The article is focusing on what the author views as an opportunity for these large social media sites to begin making money off their massive audiences like the search engines have done with keywords and websites have done with banner ads.

We have addressed the value of banner ads and their role in a campaign, as well as clarifying several points the author makes in this article that may be misleading.

The Value of Banner Ads
Articles supporting or devaluing banner ads are released as often as articles that support or devalue all forms of media. It all comes down to what the objective is for your online advertising campaign. If your goal is to build brand awareness, you will want to spread your message quickly to as many users in your target audience as possible and at an efficient CPM, which is what banner advertising can accomplish. With banner ads, you generate reach and frequency quickly to tell people a message, including those who weren’t aware of your message before – which is especially important for a new product.

Many studies have been conducted that illustrate the effectiveness of banner advertising in increasing brand awareness along with sales, website visits and time spent/pages viewed on advertiser websites. For example, the Online Publishing Association did a study with Comscore in January of 2009, called “The Silent Click.” The study used a control/exposed methodology to measure behaviors of consumers post exposure to an online banner ad campaign conducted by the 20 top display advertisers across a variety of industries. In the area of Consumer Packaged Goods (CPG) the study showed:
• The exposed group spent 14% more on CPG ecommerce than the control group.
• Large lifts in online searches for advertised brands and visits to advertisers’ websites (not counting immediate banner clicks)
• Large increases in minutes spent and pages viewed on advertisers’ website.

Specific Media, a network with robust targeting capabilities that Bolin partners with often, recently did a study measuring retail impact post online advertising campaign for a CPG client, using nothing but banner ads. This study showed a 58.6% lift in offline sales in the post-campaign period, and a lift of 86.3% in share of customer dollars.

Why “Clicks” and “Click Through Rates” Aren’t Important
In Penenberg’s article, he details click-through-rates (CTRs) and asserts in the second to last sentence of his intro that “it’s not about click-throughs anymore,” which is true…and it hasn’t been for a long time. Not since the internet and advertising on it stopped being a novelty.

Clicks are important if you’re doing a traffic-driving campaign that is specifically designed to get advertisers to your website. The media strategy here is paid search or banners purchased on a pay-per-click vs. CPM basis. CTRs aren’t important here because you’re using a mass amount of impressions in order to get a desired number of users to your site – visits to the site is the goal, and it doesn’t matter how many impressions are used to achieve this goal.

CTRs are not important in awareness campaigns because the goal is to put your message in front of the consumer where they spend their time online, similar to running a TV spot in a consumer’s favorite show or a print ad in a consumer’s favorite magazine. However, when the author talks about banner ads annoying users, he uses pop-ups as the example which is only one form of a banner ad and one that we would never recommend in any of our clients’ advertising campaigns.

The Role of Social Media
Social media is all about connections – with friends, coworkers, passion points such as sports teams, and even preferred brands. The connection you make with a consumer who “friends” your brand on a social networking site is far different than the audience you may reach with a banner ad which is why social media plays a different role in a campaign. We believe social media sites should be used to forge strong relationships through conversations with brand advocates – not for driving mass reach quickly. Social media is a longer term brand building effort.

Under the section “What Are You Worth To Facebook,” Penenberg discusses compensating consumers for participating with brands on social media sites. Our position is that to do this would ruin what these sites are all about – connections. People connect with people, groups, brands, etc. that they enjoy. Peer to peer endorsements are strong, and to know that your friend is talking about X brand because they’re getting something for it, rather than simply because they really like it, would take away much of the value of that endorsement. Sooner or later, we’d run into the same problem mommy bloggers are having – lost sincerity (also, the possibility of the FTC getting involved).

Summary
If click-through-rate is the only measure of banner ads’ effectiveness we would agree with the author. However, we use banner ads to build awareness (not to drive click-through rates).

