Recently in Markets Category
It seems to be the week of PR for me. I was also recently quoted in an Associated Press article picked up by Businessweek discussing MySpace and its music strategy as a way to be more profitable. The article focuses primarily on tastemakers and their importance while also discussing the new MySpace music player which allows users to queue multiple songs and have several different playlists streaming at once. The reporter asked me several questions about social media, why traditional ads don't work on social networking sites and how best MySpace can compete with Facebook. Below is an excerpt from the final article:
"Either you can see a message from a friend who's just broken up with you, or you can see a random ad. Which would you choose?" said Shiv Singh, a vice president at digital advertising firm Razorfish.
Because of this dynamic, growth is slowing for social network ad spending, which is expected to rise 10 percent this year to $1.3 billion, eMarketer estimates. Social media sites are expected to have 3.9 percent of the overall online ad market in 2013, down from 5 percent today.
MySpace certainly does have its fair share of challenges but its certainly making all the right moves in the music space. It leads in that category and with its new CEO hire will probably extend that lead too. But the more fundamental question is whether music is strategic or significant enough to fend off the Facebook onslaught. I would argue that it isn't and nor are the cosmetic changes to the MySpace experience. It needs another music like category or deeper, more powerful social interactions reaching into new (think older) audiences to compete.
Without that, it'll keep losing users to Facebook and then its only a matter of time before Facebook catches up in the ad dollars game too.
A new Razorfish group blog has just launched. Scatter/Gather is another absolutely must read group blog covering the intersection of content strategy, pop culture and human behavior. I know many of the contributors personally having worked with them over the years. They're brilliant and it shows in their contributions. Some of the more recent contributions include a summary of SXSW 2009 by Kyle Outlaw, Consorting with Content by Rachel Lovinger and To Fabricate or Not to Fabricate by Rob Stribely. It is worth mentioning that Rob was an award winner at a very special competition held in our offices today.Back in 2005 when I first launched The Workplace Blog we had no blogs at Razorfish. It is amazing how far we've come in a short period of time. We've got several company blogs now(check out the Digital Design Blog, Superhypeblog, Headlight and the Amnesia blog for a few examples) and dozens of individual ones and hundreds of employees on Twitter. Our internal social media list is probably the largest (and provocative) mailing list in the company and a day doesn't go by without a provocative conversation on it. We are embracing social in all its forms!
I certainly believe so and was quoted in an Ad Age article discussing how this has already been proven in academic circles and is just seeping into mainstream digital marketing now. There's no question that by knowing what one person's interests are, you're likely to be able to target peers in his or her circle of friends more effectively. Also, people are most influenced by their social graphs than by any other form of advertising or influence dynamic.
Two companies were discussed in the article - the first was Media6Degrees which takes a tacit approach to leveraging somebody's social graph by using cookie data to target advertising to one's peers. The other is SocialMedia.com which uses a person's explicit actions as an advertisement for others in his or her social graph. They do this within the canvas pages of applications on Facebook. Both are very interesting approaches and time will tell how significant their results are.
One thing is certain, we're just beginning to understand how we can leverage our social graphs now that they're more explicit than ever before. To reduce this to advertising on a social network I believe is missing the larger point though that too has potential. I believe every website and every web interaction is going to become social and our social graphs will be a part of all those interactions. And just because we're harnessing our social graphs, it doesn't mean that brands won't have a place in those conversations.
For a more provocative perspective, read Kristen's post over at Social Times.
HPs long running "The Computer is Personal Again" campaign has included some interesting social elements too. And those social media elements are making the brand increasingly social in a way that every brand needs to be.Last fall, they ran a contest in partnership with MTV inviting participants to submit designs for a special edition HP laptop. Called "Take Action, Make Art" the winner was rewarded with his design featuring on an HP laptop. The event drew 8,500 submissions from youth across the world with regional winners being selected by popular vote and the final winner being chosen by a panel of judges. The site drew 5 million hits.
Back in 2006, HP ran a viral campaign around the Soccer World Cup. In that effort, an anonymous site showed a man performing soccer tricks using two fingers and a paper ball on a desk. Visitors were intrigued with the tricks wondering if they were even possible. The site drew 180,000 unique visitors to the site prompting huge discussions in the blogosphere.
