Update: Only a few brands will trial these new ads, after testing, will then be broadly released later in the year.

A few days ago, I had a private briefing before the press with Tim Kendall, Director of Monetization at Facebook, below are the findings, with specific recommendations for brands. As I get more information, such as results and data, I’ll update this post.

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Web Strategy Summary (90 Words)
Facebook launched a new product called ‘Engagement Advertisements’ that encourages members to interact with the ads by leaving comments, sharing virtual gifts, or becoming fans. To combat dismal click through rates of traditional advertisements, these features emulate widgets and encourage users to increase member adoption, viral growth, and brand interaction. Brands will only succeed with these “WidgetAds” if they create content that puts community first, lean on new interactions, integrate with other tools, plan for the long haul, and change how they measure success –traditional internet advertising tactics won’t apply.

[Facebook’s ‘Engagement Advertisements’ emulates natural activities of members –in hopes to increase interaction, network spread, and brand preference]

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Facebook, a Fast Growing Global Social Network
Facebook, noted as the largest social network, is on a growth rate to increase it’s active users to 90million active users today in August, 2008 up from 54 million aprox at the start of the year. While presumed to be of a younger college educated demographic, it’s not the domain of the young alone as the largest growth rates are educated white collar workers, over age 25. Facebook has global growth in markets such as 66% growth rate in EMEA, and 35% and 33% growth rates in Europe and Latin America, respectively.

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Engagement Advertisements Integrate with Natural User Behaviors
Facebook’s innovative way of monetizing is unique, they were the first to launch a developer platform (F8) as well as the ill-fated Facebook Beacon, and are now launching with a new interactive marketing and advertising product.

[Facebook’s ‘Engagement Advertisements’ more akin to interactive marketing with a social twist: “WidgetAds”]

Unlike Beacon or Facebook Connect, both products intended to aggregate the actions on third-party sites (like Blockbuster.com) this new product called “Engagement Advertisements” is intended to nicely integrate with Facebook’s newly redesign profile and news pages. Early brands to trial this include: Paramount Pictures whose video commenting for Tropic Thunder ran two weeks ago –I’ve asked for campaign results. Future early adopters also include General Mills’ Betty Crocker which will have image commenting and the ability to ‘fan’, and video commenting for Addias, both to trial late August.

Engagement Ads provide three unique experiences
Rather than clicking on the ad and being whisked away to a branded microsite, these ads allow members to stay within the contained walls of Facebook and their social community. Engagement ads come in three major flavors:

1) Comment Style Ad: Members can now leave comments on these advertisements, much like wall posts. Brands that are focused on entertainment, new product rollouts, autos and apparel are well suited. The ad can show up to 4 comments per object, and the activity spreads to the users newsfeed.

2) Virtual Gifts Style Ad: Brands can now create virtual items that users can share, spread to each other. This wildly popular behavior within applications and Facebook is suitable for consumer products, entertainment, and some media.

3) Fan Style Ad: A play off the Facebook pages, users with a persona affinity for a product (like Apple) can become a fan, triggering a notification to their network, and could then tie on social ads. Will work great for established brands, like guitar hero, passion products, luxury products, or any brand with a rabid customer base.

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Forrester Data: Social Networks foster communication, self-expression
With horrible click through rates (I’ve heard cases of .04 percent CTR) of ads on social networks, some brands prefer to focus resources elsewhere. Why the low rates? Our research indicates that youth primarily exhibit behaviors of communication and self-expression –not searching for products, looking at ads, or hunting for information.

Common Behaviors of Youth on Social Networks
See what my friends are up to: 86%
Sent a message to someone: 79%
Posted/updated my profile: 70%
Looked at profiles of people I didn’t know: 65%
Sources: North American Technographics Retail And Marketing Online Youth Survey, Q4 2007, Forrester Research

This youth data supports that social network behavior is in fact, ’social’ and these respondents are not seeking to find out about product information, nor learn about the latest products at a media site, product review, or a search engine like Google.

[Brands will only succeed with ‘Engagement Advertising’ if they lean on user behaviors like communication, self-expression, and social exploration –traditional internet advertising need not apply]

Knowing that the use case between social networks and product-focused sites is key for marketers to deploy successful marketing. For success, marketers and advertisers need to focus in on the key social behaviors, and integrate the marketing activities within the community.

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Demystifying Facebook’s Marketing Tool Chest
Facebook’s marketing toolset is confusing, and many brands frequently ask me what is the current set, and how do they use it, here’s the current toolset as of today. Remember that when it comes to groups and brand engagement, the most powerful activity is for employees to actually participate in the community with their customers –not stand by the idle wayside. With that said, here are some of the other tools available to marketers to engage the Facebook community.

Engagement Ads: (new, and detailed above) allow community members to interact with the ads in the profile and newsfeeds –without leaving the Facebook site, increasing interaction, social spread, and brand engagement. Currently unproven, brands may not be ready for these types of new ads, until they change how they measure success.

Standard Advertisements: These Text and image ads can appear on homepage or profile pages, neatly integrate with the new redesign.

