The Homa Files

TakeAway: Google’s making  another attempt to break into into the social web by creating a “plus one” feature for its search results.

Much like on Facebook, you will be able to share your likes as well as see other people in your network of contacts’ and the things they like. 

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Excerpted from AdAge, “Google Adds Own ‘Like’ Button in Foray Into Social Search” , March 30, 2011

Google‘s take on the “like” button — the “plus-one” —  to make search more social, and to combat the growing dominance of Facebook.

Google will allow users to vote plus-one on search results and to share that preference in Gchat, Gmail, Google Reader, Buzz and, soon, Twitter.

This is the first time Google has added a direct social signal into search results.

Over time, Google will integrate the plus-one into the search algorithm itself so human votes will have an impact search ranking.

“Injecting a social layer into the algorithmic search is key to relevance… 35,000 results in less than 3 milliseconds. It’s meaningless, but if you can sort through those by people who have given a social signal and those rise to the top, it can only enhance the user experience.”

The question is whether Google can keep bad actors from gaming the plus-one system for fun or for profit. Google, to its credit, has a lot of experience filtering out attempts to game its algorithms..

Edit by HH

TakeAway: As many people rally around Japan, companies must walk a fine line when combining a brand message with an expression of sympathy. 

As consumers become increasingly skeptical of cause-related marketing and celebrities, organizations and major marketers have to balance trying to help without appearing to exploit the tragedy for profits. 

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Excerpted from the WSJ, “Cause-Tied Marketing Requires Care” By Emily Steel, March 21, 2011

Microsoft’s Bing learned that lesson early on. The search engine created a backlash when it posted a message on Twitter, offering to donate $1 to Japan’s relief efforts each time someone forwarded its message.  The missive set off a firestorm of complaints from Twitter users, who accused Bing of using the tragedy as a marketing opportunity. Within hours, the company responded. “We apologize the tweet was negatively perceived. Intent was to provide an easy way for people to help Japan. We have donated $100,000.”

Marketers have to be especially careful when they create programs that commit them to donate a portion of their proceeds if someone makes a purchase, some ad executives say. 

Still, several retailers are deploying this strategy.  U.S. sushi chain SushiSamba said that through the end of March it will give 100% of the proceeds of a special $12 sushi roll to relief efforts. 

Other marketers are giving their customers benefits in exchange for making donations. American Airlines and Continental Airlines said they would reward donors with bonus airline miles. 

Many companies have chosen to stick to straight donations, instead. Wal-Mart, P&G, Coca-Cola and Walt Disney are among more than 100 corporations across the globe that have committed to donate a total of more than $151 million in cash and other products or services thus far.

Marketers are promoting the initiatives through public relations, their own websites and social networking. While companies often want consumers to know about their efforts, few are launching ad campaigns to avoid any criticism of their intentions.

As relief efforts continue, companies’ motives are likely to be less altruistic, ad experts say. “The first people that do it probably have their heart and head in the right place,” Mr. Adamson says. “But as you go further along, more people try to jump on the band wagon. Doing good becomes less substantial and more of an attention grab.”

Edited by AMW

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TakeAway: When you thought Facebook couldn’t get any more stalkerish, it has just rolled out real time ads relating to status updates, posts etc.

In the mood to eat some cupcakes? Immediately cupcake ads should populate the side bar of your Facebook page. 

With real time ad response, Facebook hopes to put advertisers between consumers’ current thoughts and desires and the next step of fulfilling it.

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Excerpted from AdAge, “Facebook Test Mines Real-Time Conversations for Ad Targeting” by Irina Slutsky, March 23, 2011

….Facebook started to mine real-time conversations to target ads.

For example: Users who update their status with “Mmm, I could go for some pizza tonight,” could get an ad or a coupon from Domino’s, Papa John’s or Pizza Hut.

