Digital Media

Rebecca Lieb's picture

Online Targeting: Perhaps Privacy Isn't the Problem

Some “facts” you might not know about me, particularly if you’re going by the picture on the upper right hand side of this page.

I’m a married male head of household who speaks Spanish. I have two teenage children and a high school diploma.  I’m retired. My income is below $50,000. I’ve recently purchased luxury cars and cruises. I have only one interest: sports. I’m in-market for every type of car you can think of: economy, compact, luxury sedan, full-size SUV and a motorcycle!

Other purchases I’m considering: magazines, theme park tickets, auto parts and accessories, and men’s clothing.

That, at least, is who a major real-time bidding platform thinks I am, based on several years of browsing history.

I have never wiped my cookies.

Here are the more factual facts: I’m a single, childless, working woman who has owned only one vehicle (over two decades ago, not in the U.S.). I haven’t watched or participated in a sport event since gym ceased to be mandatory. Cruises? Once, in 1983. Last theme park visit: 1971. I don’t speak Spanish (but do know French and German), and possess a graduate degree.

With zero effort on my part and many years of data, my online profile is even more wrong than Jeffrey Rosen’s two deliberately falsified online identities, created for a feature in Sunday’s New York Times Magazine

The piece is an indictment of real time bidding (which the author occasionally conflates with retargeting, which is something completely different) and, by extension, online targeting. While Rosen mentions, almost in passing, that this (erroneous) collected data is anonymous, he nevertheless sounds the alarm about “obvious privacy concerns” because “computers can link our digital profiles with our real identities so precisely that it will soon be hard to claim that the profiles are anonymous in any meaningful sense.” Big data, he maintains, will effectively provide advertisers with your DNA map once they triangulate your email font with your shirt color and driving habits.

Do Not Track aside, this despite the fact that virtually everything – everything – in my BlueKai profile is false, excepting the fact that I do live in the New York State/Northern New Jersey area – which hardly takes a bloodhound to figure out.

In other words, there’s indeed a problem with digital advertising. If ad platforms aren’t delivering the targeting that advertisers are paying for, the emperor has no clothes.

More perplexing than Rosen’s indictment of real-time platforms for violating privacy (while, apparently, not even knowing such basics as the gender of the otherwise anonymous person whose privacy they’re purportedly violating), he goes on to lament the erosion, of all things, of our individuality as a result of receiving targeted ads.

It’s a strange logic:

‘“You might find that people who have a luxury car tend to have a high propensity to buy some kind of biking gear, so a person who expresses a high preference for luxury cars might be a good target for biking gear, even though they don’t yet bike.” But this leaves no possibility for individuality, eccentricity or the possibility of developing tastes and preferences that differ from those of people you superficially resemble.”

Waitaminnit. Who suffers if I’m served with an ad for a bike because it’s falsely assumed I own a luxury car? Everyone on the equation but me is negatively impacted: the advertiser pays for a useless impression; the bidding platform’s credibility is damaged; and the publisher, already getting lower rates for running this type of advertising, risks being viewed as an ineffective medium by both the vendor and the advertiser.

Me? I just ignore the ad, like the other 80 percent of people who use the web (Pew).

Most difficult of all to comprehend are the author’s claims that somehow online targeting will lead to a level of personalization that will erode “common culture” and “shared reality.”

Global culture has become all too common, in the most literal sense of that word. The internet offers opportunities to discover new things, to plunge into obscure fields of interest, and to find others who share uncommon passions. It’s this alternative to “shared reality” that inspired me to leave a career in television for this brave new world – a place where I could find others who share my often offbeat interests (Sports? As if.  Japanese cinema? Absolutely!).

Finally, the Grey Lady ignores the most salient fact of all. Most of the web, like almost every other media channel, is made possible by advertising – a fact not once mentioned in this story made possible by advertising

Rebecca Lieb's picture

Pay to Play: Native Advertising Shakes Up Publishing Models

here are a ridiculous number of names for it: native advertising, custom content, sponsored content, branded content, content marketing, collaborative content. Or you can kick it old skool and go with plain, old fashioned “advertorial.”

Whatever you call it, getting brand-generated content onto the pages of “real” publishing properties is becoming a real business, albeit in many guises. It’s all part of rapid convergence of paid, owned and earned media.

New York Times-owned Boston.com is the latest in a fairly long line of publishers to sell sponsored blog posts under the rubric “Insights.” “Our advertisers, and particularly our smaller advertisers, have been creating their own content. They need to get it exposed. As much as 50% of small businesses are blogging. The one thing they want is to have people see their material,” as Boston.com’s executive director-business development explained it to Ad Age.

Boston.com aligns its advertisers’ posts in the appropriate editorial section, e.g. lifestyle or real estate.