Social ads: Are helpful for brands to increase the velocity or acceleration by marketers, allowing them to buy ads that echo the behaviors “what did my friends do” of opt-in users. These primarily appear on the newsfeed, which will encourage spread to an individuals network. Some brands have been under fire from users who felt this was invasive.

Traditional IAB graphic ads: Advertising laden brands may still purchase the standard IAB skyscraper and banner ads from Microsoft both an investor and partner. With low CTRs, some brands have better places to spend their money for return on investment.

Facebook pages: Launched last year, brands can (at no charge) create their own pages, embed applications, encourage discussions, and start to garner “Fans” of it’s products. Most brands are incorrectly using these, based upon the findings from my recent report on the best and worst of social network marketing for 2008 -Forrester Research.

Event Feature: based pages allow marketers to promote events through viral invites, rsvp tools, and event rollups from media and community interaction. While a useful utility, for most brands that market on the web, this is often a side-effort, not the primary push.

Facebook Connect: Perhaps the biggest untold story is the day when Facebook (and other social networks) will connect with corporate websites, I’ve outline future scenarios in this post What ‘Facebook Connect’ Means for Corporate Websites.

Applications: Facebook was afirst mover to allow third-party developers to create an entire eco-system of applications that are growing their own applications. Most brands are harassing successful apps through sponsorships, cross branding, and a few are building their own apps, see how Dell was able to let the community create –and spread– ads on their behalf. Also read my posts on Widget strategies to learn more, or my overview of Facebook’s F8 Developers Community.

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Key Takeaways
Monetization of social networks continues to be a challenge, and Facebook continues to innovate, however for this announcement, brands and Facebook should:

To Succeed, Brands Must Learn Social Marketing
While costly, risky, and foreign to brands, the biggest missed opportunity for brands in social networks is to become part of the community, interact and build real relationships. Although we should expect interaction rates and viral spread to increase with engagement ads, brands should wait and see how these ads CTR perform. For those brands that are ready to forgo the risk, and pursue ‘Engagement Ads’ they should:

Be community themed: Ads created by the brand will succeed if the content is first focused on the needs of the community.

Rely on new interaction activities: The rules of the game have changed, the goal is to increase interaction within the community –not pull them offsite.

Approach with an Integrated Mix: Facebook offers many tools, ‘Engagement Ads’ shouldn’t go it alone, instead increase chances of success by involving other tools.

Change how they measure success: Brands must also change they way the measure success with these interactive ads, rather than weigh success solely on page views or referral traffic.

Marriage of Widgets and Advertisements offshoot: “WidgetAds”
Looking forward, this announcement helps to set in place how online marketing will start to evolve. Widgets have already become advertising units, and now these advertisements are starting to become widgets. Expect Engagement ads, and Widgets created by third parties to start to exhibit these behaviors outside of Facebook. Facebook Connect, Google Connect, and OpenID will bridge social graphs with interactive ads –springing forth a new generation of widgetads.

Although innovative, Facebook must focus on marketers
Although pushing interactive marketing, Facebook must hand-hold many brands with their frequently changing marketing offerings. Facebook must develop a client solution that will help optimize these tools with professional services based on data, results, and demographic information. Marketers can’t afford to experiment with their brand without the help of a trained and experienced group of social marketers provided by the platform.

The only caveat being that the experience of users, always, always comes first, I’ll point to others that cover this aspect.

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Related Resources

This is cross-posted on Forrester’s Interactive Marketing blog

See all posts tagged Social Networks, Widgets, Facebook, or my weekly digest

Forrester Report: The Best and Worst of Social Network Marketing for 2008

Forrester Report: Online Community Best Practices

Forrester Report: Online Communities: Build Or Join?

Forrester Report: Google’s OpenSocial: Good News For Marketing Widgets But No Silver Bullet

Forrester Report: Get With It With Widgets

As usual, the conversation spirals off into Friendfeed.

Update: Forrester clients can access a short brief with additional recommendations for interactive marketers.

55 comments

A few months ago, I covered Dell’s Green campaign called “Regeneration” which allowed community members to create their own art themed “green” and they were then given the opportunity to vote on which one was best. They turned over much of the marketing control to the community, while they become more of an enablement platform, rather than ‘forcing’ a message down their throat.

They’ve taken the next step by assembling some of the winning drawings and created an emebeddable flash player that shows the art work being created in time-lapse style. Yes, you can see how the engaged community of artists hand drew each of these ads. As I understand it, they are not paid, this is voluntary, in hopes of some prizes, and perhaps more importantly, recognition.

Now you should be sharing this with your creative team (see the initial case study) and start to think about how your brand can start listening to your customers –and allowing them to tell your story, rather than you always having to use a megaphone.

What could Dell do to take this to the next level? Integrate these final drawings in many different areas of the Regeneration campaigns, including TV ads, theme designed laptops and computers, and ultimately having a community created marketing department that spreads to other product lines.

James Gross of Federated Media, a social media interactive and conversational agency, had initially posted this on his blog.

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Although there are many forms of Web Monetization (I’ve listed out nearly 15 forms), the newest iteration of web marketing: widgets, haven’t yet fully cashed in.

