Web 2.0 Expo NY 09: Danah Boyd, “Streams of Content, Limited Attention

Why Digital Agencies Are Indeed Ready to Lead

They Understand the Technology, the Speed of Iteration and Analytics

By Jacques-Herve Roubert 

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Jacques-Herve Roubert

Over the past 18 months, a great debate has consumed our industry: Are digital agencies poised to sit at the head of the advertising table? Depending on whom you ask and what you read, the answer seems to flip flop — with a majority of people still having reservations and making claims that digital agencies aren’t ready to lead.

So why does the debate continue? Does offline or online really matter to an oblivious consumer who’s only interested in “no-line” communications? Are we spending too much time focusing on who should lead and not enough asking: What’s next?

Ana Andjelic’s DigitalNext post, provocatively titled “Why Digital Agencies Aren’t Ready to Lead,” mentions several reasons why digital agencies aren’t ready to lead, one of which was their lack of experience in the business (as compared with the “decades of experience” that traditional agencies are known for). I’m sure there are instances where decades of experience can directly translate into success, but there are certainly instances (uh, Lehman Brothers?) where deep roots had no bearing on their ability to produce — and produce well. Furthermore, a certain percentage of the individuals now working and thriving in digital agencies came from traditional agencies.

Additionally, most of the world’s most ingenious inventions were not created overnight, but took years of hard work, research, observation, trial and error, and collaboration to fine tune. The digital ecosystem has required much of the same exploration — and, in most cases, into technologies that are new to all of us. As James March himself said, “Exploration involves being an amateur for a while, but only as a step on the way to being a professional.”

And while the structure of an interactive agency may often mimic “one big crazy family” (by the way: Whose family isn’t crazy?), how could making sure everyone’s opinion is heard be a bad thing? Most interactive agencies subscribe to the notion that you never know where the big idea or concept will come from. Sometimes the big idea can come from the exploration of a new technology or method that enhances consumer connection.

Here’s why:

• That was then, this is now. Like it or not, the days of the ingenious, 30-second TV spot are over. Today’s creative ingenuity lies within the idea, the technology, the concept, the innovation and, perhaps most important, the Holy Grail: consumer connection. Word of mouth is more prevalent than ever and interactive communities have an increasingly louder and more influential voice and are stronger (and sometimes the only) sources of breaking news stories. No one understands this better — nor is better equipped to handle the swift demands required — than the digital agency.

   

• Teaching an old dog new tricks. The “new trick” is immediacy. It’s about faster response times and the concept of immediacy. E-mail, IM, Twitter, Facebook, cellphones — all of these technologies set the stage for consumers wanting and expecting immediate responses, not to mention, immediate access to products and services. Traditional advertising agencies are not adapting to this mentality because they are still working with processes and organizational structures that were developed in a time when the internet and the concept of immediacy simply did not exist.Digital agencies understand that brands are being held to higher-than-ever consumer expectations. The plethora of data we can garner from a $50,000 media buy can leave traditional agencies’ heads spinning with insight and analysis. The truth of the matter is: Interactive agencies are forcing traditional agencies to integrate with digital media to better track and measure campaign results through custom URLs, short codes, etc.

   

• Kickin’ it old school. Not only are the days of the 30-second TV spot gone, so too are the traditional advertising agency gurus like David Ogilvy and Bill Bernbach. Today, those figures have been replaced, instead, by financially backed entities. Rather than exploration and exploitation, digital agencies need their own gurus and legends that can lead by example.

Five or 10 years ago, I might agree with the argument that digital agencies weren’t ready to lead, but after sitting at the table with other agencies for the past decade — traditional, branding, public relations, marketing — it’s clear that digital agencies have proven their value, not to mention their ability to innovate, inspire, and create the big idea.

Perhaps the synergy and balance between exploitation and exploration is off kilter for digital agencies, but more and more we’re starting to see the agency structure itself change with new hires in technology and social media. And marketers are noticing:

• According to Media magazine, AKQA was named the lead agency for Nike India earlier this year.
• Precor named Ascentium its agency of record in October 2009. According to Forrester’s Q2 2009 Interactive Agency Wave, Ascentium “received the highest client satisfaction scores in this year’s review.” The assignment with Precor includes strategic planning and execution of all offline and online campaigns.
• McAfee hiring Tribal DDB as its agency of record in 2008. This assignment included all TV, print, outdoor, and digital.

