On the Future of Instagram Ads

photoCan I just say for the record, I love Instagram!  As a longtime amateur photographer (yes, I spent many hours developing & printing in a darkroom way back when) I am quite happy taking an “insta-break” to soak in well composed shots and blow by the rest.  Add in the fact that I believe you can’t just talk the talk in our business–to be a good social advisor, it helps to walk the walk or perhaps in this case, seize the #selfie. So it was with mixed feelings that I responded to Saya Weissman of Digiday’s questions about the pending arrival of ads on Instagram.  Undoubtedly, ads will change the Instagram experience and it is hard to imagine it will be for the better.

Now without going out on a limb here I suspect Facebook didn’t pay $1 billion for Instagram without a monetization plan.  No such thing as a free lunch or a free app. So ads on Instagram? You bet.  Non-intrusive ones that actually enhance the experience?  We’ll see.  And since predicting what Facebook will do is a fool’s errand, I jumped right in, offering my best prognostications (see below). Fortunately, Saya’s article also includes quotes from GE’s Katrina Craigwell (see my 2012 interview with Katrina here) and Matt Britton of MRY (one of NYC’s best places to work), two people that I know and respect.  Bottom line–I suspect you’ll want to read their opinions as well (after you get through mine of course!)

Saya: What do you think is the best ad solution for Instagram?
Drew: The beauty of Instagram is its  elegantly simple user experience.  The best ad solution will be the one that is the least disruptive.  For example, allowing sponsored posts to show up in feeds will not be too disruptive as long as there aren’t too many of them.  A highly disruptive experience would be adding pre-roll to video posts.

Saya: What is going to be the biggest challenge in implementing ads on Instagram?
Drew: From a marketer’s perspective, Instagram is going to have to make a lot of changes to be competitive with Facebook.  For example, right now you can’t include hyperlinks in the copy that goes with Instagram photo/video posts. Without a means of driving clicks somewhere, Instagram will only be able to sell impressions and cheap ones at that.  Another challenge is that Instagram doesn’t know nearly as much about its users as Facebook other than geolocation and the hashtags they use.  While hashtags may represent a currency that can be sold to marketers, it remains to be seen if these will have as much value as more direct search terms.  Perhaps the biggest challenge is that marketers are already on Instagram.  Those that are doing it right are getting thousands of fans to see their posts without paying a dime.

Saya: How do you think users will react to ads on Instagram after having it ad free?
Drew: It depends how disruptive the ads become to the overall experience.  Most will live with the occasional “promoted post” because the app is free. However, if the ads are too disruptive, Instagram can count on a user rebellion like the one they had over their privacy SNAFU.

Saya: Do you think it will be difficult for Instagram to woo advertisers?
Drew:  Certain advertisers will consider Instagram given its highly engaged user base.  That said, Instagram will need to prove that it can offer highly targeted exposure AND drive traffic either within the app to a brand page or outside of the app to external sites.

Saya: Will ads ruin Instagram?
Drew: Ads could ruin Instagram if they go too far too fast thereby disrupting their currently elegant user experience.  They will be wise to pilot various approaches with users who will give them honest feedback.   Also they might want to offer an alternative paid app subscription that is ad free for the purists.

One possibility is that ads will actually ruin Instagram for marketers who are already successful on the platform.  It is conceivable that Instagram would suddenly throttle brand feeds to increase the value of its impressions.  So for example, Oreo’s Instagram posts currently reach all 97,000 of its followers. Instagram could decide to throttle this feed to say 16% and make Oreo pay to reach the other 84% of its organically earned fan base.  I suspect this would not inspire smiles or happy cookie images from the marketing team at Mondelez.

Saya: What can Instagram learn from Facebook’s ad model?
Drew: Facebook is extremely marketer friendly when it comes to buying media on their network.  First, provide an easy to use self-service buying platform. Second, make it extremely easy to monitor and evaluate ad performance based on both CPM and CPC.  This is why Instagram will need to figure out how to include hyperlinks either in post copy or on the post itself.  Third, don’t oversaturate a user’s feed with sponsored posts. Fourth, allow marketers to sponsor posts to existing customers (like Custom Audiences) and “look alike” customers.  Fifth, have very clear and strict ad guidelines that limit that amount text on any image or video post. Sixth, make sure ads are identified as ads.

