technoballs » advertising

Foursquare’s Growing Business Model

the ballmaster — Fri, 12 Feb 2010 18:44:09 +0000

You’ve got to love Foursquare: in a few short months, it has gone from one of the myriad background apps struggling for respect into the new darling of hyper-connected users. Unlike many of its digital brethren, however, Foursquare is demonstrating a sophistication in its business model which other startups would do well to emulate.

According to AdAge, Foursquare is working on a new suite of tools and services:

…there will be three tiers of paid services: ones for small (local) businesses, ones for retail chains, and ones for big marketers. With these offerings, Foursquare would offer up analytics packages. “Then, deals could be sold against impressions such as web ads, clicks such as search ads, or a completely new model: cost per check-in,” Kunur Patel writes in the AdAge piece.

The complexity of Foursquare’s approach shows that it is determined not to rely upon the unimaginative approach of simply counting on ad revenue. I am increasingly hearing this refrain echoed by angels and VCs, and it’s clear that Foursquare is getting the memo.

via As The Deals Roll In, So Does Some Revenue For Foursquare.

MySpace’s New Strategy Won’t Work, Either

the ballmaster — Sat, 19 Dec 2009 15:22:34 +0000

A thought-provoking piece by Rory Maher about the challenges currently faced by MySpace in executing its “Social network– Us?” strategy:

Bottom line: MySpace is in a very difficult position. Facebook has won the social network war, and MySpace’s new strategy is to go head-to-head with massive, seasoned Internet companies that have many competitive advantages. The odds that MySpace will turn itself around seem low.

The one aspect that Maher may miscalculate is just how un-smart these seasoned Internet companies actually are. He is almost certainly referring to Yahoo, whose own implosion over the past 12 months may provide MySpace with a perfect opportunity to steal share. (Lest we forget, Yahoo CEO Carol Bartz has been trying to pull a similar slight-of-hand over investors with claims that Yahoo has never really been a search company.)

A more puzzling question is: why is MySpace looking to former AOL and Yahoo executives to revive its fortunes? Neither company has much to recommend it today. Why not steal from the best and poach executives from amazing companies like Google, Apple, and, er, Facebook? (To be fair, MySpace was able to execute on this last one in nabbing Owen Van Natta, who formerly served as Facebook’s Chief Revenue Officer.)

Another troubling issue where MySpace’s hopes regarding ad revenue are concerned has to do with the anonymity of its user base. Unlike Facebook, which actively verifies user identities, MySpace differentiated itself early on from Friendster by allowing anyone to hold dozens of fictitious user profiles. Van Natta’s recent comments suggest that he views this as a distinct advantage:

“We think we’re different from Facebook because you don’t have to have a real connection to use it. Maybe you use it to discover music. Music tastes get influenced by your friends. Also movies. These are touchstones in relationships. You shouldn’t have to know them in the socialization of content.”

The upshot of allowing fictitious profiles? Absolutely insane early growth rates. But no one anticipated the hidden downside to this decision: how do you convince advertisers that you really are serving up relevant eyeballs for their products? Someone once commented that selling products and services on MySpace based upon users’ self-entered demographic data is like trying to market to people based upon who they dress up as for Halloween.

There’s a lot here worth reading. Let’s hope that someone at MySpace is taking notes.

via MySpace’s New Strategy Won’t Work, Either.

When You Look Into A Can Of Spam, The Can Of Spam Looks Back Into You

the ballmaster — Mon, 23 Nov 2009 23:06:51 +0000

Here’s an idea: spam your friends.

Companies are increasingly recruiting regular people to become advocates for their products & services– without requiring those people to disclose their commercial connection to these companies.

The concept is simple: you sign up for one of these services, and grant advertisers permission to send out tweets or posts on your behalf. Each time someone clicks on the link in your post, you are paid a fee by the service.