The balance may not be there today, tomorrow or next month. The truth of the matter is digital agencies have earned their right to sit at the head of the table because they’ve brought what consumers and marketers are looking for: new innovations in measurement; flexibility and nimbleness; and, most importantly, ideas that bring what a magazine spread or 30-second TV spot cannot.

ABOUT THE AUTHOR

Now president-CEO of Nurun, a global interactive marketing agency, Jacques-Hervé Roubert began his career in advertising at Havas Conseil and subsequently held senior executive positions with BDDP and Young & Rubicam.

Purdue University Adds Twitter and Facebook to Class Participation

By Barb Dybwad

Students at Purdue University are experimenting with a new application developed at the school called Hotseat that integrates Facebook, Twitter, and text messaging to help students “backchannel” during class.

People who have attended technology conferences in the past several years are already familiar with this phenomenon, where social media is leveraged to allow the participants in a session or panel to comment and exchange questions and ideas in real-time. At Purdue, Hotseat is used to allow students to comment on the class as it proceeds, with everyone in the class including the professor able to see the messaging as it happens.

The Hotseat software allows students to use either Facebook, Twitter, Myspace (), or SMS to post messages during classes, or they can simply log in to the web site to post to and view the ongoing backchannel. Right now it’s only being pilot tested in two courses, but has already become a fast favorite for both teachers and students. Professor Sugato Chakravarty, whose personal finance course is one of the pilot tests, said, “I’m seeing students interact more with the course and ask relevant questions.”

And although it’s been optional for students to participate, so far 73% of the 600 or so in the pilot classes have used the software. We’ve seen Twitter become mandatory for journalism students at Australia’s Griffith University to some negative reaction, but this is a less structured implementation which may perhaps account for its more favorable reception.

As Chakravarty goes on to note, though, the application is called “Hotseat” for a reason — and professors will have to be resilient enough to take any potential criticism or even corrections from students in real-time. Nevertheless, he cites it as a “valuable tool for enhancing learning. The students are engaged in the discussions and, for the most part, they are asking relevant questions.”

Check out a video introduction to the Hotseat application below, and let us know what you think. Does social media have a natural place in the classroom? What role should Facebook () and Twitter () play in education?

Digital Marketing Factbook: A Glimpse Inside

Source: MarketingProfs.com

How US consumers spend their time online has shifted significantly in the past five years, according to Online Publishers Association (OPA) data presented in the Digital Marketing Factbook (Q4 2009) recently published by MarketingProfs.

The Digital Marketing Factbook, designed to be a comprehensive source of data and research for online marketers, includes chapters on email, search, and social media—with 144 pages of findings, including 110 charts and graphs from 60+ sources.

In 2004, US consumers spent 42% of their online time on communications-related activities such as reading and sending email, whereas now they spend only 27% of their time doing so, according to the OPA data cited in the Factbook.

What’s filled the gap? Community-focused social networking sites such as Facebook, which now account for 13% of users’ time, up from virtually nothing in 2004:

Key findings:

• In addition to devoting more of their online time to community sites, consumers today are spending more time on content sites and search, and less time on commerce sites, than they were in 2004.
• As for what specific activities US adults perform online today:
  —90% send or read emails
  —88% use search engines
  —76% check the weather
  —75% buy a product
  —72% get news
  —66% to make or buy a travel reservation
  —60% to look for news or information about politics
  (According to April 2009 data from the Pew Internet & American Life project included in the Factbook.)

Overview

The “Online Overview” that opens the Digital Marketing Factbook presents the information above, as well as data on Internet usage worldwide, typical marketing budgets, most successful and most used tactics, and marketing ROI—including, in all, 21 charts.

Following the overview are chapters on email, search, and social media marketing, all of which are sampled in this article.

“The Digital Marketing Factbook is more than just a compendium of charts. Marketers can use this information-packed resource to plan their online marketing campaigns and implement go-to-marketing tactics,” said MarketingProfs President Roy Young.

