All posts in “News”

Yahoo and Tumblr – Avoiding Commoditization by Association

So, it’s official – while many of us (especially on Twitter) waited and watched over the weekend after All Things D broke the story, Yahoo has agreed to buy content sharing platform Tumblr for $1.1 billion in cash. The analysis has been varied and thoughtful: why Tumblr’s exit is about 30% of what it might have been (they failed to demonstrate that they could monetize on a timeline that would suit their investors/were running out of cash), why the value isn’t in their technology, but rather the networks’ function as a “vector for viral sharing“, and, finally, how Tumblr can “make money without pissing us off” (leverage tag pages, keep your hands off my content).

I had the chance to hear Tumblr CEO David Karp speak at the GigaOm paidContent Live conference in New York just a few weeks ago. In a 1:1 interview with Mathew Ingram, Karp referred repeatedly to Tumblr’s value in “Helping get people to the stuff that they’re actually going to love,” which struck me as both interesting and incomplete. If Tumblr’s value lies in not just your content, but ultimately in its ability to filter and anticipate and deliver that content in a way that adds incremental value, that’s promising. It’s also a model that requires significant technology investment (robust search and a brilliant, best-in-breed recommendation engine that uses highly sophisticated collaborative filtering). Content is like ore, and those technical filters are required to help users refine it in order to mine and generate that additional value. To do this your tech had better be killer; from what I have seen so far, I’m not sure that’s the case today.

Nevertheless, if that’s the proposed unique value prop – rather that just a publisher of cool stuff, building a better filter in order to be a content force multiplier (which is really the “building a better mousetrap” of the Information Age, when you think about it) – how do you monetize it? “Display advertising” and “paid search” are incorrect answers. These revenue models are so deeply commoditized that to begin to rely on them for revenue serves to commoditize your business as well, regardless of how unique or robust (“commoditization by association”). This is short-term gain for long-term pain, and as we’ve seen, deadly poisonous to future innovation in generating revenue from attention. If that’s the best Yahoo and Tumblr can do together, Tumblr will die a slow death like so many other past acquisitions, in this case because of what you might call the “MySpace death spiral”: reliance on eyeball- rather than engagement-based advertising erodes the user experience. Users leave (especially a risk here since micro/blogging technology is pretty ubiquitous). Eyeball-based numbers start to drop, revenue targets are missed, anxiety ensues and the short-term answer is to further junk up the user experience in order to deliver more impressions. Rinse and repeat, and within a very short period of time you have a virtual ghost town.

I would argue that this will be a hard trap not to fall into: platforms like Facebook have come to rely on the easy source of display revenue to the detriment of figuring something out that will actually allow advertisers to add value to the user experience at scale (sponsored posts are just another form of “spray and pray”). Of course, advertisers, and particularly their agencies, are the enablers here – they want three basic things: round pegs for round holes, scale, and “set it and forget it”. In my experience, anything that doesn’t fit into a CPM or CPC model is a bespoke option that is lovely to pilot, generates great results and shows the CMO some cutting-edge thinking. It then quietly gets discarded in favor of more efficient and reliable agency revenue streams.

There are three things on the Tumblr/Yahoo to-do list for 2013:

1. Push the edges on intelligent recommendation technology (just think of the dataset they must have!)

2. Innovate on engagement-based ad format design

3. Bypass agencies: try to build partnerships directly with brands to help bring scale and meaning to a revenue model that is based on adding value rather than the very comfortable “interrupt and repeat”

If they don’t get two out of three right, we’ll be talking about Tumblr in the past tense faster than you can say “Rich Kids of Instagram”

Planning to be Spontaneous: Oreo and Realtime Marketing

Success in real-time marketing is as much operations as creativity

Ever since Oreo suggested that you could “still dunk in the dark” during the 2013 Super Bowl blackout, real-time marketing (RTM) has become the new black. Never mind that the phrase was first coined in 1995 by Apple marketing guru Regis McKenna; this winter, breathless media pundits across the social web touted the brilliance of Oreo and its agencies for inventing something earth-shatteringly new and exciting.

