So I spotted the first twitter aggregator for the ongoing political campaign. Will there be a new communications toy for every presidential election?
Interesting. There is a post at the „social media today“ blog that states that conversational marketing will outpace traditional marketing by the year 2012. The main obstacles at the moment seem to be:
â€œManpower restraintsâ€ – 51.1%
â€œFear of loss of controlâ€ – 46.9%
â€œInadequate metricsâ€ – 45.4%
â€œCulture of their organizationsâ€ – 43.5%
â€œDifficulty with internal sell-throughâ€ – 35.8%
The second point should be easier to manage, once the first point has been solved. But that needs success on point 5, which depends on point 3, because point 4 necessitates success on point 3. Confusing? Yes. But doable. And very necessary.
Android is the first truly open and comprehensive platform for mobile devices. It includes an operating system, user-interface and applications — all of the software to run a mobile phone, but without the proprietary obstacles that have hindered mobile innovation. We have developed Android in cooperation with the Open Handset Alliance, which consists of more than 30 technology and mobile leaders including Motorola, Qualcomm, HTC and T-Mobile.
It appears to carry very similar objectives as OpenSocial which was announced only last week. Google seems to favour open standards, so that the web as a plattform and mobile phones as the future personal device for everything will stay open and free. This should enable innovation to the benefit of the user, no doubt about that! But it might also serve Google quite well.
Why? I can only guess: Googles revenue models are still mostly built on advertising. So Google needs scalability in customer reach, which they can only keep increasing with ready access to information and users. As social networks are obviously becoming the dominating platforms for users to interact with, and mobile devices probably being the first choice for going „online“, then Google needs to be able to freely play on these grounds.
In the future, I think the key to revenue will most likely not reside in just delivering content, i.e. producing or transporting it, since there will be soooo much of it. And it is very labour intensive to produce it. Instead, it is much more efficient to
- intelligently aggregate and sort content (which Google already does)
- adequately aligning this content to the needs, preferences – and most importantly: intentions of the users.
Regarding the second point, I think it is fairly obvious that Google should be way ahead of the competition in gathering the necessary user data. Think about Google Toolbar, Google Analytics and Google AdSense, nevermind the main site, the search engine itself. They should have better tracking data than anybody else, which they can put to work for solving the second point above.
One thing that can stop the (nearly) endless scaling of Google’s model into the long tail of every single social media profile and mobile device is „artificial“ restrictions such as walled gardens and operating systems. So: very clever to launch initiatives to at least partially open up social networks and mobile phone operating systems.
Now, on Ad Week, he contributed an Op Ed about Web 2.0 being the death of advertising. It is quite a rant, you’ll be amazed:
Web 2.0 is, in truth, the very worst piece of news for the advertising industry since the birth of mass media. In the short term, the Web 2.0 hysteria marks the end of the golden age of advertising; in the long term, it might even mark the end of advertising itself.
At first I thought he must be joking. And then I looked up his name on Wikipedia – finding out that he must be serious about these things.
Don’t get me wrong – the new media production and consumption setup has changed (and will continue to change) and has had an effect on the advertising business. But instead of complaining about it, we should look at the possibilities and opportunities of the new landscape.
Many of the new technology enabled trends are somewhat user friendly, if not at least user-centric. So why should we not adopt and keep them? Really, there is no time for complaining. It’s a no brainer, that (mostly) bad advertising was first to adopt the new setup. Now we should try to figure out how to continuously create good advertising given the new circumstances.
Let’s not sit there like the music industry (as Andrew Keen writes):
Evidence of the crisis of mass media is depressingly ubiquitous. The recorded music business is in free-fall, the tragic victim of mass digital kleptomania.
There are alternative ways to sell music, Steve Jobs proved it with iTunes. A much more user centric model. Might not yield as high a margin as selling CDs in heavy jewel cases transported across the globe, but that’s the way it goes. Horse carriages were out of fashion at some point, too. Musicians like Madonna and Radiohead seem to get it.
The next couple of quotes are amazing:
What Web 2.0 is doing, compounded by the online consumer’s shrinking attention span and his or her hostility towards the „inauthenticity“ of commercial messages, is radically deflating the value of advertising. […]
As the scarcity of mainstream media is replaced by the abundance of Web 2.0’s user-generated content, advertising itself is being painfully commoditized. […]
No new technologyâ€”neither the false dawn of mobile, nor the holy grail of personalized, targeted advertisingâ€”is going to save the advertising business now. No, the truth is that advertising can only be saved if we can re-create media scarcity. That means less user-generated content and more professionally created information and entertainment, less technology and more creativity. The advertising community desperately needs more gatekeepers, more professional creative authorities, more so-called media „elites“ who will curate, filter and organize content. That’s the way to re-establish the value of the message. It’s the one commercial antidote to Web 2.0’s radically destructive cultural democracy.
