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!

Seth MacFarlane and Google Strike a Deal

Five minutes after entering my office after a week long trip to CA, I learned that Seth MacFarlane, the creator of Family Guy, and Google have struck a deal. Under the deal, Seth MacFarlane will create 50 two-minute episodes exclusively for the web. There will be a number of new characters introduced in this new web-only series which will be distributed through the AdSense network. There will be a four way revenue share.

Source(s):
- Google and Creator of 'Family Guy' strike a deal
- The Family Guy Strikes Deal with Google

Viral Marketing and Advertising Strategies for Social Networks - Presentation

Earlier, I blogged about the Graphing Social Patterns session, Viral Marketing & Advertising Strategies for Social Networks - Presentation.

Kevin Barenblat, co-founder of Context Optional uploaded the slides to slideshare.net (Thanks Kevin!). I have embedded them below.

“one of the best [presentations] i've ever seen on this topic”- Dave McClure (500 Hats)

I agree with Dave as it was certainly one of the best and most thought provoking sessions at the conference and I am not alone in thinking that. I heard rave reviews from attendees after Kevin finished his session.

Following presentation is by Jeff Ragovin, VP of Sales for Buddy Media.

Buddy Media Delivers Advertising on Engaging Social Media Applications

A friend of mine recently introduced me to Buddy Media, creator of several popular social networking applications and games including AceBucks, Mental Blocks, Sudoku, Pirates vs. Ninjas, Vampires vs. Werewolves, Cops vs. Robbers, Air Hockey and Pub Darts.

Launched in 2007 by Michael Lazerow, Kass Lazerow and Aryeh Goldsmith, Buddy Media also offers application development services for social networking websites. At the time of writing this post, Buddy Media claims that they reach more than 8 million Internet users every month.

Buddy Media also claims to "build an application and drive 1 million users in just a few months" for its clients.

That's a very ambitious claim to offer publicly.

“Buddy Media approves each developer to certify that only developers working on engaging applications can leverage Buddy Media’s sales engine. Our main focus at Buddy Media is not to aggregate the most amount of inventory in the social media space. Frankly, there’s already too much social media inventory. Add together the traffic from MySpace, Facebook, Bebo and the other social networks, social applications, blogs and more, and you get to trillions of impressions a month! We’re only focused on helping developers of quality applications make more money from their apps with access to higher-paying advertisers who value targeted, premium reach.” - Source: Buddy Media Blog

However, the applications created by Buddy Media was not the reason my friend introduced it to me. Instead the reason was Buddy Media's new social media ad network called Buddy Media Advertising Network.

Targeting: Buddy Media allows advertisers to target their ads by age, sex and location. In future more targeting options are expected to be available according to BM website.

Pricing: Buddy Media offers several pricing models including CPC (clicks), CPI (installs) and CPM (impressions). Performance based pricing model is available to a select few marketers.

Creative: Advertisers can either use their existing creative or create new ones using Buddy Media's provided system.

Where ads are shown?: Advertising campaigns delivered through Buddy Media's advertising network reach applications created by an "invitation only" developer network and deployed on various social networking sites including Facebook. Advertisers are offered "visibility into the apps" on which their ads are displayed.

Clients: Buddy Media's clients include Microsoft, FedEx, Anheuser-Busch, Priceline, Readers Digest, Time Inc. and Huffington Post.

Funding: Buddy Media recently raised $6.5 million in series B financing round led by Softbank Capital, European Founders Fund and GreyCroft Partners. Earlier Buddy Media had raised $1.5 million.

Overall Buddy Media seems to promise high ROI and quality exposure for campaigns by carefully choosing developers that create engaging social media applications.

While Buddy Media may be able to create great exposure for brand advertising, I remain skeptical on the short-term immediate conversion part. After a while it is very easy for users to become immune to ads that are embedded in widget or applications.

How many times have you clicked on an ad within your favorite Instant Messenger or similar application that shows ads while you chat?

Userplane, the company that offers free chat solutions based on an advertising-revenue sharing model, embeds ads in their chat client. Yet I can bet that users who use Userplane's application remain involved in their conversation and end up becoming immune to advertising that is present.

The world of widget-embedded advertising is about to get very crowded with Slide and Rock You, among others, working on similar advertising networks.

From a user point of view there is one interesting thing going on here. Widget companies are getting access to the user's data based on the application they developed and then creating new business models and applications based on the information that's passed back from social networking websites.

Only time will tell where Buddy Media can take their current targeting offerings.

In an Absolut World: Creative Advertising

In an Absolut World - Creative Adversiting by TBWA

Email Marketing ROI

Email marketing is taking online marketers by storm thanks to the incredible ROI it promises.

