Insights Archive

So the big news this week is that Facebook plans on opening their version of a .com auction for names this Friday night. I can just imagine the call that went out from editors at CrunchAbleBeatReadInsiderGigaNet to their writers to cancel all plans and be ready for the launch and the potential for breakage. I am sure somewhere a designer is creating the Facebook version of a whale. I like Anil’s future look at how the night will go.

My take is (and has always been) that you should brand yourself and/or your business and never brand another company in an attempt to backdoor your brand. Whether it’s Twitter, MySpace, Yahoo Pages, Geocities, GoDaddy or now Facebook, you need to always do what you can to control the flow. Controlling the flow is very, very easy and here’s how it’s done. And the control I am talking about is from your customer’s perspective.

Buy a domain name and use that as your vehicle.

Does that mean you shouldn’t create a presence on Facebook or MySpace or wherever your customers are? Of course not. And I think it makes sense to grab your brand’s vanity URL if it is available. I agree with Marshall about as he says his domain name is better than any vanity URL will ever be. Chris Messina takes a more technical look at the vanity urls.

This afternoon I watched an interesting video from newly-launched social media consultant Gary Vaynerchuk who seems to think the complete opposite. Gary compares Facebook fan pages to Twitter accounts - he’s right that FB FP have more flexibility but he completely leaves out the concept about owning your brand. (side note, somehow he already ”owns” the facebook.com/gary url meaning you won’t be able to get it) The ultimate flexibility for a fan is to be able to find all of a brand’s social interactions.

What happens to the people who aren’t on Facebook or who don’t care to “friend” a brand. If you push to one property, you lose the opportunity to get with users on all of the other properties. I don’t care if all a brand has on their xyz.com/net/uk/de/eu site are links to all of their social network pages, it’s still a much better interaction than allowing your brand to be controlled by one social network. It does add one extra click but the overall value of that click is higher than the alternative.

I have a unique perspective - not just from being in this industry since the beginning and having worked on all sides - but because I process business cards for a living. It’s amazing to see how many brands don’t even have their own domain for email and are using an ISP’s email server. A large percentage of cards outside the tech space have no URL at all. Every business card must have a URL on it and that URL should point to your company or personal website - not one or more networks.

Think about offline social interactions as a transaction. By pointing to one URL it makes the transaction smooth and easy for the customer. You only have seconds to make the transaction - would you rather push the person to one social network or to a site that offers them to connect with you how they want to?

Have you worked as a tech consultant or worked in a large company as a developer or other techie? You MUST watch this video now. Seriously…stop whatever you are doing and watch this video… it is absolutely hilarious but 100% true! (found via Patrick Veverka)

• Let me make a call and see if I can get you $8.50
• It’s just a test - if my husband likes it, we can roll the highlights in next time
• I am not making anything on this you gotta help me out
• I will pay you but you need to show our internal team so they can do it by themselves next time

Add your own witty tech phrases heard from clients in the comments!

Last week paid review service Izea launched a "social media" campaign for K-Mart which offered several high profile bloggers a $500 gift card to go on a free shopping spree as long as they wrote a review of their experience. The campaign also included a nice nugget of traffic for the bloggers because they were also to give away a $500 gift card to one of their readers. To enter the contest, you needed to spam Twitter with a message such as, "RT @eMom is giving away a $500 Kmart Gift Card on her blog - simply comment or tweet to enter: (url)". Immediately when I saw these posts, both on the participating blogs and the spam on Twitter, I asked to speak with Izea CEO Ted Murphy about the campaign.

I’ve always been interested in watching how Ted moves. Ted pushes the envelope as far as possible which can have positive and negative consequences. I enjoy discussions about moving the conversation forward. Ted has also been willing to go right after the valley elite bloggers (something most others will do in private but never in public). The conversation with Ted around the campaign was good and he was open to my feedback and thoughts. Understand that I’ve managed the online spend for some of the largest consumer brands in the world and to me this campaign came off as nothing more than paying for a few positive reviews. It also seems that more than one of the bloggers who received the $500 are on the Izea board of bloggers. My net take is that the money was given to the complete wrong set of bloggers for the campaign to have any real effectiveness for Kmart’s target market.

