IBM study: The end of advertising is near – as we know it…

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eu-social-mediaSometimes studies come back too late. When I was the host of the dmexco social media panel ‘Show me the money – effective ways to advertise’, I would have loved to talk about these study results.

IBM did a global study where more than 2.400 consumers and 80 advertising experts were asked about how they think the advertising world is changing. And they start their presentation of the study with the following words…

The next 5 years will hold more change for the advertising industry than the previous 50 did. Increasingly empowered consumers, more self-reliant advertisers and ever-evolving technologies are redefining how advertising is sold, created, consumed and tracked. Our research points to four evolving future scenarios – and the catalysts that will be driving them. Traditional advertising players – broadcasters, distributors and advertising agencies – may get squeezed unless they can successfully implement consumer, business model and business design innovation.

Why is this study so interesting? Well, there are different topics to talk about. Companies are shifting budgets more and more to the digital world – and not only in the States. But we also know that social media is on the rise. But what we do not know is, how to define the budgets that marketers spend with social media. Are these called advertising dollars – and will these be called the same way in the future? Will these advertising dollars be moving into PR budgets?

Why PR budgets? Because social media is all about the dialogue – the antithesis of a monologue like advertising. Social media is more, it is even a multilogue (company to customers and customers amongst customers). And this is how IBM argues the change…

Attention: The consumer are in control of the sales process. They define the way they receive, perceive and appreciate advertising.

Creativity: The value of advertising comes from the new ‘digital natives’ that create content for their peers, work with new ad revenue-sharing models (e.g., YouTube, Crackle, Current TV) – all based on new technology. The professional does not rule the process, it will be the semis.

Measurement: Mass reach gets replaced by a new wave customers demanding more individual-specific and involvement- based measurements.

Advertising space:
In the ad sales process the Traditional intermediaries will be made redundant by efficient exchanges

Spot On!
A lot of interesting (and researched) thesis that might become true for the future of the advertising industry. One thing is for sure: Advertising is a one way street – not a dialogue. The company wants the customers – who decides himself if he wants to be addressed by the ad. The truth is that we do more sales by talking to each other, right? Social media will become the new form of lead generation, and lead generation is based on customer service (not on clicks!) which is the basis of building trust – formerly generated via advertising.

Nevertheless, TV did not kill the radio star. But can social media kill the advertising industry?

Hey, Twitter wants to make money…

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twitter-moneySome month ago, Twitter founder Biz Stone told us that he sees ‘tools not ads for revenue”, planning with commercial accounts for the future. And in this Reuter article he announces to start with monetization efforts by the end of the year. Now, he seems to realign his monetization strategy…

Now, after having changed their Twitter terms and conditions last night, it seems that Twitter introduced a new system of rules as well as more options for advertisers, users and Twitter itself. It seems as if they are preparing their monetization

In his post, Stone makes three changes that will have important relevance to the new Twitter monetization strategy:

1. Advertising
Twitter has the right to book advertisements, meaning to place ads on Twitter pages – if in streams or just on the background is not quite clear yet. The terms and conditions were changed accordingly. To some respect this is quite surprising as Stone mentioned some months ago that advertising is not his prior interest for monetization. He also said that it gets on users nerves and none of his employers has a deep insight in the advertising industry.

2. Ownership
Twitter is clever and starts a smooth approach towards changing the terms and conditions on this point – not like Facebook that got flagged by their users when doing so. But in terms of advertising, there is a big point in it. Although the tweets belong to the account-holders, Twitter takes the right “to use, copy, reproduce, process, adapt, modify, publish, transmit, display and distribute such Content in any and all media or distribution methods (now known or later developed).” This gives Twitter a good starting point for targeted advertising opportunities which might become part of their monetization strategy.

3. Spam
Spam is out and -with the introduction of the new terms and conditions- officially forbidden! This is big change for the spam account holders. We all know that there are some of these spam accounts in our follower list and if we clear it up, we might loose probably 10-20% of our follower list. but who does it once he/she is over 1000 followers? So, if your company sends advertising messages to dead spam bots, you should be more careful from now on. Sanctions against spam could become expensive and won’t be positive for the reputation of your business. And it is not allowed to sell followers (probably as of the uSocial business). All sanctions resulting in a permanent-ban.

