The New York Times reports on how they’ll work, saying:

Starbucks, for instance, often publishes Twitter posts about its promotions, like free pastries. But the messages quickly get lost in the thousands of posts from users who happen to mention meeting at Starbucks.

“When people are searching on Starbucks, what we really want to show them is that something is happening at Starbucks right now, and Promoted Tweets will give us a chance to do that,” said Chris Bruzzo, vice president of brand, content and online at Starbucks.

When a Twitter user searches for a word an advertiser bought, the promoted message will show up at the top of the results, even if it was written much earlier. The posts say they are promoted by the company in small type, and when someone rolls over a promoted post with a cursor, it turns yellow.

According to Techcrunch, they’ll look like this:

You may be feeling somewhat underwhelmed by this news and wondering what all the fuss is about. I can understand why. Twitter Search is only a small part of the service and the use-case of people bothering to search for ‘Starbucks’ before they go for a coffee seems… shall we say… narrow.

On the other hand, people have been wondering how Twitter will manage to pay its way for a long time. Last September, the company accepted $100mn in VC funding, with the total standing at $160mn. That’s a lot of money, especially since, up till now, it only had one source of revenue – license money from allowing Google, Bing and Yahoo to index tweets.

Many of us believed that adverts were coming, though co-founder Biz Stone dismissed the idea last May – a position he has clearly reconsidered. Like a lot of Web 2.0-style sites, it has had no real problems with traffic since it started to hit the mainstream at the beginning of 2009: it records around 20mn unique visitors to twitter.com every month. Nor does it seem to have a lot of outgoings: no content producers; not much in the way of marketing; text messages only, so low bandwidth costs-per-user (compared to, say, YouTube). For some reason, it has a whopping 140 employees – well, I suppose they had to do something with all that money.

The move to advertising on Twitter is bound to upset some people: users who don’t like ads; twitter-advertising agencies like TweetUp (rather inauspiciously launched last week); social media agencies who’ve delved heavily into how to get links spread organically (what’s the point, if you can just pay for placement?) It may also be bad news for some of the 3rd party applications developers. If you were Twitter, and you wanted people to see adverts, would you give third-parties free access to your search capabilities? I’m not sure I would. In moves that look a lot like an attempt to control users’ experience of the service, the company has recently released its own Blackberry client, effectively burying rivals like Ubertwitter and Twixtreme. It bought the developers of the most popular iPhone client, Tweetie, last week. The makers of desktop Twitter clients like Tweetdeck must be in a strange place right now, waiting for either the rug to be pulled from under their feet or a very welcome phone call from Biz Stone.

I’d like to go back to the “users who don’t like ads” who may well be upset by this development, because I think it is significant. Twitter is quite clearly nervous about this. In the New York Times story, the company says it will withdraw adverts that people don’t respond to:

Twitter will measure what it calls resonance, which takes into account nine factors, including the number of people who saw the post, the number of people who replied to it or passed it on to their followers, and the number of people who clicked on links.

If a post does not reach a certain resonance score, Twitter will no longer show it as a promoted post.

You can’t really imagine a television company doing that, can you? There are a couple of reasons why. First, advertising on TV is an established practice, whereas Twitter is adding a layer of interruption to a previously unblemished space. Second, TV is a broadcast medium – we consume it – whereas Twitter is a communications platform – we make and interact with it. People don’t like or respond to advertising mixed with their communications. Look at the failure of Blyk, who offered free mobile phone calls in return for receiving adverts: people hated it so much that not even a free phone account was sufficient enticement. That’s why Twitter is not (yet) inserting paid placements into the message stream, only on the search results.

For me, then, advertising isn’t going to recoup $160mn – let alone an attractive exit for investors – very quickly: I’d suggest that charging for premium services would be a good start though. What sort of premium services? Well, maybe something like

• Enhanced search – find the originators and the influential passers-on of messages; sort by domain authority; sort by number of followers; sort by Klout.
• Charge for verification of accounts.
• Charge for brand-cleansing e.g. unofficial accounts; satirical accounts.
• Charge for SMS use: they don’t have a traffic problem, so why not?
• Enhanced tools for finding authorities.
• Management tools – find dropped followers; measure the impact of tweets.
• An ad-free version.
• Charge for better/cooler-looking profile pages – more links; layout control; give users ability to place their own ads.

First, what we might call the ‘good news’: as social media marketers have been telling us for the last five years, more useful, fun, non-pushy content is more likely to engage people than straightforward advertising.