If the Kmart paid campaign had the bloggers go into the store and select items for disadvantaged kids, military families overseas, kids with diseases, kids with no parents, etc., I would have felt somewhat better about the campaign. Checking the amazingly positive reviews from the paid bloggers, I did notice that Chris Brogan purchased a few items for a charity and Shoemoney purchased a pack of underwear for a military family. It’s actually interesting that none of the paid bloggers thought of this.

Very Positive Store Reviews

Here’s an example of how overly positive the reviews were. Shoemoney said, "Amazing prices on media" - I went to Kmart and priced the media and their prices can’t even come close to most online retailers or even BestBuy. Chris Brogan notes that he saved over $200 on his purchases and that the huge savings were a shock to him. I guess Chris doesn’t do a lot of offline shopping because if he did, he’d know that all stores use this as a way to get you to believe you saved something when you really didn’t. I’d be happy to scan my grocery receipts to show you plenty of examples.

Pretty funny, Julia Roy went to one of the stores in NYC. I’d love to go back to the store with Julia to do a real video review. She says the store isn’t visually appealing. Frankly that’s the least of the issues in both NYC stores. You will note that unlike many of the other paid bloggers, she tightly crops her photos, has no photos inside the store and basically ignores the store itself, instead just pimps all the free goods she got! I’d love to know if one, just one, of her readers actually went to Kmart after reading her review.

The real question here is what did Kmart get out of the positive paid reviews? In my opinion they got nothing out of it. What I’d like to see are receipts from each of the paid bloggers for their Kmart purchases in January, March and August of 2009. Clearly they loved Kmart so much they will certainly go back, right? I am also really interested to see the presentation that Ted and his team will show Kmart. If we look back to 1995, "hits" were the big metric which was amazingly gamed. I am guessing that Ted will shoe a chart pointing to just how many mentions of "Kmart" were said on Twitter during the promotion period. Those numbers are absolutely meaningless. There were two options to enter: one was to go to Kmart.com and find the item you want to win and post it on one of the paid blogger posts. The other way was to post a message on Twitter pointing to the paid blogger posts. Chris even tells his readers basically not visit the Kmart site and just do the "simple" option of a Twitter message! I have asked Ted for his Kmart contact - would love to have a conversation with him/her about their takeaways.

If anyone won with this campaign, it certainly wasn’t Kmart.

Sears Paid Post Campaign

Let’s move ahead to the current campaign Izea is running with Kmart’s parent company Sears. It looks like Ted took my suggestion of having the bloggers shop for charities. This at least moves the campaign a bit further along the stick of reasonableness. Unfortunately, it does appear that some of the paid bloggers for Sears bought items for themselves. I guess the traffic boost wasn’t enough to satisfy. Here are a couple of examples: Techipedia and Chris Heuer. You’d think that Sears would want to push their brand new mobile ordering site to these early adopters and social media users.

This Sears campaign didn’t even ask readers of the paid bloggers to go to the Sears website, instead once again a comment or a twitter message was required to enter. I can’t believe someone at Sears corporate approved this. Seriously.

Risks to Brands

Move forward to this past weekend. I got a call from Forrester analyst Jeremiah Owyang at 7am on Saturday. He wanted to discuss my thoughts on the campaigns because apparently he advises his clients on whether they should be using this type of online media in their marketing budgets. It appeared that during the balance of Saturday and Sunday morning there was some bitchmeme between Jeremiah, Chris Brogan and Aaron Brazell. Aaron is one of the Sears paid bloggers and I guess wanted to defend himself before the campaign came out today. Frankly I don’t care about any of the fighting. The net result of the fighting were 3 main blog posts:

• Jeremiah Owyang
• Aaron Brazell
• Chris Brogan

I would say I know all three of these gentlemen about the same. Chris did help me get a small ad campaign last month and I’ve known Jeremiah the longest. So it pains me to say this but I basically disagree mostly with Jeremiah’s post and am disappointed with his "risks to brands" section. His post could read as the sales brochure for Izea. Jeremiah writes:

For brands, they should realize that this is not the only way to reach customers, many brands are reaching customers in social networks, building online communities, and using corporate blogs. Brands shouldn’t put all their resources into sponsored blog posts.

Think about all of the risks that a brand could be subject to, this was the best that a supposedly top ranking analyst could come up with? I know I am being harsh but his statement just came as a total shock to me from someone who I consider quite intelligent.

