SXSW interview: How to cut through the hype

We were fortunate to interview a few bright minds at SXSW Interactive this year. Brian Morrissey is one such light, who as digital editor of Adweek has to sort through claims to seek the truth in emerging technologies. So we asked Brian: “Dude. How do you cut through all the hype?”

Stay tuned for more SXSW interviews this week with myself and Humongo hipster Darryl Ohrt. Vids will be cross posted at Brandflakes for Breakfast.

3 thoughts on “SXSW interview: How to cut through the hype

  1. Ben,

    Thanks for posting. I agree wholeheartedly with Brian’s comment that businesses need to look inward first and decide if they have a product worth talking about before venturing in to the social media space.

    However, I couldn’t disagree more about the “not enough M’s” comment–and it doesn’t take millions to get big brands on board…if you produce results.

    In a world of choice and individual taste, why does there have to be something for everyone? Isn’t the point of “social media” niche appeal? i.e. being able to locate your enthusiasts and give them something to talk about and something to do?

    What do you think? Obviously having a lot of “M”s means you have a big audience and can reach more people, but what does that really have to do with effectiveness?

  2. James, thanks — sorry for the late response, busy week.

    I agree with Brian… for this reason. There are three ways a social media company could make money:

    1. By charging the audience directly (e.g. a subscription fee).
    2. By reselling the audience to advertisers (e.g. the old radio or TV or web site model, we interrupt you occasionally and you don’t mind because the advertisers grabbing you are paying for this service).
    3. By reselling the data to businesses (e.g. what Experian does with your credit card swipes).

    So here’s the problem: While everyone talks about social media changing the communications game, no one is making money. No. 1 above doesn’t work because people expect tools for free. No. 3 is coming but not here yet (wait for it, though, Facebook and Twitter could make good dough by reselling all the human-connection and interest data flowing through their pipes).

    Ah, but No. 2 — reselling the audience. Advertisers need large audiences because only a fraction of people respond to any ad. CPMs are media-speak for “cost per thousand impressions,” say $10 to reach 1,000 people, so if you want $10,000 from an advertiser you need to serve up 1,000,000 impressions. Big audiences are required, because responses are fractions of the impressions.

    So a startup tool/widget/social media thing/platform may have 5,000 loyal customers, but if they’re not paying directly, it’s not going to be enough to generate any significant funds from the second scenario. And the buzzword “engagement” doesn’t cut it. I’m engaged listening to Scott Monty but I still haven’t bought a Ford. The Skittles thing was cute, but I don’t eat that candy. Motrin Moms sounded a little sexist, but that negative buzz didn’t stop me from taking the pill when I have a headache. I dig the Zappos brand but don’t buy the shoes cause I’ve done the math and they’re expensive. Sentiment is only that, a vibration in the air, not an action that drives finances.

    As Brian says later in the clip, buzz is find, but does it move cases?

  3. Good points–although I have to say I’m not sure how me fast forwarding through an expensive 30 second spot, or ignoring print ads moves cases either. But brands are still comfortable paying because there is some metric to back it up.

    Not that it was my intention to steer the discussion back to Tongal, but we make money because our social media platform creates valuable content and analytics. That’s the fall out of the social media “game” being played on our site. Kind of like how the fall-out of playing foursquare is geo-targeted advertising.

    Early adopters are happy to give it a try because they know that they’ll get good video creaaed for them at the end of the campaign. This is bridging the financial gap between having 5,000 loyal users and a CPM sized audience.

    I have been of the opinion lately that Social Media platforms need a rating agency (I know this didn’t exactly work out recently for mortgage bonds, but indulge me for a second). If some governing body were to place a AAA rating, then advertisers would have a way to gauge what to pay for those 5,000 users.

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