Boston.com has joined a growing list of sites offering some form or another of custom content to advertisers, including Forbes, The Atlantic, BuzzFeed and Gawker Media. Gawker is so high on the model that they maintain a list of top-performing sponsored posts to inspire and lure advertisers.

Content that morphs into ad units takes on other forms as well. inPowered (formerly Netshelter) is a new advertising product that turns “expert” content into a ad unit. Say you’re Samsung, and Engadget just ran a rave review of your latest smartphone, for example. inPowered turns that review into an ad that can be run on other publishers’ sites.

Arguably, another model of advertorial are those publishers whose business model makes them increasingly reliant on content contributed by outside experts, rather than their own editorial staff. What was long a trade publishing model is now commonplace on mainstream B2B sites, from content marketing plays such as American Express’ OPEN Forum, web pure-plays such as the Huffington Post, to established editorial brands, most notably Forbes. While arguably this isn’t advertorial because the contributors don’t pay the publisher to contribute (and in some cases are compensated, albeit never handsomely), the reality is this, too, is a form of content marketing. Contributors are selling their companies, professional services, domain expertise and personal brands.

“Native advertising” takes many guises, and an equal number of pricing models. Some publishers charges basic CPM or CPC rates. Others calculate costs based on positioning on the page, maintaining a “featured” position over a predetermined period of time, as well as additional and often premium pricing for adjacent ad units from the brand contributing the content (think brand “surround sound”). Sometimes the publisher will help create the content (think Buzzfeed), more often it’s incumbent on the advertiser or their agency both to conceive of as well as to execute the creative.

The real challenge of this type of advertising is an entire set of new standards and practices publishers must define as the traditionally inviolable wall between editorial and publishing becomes increasingly porous and permeable. It’s not as if sponsored, branded and contributed content shouldn’t happen. It should, but within limits and parameters it’s incumbent on the publisher for setting and enforcing to maintain and defend brand credibility while at the same time exploring new models.

Some publishers are do better at this than others. Before the ad or editorial teams open the doors to contributed or branded copy, publishers must define and commit to these eight critical points.

Set and maintain editorial standards: Every publisher has standards in place. Some, such as the New York Times, employ a public editor (sometimes called an ombudsman) to represent the needs and viewpoints of the reader and to critique editorial. Publications opening themselves up to native advertising and contributed content require someone in a similar role. This person almost certainly does not work in ad sales.

Create a style guide for guest contributors This is a good idea for corporate blogs and publications, too. A style guide sets expectations and streamlines submissions. What are accepted spellings for the publication (email or e-mail?). Do links spawn a new window, or take the reader off the site? How much white space should there be between an image and text? With expectations set, production goes a whole lot faster.

Edit, and don’t forget to copy edit Regardless of how thorough the style guide, contributed copy must always be subject to the publisher’s editing process. If staff contributors are subject to editorial scrutiny, it’s even more critical that non-professionals be fact and spell checked, as well as accountable for attributions, sourcing and veracity. Seems like a no-brainer, yet at least one very venerable brand posts contributed copy as-is. It’s not unwise, though this will vary by publisher, to also subject advertorial content to at least some degree of editing.

Never, ever open the CMS to outsiders A very prominent media brand that publishes a great deal of contributed “expert” columns allows its contributors to post their contributions directly in the CMS. The result? Pretty much what you’d expect. This memo went out to contributors last July:

**Reminder** Using expletives can offend and alienate your readers and hurt your credibility. Please don’t use foul language in your posts and be especially mindful to never use it in your headlines.

Don’t base compensation on link bait ability Many publications don’t compensate expert contributors. Others pay on a per-item basis. One very staid publisher, hoping to build traffic to their site, experimented with a model whereby contributors were paid based on the traffic their columns generated. Result? “National Equirer”-level headlines and content in a business publication.

If it’s paid, disclose that it’s paid Boston.com’s paid posts appear in a sidebar box prominently labeled “Special Advertiser Feature.” Gawker’s paid content runs under the rubric “Sponsored.” Content that SAP and Microsoft pay to publish on Forbes.com are not explicitly designated as advertiser content. Paid content is nothing to be ashamed of. But it is something to designate.

 Vet contributors The five Ws of reporting: “who, what, when, where, why?” are all perfectly legitimate questions to pose to content contributors and content advertisers. Publishers are not only entitled, but obligated, to ensure content running on their sites adheres to standards that will uphold the publisher’s own brand and ensure the value of the publication to readers and advertisers alike over the long term. It’s not only fair to ask these questions, it’s obligatory.

Rebecca Lieb's picture

What’s “Content” Anyway?

I recently spent two days at the headquarters of a global enterprise speaking with various stakeholders from across their marketing organization about content marketing.

