As technology continues to grow and the internet becomes a more common platform for business (believe it or not, many businesses still haven’t harnessed the internet), the amount of money spent on online ads has become, as you can imagine, fairly substantial. Although online advertising can be a more efficient way to target certain demographics than traditional media outlets, this does not always lead to greater results. According to a new study from MIT Sloan School of Management, the same search, and other technology, that has enabled advertisers to target particular audiences, such as men between 25 and 35 who work on Mac computers, is also creating greater online competition for the same audience, thus reducing profitability of advertising on any targeted web site.

If you think about it, this all makes all the sense in the world. And it isn’t enough that many online advertisers have only themselves to blame for fragmenting their own markets by hopping from one sexy technology or site to another, but now there is evidence that there is a finite amount of scree-estate available to compete for the attention of the viewer.

MarketingVox data suggest that the study’s findings take on greater relevance as vertical and hyper vertical ad networks continue to grow. Adify’s Vertical Gauge for Q3, brand advertising CPMs for various verticals continue to rebound from early 2009. Also, food CPMs are up 91% from last quarter and Real Estate CPMs are up 17%. As far as vertical brand advertising, both automotive and healthy living and lifestyle verticals contracted substantially.

Clearly this article suggests to advertisers and consumers alike that targeted ad dollars don’t necessarily create more efficacy or revenue, in fact, evidence, in this case, shows more targeted ad dollars are less profitable. It is critical that advertisers note the importance of integrated marketing strategies in their marketing communications campaigns…more to come.

By Abe Kasbo and Kim Reydel

Social media was a huge buzz word in 2009 and the hype will undoubtedly spill over into 2010.  Without a question, social media is now the new mass media (television still dominates…for now), and while businesses are still scrambling to figure out how to maximize their investment, social media delivered the following important points to the market:

1. Aggregation

2. Segmentation

3. Revelancy

As companies continue to embrace social media to grow their businesses, expand their brand footprint, and utilize the medium for PR purposes, some are still struggling to optimize social media to its full potential. According to the Social Media and Online PR Report, 86% of companies plan to more money on social media in 2010. Conversely, 54% of those surveyed say the biggest barrier to better social media engagement is a lack of resources. So, although many are plugged in to various social networking outlets, about half of them see a hurdle in using the tools to their full capacity. In addition 60% of companies say that they have gained “some benefit but nothing concrete” from using social networking. Let’s be honest, when using a tool to grow your business it’s crucial to see the results and reap the benefits. Until you know how to properly engage in social media, it’s not an essential tool for your business.

According to a survey by Econsultancy and bigmouthmedia in the B2B world 11% of respondents were heavily involved in social media while 23% were not involved and 65% experimented only. In the retail business 10% of respondents were heavily involved, 27% not involved, and 63% of retail respondents only experimented with social media. Like any other business strategy you must follow through with a plan, and a short presence on facebook is sure to generate zero business for any company. The concept of social media may have been an experiment, but building your company’s presence on a social network is a business strategy that requires a commitment and understanding of the platform. The majority of companies agree that major benefits of social media include; increased brand awareness, customer engagement, communication with key influencers, and better brand reputation. Additionally 54% of supply side respondents say their clients are incorporating video and video sharing in their use of social media. It’s superb that so many companies have hopped on the social media bandwagon but truth be told, it might as well be obsolete unless you are using it as a tool to engage your audience.

So, although statistics show that companies know how to use social media, there is a lack of understanding when it comes to the value of engagement. In other words, any company has the ability to create a fan page on facebook and populate the group, but often times it stops here. Companies have to keep in mind that those who join your network on twitter or facebook or linkedin are looking for something and it’s your responsibility to give it to them. The social networking platform allows you to offer coupons, contests, news, videos, promotions etc to ENGAGE your audience. It’s important to bring people together via your social network but it’s crucial to keep your site functional and relevant. As another year is about to begin, let’s make a resolution to remember to engage engage engage!

Now you can listen to us on our new web radio show “Hey Marketing Genius!” You can listen by clicking here http://www.blogtalkradio.com/heymarketinggenius

Today’s show discusses branding. Our guest is Erik Kent, President of NJWedding.com.

1. Engage - People who join your group or fan page want something. Find out what it is and give it to them. Give them coupons, suggestion, offers, new, meetings, rallies, contests…what ever it is, you must keep your network engage or else you risk loosing it…or worse, having a stale network.

2. Aggregate - Social networks allow you to bring people together around your issues, products and services. Once you build your relevant network, you can engage by polling, conducting market research, delivering offers, and so on.