A user may not have liked any soccer pages or indicated that soccer is an interest, but by sharing his trip to the pub for the World Cup, that user is now part of the Adidas target audience

With real-time delivery, the mere mention of having a baby, running a marathon, buying a power drill or wearing high-heeled shoes is transformed into an opportunity to serve immediate ads, expanding the target audience exponentially beyond usual targeting methods such as stated preferences through “likes” or user profiles.

The moment between a potential customer expressing a desire and deciding on how to fulfill that desire is an advertiser sweet spot, and the real-time ad model puts advertisers in front of a user at that very delicate, decisive moment.

“The long-held promise of local is to deliver timely, relevant and measurable ads which drive actions such as commerce, so if Facebook is moving in this direction, it’s brilliant.”

This real-time test could make a huge difference in how Facebook ads perform, as well as how they are perceived by users. …some analytics firms claim that the Facebook display ad click-through rate is abysmally low — 0.051% in 2010, or about half the industry average…

Edit by HH

TakeAway: With all the recent social media flops some say the end of using social media is near. 

While the way people get and consume information is different, the idea behind making a product that people need and selling it them stays the same, and CMOs need to do things that matter like actually selling the product.  

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Excerpted from AdAge, “Do Campaign Failures, High-Profile Firings Signal the End of Social Media?” by Jonathan Salem Baskin, March 22, 2011

The latest news involving social-media pioneers isn’t good. Pepsi has fallen to third place behind Diet Coke in spite of its widely heralded switch from Super Bowl ads to a huge social charity program called Refresh Project. Burger King has …fired agency Crispin Porter & Bogusky after producing Facebook campaigns and viral videos that got lots of attention while the business witnessed six consecutive quarters of declining sales. …

Every CMO should use this occasion to pause and reflect …on rolling out a social-media campaign or start giving away content for free. Unfortunately, there are many reasons why you shouldn’t, and may not.

… what good are invented metrics for social campaigns if they don’t evidence any influence on sales? There’s no such thing as a successful brand that doesn’t deliver successful marketing, is there? In fact, the latter builds the former. They can’t be disconnected, and if social marketing can’t be made responsible for tangible behaviors that matter to the business, not just to ideas about branding, then no made-up measures of its importance matter much at all.

… Identifying what the social efforts did, if anything, requires the upfront presumption that they were necessary and therefore accomplished anything at all that mattered (like starting out to claim that cereal is “part of a balanced breakfast”). …

…beginning of the end of social media’s infancy. Maybe it’s time to stop talking unseriously and get serious for real. Technology has utterly changed the ways consumers get and use information, and it has completely disrupted how companies create, share and collect it. …People still need and do the same things they always did, and companies still need to sell to them. Pretending that conversation has any value apart from the meaningful, relevant and useful information within it — fad ideas, like “content” is anything more than a silly buzzword, or that anybody wakes up in the morning hoping to have a conversation with a brand of toothpaste or insurance — is no longer credible in light of the latest news.

Instead, CMOs need to discover new ways to do the old things that still matter: Offer products and services that someone truly needs, admitting that you want to sell stuff to them, and then properly serving them after they’ve given you their business. Sounds so easy as I type it but doing so has gotten so incomprehensibly complicated. Maybe the news coming out of Pepsi and Burger King is a wakeup call that we need to make all of this simpler, not harder. …

Edit by HH

Excerpted from: USA TODAY : How cybercriminals invade social networks, companies , Mar 4,2010

Cybercriminals are moving aggressively to take advantage of an unanticipated chink in corporate defenses: the use of social networks in workplace settings.

They are taking tricks honed in the spamming world and adapting them to what’s driving the growth of social networks: speed and openness of individuals communicating on the Internet.

“Social networks provide a rich repository of information cybercriminals can use to refine their phishing attacks.”

This shift is gathering steam.

One sign: The volume of spam and phishing scams more than doubled in the fourth quarter of 2009 compared with the same period in 2008.