The purpose of the discussions was to uncover how content is being conceived, created, used, re-used, published and disseminated within the organization. Is there sufficient sharing and cross-departmental cooperation, or are different divisions reinventing the same wheel? Who creates what content, how is it approved, and where does it reside?

These are all valid questions that any organization should take seriously so they may effectively, as well as cost-effectively, practice content marketing – which, of course, feeds into social media activities, communities, paid advertising and virtually every other form of marketing.

Yet, in the course of these discussions, we continually encountered an unexpected response to one of our key questions: what kind of content do you and/or your group create?

“I Just Write Press Releases”
“Oh, I don’t create content. I write press releases,” said one person from the PR department.

“Content? We don’t make content. I spend most of my time working on PowerPoint presentations.”

“What do you mean by content?”

Mind you, these responses came from people in the marketing organization. I can imagine what the responses might have been if they came from even further afield.

– Please read the rest of this post on MarketingLand, where it originally published.

Rebecca Lieb's picture

Do Multiscreen Experiences Fragment Attention, or Focus It?

When was the last time you watched television without simultaneously interacting with a second, third, or fourth screen? A smartphone, tablet, or Xbox? Without tweeting, IMing, or posting to Facebook?
 
A plethora of devices, as well as social media are changing the way we watch, particularly when viewing is tied to an event – last night’s vice presidential debates, for example. Viewing is likely more often than not a multiscreen experience: there’s the televisions (or a live video screen), as well as additional screens (tablet, phone) and activity (reading, tweeting, commenting).

Do all these screens, and all this activity, fragment attention? Sure. But there are growing indications that multiscreen experiences fragment attention within the context of the debate or program in question. Early research indicates this multiscreen experience is additive rather than reductive (as a digital video executive put it to me yesterday).  More screens and more channels intensify rather than diminish attention and concentration on the program in question.

Or am I wrong about this? Weigh in, please, in the comment section.

Rebecca Lieb's picture

The Cat Food Would Like to Have a Word: The Sentient World Meets Marketing

Characters on packaging sing and dance. Retail inventory “knows” where it is in the store, and when it needs to be restocked. Invisible coupons can be snatched from the ether, and    mobile devices can lead shoppers to items that match pre-selected criteria (low-fat, gluten  free and strawberry flavored). Open the car door and, as the heat and engine automatically start, the seat slides to your preferred position.

The sentient world is no a radical future vision, it’s present reality. Readily available technologies such as smartphones, Google Goggles (and soon, Glass), augmented reality (AR), smart keys and fobs, even laptops make it increasingly easy to apply layers of content, images and information on top of object, products, and places. And at the same time, to view and experience these additional layers of content. Technology developments will soon enable more and more objects to become sentient, as Corning so elegantly depicted in its highly successful A Day Made of Glass Video:

 

Brands, particularly those aspiring to a cutting-edge image, have embraced advertising and marketing in the sentient world. Augmented reality almost seems old hat when you start totting up brands that have tried it, including GE, Nestlé, Lego, Kellogg, Mercedes-Benz, and Tesco. Ben & Jerry’s augemented ice cream lids. Starbuck’s experimented with enhanced coffee cups.

An iPhone app created by Dentsu in Japan allows shoppers to see animated butterflies flitting by. Each butterfly contains a coupon for a nearby business. In-store smart kiosks are becoming popular, as are apps that facilitate shopping. IBM has developed an app that finds what shoppers are looking for by scanning the shelves with a smartphone’s video camera

The sentient world goes far beyond in-store and CPG applications, of course. Destination and place marketing creates enormous potential both for data and for marketing and advertising applications. Kia, for example, a US Open sponsor, put a layer of information over last year’s event.

Unquestionably, as technology becomes increasingly sophisticated as well as cheaper, and as consumer adoption of smart devices soars, the world of places and things will become increasingly sentient. This raises a number of questions marketers must begin addressing now in order to intelligently introduce content – literally – into other dimensions.

1. Whose data surrounds your product? From a marketing perspective, the sentient world fundamentally means Things + Places = Media. OK, but what content is appropriate for which things, where? This is where content strategists and marketers face new challenges. Will they create it? Aggregate it? Allow users to contribute it? What are the paramenters of the “what”? (How comes later).

2. How will user-generated content be considered and handled? It’s already easy for users to add layers of content to the sentient world. How will brands cope with virtual UGC? As with social media, brands face a lack of control in many aspects of the sentient world. AR is something consumers can do already. Smart devices such as keys have been hacked. Negative sentiment is inevitable. UGC will soon literally spill out of the web and into if not everything, then many things that will affect brands.

3. What data should or could be layered on your product, service or brand? What information, images, data and media should surround a carton of yogurt? A cinema box office? A hammer? What goes on the label, the package, and what constitutes an invisible but discoverable layer in the virtual world? Here, content strategy merges with merchandising, packaging, point of purchase and other marketing functions in a highly complex interchange not yet informed with best practices and cases studies.