3. Measure Online - Measuring your activities on your social networks. For example, how many people joined your group. How many people are attending your events, how many people saw your event, and how many comments are made.

4. Measure Offline - Use every opportunity to drive your “offline” audience to your online social networks. So if have a quarterly magazine, or conduct monthly direct mail, or advertise in print or television, invite people to join your online network. Now you can measure what’s happening offline and at the same time grow your influence in your social network.

Social networking is no panacea.  But, done right, it can be a slice of heaven, even though it takes hard/smart/inspired work.

Here’s a brief interview with FIOS1 about social networking.

I was on fakeation (that’s a working vacation for the uninitiated), when my eyes turned to the television to catch Ford’s new advertising campaign.  The new ads feature Ford’s new tagline, “Drive the Ford Difference.”  But that’s not all, “Different is good,” they say.  Now with all the hurdles that Ford has to overcome, Ford is selling us “Driving the Ford Difference.”  I don’t know what that means, but I’m a good sport, I’ll play.  OK Ford, what is driving Ford difference?  If you can explain it beyond a tagline, I might be interested.  How does the Ford difference engage the customer? Was anyone at Ford’s advertising/MarCom department asking this question?

Once again we’re subjected to mass communications lip service, the same came from General Motors‘ recent “inspiring” video.  In this video, accompanied by iconic images of American flags, city scapes, Pittsburgh Steelers Ben Roethlisberger’s Superbowl pass, GM seeks to “to be completely honest…start over in order to get stronger.” And another thing, GM wants us to know that they are “not going out of business,” but instead “is getting down to business…”

Once again, Madison Avenue and those buying Madison Avenue to continue to fail both the Auto Industry and the American Public.  Here’s how it probably went down (with the GM video):

Madison Avenue:  (this guy is wearing a pink open collar shirt with hair a little messed up, cause he’s creative…speaks real fast) Look, we need to appeal to the American public, so we’ll need a video of the Superbowl, Detroit skyline, and a bunch of robots building cars, sparks everywhere.  Strong, deep voice, authoritative.  We’ll use technology like Youtube, and it’ll be viral…and it’ll show the government and our investors we’re serious about this. What do you think?

GM Marketing Guy:  We’ve gotta do something fast, yeah, sounds good…

GM Marketing Guy’s Staff: (this is probably what they were thinking, but they didn’t say anything, because if they did they wouldn’t be team players)  Dude, what about the actual product, our finances, and actually selling cars? How do we do that, Madison Avenue?

I would be wary with businesses who lead with communications instead of good products.  Rebuilding brands, if that indeed is your direction, starts with rebuilding your products and business, not a one hit wonder PR video release. In Amazon’s most recent shareholder meeting, CEO Jeff Bezos said: “Advertising is the price you pay for having an unremarkable product or service.” Now, some may consider this media fodder, and Madison Avenue may have been offended by the statement, but as it applies to the American Automotive industry…if the shoe fits.  And now, the American Auto industry seems to be taking it’s own advertising to an unremarkable, new low.

Here some suggestions to ponder:

1. With all the technologies and brainpower resources available to both the automotive industry and their advertising firms, Ford and GM ought to invest business driven MarCom initiatives that engage people and drive people to their hard working dealerships.

2. Redefine the objectives of these campaigns to create more connections with the consumer.

3.  Develop a serious strategy to convert non-customers (meaning non-GM or Ford customers).  This would an on and offline strategy, and may or may not be advertising driven.

4. Continue to reach newly minted drivers. Get them young, satisfy them, and perhaps they become your brand champs.

5. Capitalize on the dealer’s strong local relationships by spending local dollars more effectively - perhaps helping local dealers upgrade dealer TV commercials produced by cable companies, that undermine both the national brand and the dealer’s brand. Or assisting the dealer by vetting marketing plans & not advertising plans to help drive business.

One last thing…I’d like to suggest that the American Auto Industry needs a chief marketing officer who is more connected to the products and consumer than Madison Avenue.  This person, let’s use the vernacular of the day to call him or her, the Auto Marketing Czar, would be responsible for the deployment of business driven MarCom initiatves to communicate the real value of American cars to the public, and perhaps that will make all “the difference.”

The American Auto Industry has the responsibility to its dealers, customers, and investors to step up their marketing strategy to truely reflect its business aspirations, and it has the resources to do it.

Come on Detroit, step up…take the challenge…we want you to succeed.