As always, if you have some thoughts to share, please do either here or on Instagram itself.  

Metrics Matter

Graham MuddI popped out of the office briefly this week to hear Facebook’s Graham Mudd speak at the Integrated Marketing Week conference on the subject of measuring success across publishers. Graham, by the way, is the Head of Vertical Measurement at Facebook and is thusly well positioned to guide marketers on what metrics matter and which ones don’t.  Given the seemingly universal obsession with Likes, I was quite curious what Mudd thought about this and other Facebook-related metrics.  Here’s what he had to say…

Drew: Many digital media buyers are still obsessed with Likes and Clicks as a measure of ad efficacy.  Is this a mistake and if so, what metrics should they be looking at?
It’s a mistake unless the business outcome they are trying to drive is either directly related or correlated to clicks or likes.  If a marketer’s goal is to build a community of its strongest customers online or drive people to their website, then likes and clicks are a great measure of success. On the other hand, if they’re trying to drive sales, either online or offline, then they should be measuring sales, not likes or clicks. For instance, we’ve seen that for 99% of sales generated offline are from people seeing an ad online, not clicking on that ad.

Drew:For several years, marketers and pundits have tried to put a value on a Facebook Like.  Is this a fool’s errand or have you seen cases where a Like ultimately translates into business value?
The degree to which the value of a like is important is really driven by the marketer’s goals.  If the marketer wants to focus on building a community online or connecting with influencers, then understanding how much those customers are worth is obviously critical to understanding how much to invest.

If a marketer has more traditional goals like customer acquisition or driving online or offline sales, then they shouldn’t be paying attention to likes as much as how much their marketing efforts drove sales.

One thing that’s abundantly clear is that just like customer LTVs (life time values), there is huge variance from industry to industry and advertiser to advertisers in terms of the value of a fan.

Drew: Measuring cross-publisher effectiveness seems like a smart idea. Are there any barriers preventing this from happening now? 
The primary barrier is siloed data.  By that, I mean that each publisher is measured using a different technology/methodology so the ability to make comparisons across media partners is inherently limited. While there are definitely options out there, we believe there’s a real opportunity to focus on comparability and standardization of measurement across platforms, which is why we acquired Atlas recently.

We really believe in cross publisher measurement for three reasons: (1) our customers are pushing for this and we believe it’s good for digital marketing to be as accountable as possible; (2) we’re confident that when measured accurately, Facebook will perform really well as a marketing platform; (3) we recognize that marketing budgets generally aren’t growing, so in order for us to grow, we need to work closely with brands and agencies to demonstrate that we are a cost effecient and effective channel.

Drew: How exactly do you measure cross-publsiher effectiveness? 
Really depends on the marketing objective:  If the marketer has direct response goals, then we believe multi-touch attribution is the best methodology for understanding and valuing all the ad exposures that ultimately lead to a conversion. The last click before a purchase shouldn’t be getting all the credit for exposures and actions taken along the way to purchase.  If the marketer has branding objectives, then we believe they should be measuring and optimizing on reach and frequency using a tool like Nielsen Online Campaign Ratings (OCR) or comScore VCE.  They should also measuring brand lift and if possible, offline sales. Our customers are working with a company called Datalogix to measure how ads on Facebook impact lift in advertisers’ in-store sales.

Drew: Can you provide any real world examples of brands/agencies that are measuring cross-publisher effectiveness and how this is working for them?  (What kinds of things are they learning?)
Many major direct response advertisers in verticals like Telecom, Financial Services and e-Commerce are using highly comparable measurement techniques like multi touch attribution.  Within campaigns and from campaign to campaign  they are constantly learning how various publishers perform and can reallocate budget accordingly.