However, the real story behind Oreo’s timely tweet is perhaps not so startling after all. I moderate a weekly webinar for Social Media Today, and on one of our recent shows, David Berkowitz, vice-president of emerging media at 360i (who leads digital strategy for Oreo), reminded our listeners that the brand began building the culture and processes to support its real-time approach almost a year before, with the start of the Oreo Daily Twist campaign – 100 days of real-time content to celebrate the cookie’s 100th birthday.

By the time the Superbowl rolled around, both agency and client teams were operating like a finely tuned machine, and were about as close as you can get to experts at marketing in the moment. In Berkowitz’s words, they made content every day – Feb. 3, 2013 just happened to be a really, really good day.

A lot of the reason that Oreo was able to make this work is strikingly simple and yet totally uncommon. The agency and client trust each other. They worked together to develop an approvals process that was streamlined, they had months of practice (delivering hits and lots of misses) and had the right people at the table to make it work (including the PR team).

They could make decisions quickly, and thought thoroughly about the implications of doing it wrong – being accused of newsjacking, or worse.

In fact, Oreo was ready to go with their famous tweet, but decided to wait a few minutes to ensure the blackout wasn’t an attack of some kind (imagine how differently the analysis would be playing out if it had been?).

If you’re an organization that regularly experiences lengthy, painful approval processes on creative, you’re going to need to do some thinking before you even attempt marketing in real time. Not only because it will be virtually impossible for you to take advantage of the now, but also because throwing out a piece of RTM content is just the start of the chain. If people are interacting or responding to you in a positive way, there are layers upon layers of opportunity to keep that conversation and engagement going. You need to be able to keep your foot on the gas, and having the trust and commitment of legal, leadership and your creative team is the only way you can possibly hope to keep up.

You need to be in a place where you can sit with stakeholders and reimagine the way you market, and then be prepared to change what you imagined based on reality – not your best-laid plans. You need to be flexible, and you need to have a team of partners you trust.

Real-time marketing success is as much operations as it is inspiration – an approach that probably gives many creatives hives. It’s the orchestration of diverse teams (legal, agency, marketing leadership, communications), it’s process and it’s comfort with risk.

Both client and agency need to be prepared and plan for failure – either by getting little or no attention, or lots of the wrong kind. As Berkowitz so aptly noted: confident, curious brands that are prepared to innovate, experiment and screw up will emerge as the true leaders in real-time marketing. There is no shortcut.

A modified version of this column appeared in the May 22nd edition of Marketing Magazine.

Are You Ready for The Shake-Up?

Prepare yourself. From September 15th to 17th, 2013, Social Media Today and Blogworld will be hosting The Social Shake Up an amazing gathering of social and digital practitioners in Atlanta. This is the “real deal” – we’ll be joined by leading thinkers (and, importantly, doers) from big brands like AFLAC, Citigroup, Dell, GetSatisfaction and PwC, who will be sharing their insights, experiences and unique perspectives on what it means to be a social business, now and into the future.

It’s been my great pleasure to help curate this event. We’ve created tracks that we feel both reflect the questions you’re asking today, and the ones your boss will be asking tomorrow: Community and Customers, Big Data, Content, The Social Business, The Mobile Business, and Strategy and the C-Suite (that last section geared specifically to senior leaders and the 30,000-foot view they need to take when considering what it truly means to be a social business). I’m really excited about the content and the top-notch industry leaders we’ve asked to participate. This isn’t a theoretical event – this is the best of the best, sharing their practical insights, a window into applied innovation from those who have done it.

I’m also extremely fortunate to be hosting the event live, and I hope you’ll be able to join us. For a very short time, we’re going to be offering early registration pricing. You can sign up to attend here, and I recommend you do so quickly. This is the only event of its kind, and if you’re (like so many others) tired of the sizzle and ready for the steak, this is the conference for you.

Hope to see you there.

Where We Came From, Where We're Going

When I founded Social Media Group almost seven years ago, I had a feeling I was on to something. There were a number of technology companies that we’re selling (at the time) blogging software, but clients had no idea how to actually engage online. The deal was sealed when, in a client meeting in 2006, a very senior agency person said he was really interested in how “companies were using blogs to talk to their customers”. I’d been blogging since 2004 and knew that I could help firms figure that out.

