Merry Christmas and Happy Holidays!

Dark days ahead for Web 2.0

Rob Frankel posted an interesting analysis of the current buzz environment surrounding online social networking and, in general, "Web 2.0". In fact, Rob predicts the demise of social networking sites.

http://robfrankel.blogspot.com/2007/09/demise-of-social-networking.html

I agree with Rob that current practices in marketing and advertising do not support the current business models of these social networking sites.

So what if sites are able to collect large numbers of users who interact in these online communities? Just because lots of people do it doesn’t mean there are profits to be found.

The name of the game is building brand loyalists for these online sites. Loyalists who gladly contribute an ongoing revenue stream.

Ad-supported revenue models just aren't going to cut it. Click-through rates for ads are abysmal online and only the most targeted of campaigns with the most closely aligned offerings stand any chance of success.

Add the over-hyping of social networking and Web 2.0 by overexuberant entrepreneurs trying to make money from these sites and it starts to look like the days of the dot-com bubble all over again. Lot's of promises and hyping but very little value creation that drives ongoing revenue generation from brand-loyal users.

What we're seeing now is also the exploitation of a new medium by less than fully honest and ethical marketers.

Online videos on YouTube, blogs, podcasts, social networking sites (remember when we called them forums and sig's?) are currently seen as new and cool. Everyone gets a shot at their 15 minutes of fame.

Some so-called marketers out there are exploiting this by making things "seem" user-generated while the reality is that budgets -- sometimes large ones -- are behind the promotion of these brands. There is much scamming and shilling going on.

Does anyone really believe that "social networking" only started recently because of advances in Internet technology? Does anyone realize that secretly paying others to blog about or create YouTube videos that support their brands is nothing more than deceptive advertising?

Consumers are becoming more and more sophisticated about all this user-generated media and social networking and starting to understand that not everything is as it seems.

Some marketing tactics are designed to go undetected. Some things are hyped just to try to get somebody else's money. Some will try new, stealth ways to monetize an otherwise unprofitable social phenomenon.

As more and more people begin to understand the new media dynamics, we won't have as many snake oil salesmen rolling through town in their horse-drawn carriages hawking Web 2.0 and Social Networking-For-Money with their duo core processors and three-card monte misdirection.

Deceptive exploitation practices will be exposed and the masses will be less trusting. Once the deceptive advertising and speculation is exposed and consumers become savvy, then most of these social networking sites will dry up and go away unless a real business model comes forward where there is real revenue flow. Revenue flow from social networking means users pay for access in mass numbers, and that simply isn’t likely to happen on the web.

Speculation without real return is as bankable as fairy dust.

Use words wisely in marketing communications

I've been hearing a radio advertisement for the American Stroke Association for some time now and it has bothered me since the first time I heard it.

A transcript of the ad follows:

{Struggling voice}: The First Amendment reads, “the people shall not be deprived or abridged of their right to speak”

Narrator #1: The odds are, the person you just heard is an African-American.

Narrator #2: Because African-Americans are twice as likely to suffer a stroke as white Americans.

Narrator #1: That’s twice as likely a stroke can rob you of your freedom to speak your mind.

Narrator #2: The freedom to shout from mountain tops.

Narrator #1: The freedom to tell your mother you love her.

Narrator #2: And it’s twice as likely a stroke could take your life.

Narrator #1: Therefore it’s twice as crucial for us to do something about preventing a stroke.

{Same struggling voice}: Learn how you can help beat the odds.

Narrator #1: Start by calling 1-888-4-stroke or go online to strokeassociation.org.

Narrator #2: Join the power to end stroke.

Narrator #3: A public service message brought to you by the American Stroke Association and the Ad Council.

Here’s what bothers me about the ad.

Strokes often rob people of their ability to speak, not their freedom of speech. To imply that the loss of the ability to speak due to stroke is somehow related to the loss of the American freedom of speech by referencing the U.S. Constitution is, well, misguided.

As marketing communication goes, the American Stroke Association and the Ad Council could have taken a better approach with an issue directed at a minority population rather than toying with the notion that a constitutional freedom is somehow being taken away.

I appreciate the message that those at higher risk for strokes should know they are at higher risk and inform themselves on the topic. I also applaud the strategy of informing all of us about the risks. I just wish they would have thought a little more about how they conveyed that message.

More information…

Amendment I to the U.S. Constitution

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.

About the risk of strokes.

Top 100 Brandz

Millward Brown Optimor has compiled its list of the top 100 global brands as measured by their dollar value.

The top 10:

1. Google
2. GE
3. Microsoft
4. Coca Cola
5. China Mobile
6. Marlboro
7. Wal-Mart
8. Citi
9. IBM
10. Toyota

A direct link to the report with the complete list and description of methodology:
http://www.millwardbrown.com/Sites/optimor/Media/Pdfs/en/BrandZ/BrandZ-2007-RankingReport.pdf