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1.     It’s not free. There are plenty of free social media tools out there.  You can certainly set up a MySpace brand page or LinkedIn profile for free.  However, no social media program will succeed without time, resources and expertise.

Email lessons learned: Email marketing is still considered “free, or nearly free” by many executives.  Perhaps the inexpensive price tag is both our best friend and our worst enemy.  Too often, the poor email program manager is left alone to blast out message after message without creative, data analysis or technical support to really engage subscribers, grow loyalty and drive additional revenue.  Invest in your talent and give them the room to test new ideas and learn about the audiences they serve.

2.    Being present is not enough. Put up a corporate-speak Facebook page and see who comes.  Not so many, right?  But a Facebook page that has a cause or purpose is interesting because it’s meaningful and engaging.  At the same time, tell no one about your page and it’s all but invisible.

Email lessons learned: First, it’s not true that “just because we send, they will respond.”   Look at the high percentage of non-responsers (no opens, clicks or conversions from email in many months) on every house file.  Look at the very low response rates from non-permission files.  Any monkey can blast email.  The technology makes it easy and cheap.   Response, however, is driven by engagement and relevancy (and good timing).

Second, email marketers know well that the file doesn’t grow unless we advertise it.  Prominent and provocative invitations all over the website, catalog and call center scripts are essential to building an email community.  Third, not all subscribers are created equally.  Segment your audience and set up specific email programs and social communities and blogs to speak to their particular interest.

3.    Be authentic. This is a universal marketing truth, but worth mentioning because too many email and social programs lack it.  Our customers know when they are being sold.  Relevance, honesty, believability, integrity: these are the only things that create value and drive predictable response.

4.    Integrate, don’t imitate. Replicating your website on Facebook does not a compelling and engaging destination make.  Posting your email offers on Twitter will quickly tire followers.   Selling product may not be the best objective of your social strategy.  Perhaps your blog is about education and driving inquiries.  Your MySpace brand community may be about reach for video ads.  Twitter may be a great customer service outreach tool.

Email lessons learned: Use your digital and direct channels in support of each other.  A mobile or SMS campaign can be a great complement to email or a retail sale.  Email makes postal mail and online advertising work smarter.  Blogs can significantly improve search results to your Web site.

5.    Endorsements matter. Social media pulls the marketer off the brand pedestal and drags her into the throes of the messy, wild, unpredictable community.  In this equality, social media empowers brand advocates.

Email lessons learned: Beyond a conversion/sale, the best endorsement you can get in email is to be forwarded.  Forget the technology.  Content is only forwarded because it speaks to the subscriber and s/he aspires to own the message. Now subscribers “SWYN” — share with your network — expanding the reach further.  There are also endorsements for having a good sender reputation so your email messages reach the inbox — whitelists at the major ISPs like Hotmail and Yahoo, and third-party services like Sender Score Certified, SurityMail and Goodmail.

6.    Measure well. All investments in social media must be linked to a business goal.

Email lessons learned: This is one we are still learning in email.  Opens and clicks do not matter to executives — all that matters is contribution to the bottom line.  Branding, retention, loyalty and share of wallet can be measured if the data is collected and trended over time, and by audience segment.

7.    Have something to say. This is perhaps most important.  Don’t start talking until you have something valuable to say.  Make the commitment and stick to it.  Fund it.  Be ready to maintain it.

Email lessons learned: Too much email marketing is boring.  Subscribers readily complain to the ISPs (click the Report Spam button which depresses deliverability for marketers), unsubscribe or just ignore much of what comes to their inbox.  What a missed opportunity!  We are successful only when we make it less about us and more about our subscribers.

Conversation takes two people who do both listening and talking.  This is the essential truth of our social Web 2.0 world:  Marketers don’t own the conversation.  Give your subscribers and community members what they want — engaging, interesting, relevant content and offers that are worth reading and talking about — and they will give you what you want: sales and loyalty.

But these days, the newest games are discovered by kids as young as 4 or 5 eating sugary cereal and watching Saturday-morning TV — or by moms who point them out as they flip through the latest issue of Entertainment Weekly or Ladies’ Home Journal.

