8 posts tagged “advertising”

Tonight is the first chance I've had to write about the Facebook Developer/ Influencer conference that I went to last week.  The event was an invite-only afternoon of panel discussions hosted by Seth Goldstein of SocialMedia.  Attendees included about 50 developers, entrepreneurs, investors, and a couple of bloggers, and the discussions ranged from "When, if ever, will Facebook start 'taking back' core chunks of its platform?" to "What metrics really matter for gauging success on the Facebook platform?"

The conference began at Noon with lunch and networking followed by the first panel discussion at 12:30: "What is Engagement and why is it so important?"  In the first session, Dave McClure from 500 Hats and Seth Goldstein  set the stage for the rest of the event.  Dave emphasized the importance of establishing more meaningful metrics for measuring the success of Facebook apps - beyond counting user installs.  His point was well taken... Clearly we need a way of measuring user engagement in apps, especially given that people are often compelled to download apps that their friends send to them and never use them again.  Just because an app has great word of mouth success initially, doesn't mean that it will latch on for the long haul.  Similarly, time spent on the app isn't the right measure for success either.  As Seth asked (and I'm paraphrasing), 'What's a more important to Facebook's success- a graffiti app that allows Facebook users to draw for 3 hours, or an application that encourages shorter but more frequent interactions?'

Rumor has it that Facebook will be unearthing at least a few 3rd party app success metrics internally in the next couple of month, but it remains to be seen whether they'll share this information with the world.  So far, Facebook hasn't released any helpful metrics for measuring user engagement on apps.  Perhaps this is because they don't have them, or perhaps they're holding their cards close to the vest in the hopes of determining the best way to move forward (i.e. by taking back parts of the API they already opened and/or extending new Facebook features that leverage lessons learned by observing user engagement stats on leading apps).  Either way, in order for the 3rd party developer community to flourish on Facebook,  developers will need a better understanding of what makes a winning app and which apps are the most successful based on those metrics.

The next session of the day was about "Creating, Spreading and Scaling Multi Million User Facebook Apps."  The all-developer panel included:

• R. Tyler Ballance from Slide,
  
• Blake Commagere of Vampires / Zombies / Causes,
  
• Dave Genztel from SocialMedia,
  
• Jia Shen from RockYou,
  
• Joe Winterhalter and his colleague, Eric (didn't catch his last name), of Quizzes and
  
• James Hong from Hot or Not. 
  

Slide had over 10 million Facebook users at the time of the conference, and Tyler initiated the conversation by talking about what he thinks users want to do with their friends.  In cases where users have a large number of Facebook 'friends' (Tyler had a whopping 630 at the time), Tyler felt it was important to be able to quickly engage with lots of people, while having the option to more intimately engage with closer 'friends'.   He attributed the success of applications like Happy Hour, which allows users to send virtual drinks to their 'friends', to this very phenomenon.  Dave Gentzel from SocialMedia, who developed apps like Happy Hour and Food Fight, agreed that user engagement is key.  In addition, he felt that speed in development was a key component of success.  Anything that's taken him longer than 2 days to develop hasn't paid off.

Tyler also brought up the issue of Facebook's need to communicate more proactively and effectively with Developers.  He and others expressed concerns that Facebook had made some code changes without talking to developers in recent weeks, which resulted in killing thousands of profiles within Slide's database alone.  Generally, the developer panelists felt that Facebook's attempts to help a large number of small developers may unintentionally hurt larger developers.  As I've mentioned in previous blogs, I'm a huge proponent of investing in developer relations.  When you allow ISVs/ developers (at least large ones) to plug into your API, you should be treat them as strategic alliance partners and give them insight into what you're planning in exchange for quality assurances.  If you don't, you run the risk of alienating thousands of your users if/when something goes wrong with the apps that plug into your platform.

Blake Commagere, who helped develop popular facebook apps like Causes went on to talk more about developing Facebook apps.  It took 4 engineers to develop the Causes app (which was written in Ruby on Rails).  Blake pointed out that to develop a successful Facebook app, you don't need 100 app servers, you just need to make sure the app and database are solid.  By way of example, Causes runs using 11 app servers, which serve 2.5 million users, and it is working well.  Joe and Eric who developed Quizzes, only use 4 servers for their app.  They emphasize the importance of focusing on app quality and investing time in apps that will grow spread quickly virally.

