“It’s the Advice, Stupid”

March 5, 2013September 11, 2013 Don Mathis1 Comment

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.

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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.

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Atlas (Socially) Unshrugged …

March 1, 2013September 11, 2013 Don Mathis3 Comments

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.

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From Chaos to Sanity: Facebook Modifies PMD Program

February 14, 2013September 11, 2013 Don Mathis2 Comments

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.

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