Why Brand Advertisers Will Be the Biggest Beneficiaries of Social Media and How You Can Participate

Sitting now in Michael Lazerow's session, "Why Brand Advertisers Will Be the Biggest Beneficiaries of Social Media and How You Can Participate." Lazerow is a great speaker and this will be the third conference after Graphing Social Patterns and Social Ad Summit where he has been able to retain me as an audience member. I really need to make sure I get a Buddy Media (cool blue) t-shirt from him this time :)

He starts with the slide, "Social media is here." 37% of adult internet users are using social media sites. All major social networks have opened up their platform. Brands now have cost-effective access to more than 500MM engaged users. 250 million of these users are on Facebook and MySpace alone.

There is massive distribution but still less than 1% of digital ad budgets flow into this space. Social advertising right now sucks. All the techniques that used to work in the past, don't work anymore. Clearly, we're at a junction where we need to invent what's next and how we need to get to the users. One of the problems today is that there is too much noice. Another problem is that it is not scalable. Third problem is that social advertising is not tied to results. We need to know what are the results and how to tie them. Over 100 companies are selling Facebook alone.

Social is not just about advertising. It's not about displaying banners. It's about marketing! It's about CRM and engaging conversations. It's about people.

Impressions are worthless. They are like air. There are so many impressions available today. In the social media sites, impressions are basically worthless. The whole model of buying impressions is like shouting at users and yelling at them.

The new model is Buy Engagement, Earn Loyalty. How do you turn your consumers into intense advocates of your brand? The intense adoption of , commitment to and interaction with a brand in social networks.

We've gone from shouting to listening in the new model.

Next, he is going to talk about case studies that generated results.

The most forward-thinking clients are building applications to support their marketing activities. These are not just facebook or myspace applications. Ad units are tied to a database connected to social graph. In the end these are ads, but better ads.

So why apps? Because of :

• Emotion,
  
• Engagement,
  
• Efficiency and
  
• Social Intelligence.

There are two main buckets of apps:

1. Ad applications and the second one is sponsored gift section. You can send a free airborne gift to your friends. Another example he is showing of Tropic Thunder advertising campaign by Social Media.

2. Social branded applications which are cross-platform, tied to CRM, "socialize" existing sites. These apps allow for engaging creative, scalable technology and you pay only for results.

Now is the somehat famous example of campaign Buddy Media did for FedEx. It's a very simple application but simple is sometimes the best. Results of this apps:

• 100,000 installs in 72 hrs.
• more than 300K active users in 6 days
• less than 10% uninstall rate
• global audience in more than 200 countries
  

Next is New Balance campaign which was recently covered by MIT Review. Results:

• 250K active users
• 86% of visitors came back at least once
• 57% came back 9 times or more.
• 1M+ AceBucks earned by consumers playing the game, which can be redeemed for actual shoes.
  

Facebook just launched age-gating allowing for applications to be limited to a certain age group.

Next example is the "Dude" campaign socialized by Bud Light. They worked with anthropologists to come out with the perfect photos for the application. Results from 5 week long campaign (it's still live):

• 200,000 installs in 5 weeks of marketing
• first application to successfully implement an age-gate that prohibits minors from accessing the app
• 14% average daily active user growth
• 6,000+ daily active users during campaign
• 19% of users visited every day during campaign
  

Next is the InStyle.com campaign. Results:

• 185,000 installs in 6 weeks
• 78% of user base were InStyle's target demo of females 18-35
• avg. time on application almost 7 minutes
  

Buddy Brain provides app results which are promising. Users spent 2:35 on average engaging with the last 10 branded apps. This is 75x greater than time spent with banners and 5x more than time spent watching tv ad. 85% of the users returned multiple times to Buddy Media's apps.

The single biggest mistake brands make is that they launch and expect it to be the top app.

How do you get started?

• Make goals. Track results
• Think big. Start small
• Go fast. Iterate. Iterate
• Socialize everything
  

The days of viral growth are over. The app is the new ad unit. Facebook is not the choice of platform for everyone. Trailer views are directly related to ticket sales.

As always a great session by Lazerow!

Open Social: Open for Business

Next up is the session Open Social: Open for Business. Panelists are Patrick Chanezon (Google), Paul Lindner (hi5), Max Newbould (MySpace) and Sachin Rekhi (imeem).

Open Social offers a standard for everyone. The IT rights of Open Social are owned by Open Social Foundation. Among Open Social members are hi5, imeem, bebo, ning, Oracle, Yahoo!, six apart, LinkedIn, viadeo, friendster, AOL and many more.