Spot On!
What does all this mean? Twitter wants to make money. Hey, who is surprised? The whole bloggosphere has been wondering why they did not do this earlier. Who expected something different? Tweets will be shorter (100 words instead of 140?) as ads need some space to create a message. And a lot of people will unsubscribe and wait for the next big revolution.

What is your view? Will you kill your Twitter account just because a media business is trying to make money? Will you be advertising on Twitter once they have a business model for it?

The virtual dollar – the future of web monetization?

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money-sepiaAccording to a survey by the market analyst firm Frank N. Magid, the market for virtual goods will grow in 2009 to a volume of 1,8 mio. dollars. One out of ten Americans has spent real money in return for virtual goods in 2008. And we are not talking about pennies like in the advertising industry. The people that have spend money for virtual goods said they have invested up to 100 US dollars or more. The average invest is somewhere at 30 US dollars.

No surprise: The group around ‘Massively Multiplayer Online Role-Playing Games’ (MMORPG) is the most willing target group for virtual goods. Nearly half of this group of ‘gamers’ spent money for levels or items. Another quite obvious target group is the iphone user who spends money for apps (28%) and the members of social networks (27%).

One of the biggest success stories for virtual goods is probably China and their popular social network Tencent’s which has a special focus on virtual goods and its power on monetization. And if we look at the gaming industry, we can also find Internet Gaming Entertainment that is doing well in offering virtual goods services to collect and receive new game levels and items.

If it is Facebook selling virtual presents like nice flowers, beer glasses or kisses in the format of an icon for one dollar. Or let’s say the social network Hi5 with their casual games section. Money becomes virtual coins and you can easily spend it for a game of dart or for a video wall in your own virtual room on Smeet. Or let’s think about Second Life that is selling virtual ground in a virtual world for real hard dollars and some years ago made Ailin Gräf rich. She became a real-estate tycoon on Second Life – and thus, she became rich in the offline world.

Spot On!
This all reminds me of the good old Tamagotchi days. We were taking care of and feeding virtual animals in order to keep them alive. I am asking myself if this is a possible business model for social networks. You can buy your personalized virtual Tamagotchi and place that on your Facebook account, your iphone or your HTC mobile. So, everybody in your social network can see how you care about your ‘best friend’ – and how open you are to the virtual dollar…

Hey, why don’t we have that virtual Tamagotchi already?

Let me know how you see the future of virtual goods. And may be you want to share some ideas that would be really thrilling for companies to think about. Curious what will be coming up with…

Kevin Spacey explains David Letterman Twitter

23.07.2009 von  
Kategorie Daily Top 3

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Kevin Spacey and David Letterman gave the perfect show act at Letterman’s Late Night show on CBS TV. And suddenly these guys were talking about Twitter … pinging verbal tweets to and fro. And then, Kevin Spacey finds the perfect business model for Twitter. Okay, maybe a bit expensive…!?

David Letterman: Did it cost you money to be on Twitter?
Kevin Spacey: (scared) No, it does not cost you money…
David Letterman: I don’t know how you…
Kevin Spacey: …(amazed, shaking his head)…
David Letterman: I don’t know how it works.
Kevin Spacey: A penny for every letter. It’s so expensive Dave…
David Letterman: I don’t know anything about it.
Kevin Spacey: Are you on Twitter?
David Letterman: No, I don’t know. I can’t afford it…

Spot On!
If Twitter costs something? Yes, it does – a fortune of time, Kevin could have answered. But … ah, his answer is much cooler. Just enjoy it!

News Update – Best of the Day

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All social media platforms are looking for ways to monetize their business. Jun Loayza writes about five business models for social media start-ups.

Politics and good Twitter case studies – in no way possible? Yes, it is possible… Just read the post about Rep. Laura Brod in the US.

Will advertising and sponsorship of objective journalism survive? What’s the future of newsrooms focusing their traditional news business? Former president of CBS News, president of the Newspaper National Network and CEO of Air America Media is talking on the content crisis.

