SocialMedia Blog

While doing some research this week, I did a deep dive on the history of social media. You know, all those sites like Facebook, MySpace, YouTube, Flickr, Delicious, etc… While researching, I naturally checked the Wikipedia entry for “social media”, which the entry’s editors defined as:

“Social media are primarily Internet- and mobile-based tools for sharing and discussing information among human beings.”

I found this definition unsatisfying. Defining social media as a tool set turns the concept into a noun, when it’s really a verb. Social media isn’t a device that lets people share and discuss, it’s a process of content creation and dissemination.

A cell phone lets you discuss and share information among human beings, but companies aren’t running social media campaigns on phones. They’re doing it on blogs, social networks, and wikis.

A more accurate definition captures the process of content creation that defines social media. Social media is the shift from a “read-only” web to a “read/write” web. Websites started accepting user input. They started letting users “reprogram” them through collective actions like voting and user generated content.

Therefore, I propose the following definition:

Social media is a communications medium that relies on its audience to create, modify, or distribute the medium’s content.

This definition captures the activities we think of when we talk about social media. - “Hey, did you see all the comments on that blog post?” - “My video went viral from so many people sharing it with their friends”.

So, what’s the point? A proper definition of social media brings attention to how it works and is drastically different from traditional media. Newspaper columns never “went viral”. Advertisers never knew if a viewers’ eyes glazed over during a television commercial. Ten years ago, users never knew if they were the only ones frustrated by a defective product.

If you don’t know what social media is, you can’t market in it.

The New York Times printed an article today about Facebook’s growing Facebook Connect initiative. For those who don’t know, Facebook Connect is an API third party sites can use to access a users data from Facebook, as well as push data back to Facebook. Techcrunch has an excellent article enumerating the efforts of MySpace and Google along those lines.

The article listed no new information, but instead highlights the massive shift in the way we will interact with the web. Unlike other web applications, social networks are not simply destination for another form of media we consume (i.e. I go to Youtube for video, and the New York Times for news). They are another essential layer bringing context to the web the way hyperlinking has since 1965. Hyperlinking connects content around the context of a document. Social linking connects content around the user. The chief example has been services like Facebook’s news feed or Friendfeed, which deliver content relevant to your social connections.

We still have a ways to go.

Social networks and content networks are still separated. As a hack, we’re using ad hoc social networks, or underpowered networks to connect content through active sharing. These are the “share this” and “mybloglogs” of the world that leverage social connections around a specific task.

But what we really need is to have social linkages “baked in” to the website’s programming. Connect and Friend Connect are part of reprogramming the web for social connections. It will happen because social aspects push engagement and discovery, which will be attractive counterparts to attention driven through active interest on search engines like Google or Yahoo. Publishers understand that they need to reprogram.

Unfortunately, we in the advertising industry are behind. Advertising has been slow to reprogram for the social web. We’re still hung up on hyperlinking in a content connected world. This is the reason marketers don’t understand why just 57 percent of social net users report clicking on an ad over the past year versus 79 percent of all users (according to IDC). Although, clicks can be a misguided success metric for brand advertisers. Optimizing around clicks is a very different goal from optimizing around brand loyalty.

The problem is that we’re not respecting the context of the medium. On social networks, it’s social connections that make content relevant, not hyperlinks. And we’re only in the beginning stages of reprogramming advertising around this concept.

Online ad spend is on the decline. eMarketer has just re-adjusted their spending projections down to 8.9% growth in 2009 after earlier predicting a 14% surge. Although, that growth looks heroic when compared to lagging eCommerce expansion projections hovering around 4.1%.

The contraction in spending growth has forced the marketers to evaluate what can be pulled from their advertising portfolio. With few metrics to back value, display advertising is coming under fire. CPM rates are shrinking and publishers are concerned.

The More Things Change …

However, the growth of social media properties has made this a self fulfilling prophecy. In other words, “web 2.0″ broke web metrics. Back in 2001 top websites included AOL, Yahoo, MSN, and Lycos. To give you an idea, this is what AOL looked like circa 2001. It featured clear blocks of content resembling a magazine. You’d click, read, and move on.

Flash forward to 2008 and the top sites are Facebook, MySpace, and YouTube. These sites generate 100s of page views per session as users take quizzes or page through photo albums. MySpace is a perfect example of the impact on CPMs as it happens to also be the largest display publisher on the web.

However, despite the drastic change in inventory, the metric remains the same. But an impression on AOL circa 2001 isn’t the same as an impression on MySpace 2008. Publishers on social networking platforms realize this more than anyone. High page view apps generally command a lower CPM than low pageview apps, simply because the high number of page views dilute the revenue from those ads even if they make more money overall. CPM is only useful when you’re comparing apples to apples and we’re far from that now.

How Do We Measure Success?

If CPMs isn’t a good measure of success then what is? Metrics must be geared toward a goal. Then the format is optimized around the goal. In search advertising it’s traffic, or lead generation. In direct response it’s conversions.