Widget, Gadgets, Applications, Canvas Pages, Embeds, it goes on and one. One thing is clear, the rate of widgets continues to increase, take for example Facebook’s application platform has over 15,000, 20,000 applications in just about 9 months. Granted, many of those are slightly tweaked clones of each other, the top 100 widgets clearly has adoption.

In some cases, there are sophisticated companies developing widgets, the RockYou’s and Slides of the world can really zero in and focus, or take the garage developers such as the two Russian developers who created Scrabulouos, or lastly, the big corporations or interactive firms that are getting in on the action –often with limited success.

Yet, how do we monetize widgets? There’s only a few ways, some tied back to traditional methods, and some leaning on the new media.

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Many Forms of Monetizing Widgets

Advertising/Sponsorship: CPM models sit nicely here, yet research indicates that users don’t go to social networks for finding products, CTRs are pretty damn low. Why? because people go there to socialize and self-exprsess, not find products, (that’s what Google, eBay, Craigslist is for). Banner ads count too, such as this case study with Vampires and Sony.

Interactive Marketing: Some widget developers are selling their already existing application space to large brands, who can insert this branded engagement into an existing community. Take for example Dell’s regeneration campaign case study.

Branded Entertainment: Somewhat different than advertising and interactive marketing, popular media or widgets can be put forth from funding from large companies, while we’ve yet to see this occur, Intel comes to mind: they sponsored a feature on Digg, and paid for the development, all in the context of their brand.

Cost Per Install: I personally think this is a dangerous way to monetize, although I realize the top widget networks are getting sizable revenues from selling the opportunity for other applications to piggy back off their success, and sell installations. If everyone does this, we’re going to end up with an excess of applications installed, based upon lower value. I somehow imagine successful widgets should grow naturally and organically, not sold from a mercenary application.

Acquisition: No brainer here, but folks like Scrabulous (if they weren’t shut down) could sell of their application to an interactive firm or widget network and all the community members that come with them.

eCommerce: Surprisingly, we’ve not seen any great applications spur forth with adoption in social networks, it just isn’t happening yet, expect to see an existing eCommerce site to create a successful widget by end of year, and likely a new form of social shopping to appear. Update: Rodney is watching this new type of ‘classified’ widget Radical Buy make some traction.

Lead Generation
Techcrunch profiles how some application developers such as OfferPal are able to view ads, collect user information and send them to marketers for lead generation. Specific numbers have yet to be published in public.

Now if I’ve missed any forms of widget monetization, do leave a comment. Also, see the Many Forms of Web Marketing for 2008.

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Fedora and Data Portability Logos, too similar for comfort. (image via Techcrunch)

Turning over the logo creation to your community
For a few years now, we’ve been saying that the brand is really owned by your customers, not your MarCom brand police team. Today, we’re seeing this actually play out in a very interesting twist.

The Data Portability Workgroup launches
The Data Portability group is a workgroup focused on building industry-wide standards for information to safely and freely pass from one site to another –all at the control of an individual user. Yes, I know we’re all sick of seeing yet another working group with little or no results, but this group appears to be making progress, I’m reviewing their status reports, and will probably be briefed by Chris at major milestones.

Logo infringement a cause for redesign
Recently, they launched and announced themselves, including the easy to remember figure 8/infinity sign. Apparently, this was too similar to the logo of Fedora, While copyright infringement is never a fun thing, what’s interesting is that the DataPortability group is crowd sourcing their logo design to the community.

The community designs, votes, and is rewarded
There are hundreds of dollar worth of prizes, ad exposure on Techcrunch and CenterNetworks, and iPhone and other goodies, read the full guidelines on Chris’s site.

The logos will be submitted on spec to the team and a ‘representative election’ will occur:

“The co-founders of the DataPortability project, along with the steering group, will make a short list. We will then provide a web-based voting system for the community to make the final choice.”

Letting go to gain more
This is really an interesting way to let the community create, decide, and take ownership over your own brand and logo. Let’s see how this turns up. To add to the reward, I’ll point to the winning designer, granting even additional exposure. Great job Chris and team, turning a potential lawsuit into a community involving event, I look forward to seeing the results.

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Social Media impacts every aspect of our cultures, from business, politics, journalism, media, and advertising. Within just the business realm, it impacts research, marketing, support, product development and employees within the firewall. Despite the vast impacts of this shift “power has shifted from large organizations to individual participants” as humans connect with other humans, we often forget to see the larger picture.

Aaron Wall is someone I respect, he is certainly a domain expert in search marketing, in his recent post The Inconvienent Truth About Social Media Marketing, he gives a perspective –that’s limited from a search marketers perspective –is bearish on social media marketing. Several people asked me to blog my responses, so here it is:

[Social media marketing has it’s challenges, yet success should not be measured on ’search marketing’ alone]

Social media has many problems on it’s own (and I’ll frequently point them out) but we should remember that while search monetization is a dominant form in our industry, it’s not the only way websites are monetizes, in fact the complete list is here of the many forms of web marketing.

We’re seeing many more cases where marketers don’t want to monetize directly with ads, but would rather be part of a community of dialog with customers, so they can listen to the marketplace and learn. Also, we’re seeing examples where companies want the message about a product to spread (but not from their own mouth) but from word of mouth marketing. Companies like Dell want to build next-generation products using tools like IdeaStorm –where the customers define the product specs –in order to build better.