Open Social is 88 days old and reaches 275,000,000 users with 66 million installs of 2000+ apps developed by 20,000 developers. 10 million users use applications on Open Social.

Two client APIs : one for javascript and the other for REST.

Three areas:

• people and friends: access friends information programatically.
• activities: see what friends are doing
• persistence: provide state without a server and share data wth friends.
  

Some examples follow next.

An Open Social application has 80% code that can be readily implemented on other OS containers.

If you have a social site and want to implement OS you can use Apache Shindig which has PHP and Java version of it. Shindig makes it really easy to implement. There is a very active mailing list for it.

SocialSite by Sun: Open source project that utilizes Shindig and builds on top of it. Dave "Roller" Johnson announced it at JavaOne. Heavy potential at Enterprise.

iGoogle: 50% userbase in US!

Google Friend Connect:

• Users... more ways to do more things with my friends
• Site owners... more and engaged traffic for site.
  

MySpace Developer Platform:

• 7 months old
• Supporting REST APIs - over a year old
• #1 social network
  

Why Develop for MySpace?

• unique demographics: users you can't find elsewhere
• forthcoming metrics / analytics focused on small to medium developers
• user base is so large, you just need to get a small portion of MySpace users by popularity not virality.
  

Some Metrics of MySpace:

• 60K registered developers
• 1800+ apps
• 15 million installations (3 months)
  

MySpace Developer platform at developer.myspace.com

• IRC: irc.freenode.net #myspacedev
• Email: developerrelations at myspace.com
• Twitter: MySpaceDevTeam
• Dev Jams: range from 2-8 hours, devs bring their laptops and get first hand instruction and help from MDP team members
• Myspace offers free application press releases apply at myspace at spark.pr.com
  

MySpace Developer Platform future:

• application communication channel
• custom notifications
• invites - requesShare App
• Metrics/analytics to playing field
  

Sachin (Imeem):

• Imeem is social network focused on sharing and discovering all kinds of media.
• 24m unique users per month and third largest social network based on US traffic.
• http://imeem.com/developers
• they have made their content licenses to developers allowing them to utilize imeem's legally licensed media.
• Types of applications
• originally Adobe ActionScript 3 Flex Apps
• OpenSocial Javascript APIs (in May)
• External iFrame
• OpenSocial extensions
• immem-specific extensions that allow access to imeem media metadata, including music, videos and photos.
• Example:
• The Echo Chamber application example built on imeem.
  

My.Aol.com

• newest partner with OpenSocial
• 4 brands
• 16 locales
• 12 languages and more on the way
• 55 myAOL portals
• 2-3 new locales per month
  

My.AOL.com Gadgest

• myAOL is an AJAX basde web applciations (uses Dojo)
• moving to Google Gadgets
• this summer their platform will be completely transformed to work with Google Gadgets and Open Social.
• jennifer.consalvo at corp.aol.com
  

Social Networks for Business and Marketing Managers

I am sitting in the session "Intro to Social Networks for Business and Marketing Managers" by Ro Choy of Rock You! Folowing are my notes from the session.

Five years ago, people considered Google to be the entry point for the Internet. Now you are talking about social media and social network being the absolute entry point. Where does a teenager go first on the Internet?

What's most relevant for a teenager? Everything related to their social network.

Gone are days of SEO to position your business. Today the question is, what do I do to position my presence online within social networks.

There is an attendee from the State Department interested in reaching globally through social networks.

Another attendee from Microsoft wants to understand how to incorporate feedback mechanisms.

What are social networks used for?
Content posted on social network: "What do you do with your social networking profile?" - Active Internet Universe

• 55.1% upload photos
• 21.9% upload videos
• 74.0% message friends and communicate
• 30.8% write a blog
• 18.3% dating
• 23.3% install applications
• 9.8% promote a band
• 33.6% favorite/currently listened to music
• 3.2% do other activities
  

What are the differences between services?

• Facebook is a communication/collaboration tool which is highly structured and highly functional. Facebook is known for its primarily college-age, well educated high-income demographic although currently Facebook has many diverse demographics today. Historically it was known as an "elite" network for universities.
• MySpace is more famous for self expression. It is less structured and more customizable. You'll see millions and millions of different looking pages. MySpace has a younger, more diverse demographic. The younger you are the more time you have and therefore you can spend time on customizing your page. You can keep scrolling down for hours on some pages. Try 50 cent's page. Historically MySpace was famous for being a haven for music artists.
• LinkedIn is like a proxy for business cards. LinkedIn is used to keep business contacts in touch with each other.
  

