Senior Editor in Charge of Adotas, Sarah Novotny summarizes key future trends in Online advertising as predicted by Dilip DaSilva, Exponential's founder and CEO. Excerpting from the summary, Novotny says there are six key trends identified in this release.
1. In a world where nearly everything can be anonymously known about a registered user on a large site, marketers are making full use of the data to deliver on the promise of 1-1 marketing. Online advertisers wil create highly customized and immersive marketing experiences, fully leveraging the most up-to-date data from their databases.
2. While user generated content (UGC) is inappropriate for most major brands, we'll see more professionally-produced viral campaigns that capitalize on this genre, says DaSilva. With no standards, and lots of different players and technology, video buys are still incredibly labor intensive, and often require site-by-site exercise he says. Brand advertisers are clamoring for an affordable, brand-safe environment with the ability to target audiences with video.
Premium content is very expensive, and serious questions are emerging about the level of intrusiveness of running pre-roll. Professionally produced content affords a better value but is more difficult to find at scale. Overlay advertising will likely become the preferred solution, DaSilva anticipates, when it comes to monetizing the large volume of user generated video content, whereas pre-roll will continue to be tolerated in front of high-quality content.
3. 2008 is the year when we finally see a viable, truly local solution for local advertisers. The breakout leader in the online local space will be the company that provides the best user experience and repeat users, "without consumers being bombarded with national ads when they are looking for a local sushi restaurant." says the release.
We believe, reports DaSilva, that "vertical local" will play a vital role, becoming even more granular, or "hyper local," with legal, travel, and home services playing an important role as well. The release notes that Yellowpages.com and Superpages tend to attract the users who are searching for more services.
"Local CPC (cost-per-click) display" will evolve to be a major factor in 2008. This means local users on a national site will be shown display ads of local businesses in their area that are relevant to their interests, using data from the display network. These ads create a greater CTR and also the opportunity for local businesses to advertise on sites that they could not have accessed in the past.
4. As more advertisers launch online branding campaigns they increasingly want more metric feedback on the effectiveness of their online marketing efforts, beyond clicks, both to justify spending on the web and to help guide their future media allocations.
With the shift of TV to online, the industry has no choice but to embrace the emotional selling proposition where the emotional values becomes critically important in the buying process. This change will enable online buying to shift from a transactional strategy to an ongoing source for influencing the customer in different stages of the purchase funnel.
5. While the technology of computers acting as intelligent agents has largely lived in the research arena, it is now making its way into mainstream applications. (Some Online marketers) are now deploying applications that "learn," enabling users to structure and share the richness of their online experiences.
6. 2008 will see the increased popularity of Virtual Worlds. Users will increasingly shift towards specialty worlds more closely associated with their lifestyles or interests. This will be an opportunity for marketers to create whole worlds around products, or to customize environments inside specialty virtual environments.
Advertisers can create branded environments and even brand accessories. For example, Coke Studios is an online community with millions of users creating customized music mixes that can be shared and rated by others.
DaSilva concludes that "These are a few of the key topics we think will be consistently discussed during the conferences and industry events in 2008..."
For the complete prediction summary, please visit Adotas here.
Friday, November 30, 2007
Thursday, November 29, 2007
eToro Makes Forex Trade Child’s Play
Posted: 27 Nov 2007 02:56 PM CS - Techcrunch
Israeli eToro is taking a novel approach in simplifying Foreign Exchange (Forex) trading by packaging the complicated concepts involved in trading one currency against another, in fun non-threatening wrappers.
Just how big is Forex trading? Try an estimated $3.2 trillion in daily turnover—that’s ~35 times the average turnover of the NYSE. However, unlike stock trading which has been generally adopted by the mainstream, Forex trading to date has been mostly marginalized to professional traders. eToro wants to change all that.
I spoke to eToro’s CEO, Johnathan Assia, who explained that the real challenge for eToro is finding ways to present Forex data in a simplified and user-friendly manner that makes it accessible to ordinary users. To appreciate the challenge, take a look at the screenshot on the right depicting a typical Forex trading app interface. Now take a look at the screenshots below of eToro’s offering. Talk about a picture being worth a 1000 US Dollars Vs. the Japanese Yen…
Requiring a client download, eToro lets users practice play, or deposit funds for real money trading. The currencies available to trade are the US Dollar, British Pound, Australian Dollar, the Euro and the Japanese Yen. This is where it gets fun… There are four games to choose from:
Forex Marathon – You pick the currency you think will go up and have it compete in a foot race against the currencies you think will go down
Dollar Trend – Race the US Dollar against other currencies, choosing whether it will rise or fall.