4. What’s appropriate, in line with marketing and content strategy  and makes sense for the target audience? Currently, augmented reality is the dominant channel for marketing in the sentient world (though technology developments could shift this paradigm, and quickly). AR is opt-in. It requires a call-to-action to impel a consumer to whip out a device, fire up an app and experience the data layer. Will it be worth the effort? What’s the payoff? What’s the appropriate form of the call-to-action? More open questions that will only be resolved by extensive trial and error.

5. Data will be experienced in real-time. Do you have real-time ability? Real time marketing and advertising are becoming commonplace for many brands such as Pepsi and Applebee’s. Their marketers have always-on war rooms in which highly trained social media and analytics teams monitor digital sentiment and interaction 24/7, reacting and optimizing messaging in real time. The sentient world will rapidly become part of this intense, pressurized marketing function.

6. How will workflow be managed? Whose job is it to oversee these virtual layers of data? As with other forms of content marketing, clear roles haven’t yet emerged. The sentient world calls for developers, content creators, multimedia producers, strategist, creatives and more. Staffing, relationships with vendors and outside agencies and technology investments will all be affected – and require investment and ongoing budget.

7. What metrics will be applied to the sentient world? Interactions in the sentient world can be measured, but marketers have always had difficulty determining what to measure, particularly in new digital channels. Very little in this realm conforms to simple direct marketing metrics. Instead, more complex KPIs (key performance indicators) must be developed.

8. Who partners in this ecosystem? Who will brand align with to leverage the possibilities of this new ecosystem? If your refrigerator tells you it’s time to buy a fresh carton of milk, will the alert be accompanied by a coupon? When your car wants oil or fuel, will it recommend a preferred brand? Perhaps your phone will “know” there’s a nearby McDonalds where you can recharge – both the battery and yourself. Brands will soon explore newly-logical alliances.

9. What platforms matter now, and what must be accommodated in the future? A tough but persistent question in mobile has always been around platform. iPhone? iPad? Android, Blackberry, other tablets? What devices will consumers carry, and how will they use them to interact with places and objects? Yesterdays cameras, MP3 players and e-readers are consolidating into phones now. What will tomorrow bring – and how will you bring your data to that platform?

10. After the first wave of doing it because it’s cool, what’s next? As with all new technologies, the sentient world is a novelty now. Any reasonably serious brand initiative is almost guaranteed to have a novelty factor, PR amplification, buzz – the whole first-mover advantage package. More strategic brands will be asking themselves what comes next. How will we work, play, shop, travel and interact with the sentient world when it’s just another part of…the world?

Rebecca Lieb's picture

How to Measure Social Media ROI

Measuring digital advertising is relatively easy and

Owned and earned media? That’s a whole other story. The metrics and the methods for measuring digital marketing are less exact, the platforms are newer, while the old rules and models don’t apply.

It’s been easier to groan about “lack of analytics expertise and/or resources,” “poor tools,” “unreliable data,” or “inconsistent analytical approaches” than to roll up collective organizational sleeves and really tackle the social media measurement problem.  Yet with creativity, as well as hard metrics and defined business goals and strategies, organizations are not only measuring social media for ‘soft’ metrics such as brand sentiment, but also ‘hard’ data, such as revenue attribution.

My Altimeter Group colleague Susan Etlinger has been researching the topic and just published the result, “The Social Media ROI Cookbook: Six Ingredients Top Brands Use to Measure the Revenue Impact of Social Media” (available as a free download under the Open Research model).

While there’s admittedly no perfect measurement method, the study identifies no less than six models for measuring social media revenue impact, three “top-down,” and three “bottom-up.” The organizations that measure most effectively use a combination of these methods in concert, and the report provides a four-factor matrix to help determine which of the six methods apply, based on type of business, the product or service, media mix, and customer profile.

The media mix is of particular interest here, as my focus has been on the convergence of paid, owned, and earned media recently (the topic of my newest research report). Converged media models also require converging metrics, presenting the not inconsiderable challenge of applying findings and learnings from paid and owned, for example, into earned media. Or vice-versa, often in real or near-real time.

Like measuring social media ROI, these models are only just emerging. Measuring new media models is complex enough. The new necessity of measuring, learning, optimizing and applying data from one channel to another makes the challenge geometrically more formidable.

 

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Rebecca Lieb's picture

The Converged Media Imperative

20th century, when the commercial internet was in its infancy, there was  no end to the griping about “silos.” Back then silos referred to That Which Is Digital and That Which Is Not Digital. The gripe (from the digital side of the equation) was that the not-digital team got all the budget, and didn’t even accord the digitals a place at the table.