The real risk to brands is the damage they could face from having people spew amazingly positive comments about their products. The average mainstream blog reader doesn’t know the different between paid shill and unbiased, authentic reviews. Look at the damage that Walmart and Sony faced last year with their blogging efforts. I can provide many examples of brands being tarnished by making bad decisions. This is the real risk - what happens if it comes to light that one (or more) of the paid Kmart bloggers purposely wrote a very positive review in the hopes of getting more work and in fact their real review would have been much more critical? Or if that blogger accidentally mentions on Twitter that the post was fake? Sure that will probably be a negative for the blogger but it will be much more of a negative for the retailer. Kmart is already at the bottom of the food chain, can they afford a social media attack (see Motrin) on their brand? Brand damage is the biggest risk to a brand who gambles with paid blogging. There are other risks and at the end of the risk chain is the risk that Jeremiah mentions above.

Update: Jeremiah noted this evening about the balance that must be considered when running a paid review. "There are four stakeholders that must balance: Brands (buyers), Bloggers (inventory), community (ROI), and Izea (Broker)". I would generally agree with his statement.

Risks To Bloggers

The most popular risk I hear that bloggers face with regards to paid posts is that if they don’t tell the truth they will lose credibility and therefore their audience. Hogwash. To quote my buddy Gabe Rivera, "readers don’t care". In general readers stay no matter what happens if they like the writer, the content, or the community. The only thing that could affect the blogger is if they don’t note that the post is paid (i.e. transparency). This was apparently the issue with the "payperpost" company that predated Izea. As long as they provide disclosure, my comment above stands.

Final Thoughts on Paid Blogging

I am all for paid advertorials. This is where a company purchases a post on a blog - the company can do with it as they wish. ReviewMe runs these type of campaigns I believe. Here’s an example of this type of advertorial on VentureBeat.

I am not a fan of paid reviews because as you can see with the Kmart campaign, it pushes bloggers to write positive reviews. My concern has always been that paid reviewers who write negative reviews won’t get future work so the tendancy is to write more positively than would normally be exercised. As a former public auditor, it’s just not a pill I am willing to swallow. In fact, over the long-term, it will hurt blogging as a profession more than it will ever help. The short term wins for the mommy bloggers (they are the biggest group of paid reviewers) and other paid reviewers will be felt in the long term. Think of where we are now as the 2005 period for U.S. mortgages and you know what came next.

I’ve been offered so many campaigns on our sister site HTMLCenter over the past 12 years I can’t even count that high. I get offers daily to run all sorts of paid campaigns - most would never be visible to the average reader and would allow me to get ahead of my bills and get rid of my 20 year old tv that no longer shows the color blue. But I refuse every single time. And I won’t run paid reviews on my sites no matter how much a company offers. Everyone has to make their own decisions and by no means am I forcing my opinions onto other blogs.

I do think Ted will do very well as there are plenty of people who will be willing to take his campaigns and run for the endzone with them. What little I do know about Ted, he’s an excellent salesman (he could sell ice to an eskimo). I sure hope he is considering if he will leave the blogging industry better than when he found it when he cashes out.

Again, big eyes in the short-term will hurt the industry as a whole in the long-term. And with that, I conclude this way-too-long post. Next time we will take a look at what is a "social media" campaign. Thanks for reading.

Other posts over the past few days include: Duncan Riley, Stowe Boyd, and Lucretia Pruitt.

While it may be tough times for many social media startups, there could be a silver lining in the industry’s future. Interest in social media doesn’t appear to be waning, and in fact this week there’s been a growing realization in the mainstream media that social media played a significant role in Barack Obama’s campaign success. If the history of technology innovation is any guide, the next phase of industry growth will come from the markets and industries that adopt social media for their own purposes. And the same can probably said of the media’s evolutionary path, too. In fact mass media, which is an industry that observes events, news, and by necessity, itself, is practically destined to assimilate social media.

But added to historical tradition is another obvious but rarely noted reason for social media’s ongoing durability. It’s in social media’s DNA: that social media collapse the distance between production and consumption.

Unlike traditional (mass) media and in contrast to past modes of production and manufacture, including information production, social media co-locate the means of production with means of consumption. Video is recorded, edited, posted, and viewed on the same platform. Opinions, news, and stories are told, shared, commented on the same platform. Music is made, distributed, branded, and listened to, on the same platform. This conflation of means of production with means of consumption not only presents a threat to mass media (and one which mass media will respond to by co-opting the social), it promises opportunities for those who can see them.