But CPG (consumer packaged goods) brands don’t need more traffic and they aren’t looking for viewers to fill out lead forms. Brands like Coke and Diesel are looking to create a meaningful impression. Meaning isn’t a metric measured by just clicks or views. It’s an emotional reaction that the viewer feels when seeing or interacting with an advertisement.

The industry needs desperately toward moving toward metrics that take into account meaning. We need metrics that understand clicks and impressions can represent social interactions or signify engagement. We need what we call “performance branding”.

Some of the world’s biggest tech firms (Dell, NetApp, and Seagate) are getting into social media, according to Reuters. The reason, the article suggests, is to “harness the age-old power of the word-of-mouth recommendation” and an implicit acceptance that “television and print are not necessarily the most effective ways to reach buyers, particularly younger ones”.

Dell has a team of over 40 employees interacting with their customers through social media properties like blogs and their “IdeaStorm” voting site.

Technology firms are moving into social media because customers have in droves. Blogs and review sites have blossomed, changing a one to many conversation about their products to a many to many conversation. Companies can either let people say what they want, or dive into the conversation in a meaningful way.

I still think we’re in the very early stages of this shift. Companies are still concerned with constructing their own social media properties instead of focusing on the content. Case in point have be the slew of branded Facebook applications pushing products that only draw a few thousand users a month.

Businesses should focus on buying into the conversation, not into hosting it. More on that later.

P&G’s Ted McConnell has run large organizations, Been staff to c-level executives, holds 4 Patents, and has successfully driven Digital Marketing at P&G - which is admittedly hard to change. I know this because I read it on his LinkedIn Profile. I also know this means that when Ted speaks about marketing, it means something demonstrably different than when John Smith (who happens to live in Los Angeles) speaks about it.

Frankly, Ted McConnell has more influence over my thoughts and feelings when it comes to marketing, particularly in his latest speech covered in AdAge.

At a forum on digital media, McConnell said he isn’t sure that marketers even belong in Facebook. Specifically, “What in heaven’s name made you think you could monetize the real estate in which somebody is breaking up with their girlfriend?”. McConnell sees marketing on “social media” as invasive and with too much low quality inventory.

Old Metrics - New Medium

He’s right when you apply traditional metrics to this new media. When ad sizes were standardized and users saw roughly the same number of ads on each site, clicks and impressions helped gauge the success of campaigns against one another. However, when you buy on social media, impressions and click through rates can vary widely. Traditional media sites like Yahoo or online news sites deliver an alluring consistency, but misses the mark on what makes social media a more effective platform. Brand advertising isn’t about generating impressions or clicks. Brand advertising is about delivering a meaningful message.

It’s All About Meaning

Meaningful messages come from the people we love, hate, and admire. It’s why Nike sells shoes with player’s names on them. It’s why we value a letter from a friend. And it’s why I’m writing about something P&G’s digital guru, Ted McConnell said. When messages come from meaningful people, they influence our decisions and thinking. Focusing on impressions and clicks loses the forest for the trees.

Our social banners focus on meaningful messages. We let advertisers sponsor conversations generated by users on their terms. Advertisers only pay when users volunteer to say something about the brand to their friends. These are impressions that leave an impression and clicks that lead to conversation. That’s what social media marketing is about.

VentureBeat ran a story couple days ago talking about Facebook integrating some new social features into their ad units. The article cited a test with Facebook’s new “video ad units”, but the Facebook “video ad unit” featured in the story was actually SocialMedia’s. I featured the widget in an earlier post. DreamWorks ran the campaign with SocialMedia in an effort to get at the movie’s key demographics on social networks.

Ok, the title’s a joke and hopefully this Facebook group, ‘Join the Class Action “Beacon” Law Suit against Facebook’, is too. As some of you already know, Facebook is facing a class action lawsuit for Beacon. Not the opt-in Beacon of today, but instead the more controversial beacon hastily launched back in November (specifically Nov. 7, 2007, through Dec. 5, 2007).

Part of the plaintiff’s claims are that Facebook 1) collected transaction info of non-Facebook users 2) beacon carried out activities not covered by the site’s privacy policy. Plaintiffs want Facebook to delete all data collected through beacon (which I assume applies to the noted time period).

I can’t speak to the legal merit, other than the fact that it appears to be unrelated to Facebook as it stands today. The argument is much more nuanced than the emotional uproar over natural and perceived rights of privacy. However, it does raise some concerns in my mind for the future of the platform outside the container of Facebook, i.e. Facebook connect. Will attempts to socialize the web be met with an endless stream of disclaimers and option clauses?

Read SocialMedia’s privacy statement here.

So, we’re continuing to put the “social” in SocialMedia by holding another open bar in our Pier 38 San Francisco office. It’s a post F8 networking event. We’re handing out invites at F8, but feel free to sign up here.

Who: F8 attendees
Where: Pier 38, San Francisco
When: 7-9pm

Our office:

Last Thursday this leg of the Social Media Business School conference tour concluded. The tour brought myself and some of the SM team to San Francisco, Los Angeles, New York, and London. In each locale we shared our panelists and our own discoveries about succeeding as advertisers and developers within social networking sites. It was consistently rated as a high value event by attendees.

