
Tag: Social Media
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Beyond the Big Three Social Networks
This article was written for AdExchanger, where it was published on July 24, 2013 (see here). It appeared as part of the AdExchanger series, “Data Driven Thinking.”
The accelerating monetization initiatives of the social media “Big Three” – Facebook, Twitter and LinkedIn – have received a fair share of headlines recently. But what does the rest of the pack of social media players have up their sleeves?
The monetization plans for these second-tier social sites, including Pinterest, Tumblr, SnapChat and Foursquare, have received scant to no discussion in the press, which isn’t surprising. The new kids on the block tend to get a free pass from the digerati monetization hawks for a honeymoon period.
With the inevitable sell-by date imposed by the industry arbiters of success to hold these ventures financially accountable, how will these four sites elevate themselves from nifty idea to sustainable revenue generator?
Pinterest In The Pole Position
Pinterest holds the pole position to join the ranks of the Big Three, and not just because of its phenomenal user growth. Social media platforms are built around core behavioral affinities, and because Pinterest’s fundamental proposition is image-centric, it is arguably best positioned to capture big advertiser budgets. Engaging images are of keen interest to brands, which is something both Facebook and Twitter clearly understand. There is growing marketer awareness that Pinterest may have the right eyeballs and a dynamic forum with which to engage those eyeballs. They clearly intend to take earnings to another level with the hiring of two key Facebook veterans: Tim Kendall, who spearheaded Facebook’s monetization program, and John Yi, who ran the PMD program.
The entire industry is gravitating towards bigger and more visual ad units to boost consumer engagement. While every ad-supported site struggles to strike the right balance between big and engaging versus interruptive, Pinterest’s strong advantage is that it has less native conflict on this front.
Will Yahoo Take Tumblr To The Next Level?
Naysayers snarkily await Yahoo’s watering down of the distinctness and vibrancy that fueled Tumblr’s rise. I, however, remain sanguine and hopeful that Marissa Mayer and her team will ensure that the rush to monetization doesn’t alter the user experience that made Tumblr popular.
While nothing has materially changed in their offering to brands, I suspect big plans are afoot. In the spirit of working hard to avoid alienating the core users, I expect Yahoo to monetize Tumblr by emphasizing non-intrusive ads and sponsorships.
Whither Go Snapchat And Vine
Snapchat’s quick-strike consumer platform has generated substantial buzz among teens and millennials, but not all of its consumer impressions are appropriate to a brand marketer, to put it mildly (think “sexting”). Having said that, platforms and audiences evolve. As the perception that shorter
ads can still achieve effectiveness takes hold — just look at the ad spot compression in video and television — Snapchat may be on to something. I know many agency people who are buzzing about creating compelling 10-second ads à la Twitter’s Vine. For now, however, Snapchat still has some way to go to achieve genuine marketer acceptance.
And Then There’s Foursquare
Sometimes it’s better to slide out of the digerati limelight to build a real business. This is the route Foursquare is taking. The company initially took a beating in the media for not living up to lofty, over-hyped expectations, but Dennis Crowley and his team have doggedly worked to build the company ever since. I believe Foursquare has a chance to establish itself as a powerful local e-commerce vehicle, perhaps more so than any other social player, because of its connections to the retail and service industries and its location-based data.
Fragmentation Of Social Media?
The immutable truth about the social graph is that it is generated, demanded and influenced by people who are constantly changing, growing and as fickle as ever. Trying to control or even predict where social media will go next is like holding water in your fist.
The sobering truth for the upstarts is that Facebook holds a formidable lead on constructing a global social infrastructure. There will always be a “next hot thing,” but most won’t grow up to be the next Facebook. But that doesn’t mean there isn’t opportunity and value in serving a niche, which in some cases can be quite big.
In the next 12 months, expect to see which upstarts are on track to become the next Twitter and which will be relegated to the same dustbin holding the remains of the old MySpace.