All commerce involves some amount of marketing, whether it’s based on brand identity, "real" utility and value, pricing, or whatever else comprises a marketing message and campaign. Social media disrupt marketing by eliminating much of the distance between the marketing/sales/branding medium and its audience. In social media they are one and the same: the audience does the branding and marketing, through communication, and often without the brand’s direct intervention or participation. Distribution by means of communication among friends and colleagues (social media users) is not only natural and organic (non-commercial), it reproduces itself without any help from commerce required. In other words, it’s self-referential and non-commercial.

This might cause palpitations for those who make a living by imagining, imaging, wrapping, crafting, and distributing brand and marketing campaigns, but it shouldn’t. Conventional branding requires that value be created away from an audience, to then be introduced to an audience, resulting in (hopefully) consumer interest, desire, and spending. The distance between the brand and audience not only allows those on the brand side to finesse their presentation, it allows them to control its release. Traditional means of course are print, television, radio, and outdoors advertising. Lifestyle, affiliative, demographic and other types of market segmentation and targeting serve the purposes of campaign management. The whole process relies on a separation of brand from its audience, and time during which to conduct, refine, and steer the campaign.

Social media disrupts all of this with the sheer immediacy and proximity provided by its tools — tools that serve the needs of talking and communing. "Word of mouth marketing" is a fancy way of saying "we let it go and our fingers are crossed." Control over the marketing or brand message is but a residual inclination to stay one step ahead of the market, to use the distance between traditional media and their audiences to steer outcomes in a company’s favor. But control is precisely what is sacrificed in a medium that conflates means of production and consumption; a medium we sometimes call an "echo chamber" because there’s no telling where the noise is coming from.

Future and successful marketing campaigns that leverage social media will benefit the startup and social technology space by extending what’s been designed for daily use into soft commercial use. The budgets, while trimmed, are there. It would behoove social media companies to consider the ways in which soft commerce may play along. Just as mass media should entertain new forms of conversational and social marketing, from new types of creative, to compelling serial "talkies": brand stories, interactives, games, and other new forms of what I’ll call "participatory branding."

Social media are notorious for giving rise to unintended social practices, and those of us who design and build social applications should not for a minute think that we know everything that can be done with them. Any more than television manufacturers would be expected to develop the TV programs shown on them. Current market conditions make this a perfect time for creatives to get inventive, and for social media companies to reflect on where they will fit in.

Adrian Chan is a social media experience expert and analyst. You can follow him on twitter at gravity7.

There’s been a lot of talk lately about people being let go across large technology companies and startups. I’d like to share something with you that a CIO once told me a long time ago. It’s about always being employable instead of just being employed. I created the video below to explain the difference. Think about it.

Today Lehman is filing for Chapter 11 bankruptcy protection, and Merrill Lynch is being bought for chicken feed by Bank of America.

The Wall Street sky is falling. but what does that mean to tech companies, and particularly to startups?

The last five or six years have been all about community, "social media" and other related types of communications. That era has ended and the next phase of the Web will be about *real* productivity. That means products that make you more efficient, and more effective. It means software that saves you money or makes you money. And yes, we are really going to have to start paying for the good stuff.

One theme that has been emerging is being referred to as "web meets world". It’s an idea that has been discussed by Brad Burnham from Union Square Ventures, and also the folks at the Web 2.0 Summit. The concept is that the web needs to actually help you do things in the real world, and not just meet other folks on the web. I think this is all true but it is really just a fancy abstraction for helping people do things that matter, and things that they will pay for. As an example, Union Square just invested in Meetup — a terrific investment. Meetup makes real money charging people for helping connect them to other people. They are providing real value and so people pay real money.

I find this "web meets world" concept particularly interesting because of a controversial piece I wrote back in April called "Free Is Killing Us, Blame The VCs." The core of my thesis in that piece is not that free is inherently bad, but that too much free was distorting the value of the market because the free is only supported by VC money and not real value being delivered to users.

As a result, I opined, it was way too hard to start a small business and to grow it because you need to "get to scale" since everything is expected to be free and monetized by advertising, which requires lots of users. Perhaps the idea people found most objectionable was when I said the following:

In today’s “free” world, in most online business categories, it is inherently impossible to start a small self-sustaining business and to grow it. This is because in the digital world, advertising, the only real revenue stream, cannot support a small digital business. If businesses were based on the idea that people paid for services then small companies could succeed at a small scale and grow. But it is very hard to charge when your competition is free.

