Social Advertising About to Boom – In Growth Not Bubble Pop.

While I talked about Social Media being misunderstood, the real dollars will be in online web video advertising.  Seems pretty straight forward – the web delivers and is measurable.  Connecting the dots you can see that advertising is changing which basically means the users are changing.  User behavior is alway leading advertiser behavior change.  Except video advertising will be done in a new way.

Report out today shows that Professionally-produced Web programming yields high CPMs, according to a new report from the Diffusion Group. The CPMs for long-form online content are $40 today and will reach nearly $46 in 2013. Meanwhile, CPMs for short clips are clocking in at about $30 and will increase to about $34 in five years.

User-generated videos generate CPMs of about $15 today and will reach $17 in 2013. The report also found that user-generated videos account for about half of the online videos consumers watch but only 4% of online video ad revenue. Meanwhile, professionally-produced videos command the other 96% of Web video dollars. Advertising in Web video should reach $590 million this year and hit $10 billion in 2013.

YouTube is slowing figuring this out.   The key to success is to evove with the market not force it.  I’m long on YouTube.  They are the ‘next new network’.

Video works on the web and soon advertisers will figure out how to do it.  Right now they are failing.  Prerolls are the only game in town so we’re stuck with it for now.

Long Form Video is Good – Good Move YouTube

SAI is reporting that YouTube has finally moved to allow long form video – for now you have to be a partner to sign up.

It’s no secret that I have been a fan of long form video for a long time. I think that the future of online video advertising is ‘long form’ ads. In the Web 2.0 value proposition is around content. Content is king and now it will be in both long and short form on Youtube for the masses to enjoy. Ads will follow almost immediately.

The one problem that I have with YouTube is that the quality is horrible on the videos that I upload. Fix that and provide long form and you have the new TV platform.

As I have posted before YouTube is TV for everyone under 18. YouTube has a tremendous opportunity to not only be the resource for discovery of ‘new tv’ video but the presentation provider.

I am very bullish on YouTube. Their business development teams better get busy because a tsunami of deals will be flying in.

Facebook Closed Event – Innovation? – Are They Stuck In The Middle?

Facebook is having an open house today – oh no one knew about it so it really was closed.

What strikes me about Facebook is that they seem to be ‘stuck in the middle’ as it goes in business school. Are they a software developer of a great user experience web service or are they an innovative advertising solution? With all the mounting pressure to monetize they may be falling in the trap to force a monetization strategy that will fail.  What comes to mind is the Portal crazy in the late 90s.

Back in late 90s Google created a kick ass search app then just picked up (copied) the search paradigm from Goto.com. Why? Because they developed a great app called search.  Search drove Google’s success in advertising because their core competency was in algorithms and data center efficiencies that translated directly to what the ‘scaling’ ad market wanted.  Google was smart.  They knew what they wanted to do.

Here we see Facebook (I wasn’t invited so I can’t comment on what they presented) rolling out a new design for the profile page. It feels like a little AOLish to me. I just don’t get the feeling that Facebook gets UI, discovery, and search.  Are they force fitting the UI, navigation, and user experience to get paid on the monetization side?  What I will be looking for here is how well they design the ‘utility’ for users. If they try to hard to monetize they will fail. Facebook has to innovate on the software side or they will lose users fast. Facebook has to solve their ‘clutter problem’.  Additionally, I hope that they are more open for integration for developers.

If Facebook screws this up they won’t be the next Google, but instead be a victim of what we saw with Portals in the late 90s.  We all know how that ended up.

Will Facebook be the Portal model of Social Networks? What is their core strength?

Facebook seems to be stuck in the middle.

Future of Online Advertising – Clearspring Raises Big Round – Social Media and Social Advertising

Clearspring just secure what is being talked about is a big round. Ok I have an opinion on this. At PodTech we were one of the early players in having a deployable widget (player) with content emebbed. I can tell you that there is a big revenue model coming. Some just don’t see it yet.

I think that Clearspring could have fetched a much higher number like $30-40 million. Why because it’s about infrastructure and analytics. Online advertising is changing. Just look at Twitter. Clearspring has a bigger monetization opportunity than Twitter yet Twitter has all the VCs in a raging auction. Clearspring has a deeper opportunity.