The reports says the sponsored content was a St Patrick’s Day page containing a video and UGC. The video mentioned the brand sponsoring the content. ‘Give’ widgets let you create a present – like a badge or a greeting card – for friends. ‘Get’ widgets let you create similar things for your own profile page.

But there is a significant caveat here. Yes, people said they’d click links on sponsored content and give/get widgets to a greater extent than on banners, newsletters and non-interactive brand pages. But not by as much as you’d think. The ‘likely to click’ score for sponsored content is 3.3; for old fashioned banners it’s 2.8. That’s a 10% difference in impact. I suppose you might argue that it all depends on how good the content is, and how relevant it is to the site’s users: I can’t really comment on that since I haven’t seen the media used.

Sponsored content is a good thing, then, as far as getting people to click through is concerned. It’s good for awareness and improving sentiment. Unfortunately, there’s absolutely no correlation between this and persuading people to buy things.

Sponsored content was found to be the least successful in terms of converting exposure into sales. I’d imagine that this is probably down to context and the lack of any particular call to action. If you load up a flash game – some sort of Farmville knock-off – and it happens to be sponsored by Corona beer, I’d wager you might think: ‘oh yes, Corona beer – that exists’. If it’s a good game, then you might think: ‘Fair play to you, Corona. Nice one.’ What you probably don’t think is ‘Right, I’m off down to the shop to buy some Corona’. [Actually, that might have been a bad example. Mmm… beer.]

Better targeted, relevant sponsored content would presumably work better: a good example is the free recipe cards that supermarkets give away. If I worked for a supermarket, I’d be all over allrecipes.com with my free recipes, but not with a car-racing game.

The big winner for brands is having a profile page with fans. The ‘with fans’ difference is that fan pages give users a badge that shows on their own profile. Straight brand pages without fans are just there to look at, and are not so successful. The commitment – however slight it may seem – of publically saying that you like a brand turns out to be a fairly strong motivator to buy things from them. The report’s authors suggest that this is because people hate being seen as inconsistent, or displaying cognitive dissonance, science fans. If you’ve joined the Marmite fan page and then buy Vegemite, then that’s odd and wrong, even to you:

…once people purchase products from a brand, they report liking the brand more. But the reverse is also true – when people declare publicly that they like a brand (by putting a logo on their profile for all of their friends to see) they are more likely to buy from it.

This also explains why ‘Give’ widgets work better than ‘Get’ widgets. If you send your friend a virtual pot of Marmite, then that’s a much more public display of affinity than making one for yourself, so you’re more likely to stick to your professed tastes.

The full report is here [PDF]. via. MediaPost

picture credit: CaptPiper

I read two blog posts this morning that seemed to be crying-out to be connected together. So all credit to their authors, and a tiny bit to me for the meeting.

The first was by Jamie Madigan, who writes the terrific Psychology of Video Games blog, looking into the reasons people do (or don’t) behave badly in multiplayer videogames. People discover little cheats in videogames that can advance their score but annoy everyone else. Whether to use them anyway is an example of the ‘Prisoner’s Dilemma’. According to Game Theory, the dominant strategy is to use these cheats.

[Explication: your opponent has the option to use the cheat as well. If they do, and you don’t, you lose. If you do, and they don’t, you win. If you both do, then it’s equal. The worst that can happen from using the cheat is that the stakes are even. On the other hand, if you don’t use the cheat, then the worst that can happen is you losing. That’s worse than the stakes being even: so use the cheat.]

However, the consequences of everyone using the cheats is mayhem and no fun for anyone, so it’s actually also an undesirable outcome, but less undesirable than losing. Everyone cheating rather than playing the game properly. But so long as the strategy exists and can be executed in a way that’s undetected, the rational decision is to continue the abuse. The way to counteract this for developers and publishers is to close down the cheat strategies or publically identify the abusers so that future potential opponents will either (a) avoid them or (b) use the same strategies as the abusers. Identification and iteration of the same game conditions turns the short-term gain into a long-term loss*. Creating a state of uncertainty over whether abusers will/can be identified can also work.

[*Actually, the maths says that continuing to cheat still remains dominant, even when the cards are on the table, but humans are rarely mathematical creatures. People are complicated and irrational: winning isn’t always the overall goal for them. Some people don’t play the dominant strategy anyway, because of a sense of honour or fair-play. On the other hand, some people always will, despite the consequences, because they don’t care. (They’re ‘griefers’ in videogame jargon).]