“ ... email [marketing] ROI will hit $45.65 for every dollar spent in 2008, more than twice the ROI of other mediums including search and display.” - Datran Media's second annual survey of online marketing professionals (conducted Dec. 2007)

Of all the respondents to the survery:

• 55 percent expect ROI from email marketing to be higher "than any other [marketing] channel
• 67 percent state "email has helped boost sales through other channels."
• 80 percent indicate "email was the strongest performing media buy ahead of search (70.6%) and display (37.6%)."
• Among the lowest ROI generators were mobile (1.2%), RSS (2.4%), Cable (7.1%), Broadcast (10.6%) and Print (16.5%).
• 80 percent send targeted email campaigns
• 82.4 percent expect to increase use of email marketing in 2008 compared to 2007
• 55.3 percent expect email marketing ROI to be higher than other channels in 2008
• 25.9 percent expect email ROI to be 'roughly equal to other channels'
• 71.8 percent think that search complements the email marketing channel followed by display advertising (51.8%), direct (41.2%) mobile (24.7%), broadcast (17.6%) and cable (10.6%)
• 80 percent plan to employ email to send newsletters followed by 78.8% to drive sales, 70.6% to enhance customer relationships, 67.1% to increase upsell or cross sell opportunities, 64.7% to increase brand awareness and/or lift, 50.6% to send transactional messages and 52.9% to send messages to reactive dormant customers.
• 63.5 percent plan on integrating marketing messages in transactional emails in 2008.
• 69.4 percent currently use and/or plan on using an outside vendor for email marketing.
• Of the companies that currently send targeted email campaigns, 63.5% target based on demographics and/or geography, 56.5% target based on actions, 4.12% target based on psychographics or interests and 20% don't send targeted campaigns.
• 90 companies participated in the survey including OgilvyOne Worldwide, Avenue A/Razorfish and Stamps.com
  

Email marketing serves as an excellent way to keep in touch with customers in industries where otherwise the contact would only happen once or twice a year.

Internet Trends

A Morgan Stanley team consisting of "Queen of the Net" Mary Meeker, David Joseph and Anand Thaker recently did a presenation on Internet Trends.

The presentation focused on the topics of usage patterns, social networking, widgetization and componentization, measurability and transparency, customer satisfaction, video, monetization, mobile, emerging markets and last but not least, recession.

According to the presentation, consumer IP traffic will surpass business IP traffic in 2008 as consumers use more than 5,000,000 TB of data per month. Since 2005E, there has been a 58% CAGR in IP traffic.

Just this week, AT&T revealed that without significant investment, the Internet's infrastructure will reach it's capacity in 2010. No wonder, some are calling it the d-day of the Internet. Jim Cicconi, SEVP of External and Legislative affairs for AT&T warned:

"The surge in online content is at the center of the most dramatic changes affecting the Internet today. In three years' time, 20 typical households will generate more traffic than the entire Internet today."

If that's hard to believe, keep in mind that Apple recently announced that it will start offering DVDs throught iTunes on their release date.

Consumer Information Technology (CIT) Advancing Faster than Enterprise

No surprise here, really, thanks to Web 2.0 and media intensive applications.

Google's ex CIO, Douglas Merrill, who has since then left Google to join EMI Digital as President, is quoted in the presentation:

"Fifteen years ago, enterprise technology was higher-quality than consumer technology. That's not true anymore. It used to be that you used enterprise technology because you wanted uptime, security and speed. None of those things are as good in enterprise software anymore (as they are in some consumer software). The biggest thing to ask is, 'When consumer software is useful, how can I use it to get costs out of my environment?'"

Douglas originally gave this quote in a WSJ interview while answering the question, "What's driving the "consumerization" of tech in the enterprise, where companies are borrowing tech ideas from the consumer Internet?"

Massive Transition in Available Ad Units
This part of the presentation shows massive decline in the number of page views Yahoo! used to enjoy since 2002. At the same time the Alexa graph comparing Yahoo!'s page views to Google, Facebook and Youtube shows interesting patterns. Specifically YouTube's rapid rise to become the #2 destination on the Internet. This slide also touches on an important point that Supply of ad units is now greater than demand. An important thing to note is that Alexa changed their ranking algorithm recently. The latest Alexa graph for these sites doesn't go back to 2002, however it tells a slightly different story:

- Page views wise, Yahoo! is still number 1, followed by YouTube, Google and Facebook.
- Reach wise, Google is number 1 followed by Yahoo!

Social Networking Characteristics - Fast Growth and Low Penetration

Next slide has a graph from from comScore's "Digital World: State Of The Internet" report which highlights growth in Emerging Internet Markets. The graph shows very fast growth for social networking sites but at the cost of low penetration. In contrast, the online search sector showed very high penetration but low levels of growth. Online personals, retail movies and Retail music industries depicted significant decrease in growth. Multimedia, on the other hand, shows decent growth but much higher penetration than social networks. Visitors growth to community focused sites that aren't social networks also decreased although these sites still have a strong penetration (even stronger than social networks).