How is Facebook used?
Four most important areas of Facebook:

• Profiles:
• used to create a profile
• communicate with friends
• share media
• install applications
• browse
• other!
• Pages
• Groups
• Events
  

Each of the above revolve around trying to communicate.

New Media today is about communication and about finding interests. Information collected by social networks like Facebook is a gold mine for advertisers.

There are 45 million people using RockYou's tools on Facebook today.

Among younger generation, email is old medium. 90% mail in his Yahoo! mail is spam whereas 0% of messages on his wall are spam. I find this hard to believe as Wall's on Facebook do generate quite a bit of spam, even though that spam is sometimes being created by your friends :).

You can make a lot of money at Facebook. Anything that works on the Internet, works on Facebook within applications.

Facebook email is probably used more by Facebook users than their own personal email account.

No one likes to read in social environments. Reading is 'death of viral.'

MySpace overtime has adopted a lot of Facebook's features. Background is really important on myspace. It took Ro a week to 'make his profile look really bad.'

Career-oriented and older demographic are the primary users of LinkedIn, which has now adopted Open Social. LinkedIn offers a somewhat different experience and allows you to make business connections, get recommended by associates and to post one's resume.

Viral marketing is key to success. He's showing a graph depicting explosive growth in Rock You's usage.

Key Takeaways for Viral Growth:
- New User focus: Without it, viral isn't possible.
- Simplicity
- Novelty
- Universal Applicability

When you communicate with new users, focus on actionable items because it's the action that's viral. Don't make your users fill out a form.

Anti-viral is thinking. Deliver something with immediate value proposition.

Simplicity is also co-related to virality. Things that take 10 seconds are more viral than things that take 30 seconds. Things that take 1.5 minutes aren't viral at all.

In the viral space, people who know viral get big really quickly. To win virally, you must be novel. There are a lot of free gifting applications. Even small ideas that make an existing application novel can hit big, but there must be something novel about about it.

Games can be very specific or very broad. Casual games do really well on social networks.

RockYou's competitors are experts in viral marketing who look for immediate exposure. Don't market until there's a base established for viral methods.

Good viral methodologies generate 2 new installs per user. Even viral rate of 1.001 is healthy.

Building Viral Engagement: (chart of circles with inner to outer most: user -> direct friends -> indirect friends -> interested parties)
1. New users => build clean flows
-- New users are absolutely key to viral engagement (vs returning user).
-- focus on linear, one-action flows to maximize activation for new users
-- forget registration.
2. Direct friends => deliver clear value proposition
-- provide clear value proposition to new user for inviting friend network (Likeness)
- ensure invitation is first/second step new user flow to maximize viral value of user (superlatives vs superatives)
3. Indirect friends => focus on messaging
-- focus on on messaging to invite/notification receivers to drive more friends invites
-- deliver increasing AND simply understood value to app w/ ever friend invited (Zombies)
4. Interested Parties => allow universal use
-- enable simple tols (comments, ratings, answers) that allow interaction w/o requiring full engagement w/ application (My questions).
-- Old school discussion boards are awesome
-- If you depend on creativity for something viral, you're dead.
-- for e.g. for movie review, have pre-created choices for users (I love this, thumbs up OR I hate this, thumbs down)
--- Click rate for this kind of engagement is really high.

Remember, activities drive awareness. Facebook will reduce an application's ability if your emails don't get clicked on. Your bandwidth on platform will decrease.

Marketing opportunities with social applications
How do you market something successfully in social space? Successful marketing for social media should focus on social applications.

1. Application content integration
-- Integrating brand or product as part of user experience (e.g. Indiana Jones character)
-- Example: likeness quiz, virtual gifts, greeting cards, virtual actions etc.
-- build applications that take into account existing user behavior.
2. Sponsorships or branding of applications
-- app takeover or skinning w/ possible promotion
-- Example: Skin application w/ sweepstakes or cntest
3. Custom social application building and distribution
-- Build a social app for advertiser and/or distribute it through social network specific ad networks
-- Example: build, viraal tune, launch and seed an app recruiting users from RockYou's leading ad network jumpstarting viral spread of app.
4. Rich Media.

For Sweeney Todd campaign, there was a 0.01% CTR for banner alone but when they did integration with application the CTR jumped to 0.65% (65x better).

RockYou created a SuperWall card for Step Brothers and provided that as an example for application integration. They featured two custom designed greeting cards on SuperWall. Greeting Cards were placed in top placement, pre-selected and expanded upon roll-over. The card appeared in user's profile. The results were 8M impressions on application pages. 6M cards sent and immeasurable viral impressions through newsfeed events and in-profile prominenece. These were traditional CPM based campaigns.

Women tend to be more active in sharing content.