10 general questions on web monetization 2.0

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Brainstorming… ! This is a project which needs your help in order to start saving the future of the web in all its facets…

A post for you, me and all of us platform owners, web maniacs, companies, advertisers, affiliates, social medians and web workers to do some brainstorming and share some thoughts on the future of monetization.

In a lot of discussions, talks and chats with partners, clients and friends, we came across these questions. It is time to find some answers…

Please, tackle this project with me and give as much feedback as possible. We all want to participate in the future of the web. So, let’s do some work…

10 Questions on web monetization 2.0

What if…
1. … all companies respect that platform owners (social networks, media publications, portals, etc.) start their web activities in order to monetize their business like they do?
2. … web platform owners never had started using the measurement argumentation versus the former print world?
3. … companies accept that web platform owners start their business model to earn money – not just to be a service provider?
4. … web platform owners never had started the price competition in order to ‘drag away’ clients from each other – resulting in cpm values of cent amounts?
5. … companies had not overrated the measurement options and tried to buy ROI value (leads, orders & revenue) only – than simply the ‘best price’?
6. … web platform owners never had started cpx payment, let’s call this ‘performance payment’, but were using the old advertising model: ‘pay for play’?
7. … companies suddenly stop advertising the ‘pay for play’ way and just strive for performance payment?
8. … web platform owners need to go for ‘free-mium’ or premium service payment for users, as they cannot afford to run their business any longer without the support of the ad industry from the last 5 years?
9. … companies could finance, sponsor or take over the costs for those ‘free-mium’ or premium service payment for certain target groups?
10. … finally, we users all understand that without web platforms owners generating any revenue, the internet is nothing more than a shell without pearls?

Pick a question, share your views and posts and give us some answers.

Looking forward to your comments…

Dead or alive? Some philosophy on the future of blogging…

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Last week, there was a lot of talk on the future of blogging, online – and offline at ‘online-minded’ events. The coincidence crossed my way that last week some of my closest friends (no bloggers by the way) were sitting together, discussing heavily on why blogging is the future of media – and obviously micro-blogging as well. The conclusion we came up with can be found in the ‘Spot On!’ at the end of this post.

Let’s give the word to the blogging experts and their thoughts first…

A kind of an ‘inner circle’ had dinner at TheNextWeb09 and was brainstorming in a relaxed atmosphere on the topic if blogs are dead. Now, Andrew Keen shares this controversial conversation with us and quotes on his blog Hermione Way, founder of Newspepper: “Blogging as we know it is dead”. The co-founder of WordPress, Matt Mullenweg, sees more of a different new approach for blogs and the way people will handle blogging in the future…

“Blogs will become aggregation points” (…) “They will become our personal hub. Places where we store all our personal media content such as our flickr photos and Twitter posts.”

Especially when we think of micro-blogging, this seems to be the state of mind for a lot of the Twitterati – and some also do it vice versa in a (sometimes self-referential) cross-promotional way.

But, are Mullenweg’s thoughts not interfering with the business model of bookmarking sites, websites such as Mister Wong, Digg, StumbleUpon, Technorati or others, someone may ask? So, is the future of micro-blogging a mixture of bookmarking with the positive effect that you share personal or follower content with friends and followers?

And finally, let’s listen to the words of David Tokheim, Six Apart Media, top manager of an American blogging service provider…

“The lines are becoming blurred between a standalone blog that might be created on TypePad or Blogger or WordPress and blog content that’s created by The New York Times.”

And eMarketer defines blogging today this way…

“…today’s (blogs) are about two-way conversations that take place on many fronts: independent, standalone blogs; social networks; e-commerce and mainstream media sites; and micro-blogging platforms such as Twitter.”

Obviously, times for blogs are changing. The former definition of blogging as a personal expression using an easy self-publishing tool has gone lost on most of the blogs. It seems that blogs are becoming mainstream as a modern format of publishing in the meaning of creative thought sharing … So, we may be asking ‘Why?’.

Spot On!
Now, reading all these opinions, my answer and view on blogging is more a conclusion that goes in the direction of Richard Jalichandra, CEO of Technorati: “You’re also seeing mainstream media coming in the other direction by adding blog content”.

