Social Media Advertising – Part II

10 09 2010

Just after my recent blog (9/7/10) on this subject, I saw a very interesting article on Mashable that offers some interesting numbers and analysis around social media advertising trends.

Some of the key points of the article include:

  • eMarketer projects that social will account for 6.7% of the total online ad spend this year.
  • The 2010 spending forecast for advertising on social networks is projected at $1.68 billion in the US, up 30%
  • Total social media ad spending is expected to pass $2 billion next year.
  • The big winner in this space is Facebook, with revenues projected to pass $1 billion this year.

In addition to Facebook, the article goes on to describe Promoted Tweets on Twitter where a company can insert a brand-sponsored topic into the trending topics list.  This program is in the early stages and is well worth watching.

Why the Move to Social Media Advertising?

  • The average user is now spending more time on Facebook than on Google according to comScore.
  • Nielson says that the average person spends more than seven hours per month on Facebook.
  • It’s effective 1: Social media lets companies target their audience much with much greater exactness.  The result: context-relevant ads and messages that are useful to end-users.
  • It’s effective 2: Social media lets the community digest messages if and when the want them, rather than interrupting their TV, reading, or radio experience.
  • Location-awareness offers the prospect of making messages even more relevant, helpful, and entertaining.
  • But, maybe most important of all, social media offers the opportunity for companies to engage in a two-way conversation with their communities 24x7x356.

The bottom line is that social media is where people are spending their time.  Social media also offers an opportunity to really engage with customers rather than just “drive-by selling.”


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Categories : Business Models, Enterprise Marketing, Inbound Marketing, Marketing Plan, Social Media, Social Media Data, Social Media Marketing

The Future of Advertising

7 09 2010

In previous blogs I have shared some of the research that shows that Social Media Marketing spend is projected to increase, often at the expense of traditional marketing methods.

Since then, I have run across the interesting news that the ad click-through rate has fallen in half in the last two years. (Source: comScore)

  • 32% click-through rate in July 2007
  • 16% click-through rate in March 2009

That should not be too surprising.  As users get more comfortable with technology, they develop personal skills and technologies to block out intrusive advertising.

So, advertising spending is moving away from traditional media, and moving more towards Internet and online advertising.  At the same time we know that click-through rates on ads are falling.  The conclusion is:

  • Ads need to be contextually relevant and helpful or entertaining to readers
  • Traditional, intrusive advertising will be less and less effective
  • You will also need to look at where you are advertising

The other big shift that we are seeing in advertising higher growth in display advertising and lower growth in search advertising. (Source: comScore)

  • Search Advertising was $2.9 billion in 2009, but grew at 4%
  • Display Advertising was $2.3 billion and grew at +15%
  • Some of the hot areas in Display Advertising include:
    • Banner Ads +8%
    • Video Ads + 48%

Some of the recent news in the industry reflects this data:

  • YouTube is using their ContentID technology to identify copyrighted content on their site, but rather than removing it, they are placing relevant ads with the content.  Full Article.
  • Yahoo! Has changed its strategic focus away from search and search ads to focus more on content and display ads.  The idea being to make the ads more effective by making them contextually relevant.  Full Article.

Where is online advertising heading from here?  Here are two examples of hot areas:

  • Ads within Social Media. Facebook has ads and Twitter is expected to follow in the reasonably near future.
  • Ads in mobile apps.  One the coolest and most useful examples I have seen is the information I have seen in the augmented reality apps.  These are presented as useful information about the physical locations around your present position.

The bottom line is, no matter where you place the ad, it has to be contextually-relevant, helpful and/or entertaining or your audience will just tune you out.  (Or some clever hacker will built a way to block your message.)


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Categories : Business Models, Enterprise Marketing, Inbound Marketing, Marketing Plan, Social Media Marketing

Google Kills Wave

5 08 2010

I just read about the demise of Google Wave.  There is lots of talk about why Wave failed but what interests me more is the evolving Google product development model.  Google tries things out in the market, gets feedback, adjusts, and very quickly kills projects that don’t work.  Google has killed several projects this summer including

The important thing is that Google is listening very closely to these “failures” and learns from them.  They use social media very effectively to listen to their customers.  The power of their brand also means that large industry players will take them seriously and provide input.  The result is that Google is on the cutting edge of sensing what the market is thinking.

Why didn’t Google Wave catch on?

  • Google Wave was very interesting but it demanded too much change in the way that users go about their work.  The best tools are those that fit naturally.
  • 500 million Facebook users.  The value of social networking is in the size of the community.  Google faces a big “barrier to entry” in jumping this hurdle.