Application Sponsorship:
RockYou worked with Sony and Resident Evil to create skins or brand applications. ResidentEvil campaign was expecting 10K registrations for contest but they achieved a million registrations for the contest.

CTR rate:
Social networks: 0.13%
Web 0.20%
Avg RY ad: 0.28%
Best RY campaign: 30%!!!!

Some rules of thumb from Context Optional for developing and promoting applications for social networks.

Application development and Promotion:
- 3rd party ad networks on Facebook can radically accelerate Facebook application adoption
-- RockYou
-- SocialMedia
-- Lookery

- From RockYou's experiecne, advertisers can generate between 1000 to 20,000 installs a day
- CPI can be as much as $0.60.
- Consider potential throughput of the ad network
- quality of ads => requires constant tuning to maintain high CTR
- Ad copy => make it actionable and presonally identifiable
- viral tuning => work with a team that knows engagement / growth
- successful applications require ongoing investment.

Stylefeeder:
Largest fashion/shopping application on Facebook with over 1 million installs. They are getting multi-dollar CPMs. Their goal is to drive traffic to existing website.

Rich Media on Social Applications can provide 2x interaction rate and 2x activity rate (e.g. campaign for Ruins movie)

Monetization:
Online advertising is growing but social advertising is growing 3x faster. CAGR in global online media advertising is expected to reach $61 billion by 2010.

Context is the key to social application monetization:
Search is not viral and has high context and low virality. With social networks you have low context and high virality. With social applications, you can get high context and high virality: Apps add context to social networks and social apps are viral.

1. Application cross-promotion:
- CPI = $0.30 - $0.50
- selected customers: Acuvue, IAC, Microsoft, NBC, ESPN, Coca Cola, Expedia

2. Agency sourced branded advertising
- CPM = $2.00 to $10. (their avg CPM from brand agencies is $5)
- customers: Sony, AT&T, Warner Brothers

3. Direct response and lead generation
- CPA

4. Virtual Goods, Micro-transactions and subscription

Agency sourced branded advertising campaigns can range from $30K to $150K spend.

The session has ended. We ran over about 10 minutes but it was worth it.

Graphing Social Patterns East - Leaving for DC

Graphing Social Patterns is the premier conference on the topic of social networking and social graphs. The conference is being held in Washington DC.

In a few moments I will be leaving to attend Graphing Social Patterns East. The drive is about four hours so not too bad. I always enjoy driving this route as my first driving route in the US was from German Town, MD to New York.

I wanted to go to Graphing Social Patterns West as well but couldn't so I am very excited to attend the east one. I plan to learn about the inner workings of the platforms and engage in networking opportunities at the conference.

The conference is being held at Hyatt Regency Crystal City which is where I will be staying.

The conference explores social networks from two interesting perspectives:

Business & Marketing Strategy:

* LinkedIn: The Business Social Network
* MySpace and Facebook Social Advertising
* Apps & Widgets: The New New Ad Units
* Social Advertising & "App"-vertising
* 10M in 10 Weeks: What Stanford Learned Building Facebook Apps
* Social Networks & the NEED for FEEDS
* Social Networks for Mobile Devices

App Development & Technical Strategy:

* Google OpenSocial + AppEngine Technical Overview
* Poke Back: Facebook Platform Team Live Chat
* Bring Your Own Platform (BYOP)
* Social Games for Social Platforms
* Geek Metrics: App Analytics for Distribution, Engagement, & Monetization
* OpenSocial: Open for Business
* VIRAL vs STICKY: Designing Social Apps for Reach & Retention
* Show Me the Money: App Monetization

The keynotes at the Graphing Social Patterns conference include:

• LinkedIn: The Business Social Network by Adam Nash
• MySpace Business & Marketing Overview
• Facebook Business & Marketing Solutions by Kent Schoen
• Google OpenSocial + AppEngine Technical Overview by Patrick Chanezon and Paul McDonald
• Technical Overview: The MySpace Developer Platform (MDP) by Allen Hurff
• Poke Back: Facebook Live and Interactive by Benjamin Ling, Dave Morin, Ruchi Sanghvi, Josh Elman and Dave McClure.
  

It should be a lot of fun to see old friends and make new ones. If you are attending, ping me via this blog or by email (on the top right hand side) and let's meet up for a drink or two ;)

The Business of Facebook Applications - Reid Hoffman

Reid Hoffman, Chairman and President, Products at LinkedIn, talks in this business and marketing keynote, presented at Graphing Social Patterns 2007, about the Business of Facebook Applications.