Globe Trader – Manage your Forex trading portfolio by forging relations with other currencies on the map of the world.
Forex Match – Choose the currency you think will go up and
have it go one-on-one in a tug of rope against a currency you think will go down.
I was supplied with a real money account by eToro and managed to lose $17 in an hour’s-worth of play =(
When a user registers for a real money account, that account is actually opened at one of two foreign exchange trading brokers, RetailFX or IFX Markets. eToro decides which broker based on where it expects to make the most commissions on trades the user makes.
The one thing I found odd about eToro is its rigid insistence on the lack of parallels when comparing it to online gaming operators. This is a rather naïve point-of-view for several reasons: First, one of the company’s co-founders and its CTO is David Ring who was a key R&D leader at Israeli-based 888.com (a major online casino and poker room operator). Second, eToro’s client application is strikingly similar to gambling apps, and this cannot be a pure coincidence. Third, eToro is a BVI company, (a.k.a., a British Virgin Islands company)—classic tax strategy by gambling operators. Fourth, the company’s affiliate marketing offering is extremely reminiscent of gaming operators, “Receive 25% of eToro’s Revenues or Get $2 per every free registered user.”
It’s important to note that will all the similarities, eToro is in fact not a gaming operator. Forex trading is not considered gambling and therefore does not fall under the scope of H.R. 4777, the Internet Gambling Prohibition Act.
In January 2007 eToro raised a first round of financing to the tune of $1.7M from by private investors. In an interesting side note, one of these investors is Chemi Peres, who heads Pitango Venture Capital and also happens to be the son of statesman and current president of Israel, Shimon Peres
Israeli eToro is taking a novel approach in simplifying Foreign Exchange (Forex) trading by packaging the complicated concepts involved in trading one currency against another, in fun non-threatening wrappers.
Just how big is Forex trading? Try an estimated $3.2 trillion in daily turnover—that’s ~35 times the average turnover of the NYSE. However, unlike stock trading which has been generally adopted by the mainstream, Forex trading to date has been mostly marginalized to professional traders. eToro wants to change all that.
I spoke to eToro’s CEO, Johnathan Assia, who explained that the real challenge for eToro is finding ways to present Forex data in a simplified and user-friendly manner that makes it accessible to ordinary users. To appreciate the challenge, take a look at the screenshot on the right depicting a typical Forex trading app interface. Now take a look at the screenshots below of eToro’s offering. Talk about a picture being worth a 1000 US Dollars Vs. the Japanese Yen…
Requiring a client download, eToro lets users practice play, or deposit funds for real money trading. The currencies available to trade are the US Dollar, British Pound, Australian Dollar, the Euro and the Japanese Yen. This is where it gets fun… There are four games to choose from:
Forex Marathon – You pick the currency you think will go up and have it compete in a foot race against the currencies you think will go down
Dollar Trend – Race the US Dollar against other currencies, choosing whether it will rise or fall.
Globe Trader – Manage your Forex trading portfolio by forging relations with other currencies on the map of the world.
Forex Match – Choose the currency you think will go up and
have it go one-on-one in a tug of rope against a currency you think will go down.
I was supplied with a real money account by eToro and managed to lose $17 in an hour’s-worth of play =(
When a user registers for a real money account, that account is actually opened at one of two foreign exchange trading brokers, RetailFX or IFX Markets. eToro decides which broker based on where it expects to make the most commissions on trades the user makes.
The one thing I found odd about eToro is its rigid insistence on the lack of parallels when comparing it to online gaming operators. This is a rather naïve point-of-view for several reasons: First, one of the company’s co-founders and its CTO is David Ring who was a key R&D leader at Israeli-based 888.com (a major online casino and poker room operator). Second, eToro’s client application is strikingly similar to gambling apps, and this cannot be a pure coincidence. Third, eToro is a BVI company, (a.k.a., a British Virgin Islands company)—classic tax strategy by gambling operators. Fourth, the company’s affiliate marketing offering is extremely reminiscent of gaming operators, “Receive 25% of eToro’s Revenues or Get $2 per every free registered user.”