“Armed with data regarding consumers’ online habits, preferences and inclinations, you’ll be able to best craft your digital message to reach loyal customers, reach new ones and retain them.”

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The Factbook is available for purchase by nonmembers for $199—or $119 for MarketingProfs Premium Members. Basic Members (just provide your email address to become one) can obtain a copy for $159 until Saturday, Oct. 31.

 

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What Marketers Say

 

Senior marketers were asked which components of their current digital marketing programs—search, email, display advertising, social networking, and mobile advertising—delivered the best results. Only 11% cited social networking—an especially striking figure when you consider that consumers spend 13% of their online time on social networks, and this percentage is likely to grow.

Here’s what senior marketers said of the results they get from components of their campaigns:

Key findings:

• Search marketing delivers the best results (33%); search and email still constitute the core of a solid online media plan.
• Mobile advertising… whoa.

Email Marketing

Nearly everyone uses email, and this medium is repeatedly ranked as one of the most cost-effective (and effective) forms of marketing.

The Email Marketing section of the Digital Marketing Factbook covers how, when, and why consumers and businesses use email, as well as providing marketing benchmarks, such as average open rates, that can help you judge your own efforts. In all, this section of the Factbook contains 18 charts.

What Consumers Say

Global email users were asked the following question: As a result of opening permission-based emails, how often do you normally take each of the following actions?

Key findings:

• Consumers in Asia appear more responsive to email offers than those in other regions, though a higher percent of consumers in North America would enter a sweepstakes or promotion.
• Asian consumers are also more likely to forward emails than consumers based elsewhere: 51% forward emails, compared with 39% of North Americans and 32% of Europeans.
• In another question, consumers were asked about what makes a subject line effective. The results showed that discount offers have universal appeal, but many subject lines are much more popular in Asia than in Europe or the United States (familiar brand names, new product announcements).
• European and North American consumers respond much the same to subject lines, although Europeans are more likely than Americans to find free product offers attractive (66% vs. 57%).

What Marketers Say

Looking at the most important email marketing initiatives that businesses consider implementing, we see that the top-ranked ones reflect a desire to improve relevancy. Some 66% of respondents are looking to increase the performance of their campaigns and 52% are looking to improve segmentation and targeting:

Other findings:

• According to a survey of 623 email marketers, almost 50% of respondents report that sending emails at midday (10 a.m. to 2 p.m.) is the best time of day to do so.
• The start of the business day (6 a.m. to 10 a.m.) is considered second best at 31.5%. Though every emailer should test for himself or herself what the best time of day is, this can help guide initial efforts.

Search Engine Marketing

The first stop for just about any type of information imaginable is an online search. This section of the Digital Marketing Factbook is full of information about how consumers seek information and how businesses are ensuring that their potential customers find it: e.g., which search engines are the favorites worldwide, how those favorites perform in different regions, and how to improve search marketing efforts.

This section of the Factbook contains 34 charts.

What Consumers Say

A survey of 320 Internet users found that search engines were the most valuable information source for someone making a purchasing decision:

Key findings:

• Survey respondents ranked online rating systems second and discussion forums third.
• Consumers ranked social networking sites low among the options; it will be interesting to see whether consumers come to rely more on these sites in the months and years ahead.

Not all searches take place on search engines. Though not nearly as large as Google, a site like eBay hosts about as many monthly searches as Microsoft or Ask. With such volume, search marketers should be taking these sites into consideration when planning PPC strategies:

Other findings:

• Data from comScore suggests an interesting trend: a steadily increasing length in the phrases people use when searching for something. This means that the long tail of lesser-used, but more productive search phrases of 3+ words is growing. More exact searches mean more efficient targeting. More sophisticated usage as search becomes more mainstream is the most likely factor responsible.
• Hitwise data based on a sample of 10 million U.S. Internet users shows the same phenomenon: the length of search queries has increased over the past year. Searches of eight or more words increased the most (18%), although two-word searches made up the majority of searches, amounting to 23% of all queries in 2009. Understanding the middle of the long tail is a key part of maximizing the efficiency of a PPC campaign.

What Marketers Say

The search marketing firm SearchIgnite put together an aggregate analysis of its clients’ activity in Q2 2008 compared with Q2 2009 to see the effects of the market downturn. What it found is that its clients have been able to get more PPC impressions and clicks while spending less.