People really objected to the idea that "in most online business categories, it is inherently impossible to start a small self-sustaining business and to grow it." And of course there is room for debate here. But what is not debatable is that by and large, tech startups engaged in offering totally free services ( I am not talking about freemium here) are not making money, and they are not getting acquired. Its fine not to get acquired, but you can’t do that very long if you’re not making money. And now that "free" VC capital is drying up, sustaining such businesses will be really tough.

Interestingly, at the time, Brad, among many others, took me to task for having a dated view of the online world, and for not understanding how it really works.

But in my view, Brad’s stated new thesis is exactly in line with my writing at the time. "web meets world" really might be better phrased "web meets money." There will be fewer and fewer companies getting funded by offering services that help online folks interact with other online folks, because cool as it is, people won’t pay for it, and the bottom is going to fall out. Brad and Union Square’s new investment thesis is the canary in the coalmine for that strategy.

Brad’s rebuttal to my April piece talks a lot about new business models that are going to emerge that I am just missing. But five months later, I see no evidence of it, and "web meets world" to me, suggests that in their heart of hearts, they don’t either.

In fact, I think companies like 37 Signals have had it right all along. They preach charging people for services, and staying small, and adding real productive value. Scale is irrelevant in this model because the software ads value to the individual without the network effect. In this model, scale is a benefit, not a requirement. I am not saying there will not be successful advertising based companies, but I am saying they will have to solve really serious issues like improving the value equation of online banner ads, in order to be successful.

As I see it, this is a fantastic shift in the marketplace, because it means if you have a company that adds real value, you are less likely to get thrown off course by a flood of capital creating unsustainable competition. I am very happy the venture markets are making this shift.

This article was authored by Hank Williams who is a New York-based entrepreneur who explores the tech marketplace from 10,000 feet at Why Does Everything Suck?.

Yesterday I received a survey from one of the services that provides paid content. I thought it would be interesting to share the questions and my responses. I would love to hear your thoughts as well. My general take has not changed - I am all in favor of advertorials but not in favor of paid reviews. Advertorials would be full "posts" that a company purchases similar to full page ads in newspapers. Labeled correctly, advertorials could be a huge winner for blogs. As I do with all advertising on any of my sites, the ads would need to meet my standards before accepting. The comments below only relate to advertorials not paid/sponsored reviews.

Intro from email sender: I am trying to best understand what is most important to bloggers like you. I would greatly appreciate it if you could take the time to answer a few questions.

1. At what price point is making a sponsored post interesting to you? $100/post? $500/post? $2000/post? More?

Allen: In general terms, the price for an advertorial should depend on the site’s real audience (not the fake rss numbers, etc.), the site’s reach and what media the advertorial includes (i.e. video/audio). The other consideration to look at is how long the advertorial will run. Pricing should also be in line with the monthly sponsorship pricing. Each advertorial should be priced accordingly.

2. If you have no interest in including sponsored content on your blog at any price why?

As I stated above, advertorials would be ok in moderation. For a large blog, running one or two a week would be acceptable. I wouldn’t run sponsored reviews for any price.

3. If you were to include sponsored content on your blog would you rather write a review yourself or simply place an advertorial?

Answered above. Sponsored reviews are not healthy for the overall market. There will always be the question lingering as to why the review was positive. We are starting to see some interesting business going on with video bloggers and decisions they are making around sponsorship and what amounts to paid reviews. This type of business needs to be corraled before it gets out of control and puts a hurt on the overall blossoming video industry.

4. In addition to full in-post disclosure what other conditions would you have for accepting a sponsored content?

To properly handle advertorials, naturally in-post disclosure is required. In addition, I’d like to see an "advertorial standard" created - similar to the IAB ad format standards. This will allow search engines and other aggregators to properly handle this type of sponsored content. Whether it’s some type of microformat or a specific "rel" tag or some other technical means to handle, it’s critical that this is setup correctly from the beginning. If it’s not handled correctly from the beginning, it will not work over the long-term.

With that said, there are a variety of other concepts and ideas I have for ways to monetize blogs. I will begin to share them over the next couple of weeks. It’s time for the CPM ad to rest in peace.