We started small – for the first year or so of being in business, I could literally read, and write about, every single thing that happened in social media. And I did – I posted daily on the SMG blog, commenting on many others. There was a small group of us working in the space then – all of whom I still count as friends, and many of whom have gone on to amazing careers as some of the most recognizable names in social and digital strategy and execution. One of the things I love best is when I get the chance to hang out with this group of “Social Media Old-Timers” at conferences like South by Southwest.

Social Media Group grew along with interest in social media – in 2007 we were hired by Ford Motor Company to increase their capabilities in social. By 2010, they were winning awards from their peers for their work in the space. We were engaged by companies like 3M to help craft strategic plans, and I take pride in the fact that digital policies and guidelines we wrote for them have been adopted across their global organization. We helped retail and consumer companies, too – in our work with Sleep Number we were able to help them draw the line between a Facebook “like” and direct return on investment - a case study Facebook’s legal department told them they couldn’t use because it was so exceptional. We pioneered – being among the first to use platforms like Outbrain and promoted tweets, and we lead – as in the early days, thought leadership and speaking was an enormous part of our marketing (and was always what I loved best).

Of course there were plenty of mistakes, missteps and misunderstandings along the way, but I learned from each and every one of them (and hopefully repeated very few!). As with all agencies, we ebbed and flowed with the work – but have, in recent years, gotten to an absolutely incredible place in terms of team. I have NEVER worked with such an amazing group of people. I understand that our folks are a regular target for headhunters, and it pleases me to hear that (and also to know that the headhunters never get very far).

And so, with all that in mind, it’s time to talk about where we’re going next. The part of our work that I have always enjoyed the most is the thought leadership and analysis – both external (what does this mean?) and also internal (what we have learned from our work?). Writing, speaking and sharing that industry-leading knowledge and insight has always been what we’re best at, which is why this will be our new area of focus moving forward. SMG will be backing away from the business of agency and creative execution and instead focus on delivering executive counsel, thought leadership and strategic insights based on our years of experience working with some of the biggest social businesses in the world. It’s a big change, and with it come big changes for our fantastic team. Although challenging, I’m very much looking forward to the next chapter.

Column: It's Time For Facebook to Grow Up

This post was originally published by Marketing Magazine by Patrick Gladney, Director of Research and Insights at SMG. Follow him @pgladney

Last week was kind of like Facebook’s Bar Mitzvah – a time for the social network to grow up and begin taking responsibility for its own actions. Funny that Mark Zuckerberg chose to wear his trademark “hoodie” to ring the bell on Nasdaq the day of the IPO, signaling to the market that he still plans on playing by his own rules.

Zuckerberg may still choose to dress casually, but I would hazard a guess to say that he’ll soon begin to feel the pressure of the Street. Facebook needs to share a strategy that will explain how they plan to achieve revenues that will justify their valuation, especially in light of GM’s public announcement that they will be pulling ad spends from the platform because they can’t clearly define the value of Facebook ads to their business.

With GM as the backdrop, Facebook is working hard to help its advertisers achieve measurable results. Just last week at the CMA conference, Facebook and L’Oreal took the stage and admitted they were still working together to crack the ROI challenge. While most brands by now are committed to investing in Facebook as a content channel play, brands publishing content to generate awareness won’t pay a dividend to Facebook investors, and besides, for large advertisers like GM, awareness isn’t the problem. GM needs people to buy cars.

Working in Facebook’s favour is the fact that they are already an immensely profitable company, earning $1 billion in profits on $4 billion in revenue. Also working in their favour is the fact that their entire mobile platform is yet to be monetized, which is promising knowing that the 54% of users who access Facebook through mobile are two times as active. But unfortunately, activity, including time on site, does not yet translate into sales. Sure, ads on Facebook can be accurately targeted, but accuracy doesn’t amount to anything if the ads perform no better than their display ad brethren.

