Cymfony's Influence 2.0

Consumer Online Behavior: Community or Content as King

An Ad Age story is headlined "Content Trumps Community" and notes that only 7.5% of consumer time online is spent in community sites like Facebook, MySpace, etc. True enough, but the stats say social networks have less of an issue with the number of users and page view consumption than with their users' fleeting attention.

First, kudos to the Online Publishers Association for recognizing that community is its own category. That alone is a statement about how far "social media" has come in the last couple of years.

I've followed the OPA's Internet Activity Index for several years and I often quote it to show how the Internet is different from other media: other media are 100% about content, but the Internet has always been a balance of content and communications (email and IM), with a healthy dollop of commerce thrown in.

While the Ad Age article implies that the focus and attention paid to social networks is overblown compared to the time spent, I beg to disagree with my friend Ms. Klaasen on these grounds:

• Time spent on social networks is 50% higher than search -- and we all know how big search is.
• Contrary to Ms. Klaassen's observation that social network time is coming primarily from communications, content's share of time dropped 6 percentage points from December to January, making up the bulk of community's 7.5 percentage points. With this drop, content's share of time is lower that it was in January 2007.
• Look also at page views per person: content dropped 225 pages, which suggests that in the reclassification, a number of sites formerly in the content group were moved to community. Communications, meanwhile, had 404 pages, the second highest number in the past 12 months.
• Another interesting angle is that content sites show 480 pages per month per user while community sites show 380 pages. In other words, community sites already have 80% as many places to put ads in front of each user as content sites.
• Only 59.5% of online users used community sites in January, while the other categories ranged from 78% - 93%. Given that these sites are only a couple of years old, that is a healthy number.
• Even more important, and not reflected in any of these numbers, is the degree of influence this time has on users' brand perceptions and purchasing decisions. Word-of-mouth continues to be the leading influence and roughly twice the influence of online ads, which would imply that this 7.5% of time is likely to have disproportionately higher impact than content pages.

I don't think social media's issue is with having sufficient space to sell -- the audience will continue to grow, and if the past is any indication of the future the number of pages per user will grow as well.

I wrote a while ago that social networks have a difficult tightrope to walk, between monetizing their user's attention and alienating those very users.

These numbers also imply that the users' attention is so fleeting (users are cramming 380 pages into about 1/4 the time they spend on content sites) that creating an effective marketing communication/ad format is the real challenge. Like email and IM before it, banners and other display ad formats are probably not the answer; unlike those communications media, word-of-mouth marketing techniques can be employed to involve brands in the conversations taking place.

Has the Web 2.0 Hype Cycle Kicked In?

I'm as bullish as anybody about the growth of social media and the impact it will have on the relationship between brands and consumers. But this study makes me think "Bubble 2.0" with its conclusion that 81% of marketers will spend as much or more on Conversational Marketing than traditional marketing by 2012. This suggests an order-of-magnitude faster growth than Interactive marketing and TV advertising has seen in the last decade...

Let me start by saying Cymfony is a member of SNCR and fully support their work. And I'm friends with Joseph Jaffe and think he is one of the leading thinkers in the dramatic changes marketing is experiencing.

That said, this study smacks of the hype cycle "peak of inflated expectations". I use these as reference points:

• Interactive marketing has been around for over 13 years, and it is $18.4 billion this year, according to Forrester's latest interactive marketing sizing report and will be only $61 billion by 2012. (I say "only" because Bob Coen at Universal McCann pegs 2006 advertising spending at $285 billion.)
• If you date DVR's to TiVo's launch in 1999, they have been around 8 years, and the penetration is only 17%, with only about 5% of viewing is on DVR (don't remember where I saw that stat...). Sure, the TV business is quaking in their boots but the 2007 Upfront was stronger than ever -- about a 5% overall increase and CPM increases up to 8 - 9%, despite repeated predictions that it must collapse in the face of declining audiences and rising CPMs.

In other words, if after 13 years, interactive marketing is less than 10% of total marketing, how is conversational marketing going to get to 50% in 5 years? Same question if DVRs haven't demolished the TV advertising business after 7 years?

As an ex-analyst, I sympathize with anyone trying to predict the future of radical changes like this. I've had my share of "irrational exuberance" reports like the December 1998 "1999 will be the year of rich media ads" and my wish-to-be-forgotten January 2001 classic "Online Advertising Eclipsed" (which predicted rapid growth for online ads but even more rapid growth for a broader definition of interactive marketing just as we entered the collapse of Bubble 1.0; I quickly revised it in October 2001 with "Online Advertising Retrenches"). I fear Joseph may have fallen into the trap I fell into of 1) believing what the marketers he interviewed told him and that 2) he only spoke to early adopter conversational/social media/Web 2.0 marketers who have all good intentions that haven't yet hit the reality of corporate conservatism.

The one thing I learned is that no matter how fast technology changes, consumers and marketers don't change nearly as quickly.

My fear is that numbers like this strain the credibility of the industry such that they may do more to reinforce reluctant execs' view that this is another bubble than they do to galvanize them to change.

Is there an irreversible change that will shift money out of traditional, one-way, broadcast marketing? Yes.

Is the future of marketing conversing with customers, listening to their needs/complaints/suggestions and adapting products and messages to align with them? Absolutely.

Will marketers learn to love giving control to their brand advocates and increase their use of widgets and allow consumers to take and spread an array of brand assets as they see fit? No doubt in my mind.