“Phishing” lures — designed to trick you into clicking on an infectious Web link — are flooding e-mail inboxes, as well as social-network messages and postings, at unprecedented levels.

An infected PC, referred to as a “bot,” gets slotted into a network of thousands of other bots.

These “botnets” then are directed to execute all forms of cybercrime, from petty scams to cyberespionage.

Authorities in Spain announced the breakup of a massive botnet, called Mariposa, comprising more  than 12 million infected PCs in 190 countries.

The criminals had been spreading infected links for about a year, mainly via Microsoft’s free MSN instant messenger service.

Full story:
http://www.usatoday.com/cleanprint/?1267714767796

Takeaway: The latest breakthrough in online innovation has come from a rather unsuspecting source: Hollywood playboy Ashton Kutcher. He’s taken his act to the web, and has lured an entourage of prominent consumer brands along with him.

Kutcher’s new format merges traditional entertainment, advertising, and social networking into a seamless product. The programming has attracted droves of viewers, and companies like Pepsi and Nestlé believe that this format will enable them to drive deeper levels of customer engagement.

In the crowded world of webertainment one other characteristic sets this pied piper apart from the other online media moguls – he’s intensely profit-focused.

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Excerpt from Fast Company, “Mr. Social: Ashton Kutcher Plans to Be the Next New-Media Mogul,” by Ellen McGirt, Issue 141, December, 2009.

Ashton Kutcher, best known for his eight seasons as Michael Kelso on That ’70s Show, and on his hit MTV show Punk’d, is using his media company, Katalyst, to pioneer a new kind of business bridging Hollywood, technology, and Madison Avenue.

Kutcher and his partner, Jason Goldberg, spent the better part of two years courting the wizards of Silicon Valley, converting them from teachers and skeptics to friends and allies. For all their pranks, Katalyst can claim one thing most other social-media businesses can’t – profitability.

It’s not just talk. Some 3.9 million people follow Kutcher on Twitter, and he has nearly 3.3 million Facebook fans. Those numbers have helped attract corporate clients including Nestlé, Pepsi, and Kellogg.

Katalyst series, HQ, illuminates what Kutcher’s production company wants to become – not just a home for his television and movie projects but also a go-to source for brands looking to deploy what’s called “influencer marketing,” a hybrid of entertainment content, advertising, and online conversation that finds its audience via video, animation, Twitter, blogs, texts, and mobile. “Entertainment is a dying industry,” says Kutcher. “We’re a balanced social-media studio, with revenue streams from multiple sources” – film, TV, and now digital. “For the brand stuff, we’re not replacing ad agencies but working with everyone to provide content and the monetization strategies to succeed on the Web.”

Kutcher is not exactly the image of a business visionary, but he intends to become the first next-generation media mogul, using his own brand as a springboard.

Still, even if Kutcher turns out to be more style than substance and Katalyst doesn’t become the next big thing, Kutcher’s experiment points toward a new model for the evolving media business.

What the Katalyst team is planning, he says, is simple – make entertaining stuff, give it to people where they already are, let them have some fun with it, and mix in brand messaging. And because of the viral nature of the Web, each new consumer is cheaper to win than the last one. “We know how to gain and activate and retain an audience,” Kutcher says. “We create social networks for brands.”

This is the way things are going, says Netscape founder Marc Andreessen. “Katalyst is way out on the leading edge in terms of thinking this stuff through,” he says. Katalyst steps into the gap left by ad agencies that gave up on the Web after the dotcom bust. “Banner ads aren’t going to cut it,” he says. “And media companies have not been creative or aggressive about making products designed for engagement marketing. Now that’s changing, giving brand advertisers a new way and reason to buy.”