And you thought application spam was bad. As The New York Times‘ Brad Stone puts it–

…the bigger opportunity may be in matching advertisers with so-called influencers — the more popular users of services like Twitter. A number of start-ups, like Ad.ly, Izea and Peer2, a division of Creative Asylum, a Hollywood ad agency, are pursuing the opportunity to put persuasive messages into regular dialogue on social networks.

“We don’t want to create an army of spammers, and we are not trying to turn Facebook and Twitter into one giant spam network,” said Joey Caroni, co-founder of Peer2. “All we are trying to do is get consumers to become marketers for us.”

Got that? We don’t want an army of spammers. We just want everyone you know to market our stuff.

via Ping – Hiring Tweeters and Bloggers to Send Ads – NYTimes.com.

Digg Lights the Way

the ballmaster — Wed, 14 Oct 2009 15:48:19 +0000

Earlier this year, Digg began experimenting with advertisements that would appear in the stream of user-added stories. Users could digg these ads up or down, giving advertisers instant feedback about the quality and saliency of their ads:

“…advertisements that get more “diggs,” or votes, get a lower cost-per-click rate for the ad, and the ad is likely to stay visible on the site longer. If users veto the ad, also known as “burying” it, the cost-per-click rate will go up and the advertiser will be more likely to remove the ad from the site.

“In a way, its beneficial for the advertisers to figure out what does and doesn’t work,” Mr. Maser said. “Digg is the world’s largest focus group.”

Is this the future of advertising– in-stream placement subject to community approval? If so, it represents a novel approach. Relevance gets rewarded, and overly-broad ads get punished (and ultimately removed.)

via Digg’s Vote-for-Ads Experiment Is Raising Revenue – Bits Blog – NYTimes.com.

What’s New In Social Networking? Advertiser Dollars.

the ballmaster — Mon, 05 Oct 2009 15:19:13 +0000

A new study by Nielsen shows that ad dollars are now flowing into social networking platforms like Twitter and Facebook. The contraction between 2008-2009 appears to have been an artifact of the recession than any summary judgment against the effectiveness of social media marketing: growth is poised to grow over 13% in 2010 and 8.2% in 2011:

“In the past, advertisers had significant concerns with social media advertising,” said Jon Gibs, vice president, media and agency insights, Nielsen’s online division. “The considerable increases we’ve seen in ad spending over the past year suggest that many of these concerns have subsided or been addressed.”

The entertainment industry led the charge, with 812% year-over-year growth in social network ad spending. Travel, business to business, and automotive advertisers all increased spending on social networks by more than 150% between August 2008 and August 2009—even while decreasing overall online ad spending.

“The reported growth in social network and blog ad spending is a sign that companies are finally implementing an overall social media marketing strategy,” said eMarketer senior analyst Debra Aho Williamson. “This foundation is essential for future growth in social network ad spending.”

via Ad Dollars Flood to Social Nets – eMarketer .

Should Affiliate Marketers Count on Facebook?

the ballmaster — Tue, 29 Sep 2009 16:27:08 +0000

Forrester Research has just published a report which shows moribund growth in affiliate marketing budgets for 2009, followed by an aggressive compound annual growth rate of 16%:

The question is: how many of these ad dollars will flow to social media? Andy Beal explains:

Sixty-two percent of U.S. online buyers use social networking sites like Facebook or MySpace.com for communicating and keeping up with friends. Only 2% of U.S. online buyers have purchased products through social networking sites. Affiliate sites get paid based on transactions they drive, not simply click-throughs. Thus, affiliate sites currently experimenting with social networks may be getting traffic from these sites, but they are sending very few qualified leads to marketers. Little money will therefore change hands in this scenario.

There’s that word again: experimental. It began as a term of admiration, as in: “Cool– we can allocate some of our ad budget to experimental, up-and-coming sites like Facebook and MySpace.” Over time, however, the term has taken on a less enthusiastic connotation, as in: “Our ad budget is down as it is– you really want to invest some of it in experimental areas like social media?”