It almost sounds like advertising is a form of art worth protecting for its own good.
Instead, the value of the message should come from relevance, in terms of content, targeting and timing – and of course the creative idea! (This, by the way, has always been the case. But not all advertising in the past has had good content, targeting or timing. Nevermind a creative idea.) A valuable message should still resonate, even when surrounded by a cacophony of user generated clutter.
Only now it is not so easy to spread bad advertising any longer, because the audience has more choices and more control.
What do you think people have thought about bad advertising in the last 50 years? Yes, they fast forwarded, or got a new drink from the fridge, or switched the channel. Or cursed at the TV. Or flicked over to the next page. Bad advertising always existed, and yes, it has always been a pain.
Good advertising, however, has (almost) always found the attention of the audience. And it still does. It has even become a lot easier for the audience to seek and find the content of those campaigns that they’re really interested in. At any time of the day. And it has become much easier to share good advertising, forwarding the content, (clips, emails, site URLs) to their friends.
While Web 2.0 has made it much more difficult for traditional advertising mechanism to work or break through the increasing clutter, there is also a lot of opportunity, new ways for attracting and involving users. Sometimes even beyond what traditional advertising mechanisms are capable of delivering.
Sometimes it feels like there never is a single day without news about Facebook. Today, the New York Times published an article about „investing in a theory“ – the fact that there is a hype about participating on Facebook, programming widgets, earning revenues in any way possible. But nobody really found out how just yet:
Now it appears that such exuberance has infused the expanding Facebook universe, even though no one has yet proved it is possible to build a profitable business with sustainable revenues on the site. Some developers report earning tens of thousands of dollars in advertising with the applications they have created. Yet their applications are mostly running ads promoting other Facebook applications â€” a situation that recalls the earliest Gold Rush miners, who earned a living selling shovels to other miners. And developers must cover the cost of hosting the applications on their own Web servers.
Nevertheless, people are as optimistic about this as they were about the whole industry some 7 years ago.
This summer, Lee Lorenzen, a venture capitalist in Monterey, Calif., who describes himself as â€œthe first Facebook-only V.C.,â€ started a $25 million Facebook investment fund and introduced a Web tool, at Adanomics.com, that assigns a monetary value to Facebook applications.
And here is a quick facts summary taken from adanomics:
- There are 348,289,583 installs across 5,160 apps on Facebook.
- These applications were used 25,756,704 times in the last 24 hours and have a combined valuation of $286,885,848.
- Facebook has approximately 40 million Unique Active Users in the past 30 days and a valuation between $10Bn and $15Bn.
- This translates to between $250 and $375 per active user.
… a combined valuation of $285 million! $250 valuation per user! Hard to believe, but that seems to be the reason why Microsoft decided to invest in Facebook. (A small amount that will dent their annual report like a rounding error.) So is this a real deal, or is it a hype?
The optimism of some of the widgets programming marketeers are so optimistic, that it makes me sceptical.
„We have the potential opportunity to create the new MTV,â€ (iLike)
Mr. Lorenzen values popular Facebook applications like Where Iâ€™ve Been (lets users show which countries and states they have visited), Texas Hold â€™Em Poker and Whatâ€™s Your Stripper Name (suggests what you and your friends would call yourselves on stage) at around $2 million each.
Most hope to either attract Facebook-users to their website and offers, some might publish ads on their widget canvas. But will that really be enough to sustain these valuations?
On a side note: If advertising is the model for generating any revenue, Facebook might actually perform much worse than other sites, because people are so familiar and engaged with the existing contents/widgets, that ad banner blindness will be much more common amongst these users than visitors of other media sites. That’s at least what some people say, and I think that is a reasonable assumption.
However, it could also imply that any click on a banner on Facebook is probably much more valuable than clicks on other networks. Simply because it wasn’t an accident or pure boredom. The user is actually interested in whatever the banner offered.
Soon enough, apparently, Facebook will start targetting ads using information they take from the profiles (makes sense, doesn’t it?), so ads should also become much more relevant.
The whole phenomenon of Facebook widgets definitely needs to be watched carefully, and I don’t think it would hurt for companies to test the water publishing small widgets and measuring the effects. But I am still sceptical about this exuberant optimism. Prove me wrong, I would be very much delighted to report on successful tactics any time!