All of the developers mentioned that that Facebook platform is a little sluggish at times.  James Hong from Hot or Not said that to combat delays, his team opted for using Ajax.  The challenge here is that most ad networks don't currently consider user action as the way by which advertisers pay for ads. Instead, it's still page changes.  In principle, the ad networks James knows say they're happy to move towards a user action model, but in the meantime, there are monetary disadvantages to using Ajax on Facebook.  But, most of the panelists seemed okay with the tradeoffs in the short-term because they increase user engagement long-term.  At the time, Hot or Not is apparently making $1000/day off of AdSense, and rumor has it (according to a member of the audience) that Graffiti is making $100,000 month!

Ads were a hot topic on all panels - including the developer panel - with the need for relevant content delivery emerging as a key theme.  Most of the developers on the panel said they'd been approached to do demographic based behavioral targeting of users.  What I found interesting is that the only data anyone would cop to hearing advertisers request is: sex and geography.  If this panel was any indication, for all of those personalization fans out there (of which I'm one), it looks like we're a ways off from seeing any meaningful movement in this space.

The 2pm panel was on "Facebook Advertising Models."  Panelists were:

• Aryeh Goldsmith (Acebucks)
• Sourabh Niyogi (Appsaholic)
• Scott Rafer (Lookery)
• Narendra Rocherolle (fbExchange)
• Matt Sanchez (VideoEgg)
• Sundeep Ahuja (Appfuel)

Perhaps the most interesting part of this panel was how so many people are attempting to create ad networks on Facebook.   Matt Sanchez from VideoEgg says he has 20 sales people selling in 4 countries.  Aryeh Goldsmith is creating a new Facebook economy and customer loyalty company by introducing a fake currency to Facebook called Acebucks.  At best, the currency takes off and does just what Linden Dollars are doing for SecondLife.  Appsaholic is hoping to become a fully independent monitor of Facebook Stats (think the AC Nielsen of Facebook).  While, Slide wants to be the "single largest content delivery platform to unique users" across all social media OSes.

How useful are Facebook users to developers and advertisers?  The final session addressed "How to Value Facebook Apps."  The panelists were:

• Eve Phillips, (Greylock)
• Keith Rabois, (Slide)
• Naval Ravikant, (Hitforge)
• Angela Strange, (Bay Partners' AppFactory)
• Susan Wu, (Charles River Ventures)

One VC in the audience reckoned that each Facebook user is worth about $500 each.  While, Angela Strange from Bay Partners, whose AppFactory is actively seeking investments in start-ups that make Facebook applications, used a guideline of 25-30 cents per user per app.  In watching this last panel and listening to the excitement relayed through the questions from the crowd and VC responses, it's clear that there are a lot of people pinning their hopes on Facebook (and other Social Media Platforms) continuing to open their APIs and thus encouraging the growth of a new developer economy that pushes apps for so-called social media operating systems.  There is a frenzy of enthusiasm about the potential, but it remains to be seen whether potential becomes reality.  The VCs aren't taking any chances.  Each of the panelists said that when they're looking to invest in a company that develops Facebook apps, they need to see the potential of those applications beyond the confines of Facebook.

For those of you interested in future developments in the Facebook space, Dave McClure mentioned that he's planning a Facebook conference of his own on October 7-9. Stay tuned to his blog for details.

The Financial Times reports today that Central Office of Information (COI), the UK Government's "center of excellence for marketing and communications," has put a moratorium on advertising on social media sites like Facebook.   COI organizes marketing campaigns to promote issues of public importance (education, health, welfare, etc.) for various UK Government departments.  The organization announced that it is reviewing how it handles advertising on social networking sites fearing that its ads could appear on innapropriate user generated sites.  Alan Bishop, chief executive of the COI, explained the decision to the FT saying:

"We always have to keep a very close eye on the context. People are still getting to grips with this. We don't want to exclude the use of any of the new social media but we do have to have a very clear idea of what the context is going to be like."