What we are seeing here is a new style of product development.  Google has already shown itself to be the master of the very long beta.  Now they are going beyond that into product launches that are trials.  If the services don’t stick in the market, they are killed.  In both the betas and trials, Google has the mechanisms in place to listen to the feedback from customers, non-customers and partners.  They have shown that they are very willing to take action based on this input.

There is already a rumor of a Google Me service that is supposed to take on Facebook directly.  The reasoning goes that Wave was removed from the market to clear space for this new entrant due soon.  When it launches, we will see what Google has learned from listening to its customers and partners.


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Categories : Business Models, Cloud Computing, Social Media, Social Media Company, Technology

iPhone Gets Press, Android Gets Market Share

8 07 2010

No knock on Apple here.  They have some run-away best sellers going:

The interesting news is that while all this is going on,  comScore’s latest numbers on smartphone platform market share show Apple iOS declining slightly while Google’s Android market share grew 4 percentage points.

Important caveats:

  • The time period was the three months ending in May
  • This does not include iPhone 4 sales
  • It also does not include iPad.  Not a smartphone

The key thing to note that while all the major players are growing in absolute terms, Apple pre-iPhone 4 was not gaining market share.  It will be interesting to see what happens now that the iPhone 4 has shipped.

Full comScore numbers


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Categories : Business Models, Cloud Computing, Mobile, Technology

What Could Save Second Life?

2 07 2010

OK, before everybody starts shooting at me for suggesting anything negative about Second Life, let’s review some of the recent news coming out of this virtual world:

  • User logins are flat with the level a year ago, about 1.4 million logins.
  • Several companies have left Second Life including Coke.  IBM, an enthusiastic backer, is “exploring other alternatives” now that Second Life is focusing on consumers.
  • Linden Labs, the operator of Second Life laid off 30% of its staff in June.
  • In late June, Linden Labs named a new CEO, Philip Rosedale.

Virtual Worlds seemed like a great idea.  They enable social interaction without all the nasty side effects of travel costs, security lines, lost baggage, etc.  They also have the potential for more more natural interaction and freedom of activity.  The idea is that one can go and interact with any community they want at any time over the Internet.  So, why hasn’t it caught on yet?

  • Difficult initial learning curve.  It takes a while for users to learn to navigate, talk, and interact in Second Life.  Many users are lost at this stage.
  • Even when over the initial learning curve navigating, interacting and communicating can be clunky.
  • The current version of Second Life requires a software client download.

So, what is the good news about Second Life as a virtual world?

  • The remaining Second Life users are passionately supportive and active.  Editors Note: The previous blog I wrote about Second Life was the most viewed blog I have ever posted.
  • User-to-User financial transactions grew by 30% year over year.  People are really making money in this virtual world.
  • There are still 1,400 companies using Second Life.
  • “Marketing” can be more natural and helpful rather than annoying and interrupt-driven.  People see products and events that interest them and decide to engage or not as their curiosity motivates them.  There is still huge potential for providing really useful and welcomed product/brand information in this context that is as yet untapped.
  • Travel is getting more expensive, exhaustive, time-wasting and annoying.  One alternative is video conferencing and Telepresence.  Another very interesting approach is the virtual world approach, explaining why so many large companies were interested.  It is a very different experience than a video meeting.

In retrospect, it is not surprising that the first really big attempt at virtual worlds failed to live up the initial hype.  Possibly, nothing could have.

Recommendations for Second Life and Other Virtual Worlds:

  • Pick a target market and really optimize for it.  Are you going to be a virtual world game environment or a virtual business/social environment?
  • Get rid of keyboard typing as the means to communicate.  Let people speak to each other naturally by using Voice Over IP technology.  This probably means a strategic partnership for Linden Labs.
  • Simplify navigation and interaction.  Lower the initial learning curve.  Make it easier for even experienced users to get around.  The more natural an unconscious you can make it, the better.
  • Make it work in a browser.  Don’t make people download and update client software in order to participate.
  • Look into Smartphones.  Consider tilting the smartphone as the way to navigate virtual worlds.

Second Life is such a brave attempt that it is well worth watching.  Now that Second Life  is over the “Peak of Hype” and well into the “Trough of Disillusionment.”  Now comes the real test to see if they can take what they have learned and deliver a more natural and useful SL 2.0.

7/8/2010 Note:  Please note that this blog is about business / enterprise use of SL and virtual worlds.


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Categories : Business Models, Marketing Plan, Social Media Marketing, Technology

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