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Social Media Ad Revenue Will Never Match Search

H is for hype

Everyone is waiting for Facebook or MySpace to start turning out ad revenue like Google. It is not going happen.

Around this time last year, Microsoft (in)famously valued Facebook at $15 Billion, or $323 per user. This was at a time when their annual revenue was $0.73 cents per user, placing Facebook’s presumed retention rate at 100% and their average user life span right around 400 years. (Oops)

Expectations have cooled a bit since then, but not by much. And that’s bad news for social media hopefuls. Search-engine-like ad revenues are not on the horizon for the social networks for one reason: Search engine marketing ROI cannot be beat by a social network.

Yes, these web 2.0 giants have had exponential growth. Yes they have millions of eyeballs and lots of mindshare online. But you can’t assess the value of mindshare without thinking about what state all those minds are actually in.

People visiting Facebook or MySpace are there to connect with other people. A social networking website is itself an end. It’s not a means. People on these sites have reached their destination. They’ve no momentum going that will push them to leave by clicking on an ad. This leaves the momentum problem up to the advertiser to solve. No matter how you slice it, generating momentum is HARD. (It’s fundamental physics, and in this case the metaphor keeps on delivering.)

That’s what makes search engine marketing so powerful. People visiting a search engine have come there specifically to leave and find something else. They have momentum. They just need a shove and they’re off. Add in the fact that their search terms or keywords provide marketers a context for exactly what kind of shove is needed, and you end up with a marketing environment that may be impossible to beat when it comes to value for advertisers. The money will go to search engine marketing, because in the long run it’s a matter of ROI for advertisers.


PR Disaster: Ford Suing The Only People Who Actually Still Care About Ford Cars

Ford and Mustang Emblems

Ford and Mustang Emblems

Preface: Maybe this post should be title “PR Disaster Averted… by Brand-Management Jedi Scott Monty.” This story changed a lot in the few hours after it was published due to Ford rep Scott Monty. If you read through the updates you’ll see that he single-handedly put down an internet uprising by acting fast, talking to the lawyers to get the real story and then fully explaining Ford’s actual position on the subject…

Ford is suing multiple Ford enthusiast web sites. You may want to read that again. Ford is suing multiple Ford-enthusiast web sites. Ford Motor Company, who loses an average of $1,925 every time it sells a vehicle and who wants billions from the government to keep operating under a failed business model* is now suing people who run Ford vehicle fan sites.

Websites such as The Ranger Station, Michigan Mustang and Mustang Evolution** have received legal notices from Fords lawyers. Jalopnik reports:

In a recent letter to enthusiast web sites, Ford’s reportedly requiring the relinquishment of all Ford trademarks including domain names, banners, signs and merchandise as well as a restitution payment of $5,000 by December 19th.

This company doesn’t understanding anything about… well, anything.

People who run Ford-enthusiast websites should be Ford’s closest allies at this moment. The company is on the ropes. They’ve gone to the government hat-in-hand and been denied. This may be their final hour and they’re lashing out at the people they need the most: people who still believe in the company’s products. (Yes, they’re out there.) They should be cultivating these brand ambassadors, but no, they’d rather send the lawyers after their best, and maybe only, source of positive word-of-mouth.

This is so short-sighted it defies belief. That is, unless you know that in 2006 after posting a record $12.7 billion net loss Ford gave its new CEO Alan Mulally $28 million for four months on the job. (This is according to the company’s proxy statement filed with the Securities and Exchange Commission.) This man went to Washington in November with GM and Chrysler, collectively asking Congress to loan him $25 Billion of taxpayer money. When he was asked to take a symbolic salary cut to $1, not including stock options or bonuses where corporate-America CEOs make the majority of their money, he replied “I think I’m OK where I am.”(!?)

Well, pretty much no one else does, Alan. And now your company is suing the only people who do “think you’re OK where you are.”

What should Ford be doing with it’s fan sites? How about cultivating them? How about tapping into this community of folks passionate about your product…

  • Sponsor a barbecue and talk to these people about why they’re passionate about past Ford vehicles and apply that to future products. (The Ranger Station? Who loves Ford Rangers? Why?)
  • Host a track day at their proving grounds to strengthen the bond between the company and their most evangelistic customer base.
  • Reaching out to them with special promotional products you can only get through membership so they can increase their numbers.

Or jeez, maybe they could just not sue them into oblivion. That’s free.

The hubris runs high at Ford and it goes all the way to the top. President Bush said that giving this company a loan would be throwing good money after bad. I finally agree with him.

*Ford has stated that they’re not facing short-term liquidity issues like GM and Chrysler and they will not be seeking any sort of government funding – Link

**Mustang Evolution and Michigan Mustang have since been removed from the original Jalopnik Article as defendants; they are just reporting on the issue.

SAME-DAY UPDATE:

Good news! At least someone at Ford is paying attention to their base: about 30 minutes after this was posted, Scott Monty, Global Digital Communications Ford Motor Company, left a comment below. I’m pasting it into the body of the story, because I think it’s important to note that there are people at Ford who are “not pleased” as well.