Being an online publisher for more than 10 years now, there are coming different memories to my mind that bring my vision on the future of blogging to you. Memories from past days where the following “unwritten editorial manifest” counted, using the good old editorial questions (and old silicon brand slogan) …

who cannot write professional is meant to leave the pen in the bag, better stop expressing opinions open wide and keep their mouth shut. – Now, most of the blogosphere has forgotten pens exist, publish excessive, express great visions and are not even physically meant to keep the mouth shut.
what intelligent brains cannot control in their minds or ‘scribble’ in books was not worth to be mentioned as it lacked the only format of intellectual value proposition: print. – Now, the web is crowded with blogs (and will be even more in the next decade) offering more intelligent content output in not more than 500-750 words but hundred times more trendsetting, enlightening and progressive than some theses.
when choosing the ‘right’ content management system (cms) was key for the success of online publishing. – Now, there are content management systems, called blogging tools, comparable to former publishing cms systems, leveraging an individual’s mind to the status of a well-rated publishers level.
where long, grey-haired editors with black, stand-up collar long-sleeves or flashily-dressed outfits were the only valid authority of the written word. – Now, we have casual-dress code at Tweetups, meet calling cards of the blogosphere in jeans giving advice on stage to white-collar professionals and suits. University education turned upside down…
and why the individual, the economy and the industry is not publishing? Media experts were doing it much better, more professional, well experienced and with heart and soul. – Now, the world is overwhelmed how complex, creative and informative individuals, employees and companies find ways to be heard by the world, their target group and their customers – just by (micro-)blogging.

The glory of blogs has just been brought to life. Blogging is alive – different from its beginning, sure. But the future of blogging has not even started being perceived as the leading new format for digital portals, magazines, newspapers, custom-publishing, or even digital TV broadcasts. And there will be companies and individuals becoming new famous publishers with their blogs that we don’t even know yet.

This is my take on the future of blogging and I love to hear other views…

Parody: Is Twitter out and nanoblogging the next trend?

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If you are on Twitter there are three things we don’t like: people that talk to much, the speed of the service and the interruption time. Now, there could be a new alternative to Twitter called Flutter.

This nanoblogging service will restrict users to blogging in 26 characters or less. A new blogging trend? At least if you believe in the theory of Matt Ibsen, founder of Flutter…

The cool idea about Flutter would be that you can update your updates from other social media sites and Flutter will automatically cut them down to the 26 character limit. A brevity which all our followers and friends will appreciate…

Sure, this is a fictitious parody on the latest innovation drive in the ‘social media industry’ by the Slate Magazine. The world needed someone to make some fun out of the latest madness around Twitter.

Spot On!
Some questions we do not need to ask for evaluating Flutter: Did we all get the benefit of the business? What is their business model? If it is really a great concept… why do we see such a ‘poor’ delivery on the concept by the execs? Why don’t the execs explain the essence of their business model in 26 characters? This could be an interesting approach for Twitter’s 140 as well…

In some way this parody reminds me of…

Twitter Ads: Thoughts on the test

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Now, there has been a lot, a lot, a lot of thoughts and talk lately on how Twitter will be making money. Finally, Twitter is experimenting with a new revenue model as Techcrunch tells us…

First, it seemed like a nice idea to promote their own service (i.e. widgets and search), which I thought is the case. This well-placed add-on feature makes it easier to work with Twitter, especially heading towards their search site, when you are not using any of the helpful Twitter apps. And there were also some good thoughts on Twitter becoming a search engine and as how this will be a driver monetizing their business. But Overture (now controlled by Yahoo), has patented placement of text ads on a search results page. So, this was probably a difficult pitch.

Now, back to what is happening, see the black box on the right hand side on ‘Widget’…

It is obviously really a ‘simple’ test for some solid revenue stream generating business, we all are familiar with via Google text ads. But can this be an appropriate test to recall on revenue models?

