How Advertisers Catch Up to Consumers in Social

Facebook and other identity and behavior networks have created new behaviors - and these behaviors have had no trouble attracting the attention of consumers.  The new behaviors have been so empowering of consumers, that as they adopt new behaviros, they have learned to tune out advertising even more effectively.  Consumers have even learned to kill ads, concepts, and brand strategies they dislike en masse.

Debra Aho Williamson, principal analyst at eMarketer in Seattle, noted that when the firm published its most recent forecast for digital advertising back in February, it projected that Facebook revenue would probably double again this year to $6 billion, a number she said is likely now out of reach.

"Consumers have adopted social media a whole lot faster than advertisers," Williamson said. "It's taking them a lot longer to figure out how to fit social media into their plans. [TheStreet.com]

This gap in "monetization" should be viewed in the context of how all innovation takes time to conquer relevant adoption curves and settle into a business model that works for all participants.  With the pace of today's change, we have cases like Groupon, where the vectors of growth point one way, while the sustainiability of the business is highly questionable.  This phenomenon in the information sector is likely to continue as the flow of information between market participants becomes effortless.  It is even worthy of excellent satire from McSweeney's: Ponzify 

So it's not just about your 2 Million app downloads that net you some nice venture funding for "traction" in the marketplace.  Make sure you're paying attention to how your users behave, as well as how their behavior change when you add "monetization" strategies.  

Watch Facebook's Mobile ad product introductions carefully.  If the users hate the products, and find them annoying, intrusive, or unstable, that's bad for the Facebook ecosystem and engenders the kind of hatred consumers have for companies like AT&T, in which they stay with the company but hate it because they cannot easily leave.  Conversely, if the consumer ignores the ads,  and skps right through them, that's bad for advertisers, who need at least some user attention to get value out of the ads.  The holy grail for facebook is helping to identify the ads in the middle: the ads so content-like that consumers will see them as a net benefit.  

This is small thinking strategy for Facebook, at best.  Which are the two or three brands whose social engagement strategies you like as much as you do their products?  Those are the ads that will be premium inventory in your newsfeed.  The social experiences that consuemrs want, which are so attractive consumers will seek them out for their value, are the name of the game for Facebook, because these experiences will have to rent access to Facebook's identity network.  And that is where the money will be.

People and Culture vs. Creative genius and Money

In "Confessions of an Agency CEO" we find some interesting questions about the nature of client relationships and whether that "good" vs. bad dynamic is associated with good work.  I quote the passage I find most interesting below.

The Lesson is similar to the Zappos example: in a well-run company, culture often trumps strategy.

It’s often said that clients get the work they deserve. What separates
the truly good ones from the awful?
 I am big believer that, whether they want to admit it or not, agencies are defined by their clients. A client’s willingness or desire to do interesting or innovative work is what’s going to help you or hurt you in your attempt to create successful campaigns, build a portfolio, win awards and recruit new talent. The client’s culture invariably rubs off on the agency. It’s important to consider this going in to any new relationship. Good clients are secure and accountable individuals, who know what they need to do and can give clear direction. They stand behind their word and defend their position. They don’t hang the agency out to dry at the first sign of trouble. Good clients are secure enough to take risks and are not afraid of being wrong. They trust the agency and can effectively manage from a distance, which allows the agency to focus on delivering a great product, not managing an erratic client. Bad clients, conversely, are insecure, political and weak. They are afraid to stand up to their peers and bosses. They try to make everyone happy and get incremental credit along the way. Making great ads is secondary to their petty need for constant validation. Their insecurity and weakness leads to fear. And the fear leads to constantly second-guessing their decisions.

Help a millenial with experimental advertising!

Shelly Palmer provoked me to think about whether I am "too into technology to understand real business."  Yikes!

I'm sympathetic to the idea that many "social media" people live in a reality-exclusion zone where they only buy products from brands they can @message on Twitter.  On the other hand, the “real business” folks can probably wait it out, but more and more of them are starting to wonder.

I talked to a small outdoor advertising business owner who might not be ready…but he’s intrigued.  He gets online marketing and does aggressive SEM advertising. But social?

The shift to social marketing certainly made a splash but isn’t sustainable, really. In the early days of Twitter, most of the buzz about the promise of the service to transform marketing was being made by marketing people on Twitter.  Is the future of one-to-one, fragmented media a self-fulfilling prophecy? Perhaps.

That being said, we’re starting to see the ways in which pure awareness advertising shifts into engaging digital and offline experiences that aggregate attention rather than interrupting a piece of content. 

Advertising remains real and necessary, but it will increasingly be built around producing perceived value in and of itself. Pepsi’s PepsiCo10 strategy to take Refresh one step further and start funding new tech entrepreneurs is an bold example, and even if it’s on the wrong side of Wannamaker’s 50%, at least some millennials may get jobs.