It’s important to note that will all the similarities, eToro is in fact not a gaming operator. Forex trading is not considered gambling and therefore does not fall under the scope of H.R. 4777, the Internet Gambling Prohibition Act.
In January 2007 eToro raised a first round of financing to the tune of $1.7M from by private investors. In an interesting side note, one of these investors is Chemi Peres, who heads Pitango Venture Capital and also happens to be the son of statesman and current president of Israel, Shimon Peres
Tuesday, November 27, 2007
How to do VIRAL
This guest post was written by Dan Ackerman Greenberg
, co-founder of viral video marketing company The Comotion Group and lead TA for the Stanford Facebook Class. Dan will graduate from the Stanford Management Science & Engineering Masters program in June.
Have you ever watched a video with 100,000 views on YouTube and thought to yourself: “How the hell did that video get so many views?” Chances are pretty good that this didn’t happen naturally, but rather that some company worked hard to make it happen – some company like mine.
When most people talk about “viral videos,” they’re usually referring to videos like Miss Teen South Carolina, Smirnoff’s Tea Partay music video, the Sony Bravia ads, Soulja Boy - videos that have traveled all around the internet and been posted on YouTube, MySpace, Google Video, Facebook, Digg, blogs, etc. - videos with millions and millions of views.
Over the past year, I have run clandestine marketing campaigns meant to ensure that promotional videos become truly viral, as these examples have become in the extreme. In this post, I will share some of the techniques I use to do my job: to get at least 100,000 people to watch my clients’ “viral” videos.
Secret #1: Not all viral videos are what they seem
There are tens of thousands of videos uploaded to YouTube each day (I’ve heard estimates between 10-65,000 videos per day). I don’t care how “viral” you think your video is; no one is going to find it and no one is going to watch it.
The members of my startup are hired guns – our clients give us videos and we make them go viral. Our rule of thumb is that if we don’t get a video 100,000 views, we don’t charge.
So far, we’ve worked on 80-90 videos and we’ve seen overwhelming success. In the past 3 months, we’ve achieved over 20 million views for our clients, with videos ranging from 100,000 views to upwards of 1.5 million views each. In other words, not all videos go viral organically – there is a method to the madness.
I can’t reveal our clients’ names and I can’t link to the videos we’ve worked on, because YouTube surely doesn’t like what we’re doing and our clients hate to admit that they need professional help with their “viral” videos. But I can give you a general idea of who we’ve worked with: two top Hollywood movie studios, a major record label, a variety of very well known consumer brands, and a number of different startups, both domestic and international.
This summer, we were approached by a Hollywood movie studio and asked to help market a series of viral clips they had created in advance of a blockbuster. The videos were 10-20 seconds each, were shot from what appeared to be a camera phone, and captured a series of unexpected and shocking events that required professional post-production and CGI. Needless to say, the studio had invested a significant amount of money in creating the videos but every time they put them online, they couldn’t get more than a few thousand views.
We took six videos and achieved:
- 6 million views on YouTube
- ~30,000 ratings
- ~10,000 favorites
- ~10,000 comments
- 200+ blog posts linking back to the videos
- All six videos made it into the top 5 Most Viewed of the Day, and the two that went truly viral (1.5 million views each) were #1 and #2 Most Viewed of the Week.
The following principles were the secrets to our success.
2. Content is NOT King
If you want a truly viral video that will get millions of people to watch and share it, then yes, content is key. But good content is not necessary to get 100,000 views if you follow these strategies.
