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How to Measure Social Media Advertising September 27, 2010

Posted by David Card in Uncategorized.
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Recent stories about social networking companies and third-party data suppliers highlight a key challenge currently facing social media: advertising measurement. Facebook cut some beta features out of its measurement tools for advertisers; Twitter said it would offer an analytics dashboard for the first time. Meanwhile, traffic tracker comScore introduced a new social media monitoring service and news leaked about a new metric from Nielsen.

Companies that best address the social advertising measurement challenge will be the ones to get more of what eMarketer says will be $2.1 billion in U.S. spending next year. How? Opportunistic suppliers will thrive by better measuring the unique characteristics of this new advertising medium and translating those metrics into ones that complement traditional media-buying.

What Social Media Adds to Advertising Analysis

In traditional media, day-to-day brand advertising measurement is about tracking efficiency in buying ad space. Advertisers usually measure brand objectives like increased preference or loyalty after the fact. And they tend to do marketing mix modeling — comparing the effect of different media on sales as well as brand objectives — rarely, due to cost and complexity.

Social media experiences, on the other hand, lend themselves to brand advertising rather than direct marketing techniques. Most advertisers use ads on social networks to raise awareness and consideration, rather than for direct conversion to sales.

And while most traditional advertising measurement concepts are applicable to social media — demographics, reach, frequency, duration, brand “halo effects,” etc. — there are three things truly unique to social media advertising:

  • Explicit preference. Whether it’s Facebook Likes or Twitter followers, social media properties offer marketers the chance to observe users’ self-professed preferences rather than relying on implied or survey-determined preference, or on actual purchase behavior.
  • Advocacy and pass-along. Beyond preference, social media enables consumers to post reviews and recommendations and act as influencers for advertisers. Of course, viral word-of-mouth exists offline, but social media greases the wheels and accelerates it.
  • Real-time feedback. Social media enables marketers and brands to take the pulse of their customers and prospects in real-time, where traditional media has to rely on slower market research techniques.

Social media marketers waste a lot of time debating “engagement.” Some studies hint that marketing messages experienced on social networks engender better recall or brand affinity than those in other forms of media. But that idea doesn’t differ much from what happens in traditional media, where advertisers choose which magazine or TV show runs their spot for context as well as audience type.

Where’s the Opportunity?

Marketers can get some of those traditional and social metrics mentioned above from the social media companies where they happen, e.g., Facebook, Twitter, YouTube, Foursquare, etc. But agencies and third-party tools like Google Analytics, Nielsen Buzzmetrics, WPP’s Cymfony, Radian6 and others do a better job at aggregation and comparison. Social media properties that support and integrate those third-party tools will get more than their fair share of ad dollars, particularly if they can help agencies demonstrate those three aforementioned social attributes for campaigns and long-term marketing programs.

What’s lacking that social media players and measurement companies need to provide?

  • Benchmarks. Companies can track their own progress in achieving effective advertising. But advertisers would loosen their purse-strings faster if there were standard measures for things like how often a social user should see an ad before it becomes ineffective or the value of a follower versus that of a casual visitor. Case studies will have to suffice for the moment.
  • Currency. Likewise, there’s no single ratings currency online — let alone in social media — to fill the role of Nielsen ratings for television or ABC circulation data for magazines. Fragmentation remains across Nielsen, comScore, Hitwise and others.
  • Cross-media comparisons. In theory, Nielsen is best positioned to deliver something like a gross ratings point that would be comparable across TV and online, enabling media planners and buyers to compare the efficiency of different properties. But industry inertia, expense, panel inconsistencies and new TV data from set-top boxes have distracted or slowed Nielsen so far.

Related Research: Multiple Models for Social Media Businesses

Question of the week

What’s missing in social media measurement?

Multiple Models for Social Media Businesses September 20, 2010

Posted by David Card in Uncategorized.
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No single strategy guarantees social media success. Twitter’s recent relaunch mirrors some of Digg’s tactics, but social services — or recent hints of them — from players like Google, Apple, and Yahoo take entirely different approaches. But while there are multiple paths to social success, the one a company chooses tends to align it with a particular revenue model.

More Than One Way to Win

Last week, Twitter showed off a major overhaul of its site, which sponsored a “final post” by its former chief engineer. In the post, Alex Payne lamented that Twitter was abandoning its original “decentralized” set of services both users and developers could profit from. In its place went a more “centralized” broadcast-media-style model. Indeed, in efforts to broaden its audience and hold onto its users a little longer, Twitter risks cannibalizing the ecosystem of developers and applications that have grown up around it — companies like TweetDeck, Seesmic, and Bit.ly — by replacing their value-added features with its own.

