Furrier.org - Business & Technology Blog

Rob Hof has a post about online advertising showing signs of weakness. I would generally agree with Rob, but would say it’s growing in another direction.

I’ve seen this movie before in 1998. The ad business is changing again. Back in 1998 the rage was impressions impressions impressions..it’s was all about banner ads. Then it became clear impressions and paying for traffic wasn’t working for advertisers - enter performance advertising - the paid keyword.

Today we are in a similar dynamic. Sure the ad market is showing weakness but it’s not because it isn’t effective. It’s because the CPM don’t get the job done for advertisers and publishers. New products will be coming…

I’ve been saying on this blog and other places that CPM will be one small feature of the future online advertising market. The future is about the social graph..the next Google will emerge from the new dynamics and relevance coming out of the social graph infrastructure (yes that would include data).

Microcontent is the big trend that will be the preferred ad unit in the future. As I have been saying for years - In Social Networks - The Content is the Ad.

Update:  eMarketer has social advertising data including key trends and growth rates.

Social Gaming Network lands a round of $15 million in venture funding.  Eric Eldon at Venturebeat has the best  writeup on the company and the news.

I think that Social Gaming Network is on to something really big.  The social graph is working and these guys have proven how fast applications can grow.  The big news here is the scale of their reach and the platform that they are building for Social Graphs and Social Networks.

This is a very important trend to watch.

It is clear that social media or new online advertising isn’t easy for traditional agencies. Recently an adage article came out and basically said the same thing.. What is the effectiveness of online advertising?

It is clear that advertisers are more in control and the role of the agency is become less relevant in social media. The new web 2.0 trend is presenting opportunities for new web services platforms to be agencies that replace the middleman agency.

Here is my equation for successful marketing or advertising in today’s web 2.0:

Advertising 2.0 = (Social Media + Social Networks) + Social Commerce

I’ve been involved in successful social media campaigns and one consistent observation is that content is very important to influence social networks which in turn creates a ‘conversion’ or social commerce dynamic.

Update:

Twitter conversations are suggesting that agencies will still be around.  Maybe a better title for this post would be:  Traditional Ad Agencies are Dying - Make Room for the New Modern Agency.

For example GM, Intel, Microsoft, and leading bellweathers in advertising are all doubling down every year online advertising at the expense of other areas like TV and print.  If you believe that TV, print, radio, newspapers are declining then the firms servicing them will disappear.

Here is a graph in today’s adage that shows the spend trends in the automotive sector.

For the past three years I’ve been working with over 40 corporate advertisers in developing, testing, deploying, and measuring social media. I’ve discovered many things and learning more everyday.  As I am documenting my findings I have to highlight Charline Li’s post from yesterday.

Charlene Li has a great post on her views of Social Graphs and business models. It’s about “Social Everything”.

The big trend in Charlene’s post is that social individuals, groups, networks, graphs are great, but they still don’t connect to real world value. This linchpin to real world benefits is where I have the vision for social everything - it’s about collaboration. Virtual activity is highly productive, but seems to dead end when translating and scaling to real world offline benefits.

If you have been one of the 10k people following my blog you know where I stand and have a sense of what I’m working on for my next venture- Social Advertising, Social Media, Social Graph, Social Everything.   Charlene’s post reasonated with alot of my findings and the direction that I’m heading.  Here are some nice gems in Charlene’s post:

“.. the idea of social graphs being “owned” by different social networks makes no sense. Yet, all of today’s social networks build their business model and competitive advantage on having the largest, most complete social graph. The result: I have a close colleague who enjoys exploring all of the new social networks and “friends” me on all of them, figuring I’m a pretty good person to have in his new network. In a world with a single social graph, he would be able to import his existing personal, social graph into any new service, and immediately begin enjoying the new service without having to wait for his friends to catch up. And I would be spared the insanity of having to accept his umpteenth “friend” invitation!….In a world of a single social graph, social networks will have to compete on the basis of creating the best experience for its members – not because it controls a unique social graph.”….

…”The brilliance of Facebook Platform is that it greatly expanded what people could do on social networks. The problem is that what people do is still pretty limited. Take a look at the top applications on Facebook – they can be roughly grouped into 1) managing/comparing/interacting with friends in a general context; 2) self-expression (FunWall, Bumper Sticker); 3) games; and 4) media preferences (iLike, Flikster). These are all fun and interesting, but they only begin to scratch the surface of what I do every day.”….