Even as most kid marketers’ budgets shrink — by regulation, in the case of food companies, or by the economy, in the case of everyone else — video-game marketing spending is growing. The previously steady, now hurried march of gaming into mainstream America, with a flood of family-friendly titles, has hardware makers and game developers trying to extend their advertising reach as well.

Nintendo leads the way
Nintendo, maker of the ultimate family gaming machine, Wii, and a plethora of “E for everyone” titles, has led the way, boosting its ad spending from less than $13 million in 2006, the first year of Wii, to $57 million in 2007 and $41 million through November of last year across all Wii hardware and games, according to TNS Media Intelligence.

And it seems to have worked. The top four games for 2008, according to NPD Group, were Nintendo Wii titles “Wii Play” and “Mario Kart” ($5 million in ad spending, according to TNS); Wii Fit ($12 million); and “Super Smash Bros. Brawl” ($1.5 million).

“Originally everyone was so fixated on the 18- to 34-year-old male,” said Michael Cai, Interpret’s VP-research, video games. “Then with the Wii, and online casual-gaming sites exploding … now publishers are designing and developing many more family-friendly games to appeal to people from 7 to 70 years old. With that expanded market, it makes sense for them to look at additional marketing and sales channels.”

Top video-game publisher Electronic Arts, for instance, made a point of telling analysts during its quarterly investment conference call in February (in which it reported a net loss of $641 million) that it will shift 50% of its emphasis and budget to games for the Wii platform, including a Wii-focused ad campaign.

CEO John Riccitiello pointed to a renewed marketing push across all titles as key to EA’s plans this year. “We plan to match strong quality with strong marketing — particularly with our top 10 titles. Operationally we expect to improve the way we go to market with our titles — starting earlier to create positive buzz and demand. Every expense will be down significantly this year, he said, “with the exception of variable advertising.”

Game makers boost spending
That will likely help continue the trend at both EA and its rival, Activision Blizzard, of increasing ad spending to reach kids. In kid TV programming, EA spent $6.3 million on Nickelodeon last year, up from $1.1 million in 2007, while Activision spent $4.4 million, up from $3.2 million in 2007. EA also spent $1.5 million on Cartoon Network, up from $394,000 in 2007, while Activision also spent $1.5 million last year, up from $703,000 in 2007. In media overall, Activision spent heavily on the demographically broad “Guitar Hero” franchise, with more than $21.5 million in paid media through November 2008, according to TNS, a 75% increase over $5.3 million for all of 2007.

“As more people that grew up playing video games start to become parents themselves, they have a much better realization of the value proposition that games can provide,” said analyst David Cole of DFC Intelligence. “There will be a lot more experimentation with marketing going forward, and the companies that are innovative with finding cost-effective ways to advertise to consumers could be much more successful than the rest of the pack. Marketing, advertising and distribution could become more important than ever.”

Comscore

Since last month, MySpace saw the number of minutes each U.S. user spent on the site per month grow 15%, to 266.3 minutes - a new record for the social network, and a 31% increase since last January. Facebook has also shown an increase over the last month, growing 4% since December to an average of 176.6 minutes per user, but has only grown around 3% year over year. And MySpace is still besting Facebook by around 90 minutes per user.

As the graph below shows, MySpace has had the advantage here for quite a while, but the recent spike is likely due to the site’s launch of MySpace Music, as well as growth in MySpace Video. In the struggling economy people are spending more time at home, which tends to benefit these media-heavy sites.

Page views are also up for both social networks, at least in the short term. MySpace’s page views are up nearly 10% since December to 579 pages per user per month, while Facebook has grown around 3% in the same time period to 337. Figures for both sites are smaller than they were a year ago, likely because they have both been introducing UI improvements like AJAX that don’t force users to refresh their page for every action. Such improvements generally help with lengthening visits as users are less likely to get frustrated, but they also lead to deflated page views.