In each of the above cases, social media is used in a way much more than just search marketing and advertising.

[The greatest opportunities lie where companies be part of communities where ads may not even be present]

So before we suggest that social media marketing is ineffective, we should first look at the bigger picture, and perhaps revisit the 95 theses of the Cluetrain Manifesto.

Think bigger my friends. (Update: Steve Rubel is)

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I’ve created MicroMedia events before, this time, I want to frame it as an overlay to the multi million dollar advertising event, the Superbowl.

[TwitterBowl is a real-time social experiment where the audience rates million dollar advertisements in real time using Twitter]

Are you a superbowl ad critic? Of course you are, everyone is. Even if you don’t watch the superbowl, those pervasive ads will end up in YouTube, Digg, and your cousins blog and your best friends Facebook profile. Tired of others choosing which one was the funniest/stupidist/biggest waste of time? Well this year, you can rate your own superbowl ads using Twitter, and see what everyone else in Twitter thinks too.

There’s just three steps:

1) Sign up: Get a twitter account, got that? Good.

2) Send your vote to @superbowlads: When we’re watching the game in real time, simply send a reply to superbowlads. I created this Twitter account just for this virtual event. Reply to the superbowlads account, name the commerical, and give it a rating of 1-5 stars, 5 being the best.

examples:

“@superbowlads That Pepsi commercial was funny 4 stars”

“@superbowlads The Hillary Clinton advertisement was bunko 2 stars”

“@superbowlads Bud-wise-er, that was so 10 years ago, weak. 1 star”

3) See what others rated: You can then see everyone who’s rated the ads by doing a search on any of the Twitter search tools, I like Terraminds. See this example, it’s showing all the people who have replied to superbowlads.

I’m going to be hanging at Brian Solis’s house (Eric will be there too), we’ll be tweeting the whole time, and I hope the rest of you do. And no, I’m not using this data for anything, it’s just for fun. I may try to tally up the results, but it’s not for anything official, just another way for social media to be an overlay where we take charge, where we control, and where we voice our opinions.

See you on twitterland on Sunday!

Update: There are dozens of messages coming in every few minutes. One respondent said he was tracking them on his mobile and received 677 messages in 30 minutes.

Also, twitter replies seems to be going slowly, I’m using the search tools to get updates.

Update: Chris Heuer did a quick Utterz interview asking me about the purpose of this experiment.

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It’s about 3am and I got up to test the Facebook SocialAd and Facebook Pages system.

Status of Test
I’ll update this section as I have changes

Nov 7: Created a Web Strategy Facebook page, ran $20 SocialAd requesting people write on my wall.

Nov 8: Social Ads are working. A few people have arrived to the Facebook page from Social Ads, at least 4 people have voiced that from the wall writings. The stats on insight are still not populated (it says it takes 48 hours), 99 Fans now.

Nov 9: The insight dashboard is not displaying any data, although there are a few people who left wall comments that they’ve come from newsfeed (socialads).

Nov 11: The insight dashboard is still not displaying click through rates (CTR) of the social ads, so I can’t give any formal metrics away. I do think that it’s likely under 5%. There were a handful of folks that came to the site from social ads, but certainly not the majority, which came from blogs, twitter, and other incoming links (Scoble).

Creating a Facebook Page easy, segmentation detailed
I created a Facebook Page for the “Web Strategy by Jeremiah” brand and was pleased to see there were filters for people (they call them celebrities) and I was able to filter to “Writers”. Analysts are professional writers, and part of why I was hired is because of this blog, so I’m qualified.

Adding details to give color
Creating the page was easy, much like creating a profile, I added a few basic blurbs about the brand, where it’s located, and interests. I uploaded the graphic banner. I tweeted the experience, and within minutes had a few fans. I tested the ‘message all’ product to the three people in the group. I also added an event, promoting the Barcelona Blogger Dinner I’m co-hosting next week. Finally I added a discussion board and asked “How can the Web Strategy Blog improve” (feel free to give honest feedback, even if critical). Of course, I added my masthead photo, which also embodies the brand, and my ugly mug as a profile picture.

$20 test of SocialAd: Highly targeted
I learned this from Charlene Li, who recently tested Facebook flyers. I aimed for and the text reads “Web Strategy Blog Readers This is really a test of the F Pages and Fan systems” and has my picture on it. The ad systems would not let me have the word “Facebook” in it, interesting.

The targeting system is very targeted, here’s what I selected:

Targeting: You are targeting people between 18 and 65 years old in the United States who like blogging, marketing, or web design.
Social Actions

This ad will display with social actions from: (This is the part everyone is concerned with)
* Web Strategy by Jeremiah

Locations
This ad will display in the:
* News Feed
* Ad Space

In the ad, I requested people to write on my wall, I wanted to be more specific, but there’s not a lot of real estate.

Insight Dashboard
Although there’s no data yet, the dashboard has some pretty sophisticated tracking and graphing tools, I’m sure others will post some screenshots, so I’m not going to worry about it now.