For marketers with intact budgets, this is good news, because it means decreased competition and more cost-efficient PPC ads:

Social Media Marketing

The Social Media Marketing section of the Digital Marketing Factbook features the latest stats on usage of social media, including data for how usage differs across various demographics. Learn about who is reading blogs, chatting with friends or business contacts, putting up a blog, tweeting or creating a Facebook or MySpace page.

This section contains 37 charts.

What Consumers Say

Of the 418 social network users surveyed online by Knowledge Networks, almost one-quarter “sometimes” turn to social media for information on travel or travel services and “sometimes” got purchase advice on clothing or shoes, but very few do so “regularly.”

Other findings:

• According to BIGresearch’s Simultaneous Media Usage Survey of 22,000 consumers, women are far more active on social networks than men, with the exception of the career-oriented LinkedIn.
• According to a study of 711 women social network users, nearly half of all social networking women belong to four or more networks. Based on focus groups conducted by ShesConnected, the primary reason given for joining multiple sites was “no one site meets all of my needs or interests.” This insight may be particularly useful for marketers trying to help meet certain product-specific information needs.
• Some 57% of white-collar Baby Boomers report they use the networking site LinkedIn, while another 55% have a Facebook profile. This data comes from a survey of 1,660 business professionals age 45 to 63.

What Marketers Say

According to a survey of CMOs, 65% of companies use social networking sites for marketing. Those firms that do use social media do so toward a wide range of marketing objectives:

About the data: The Digital Marketing Factbook, designed to be a comprehensive source of data and research for online marketers, includes chapters on email, search, and social media—with 144 pages of findings, including 110 charts and graphs from 60+ sources.

The Factbook is available for purchase by nonmembers for $199—or $119 for MarketingProfs Premium Members. Basic Members (just provide your email address to become one) can obtain a copy for $159 until Saturday, Oct. 31.

Social Media Hits Mainstream; Tried-and-True Still Works Best

Source: Marketingcharts.com

Despite continuing concerns about measuring ROI and effectiveness, two-thirds of marketers have used social media in 2009 and half have used viral videos, making these two formats the fastest-growing tactics in marketing,  according to a survey from the Association of National Advertisers (ANA), BtoB Magazine and ‘mktg’.

The 66% who used social media this year represents a a increase over 2007 survey results, which revealed that only 20% of marketers were using social media and 25% were employing viral videos two years ago.
Among marketers using social networking, the top sites being used:

• Facebook (74%)
• YouTube (65%)
• Twitter (63%)
• LinkedIn (60%)

Budget Allocation for New Media
In order to properly fund these new media formats, the study found that 55% of respondents have shifted funds from their traditional media budget, while 48% shifted funds from other marketing communications budgets.  More than one-forth of marketers (26%) created an incremental budget.

Top Concerns About New Media
Despite the growing use of social networks and viral videos, marketers do not think they are using these media in the most effective ways and are still struggling with measurement and media-mix allocation issues. The top concerns for marketers when considering newer media platforms are the inability to prove ROI (45%) and worries about not having metrics to properly allocate the mix of traditional and digital media (43%).
On the other hand, the most effective of the newer media platforms are those which marketers have been doing for longer periods of time and those for which more measurable results are available:

• Search engine marketing (SEM) (65%)
• Own website (59%)
• Search engine optimization (SEO) (55%)
• E-mail marketing (45%)

B2B vs. B2C Marketers

The study results also reveal that B2B and B2C marketers differ in how they use new media platforms. Some of the ways:

• While mobile is used by 32 percent of overall marketers, it is three times more likely to be used by B2C versus B2B marketers (52% vs. 18%).
• LinkedIn rates first among B2B marketers while Facebook is top among B2C.
• Twitter is used more by B2B marketers (70%) than B2C marketers (46%).
• B2C marketers see much more effectiveness from SEM (76%) than B2B (48%).
• Webinars are a much more effective platform for B2B marketers (48%) versus B2C (6%).

Plans for Next Year

In the next year, blogs are the new media format at the top of the list for all marketers not using them (34%), followed by mobile (28%) and social media (23%). Viral video and podcasts are also of high interest for many B2B marketers who are not using them.

