Category Archives: Facebook

Why can’t advertisers get personalization right?

girl heart eye

 

Deep near the bottom of today’s NYTimes story on Facebook — “How Facebook Sold You Krill Oil” — a marketing manager for Reckitt Benckiser, a company that sells fish-oil pills, says “Facebook is a fantastic tool for doing personalized marketing at scale.” The NYT case study goes on to explain how the advertiser in question is able to pinpoint-target different female demographics, users of other fish-oil products, and even “lookalike” profiles of individuals with similar interests. The Facebook campaign worked and fish-oil sales went up.

Yet all this is outbound targeting from the marketer’s perspective, similar to really good archers being able to fire arrows into the chests of different consumers with different needs in a crowd. It’s not personalization.

True one-to-one personalization was described by Don Peppers in the 1990s as an iterative process in which consumers are identified, differentiated on both their financial value to a company and need from a company, interacted with, and then given customized services or communications. The most crucial step was to make all of this a feedback loop, a “learning relationship” in which a marketer grows ever more sophisticated about anticipating individual needs over time.

It is this anticipation of needs that creates loyalty, Peppers said, because once a consumer has trained one organization to anticipate her wants, she would face switching costs going somewhere else. The classic example of marketers who actually pull this off are local coffee shops who see you walk in and immediately warm your specific version of coffee and breakfast muffin without you asking. You skip the line, you save 3 minutes, you’re individually recognized, and so you don’t want to go anywhere else. One-to-one personalization, evolved as a learning relationship, becomes almost like a strong marriage — where all the prior history of learning enhances the bond between consumer and brand.

Now, let’s revisit advertising.

Today, I checked my ads for Facebook, and saw this: retargeting ads from a hotel chain I searched two weeks ago; a technology course apparently inspired by an online friend who works in Web services; a tiny chip-wafer thing I can attached to objects around the house to “never lose them again”; and an ad for a local plumber. Personalization score, from 1 to 100: About a 5. At one point, I was interested in the hotel.

Twitter was even worse. I got two ads for a Red Bull music festival; a local Applebee’s ad for a frozen fruit drink; and a promotion for small-business insurance. Personalization score: 3. Maybe, just maybe, we’ll go out tonight to a restaurant, but I don’t like frozen fruit drinks.

All of these ads express a knowledge of my personal needs about as sophisticated as the  direct mail lists that trigger our Pottery Barn catalogs. I am a target with some general color descriptors: So, go ahead, fire your arrow into me.

Product-focus creates a personalization failure

The problem that personalization faces is most marketing engines base it from the marketer’s point of view (since the guy with the ad budget is calling the shots). This creates a data collection model centered on a product, which inherently has vast gaps. A home services company will build a CRM system to include lots of information about an individual prospect’s interactions and a customer’s service records, but that data is only germane to the product. Jane Smith may have a forecast lifetime value of $20,000 in utility bills over 10 years … but the data systems don’t recognize that she is a mother with three daughters interested in mountain climbing and kayaking. The utility frankly doesn’t care.

All of this is driven by economics: individual companies want to store and analyze only data related to their product sales; social networks want to release only the data needed to target a product to a customer; and a truly customer-centric personalization campaign would require coordinating millions of potential product offers, likely from competing brands who have little incentive to sell services outside their own scope.

In simple terms, because the varied needs of a customer would require unified data and services that cut across brands, until an ecosystem of brands has an incentive to share data and revenue, personalization will not happen. What this gives us is ads on Facebook for fish-oil pills based on a rudimentary understanding that you are friends with someone who takes vitamins, but no anticipatory personalization that informs you of where to take your wife to dinner on the anniversary of your first college date.

The customer loses out

What would it take for true personalization to arrive? A few companies may come close. Amazon and Walmart, which house millions of product SKUs, have incentive to use data to anticipate your needs and the service offerings to potentially benefit from a vast range in sales. Twitter, which conceivably could parse your real conversations to build better profiles of your mind than simple Facebook stated interests, could truly personalize its #discover newsfeed to create content germane to your interests.