Don’t get me wrong: the content is what will drive visitors back to a site. So a video must have a decent concept, but one shouldn’t agonize over determining the best “viral” video possible. Generally, a concept should not be forced because it fits a brand. Rather, a brand should be fit into a great concept. Here are some guidelines we follow:
- Make it short: 15-30 seconds is ideal; break down long stories into bite-sized clips
- Design for remixing: create a video that is simple enough to be remixed over and over again by others. Ex: “Dramatic Hamster”
- Don’t make an outright ad: if a video feels like an ad, viewers won’t share it unless it’s really amazing. Ex: Sony Bravia
- Make it shocking: give a viewer no choice but to investigate further. Ex: “UFO Haiti”
- Use fake headlines: make the viewer say, “Holy shit, did that actually happen?!” Ex: “Stolen Nascar”
- Appeal to sex: if all else fails, hire the most attractive women available to be in the video. Ex: “Yoga 4 Dudes”
These recent videos would have been perfect had they been viral “ads” pointing people back to websites:
- Model Falls in Hole on Runway
- Cheerleader Gets Run Over By Football Team
- PacMan: The Chase
- Dude
- Dog Drives Car
- Snowball – Dancing Cockatoo
3. Core Strategy: Getting onto the “Most Viewed” page
Now that a video is ready to go, how the hell is it going to attract 100,000 viewers?
The core concept of video marketing on YouTube is to harness the power of the site’s traffic. Here’s the idea: something like 80 million videos are watched each day on YouTube, and a significant number of those views come from people clicking the “Videos” tab at the top. The goal is to get a video on that Videos page, which lists the Daily Most Viewed videos.
If we succeed, the video will no longer be a single needle in the haystack of 10,000 new videos per day. It will be one of the twenty videos on the Most Viewed page, which means that we can grab 1/20th of the clicks on that page! And the higher up on the page our video is, the more views we are going to get.
So how do we get the first 50,000 views we need to get our videos onto the Most Viewed list?
- Blogs: We reach out to individuals who run relevant blogs and actually pay them to post our embedded videos. Sounds a little bit like cheating/PayPerPost, but it’s effective and it’s not against any rules.
- Forums: We start new threads and embed our videos. Sometimes, this means kickstarting the conversations by setting up multiple accounts on each forum and posting back and forth between a few different users. Yes, it’s tedious and time-consuming, but if we get enough people working on it, it can have a tremendous effect.
- MySpace: Plenty of users allow you to embed YouTube videos right in the comments section of their MySpace pages. We take advantage of this.
- Facebook: Share, share, share. We’ve taken Dave McClure’s advice and built a sizeable presence on Facebook, so sharing a video with our entire friends list can have a real impact. Other ideas include creating an event that announces the video launch and inviting friends, writing a note and tagging friends, or posting the video on Facebook Video with a link back to the original YouTube video.
- Email lists: Send the video to an email list. Depending on the size of the list (and the recipients’ willingness to receive links to YouTube videos), this can be a very effective strategy.
- Friends: Make sure everyone we know watches the video and try to get them to email it out to their friends, or at least share it on Facebook.
Each video has a shelf life of 48 hours before it’s moved from the Daily Most Viewed list to the Weekly Most Viewed list, so it’s important that this happens quickly. As I mentioned before, when done right, this is a tremendously successful strategy.
4. Title Optimization
Once a video is on the Most Viewed page, what can be done to maximize views?
It seems obvious, but people see hundreds of videos on YouTube, and the title and thumbnail are an easy way for video publishers to actively persuade someone to click on a video. Titles can be changed a limitless number of times, so we sometimes have a catchy (and somewhat misleading) title for the first few days, then later switch to something more relevant to the brand. Recently, I’ve noticed a trend towards titling videos with the phrases “exclusive,” “behind the scenes,” and “leaked video.”
5. Thumbnail OptimizationIf a video is sitting on the Most Viewed page with nineteen other videos, a compelling video thumbnail is the single best strategy to maximize the number of clicks the video gets.
YouTube provides three choices for a video’s thumbnail, one of which is grabbed from the exact middle of the video. As we edit our videos, we make sure that the frame at the very middle is interesting. It’s no surprise that videos with thumbnails of half naked women get hundreds of thousands of views. Not to say that this is the best strategy, but you get the idea. Two rules of thumb: the thumbnail should be clear (suggesting high video quality) and ideally it should have a face or at least a person in it.
Also, when we feel particularly creative, we optimize all three thumbnails then change the thumbnail every few hours. This is definitely an underused strategy, but it’s an interesting way to keep a video fresh once it’s on the Most Viewed list.
See the highlighted videos in the screenshot below for a good example of how a compelling title and screenshot can make all the difference once the video is on the Most Viewed page.