Community Responses: Approvals and Rejections
So far, a few people have become Fan-Sumers, there’s about 8 fans of just an hour of deployment. Many of them saw it from my Tweets, and most I already know.

Warning: Corporate Facebook Pages
I also created a Facebook page for Forrester, but did not publish it yet. Why? Because a corporation should have a strategy before using tools, and I haven’t developed one for this specific tool. Please, before you rush in and create a Facebook page for your company, consider the overall strategy, and use the POST methodology that we prescribe: People, Objectives, Strategy, and then finally Technology.

Analysis: Will update in Real Time
I’ll update this post as the test continues to run, and then will eventually do some analysis, pow-wow with Charlene and then explain HOW TO use these tools most effectively.

Nov 07: So far, the process went smoothly, and since it’s self-service many people can get in on the game.
Nov 08: Overall, I’m starting to see how this could help companies, still in ‘analysis mode’

ok, now back to bed

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You: A Web Strategist
You’re an individual who is responsible for the long term direction of a website, and meets the requirements of business, community, and technology. Part of your role is to keep your website profitable, even if it doesn’t generate direct revenue streams.

Situation
As you plan out the direction of your website, there are multiple ways to bring your web strategy to fruition, I’m listing out these methods below.

The Many Forms of Monetization using the Web:

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Marketing
What’s Marketing? Everyone has a hard time describing this activity but I’ll break it down for you with my definition: The activity of bringing products and customers together.

Advertising
The most common form of monetization for websites is Advertising, it works great for media sites, blogs, and other news and media sites. For the corporate web strategist, their goal is to get ads on these sites. ConversionRater has listed out the many forms of advertising including:

Contextual Advertising

Display Advertising

Targeted Advertising

Text Link Advertising

Sponsorship
I’m calling this out as separate than advertising as often sponsors are infused into website or media as part of the experience. One example that often comes to mind is the infusion of the ScobleShow and Seagate brand. Robert mentions the brand uses the products, and displays the logo on a variety of media he creates. Please note I’m a former employer employee of PodTech, so here’s a few other examples: Chris Pirillo’s live stream show is sponsored by Dell and others, a perfect fit. Recently, Ask a Ninja of Federated Media created some customer shows to promote blades of steel, a cross over and viral marketing campaign.

Paid Content and Advertorials
Often in magazines and newspapers we’ll see advertorial sections that –at first glance– appear to be editorial of the publication. These paid content areas likely have useful or valuable knowledge being shared, but at the same time will guide the user towards a marketing direction. Media websites can offer these advertorial sections to their websites, allowing marketers to publish content. Transparency is required, don’t even think of trying to slip one over your users, as when they find out (they always do) a rebellion will occur.
Thanks Andy Beard via comments

Syndication of Content
By repurposing content from other channels, or displaying your content on other websites can result in residual revenue in micropayments or fixed pricing. Displaying content feeds from other sources can result in content providers paying money to the provider.

Affiliations
For many websites, providing recommended links to partners can be steady stream of links and revenue from commission. Amazon’s book recommendations program is an example of this. It’s important that the website be fully transparent about the relationship of the linking and recommendations. Companies that aggregate content and distribute to other companies can receieve a micro-payment for such activities, for example: Mozilla’s Firefox generates regular amounts of micro-payments from users that use their search bar in the top right on the browser.

Donations
I put this under the Marketing bucket as the same types of activities are required to obtain donations from groups or individuals. This common method requests money be given to a cause, in return goodwill is shared from recognition (or badges to be placed on website) tax benefits, or knowing that one has supported something they believe in.

Conversion
Not all websites make direct revenue, although Marketers can bring prospects closer to the sales point. In some companies, those that bring qualified leads get paid, a dollar amount is defined for those leads. Websites can generate interests from marketing activities, contact sheets, qualification activities that eventually result in sales. Although indirect, don’t overlook this powerful form of revenue generation.

Financial
For many web strategists and founders, this is considered the ‘exit strategy’. Although not listed directly, long term monetization and steady revenue growth is often a method to grow.

Acquisition
The most talked about for today’s startup is the opportunity to get purchased by a large web entity. A few come to mind Flickr, Mybloglog, Upcoming > Yahoo, Measuremap, Google Analytics, Blogger > Google, MySpace > Newscorp, and others. Most notably the sale of YouTube to Google for $1.5 billion is a good indicator of an exit. This also includes domain squatting.

Initial Public Offerings
More common in the first web wave (I used to be at Exodus) IPOs are a company’s way to sell ownership of it’s company to the open public, these purchasers became shareholders, and eventually the value of the shares (and company) would increase. The founders and employees maintained a significant share of the company in which they eventually (hopefully) would sell and profit. This form of monetization has greatly tapered off in 2007, being very rare.

Investment and Partnership
Seen more frequently, and maybe not a direct form of long term revenue streams, many startups are receiving waves of funding from venture capital firms, or large partners. From Seed/Angel, A Round, B Round and partnership money we’re seeing these opportunities. Three year old Facebook recently received over $250 Million from advertising partner Microsoft. Although often not counted as ‘monetization’ methods, it truly keeps those who are running the site working, the lights on, and opportunities for growth.

