Businessweek’s B.L. Ochman (via Henry Copeland) makes a good point about all of the people trying to cash in on the social media boom:

Search the bios of Robert Scoble’s 56,838 Twitter followers using Tweepsearch (www.tweepsearch.com), an index of the bios of Twitter users, and you’ll find:

• 4,273 Internet marketers
• 1,652 social media marketers
• 513 social media consultants
• 272 social media strategists
• 180 social media experts
• 98 social media gurus
• 58 Internet marketing gurus

How many of them have actually created a successful campaign for clients using social media tools? I bet you’d be hard-pressed to find half a dozen with real track records.

Pretty funny. I’m fairly confident that many of the various innovations that fall under the “social media” umbrella will end up transforming the way companies interact with their customers. But who gets rich off that transformation is a completely separate question.

I do, however, disagree with Ochman on one of her other supposed social-media myths: Read the rest of this entry »

I wrote earlier that this Great Recession is an opportunity for marketers and even agencies themselves to invest in digital and to begin to transform their marketing efforts to become more cost-effective and targeted. Adage today features a perfect example: Marriott Hotels (despite otherwise poor results) generated over $2 million in bookings via their mobile site. And Marriott isn’t alone:

Marriott Mobile generated $2 million in gross revenue between its August 2008 launch and the end of the year. But revenue from mobile bookings in January was headed upward fairly quickly, the hotel chain told Ad Age.

Meanwhile, Omni Hotels’ mobile site has grown 85% in the past six months, and Hilton’s mobile channel has generated a 22% return on investment for the brand. Those kinds of numbers are bright spots in a tough time for hoteliers — and they show that even in recession, companies are willing to invest in and experiment with new media when the ROI is clear(emphasis mine).

To be fair, this is essentially an e-commerce play, where the transaction can occur online and the effects of ROI are measurable. But, then why not shift more marketing dollars online to complete the circle and measure the ROI from the first dollar spent through the last? That’s exactly what is starting to happen, according to Chris LaRose who direct’s Hilton’s website strategy:

“Where we’re seeing in general is a shift to … digital across the board. The rate of return that we’re seeing in online campaigns is much more favorable than what we’ve seen historically in print,”

Can’t say it much more clearly than that.

I hate to hock a book that’s already being hocked everywhere, but it struck me while reading Greg’s post on the issue of “free,” that there may be something to Jeff Jarvis’ new thesis. Greg wrote about Skyblox and its free wi-fi model:

One intriguing example I recently heard about is Skyblox, which works with merchants in a neighborhood to offer free wi-fi to the merchants’ customers, then creates a portal that hotspot users have to go through featuring targeted local advertising. I don’t know enough about the business to say whether it’s going to work, but from a stakeholder perspective, they’re definitely taking the right approach. Customers get free wi-fi and relevant, targeted information about their neighborhood. Merchants get an advertising vehicle that outperforms ads in local alt-weeklies (which is what most of them have been relying on to date). Even indirect stakeholders benefit — by creating a local portal, Skyblox provides a collective good for the neighborhood.

So they create a product that benefits consumers, advertisers and themselves all at once. Where have we heard that before?
Read the rest of this entry »

In an earlier post, I criticized Chris Anderson for eliding the problems of using free as a business tool. The reason this omission was such a crucial mistake was that comparing free-dependent business models that do work with those that don’t helps define the underlying principles.

The two main types of “free” Anderson discusses are the media model (e.g., broadcast TV and print) and freemium (giving away a base product for free and then upselling to a premium version). I’ll start with the media model, and address freemiums in a subsequent post.

Read the rest of this entry »

In response to Dan’s post, I think the biggest problem digital advertising has faced in claiming a bigger piece of marketers’ budgets is its inability to scale up. Yes, it’s more efficient, measurable, targeted and all those things. And certainly a startup such as Guyville would want to focus all its efforts online. But if you’re a large company looking to really move the needle on sales, there aren’t many options that can do the job better than an ad on primetime TV or a large print campaign in a national magazine.

It’s not that the Web doesn’t have a big enough audience. But there aren’t really any sites that aggregate that audience the same way that popular TV shows do. To cite two example, Facebook has a huge audience, but so far it has underwhelmed as an advertising platform. Google, meanwhile, has the audience and and an effective platform, but the ads are so targeted that it can be difficult to scale effectively.

That said, Dan is definitely right that now is the right time to shift ad dollars online. In a bad economy, gargantuan ad budgets will likely be pared down, and marketers will need to demonstrate ROI and prove themselves as revenue centers rather than cost centers. And unlike in the last recession, I think online marketing may have finally matured to the point where it can more effectively absorb ad dollars.

If there is one thing that amazes me about this recession/depression and the digital space more than anything other, it’s the degree to which marketers and even some ad agencies are being short-sighted. Well, perhaps it shouldn’t amaze me, but I stand here proclaiming myself amazed nonetheless. This downturn provides an incredible opportunity for marketing to re-orient itself and invest in digital marketing.

Part of my “amazement” comes from my firm belief that digital is the core around which all marketing will revolve. But we’re clearly nowhere near that point yet. Digital marketing is still viewed by many marketers as an important, but supplementary outlet for their efforts. TV, print, in-store, etc, are still regarded as the core of marketing…and when budgets allow it, a small percentage is allocated to digital. I believe that this relationship will be flipped in a few years. That’s not to say that digital will have the largest budgets, but that every plan will begin with digital as its centerpiece when strategies are developed.

And why not? It’s the most measurable, impactful, targeted, and cost-effective marketing known to human-kind. Online retailers know this, and that’s why so many of them are actually increasing their investment online. For example:
Read the rest of this entry »

As a regular reader of Chris Anderson’s blog, I generally have a good opinion of his writing. And though I haven’t read his first book, The Long Tail, I’ve heard good things about it (even if it did spawn the most annoyingly overused business catchphrase since The Tipping Point.) Plus, how can you not like a guy who gives PR spammers the smackdown they so richly deserve? So when I heard last year that Anderson was excerpting his next book, Free, as a cover story in Wired, I expected to read an intriguing argument.

Instead, I found his thesis to be shockingly naive. It wasn’t so much what he said — his analysis of how “free” fits into a business plan was actually pretty good — as what he didn’t. How could anyone explain the concept of “free” with barely a mention of the dangers it poses … just a few years after the dot-com bubble, a textbook example of those dangers? Similarly, how could he write “What the Web represents is the extension of the media [ie, newspapers, magazine and TV] business model to industries of all sorts” without acknowledging the fact that the “media business model” in all three of those sectors is in the midst of an existential crisis?

In short, what the article was missing was balance. Free is a valuable tool in business, but there are hazards in going too far (as happened in the dot-com bubble) or getting complacent (as happened with many print and broadcast outlets).

The good news is that, judging by his recent piece in the Wall Street Journal, Anderson seems to have finally figured this out. But he presents it as a revelation brought on by the current economic downturn: Read the rest of this entry »