6. Commenting: Having a conversation with yourself
Every power user on YouTube has a number of different accounts. So do we. A great way to maximize the number of people who watch our videos is to create some sort of controversy in the comments section below the video. We get a few people in our office to log in throughout the day and post heated comments back and forth (you can definitely have a lot of fun with this). Everyone loves a good, heated discussion in the comments section - especially if the comments are related to a brand/startup.
Also, we aren’t afraid to delete comments – if someone is saying our video (or your startup) sucks, we just delete their comment. We can’t let one user’s negativity taint everyone else’s opinions.
We usually get one comment for every thousand views, since most people watching YouTube videos aren’t logged in. But a heated comment thread (done well) will engage viewers and will drive traffic back to our sites.
7. Releasing all videos simultaneously
Once people are watching a video, how do we keep them engaged and bring them back to a website?
A lot of the time our clients say: “We’ve got 5 videos and we’re going to release one every few days so that viewers look forward to each video.”
This is the wrong way to think about YouTube marketing. If we have multiple videos, we post all of them at once. If someone sees our first video and is so intrigued that they want to watch more, why would we make them wait until we post the next one? We give them everything up front. If a user wants to watch all five of our videos right now, there’s a much better chance that we’ll be able to persuade them to click through to our website. We don’t make them wait after seeing the first video, because they’re never going to see the next four.
Once our first video is done, we delete our second video then re-upload it. Now we have another 48-hour window to push it to the Most Viewed page. Rinse and repeat. Using this strategy, we give our most interested viewers the chance to fully engage with a campaign without compromising the opportunity to individually release and market each consecutive video.
8. Strategic Tagging: Leading viewers down the rabbit hole
This is one of my favorite strategies and one that I think we invented. YouTube allows you to tag your videos with keywords that make your videos show up in relevant searches. For the first week that our video is online, we don’t use keyword tags to optimize the video for searches on YouTube. Instead, we’ve discovered that you can use tags to control the videos that show up in the Related Videos box.
I like to think about it as leading viewers down the rabbit hole. The idea here is to make it as easy as possible for viewers to engage with all your content, rather than jumping away to “related” content that actually has nothing to do with your brand/startup.
So how do we strategically tag? We choose three or four unique tags and use only these tags for all of the videos we post. I’m not talking about obscure tags; I’m talking about unique tags, tags that are not used by any other YouTube videos. Done correctly, this will allow us to have full control over the videos that show up as “Related Videos.”
When views start trailing off after a few days to a week, it’s time to add some more generic tags, tags that draw out the long tail of a video as it starts to appear in search results on YouTube and Google.
9. Metrics/Tracking: How we measure effectiveness
The following is how we measure the success of our viral videos.
For one, we tweak the links put up on YouTube (whether in a YouTube channel or in a video description) by adding “?video=1” to the end of each URL. This makes it much easier to track inbound links using Google Analytics or another metrics tool.
TubeMogul and VidMetrix also track views/comments/ratings on each individual video and draw out nice graphs that can be shared with the team. Additionally, these tools follow the viral spread of a video outside of YouTube and throughout other social media sites and blogs.
Conclusion
The Wild West days of Lonely Girl and Ask A Ninja are over. You simply can’t expect to post great videos on YouTube and have them go viral on their own, even if you think you have the best videos ever. These days, achieving true virality takes serious creativity, some luck, and a lot of hard work. So, my advice: fire your PR firm and do it yourself.
Monday, November 26, 2007
You talk, they hear on Web
Companies are reading and listening to what is being said online as they seek to take advantage of new marketing opportunities evolving on social networking Web sites
By Eric Benderoff | Tribune staff reporter | November 23, 2007
You may never hear a word from a conversation analyst, but there's a very good chance one is paying close attention to what you're saying on blogs, in Web forums or in product reviews on sites that sell books or blenders.
Somewhere, someone is reading and analyzing your words.
"I pay attention to what people say online," said Leah Jones, one of these so-called conversation analysts, who works for a recently formed division of public relations giant Edelman called Me2revolution.
She is part of a growing practice at such companies as Kraft Foods Inc. and Procter & Gamble Co. that listens closely to what people say as the Web continues to morph from a medium of static sites to a place where dialogue and interactivity dominate.
The companies are adding positions like community manager, new media strategist or blog strategist, and are actively engaging on the Web.