Despite the interest in blogs, mobile and social media, however, the newer media platforms that will get the most spending in 2009 are still the ones that are more established:

• Own website (26%)
• Search engine marketing (19%)
• Online ads, including banners, etc. (17%)

“As more media platforms become available, it is imperative that all marketers continue to assess their capabilities and select the platforms that are best suited to help them meet their brand’s goals and objectives,” said Bob Liodice, president and CEO of the ANA. “With this proliferation of media, marketers must work harder, survey the entire landscape available to them and create their brand’s most optimal media mix.”

About the survey: In June, 2009 the ANA, in partnership with BtoB Magazine and ‘mktg’, conducted the online survey, “Harnessing the Power of Newer Media Platforms for More Effective Marketing.” In total, 172 client-side marketers responded to the survey. These results are being compared with the same survey that was fielded in 2007. Full results will be shared at the ANA/BtoB “B-to-B Marketing in the New World Conference” August 4-5 in Chicago.

Building an Army of Hyper-Local, Mobile-Connected Advocates

Or, Why Marketers Should Pay Attention to Foursquare

By Allison Mooney 

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Allison Mooney

No, this isn’t “the year for location” in mobile. That phrase has become industry cliche by now. But it’s hard to ignore the hype that one location-based service called Foursquare is getting in some circles — and no advertiser should. The NYC-based startup has built a sticky platform, an avid fan base and, quite possibly, the next-generation platform for proximity marketing.

Foursquare bills itself as 50% friend finder, 30% social city guide, 20% nightlife game. Basically, you tell it where you are (a bar, a park, a museum, whatever) by “checking in” (via iPhone app, SMS or mobile site). The service then tells your network of friends, recommends things to do in the area, and awards you points and badges for your activity. It also lets you recommend things other people should do and track what you have done yourself.

Part of the appeal of the service is how it links the digital and “real” worlds — truly putting the “social” in “social networking.” After its big unveiling at SXSW, the service has garnered a passionate and growing base of early adopters (full disclosure: I’m an alpha tester and “super user” myself). The other weekend, some avid Foursquarers in New York even organized a bar crawl, called Town Holler, for people who’d achieved “mayor” status at a certain venue.

Photo Credit: Dan Maccarone

Co-founder Dennis Crowley puts it this way: “I think Foursquare found some kind of sweet spot between the intersection of social utility (Hey, I know where my friends are), sharing/oversharing (I log everywhere I go/everything I do) and gaming/rewards (every check-in gives you a little piece of candy).”

Foursquare is designed with these game dynamics in mind, and it’s the absurd appeal of its reward that makes the service so “sticky.”

“Even after having written the code that makes the badges work, I still find them absurdly compelling,” says Crowley. He recently checked in all over Manhattan’s Upper West Side to get Foursquare’s “Douchebag” badge). For me, it often takes the place of making plans. I can just see where people are congregating and swing by (note to users: refrain from checking in on a date or other private engagement). If I do make plans, I’ll often choose to hit a place in order to snag the “mayorship” or get a new badge. People are now checking in at the gym, at work, from the supermarket — I even saw one from a free clinic recently — all in an effort to score points and stay socially connected.

This is a concept we’ll see more and more of — in fact, the team behind “World of Warcraft” just released an app called Booyah Society that rewards users for status updates.

Some are calling it “the next Twitter” and Mashable describes it as following the same evolution: breakout at SXSW, passionate early adopters, media, naysayers, misunderstanding … Also, like Twitter, you need to use it to “get it.”

This usage may look very different depending on the person. As Crowley says, “The product is really complex — score, leaderboards, friends, tips, to-dos, etc. — and I think different parts of the product speak to different people. If you get on Twitter and search for Foursquare, you find people who think it’s ‘Delicious for places!’ or ‘Twitter with location!’ or ‘Loopt, but with points!’”

Many people already use Facebook status updates and Twitter to share their locations — witness the “tweetup” — so Foursquare is tapping into an existing behavior. But the fact that it’s actually tied to location through GPS coordinates is what makes all the difference — and the potential for advertisers, especially on a local level. As The New York Times recently pointed out, local businesses need to manage their online reputations and engage with tech-savvy customers to promote themselves in the social-media channels. Foursquare presents the perfect opportunity to do this.