…”A business model where social influence defines marketing value. Today’s advertising models don’t work on social networking sites – that’s because simply targeting better on profile or social graph details is still the same old media model of CPM and CPC pricing. What’s missing is marketing value based on how valuable I am in the context of my influence. For example, Steve Rubel is a highly influential person because he is an authority on social media, the people in his social graph tend to interested in his views, and they in turn have a great deal of authority as well. (Several people came up to me after the speech and said that this is similar to a “PageRank of people”, a very easy way to crystallize the idea.)

This means that each person will have their own “personal CPM”, an idea I heard JWT’s Marian Salzman discuss at a private event in February (here are more details on the JWT’s Top Trends for 2008). The idea is that marketers want to reach highly influential people, and hopefully curry their endorsements. This has traditionally been the province of public relations, where they reach out to key influencers. But in the world of social networks, this is influence writ large and wide – every person has their own network of influence, and hence, their own personal CPM or value that they contribute to a social network.

..”There are several start-ups as well as established agencies that are already looking at marketing, brokering, measuring, etc. social influence, so you can expect to hear more about this topic soon. But don’t expect advertising spending to quickly embrace social influence – after all, the vast majority of ad budgets are spent by media buyers who still cleave to the tried and true reach and frequency, CPM models.”

Why is this relevant? Because as pointed out yesterday by industry visionaries, the iPhone SDK announcement represents the biggest trend since the PC revolution - socially connected individuals, groups, and media are at the heart of this new revolution.

Social Everything includes devices (iphone) to connect to networks (open social + social graphs) to consume media and information (social media). Users love it and so advertisers will soon have solutions - hopefully provided by us entrepreneurs.

Disclosure: I’m a fan of Facebook.

Facebook is getting dirty. I’m pounding out more rejections for unwanted stuff and unwanted clutter - Facebook is dirty. Others are feeling tired of Facebook.

Facebook is so cluttered that it feels dirty. Meanwhile the new LinkedIn is clean. It reminded me of how Google had the clean design in 1998 and all the other search engines went down the cluttered portal route.

Facebook clean your act up and be a utility not a pain in the butt.

It’s no surprise that Howard Rheingold loves and is addicted to Twitter.  I have been at the center of social networking and social media from day one and have seen tools come and go.  Twitter is the real deal. 

Many people don’t get it and will never get it.  Where’s the business model - they cry.  Many see Twitter as a geek utility - a low cost to run utility.   It is clearly a solid communication utility. 

Where’s the Beef people ask?   Two Areas: 

1)  Communication and Coordination:    At PodTech we did many social media experiments and one of them was implementing Twitter mobs to drive brand awareness - we used as a communication tool to create an engaged ”smart mob”.  Did it work.  It sure did. 

2)  Smart Collaboration:   Another area that Twitter rules is what I call the “smart collaborative mob”.   This is the Web 2.0 “holy grail”.   

Let me give some examples:  I have been personally using it this way for sometime in vetting out my next venture.  Also, more publically take a look at Seesmic and Loic Lemur.  He is actively using Twitter as a collaboration tool to build his business - I love that about Seesmic.  Just this weekend Loic Lemur was going through 900 feature ideas from the community - talk about smart mobbing for collaboration.  It’s open source entrepreneurship - high quality, efficient and low cost.

Twitter is one major component for Social Media but it can’t be used unless it has a community.  

Where’s the big business model in Twitter? 

Answer:  “Smart Collaboration”

Who owns it:?  Everyone

Who makes money:?  Everyone and Twitter

Attention Fresh Ex-Yahoo employees or future Ex Yahoo employees.

I am looking for product and engineering startup employees for my upcoming startup. This is a pure startup opportunity in Palo Alto. I’ve been working on this new opportunity with my wife Linda.

Consider this an open call for Yahoo entrepreneurs who know social networks and social graph technology: I’m looking for product managers and engineers for my new social advertising startup.

For more information read through some of the posts here at Furrier.org

I also posted on Techcrunch comments as well.

Update:

I saw Susan Mernit at the Yahoo campus today while I was attending the SDForum Social Graph Search Developer Event.  She was bummed.  Wait I’d say more stunned.  Susan blogged about it here.  Susan is a good person who takes pride in her work.  It must have been a surprise.  Susan: lets get together next week.  I’m happy to share with you the months of research on the landscape.  Ping me if you need anything.

Another employee named Ryan twittered the layoff.   Randy Farmer who I met when Yahoo launched Yahoo 360 (their social network beta) blogged the surprise layoff.  

Hello Web 2.0 Real Time Communication.  I hope that we can use these same tools for Real Time Collaboration and get people back to doing great work.