Brand advertisers use tools like Nielsen OCR and comScore VCE to understand which publishers are deliver their desired audience with controlled frequency and maximum reach.

Drew:  Marketers tend to look at Facebook as exclusively a B2C channel.  Can you give me an example or two of B2B marketing campaigns on Facebook that are moving the needle?
HubSpot is one that comes to mind right away. It wanted to promote its brand as a thought-leader in the business-to-business field on Facebook to lead fans to its Page and ultimately engage them with other content and drive customer engagement and generate more leads.  The company ran ads that targeted different age segments, including 24-34, 35-44, and 45-44, along with Likes and Interests such as “marketing director,” “marketing manager,” and “marketing manager.”  HubSpot increased engagement on its Page by posting updates about marketing conferences and e-commerce tips as well as links to demos and videos. As a result it saw 71% sales increase from Facebook over the course of three months and 39% increase in traffic coming from Facebook during the course of three months

Drew:  Should B2B marketers look at different metrics than B2C brands when putting together a Facebook and/or cross-publisher ad campaign? 
Just as is the case for B2C marketers, B2B should try to use whatever metric mostly approximates or directly measures their business outcome.  Measuring sales leads using MTA is certainly possible if the lead generation occurs online. Recently we’ve developed the capability to allow advertisers to upload CRM data to Facebook and reach customer segments on Facebook using a targeting feature called custom audiences.  This is a really powerful tool for B2B marketers — and because CRM databases typically track transactional data, marketers can effectively connect exposures to ads on Facebook (and other online and offline channels) with conversions.

Drew: Big companies with big budgets tend to have more sophisticated tools to work with.  Can a small advertiser measure cross-publisher effectivenes and if so, how?
Smaller advertisers that have DR objectives often utilize ad products that are more straightforward from a cross publisher perspective.  Tools like coupons or discounts, such as our Offers product, can be tracked on a redemption basis, which is easy to compare from publisher to publisher.  Same is true for online conversion measurement — Facebook and others provide conversion pixels which can link ad exposure to buying and be compared across sites.

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Do You Have Room for One More Network?

If you count yourself among the members of the social tribe (MOST), then inevitably you are facing some degree of social media fatigue. Even those of us who make a living in social media find the challenges of listening, responding, creating and tracking content on multiple platforms overwhelming at times. Kirsten Gronberg, community manager at start-up CMP.LY, admitted in a Yogi Berra-like fashion that all her job related tweeting, checking-in, liking and blogging was actually “getting in the way of work.”

Writer Corey Guilbault relates his social fatigue to the “abundance of noise from a bazillion broadcasters making it hard to hear anything.” Valerie Romley of Moving Target Research is even more fed up, exclaiming, “I’m totally over any and all social networking which is a huge time suck.” That said, Romley does admit that LinkedIn remains a great source for finding “referrals to qualified partners and vendors.”

Oh no, not another network!
Which begs the question, have we reached a saturation point that limits if not dooms the opportunity for new networks to blossom? Valerie Grubb, who runs a bustling real estate consultancy and actively reaps benefits from Facebook, LinkedIn and Twitter proclaimed, “I just don’t need ONE MORE SITE.” Mia Malm, an SF-based PR consultant echoed these thoughts concluding, “I think most people have at this point established what networks they want to be in and those networks have a critical mass.”

A week ago I would have agreed with these prognostications but having experienced two new network enablers, Referral Key and MixTent, now I’m not so sure. Both of these new services have a fighting chance of catching on, addressing areas of business social networking not fully covered by LinkedIn and certainly not addressed by Facebook while taking full advantage of the connections you already have on these networks.

Referral Key is a viral juggernaut
Of the two, Referral Key may be the most profoundly viral application since Twitter came on the scene in 2006. Like its name implies, Referral Key, is designed to enable peer-to-peer referrals among small businesses, finding strength in the simplicity of its offering. Once you sign up for Referral Key, you can then solicit all or selected peers on LinkedIn to send you referrals, offering the referrers any kind of reward you desire including cash.

