Startup Addict Musings

Most of you are aware social advertising has had a tumultuous time in 2007 and 2008. Although not all that different than the overall economy at this point I guess. Probably the most well know social advertising is Facebook’s beacon which has gone through numerous iterations and revisions to walk the line between “user privacy” and “advertiser confidence” for brand exposure among sometimes less than tasteless user-generated content. Despite the difficulties of being Avant-garde social advertising is here to stay. Rich Ord from Webpronews has a great article with some convincing stats on why social networks and technologies continue to get gobbled up by old media. Webpro stated:

The top 25 social media networks delivered over 155 million unique visitors in Feb. 2008 with 70 percent coming from MySpace, Facebook and Classmates.com. Add in YouTube and Flickr and you get another 60 million totaling an estimated 215 million humans viewing social media monthly.

Now imagine the the growing number of concentrated vertical networks in industries like healthcare, financial, beauty, business etc…The numbers are much smaller but the potency of advertising is much greater. The value of a 20,000 member social network on facelifts is greater to an advertiser than a 75,000 member general network.

Tags: Social Advertising by Startup Addict

Lotame closed a multi-million dollar series A deal led by Battery Ventures. Lotame is a social media aggregator that focuses exclusively on helping advertisers and publishers monetize the ad space/inventory available on social networks. Lotame keeps the consumer interests at heart as well. A statement from the press release gives a better summary:

Lotame is a company that focuses on providing the most advanced revenue solutions exclusively within social media. It aggregates intelligence across multiple social networking sites, which allows advertisers to build the most targeted and customizable audiences, and gives publishers the ability to monetize their inventory more effectively to garner higher streams of revenue.

Lotame is challenging the status quo online advertising networks (ironic, we use to say that about Madison Ave when referring to online advertising networks). This is very similar in concept to Facebook’s Beacon that serves advertising based on consumer interests and privacy tolerance. The key difference from Beacon is Lotame is not restricted to the Facebook community, rather it uses a cutting edge crowd-control technology to gather trends, interests and likes among numerous disparate social networks and utilizes the data to benefit the three stakeholders: Advertisers, Publishers and Consumers.

This could be a win-win if Lorame’s technology can place relevant audiences around user-generated content, you get the new triple play– advertisers (target the audience), Publishers (monetizing the audience) and consumers (willingly participate as the audience).

Satya Patel from Battery Ventures has some great statistics about the brand stickiness of social media and user-generated content for further discussion.

This space is gaining tremendous momentum in 2008 as discussed in previous posts.

Tags: Social Advertising by Startup Addict

According toemarketer

video and social networks are among the hottest new ad formats today, they will account for $2.9 billion, or about 10% of total online advertising dollars projected for 2008.

The total online media buy or ad spending accounts for $27.5 billion in 2008 with growth reaching $42 billion by 2011. If the same growth percentage held ground that would equal almost $11 billion for video and social advertising spending by 2011.

The difficultly of the new social web is tracking it. Coming up with better metrics in itself could be a great opportunity for startups. The trend will continue and the growth inevitable, a startup could benefit tremendously by arming businesses with better metrics, tracking and usability reports. The traditional tracking of page views and unique visitor is not enough in a world of social networks, RSS,instant messaging, widgets, cross platform pulling and pushing of data. Brand exposure becomes paramount when everything is repurposed. Emarketer also sited:

As Adam Gerber of Quantcast has said, in the future, online media buying will be about “the re-aggregation of a fragmented audience that’s actually watching different things.”

Plenty of companies are tracking clickstream, but with unhappy privacy results from users. The key is to balance privacy, user and advertiser relationships so it becomes a win-win. I think Facebook’s beacon will continue to take the brunt of the work and craft a model for social networks to follow. Let me know your thoughts on social advertising today and where you think it is headed.

Tags: Social Advertising by Startup Addict

Facebook privacy woes are steadily becoming an uphill battle with much more at stake than activist groups like moveon.org. Facebook’s Beacon and web-tracking tactics continue to have far too many unknowns and is starting to cost Facebook flag-ship clients like Coca-Cola. I have no doubt that Facebook will eventually get the privacy concerns addressed especially with 55 million users at stake. FB is in a very delicate stage as it pioneers social advertising.

Tags: Social Advertising by Startup Addict

Myspace, Facebook and Google’s opensocial have all made major announcements regarding a social evolution for advertising. Myspace and Facebook have announced new advertising systems that are integrated in the social networks. Facebook has more than 60 major companies already signed up for “user advertising” from Blockbuster to Verizon. Facebook’s advertising model does away with the old push model of placing ads in the user’s face and hope for the best. FB’s system allows a company like Sony Pictures to create a Facebook page and have uses interact with the page and message that are pushed out on the network to receptive or targeted users. User’s can then hold the company accountable by leaving reviews or spreading the message to friends etc. enabling viral growth of the ad. Truly an interesting concept but way to early to determine effectiveness and/or hot spots in privacy.

Discussions of a Do Not Track List continue as online advertising spending continues to surge. Behavioral advertising is in the infancy and a certain level of checks and balances need to be put in place to properly protect privacy. It’s all about free will…as long as a user knows about it or has the option to opt out, life is good. Anne Zelenk over at GigOm has some interesting comments regarding becoming Adfriends.

Check out my Facebook source at computerworld.

Tags: Social Advertising by Startup Addict