The second post was by Bobbie Johnson on the Guardian website about the Firefox and Chrome extension Ad-Block. If you use Ad-Block, then it stops the advertising banners and MPUs on websites from loading. That makes for a faster and smoother browsing experience for you as an individual. However, the websites that you are looking at lose revenue, since they probably sell their advertising on a CPM basis – cost per thousand views – it doesn’t matter whether you click on the ads or not. Not all ads are intended to be clicked on anyway, such as branding campaigns.

If everyone Ad-Blocks, then the site you love goes out of business. If no-one does, then it thrives. The ‘cheat’ is the idea that Ad-Block is still pretty-much a secret, or that most other people are more honourable than you. That you can block advertisements, but because hardly anyone else is using it, then the sites will still be OK.

So here’s the obligatory 2x2 matrix:

The best outcome is that your favourite sites prosper and continue, and you don’t have to see the adverts. The worst — the ‘everyone cheats but me’ scenario -  is that they go bust despite you not filtering ads yourself. The dominant strategy is to Ad-Block and hope very few other people do that as well. It will continue to be dominant until enough of us perceive free web media as a long-term game, are identified as free-riders or learn the consequences to our short-term victory.

We want sites to prosper, yes? So what do they/we need to do? They need to make viewing and interacting with their content a long-term game. Part of that is achieved by Bobbie’s column – if Ad-Block is worthy of a column in the Guardian, then it’s certainly not some sort of hacker secret anymore. It is the most-downloaded Firefox Add-on and the leading Chrome Extension. Any certainty that ‘everyone else’ will play a dominated strategy ought to disappear. Thus, the ‘best’ outcome, where you get a free ride on sites that prosper has gone. Take that out of the picture and the game looks rather different: playing fairly together is the new best option. They should probably publish figures on the footer of every page of the revenue lost to filters; maybe scale that into an ‘articles we were unable to commission this month’ widget, if the loss is large enough. Arguably, it should be possible to identify the users of Ad-Block (if it isn’t already) and serve them altered content.

We need to switch off the extension, with the recognition that this is a long game, even if our identities remain masked: it’s the future of free media on the Web. Our best outcome is a free-ride, on sites that are free-to-access anyway. The worst outcome is our favourite sites going bust.

With long-termism brought to the front of our minds, the best outcome is removing a little inconvenience; the worst would be a disaster.

picture credit: HDR cafe

[As you might be tempted to point out: I used to use Ad-Block but I have stopped].

The excitement over Google advertising Chrome and Search during the Super Bowl comes from two hot-spots of media attention:

1. Google Search is continually used as the prime example of the power of word-of-mouth over traditional forms of marketing: ‘…and they never spent a dollar on advertising it!’ says the social media guru.
2. The slots between segments of the Super Bowl are famously the most expensive and sought-after TV ad-spots of the year. (On the official site, linked above, a link to a video of the commercial slots was the top item when I looked!)

The Internet and the Super Bowl last intersected so heavily ten years ago, in 2000, called — at the time — ‘dotcom bowl’, when ten heavily-funded, but mostly impractical internet start-ups spanked $40mn in venture capital in order to secure the slots, at an average of $2.2mn for 30 seconds. Twelve months later, all but two of those start-ups had gone bust. Internet companies have tended to avoid the Super Bowl since then for obvious reasons.

So you might take this appearance as an indication that either Google has given in to Old Media; or conversely that the value of old media has dropped so low that even the biggest advertiser on the Internet will give it a go.

Personally, I take it as a sign of changed understandings of old and new media and of how persuasion through advertising works. Hell freezes over indeed.

Firstly, dividing old and new media into two separate, enemy camps that will have nothing to do with each other is nonsense. You aren’t a Luddite if you use TV; you aren’t progressive if you use the Web. This false dichotomy has held both sides back for too long. Old media still have massive reach compared to the Web: and telling more people about your stuff is mostly good, especially if you have a consumer product, like a new web browser, to give them. To give an example: the highly favoured Compare the Meerkat campaign — created by VCCP – had digital end-locations but depended on a massive TV, newspaper and outdoor campaign to create its success (400% increase in traffic and 80% more quotations given for client Compare the Market).

Second, Internet advertising isn’t a very good platform for persuasion. Sorry. You have one five-or-so-word opportunity and (maybe) a graphic that has to fit into a fairly small space. Most people ignore you. The people that click on your ad are stupid, bored and poor. Or are your competitors and their agents. What’s good about it is that it’s so cheap that you can throw a small amount of money at it (compared to traditional media) and create a lot of clicks, it generates great CPA information and, if correctly targeted at long-tail keywords, then yes, it sells.