It is Katalyst’s work with Pepsi on something called DEWmocracy that may best illustrate the model Kutcher & Co. is after. The first iteration of DEWmocracy was a reasonably successful promotion – a destination site with an animated film made by actor Forest Whitaker, where fans could pick the next Mountain Dew flavor. For the second iteration, chief marketing officer for Pepsi says, “Katalyst had new ideas about where we could find value in the social-media space and how to mobilize large groups of people.” The campaign, which runs through early 2010, lets people pick not only the flavor, name, color, and label of new sodas but eventually the in-store merchandising and the ad agency, in an online bake-off. Fans can also submit their own ads. “My theory is, you have to engage the constituency and let them be the voice of the brand,” says Kutcher. “I help connect people to the Mountain Dew brand so they can be creative with it.”

Mountain Dew’s Facebook fan page grew fivefold at the launch, but the big win is inside Pepsi. “A lot of senior managers at consumer brands feel like their role is to control the communications around a brand,” a Pepsi executive explains. They are uncomfortable with the transparency of social media because “people will say negative things about you.” What makes him happiest about DEWmocracy, he says, is “the competency we’re building throughout the organization in using these new tools. It’s a symbol of what’s possible within brand marketing at Pepsi.”

Kutcher and Goldberg acknowledge that Katalyst today is still primarily a film-production studio. And not all on that end is going swimmingly. Its most recent Kutcher vehicle, Spread, earned a pathetic $250,000 in the United States. For 2010, Kutcher has two major features coming out, and Katalyst is producing an experimental film that could easily flop. “We’re taking a big risk, but we’re all about learning,” says Goldberg.

Edit by BHC

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Full Article: http://www.fastcompany.com/magazine/141/want-a-piece-of-this.html?#

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Takeaway: Marketers have long used online media to manage their company’s reputation with consumers. However, in an effort to more precisely select and target profitable customers they have now turned the looking glass around on the consumer.

By analyzing the online behaviors and social networks of their customers, marketers believe they can determine who has been naughty and who has been nice.

In this world of increased transparency, who will come a-wassailing in your virtual neighborhood this holiday season?

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Excerpt from Fast Company, “How Rapleaf Is Data-Mining Your Friends Lists to Predict Your Credit Risk,” by Lucas Conley, November 16, 2009.

They say you can tell a lot about a person by the company they keep. By now, you probably already know your behavior on social networking sites like Twitter and Facebook can get you fired, evicted, and even arrested–but what about your friends’ behavior? Upon reviewing your social networking friend list, the data-mining firm Rapleaf says it can help predict which ads you’ll pay attention to and whether or not you’re a worthwhile risk for a credit card or a loan–all without hacking into any accounts or breaking any laws.

Until recently, such data has largely been applied towards reputation management, helping brands, advertising agencies, and public relations firms hear what we’re saying about them. But as the volume of consumer data has grown, and the technology employed to gather, sift, and analyze it has advanced, organizations are turning the tables, asking what the data says about us. There is mounting evidence suggesting that your friends influence everything from your weight to your happiness.

Seventy percent of U.S. consumers claim they “definitely would not” allow advertisers to track their online behavior–even if they were to remain anonymous. It is therefore unlikely that consumers will react favorably to businesses monitoring and ranking their social footprints.

Rapleaf only aggregates publicly available information, and allows customers to opt out or register “to discover what information about you is available online and to edit your Internet footprint.” Rapleaf claims it is making ecommerce faster, cheaper, and easier for consumers and businesses alike.

By accessing its database of nearly 380 million consumer email profiles, banks, retailers, and anti-fraud firms, Rapleaf can quickly confirm legitimate customers and weed out scammers, cutting verification costs and improving the user experience. “Companies spend as much as $100 getting customers to their site. The goal is to filter out the bad people and keep as many good people as possible,” Rapleaf says.

Beyond simply helping verify your identity, Rapleaf claims information about your friends’ behavior can be used to better predict your behavior. For one company, Rapleaf adapted ads based on friends’ responses, ultimately tripling the click-through rate. Rapleaf’s Web site even suggests that clients “use friend networks to enhance … credit scoring.” Rapleaf explains: “Say someone would have been rejected for a credit card, but their social graph says their friends are good payers. Instead of saying ‘Rats, we couldn’t give this guy the card,’ they’ll be approved.”

