According to the Newspaper Association of America and referenced over at Editor&Publisher and TechCrunch,  Newspaper revenues fell 9.4% to $42 billion in the past year compared to 2006 in the US.  For reference, online ad revenues grew 19% to $3.2 billion over 2006.  What does this signal?  Well, for starters, the looming US recession has and will continue to have a definite impact on advertising revenues, as one of the first things to be cut during tight times are marketing budgets.  But is there more to it?

It’s no secret that traditional print media like newspapers are falling on hard times.  Marketing executives are being given more options with where to spend their marketing dollars, and while I don’t believe that Internet ad revenues have totally lived up to their potential, innovations in the online space are arriving that will present credible options for said Marketing execs when they determine how to optimally allocate their ad budgets.

First of all, the static ad banner on the side of every web page is starting to be replaced with interactive and engaging multimedia.  Online video ads and flash-based multimedia are becoming more and more common, attracting the user’s attention and creating a much more solid impression over and above the typical static classmates.com banner you traditionally see.

But more importantly, online ads are beginning to take advantage of demographics and eventually will leverage individual user preferences, as I alluded to earlier this month, to provide much more relevant and contextual ads that are targeted to every individual.

Finally, combine these new contextual online ads with a solid metrics and reporting system that can track every user’s interaction with the ad, and you can create an objective sales presentation to the aforementioned Marketing executive, giving him or her direct insight into how each penny spent online translates into brand impressions/interactions, and eventually, sales.  This gives the online ad realm a tremendous advantage over traditional media, because the feedback reporting mechanisms can objectively indicate the success rate of an online marketing campaign .  A complete return-on-investment can be calculated along with with every reportable stat you can imagine, so that the Marketing exec can easily gauge how to optimally allocate their online marketing spending.

Newspaper and traditional media are a one-way street.  You can get indirect feedback based on general sales lift, but nothing near what can be done through online metrics.  This gives online advertising the advantage, and with innovations still to come to provide even more creative as well as socially relevant ads to users, it appears as though online advertising is destined for continued growth.

On another note - Duncan Riley at TechCrunch wrote an interesting post last November about the need for consolidation in the Newspaper industry to improve their chances of survival in the face of increased competition for advertising dollars.

Tags: Advertising, Facebook, Marketing by Tim McKillican
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One of the traditional kingpins of mass marketing - the Television - is slowly beginning to see the light shining from the modern advertising revolution. The 6 big cable companies in the US are teaming up to develop a customized and targeted ad system, paving the way for potentially lucrative advertising deals that can target ads based on a viewer’s viewing habits and demographics, giving the viewer a much more relevant and contextual ad viewing experience.

Now how does this relate to Facebook? Well, the goal of any advertising platform is to produce relevant ads that are in line with each individual’s interests and demographics. It’s in the advertiser’s best interest to maximize the relevance of the ad for each user, as forcing a 25-year-old male bachelor to watch a commercial on teen fashion products is pretty damn inefficient.

But in order to optimize efficiency, the more information that is available about the user, the more the ad can be targeted to his or her interests. And who is best positioned to have a complete view into the details surrounding every individual’s life? Yes - Facebook.

Social networks are unique in that users frequently volunteer many details about their day-to-day activities and social connections, not to mention they provide detailed demographic information (education, age, political views, relationship status, etc.). Whoever owns this data has the ability to leverage it to build a very powerful advertising system. I’d imagine Facebook will first use this data to build an ad platform internal to Facebook - but there’s nothing stopping them from then going one step further to license this information to 3rd parties, whether it be CNN.com or a new TV-advertising platform (I know, I know, that privacy point again). Google’s grip on contextually-based online advertising is about to face another dimension in the advertising wars. And don’t you think Google has realized this disturbing fact?

Now to address the privacy police. Of course Facebook, Google, and anyone else who owns private customer information would not dare to release it without the user’s consent. No one is disputing that fact. But as with any market-driven solution - Facebook et al. must will come up with an incentive so that it’s in the user’s best interest to make their demographic information available (individual identities will remain private, of course, so this scenario is quite feasible). Those who choose to remain anonymous can do so, but their personal experience will be limited, and most will end up consenting so as not to disrupt their experience.