It won’t change people’s minds, though. You need longer periods of time and richer engagement to do that. I read today that cinema advertising revenues went up 5% [PDF] last year. What’s that about – apart from creative agencies loving them? It’s about the realisation that advertising-as-experience (and therefore, ‘something that might influence someone’s opinion’) still doesn’t happen very often, predictably or inexpensively on the Web.

This is the truth. We live our lives not offline or online, but inline. We’re continually in both spaces and don’t draw much distinction between them, contrary to what a lot of commentators would have us believe. This is especially true of younger people, who’ve grown up with the Net at their side. We don’t ‘jack-in’, as Neuromancer and countless successors imagined, we accommodate.

[PS. Throwing irony upon irony, this is also the year that Pepsi, long a Superbowl standard, decided not to bother and devote the money to social media *cough* philanthropy instead.]

[PPS. What I wonder about is why Google cares so much about Chrome? It’s given none of its other products, consumer or business, remotely the same funding or attention…]

On most news organisations’ websites, you’ll find a widget called ‘most read’, ‘most shared’ or ‘most commented’, possibly all three. The Guardian’s Zeitgeist experiment suggests an interesting alternative.

Typically, the content found in the most-X sections provides a salutary — if depressing — reminder of humanity’s baseness and stupidity. What tends to get flagged is not ‘Picasso retrospective opens at the ICA’ or ‘Proposed Amendments to Digital Economy Bill’: it’s ‘footballer shags team-mate’s wife’. If you’re seeking the Wisdom of Crowds, look away now.

Here’s the latest from the BBC:

Even worse is the equivalent list from the Telegraph:

Not to mention the Daily Mail:

Oh dear, oh dear. Showbiz, trivia, sport, sex and weirdness. And these aren’t tabloid publications. The Telegraph, in particular, paints itself as a serious business and politics paper with a concern for moral values. Its readers, on the other hand, appear to prefer sex scandals and weird animals. I can’t imagine its editors are especially proud of these results but ultimately have to shrug and be grateful for the extra page-views.

The Guardian has a similar widget, which isn’t as lowlife as the examples above, but again favours the funny and the odd.

Newspapers and news organisations are in a strange position with regard to these most-popular lists. The short-term value is that they flag up the items that new visitors are most likely to click on and enjoy. They get more page views out of their visitors and thus more advertising inventory to sell. They help the organisation bolster their claims to advertisers that their sites are busy and popular. Readers get what they want quickly and leave happily.

On the other hand. There’s a long term devaluation coming out of this for serious papers. When they sell to advertisers, they aren’t just selling so-many million eyeballs much of the time. They’re selling a certain quality of readership and particular brand values. For readers, there’s a similar brand attachment. They go to a serious news site because they trust the brand and want serious coverage. If they then end up then clicking on the story about a funny-looking gorilla, then that’s their own affair. Maybe, rationally, they should have gone to weirdanimalpix.com, but they don’t see themselves as the sort of person who does that.

What’s more. Papers don’t really have an ad-inventory problem. They generate thousands of new pages and hundreds of thousands of impressions a day and rarely sell more than 20% of what they have to offer. The only real reason for driving page views is the arms-war between the Nationals over who is the most popular. And being the most popular isn’t a great argument to advertisers if you are simultaneously claiming that your readership represents an elite, as is likely for any serious news site.

So maybe it’s a good idea to find a middle-ground; a way for serious news organisations’ websites to highlight popular items that doesn’t make them look like a zoo for morons: for readers or advertisers. The Guardian’s Zeitgeist – launched today – is one attempt to find that middle ground.

The idea is that it blends populism and curation. The most popular stories will appear on the grid, as you’d expect, BUT:

• The different sections of the site – news, features, opinion, sport, etc. — remain balanced in the proportions conceived by the editors. So if 90% of its visitors are looking at Sports stories, it still only occupies 2–3 slots on the grid.
• Like is compared with like. For example, Charlie Brooker’s satirical swipes at popular media are perennially popular on the site, but will only hit the grid if a particular column is more popular than the norm.

Guardian communities editor Meg Pickard explains:

…we’re analysing and combining all sorts of things; where people come from, where they go to next, how long they stay on a particular page, if the page is getting passed round twitter and other social websites, number (and rate) of comments and so on.

We’re taking a range of these variables — enough that a single datapoint doesn’t skew the results — and mushing (that’s the technical term) them all together to get a value of “Zeitgeistiness” (another technical term) for each content object.

