Blind Five Year Old

Does TweetSense make sense? And more importantly would it make cents?

Twits have been up in arms with the introduction of Twitter based ad networks like twitAD and Magpie. Magpie in particular drew a lot of coverage with notables like Mark ‘Rizzn’ Hopkins at Mashable and Michael Arrington at TechCrunch weighing in on the topic. Many claimed that it was outright spam that had no place on Twitter. Lots of huffing and stamping of feet. They’d unfollow anyone they saw using such a service!

I’m not opposed to this type of monetization if it’s implemented well.

The fact is, are you really going to notice? If you’re that attached to Twitter you probably use the service quite a bit. You follow a lot of people. Many are very active. The odds that you’re going to see an advertising tweet are quite low and if you did it would be gone from your existence in a matter of minutes.

Advertising tweets would be very ephemeral.

So, that begs the question: will these Twitter based ad networks be effective? Will people click on them enough to make it a viable advertising platform? They will if it’s done right.

Spare me the ‘nobody clicks on those things’ type of indignation. There’s this company called Google. They have these products called AdWords and AdSense. Both seem to be doing just fine even though many say they’ve never clicked on either type of ad unit.

The implementation will be paramount. They’ll fail if the ads become too frequent, overwhelming tweet streams for users. Essentially, if the noise drowns out the signal, it will fail. They’ll also fail if the ad content isn’t relevant. Viagra ad tweets mixed in with a discussion about Motrin Moms isn’t going fly.

The frequency and context of advertising tweets are critical to the success of this type of ad network. So, who is in the best position to pull this off?

Twitter!

Twitter knows your tweet velocity. Twitter has the ability to create dynamic tags for users based on keyword frequency analysis. As such, it is best placed to deliver timely and relevant tweets to their users. By doing so it would also remove the potential abuse of the service by those seeking personal, monetary gain.

Block the third party ad networks! With Twitter at the controls, the odds of success (for both users, advertisers and Twitter) go up, way up.

Twitter does need a revenue model. So why not TweetSense?

The other day I updated my StumbleUpon toolbar (well, I was essentially forced to) and immediately couldn’t Stumble posts from this blog or my Used Books Blog. Each time I tried my Stumble just would not go through, stalling at a blank white box where the review and tagging takes place. I tried numerous times on a couple different browsers. Nothing worked.

I assumed that something had gone awry with the new toolbar. I even posted a message on FriendFeed calling eBay lame. But you know the old saying about assuming, right?

I sent feedback to StumbleUpon about my problem and got a prompt reply as follows.

Hello,

Thanks for writing in.

After reviewing your account history, it appears
that you’ve repeatedly submitted content from one
or more sites in particular.

Our site software detects behavior like this to
prevent the unauthorized use of StumbleUpon to
promote a specific Web site, product or service.

This limit will likely remain in place until you
use the StumbleUpon Toolbar more frequently to
rate, review and discover Web sites that can
shared with other members.

If you’re interested in using StumbleUpon to
advertise a Web site, please look into our
Advertising program:
http://www.stumbleupon.com/ads

If you have any other questions, please review our
Terms of Service and Community Rules:

http://www.stumbleupon.com/terms/
http://www.stumbleupon.com/rules.html

Thanks for your feedback,

Oops. I admit, I’ve only been Stumbling my own sites lately. However, I think they’re pretty good so I don’t see anything too wrong with that. Also, I’m pretty transparent. I don’t have a Stumble army nor do I have multiple profiles so I can distribute my Stumbles across accounts and dodge the software.

But I get it and I’m not really complaining. It’s not what StumbleUpon is really supposed to be about. And I respect them for protecting the product and StumbleUpon business model. It also got me to Stumble again and I discovered some interesting sites and images. So … thanks for that.

My one nit would be that I had to contact support to get this information. Instead of presenting the white box of frustration I suggest that StumbleUpon simply insert the text I received into that area. Not only would I have immediately understood what was going on and not throw invective into the htmlosphere but StumbleUpon would have saved a bit of money on customer support.

Forgive me StumbleUpon for I have sinned. My penance? Stumble.

Facebook is changing as it seeks to find a sustainable revenue model. Over the last year it seems clear that Facebook is trying to make itself more relevant and attractive to brands before the sun sets on the buzz parade.

Facebook Embraces Search

Most recently Facebook added fan links to public pages, creating a tremendous density of internal links to brand and product pages. The likely goal of this change is to boost the visibility of brand pages in search results. The attention to SEO and search is an interesting change for the proponents of the walled garden.

If it works, Facebook pages could take up valuable shelf space on search engine results pages (SERPs). Brands and marketers would be wise to take advantage and spend a bit more time on a Facebook strategy aimed at acquiring fans.

And lets remember that Facebook recently integrated Microsoft Live Search into their standard search interface. If Facebook continues to integrate and highlight search, it could provide a substantial revenue stream as well as help Microsoft capture more of the search market.

Facebook Disses Apps

The major redesign implemented this year pushed a substantial number of applications out of the limelight. The redesign aimed to leverage life streaming and encourage user interaction not application interaction.