“There are a ton of branding and marketing opportunities and we’re approached by people all the time — sponsored badges, sponsored mayorships, etc.,” Crowley told me. “What [co-founder] Naveen [Selvadurai] and I feel really good about is building two things at once — things that make it easier/more fun for our users explore the city (tips, finding friends, badges) and things that make it easier for venues to reach out to their most loyal/vocal/early-adopter users. For example, it would cost $5 for a restaurant to give my brother a free dessert for being mayor, but with Foursquare linked to Twitter (read word-of-mouth), that $5 could go a long way towards driving people to that venue. The local ad market has long been underserved — and that means one thing to a lot of companies (e.g., finding nearby doctors and dentists and lawyers and lawn care, etc.) but something different to us (cafes, restaurants, pubs, bars).”

Another advantage of Foursquare is its location data, which can measure foot traffic to a store, proving quantifiable ROI for an advertiser. Charlie O’Donnell points out that this is the missing ingredient for Yelp. Beyond that, though, Foursquare can provide an incredibly compelling data set for anyone interested in consumer behavior (check out Social Great, which shows the most popular venues based on check-in data).

Photo Credit: Dennis Crowley

The startup is working on tools for local businesses that will help them with promotions and tracking, but we’re already seeing some take it into their own hands. Destination Bar in New York’s East Village and Marsh Cafe in San Francisco offer free drinks to the “mayor,” and Southside Coffee in Brooklyn listed the “mayor” on a chalkboard outside. Think about that — an incentive purely based on social capital! I can’t remember the last time that I (or anyone I know under 50) clipped and redeemed a coupon — these sorts of social incentives could be the new discounts.

Foursquare is available in 21 cities (mostly in the U.S.) with others on the way. Right now, the service has a strictly urbanite appeal, and it could inhabit this niche quite nicely. However, if local offers are incorporated in a compelling way as its coverage area expands, it could certainly head towards the mainstream. I can also see people using it just to discover what’s around them, regardless of telling people where they are. I’ll get toro at Ki Sushi since Carter P. tells me it’s the best in the city, or I’ll hit up an ATM if I go to Trout when D.M. warns that it’s cash only.

Advertisers — both local and national — would be smart to start thinking about their “location” strategies while there’s still a relatively open playing field. By taking advantage of mobile platforms like Foursquare, ones that engage and offer incentives to consumers within the proverbial “last 50 feet,” businesses can bring all the advantages of the social web to their front door.

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Allison Mooney is VP-director of trends and insights at MobileBehavior, an Omnicom Group Company, and runs their blog Next Great Thing.

Advertising Will Change Forever

Digital Spending Will Nearly Double in 5 Years, But Ad Budgets Won’t

Posted by Josh Bernoff on 07.20.09 @ 02:30 PM

Josh Bernoff

Here’s one of the things we do at Forrester Research: we interview as many marketers as we can about their plans, identify trends and project future likely conditions, and then we put together some numbers to make a projection. If you’ve ever seen a Forrester projection, it comes from a process like this.

This means that inside every projection is an idea or ten about the future. Those ideas can be powerful, and they come from research with marketers and consumers.

My colleague at Forrester, Shar Van Boskirk, just published our five-year interactive marketing forecast. The idea inside it is the real kicker.

In this recession, marketers have learned that interactive marketing is more effective, and advertising less effective, per dollar spent. While budgets for online have decreased, they decreased less than other budgets. Six out of ten marketers we surveyed agreed with the statement “we will increase budget for interactive by shifting money away from traditional marketing.” Only 7% said “we have no plans to increase our marketing budget.”

Unlike the last recession, digital marketing is no longer experimental. Now it looks more like advertising is inefficient, relative to digital. More than half of the marketers we surveyed said that effectiveness of direct mail, TV, magazines, outdoor, newspapers, and radio would stay the same or decrease within three years. In contrast, well over 70% expected the effectiveness of channels like created social media, online video, and mobile marketing to increase.

The result is that digital, which will be about 12% of overall advertising spend in 2009, is likely to grow to about 21% in five years. Along the way overall advertising budgets won’t grow much.