Thus far, the secret to Referral Key’s virality is the most compelling email subject line I’ve ever seen: “Are you taking on any new clients?” To gauge the power of this line and interest in yet another network, I used Referral Key’s system to send about 100 invitations to selected colleagues culled from my larger LinkedIn database. Within 72 hours, an astonishing 70 of the 100 had joined Referral Key. Another 10 responded to my email politely declining but reinforcing the undeniable power of a “killer” email subject line.

Sure Referral Key got our attention, but will we use it?
Of course, responding to an email and delivering referrals is hardly the same thing, and it remains to be seen if Referral Key will end up being the useful source of leads for small businesses that it promises to be. Stephan Paschalides, co-founder of NowPlusOne, a research and innovation agency, wonders if Referral Key will really catch on. Explained Paschalides, who is certainly open to the idea, “I invited a bunch of people, but none of them invited other colleagues yet–maybe there are too many work/networking-related sites out there.”

MixTent, another new entry in the B2B networking world, takes a completely different approach from Referral Key: It asks users to rate colleagues already in their LinkedIn networks. The rating process has a fun, game-like component, in which users choose from a pair of colleagues, based on the question, “which would you to prefer to work with?” in a particular category (in my case, Marketing, Consulting, Writing, Social Media, etc.)

MixTent gets mixed reviews but there are great lessons here
After rating 25 pairs, MixTent asks if you would like to share your positive ratings with your preferred associates. This triggers a potential email with the subject line, “Hi, I just voted for you on MixTent.” MixTent encourages you to share this email, which in theory attracts more people to the “tent” and unlocks more aspects of the service to the user. Based on the limited response to the emails to 35 peers for whom I voted, it’s a bit too early for me to declare MixTent a viral peer to Referral Key.

Whether or not Referral Key or MixTent becomes the next big thing in social media, there are two important lessons here. First, email is still among the most powerful weapons in marketing, assuming you write compelling subject lines. Second, there are still unmet needs out there that the social media giants will either ignore or be unable to address. These chinks in the armor will create opportunities for highly focused start-ups that can work around or better yet within the giant ecosystems created by the likes of Facebook and LinkedIn, overcoming the social fatigue that will hold the less viral ones at bay.  (If this article seemed familiar, that’s because you read it already on MediaPost.com)


Could IBM Be Bigger in Social Media than Facebook?

Fathoming a new product from IBM via a launch event is like trying to understand the ocean by watching a wave. Nonetheless that was my task, swimming through the presentations and ultimately landing an interview with Jeffrey Schick, IBM’s VP of Social Software. Drenched in the vision Schick shared for the IBM Customer Experience Suite, it occurred to me that IBM could end up being more important to the business use and monetization of social media than Facebook.

While the comparison between IBM’s new social software solutions and Facebook could be considered all wet from the start, the mere fact that I’m discussing both in the same sentence should make you take notice. IBM is not sitting idly on the dock as web and mobile usage transform business interactions. Rather they intend to ride the wave of Web 3.0, creating and implementing the software that according to Schick, “can better connect people with people and people with information.”

Social software is not a new idea at IBM

Long before Mark Zuckerberg aggregated his Harvard friends online, IBM’ers could find their colleagues in a similar manner. According to Schick, “at IBM 15 years ago, we had a way to look up people to create a globally connected enterprise.” “Today we have approximately 500,000 people within IBM and we do about 6 million look ups a day on pages that look strikingly similar to other social network profile pages with features like blogging and photo posting,” added Schick.

IBM’s internal network served as both an incubator and torture test for its latest offering. “The idea of getting the right person over the right time at the right opportunity and yield the right result was really important,” explained Schick. So while Schick and his team watched the rise of Facebook with interest, they took greater inspiration from the technology they were already using to deliver “an exceptional work experience for employees” which also translated into better client service.

Social software for business that is as easy as Facebook

Recognizing how simple it is to publish on the web today, IBM aims to make their social software tools as easy to use as social networks like Facebook. Acknowledging the early adoption of social technology by kids, Schick noted, “now I say this stuff is so easy us old people can use it!” This simplicity of use has fundamental implications for business, “making a tremendous difference in the way that people can collaborate and share information,” added Schick.

