Monthly Archives: March 2008

“Social Media” that Works

Measuring Engagement, Web Analytics

So what kind of social media really works for display advertising?  I have 2 examples.  They’re not poke-me, friend-me, follow-me kind of apps, so perhaps some will tell me they are not “social media”.  But they are successful in a Wiki way, and have some interesting lessons to teach us, I think.

Wisdom of Crowds

Angie’s List is an interesting example using multiple revenue models.  Over 600,000 members pay (yes, pay) about $50 a year (differs by city) to belong to a community of people looking to hire the best service companies in their area.  Members post their experiences with every local company from plumbers to auto repair shops into a database searchable by anyone who is a member.  Companies are graded and ranked by their performance, with testimonials (no, make that UGC) posted by each user (sorry, customer).  There’s a few more twist ands turns, but you get the idea.

On top of that, they send a very nice slim-jim monthly magazine to all members, which if you think about it is an super-targeted local ad vehicle for these service shops.  I talked to one guy I hired (re-modeler) who said 1 year of advertising in that Angie’s List mag generated more closed sales for him than 5 years in the Yellow Pages – and a year costs 1/20 of what an annual Yellow Page ad costs for the same size.  Yikes. 

That’s display advertising done right.  All you have to do is look up the company in the Angie’s magazine ad on Angie’s List.  The companies with Ratings of “A” and lots of glowing testimonials say their magazine ads work like gangbusters.  I imagine companies with “C” ratings and UGC horror stories say their magazine ads suck.

Go figure.

Then the companies who fall to a “C” get barred from advertising in the main part of the magazine any more due to poor ratings on the list.  New companies not on the list can attract Attention to themselves by advertising in the back “classifieds” section, in hopes of getting “A” ratings and the opportunity to advertise tin the main part of the mag.

Self-policing, continuous quality improvement.  The Attention improves in quality over time.  Sure, “ratings” are very e-Bay-like.  But the online / offline approach to maximizing Marketing Productivity for all sides is fully integrated and just very smart Marketing, they are working the model to full potential.

This community, though small by MySpace standards (that is, if all those MySpace members are active), has a very valuable, tangible reason to be working together on this shared database.  And because they put so much value on this relationship (they pay to participate), there is a lot of value in the relationship. 

You see this same pattern time and time again in display media; the more people are willing to pay for the content surrounding the media, the more valuable advertising in the media is.  It’s that fashion magazine thing again, the ads are part of the content. 

We know how much people are willing to pay for a membership to MySpace or FaceBook…

Offline Front End

Moms Tampa Bay is a very basic chat board idea – mothers in the Tampa Bay, FL area post questions and provide answers on family and child care issues.  It was built by a local TV station and soft launched in May of 2007, currently at 2700 members or so.  Just recently, they have started heavier promotion of the board on the TV station itself.

Now, it’s not hard to understand the display advertising opportunities on a site like this, this display model is a proven one because the members have well-defined interests and needs.  They’re paying Attention.  The fact they are all local people drives further targeting capability and some unique social opportunities.

For example, the TV station is going to launch an “issues show” based on the topics discussed in the community, with members from the community as the talent.  This kind of exposure is sure to cement the relationships and drive further participation.  YouTube local on real broadcast TV. 

“Mabel, I could be a staaahhhh…”

The station / members could do all kind of things to expand on this core idea – publish guidebooks, produce educational videos, hold events - all of it sure to attract advertising dollars. 

No brainer for many categories.

Now, TV is not known for being very good at one-to-one, and this board is far from perfect.  There are risks the station could screw this up by pushing the group too hard or far, and I’d bet they would benefit from an experienced online community manager / more resources.  But they seem to be doing pretty well at it so far, and to me, it’s quite ironic to see the old broadcast model going vertical using online, just as the onliners are trying to do broadcast…

Both sides can’t be right.  My bet is the media itself defines what you can so with it successfully, and you can’t simply decide to “break the rules” and get the result you want.  FaceBook and MySpace are devoted to people who want to create a free media platform for themselves.  Just like GeoCities and Tripod. 

With similar results on the display ad side.

I want to make it clear I’m not dumping on MySpace or FaceBook as being “useful” or even essential to certain groups of people for specific purposes.  What I am saying is while the utility to the user might be extremely high, the value of the space surrounding this content is quite low for display advertising purposes.

Other than display ads targeted to the specific needs of people in that group with those media platform goals, there is no reason to believe general display advertising will ever be successful in that environment. 

There’s No Attention to spare.

Google-Click Has Answers

DataBase Marketing, Web Analytics

Well, we’ve been on quite a roam through the world of online advertising.  We discovered how to make AdSense work, speculated on what that test means for Social Media, and spent some time running down the Relationship between Engagement and Attention.

Other than the actual test on the Lab Store, a lot of the conclusions reached throughout this trek are really speculation, because we just can’t get the information we need to do a comprehensive analysis.  However, there are an awful lot of coincidences out there, and I dare say some of this speculation (thanks for the Comments to all who participated!) will probably prove true.

Regarding the Social Media business model, the speculation surrounded the idea of “the more Engaging they make it, the less Attention people have to pay to Ads”, which leads to the widely reported problems with social media ads.  I asked how they could change this to create a more effective advertising environment.  Barring any improvements in (what participants speculated to be) very poor ad targeting mechanisms, here’s a suggestion: Do what happens when every web ad business model fails – create vertical spaces.