Follow Don on Twitter @KineticDHM Connect with Don on Google+
Don Mathis is the CEO and Co-Founder of Kinetic Social, a company launched in 2011 with a core mission of making sense of the world’s ‘social signal’ on behalf of large brand advertisers. He also serves in the active reserve of the US Navy, where he is the Commanding Officer of a highly deployable, selectively staffed, joint-service combat logistics unit that supports forward deployed war-fighters.

“It’s the Advice, Stupid”
By Don Mathis, Kinetic Social CEO

Earlier this week, we began to hear more details regarding the changes Facebook has made to the Preferred Marketing Developer (PMD) program, in particular as these changes will relate to both the initial application to the PMD program as well as to the recertification process for existing badge holders.
Of all of the new requirements, I believe the first one mentioned by Zach Rodgers in an AdExchanger article will cause the most difficulty amongst the existing PMD community: “Going forward, all PMDs must demonstrate ‘the ability to advise marketers on ad spend to amplify word of mouth and ensure success of brands on the platform.’” (Read the full AdExchanger piece here).
Did everyone get that? To keep your PMD badge, you better be able to help your client understand not simply what to buy, but why they should buy it. It isn’t enough to be a smart buying platform. In fact, that’s becoming the price of admission to the game … to be an effective (preferred) marketing partner for Facebook, you better be good at providing outstanding strategic client advisory services.
Facebook is looking for partners who are able to help clients create holistic campaigns that take full advantage of the FB platform. Just arbitraging “Likes” for a cheaper price than the next guy does not equal effective campaign management or genuine brand building, and increasingly won’t cut it. That’s been true with the more sophisticated brand advertisers for a while; it is becoming true with Facebook now too.
Why should that be so hard for many of the PMDs? Because most PMDs were created as “platforms” to engage in the social media equivalent of programmatic buying. As a general rule, the PMD community has focused sharply on trying to be social trading desks and/or Software-as-a-Service (SaaS) platforms for social media buying.
There is nothing wrong with that, per se. In fact, to be an effective badge holder, a company must be very good at providing differentiated, optimized programmatic social media buying. But having a strong technical skill-set and platform which interfaces with the FB API is not enough.
The PMD community seems to operate as if they attended a big venture capital summit in 2010 or maybe early 2011. At that summit, some prominent VC made a speech along the lines of, “whatever you do, DO NOT claim to be in the media execution business. You’ll get a crappy agency-like multiple when you sell the company … instead, be a SaaS play! That’s the path to a 4-5x revenue multiple exit!”
And while I’m sure no such thing actually occurred (or if it did, we weren’t invited), the industry certainly seems to act like it. Don’t believe me? See how many times the word “Platform” is repeated on the websites or in the marketing materials of the badge holders. “Platform” has replaced “Optimization” as the ad:tech word of the year. Thankfully, the buzz phrase “Social Graph” is already starting to die.
But as I spoke about in my post last week, Facebook is the inventory aggregator in the social media ecosystem, not the publisher. Facebook’s one billion users are the publishers … and in this ecosystem, Facebook makes the buying easier – like an exchange, only better – and the role of the PMD ought to be to help the client access the FB universe effectively. Not just buying, but buying smartly to build a brand.
Bottom line: if you want to hold a PMD badge, you better be good at helping your clients grow their brands.
Follow Don on Twitter @KineticDHM
Connect with Don on Google+
Don Mathis is the CEO and Co-Founder of Kinetic Social, a company launched in 2011 with a core focus of marrying “Big Data” to social media on behalf of large brand advertisers. He also serves in the active reserve of the US Navy, where he is the Commanding Officer of a highly deployable, selectively staffed, joint-service combat logistics unit that supports forward deployed war-fighters.
Atlas (Socially) Unshrugged …
By Don Mathis, Kinetic Social CEO
I was speaking to an investor in one of the Facebook PMD players last year, and he told me that his portfolio company was “going to be the Atlas of Social Media.” My response was that Facebook already was the Atlas of social (at least, of its own social media). Now, it is also the Atlas of Atlas … which means, of the open display & mobile web.