So ingrained was the silo grudge that no one, but no one, grew to understand silos better than the digitals. In a scant decade, more digital silos emerged than you can shake a stick at: Search. Email. Display. Social. Analytics. Online video. CGM. CRM. Targeting. Retargeting.

The list goes on. Digital is, after all, highly technological and all these areas legitimately require high degrees of specialization. They still do, but now there’s a very compelling reason for digital to stop the Balkanization it so actively criticized just a few short years ago.

The reason? Media are converging. The new research report I publish today, together with co-author Jeremiah Owyang (we were ably assisted by Jessica Groopman and Chris Silva) reveals that consumers, who flit like so many butterflys between devices, screens, windows and channels, are making little distinction between media types.

Paid, owned, and earned media? It’s rapidly becoming all just…media. Ads, blog post, social interactions – either they’re interesting (or entertaining, or engaging, or helpful, etc.), or they’re not.  Brands must integrate paid, owned and earned channels now. It will not only make marketing more effective and efficient, but it will prepare them for the future. As traditional media becomes increasingly digital, this trends is beginning to occur offline, too.

Converged media is tough to wrap your arms around. Paid must inform owned which must inform earned, and vice versa, and sideways, too. It’s complicated, but it can pay off in much-improved optimization, reach, insights and above all, effectiveness. We like to think of it as a stool. Three legs (paid, owned and earned) provide a better foundation than one or two would.

To effectively commingle paid, owned and earned media, brands must get everyone around the table and make them play nice together – easier said than done. Ecosystem players such as software vendors and agencies have areas of specialization – not to mention revenue models – that rarely scope beyond one of these three channels.

Yet effectively converging media brings with it an advantage beyond more effective advertising and marketing.  Integrating teams, both internally and externally, will help smash the multitude of silos that litter the digital landscape.

Converged media is both a reality and an opportunity for better integration and collaboration across a myriad of digital specializations. Imagine the possibilities when we all start really collaborating with each other!

As with our other reports, The Converged Media Imperative is published under the Open Research model. Use it. Share it. And we’ll publish more.

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Rebecca Lieb's picture

How Will DoubleClick Stack Up?

It almost had to happen. Ad stacks are proliferating across the digital media landscape, and corporate behemoths such as IBM and Adobe are refining and growing their suites of digital marketing and advertising software offerings. All the while, Google’s been very quiet on the display advertising front.

No longer. Today at DoubleClick Insights, Google announced its commitment to going full-bore into the stack wars with what Vice President, Display Advertising Neal Mohan described to me in an advance briefing is “the biggest upgrade in DoubleClick history.”

Everything digital advertising at Google: search, the Google Display Network, AdSense, text ads, rich media, YouTube, and mobile advertising (AdMob) will be integrated. A new brand encompassing all of DoubleClick’s platform technology has been created. The components include:

  • DoubleClick Digital Marketing Manager – an upgraded version of the DoubleClick ad server, the control panel for ad scheduling, delivery, reporting and more across premium media.
  • DoubleClick Bid Manager – a revamp of media buying platform Invite Media. Google promises faster processing and better reporting to manage audience buying across ad exchanges.
  • DoubleClick Search (launched last year) enables buying across multiple search engines.
  • DoubleClick Studio – a rich media solution that now incorporates Teracent.
  • Google Analytics integration.

“It’s a rolling thunder kind of rollout,” Mohan explained. Workflow, reporting and portfolio management components won’t be released for several weeks. “We invested very heavily in building out a unified stack instead of kluging together existing products.”

Mohan identifies three core benefits of turning all Google’s ad products into a unified stack (and DoubleClick is the platform used by most top agencies and advertisers). The first is “giving time back to our advertisers and agencies.”  In a typical week, Mohan estimates, up to two full days are spent in various digital platforms that don’t talk to each other. “By bringing all these pieces together we can save up to  six working weeks per person per year,” he claims.

Unified reporting and attribution is the second benefit. DoubleClick promises its suite will provide perspective and insights across campaigns and channels. How did display influence search, or vice versa?

Finally, Google says it’s offering cross-channel campaign optimization that will encompass bidding and campaign management.

How will Google’s stack differ from the other major players, notably Adobe and IBM? Most notably, DoubleClick includes an ad server – those two players don’t serve ads (AppNexus, however, does). Critically, the stack will maintain an open API to enable integrations of other software packages.

An open API is a desirable feature in any ad technology stack, but here it’s critical as (Google+ excepted), social support is something earmarked for an unspecified future date, not the present. Moreover, it’s hardly a secret that Google’s relationship with Twitter is tenuous, and with Facebook openly competitive. Both can be viewed as significant shortcomings in a truly integrated stack – though clearly no stack out there is all things to all advertisers.