The web is simply not suited to be a “mass media”, the economics don’t work.  The web was born to be segmented, niched.  By creating vertical social sites, you address a lot of the context problem and the display ad model begins to function more appropriately.  Not to mention the traffic would be of higher quality relative to the ads.

More like a Topical Chat Board, don’t you know.  Ads that make sense to the context of the visitor, for a change.  Display Ads that people don’t hate or want to block.  What a concept.

Hopefully, Google-Click (the merger of Google and Double-Click) will provide some real answers.  I think they can, if they choose to.

I think it might even be likely they will, given the stroke of genius giving Analytics to ad clients was.  The more people know, the more they spend.  Transparency is king.  If the display model ever wants to deliver some weight, if it is ever going to attract the big media players, they have to make these ad networks more transparent.

I still have a lot of questions about the validity of the display ad model as it is implemented today, with opaque, untargeted networks as the rule.  But imagine the transparency Google-Click could bring to the whole equation with a unified cookie across Search and Display.

We could finally begin to understand the true incrementality of the relationship between Search and Display.  Even more so, if Google-Click would facilitate the use of Control Groups.

We could finally address the legendary view-through measurement problem that makes me shudder every time I hear view-throughs used to bolster the value of a poorly performing display campaign.  If you’re not clear on how important a common Search / Display cookie is to resolving the issue, this post by Avinash should help.

And with the kind of automation Google could bring to display, we would finally get rid of the value-destroying human overhead that cripples the display business model (placements, contracts, billing, verification, management), and then be able to price it correctly versus the value of it.  Then the agencies could spend a lot more time on what they are good at – strategy, creative – and a lot less time on paperwork.  Everybody wins with Google-Click.

That is, if they take the same path they took with AdWords / AdSense / Analytics.  Transparency, Optimization.  Display space can become PPC space – and with highly in-context spaces, vice versa.

This approach would probably bring us to a place that looks a lot more like cable network advertising does today.  100 - 200 “channels” or so of targeted, contextually-cohesive content for display to sit in.

I don’t think the web will ever be able to deliver the weight (GRP’s) of a broadcast TV network.  But a cable network?  Maybe.

It’s time to leave the broken offline “print model” used in online display ads behind.  Because the web is different.  Right?

Google-Click just might prove it.

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Your thoughts?

Do you think you would get increased value from tracking Display and Search in the same interface based on the same cookie?

Perhaps this event might even “force” a valuable unification of the Display and Search teams / agencies?

Dream On, Jim?

The next post in this series is here.

Too Engaged to Pay Attention?

Brand Management, DataBase Marketing, Web Analytics

So we take the report on Natural Born Clickers and the results of our Lab Store AdSense Optimization and what do we have?

I’m thinking about a basic model for understanding the potential effectiveness of online advertising based on Engagement.  Basically:

The more Engaged a person is with the task at hand, the less Attention they have for out-of-context advertising.

The gross amount of Attention available on the web is finite.  That means if you pay Attention to one thing, you have to ignore something else.  This creates Attention winners and Attention losers.  In general, for any space available for advertising, in-context wins and out-of-context loses.  That’s Relevance, right?   Therefore, out-of-context ads should be much less effective than in-context ads.

So, for example, if the task is Research, and a person is using a Search Engine, the PPC ads focused on the Research topic are highly relevant and Attention gets paid to them.  Also, in the same Research mode, if a person is searching or participating in a Chat Board focused on the topic, display ads focused on the Research topic are viewed as highly relevant and Attention gets paid to them.

However, if the task is (for example) interacting with a social media account, then very little Attention is available for advertising – PPC or otherwise – because all other advertising would be out of context with the task, except ads directly related to the task, such as for widgets or tools.  This effect would generally explain the concept of Banner Blindess, since most display advertising is completely out-of-context.  People just learn to ignore it.

Not breakthrough thinking in Consumer Behavior or Psychology but for Online Advertising it might be, considering the number of business models nowadays that plan for “advertising” to be the revenue stream.  In fact, it’s quite possible that the more Engaging they make these social apps, the less effective the Advertising will be.

It’s about the limited amount of Attention any one person can have.

When ads are in context, you get an effect much more like that of Fashion or Hot-Rod Magazines, where the ads are part of the content, they are part of the Engagement and so get Attention.  Out of context, much less Attention, if any.  Not part of the content, screened out.

For the same ad, PPC or Display.  In other words, it’s not the delivery method that matters, it’s the context and available Attention.  PPC ads by their very nature just happen to have the context problem solved.

For example, a TV ad running in the middle of a favorite TV show is much more effective on an individual than the same TV ad that plays in the background while someone is Engaged with a project on the computer.  Same ad, different context.

Now, here’s the thing.  This idea makes a lot of sense.  Can we expect anyone with scale to test it, prove it empirically?  I dunno, because an awful lot of business models will get completely hammered if it is true.

The test would be pretty simple:

1.  Define Engagement – really not too hard for this, it’s how many “actions” take place per unit of time.  Seems to me this would capture the whole Attention thing; if you are busy taking actions, that’s where your Attention is. 

2.  Run both in-context and out-of-context ads during the measurement period.  Display or PPC.

3. a.  Measure clicks and conversion, if that is your game
    b.  Measure Awareness and Intent, if that is your game

4.  Compare results

Does anybody think that out-of-context advertising would win, or at least match in effectiveness?

If there is a difference, what does it mean for biz models relying on out-of-context impressions?  What can they do to correct this problem?

The next post in this series is here.