First a thank you to the sponsors:

While we brought our own thoughts and experiences to the table, the events couldn’t have succeeded without a list of highly qualified panelists coming from the development, advertising, and venture capital worlds. I just wanted to take a moment to share the list with everyone.

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This post is by Dave Gentzel and is in regard to the recently released “Social Banners”.

Change. We hear the word frequently. It’s utilized by politicians, elite business people, and millions of others around the world. Because with change comes the promise of something better. Something revolutionary. Something that will change the world! Or, at least something that sucks substantially less than it did before.

Since the beginning of time (currently known as May 24th, 2007), it has been SocialMedia’s passion to understand the dynamics of social applications, and specifically, how to help developers make money from them. In doing so, we’ve explored many different angles of monetization, ranging from virtual currency incentives back in June of last year, to AdSense-like ads currently, and everything in between. So, now that it’s been over a year, what have we learned?

Simply put, traditional advertising and social media environments don’t really mix.

Now, we mean no disrespect to the dancing ladies of many mortgage ads, whose killer moves have lured millions into saving money. Nor do we wish to offend Mr. Monkey of punch the monkey, as he’s undoubtedly accumulated enough angst to unleash a world of clicking furry on the internet. And Google, the king of kings. If developers were creating tech blogs or web hosting review sites, AdSense would be in heaven. But, unfortunately, “fun wall” and “hug me” keywords aren’t in huge demand.

And thus, we at SocialMedia realized something had to change.

For the past many months, we’ve been tidying up our ad serving, washing and drying our metaphorical dishes, and working away to bring you revolutionary things! So, on this day, can we proudly proclaim we’ve solved social media monetization and changed the advertising world? Not to the extent that Google has solved search monetization. But, we have made great progress. And with little doubt, we can stand up, raise our arm in jovial assertion, and confidently proclaim, “In social media, everything must be social — even the ads — and we’re going to help make it happen!”

Uh oh. Now we’ve done it. We just used “ads” and “social” in the same sentence. Sound the alarms! Unleash the privacy brigade! All ur data are belong 2 us!

Or not.

Below is a concrete example of a social banner. It’s an ad, presumably sponsorable by a company seeking to spread the word about its new-found greenness. So, without further ado, here’s a our user violating, privacy busting, all your data in a social banner, banner!

Blog Reader: “Umm…wait. Is this a trick? My data has to be in here somewhere. I know! It’s hiding under the alien! Oh, no. That’s silly. Wait! You pulled my facebook interests to stereotype me as a certain type of user, thereby populating the buttons with choices that would appeal to me, thus increasing ad CTR!”

As Winnie the Pooh would say, “Oh bother.”

Your data isn’t in there. Not at all. But, let’s say you do opt to share why you’re green with your friends by clicking on a button. This is what your friends would see, except replace this dude’s picture with yours.

Blog Reader: “OMG I’M IN THE AD! You mean when I choose to share why I’m green with my friends, my friends will actually see it?”

It’s rather difficult to share something with your friends when we can’t tell your friends the thing you wanted to share. So, yes, that’s precisely what we did.

Blog Reader: “Wait, did you just spam all my friends too?”

No, we didn’t.

We did not post a news feed item to your friends on your behalf.

We did not invite your friends to an application.

We did not email your friends.

We did not send your friends a notification.

We did not IM your friends.

We did not post a message to your friends walls.

We did not send your friends a facebook message.

We did not post anything to your profile.

Nor will we be sending your daily email reminders about your green status, and that you should update it.

In short, we did not do anything other than wait for your friend to show up in an application that uses SocialMedia’s advertising services, and then display the message you explicitly chose to share to your friends. And, we did not access your data from Facebook, other than making a call to get your 50×50 pixel picture, which you can control via facebook’s privacy controls. We also have our own opt-out mechanism.

Blog Reader: “You know, this thing seems very familiar to a lot of applications on facebook I have installed before.”

You mean the ones that did spam you and your friends in every which way and had access to every little bit of your data, and every little bit of all your friends data? Yes, I’m familiar with those.

Blog Reader: “I seem to have forgotten why I was so angry. Oh yes. BUT I’M IN AN AD!”

The fundamental reason people dislike advertising is because they think it takes advantage of them. This is especially true when individuals are inside ads. But, our goal is not to put people inside of ads as a gimmick, as gimmicks die and provide little value to anyone. Instead, we want to facilitate real conversation and interaction around certain products and brands.

We don’t get paid to put you in ads. We’re getting paid to present you with the opportunity to interact with a product socially. And, if you choose to do so and we can display this interaction to your friends, then we’ve done half our job. The other half is ensuring that the social experience was well received by you and your friends. It’s a different type of adverting that pulls from the core of the social graph in a distributed manner that is neither invasive nor annoying. Essentially, we’re building mini-apps inside your apps, available when you want them, empowering you to share and communicate with your friends wherever you go (inside of facebook, of course!).

That’s SocialMedia’s mission, and that’s how we plan to bring change to the advertising industry.