degrees today. It automatically rotates the clothing to bring your favorite cold weather attire to the front, keeping in mind your preference for gray suits for client meetings like the one you have today. As you zip your coat, grab your coffee, and head for the car, the smart kitchen checks its inventory versus your standard lineup and automatically places orders for bread and cereal.

Not bad for an hour’s worth of work. And the best part is that this is just a start. As your personal identity continues to grow and more devices gain access to the cloud, there is no limit to the potential customization of the world around us. Imagine every device you interact with being tied to your personal identity and fully customizable to your preferences. Every couch has adjustable lumbar specific to the user. Every TV adjusts volume, brightness, contrast, and content to the user. Windows and fans in every room automatically open and turn on to suit the particular user. Every vehicle adjusts handling characteristics to fit the specific driver. Every restaurant adjusts the menu to fit your culinary preferences. The possibilities are truly endless. So in the end, maybe it’s a good thing that your personal identity is becoming so detailed. I would certainly trust it more than my parents to pick out my clothing for the day.

Tweens –defined here as preadolescent girls between 10-14 years old–have much to teach us about the future of social media.  They are all over the web.  Impressionable, they pick up on the latest trends, and—most exciting to marketers—have access to their parents’ (and even their own) credit cards.  They have their common loves: Biebs, Mary Kate and Ashley, Glee.  More importantly, tweens are quick to evangelize about brands and products they lust after, and they listen to each other.  Brands targeting this segment would be wise to tap into the most influential among them – the tween “girlcrushes” –­ to take their brands to the next level.  While the law prohibits kids under 13 from owning a Facebook or YouTube account, many have found ways around this and are active users.

A few examples of how tweens are using social media in novel ways, which I encountered during my summer at Birchbox:

1)      Evangelical “hauls”: One of the most remarkable phenomena I encountered at Birchbox was Miss Glammorazzi, a 21-year-old video blogger who would make a “haul” video of herself introducing viewers the products she received each month in her Birchbox. Within days, the video would reach 100,000 views—a number that many marketers would be willing to pay tens of thousands of dollars for through traditional channels.  Miss Glammorazzi was a popular “girlcrush” with tweens, perhaps because of her obvious influence: the tweens noticed that view number too, and inferred that this effusive fashion maven was a trendsetter not to be ignored.

2)      Social shopping:  Tweens love to share their purchase decisions with their friends and ask questions on their Facebook walls about music, clothes, cosmetics — effectively “crowd-sourcing” advice from friends.   The integration of smashbox.com (a prestige cosmetics line) and Facebook is a portent of things to come.  This is a nascent and still-tiny e-commerce market, but given the fervor it is attracting in the tween market, one can expect it to become much more significant in coming years.

3)      Gaming and contests: Tweens love entering contests and playing games.  Sorority Life, a Facebook-based game in which girls go to the mall, find a boyfriend, but also pursue “academic goals”, has nearly 1M active monthly users. Additionally, one of the most successful ways to drive social media engagement and Facebook “likes” is via contests (“’Like’” us and vote to win!”) By providing opportunities for tweens to live out real-life fantasies through social media and compete in thrilling games of chance (toward which, perhaps, they have not yet grown jaded), games and contests amplify the experience of being social online, and draw added attention to brands. Marketers targeting this segment should consider these kinds of games as they look for ways to capture tweens’ attention in a crowded space.

Tweens are at an age where “growing up” can’t happen quickly enough, and they are constantly scouring their social environment for cues on how to assimilate to an exciting, glamorous, highly socialized teen and twenty-something world. An analysis of how this socialization process plays out on Facebook would not be complete without considering role models. Taylor Swift, Miley Cyrus, Justin Bieber, and the cast of Glee all provide hundreds of cues each week on what to wear, how to talk, and how to think. While these cues are usually first acquired through traditional channels, they are dissected and disseminated through social media, where the most influential tweens on the web build on their impressions of “what Biebs said about X” or “what Selena Gomez wore to Y” to establish trends that catch on with a speed and ferocity that often surprises even the most fashion-sensitive marketers. Accessing these role models, and then gaining influence over the tween brokers who bring their clothes, makeup, and personalities to market on Facebook, are crucial to any successful tween-focused social media strategy.