I’m looking into this personally with our Chief Trademark Counsel. I’m not pleased that such action would be taken, but I’m trying to understand the full ramifications of the story.

I’ll update when I know more.

Scott Monty
Global Digital Communications
Ford Motor Company

He also has a good post on his blog about how Ford can pay more attention to their customers (instead of, say, suing them.) Thanks for chiming in, Scott, I’m looking forward to your update.

SAME-DAY UPDATE #2:

Scott has more info on The Ranger Station: They were selling counterfeit merchandise branded as Ford. Pulled from the comments:

Thanks for bringing this issue to our attention. Without question, Ford enthusiasts are extremely important to us. Their enthusiasm and loyalty are part of our heritage and part of what’s going to keep us moving forward.

Recently, there was an item posted stating that Ford was requesting TheRangerStation.com to turn over its URL to Ford and pay $5,000. We’d like the opportunity to share some additional facts that might make a difference in how you think about this situation.

In its communications, TheRangerStation.com stated that Ford was making them change the name of their site and pay $5,000. What was not mentioned was that TheRangerStation.com was selling counterfeit Ford-brand merchandise on the site. As a company, Ford has a responsibility to protect our brand and a responsibility to our licensees. We cannot let something like that pass. (The counterfeit goods have been removed from the website since TheRangerStation.com got the letter from Ford’s attorney.)

Please know that Ford takes no joy in pursuing enthusiast sites. Since there are a number of sites out there with Ford vehicles as part of their names or URLs, some people have asked if they should be concerned. Ford has been and continues to be willing to license its trademarks for use by enthusiast groups and enthusiast websites. Requesting a license is done easily by contacting tmgroup@ford.com. To request a license to produce or sell branded merchandise bearing Ford’s trademarks, contact branduse@ford.com.

In short, we are not asking for $5,000 and we would like TheRangerStation.com to keep the domain name. We simply encourage TheRangerStation.com to contact Ford to request a license to continue using the domain name.

We hope you will share this information with anyone who is concerned. We deeply appreciate our fans’ dedication and enthusiasm and want to be able to work together with all of our supporters to tell the Ford story.

Scott Monty
Global Digital Communications
Ford Motor Company

That seems about 100% more reasonable, Scott. Thanks for keeping us in the loop. if anyone wants to get more on this story and read a play-by-play from Scott as he got to the bottom of things, check it out over at Mustang Evolution.


A Checklist for Professionals Taking On Social Media: Don't Forget "Mutual Benefit"

Katya’s Non-Profit Marketing Blog had a killer post the other day titled 3 questions before plunging into new media. But it was missing something…

Here are three good questions to answer before you start going crazy with technology, from Alyce Myatt of Grantmakers in Film + Electronic Media.  I’m sharing them from the session I just blogged:

1.What are you trying to do?  (As opposed to what you are trying to say.  What are you trying to get a certain audience to do?)

2.How best can you make that change occur?  How can it best be done?  (Given your audience and where they hang out online or in the world, what technology or media will engage them best)?

3.What resources do you have at hand? (This will help you determine the right scope.)

I’m not sure we’re asking these questions enough before we get started.

I’m also concerned we’re not getting started.  Ramya just noted in this session that YouTube for nonprofits is the slowest growing vertical on the site.  Not enough nonprofits are involved, and too many just slap up a video without seeking to build a community or reaching out to popular YouTube users.

This is a great list of tips, but what’s not there? It’s the item missing from most professional social media plunges. “What is the mutual benefit for us and our audience?

So many companies diving into social media forget this important question. Professional social media marketers spend too much time on #1 and completely disregard this point I just brought up. But it’s probably the most important thing when it comes to engaging a market via social media.

So here’s the appended list of questions to ask before plunging into new media:

  1. What are you trying to do? (As opposed to what you are trying to say.  What are you trying to get a certain audience to do?)
  2. How best can you make that change occur? How can it best be done?  (Given your audience and where they hang out online or in the world, what technology or media will engage them best)
  3. What resources do you have at hand? (This will help you determine the right scope.)
  4. What is the mutual benefit? (How can you add value to the environment in which the conversation is happening? How does listening to your message directly benefit your audience? )

If you can’t answer this last question clearly, you’ll just end up amongst all the other noise your audience filters out to get to the (benefit) signal. The reason social media is social is because it’s permission-based, not push-based. With no mutual benefit for you and your audience, there will be no permission, or even worse: there will be, but it will be revoked because of backlash.

The image at the top of this post is Identically Named Places Connected(USA) by Neil Freeman and is available as a limited edition print from Next American City.


Amazon Takes The Frustration Out of Packaging

Amazon.com is taking on the frustration many internet shoppers feel, myself included, when they order an item online and then receive small box packed in a bigger box. It’s usually wasteful and serves no purpose. Almost every time I’ve ordered something online and had my box in a box show up, I’ve thought to myself, “Why can’t they just ship it to me in one box?”