It is a brilliant transaction if Facebook executes well.
Here is what Sanjay Vasdev of Microsoft wrote in a blog post: “Through Atlas’s Click Purchase Path Analysis, [advertisers] can glean insights into where Facebook advertising dwells as an introducer, influencer, or closer across each unique click path, essentially creating a virtual representation of the digital conversion funnel.”
He added: “Accurate measurement will help draw conclusions on the quality of audiences delivered at scale. Marketers will be better informed on the synergistic aspects of Facebook advertising, gain better understanding of its reach and overlap, and aid the movement of marketing budgets to appropriate sources.”
See a great Zach Rodgers / AdExchanger interview with FB’s Ads Product Director Gokul Rajaram discussing the transaction in greater detail here.
What does it mean? From our perspective at my company Kinetic, it is one more mile marker on the path to digital media ad convergence … and it is a step in the right direction for the entire ecosystem. The objective for major brands is increasingly to seek cross-platform integration, because dollar for dollar, a campaign integrated across media channels with a well-balanced (and data-driven) mix provides the best bang for that buck. Measuring the effectiveness of cross-platform integration is today’s challenge; Facebook just made it a little easier, and the Atlas deal will pave the way for brands to accelerate the shift to integrated campaigns.
It also reflects, I believe, a deeper philosophy of Facebook: they don’t seek to be a glorified publisher with social bells and whistles as some believe and as the Street sometimes appears to want. I believe Mark Zuckerberg has a bigger vision: to be the infrastructure and architecture of the global social digital experience. They’ll leave the actual trading of the ad units to their partners.
What does the Atlas transaction mean for the Facebook Preferred Marketing Developer community? If you are a PMD and you do smart media buying / analytics in Facebook and across platforms (social, display, mobile, etc.), Facebook just became a more effective distribution partner for you and your clients. I wrote about Facebook’s continuing effort to improve its ad experience for its users here and here. And full disclosure: my company Kinetic is a PMD badge holder.
HOWEVER … if your goal is to try to become yet one more intermediary layer focused on adding measurement or analysis of other people’s buying and optimization, you should be thinking hard about your next pivot. In the display world of fragmented inventory, there might be a need for an intermediary layer or two that interprets the chaos. There might (might) be a long-term value proposition for an ecosystem with programatic buyers (e.g., trading desks, DMPs); an aggregator of inventory like an exchange, and/or even an SSO aggregating across multiple sources; and of course the supply itself, i.e. publishers.
But in social? Facebook, Twitter, LinkedIn, Pinterest etc. ARE the aggregators. WE – as in, everyone with an active profile – are the publishers. So the opportunity for the PMD community is to be a demand-side player, a trading desk for social and integrated campaigns, helping plug our clients into this ecosystem … not to be yet another intermediary layer adding an unnecessary tolling fee to the ad transaction.
Follow Don on Twitter @KineticDHM
Connect with Don on Google+
Don Mathis is the CEO and Co-Founder of Kinetic Social, a company launched in 2011 with a core focus of marrying “Big Data” to social media on behalf of large brand advertisers. He also serves in the active reserve of the US Navy, where he is the Commanding Officer of a highly deployable, selectively staffed, joint-service combat logistics unit that supports forward deployed war-fighters.
From Chaos to Sanity: Facebook Modifies PMD Program
By Don Mathis, Kinetic Social CEO
On Feb 13th, Business Insider broke a story about Facebook changing its PMD program that caught the attention of a lot of people in the social ad:tech space. AdExchanger picked up on the story as well. What’s going on? Facebook has changed the rules regarding new entrants to its Preferred Marketing Developer program – the single most important program for a company like my own, Kinetic Social, for conducting advertising on Facebook.