"If you have a social media strategy, you need the right people," said Jeremiah Owyang, the recently hired senior analyst for social computing at Forrester Research.
He and Jones are typical of the types of people paying attention to how people interact online. Both are active bloggers and social networkers (Owyang counts more than 1,500 friends on Facebook, for instance) and well connected to an assortment of communities online. "My job is research and education," Jones said. "I do a lot of small group training on social media."
Behind this tidal wave of new positions in companies and consultancies is the explosion in popularity of social networking sites and online conversations opening new potential marketing opportunities to companies looking to interact with consumers.
One example is that Facebook and MySpace, two of the Web's top destinations, have introduced new advertising platforms to reach the millions of users at each social site. According to a November survey from eMarketer, advertisers are expected to spend $900 million on social networking sites this year, but by 2011 that is expected to reach $2.5 billion.
Northfield-based Kraft is actively engaged in social networking. This year it opened a grocery store in the virtual world of Second Life (www.second life.com), and it is conducting a contest on MySpace asking people to submit a short video on why they love Kraft Singles. MySpace users can vote for the winning video, which will be announced at the end of December.
For consumers, social media "gives them an opportunity to tell us exactly what they want and what's important to them in an uninhibited environment," Andy Markowitz, Kraft's director of digital media, said in an e-mail. "We're listening and learning as we go."
Owyang said 2008 will be a key year. "For the first time, you will start to see budgets set aside for social media strategies and processes," he said.
But companies have to tread carefully. Unlike traditional advertising messages, Web ads and social networking strategies that try to covertly blend into the mix often backfire, leading to severe consequences.
"To get a true sense of what people are saying on blogs or in forums, we don't get involved in the conversations," Jones said. But if she or someone else from a company she counsels inserts themselves into a conversation, there should be "full disclosure. If I e-mail a blogger, I tell them I'm Leah, I work at Edelman and I'm writing you because ... ," she said.
Fake blogs can hurt brand. In the past, there have been so-called fake blogs set up by companies that were exposed as frauds, including one by Sony Corp. last year to promote its PSP hand-held game player, that can potentially damage a brand.
And not all social media is being used to pitch products. "It can be used for building better products or used to support products," said Owyang, who was hired at Forester after serving as Hitachi Ltd.'s first community manager. "As customers get more involved, expect their feedback to shape new products."
Deborah Schultz, who consults on social media strategies for Procter & Gamble, calls the emerging social practice "conversational marketing." "I'm actually thinking of calling myself a 'digital anthropologist,' but there's more money in being a 'social media strategist,'" she said. "It's absolutely a good time to be doing this, because how companies need to relate to the customer is completely changing."
That can be tricky to manage, Schultz said, and partly explains why companies want to tap into people who have experience interacting online to implement the strategies. "Relationships take time, and they are messy," she said. "There is a give and take, and companies have to realize it can take a long time. "You wouldn't show up at dinner party you weren't invited to and suddenly start selling Tupperware."
Building social media strategy
Jones said Me2revolution's clients include Microsoft Corp., Nissan Motors, Unilever PLC and Wal-Mart Stores Inc., all of which are trying to tap into the conversations about their products that are happening online.
"Everybody knows social media is important, and they want to move the conversation forward," she said. Next year, she said, most of her clients will have a social media strategy "as part of their program, not as an add-on." "When we look at 2008, we're asking, 'What's our news? What's our online strategy? What are our conversation strategies?'" Jones said.
But Schultz cautions that tapping into social marketing is so new that measuring things like brand equity and customer engagement is hard to determine. "That's what we don't know yet," she said.
That thought was echoed by Debra Aho Williamson, a senior analyst for eMarketer. The group's forecast that ad spending will nearly triple by 2011 is based "on the idea that the proof will come, and that marketers will see solid [return on investment] from delivering a brand message to one person and having that person pass along the message to friends," she wrote in a November report.
By Eric Benderoff | Tribune staff reporter | November 23, 2007
You may never hear a word from a conversation analyst, but there's a very good chance one is paying close attention to what you're saying on blogs, in Web forums or in product reviews on sites that sell books or blenders.
Somewhere, someone is reading and analyzing your words.
"I pay attention to what people say online," said Leah Jones, one of these so-called conversation analysts, who works for a recently formed division of public relations giant Edelman called Me2revolution.