“Social networking is part of the advertising-supported Internet,” he says. “It’s one of the free services we all enjoy. Now people are becoming aware there is a cost.”

Edit by BHC

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Full Article: http://www.fastcompany.com/blog/lucas-conley/advertising-branding-and-marketing/company-we-keep

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TakeAway: Facebook has been massively successful enlisting posters … but far less successful making money. Which raises an obvious question: why not charge for the service?

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Excerpted from Business Week: How Facebook Could Cash in on Its Upscale Fans, Oct 12, 2009

Nielsen says that 17% of the time people spend surfing the Internet is devoted to social sites, up 6% from a year earlier. No doubt, the quick and addictive status updates posted daily by users of Facebook and Twitter have something to do with the increase.

Facebook is the king of social networking. But the site is stuck with an old business model that may prevent it from turning the increasing affluence of its users into profits. Simply put: Facebook should charge, says BusinessWeek blogger Douglas MacMillan.

A recent study by Nielsen Claritas that divides 200,000-plus participants into three segments based on affluence showed that 25% of the top tier were more likely to use Facebook than the bottom tier. In the lowest segment, 37% were more likely to use MySpace.

Not only has Facebook won over many younger users of MySpace but it has introduced social networking to people in their 20s, 30s, 40s, and older. As the Nielsen Claritas study hints, these users have jobs and bank accounts, and might be willing to shell out a few bucks a month for an increasingly valuable tool.

Facebook has shot down the idea of charging all of its members. But the site may have plans to put a price tag on services, such as offering to print the millions of photos people upload to the site. It could also charge a nominal fee, like $1 per month, to let members avoid ads.

The company reports positive cash flow and talks up bold advertising initiatives. But is it building a business that taps the deep pockets of its users?

http://www.businessweek.com/magazine/content/09_41/c4150executive737881_page_3.htm
http://www.businessweek.com/the_thread/blogspotting/archives/2009/09/facebook_users.html

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TakeAway: Social networking sites may be popular, but they’re still not profitable …

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Excerpted from: Knowledge@Wharton, Early Tremors: Is It Time for Another Social Network Shakeout?, October 14, 2009

Experts predict a shakeout in the social networking market.  Why? Consumers only have time for so many social networking sites and are likely to gravitate where they already have friends.

What’s unclear is where social networking goes from here. Experts say there’s still a lot of growth left in the sector, but a round of consolidation, reinvention and restructuring is likely in the not-too-distant future. “Clearly, social networking has caught on in a great way, but there’s still a lot of uncertainty about where all of this will wind up. The market is very dynamic.”

The upcoming round of consolidation may include a good bit of reinvention as social networking sites tinker with business models.

“The big question today is: How will social networking and social media sites monetize themselves? Turning themselves into social commerce sites will be very difficult.”

Most companies in the social networking space are still experimenting with ways to generate revenue. The Holy Grail: Highly personalized advertising and word of mouth marketing.

Social networking companies could sell applications (like Apple’s iTunes Store does), aggregate massive audiences for advertisers or target high-value consumers that are coveted by Madison Avenue. Another option: Sell behavioral data to advertisers. Smaller players can target groups that are highly coveted by marketers.

Other social networks are focusing on business uses and providing tools for advertisers and any company that wants to monitor its brand. Most social networks are likely to develop models that revolve around serving so-called “enterprise customers” — companies looking for intelligence about their products and reputation.

Indeed, the focus on business intelligence could help some of the smaller social networks thrive. For instance, LinkedIn has a recruiter product for human resources professionals, designed to find “passive candidates,” or people not actively looking for jobs who could be good hires. LinkedIn charges a fee per user for the recruiting service and counts Allstate, eBay, Logitech and Kaiser Permanente as customers.  