He addresses five themes:

Social Networks and Platforms
What makes social networks, platforms? What sets Web 2.0 social networks apart? Is Social Networking a feature, an application, or a platform? He talks about Friendster being referred to as Match.com but with a friends list added on top of it and for that reason it was considered a feature. He credits MySpace allowing the ability to "hack in 'widgets'" as the start of social network as a platform. He clarifies that according to his understanding it wasn't a 'deliberate design decision' by MySpace but rather an 'artifact of their platform' that didn't turn off or filter javascripts. This by accident lead to a 'robust ecosystem' through which users were including rich media etc. Ning then created a 'different conception of social networking as a platform,' allowing users to build any kind of social network. Facebook then 'launched the first platform on a large social graph.' Facebook applications could then rely upon the social graph in order to build.

He believes that social networks are platforms and has invested in several different social networks.

What makes a social network interesting? What creates a robust and interesting environment?
"The key thing is that a social network takes patterns of important relationships we have in real life and then pus them on the web in ways that empowers important applications." People still care more about their offline world so if you can "import the relationships that matter to people here and make them available to [either] generate thin or light app yourselves which most of these networks do or provide them as a platform for other people, it actually enables applications that can really change people's lives"

The key elements 'from a sociological perspective' of Facebook's platforms are "extending functions of profiles, communications and messaging and the newsfeed." He goes on to say that Facebook's newsfeed is an example of many to many messaging. Then, you can 'integrate general web applications with data, relationships and communications'

He then goes on to contrast and compare several social networks including Facebook, MySpace and Ning. Facebook offered developers a massive social graph that allows them to acquire customers, leverage key relationships and leverage existing communication scheme. With Ning, although you can build your own social network feature wise, you are also left to build your own user base. For developers the key thing was that if they built something Facebook could get them in front of millions of potential customers. An example of leveraging existing communication scheme is that most Facebook apps have spread through messaging or emails or through newsfeed.

The remaining four themes of the video:

- Social Networks and Professional Networks
- One graph to rule them all?
- Facebook Platform: some of the opportunities enabled
- What does the social platform mean for the evolution of the web?

Also see:
- Social networking is a feature, not a destination

The Strategy Chronicles #1

This is the first edition of a new series of blog posts that I will try to write regularly (no hardcore promises though). I will be calling it, for the lack of better imagination and because it's 3:09 in the morning, The Strategy Chronicles, or TSC. The primary purpose of this series is to help me keep track of what's happening each week. So whether you liked it or hated it, please let me know. So, let's get started.

Microsoft makes Yahoo! investors very unhappy: At least some of the Yahoo! investors are now worried about an increased Microsoft bid to acquire Yahoo!. The primary reason being that there are several Yahoo! investors who are also Microsoft investors. Separately, several share holders are blasting Yahoo! for rejecting Microsoft's bid.

Yahoo! losing another ground: Opera has now decided to dump Yahoo! in favor of Google for its mobile browser.
- "every month, Opera Mini users browse more than 1.7 billion pages"
- most of the page views were related to search. Yahoo! has a serious relevancy problem in addition to the problem of effectively monetizing its search traffic. I can see how easy it was for Opera decision makers to ditch Yahoo! in favor of Google.
- Google has been Opera's choice for desktop browser for 7 years.

Even more troubles for Yahoo!: Remember the time when Yahoo! handed over the information about its Chinese users to the authorities? Well, that issue continues to haunt Yahoo! as yet another lawsuit was filed against the company by its Chinese dissidents. Yahoo!'s submitted evidence lead to one year imprisonment of a plaintiff.

Finally!: Meanwhile, Google has finally re-launched JotSpot as Google Sites. Exactly how that will hurt Microsoft's similar initiatives is yet to be seen, however the outlook according to the media, doesn't look so promising as far as Microsoft is concerned.

Clean console!: Consumerist reports about an incident where a passionate Xbox user lost his beloved collection of autographs and custom artwork drawn on the console by prominent members of the gaming community. Perhaps, the Microsoft employee responsible for this thought the collectible autographs were making the Xbox unit look dirty.

Bill Gates now LinkedIn!: Facebook's loss is LinkedIn's gain. Bill Gates recently quit Facebook despite Microsoft's recent investment in the social networking powerhouse, and decided to start a profile on LinkedIn. Once his profile was created, Gates then asked a question that received more than 1,000 answers. Interestingly enough the same day I noticed the featured question, Facebook changed their site's theme.

Sliding the Social way!: Slide, the media and gadget distribution powerhouse announced recently that it will create new applications to for MySpace users using MySpace Developer Platform. This could increase Slide.com's profile and reach significantly. Earlier this year, Slide announced that it raised $50 million in its latest funding round.