The good folks at allfacebook conducted a study that shows the impact the Facebook redesign had on applications. The more popular applications were essentially unchanged but there was a 13% to 15% drop in active users when you look beyond the top 50.

Social Advertising In Trouble

The rush to search and away from applications can be seen in the context of an anemic advertising environment. Social media advertising is quickly getting a bad reputation. Ted McConnell, general manager-interactive marketing and innovation at Procter & Gamble Co. had this to say at a November 15 forum on digital media.

What in heaven’s name made you think you could monetize the real estate in which somebody is breaking up with their girlfriend?

and …

I really don’t want to buy any more banner ads on Facebook.

The numbers don’t look good either. CPM rates on social networks are some of, if not the, lowest around. And the effectiveness, from a click measurement perspective, of these ads aren’t good. Allen Stern is conducting a Facebook ad test for his new start-up, CloudContacts. Recent tweets on performance look dismal and campaign results should be made public this week.

In the interim there are other benchmarks to review. Once again, allfacebook has done an interesting comparison of Facebook ads versus Google AdWords. The end result was a cost per lead of $0.72 using Google and $1.83 using Facebook.

Now, the comparison isn’t exactly fair since you’re matching passive (though well targeted) search versus active search. Clearly active search is far more valuable … which leads us back to Facebook’s recent focus on search. Brands understand search. They can easily measure search. Brands will spend on search.

Facebook has a huge audience but is running out of time and chances to translate that into dollars and advertising confidence.

Are banner ads dying?

I remember people shouting about this during the Web 1.0 hey day and there have been plenty of folks who have since cried wolf on the topic. Each time banner ads come back from the proverbial dead, walking the Internet with zombie like efficiency. Is this time any different?

Maybe.

More and more research indicates that young users are not responding to banner advertising. But can we blame them? We’re entering an era in which a whole generation has grown up with the Internet. At an increasingly young age children begin to surf the Internet. Yet, the sites they visit often have far less clutter and advertising than the traditional site.

Are we creating a generation of banner intolerant Internet users?

Those of us, myself included, who came to the Internet as young adults have been exposed to a higher degree of ad clutter from the start. We’re used to it. Not only that, our context for approaching the Internet was shaped through television. Television conditioned us to expect advertising to be part of the equation.

Yet, again, this is not the case for a new generation that has grown up with TiVo and other DVR products. These services have undermined normal TV watching patterns and preconceptions. Every day more of us are conditioned to simply hit the 30 second skip button when presented with a commercial. (As an aside, thank you to Fringe for telling me how many seconds the break is going to be. That’s very handy!)

These habits are particularly important since new research indicates that the heaviest TV viewers are also the heaviest Internet users.

Are social networks part of the problem?

Yes.

Social networking is one of (if not the) largest activity for the young. Sites like Piczo, MySpace and Facebook, among others, are like the middle school and high school of the Internet. These sites are, at their core, utilitarian in nature. They’re about communicating. They’re about making ‘friends’.

Some of them do use banner ads, but more and more evidence shows a growing banner blindness on these sites. I suspect the high number of visits (for a very specific purpose) exacerbates banner blindness on social networks.

If you use CPM rates as a proxy for effectiveness then it becomes obvious that social networks are in distress.

Can we blame Twitter?

Yes.

Twitter and even my current addiction, FriendFeed, contribute to the problem by not using banner ads. They are but one more site, one more application, one more widget that is providing a valued service for … nothing. Clearly advertising isn’t the only way to monetize these sites, but by not implementing any monetization strategy they send a signal to users that they can get something for nothing.

The ‘something for nothing’ mentality makes us less tolerant of advertising. I can surf the Internet with Firefox, supercharge my blog with WordPress plugins and use Google Analytics to track metrics for a slew of client sites all … for not one penny.

This isn’t a long term problem. A type of Internet Darwinism will take place where those without a true business (aka revenue) model will either fail or try to implement some sort of real revenue strategy. In most instances, that will be advertising or subscriptions.

Will it be advertising or subscriptions?

Just before the collapse of Web 1.0, I worked at Bluelight.com, the online version of Kmart. One of their major initiatives was an ad supported free ISP. We had millions of users! The thing is, it didn’t really work. They wound up converting it to a subscription based service which was ultimately acquired by United Online

Today, we’re conditioning a generation to ignore banner and display advertising. The cat is out of the bag. The genie is out of the bottle. So even if we want to return to it as a revenue stream it is becoming an ever weaker medium. And we only have ourselves to blame.

So perhaps subscription based sites, or networks are the wave of the future. Would you pay for Twitter?

Will banner ads die?

Of course not. Banners will never completely die, but a few things will have to happen for them to rise again to feast on the glorious eyeballs of Internet users.

They’ll need to be more engaging and use rich media in more appropriate ways. More importantly, the industry will need to measure banner ads not by CTR or traditional click-based ROI but by brand measurement metrics. There are a few companies who provide this service, though my favorite is Vizu Ad Catalyst. (Disclosure: I worked at Vizu for a short time but stand by the fact they are leaders in this new field.)

The current economic climate has forced many analysts to adjust their online advertising industry forecasts, some of them twice. Yet, I’m unsure any of them are accounting for this new generation of Internet users who are blind to banners at best and intolerant of them at worst.