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March 28, 2024

Avenue A | Razorfish Deal with Pluck Brings New Twist to Social Net Ad Initiatives

Important Details: Social networking has grabbed global attention, as tens of millions of web users have flocked to – and spend lots of time on – such sites as Facebook, MySpace, Bebo, and many smaller ones. The revenue value of social networking has been, at best, a work in progress. MySpace’s early ad deal with Google fueled hopes that all those page views and duration could be well monetized. Social networking revenue, though, has been uneven. It’s taken time to set standard ad units and metrics for social net advertising, but that process is now well underway. The display of ads has not been completely figured out either; witness Facebook’s recent announcement that it thinks it is now getting that right. More seriously, marketers have been hesitant to embrace social net content, given the wide disparity in its value and its credibility. General Motors is careful about associating with the general mayhem of user-gen sites.

Now, there are signs marketers may be learning how to harness the burgeoning opportunity offered by engaged media:

  • Avenue A | Razorfish, a Microsoft-owned and major digital marketing company, and Pluck, a leader in enabling social media for publishers and major brands, announced that the two companies have signed an agreement to develop and market the industry’s first offering to inject social media features like customer comments and user-generated content into mainstream digital ads. The move is an interesting twist: instead of figuring out how to place ads next to social content on various sites, this initiative takes the impressive Pluck SiteLife suite and tests allowing readers to use them within a commercial space. The beta-named AdLife product could, says Avenue A, allow a film studio to promote a movie release through a banner ad that lets consumers review the movie by clicking on the ad, as well as read feedback from other moviegoers – without ever leaving the point of display for the advertisement.
  • In its recent quarterly earnings reports, News Corp COO Peter Chernin suggested that MySpace was finding ways to satisfy marketers: He noted a “dramatic” increase in branded display advertising, with several categories up over 100% year over year. Other points: hyper-targeted campaigns are seeing doubled CPMs and advertisers are increasingly interested in branding campaigns for the MySpace.com homepage.
  • Earlier this month at an Interactive Advertising Bureau (IAB) session in Manchester, UK, Microsoft’s Alex Marks explained what the company was learning about what kind of social net advertising worked – and what didn’t. He likened an online social community to a small village whose inhabitants are comfortable with word of mouth and personal recommendations, as compared to city dwellers’ acceptance of “big signs and neon lights.” Marketers, he said, must adjust their messaging accordingly.
  • The Obama campaign is leading the political ad space into social networking, investing ad money in such social networks as BlackPlanet.com and Glee.com, a website targeted to the GLBT community.

Implications: Social networking is an enigma, especially to traditional publishers. They edge into it, weighing the professionalism of the content, their liability in publishing it, and how much revenue it may possibly earn them. Outsell believes that mastering this new content type is essential. Traditional content is waning as publishers cut back on staffs. New content is being produced in new ways. For publishers with uneven knowledge, the US Interactive Advertising Bureau’s user-gen report is a good primer, and points out that social networking produced more than $1 billion in advertising in the US in 2007.

Certainly, much social networking is just chatter. It’s the web amplifying conversations that happen every day on the street as friends, co-workers, and associates – communities of interest – talk to each other on the way to and from Starbucks. As with the blogosphere generally, though, there’s a higher end of social networking: some conversations are more interesting, and more valuable, than others. Enabling useful and smart social communication is a skill to be learned, mastered, and then monetized. There are positive signs that monetization will come, and this is but one revolution where it’s better to be on the leading, rather than the trailing, edge.