Services
Key for ongoing revenue generation, websites that offer value added services to it’s users will grow.

Ecommerce
Brought to our attention during the first web phase, the “brick to click” mantra became talked about at many traditional retailer stores and has now solidified on many corporate websites, and etailers. Selling online goods, and providing recommendations to them provides and opportunity for the seller to either profit from selling their own goods, or a wholesaler or middleman to take a cut from the transactions.

Premium, Memberships, and Licensing
Common for websites that offer free service, feature-ladden exclusive memberships will provide users with additional benefits. A few examples include mail services offering additional storage, flickr offering more photo upload capacity, or access to other websites. This could also include software licensing options and white labels. (saw this from Brian’s list)

Virtual goods
Not to be overlooked, this form of monetization is growing steadily on Social Networks and Virtual websites. Objects (real and virtual) connotate value and meaning from the giver to the receiver, and can have a monetary value assigned. I’ve outlined the value of virtual goods, do not disregard.

Corollary Benefits
These are revenues that are generated as an outcome from the website itself. Based upon the feedback I’ve received from Twitter and in the comments, there’s some additional revenue opportunities.

Selling Data
Many websites collect information that can be resold to third parties. Data types could be: web traffic, search terms, registration information, email information. Please be open and transparent to your users when collecting information if this is your intention.

Secondary Opportunities
Opportunities to extend a brand into other mediums can generate revenue. In particular new jobs, speaking opportunities, writing opportunities, and syndication of content.

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Additional Resources
Brian Oberkirch has a similar list to this one, I didn’t see it until now. If you want to get specific on blog monetization, problogger has a great list. Also read The Many Forms of Web Marketing.

Was this post helpful? Read the other posts tagged Web Strategy. Have any additions? Don’t agree with my taxonomy? I wanna know. Leave a comment and talk back!

35 comments

I’ve become a fan of Heroes, an ongoing series by NBC. Interestingly enough, I time shift, medium shift, and control the content in the way I want to. The first season, I didn’t watch on TV, we rented the episodes from the local Blockbuster (not online). For season 2, which just started, I’m watching the episodes online from the NBC site.

The have pre-roll ads, that are about 30 seconds, which you cannot fast forward. The advertising videos are actually interesting, as they change them up for different sponsors and there are links to learn more. For example, last week, there was an interactive game in addition to the video for a new Nissan crossover. This week, Bertolli is launching a frozen dinner product, and there are links to video recipes, very interesting. After the spot plays, the user is required to click on the add to advance. 3-5 times during each episode a 30 second spot is run, which I can’t fast forward.

I’m in control of:

1) What I watch
2) When I watch
3) What medium I watch
4) How I watch (I can start and stop)
5) Where I watch (mobile)

In return, a few 30 second spots, that are related to my interest don’t bother me at all, although I would prefer if I could select (rate and comment too) the types of commercials I want to watch, increasing the opportunity for the message to be on mark.

Most of the control over TV medium is now in my hands, although the 30 second spot doesn’t seem as intrusive. The web and TV continue to intersect, with the control moving to my hands, the savvy media brands realize, embrace and change.

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Click To Play

Brian Keith (of Portent) and I have been interacting online from blogs, emails, and phonecalls for quite sometime. I’m glad to finally meet him in San Francisco on a roofop terrace at the FamilyOven headquarters. He’s involve with Search Marketing, and I asked him some key questions. And yes, he was avoiding the sun, those Seattle need to get out more.

BTW the Portent website has baby pictures of them, and it reads “We were born for Internet Marketing” clever!

Find out what the web strategist should know about Search Marketing before getting started.

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It’s amazing, the internet is a tool that can free the world, spread democracy, the wishful thinking of communism and socialism, yet we still return to our human instincts to create hierarchies –against our better judgment.

We create lists “A-Lists” and point to leaders, who in turn get other information (under embargo) yet shifting the power of media from traditional to the new influencers.

Despite the nobility of such idealistic causes, I’ll just go along with it, since I’m guiltier than most. Transparency: I’m guilty at bragging too, I’ve worked hard, and it want it to be known… how human of me.

To prove my point, recently, there’s been a few lists created of bloggers, last year, it was for the overall blogosphere:

Technorati’s Top 100 blogs

This week, Techmeme, released a list of top websites and blogs (noticed I used “and”) in the tech industry. Please note that many of the top “blogs” are actually web magazines with multiple authors, editorial policy, agenda and calendar, here’s the list:

Techmeme’s Leaderboard

We continue to segment, as the power 150 releases the top Marketing Blogs:

The Power 150

Ad Age follows suit, with similar results:

Ad Age top Blogs

And now, the top Analyst blogs are released. Nathan notices that one firm is dominating the space. It’s interesting to note that most of the top blogs are from Forrester, which was highly factored into my decision for joining this team. The other analyst firms lock up their bloggers for clients to read only. I met the CEO today, he embraces this new world and supports the intimacy that these tools can bring between Analysts and Customers.

Here’s the the top 100 Analyst blogs (using similar methodology):

Top 100 Analyst Blogs

To further the whole numbers thing, I just completed a “Social Media Scorecard” around the entire Web Strategy Brand. I’ve documented the brand on the various tools that I’m using, you can check it out here. It’s during a milestone period of my life as I transition to a new role. Sorry to disappoint for all the cavalier self-importance here, but I’m not the only one doing it.