So, let me illustrate how it works today. Bob says something bad about Product X on his blog. Product X’s team has listening tools, and are alerted to Bob’s post. Product X’s team, posts an appropriate response on Bob’s blog comments. Makes complete sense, right? Bob has a problem, and Product X tries to alleviate that problem. Problem solved. Product X, then swoops away in the middle of the night until the next comment is made referring to them. That sounds like a pretty weak way to build a relationship. It’s a start, but we can do better.

What if we listen to fewer people. The people who are interested more in us. We listen even when they’re not talking about us. If they’re having a bad day, we reach out, and do what we can. Is this possible? Can we measure how it affects them in the minutes, hours, days, and weeks afterward? Remember, we’re talking about people, and people have emotions. We’re building connections and relationships, one person at a time.

As experts in digital marketing, we often find ourselves talking a lot among peers about social media – what it is, the  value it provides, how we leverage it for our clients, and so on. And we find ourselves (generally) nodding in agreement.

But that’s not always the case with people outside the realm of the social media industry, practice or study.

We firmly believe that social media strategies and tactics can have huge impact for specific clients. But we also erroneously assume that everyone around us also understands the imputed or explicit value it can provide. It goes without saying that many marketers are skeptical about social media, especially when they’ve grown accustomed to traditional measures for marketing activities in the mix.

After all, it all comes down to dollars, comfort with what people know, and discomfort with what they don’t know.

Definitions like reach, awareness, frequency, preference, recognition and recall are generally understood by seasoned marketing folks. Social media, however, requires new definitions and new measures, like conversation, sentiment, velocity and online share of voice. These new definitions need to be matched against old ones and compared and contrasted regarding their value. Social media has the ability to take customers deeper into the product, service and brand experience. There are varying discussions on how to measure it objectively and subjectively, too. We’re finding that comparing the value of traditional media and social media is an apple-versus-orange argument.

We are not only talking about different types of measures for different types of consumer activities, however. In true Gerald Zaltman fashion, I came up with another metaphor (a little more elaborate than apples and oranges) to explain what I think is also happening with social media. For instance, consider the effect the alternative fuel car (social media) will have (or, is having) on the infrastructure and market for gasoline and gas-powered cars (traditional media and marketing).

For example (here’s just one), the electric car will soon make up a significant mix of all road-bound vehicles. Why? The very existence of the electric car challenges the infrastructure of gasoline distribution, not to mention the market for oil itself, by reducing demand for gasoline and the need for gas stations (presumptively, because people are more carbon-footprint conscious and are coming to terms with the inefficiencies of the gas-powered car). There’s a (presumptive) growing demand for alternatively fueled vehicles which is fundamentally changing the way we perceive and measure value in our commuting and consuming lives. (Reference what’s happened in Detroit).

Let me take that same paragraph and substitute some language:

Social media will soon make up a significant mix of all media spends for many marketing initiatives. Why? The very existence of social media challenges the infrastructure for media distribution, not to mention the market for traditional media itself, by reducing demand for traditional media and the need for media placement (presumptively, because more people are understanding the benefits of social media’s efficiency in connecting with consumers, dollar for dollar). There’s a growing demand for social media which is fundamentally changing the way we perceive and measure value in our marketing mixes. (Just look at this tiny example of efficient local marketing).

I’m not saying traditional media (on and offline) and gas stations will go away entirely. And I’m not saying social media has evolved as much as the alt-fuel car. There is a lot of change happening, however. And this is just one metaphor to help explain it.

What do you think?

Here is the official list of Top 20 Social Media Innovators:
http://tinyurl.com/lq7neq

Last night I had the fortunate opportunity to attend the local UPA MN lecture where Susan Dray and David Siegel talked about some of the myths of user research.  Without getting into the details of the presentation, their main message was basically don’t always trust research outcomes, no matter how massive or sophisticated they appear.

We work hard to never stop questioning our approaches to defining customer or user experience problems, in addition to our methods in answering them. But as experience design strategists and designers in agency or consultancy settings like Bolin Digital, we often don’t have the luxury of large budgets to help us inform our design decisions for many projects.