COI's decision comes one week after New Media Age reported that Vodafone, The AA, First Direct, and others were pulling their ads on Facebook because they appeared on the Facebook page of the British National Party, a highly controversial political organization.  Last week, Vodafone released a statement saying:

"We advertise our products and services across a wide range of on and offline publications... In the case of online, bundles of space are purchased across a number of sites including the social networking sites. As a result we were not aware that a Vodafone ad would appear next to a British National Party group on Facebook.

Our Public Policy Principles state that we do not make political donations or support particular party political interests and therefore to avoid misunderstandings we immediately withdrew our adverting as soon as this was brought to our attention.

We are working with our media buyer OMD to ensure that more robust controls are in place before we agree to any potential re-investment," the statement added."

The concerns raised by organizations like COI and Vodafone are understandable and highlight the need advertisers to have greater control over when and where their paid ads appear.  As far as I'm aware, thus far, website optimization solutions and content delivery platforms are only helping advertisers and marketers understand visitor behavior, segment visitors into groups, and deliver targeted messages that are relevant to specific segments. I'm not aware of any optimization solutions or content delivery platforms that helping advertisers optimize ads and website content so that they're not only relevant to various segments of website visitors but that they're also blocked from appearing on pages that promote or discuss controversial topics.  I'm interested to see who will be the first to make this happen.

Marketers can already test and optimize ads and web content so that relevant messages are delivered to different audiences i.e. (Audience segment A "High value customers" sees Ad #1, Audience segment B "First time visitor" sees Ad #2, etc.).  Similarly, search technology makes it easy to identify controversial key words on web pages (i.e. "BNP," "Political Party," etc.). I can't imagine that it would be too difficult to combine these two technologies to create an ad optimization and delivery network that allows advertisers to deliver blank ads on social media pages that have potentially dubious content, or 'sublease' that ad space on controversial social media pages to less discerning advertisers. 

Instead of simply segmenting users, the ad publishing optimization solution I'd like to see would also segment content.  The ad delivery platform would scan social media pages at regular intervals for controversial words.  If dubious words or phrases that go against a given advertiser's rules of engagement appear, the ad slot could display nothing at all or an ad from another, less discriminating advertiser, who subleases the ad space in cases where the primary advertisers chooses to bow out.  Having a solution like this would allow social media platforms like Facebook to offer a two-tiered advertising platform that offers the ultimate control to Tier 1 advertisers who are willing to pay for it and exposure to Tier 2 advertisers with a smaller budget.

Could this work?  Post a comment with your opinion, and if you don't have a Vox account, email me with your comment, and I'll post it manually.

Italy-based social networking company, Dada S.p.A., is partnering with Google AdSense to pay users for allowing ads on their space.  Dada's new Friend$ is an opt-in revenue sharing program that rewards users for adding friends and updating the content of their Dada space.  According to Dada, Friend$ is, "the only program that rewards you both for keeping your personal space updated (blog, video, profile, etc.) and for spreading the word by inviting friends to do the same."  The idea is that users keep their Dada space updated and invite friends to participate in Friend$.  In exchange, Google posts ads on their site/friends site, and pays users and their friends a percentage of the money generated by click-through on those ads.

I wonder how advertisers feel about this? It seems like an easy system for Dada users and their friends to exploit for revenue purposes.  If I were an advertiser, I'm not sure how excited I'd be by having people click on my ad with the express purpose of extorting me for their own/ friends' financial well being. 

Similarly, I find this whole concept a little disconcerting in that it encourages social networkers to talk about specific topics for the express purpose of generating revenue.  I feel perfectly okay about the idea of hiring paid spokespeople to talk about companies, so long as the public knows that they're being paid.  However, I take issue with situations like this, where there are blurred lines of distinction between people talking about what they're genuinely interested in versus talking about things they're being paid to discuss.  It's not Dada and Google are talking about sponsoring corporate blogs...  In a way, they're steering kids (and adults) towards discussing specific topics their conversations, blogs, profiles, etc.  If a social networker wants to make money through Friend$, and they know which companies use Google AdSense, I suspect that it will be very easy for them to exploit the system.

What do you think?  If you're unable to post a comment, email me, and I'll post it for you.