The emphasis on ease of use also means that IBM may be able to address some of the needs of small and medium size businesses with its new offering. By taking the capabilities they’ve created for big companies and putting them on the cloud, smaller businesses may indeed be able to leverage these services and according to Schick, “easily create a community that would allow them to invite their clients and engage them.”

Reaching for more than 500 million “likes”

While pundits debate the value of a Facebook fan, IBM has no doubt about the value of its new social software portfolio. In addition to using the software to “build better client and employee relations,” Schick expects that “people can get genuine business value [from it].” While dialog is important, all of this, according to Schick, “is done to drive revenue, to create better customer satisfaction and gain some competitive advantage.”

And though IBM calls its Customer Experience Suite “new,” they are already touting case histories that prove its merit. Schick explained how the relatively small Practicing Law Institute is “leveraging the web to create communities to better engage their attorneys that take their classes.” He also explained how a large construction firm, “created a web experience that allowed them to hear the types of homes they should be building.”

Being a social organization is more than being on a social network

Though Facebook is the reigning social network, it is simply a ripple in the ocean of IBM’s vision for the new social organization. Businesses of all sizes need to think social across their intranets, extranets, the internet itself and the emerging mobile marketplace. Whether it’s about sharing information internally, with clients in a walled garden, or with prospects on their cellphones, “social is an important dimension and critical to what we’re doing,” explained Schick.

Recognizing that the social tsunami could be a bit overwhelming to its customers, IBM also tried to use itself as an example, employing a range of external and internal social tools at the launch event and online. Attendees were encouraged to tweet using the hash tag #IBMexperience while the event was streamed live online. All of the launch-related content was shown in real-time using IBM’s social media aggregator providing proof positive that IBM was indeed practicing what it preached.

Final Note: Regardless of your business size, IBM’s big move into social software should be a clear indication that every business needs a broad-reaching social strategy not just a Facebook fan page! This strategy needs to address the needs of your customers and your employees, ensuring optimal collaboration between them anytime and anywhere.  (This article first appeared on FastCompany.com)

Don’t Get Those Summertime Social Media Blues

This article ran on MediaPost earlier this week: As we enter August and our shrinks go on vacation, it would be easy to go crazy over all the dour news related to social media. Fortress Facebook is showing cracks as 170,000 or so 26-34 year-olds defected from the network in June according to Inside Facebook. Fast-growing Foursquare, which reached its 100 millionth check-in milestone in July was doused by a Forrester study that recommended a “wait and see” approach. And 24 hours after the most beautifully orchestrated social media stunt since BK’s Whopper Sacrifice, several respectable publications were asking, “Yeah but did it sell bottles of Old Spice?”

Admittedly I do find the Facebook news a bit troubling because no one seems to know where these young folks are defecting to and if it was a temporary aberration or genuine trend. [Note: Facebook grew again in July.] As for the Forrester’s study that recommends a cautious approach to Foursquare, I’m delighted since this will leave it open for the innovators while the wait and see types sit by the sidelines and lose early adopter advantage. And just in time to restore order in the creative universe, Nielsen reported that Old Spice sales were indeed up 107% in the last month. All this said, I’d like to offer a little pep talk in what otherwise might be the dog days of social media.

Don’t Give Up on Facebook Just Yet

Considering the sheer massiveness of Facebook, it is quite likely your target is still actively engaged on the largest truly global social network. According to Comscore, in June 2010 over 130 million people within the US used Facebook. With that kind of reach, its easy to understand how some brands are using Facebook as their only website while others create ecommerce stores within the network. So the real challenge is figuring out the Facebook strategy that is right for your brand.

Venerable print pub National Geographic has attracted over 1.4 million fans on Facebook by providing a steady stream of interesting factoids. Offering his own pep talk at the Supergenius WOM conference in NYC last month, National Geo’s VP of Marketing Brendon Hart advising having a “fan first” approach specifically for Facebook. Hart advised testing a wide variety of content in order to zero in on what drives the most likes and comments. If this old brand can make hay on Facebook, certainly yours can too.