Social isn’t Google’s only long-term goal. “Digital, whether on the search or display side, has been a result of performance marketing,” notes Mohan, “The brand opportunity still remains untapped.”

Smashing silos and making digital processes easier, more streamlined and unified is a good thing.  What remains to be seen is if the digital brand opportunity lies in display advertising, or in social channels including earned and owned media.

Image: DumboNYC.com

A version of this post also appears on iMedia Connection

Rebecca Lieb's picture

Facebook Advertising Can’t Succeed (without Marketing)

Perhaps GM’s ad unit needs more of a social life.

It’s hard to believe there wasn’t some sort of agenda in telling the Wall Street Journal, three days in advance of what’s slated to be the biggest IPO in U.S. history, that advertising on Facebook isn’t working for GM, but that’s what the automaker did. If the company was looking for attention, they certainly got it – the media were scrambling for new angles on the week’s biggest story.

Sure, it’s a big deal when one of the world’s largest advertiser pulls back $10M in spend (or makes such a public proclamation). Perspective is also warranted in this situation.

Facebook’s success as an advertising medium, or a public company for that matter, is far from guaranteed. Blazes of glory in this industry are often nasty, brutish and short (AOL, Yahoo, MySpace). But herewith, seven reasons to temper GM’s very public proclamation against Facebook’s advertising:

Facebook advertising isn’t even 1.0. It’s still beta Facebook is developing new advertising products, refining them, killing others, and tweaking some more.  The company’s IPO is a $100B bet that eventually, they’re going to get the model right, just as the search ad model was (and remains) very much in evolution when Google went public. For many advertisers advances can’t come fast enough, but the old term “new media” is very much in play in this contest.

Paid media can’t succeed without earned and owned integration Shortly after the GM story broke, rival Ford tweeted: “It’s all about the execution. Our Facebook ads are effective when strategically combined with engaging content & innovation.” Sounds simple, but integrating paid, owned and earned media into a viable, sustainable strategy in which each informs the other is hard. It requires silo-busting, new metrics, and an entirely new approach to media. Yet it’s a task marketers and advertisers must master – first in social media channels like Facebook, then across the rest of digital as well as traditional media.

Advertisers are only now testing the waters. “We believe that most advertisers are still learning and experimenting with the best ways to leverage Facebook to create more social and valuable ads,” Facebook says in its IPO filing. Best practices for advertising on social networks, or integrating that advertising with owned and earned media? Barely even embryonic. Like Facebook’s evolving ad platform, how to effectively advertise in social channels is still in the earliest stages of evolution

Facebook advertising is not about direct response Those ads on Facebook about tooth whitening and belly fat? Going, going gone says the company. Yet GM’s complaint was that its Facebook ads weren’t moving enough car sales, a pretty disingenuous argument.  GM is certainly sophisticated enough to know that advertising has many purposed other than direct sales: branding, consideration, and purchase intent for starters. It’s very hard to believe the company expected to sell X number of vehicles per Y Facebook ads.

Display is down across the board Why integrate paid, owned and earned media? Because fewer and fewer consumers engage with display advertising. It would be a lot simpler if that weren’t the case. Advertisers could plop creative into ad units and meet goals. But banner blindness and declining click trough rates call for more creative and integrated solutions – again, particularly in social environments.

Content Counts Even GM cedes to Facebook on this account. “We remain committed to an aggressive content strategy,” is one of several quotes GM made in the wake of its ‘no-advertising’ bombshell.

Facebook is biggest media company in history Ever. Of all time. Why doesn’t anyone ever state the obvious? No print or broadcast medium has ever even remotely approached a one billion user base. That old adage about advertising going where the eyeballs are? There are more eyeballs in the world focused on Facebook than anything else man-made. That’s a pretty compelling argument to get this advertising thing right – both internally at Facebook, as well as for advertisers and marketers.

Addendum: I’ve done quite a bit of talking to the media about this issue. Here’s a particularly insightful article from Venture Beat’s Jolie O’Dell: Why Facebook’s GM ad drama won’t impact this IPO.

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Beyond the IPO: 9 Implications of a Public Facebook

Susan Etlinger & Charlene Li are not only co-authors, they contributed more to this post than I did.

The run-up to Facebook’s IPO reminds me a bit of a wedding: everyone’s attention is on the big day (expected to be Friday May 18), without much regard for the weeks, months and years afterward. Charlene, Susan and I sat down to discuss some of the implications of a newly public Facebook: on shareholders, business and Facebook itself. — RL

Whether or not Facebook’s IPO ends up being one of the world’s largest (this Washington Post article places it sixth, between AT&T Wireless and Kraft Foods), it will certainly earn a respectable position in the history of the public markets, a lofty spot for an eight-year-old company in a relatively unproven business.