Update: Humorous commentary about Gabe Rivera, the creator of TechMeme, of course, seen from his own site, techmeme.

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Arrived in Hong Kong, although my fifth time here, the sheer size and energy of the city that’s always under construction always amazes me. The flight over, on Singapore’s luxurious planes was fantastic, I feel rested when fully reclining in a chair after 14 hours of flight (flickr photos). On the way over, I was able to read a ton of Forrester material, analyze a few strategies, and just relax.

Tonight is the Hong Kong Blogger dinner that I encouraged everyone to come to, there’s over 60 folks, and OutBlaze, a white label communications company has offered to be a gracious host. I’ll be hanging with them and other technologists over the next few days to understand Hong Kong’s web scene better.

I’m here as I’m speaking at the CLSA investors conference. CLSA is a brokerage, consulting, event and analyst firm. There are about 2500 investors from all over Asia here at the Grand Hyatt (flickr photos), with speakers from the largest corporations and China, and even entertainment by the band INXS, which I grew up on. I have distinct memories of them in Sixth Grade, although my kid sisters had a blank look on their face when I brought up their name “in excess what?”

When I meet people from the Finance industry, I often tell them I’m in “new Media” first, if they probe farther I’ll explain it as social media or social computing, so far, most understand.

I’m also reading, listening, and absorbing data points about Asia’s web scene. Today, one of the executives of China Mobile presented, she gave quite a few facts, trends and data points. Wireless infrastructure for one of the world’s largest cell phone market (China), will access the web via the phones.

Asia’s Growing Web and Mobile Industry

China Mobile has 21% growth last year

China Mobile has 68% market share in China

They are deploying ‘nodes’ into Rural areas, which can quickly scale

In other reports, from CLSA’s Elinor Leung, I learned that China is 2nd to Japan in Web Advertising

The Beijing Olympics will be a major web advertising opportunity and spike

Beijing is pushing the digital/broadband experience for the Olympics

Broadband in China is 14%

Advertising Spend: Online Growth is 68%, while the second highest, radio is a mere 20% growth.

It’s truly an international conferences, at the back of some rooms, there’s small glass enclosed boxes where translators sit and transmit to wireless devices so everyone in the audience can absorb the knowledge.

Hey Web Strategist! Are you paying attention to what’s happening in Asia? There’s going to be a lot of eyeballs here, what are you doing about it? Here’s some stats from the World Internet Usage.

Have a story to tell?
My schedule the rest of the week? It’s Tuesday right now, but on Wednesday, I’ll be visiting some of the offices of folks that hosted the dinner, and will meet a few other entrepreneurs. I speak on Thursday, and am free on Friday if you wanted to meet for tea or coffee here at the Grand Hyatt to discuss Asia’s web industry, I’m very curious in learning more.

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Imagery tied to a brand will still remain important to the corporate marketer, Is your irrelevant corporate website needing a refresh of it’s marketing images? Lucky Oliver uses pro-amateurs to fuel their image library, where they explain it’s about building a concept or image. Recently zooomr has entered the pay-for-image, but it’s suggested that Lucky Oliver has rights and prosumer quality unlike public sites.

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THe Internet Outsider demonstrates the formula most of us have already figured out, the web is causing a shift in advertising dollars (although not the most important attribute, but a key indicator to what’s changing)

“US advertising revenue at 4 big online media companies–Google (GOOG), Yahoo (YHOO), AOL (TWX), and MSN (MSFT)–grew by $1.3 billion in Q2, or 42%.

US advertising revenue at 15 big television, newspaper, magazine, radio, and outdoor companies (Time Warner, Viacom, CBS, etc.) shrank by $280 million in Q2, or 3%.”

42% online vs -3% traditional
Read the bottom line on this spreadsheet analysis. Google is growing hand over fist at 96% while NYT has a decrease by 6%.

Quite interesting that mainstream media would suggest that other factors were to blame such as the “real estate market” or “cyclical weakness.” Take a step back, look at how your kids are communicating, and see the forest.

When is the tipping point of advertising dollars being heavier online than on mainstream media? Collective research indicates 2011.

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Well, the title is a bit misleading, the money is already coming to the online space, but I’m seeing more and more reports that advertising dollars both on newspapers and TV will shift to the web. Read the Financial Times’ article on Online ads to overtake US newspapers.

Why is this important? The web is a platform for TV, the newspapers are going digital, and it’s the underlying infrastructure for mobile devices.

[Near vertical adoption curve: In just 15 years the web becomes the most dominant medium on the planet]

Check out this report from MediaPost that indicates that Internet Ad Spending Set To Overtake All Other Media By 2011: VSS

“Spending on internet advertising willl reach $61.98 billion, and will surpass newspapers to become the nation’s leading ad medium in 2011, projects private equity firm Veronis Suhler Stevenson in its 21st Communications Industry Forecast released today.”

Shift of the advertising dollars:

“Growth of 25.79% is projected for ad spending on traditional media-based Internet sites, which hit $8.585 billion in 2006, and is projected to reach $27.2 billion in 2011.”