Facebook might do true personalization, if it could somehow depress ad offers that had nothing to do with your interests. Unfortunately, Facebook wants the billions from the unexpected plumber ad or computer technology course offering that sprays you despite your disinterest. Most Facebook ads are priced on a cost per click, rewarding Facebook if a user clicks on the ad, but not worrying about the 99.97% of users exposed who don’t want to respond. The economic model focuses on what advertisers catch, and ignores the adverse impact of what they spill.

Television is in the same boat. The typical U.S. consumer receives 6,600 spots per month, based on 4 hours and 34 minutes of TV viewing per day. You may want 3 of those products, putting your “response rate” in the 0.05% range, about the same as responses to online banner ads. If TV truly personalized ads, it might have to forego 99.95% of its advertising inventory — and lose billions of dollars a year by removing all that unwanted communications bloat.

Truth is, personalization will never arrive until a giant platform is able to match transparent data on individual needs with a vast consortium of products and services that can be personalized in promotions without friction from marketers demanding that their product appear next in line. Marketing would have to become a true marketplace, and product-makers would have to cede their product focus to a willingness to give consumers what they really want — even if that means the brand down the street wins instead of them.

Which is why, tomorrow, you’ll see more unpersonalized ads on Facebook for fish oil. Today’s economic incentives decree that unpersonalized ads are the way to go.

Photo credit: Ruurmo

Facebook solves the mobile sandbox problem

sandbox

At its annual F8 conference this coming week, Facebook will announce it’s solved a vexing problem for marketers trying to reach consumers on mobile: The sandbox.

Mobile advertising, you see, to date has stunk. The prime reason is that data about consumers — the core of any advertising is the information that allows you to target someone — has been largely missing in mobile advertising. When you use your cell phone, there is large entity called your phone carrier between you and most marketers, and the data about who you really are (gender, age, income, habits) doesn’t get through that intermediary very easily. Now, of course, many apps can monitor your behavior and gather information about you. A weather app likely knows what cities a business traveler goes to, and a news app may be able to build a profile of you based on your content consumption.

But apps don’t talk to each other well, and all the data within each app has been “sandboxed.” This means that the vast majority of mobile advertising to date has been ludicrously un-targeted. Some mobile ad networks claim they can IP target, but that is based on cell tower location, and only good to a few miles. So, like the very early days of web advertising, mobile targeting hasn’t worked well, and mobile ad dollars have not followed.

Except for Facebook.

In 2013 Facebook began rocking mobile advertising with its own system, because of course Facebook is more than a social network — it is a data giant, with enormous profiles of who you are, who you are dating or married to, your friends, your interests, and behavior. If you are logged into Facebook, suddenly marketers have a dreamload of data about you. In Q4 2013, Facebook made more than half its total revenue from mobile advertising.

Facebook is smart, and realizes that its nexus as the main social media platform may not last forever — so it needs to build out new revenue streams. How? By using all that data elsewhere, outside of the Facebook system.

Observers say Facebook will announce at F8 a new mobile advertising platform that allows marketers to use Facebook data outside of Facebook on other mobile apps. This is revolutionary, because for the first time marketers can really target mobile based on robust profile information. Marketers will love this, not only for the targeting ability, but for scale — because now it won’t matter if the consumer is reading her Facebook Newsfeed or checking a weather app, she can be reached across thousands of mobile touchpoints.

The data that used to be sandboxed inside each single mobile app is now accessible everywhere, with Facebook owning the treasure trove. And with 37% of all U.S. consumer digital “media time” now spent on mobile devices,  ad dollars will pour into Facebook’s new mobile ad network.

Data is the future of Facebook

Beyond this tactical network, this signals in the future Facebook will be much more than a social network. It has become both the keys to the Internet (you can log on to most major sites with Facebook) and the safety deposit box for your personal information. Facebook is the new Experian, a vast trove of data that marketers can use almost anywhere. If wearable technology takes off, Facebook will be there. If consumers gain enough trust to start buying products through Facebook, the social network could rival Amazon.com in personalization and e-commerce. If Facebook wanted a slice of the $144 billion U.S. television market ($70B in advertising plus $74B in cable subscription fees), it could launch broadcast capabilities with revolutionary data targeting ability.