In contrast, Facebook has “opened up” a bit. The social giant initially offered apps vendors like Zynga, Flixster and Living Social access to its audience and their social graphs, so long as the apps lived in Facebook. With initiatives like Open Graph and Facebook Connect, Facebook is giving third-party sites and apps access to services like common sign-in and message-exchange. Its goal is to establish those services as standards, locking out competitive offerings and enhancing the services’ utility for both users and developers via scale and scope.

Whether you call these approaches centralized vs. decentralized, closed vs. open or site vs. services, they don’t have to be mutually exclusive, and neither one always wins. MySpace initially thrived in part by offering its users the chance to embed photos and videos from other social media sources; now it’s collecting feeds from Twitter and Facebook. Whether MySpace succeeds in regaining user attention or not, its heavily site-centric strategy steers it towards a specific revenue strategy.

Sites, Services, Dollars and Cents

With a site-centric strategy, you’re in the eyeball business. That means you’re either selling to your audience or selling the audience itself (to advertisers, marketers, retailers). And either way, a social media site needs a big enough audience — even if it’s within a desirable, targetable subset — to attract advertisers or produce profitable volumes of sales. Both Twitter and Digg are redesigning their sites to appeal more to broad audiences: They recognize that there are far more content consumers than creators. At the same time, they both need to service the content creators or broadcasters. It appears that, in contrast to Digg, Twitter’s new content consumption features — embedded media, multiple panes, lists for filtering — have encouraged rather than alienated its power-user communicators. But while Twitter’s doing carriage deals with content companies and marketers, it still lacks a robust marketing and advertising platform.

If you’re primarily in services, you have three revenue strategies to chose or to mix and match:

  • Licensing: Enterprise applications have tapped social media technologies to create traditional or software-as-a-service businesses for companies like Salesforce.com, Box.net and Jive. Likewise, Amazon and others offer cloud-based hosting and storage in support of social media applications and functions. But it’s rare to see technology companies pay to license APIs and social media services.
  • Harvesting: This is social media’s big undelivered promise, and the real reason for Google to keep on trying. In theory, the information gleaned from community activities and users’ social graphs can provide powerful insights for marketers, or as a core driver for shopping or search.
  • Plundering: Will companies with social platforms turn on their ecosystem by replacing them with their own features, apps, and services? So far, Google Maps, for example, remains hugely popular mash-up material, and Facebook and Zynga are still getting along.

Related Research: Social Media in the Enterprise

Question of the week

Is there a superior strategy for making money off social media?

The Age of the Feed-Based User Interface September 13, 2010

Posted by David Card in Uncategorized.
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Last week, Google dramatically changed its core search user-interface with Google Instant. Instant search results look like a news feed and change dynamically as the searcher types. In moving toward a more feed-like UI, Google is following the trend established by Facebook and Twitter. Other feed-style UIs, meanwhile, appear on a broad range of applications and services, including Apple’s new Ping music social network, Box.net’s cloud-based content management system and Salesforce.com’s Chatter enterprise collaboration platform.

With the trend of feed-like UIs continuing to gain momentum, it’s worth taking a look at some of the advantages and disadvantages, as well as how businesses can implement and add value to them.

Pros and Cons of Feeds as UI

In contrast to a “seek, search, consume” model of content discovery and consumption, a feed presents a more passive approach for a user to gather information. Some feed UIs, like Facebook’s news feed, contain algorithms that fine-tune what could otherwise be an overwhelming flow of information. In contrast, without such customization, Twitter’s bare-bones approach defaults to a real-time stream from everyone you follow. That only works for Twitter users with relatively few followers.

Not all information, however, benefits from being optimized for passivity or immediacy. For instance, most online shoppers aren’t just passively browsing, at least not until they put some parameters like product, price and color in place. Most news consumption benefits from categorization and importance, whether judged by professionals or by popularity. And although Google Instant feels like a mobile app, network bandwidth and latency currently prevent it from being implemented for phones.

Who Benefits?

So what kind of applications or services might next adopt feed-like interfaces?

  • Television. Years ago, I saw a Canal+ demo of a carousel of picture-in-picture images of what was playing on other channels. I’ve seen similar items from TV middleware companies.
  • Shopping. How about a stream of product thumbnails? Seesmic has a Zappos plug-in.
  • News. I’d welcome an editorial hand to feed me prioritized news stories with graphical cues, though I’m not sold on social curation as the only organizing principal.

Adding Value

When properly enhanced, feed-based UIs can deliver great user experiences. They feel “modern” to web and mobile audiences, in contrast to static blocks of content. Many — if not all — information streams do benefit from being current. And there’s a natural tendency for a user to re-visit them frequently, and to engage with them in a social fashion.