The real trick will be finding the balance between privacy and profit.  In 2007, Facebook launched a service called Beacon that was designed to track users’ activity on external sites and deliver more targeted ads. After privacy complaints, Facebook continued to tweak Beacon before ultimately shutting it down in September.

What’s likely to emerge is a social networking market where there are multipurpose sites that have vast economies of scale, like Facebook and MySpace, and niche players, like LinkedIn, that find profitable business models. “People will go with the large social networking sites, but there will be very niche communities that will also be successful. The companies in the middle will be squeezed.”

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According to comScore’s August data, the top three social networking sites in the current U.S. market are Facebook, MySpace and Twitter.

Facebook (which launched in 2004) is number one, with year-over-year growth of 125%.  Facebook had more than 92 million unique visitors in August in the U.S., and now serves more than 300 million people worldwide.

MySpace, which is increasingly focused on becoming an entertainment portal as well as a social networking site, is in flux, but is still the second-largest social networking site. MySpace had 64.2 million unique users in August, down from 75.5 million in August 2008

In third place sits Twitter, launched in 2006, which had 20.8 million unique users in August — up 1,773% from a year ago.

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Full article:
http://knowledge.wharton.upenn.edu/article.cfm?articleid=2354

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Extracted from “Is Twitter for Serious Marketers?”,Tom Davenport The Next Big Thing, April 9, 2009

Do serious marketers spend a lot of time and energy on Twitter campaigns? I doubt it. Sure, go ahead and play around with it — it doesn’t cost much. But I defy you to do serious brand management in 140-character messages. I defy you to prove that Twitter users are your typical customer — unless you sell bubble tea or something similar — or that their tweets are a true reflection of their relationship with your company.

Let’s face it — Twitter is a fad. It has all the attributes of a fad, including the one that people like me don’t get its appeal. It has risen quickly and it will fall quickly. It’s this year’s Second Life — which, you may have noticed, nobody is talking much about anymore. One Daily Telegraph article that did talk about it noted, “While the site is still beloved by geeks and the socially awkward …  it has been virtually abandoned” by “normal” people and businesses.” Ouch!

I’m not as negative about the business and marketing potential of some other social media. For example, because Facebook offers the promise of monetizing social networks — though it hasn’t done so yet — they are not to be easily dismissed.

One conclusion I’ve come to is that we should unbundle the concept of “social media,” because some of its components are much more useful than others in a business and marketing context:

Facebook? I suspect it faces prosperity, over time. Second Life? On life support. Twitter? In the long run, not worth a tweet.

Full article:
http://blogs.harvardbusiness.org/davenport/2009/04/is_twitter_for_serious_marketer.html

Ken’s Take: Part of my summer research, I’m trying to learn more about the the marketing power of search engines (i.e. Google) and social networking sites (e.g. Facebook, LinkedIn). As a proponent of the Customer Lifetime Value methodologies, I’m intrigued by the “value of a (networked) friend”. 

Below are highlights from a Business Week article on the subject.  Short on answers, but sets up the problem …

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Excerpted from Business Week, “Learning, and Profiting, from Online Friendships”, May 21, 2009

Friendships aren’t what they used to be. Practically every hand we shake and every business card we exchange can lead to an invitation, sometimes within minutes, for a “friendship” on LinkedIn or Facebook.

What do these relationships say about us and the people in our networks? Companies armed with rich new data and powerful computers are beginning to explore these questions. They’re finding that digital friendships speak volumes about us as consumers and workers, and decoding the data can lead to profitable insights.

Companies are working fast to figure out how to make money from the wealth of data they’re beginning to have about our online friendships.Calculating the value of these relationships has become a defining challenge for marketers.  They’re finding that if our friends buy something, there’s a better-than-average chance we’ll buy it, too. It’s a simple insight but one that could lead to targeted messaging in an age of growing media clutter.