More recently, HP has launched a line of computers targeted at fashion conscious women. They partnered with fashion designer Vivienne Tam to design and launch these laptops. And not surprisingly, the laptops look more like digital purses than computers. By their very design (and an accompanying clothes lines that matches the laptops), these laptops will become social artifacts taking people to place that one wouldn't expect. The marketing effort around this launch harnesses social media - and because it brings the worlds of fashion and technology together it has been attracting a lot more attention in the blogosphere than one would expect.
What allows HP to successfully run these campaigns? Its the fact that their brand has become increasingly social. The tag line "The Computer is Personal Again" is inherently a social one focusing on the lives of consumers versus touting features of a specific technology. They're making their brand social and are inviting customers to participate and take ownership of it in different ways. More brands need to move in that direction.
This morning I attended the Future of Media forum over at the Times building a few blocks down from my office. With Mark Cuban, Cathie Black, Nigel Morris and others, it promised to be a provocative discussion and it certainly was. Here are some of my takeaways from the morning.
It doesn't matter whether you're old or new media, generation x, y or a baby boomer - no one has really figured out the direction that this industry is headed in. Everyone agrees that new monetization models need to appear but nobody knows what they will look like and how exactly the traditional print industry will be effected.
The ad agencies need to change as well. They're too focused on buying media and still too TV centric. A more holistic approach that also recognizes how we consume and interact with multiple forms of media in a social context and at once is needed. The work being done by ad agencies is getting commoditized as well. The only real differentiator over the long term - creativity with its broadest definition. Agencies that can attract the best talent and deliver the most creative work will win.
Social came up a few times in the discussion but mostly in the context of Facebook and YouTube not making any money. And I think that's where these speakers are missing something. Firstly, Facebook and YouTube do have revenue models and each year earn more money. Secondly, the social behavior on these platforms is so widespread that they cannot be ignored. Google maybe paying for YouTube with its search dollars but I am confident that a significant percentage of YouTube users would pay $1 a month if they had to keep using the service. That's all YouTube would need to make their service incredibly profitable. At the moment, Google doesn't need to take that step.
Another key discussion point was the importance of mobile devices and how televisions and other large screen formats will be incorporate the web into them all at the cost of desktop computers. There's no question that the Internet will keep getting more mobile but will that address the monetization issues facing a lot of media today? Probably not. It was interesting how the speakers struggled with thinking of media beyond the framework of channels through which to push content.
The Future of Media forum confirmed a few suspicions of mine. Some people are wedded to old business models and with good reason. In some cases, as with Hearst Publications this is because the business models still continue to work well. In other cases, it is because that's all they know. What's missing is that no one is focusing on how consumption behavior has changed and the importance (or lack of importance) we give to traditional media brands. They way we consume, appreciate and respect media has fundamentally altered. We recognize that change but no one is rethinking their business model based on that change. That's the problem.
Also check out this article on The Future of Media at Mediapost.
I'll be speaking at the Social Ad Summit here in New York on Monday. Its a full day invite only conference focusing on advertising and social networks. I'll be on a panel hosted by Brian Morrissey of Adweek where we'll be discussing what social networks can and are doing for marketers. It should be a provocative discussion. You can bet I'll probably touch upon our own efforts to bring the worlds of social media and online advertising together. Nobody has this figured out but things are changing quickly.
Today we made an exciting announcement to develop new social media advertising offerings in partnership with Pluck. The offering, code-named AdLife, will inject social media features like customer comments and user-generated content into digital advertisements such as banner ads or microsites - in effect, turning mainstream ads into social media opportunities distributed across the digital world.
What's so special about this? It brings together two major trends on the web - firstly consumers are more influenced by their peers than by any traditional forms of advertising. Secondly, nothing can beat the potential distribution and placement of a message via a display advertisement on the web. Putting social media elements into the ad
units makes them more interactive, personal, accessible, relevant and engaging to users. It's a natural extension of everything that has been done on the display advertising space on the web before.