Readers of Furrier.org know my opinion on the changing online advertising market. A new metric will emerge. Alot of us insiders know this and are racing to build the solution. Who will win? Clearspring has a great chance and is more than viable. It’s a billion dollar business.  Oh yeah Clearspring has big media companies adopting as well – that’s all upside.

I think that this financing represents the growing trend of convergence within online advertising and social networks.

I won’t even talk about the media and search opportunity that I see with widgets and infrastructure data. Hmmmm..

Successful Social Media Advertising – AdAge Highlights H&R Block

AdAge has a great article talking about the success of H&R Block’s implementation of Social Media.

Here is a nugget from the story. “Once brands embrace social media, agencies also have to change some of their fundamental processes when it comes to creating and distributing content, said Kelly Mooney, president and chief experience officer of Resource Interactive. For example, in social media there isn’t just one big idea. As evident in the H&R Block case study, sometimes social media is about stacking up many small ideas to create a big total impact.”

Over the past few months I’ve been consulting and researching social media strategies and tactics with large companies.  It is true that agencies are challenged in delivering on the social media plans.

Social Media is the New Standard for Emerging Online Advertising

This blog is about the cutting edge of technology and social media. It is often overlooked by the social media experts who are just now approaching the cutting edge. I’ve seen that the best social media consultants just don’t understand what social media is? To fully understand social media you have to look at the trends within Internet Infrastructure side of web 2.0 – collaborative filtering, software search tools, viral sharing, measurement. Most social media experts come from a PR background – not that there is anything wrong with that. I have yet to meet a PR person who can really nail the value of social media.

Forget all about that infrastructure stuff for now – just look at the numbers. Alternative media is growing fast. source:adage

Alternative media or emerging media or social media is fast becoming the standard in online advertising. Why? Because Web2.0 is about connected relationships with channels of abundant content that is fully measurable.

What the web page was to web1.0 social media is to web2.0.

The numbers are behind it. Below are the highlights from AdAge.

Spending on alternative media hit $73.43 billion in 2007, a 22% increase over the previous year, and will continue to grow, according to PQ Media’s Alternative Media Forecast: 2008-2012, released today. The research firm tracked 18 digital and nontraditional segments, with a combined 16.1% of total advertising and marketing dollars in 2007, up from 7.9% in 2002, yielding a compound annual growth rate of 21.7%.

The forecast predicts a 20.2% increase over the next year, to a total of $88.24 billion, and a compounded annual growth rate of 17% for 2007-2012, reaching $160.82 billion. By then, alternative media will represent 26.6% of all advertising and marketing dollars.

The upswing is as much a result of the effectiveness of new media in a fragmented market as it is from a lack of confidence in traditional media, said PQ Media President Patrick Quinn. “Traditional ad budgets have been going down, but spending has remained stable. This shows where the money is going,” Mr. Quinn said.
Alternative advertising, including online, mobile, entertainment and digital out-of-home advertising, saw spending rise at a compounded annual growth rate 25.8% to $39.22 billion in 2007, accounting for 17.7% of all ad spending that year (compared with 7% of all ad spending in 2002), and grew at a compounded annual growth rate of 26.2% from 2002 to 2007.

Online and mobile advertising spending –including search and lead generation, online classifieds and displays, e-media, online video and rich media, internet yellow pages, consumer-generated ads, and mobile advertising — reached $29.94 billion in 2007 (up 29.1% compared with 2006), a compounded annual growth rate of 31.4% over the 2002-2007 period. The category received heavy infusions from brand marketers trying to reach key demographics that have migrated online and to wireless thanks to wider broadband adoption.

Entertainment and digital out-of-home advertising — including local pay TV, digital out-of-home media, video on demand, interactive TV, and digital video recorder, video game, home video and satellite radio advertising — increased at a compounded annual growth rate of 15% from 2002-2007, and rose 16.2% over the previous year to $9.28 billion in 2007. The growth was driven by rising adoption of entertainment technologies, including ad insertion technologies and ad platforms to reach young audiences.

Alternative marketing — including branded entertainment and interactive marketing — hit $34.21 billion in 2007, a 17.9% rise over the previous year, and grew at a compounded annual growth rate of 17.5% from 2002-2007. This brings its share of total marketing expenditures up to 14.5% in 2007, compared with 8.7% of total spending in 2002.