This is not silly conjecture. Facebook is smart, and somewhere in its boardrooms lies a master, multiyear plan of how it will expand its services carefully using its data bank to protect itself from the inevitable decline of its social network while jacking up its stock price. Networks can only increase in value if the size of the network increases. With Facebook’s direct social users capping out (there are only so many people on the planet), it needs to expand its nodes elsewhere.

Like 1970s Ham radio, social media fads don’t last for long. But the data Facebook has on you is forever. Look for it next month via relevant ads on your smartphone.

Facebook’s $7 Trojan horse (watch out, Amazon)

Mark Zuckerberg, how investors have underestimated you.

Depending on how you look at it, Facebook is either on a tear or washed up. eMarketer predicts Facebook will generate $5 billion in revenue this year, with $4.2 billion from advertising, taking 4% of the global digital ad spend in 2012 — not too shabby. But Facebook also faces the law of large numbers, meaning it’s hard to grow once you’re already damned big. That eMarketer forecast of August was downgraded by $1 billion from its previous prediction in February; ouch. And Facebook has two other huge challenges — it’s making pennies from mobile and online video, the fastest-growing media channels in advertising, and Facebook is still a weakling in the Asia-Pacific, the market expected to grow fastest in ad spend over the next few years.

So Facebook made a brilliant move this month to diversify its ad portfolio by going … straight to you, dear consumer. Facebook now invites individuals who post something to pay to promote their missives at $7 a pop, to make sure more people you connect with inside Facebook actually see you. Let’s put aside for a minute the fact that Facebook is fighting its own EdgeRank algorithm that helps us enjoy our social feeds by blocking old girlfriends or uncles with annoying politics, and consider how much money Facebook could make:

  • Facebook has 1 billion total users
  • Of those, about 552 million log in daily
  • Facebook has reported users make an average of 3.5 comments or Likes per day, so let’s assume users make an equal number of personal posts each day: 3.5
  • That’s 1.93 billion posts per day
  • Let’s assume Facebook gets an anemic 0.03% response rate on this offer for consumers to pay for their own posts (a response rate equal to click-throughs on all those other FB ads)
  • That’s 579,000 self-promoted posts a day
  • Each post costs $7
  • Facebook just made a cool $1.5 billion next year — achieving 30% revenue growth

$1.5 billion is nothing. Facebook is just getting started with your data.

There’s a much larger play here as well — if you pay for your post with a credit card or PayPal, for the first time Facebook is training you to give it your payment mechanisms. OK, so you’re addicted to Facebook. And Facebook has your credit card. Whatcha think you’re going to do when Facebook makes it easy for you to buy stuff inside Facebook?

I’m not talking those little Facebook ads for things you don’t want — I’m pointing to a store that rivals Amazon.com with everything you desire on your own terms. Facebook has already built this store: millions of brands have “Facebook pages” touting Pepsi, Coke, Barack Obama and Mitt Romney. All Facebook has to do is install the cash register, and you better believe when those pages become e-commerce functional, brands will promote ways for you to buy stuff inside Facebook.

Mobile payments come next.

And of course Facebook, with your payment information now loaded, would helpfully transform your mobile Facebook app into a mobile wallet … extracting a cut of the billions of dollars that are paid to AmEx, Visa and Mastercard in annual financial transaction fees. Go out for a nice Italian dinner and swipe your newsfeed at the register, and you could pay while also telling all your friends about the great night out.

It’s all so brilliant. A $7 offer. Which leads to $1.5 billion in revenue as Facebook collects your credit card numbers. Millions of brand pages waiting to be turned into an online mall. Marketers promoting Facebook for free by including their “Like us on Facebook” in every one of their own ads, stimulating demand. And a Facebook mobile app that, once preloaded with your credit info, could rival Visa.