Today, I read an interesting article on Pocket-Lint, which summarizes a recent Harris Poll, which questioned 2,309 people back in December 2006:

Of all frequent YouTube users, two-thirds (66%) claim they are sacrificing other activities when on YouTube. Although their visits to the site are most likely to have been at the expense of visiting other websites (36%), time spent watching TV is next most likely to have taken a hit (32%). YouTube also cuts into email and other online social networking (20%), work/homework (19%), playing video games (15%), watching DVD(s) (12%) and even spending time with friends and family in person (12%).

According to the article, 3/4 of respondents would be less likely to visit YouTube.com if ads were placed in front of videos.  Interestingly though, that same group of respondents, was okay about TV network websites airing commercials during on-line showing of television shows.  Almost as many adults (41%) have watched a video on a TV network website as they have on YouTube (42%).

Pocket-Lint takes a unnecessarily negative view of what these survey results mean for Google's monetization of YouTube, saying: "It seems like TV networks can get away with advertising more easily." I don't think this is necessarily true, and I take a much more positive view of the survey results than Pocket-Lint.  While additional research would be required to confirm my thoughts, I suspect that people are more willing to see ads on material that cost money for networks/studios to produce because there is a high likelihood that this content will be entertaining vs. seeing ads on material that had little production cost and may or may not actually be entertaining. 

The thing with home videos on YouTube is that users have to sift through material to find the really funny/ interesting/ good stuff.  That's part of the excitement and charm of the site, but it may also make users reluctant to accept watching ads, if they feel those ads "waste their time."  This isn't to say that users won't accept ads on YouTube, but if YouTube goes, choses to implement ads, to be successful, ads will need to be both relevant to the user and offered in formats that don't annoy users.  Another issue, which I think impacts users willingness to see commercials, is the quality of the picture.  When copyrighted content is illegally posted on YouTube, it is often not very high resolution footage, which impacts the viewing experience.  When a user watches copyrighted content on a network's website, the footage is usually very clear and higher resolution.  I think it goes without saying that if YouTube were able to legally secure content from the content owner (e.g. movie studios/networks), resolution wouldn't be an issue.  But, why would a Studio or Network want to "give" YouTube their content?  I've got a few ideas...

If YouTube users are, as the Harris Poll suggests, really sacrificing time elsewhere in order to spend time on YouTube, there should be plenty of revenue generating opportunities for Google.  First, there are the conventional options worth exploring:

• Conventional Ads -  Additional studies would likely be required to determine what type of ads could be run without causing YouTube user attrition.
  
• It might not be a good idea to put ads ahead of every user-generated video on YouTube, but video ads or splash print ads may be tolerated by users in front of or behind highly ranked home movies or videos that networks and studios post (if YouTube is successful as signing licensing agreements with content owners). 
  
• Targeted banner ads on Youtube.com, or short video or splash ads put in front of YouTube videos that are fed through to other websites (say VOX blogs, etc.) may be more tolerated.
• Subscription services - Perhaps users who aren't willing to see ads would be willing to pay a subscription fee to watch videos.  While those who are happy to watch ads, could do so, in lieu of paying a subscription fee.

• Free to stream X number of times - Pay to watch more than X times or to download the video to your PC, Phone, iPod, etc..

If, however, Google wants to make serious money with YouTube (without being "evil" in the process), there is plenty of room to innovate...  As I mentioned in an earlier post, YouTube recently announced that it would soon incorporate an audio engine that recognizes songs laid on top of home videos that appear on YouTube. At the end of videos, YouTube will give viewers a chance to legally purchase those songs.  This technology could be used to allow users to buy/download videos from studios/ networks as well.  However, I see  enormous possibilities to innovate and create revenue generating opportunities, which would allow Google to extend the advertising empire it started with AdWords into a whole new generation of interactive advertising.