The proliferation of social networking sites is advancing at an impossible pace. For businesses, these sites offer the Holy Grail, the opportunity for engagement of their customers. This particular race is reminiscent of the race for eyeballs in the early days of the consumer Internet between Yahoo, Excite, iWon, Alta Vista, DogPile (yeah, remember those guys) and the countless search engines, turned portals.  Then Google appeared and poof, most of those guys are gone or relegated to the Internet’s C-list - in the business sense of course.  Some of them still retain their web presences, others have morphed into something else.

The similarities between the portal races and social networking race are many, let’s look at some of them:

• Market share competition - This is done by creating useful tools that are meaningful to users.  More relevant tools, more people join, use, stay, and proselytize…at least that’s the way it’s supposed to work.
• Viral growth - portals and social networking sites relied heavily on their users for growth, although Yahoo delved into traditional advertising to drive growth. Interestingly, advertisers are creating their own space on Facebook, and bypassing their own corporate sites by driving consumers directly to their Facebook page through traditional advertising.
• Relevancy rules the day - the survivors of the portal wars won on their space’s relevancy to the user. Yahoo finance was created making it robust and useful, Yahoo mail kicked it up a notch after Hotmail was bought by Microsoft. And as much money iWon vowed to give away, users rejected  its business model because users care about the things important to them: 1. relevancy, 2. usefulness…iWon delivered neither.

Based on these lessons, let’s look into the crystal ball and see what shakes out for the social networking world:

Like the portal proliferation of the mid to late 90s, Facebook, Linkedin, Plaxo, MySpace, Youtube, Twitter, Friendster, et. al. are in an arms race to create useful tools in order to attract and keep market share.  One thing that must be considered here, and only one…who will be left standing when the user bandwidth becomes depleted.  In other words, why would I have a Plaxo and Linkedin accounts? Or Facebook and Twitter accounts?  Who has time for all this stuff?

Still, let’s assume businesses have the resources to sign up for these sites. Your business at Facebook, Twitter, Linkedin, is only as important as your network on those sites.  Imagine managing several networks, building your client database, and then working the networking by pushing out content.  This would involve high level strategy, definition of marketing tactics, PR strategies, and a solid implementation plan…I’m getting winded just thinking typing out these words.

Now on to Twitter…

Twitter’s growth, largely organic, press and celebrity driven, is understandable. I can understand how people would want to know what Brittany Spears is thinking about while on the checkout line at Walmart - well not really.  But why would I migrate my network from Facebook to Twitter. Ok, I can update my Facebook status via Twitter, but I can do so much more with Facebook and Linkedin. I can create groups, post videos, create events, and deliver status updates, so why would I recreate or duplicate my online world on a largely one dimensional site?  What is the relevance of Twitter to my business is the question we all must answer.  And so, if  we’re tweeting to no one or an irrelevant bunch of followers, than who cares.  But if we’re serious about tweeting as a social networking medium that can help advance business objectives, then we have to take time to create a relevant pool of people that either needs or wants to hear from us on  a consistent basis.  And if I’m on Facebook or Linkedin doing this very same thing, I am not inclined to dilute or distract my network by sending them somewhere else for a singular function, like a status update.

According to a recent article in Slate, citing a study by a Harvard Business School professor, showed that 10% of Twitter users were responsible for 90% of tweets. The article also referenced a study by Nielsen, the media research firm, which asserted “that 60 percent of Twitter users do not return from one month to the next.”

So what’s Twitter to do?  Simple.  Provide more useful functionality to continue to survive. Attracting visitors is one thing, keeping them engaged on a long term basis is another.

More to come…

A couple of weeks ago, I read an article about social networking in a leading New Jersey business magazine. The story quoted several New Jersey based marketing firm execs who weighed in on social networking. The article found a consensus among these folks who opined correctly that social networking is still in its infancy, but wondered about the direct relationship between social networking and the bottom line. The article went on to say the following [editor's note - I have removed the names to protect the innocent]:

• “I think most people are probably savvy enough to know you can’t draw a line directly from a Facebook page to the impact on the bottom line,” but     building relationships with constituents through social sites will ultimately contribute to a company’s success, he said, in ways that may not be quantifiable.

• [Name Removed] compares the push to participate in social media to the early days of companies seeking higher ranking on Web search engines. With social media still in its early stages, [Name Removed] said there are no proven methods of how best to reach customers.  [Name Removed] said while many companies want to engage in social media-based marketing, she warns that few know what to expect. Taking time to understand how the new playground functions can save businesses from a few headaches. “Corporate America isn’t quite ready for this interactive marketing highway that we are going on,” she said. “With this two-way street, they can’t control [the interaction] anymore.”