Early attempts at “f-commerce,” designed to create an integrated user experience where consumers can shop and buy without leaving Facebook, have failed to generate any meaningful results or more companies would be doing it. Mind you, most trailblazing Facebook e-tailers haven’t worked to create much in the way of retail excitement to entice Facebook buyers. Brands need to do more than simply iframe in their e-commerce site and emulate companies like BMW, who last year began selling exclusive limited edition brand merchandise on Facebook. In targeting BMW owners, this initiative helped test the potential of f-commerce to drive customer retention and generate advocacy through the network effect. But once again, we are back to putting the onus on brands to develop great content and customer experiences, with a relatively small amount of measurable sales potential in return.

So is Facebook a good bet? The risk is that the tremendous potential of Facebook turns out to be just that. The long term success for Facebook depends on the ability for brands to measure sales. And now that the company is public, they will be measured against other media companies, which are valued based on revenue per user. According to a recent mathematical model published by the MIT Technology Review, Facebook will have to increase their profit per user by between 160 and 600% for their current valuation to make sense in this context.

At Social Media Group, we’re obviously bullish on the potential of social media. But now that Facebook is a publicly traded company, it’s time for the platform to mature past the stage of experimentation and help deliver solid business returns.

Facebook IPO: Will Zuck Need to Eat His Words?

Patrick Gladney is the Director of Research and Insights at SMG. Follow @pgladney

This week represents a coming out party of sorts for the gorilla of social networks, Facebook. Any day now, the Facebook IPO means that people will be able to own a piece of the company rather than just “Like” it. So how will Facebook fare once it is traded on the open market? Will the merciless scrutiny of Wall Street and public investors alter the trajectory of a channel with a (projected) larger market cap than Disney, News Corp or CBS? I wonder, particularly when one reads the 16 words from a letter Mark Zuckerberg wrote, included in Facebook’s IPO filing:

“Simply put: we don’t build services to make money; we make money to build better services.”

Perhaps Zuck is looking to mimic Google’s famous  ”informal” corporate mantra “Don’t be evil” in choosing such an altruistic social mission statement. But Facebook consistently gets in trouble with privacy watchdogs, intent on protecting consumer data. So much so, that one might easily believe that money making trumps services at Facebook. Or perhaps those services relate to the needs of advertisers, instead of ordinary members?

Regardless, I find it interesting that a business the size of Facebook downplays the significance of making money, almost as if it’s a dirty practice.  Businesses are built to make money, and I am sure that investors will see this as the priority. Investing in the business to improve the service offering makes sense in the early stages, but my guess is that Wall Street will want Facebook to grow up. As the old saying goes, “if you want to run with the big dogs…”

What do you think Facebook’s real priorities are?

New Free SMG Whitepaper: Unleash the Power of Content Marketing Part 1

SMG Content Marketing Logo

Today, we’re thrilled to release part one of our latest whitepaper: Unleash the Power of Content Marketing: Strategy and Considerations for Operations.

DOWNLOAD THE WHITEPAPER NOW

Truly a labor of love, when we sat down to write this whitepaper (it is jointly authored by Leona Hobbs, Michelle McCudden and myself), our vision was to provide a guidebook for marketers looking to execute content marketing programs inside their organizations.  Drawing on the expertise we’ve gleaned working with our clients on content marketing programs, we quickly realized that we had enough for two (or more) whitepapers.

So, we’ve split them up. Part one covers Strategy and Considerations for Operations – this is our best counsel and advice for leaders and executives about how they can set their teams up for success in the execution of content marketing programs. Part one of Unleash the Power of Content Marketing covers:

  • How to define your program
  • Building the case for change
  • How to structure operations
  • Content marketing and the sales funnel

Please take a look at an excerpt from Part 1 of Unleash the Power of Content Marketing and if you like what you see, download the entire thing. We’re always interested in conversation, so we look forward to hearing back from you. How does this whitepaper match your experiences as you plan strategy and operations for content marketing?

Oh, and Part 2 of Unleash the Power of Content Marketing covers concrete steps for achieving excellence in execution of content marketing tactics. Its scheduled for release in a couple of weeks.

How Content Marketing is Changing Everything, and How Social Media Group Can Help

In today’s billion-channel universe, the traditional ‘interrupt and repeat’ approach to advertising is in serious trouble (thank goodness!). After years of intrusive pop-ups and pre-roll ads, brands are realizing that they not only must compete with entertainment-quality content, but earn their consumers’ attention by delivering relevant, valuable, and remarkable information. Enter Content Marketing.