This is huge.

It means we are all digital marketers now, since digital is at the center of many campaigns anyway.

It means media is in trouble, or at least in the middle of a transformation. For example, online video ads, which will be about $870 million this year, will grow to over $3 billion in 2014. What will this do to networks plans to put more of their shows online in places like Hulu. How will it accelerate some newspapers plans to become more and more centered around online?

And it means that social “media,” which will account for $716 million this year between social network campaigns and agency fees, will generate $3 billion in five years. And this doesn’t even count displays ads on social networks (which are in the display ads category.) Of all the parts of digital marketing, social network marketing one is poised for the most explosive growth.

Pundits have been declaring the end of mass media and advertising for years now. From my 14 years of experience analyzing this stuff, I’ve learned that things die very slowly, but there are real trends you can see. If you’re in advertising, you’d better learn to speak digital, because that’s the way the world is going.

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Josh Bernoff is the co-author of “Groundswell: Winning in a World Transformed by Social Technologies,” a comprehensive analysis of corporate strategy for dealing with social technologies such as blogs, social networks and wikis, and is a VP-principal analyst at Forrester Research. He blogs at blogs.forrester.com/groundswell.

Fred Wilson: The Value Of Twitter Is In “The Power Of Passed Links”

by Erick Schonfeld on June 16, 2009

Venture capitalist Fred Wilson, who is an investor in Twitter, argues that the value of Twitter is “all about links.” Today at the 140 Characters Conference in New York City, Wilson gave a presentation ostensibly about how to make money from Twitter. The value of Twitter, he says, is in “the power of the passed link.”

He compared Twitter’s recent organic growth to the early growth of Google (minus any mention of Twitter’s recent slowdown) and shared some analysis of traffic to the Websites of his portfolio companies and his blog. Google is the dominant source of traffic, but over the past 12 months Twitter [and Facebook] traffic has been growing 30 to 40 percent per month. It is becoming a significant source of traffic to those Websites, to the point where it is now bringing about 20 percent as much traffic as Google.

Wilson predicts that at current growth rates, Twitter [and Facebook] “will surpass Google [as a source of traffic] for many websites in the next year.” And that just as nearly every site on the Web has become addicted to Google juice, they will increasingly try to find ways to get more links from Twitter. Because Twitter equals traffic. (We’ve noticed a similar trend at TechCrunch, where Twitter is now our second largest outside source of traffic after Google).

Moreover, he asserts that these Twitter links “convert better” than search links because they are often pre-filtered and come in the form of a recommendation from someone you are following. And while spam is a growing issue, it is somewhat mitigated by the ability to unfollow anyone who abuses your trust.

Given these dynamics, Twitter needs to “inject a paid model” into its service, says Wilson. He is clear that he is not speaking on behalf of Twitter:

I am not telegraphing anything here. It is the obvious thing to do. If they don’t do it, someone will figure out how to do it as a third party application.

Twitter co-founder Jack Dorsey was sitting right next to me when Wilson said this onstage. He didn’t seem surprised by anything Wilson was saying. But how exactly is the best way to inject paid or sponsored links into Twitter?

Again, looking at Google might be instructive. Google delivers traffic to Websites through a combination of organic and paid links. The paid links amount to billions of dollars in revenues for Google, but they wouldn’t work without the links in natural results. Twitter needs to come up with unobtrusive ways to inject sponsored Tweets with paid links into people’s Twitter streams. It is still not clear, however, how it can do this without turning off users.

Update: Fred Wilson points out in comments that his observations were “about facebook and twitter together, not twitter specifically.” Fair enough, Twitter isn’t the only stream out there. Although, if his referrer logs look anything like ours, passed links on Twitter bring in five times as much traffic as passed links on Facebook. Maybe it is the exact opposite for him. So wherever you see Twitter above, insert “and Facebook.” But he was at a Twitter conference, after all, and passing links is more of a core activity on Twitter than it is on Facebook, which is why I focused on his comments as they applied to the former.

Dell Says It Has Earned $3 Million From Twitter

By Claire Cain Miller

These days, lots of companies are talking about their “Twitter strategy,” but few have figured out how to measure what amassing hundreds of thousands of followers on Twitter does for their businesses. Dell has shown that it can go directly to the top line.