Google could power a next generation advertising platform on YouTube that works like this for consumers:

• Watch a video on YouTube
• If you've liked anything you've seen/heard about in this video, buy it now or get a discount to buy it.
• YouTube could suggest products to purchase that appear in the video that users have just watched.  Advertisers already pay to get rappers to mention products (cars, booze, etc.) in songs, and they pay for subtle (or not so subtle) product placement in films and TV shows... I imagine these same advertisers would LOVE the opportunity to immediately capture customers by either enabling them to buy (or providing them coupons to buy) products featured in YouTube videos.
• If you like what you've just watched, check out these other programs X,Y,Z (this already exists on YouTube, but it could be enhanced/expanded to more closely mirror the system on NetFlix, which recognizes a users' interests and behaviors in combination with the behavior of users with similar profiles).

TV Networks and movie studios may be more likely to allow YouTube to use their content, if significant revenue sharing opportunities are involved.  A great way to generate tons of ad revenue (without bothering the consumer) is to work with advertisers who pay for product placement within movies and TV shows, allowing them the opportunity to capture new customers who are exposed to their product placement via watching movies/shows on YouTube.  YouTube could either allow users to click-to-buy (or express interest in) products within videos (a possibility if the videos are uploaded directly by the studios/networks) OR offer viewers the opportunity to purchase any of the featured products at the end of the video. 

For those of you who are wondering why networks/studios would want allow YouTube to reap the rewards of this idea, versus just implementing it themselves on their own websites, that's a great question.  In order to make this model work, Google/YouTube would have to make a multifaceted and compelling case, which could include the following points:

• YouTube has the ability to bring new viewers to network's/studio's content... When a user goes to YouTube, they often go to explore/discover new content.  Whereas, users that go directly to a network's or studio's website go with the intent of discovering content they already know about.
• YouTube could easily maintain multiple years of content, bringing back to life ad opportunities that studios and networks thought long gone (see Reese's Pieces example a few paragraphs below).
• Google is an advertising machine and has the ability to share revenue with studios and networks. (YouTube/Google would need to make this case strong enough by offering enough of a revenue share to discourage networks from thinking it is worthwhile to expand their own IT staff and infrastructure to implement the idea themselves.)
  

In addition to enticing networks and studios, YouTube could easily entice individual contributors (home video producers) to upload quality video content.  One way to do this is by maintaining a list of products and songs that have the potential to generate extra revenue sharing opportunities for uploaders.  For example, I mentioned earlier that advertisers are willing to pay rappers to mention products in their songs.  Why wouldn't those same advertisers be willing to pay YouTubers for playing those songs on top of their home movies IF they could prove that doing so increased customers?  If viewers had the immediate opportunity to purchase the product they just heard about on YouTube after watching a video, YouTube would have the case to get ad (and commissions) revenue off of the advertiser.   To prevent gross over commercialization and "pimping" of products, YouTube could require videos to get a certain number of page views and high rankings from viewrs before agreeing to share the revenue.

Taking this a step further, if, someone were to upload a video with a rap song overlaid on the top that mentioned say "Sprite" and PepsiCo didn't want to pay to have viewers "click-to-buy" (or print off a coupon) at the end of the video, Google could offer that opportunity up to a Sprite competitor, like "7-Up".

A few use cases to illustrate my point...

• Watch the movie, ET, and at the end of the movie, have the option to buy Reese's Pieces or get a manufacturer's coupon for 10% off. 
  

  E.T. - The Extra-Terrestrial (Full Screen Collector's Edition)
• Watch Grey's Anatomy, and at the end of the show, download songs from the soundtrack from the record labels or a Gray's Anatomy t-shirt from ABC.
  
  

  Grey's Anatomy - Season One
• Watch someone's home movie with Snoop Dogg's "Gin & Juice" laid over the top, and at the end of the movie, buy the song and/or download a coupon that allows you to get a 10% discount on your next Segram's Gin purchase at BevMo. (When viewers use these coupons, there is even an opportunity for revenue sharing with YouTube, The Record label, and the person who posted the video and chose the song.

In summary, ad revenue and user enthusiasm potential is far from lost for Google and YouTube.  In fact, the world is very much Google's oyster.  There are infinite revenue generating possibilities for Google, content owners, and advertisers, which, if executed properly, benefit the consumer.  The trick is thinking creatively and getting buy-in from both advertisers and content owners. If anyone can do it (without being "evil"), Google can.