I think the cancer at the heart of the rose here is social marketing’s inability to affix ROI metrics to advertising campaigns. A recent report shows that only 16% of companies that use social marketing even bother tracking ROI. (Read another way, a full 84% of companies using social marketing do so in the blind.)

Until we can create a common dashboard of meaningful metrics to measure success, social media will continue to be plagued with the “experimental” moniker.

via Marketers: Don’t Count on Facebook — Seeking Alpha.

Microsoft Shows You How To Par-Tay

the ballmaster — Mon, 28 Sep 2009 18:13:31 +0000

In a move which further blurs the line between farce and fiction, Microsoft is encouraging people to throw Windows 7 launch parties at their homes.

Yes, you read that right.

Just in case you have trouble understanding what on earth you’re supposed to do at a Windows 7 launch party, Microsoft has kindly created a video to help you out.

Warning: this makes the Jerry Seinfeld videos look clever by comparison.

Key takeaways:

Microsoft’s marketing is truly lost in the wilderness of bad ideas. Very, very bad ideas.
See #1.

Rediscovering Customer Retention

the ballmaster — Sat, 26 Sep 2009 15:48:41 +0000

A new report by Unisfair highlights the top marketing goals for 2010. Among them? Customer retention:

Six in 10 marketers polled said acquiring new customers would be critical in 2010, while 48% would focus on retaining current customers—a particularly important effort in the recession.

Marketers also pointed to the need to engage users in social networks as a means of engagement:

Unisfair suggested that virtual communities to engage both current and future customers would help accomplish both these major goals.

So far, so good– pretty standard stuff. Things get interesting, however, when marketers report about which online communities are the most effective in adding value.

The winner?

LinkedIn.

It would be fascinating to dig more deeply into these numbers to determine which LinkedIn features are most favored by marketers– groups? Company profiles? Discussions? I wonder how much of Digg’s current malaise is connected to marketers’ perceptions of its relative lack of value.

via Customer Acquisition and Retention Top Priorities – eMarketer.

The Fastest $100 Million You’ll (Never) See

the ballmaster — Fri, 18 Sep 2009 18:47:55 +0000

Yahoo is set to spend north of $100 million on a new advertising campaign aimed at re-branding Yahoo in the public mind as the web’s ultimate source of content:

AllThingsD’s Kara Swisher said it would be centered on presenting Yahoo as the “home on the web” for both advertisers and consumers. A source also told paidContent that the company would be pitching itself as a “be-all, end-all” source for content with consumers, with the hope of ultimately inspiring advertisers to spend more on its sites.

Because that’s going to work.

Rather than launch a counter-propaganda campaign to re-educate the masses, why doesn’t Yahoo take the money and create a compelling product? Crazy-talk, I know. These kind of moves put Yahoo up there with Microsoft in the category of Most Clueless Marketing.

via Yahoo To Spend More Than $100 Million On Marketing Campaign | paidContent .

Twitter Unveils New Terms of Service: Hello, Advertising!

the ballmaster — Wed, 16 Sep 2009 06:17:50 +0000

Twitter co-founder Biz Stone announced new terms of service for the wildly-popular social media site today. The update makes it clear that Twitter is getting serious about monetizing, and will open the door to advertisers on the one hand while cracking down on spammer profiles on the other:

With these revisions, we expect some discussion so here are a few highlights from the updated page.

Advertising—In the Terms, we leave the door open for advertising. We’d like to keep our options open as we’ve said before…

SPAM—Abusive behavior and spam is also outlined in these terms according to the rules we’ve been operating under for some time.

Other updates include the understanding that user content (“tweets”) are allowed to passthrough to other non-Twitter sites via third-party APIs. To offset this, Stone also reiterates his position that user content is the property of users, not Twitter–

Ownership—Twitter is allowed to “use, copy, reproduce, process, adapt, modify, publish, transmit, display and distribute” your tweets because that’s what we do. However, they are your tweets and they belong to you.

It will be interesting to see how Twitter users react to these updates.

via Twitter Blog: Twitter’s New Terms of Service.