CrunchBase Information

Facebook

Website:	facebook.com
Location:	Palo Alto, California, United States
Founded:	February 1, 2004
Funding:	$516M

On February 4th, 2004 Mark Zuckerberg launched The Facebook, a social network that was at the time exclusively for Harvard students. It was a huge hit: in 2 weeks, half of the student body… Learn More

MySpace

Website:	myspace.com
Location:	Beverly Hills, California, United States
Founded:	August 1, 2003
Acquired:	July 1, 2005 by Fox Interactive Media for $580M in Cash

MySpace, which launched January 1 2004, is a popular social networking site that lets friends share, message and stay connected. The site lets you browse profiles, blog, email and join groups. MySpace also has videos, music and classifieds. Music… Learn More

Information provided by CrunchBase

Digital media agency R/GA is working with HP to redesign HP.com, which supports about 82,000 product descriptions and 130 million hits monthly. Curtin said HP has added customer support forums and detailed some of the company’s plans such as adding lifestyle features focused on gaming, for example. Also in the works are custom navigation tools that allow people to create and share user-generate content.

After Curtin detailed some of HP’s plans for the new Web site, he invited HP Labs Scientist Bernardo Huberman on stage to discuss how the company determined the driving factors behind social media, which contributed to the redesign of the site.

The value of information is giving way to individual expression as more people post on Twitter, Facebook and other social media sites, Huberman said. And as the value of information degrades, media managers are attempting to harness that individual expression. “Our ability to pay attention to things is limited,” so it will become more important to look at “propagation of signals” at social media sites to determine effective marketing strategy, he said.

HP has been experimenting with various viral marketing concepts such as looking at propagation of signals, which could include people writing book reviews on social networks. HP analyzed this type of analysis to improve the performance of its new Web site.

Analyzing the propagation of signals on social media sites can give marketers insight into possible success. “The social networks that matter are the ones with behavioral patterns,” Huberman said. “It’s not important to have 150 friends on Facebook, but rather more important to see who you interact with on a daily and hourly basis.”

Huberman said marketers that want to influence the social medium around a person or group need to pay more attention to the content that gets transmitted and the interactions of people who send and read the transmissions. He also alluded to a “cool” mobile application in the works that HP will launch based on these observations.

by Laurie Sullivan

by Michael Fassnacht

Accountability is clearly keeping marketers up at night as the economic crisis continues to thread its way across industries around the globe and 2009 budgets come under greater scrutiny. So with economies performing badly in ways not seen in decades, all marketers should have a method-based and actionable answer to why marketing dollars are not a dispensable spending item but instead an investment with measurable ROI.

Yet, surprisingly, most marketers have no clear framework, methodology or process for dealing with the accountability issue. Many are still trying to figure out how to tackle and implement an accountability practice without stifling the innovative or creative ideas that marketing ultimately drives.

Roughly translated, accountability means being responsible for one’s actions, calculating how to achieve one’s obligations and suffering the consequences if those obligations go unmet. In this New Year, facing unprecedented economic roadblocks, here are three resolutions for marketing accountability success:

1. Make accountability relevant for everyone, not just analysts and accountants.
A marketing organization can be successful only if every member understands the metrics against which it will be measured. Not informing team members is like telling a football team to play the game without giving them a time limit or ever sharing the score. What athletes call the score, the marketing discipline calls accountability.

2. Plan for accountability upfront, in concert with the design and launch of marketing programs.
If marketers talk about accountability only after a program has launched, they are doomed to fail. A marketing organization cannot produce accountability if, at the outset, no one has defined the quantifiable goal. To do otherwise is like telling a designer to create a beautiful product without designating whether the product is supposed to drive or fly.

3. Recognize accountability as the friend, not the mortal enemy, of creativity.
Creative (in the context of marketing programs) must sell stuff. It must move individuals to do something they might not otherwise do. If the marketer fails to know if the creative has moved anyone, how can any creative work be improved? It’s rather like saying that designers who create cars or airplanes should not be judged by the ability of their end products to drive or fly, but by the pure aesthetic of the products. What functionality is for designers, behavioral impact is for marketing creatives.