An immense new laboratory of human relations is taking shape. Millions of us are playing, working, flirting, and socializing online.  —. The network behavior of 295 million e-mailers and legions of the 200 million Facebook users is producing oceans of data, 

A critical finding: “The value of most information has collapsed to zero. The only scarce resource is attention.”   This has created what many call the “Attention Economy.”

The easiest way is to get tips from friends. They’re our trusted sources. At least a few of them know us better than any algorithm ever could. Little surprise, then, that the companies most eager to command our attention are studying which friends we listen to.

Statistically, friends tend to behave alike. A couple of years ago researchers at Yahoo found that if someone clicked on an online ad, the people on his or her instant chat buddy list, when served the same ad, were three to four times more likely than average to click on it. It makes sense. Friends share interests.

But it raised lots of questions. Which types of friends have the most meaningful correlations with each other? People have always confided in a small circle of intimates, often only two or three. They’ve also had wider circles of experts for specific advice, whether on cars or cooking. Then there’s a broader circle of acquaintances whose opinions count far less but who can still generate buzz about a new restaurant or senatorial candidate.

By studying patterns of interactions on networks, researchers are working to predict which friends we trust and which we pay attention to in each area of our lives. A research scientist at Facebook, has perhaps the greatest lab in history for studying friendship. He can study social media communications including wall posts, shared photos, pokes, and friend requests among 200 million people.

For all its popularity, Facebook has yet to prove itself as an advertising platform. Visitors, it seems, focus on their friends and pay scant attention to ads. Few click on them, and advertisers pay pennies for page views. Consequently, Facebook, with its estimated revenue of $300 million this year, brings in scarcely a dime a month per member.

An average Facebook user with 500 friends actively follows the news on only 40 of them, communicates with 20, and keeps in close touch with about 10. Those with smaller networks follow even fewer.

What can this teach advertisers? People don’t pay much attention to most of their online friends. By focusing campaigns on people who interact with each other, they’ll likely get better results.

In an industry where the majority of ads go unclicked, even a small boost can make a big difference. In one market test, tailoring offers based on friends’ responses helped lift the average click rate from 0.9% to 2.7%. Although 97.3% of the people surfed past the ads, the click rate still tripled.

All of networked humanity mingles in avast marketplace, trading information, creating alliances, doing favors. We may not think of our connections in such mercantile terms. But for business and individuals alike, the value in online friendship is a central focus.

Full article:
http://www.businessweek.com/magazine/content/09_22/b4133032573293.htm?chan=magazine+channel_in+depth

Ken’s Take: I finally joined one of the social networking sites -– mostly to see pictures of my granddaughter.  I wouldn’t describe myself as hooked – but my interest in the social networking phenomenon is elevated -– so, I’ve been doing some digging.  Here’s the first post.

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Excerpted from AudioTech Trends, May 2009

Some stats: 

Facebook  has 125 million members worldwide. 

On a typical day, MySpace adds 250,000 members, and draws 4.5 billion page views.

Google purchased YouTube for $1.65 billion. 

News Corp bought MySpace for $580 million. 

Microsoft purchased just 1.6 percent of Facebook for $240 million.

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Social networking sites usually fall into one of five categories: 

The egocentric sites, such as MySpace and Facebook, allow a user to create a profile and develop a network of friends.  They are also a medium for creating a new identity — or multiple identities — and for the publication of songs, videos, photographs, writing, or other artistic expression.

Community-based networks bring together people of the same race, religion, or nation.  They tend to mirror real-world communities. BlackPlanet, for example, is a site for African Americans. 

Opportunistic social sites, such as LinkedIn, attract members who want to leverage the Web for business reasons, such as people looking for work, managers seeking job candidates, or free-lance consultants looking for clients.

Passion-centric networks are organized around a hobby or pursuits of some sort, such as people who like dogs or restore antique cars.  Almost any hobby or specialty can spawn such a site.