In the methods of our work, we rely heavily upon activity-, user-, and system-centered approaches as models to guide us through the forest of decisions. We hope that one of them or a combination of them gets us to the answer quickly.  Paul and I have also chatted about the common sense approach to design: should we  sometimes  rely on our own experience or instinct to guide decision making (also referred to as Dan Saffer’s “genius” centered design approach)? It seems like even this cost-efficient “gut” check, however, can get us into deep water.

As we continue to grow up in a world of increasingly sophisticated interactions and product experiences, it’s important to understand how we arrive at conclusions about which design paths to take.

All this recent thinking provoked me to ask these questions about design research methods and tools: Wwhat’s the best mix of data and methods?  How much of it is driven by common sense? How do we know when we arrive at the best possible solution?

Many of you may have already seen this augmented reality project by GE. It’s actually using a Adobe Flash based version of ARToolKit called the FLAR Toolkit. We see a lot of potential for this technology to help our clients that have product visualizers. This may help their clients bridge the mental gap of what the product may look like in their house. This would allow anyone with a printer and webcam the ability to view a product rendered in 3d, in the exact location they choose. It’s still pretty new technology, and we’ve spent some time getting it to run smoothly, but we definitely see the potential in both the mobile and home settings, as there is a kit for the iPhone as well.

We will be posting some demos in the following days and weeks.

A record number of email marketers plan to bridge the gap between online social networks and their email marketing campaigns in 2009, according to new research from Ball State University, the Email Marketer’s Club and ExactTarget.

The study surveyed 351 email marketers in March and found that while only 13 percent leveraged the power of online networks last year to grow their email subscriber list, more than 46 percent plan to use social media and email in tandem in 2009.

“While the global reach, rapid adoption and high engagement found in social media have email marketers salivating at the potential these environments offer to engage with customers and prospects, the real challenge is how best to facilitate meaningful interactions,” said Morgan Stewart, ExactTarget’s director of research and strategy.

Although the demand for the integration between social sites and email is surging, the success with the integration remains largely uncharted, according to the study featured in ExactTarget’s newest whitepaper entitled, “Expanding the Reach of Email Through Social Networks”.

“Consumers are reluctant to invite marketers into social environments, and this is because they don’t want to see the channel overrun with irrelevant commercial messages,” Stewart said. “However, marketers who are able to align their messaging with the distinct mindset of consumers engaging in social networks are posting positive results and building a quality following in these environments.”

The whitepaper features research that highlights how brands such as Carmex, TripAdvisor and Papa John’s have scored success by broadening their communications to include social media sites such as Facebook, MySpace, Twitter, Digg and others to their traditional email-based efforts.

“We want visitors to share the experience with their friends, but we don’t want to force them to use a channel they are uncomfortable with,” said Paul Woelbing, president of Carma Labs, the maker of Carmex (a Bolin Digital client). “By offering visitors choices, we are learning a lot about the dynamics of integrating email, social media and text messaging – namely that they complement each other very well.”

The release of the whitepaper follows Tuesday’s launch of ExactTarget’s Social Forward, its new flexible metrics-driven social sharing solution for email. Debuted at ad:tech San Francisco, the new functionality gives marketers the industry’s first social media integration for email that allows multiple ways to leverage sharing and provides the industry’s most complete solution to enable and track sharing through its Direct to Social capability and through a partnership with social media syndication powerhouse ShareThis.

ExactTarget’s Social Forward will be available to users through its online Innovations Lab starting May 1 and will become an integrated solution for all ExactTarget users worldwide as part of the company’s Summer release.

The whitepaper and an overview of ExactTarget’s Social Forward technology are featured in ExactTarget’s Social Media Kit for Email Marketers. Marketers may download the kit free of charge at www.exacttarget.com/socialmediakit.