How does this impact Social Media?

“Blog, podcast and RSS advertising is projected to reach $1.138 billion by 2011, registering the fastest growth rate at a 70.9% CAGR forecast from 2006-2011.”

Stories are great, but data is powerful, so read all my other posts tagged Web Usage, or Reading Samplers.

What’s the medium to watch? Well at PodTech, we’re very focused on Video, as we know that 75% of all internet users streamed video in May 2007.

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This is great, this blog that you’re reading makes the list of the top media and marketing blogs, find out the top blogs according to Ad Age. Funny thing is, I don’t even consider this a Marketing blog, this is a “Web” blog. I find the integrated index is a good way to rank blogs, much better than relying on incoming links like Technorati does. Not bad, since I’ve only been on this domain for 14 or so months!

It’s interesting to note that many of the folks who scored better than I have SEO strategies. I’ve got one coming…stay tuned for details.

What’s my secret? I give away as much information as I can to help others (except the really important info to my employer), I really believe that the more you let go, the more will come back.

My wife says I need to ‘bump it up’ because 24 is a bad number in Chinese numerology. The Chinese words for twenty four translate to ‘easy death’ in cantonese…gulp.

link via my buds at compete.

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Viral videos, the craze of internet advertisers and online media groups. If any agency ever promises you they can deliver this, they’re lying to you, as the elements need to be just right.

I’m a big believer in community marketing as opposed to ‘viral marketing’ I’d rather build a thriving communigy of customers, users, partners, and employees than risk all my resources on the potential to get a one hit wonder.

In any case, here’s a great list of the top 10 viral videos. I’ve embedded them below for your ease.

NIKE
“This clip is one of the all time greatest virals ever, with more than 50 million views globally. Featuring world famous soccer star Ronaldinho hitting the crossbar no less than four times, without the ball touching the floor”

AGENT PROVOCATEUR
“Kylie Minogue rides a velvet bucking bronco wearing nothing but lingerie from Agent Provocateur.”

JOHN WEST SALMON
“A John West employee fights a grizzly bear off to land a fish”

QUICKSILVER DYNAMITE SURFING
“How to go surf in a country without waves: a group of young men throw a bundle of dynamite into an urban lake. Whether the clip was real or not was never really discovered, a factor that itself garnered attention.”

BIG AD
“The Carlton Draught Big Ad is an award-winning advertisement for Carlton Draught created by George Patterson and Partners (Young & Rubicam) of Melbourne, which used viral marketing techniques before being released on television.”

TROJAN GAMES
“In 2003, to launch Trojan Condoms in the United Kingdom, the “official” web site for the so-called “Trojan Games” was created with several clips by UK-based The Viral Factory.”

DOVE EVOLUTION
“Already a classic, even though it is one of the newest campaigns in this selection. Ogilvy & Mather, Toronto, used time-lapse photography to show the transformation of an normal woman into a glamorous billboard model using beauty stylists and Photoshop enhancements. The clip was released under the slogan ‘No wonder our perception of real beauty is distorted’.”

BERLITZ – WHAT ARE YOU ZINKING ABOUT?
“A viral video campaign featuring a language difficulty in a European coastguard station.”

DIET COKE & MENTOS BY EEPYBIRD.COM
“This campaign was never planned, neither by The Coca Cola Company nor Mentos. It started out as an experiment by Eepybird with a video showing two men adding Mentos tablets to a Diet coke. Watch to see the results. Several videos resulted, which makes it difficult to estimate exactly how many views the campaign has generated so far. But a qualified guess would be more than 50 million in total, including both the original and all the user generated videos.”

MARK ECKO – STILL FREE
“The best virals usually lead to massive attention and, in some cases, controversy and outrage. This is exactly what happened to Mark Ecko. Having started several enterprises around the hip/hop, skater and style scene, Ecko decided to create a ideological statement on the First Amendment. He filmed a session of himself ”tagging” Air Force One and used the following hype to explain why. Did he really spray grafitti on the President’s jet? Judge for yourself by following the link below.”

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AOL has announced their new homepage design, it looks strangely familiar to Yahoo’s. Here’s the feature list.

Let’s compare using the same techniques I did for the top ten blogs(well they are more like magazines and top personal tech blogs.

Yahoo’s homepage

AOL’s new homepage

These look pretty simliar, what do the rest of you think? Have you seen my comparison of Google, Yahoo, MSN, and AOL? Take a look.

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I got the rare opportunity to be camera dude for the ScobleShow, (and Robert reciprocated for me, the gent) we were at the Internet Strategy Forum last week, and interviewed many of the speakers in our own private room. Learned a lot.

Eric shares with us a broad view of online media, Cnet’s one of the most successful online media brands, and has over 30 sub-brands. Learn from Eric about the emerging media, online advertising, marketing, and the future of all this to come.

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AOL’s announced strong interest in purchasing Tacoda, an online behavior ad system. I’ve got a list started of companies in this industry, and I’ve updated the list of List of companies that provide Dynamic or Contextual Online Video Advertising.

I’m making lots of lists of emerging industries to watch, see the tag Industry Index.

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