Media-sharing sites, such as YouTube and Flickr, exist so that people can share videos and photos.  They are more about the content than about interaction.

Source article:
http://www.trends-magazine.com/trend.php/Trend/1914/Category/42

Excerpted from WSJ “Facebook Tries to Woo Marketers” by Jessica Vascellaro, November 11, 2008

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Despite its surging Internet audience, Facebook has yet to prove it can wring steady revenue out of advertisers. Now it’s trying a new tactic to woo Madison Avenue.

The company is rolling out a new ad format called “engagement ads” that further blurs the line between marketing and social networking.

The new ads appear on the main screen when a person first logs in to Facebook. They prompt a user to do something within the ad, such as comment on a movie trailer or RSVP for the season finale of a TV show.

If the user completes the action, such as adding Bravo TV’s “Project Runway” show to a personal list of events, Facebook tries to get Bravo’s ad in front of more eyeballs by sharing a notice about what the user has done with their friends.

Facebook has a lot to prove with the new ad format, which it began quietly testing in August and started making available to all advertisers this month. The company says 70 of the U.S.’s 100 largest advertisers have advertised on its site since 2007. But its share of total number of U.S. online display ad views was just 1.1%…MySpace.com, is the market leader with 15.9% of display-ad spending…

Facebook’s new push also comes as economic turbulence hits the online ad market…growth is expected to decelerate from 17% in 2008 to 14.5% next year…

Advertising on social-networking sites appears particularly vulnerable, analysts say, because advertisers are still searching for the right ways to measure the effectiveness of ads on those sites…

The new ads won’t appeal to all Facebook users. Heather Watson, 32, recently saw the engagement ad for “Project Runway.” Ms. Watson says such ads “detract from the [Facebook] experience,” and she clicked the “not attending” option to wipe the Bravo ad from her view…

Facebook has tried many ad efforts in the past, starting with basic “fliers,” the low-budget graphical ads users could buy to promote things like events….But many marketers stayed away, concerned advertising alongside user-generated content might tarnish their brands and that the site appealed only to college students.

As Facebook has widened its audience, it has run into another problem: users weren’t clicking on ads when they browsed each other’s profiles…the rate at which users click on Facebook’s display ads is less than 1% 

Edit by SAC 

Full article:
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Excerpted from Wall Street Journal “Marketers Cut Back on Digital Media” by Emily Steel, October 16, 2008

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Financial woes likely will derail the growth of a slew of advertising technologies that until recently were being hailed as the next big thing.

In recent years, marketers have set aside a portion of their ad budgets to experiment with digital technologies such as Web video, mobile phones, gaming and virtual worlds.

But with broader economic turmoil reaching Madison Avenue, these “experimental” budgets are among the first to hit the cutting-room floor.

Chrysler LLC has already slashed its experimental ad buys. With each ad dollar facing additional scrutiny, especially in the hard-hit auto industry, these ad buys will now make up about 5% of the auto maker’s marketing budget, down from as much as 10% in previous years…

Areas like mobile, virtual worlds and widgets are expected to be hit particularly hard, as it remains unclear what kind of impact ads in these media have. These campaigns often reach a small number of people, and standard measurement systems have yet to be developed. “When we get into the need to drive results, you can’t spend money on the experiments and hope to keep your job and get your sales goals.”

Spending figures for emerging advertising remain small compared with spending in the overall online ad market,…  in 2007,  U.S. advertisers spent $878 million dollars on mobile marketing, which includes ads delivered through text messages or displayed on a mobile Web site.

 U.S. ad spending on widgets and applications — small computer programs that can contain videos, interactive games and music that Web surfers can post to blogs, social-networking or personal Web sites — was $15 million.

PepsiCo says emerging media remains an important way to engage today’s consumers. “The market is not going to drive us to miss one of the largest opportunities that we’ve had in a long time.” 

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