Zuck, some days I really like you.

Deconstructing the canned Pepsi Facebook feed

Social media promised a new ability for brands to engage with and build relationships with their customers. So why does Pepsi have such a simple Facebook feed?

If you “Like” Pepsi in Facebook, here’s what you get: A series of Pepsi cans in your Facebook feed. Cans. And more cans. Blue cans with the Pepsi logo, blue cans in front of walls, blue cans on blue cans sitting in the sand at the beach. Anyone savvy in marketing might wonder, Pepsi, can’t you do better than cans? Why aren’t you engaging with your Facebook customers?

We suggest there are three reasons Pepsi is spraying its Facebook fans with little more than images of its blue cans:

1. Engagement doesn’t work for everyone. Two decades ago, the one-to-one guru Don Peppers posited that engagement (he called it personalization) only made sense for companies whose customers had wide variances in terms of what they need from you and the financial value they provide to you. Book readers and movie renters have wide ranges in needs, so it makes sense that Amazon and Netflix became experts in personalizing recommendations. Personal investors have wide ranges in financial value, so of course financial advisors treat Jane different from Jim when they call. The more diverse the needs and values, the more critical engagement — and its corresponding personal feedback — is to persuade customers to do business with you.

But if all of a brand’s customers simply want the same commodity, it makes little sense to personalize communications or engage in meaningful two-way conversations. Gasoline, laundry detergent, kitchen ovens and sodas are all simple commodities. Customers of such products have little range in value, so treating me differently than you won’t really drive more sales. So Pepsi is doing the right thing — it’s ignoring the expense of engagement and simply spraying everyone with one simple message. We have pretty blue cans.

2. Frequency is important. U.S. consumers are exposed to thousands of advertising messages each day: more than 160 television spots, scores of web pages, and hundreds of social-media updates. The typical Facebook user makes 3.5 “Likes” or comments daily, and with the average user having 234 friends, he or she (Facebook Edgerank filters notwithstanding) could be exposed to 820 messages bouncing back to them daily. Brands must break through this clutter, and the best way to influence consumers is to focus on frequency — the idea that it takes 3 or 4 outbound messages per week for a brand to penetrate a consumer’s mind. By peppering you with blue Pepsi can images, Pepsi is building a frequency of advertising impressions that might influence you next time you’re shopping in the soda aisle.

3. Social media is not “social” most of the time — because if one-way communications are a worthy goal, the “social” is gone and all that is left is broadcast media. This sounds cold, but most of social media has turned into broadcast as users spray other users with their wit, links and thoughts much more than they engage in two-way conversations. If you don’t really listen to the 1,000 people you connect with on Twitter, what chance does a non-corporeal brand have to really engage with you?

Pepsi is doing the right thing by turning social media into a spray-and-pray advertising platform. That’s the hard logic of a world where there are more commodity brands who want to engage with you than you have attention to give back in return. Pepsi may seem annoying in your Facebook stream, but look again, people: All Pepsi is doing is making its soda pop.

The great Facebook ‘Like’ currency devaluation

Humans will make 1,168,000,000,000 “Likes” and comments on Facebook in 2012. That’s an almost unfathomable number, so we can put it in perspective in several ways — if each Like and comment were one dollar, that’s slightly more than U.S. annual military spending ($929 billion); it’s 3.2 billion per day; it’s 1,296 per year per Facebook user; or, to bring it all the way home, the average Facebook user makes 3.5 Likes or comments each day. Since the average Facebook user also is connected to 234 friends, and you see what your friends do, this means if you’re on Facebook you are exposed to 819 “Likes” or comments each day.

819 Likes and comments per day is a lot.

Now, to be fair, Facebook doesn’t break out “Likes” and comments separately, and to parse only the “Likes” that brands are now so enamored with is difficult. Facebook is a chatty medium, so if we assume charitably that 90% of activity on the network is comments, that’s still about 82 Likes per day that you would see.

