What the BIG BRANDS are spending on Google AdWords.

According to AdAge.com, the top 10 represent less than one percent of Google’s revenue in June.  The big brands are clearly lagging when it comes to online marketing.  Perhaps they are expecting their traditional marketing departments to shift online on their own.   Whatever the reason, the long tail is working for Google and it is helping the SMB segment continue to compete effectively online.   Wonder when the big brands are going to get it….

Newcomer Hulu Leverages Social Networks, May Be “the one”

According to PC World’s, Brennon Slattery Hulu rockets to the second largest streaming video provider.   According to February Neislen data Hulu enjoys 9.4 million unique visitors.   Imagine Hulu aggregating the MySpace, FaceBook, and You Tube audiences all logged in and watching the latest Angelina Jolie, Brad Pitt, or Jennifer Aniston block buster.   The big idea here is that personalization, interactive advertising, and monetizing the social networks is now a reality.  To all those interactive agencies wondering how they are going to weather the current macro economy slump, I encourage them to get on the first flight to Austin, Texas  for SXSW and start preparing for the Interactive  Earthquake that will be felt around the world.  You might also want to consider some stock in Adobe.   🙂

Hulu Sees Advantage in Social Networks

According to the New York Times,  Hulu, Internet broadcaster, is adding social “friending” to its service offer.  However, they are going it alone.   Using Open ID would allow Hulu to amass much larger audiences such as Myspace and Google.   Maybe Hulu will be the High Quality Internet Broadcaster that produces content for the Internet demographic synchronously.   They certainly have the quality on an asynchronous basis.  If so, and they leverage the log in features of  some of the larger social networks they may be the next major Internet portal.  Interactive advertisers start your engines.

Eric Schmidt – Try Online Video

The New York Times reported today by MIGUEL HELFT that Goggle is in advanced discussions for premium content in the form of music.   Choosing music as the premium content of choice means ans their are more folks in line getting paid than a royal wedding.   Plus it’s already been done….   Another more interesting alternative is to create high quality multi-media content programming targeted for the on-line demographic and premiere these programs creating on-line eyeballs that advertisers will pay a premium for.   They are free to the consumer.  Much better business model.  The on-line demographic is very attractive but can’t find anything of quality on-line other than news and niche product placements. 

New Entrants Could Leap Frog Existing Social Networks Using Open Standards Open ID

New social network entrants taking  advantage of the ubiquitous broadband can aggregate  millions of users effortlessly using the open standard Open ID .  Many content providers and social network myspace are already using these open standards as well as Goggle. 

Imagine a new entrant to social networking whose business model is broadcasting high quality multi-media video synchronously and leveraging the open ID standard to reducing the switching costs to zero.  It just might work.  It all depends on the high quality multi-media content.   Producing content on-line for the on-line demographic is a sustainable business model.

Based on yesterdays posting that demonstrates how the legacy social networks can monetize  a new paradigm presents itself that a new social network can emerge overnight using the same idea and present a formidable challenge to the My space, You Tube , and Facebook  Goliaths  along with hundreds of other niche players.

The Secret of Monetizing Facebook You Tube and Myspace Revealed by Michael Duley

The framework:  Facebook,  You Tube,  and Myspace from here on out will be considered networks.   Consider the network where there are millions of logged in users and some  user preferences are known and other preferences are gleaned periodically.   Imagine  you have an aggregation of eyeballs and you know something about each one such as age, gender,  sports, zip code and other valuable preference.  The big idea is that the network with logged in users is built.  The distribution has a marginal cost of nearly zero.  The delivery of high quality synchronous and asynchrnous programming  is the missing link.

The strategy:   the network will advertise and broadcast content on the network.  Customers that are logged in will tune in to the content and receive value from the content (favorite program) whether it be comedy, action movies or any content/program  that one might broadcast.   The big idea here is that personalized ads can be delivered because of the logged in nature of the network ads will be personalized.

Scalability:  As more customers log on for their program/content, more segments are aggregated and advertising is more targeted than ever.  After 6-18 months a very affluent segment emerges that’s logged in to the network and high value personalized ads can be delivered.   Some programs will be delivered synchronously while others may be asynchronously or on-demand

A new paradigm:  The ads are interactive….  For example, if  someone in the network wants a boat they will not only see boat images but will have the opportunity to see diferent types of boats and after a few interactions/clicks be presented with the ability to design one.   Another example is with an automobile, the networks starts with serving aftermarket ads showing how their current wheels could be enhanced and after some interaction/clicks a customized ride.   It’s fairly easy to extend this thought to a new car purchase and how that might work as well.   The data available for storyboarding alone would generate revenue by learning customer preferences first-hand.  Think about how this could change real estate shopping.  It will transform shopping and will be value added almost multi-tasking from the customers perspective.

Given the choice for a customer to view an advertisement  in between periods of content ( your favorite on-line program)  wouldn’t you love for it to interact with you and serve your needs.

In summary, the network is built.  The missing link is the delivery of syndicated content from high quality content providers synchronously for high cost per thousand audiences and asynchronously for the 24/7 always on value of the network .  The online demographic is very attractive to advertisers.   Additionally, advertisers need to vertical integrate interactive agencies into their functional organizations and will pay to access the network for focus groups, story boards, detailed future preferences , data mining and actual orders.   One could imagine a commission based model with the network benefiting.  Imagine a logged in user of the network designing their sneakers and ordering them while watching the Boston Marathon and the network say takes 15%.

Imagine for Facebook alone, what if you could motivate their 175 Million active users to attend a concert, watch the latest cell phone reveal, or see Justin Timberlake.  Even a small percentage of this type viewership would make most ad models work exceedingly well.

The New York Times indicated the social networks might be strapping on a movie projector and a concert hall last year in addition to going global.  All good ideas.  As any decent strategy person soon learns, strategy is one thing, execution is another and it takes both!

http://www.nytimes.com/2008/01/21/technology/21myspace.html?pagewanted=1&_r=1&sq=rupert%20facebook&st=Search&scp=4

What we should learn from Stephan Lee, the author of the link below is that others have come before and delivered a  cost free distribution model and  all the social networks need to do is use it to the max.

http://atwiad.com/blog/2009/1/30/what-telco-history-tells-me-about-facebook-business-model.html

Diann Daniel  cio.com supports that currently social networks are vast wastelands.  I assert the money will follow the quality

http://www.pcworld.com/article/159992/social_networks_thrive.html?tk=rss_news

Michael Duley

March 1, 2009