Wednesday, 18 June 2008

Fink about the money!

I was over at Zeus Jones blog a few days ago, and Adrian’s post on monetization of social media got me thinking about digital again, and whereas I usually fire off a long comment when that happens, I reckon it’s time to write some thoughts down over here.

Firstly I can’t bear that word monetization. It’s the English part of me I guess, but it just feels crass that everything has to be monetized. I’m reminded of this each time I watch Fox News, because all the bullying of any (pinko Commie bastard) liberal guests they bring on to bait is won by their vulgar but implicit idea that if profit is not made then its not of worth. This is the point where I think the United States has gone slowly wrong in the last 50 years because the values it was built on are not about profit to the detriment of all else. OK I got that off my chest. Back to making money! We’ve also all got bills to pay. The environment of course being the biggest!

Yes of course there should be some sort of transactional value exchange model between social media platform providers and the people who frequent them. It does however feel like the old media model of huge profits and mass market broadcasting persuasive powers has disintegrated.

Micro-transactions work very well here in China for the most popular platform QQ using a virtual currency that is paid for in hard cash. (Kind of like a Second Life model) but this is where I like to think social media should embrace a number of revenue streams and think about revenue diversity because it’s obvious (to me) that good old fashioned bread and butter banner advertising works very effectively in Facebook. I generally love the ad to the left of their pages because they are eerily effective and are mainly China location based services making them highly relevant. In short they work. I like them even.

So we’ve got micro-transactions, and then traditional banner advertising. I like to call this distractive (contextual) advertising because if it’s good enough, then it distracts much like print advertising does today, interruptive advertising which is generally disliked but is based on the commercial break and includes pre-roll advertising as well as the hated pop up and even ideas such as “get this digital mobile phone for free as long as we can give you x number of ads a month”

I also think there are more innovative ideas that could be considered such as tiered or rewarded internet activity. Adrian has done a fine post about social media but as he correctly points out most people are hanging out on the net to get away from dull content and patronizing marketing communications. However the tiered subscription or rewarded activity is based on a model that really needs to embrace some ideas that Adam Crowe was, I think, the first to bring my attention to. The notion of data portability. The information accumulated by internet usage should belong to the customer not us.

If we (or Google or the ISPs) do the unthinkable and give our potential customers their own internet usage data to trade with us we then are truly opening up ideas loosely called the free market economy. It’s probably more American/United States than apple pie and fanny packs put together now that I think of it. This then opens up our potential customers to benefit from their data portability in the best way possible. The provider they choose to allow receipt of marketing communications from. It’s a bit like a bazaar. If you don’t like the voice of the trader or the goods they are selling, you can stay clear of them. Imagine a world where in return for premium content we permitted ourselves to exposure of specific marketing models. If the advertising sucks we make a decision about whether we can get by with lower value advertising-free content or not at all.

Either way I think we are moving into a new era of marketing communications because as an advocate of 'the medium is the message' it's clear to me that I never got ‘spammed’ while watching a commercial in a movie theatre, direct mail is lower down the food chain because its so much more cheaper to indiscriminately ‘target’ (using the language of old) with geography or basic demographics acting effectively to the point where a 3% response rate still makes it worthwhile.

But here’s the context. The internet is both a place where I can watch a Cannes winning Youtube clip and also open up my mail to be offered a larger penis or a fake Rolex watch. That never happens on TV or even direct mail and so the value of the internet is diminished by this activity. There are innovative ways around this if advertisers want to raise the perceived value for a short while. Like for example if I was P&G I would buy all the available online advertising space within a specific digital media aperture. Maybe the whole of the NYT or The Guardian for a few days. Just wipe out every ad in the online editions and put one sponsor message on there, advertising some spot removing clean or dandruff clearing shampoo. Something relevant seems appropriate!

There are ways to be creative on the internet, although finding the clients bold enough to do stuff like this is tough. Anyway in principle the point I want to end on is that it's not us who should be targeting the customers, it’s the customers who should be targeting us.

This is after all the 21st century and not the 20th. We had two world wars in that one.

Update: Adam links to this which is just the sort of example I'm talking about with P&G. i.e. buying space that would normally be filled with ads.