82 Likes is a lot, too.

All this means is “Likes” have become a commodity — and they face the same challenge that advertising “impressions” have for decades. There are more coming your way than you know how to respond to. This is not a mathematical nuance, but a real problem for marketers who hope to scale organically inside social media without paying for it, because the old challenges of communication really have not changed — there is more supply of messages being pushed out than there is demand for consumers willing to receive them.

I’ve written elsewhere that the desire to “go viral” inside social networks faces tremendous friction that precludes success. The formula for going viral — Viral spread = (Message generation rate – Absorption rate) * Cycle time — means if more people “absorb,” or refuse to pass along, the message than the number of people who share it,  your meme will die. Like a story passed from person to person at a party, if your message is deemed boring, the conversation will flow somewhere else.


The problem social media faces is really that its rapid adoption by users, who spend hours a day sharing on Facebook and Twitter, has created a growing glut of messages. Like email or TV spots or radio ads, there are more people braying at you than you choose to listen to.


The supply of marketers chasing the demand of consumers has always been out of whack. Facebook “Likes” now face exactly the same challenge that other forms of outbound communications do, too. All of this explains why advertising expenditures in the U.S., especially among digital advertising, continue to grow. The dream of consumers organically listening to your pleas for engagement is a nice one. The trouble is, you need to get in line for organic growth, so it may be easier to just pay for it.

Why Facebook should sell ads outside of Facebook


Back in January I noted Facebook has a frequency problem — the basic fact that every Like happens only once, and one touch is not enough to spur consumers to action. In advertising, frequency is the number of times you reach a person with a message, and in study after study a frequency of 3 to 4 ad impressions per week is required to break through resistance to get people to respond. This typically maximizes the “response rate curve,” as shown above. So the basic problem with Facebook “Likes,” the one click of a human saying she digs your product, is that it is only one real impression. What happens next?

Which brings me to the solution — Facebook should sell retargeted advertising outside its Facebook ecosystem. This wouldn’t be hard to do; Facebook would simply tag the computer of any user who “Likes” something with a cookie, and then via partnerships with ad networks or direct bids into ad exchanges, Facebook would enable the serving of downstream ads against that user.

This would provide an incredibly powerful new ad format, combining social media engagement (one Like) with multiple followup contacts (banner ads served across the Internet to maximize frequency) to drive real response (which is not a silly “Like,” but rather when someone actually buys your product).

But it would mean Facebook would have to admit users do things outside the Facebook ecosystem.

The downside is this would remove the perceived brand imperative that you must build response mechanisms inside Facebook, just as 10 years ago you had to have keywords inside AOL. Sad. Because Facebook serving retargeted ads outside of Facebook would work beautifully. What do you say, Facebook, want to give integrated advertising a try?

Ben Kunz is vice president of strategic planning at Mediassociates, an advertising media planning and buying agency, and co-founder of its digital trading desk eEffective.


Facebook’s mobile advertising problem


Facebook’s registration with the Securities and Exchange Commission is a brilliant read for anyone who works in marketing or social media, because as Facebook prepares to go public it has to lay out everything that could go right or wrong in the future of social. The company is crushing its numbers now, with a cool $1 billion in profit, but read Facebook’s “risk factors” and what leaps out is the challenge of mobile.

Nobody has figured out how to make big money from mobile advertising; advertising rates for mobile ads are absurdly low, from $0.06 to $0.25 cost per click, a signal inside the ad industry that perhaps the back-end conversions from consumers clicking the ads are pitiful, and the macro mobile ad market has missed every rosy forecast of the past decade. Facebook hasn’t even launched mobile ads yet on its app (although that is coming soon) — and yet you know where consumers are headed. Handsets, tablets and other portable screens.