We identified ten areas where we are watching Facebook closely, as an indication of its success in the future. We picked these topics because they intrigue us, because they provoke discussion and, ultimately, because we believe they are the issues most central to Facebook’s future.

#1. Leadership
In a media frenzy in which anything (such as, for example, wearing a hoodie on a road show) can spark a news cycle, it’s to be expected that Mark Zuckerberg would have kept the lowest possible profile during Facebook’s quiet period. But now during the roadshow, on the first day of trading, and afterwards, he’ll need to step out, step up and set the tone for how he will lead this company into its next major phase. Can he pull it off?

The decision Zuckerberg must make, as a CEO who’s famous for his a “go away; we’re working on it” attitude, is whether he will use this milestone as an opportunity to cultivate his newest constituency: investors. As CEO, Zuckerberg needs to be accountable to his shareholders–not to a stock price per se, but to their faith in him. We will start to see clues to this decision during the first earnings call (a trial by fire for the CEO of any newly public company).

Of course, it’s all fun and games until there is a major hit to the stock price. We know, generally speaking, what the triggers will be: a new, poorly received product, a privacy issue, slowing user growth–the registration statement is full of examples. When this happens, Zuckerberg will have to demonstrate a completely new level of leadership. He’s chosen his executive team wisely in that both COO Sheryl Sandberg and CFO David Ebersman are strong, respected executives who have been through this process before. And, despite his youth, Zuckerberg has learned from previous missteps like member revolts, privacy, and Beacon. If you still wonder if Zuckerberg is ready for prime time, imagine how you’d react if a major, highly unflattering motion picture had been made about you while you were still in your twenties. The issue isn’t whether he can avoid controversy, but how well he can quell the concerns of skittish investors.

#2. Innovation
Facebook has a hacker culture; its development mantra, “done is better than perfect,” is at the root of both its growth and its biggest failures. Given the massive number of monthly active users (901 million according to the latest released figures) the strategy has been to release product to the market and learn as it goes.

But as a public company, Facebook will need to choose whether it will continue to release products the way it has in the past or take a more cautious approach. How will it behave when it’s not just the pundits on Twitter, but the shareholders who react?

Although they’d hate the comparison, there’s a strong role model in Google, which, even as a public company, has managed to maintain its agile development strategy. Granted, there’s always the risk of a Buzz (Google) or Beacon (Facebook), but Facebook has demonstrated considerably more focus from the start than Google. Furthermore, the company sent a strong signal in its last quarterly statement that it will continue to make investments for long-term growth, even at the cost of short-term profits. It’s setting expectations that it’s investing for the future, not just for the quarter.

#3. Brands
Will brands buy what Facebook’s selling? Facebook is, after all, a media company, and while it has other sources of income through partnerships, brand dollars are what will ultimately make not only the IPO, but the company itself, succeed or fail. With close to a billion users, Facebook is the biggest media company that’s ever existed, in any medium, ever. Advertisers go where the eyeballs are, which is Facebook’s undisputed advantage. After that, it gets a bit trickier.

Facebook is at the vanguard of developing products that merge and conflate advertising and marketing, that blend content, conversation, paid, earned and owned media with media buys. Advertising is media buying, but those other aspects: owned media (premium brand pages) and earned media (the conversations and comments and interactions brands have with their fans, users and yes, detractors) are part and parcel of what Facebook is working to monetize. It’s still experimental. Brands are still testing the waters and are far from establishing best practices or firm models in a “brand” new environment.

#4. Data

Facebook is also in a position, thanks to its staggering user base, to possess and be able to leverage data on a scale we’ve never before seen. Likes, affinities, social graphs, recent behaviors – it’s all there, together with the basic demographic information. Again, the ability to package, parse, productize, make understandable and actionable this vast quantity of data is as formidable a challenge for Facebook as it will be for the media agencies who buy against these very new models. Facebook’s potential as a marketing data juggernaut is very real, and can potentially take advertising to new levels, if the company succeeds in making that data useful.

#5. Mobile
Most of the coverage around mobile has been focused on Facebook’s “lousy” mobile applications. But we believe this is a red herring – the core issue revolves around the slow development of mobile advertising and marketing. The S-1 says it best in the section on risks related to advertising:

  • “…increased user access to and engagement with Facebook through our mobile products, where we do not currently directly generate meaningful revenue, particularly to the extent that mobile engagement is substituted for engagement with Facebook on personal computers where we monetize usage by displaying ads and other commercial content…”

But with 85% of revenue coming from advertising as of the end of 2011, the more effective Facebook is at appealing to its mobile users, the more it risks shifting revenues from the Web platform where it can monetize users, to the mobile one where it can’t — at least not immediately. So the real question becomes how Facebook will balance creating mobile user value against driving shareholder value.