Branded-entertainment marketing — including event sponsorship and marketing, paid product placement, advergaming and webisodes — also saw and increase of 14.7% to $22.30 billion last year, and climbed at a slower compounded annual growth rate of 13.4% from 2002-2007.

The deployment of new-media strategies focusing on better interactivity, entertainment and engagement than traditional media was the driving factor.

Thanks to strong gains in segments that reach affluent and influential consumers, interactive marketing — including e-direct marketing, word-of-mouth marketing, and e-custom publishing — saw big increases in 2007 of 24.4%, reaching $11.9 billion, compared with the previous year, and a compounded annual growth rate of 28.6% over the 2002-07 period.

Say hello to social media and the upcoming engagement metric.

Social Everything: Interaction and Integration – The Future of Social Networks and Media

For the past three years I’ve been working with over 40 corporate advertisers in developing, testing, deploying, and measuring social media. I’ve discovered many things and learning more everyday.  As I am documenting my findings I have to highlight Charline Li’s post from yesterday.

Charlene Li has a great post on her views of Social Graphs and business models. It’s about “Social Everything”.

The big trend in Charlene’s post is that social individuals, groups, networks, graphs are great, but they still don’t connect to real world value. This linchpin to real world benefits is where I have the vision for social everything – it’s about collaboration. Virtual activity is highly productive, but seems to dead end when translating and scaling to real world offline benefits.

If you have been one of the 10k people following my blog you know where I stand and have a sense of what I’m working on for my next venture- Social Advertising, Social Media, Social Graph, Social Everything.   Charlene’s post reasonated with alot of my findings and the direction that I’m heading.  Here are some nice gems in Charlene’s post:

“.. the idea of social graphs being “owned” by different social networks makes no sense. Yet, all of today’s social networks build their business model and competitive advantage on having the largest, most complete social graph. The result: I have a close colleague who enjoys exploring all of the new social networks and “friends” me on all of them, figuring I’m a pretty good person to have in his new network. In a world with a single social graph, he would be able to import his existing personal, social graph into any new service, and immediately begin enjoying the new service without having to wait for his friends to catch up. And I would be spared the insanity of having to accept his umpteenth “friend” invitation!….In a world of a single social graph, social networks will have to compete on the basis of creating the best experience for its members – not because it controls a unique social graph.”….

…”The brilliance of Facebook Platform is that it greatly expanded what people could do on social networks. The problem is that what people do is still pretty limited. Take a look at the top applications on Facebook – they can be roughly grouped into 1) managing/comparing/interacting with friends in a general context; 2) self-expression (FunWall, Bumper Sticker); 3) games; and 4) media preferences (iLike, Flikster). These are all fun and interesting, but they only begin to scratch the surface of what I do every day.”….

…”A business model where social influence defines marketing value. Today’s advertising models don’t work on social networking sites – that’s because simply targeting better on profile or social graph details is still the same old media model of CPM and CPC pricing. What’s missing is marketing value based on how valuable I am in the context of my influence. For example, Steve Rubel is a highly influential person because he is an authority on social media, the people in his social graph tend to interested in his views, and they in turn have a great deal of authority as well. (Several people came up to me after the speech and said that this is similar to a “PageRank of people”, a very easy way to crystallize the idea.)

This means that each person will have their own “personal CPM”, an idea I heard JWT‘s Marian Salzman discuss at a private event in February (here are more details on the JWT’s Top Trends for 2008). The idea is that marketers want to reach highly influential people, and hopefully curry their endorsements. This has traditionally been the province of public relations, where they reach out to key influencers. But in the world of social networks, this is influence writ large and wide – every person has their own network of influence, and hence, their own personal CPM or value that they contribute to a social network.

..”There are several start-ups as well as established agencies that are already looking at marketing, brokering, measuring, etc. social influence, so you can expect to hear more about this topic soon. But don’t expect advertising spending to quickly embrace social influence – after all, the vast majority of ad budgets are spent by media buyers who still cleave to the tried and true reach and frequency, CPM models.”

Why is this relevant? Because as pointed out yesterday by industry visionaries, the iPhone SDK announcement represents the biggest trend since the PC revolution – socially connected individuals, groups, and media are at the heart of this new revolution.

Social Everything includes devices (iphone) to connect to networks (open social + social graphs) to consume media and information (social media). Users love it and so advertisers will soon have solutions – hopefully provided by us entrepreneurs.