Dell said Thursday night that the company had earned $3 million in revenue directly through Twitter since 2007, when it started posting coupons and word of new products on the microblogging site. In the last six months, Dell Outlet earned $1 million in sales from customers who came to the site from Twitter, after taking 18 months to earn its first $1 million. Dell has also earned another $1 million from people who click from Twitter to Dell Outlet to Dell.com and make a purchase there.

Dell joins companies like Starbucks, JetBlue and Whole Foods as one of the most active corporate Twitter users. “It’s a great way to fix customer problems and hear what customers have to say, it’s a great feedback forum and it leads to sales — how can you miss?” said Richard Binhammer, who works in Dell’s corporate affairs office and is active on its Twitter accounts.

Twitter made exactly $0 from those Dell sales, something that will very likely change. Twitter’s founders have said that it someday hopes to make money from its corporate users, with paid accounts that offer additional features like analysis of the traffic to businesses’ Twitter profiles and verified accounts so customers know they are not dealing with an impostor. When asked whether Dell would pay Twitter for an account, Mr. Binhammer said, “We’ll cross that bridge when we come to it.”

Dell uses Twitter to send out coupons, including some that are exclusive to its Twitter followers. It is particularly useful for the Dell Outlet, Mr. Binhammer said, because the inventory of returned and refurbished products fluctuates. If it gets 30 flat-screen televisions one week, for example, it can alert its customers. Dell Outlet has 624,000 followers on Twitter.

Dell also announces company and product news and talks directly with customers, responding to complaints or asking for feedback. There are about 200 Dell employees who talk to customers on Dell’s Twitter accounts, from a gaming expert to a server expert to members of the chief technology officer’s staff, Mr. Binhammer said.

For example, as I wrote in an article on the various ways people use Twitter, Dell heard on Twitter that customers thought the apostrophe and return keys were too close together on the Dell Mini 9 laptop and fixed the problem on the Dell Mini 10. Now, the Dell Mini product development team is asking around on Twitter for new ideas for the next generation of the computer.

Want to Tweet? Do It From an Ad Unit Nearby

New Campaign From Nestle Encourages Users to Post Twitter Messages From Display Ads

by Michael Learmonth

NEW YORK (AdAge.com) — Nestle’s Juicy Juice isn’t the first brand to try to integrate Twitter in to an ad campaign (see Skittles and TurboTax). But it may be the first to allow users to post tweets within an ad unit that can appear anywhere on the web.

Juicy Juice’s Twitter display ad

Juicy Juice is testing the unit, from SocialMedia, for one month on mom-targeted sites BabyCenter and CafeMom. The units ask questions such as “How do you stimulate your child’s mind?” or “How important are vitamin-enhanced foods to you?” and users can answer the queries as short messages, or tweets, directly in the ad.

If users are logged on to Twitter, the answers will be posted to the ad directly; otherwise users are first directed to Twitter.com to sign in. Posts, which also appear in users’ Twitter feeds with a “hashtag” (the symbol #, used to group keywords or events for simpler searches on the site) are moderated by Nestle, but there’s the option for that to be turned off.

Clicking on the ad unit, meanwhile, takes the user to Juicy Juice’s YouTube site, which is chock-full of helpful videos, including a scary one about how many more germs per inch are on a water fountain than your average toilet seat.

The difference between this campaign, dubbed “Twitter Pulse” by SocialMedia, and other recent attempts is that it allows a conversation to be instigated by — or occur within — the ad unit, rather than just syndicating tweets already posted on Twitter.

“The ad unit is paid placement but the additional impressions are effectively earned media,” said Seth Goldstein, CEO of SocialMedia, a technology company, noting that the hashtag then reaches the follower base of those who have entered tweets, and potentially sparks more attention and conversation.

SocialMedia is tracking a number of metrics for Juicy Juice, including traditional views and click-through rates but also number of tweets posted and the number of followers exposed to the hashtag on Twitter. Like other executions with Twitter, there is no revenue involved with the microblogging service, but, as Mr. Goldstein pointed out, it could be a potential source of new sign-ups and increased usage.