But none of this will happen overnight. Living through one "Trough of Disillusionment" is enough for my career. Let's all try to skip it and keep the marketing world climbing the "Slope of Enlightenment".

Superbowl advertisers are missing the real game

Ad Age reports that many Superbowl advertisers are staying quiet about buying the expensive spots. This is exactly the wrong strategy.

At $2.6 million per spot, even with 100,000,000 people watching, this works out to a $26 cost per thousand, high by any standards. Add the fact that this is a very untargeted audience and any specific advertiser's cost per target audience thousand escalates rapidly. There's no way to get a return on just the 30 seconds of the game alone.

Last year, I posted my thoughts about the right Superbowl ad strategy:

"The only way to rationalize this expense is to use it as a platform for public relations, word of mouth, and other exposure for your spot. Just as the ads have come to almost overshadow the game, the value from exposure before and after the game overshadows the 30 seconds the brand is paying for. "

Ad Age attributes companies' reluctance to promote their Superbowl ads to "accountants and procurement types breath[ing] down CMO necks."

In other words, the bean counters, trying to squeeze more efficiency out of marketing budgets, are accomplishing exactly the opposite of what they intend.

I have expected that the buzz about the Superbowl ads this year would focus on Doritos, the NFL, and Chevrolet who are conducting a contest for consumer-generated ads. It looks like the other advertisers are making this a reality by leaving the field wide open (pun intended)...

2007 Prognostications

I've been speculating on what 2007 will hold. Here are links to some of the places I've been quoted. Check them out, plus some bonus thoughts....

Heidi Cohen published my thoughts on how marketers will embrace online video in new ways on ClickZ.

Mickey Alam Khan wrote an excellent recap of a long conversation he and I had at AdTech about what all the changes in the media landscape mean for advertisers and media companies in his recent DM News editorial.

Then, ADOTAS tapped me for an article of crystal-ball gazing, based on the Time Magazine Person of the Year, which should appear soon....

Now, for a couple of other thoughts:

Bubble 2.0 ? -- I don't think so. Earlier this fall David Pogue worried that AOL's switch to a totally free ad-supported service signals the return of the late '90's Internet bubble. I agree, we have some froth in the market, but there is one big difference: online advertising is heading toward $16 billion this year, and it is real money, not VC cash that sloshed through Bubble 1.0. But an even more telling example is YouTube suing TechCrunch to protect their business model. This is the anti-bubble -- content may want to be free (in the popular Bubble 1.0 era phrase), but content owners/creators/distributors are not charitable institutions. For there to be content worth watching, somebody has to make some money somewhere along the line.

Web 2.0 is growing up. Reuters investing in Pluck is a strong signal that the worlds of "traditional" and "social" media continue to converge, bringing blogs to a wider, less tech-happy audience. Moves like this advance the case for Influence 2.0, the intersection and interaction of both mainstream and traditional media. With YouTube safely entrenced in the Google world and striking deals with NBC Universal, Vivendi's Universal Music Group, Sony BMG, the NHL, and others, it is clear that real companies are starting to work Web 2.0 into their business models. Contrary to Steve Rubel's thoughts, there is still a long way to go, but the trend will accelerate in 2007.

The post-TiVo era begins. TiVo taught consumers they could break the control network programming bosses had over scheduling. Then the networks completely gave control over by putting popular shows on iTunes, and consumers learned they could have their video content not only whenever but wherever they wanted it. In 2007 as video-enabled mobile phones become a reality, consumers will have even more freedom to view what they want, when they want, wherever they want. Ads will spread but the real change will come as marketers create more product demonstrations and segments with expert advice. Someone wondering what to make their family for dinner will dial up a 5-minute segment with Rachel Ray sponsored by Kraft.

Beyond MySpace. Marketers will seek sites that are “not your teenager’s social network”. MySpace still grabs all the attention, but social networks have begun to spread, popping up to serve different segments of consumers. Though sites like Gather.com and eons.com don’t have the raw numbers of MySpace, they have the buying power of aging Boomers and the NPR audience. Marketers will discover that novelties like a brand character page on these sites won’t cut it. Instead, brands will engage with consumers on how to fulfill their LifeDreams on eons.com while resurrecting the concept of “cause-related marketing” to support issues the Gather.com audience cares about.

More fake blogs. As a member of the Word of Mouth Marketing Association Board of Directors, it pains me to say this. But we will see more examples where marketers try to take shortcuts to create buzz by pretending to be someone they are not. Sony launched AllIWantforXmasIsAPSP.com, having missed the lessons of the “Walmarting across America” fake blog controversy that gave the retailer and their PR firm, Edelman, such a black eye just a month before. Pardon the slightly commercial message, but there is still time to establish a New Year's Resolution of engaging in ethical marketing practices: join WOMMA, embrace the Honesty ROI principles, and institute the practical ethics steps that will help you engage in authentic, valuable conversation with consumers.

No Mo Social Media?

Steve Rubel declares "social media" is dead. Long live social media!

Steve's post makes the case that there has been so much convergence between "mainstream" and "social" media, that the distinction is no longer meaningful.

He is a bit extreme in saying there's no longer a distinction, but the trend is absolutely correct. Which means that it makes no sense to focus on blog analysis to the exclusion of "traditional" media. To understand the full set of influences that shape peoples' opinions, marketers and PR people must track the full spectrum and understand the interplay of influences.