Yesterday, inCode Telecom Group Inc. announced its "Top 10 Global Wireless Predictions for 2007".  Topping the list as the number one trend for wireless operators in 1007 is Social Networking:

"Social Networking Gets Mobilized. Mobility is added to existing Internet business models, services and behaviors, driving traffic for wireless operators. Teens and twenties accustomed to constant connectivity and habit-forming Web sites, such as MySpace and Facebook, lead a wave of membership in mobile social networks. Location social networking including friend and event finder services gain popularity, even in the professional and over-50 segments. Google, Yahoo and Skype are more compelling for users than wireless brands, which are hard-pressed to compete. As customer appetites for social data and video services spike, wireless operators offer more “all you can eat” pricing for high-end data packages. Social networking applications initially are preloaded on many mobile devices sold and later become downloadable."

On the handset side, inCode predicts that in 2007, "Multi-Function Devices [will] Become Cheaper and More Versatile".  This includes the introduction of video-capable devices to the masses.  They also predict that location-based services (LBS) and GPS will become mainstream.  According to the article:

"GPS is the location technology of choice for the wireless industry. Handset manufacturers continue to push GPS-enabled handsets as the technology evolves from popular in-car satellite navigation systems like TomTom to a broadly accepted feature in wireless phones. With Nokia having launched its first GPS-enabled handsets in early 2007 and bandwidth available to support new multimedia services, location-based service providers build critical mass. Since there are 10 to 20 times more mobile phones sold than any other consumer electronics device, wireless is a huge driver for GPS adoption. That’s great for users and handset vendors, but the benefit to operators isn’t clear."

Another of inCode's predictions is that "Mobile Advertising Breaks Loose:"

"Major brands shift from basic SMS marketing to more sophisticated multimedia advertising. RBC Capital Markets expects mobile marketing revenues to balloon from $45 million in 2005 to $1.5 billion by 2010. With the technological ability to target and measure the effectiveness of mobile advertising, brands are more strategic in their approach. Operators under increasing price pressure set limits on current handset subsidization. Brands take up the slack, subsidize handsets and services for target demographics and take direct ownership of marketing channels. Rich 3G content and video services and accuracy advancements in GPS-based location services deliver further value to brands targeting existing and potential customers in innovative ways."

This prediction, is already starting to come true, with MVNOs like Virgin Mobile USA and Amp'd Mobile planning to offer discounts to customers for viewing advertisements on their mobile phones.  Cingular Wireless, Verizon Wireless and Sprint Nextel have also said they're going to test the concept of mobile advertising.  And, according to CNET, mobile advertising services company, Millennial Media, which was founded by Paul Palmieri, a former Verizon executive recently received $6.3 million in Series A funding.

inCode is on the money with their predictions for 2007.  Tying together the above predictions for 2007 and thinking about the future, I predict that in 2008, mobile operators will further realize the power of social media - extending beyond simply social networking to all forms of social media.  If all goes as I predict, in 2008, Mobile Operators, MVNOs, OEMs, and ISVs will harness the power of social networking, GPS (LBS), and multi-function handsets and incorporate the power of social media, adding applications and web-based services to handsets that add value to consumers.  Services/ applications like Helio's Buddy Beacon, Dodgeball, etc. will increase.  I predict that large mobile operators and OEMs will begin to pre-load devices with social networking-focused applications that incorporate GPS.  I also believe that mobile advertising will increase and that the value of GPS to mobile operators will be realized in the ability to either charge for LBS social networking services and/or offer interactive mobile advertising via these LBS-enabled social networking applications.

Collaborative and community-based entertainment like YouTube on the go will evolve and continue to be popular.  I also expect that sites that monetize video footage (of, say, news events) that users take on their mobile phones will become increasingly popular....Think sites like: ScoopLive.com, Scoopt.com, and SpyMedia.com.

Search Engine Optimization (SEO) and Social Media Optimisation (SMO) will also play a big role in mobile social networking AND mobile advertising in 2008.  Though, I expect to see real advances in and popularization of this area happening towards the end of the year and into 2009, once mobile GPS and mobile advertising are better established.  I see this happening in several ways:

• When users search for friends, that mobile advertising will be well integrated so that suitable meeting locations and activities will be suggested (e.g. restaurants, coffee shops, stuff to do, sites to see, etc.)
• Based upon users mobile searches, social networking behavior, and text written in the emails they send via mobile phones, mobile LBS and mobile ads will generate new advertising content.