This mutually beneficial relationship will drive unmatched efficiencies in modern advertising. You’re a 25-year-old male who just bought a new pair of skis? Let me show you an ad for Whistler promoting the powdered ski slopes and the happening party scene. Swap the 25-year-old to a 55-year-old and we’ll instead contrast the powdered slopes with some fancy dining and relaxing amenities. This will all be done automatically and will drive ad relevance and positioning to new extremes.

It’s an exciting time to be a part of the modern advertising revolution.

Tags: Advertising, Facebook, Google, Marketing, Social Network by Tim McKillican
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Late last year, Federated Media, one of the first blogosphere advertising publishers, announced a big move into Facebook. The centerpiece of the announcement was the integration of the Hewlett-Packard brand to the Graffiti application. This turned out to be a proof-of-concept for Facebook marketing, with HP’s brand and printer offerings integrated into the application workflow itself. For example, after a user draws a picture on Graffiti, users are shown Hewlett Packard’s branded “Print Button”, and taken to the HP website to print the images.

Along with other moves into what they call “conversational marketing”, FM has shown an aptitude for looking forward in a market in the midst of transformation. Their recent move to secure a second round of funding is no doubt a response to the large amount secured by Glam Media, and the precursor to a new era for online advertising, where companies will vie for the use of social networks’ targeted advertising to present their products to their precise target demographic.

While the many competing technologies (OpenSocial, Facebook, OpenID) that will be used to tie a user’s preferences and profile to an advertisement are still developing, demand will steadily rise. With attractive Facebook marketing strategies, like FinancialTimes’ recent campaign, sprouting up, more and more companies are going to question whether their existing advertising budget, locked in mass-market print & television ads, is properly allocated. And if they start looking to Social Networks, companies like Glam Media and FM stand to pioneer a new market.

Tags: Advertising, Facebook, Marketing, Social Network by Neil
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I, like thousands of other Facebook developers, have come to the realization that nothing is going to happen overnight. Facebook ads are not going to pour from the sky raining cash on applications far and wide. The money just isn’t there yet.And this post is in response to the discontent and negativity pervading the blogosphere upon this realization.

Just like when eBay, Yahoo and Amazon started their ascent, things are unpredictable. People aren’t really going to bite until there is a proven use and revenue stream for social networking applications. Why advertise on Facebook when click through rates are sub par? Why advertise when you’ll be featured on a small banner alongside “John’s Pants Corporation”. There’s no glamour and in fact at this point it could damage your brand. Blah.

Can revenue be created? At this point, the money is still in the air, but you can secure yourself a future in one simple way. By adding value for your user. I had a short discussion with Jamal Ashraf, founder of 12-million Facebook App-install powerhouse Esgut.com, and among other things, he pointed out that the economy of Facebook is yet to be decided. Every aspect of Facebook, in fact, is under transformation. The only consistency is the number of users, and the consistent amount of time per day (~20 minutes) that people spend connecting. There are 50 million+ users, and if you provide them with value, they will engage. The focus needs to be on something that will enrich their lives in some sort of way.

Why bother if there’s no money? Because $0.00 is the future of business. Large corporations and basement-bound two-man development teams are on the same playing level. Whoever can generate the most creative way to integrate useful products into popular applications will be the winner: Companies that market to and understand social networks and application developers who attract users.

It’s not easy, but seeing the creative ways in which Graffiti plans to fuse with Hewlett-Packard, I think we can all agree that the potential is there. An HP sponsored comment board and the HP sponsored “What Do You Have to Say?” segment. IMHO, that’s integration and positive branding in the social networking world.

Reading the article, we can see that Federated Media also plans to get involved with the massively popular “Addicted to…” series of applications, which all focus on specific TV series or cult followings.

In my opinion, if you want to win out here, stop crying about low click through rates, and start pounding on vendor’s doors, promising them a fantastic way to reach a completely new market.

Tags: Advertising, Facebook, Marketing, Social Network by Neil
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