She is part of a growing practice at such companies as Kraft Foods Inc. and Procter & Gamble Co. that listens closely to what people say as the Web continues to morph from a medium of static sites to a place where dialogue and interactivity dominate.
The companies are adding positions like community manager, new media strategist or blog strategist, and are actively engaging on the Web.
"If you have a social media strategy, you need the right people," said Jeremiah Owyang, the recently hired senior analyst for social computing at Forrester Research.
He and Jones are typical of the types of people paying attention to how people interact online. Both are active bloggers and social networkers (Owyang counts more than 1,500 friends on Facebook, for instance) and well connected to an assortment of communities online. "My job is research and education," Jones said. "I do a lot of small group training on social media."
Behind this tidal wave of new positions in companies and consultancies is the explosion in popularity of social networking sites and online conversations opening new potential marketing opportunities to companies looking to interact with consumers.
One example is that Facebook and MySpace, two of the Web's top destinations, have introduced new advertising platforms to reach the millions of users at each social site. According to a November survey from eMarketer, advertisers are expected to spend $900 million on social networking sites this year, but by 2011 that is expected to reach $2.5 billion.
Northfield-based Kraft is actively engaged in social networking. This year it opened a grocery store in the virtual world of Second Life (www.second life.com), and it is conducting a contest on MySpace asking people to submit a short video on why they love Kraft Singles. MySpace users can vote for the winning video, which will be announced at the end of December.
For consumers, social media "gives them an opportunity to tell us exactly what they want and what's important to them in an uninhibited environment," Andy Markowitz, Kraft's director of digital media, said in an e-mail. "We're listening and learning as we go."
Owyang said 2008 will be a key year. "For the first time, you will start to see budgets set aside for social media strategies and processes," he said.
But companies have to tread carefully. Unlike traditional advertising messages, Web ads and social networking strategies that try to covertly blend into the mix often backfire, leading to severe consequences.
"To get a true sense of what people are saying on blogs or in forums, we don't get involved in the conversations," Jones said. But if she or someone else from a company she counsels inserts themselves into a conversation, there should be "full disclosure. If I e-mail a blogger, I tell them I'm Leah, I work at Edelman and I'm writing you because ... ," she said.
Fake blogs can hurt brand. In the past, there have been so-called fake blogs set up by companies that were exposed as frauds, including one by Sony Corp. last year to promote its PSP hand-held game player, that can potentially damage a brand.
And not all social media is being used to pitch products. "It can be used for building better products or used to support products," said Owyang, who was hired at Forester after serving as Hitachi Ltd.'s first community manager. "As customers get more involved, expect their feedback to shape new products."
Deborah Schultz, who consults on social media strategies for Procter & Gamble, calls the emerging social practice "conversational marketing." "I'm actually thinking of calling myself a 'digital anthropologist,' but there's more money in being a 'social media strategist,'" she said. "It's absolutely a good time to be doing this, because how companies need to relate to the customer is completely changing."
That can be tricky to manage, Schultz said, and partly explains why companies want to tap into people who have experience interacting online to implement the strategies. "Relationships take time, and they are messy," she said. "There is a give and take, and companies have to realize it can take a long time. "You wouldn't show up at dinner party you weren't invited to and suddenly start selling Tupperware."
Building social media strategy
Jones said Me2revolution's clients include Microsoft Corp., Nissan Motors, Unilever PLC and Wal-Mart Stores Inc., all of which are trying to tap into the conversations about their products that are happening online.
"Everybody knows social media is important, and they want to move the conversation forward," she said. Next year, she said, most of her clients will have a social media strategy "as part of their program, not as an add-on." "When we look at 2008, we're asking, 'What's our news? What's our online strategy? What are our conversation strategies?'" Jones said.
But Schultz cautions that tapping into social marketing is so new that measuring things like brand equity and customer engagement is hard to determine. "That's what we don't know yet," she said.
That thought was echoed by Debra Aho Williamson, a senior analyst for eMarketer. The group's forecast that ad spending will nearly triple by 2011 is based "on the idea that the proof will come, and that marketers will see solid [return on investment] from delivering a brand message to one person and having that person pass along the message to friends," she wrote in a November report.
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