Here’s what Facebook warns in its S-1 filing:

Growth in use of Facebook through our mobile products, where we do not currently display ads, as a substitute for use on personal computers may negatively affect our revenue and financial results.
We had more than 425 million MAUs [monthly active users] who used Facebook mobile products in December 2011. We anticipate that the rate of growth in mobile users will continue to exceed the growth rate of our overall MAUs for the foreseeable future, in part due to our focus on developing mobile products to encourage mobile usage of Facebook. Although the substantial majority of our mobile users also access and engage with Facebook on personal computers where we display advertising, our users could decide to increasingly access our products primarily through mobile devices. We do not currently directly generate any meaningful revenue from the use of Facebook mobile products, and our ability to do so successfully is unproven. Accordingly, if users continue to increasingly access Facebook mobile products as a substitute for access through personal computers, and if we are unable to successfully implement monetization strategies for our mobile users, our revenue and financial results may be negatively affected.


Digiday reported this week that Facebook will soon run mobile ads inside its smartphone app UI. For Facebook, it is absolutely critical that this new format succeed. Google also has been struggling with this issue, because the smaller screens in mobile mean any ads are more intrusive and less likely to be welcomed by consumers; this is one reason why Google bought Motorola Mobility and has pushed handset hardware designed with hot keys that boot search (and the corresponding search ads). As Facebook user growth slows (there are only so many people on the planet) and consumers shift away from PCs to portable Internet devices, the question is will we all want advertiser friends in our pocket?

Ben Kunz is vice president of strategic planning at Mediassociates, an advertising media planning and buying agency, and co-founder of its digital trading desk eEffective.

Originally posted on G+.

Facebook Actions vs. the frequency problem


Imagine walking into a bar and meeting the love of your life. Your eyes lock, a flash kindles, and immediately both of you realize destiny has arrived.

So you walk up to her and say, “I like you,” and then walk out of the bar forever.

Good tactic? Nope, because your communication had no frequency.

Frequency has been a basic advertising concept for a century, the logic that repeat impressions are required to drive any action. Alas, this is where social media engagement falls down, because most “engagement” in the space equals just 1x frequency. For years now, marketers have been pushing Likes on Facebook, or similar social media actions such as retweets on Twitter, as a new metric indicating an audience is interested. But what happens when someone Likes your brand on Facebook once? They click a button, then walk away. You’ve had one tiny interaction. Sure, they may now be subscribed to some outbound stream, but that push followup messaging is just another form of broadcast media, especially at scale.

Now Facebook is addressing this problem; VentureBeat reported on Thursday that FB is expanding its “Like” functionality to include other “Actions” — a series of verb terms that could include “Read,” “Watched,” “Listened,” or custom responses such as a foodie site that could post a button for “Cooked.” Facebook Actions would solve several problems with current social media response:

+ It allows for nuance, the various stages of consumer engagement, which could boost response.

+ Actions solves the Facebook frequency problem.

Now, an enterprise trying to engage customers in social media can do more than push for one Like — it can add shades of subtlety that bring consumers back for repeated interactions. Imagine Ron Paul trying to win your vote. It’s unlikely he’ll get you to Like him immediately if you are not in his political camp, but you might Argue, Debate, Listen, Consider … and eventually be persuaded to Like his message later. The more variations of engagement organizations provide, the more chance that they’ll move prospects up the response curve. And every additional interaction creates another ripple in the broader social-graph stream.

Sure, all this could create a vast online silliness, a cluttered bunch of buttons for people to click on. With Diggs, Tweets and +1’s all competing for space, social response controls may become as ridiculous as a 1980s’ flight-simulator videogame interface. Facebook Actions could also devalue the already-fuzzy currency of Likes; how in the world do you score 2,000 “Cooked” mentions for your CFO? But let’s give Facebook credit for trying; at least now, like rethinking the true love you met last night, you may get another chance.

Ben Kunz is vice president of strategic planning at Mediassociates, an advertising media planning and buying agency, and co-founder of its digital trading desk eEffective.


Why Google+ should carry advertising


It’s curious how gun-shy digital networks are about running advertising. Facebook famously held off on traditional banners, inventing its own not-so-intrusive tiny promos at the side, and now Google+ insists it will skip ads. The most amazing restraint I see is the Facebook mobile app — imagine, with 350 million active FB users staring into smartphones, and Facebook holds off on monetizing that audience.

