Sandlines

the price of success

I’ve been twittering on and off for a while now – trying to figure out how it fits in with all my other activities – and gradually finding it more and more interesting over time. Already this year, the buzz around the microblogging service has kicked up several gears: Stephen Fry’s often witty stream-of-consciousness has been a highlight, but I’ve been gradually seeing more and more of my friends and business contacts using it.

Links back and forth with blogs (alerting to updates), Facebook, various IM and LinkedIn status messages seem to have potential.

One of my LinkedIn connections has been using his status to advise media sales people when he is in ‘buy’ mode – I’m curious to learn how this will impact the quality of his media buys.

Twitter has also gained considerably attention in mainstream media this month: suddenly DJs on Radio 1 are talking about it incessantly.

So perhaps it is unsurprising that  @gordonm’s tweet yesterday about Twitters desire to monetise their service by charging businesses for using the service in a commercial fashion was essentially a link back to the Brand Republic site.

I don’t know how many followers @gordonm has at the moment, but the suggestion of how effective this can be found in @stephenfry’s history, where his mere mention of a site can bring their servers to a standstill. Mr Fry has over 150,000 followers today.

So how long before Twitter becomes part of the marketing landscape? And how will they develop sufficient revenues so that they can improve their up-time (Twitter.com is down as I write this)?

One interesting example: on Monday my flight from Heathrow was delayed by 2 hours. I tweeted “Desperate rush to h’row this morning was futile: flight delayed 2 hrs +. Grrr.”  This from my iPhone.

Almost at once I had a response from Boarding! inviting me to post details of airport to them to meet up with other stranded travellers.

It’s going to be an interesting one to watch: can Twitter do what other social networks are struggling to do and crack the social networking revenue stream conundrum? My guess is there’s a way to make it work via mobile perhaps. AFullerView evidently has some ideas as well.

Anyone else?

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Facebook? No thanks.

Thanks to Dylan Fuller who, over in the Local Search Summit on LinkedIn drew my attention to this article. It seems that P&G are no longer interested in running advertising on Facebook. Ted McConnell, GM of Interactive marketing over at Proctor and Gamble said:

“I have a reaction to [Facebook] as a consumer advocate and an advertiser: What in heaven’s name made you think you could monetize the real estate in which somebody is breaking up with their girlfriend?”

Now there’s a hefty dose of rhetoric about the circumstances that McConnell describes, but the point is clear: he sees Facebook (and their peers) as C2C communications, not media opportunities. He feels it is arrogant to interrupt it.

I’m unsurprised by this reaction – and I tend to agree that banners on FB are not the way forward. But it’s nothing new. After all, ad placements have funded Hotmail, Yahoo! Mail, Gmail …. for years – and often quite successfully.

But it’s the placements that occur outside the composition and reading of the emails that works best – i.e. the log-on or log-off pages, or the pages that confirm an email has been sent in the old style webmail accounts. Which is logical: you’re not interrupting someone in the middle of another conversation.

Several years ago, when I was at Yahoo!, I devised a campaign for Vodafone that was deliberately designed to sit inside these types of C2C interactions. There was an obvious relevance to such a campaign that fitted with the creative tone. However, these types of campaigns have always been the exception rather than the rule.

Historically advertisers have been shy of placing brand sensitive advertising near user generated content. The risk of negative association has been deemed too great. Imagine, placing your family friendly cereal brank ad next to content that celebrates gore or porn. Not an attractive proposition.

Meanwhile the low responsiveness of such placements have made the inventory generated on UGC amongst the most commodotised online.

So what is a social network to do?

Invent a new model, is what. Old skool advertising is (Sandlines believes) never going to be the way forward for such businesses. They need to figure out a way of converting the obvious engagement they build with their user communities into a commercial proposition. And the starting point to that is to consider where the exchange of value can occur that benefits all parties: the community members, the marketer – and of course the network owner.

Simple, huh?

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Last week I got into a discussion that started over on LinkedIn about whether simply placing ads on social networks sites was enough to claim that you are engaged in Social Media Marketing (SMM). The question was linking to a post over at Windchimes which does into more detail.

Of course, my view is that all you are doing is advertising in this instance: you are not engaged in SMM unless you are, ahem, engaging with the audience. And that takes a lot more work.

So I was interested to read that online video upstart Hulu is outgunning YouTube in terms of revenues over in the US. Forecast revenue, that is, for 2009.

This is on the back of 6m users compared to YouTube’s 83m.

That would appear to be a useful measure of the ad-revenue-value of ‘professional’ content versus user generated (or, dare I say it, pirated?) content. 14:1 – not a bad multiple… and wholly understandable.

So, the question remains: what is the revenue model for social media? Doesn’t look a lot like it’s advertising as we know it… it must come down to engagement marketing. I wish I had some great examples to share wtih you but they are still too few and far between IMHO.

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