SMG Content Marketing

What is Content Marketing?

Content Marketing is about changing your approach from push to pull. It’s about designing quality, aligned content that is highly targeted to an interested audience that is already in ‘content consumption mode’. It’s about being the right thing, in the right place, at the right time. Ultimately, it’s about cutting through the clutter.

Today, after years of paving the way with content marketing beta programs on platforms like Outbrain, Digg, and Twitter, SMG is pleased to formally announce Content Marketing as part of our full service integrated digital offering.

A recent Content Marketing campaign developed and launched by SMG generated:

  • 375 million impressions
  • 700,000 clicks (0.22% CTR)
  • 6,000 content downloads (conversions)
  • Average Cost Per Click (CPC) of $0.16 and Average Cost Per Thousand (CPM) of $0.48 (98% lower than historical Search PPC costs)

Head over to our Resources page to get the latest SMG Content Marketing Case Study.

Want to learn more?

Register for our free webinar, “How Content Marketing is Changing Everything”, where I’ll be joined by C.C. Chapman, co-author of “Content Rules“, on January 31st, 2012 @ 12PM EST. Presented by Social Media Group and Social Media Today.

Or, if you’re in the San Francisco Bay Area during Social Media Week, come by SAP’s Palo Alto offices, where I’ll be delivering a session all about content marketing and how it’s truly changing everything.

Want to find out how SMG can help your content marketing efforts? Click here!

Social Media as News, SMG in the news

The new media paradigm:

The fastest way to get a news story out is on twitter.

Every journalist is using social to communicate and look for a scoop.

Social media is a big story behind elections, social movements and the occasional publicity crisis.

It’s symbolic of the fact that each and everyday we’re witnessing the convergence between social media and mainstream news sources.

Further proof of this convergence is the fact that every two weeks, you’ll find Social Media Group in the newspaper of all places (digital editions too!)  Bi-weekly, we’ll be contributing social media data and analysis to the folks at Postmedia relating to current events, both lighter fare and important issues.  We aim to be the Angus Reid of social media research!

To see what we’re up to, just click on our contribution to the viral global spread of the Occupy movement on Twitter, or last week’s gem,  Beaver versus Polar Bear as the Canadian national animal (infographic below).

Like the work we do for our clients, our goal is to inform, provide insight and occaisionally offer some entertainment!  Enjoy!

 

Announcement: Social Media Group Teams Up With FPinfomart

Today, we’d like announce an exciting new partnership between Social Media Group and Canada’s leading media monitoring service, FPinfomart.

FPinfomart, a division of Postmedia Network Inc., is a one stop resource for traditional media monitoring, covering print, newswires and broadcast in a single integrated platform. Our partnership brings together industry leading mainstream media coverage with SMG’s social media Research and Insights Practice whose principal job is to help clients understand and act upon conversations in social media.

Why are we so excited about this new venture?

  • It recognizes the convergence of channels.  Social and traditional media are now inextricably linked and analyzing them separately no longer makes sense. Social media pundits often reference the decline of traditional channels, but a more honest appraisal of the landscape would still recognize to the mass power of print and broadcast and the conversation it triggers online.
  • Insights from social data now have greater context. Looking at social media data alone is the equivalent to a horse wearing blinders. Brands need to see the bigger picture. At SMG, we’ve witnessed social media groundswell lead to coverage in mainstream media, and vice versa. With integrated measurement, clients can see the entire landscape, not just a sliver.
  • We will deliver extra value to our clients. SMG is all about helping clients succeed on the social web.  Increasingly, the social web is populated by the media and responses to mainstream media activity.  Being able to tell a story and take action based on a holistic view of influence and issues is a powerful, unique and creative offering.

Together, Social Media Group and FPInfomart will now provide a complete, holistic view of the communications landscape that is unmatched in the marketplace, enabling our clients to understand and act upon what’s being said in any channel.

To find out more about this unique offering, please email me at patrick [dot] gladney [at] social media group [dot] com, call +1 416-703-3764 or Contact Us.