At Avenue A | Razorfish, we're one of the largest buyers of online media in the world and we're partnering with Pluck, a social media technology vendor serves 2.5 billion impressions a month to bring this to life. For more information read the press release or read David Deal's blog. I'll also be discussing the announcement during my ad:tech talk this afternoon.
A friend of mine, Ashley Laing has started a new blog covering social media. In one of his first posts, he compared the "social media mindshare" of the major automakers to their market share using social bookmarking tools like Digg and Reddit. 
The analysis gets interesting when Ashley breaks down the social media mindshare into three categories bookmarking, commenting and rating. The results conflict with a recent report from Forrester on how successful the automakers are in social networking marketing.
The analysis gets interesting when Ashley breaks down the social media mindshare into three categories bookmarking, commenting and rating. The results conflict with a recent report from Forrester on how successful the automakers are in social networking marketing.
Now social media mindshare is definitely not a measure of success but using the premise that any press is good press, the analysis tells you something. I can see a lot more firms tracking activity like this in the future. Many have already begun to do so using tools from the likes of Visible Technologies, Cymfony and Buzzlogic but more are about to enter this space. Some can just start by doing the basic analysis themselves akin to taking Google Alerts of their competitors to the next level.
Last week I was quoted in an Adweek article that discussed how large Fortune 100 companies are starting to hire new kinds of leaders to help them navigate the social media space. Talking about Ford, Intel and Pepsi, the article discussed the trend towards hiring social media czars that coordinate social media efforts across the organization within and beyond the marketing departments. I believe it is just a matter of time before most organizations either have dedicated roles like this or push their employees (or specially identified employees) to go through a social media boot camp of sorts. The way consumers communicate and interact has fundamentally changed. Recognizing that I probably sound like one of those social media evangelists, I do feel that organizations need to adapt as well. Whereas some departments need to adapt just to survive (Corporate Communications and Human Resources are the most obvious ones), others don't need to change but can benefit immensely by harnessing the social influence and the wisdom of the crowds.
And not just the organizations, but the agencies need to change too. Whether it be by encouraging every employee to become experts in the social media space or by hiring or identifying social media champions from within, they do need to identify new leaders. And these leaders need to think in terms of how their agency's service offerings must evolve to keep pace with the ever evolving social web. Ask me, this is something that I worry about everyday.
Life begins to get easier when others talk about a topic that you've been going hoarse evangelizing. In an interview in Fast Company, BJ Fogg discusses the power of Social Influence Marketing and why it is so new and important.Calling it interpersonal persuasion, Fogg sees it as something potentially bigger than radio. I for one couldn't agree more. He focuses on Facebook in particular but I believe the subject extends beyond Facebook to every digital platform and device.
For reference, Fogg is an authority on persuasion and also one of the people behind Stanford's first Facebook class. Here's a key quote from the interview.
Facebook is the precursor of something I'm calling mass interpersonal persuasion. That is a new phenomenon and the most important thing to happen in the world of persuasion since the advent of the radio over 100 years ago. Radio changed the game for persuasion because it allowed a message to be broadcast to thousands and millions of people, which was previously not possible. TV was an extension of that, but I don't think it was the big leap that radio was.
Facebook takes very strong interpersonal influence dynamics -- the way people persuade each other face-to-face in small groups with peer pressure, reciprocity, flattery -- and allows those to be used on a mass scale because your social networks are built in. Friends influence friends, who influence friends, and that keeps rippling out. They can reach people very quickly for very little cost and ordinary people can set these in motion. It doesn't require a big broadcasting company or a big PR campaign. If you get the right message in the right way, you'll effect millions of people. Facebook has been the best platform for that, but I think in the future it will be commonplace.
Read the full interview over at Fast Company. I briefly met BJ Fogg last year while speaking at a conference in Denmark and found him to be insightful. He understands persuasion better than most people and its great to learn that he's looking at it in the context of social influence too.