Some other interesting findings from the comScore report that weren't in the Morgan Stanley presentation:

• more than 300 million Internet users from Asia Pacific region, 15 years of age or older, were online in January 2008. This shows an increase of 14 percent over 2007 numbers (compare this to 10.4% increase in worldwide users). According to comScore, this increase "makes Asia Pacific the largest of the five worldwide regions"
• Latin America and Middle East-Africa are two other regions that have also experienced "above average audience growth" since 2007. Latin America experienced 16.6% growth where Middle East-Africa experienced 20.2% growth, the highest percentage of growth among five worldwide regions.
• US online audience now only represents 21% of worldwide Internet users.
• Visits to social networking sites by global Internet users increased 34%
• approximately 2 out of every 3 Internet users now visit a social network site with total visitors to social networking sites exceeding 530 million
• MySpace and Facebook both now attract more than 100 million visitors per month
• YouTube leads the way in online entertainment. Video is now the "dominant online entertainment format." More than 250 million visitors visited YouTube in January alone.
  

Social Networking Sites Gaining Significant Share of Online Traffic
The next presentation slide highlights new entrants in the top-10 list of Alexa as well as top-10 sites of 2005 that have lost significant traffic. The sites that lost their top-10 ranking since 2005 include ebay.com, amazon.com, microsoft.com (not counting Microsoft Passport), google.co.uk, aol.com and go.com.

The new entrants in the top-10 list as of 2008 (based on old Alexa ranking model) included youtube.com, live.com, facebook.com, hi5.com, wikipedia.org and orkut.com. If the ranking list was a top-15 list, my employer would have been included at number 13.

How People Worldwide Spend Their Time Online

• 22% time is spent in online communication
• 16% time is spent in social communication. The presentation makes a note that this category didn't exist 3 years ago.
• 8% time is spent in online shopping activities
• 14% time is spent in entertainment and leisure activities
• 6% time is spent in work, business and education activities
  

Another interesting point made by the presentation, although no surprise, is that younger users (aged 15-24) tend to communicate more via Facebook whereas older Internet users (aged 44+) tend to use Yahoo! Mail more to communicate. The presentation raises the question whether email is becoming more archaic.

Comparison of popular sites

Facebook (#4 in global minutes) has experienced most growth (305%) since last year reaching 101 million members according to comScore. YouTube (#3 in global minutes) had the second highest growth (94%) with a total of 258 million users. Other two sites mentioned are PayPal and Skype, both eBay properties.

Two interesting facts about YouTube that I didn't know: A very high number of YouTube visitors (51%) visit the site weekly and half of the users "watch all videos to the end"

What is the most important source of Information?

Citing a study titled "Online World As Important to Internet Users as Real World?" conducted by Annenberg School for Communication , the presentation makes an important point: personal and online sources are two most important sources of information, and together they are the "essecnce of a social network."

The original report by digitalcenter.org also says that "online communities are a catalyst for connection and activism" and that "involvement in online communities leads to offline actions. More than one-fifth of online community members (20.3 percent) take actions offline at least once a year that are related to their online community." The original report also states that online activism is making online users get involved "in causes that were new to them when they began participating on the Internet" and that "more than 40 percent (43.7 percent) of online community members participate more in social activism since they started participating in online communities."

Another interesting point is that according to the Digital Future Project, Internet users 17 years of age or older trust Internet more (80%) than personal source (73%)

Some other important findings from USC-Annenberg Digital Future Project's report:

• 64.9 percent are involved in new causes
• 43.7 percent now participate more in social activism
• 56.6 percent log in to their community once a day
• 70.4 percent of community members "sometimes or always interact with other members of their community while logged in"
• 7.4 percent of American Internet users maintain a blog
• 23.6 percent of Internet users now post photos online. Previously only 11 percent were posting photos online.
• 12.5 percent of users now maintain their own website.
• Internet users meet an average of 4.65 "friends online whom they have never met in person" and 1.6 "friends met in person whom they originally met online"
  

Facebook growth

Next, there are some metrics from Facebook's growth. Some highlights

• as of 03/08 there were more than 14 million photo uploads a day being uploaded to Facebook and 6 million active user groups on Facebook.
• there are 55,000 total networks (partitions?/shards? :) ) and 50% of the networks are outside of college. I wonder how many networks are location based?
• Segment of users who are 25 years or older are the fastest growing segment. No surprise for me as my mother in law just joined Facebook.
• There are more than 250,000 new registrations per day since January of 2007.
• There are more than 859 million installations of 20,000 applications
• Super Wall by Rock You! is the most popular application with 28 million installs on Facebook followed by Top Friends (26 million installs) and Fun Wall (25 million), both by Slide
• Both Slide and Rock You! have 3 applications each in top 10 applications.
• Facebook's own Video application is ranked #7.
  

Reasons for Facebook growing faster than MySpace

• advertising that is considered less intrusive
• news feed that is personalized
• UI that is cleaner
• friends section that receives more prominence
• ads that are more personalized
• more applications
• more mobile friendly
• facebook focusing more on monetizing word-of-mouth and conversations
  

The presentation titled Internet Trends is available on Slide Share, thanks to Tech Crunch.

Other Sources:

• Online World As Important to Internet Users as Real World
• Digital World: State of the Internet
• Alexa Ranking Algorithm Changed
  

Facebook Advertising: An interesting tag line for social networking sites

Facebook's smart tag line to snatch advertising dollars from search advertising giant. The graphic reads: Facebook Advertising: Reach your customers before they start searching.