Well, Amazon is launching a multi-year initiative working with manufacturers to develop ship-friendly packaging that items can be placed in as they come off the production line at the factory. But that’s not all, the frustration free packing materials are also designed for opening without the use of knives or other tools and are 100% recyclable… Ah, lazy environmentalism, this is just my style. Bravo Amazon.

Here’s an excerpt from the Amazon Frustration Free Packaging FAQ:

What’s the difference between Frustration-Free Packaging and traditional packaging?

The Frustration-Free Package (on the left) is recyclable and comes without excess packaging materials such as hard plastic clamshell casings, plastic bindings, and wire ties. It’s designed to be opened without the use of a box cutter or knife and will protect your product just as well as traditional packaging (on the right). Products with Frustration-Free Packaging can frequently be shipped in their own boxes, without an additional shipping box.

Also, not to completely rain on the green-design parade here, but Amazon recently shipped a “ready to ship” box… inside another “ready to ship” box. Oy!

Never-the-less the above announcement gives me hope.


QR Codes in America

Some of you may have noticed the bitmap in our sidebar. It’s a Quick Response (QR) Code. Normal bar codes are 1 dimensional: they store information horizontally. A QR Code stores information in 2 dimensions; horizontally and vertically.

A good way to think of a QR Code is as a real-world right-click. It’s a hard-link instead of a hyperlink. QR Codes that store addresses, contact information or URLs appear in magazines, on signs, buses, business cards or any other object that users might need information about. Our sidebar QR Code contains the url of the mobile version of the Voltage Blog. That way someone can just scan the QR Code with their phone instead of having to manually enter the url into their mobile browser.

The QR code is an open-source standard in Europe and Asia (In the sense that the specification of QR Code is disclosed and that the patent right owned by Denso Wave is not exercised.) In fact, Japanese Cell phone makers include QR readers in their phones by default. If you’re phone doesn’t have one, you can download one for free at any of these websites:

Most of the sites above also have QR code generators where you can create your own QR code for anything you want to tag. Like your blog…

[photo by CoCreatr]


The Voltage Executive Movie Poster Series

In the spirit of entertaining information design we bring you the Voltage Executive Movie Poster Series. These posters are envisioned adorning executive suites populated by the titans of Hollywood. They feature the top 3 grossing movies of all time, as of today. Doing away with all that emotional appeal and artistic expression kerfuffle and concentrating on what’s really important: the money.

Click the images for a high-res view. These are published under a Creative Commons Attribution-Noncommercial-Share Alike 3.0 License.

Read More…


iPhone 3G / iPod Touch Dock Build (DIY Instructions with Pictures)

The other day, Voltage got an iPod Touch (2nd generation) as a development machine for the office. We use it when building out our Mobile Safari sites for the iPhone / iPod Touch market. These new iPods / iPhone 3Gs don’t come with docks, just dock inserts. I didn’t want to pay $50 for a dock, and the DIY tutorials I could find online about building one were unsatisfactory. Truthfully I couldn’t even find one that used the packaging it came in, which is what I wanted. (Recycling and frugality and all that…)

So, here’s my iPhone 3G / iPod Touch Dock Build with lots of big pictures and detailed instructions. Enjoy… Read More…


A Graphic History of the Color Pink

The history fo the color pink.

Full Size Image ( 237KB GIF – 5000×800 )

No other color in modern history has carried such gravitas when it comes to associations with masculinity, femininity and politics. The color pink is a vessel for weighty subject material, indeed. Especially when you consider the fact that it has only been around in its proper form for less than 500 years. Who knows what the future for this light shade of red will hold, but this info graphic covers the last hundred years of politics and pop culture in all things pink.

This image is published by Voltage Creative under a Creative Commons Attribution-Noncommercial-Share Alike License.


The Oxford Comma

So… you’re a copywriter, you’ve got to make a list of three things and you know that commas are going to be involved. The question is how many? Well, that all depends on how you view the Oxford comma. Yes: you.

You see the greatest thing about The English Language is probably also the worst thing. It’s not like the romantic languages; there’s no ruling body of stuffy academics assigned to keep things in shape. Proper grammar in The English Language is determined by popular use or “consensus.” (That’s why text messaging ‘tweens have English professors running for their pitchforks and torches.) But I digress…

The serial comma (a.k.a. the Oxford or Harvard comma) is the comma used before a conjunction that comes before the last item in a list . Here’s two examples:

“Tom, Dick, and Harry” is written with the serial or Oxford Comma.

“Tom, Dick and Harry” is written without it.

They both mean the same thing and neither is wrong. How you feel about the two uses is a product of your location and education. Most US authorities think the Oxford Comma is proper.

So who knows how many commas to use in your list? No one. No one knows. It’s a matter of personal taste and, personally, I get the heebie jebbies when I run my eyes across a list without an Oxford Comma placed before the grammatical conjunction. You see, I was raised to believe in The Oxford Comma. Mrs. Shultz, my third grade teacher, struck fear into my heart over the issue. Which is why I can’t see doing it any other way. Can you? Because it’s an important distinction…

Who gives a **** about an Oxford comma?
I’ve seen those English dramas too
They’re cruel
So if there’s any other way
To spell the word
It’s fine with me, with me

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