To ensure accountability, marketers must first recognize that it is more than just a one-dimensional concept solely focused on metrics. Particularly in a recession-stressed organization, accountability calls for a holistic approach that is owned and practiced across all critical marketing functions. The recommended formula becomes even more relevant in tough times:

Accountability = Metrics + Expertise + Culture + Action

Metrics must focus on the correlation between marketing action and business impact; expertise relates to the necessary analytical skills; culture speaks to an organization’s environment, which must embrace a focus on accountability as a prerequisite to doing business; and action sees to it that accountability metrics are used in strategic planning discussions before, during and after marketing plans are designed.
ABOUT THE AUTHOR
Michael Fassnacht, exec VP-chief customer intelligence officer of DraftFCB, is a data guru with more than two decades of experience in CRM, analytics and customer loyalty programs.

Only if all four elements are equally institutionalized throughout a marketing organization can accountability be truly implemented, embedded and alive.

The right metrics remain critical, however. A focus only on either pure financial metrics (sales) or on very soft brand metrics (brand awareness) will not deliver success. Three categories must be used:

Financial metrics. These are all the financial corporate metrics that link marketing activities directly to CEOs and Wall Street, such as (in order of corporate importance in most cases) share price, profit, sales and brand value.

Direct behavioral metrics. These are the consumer-centric metrics reflecting a desired change in consumer behavior such as traffic, purchase metrics (frequency, size, penetration), repurchase/retention rate, and referrals.

Indirect attitudinal metrics. These are the psychological-based metrics that gauge consumers’ internal feelings or attitudes toward a particular brand — such as awareness, consideration, preference and satisfaction.

Far too many marketers have forgotten that marketing’s core function is not to drive financial metrics but to change consumer behavior in a manner that leads to financial success, so any accountability-seeking marketing organization should focus primarily on direct behavioral metrics.

In reality, marketers today need to begin talking less about accountability as a stand-alone concept and instead begin to deliver marketing that includes accountability as a crucial and integral element that works in a productive union with creativity.

As we head into what some are predicting may be the largest, longest recession since the 1930s, marketers would do well to behave less like a rabbit in front of a snake but as true content leaders and innovators in the realm of ROI and accountability.

Burger King wants to help consumers do something about it.

The fast-food chain has released the Whopper Sacrifice application on Facebook. The app rewards people with a coupon for BK’s signature burger when they cull 10 friends. Each time a friend is excommunicated, the application sends a notification to the banished party via Facebook’s news feed explaining that the user’s love for the unlucky soul is less than his or her zeal for the Whopper.

The effort crafted by Crispin Porter + Bogusky came about after agency creative staffers confronted the too-many-friends scenario themselves on Facebook.

“We thought there could be some fun there, removing some of these people who are friends [but] not necessarily] best friends,” said Jeff Benjamin, executive interactive creative director at Crispin, and friend to 736 on Facebook. “It’s asking the question of which love is bigger, your love for your friends or your love for the Whopper,” he said.

The app also adds a box to user profile pages charting their progress toward the free burger with the line, “Who will be the next to go?”

The application is available on Facebook and at WhopperSacrifice.com.

Whopper Sacrifice is the second application Crispin has built for BK. During the election, it released the BK Polarizer, a quiz widget that gauged where users stood on a political matrix compared to their friends.

Brand applications have a spotty record on Facebook, with few enjoying more than a temporary jolt in popularity before quickly fizzling. Some brands have begun rewarding consumers for installing their apps. One example is Kraft’s current campaign that includes donations of meals to needy families when users get their friends to add the Kraft Facebook app.

“We always look at these social networks and think of what tool or thing we wish was here,” Benjamin said. “A lot of times, brands force a feature or an application that I don’t think people ever want. That’s when you can waste some money.”

The notion of dumping friends in exchange for a burger could offend some, though Crispin has not shied from controversy with BK. Its recent “Whopper Virgins” campaign, showing people in remote areas of the world introduced to fast food, came under fire from many critics. Benjamin said the agency and client were careful to make the application lighthearted rather than “vindictive.”

“The [friend] removal is another kind of socializing,” he said. “At first you think it’s antisocial, but it’s a social device. Now we finally have something to talk about.”