Feeds can be implemented as an RSS stream or API, making them open to mash-ups and plug-ins. Companies that offer information or communications services and are looking to implement feeds as UIs should offer the following directly to users, or as behind-the-scenes optimization tools:

  • Aggregation. This isn’t new, but Twitter clients like TweetDeck and Seesmic allow users to pull in multiple feeds from micro-blogging tools or status updates, and to post to multiple destinations. Box sucks in information from Salesforce.com and NetSuite into its feed. Seesmic just re-implemented its desktop client to accommodate plug-ins for other feeds or functions, e.g., local information from Foursquare. There’s opportunity in promoting and pre-packaging collections of feeds to give users different views of information.
  • Filtering. Facebook prioritizes the default view of its news feed via the user’s prior behavior and the network activity around items, among other things in its algorithmic secret sauce. Trending topics is a popular device for exposing users to information that might come from outside their network. But ceding active control of filtering, sorting and searching to the user is also powerful: That’s what made TweetDeck the choice of Twitter power users.
  • Other utilities. In the spirit of Tufte, I’d suggest there is opportunity in offering features that better present quantitative and qualitative information atop of feeds. Color-coding or boldfacing feed items based on popularity or importance would be simple, but there’s probably something like TheBrain that would illustrate relationships between items better than a threaded conversation does.

Related Research: Why Google Should Fear the Social Web

Question of the week

Where’s the best place to add value to real-time feeds?

Can Apple Build a Real Social Network? September 6, 2010

Posted by David Card in Uncategorized.
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Or maybe the question is, “Does Apple want to build a real social network?” Last week, at its usual September iPod product refresh, Apple rolled out Ping, a collection of social networking services tied to the iTunes Store. Much was written about how Ping did or didn’t integrate Facebook. The term “walled garden” came up.

As it stands now, Ping is explicitly about selling music on the iTunes store. Om thinks it foreshadows the future of social commerce, but how far could Apple take Ping, and other initiatives like the Game Center services soon to be built into iOS? Could Apple build a social network that could challenge Facebook and Twitter?

What Makes a Real Social Network?

Social networks are challenging the web portals of the ’90s (Yahoo, AOL, MSN) as the dominant content and communications paradigm. They’re permeating mobile communications, affecting enterprise collaboration and even taking a shot at television. Let’s take a quick look at what makes a social network, and how Apple measures up:

  • User Profiles house information about the person and collect identification and authentication services. Ping profiles have very limited information about users’ music preferences. Ping uses Apple ID, which enables credit card authorization and check-in, although almost exclusively to Apple — rather than third-party — products and services.
  • Social Graphs map the relationships between profiles and the activities of the user, and offer potentially powerful marketing and advertising targeting. Ping users explicitly make music recommendations to their friends and followers. Apple was using collaborative filtering and favorite-watching to create recommendations and playlists before Ping.
  • Platforms offer APIs and services so developers can build applications. Social networks also work as distribution channels — viral or otherwise — for those apps. Apple certainly knows platforms, but iTunes and its App Store aren’t very social yet, and Apple hasn’t revealed a Ping API strategy.
  • User Interfaces and user experience are elements Apple practically defines itself by. Modern social networks have replaced the profile page with a stream of real-time information. Ping’s UI mimics that approach, and features Apple’s classic simplicity and elegance, but so far offers none of the charm or serendipity of iOS. Ironically, Apple hasn’t contributed anything to social network UI; even its iPhone integration of third-party social networks is unexceptional.

Air and Electricity: Services or Applications?

Some analysts describe social networking as air, but perhaps the more relevant metaphor is electricity. In that view, companies and sites tap into social networking to create applications or experiences. Right now, Apple is treating social media as electricity to fuel its own shopping and communications applications.

Apple makes its money by selling products and “renting” its distribution channel. It likely won’t hire an advertising sales force, and Apple Me.com is a weak collection of fee-based services. I suspect Apple’s more comfortable creating social networking features that enhance its products and marketplaces, rather than building out a free-standing social network.

Competitive Implications

Standalone social networks like Facebook, Twitter and LinkedIn probably won’t face Apple as a head-to-head competitor for their audiences, advertisers or what they deliver as their core user experience. Apple doesn’t appear to be interested in building a general-purpose social network, a short message broadcasting service or a professional connections network. MySpace is way ahead of Apple in gathering artists’ pages and a social music audience, but Apple’s ability to drive sales makes it a fierce competitor for label attention.

Those companies, and others like Google, Yahoo and Microsoft, who aspire to provide social media APIs, services and even infrastructure, should cultivate, rather than compete with Apple, especially if they want to reach Apple’s customers. That means they should license or, if Apple’s in its usual DIY mode, integrate their own social networking technologies with Apple’s. By the time you read this, Ping users may be able to find their friends via Facebook Connect.

Related Research:With Ping, Apple Builds a Social Network Inside a Walled Garden

Question of the week

Could Apple build a social network that could challenge Facebook and Twitter?