While the article suggested, correctly, that social marketing efforts ought to be tied into integrated marketing efforts, it completely ignored certain business driven realities of the medium and went on to substantiate the experience of those quoted in the article.  I called the reporter to let him know that, indeed, you can quantify the contributions of social networking to the bottom line. I provided the reporter with several cases from our firm showing him the direct correlation between successful social networking efforts and the bottom line. Other firms who work within, and understand the nature of the medium have done the same for their clients.  The reporter rationalized that the purpose of the column was simply to point out that social networking is no panacea, that there are still miles to go before we perfect the medium for business.  Agreed and if you read my previous posts on this blog, you’ll see how much I agree. But as much as I agree, I cannot accept the fact that the other side was not told.

The truth is that social networking takes work. It takes time, it takes strategy, and moves in real time.  This is not easy, and not easily explainable. And yet, we have the other extreme where the corporate business media make it sound like you can sign up for Twitter and make a million dollars.  The blinding speed in which people adopt, and are attracted to social networking, certainly does not help.  Which means, that as marketing/advertising/PR/communications professionals, we have to stay not only on top of what is happening, but provide meaningful interpretation for our clients in order to best leverage the medium to advance their business goals.

But there are certain realities that marketing and PR folks will not speak about in public. Frankly many traditional marketing firms are very, very afraid of social networking, because social networking, if done right, is a game changer, an eminent threat to their bottom line.  Much like the Internet decimated newspapers because of their their head in the sand rigidity about protecting their revenue stream, newspapers were like the proverbial frog who hangs out in a slowly boiling pot until it’s too late. Traditional marketing and PR firms will soon suffer the same fate, unless they begin to change their business model, and delve deeper into social networking to uncover real value and meaning for their clients.

Take a look at the last quote above from the article. With all due respect to the depth and breadth of the experience of the marketing executives who were quoted, but, have these people been on the Internet? Have they looked around to see how “corporate America” is utilizing social networking and the web? Have they seen major international / national brands direct people from TV commercials straight to their Facebook, rather than their own websites?  Do they realize that “marketing and advertising” or a very good portion of it, is so 20th century, and engagement is about today and tomorrow. Have they heard of the iPhone and it’s billion dollar earning apps?  I am sure that these folks have heard the calls of major brands like Procter and Gamble, American Express, Verizon, who understand that their businesses indeed do not have control of their brands, but they’ve adapted by developing strategies to engage their customers to proselytize for them and advance their business.  Have they attended the many leading conferences, where the Global marketers have called on Madison Avenue to stop wasting their money and their time?

Head in the sand strategy seemed to have worked fine for our banking system, right? I make the same analogy here, marketing and advertising firms have a responsibility to their clients rethink and reshape the way they do business. Because like newspapers, if they keep the old model close to their vest because they don’t understand the realities of the day…well, need I say more…

I’ll post about the imperfection of social networking in my next blog…more to come.

The rush to social networking is an interesting phenomenon. We watch with amazement as people flock to facebook, twitter et. al. and the offline social pressure that ensues to get on these sites. The business implications are plenty, from the demise of newspapers, to the rise of social networking, how does capitalize on these sizemic shift in the tectonic plates of media?  Here are some ideas to ponder:

1. Social networking online is like social networking offline. I can’t tell you how many people I know attend trade shows, networking events and come back with a stack of business card that just there. The key to any networking, on or offline is the “next.”  What do you with that valuable information? How do you use it? When? For what?  So online social networking is more about your behavior than the technology. If you’re a natural networker offline, you’ll probably know just what to do online.

2. “Own” a social networking site - like a good media planner, aggregate your efforts on where your market is and focus on learning the social networking environment and make it work for you. Own the medium.  For example, if the majority of your target market is on Linkedin, get on that site and work that site. Do not dilute your efforts by attempting to do the same on facebook, myspace…your market simply isn’t there.

3. Social networking sites have become destinations with emotional attachments. People will have a hard time leaving, unless something drastic happens like a serious breach of privacy or the sites become fee driven. Even if that happens, I believe that these properties will prosper (perhaps not financially, but will be around in one form or another as utilities).

4. Your network is key - building your online network on social networking properties is the foundation for everything you will do.  If you have relevant contacts whom you can engage, then you have a distinct advantage.

5. Do not abuse your network - remember you do not have a right to your clients, so bombarding them with emails, and offers may turn them away from your online network. Respect that this is their space too.

6. Integrate social networking sites where possible to get the biggest bang for the buck - for example, facebook has a twitter app that allows twitter to be updated whenever you update facebook, saving you time and extending your reach.

There is so much more to share, I am thinking of launching a social networking advisory for our firm. I’ll keep you posted.