By Brian Morrissey

On Wednesday, Cisco will kick off the Consumer Electronics Show here by announcing Eos, a hosted software platform that allows media and entertainment companies to create, manage and grow online communities. Through Eos Cisco has compiled technology tools and slapped on an easy to use interface to make building and customizing Web sites easy. But most importantly, it’s bundled into the software, technology that will allow media companies to build interactive Web sites so that fans can connect with musicians, TV shows, movies, or whatever brand a media company wants to promote.

Cisco gets social

Cisco first began looking for ways to help big media companies late in 2006, when it created the Media Solutions business unit. The idea was to develop and market products to digital media content owners. In February last year, the company bought a startup called Five Across, which developed social networking software.

Dan Scheinman, the Cisco executive behind Eos, believes that the new software platform addresses one of the biggest problems that media companies face today.

“The reality is that media is so disrupted by digital technology,” he said. “Fans are looking for ways to connect to their favorite artists or TV shows and they are seeking out communities, but the media companies have been slow to provide this for them. Eos is centered around community and allows fans to participate.”

The service provides tools that allow media companies to create blogs, live chats, message boards, rating and ranking systems.

Scheinman believes that social networking is the most important way for marketers and big media companies to reach consumers. Consumers are using sites such as YouTube and Facebook to share media, like videos, music and pictures. He also believes that media companies can combat piracy by offering fans an interactive experience through their own branded Web sites.

“In many ways digital destroys the value proposition for media,” Scheinman said. “Other people can rip off the content and monetize it, aggregate it, and take pennies for it.

“Eos offers the answer to this,” he explained. “If media companies allowed people to interact with the music or the video and do some things it with it, it enhances the experience and makes the brand more powerful. Eos won’t stop piracy entirely. But at the very least it lets the media companies put up a fight by allowing the audience to participate.”

Enlisting Warner Music

Warner Music Group is the first major media company to sign up for Cisco’s Eos service. The company is using the software platform initially to create Web sites for two artists, Laura Izibor and Sean Paul. Michael Nash, executive vice president of digital strategy and business development for Warner Music Group, agreed with Scheinman about the importance of creating community for the company’s music fans. He said that Warner Music has been looking to do just that for several years, but building the technology itself or cobbling together off-the-shelf tools has proven difficult and too costly.

“We have tried just about everything out there,” he said. “We eventually realized that we are dependent on technology, but we are not a technology company, so strategic partnerships in terms of using a platform is a very desirable approach.”

Nash said that Warner Music first started talking to Cisco about two years ago when the networking company initially conceived of the Media Solutions business unit. And it was Scheinman’s team at Cisco that presented Warner Music with a proposal for Eos that could help the company build these Web sites. For the past year, the companies have been working closely to fine tune the Eos tools and service.

Nash admitted that Warner Music could have partnered with several other companies to build interactive, community based Web sites. But he said that Cisco’s holistic approach was appealing because it provides a common platform that is easier to manage and much less expensive than building it from scratch. What’s more it allows the company to focus on its core business instead of trying to keep up with technology innovations.

“We’re a music company,” he said. “We don’t have the resources to make big technology investments and maintain those investments over time. But Cisco is a fantastic partner that has the money to invest in innovation and world class capabilities.”

Cisco and social networking?

At first glance, it seems odd that Cisco, a company that sells hardware to shuttle bits around the Internet, would get into the Web 2.0 social networking business. Even though the company is the largest supplier of networking equipment to large companies throughout the world and powers over two-thirds of the Internet with its IP routers, it’s not a software company. And besides its acquisition of WebEx it has little experience offering a managed service of any kind to customers.

But the truth is that Cisco sees social networking and the Web 2.0 experience as an important trend in Internet usage, which ultimately drives more demand for its traditional infrastructure business. People viewing videos from YouTube or listening to a friend’s favorite song on Facebook consume more bandwidth.

And when consumers use more bandwidth, Cisco sells more infrastructure equipment. It sells gear, to the media companies creating and disseminating the digital content and to the service providers building the networks, and also to consumers who are accessing all that content at home.

Scheinman described the situation as a win-win for everyone involved.