The two test objects, Twitter search and the above mentioned Twitter widget link, belong directly to the Twitter concept. It offers some immediate navigation benefit to the user. This is what users are after for a long time. Thus, ‘Twitterati’ will click on the links and appreciate the easy way accessing their search service. So, the results Twitter sees with the test don’t reflect in any way potential click rates on text ads as these are dependent on results.

Isn’t there a difference if you promote some internal service or feature, or if you run a promotion from some external party or company? In my experience, in terms of text ads, and those generating results, we can definitely say, there is a huge difference on the click rates. Hence, on the conversion rate clients will find the difference as well. Editorial focus is not comparable to advertising, reaching out for awareness, right? And as clicks is the interactive currency ‘No. 1′ for marketers and convergence their need, according to yesterdays CMO report, the test sounds like comparing apples and oranges.

Spot On!
Nevertheless, the test is worth some thought. And just imagine Amazon and Twitter are getting engaged, the business model becomes clear based on some semantic web thoughts: connecting Amazon’s product catalog by connecting tweets and related products. Someone talks about a film and gets an offer from Amazon in the text ad. Or maybe Yahoo could be the new ‘Who is buying Twitter at last’ as they could compete in the long-tail market. In general, Google could finally face a competitor here…

Print and Online: thoughts on modern publishing

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This week, there was some interesting buzz around modern publishing. How the future might look can only be found between the lines of the news. Let’s face some of these indicators of the modern publishing industry…

Print
In Germany, we have had the breaking news that Vanity Fair will be closed down – the magazine survived only two years. Is this a sign for the publishing industry that print is dead? Or just an proof that the publishers have not found the right approach for a target group? OK, America loves VIPs, so does the UK, and even Austria the famous opera ball (yesterday) indicates some addiction to vanity sanction. In these countries people love luxury goods, focus on lifestyle and want to be up to date in the VIP scenario. Pure news business, great for ‘word-of-mouth’ conversation in the bars.

Some thoughts… In Germany, can we doubt that people don’t even appreciate socializing in bars in the night? Is jealousy a ‘critical’ mentality topic in the German society? Is there a nightlife that the other mentioned countries can offer? In the end, how about the editorial approach when all these questions remain with an at least ’50% Yes’ in the room, and when there is no word-of-mouth VIP-society?

Online
The TIME magazine just awarded the 25 best blogs in 2009 – but also ‘downsized’ the ‘ratings’ of some famous blogs. Let’s have a look at the top and flop 3…

Top 1: Talkingpointsmemo.com
Top 2: The Huffington Post
Top 3: Lifehacker

Flop 1: TechCrunch
Flop 2: Gawker
Flop 3: The Street

Are we surprised that the Huffington Post is amongst these top three blogs? They raised 25 Mio. US Dollars investment this week. But wait a minute? How are they monetizing their platform? Classical advertising models like banners, text-ads, paid links and Google AdSense, right? Is this the future of monetizing an online publishing platform – monetizing based on reach? Is this pioneering?

If you doubt this, then how do we have to face modern publishing reality? What is responsible for the Huffington Post success? Editorial credibility (3,5 Mio uniques, 60 mio. page impressions), the political new way of opinion-forming, the modern blog publishing format or just the name of the founder Arianna Huffington? Or was it just the Obama hype that made this blog famous? A mixture of everything maybe…?

Techcrunch is one of the most quoted websites in the world today. Nevertheless, it finished in the flop 3. Did the quality go down because Michael Arrington wants to sell the blog? Or are there other reasons for their downsized rating than those of the TIME magazine?

Spot On!
According to the cluetrain manifesto: markets are conversations. Bearing this in mind, publishers of all kind need to have a close look to the talks of the target group they intend to address, which market mentality they wish to access and above all, if there is a ‘word-of-mouth’ power for the publication in the entered country. The publisher editorial teams need to find the right investigative approach to modern journalism that makes people want to think and generate content for them, not answering peoples’ thoughts – in order not to face a publishing crisis. Having a monetizing model in place is the justification for a business model and an investment round. But it does not have to be innovative, it seems…

PS: Can we summarize… First, there were print magazines, then there online magazines and now we have blog magazines? A lot of questions… open to your word-of-mouth.

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