I'll be on a panel tomorrow at OMMA Social at the Yale Club here in New York. We'll be discussing how best to mine social media behavior to build brands. Consumers are doing a lot more on the web and they're having many more conversations about brands. How can a brand take advantage of that? That's what this panel will be about. David Honig, Co-founder, Media6° will be moderating and Dr. Joseph Plummer, Adjunct Professor, Columbia School of Business, Matt Jacobs, Vice President & Group Director of Strategy and Analysis, Digitas, Melissa Davies, Research Director, Healthcare, Nielsen Online and Bill Alena, Vice President Advertising/Business Development, myYearbook.com will be on the panel with me.
Is there any such thing as a digital brand? Here at Avenue A | Razorfish, we certainly think so. Joe Crump, Vice President of Strategy and Planning explained it best when he spoke on the topic at Cannes recently.
In a nutshell, Joe contends that brands need to view the digital world differently as consumers form opinions of your brand in milliseconds. If they don't like what they see, they can shut you out forever or worse still use social influence to hurt your brand by telling their friends and the rest of the world how boring you are. Here's the slide deck.
The most digital brands are Google, Apple, YouTube, Flickr and Netflix. These brands scored the highest when we measured them against atributes like immersion (how easy it is for a consumer to become engaged with your digital home), social (whether a consumer finds your brand worth sharing), and adaptive (how well a brand responds to a consumer’s digital environment), among other qualities. Interbrand's top brands are Coca Cola, Mercedes, General Electric, Nokia and Microsoft. Download the Brand Gene Scorecard.
In a nutshell, Joe contends that brands need to view the digital world differently as consumers form opinions of your brand in milliseconds. If they don't like what they see, they can shut you out forever or worse still use social influence to hurt your brand by telling their friends and the rest of the world how boring you are. Here's the slide deck.
The most digital brands are Google, Apple, YouTube, Flickr and Netflix. These brands scored the highest when we measured them against atributes like immersion (how easy it is for a consumer to become engaged with your digital home), social (whether a consumer finds your brand worth sharing), and adaptive (how well a brand responds to a consumer’s digital environment), among other qualities. Interbrand's top brands are Coca Cola, Mercedes, General Electric, Nokia and Microsoft. Download the Brand Gene Scorecard.
While at O'Reilly Graphing Social Patterns East 2008, I heard Adam Nash of LinkedIn make the pitch for advertisers and developers. Notable was the fact that LinkedIn acheived a 361% growth rate in the last twelve months. That's more than any of the other social networks. According to Neilson Online, they had 8 million unique visitors in April 2008. See Adam's slideshare presentation for more details.
What's also interesting is that the average household income of a LinkedIn user is greater than those at WSJ.com, Forbes.com or Businessweek. Last fall, I sat on a panel at Office 2.0 with Adam Nash that was moderated by Shel Israel where we all talked about social networks in general. It was good to hear him talk about LinkedIn specifically. More at the LinkedIn Events Blog.
It is nice to see some actual Twitter numbers. According to Techcrunch, in March Twitter had 1+million users of which 200,000 were active each week. The active users send an average of 15 tweets a day. That's well above my average. And finally, there are 4 million connections between Twitter usres. You do the math to find out how many connections per user. Now I wish I knew who these actual users are. What are their demographic and psychographics?
On a loosely related note, LinkedIn told Silicon Alley Insider that its earning $75 CPMs (cost paid per thousand viewers) for advertising in the US and $50 CPMs in the U.K. Now, LinkedIn certainly has a more targeted and potentially valuable audience than Facebook and MySpace but those CPM numbers sound really high. Still its a sign that niche networks with more focused audiences matter. LinkedIn has 17 million users in comparison to Facebook's 70 million and MySpace's 200 million. CPMs on Facebook and MySpace are much lower.
On a loosely related note, LinkedIn told Silicon Alley Insider that its earning $75 CPMs (cost paid per thousand viewers) for advertising in the US and $50 CPMs in the U.K. Now, LinkedIn certainly has a more targeted and potentially valuable audience than Facebook and MySpace but those CPM numbers sound really high. Still its a sign that niche networks with more focused audiences matter. LinkedIn has 17 million users in comparison to Facebook's 70 million and MySpace's 200 million. CPMs on Facebook and MySpace are much lower.