“Eos gets the media companies out of the infrastructure business, which they weren’t happy about spending money on anyway,” he said. “Fans get a more interactive experience. We also get the infrastructure benefit. And even service providers benefit because people are consuming more bandwidth.”

But that might be a mistake.

What’s good for the business is not necessarily good for the brand. And vice versa.

What’s a brand anyway? It’s a word that stands for something in the mind of prospects. That definition, by the way, is at odds with conventional thinking.

Most managers equate a brand with its celebrity index. The more famous the brand, the more powerful it is. “Making our brand name well-known” seems to be the conventional approach to brand building.

Chevrolet is one of the world’s best-known automobile brands, but how valuable is the Chevrolet brand? Not very.

Chevrolet doesn’t make Interbrand’s list of the 100 most-valuable global brands. Chevrolet, like many other exceptionally well-known names, isn’t worth much because it doesn’t stand for anything.

It’s not just Chevrolet. The U.S. automobile industry markets 14 vehicle brands: Buick, Cadillac, Chevrolet, Chrysler, Dodge, Ford, GMC, Hummer, Jeep, Lincoln, Mercury, Pontiac, Saab and Saturn.

I would guess that every one of these brands (with the exception of GMC) is exceptionally well-known with a recognition score in excess of 90%.

Except for a house or an apartment, an automobile is the most expensive product a person might buy in his or her lifetime. In addition, an automobile has enormous street visibility. These factors combine to give automotive brands a huge advantage in the battle for the consumer’s mind.

It’s not surprising that 11 automobile brands made Interbrand’s most valuable list. But just one of those 11 brands was an American brand. (Ford at No. 49.) The other 10 were European and Asian brands. Why? The European and Asian brands stood for something.

* Toyota (No. 6): Reliable
* Mercedes-Benz (No. 11): Prestige
* BMW (No. 13): Driving
* Honda (No. 20): Reliable (second to Toyota)
* Volkswagen (No. 53): Practical
* Audi (No. 67): Advanced technologies
* Hyundai (No. 72): Cheap
* Porsche (No. 75): Sports cars
* Lexus (No. 90): Luxury
* Ferrari (No. 93): Expensive sports cars

Keep in mind, these are global brands. Volkswagen is not doing particularly well in the U.S. market, but it’s No. 1 in Germany. Also, Audi suffers in the U.S. market because of its unfortunate name, but that’s not a disadvantage in many countries where English is not the spoken language.

How do you build a brand? Almost every successful brand in the world started as a narrowly focused brand that stood for a single idea. Then the business builders took over. First objective: Expand the business.

Dell Computer started as a narrowly focused business-to-business company selling personal computers direct. Dell got off the ground by owning the word “direct.”

Michael Dell wrote a book that outlined his company’s rise from obscurity to fame. The title? “Direct From Dell.”

In the first quarter of 2001, Dell became the world leader in personal computers. (And not just in sales, but in profits, too. In the 1990s, for example, Dell had the best stock market performance in Standard & Poor’s index of 500 leading American companies.)

What did Dell do next? It forgot about building the brand and started building the business. First Dell moved into consumer personal computers, undermining its position as the “business” PC specialist. (”Dude, you’re getting a Dell.”)

Then Dell moved into consumer electronics, undermining its position as the “personal-computer” specialist.

Then Dell moved into retail distribution, undermining its “direct” distribution position.

In 2003, Dell Computer Corp. dropped “computer” from its name and became Dell Inc. (That’s always a bad sign.)

Did all these business-building moves work? Sure. Sales steadily increased from $31.9 billion in 2000 to $61.1 billion in 2007.

While Dell sales went up, the Dell brand went down. Dell, formerly the world leader in personal computers, is now second to Hewlett-Packard. (In 2007, HP had 18.2% of the market and Dell had 14.3%.)

Dell’s net profit margin, a good indicator of a brand’s value, also went down. From 6.8% in 2000 to 4.8% in 2007.

Where Dell went wrong, in my opinion, was that it forgot what built the brand and instead focused its efforts on building its business. Yet that’s not the conventional wisdom.

“Where Dell Went Wrong” was the title of a Feb. 19, 2007, article in BusinessWeek. “In a too-common mistake, it clung narrowly to its founding strategy instead of developing future sources of growth.”

