Don't Let Your Business Get Squeezed Out By Social Media

Competing with social media masters requires becoming one yourself. Involve data, effective ads, and credible brand-spending claims to bring your networking game up to par.

Publishers who don't have access to social data are facing a growing challenge--social squeeze. When it comes to digital advertising market share, they are losing out to the likes of Facebook and Twitter.

AOL’s acquisition of Gravity in January shows that AOL knows it needs to make its ad offering more social. Likewise, Marissa Mayer’s recent statement that the interest graph is the future of understanding what consumers want shows that Yahoo is aware it has the same problem.

With Facebook recently laying claim to the second-largest share of digital advertising dollars in the country, this is actually every publisher’s challenge today. The cash flowing into social platforms is not new money being spent in digital for the first time--these dollars are coming from the pockets of existing publishers, and few are avoiding the social squeeze.

Publishers, then, must keep Facebook and Twitter from further encroaching on their home turf. The social companies have made their presence known far and wide--so how can publishers defend and grow their revenue when media buyers are increasingly buying into the power of social?

Just playing defense won’t cut it. Publishers have to change their game plan--the only way to compete with social is social. To do so, they’ll have to make three critical adjustments:

1. Make data more social

As Mayer so accurately noted, understanding an individual’s interests allows for more personalization, which is great for consumers, and better ad targeting, which is great for advertisers.

At the confluence of these two are the publishers, who need both eyeballs and ad dollars. AOL’s intention is to use Gravity’s data as a proxy for interests, which shows effort in the right direction, and Apple may be taking a similar step with its acquisition of Topsy.

Social data gains more value the closer to the source you get--that is, to individuals and to what they express about themselves on social platforms. It can be used to make recommendations to people on content sites driving an alignment of content and advertising to make the advertising more premium--or it can be used to ensure that ads appearing in many places will be relevant to the consumer. In this way, advertising can take on aspects of CRM.

2. Make ads more effective

Ads must move away from the much loathed and widely ignored banner. Similarly, the word “native” is becoming one of those overused industry words that has accrued so many meanings that it’s meaningless.

We learn from social that ads in line with the content and with the same appearance and tone of the platform around it are very effective. Some publishers have dealt with dropping rates by adding more ads to each page, but that is unsustainable. Others have placed ads in whatever they can call a “stream” or a “feed,” but because there is no social targeting, they wind up with belly fat ads that are undesired by most audiences and, even worse, undermine the quality of the publisher.

Fewer ads of greater quality and relevance will drive rates back up because they are truly valuable.

3. Make a more credible claim on brand spending dollars

Lastly, the real opportunity for publishers lies in capturing brand dollars. Action-based data and lookalike models that third party Big Data providers sell haven’t convinced brand advertisers to do their image-building work in digital--and they never will. While they may be comfortable with content alignment, that’s often difficult to scale via the Web.

Brands willing to build awareness online and in mobile will require a deep understanding of the real interests of the people on the other end of the ad server. And, interestingly enough, Twitter and Facebook don’t seem to have gone up to the plate swinging for brand dollars.

Facebook Exchange, Twitter Custom Audiences: these are retargeting techniques, and, while they are effective for driving action, they continue to leave much potential brand spending on the sidelines and keep new dollars out of digital’s reach.

If publishers can accomplish the first two points--making their data more social and their ads more appealing--then they’ve got a chance to bring in brand advertising in a much bigger way. Google’s new Custom Brand Exchanges are a step in that direction, as they’ve been reverse-engineered to capitalize on demand from brands and match them with premium inventory. Targeting audiences through social data with ads that they are interested in will expand the pool of inventory, whether served through exchanges or sold directly by publishers.

Some publishers have taken strong first steps toward understanding the competitive advantages that they should bring to the table. The social squeeze is avoidable--if you learn from social.

--Jon Elvekrog is co-founder and CEO of 140 Proof, a social interest technology company. Follow him on Twitter at @jonelvekrog.

[Image: Flickr user zengmar]

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