Innovative Brands Should Be Testing Location-Based Services

While the installed base of Foursquare users is admittedly small at about 2 million, now is the time for innovative brands especially those targeting millennials to be testing this and other location-based services like Gowalla, Loopt, and GetGlue. Not only will experimenting now give you a leg up on your competition when these services are more mainstream, you’ll earn special points with millennials who love the competitive nature of location-based social networking games.

Ramon DeLeon, the owner of six Domino’s Pizza restaurants in Chicago, is a legend in the social media world and an early adopter of Foursquare. Speaking at the Supergenius conference, DeLeon explained that he’s had fun experimenting with Foursquare and with letting his “mayors” take charge at his restaurants. Noted DeLeon, “I invite our mayors to do whatever they want, to make their own pizzas or eat for free.” Adding Foursquare to his already broad mix of social media including Facebook, Twitter, Flickr, YouTube and a blog was a “no brainer” as DeLeon wants to part of the conversation wherever his target is talking.

And Yes, This Social Media Stuff Can Drive Your Business

While the Old Spice guy making customized YouTube videos for a select group of his Twitter followers is a spectacularly innovative case, other brands are using social media to drive their businesses every day without as much fanfare. The challenge to figure out your overall goals for social media and then determine how to make the most of each of particular channel, especially the over-hyped and often misused Twitterverse.

Paull Young, Director of Digital for CharityWater.org, reported at the Supergenius conference that his organization has grown almost entirely through word-of-mouth, raising $20 million in 4 years. As the first charity with over one million followers on Twitter, CharityWater.org has inspired a “long tail” of givers, from well-known celebrities to precocious 8-year-olds, all attracted to the mission of providing clean water to the 1/6 of the world who doesn’t have it. Young noted that a Twestival to create clean water wells in Ethiopia raised $250,000 despite the fact that “[they] never ask for money directly.”

The bottom line: don’t let the summertime blues affect your vision, use this time to assess your strategy via a social media audit and get ready to break new ground this Fall.

Pepsi Refresh Serves All

What I love about the concept of Marketing as Service is that when done correctly it is a win win all the way around.  The consumer wins because they get something of real value and the marketer wins because they get something of real value too, not the least of which is a meaningful consumer interaction.  Done correctly, marketing as service can increase loyalty, attract new customers, generate favorable PR and even increase your fanbase on Facebook.

Which brings me to Pepsi’s Refresh Project.  If you haven’t seen it yet, stop reading this and click here.  In their words, “Pepsi is giving away millions of dollars  to fund great ideas.” Here’s a quick recap from MediaPost:

PepsiCo introduced the Pepsi Refresh Project to a large audience during the Super Bowl. The yearlong project, whose mission is to fund entrepreneurial projects with “a positive impact,” encourages fans to submit ideas — as well as vote online to decide who will be monthly winners of multiple grants ranging from $5K to $250K apiece.

At first you might ask what does saving the world have to do with Pepsi but the simple answer is in the program tagline, “every Pepsi refreshes the world.”  The reality is that Pepsi is finding a deeper way to connect with its youthful target, a target that is indeed keen on saving the world or at least making sure that young artists find an audience or that an eco-friendly play gets produced in NYC. If the target believes Pepsi actually cares, Pepsi moves from soda to soul mate.  The project has been gaining momentum over the last several months according to MediaPost:

Using no broadcast media to publicize the contest in December, Pepsi closed the submission period for ideas in 72 hours. Then the company added a little media to the mix in February and closed submissions within 24 hours. By March, as the project became more well-known, Pepsi closed submissions in less than 12 hours. There have been millions of votes, more than a billion media impressions and hundreds of thousands of new Facebook Fans.

This program is worth studying in further detail for its state-of-the-are use of social media, crowd sourcing and good old CSR (corporate social responsibility.)  But alas, I can’t do that for you right this second as I need to take a Pepsi break.