But — and this is the important bit — each content object only gets compared to other items in the same section, which in real terms means that Football articles only get compared to other Football articles, Technology blogposts against other Technology blogposts and so on. In fact, we go one step further, and take the type of article and day of week into consideration: an Environment gallery on a Monday only gets compared to others of the same type/section also published on Mondays. Because we’ve been storing and analysing this data overnight for a while now, we’ve got a good baseline to work from.

It’s early days for the Zeitgeist experiment, and I’m afraid it’s rather buried away from most visitors to the site, so it will be hard for them to see how popular the idea plays out compared to the regular ‘most-read/commented/shared’ widget. Nonetheless, it’s an interesting project that shows how news organisations might protect their brand at the same time as playing to the cheap seats.

picture credit: Joi

The FT reports that The Economist plans to make headroads into social networks:

The Economist newspaper plans to acquire 500,000 fans on Facebook and 750,000 followers on Twitter within six months, in another sign that traditional publishers are looking to social media as a substantial source of web traffic and new readers.

via FT.com / UK — Economist eyes social network cash boost.

It may come as a surprise to some that the magazine is interested in such things. In many respects, The Economist is the great hope for paid-for printed magazine media. The title sells more than 180,000 copies of the UK edition alone, according to the latest ABC report. I do not have advertising figures, but the interim annual report posts profits of slightly over £20mn for the first half of 2009, under the toughest advertising conditions for years.

The reasons for The Economist’s success where other news media have failed and flailed are fairly clear: its content cannot be obtained elsewhere online; consequently it’s of high value; plus its target demographic is one that doesn’t resent the need to pay a cover price. That’s a reaadership that, fortuitously, is also of great value to premium brand advertisers.

But no reason there to ignore the rich pickings potentially available online. Paid Content reported earlier this year:

Economist.com [viz. the online magazine] increased its advertising revenue by 29 percent year-on-year, while page views increased 53 percent.

For me, the interesting part of this story is the magazine’s acknowledgement of social networks as a key part of its marketing strategy, but not by just advertising on those sites — though I am sure that in the case of Facebook, ads will also form a part of the plan. The interesting bit is their embrace of the social aspects. To gain the figures that they aspire to, the site will need to offer more and more free content and market it cleverly. Gaining followers and fans depends upon making people willing to share your content. And for that to happen, it needs to be good.

A far cry from the paywall route currently touted by Rupert Murdoch and the Johnson Press chain of local papers in the UK. Or the free-for-all route followed by competitors for that matter — The Economist magazine’s print content will remain subscribers-only.

Perhaps if other media owners were more able to offer uniquely valuable content, rather than paying their reporters peanuts and reprinting press releases, they might be equally bullish about the opportunies offered by the likes of Facebook and Twitter.

picture credit: Edgar Zuniga Jr.

AdWeek covers a story that most people working in the digital sector will already have had some intuition of:

Forrester Research conducted a “state of interactive agencies” survey of about 100 global interactive marketers. It found just 23 percent believed their “traditional brand agency” is capable of planning and managing interactive marketing activities. About 46 percent did not believe them capable, with the rest neutral on the question.

While that held good news for digital agencies, particularly as digital becomes a much larger part of marketing, Forrester found few clients are willing to give them responsibility for the brand’s direction. Just 22 percent agreed that their interactive agency is “ready to lead my brand.” Another 33 percent said their digital shops aren’t ready, with the rest neutral.

via ‘Great Race’ Between Traditional, Digital Shops.

In brief: clients think traditional agencies can’t be trusted to do online; digital agencies can’t be trusted to lead.

The article postulates a ‘Great Race’ as traditional agencies struggle to acquire digital skills and people, while digital shops expand their offerings to include more mainstream marketing activities to prove their wider competence.

The trouble here is that it slows down and distracts both sides.

Initially, at least, they are likely to do a poor job of imitating their competitors on the other side, despite sinking what probably seems like an inordinate amount of resource into them. The two sides come with very different mind-sets in the majority of cases, and adjusting to the world of mainstream brand marketing or interactive media will be a painful and slow process that will inevitably involve several failures.

I am sure that there are some marvellous full-service agencies, but when I look at the ones I come across, it emerges that they’re actually formed of five or six different business centres created through acquisitions and spin-offs.

While they’re busy getting nowhere fast, new disciplines like interactive signage or phone apps appear, and specialised agencies pop up to fill the gap. Neither the digital nor traditional agencies have a handle on these disciplines because they have been spending all their time watching their competitors.

So now there are three, four, five and more agencies looking for a slice.

I’m not convinced that getting involved in the Great Race is likely to lead to a winning position. Better surely, to display leadership, integrity and genius in the bit that you’re actually good at?