Scott Thurm, writing in The Wall Street Journal, said essentially the same thing: “Dell couldn’t diversify its business, making it vulnerable once Hewlett-Packard matched its expertise.”

That’s the way it is in corporate America today. Everybody is looking for ways to build their businesses by expanding into other categories. Their real strategies should be to build their brands by dominating their categories. And often the best way to do that is by contracting their brands so they stand for something.

What’s the most reliable measure of the power of a brand? It’s not making the Interbrand list. The most reliable measure is market share. Powerful brands dominate their markets.

In the U.S., Tabasco has 90% of the hot-pepper-sauce market. Campbell’s has 82% of the canned-soup market. TurboTax has 79% of the income-tax software market. Starbucks has 73% of the high-end coffeehouse market. The iPod has 70% of the MP3-player market. Taco Bell has 70% of the Mexican fast-food market. Google has 68% of the search market.

When your brand dominates a market, it is in an exceptionally strong position. In a mature market, a dominant brand is highly unlikely to ever lose its position. (Think Kleenex, Gatorade, McDonald’s, Budweiser and many other dominant brands.)

Even more important, dominant brands usually generate exceptionally high profit margins. Compare Intel, the dominant microprocessor brand, with Advanced Micro Devices, the No. 2 brand.

In the last 10 years, Intel has had sales of $319.6 billion and net profits of $62.2 billion. Intel’s net profit margin was an astounding 19.5%.

In the last 10 years, Advanced Micro Devices had sales of $42.7 billion and net profits of … well, they didn’t make any money. They lost $4.1 billion.

You see the same relationships on Interbrand’s list of the 100 most-valuable global brands. No.1 brands are worth far more than No.2 brands.

* Coca-Cola is worth $66.7 billion. Pepsi-Cola, $13.2 billion.
* Nokia is worth $35.9 billion. Motorola, $3.7 billion.
* Nike is worth $12.7 billion. Adidas, $5.1 billion.

The personal computer was the most important new product of the 20th century and it’s likely to remain that way for decades to come. Someday some brand will be the Coca-Cola or Nokia or Nike of personal computers with a market share of 40% or so. That company is unlikely to be either Hewlett-Packard or Dell.

You can’t dominate a category if you expand your brand into many other categories. (That’s why IBM is no longer the dominant PC brand.)

You can only dominate a category by keeping your brand focused.

Building a business or building a brand? That’s the most important question in marketing.

What this means is that video is coming to Facebook in a big way, but it will not look like the video we have seen on such social media platforms as YouTube and MySpace. To date video on these and other social sites has fit the paradigm of a small number of content producers, relative to a larger audience of content viewers.

Meaning, the goal on YouTube, for a bulk of the content creators, is to get more views of their videos regardless of who is doing the viewing. To date, even with all of the user-generated content out there, on social sites most users’ primary role was to either distribute/share other people’s (commonly strangers’) content, or simply consume that content.

Now users on Facebook are creating videos specifically to communicate with people — or even a single person to whom the user is already connected. It sounds simple, but the difference is significant. The shift in behavior is being caused by a proliferation of easy-to-use devices that produce easy-to-upload, Flash-based videos (like Flip, and the video camera now built into every phone and computer) and Facebook’s support of intuitive video sharing among social graph connections.

As this behavior increases, it creates a whole new class of video content on the Web. The plus side for Facebook is that using the site to store and share videos for communication adds a new layer of utility for Facebook, in a way that is very appropriate for the platform. Still, the trend brings another big issue: if you thought YouTube had a hard time monetizing its video content, imagine trying to monetize someone’s personal video message to a friend.

For us, as marketers, video as communication represents people adapting to new technologies and evolving new media habits, even while we are still trying to adjust to the idea of social media at all. There is no guarantee how this will shake out (i.e., Will YouTube and MySpace simply cede this functionality to Facebook?). I am not sure yet what this will mean for the industry as a whole (marketers, social networks or users), but I am interested in your thoughts, as I am convinced this will be one of the major consumer trends over the year.