All of this indicates that consumers now hate advertising — why skip ads unless you’re worried it will degrade your networked product? Advertising works, of course (we plan it for clients), and traditional television media that carries advertising still remains king, with consumers watching 4 hours and 44 minutes of television a day on average in the U.S. But “watching” is an overstatement; studies by Nielsen and Pew show consumers actually do two or three things at once with TV or radio on in the background. In-home observations show that when TV spots appear, consumers pick up laptops, handsets or magazines, and attentiveness slides. Put another way, the typical consumer is exposed to about 160 30-second TV spots a day, and of course none of us really “see” or recall most of them. The radio industry has the same problem; data from new Portable People Meters, which replace the old diary journals to tabulate radio ratings by picking up signals embedded in broadcasts, show people tend to switch the radio dial as soon as radio spots intrude.

So new communication networks, trying to gain mindshare in this cluttered space of media options, are very careful not to diminish UX with advertising — almost comically so. Twitter could easily push ads into its stream (and is just starting to roll this out), but has been scared to death that degrading the Twitterer experience might chase users out of its network. G+ could easily provide personalized sponsored links at the right of its pages, but for now, says it will hold off.

Why the fear?
Advertising works; it educates consumers and drives billions into the economy. But at heart, consumers find it a pain in the ass and are migrating to new channels that avoid it. The danger I see is if marketers cannot influence you by clearly putting their messages in an ad box, they will try more nefarious routes of embedding the message into other content — sponsored tweets, paid posts, advertorial — that degrades the actual content we hunger for itself. You’re starting to see this with top bloggers bragging about Kmart shopping experiences or GPS gadgets that actually pay them for mention, and the result is confusion. Is the message true? Doe someone I respect like that product? Or is someone just putting their self interest ahead of mine, giving me a message that may not have meaning? The value of advertising is it clarifies the source of the message, allowing consumers to clearly judge the content by knowing it is meant to influence. A catalog is selling you; you know that; so you look and judge the material by its source merits. Alas, if marketers and people can no longer be clear about their intent to influence you, they may resort to trickery, subterfuge, embedded lies, and that form of pollution may degrade our experience far more than little ad boxes at the side of the stream.

Ben Kunz is vice president of strategic planning at Mediassociates, an advertising media planning and buying agency, and co-founder of its digital trading desk eEffective.

Originally posted on G+. Image by Jesse S.

Facebook should have seen it coming


In the past two weeks Facebook must have been shocked to see Google+ attract 10 million users and apparently be on track to double that number by the end of July. It’s a stunning achievement, yet the signs of weakness have been there: Facebook’s cumbersome interface, constant stumbles over privacy, and the inability to get users to adopt new Facebook services such as Messages (do you remember you have a name@facebook.com email?). Facebook like many businesses grew fat and happy with its wonderful business model, neglecting the cracks that gave Google an entry point.

Students of Michael Porter know you can fit all of competition into five boxes: You with your competitors in the middle; customers who buy from you and suppliers who help you build what to sell; and the dastardly product substitutes and market entrants. The current slow demise of the publishing industry is modeled above, with the lock-keepers of content being eaten up by substitutes (the Internet and Google search) and entrants (social media, mobile and tablets).

In July, Facebook became an old-school publisher and Google became a surprising market entrant. This is nothing new: Google+ is doing to Facebook what Wikipedia did to Encyclopedia Britannica, the Prius did to the VW Bug, Napster to the music industry. When you least expect it a competitor pops up with a revolutionary idea … but if you think about it, the new idea is always based on flaws in the old business model. Facebook could have avoided the G+ explosion if it had overhauled its design to address privacy concerns and made Facebook Groups something as easy as Circles to manage. Instead, it left Groups buried and difficult to use. Why change, if things are going so well? Oh, um…

It’s a cautionary tale. What gaps have you been neglecting in your business that could allow a competitor to take everything away from you?

Ben Kunz is vice president of strategic planning at Mediassociates, an advertising media planning and buying agency, and co-founder of its digital trading desk eEffective.