These are my initial thoughts for 2008, and all of them are predicated on inCode's predictions for 2008 coming true.  If you've got any additional predictions for 2008 and beyond, post a comment!

Gather is a social networking site for adults. It is free, fun, well organized, and a little bit like vox, though it encourages cross posting of blogs, articles, comments, etc. around specific "groups" of participants with similar interests.  There are some really interesting blogs, conversations, and participants happening on Gather... 

For example, one of America's most well known criminal lawyers, Alan Dershowitz has a group on Gather and is in the midst of publishing a six part series of articles on a variety of controversial, and politically fueled topics.

Today, Borders launched a new group on Gather, making it one of the many companies that is now using social networking to further business by reaching out to prospective customers.

Gather works on a revenue sharing model, not unlike other social media sites like Revver.  Here's how Gather's  CEO describes it:

Gather is a place for you to connect with people who share your passions. It's a place where you can contribute thought, art, commentary, or inspiration. We will reward you for all the great things you will share with others in your communities of interest. And together, we think we will create a pretty special place to hang out online.

Gather will make money by displaying advertising to people who use Gather's services. It just seems fair that we share our advertising revenue with you based on the quality and popularity of the content you contribute on Gather. We will also share some of our revenue with you if you choose to use the site actively, exploring content that others write, searching on Gather and on the web, and inviting your friends, family, and colleagues to use the site. We will pay occasional users in points that you will be able to use to purchase goods and services from Gather partners in a few months. We will pay frequent users, who write great content consistently, in cash if they choose.

I think Gather is a really interesting site. I like the way that it makes adults with similar interests discoverable to each other.  I've only used it for a short time, so I'll be interested to see what my longer-term impressions are.  To test Gather.com a bit more and hopefully extend the readership of this blog, I've set up my own Gather group: socialmediagroup.gather.com.  I hope that people will use this group to share information on social media, social networking, web 2.0, mobile 2.0 and related topics.
 

Do you use Gather? If so, post a comment and let me know what you think.  If you're a non VOXer, feel free to drop me a line with your comment and I'll post it manually: socialmediablog@gmail.com.

For those of you interested in using Social Media as a way to communicate to your customers, partners, etc., I recommend reading the following blog post by Rohit Bhargava, VP of Interactive Marketing for Ogilvy Public Relations.  Back in August, Rohit started an interesting conversation about Social Media Optimization (SMO), summarizing a series of rules for implementing a successful SMO strategy:

1. Increase your linkability
2. Make tagging and bookmarking easy
3. Reward inbound link
4. Help your content travel
5. Encourage the mashup

In time, Rohit linked to a few additional “rules,” for SMO, as offered by other bloggers.  Including:

6. Be a User Resource, even if it doesn’t help you (Jeremiah Owyang)
7. Reward helpful and valuable users (Jeremiah Owyang)
8. Participate (Cameron Olthius)
9. Know how to target your audience: "If you don't even know your target audience you are in trouble. I would love to have everyone using my product too, but you need to be realistic. There is always going to be a certain audience you can appeal to and others that you can't. So know your appeal and who it is appealing to." (Cameron Olthius)
10. Create content (Cameron Olthius)
11. Be real (Cameron Olthius)
12. Don’t forget your roots, be humble (Loren Baker)
13. Don’t be afraid to try new things, stay fresh (Loren Baker)
14. Develop a SMO strategy (Lee Odden)
15. Choose your SMO tactics wisely (Lee Odden)
16. Make SMO part of your process and best practices (Lee Odden)

A couple of weeks after publishing his original post, he wrote:

At this point, I think it's safe to say the term has grown beyond a point when I feel like I can (or should) be the gatekeeper to decide what the 17th rule should be or how this area evolves.  So, to that end, for those interesting in continuing the discussion and helping SMO to grow - here is my quick list of things you can do to help spread the word about SMO:

• Post your thoughts on your own blog
• Add a comment to the original SMO post on this blog
• Add a comment to a relevant blog post about SMO (whether they mention it or not)
• Tag any blog posts or online content about SMO with the tag "socialmediaoptimization"
• Update the Social Media Optimization page at the New PR Wiki
• Translate the rules into more languages (apart from those already done)
• Tell your colleagues (especially those outside online marketing) about SMO

I agree that SMO is an important topic of conversation, and while I don’t want to “own” the conversation either, I would like to add a new rule to the list - building a bit on rule 9:

17. Make your Social Media Optimization strategy targeted and multi-pronged.  Know your audience and customize marketing messages, making them relevant and compelling to the core groups of people you're targeting (e.g. YouTube users, bloggers, social networkers, people interested in specific topics, etc).

In my view, one of the most important parts of implementing a successful social media optimization strategy is not just knowing your target audience but making marketing messages to your different target audiences relevant.  I advocate using social media to articulate marketing messages in a slightly different way to different target groups – ensuring that the message a prospective customer received is tailored to their specific needs/interests.  From a customer’s perspective the best “sell” is a “soft sell” – one that makes them excited to buy a particular product/service rather than one that makes them feel “forced” to buy it.  In other words, people want to buy products because they actually want them, not because they’re told they want them.  

The companies who participate in Second Life (as discussed in my blog on December 7, 2006) are doing something right.  They’re making their message relevant to a specific group of people with a particular interest.  These advertisers are offering Second Lifers something that is relevant to/ enhances one's “second life”.  I recommend that companies take a similar approach to other marketing via other social media avenues.  So, for example, if you’re trying to attract YouTube users to purchase your product, talk about why your product is relevant to YouTube… If you make a mobile phone, place a targeted ad on the site that emphasizes about how easy and fun it is to watch YouTube using X, Y, or Z model of phone.  If you’re selling Mentos or Diet Coke, plug the YouTube videos that feature your product. 

When you're building an SMO strategy, take a more targeted approach by:

• Customizing your ads, making them relevant to different target groups
• Writing blogs and posting relevant track backs / comments in high-traffic blogs that point out the positive aspects of your products
• Participating in popular social networking sites and “making friends”, etc.  

In other words, don't just know who your target audience is, but make your messages more relevant to each of the target audiences that you expect will read/watch/hear them.  Because product evangelism through social media can be done inexpensively (or, in some cases, for free), it is possible to execute a multi-pronged approach that is more relevant to target prospective customers than more conventional forms of advertising.  The goal should be to develop a multi-pronged SMO strategy that is more relevant/ compelling/ convincing to groups of target customers with different interest, with the aim of increasing the probability that marketing messages "speak to" different groups in different ways and therefore improve customer acquisition and result in increased sales. 

Companies are only just starting to consider ways to exploit social media to their advantage... Case in point, in the last few months, I've been asked to interview for several new "social media" business development manager/evangelist positions at large companies.  Social Media is a growing area and one which has evolved through consumer interest, rather than corporate push.  It will be interesting to see how early adopters of social media react as big business starts wading in the water.  The reaction to Google's purchase of YouTube was certainly mixed, with plenty of folks asking, "Is Google Killing YouTube?"

Yesterday, I talked a little bit about Singshot.com... Last night on Yodel Anectotal,  Yahoo, Inc. announced that it acquired Bix.com.  Bix takes things one step further than Singshot - people to judge all sorts of contests - from Karaoke to photos to dance routines to beauty to comedy and more.  It's an interesting site, but one that parts of the site don't appear to have much content/ user participation yet. Today, in his personal blog, Bradley Horowitz admitted, "... We need to get some cooler songs into the Bix karaoke system." Considering the source, I'm sure it won't be long before that changes.

In other news, this week, Reuters invested $7 million in an Austin, Texas based start-up, Pluck.  According to Pluck.com, "Pluck helps transform how publishers, media sites and major brands engage their audiences and customers to discover, create and distribute information online. Providing the technologies for content generation, syndication, social networking and news personalization, Pluck helps its customers more easily consume and leverage the new open content model that has emerged as the cornerstone of Web 2.0." 

In my opinion, social media is the next wave of revenue generation and marketing opportunity for big business.  The question yet to be answered is - How will consumers react to the commercialization of something that is supposed to be all about the user?