Facebook can’t risk waiting too long before moving aggressively into the mobile space, but also needs to buy time to help mobile advertising develop. Given this significant risk, the purchase of Instagram represents $1B of earnest money that Facebook is focused on the long term. With the war chest Facebook will have accumulated post-IPO, building a great iPad app and upgrading the smartphone experience is a foregone conclusion. The bigger issue to watch is how well Facebook can develop the mobile advertising market with that experience, in a similar way that it created social media marketing.

#6. Investors
The first earning call is always rough for a first time CEO, and Facebook will likely be no exception. But what we are watching closely is if Facebook will develop a different kind of relationship with its shareholders. The company is, at its essence, about sharing: will a newly public Facebook use its own platform to share more information with investors? Facebook has an unprecedented opportunity to change the way that it handles investor relations. Will it take this opportunity, or will it stick with the tried and true? We’d love to see Facebook use its own platform as a way to engage with and provide greater transparency to its newest stakeholders: the public markets.

#7. Mergers & Acquisitions
Thanks to Instagram, every venture-backed start-up has dreams of meeting with Facebook’s M&A team. Will Facebook focus on smaller acquisitions to acquire talent or smart ideas, or will it make major deals to really move the ball forward?

One of the more interesting areas of speculation lately is what would happen if Facebook were to buy Bing from Microsoft. With Google arguably its most formidable competitor, the addition of search would give Facebook advertisers a direct response medium they could not get before on Facebook. Google is, at its essence, a search company that has struggled with social. Facebook is a social company that needs search. A Bing acquisition would up the ante in a significant way between Facebook and Google.

Looks good on paper, but acquiring Bing would also be a huge distraction and a departure from Facebook and Zuckerberg’s legendary ability to focus on social sharing. A more likely scenario is that Facebook and Microsoft continue their long-term strategic partnership, integrating Bing deeply into the Facebook search experience.

Regardless of whether it buys Bing or another organization, few companies do the “merger” part of M&A well. We expect that Facebook will focus on smaller acquisitions that it can absorb and leverage quickly, while any large acquisitions like Instagram will be kept running separately, in much the way that Google ran YouTube as a separate entity for years. Again, a focus on the long term gives Facebook the ability to look at M&A in a very different way than traditional companies who much justify every single penny spent on a company.

#8. Culture
Facebook is a private company in many respects (one of which is about to change dramatically), but the internal culture has always been very open. It has invested heavily to create this open culture, and it has slowly but surely been reducing the amount of information shared internally in the run-up to the IPO.

This will only increase, as the company will now be beholden to even more securities industry regulations intended to protect investors from selective disclosure. So again the balancing act, this time between employees (and openness) and shareholders (and fiduciary responsibility). Which leads us to…

#9. Talent
Once it goes public, how will Facebook retain talent, especially top talent? Expect to see the usual exodus as people wait to vest, then cash out (the Bay Area housing market is already bracing for impact). But, again like Google, Facebook will retain its cachet for some time to come, and some will be motivated by the opportunity to change the world from within Facebook rather than from without. Where else can you find a platform of 900M people to try out your next great idea?

#10. Privacy
Zuckerberg has said that increased sharing is core to Facebook’s growth. But with greater sharing also come increased pressures on and threats to user privacy.

Over the past eight years, Facebook has mastered the art of trial and error when it comes to privacy. There have been huge missteps (Beacon), significant improvements (to privacy settings) and escalating tensions as the company has continually pushed its users to share more, and more often, frequently beyond their comfort zones. The company has accumulated a great deal of resilience along the way, and has tried to balance giving people a granular degree of control (at the risk of confusing them) with offering a simplified experience (at the risk of alienating them).

Charlene: The addition of Timeline, and the emergence of “passive sharing,” raise the bar yet again. A few months ago I installed the Washington Post Social Reader on my Timeline. Now I know that it involves social sharing, but one day when I was in need of a little “mental floss,” I clicked on a story about Snooki’s recent weight loss. I didn’t think anything of it until a bunch of friends and work colleagues started teasing me. There it was, on my timeline with comments: “Susan Etlinger read an article: “Snooki Finally Reaches Goal Weight of 98 Pounds – But Has She Gone Too Far?” I was, frankly, mortified. I’d forgotten I was “in public,” and I am someone who is supposed to know better.

Wherever your stance on Facebook’s privacy record, privacy will continue to be a litmus test issue for Facebook. User outrage is one thing; shareholder outrage is quite another. We will watch to see how Facebook balances continued innovation against privacy. Where will Facebook stand when and if privacy issues affect the stock price — will they pull back or forge ahead?

As always, we’d love your thoughts on these issues. What are you watching as Facebook heads into its IPO?

Rebecca Lieb

Rebecca Lieb is a strategic advisor, consultant, research analyst, keynote speaker, author, and columnist.

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