In the AdExchanger article, Zach Rodgers’ writes that Facebook is now telling “prospective PMD partners … (that) they’ll need to prove their knowledge of its ad products and their ability to “influence your clients on media spend.” Zach adds, “Facebook has stopped accepting new badge applications while it reshapes the PMD requirements and works its way through a glut of badge requests. The company expects to open up the program again in about two weeks, albeit with a significantly higher bar.”
See the full AdExchanger piece here.
At Kinetic Social, we see this development as a very good thing. AdExchanger reached out to us today, as well as two other PMD partners, for our opinions … which tracked pretty closely to each other, interestingly. It seems that the industry overall is looking for a “higher bar” and hoping to see the wheat culled from the chaff, as I discussed in a post last week.
Here is what we told AdExchanger:
“This is one more step in FB’s ongoing effort to improve the ad experience. They are raising the bar here, and that’s a good thing for the serious players … less noise in the ecosystem, more focus on actually adding value.
A potential concern would be with the emphasis on inside referrals, which could be good or bad. The current PMD program already seems to be heavily weighted in this direction … for the smaller players that have superior products but less penetration into the internal world of FB, this represents a hurdle which could work at cross-purposes with improving the program.
Bottom line: overall, we think this is good for the PMD program. It represents FB putting increasing emphasis on working with partners with real technology and demonstrable value-add, and who can guide brands on how to fully harness FB. It should help thin out a glutted space (have you seen the Lumascape recently??) and, in turn, make it easier for marketers to make a PMD choice based on skill. It probably isn’t such a good thing for the newbies with no FB relationship, or for the established PMDs who have pursued a ‘reseller’ business model.”
Find the full article here, well worth the read with astute comments from Rob Leathern and Jeff Dachis.
This development is part of a phenomenon I blogged about last week, The Smell of Social Desperation.
Follow Don on Twitter @KineticDHM
Connect with Don on Google+
Don Mathis is the CEO and Co-Founder of Kinetic Social, a company launched in 2011 with a core focus of marrying “Big Data” to social media on behalf of large brand advertisers. He also serves in the active reserve of the US Navy, where he is the Commanding Officer of a highly deployable, selectively staffed, joint-service combat logistics unit that supports forward deployed war-fighters.
The Smell of Social Desperation
By Don Mathis, Kinetic Social CEO
There is a smell of desperation afoot in social ad:tech. The bloom is off the rose, and ad:tech social marketing is undergoing a period of tumultuous change. The headlines are focused on sell-before-death M&A, shuck and jive (aka “pivoting”) stories, and lay-offs.
I think we are seeing an important evolution underway in the social ad:tech sector: the shake-out that most of us expected to occur is underway, the era of frothy valuations is over for the moment, and the real social media marketing companies are beginning to stand out from the pack.
As the wheat gets culled from the chaff, many of the start-ups listed in Terry Kawaja’s LumaScape will fail, pivot or both over the next 18 months. That’s because anyone with a heartbeat and a Facebook API key could sling social arbitrage advertising in the early days. Now, you can’t shake a stick without hitting a venture-backed social play.
But the companies with genuine added value will continue to expand and thrive … the ones that have invested in real technology development and differentiation. Meanwhile, the companies that raised a bunch of venture capital and spent it mostly on marketing with go, quietly or not, into the night.
AdExchanger had a great interview with LUMA’s Terry Kawaja on this subject, posted a few days ago on February 4th.
Perhaps we are approaching the end of this era?
http://www.collegehumor.com/video/6507690/hardly-working-start-up-guys
Follow Don on Twitter @KineticDHM
Connect with Don on Google+
Don Mathis is the CEO and Co-Founder of Kinetic Social, a company launched in 2011 with a core focus of marrying “Big Data” to social media on behalf of large brand advertisers. He also serves in the active reserve of the US Navy, where he is the Commanding Officer of a highly deployable, selectively staffed, joint-service combat logistics unit that supports forward deployed war-fighters.